dopamine-B
Member
- Sep 1, 2012
- 93
- 279
So you have seen the advertises on the internet or maybe been to a seminar on how forex will make you rich overnight.The truth is to tell you the reality that 90% of retail FX clients do not make money and most accounts are wiped out in under 6 months.
But it’s not all that bad money can be made from FX but not by doing what the majority do, Some people have made huge fortunes just Trading. A young South African Sandile is one of them, a young trader who successful made money trading, and there are many more.. just to name a few.
I have traded for a time, but its a full time job trading. You need to follow up the news, Look for possible market ENTRIES and EXITS etc. Although some brokers offers automation on some point to EXIT a trade at a determined Profit or Loss.
Its fun trading! ...and you can make a lot of money while trading.
However consider these, make sure you invest the amount of money your are willing to lose.
1. Forgot about buying fancy software and don’t waste your money on FX robots. It’s easy to get blown away on-line trading, real time data, charts, business channels and bells and whistles. The truth is, less is more, and information overload makes you a worse trader. The more complicated your system, the less chance it will work or that you will follow it. The majority of technical trading indicators are a total waste of time and you do not need to waste money on expensive trading software that claims to predict markets. The most important factor when trading any market is the price.
2. Day trading FX is a waste of time ultimately you will lose money.
3. The most successful FX traders make money from longer term trends. Some traders held currency trades for days, weeks, months and even years – not quite what the media make you believe that you have to be glued to 10 screens all day.Brokers want you to over trade as that way they make more commission and spread.
4. Whilst charts can be helpful do not look at short term charts they provide no value and are near random. Use Daily, Weekly and monthly charts. The main tools are trend lines, Moving averages and support and resistance levels. Keep it simple.
5. New traders should avoid OTC FX brokers and should not use margined FX. To start with consider Exchange Traded Funds on currencies and options on currency futures. You get a better deal and have more protection using a currency futures contract than and OTC broker. Be aware what FX brokers often claim “tight spreads” which are misleading.
6. Many traders don’t realise the news they hear and read has, in many cases, already been discounted by the market. Often, new traders jump into a market based on a story in the morning; the market many times has already discounted the information.
7. Trade with what you SEE not what you Think. You may think the Euro is overvalued and you may be right eventually, but if the price is moving from 1.26, 1.28 ,1.32, 1.37, it does not matter what you think, it does not matter what the so called FX prof. says, the price is moving up and you should be trading with the trend.
8. Many focus on the major currency pairs but over the years some people have made large amounts from trading the not so well covered currencies such as Norwegian Crown, Swedish Korna and South African Rand.
9. Some times the best trades in FX are the ones you don’t make! Some people trades currencies, commodities, stocks and bonds and can move from one market to another. If the FX market is dull he will move focus to funds and commodities. Oil or Brent for example.
10. New traders just think about the entry of a trade, truth is the EXIT is more important than getting IN. It’s a bit a like a relationship it’s easier to get in than to get out, also the money management and the amount you risk per trade is a factor that many do not spend enough time considering.
But it’s not all that bad money can be made from FX but not by doing what the majority do, Some people have made huge fortunes just Trading. A young South African Sandile is one of them, a young trader who successful made money trading, and there are many more.. just to name a few.
I have traded for a time, but its a full time job trading. You need to follow up the news, Look for possible market ENTRIES and EXITS etc. Although some brokers offers automation on some point to EXIT a trade at a determined Profit or Loss.
Its fun trading! ...and you can make a lot of money while trading.
However consider these, make sure you invest the amount of money your are willing to lose.
1. Forgot about buying fancy software and don’t waste your money on FX robots. It’s easy to get blown away on-line trading, real time data, charts, business channels and bells and whistles. The truth is, less is more, and information overload makes you a worse trader. The more complicated your system, the less chance it will work or that you will follow it. The majority of technical trading indicators are a total waste of time and you do not need to waste money on expensive trading software that claims to predict markets. The most important factor when trading any market is the price.
2. Day trading FX is a waste of time ultimately you will lose money.
3. The most successful FX traders make money from longer term trends. Some traders held currency trades for days, weeks, months and even years – not quite what the media make you believe that you have to be glued to 10 screens all day.Brokers want you to over trade as that way they make more commission and spread.
4. Whilst charts can be helpful do not look at short term charts they provide no value and are near random. Use Daily, Weekly and monthly charts. The main tools are trend lines, Moving averages and support and resistance levels. Keep it simple.
5. New traders should avoid OTC FX brokers and should not use margined FX. To start with consider Exchange Traded Funds on currencies and options on currency futures. You get a better deal and have more protection using a currency futures contract than and OTC broker. Be aware what FX brokers often claim “tight spreads” which are misleading.
6. Many traders don’t realise the news they hear and read has, in many cases, already been discounted by the market. Often, new traders jump into a market based on a story in the morning; the market many times has already discounted the information.
7. Trade with what you SEE not what you Think. You may think the Euro is overvalued and you may be right eventually, but if the price is moving from 1.26, 1.28 ,1.32, 1.37, it does not matter what you think, it does not matter what the so called FX prof. says, the price is moving up and you should be trading with the trend.
8. Many focus on the major currency pairs but over the years some people have made large amounts from trading the not so well covered currencies such as Norwegian Crown, Swedish Korna and South African Rand.
9. Some times the best trades in FX are the ones you don’t make! Some people trades currencies, commodities, stocks and bonds and can move from one market to another. If the FX market is dull he will move focus to funds and commodities. Oil or Brent for example.
10. New traders just think about the entry of a trade, truth is the EXIT is more important than getting IN. It’s a bit a like a relationship it’s easier to get in than to get out, also the money management and the amount you risk per trade is a factor that many do not spend enough time considering.
