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Most traders think forex money management is just placing a stop and it’s much more than that. Good money management can turn a losing system into a winner and mediocre system into one that makes triple digit gains.

If you want to win long term at forex trading, you need to defend what you have and keep losses small. As the old saying goes – to win you need to bet and you can’t bet if you’re not at the table! Obvious but true.

Most traders pay very little attention to money management – but it’s the cornerstone of your forex trading strategy’s success, so let’s look at some tips you can incorporate in your forex trading strategy and become a winner.

Leverage

The first point to keep in mind is don’t use all the leverage your broker gives you.

They will in many instances give you up to 400:1 and it’s tempting to use it all however, if you do you will blow your account out the water.

A good leverage is maybe 10 – 20:1.

Trading Frequency

Cut your trading frequency back.

Most novice traders simply trade too much and take low odds trades. The good opportunities don’t come around often and you need to be patient and wait for them.

I know traders who trade less than 20 times a year and make triple digit annual gains so – trade only when high odds trades present themselves.

Deciding Bet Size

How much should you risk on one trade?

Common wisdom often says 2% but for a small account this risk is so small it means 20 on 1,000 account. Well you won’t make much money doing that! Risk 10 – 20% of your account equity on any single trade.

Forex trading is all about taking calculated risks at the right time and making meaningful bets – if you don’t like risk don’t trade forex.

Diversification

If you have a small account and a good trade and you think can make big profits, don’t dilute its potential. Diversification is not guaranteed to reduce risk and in most instances dilutes gains.

Always Assume the Worst

Many traders think their risk reward is their stop minus their profit objective – but that’s a trader’s opinion nothing more. When entering a trade always assume the worst eventuality and from there, things can only get better!

The Biggest Mistake of Novice Traders!

In money management placing a stop is normally easy, where most traders go wrong is the way they trail it.

Most traders get so excited when they get a profit, they don’t want to let it get away and they immediately move their stop up to close and get stopped out on a normal counter trend swing. The market then immediately goes back the way they thought and makes thousands and their not in!

To make the really big profits, you must accept drawdown in the short term in your open equity, to bank the big profits. Look at any forex chart and you will see that the big trends last weeks, months or in some instances years and you need to hold them as long as possible.

A good way to do this is a key moving average and we like the 40 day MA, then look for trend line support or resistance just below it. It’s far enough back to keep you in the trend but close enough to protect you.

Forex money management is all about taking calculated risks at the right time.

It’s a fact that most traders try so hard to avoid risk, they take too little which guarantees they lose. The above money management tips if used correctly will balance the risk reward just right and lead you to triple digit gains.

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Forex Trading is learnable for the normal person that is interested in the subject of
forex. But you don’t have to worry if you are not interested in the subject forex, but you
can see the opportunity in currency trading, it still also learnable. I only say this because
I find it easy to learn anything easier if you truly have an interest in the subject.

It just takes a little dedication with study, like any other skill and talents we as people
develop. What you do need in order to learn how to trade in the forex market is to
indulge ones self in all the free content they can get their hands on. When free
information doesn’t cut it anymore or it’s not enough, then purchasing a beginner’s
course with tutorials will help you succeed in the learning process.

One thing you will be finding out as you go along is that learning and sticking to a forex
trading strategy or a flexible plan is essential to survive in the fx market. When starting
out, be sure to just stick to practicing with a demo trading platform. These platforms are
usually provided in the software that you will download when signing up with a forex
trading company. That is always the safest manor how everyone must start out until they
really have a feel for how the currency markets work.

You must be careful when starting to trade with real money, and try to keep your
emotions out of your trading game. It is not unheard of for a person to not succeed at
first and turn to finding a forex mentor. However, this is probably the most expensive
method, but if you think with a long-term mind set it could be a very wise investment.
Since there is a lot of money to be made with in this forex currency trading market
online.

Whatever way you decide how to learn to trade in the forex market, don’t give up. There
are lots of resources from group forums, to blogs, to pdf ebooks that will give you the
information you need to be a skilled trader.

Want to get a better grasp on Forex go to Prolificinfotoday.com and find useful trading information

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When it comes to a forex trading strategy you can use to build a good business model from, nothing is more important than keeping things nice and simple. There’s nothing wrong with delving deep into the unknown areas of forex trading, however when it comes to building a successful trading business, keep it simple and try to stick to one method.

Find One Forex Trading Strategy and Stick To It

Probably the most important part of building a successful forex trading business is to find one method of trading and stick to it. When we speak of strategies, we generally speak of trades which can work as a process between any two currencies. So what we tend to look for are pivet points within the market.

Pivot Points

Pivot points are one of the most studied elements of forex trading as well as any form of trade amongst the financial market. Pivot points are normally used by short term traders looking to make a lot of money in a short period of time. This is extremely common with the forex trading circle as the forex market is one of the most volatile markets to trade in.

A lot of people tend to be put off by its volatility, however in most cases this can in fact work as a benefit, especially those who know how to detect pivot points easily.

Pivot points are found by calculating the average of the currency price’s high, low and closing prices. Pivot points are flexible in that they can be derived between any length in time, hourly, daily weekly etc, however most successful traders tend to stick to short pivots rather than long one’s to again take advantage of any volatility present in the market.

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Many people use just one time frame to trade the forex markets, and if they are profitable then fair enough. However if you want to be a profitable trader, it generally makes sense to use two or more time frames when making trading decisions.

This is because if you’re basing your entries and exits on just one time frame, you’re oblivious to the wider trend and you therefore risk trading against this longer term trend, which is never a good idea. For example, if the 4 hour chart and the 1 hour chart of a particular currency pair are in a strong bullish trend, then it’s probably not a good idea to be looking for possible shorts on the 15 minute chart.

You should always look to trade in the direction of the trend and viewing charts from longer time frames helps to show this longer term trend. This is something I picked up from reading one of Dr Alexander Elder’s books a few years ago, and this piece of information was invaluable to me as it helped shape my current trading strategy.

I now trade the 4 hour charts using an EMA crossover system but only ever trade in the direction of the overall trend from the daily chart. So if the daily trend is bullish then I will look for EMA crossovers upwards and vice versa. This has stood me in good stead and ensured I’ve always made some decent profits from forex trading.

It’s important to remember that if you only ever trade in the direction of the longer term trade, then you’re stacking the odds in your favour, and your entry points are not necessarily so crucial. Many times you will be saved by the overall trend going in your favour.

For example, if you like to trade the 5 minute charts, then you could use the 15 minute and 1 hour charts as a basis for your trading decisions. So if the pair was trending downwards on the 1 hour and 15 minute charts, for instance, then a good strategy would be to look to go short when the pair is overbought on the 5 minute chart because the odds are in your favour that a continued downwards move will take place.

Similarly you could trade the 1 minute charts and use the 5 and 15 minute charts for guidance, or if you are a long term trader, you could trade off the daily charts and use the weekly and monthly charts for guidance.

Whichever system you use, I personally think you’re always giving yourself every chance possible to become a profitable forex trader if you use multiple time frames to help you trade in the overall direction of the longer term trend.

Click here to read James Woolley’s review of ZuluTrade and to learn all the latest tips and strategies related to forex currency trading.

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There are two camps that most Forex traders tend to belong to: Fundamental analysis and technical analysis. What Forex trading strategy you choose largely depends on where you line up in the two camps. For currency traders that rely on the fundamentals to make their plays, there are a series of good and reliable strategies that can be employed. However, I want to concentrate on the other camp. We will look at a winning Forex strategy that is based in solid technical analysis.

First, start off your day by checking out the Relative Strength Indicator (RSI) on each currency. What you are looking to determine is whether or not a currency is oversold. If it is then we have our ears up and look to possibly confirm this as a potential move in the long direction. However, if it is overbought then we are looking to possibly short the currency but this is just preliminary. Remember, just because a currency is oversold or overbought does not mean very much, it simply tells us there is potential to move in a certain direction.

Second, we look at the 200 day moving average as this is also a helpful indicator as to whether a currency is about to move in a certain direction. This is my favorite technical indicator because it is what the “Big Money” moves on so often.

Lastly, we look to see what our trading signals are telling us. If it all lines up then you have yourself a winning Forex strategy. If you do not currently have a good, reliable Forex software program that provides reliable trading signals then I have provided a review of the three leading software programs at the bottom of the page, I am sure it will help.

Good trading ahead.

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I began my first forex trade three years ago, at this time, information sources of trading available were very limited, I could not get the the suitable information on online forex course for free trading to allow me to begin a live forex trading successfully, all my sources of information and trading strategies were obtained from forex forums posts and the trial and errors of former forex traders and their trading strategies, which were evolved to suit their needs and their potential financial capabilities.

I had a long time with a forex demo account for several months, I did not dare to enter into a real live forex trading, because my capital was very limited, and there were no free online forex courses which I can get to help me in my trading. But one day I landed on a website which sell a forex training course package, this website claimed that the its strategy results in a profit rate around 80% in all cases, I read more on this course enough to to be motivated to buy it, especially its price was very suitable to me ($99 total for the 5 ebooks). Once I got the ebooks, I began reading every single word in them with voracity, and – for honesty – it was the first time for me to read in details about forex money management and risk management and their vital rule in forex trading, but this was all I had gotten from this course, nothing otherwise.

I tried to contact the author of the forex course to query him about several points regarding his training program, and guess what? I did not get any response from him, I contacted him up to 10 times, however I did not hear one word.

This was the lesson #1 I learned: It is not about the training program, it’s about the AUTHOR of this program, is he alive man? is he a real forex trader OR: he’s just a teacher of theoretical lectures in forex trading!

The lesson #2 I learnt was: What is degree of the technical support provided after purchasing his forex training program? shall I find him when I need him?

After a whole year, I would have left almost forex trading and preoccupied by other businesses, but one day while surfing on the internet, I found by accident the Forex Mentor website, and once landed on the main page, at the first sight I cynically laughed and said to myself: “Another Scam!!”

However, I started reading all the information on his training program and the main idea behind it: Pivot Points. I began once again thinking seriously to return to forex trading, and decided to purchase this program of Peter Bain, but for the first glance, I was disappointed for its high price ($495 for a hard copy on CDs, or $349 of the digital copy). After a short time of deep thinking and trying to decide whether I’ll buy or not, I said to myself, I lost in the forex trading in the past several thousand of dollars, let them be several thousand PLUS $495!!

I read every word on the Forex Mentor Website, I collected every information available about the Author (Peter Bain) and his history in the forex and stocks market, I read many indpendent reviews about this course. Despite of that, The most important factores encouraged me to buy forex mentor course were as the follows:

The Concept of Forex Mentor Trading System

1- The Program Author: Peter Bain, I read a lot more about him on the internet and on his long experience in the area of trading in stocks, currencies, and the large number of successful traders who trained by him who achieved good trading results with the favor of his forex trading advises.

Peater Bain has developed a very successful trading strategy based on Pivot Points, which depends primarily on the concept of support and resistance: When you see price violate a pivot point convincingly, there are automated trading systems out there that automatically kick in and buy or sell, depending upon where price is going. So, in essence, these two factors alone account for why other indicators are left breathing dust. Bar patterns, MACD divergence, different time frame readings, and trendlines are definite precursors to price changing direction but, in the final analysis, where price is in relation to its nearest pivot point, is the big clue. Tie all these indications together, and you are sure to out-fox price’s next move.

2- This coach always exists whenever you need him, he provides One-on-one feedback, he believes that every forex trader trainee has different needs and requires special attention, this feature adds high value to his forex training program.

3- Members only forum, where members can talk just about everything related to the Forex market and the Forex training program. This is the most important characteristic of this program, getting in touch with other forex traders add to your learning experiences.

4- Free membership for 6 months ($ 199 value) membership alone equal times the value of this course, after the period of six months, you will be deducting $100 for renewal, through this membership you will receive on a daily basis the following material:

• Daily Video Questions and Answers – That’s right! I will personally answer your email trading questions via live streaming video. You probably think we’ve gone off the deep end! But again, we are fully committed to your success!

• Daily Trading Examples and Reviews – Success by repetition! Everyday, I will illustrate successful forex trading techniques using the most recent trading markets. These videos streamed to your PC put you right in front of the action! No more reading static charts and text. You can watch these videos any time for as many times as you like.

• Daily Pivot Data for the 6 Major Pairs – We calculate the daily pivots for all the major currency pairs & make them available to you. So you don’t have to do the work!

• Forex Online Pivot Calculator – Fine-tune your forex trading by calculating your own pivot points. Trade other markets using these same pivot point principles.

• Meet Local forex traders in your area through one of our dozens of local user groups all over the world.

• Member Discussion Forum – Discuss forex trading strategies and tips with thousands of other like-minded traders from around the world in our member discussion forex forum.

Fore more Details on the Forex Mentor Course Components: http://www.4x-course.com

Author: Hatem Serag – For more Tips and Ideas about the Best methods to start trading Forex Successfully please visit my websites: http://www.eforexcourse.com – for more details on the top rated forex training courses please visit: http://www.eforexcourse.com/forexmentorcourse.php

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There have been a lot of articles written about the high probability of winning trades when trading with the trend. Everyone has heard the phrase “the trend is your friend” but does any one know the definition of a trending market? A trending market can be defined as several bars in the same direction. It can further defined as a relationship of where the price is in proximity to the 56 Exponential Moving Average (or any moving average that a trader is comfortable with). Above the 56 EMA, a trader is looking for long trade set-ups, below the 56 EMA; a trader is looking for short set-ups. By not violating this one crucial rule, a trader can keep the winning trade ratio very high. The basic premise behind this concept is that if the market is trending in a particular direction and the trader uses a trading strategy to get into that trend, the results of the trader improves dramatically.

85 to 90% Winning Trade Ratio

There are systems out there that claim to have an 85 – 90% winning trade ratio. How do they do that? The ones that I have seen have 2 common traits. The first and probably the most important rule is that they buy into the trend-trading concept. Trading with the trend really does improve trading results. The second trait that most systems that have high winning percentages are that they keep their profit objectives reasonable. The hardest thing for a trader to do is to go for large profits. The market gives a trader those types of returns but they are usually few and far between. Even with the market volatility that we have been seeing, going for the large “out of the park” type of returns will reduce the winning trade ratio. The system that typically looks for “single base hits” will end up doing better in the long run.

System Simplicity

The complexity of the system will also reduce the winning trade ratio. The main reason why most systems that are complex are developed is so that the person who developed the system can charge you a lot of money. Most of those systems or trading plans require the trader to make a large number of discretionary decisions. Every time one of those decisions are made, there is the possibility that a mistake can happen. If, on the other hand, a trader that uses a system that has very few decision points, the better the winning ratio will be.

If you are looking to improve your trading results, look for a trading system or plan that utilizes the “kiss” (keep it simple, stupid) principle and one that uses the “trend as your friend” mind set. Finally, make sure that the profit objectives outlined in the plan are reasonable. By keeping these simple concepts in the forefront of their mind when selecting a trading system, most traders will greatly improve their results.

So you think that this type of system is not available? Take a look at http://www.futuresinvestingmadeeasy.com. What do you have to lose!! The strategies and the daily market wrap-up, including the charts of that days trades set-ups, are totally FREE! Take a look…

This is not a solicitation to buy or sell.

There is a risk in any investment!

Ron Lewis operates http://www.futuresinvestingmadeeasy.com an educational blog about investing and trading. For more trading tips and investment strategies, or to contact the author, visit his blog at http://www.futuresinvestingmadeeasy.com To get the FREE report “HOW TO MAKE $12,000 A MONTH ON A $5,000 ACCOUNT, click on to the above link and fill out the FREE GIFT area in the upper right hand corner of the blog.

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Is trading Forex profitably is a learnable skill or is it something that depends on personal traits? I hear some people who failed in trading complain about anything but their ability to change their psychological outlook on trading. I do believe that successful trading is a learnable skill as long as one has a strong desire to succeed.

First of all let’s find out why people fail in trading Forex as in any business they want to start. Most of us come to a decision to start our own business be it a trading or something else because of the freedom it promises. How often we hear “fire you boss”, “become your own boss”, etc. But what we don’t realize is that we come to these endeavors with the job environment mindset. We cannot be accountable to ourselves unless someone else will hold us accountable. In my opinion that is a big problem for many of us.

So once we identify the problem the solution is simple. Find a partner who you can be accountable to. If you can find a mentor successfully trading currencies himself then it’s the best option. But it can be your friend or relative how doesn’t even know anything about trading. The only requirement for such a person is that he or she must be supportive in your venture. I personally have my wife to hold me accountable in completing my daily tasks that I have planned.

Now these are the steps you can take with your partner to develop your disciplined approach to trading Forex. First pick a trading strategy. Second decide how much time you are going to devote to back testing it on a daily basis. Third make a list of qualities you want to develop or get rid of in your trading. It can be for example “Don’t take a trade if the signal is not clear” or “don’t risk more than 2% of the capital in one single trade”, etc.

At the end of the day or end of the week report to your partner on how well you followed through your own rules. It is not important if you lost a trade or won. What important is how well you were able to stick to your plan. If you managed to accomplish every task that you have preplanned than the day was successful. If not than you have a failure. You should remember that it is not the profit in a single trade will make you successful. What will make you successful in a long run is the habit you develop by following your rules of trading day in and day out without fail. An accountability partner can help you to achieve this goal much more easily then if you were on your own.

Albert Schmidt is a part-time currency trader. After quite a long time of struggle he learned to make consistent profit trading in Forex. Review a trading strategy he successfully uses in his trades.

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Leverage is a major component of forex trading and is one of the main reasons why so many people are drawn to forex trading in the first place. Leverage basically allows you to trade positions far in excess of your initial trading capital which means you can potentially make vast profits from forex trading.

However it should be pointed out that leverage works both ways. Whilst you can earn a lot of money very quickly by making winning trades, you can also lose money very quickly by using leverage. This is not uncommon either. There are lots of forex traders who have blown their account completely just through one single losing position, and all because they over-leveraged themselves.

Let me explain in more detail how leverage actually works when trading forex and why it is potentially so dangerous.

If you visit the website of any forex broker you will usually be presented with appealing offers such as ‘trade forex with 1:200 leverage’ or ‘open an account with us and enjoy 1:400 leverage’. These offers are designed to appeal to forex newbies who are drawn to brokers who offer high leverage rates because it means they can trade large positions whilst only risking a small amount of capital. In these examples 200 and 400 times their trading capital respectively. In other words $1000 can be used to trade a position worth $200,000 or $400,000.

Of course ultimately it’s the forex brokers themselves that benefit from such leverage because they know that the majority of forex traders will end up losing money, and by enabling their traders to overcommit themselves it means they make more profits in the long run. Plus even if they do not overcommit themselves they know that even a small move can result in large losses for highly leveraged traders.

So as a forex trader, you should be wary of signing up to brokers who offer high levels of leverage. It usually ends up benefiting them more than it benefits you. Your major concern should be finding a top quality reputable company that is reliable even during busy periods of the day, offers tight spreads, and is fully licensed and regulated by the relevant authorities. Leverage should not really be an issue at all.

Your aim is to make money so to do this you should use strict money management rules. This means employing a tight stop loss and only risking a very small percentage, ie 2 or 3%, of your trading capital on any one trade. This will mean that any losses you may incur are kept small in relation to your total bankroll which means you can stay in the game and live to fight another day.

The thing to remember is that you can still make substantial profits from forex trading without over-leveraging yourself. High leveraged positions should be reserved for gamblers and we all know that gamblers using end up losing money in the long run.

Click here to read a review of Forex Candlesticks Made Easy and to discover lots of free tips and strategies relating to forex currency trading including the exact 4 hour trading strategy that James Woolley uses to trade the markets.

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Forex price movement is misunderstood by most traders. Prices don’t move in line with the news and they don’t move to some mystical recurring scientific theory either. You can win but understand the key reason prices move or lose…

Here is a simple equation for forex price movement.

Fundamental Supply and Demand inputs + Investor Perception = Price.

Simple enough but most traders fail to see the significance of the above which is:

- The news and facts are un-important its how traders perceive them as a whole that is.

- Humans are emotional so you cannot predict what they will do.

Those traders who think they can trade breaking news are wrong and they don’t understand the markets discount news instantly furthermore, we all have the same facts to see but we all draw different conclusions from them.

How Markets Really Move

As humans are emotional, there is no way of predicting forex prices in advance or some mystical scientific theory they move to which the far out investment crowd love with their Fibonacci, Gann and Elliot Wave based systems.

If you want to trade forex, you need to see it as an odds game and play the odds when there in your favour, run your profits and cut your losses. Sure, human nature means you cannot predict exactly what will happen next – but human nature is constant and we are all governed by greed and fear and this means you get hig odds formations which can be traded for profit.

Keep It Simple and Trade the Odds for Success!

All you need to do is – use a simple odds based forex trading strategy and have good money management and you can win.

Today traders make forex price movement much more complicated than it really is, traders try and apply ever more complex formulas and software to try and crack the code behind forex price movement but it’s all in vain – there isn’t one!

Complex Systems and Maths are NOT the Answer

This is proven by the fact that 50 years ago 95% of traders lost and the same ratio lose today; showing that advances in technology have not helped at all.

This leads to the obvious conclusion that forex trading success is not dependant on being clever, complex or the application of maths and of course this is true – its NOT and the fact we have just given you, clearly shows this.

How to Enjoy Success

Forex trading success is simply based upon a combination of a simple, robust forex trading strategy, with good money management which you can apply with discipline. Forex trading is an odds based market and if you learn to trade the odds, you can make a lot of money and enjoy currency trading success.

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