Anyone who tells you how fast and easy it is to make money trading forex is lying. The truth of the matter is trading forex is a complicated thing that requires in-depth understanding of the market forces and dynamics, as well as resources such as time and capital, and emotional readiness. Those who claim to have enjoyed big successes are those that choose to trade with a strategy, rather than put their money where their instincts or the current hype tells them to.
It is also not accurate to say that one can consistently win in forex trading. As with any other venture, you win some and you lose some when you trade currencies. This is so primarily because the currency market is a very volatile market, and prices are subject to change at the slightest influence of market forces. Having said this, the only safe conclusion when it comes to forex trading is that the trader that adopts a sound currency trading strategy ends up winning more than the rest who don't.
A currency trading strategy has to take into account the timing of the trade as a primary consideration. Mastering the timing for selling out or buying particular currencies increases your chances of making profit. The right timing, when coupled with a good market sense, often results in windfalls. For example, you might have been correct about a looming market movement, but that won't matter if you put in your money too early or too late.
On a bigger perspective, you also need to decide early on what time frame you are eying, that is, whether you're in it for the day trade or the longer term, as part of your currency trading strategy. Deciding on your time frame will help you put your series of transactions in perspective, so you have an idea of whether you can still risk some more or you should bail out.
Thursday, July 16, 2009
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