So you want forex trading advice that you can use to make money in the currency markets? You want to learn something simple and easy to follow. Something that will take you from a beginning trader to a profitable, successful trader immediately. You are looking to know everything just yet. Just enough so that you can start making a little extra income with forex without losing money in the process.
Unfortunately, there’s no forex trading advice or tips that will guarantee that you will be successful. I don’t want to discourage you from trading because forex trading can be very profitable and a whole lot of fun, but you must understand that making money in the foreign exchange will take work. Just like any other investment model, there are risks involved with forex trading. But having a little bit of knowledge can help you minimize those risks and hopefully prevent you from losing money.
So let me pass along the trading advice that turned me into a profitable trader – simply find a proven system and stick to it. Here’s why.
Forex trading is very subjective. How do I know this? Because for every buyer, there is a seller. When you buy a currency, there is somebody on the other side who sold you the currency. So what does this mean? You think the price is going up, and somebody else thinks the price is going down. Every time you make a trade, somebody else thinks you are absolutely, 100% wrong.
This subjectivity means that there is no correct way to look at the forex. Ten people can look at the exact same chart, and you will get 10 different opinions as to where the market is heading next. Your system might say the price is going up while another person’s system says the price is going down. Sometimes you will be right, and sometimes the other one will be right.
The problem most traders have is that they tend to switch from trading system to trading system. They lose a few trades, so they blame their system and try to find another “profitable” one. What they don’t realize is that they have just started their learning process all over again. This is why sticking to one trading system is a good piece of forex trading advice.
A trading system is much like a baseball batter’s swing. There are all kinds of swings. Every one of them has strengths, and every one has weaknesses. The key is to maximize the strengths and minimize the weaknesses. But one thing is for sure – if the batter changed his swing every week or even every month, he would never, ever be a consistent hitter.
The same thing applies to forex systems – each has its strengths and weaknesses. You must stick with a system long enough to master it. The strengths and weaknesses will teach you when to trade and when not to trade. This confidence, in turn, will make you a very profitable forex trader.
Don’t do what most traders do by jumping from system to system. Instead, take to heart this one important piece of forex trading advice that I am giving you: find a system that works, learn it inside and out, and use it for at least six to twelve months before developing an opinion on it.