What follows will be a list of those things which must be done. Some must be done before you begin to trade Forex and some must be done after you begin to trade Forex.

Decide Why You Want To Trade Forex – It is important to understand why you want to trade Forex in the first place.  You might say that quite obviously everyone wants to trade Forex in order to make money.  You would not be wrong in that statement, but different people will have different reasons in addition to making money.  Some of these reasons may include quitting your day job and trading Forex full time or earning a good living while traveling the world.

All the above are valid reasons as long as they are kept in perspective.  For instance, it would be unrealistic to expect to earn a full-time living trading Forex after your first week of trading.

Have Realistic Expectations – This is one of the most important things that you can do in order to trade Forex successfully.  It’s easy for any of us to find products with exaggerated claims of making unbelievable amounts of money after only trading for a short period of time.  Many beginning traders fall into the trap of thinking that these exaggerated, atypical earnings claims are the norm in Forex trading.  As a result of this many beginning traders abandon perfectly good Forex trading strategies because they may compare the returns with unrealistic returns they see elsewhere.

Have realistic expectations of your Forex trading and realize that much like Rome your Forex trading fortune will not be built in one day.

Have Adequate Working Capital – It is very inexpensive to open an account and begin to trade Forex.  There are micro accounts available that can be opened for a minimum of $25.  Forex mini accounts start at around a $400 minimum deposit level.

It makes perfect sense to open up a smaller account when you are honing your ideas and trading strategies. If your plan is to trade for a living then quite obviously starting off with a $25 account isn’t going to cut it.  There are a number of factors you’ll need to consider in order to determine how much is necessary to fund your account.  Here are a few things which must be considered:

Know Your Trading Profit Goals – If you’re planning on generating $100,000 in Forex trading profits and your trading method can generate 100% return annually then you will need $100,000 in initial working capital.

Know Your Maximum Drawdown – Your Forex trading strategy’s maximum drawdown must be factored in.  Your maximum drawdown is the largest peak-to-valley dip in equity that your trading system has historically experienced.  Here’s a quick example:

If your trading strategy has a maximum historical drawdown of $25,000 you should not open a Forex trading account with only $25,000.  The reason for this is that this leaves you absolutely no breathing room.  If and when your $25,000 trading account experiences this level of drawdown you will no longer be able to trade.  This means that you will not be able to take advantage of any trading opportunities after your drawdown level is reached.

Have A Solid Forex Trading Plan  – Every successful business creates a business plan before they open their doors for business. There is no reason that Forex trading should be any different. Planning is important in Forex trading because planning helps you to keep on track and minimize uncertainty. Your trading plan doesn’t have to be complex for you to trade Forex effectively.

Have A Good Forex Trading System/Forex Strategy  – This may seem obvious, but you would be surprised how many people trade Forex on a whim. There may be a few gifted traders who have an uncanny knack for choosing the right market direction. For the rest of us who wish to trade successfully it’s important that we use a good trading system already proven to yield positive results.

Test Your Trading System On A demo Account/Micro Account – Try hard to resist the sometimes overwhelming temptation to jump in and start trading with a large amount of real money. Practice and perfect your skills first using a Forex demo account. Your demo account will be your “acid test”. If you can’t make your demo account grow then it is unlikely that the trading methods you are using will make you money in a real-money account.

It is recommended that you use a demo account to refine each new Forex trading strategy that you use. Remember, in Forex trading practice really does make perfect.

Learn Forex Trading – It may not be the most prudent thing to do to simply buy a Forex robot and let it start to trade for you. In the long run you will be a much more successful trader by learning to trade Forex yourself. Get your Forex education started by reading Forex books, taking a few Forex courses, and practicing what you’ve learned on a Forex demo account.

Trade Only With Risk Capital – Risk capital is also referred to as “money you can afford to lose”. This is money specifically set aside for speculation in the Forex market.  Another way to look at this is that if you were to lose all the money in your Forex account that it will not affect your lifestyle in any way.

Trading with money that you cannot afford to lose is also referred to as trading with “scared money”.  Scared money is money that you are afraid to lose and will agonize over even to the point of having sleepless nights.

If you can not afford to lose money in your Forex trading account you are treading on dangerous ground. Keep in mind that even a great Forex trading strategy may not deliver the exact profit that you need at the exact time that you need it. 

Never Add To A Losing Trade – This is an easy trap to fall into. None of us is thrilled about taking a loss on a trade. We have to realize that losing trades are a natural part of Forex trading and every single one of the most successful Forex traders in the world has had losing trades.

New traders will often add another position to an already losing trade in order to “get a better average price”. They believe that they will at least be able to break even when it goes in their desired direction. Unfortunately what often happens is that the market moves further and further against them. Now what was once a small manageable loss has become a large catastrophic loss.

The moral of the story here is simple. To trade Forex profitably never add to a losing trade.

Control Your Risk – By controlling your risk you control your reward. Never trade a system if you don’t know your risk level. Never enter a trade without setting a definite level to exit the trade if the market moves against you.

Risk control will allow you to “stay in the game” by preserving capital by not allowing for needless, out-of-control losses. Let’s look at an example.

If we have a $5,000 Forex account and decide to risk $2,500 on each trade how many times can we lose? It doesn’t take a rocket scientist to see that the above example was one of poor risk control.

Have Proper Trading Discipline – A lot has been written about Forex trading psychology and trading discipline.  Successful Forex traders know that it is absolutely crucial to trade in a disciplined fashion.  Without trading discipline and the mindset to maintain your discipline all Forex trading tools will be useless to you. Discipline helps you to stay focused and stick to your trading system. Sticking with a good trading system helps you to profit and eventually create wealth. By keeping your emotions in check you will be able to trade forex without guesswork, anxiety, or frustration.

We’ve covered some of the basic things you must do to trade Forex successfully. Each of these are important trading rules which continue to withstand the test of time. Refer to this list from time to time and apply the rules to your own trading. You will find that they will help keep you on the right path to successful Forex trading.

1 - Successful Forex traders realize that trading is more like a marathon than a sprint. They know there is no holy grail of trading and have no interest in “here-today, gone tomorrow” get-rich-quick schemes.

2 - Profitable traders all start with adequate working capital. They realize that their trading account balance will have it’s ups and downs as the market fluctuates. They also realize that you can’t win the trading game without having sufficient capital to stay in the trading game.

3 - They have a plan. The most successful businesses have been built on a solid foundation of planning. Just as the average person would never consider building a house without a plan, no trader should attempt to build a trading business without adequate planning

4 - They have discipline. The best traders all have a trading plan and the discipline to stick to their trading plan and trading system. Without proper trading discipline nothing else really matters. Discipline also ties in closely with adequate working capital. Successful traders do not trade with money they cannot afford to lose. They realize that trading with money you cannot afford to lose places too much pressure on their trading for them to be successful in the long run

5 - They have realistic expectations. Successful Forex trading involves realistic expectations. Unrealistic expectations can paralyze a trader and keep him/her from moving forward and profiting using the perfectly good trading system that they already have. This often happens because beginning traders often find themselves “shopping around” for a better trading system than the on they already have. If they are already using a Forex trading system with 70% winning trades they find themselves looking for a system with 95% winning trades.

6 - They all have a profitable trading system. This is often called a Forex system with a positive mathematical expectation. This simply means that the system is expected to end up with a net profit over time. Creating or buying a profitable trading system is a skill in and of itself. There are a great number of commercially available Forex trading systems and Forex robots to choose from. They are definitely not all created equal. Make certain that you know how to properly evaluate a trading system should you decide to buy one.

7 - They are patient. Much like Rome, no large trading fortune was built in a day. A successful trader must be patient and realize that over time his/her trading system will prevail. Profitable traders also realize that there will be periods when their trading system simply does not trigger a trade. Those with experience realize that this is normal and that they are far better off having their trading system be more selective. They are content with being on the sidelines waiting for only the best market conditions to trigger their Forex trading signals.

You see, Forex trading success will always elude the unprepared. Just as in any business if you fail to plan you plan to fail. What exactly does that mean? It means that guessing and shooting from the hip is not the way to profit in trading. Below are a few questions every would-be Forex trader must ask themselves: 

• Do I have a plan for my trading success?
• Do I know how much trading capital I need?
• Do I have the trading capital I need set aside specifically for trading?
• Do I have a proven trading system to grow my capital?
• Am I mentally prepared to exercise the discipline necessary to place the trades when needed?
• Am I mentally prepared to stand aside and do nothing when needed?
• Am I emotionally prepared to handle the inevitable losses that are a natural part of trading?

These are just a few of the questions you must answer BEFORE you start to trade. If you answer NO to any of these questions do not, I repeat, do not commit any funds to trading. Why? Because being unprepared to trade Forex is a recipe for disaster.

Please keep in mind that contrary to what we constantly see advertised, Forex trading is not for everyone.

“Chance favors the prepared mind.”
–  Louis Pasteur

Leonardo Fibonacci was the originator of a series of numbers that are utilized in the Fibonacci retracement tool. A retracement is achieved by picking two points, usually a high and low point in the price and dividing them by certain fibonacci ratios. The 23.6%, 38.2%, 50%, 61.8% and 100% ratios are used.

If plotted on a financial charts, the ratio lines will be drawn automatically. Areas of support and resistance seem to have a tendency of forming at these ratios. It is vague how or why market prices react to these ratios but history has shown us that they do. As such, fibonacci retracements are always referred to by technical traders before entering a trade.

This instrument is used in all major financial markets ranging from the forex market, stock market and the futures and commodities market. Fibonacci confluence is a strategy that was achieved by some traders looking to make fibonacci retracement more successful. Fibonacci confluence is a method that needs the plotting of two or more fibonacci retracements on the same instrument. Multiple retracements are plotted from the same starting point while they end at different areas of resistance.

Areas which are found to have more than one ratio line are considered areas with strong support or resistance. Traders mark these areas as a reminder during trading.

It is not recommended to use fibonacci retracements on their own. They are used with other forex indicators to enhance decision making. When used with a variety of tools and indicators, fibonacci retracements are often useful.

Read more for a guide on fibonacci retracement in addition to extra universally employed indicators at www.i-forex-trading.com.

The two extra tactics are the aggressive entry and the delayed entry. Each entry tactic is suited to different types of traders and trading situations.

When trying to decide which entry tactic to use, it is best to consider the situation. For example, suppose a trader finds a stock that has already formed several Darvas boxes. An aggressive entry into the stock might be more beneficial and profitable, than a classic entry. The classic Nicolas Darvas entry tactic is to buy as soon as the stock price breaks out of the current Darvas box, and the Modern method is to buy the day after the stock closes above the Darvas box. Both of these methods would cause a trader to lose a portion of the profits in this situation. The alternative Nicolas Darvas entry tactics exist to allow traders to enter into a trend in such a way that the trend yields more profit.

Aggressive entry takes place when a trader buys a stock before it has broken out of its Darvas box. The trader buys in anticipation of the stock breaking out of its box. Buying before the breakout is risky because there is no assurance that the stock will actually break out of its Darvas box. The advantage to buying before the breakout is that the entry price will be closer to the stop-loss order. The trader is making a guess that it will.

Another effect of buying before the breakout is that a trader can possibly capture more profit from the beginning of the trend. However, in today’s volatile markets, a stock is almost as likely to plummet as to rise. Buying before the breakout puts the entry price closer to the stop-loss order. Should the stock plummet, the trader will lose less money.

On the other side of the spectrum, delayed entry is when a trader will not buy on or directly after the breakout, but will wait for the price to come back down. In a trend where a stock is just starting to form Darvas boxes, this tactic can increase the amount of profit. Instead of buying on a high, the trader will buy on a low, most likely one of the lows used to form the next Darvas box. This entry point is closer to the stop-loss order set by the previous valid Darvas box and minimizes any loss should the trend fail.

Looking to find the best deal on Darvas Software? Visit www.nicolasdarvastrading.com today.

If you’re contemplating trading the Forex markets, you need to ensure you know as much as possible before you venture out on your own. It’s true that many people make a lot of money through trading the Forex markets, but if you’re not careful you can lose all of the money you invested, plus a lot more.

Many people will try to break into the Forex market by following trading signals sent to them by other traders, or by investing in guides to teach them simple patterns. The idea is that when certain market conditions appear, you trade as per the instructions you have been given and you should win more often than you lose. But the main problem with these systems is that they normally work for a very limited amount of time, then stop working as quickly as they started. If you’re going to do well in Forex, you need to treat it like a business. And if you want to succeed in a business, you need to learn as much about it as you can. That’s why you need to think about enrolling in good quality Forex Self Learning Programs.

So what do you need to look for when you’re choosing? Well, a good place to start is checking out the sales letter. Does it make ridiculous financial promises, or suggest that you can invest a few bucks and become a millionaire overnight? If it does, avoid at all costs. Forex can make you rich, but it will take work and effort on your part, which means if something looks too good to be true, then it probably is. Also, what does the Forex Self Learning Program actually offer? It should offer you some valuable information, starting with the basics and taking you all the way through to a more advanced level. It should tell you how to work out technical analysis, how to read charts and how to manage your money effectively. If you can find all of this, you’re onto a winner, and have found one of the Forex Self Learning Programs that will actually make you money in the long-term.

A great source for Forex Information is this blog, you can find it at http://forex-education-online.blogspot.com/ – There’s lessons, useful info and some cool hints and tips. But if you’re serious about trading, you need to visit it today!

Below is an example of a simple day trading system trade with a profit target. It is not necessary to know how to accurately predict intraday Forex prices in order to profit. The main reason for this particular trading system’s success has more to do with proper risk control that anything else. Actually that can be said of any successful Forex trading system.

I have been asked more times than I care to answer whether or not I use any automatic Forex trading robots. I nor any of my associates use any of the commercially available Forex robots. I prefer creating my own Forex trading systems using simple methods that can withstand the test of time.

If you are in the market for a Forex trading system I would urge you to read sites like this one to further your Forex education. If you learn Forex trading you will build for yourself a solid foundation to profit in the future.

So how do you cater for this fact that markets keep on changing all the time. By developing a trading system that uses different trading strategy under different market conditions. For that, you will need to develop a diversified trading system consisting of a set of trading systems that can be used as a basis for a specific trade tactics at any given moment.

Such a diversified trading system can be used according to a trader’s free choice and considering the individual situation. Trading systems based on these principles can be complex and adjustable.

Optimizing a trading system to different market conditions is very important. This optimization can provide an effective evaluation of market shifts and trends at any given time. Such a diversified trading system can be optimized for current market condition and the trader’s resources at any given moment.

The only thing necessary is to find the tools for the probability evaluation for the trading system with maximum accuracy and minimum time. The optimal solution could be a diversified trading system based on the natural market features and regularities. A trading system needs to be evaluated by calculating its win ratio over let’s say at least 100 trades.

Developing a mechanical trading system with a set of trading rules that you can apply rigorously in making your trading decisions in any market condition should be your goal. Mechanical trading is good in the sense that it helps you avoid emotions in making your trading decisions. Emotions are your biggest enemy in trading. Fear and greed will always force you to make wrong trading decisions. Have you ever heard about the turtle trading experiment?

So in the end what you need is to develop your own trading system that has been thoroughly tested and its performance parameters measure accurately by you. If you have a good trading system, you can become a highly successful trader. Turtle trading experiment was conducted to demonstrate the fact that it’s not the trader that matters; it’s the trading system that matters.

You must have played different sports in your life. As a young person you must have learned that just by observing good players play their games you could improve your level of playing tennis, golf, badminton, swimming or for that matter any type of game. Just by looking and observing at good players, you can improve your game. What you need to do is learn from successful traders and try to copy their trading systems.

The same principle applies in trading. Have you heard about the Surefire Trading Challenge? Surefire trading challenge is held after every few months. The winner gets a cash prize of $5000. In every tournament thousands of forex traders take part from all over the globe. The most interesting thing is that most of these traders are part time traders and not professional traders. The top traders have an ROI of almost like 2000-3000% in one month. You need to take a look at these 25 forex trading systems that had emerged on the top of more than 5000 traders who had taken part in a recent forex trading championship. The best forex trading system had an ROI of almost 3000% in one month. By observing the trading systems of successful traders you can also develop your own highly successful trading system.

Mr. Ahmad Hassam is a Harvard University Graduate. Discover a Revolutionary Forex Robot Trading System. Read about a Forex Trading System with an ROI of 3000% per month.

Unfortunately those who are new to the Forex market buy into the belief that anyone can trade Forex and make money. Nothing could be further from the truth.

You see Forex trading is risky. In fact all trading carries risk with it, but nobody seems to talk about it much as there is such a thing as risk without reward. By not addressing Forex trading risks much of the Forex information that you read is simply setting you up to fail.

The trade displayed below is one that I am currently in. What you see is my sell entry for the short trade, however, my risk in this trade is clearly defined by the stop loss I currently have in place.

I would not dare place a trade without controlling my risk and you shouldn’t either.

All trading is risky and only those with the discipline to control their risk can ever hope to prevail.

The long-anticipated GBPUSD trading system from EFS is finally about to be released. This swing trading/long-term trading system is the second addition to EFS’s premier Forex system line up.

EFS is still the only Forex signal service available through invitation only.