Wednesday, September 12, 2007

Increase Your Chances Of Success In The Forex Market

The learning curve in the forex market is a big one and most traders already lost there first account before they ever get passed this point.

Almost all new forex traders believe they must predict turning points in the forex market in order to make money. Not only is this totally wrong it is also very hard to do.

I always recommend a new trader to follow the herd, trade with the trend. The trend is your best friend in the forex market and you should always be with him, never against him!

When the market is going up you buy.

When the market is going down you sell.

Simple as that, you may want to pick a couple of technical indicators to help you in your trading decisions. I say a couple because I personally believe that any more than 2 and you are just making it harder to define you entry.

For example you may want to use the 50% fib level along with round numbers. These are great tools to use as this is what the large institutions are using.

Cut your losses short and ride you winners as long as you can. Even try adding to then along the way.

Start trying to risk less than half of what you are trying to gain, this ensures that in the long run you have a good chance of success. I always try and shoot for three times what I have risked as this means I only have to be correct 25% of the time to break even.

One of the most important things I can tell you to help you with your trading is protect you account. Remember it is money, hard earned money in your trading account, don't waste it on silly trades. Only plan and take the absolute best trade set ups.

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