Trading money in the global markets can be great way to make more of it, it can also be a lesson in how to lose money quickly. Making money in the forex market is not an easy task by any means. However, given a bit of education and knowledge of the market, it can become quite easy to profit in the forex market. More than $1 trillion is traded every day on the foreign currency exchange (Forex), and yet no centralized headquarters or formal regulatory body exists for this form of trade. Most traders end up learning that it’s the simply systems that create the wealth.
Foreign currency exchange is regulated through a patchwork of international agreements between countries, most of which have some type of regulatory agency that controls what goes on within their respective borders. Thus, the foreign currency exchange actually is a worldwide network of traders who are connected by telephone and computer screens.
Over analyzing and over thinking can sometimes affect your trading methods and strategy.
Sure, experts can help you in explaining the working of foreign exchange markets and how the language of the Forex and its risks are unique, but you need a lot more training before you even consider entering this extremely risky trading arena.
The trading method I am going to explain here is probably going to upset you a little and will most likely go against everything you have ever been taught about forex.
I don’t trade with a stop-loss period. How is this so? How can I make money without using a stop-loss? I tend to believe that the big players in the forex market like to drive this market in certain directions to take out other traders stop-loss positions.
I only risk one tenth of my account balance per trade. For example, I only trade $1 lots on a $10,000 account. What this enables me to do is use no stop-loss. If the market moves 200 points no problem. By the time the market moves 200 points, I’ve already made 100 other trades in profit all for 3 to 6 pips each. If the market continues to get away from me, I continue trading each day gaining which eventually compensates for the few losers and eventually overrides them. When the market comes back in my favor, those losing trades are making profit every step of the way.
If you have ever traveled outside the United States, you have probably traded in a foreign currency. Every time you travel outside your home country, you have to exchange your country’s currency for the currency used in the country you are visiting. If you are a US citizen shopping in England and you see a sweater that you want for 100 pounds (the pound is the name of the basic unit of currency in Great Britain), you would need to know the exchange rate. And that’s the way foreign currency exchange is used by the average shopper, but foreign currency traders trade much larger sums of money thousands of times a day.