| Trading forex (foreign exchange) is highly risky. Due | | | | than your investment so make sure you use only a |
| to the leverage available, with very little money down | | | | portion of your cash to invest and keep about 80% |
| you can have big gains, but also big losses. In | | | | of cash to cover the down side. |
| addition, there is financial friction, since you are paying | | | | * If your currency pair goes against you and you |
| fees in the form of the spread. Only highly | | | | don't have enough money to cover the duration, you |
| sophisticated investors should trade forex -- and if | | | | will automatically canceled out of your order. Make |
| you're not sure what you are, then you're probably | | | | sure you don't make this mistake. |
| not highly sophisticated. Whatever you do, don't | | | | * Limit your losses, but don't be too conservative, |
| trade more than you can lose -- because odds are, | | | | lets say that you invested $200 in EUR/USD, and |
| you will lose everything. | | | | today, your total losses are $50, if you limit your |
| * Open a FOREX trading account. You will usually | | | | losses to less than $50, you would have lost money. |
| have the option to trade with free money or real | | | | This is why it is important to use only about 20% of |
| money. Learn to trade with the demo/practice | | | | your funds, since you can set the stop loss to more |
| account before you start using real money. | | | | than your investment which can be $200-$300, |
| * Don't feel discouraged because you performed | | | | however much you are willing to risk. Having enough |
| poorly with the demo account, it is very difficult to | | | | capital to cover the downside will allow you to keep |
| create a realistic situation when you are using demo | | | | you position open and see profits. Please note: Loses |
| money. The way you think and analyze will change | | | | aren't losses unless your position is closed. If your |
| when you start trading with your real money. | | | | position is still open, your losses will only count if you |
| * Learn the basics of Forex trading, keep an eye on | | | | choose to close the order and take the loses. |
| OIL, GOLD, STOCK Market prices, these are some | | | | * It will only be matter of time until you get your |
| of the few factors in currency fluctuation. | | | | money back and start seeing profit. Be patient and |
| * Stick to just one pair. The most commonly traded | | | | don't get too emotional about what happens to the |
| pair is EUR/USD and USD/JPY. If it's good enough for | | | | prices. They are out of your control and the only |
| the banks, it's good enough for you. | | | | thing you can do is to research estimate the direction |
| * Learn money management! This is the most | | | | of the market. |
| important thing you can do, learning what amount | | | | * There are softwares to help you analyze the risks |
| should be used on a specific trade can save you | | | | and losses which will help your trading experience lot |
| from losing your bankroll. | | | | more consistent and profitable. |
| * Try to focus on using only about 20% of your | | | | * Be smart with your money and don't create a |
| total cash. For example, if you decide to invest | | | | casino environment. You can be successful if keep |
| $1000, try to use only $200 to invest in the currency | | | | track of the financial news and control your losses. |
| pair. The prices in Forex are extremely volatile, and | | | | * Look for useful tools and analytical reports online |
| you want to make sure you have enough money to | | | | regarding the economy, etc and use helpful |
| cover the down side. | | | | softwares to control your risks. |
| * Please note, trading currency is different from | | | | * Remember that trading with Forex is highly risky, |
| trading stocks. For example, if you bought $1000 | | | | you may lose your hard earned cash, therefore |
| worth of stocks and if the stock prices become $0, | | | | never use money you can't afford to lose. |
| you will lose your $1000. In Forex, you can lose more | | | | |