The Forex Resource

Are you ready to make millions trading in the Forex market? Well, you might want to hold up for a second.

Statistics show that more than 50% of Forex traders lose money in the foreign currency exchange market. And who do you think loses the most money? Brand-new traders who have no idea what they’re doing.

Forex trading isn’t like going to a casino. Although some people treat it like playing the lottery, it really isn’t a game. Here’s a list of three things every new Forex trader should do.

1. Invest in Your Forex Education

This is the most important pointer on this entire list. If you are serious about succeeding in the Forex market, you need a good education.

There are seminars, workshops, and books you can learn from. Beware of free e-books that you can get online. A large amount of the information is just plain wrong.

You need to learn a bunch of technical stuff like how to use indicators to determine the right time to enter or exit the market, how to get started in the first place, where’s the best place to start, and so on.

It’s best to learn these things from a reliable source, such as a book that’s been written by a professional Forex trader and fact-checked by a reputable publishing company. Or in a class taught by someone whose background you can check and verify.

2. Learn Money Management

Money management is the ability to not lose all of your money in the market. You know how much money you can risk, and you never trade with money you can’t afford to lose.

It’s a good idea to keep your living expenses separate from the money you put into Forex. Also, you should never spend your life savings in the Forex market.

3. Trade with Discipline

Discipline is important. You should have a trading plan that you stick to no matter what. You should also avoid trading based on your emotions.

In poker this is called going “on tilt”. It basically means you make a bunch of bad decisions based on how you feel at the moment. This is a quick way to the poorhouse.

If you can follow these three steps, then you’re off to a good start.

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Forex trading success is not about luck. It’s about doing the right things. And doing the right things is all about having the right kind of qualities. How you behave as a trader determines how well you do in the actual trading.

Successful traders come in many forms yet they do have things in common. There are some qualities which all successful traders have and these have nothing to do with luck. Attain these qualities and you will do well on the Forex market as well.

So, which 5 qualities help to make a successful trader?

1. Knowledge – This is a deep understanding of how the Forex market works, inside and out. It’s knowing the psychology of the markets, understanding financial factors, and always pursuing more strategies and techniques to improve your ability to exploit opportunities in the market to make more money. Realize that successful traders spend money on education and you should do so as well.

2. Following the news – I said following, not trading the news. Successful traders don’t allow the market to pull them into stupid decisions, the take advantage of other people’s mistakes and use them to turn a profit. For that you do need to be aware of what’s going on in the world, you just have to avoid being a slave to news.

3. Discipline – Discipline is something most traders have and it costs them their shirt. Discipline is knowing when to cut your losses, trading by a system and not by your gut, and not allowing the markets to influence your frame of mind, mood, and decisiong making.

4. Working with the right tools  – Tools can help you make more money although they shouldn’t be the only way you trade the Forex market. But tools are important and people are making more and more use of them. You just need to know which tools to use, and be willing to experiment with new ones every so often.

5. Looking at this as a business – Serious traders don’t look on Forex as a hobby or a part time thing. For them it’s a true business and they treat it with the utmost seriousness. You should do the same. This means investing time and money into your business to make it grow all the time.

Become a successful trader with these qualities. It’s in your hands.

by John Drummond

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If there’s one thing that’s holy in the Forex market it’s your stop loss. And the reason why so many people lose their shirts trading Forex is that they commit blasphemy and don’t respect the sanctity of the Stop Loss.

It’s not that people don’t set Stop Losses. Most of them do. But they just do it for no apparent reason because once the tide turns against them on a specific trade they go ahead and change the Stop Loss to allow them to remain in a losing position longer.

For instance, if you go into a buy position you want the price to go up, right? Then you set a SL (which is short for Stop Loss) somewhere below your entry price (no more than 5% less in most short to medium length positions) and then you wait and hope for the best.

What blasphemous traders do is keep looking at the computer screen waiting to see what happens. If the position starts to go against them, they freak out and start “adjusting” their Stop Loss.

Why? They’re afraid of being thrown out of the position and losing some of their money. The believe that as long as their in the position, the tide may change and they’ll eventually profit. What they don’t realize that they’re already losing. It doesn’t matter than they haven’t closed the position yet. Furthermore, they’re going to lose more if the price keeps falling.

You never change your stop loss once you set it up, otherwise it’s pointless to do so in the first place. It’s like having a safety net below you when you jump over a cliff but then lowering it the closer you come to being splattered on the ground. It’s how people lose a lot of money on Forex.

It’s better to cut your losses short and go on seeking a better opportunity than elongating your losses. You may sometimes win with this strategy, but in the long run it’s bad for your bottom line.

Trust me.

The Stop Loss is Holy. Respect it.

by John Drummond

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Every new trading week I try to do a little process which I think you may find valuable: I try to make this week a new beginning, a clean slate which will allow me to trade in a positive and optimal way during the coming week. One of the things which a lot of traders do is carry over their mistakes from the past and this influences their mood and their trading decisions.

To avoid this I want you to try a little positive affirmation tricks with me here. You just need to say a few sentences to yourself and try to believe them as much as possible:

• This week I’m going to make more money than the last one
• This week I’m not going to let my emotions play with my decision making
• This week I’m going to try to spend less time monitoring the markets and more time doing what I truly love
• This week I’m going to educate myself further by reading articles or signing up for a Forex course
• This week I’m going to become a better trader overall
• Starting your trading week this way will help you remain positive about trading even if you had a bad run of luck lately.

To me it helps. I hope it helps you too.

by John Drummond

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On this post I want to return to basics. We’re all looking for intricate (and often super-expensive) ways to make forex earnings that we often miss how much we can make with all the small and ordinary steps we can take. Making big profits on the Forex markets doesn’t have to be complicated. It can be quite simple.

So I want to take a step back and look at what you really need to make more money on the Forex market:

1. The willingness to accept losses – Ever hear of a boxer who didn’t get pounded once in a while? You learn the ropes the hard way or not at all. It takes time, it takes effort, and it does cost you some money in losses. As long as you’re new at the game, play for small lots. This is tuition. Later, you’ll make it back and then some.

2. Sign up for a broker already – For some reason, this decision is one of the hardest for many traders. Don’t waste too long on this one. You can easily switch brokers any time you want. Here’s one you can start with, or even try to see if it’s better than the one you’re currently using: eToro Forex Platform <== click here

3. Know your interest rates – Whenever I meet a Forex trader who doesn’t know the world’s interest rates, I know I’m meeting a future loser. Interest rates are one of the key fundamentals of Forex pricing. Know them by heart.

4. Learn by yourself and not through forums – Forums are bad bad bad. They’re usually a place for whiners, newbies, and liars. The big guys hardly visit forums unless the own them and they charge you a hefty fee for participating. The best thing to do is to learn through your own experience.

5. Try 3 different tools this year – Why 3? Because you need just one to work for you to make up the price of the 3 and much more at that. If you try just one you may land on a dud. This is an investment in your future.

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