Making money from forex is a dream for many who’d like to earn a living working at home. Basically you decide whether one currency is going to rise or fall against another and make money if you’re right. Trouble is, if you're not trading with all the odds in your favour your money is going to end up in the hands of those who've already got too much, as so often happens. So after trawling the internet reading about all the magic courses/systems/methods which - and I'm quoting directly from a Google web search in front of me - offer '$100,000 a month guaranteed', '£500 in ten minutes', '£2,299.71 - £30,000 a month 100% fully guaranteed and proven'...I could go on, but you get the idea...how on earth do you pick a system which fits
your needs?
Now for all I know each of those systems I've just mentioned may be exactly what you're looking for to begin your new career which will culminate in owning a private island and your very own Learjet. But before purchasing any trading system – no matter whether it’s forex, options, stocks or geegees – there must be four essential elements present in order to succeed.
1:- Simplicity
If you know anything about financial trading then you'll have heard of fundamental and technical analysis, moving averages, crossovers, bollinger bands, time frames, fibonacci numbers and all the other indicators which promise to make you rich if only you can master their secrets. Generally the ones who get rich are the system sellers. What you need from a system is a set of simple-to-read signals to show when to enter and exit a trade. Most important is that anyone must be able to read the signal in the same way so that it's no longer left to individual discretion; and the fewer indicators used the better. The fact that the trade might go against you is neither here nor there - provided the method you're using can provide simple and clear triggers into and out of a trade, it suggests a strong system.
2:- Reliability
Some systems rely on making money from forex by using decidedly risky tactics - for example trading around news events which are known to trigger wild volatility in particular currency pairs. You can make a lot of money in a short time from these. The corollary of course is that you can just as quickly lose. The best way to trade is to use a system which will keep plodding along, quietly adding to your trading bank over time. Rather than aiming for hundreds of pips a day - very tempting! - it's far more productive to target, say, 5% a day, and achieve that with small risk and steady gains.
Every system known to man will lose at some time. Find a system which makes small and steady profits and you will be rich. Even if it will take a lot of time, effort, patience, perseverance...yeah, I don't have them either...
3:- Consistency
One of the problems when you're starting out in forex trading and discover a number of ways which seem to work for you, at least occasionally, is sticking with one decent system. It's not only the system which must deliver on a regular basis but also you yourself. If you are one of those who flit from one task to another you'll never get anything done properly. It's worth finding a system with which you are comfortable and sticking with it, using sound money management rules to build up a steady profit. Money management means using common sense when you enter trades: risking a small proportion of your bank, being prepared to lock in profits while allowing trades to run. If you make 5% a day, you'll double your bank within a month: double your bank every month and...well, I'll leave you to do the maths.
4:- Risk Control
The quoted ads above come from a Google page. All over the internet you’ll find boasts about the thousands you can make, the pips won this month and so forth. Of course you can make these kinds of figures. I could put $10 on sterling to rise against the dollar this minute, and if it rises 100 pips in an hour I’ll be $1000 better off – very nice! But what if it goes the other way? How much will I lose? The first question before any other must be: how much am I willing to lose on this particular trade? With a million dollars in my bank I might well behave differently than someone who’s scraped together $50 (and if I had a million I doubt I'd be looking for 5% - a daily income of 1% of a million would do me!).
There are many systems which can propel an already large bank into the stratosphere - or else require an outlay of a thousand dollars and more up front before you even start. I'm sure some people have that kind of money lying around but I'm not one of them, and nor are pretty much everyone else I know. And we're by no means badly off. What you need to start off with in forex - or in any kind of venture, come to that - is a way to start small. You need to take a starting bank of $50-$100 and by targeting small, regular gains build up your trading capital reliably and consistently till you can take from it the comfortable living you’ve always dreamed of.
Learn to trade forex with all the odds in your favour – and get 10% off! There's a pile of great FREE information available at
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