learn forex first

With a daily turnover estimated at around $1.8 trillion the answer to the question “Does the Forex make money?” is pretty obvious.

The bigger question is: “For whom?”

With the opportunity for anybody and everybody with a computer and an internet connection to participate in the Forex to make money in recent years, thousands of individuals have had some exposure to the challenges of Forex trading.

Is The Forex A Fool’s Game?

According to some estimates, the vast majority, perhaps as high as 95%, lose money.

Is it a fool’s game, just an elusive dream to trade the Forex to make money to try and achieve financial security?

In view of the high failure rate, it is prudent for anyone who is contemplating entering Forex trading to do their homework first. While the majority fail to make consistent profits from the Forex, a minority do, and some of them make huge profits from the Forex.

The Realistic Mindset

What is the key? A realistic mindset when approaching the Forex, a commitment to learn and get a proper education, and then, application of the knowledge learned in a disciplined way backed up by perseverance!

For an individual who has already had experience trading stocks, or futures, the learning curve may only involve a few months when switching to the foreign exchange market.

For the complete novice the learning period will probably run into years, anywhere from 1 to 3 years according to some estimates.

During this time the novice will have to first get acquainted with the workings of the Forex, learning the terminology, and working with a demo account on a trading platform supplied by an online broker.

Months will need to be spent sitting in front of a computer screen studying candlestick charts, getting acquainted with specific patterns, learning to recognize high probability setups. There is no shortcut for this part of the educational process if you want the Forex to make money for you.

The Most Critical Factor

Then comes the most critical part of all: developing the mental discipline and emotional control necessary for safe trading.

The Forex can be a minefield for anyone who is not in control of their emotions. For a person who has a gambling instinct, the Forex will suck their account dry in a very short time. The Forex is not a game of chance.

Successful trades are the product of careful market analysis, an understanding of how the market moves acquired from months and years of experience, and a strict control of equity management.

Even with all that input, the successful trader will still regularly lose trades. As long as there are a greater number of trades that are successful, the Forex will make money for you.

Make An Informed Decision

If all this sounds overwhelming and a little foreboding, you are getting the picture of what is involved once you start down the road as a Forex trader.

On the other hand, this is a job that can be done from home, with as many hours committed to it as you wish to allow, and in the long term, once the skills have been acquired, the Forex can provide a substantial form of income.

Will the Forex make money for you? That is an individual question and will depend on all the variables discussed above. Do your homework, check out educational materials, examine your current workload and circumstances, be honest about your personality style, and then make an informed decision.

To learn how to preserve your mental and emotional resources in addition to your account equity click here:

http://www.vitalstop.com/Forex/Advisor/forex-day-trading-mental-equity.htm

For a free pivot point calculator, Fibonacci calculator and the best free economic calendars click here:

http://www.vitalstop.com/Forex/tools.html

If you are looking for a comprehensive Forex education with mentoring from professionals check this:

http://www.vitalstop.com/Forex/forex-education.html

With a daily turnover estimated at around $1.8 trillion the answer to the question “Does the Forex make money?” is pretty obvious.

The bigger question is: “For whom?”

With the opportunity for anybody and everybody with a computer and an internet connection to participate in the Forex to make money in recent years, thousands of individuals have had some exposure to the challenges of Forex trading.

Is The Forex A Fool’s Game?

According to some estimates, the vast majority, perhaps as high as 95%, lose money.

Is it a fool’s game, just an elusive dream to trade the Forex to make money to try and achieve financial security?

In view of the high failure rate, it is prudent for anyone who is contemplating entering Forex trading to do their homework first. While the majority fail to make consistent profits from the Forex, a minority do, and some of them make huge profits from the Forex.

The Realistic Mindset

What is the key? A realistic mindset when approaching the Forex, a commitment to learn and get a proper education, and then, application of the knowledge learned in a disciplined way backed up by perseverance!

For an individual who has already had experience trading stocks, or futures, the learning curve may only involve a few months when switching to the foreign exchange market.

For the complete novice the learning period will probably run into years, anywhere from 1 to 3 years according to some estimates.

During this time the novice will have to first get acquainted with the workings of the Forex, learning the terminology, and working with a demo account on a trading platform supplied by an online broker.

Months will need to be spent sitting in front of a computer screen studying candlestick charts, getting acquainted with specific patterns, learning to recognize high probability setups. There is no shortcut for this part of the educational process if you want the Forex to make money for you.

The Most Critical Factor

Then comes the most critical part of all: developing the mental discipline and emotional control necessary for safe trading.

The Forex can be a minefield for anyone who is not in control of their emotions. For a person who has a gambling instinct, the Forex will suck their account dry in a very short time. The Forex is not a game of chance.

Successful trades are the product of careful market analysis, an understanding of how the market moves acquired from months and years of experience, and a strict control of equity management.

Even with all that input, the successful trader will still regularly lose trades. As long as there are a greater number of trades that are successful, the Forex will make money for you.

Make An Informed Decision

If all this sounds overwhelming and a little foreboding, you are getting the picture of what is involved once you start down the road as a Forex trader.

On the other hand, this is a job that can be done from home, with as many hours committed to it as you wish to allow, and in the long term, once the skills have been acquired, the Forex can provide a substantial form of income.

Will the Forex make money for you? That is an individual question and will depend on all the variables discussed above. Do your homework, check out educational materials, examine your current workload and circumstances, be honest about your personality style, and then make an informed decision.

To learn how to preserve your mental and emotional resources in addition to your account equity click here:

http://www.vitalstop.com/Forex/Advisor/forex-day-trading-mental-equity.htm

For a free pivot point calculator, Fibonacci calculator and the best free economic calendars click here:

http://www.vitalstop.com/Forex/tools.html

If you are looking for a comprehensive Forex education with mentoring from professionals check this:

http://www.vitalstop.com/Forex/forex-education.html

Back in 1997 major financial slump rocked number of countries in Asia, an event that became known as “Asian currency crisis”. Effected countries included Taiwan, Thailand South Korea and others. One of the memorable comments of the time came from one of leading Thai politicians. He blamed this whole mess on speculators, with George Soros being the main culprit. The remarks went so far as to public statement of “not being able to guarantee his safety if he visited Thailand”. Quite ominous.

The fallout in South Korea was brutal. The US Dollar has about doubled in value against the Won, with USD-KRW moving from just above 800 in early 1997, to 1600 by the year’s end. Local stock market suffered similar fate, as did all areas of economy. Perhaps most telling was an enormous spike in unemployment, as the jobless rate soared to almost double digits, with about 9 million people out of work.

This author observed the aftermath first hand, during one of his business trips to South Korea at that time. Collapse of once high flying conglomerate Daewoo under burden of debt. The sight of many construction projects suspended or stopped all over Seoul and Pusan. Daily failure of scores of small business. It was good time to visit South Korea, due to low prices, but very difficult period for residents.

The country has rebounded nicely since then and became one of Asia’s most dynamic economies. KRW strengthen considerably reaching level 900 against USD in 2007. The stock market has recorded double digit gains in four of the last five years, gaining 32% in last year alone. Korean companies like Samsung Electronics Co, and Hyundai Motors Co, have established themselves as some of the world’s leading corporations.

Things have changed in 2008. Challenges like high oil prices, inflation, external debt and account deficit have shaken investors confidence. While many countries have seen outflow of funds into the dollar, this process became especially painful in South Korea. The Won has become the Asia’s worst performing currency, loosing 20% to date. Stock market was no better, falling 25%, with farther sell off of equities expected.

These developments created widely spread comparisons to situation from 1997 and were quick to be picked by the press. International Monetary Fund disagrees with this assessment and expressed confidence by saying that South Korea is a mature and resilient economy with country’s fundamentals much stronger than a decade ago. Korean financial authorities, however, felt obligated to act by intervention on Wons behalf in the open market. This seemed to stop the bleeding for now.

What can be expected next? In all reality, 1997 type sell off is extremely unlikely. As South Korean economy is cooling down together with the rest of the world, Seoul might not be able to stop bleeding of the stock market but there is one thing they can do- keep intervening on behalf of its currency. Unlike before, there are huge foreign reserves, about 250 billion dollars worth of, and they can be used to support Won.

Very likely scenario, as of this writing, is continued fall of Korean equities, in tune with broader stock declines. The Won should also keep dropping, but in much more measured and steady pace. Central Bank has not mentioned what the comfortable level for USD-KRW is, but as we noticed over last few years, major trends are very powerful and can go through any “line in the sand’ drawn by anybody.

Current rate is around 1150. Even with expected interventions, Won can easily weaken to 1300 and maybe 1400, but far short of the previous low of 1600. Also, one shouldn’t look for a fast move, but rather steady depreciation, lasting a year or two. This is not a situation for active traders, but for those who prefer longer term positions current development might present good opportunity for farther selling of KRW.

Mike P. Kulej is a Chief Forex Strategist for Spectrum Forex LLC. He specializes in mechanical trading systems as explained on http://www.spectrumforex.com . Spectrum Forex LLC offers numerous services to individual traders. He also publishes trading blog http://www.fxmadness.com. With questions and comments e-mail him at kulej@spectrumforex.com

If anyone tells you that trading forex is easy - run a mile. Its hard work, it requires emotional and physical discipline and importantly requires flexibility of both thought and action.

I started forex trading straight after university in the early 80’s when it was a ‘more primitive’ market - by that I mean we didn’t have all the sophisticated signal software available to todays dealers but what we did have to do was learn the ‘basics’. This involved watching price movements on Reuters and Knight Ridder and doing our own charts. This gave us a greater ‘feel’ for the market which was invaluable for creating a solid foundation for profitable trading.

What I am basically saying is that you must look at trading forex as either a business or a profession and that you need to do some learning and training.

You need to learn first and then act!

Control Your emotions First!

However there is a concept that you must grasp first - all successful traders know this instinctively - you must control your ‘emotions’ and ‘hone’ your instinct.

Let me explain the above concept. Research shows that most purchases (up to 80%)are made on impulse and then the purchaser ‘justifies’ the purchase. You can’t do this on the forex market - it’s the reverse YOU have to ‘justify’ the purchase/sale first. Therefore logic, reasoning and action are the first determinants of a successful trading outcome i.e. profit.

Never confuse ‘instinct’ with emotion and don’t confuse instinct with gut feel. Instinct in the forex sense is developed from experience, you get to understand subconsciously why you made profits and when faced with similar situations you take the same action instinctively. Trading on ‘gut feel’ is more akin to ‘gambling’ especially with inexperienced traders. I prefer to think that many traders refer to ‘instinct’ as gut feel. The reason I believe this is through experience. I have rarely seen an inexperienced trader make money from day 1 on gut feel - it’s as I said a learning process.

Practice Makes Perfect - Open a Practice Trading Account!

If you decide to enter into the forex market you need to practice ‘real life’ trading as much as possible.

I can certainly vouch for the fact that trading on personal account adds a completely different set of challenges than trading interbank - Why? Because it’s your own money - you are completely accountable for your own decisions and every action or non-action has a direct bearing on your wealth.

I would strongly recommend using demo software that allows you to practice trade but I would go one step further I would actually put the money (hopefully you have it) aside as though you were really trading and measure your performance ‘under pressure’. This will simulate real trading more accurately.

You need to take action!

It’s like doing the lottery - you can’t win if you don’t do it. You need to learn how to trade forex or you wont make profits!

To find out more how you can become a profitable trader on a consistent basis sign up to my Free Weekly Newsletter. Here you will learn valuable tips to help you make money. Join Forex4Traders.com here to receive all the benefits.

Peter Burke MBA has been writing Journals and Articles for academic publications for over 7 years and is Managing Director of a Consulting Company in the United Kingdom.