Anyone interested in making a pile of money from forex should keep in mind the rule of thumb that you should learn how to do it yourself rather than relying exclusively on someone else’s direction. Maintaining your independence will allow you to pick the best and leave the worst of what you learn from others. On the other hand, becoming too dependent upon someone else’s advice will not allow you to do so.
While this rule applies to all forms of investment, it may be particularly important to follow when trading foreign currencies. Forex is the largest market in the world with the equivalent of over 4 trillion U.S. dollars being traded each day. This is far larger than the value of shares traded on the New York Stock Exchange. It is actually larger than the combined value of trades made from all the equity exchanges around the world each day.
So the question becomes, how does one get as large a piece of that 4 trillion dollars as possible? Obviously you need to build your own profitable trading system. There are many such systems for sale but ideally you will make your own out of the best that you can learn from others.
Your system should be as simple as you can possibly make it. Focus on long-term trends, a weekly basis is best, and then look at the daily charts in order to time your entry properly. Another important tip is to use a system which does not require too much of your time. Be realistic about the amount of time you’ll be able to devote on a regular basis to analyzing the Forex market.
If you are debating whether to get involved in currency speculating consider this, we are all already playing the game. If we don’t trade currency we are simply betting that the currency in which we hold our cash in hand, or the cash in our bank accounts, etc will appreciate, or at least not depreciate. Actively trading is just acknowledging that from time to time another nation’s money may be a wiser one to use than our own.
If you do decide to get actively involved, do your homework, things are not always as they may seem. For example, if some economic bad news about a country is widely anticipated, the market may take that into account long before the news is confirmed. By that time the news may have just the opposite effect as traders had already more than compensated for the bad news and the price of the currency may move up as people buy it expecting its economy to rebound.