My Forex Experience

The forex or currency trading market is the largest and fastest growing market on the planet. In April 2010 the forex market was estimated to have a daily turnover of 3.98 billion dollars, however a report released last month (July 2011) by Dow Jones Newswire and reported here by the Wall Street Journal estimates daily forex trading volume to have grown to 4.71 billion dollars. All of this trading in currencies is being carried out by central banks, commercial banks, hedge funds, institutional investors and private investors and speculators like you and me. The forex marketplace is no different though from any other marketplace. It is a place where goods are bought and sold, in this case the goods being the currencies of various countries. Traders in forex are simply buying and selling currencies. Maybe they sell U.S. dollars to buy Yen or buy Euro with Australian dollars, but in the end it is simply trading one countries currency for another. And there is no need to actually physically hold the currencies so you can work with whatever your home currency is. For example, a U.S. based forex trader could open their forex account with U.S. dollars and then proceed to buy Euro to sell British Pounds. In addition to the aforementioned huge trading base and liquidity, one of the chief advantages of trading currencies is the large leverage you are able to use with forex contracts. Leverage is the ratio of your investment to the actual value of the  [ Read More ]

Getting started in forex trading is a decision that should never be taken lightly. As you’ll see from the list of “rules” below and by hopefully following along with my journey, the decision to trade forex did not come lightly to me either. While there is an opportunity to make great profits, there is also an opportunity to have great losses; possibly as much as you’ve deposited (called “blowing your account”). In an effort to avoid blowing my account there will be several rules I will be adhering to throughout this journey. This is a business and will be treated as such. All trading decisions will be based on common sense and research and will not be made on a hunch or gut feeling. Test all new ideas. By this I mean each new trading methodology will be tested for a minimum of 3 months on a demo account to determine if I can be profitable using it. The initial focus of my trading will be Pinocchio bars as outlined by Martin Pring, once I am comfortable trading that set-up I will test others. To keep things simple I will be trading only daily and weekly time frames. No day trading or scalping here. Never risk more than 3% of my account on a single trade. Treat this as a business. Maximize profits. Never let a winner turn into a loser. Those are the rules to start. I know it’s not many, but I believe it’s enough to keep my  [ Read More ]