7 Key Factors To Making REAL Money With Forex
Do NOT Use Automated Forex Software
The creation of automated software sounded like a great idea but in the real world it just doesn’t work very well. To create it, it is “back tested” using historical data which does not really test it in the current market which is constantly changing. It can not respond to unexpected turns the market may take in response to critical news events or to normal stochastic drift.
Do NOT Use Robot Generated Forex Signals
Some automated forex signals are now delivered through an online web interface rather than downloading software to your personal computer. However, these are STILL automated signals and don’t work well for the reasons given above.
Don’t Trade In a Demo Account For Too Long
It seems like a lot of online marketers are suggesting that you can “test” strategies with a demo account. I completely disagree with this strategy. First, a demo account was designed so that a trader could get used to a particular platform so they wouldn’t have any surprises with the system during real trading. Demo accounts were NOT designed to test strategies. In fact, they don’t work very well for this because the pricing is often off enough that you really aren’t testing your strategy under real conditions. Perhaps more importantly, you are trading without having to control the emotions that so often come into play with forex – that of fear and greed. You aren’t trading with real money and you know that so your decisions will be different. If you trade in a demo account for too long, you may develop some really bad habits that will cost you dearly when you start using real money.
Limit the Amount You Put Into Each Trade
Limiting the amount you put into each trade is a great way to lower risk – and the very best forex traders all focus as a top priority on lowering risk. If you are starting with an initial investment of $5000 or more, I suggest limiting each trade to no more than 1% of your total investment. If you are starting with less, I’d still suggest setting a strict limit for yourself but you may want to bump that up to 2% – 5%.
Diversify But Use Common Sense To Avoid Increasing Risk
Another way to increase profits and at the same time lower risk is to diversify. Instead of trading just the main currency pairs, try mixing in others as well. Just be smart about it and avoid pairs involving countries where there is a major crisis going on. For “safe” example, you might consider trading the Canadian dollar and the Australian dollar.
Get Real Time Signals From Successful Forex Traders
This is the best advice I can give you because it actually incorporates everything above PLUS it gives you the benefit of following a really successful trader trade for trade. It is an amazingly simple way of earning while you learn – and earning A LOT while you earn. You get to see first hand how very successful traders handle unexpected events in the market and precisely when and where they change strategies. Make sure the signals will be sent to you in real time. Look for auto trading too as you can make really good money with these types of signals even when you are away from the computer.
Set Yourself Up For a Good PRACTICAL Education
When shopping for a signal service, you want to make sure you’re going to get more than just signals. You want support and education in addition to the signals because this is by far the best way to learn. You want forums where you can ask questions to the traders sending the signals and to fellow traders who are being sent the same signals. You also want additional follow-up educational materials so you can understand exactly why they made the trading decisions they make.
