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Thursday, October 2, 2008

Currency Exchange Trading - Understand These Key Points Before Trading Or Lose Your Money!

By Kelly Price

If you want to engage in currency exchange trading, you are probably aware that 95% of traders lose. They don't lose because they can't win but because they make fatal errors and there enclosed - you need to avoid them at all costs...

1. The Myth of the Forex Expert Advisor

Anyone can claim to be a forex expert advisor and many do, in fact the vast majority who claim there experts and can lead you to success will lead you to disaster. They present back tested simulations, as evidence of their skills but there nothing of the sort. All they prove is they can make a profit in hindsight whereas a child could do that.

You will see lots of forex robots and systems, all with simulations that have ever made money real time with hyped copy - pass them by! The only person who can give you success in forex trading is you and this requires learning and applying skills.

2. You Need to Lose to Win

Most traders are simply unprepared to lose but you must lose to win. The fact is even the best trading systems will lose for weeks on end and you must trade with discipline, through these periods until you hit a home run.

Don't believe anyone who tells you that you can earn a regular income or drawdowns can be avoided they can't. Sure you can win longer term and make a lot of money - but you must be prepared to lose in the short term.

3. Trade the Truth

To win you need to trade the reality of price change and forget about predicting the market. If you predict your hoping or guessing and that will lead you to a wipe out of equity.

Markets are an odds game - nothing more. You cannot trade with the certainty of knowing what will happen next, that's why you should trade the reality of price on a forex chart and not predict - that way you have the odds on your side and will win longer term.

4. The Simpler the Better

You don't need to work hard you need to work smart and that means a simple trading system - not a complicated one!

Currency trading exchange is simple, yet most traders think the harder they try and the clever their system, the more they will make - but your not judged on hard work or being clever, your judged on the money your trading signal makes and that's it.

Simple systems are more robust than complicated ones with fewer elements to break and that's why you should keep it simple.

5. Know Your Trading Edge

Most traders don't think about this but of course you need a trading edge and that is the reason your system will win when most others fail. A trading edge is something you understand, have confidence in and can apply with discipline. You need to have the right forex education and the mindset to apply it and I you do currency trading success can be yours.

Anyone can succeed at currency exchange trading and the difference between winners and losers is simply mindset. The forex trader is not beaten by the market, he is beaten by himself.

So if you want to win and enjoy currency trading success, get the right forex education, work smart and trade with a disciplined mindset and you could enter the elite 5% of forex traders, who make big consistent gains.


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