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Monday, April 13, 2009

Tips for Big Profits Using Forex Strategies

By James Smith

There are so many forex strategies out there in the market today, it is very hard for a novice forex trader to pick one which he knows will be profitable without losing a large sum of money making expensive mistakes. A good tip for a forex trader looking for a winning solution is to use multiple forex strategies - this way he is able to diversify his risk, and then see them in action before having to choose which one he will trade with on a full time basis.

Whatever forex strategies a forex trader employs will depend on his personal preferences. Some strategies may work for one but won't for the other. This is because every forex trader wants to realize profits in their own way and in their own pace. Using these forex strategies will surely help the investor make his choice in what stocks to buy and when to buy them.

The first thing a foreign exchange professional needs to be aware of is that the currency marketplace does not have any single market exchange for trading, but is carried on by any bank or instutution who wants to make a market in a particular currency pair, which means that pertinent information needed by foreign exchange professionals, such as volume, and details of buyers and sellers, will not be available to them. They have to rely on other fundamental and technical market information, and profitable forex strategies to be able to place profitable trades.

Instututional foreign exchange professionals, however, have the massive edge of seeing the order book at a specific bank, which means that they know when their own clients are going to place big trades, and at what price. This is why retail foreign exchange professionals have to be sharper and more ruthless if they want to be ahead and beat the interbank foreign exchange professionals, as they have a huge advantage over the average retail trader.

No matter how good the forex strategies are that the forex trader has chosen, it is useless unless we are effective with our trading. I was always blaming the forex strategies for my losses when I first started out as a forex trader but when I look back on it the problem was that I was not being consistent with my trading, and not employing good risk management.

It takes an extremely disciplined forex trader to be able to stick to their forex strategies and trade without emotions such as fear and greed entering their forex trading decisions. When you bring human emotion to the table it changes the patterns of your forex trading system and can change the results. If your emotions aren't right for trading it usually alters your trading in a negative way and often turns a profitable trading strategy into loser.

Another problem with foreign exchange dealing is the market operates 24 hours a day, and never stops to sleep. While this is an advantage in some ways it can also be a big disadvantage. The disadvantage for a foreign currency dealer is you cannot watch the market all the time. You can't be there to take all your deal signals. This alone can mean that a number of forex strategies are impossible to follow, if you are sleeping when the strategy gives you a trade, unless you are working with a team of people who can monitor the markets day and night.

Finally, it should be noted that currency trading is not for everyone, as a lot of forex strategies can be hard to follow. I don't know about you but I don't want to spend my life watching charts and I decided a while back that being a foreign exchange professional is really not for most people. One solution is to identify forex strategies which use automated software programs which will monitor the action for you 24 hours a day and do the currency trading for you automatically. Using such a system they will enter and exit your trades when the market gives them the signals. For the working foreign exchange professional looking for profitable forex strategies, this is often the ideal currency solution, allowing a working person to profit from forex whilst he is at work. - 23208

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