Forex System Foundations: Before you can make it big in the forex market, the following four building blocks that I believe to be foundations to the forex profit system must be considered. CURRENCY TRADING IS NOT A GET-RICH-RICH-QUICK SCHEME. Currency trading is a skill that takes time to learn. Skill Traders can and do make money in this field, however like any other occupation or career, success doesn't just happen overnight. Here is a great formula for success in the forex market. Practice, Patience and Persistence equals profits: There is no substitute for hard work and diligence. Practice Trading on a demo account and pretend the virtual money is your own real money. Do not open a live Trading account until you are profitable Trading on a demo account.
TRADE ONE OR TWO MAJOR CURRENCY PAIRS. The following pairs' spread are referable and liquid. The EURO/USD is the most commonly traded pair and usually has the best 'spread' because of its liquidity. The USD/SWISS FRANC is usually the most volatile and moves the most during the Trading week. The USD/YEN moves a lot on the news out of Japan and normally the POUND STERLING/USD is more stable in its moves than the other three. FOLLOW AND UNDERSTAND THE DAILY FOREX NEWS AND ANALYSIS OF THE PROFESSIONAL CURRENCY ANALYSTS. It is important to get a bird's eye view of the currency markets and the news that affect the prices. LEARN HOW TO USE THE TECHNICAL INDICATORS AND ALWAYS TRADE WITH STOP LOSSES! Depending on your risk capital, and strategy, set your stop losses accordingly