Forex Market Trading - How you Can Profit Like the Big Boys

By: Adam Hefner

Forex market trading is the trading of one country's currency for a another country's currency. Your transactions deal with buying one and selling the other currency in the pair. If you have bought a country's currency, you are hoping that the price of that particular currency rises against the paired currency, so you can sell it back at a higher value. This type of trading has been going on for years with the big banks, central banks and government. Not until recently have individual investors been able to trade in this market with the high leverage brokers and banks offer.

Everyone has a image of Ivy League graduates trading for these huge financial institution, making millions in a day. While this is true in a way, not all traders that are or have become wealthy from trading currencies are top B school geniuses. As a matter of fact, more traders that trade the forex market that obtain better ROI(return on investment) statistics are normal everyday traders like you and I. The difference is that banks have huge sums of money to trade so a little change in the price gives them a huge gain or loss.

Trade with the market movers

Forex market trading can take some skill that could require some extensive education. One thing though that has been proven is that individual small traders have no affect on the price movement. Central banks, large financial institutions do though because of the heavy amounts of currency they put on the table for each trade. We call them the market movers. How do traders like you and I take advantage of this? You jump on there back and go along for the ride. Trading with the consensus of the price trend is piggy back riding the banks trades. Like the saying goes "If you can't beat, join em."

Take your loss and move on

One big mistake most traders make in forex market trading is that they let there ego and pride get in the way of their trading. Money management is a big key in trading, and if one has not required some knowledge of it, then they are more than likely finished before they begin. What I mean by this is that most traders make a decision to buy or sell in hopes of the price to rise or fall in their favor. When price does not move in their favor, they get stuck in a world hope that it will eventually turn their way. What happens is most of the time it never does and there went there account. Stop losses are your friend. Except that you will lose and make them small. Do not let them beat you out of the game.

Foreign Exchange
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