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a Hitchhiker's guide to the Forex Market

a Hitchhiker's guide to the Forex Market



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Published by Jacques
a Hitchhiker's guide to the Forex Market
a Hitchhiker's guide to the Forex Market

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Published by: Jacques on Aug 12, 2008
Copyright:Attribution Non-commercial


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A Hitch-hiker’s Guide to the Forex Market
Contents:Key #1: PreparationKey #2: ToolsKey #3: MentoringKey #4: Market price movementKey #5: Risk and RandomnessKey #6: ProbabilityKey #7: Price ActionKey #8: Risk exposureKey #9: PatienceKey #10: Enjoy your Trading!
Many people I meet seem fascinated when I tell them that I trade currencies for aliving. I imagine they fantasize about huge sums of money being made and lostduring frantic moments of trading where lightening quick reactions and a roll ofthe dice determine the outcome of today’s bet, and possibly the size of my nextcar. Nothing could be further from the truth. I have been trading Forex for over 6years now as a full time occupation. I have had successes and I have hadfailures, but above all, I have grown as a trader and as a person. In this little E-book, I want to take you through the basics of trading Forex, which arecompletely opposite to the picture I have just painted. When you reach the end,you will see why.The big question is
“If so many people fail at trading (I have been toldaround 95%) then how can I beat the crowd and succeed”
 Well, hopefully this little book will help to answer that question for you and giveyou some of the keys for success. I say “keys” because I truly believe that’s whatthey are, and if you use them properly, you can unlock the door to success. Theproblem with keys, unfortunately, is that few people are prepared to use themproperly. Using keys requires several qualities which many people simply do notpossess or are unwilling to use; qualities such as hard work, perseverance,enthusiasm, determination, study, and so on.
I will assume that you possess some or all of these qualities and now lead youthrough the steps (keys) which I firmly believe can turn you into a profitabletrader and a master technician.
Key number 1: Preparation
This is going to sound terribly boring to some readers, but the first step in anybusiness is to
learn from the experts
.Pilots don’t try to fly a plane without going to flight school. Builders don’t try tobuild a house without studying building management, and Engineers don’t try tofix a machine without studying engineering. I am firmly of the belief that
you should not take a single trade with real money 
until you have read and studiedthe basics of technical analysis. I am a technical trader, so I am recommendingtechnical analysis. Other traders will rely more on fundamentals and that is quitefine with me. I know that technical trading works, and works well, so that is what Iuse.
What are the basics?
Well there are hundreds of books on the market on thesubject of Forex and trading, but there are a few which I highly recommend. Thatis not to say that you should only read these books, but you should start withthem and make sure you have read each one several times before trading asingle cent of real money. They are listed in order of reading so you can startwith the first one on the list and continue through the list:The books are listed atwww.forex618.net/read.htmand, although we highlyrecommend all the books in the list, the books on “technical charting” and“probability and statistics” are the ones I highly recommend you read first.Please take this advice seriously. Yes, it costs money to buy books, but thebooks I have recommended to you are key reading material and they will giveyou an excellent foundation in your trading.I also recommend the E-book called
“G7 Forex”
which can be downloadedinstantly atwww.forex-science.com How do I know? Because I wrote the G7 system and the book follows theconcepts in this E-book, and is the basis for the way I trade and make moneyevery month from Forex!
“If you don’t invest in knowledge, you won’t succeed in anything”
Key number 2: Tools
There are several things you need to trade currencies online. Firstly you need agood computer and internet connection, secondly you need good technical chartsand thirdly you need a good broker (market maker). I am not going to suggestwhich tools you should be using, but I can tell you that if any of those three itemsare not working properly, you will have problems.Make sure that you have a good enough computer and internet connection,which will not let you down in critical moments. This might sound basic, buttrading is only about money and timing. A poor computer setup could well loseyou money if it fails during a trade or during a time when you need to enter atrade.Use good charts. In the following sections you will see that the key to goodanalysis is to have good charts which can display what you need in a clear visualformat without you having to click on icons to bring up information or having topage between windows to find the information you need. Once again, there areseveral good chart providers on the market – find the one which is right for you.Make sure you use a safe, honest broker. About 50% of the online brokers outthere are probably neither safe or honest, so do your homework. Particularlywatch for brokers who are not insured, do not have any credentials, have low orzero spreads, use “gorilla” marketing tactics etc etc. If possible, use a brokerwhich is part of a listed company, where you know your money is at least part ofa bigger, safer pool.
Key number 3: Mentoring
We highly recommend that traders get a good mentor when they start out. Theproblem is – are there any genuine mentors? A lot of the mentors advertisingtheir service online are simply charlatans and losers. Try to find someone youknow is highly recommended and is REALLY a trader. It’s no good trying to learnfrom the multitude of so-called “trainers” who have never managed to turn a profitin a live trading account. The classic “blind leading the blind” scenario!We have 2 Forex services you might want to check out atwww.forex618.netandwww.forex-science.comboth of which are designed to help you become aprofitable trader in your own right.www.forex-science.compresents a complete trading system based on theprinciples in this E-book, and we will remind you of the link again later, whereaswww.forex618.netoffers a complete daily analysis and signals service, which hasa verifiable and profitable track record.

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