Most traders will tell you to trade a demo account to get started in Forex.

Don’t. Don’t. Don’t.

Why? You’ll make great trades right and left, trust me. I was a demo trading king (often doubling my account multiple times in a week) back in the day. I thought I was such hot shit with my demo account that I would be Hotel Sierra with a live account as well.

I was wrong.

If you really want to get started trading forex, you need to start with a live account. Don’t put your life savings in, but deposit enough ($500 is a good opening deposit) so that if you lose it…it hurts.

What? Why would I want pain?

Sometimes trades go bad, if you experience that pain by losing $100 that is a much better way to learn than losing $10,000 (which is what I did!).

So trade a real account, but start small.

Don’t have a broker yet? Start with these guys. Make sure and get a gold account (the spreads are better). Once you make money there, come back and comment and I’ll recommend a broker for larger accounts.

Trading forex can be boring. WTF? Are you serious?
Honestly, if you trade during a down time when no one else is trading…well, nothing really happens. The real action takes place during the top 4 “forex sessions” as listed below. The US session is usually the hottest of the bunch, but if its a big news day or an event happens outside the great US, the others can be crazy as well. Here are the major 4 sessions, all in GMT time:

Asia   0:00 - 08:00    | Europe  08:00 - 17:00 | America (F yeah!) 13:00 - 22:00 |Oceania  20:00 - 04:00

When these sessions overlap is when the markets are really crazy…

Trading forex in the pacific time zone can be challenging for someone looking to trade as a profession. All those damn important fed meeting all take place on the east coast! What’s so great about the east coast? I don’t know, I’m yet to be convinced.

So what’s a west coast trader to do?

First off, you gotta adjust your sleep schedule. If you like to trade news, or trade during the news, you gotta be awake and alert. And I don’t mean awake because you just had 5 cups of coffee or 2 rock star energy drinks. You need to be naturally awake and alert to trade well.

Divide and conquer

The first thing you need to know is: What the hell is PST to GMT? It’s minus 8!

Nearly all forex related events are going to be listed in GMT time! Why? Hell if I know. Stupid Brits gotta a lock on the GMT thing.

So, if its a 13:00 (military time, gotta know that too!) event. 13 - 8 = 5am PST!

It’s quite easy, but just remember, if you trade PST its minus 8!

1. You can trade at 3am in your boxers

2. You can double your money in a day

3. You can lose all your money in a day

4. You can make a month’s of wages in a good hour of trading

5. Flashing Lights. Enough said.

6. You now wish you’d paid more attention to those boring lectures about the federal reserve back in high school economics.

7. They banned gambling in the US, but not forex!

Disclaimer: trading forex is addicting. If you are looking to “gamble”, hit a casino. Don’t trade forex. don’t be a dumbass.

The EUR/USD pair continues its climb towards the psychological barrier at 1.40. Will the thing ever drop? With the fed looking like they are going to cut rates,  I’d bank on buying dips and riding the trend. Remember, the trend is your friend. The trend is your friend. Stay tuned…

diclaimer: if you ever listen to any of my ideas, you are crazy. I am not a lawyer, trader, or anything special. I lost a crap load of money trading forex. I don’t even trade anymore. You can lose your shirt in forex in 1 second, so don’t be stupid! end disclaimer.

I traded off and on with forex.com (a Gain Capital division) for over 2 years. I had a love/hate relationship with them and I’ll delve into my experience with them in this article.

Forex.com - good, bad, or evil?

Forex.com has some very attractive features. Their demo accounts are easy to open and their trading platform is available online as well as as a download onto your computer. Live accounts are easily funded with a credit card or debit card, though they limit those deposits to $5000 per month. When I would wire money into my forex.com account it was usually funded and ready to trade within 2 business days. All good things.

So what’s bad about forex.com?

Pretty much everything else. While it looks like they have tightened their spreads since I last traded with them, they are still higher than many other brokers out there. Their customer service (especially the “live help”) is atrocious. You will get stopped out when you shouldn’t and not stopped out when you should.

Their mini-accounts (which you can fund with any amount you want. I once had a “mini” account with $60,000 in it) are leveraged at 400:1. You can double your money on a EUR/USD 100 pip move at that leverage. Which also means (such as in my case) you can lose a crap load of money very, very quickly.

Overall, I would never recommend forex.com aka Gain capital group to anyone looking to start trading forex and certainly not for an experienced trader in any markets.

My recommended Broker

These guys.

Forex trading can be a harmonious affair and at the next moment it can turn chaotic. It can be similar to watching the movement of a herd of deer. When the herd is attacked by a predator, they seem to move in all directions. Now if you were to place a bet on whether they will run to their left or right, would you feel confident about it? Not really because it is absolutely unpredictable.
Similarly in Forex, you can face a similar scenario. One moment it might seem that everything is happening in tandem and the next moment everything may go berserk. And you wouldn’t know why the market changed so violently. You will have to be a predator, wait and observe, learn more about the market, understand when and how it moves and then go for the kill. A Precision killer is what you need to be.

To begin with you need to understand the players in the market. You have to understand why you want to get involved with the forex trade and who are you dealing with. What are the probable losses and what kind of profits can you make. Which are the currency pairs that can help you to make money? Know more about different currencies and their standings in the overall market scenario. What are the best methods of trading? Are there any particular software tools that can enhance your trading abilities? These are some of the questions you need to ask before you take that jump into the forex whirlpool.

Remember that the first and the foremost rule is the survival of the fittest. This rule applies because the forex market can be quite uncaring and you may incur heavy losses. Hence you need to know the winners. Target the key players and understand their strategies that help them to win so effectively. Each player has a different perspective and each perspective is marked by a distinguishable investment, goal and impact. Each player has their own level of sophistication.

The second thing that you need to understand is that every investor in forex is looking for a better return. Sometimes, the return depends on a high degree of market transparency and forecasts. It is a known fact that the forex trading is open 24 hours a day and demands that kind of monitoring on your behalf too. Then there is the cost factor. Although there is no commission involved in trading yet the cost paid to dealers are quite high. This is the result of the bid-ask spread. Now here’s a risky part – choosing the right dealer. The best way to choose the best dealer is through comparison. Understand their offerings and then rank them and then compare them to your trading style and you will automatically know which dealer will be best suitable. Another important thing is to have a strong trading strategy or plan in place. You should develop understanding of what you need to trade, when to trade and with whom to trade.

There are three bases, which can be extremely handy for currency traders and are easy to implement. They are listed below and you can take advantage of these 3 bases to maximize your advantage.

The first base states that it is quite useful for some Forex traders to trade with a currency pair everyday at the same time. The reason behind this is that the other traders involved in selling or buying the same currency pair might also end up trading at the same time, everyday. This is a proven technique that is useful for those Forex traders who are able to understand and capitalize on various technical analysis of the currency market. Another probable reason would be that this sets a standardization process for trading conditions if the trader does the trading everyday at the same time. This kind of standardization can also yield profit. But never forget that the currency or Forex market is extremely volatile and can change rapidly.

The second base deals with particular currencies trading with a particular volatile situation of the market at a particular time. After you have outgrown the demo account where you have practices all your skills, you can take the dip into high waters. When you are investing your own capital there can be two scenarios. You would want to minimize the liquidity amount and the volatility to decrease your risk. The second scenario is that you can increase your risk and thus increase the changes of earning a huge profit.

The foreign exchange market revolves around the sun but follows a different path from the actual sun. Instead of the sunrise happening in the east, the Forex market opens in the west. It starts from the United States and takes the Pacific route to Australia and then to Far East and Europe and comes back a full circle to the United States. The total foreign currency trading volume is determined by the opening figure of the market and the various overlaps caused during the time the market was open. Although the Forex trading market works 24 hours a day but there are certain peak hours of trading when the volumes are relatively high. This time according to GMT is between 1 pm and 4 pm. Hence if you trade at a certain time in the day then you will be able to minimize or maximize the risk involved for a particular currency pair.

The third base deals with the volume of activity involved with a particular currency or currency pair. It is always a sound theory to capture the different levels of volatility for the particular currency pairs and thus capitalize on your profits. One of the popular tools used by technical analysts is the Bollinger bands and they help in quantifying volatility. These Bollinger bands can compare volatility with reference to their relative price over a pre-determined period of time. But it really depends what your trading manager wants to use because there are certain Forex trading managers who don’t find this as a utility tool while others swear by it. It also depends on whether the Bollinger bands are favorable for use in your situation.

Whether we are talking of a business or about Forex trading, a sound strategy is a must. Forex trading may look simple but that’s not the reality. To be successful in trading, you will need to gain in-depth information and knowledge regarding the Forex market. You need to follow the market through its ups and downs, and determine the underlying causes for the rise and fall in rates. You can make a lot of money in Forex trading but sometimes you will also incur losses.

When talking about trading in such a volatile market, you need to continuously monitor the changes. Gather data and information regarding various changes that has taken place in the Forex market in a couple of years. This will strengthen your knowledge and help you to formulate a strategy. A successful trading is one that is based on an informed decision depending on the market sentiment and expectation. Your decision needs to be well timed and the difference can make you a winner or loser.

Here are a few tips that can help you become a successful investor.

Money: Always trade with only that amount of money, whose loss would not impact deeply into your day-to-day life. Forex trading is a speculative activity and one mistake can bring you down. The best thing to do is invest wisely.

Market Situation: Before you start to invest in the Forex trading, try to get a grip on the prevailing market situation. Is the market going up or is it going down? Is the trading strong or weak? Once you get a clear picture, it will be easier to start trading.

Time Frame: Many investors and traders enter the market with the sole objective of earning quick money but that’s not what Forex trading is all about. This is a volatile market and movements can change the entire situation in matter of minutes. It is always good to observe the market for some time and know the various time frames when the market behaves sluggishly or when it is at an all time high. For example: 1pm in the US, the market is absolutely packed with investors, buyers and sellers. Everything seems to be happening then. So this is the appropriate time to go for it. It is also important for you to decide whether you are going to do it short-term or for long-term. For short-term time frames, you need to analyze the market carefully and go through all the statistical graphs.

Right Move: Timing your trade is very important because one wrong move can take you down. There could be an upward movement in the market but take time out to understand and analyze whether it is going to remain for some time or is it just another illusion. The trade timing is two fold and an expected market figure like CPI or a decision from the Federal Reserve can consolidate any Forex market movement whatsoever. A good timing means that you need to take into account all possibilities. If you are doubtful, then don’t take an unnecessary risk, stay out of it.

Forex trading can seem to be tough at the first instance to a new investor but once you have understood the grooves then it is all about making the right decision and earning a handsome profit. The first taste of profit can be scintillating and gives a great feeling. But on the downslide, a loss will cause enough pain. It is a consistent and self running pattern. With every new generation of traders hitting the market, this pattern keeps repeating itself. The pattern is strong enough to pull you down or earn higher.

It is imperative for a trader to learn, understand, and master this pattern. Of course it cannot be mastered because it can change anytime and is volatile in nature. To be on the top of this pattern, a trader needs to ask the right questions, do an analysis, understand the forces behind it and backed by a keen observation, he/she can draw upon a logical conclusion. The patterns might be similar and recurring but observing them closely means that as a trader you may get to know what makes them tick.

There are various conclusions that can be drawn from observations of this pattern. Let try and understand some of them because this is the thin line between failure and success.

The highest number of traders who have suffered a loss can be found in the short-term and intraday group. Although traders do blame the result on time, but this is not the case. It is more because of a lack of preparation and formulation of a strategy and game plan. If a trader is trading in a precariously balanced time frame where the smallest of errors can be damaging, the lack of a strategy or plan can raise the volume of the loss. It has been observed that trading in selected time frames like the mid-term and long-term time frames can offer a higher success rate.

It has been seen that many traders use complex systems or tools and even rely on black boxes and this has led to recurring losses. On the other hand, traders with winning streaks have been found to use some of the simplest techniques. Actually, most people try to confuse complex with better. That is certainly not the case. The more complex the system is, the more difficult it will be to understand and as a result might create confusion or error in understanding the data. And from a logical point of view, the simplest approaches are less prone to incorrect interpretations.

Traders who have lost money generally spend a lot of time forecasting the next day’s market situation. On the other hand winning traders spend most of their time strategizing keeping in mind the current market scenario. A successful trader is the one who can predict what kind of a behavioral reaction the crowd will have to a certain change in the market. Since the market is always volatile hence a rational thought for the irrational buying and selling behavior can be the benchmark for success.