I have found this youtube video on “How to Make Money in Fx Trading”…pretty good points.
Some of them are pretty obvious, others, I follow myself. However, unless you trade, you wont understand the context behind the tips. Hence, I felt the urge to share the transcript with the community, so here we go:
“How to Make Money in Fx Trading – What the brokers don’t tell you! So, you have seen the adverts on CNBC, the Internet, or maybe been to a seminar on how forex will make you rich overnight…Sorry to tell you, the reality is that 90% of retail FX clients do not make money and most accounts are wiped out in under 6 months. But it’s not all doom and gloom, money can be made from FX, but not by doing what the majority do.
Vince Stanzione is a self made millionaire trader with 26 years experience in trading and investing and gives beginners these tips:
- Forget about buying fancy software and don’t waste your money on FX robots. It’s easy to get blown away in on-line trading with all that: real time data, charts, business channels and bells and whistles. The truth is, less is more, and information overload makes you a worse trader. The more complicated your system, the less chance it will work, or that you will follow it. The majority of technical trading indicators are a total waste of time and you do not need to waste money on expensive trading software that claims to predict markets. The most important factor when trading any market is the price.
- Day trading FX is a waste of time; ultimately you will lose money. Vince did a study into new FX traders and found they made less per hour trading than working on minimum wage at Mcdonalds.
- The most successful FX traders make money from longer term trends. Vince has held currency trades for weeks, months and even years – not quite what the media make you believe, that you have to be glued to 10 screens all day. Brokers want you to over trade, as that way they make more commission and spread.
- Whilst charts can be helpful, do not look at short term charts; they provide no value and are near random. Vince uses Daily, Weekly and Monthly charts. The main tools he uses are trend lines, Moving averages and support and resistance levels. Keep it simple.
- New traders should avoid OTC FX brokers and should not use margined FX. To start with, consider Exchange Traded Funds on currencies and options on currency futures. You get a better deal and have more protection using a currency futures contract, than an OTC broker. Be aware what FX brokers often claim “tight spreads” which are misleading.
- Many traders don’t realize, the news they hear and read has, in many cases, already been discounted by the Market. Often, new traders jump into a market based on a story in the morning; the market many times has already discounted the information.
Also, check: Day Trading Red Flags…You, Do Not Want to Miss!
- Trade with what you SEE, not what you Think. You may think the Euro is overvalued and you may be right, eventually, but if the price is moving from 126,128,132,137,144,147 it does not matter what you think. It does not matter what the “guru” on CNBC says – the price is moving up and you should be trading with the Trend.
- Many focus on the major currency pairs but over the years Vince has made large amounts from trading the not so well covered currencies, such as Norwegian Krone, Swedish Krona and South African Rand.
- Some times the best trades in FX are the ones you don’t make! Vince trades currencies, commodities, stocks as well as bonds, and can move from one market to another in an instance. If the FX market is dull, he will move focus and funds to commodities.
- New traders just think about the entry of a trade, truth is, the EXIT is more important than getting in. Vince comments “…it’s a bit like a relationship; it’s easier to get in than to get out.” Also, the money management and the amount you risk per trade is a factor that many do not spend enough time considering.”
As found on Youtube
Comment below and find out which of these 10, I follow personally…
Also, share Your opinion and let us know which ones, You think really matter…