In a famous trading experiment, it was proven that anyone could learn to trade, learn quickly and make huge profits and in the example enclosed it was millions. Let's look at what you can learn from this experiment …
In the 1980s, trading legend Richard Dennis taught a group of people with no experience to trade and they ranged from a security guard to an actor, they were of both sexes, all ages and none were rocket scientists.
They got two weeks training and then were set off to trade and made hundreds of millions of dollars. So if anyone can learn to trade, why do the vast majority of traders lose? The answer is in the experiment and you should make it part of your Forex education. Forex trading is simple to learn because all you need is a simple system! The system the traders learned was basically a long term trend following breakout method.
Simple systems work best, because they are more robust than complicated ones and this is proved by the fact that all the advances we have seen in technology have not increased the number of winners.
The ratio has remained the same for decades 95% lose and only 5% win.
So what is it that separates winners from losers? There are two key points to consider.
1. You have to Deal with Losses
This means money management needs to be strong. After what all the get rich quick vendors will tell you, you need to trade through periods of losses that last week on end and preserve equity, until you hit a home run.
Source by Samuel Leslie Berkovits
Foreign currency exchange, also known as Forex, is the process of buying the currency of one country and sell it to make a profit.
There are certain similarities between Forex and the stock market, but there are also differences. Forex has a much higher liquidity, meaning more money is changing hands daily. Another difference is that stocks are traded within a single country whereas Forex involves trading between banks and brokers all over the world 24/7. Consequently, Forex traders can expect higher profits, but they can also lose more money as well if they have no experience.
Learning to trade Forex can be confusing and complicated for a novice trader because there is a lot of terminology to learn. When you take a look at the symbols used in Forex trading, you will see that they are composed of two parts. The symbol “usdjpy” represents the “US dollars” and the “Japanese yen”. It is important to learn what these currency symbols mean.
Besides learning the terminology, you also need to learn how to choose a broker. It is to your own benefit if you go with someone that offers low spreads. The spread is the difference between the price at which that currency can be purchased and the price it can be sold at any given time. Since Forex brokers do not get a commission from you, they will make their money off the spreads.
Also make sure that your broker has access to the most up-to-date research tools and data, meaning all charts, graphs, news and data are updated in real time. This will prevent inaccurate Forex forecasting due to inaccurate data.