2Bull Forex Blog

Here are some currency trading basics in the form of tips which if you follow them, will get you on the road to forex trading profits quickly and can help you enter the elite 5% of traders, who make the really big profits.

The tips below are in no particular order of importance - but there all important, if you want to enjoy currency trading success!

1. Your On Your Own

Forex trading is not easy and not the walk in the park many vendors would have you believe it is. Don’t look to someone else for forex trading success take responsibility for your actions.

Success is on your shoulders and no one else’s accept this fact and you’re ahead of the majority of losers.

2. Get The Right Forex Education

You don’t have to pay for it you can get most of it free on the internet. There are no secrets to successful forex trading it’s a combination of a simple robust forex trading strategy and having the discipline to apply it.

3. A Forex Trading System For Profit

To get started you can either long term trend follow or swing trade the choice is yours ( never day trade it doesn’t work see our other articles for why) - but you need to educate yourself how to use support and resistance, breakouts and learn some momentum indicators to time your trades. If you do this, you will have a forex trading strategy together very quickly that works.

Always remember this - simple systems work best and always have as they are robust make a trading system to complicated and it will have too many elements to break.

Base your forex trading strategy on forex charts - the reason for this is all you need to do is spot repetitive price trends and lock into them for profit.

You don’t need to watch the news or listen to experts; you simply trade the reality of what you see on the charts. Its simple but very effective and time efficient.

4. Confidence and Discipline

If you build your own forex trading strategy chances are you will acquire confidence in it and this will give you the discipline to follow it through losing periods. If you try and follow someone else’s system, you won’t acquire these traits and throw in the towel, as soon as you have a few losses.

Discipline is the key to trading success - if you don’t have the discipline to follow your trading system, you don’t have one!

5. Don’t Work Hard Work Smart

You don’t get paid for effort in forex trading - you make money for being right with your trading signal and that’s it. It doesn’t matter if it took you 5 minutes, or 5 hours to decide - it’s the result that counts.

Many people think the more effort they put in the more they get out - Rubbish!

You can learn a simple system in around 2 weeks and you can then spend just 30 minutes day trading - you don’t need to do more.

If your system is soundly based - for the effort you put in, your potential rewards are in some instances life changing.

6. Know Yourself and Your Edge.

Perhaps the most important currency trading basic to learn that finishes off your education is - to know what your trading edge is and it’s simply defined as:

Why you are confident you will succeed, when 95% of traders fail?

If you have read and understood the previous 4 points, you will soon have an edge and have confidence in it, to bring you forex trading success.

I hope you enjoyed the currency basics for success above and that you find them useful when learning forex trading online.

“Forex trading” is short for “foreign exchange trading”. It refers to the buying and/or selling of a nation’s currency, using another nation’s currency. This might sound a little strange since most of the time we normally exchange money for stuff that we use.

For example, we normally exchange money for a new T-shirt, or maybe a warm meal at the local restaurant. We can wear the T-shirt, or eat the meal that we’ve bought with our money.

However, in Forex trading we are exchanging money for money instead. But why would anyone want to exchange money for money? It doesn’t seem to make sense, right?

Most People Trade Currencies For Profit

In Forex trading, we exchange money to buy another nation’s money in expectation of selling it later. For example, we can use the U.S. Dollar currency to purchase some Euros now, because later we want to be able to sell away the Euros for a profit.

Here’s an example:

Let’s say we buy 1 Euro (1 EUR) at the price of 1.5 U.S. Dollars (1.5 USD). A month later, the price of the Euro increases to 1.6 USD and we sell the 1 Euro that we purchased earlier to get back 1.6 USD.

In this transaction, we made a total of 0.1 USD in profit. Does this make sense?

Now of course, a profit of 0.1 USD doesn’t seem like much… but if you carried out these same transactions with 1,500 USD instead of just 1.5 USD, then you’d have made a profit of 100 USD. And if you started with 15,000 USD, these same transactions will have profited you with 1,000 USD!

But I Don’t Have 15,000 USD To Begin With!

This is where the Forex market really shines. You see, even if you don’t have 15,000 USD to start with, you can still make 1,000 USD in profit. How? You can do this by ‘margin trading’.

Margin trading basically allows you to trade with 15,000 USD, using only 150 USD of your OWN money. This means that you can potentially make 1,000 USD in profit by using buying and selling 150 USD ‘worth’ of the Euros.

Now of course, margin trading is a double-edged sword and you’ll have to be careful because you can lose as much as you win. But with a proper education in managing your money and risks, Forex trading can be a very lucrative past time.