It's possible to trade profitably on the Forex, the nearly $2 trillion worldwide currency exchange market. But the odds are against you, even more so if you don't prepare and plan your trades. According to a 2014 Bloomberg report, several analyses of retail Forex trading, including one by the National Futures Association (NFA), the industry's regulatory body, concluded that more than two out of three Forex traders lose money.
This suggests that self-education and caution are recommended. Here are some approaches that may improve your odds of taking a profit.
Prepare Before You Begin Trading
Because the Forex market is highly leveraged -- as much as 50 to 1 -- it can have the same appeal as buying a lottery ticket: some small chance of making a killing. This, however, isn't trading; it's gambling, with the odds long against you.
A better way of entering the Forex market is to carefully prepare. Beginning with a practice account is helpful and risk-free. While you're trading in your practice account, read the most frequently recommended Forex trading books, among them
Currency Forecasting: A Guide to Fundamental and Technical Models of Exchange Rate Determination, by Michael R. Rosenberg is short, not too sweet and highly admired introduction to the Forex market.
Forex Strategies: Best Forex Strategies for High Profits and Reduced Risk, by Matthew Maybury is an excellent introduction to Forex trading.
The Little Book of Currency Trading: How to Make Big Profits in the World of Forex, by Kathy Lien is another concise introduction that has stood the test of time.
All three are available on Amazon. Rosenberg's book, unfortunately, is pricey, but it's widely available in public libraries. "Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude," by Mark Douglas is another good book that's available on Amazon, and, again, somewhat pricey, although the Kindle edition is not.
Use the information gained from your reading to plan your trades before plunging in. The more you change your plan, the more you end up in trouble and the less likely that elusive forex profit will end up in your pocket.
Diversify and Limit Your Risks
Two strategies that belong in every trader's arsenal are:
Diversification: Traders who execute many small traders, particularly in different markets where the correlation between markets is low, have a better chance of making a profit. Putting all your money in one big trade is always a bad idea.
Familiarize yourself with ways guaranteeing a profit on an already profitable order, such as a trailing stop, and of limiting losses using stop and limit orders. These strategies and more are covered in the recommended books. Novice traders often make the mistake of concentrating on how to win; it's even more important to understand how to limit your losses.
Be Patient
Forex traders, particularly beginners, are prone to getting nervous if a trade does not go their way immediately, or if the trade goes into a little profit they get itchy to pull the plug and walk away with a small profit that could have been a significant profit with little downside risk using appropriate risk reduction strategies.
In "On Any Given Sunday," Al Pacino reminds us that "football is a game of inches." That's a winning attitude in the Forex market as well. Remember that you are going to win some trades and lose others. Take satisfaction in the accumulation of a few more wins than losses. Over time, that could make you rich!
SPRINKLES COPYCAT VANILLA CUPCAKES
SPRINKLES COPYCAT VANILLA CUPCAKES
This recipe for Sprinkles Copycat Vanilla Cupcakes with vanilla icing is even better than the original! Moist, dense cake that is packed with vanilla flavor
Sprinkles Copycat Vanilla Cupcakes
Yield: 24 Cupcakes
Ingredients
For the Cupcakes:
- ¾ cup unsalted butter, room temperature
- 1 ½ cups granulated sugar
- 3 large eggs, room temperature
- 2 teaspoons pure vanilla extract
- ½ teaspoon almond extract
- 1 ¼ cups sour cream, room temperature
- 2 ½ cups cake flour
- 1 teaspoon baking powder
- ½ teaspoon baking soda
- ½ teaspoon kosher salt
For the Frosting:
- 1 cup butter, softened
- 3 ½ cups confectioner sugar, sifted
- 1 teaspoon cream
- 2 teaspoons pure vanilla extract
- 1 ½ teaspoons vanilla bean paste
- 1/8 teaspoon salt
Instructions
For the cupcakes:
- Preheat the oven to 350°. Line 2 muffin tins with 24 cupcake liners.
- Sift flour, baking powder, baking soda and salt together in a medium bowl and set aside.
- Cream butter and sugar in the bowl of an electric mixer fitted with the paddle attachment until light and fluffy. Add the eggs one at a time, beating to combine after each addition.
- Add vanilla, sour cream and almond extract, beating until just combined.
- Reduced the mixer speed to low and stir in the flour in several additions. Remove the bowl from the mixer and stir the last bit of flour in with a spatula until just combined. Do not over mix.
- Scoop batter into cupcake liners and bake in preheated oven for 14-18 minutes or until a toothpick inserted into the center comes out with a few clinging crumbs.
- Allow to cool completely before icing.
For the Frosting:
- In the bowl of a stand mixer fitted with the paddle attachment, cream butter, sugar and salt on medium-high speed until combined, then add cream, vanilla extract and vanilla paste and continue to beat until light and fluffy.
- You can either smooth the frosting on the cooled cupcakes with a small offset spatula à la Sprinkles, or you can just pipe it on. Personally I find piping easier!
Notes:
Cupcake recipe adapted from Layers of Happiness and the Vanilla Frosting recipe was modified from Food.com
