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!
VEGAN POTSTICKERS
Ingredients
25 vegan wonton wrappers (see note)
2 tablespoons oil, divided
Half an onion, chopped
2 cloves of garlic, minced
1 tablespoons minced ginger
3/4 cup chopped mushrooms (Asian mix or oyster or shiitake or white button)
1 carrot, grated
1 cup shredded cabbage
1/2 cup chopped green onions
Salt and pepper to taste
1 teaspoon sesame oil
Water for steaming
1/4 cup soy sauce
2 tablespoons rice vinegar
Instructions
Heat 1 tablespoon of oil in a large pan over medium-high heat. Add the chopped onion and white parts of the green onions and fry until softened. Add the garlic and ginger and fry until fragrant – about 2 minutes. Add the mushrooms and fry for a further 5 minutes or until soft and beginning to brown. Add the carrot, cabbage, green parts of the green onion, salt and pepper and fry, stirring, until the cabbage is soft but not limp – about 2 to 3 minutes. Remove from heat and stir thorough the sesame oil. Allow to cool on the counter or in the fridge.
Once cool, assemble your potstickers. Place a small teaspoon of the filling in the centre of a wonton wrapper. Wet the edges of the wrapper with water. Fold the wrapper over the filling and pinch the edges together to seal. Place them upright on a plate, being careful not to let them touch or else they will stick together.
Heat 1 tablespoon of oil over medium-high heat in a large pan. Add the potstickers and fry until browned on the bottom – 1 to 2 minutes. You may need to work in two batches if not all your potstickers fit in the pan. Add 1/4 cup of water, cover the pan and reduce heat to medium. Allow to steam until the tops are tender and the water has evaporated – about 2 to 3 minutes. Uncover the pan and flip the potstickers onto their sides to brown on each side (optional). Remove to a serving dish.
In a bowl combine the soy sauce and rice vinegar to make a dipping sauce and serve alongside the potstickers.