As a beginner in the FOREX market, you must understand that you cannot go from rags to riches in just a few days. If you’re just starting out, you may want to start making profit on a few pips and work from there. Most traders try to trade long or short for a few days, just to find our that they lost all their money. They lost it because they fail to excesice proper risk management.

As a beginner you should set a profit target at atleast 5 pips per day and then increase it over time as you get used to the FOREX market. Making 5 pips isn’t all that bad, it’s better to make 5 pips in a day, rather than losing 5 pips in a month.

The trick to making thousands in just 5 pips alone is the amount of lots you buy. In a mini or standard account, 5 pips equals to $5 USD (mini account) and $50 USD (on a standard account). Now that may not sound much but if you earned five pips trading on 5 lots that will equa to $25 USD (mini) and $250 USD (on a standard account), you see where I’m getting at?

Here’s a quick simple formula for that (LET’S SAY YOU’RE TRADING ON A STANDARD ACCOUNT):

5 PIPS/DAY   X   5 LOTS     =   25 PIPS   X   $10   = 250

5 PIPS/DAY   X   10 LOTS   =   50 PIPS   X   $10   = 500

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Everyday hundreds to even thousands of new people are trading in the Foreign Exchange. The Foreign Exchange (FOREX) is such a liquid market the profits are shown the second it comes available. If trading a mini account, the required deposits to buy a lot is low/cheap.

When I first started trading, I opened myself a mini account and placed my first EUR/USD trade. In about a week and a half my $50.00 investment climed to $500 USD. At that time I started to pay more attention to my Forex Trading rather than my eBay store. Shortly after that (about 5 months later) I closed my ebay store, I now fully concentrate in trading in the FOREX market.

I’m currently trading a standard account now, and on a daily basis I generate anywhere from $300 USD to sometimes $800 USD.

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By Arman Logan

Using Technical Indicators

Forex traders use price charts to help them locate the profitable market trends, while technical indicators are used to identify the strength and sustainability of the trend.

You should confirm the shift before you act, if an indicator is suggesting a reversal. That usually means that you have to wait for another period to verify the signal of the same indicator or check out another indicator. It’s important to stay patient and calm, when trading forex, because it will help you to identify signals correctly and respond to them accurately. Read the rest of this entry »

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