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Forex Trading Guide - Some Useful Advice
By Rohit of Adsenselover.com

Before I go into detail about a forex trading guide I would like to point out that forex trading is a 'risky business'. I'm not trying to put you off reading the rest of this article but I would like you to know that a lot of newcomers into the market do lose money and don't re enter it again.

The purpose of this article is to try and help you so as you do not lose 'your shirt' and can ultimately profit from trading. If you are going to trade it's better to be in a position of looking at this as an investment that can go up or down faster than anything you may have considered before so it should be money that you won't miss - if it turns sour!

You will need to understand a bit about the market first. If you're new to you have probably contemplated trading stocks as a substitute and are interested in finding out a little more. In the stock market there is a more 'level playing field'. By that I mean that pricing (the cost of the stock and the price to trade) are spread evenly amongst market participants, whether that is brokers or private traders.

In the market there are different access or entry points. You have the huge 'interbank' market where the standard deal is usually $10 m and at the other end the personal account trader who is probably trading with a leveraged margin of $100k. Due to this difference in the market participants there exists two important elements - information tends to 'trickle down' the food chain and the cost of trading becomes higher the smaller the 'deal' becomes.

The biggest discriminatory factor is access to information that gives a more accurate snapshot of where the market is. The large banks like Citi Group have access to information from other trading banks, their corporate trading arm, their investment arm, their economists - need I labor the point more? What you have (assuming you're like me, a smaller fish in the Ocean) is none of this. So how do we compensate?

The answer is by looking at the market differently and taking a 'niche' view. You can't actually compete against the 'big' guys but what you can do is compete against the 'market'.

So How do I do This?

The first step is try and get on a 'level peg' with knowledge attainment. Learn about the market as much as you can. You may have to eat, breathe and absorb information. Remember, you have to compensate somehow for you lack of market intelligence and size.
When you have achieved a level of knowledge where you feel that you are more confident look at trading strategies (Yes try out more than one!).

Join a few trading forums, newsletters - keep learning but at the same time open up a dummy trading account. You will find plenty of these being offered by brokers (make sure it's one where you don't cough up for a trading deposit) this for practice simulation.

Trading Techniques.

When you start trading you should already have experimented with various forms of trading. This will possibly include scalping, day trading or a mixture of both. You should at this stage have sorted out which trading style works best for you and stick to it. When you have progressed this far you should have selected a broker that suits your style.

This is a vital and often overlooked step that should be included in any forex trading guide . You need to have a good relationship with your broker and a good feel for his/her understanding of you as a client and also the market - although this is not always possible in such a competitive market but they do exist if you look hard enough.


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