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!
Curried Parsnip and Wild Rice Soup
Now and then I purchase a vegetable that I enjoy eating but for some reason rarely ever cook with. The vegetable may sit around for a while, but the challenge of using it gives me occasion to find inspiration. In this case, the vegetable was a bag of parsnips and the inspiration was a soup submitted to our own No Croutons Required
roundup from two years ago by mangocheeks of Allotment2Kitchen.I'm delighted that I came across it again! Parsnips are surprisingly sweet when cooked and puréed, but retain their characteristic and unique flavor that's enhanced with a judicious seasoning of mild curry spices. And adding wild rice lends a wonderful nutty flavor and chewy texture that makes this creamy, warming and nourishing soup a real winner. It's beautifully simple too and likely to win over even the staunchest parsnip critics.
Thick, sweet and creamy, and warm and nourishing blended parsnip soup with wild rice and mild curry spices
ngredients:- 1/2 cup uncooked wild rice
- 2 tablespoons olive oil
- 1 onion, chopped
- 1 clove garlic, chopped
- 1 lb (450 g) parsnips (about 4 large), diced
- 1 tablespoon curry powder
- 1/2 teaspoon ground cumin
- 1/4 teaspoon turmeric
- 4 1/2 cup vegetable stock
- 1 teaspoon sea salt, or to taste
- fresh ground black pepper to taste
- large handful fresh parsley, chopped
Instructions:- Bring 1 1/3 cups of water to a boil in a medium saucepan. Stir in the wild rice, reduce the heat to low, and cover. Simmer for 20 to 25 minutes or until the grains are just tender but not falling apart. Remove from heat and drain off any excess liquid. Set aside.
- Heat the oil in a large saucepan over medium heat. When hot, add the onion and stir for 3 to 5 minutes or until the onion starts to turn translucent. Add the garlic and stir for 1 minute. Add the parsnips and stir to coat the vegetables with oil. Toss in the curry powder, ground cumin and turmeric, and stir to coat the parsnips with spices.
- Pour in the vegetable stock and raise the heat. Bring to a boil, then reduce the heat to medium-low and simmer uncovered, stirring occasionally, for 30 to 40 minutes or until the parsnips are tender.
- Remove from heat and purée the soup with an immersion blender or in batches in a countertop blender until smooth, adding water or more vegetable stock if you want a thinner soup. Return to the stove and add the wild rice and half the chopped parsley. Simmer gently for 5 to 10 minutes to warm the soup, then season with salt and pepper.
- Serve hot or warm garnished with the remaining chopped parsley.
Makes 4 servings
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