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!
One Pan Caribbean Jerk Chicken with Pineapple-Coconut Rice
INGREDIENTS
For the chicken marinade:
4 boneless skinless chicken thighs (about 1.25-1.5 pounds)
1/2 tablespoon olive or avocado oil
3 cloves garlic, minced
1 tablespoon freshly grated ginger
2 tablespoons gluten free soy sauce
1 tablespoon apple cider vinegar
1 tablespoon lime juice
1/2 tablespoon honey
1/2 tablespoon ground allspice
1/2 teaspoon ground cinnamon
1 teaspoon dried thyme
¼ teaspoon cayenne
½ teaspoon sea salt
Freshly ground black pepper
For the veggies & rice:
½ tablespoon olive or avocado oil
1 bunch green onions, diced
1 large red bell pepper, cut into chunks
1 (15 ounce) can lite coconut milk
1 cup fresh or frozen pineapple chunks
1 cup basmati white rice (don’t use brown, it will take too long to cook)**
To garnish:
Green onions
Fresh lime
INSTRUCTIONS
Add chicken to a large bowl. Add in 1 tablespoon olive oil and your jerk seasoning: garlic, ginger, soy sauce, apple cider vinegar, lime juice, honey, allspice, cinnamon, dried thyme, cayenne, sea salt and black pepper. Use clean hands to toss the chicken in the mixture. Cover and allow chicken to marinate for at least 30 minutes or up to 6 hours, or you can skip this completely and begin the cooking process.
Next add 1/2 tablespoon olive oil to a large deep 10 inch skillet and place over medium high heat. (If you do not have a skillet a large pot will also work very well!) Once oil is hot, add in chicken and season with a little more salt and pepper. Cook until browned 4-5 minutes, then flip and and cook an additional 4-5 minutes. Remove from pan and transfer to a plate.
In the same skillet (it should be greased enough already for sauteing), add green onion, red bell pepper chunks; saute for 1-2 minutes. Then add in coconut milk and rice and stir well to combine. Bring to a simmer then fold in the pineapple, making sure it is evenly distributed. Add browned chicken on top. Reduce heat to low, cover the skillet immediately and cook for 20-25 minutes. After 20-25 minutes, most of the liquid should be absorbed and rice should be cooked. Serve immediately. Garnish with green onions and serve with a squeeze of fresh lime juice.
To meal prep: This meal serves four. Place rice in a meal prep containers and top with 1 chicken thigh. Garnish with green onion.