Do Your Forex Homework

By: Charley Warady

You may be in a hurry to make a fortune in Forex trading and not have any time to do any extensive research of the intricacies of the markets, or trading techniques. So if you want to cut to the chase so you can put that downpayment on that yacht you've been eyeing, there is a fool-proof system that only takes a second to learn: “Buy low...Sell high”. And there you have it. Happy sailing.

There is, however, a school of thought that the above is a bit simplistic; that everybody knows that and yet so few people do it on a consistent basis. Evidently there must be more to it.

A certain amount of any kind of currency trading or futures trading involves luck. Just old fashioned, blind luck. There is an old saying among traders in the days of the Chicago Mercantile Exchange and Chicago Board of Trade that goes, “I'd rather be lucky than smart any day”. Truer words could never be spoken. The problems with relying on this philosophy are pretty obvious. Therefore, although it does remain a fact that a certain percentage of your trading experience will depend on luck; it is up to the Forex trader to get that percentage down to a very small number. If you want to depend strictly on luck, then go to Las Vegas. At least there you can see Wayne Newton.

Do your Forex homework. It may take patience, and it may be time consuming, but it is the difference between time being spent and time being invested. With time being invested, you will get a return. If you go to Google and type the words “Forex trading strategies” you will receive 1,730,000 results. If you go to YouTube and type the words “Forex trading strategies” you will receive over 5,000 videos. With all these options available, to go blindly into the Forex market is as smart as relying on “Buy low...Sell high”. It's great if you can do it...but just in case...better have a backup.

In Google, take a look at the first few pages of Forex strategy links. Also, click on the Sponsored Links and see what they have to offer. With so many choices, it becomes obvious that nobody has “the” answer. So, do some reading. Find out what makes sense to you. Perhaps you want to take two conflicting strategies and formulate your own somewhere in the middle. Knowledge is meant to be shared; and whether it's for a price or for ego, it's available to you and should be utilized.

In the old days of commodities, a person would start out as a runner for a commodities firm on the floor of the exchange and move their way up, getting a hands-on education. Nobody was expected to jump right in. It makes no sense that the Forex market, being electronic, would require any less of an education. The process may be different, but the results remain the same. Luck is a great thing to have; but you don't want to depend on it.