Consistently make money trading Forex! This is a key problem many people have and is not always easy to accomplish. There are three basic methods that are typically used for those interested in making money.
1- Let Someone Else Do It . While this method is popular, one is trusting someone else with their money and hoping they are successful. The client has limited input and the day to day adjustments are typically left with the manager. Oddly enough many accounts tend to follow the market and not exceed the market by much. For example, look at mutual funds, while very popular, the results tend to just follow the market, e.g. S&P 500. Also, significant restrictions are often placed on the client.
Most people, these days, are more sophisticated in their financial knowledge and are looking for alternatives, at least with a modest portion of their portfolio. These alternatives provide an opportunity for one to hedge their existing portfolio or even significantly expand their financial holdings.
2 – Learn And Do Everything Yourself. Some try this method and find it extremely time consuming and difficult. While some are very successful, many are not. Most find that they do not have the time and technical ability to do everything themselves. They typically have a day job and spending many hours per day learning multiple Forex trading approaches and techniques are daunting and eventually stop trying.
Emotional trading, not having a complete grasp on trading techniques and lack of time tend to result in trading losses. These losses lead to portfolio declines and eventually withdrawal from the market and continue with other more conventional approaches.
3 – Do It Yourself But With An Automated Program. In this method one learns the basics of trading but utilizes an automated trading program for most of the actual trades. Some may say this is not possible. However, it is possible, just look at all the mutual funds and managed accounts. They all use computer programs for trading.
Having a good affordable, simple and automated trading program is the “Holy Grail” of trading. Everyone I have met would love to have a program that was simple yet consistently makes money over time. There is no perfect program but there are a few that come close.
I have seen and tried numerous programs ranging in cost from a few hundred dollars to many thousands of dollars. Most programs are very complex and require one to personally watch the market and make trading decisions during market hours – when most people are working.
Also, profiting during the ups and downs of the market are not usually available to the average investor. Typically one buys a mutual fund or stock and if it goes up you make money and if it goes down you loose money. Shorting a stock or option can be very risky and not available for the average person.
Currently, numerous market watchers believe that we are in the middle of a long term market down trend. The down trend is expected to last another 10 years (if it follows previous 18-20 year trends). This may place significant pressure on retirement funds over the next several years. As a result having a hedge against a market decline could be very beneficial.
With Forex or futures trading one can make money no matter which direction the market goes. Finding a good simple, affordable program which limits financial risk and does not take years to learn yet can place long or short trades is key. This method of trading can provide significant leverage and opportunity to increase one’s portfolio, or at least protect it.
With the correct program one can learn a little, set the basic risk parameters and let it trade, essentially unattended, during much of the day or night. Then one can make adjustments as needed for accuracy and risk tolerance. Forex accounts can also typically be started with limited capital and therefore financial risk.