Earning money on Forex is not as simple as some people think it can be. Statistics show that 95% of Forex traders lose their entire account balance. People hear all the time about forex or day trading and then they think they need to get in to make some money, and then what happens is they rush to set up their trading account and lose it all. Now for other people, they may run into some problems like “thrills” which means they lose some money and try to win it back by doubling or tripling the trade size without success.

Again with emotions, you could be in a BUY trade (you predicted the market would go up) and then all of a sudden you see the market sell off (the market went down in the opposite direction), then you freak out and close your trade and take a lost. But then later that same day, you see the market go back up to where you predicted it would go.

The Forex Market is very unpredictable no matter what someone wants to tell you. However, there are strategies and tools you can use to plan and increase the probability of your trades and overall success in this attractive and unregulated market.

Strategies –

There are some systems/strategies that people use to enter and exit trades, these are mostly indicators that notify a person when to ENTER and EXIT a trade. But not all systems work all the time, the market changes and evolves and then the systems will have to be adjusted, etc.

Tools –

There are many different tools in a forex charting system that help a trader perform technical analysis on currency pairs. Some of the most used tools are Fibonacci, Trend Line, Candlestick, Pivot Lines, etc. Forex charts have different time frames that you can use to help predict, like this 1 min, 5 min, 15 min, 30 min, 60 min, 3 hr, 1 day. So for example, if you want to find out if a trend is up or down, one way to do it is to check higher time frames, this gives you a better probability on your trades.

There are two types of trading: fundamental and technical analysis. Fundamental analysis is more about trading what controls or moves the markets, examples are major news announcements, gold or oil. So if tomorrow morning there was a US unemployment rate news event and the number that came out was very negative, that would be bad for the US, so you would want to enter a SELL on a USD pair. Fundamental trading is mainly for more experienced traders due to its high volatility. Technical analysis mainly consists of using charting tools and systems/strategies, this is the most common way to trade and everyone does it.