Forex Strategies and How to Trade Forex

Trading Forex is the business of buying and selling international currencies against one another, for example buying the Euro at 1.36 US Dollars, then selling it back at 1.37, buying low, selling high and making a profit. To trade fx and make a profit you should find a few of the many Forex strategies, that traders use to trade fx. The main issue with these Forex strategies is finding one that works, and one that you can learn and cope with.

Although there are a number of profitable strategies available, none of them can trade and win every single trade, no fx strategy is one hundred percent successful and you should not expect them to be. To trade successfully is to simply win more trades than you lose, or to profit from your winning trades to a larger extent than your losing trades do. This is known as your risk/reward ratio and varies between each strategy.

Some Forex strategies will use the principal of winning a high percentage of the trades, but each trade is only profitable by a small amount, or a few pips as it is referred to. These Forex strategies are known as scalping methods, and the principal is that, you will win most trades as you are looking to take small quick profits. The problem with these Forex strategies is that you must control your loses, otherwise you may cancel out ten winning trades with one losing one, that is not a good way to trade fx.

Other strategies, will take the opposite approach to the risk reward ratio. Trading Forex in this manner means looking to make large amount of pips on a winning trade, and using small stop loses, and only losing a few pips on the losing trades. Using these types of strategies, means you can trade profitably by winning less than half of the trades, depending on the ration, you may only need to win twenty percent of your trades to trade fx and turn a profit.

Whichever way you decide to trade Forex, whichever of these Forex strategies you use, it is still going to take time, patience, and dedication to master the art form that is trading. To trade Forex is not a science, it is not gambling either, but can feel like it, so keeping control of your emotions is a common problem that must be overcome to trade Forex successfully.

If you are just starting to learn how to trade Forex, then there is a lot of information on the internet describing people's different Forex strategies. Some advice is free and freely available, some people will sell you there Forex strategies so you learn hot to trade Forex, the same way they do. It is difficult to say which is best, there are some golden rules on how to trade Forex, but no guarantees, it is an art form in many ways, and some people say that to trade Forex well, you must adapt your own style of Forex strategies, just is suitable to your personality.

So if you are going to trade Forex, take your time and do your due diligence. Research as many Forex strategies as possible, and take your time with demo accounts to practice with, before using real money.

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Article Source: http://EzineArticles.com/expert/Daniel_Melton/483396

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