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Make Money Trading Currencies
Can you really make money trading currencies? Many may believe that profitable currency trading is a fantasy after losing their trading capital. However, the Forex markets offer substantial profits to those who approach the job of Forex trading wisely and with a plan. There are several pitfalls in Forex and if you avoid them you can commonly make money trading currencies. So, develop a currency trading system that hedges risk and takes advantage of recurring Forex volatility. Read more about how to make money trading currencies.
Forex Trading Is a Business and Not a Trip to Las Vegas
If you want to make money trading currencies you need to follow the fundamentals that dictate currency rates and you need to track market sentiment with technical trading signals. All too often traders fall victim to the twin demons of trading, greed and fear. When you are in a losing trading and do not understand why it is not time to “double your bet” but rather to get out and reassess both market fundamentals and technical signals. Trend trading is an established way to make money trading Forex and other markets. However, the most successful traders know why the USD is going up versus the Euro or why the Yen is going up versus the British Pound. They keep track of the economic factors, political factors and central bank policies of the nations whose currencies they trade.
Where Analysis Works the Best
Most successful traders trade the major currency pairs. These are as follows:
USD US dollar
GBP British Pound
CHF Swiss franc
CAD Canadian dollar
AUD Australian dollar
All of these currencies trade in high volume and liquidity. These twin facts make technical trading of these currencies more accurate and thus more profitable. The US dollar is part of eighty-five percent of all trades. Thus the USD trades at the highest volume and has the most liquidity. There are many minor currencies that one can trade but commonly one must trade them versus the US dollar. When a minor currency in involved there are two reasons why you might not make money trading currencies. The first is that the fundamentals may be misleading. Not all economies are as transparent as those of the major currency pairs. What you think might be great info that will lead to profits may be just hype or downright lies. The other factor is that trading volume in minor currencies may be very small. That means you can buy a minor currency and watch it go up versus a major but when you want to see you may find that there are no buyers! Most successful traders stick with major pairs.