Currency trading is a great way to make money fast and here we are going to give you 3 tips (that go against a lot of common currency advice) but do not let that put you off 95% of currency traders lose and do not make money fast.
Here are your 3 tips for making money fast in currency trading:
1. Do not Diversify
I read a lot about how diversification spreads your risk and it does, but it also cuts your profit potential.
If you are trading currencies and you are a small trader (under $ 50,000) diversification will simply ensure that you dilute your profit potentialia, or worse help you lose.
When you see a trade that looks good (in line with your trading methodology) hit it hard and risk as much as you can.
You will hear a lot of advice saying you should risk 2 – 5% well you will not make money that way! risking 5% on a $ 10,000 account is $ 500.00 and that wont get you much in the way of open positions.
Risk up to 10% and have the courage of your conviction.
Many currency traders try so hard to restrict risk, they never make any decent profits, as they place their stops to close.
This means they are bumped out of good trends even though they have the direction right, by normal volatility.
This is an error most novice traders make – they need to study standard deviation, but most do not even know what it means and they should – look it up and understand it fully if you want to trade successfully.
Do not make this mistake.
If you think the above sounds risky it is – but currency trading involved taking calculated risks.
If you do not like risk then do not trade currencies.
2. Be Patient
If you are risking more trade and not diversifying, then you need to have very selective in the trades you take.
Patience is the key.
Many FOREX traders think the more they trade the greater their chances of success, but the opposite is true.
You do not get rewarded for how often you trade – you get rewarded for getting your trades right.
3. Trade In Relation To What's In The Bank
Judge progress by what's in the bank.
If you have had a good run you can afford to have a bit more aggressive (if conditions are right) and risk a bit more.
Generally, try not to have too many open positions, once you hit target bank and move on, this keeps you focused and is good for confidence.
Personally, I like to have only one or two trades open at any time
I will then shift position size and risk depending on how well I am doing.
It's always easier to risk profits you have made than your own cash.
So there you have 3 tips to make money fast in currency trading.
Many currency traders will see the above is risky, but that's the nature of currency trading:
Taking calculated risks when the conditions are right and waiting patiently for them.
Its logical and can and does make money fast.