Forex Basics

Forex is the name that refers to exchange of currencies (euro, usd, yen, sterling, etc).

So you have some money in an account. This is the list of the most important things you have to know before hand.

1) Money management. If you want to stay alive I'll recommend you risk 15% of your capital AS A MAXIMUM. There's people who risk 1% of their account, so you can imagine that 15% is a BIG amount.

2) Before opening a trade, and having desided what to invest in, you need a cold approach. Think what you can tolerate losing and stick to it. For example, you have $10. If you risk $1, it's ok, but PUT A STOP LOSE when this $1 is gone. At the same time, if you have a winning trade, change the take profit more close to the actual price, this way you will earn even if it reaches stop loss.

3) You opened a trade. The currencie pair (i.e. eur/usd) goes against you, DON'T OPEN MORE TRADES, thinking it will go down, and this is the opportunity. Just let it stop lose, breath some air, relax, calm down, and enter another trade. This kind of "it's gonna go my way, i'll open more positions" is the worst thing you can do. You have around %20 winning and 80% losing. And this is related with 4),

4) Don't let the emotions get control the way you trade. Losing is part of the game, you should accept that you made a mistake, but not turn it into a battle in an efford to gain what's been lost.

5) Source of information. Take time to look at the charts, in the different timeframes, and start recognizing patterns. I think you should became very intuitive and this way, start getting a call.

6) Follow the trend. There are times that 1m, 5m, 30m, 1h timeframe give mixed signals, and this will alter the way to invest. If, for example you see a bullish signal on the 1h chart, you must have to make a lower leverage bet as it can go against you and then came back. The same is if you are looking at a 5m chart. You could leverage more, but put a tight stop lose.

7) Resources. Most of people who write about forex, and especially forex forecasts are wrong.

It's good to read, but question everything. A good starting point to be able to ask, talk, and read new outlooks, (socialize and have fun too) is the forum http://www.forexfactory.com/ . Don't follow a call, just read what they say, look at the chart, then make a decision. Be carefull as people tend to say "i guess is going up", but that should be said with the timeframe they are thinking. That forum is an excelent source of info. As an example, there's a pro named Wormboy, who has his own thread "Wormhole". He is very well educated in forex, and posts his trades. If you are an active reader you'll find who is more likly to win given it's past records. But again, question it, watch your charts and learn how to read them.

8) News. Every day there are news from countries and affect the trend. But this is for a while, then back to the trend. I don't recomend trading news, it's very tough. But just be carefull if you're going with a small timeframe, a news can kill you. (again, set stop lose).

9) Fundamentals. They are good for long term trades, but absolutly void in the short term. Anyway, reading some won't hurt you, just don't take, for example, a scalp based on fundamentals.

Here is one of the best sites on fundamentals. www.gold-eagle.com/editorials.html

Don't forget to check the no deposit forex free cash, you will have the motivation to do it right, learn, and invest money without depositing.