Risking 50% of your account equity is foolhardy no matter how sure you feel about the outcome of your trades. If 2 consecutive losses can take you out of the game you were never really in the game to begin with. 

A common method of controlling your risk is to only place a small percentage of your account equity on each trade. 1 to 3 percent is what is typically recommended. This gives you the ability to ride out those rough periods in trading when the Forex market and your trading system don’t quite see eye to eye. 

Your trading system will dictate what percentage of your equity that you risk per trade. How much you risk per trade should always be studied closely. If the amount is too small your account equity will grow much slower than it should. If the amount is too large…well we all know what can happen in that case.

Several forex brokers have education centers built right into them that explains, some forex terminology and forex indicators, this does not mean that they are the best broker out there or that a broker with no education center out there is a horrible broker, every broker has different pros and cons. The most important thing is to find a broker you are happy with and start demo trading try different systems, indicators, trade at different times of day set different limits and work very hard to get that demo money to grow.

So you’ve been trading your demo accounts and it is going great looks like your a forex wizard, your demo account is growing at incredible rate and you can’t wait to get your real money account off the ground and running.  Here’s the best advice I can give you SLOW DOWN !!! You can have great days, weeks even months, but just when you think “I have got this mastered” the forex market can turn and teach you a lesson.  Always input your stop losses and stick with a system you are comfortable with and don’t leverage too much of your account.

So what you are really looking for is experience in the forex marketplace before you get into buying a robot or investing a large amount of capitol, you need to know if you can trade successfully and a demo account with any broker is one of the best ways to find out.

The minimum capital requirement from your Forex broker actually has nothing to do with what it takes to trade Forex successfully. The amount of capital you need is determined by your trading plan. Your trading plan should outline your goals for your Forex trading as well as include your Forex trading system. Let’s dig into this a little further. 

If you wish to trade Forex for a living then you will quite logically need more money to work with than someone interested in trading Forex as a hobby. For instance let’s say you want to replace a $50,000 per year income by trading Forex. In our example we will assume that your Forex trading system will produce a 100% yearly return. In order to replace your $50,000 per year job you will need to start with $50,000 in working capital and get a 100% return on your money. Please take note that in this simplified example we are not taking other factors such as employer-funded plans such as insurance or retirement. 

So as you can see having the proper amount of working capital is crucial in Forex trading as it is in any business. Do not make the common mistake of underfunding your Forex trading account.

Trade only with risk capital — you should only trade Forex with money that you can afford to lose.  This means that if the money is lost that it will not affect your lifestyle in any way.  Trading with money that you cannot afford to lose is also known as trading with “scared money”.  When trading with scared money beginning traders find themselves afraid to take losses.  Since losses are a natural part of Forex trading this means that they will eventually be afraid to take the trades that they are supposed to. 

Maintain your trading discipline — this tip goes hand-in-hand with having the patience necessary to follow your trading system to the letter.  Second-guessing yourselfor your trading system can easily have a negative effect on your trading performance. 

Don’t  search for the holy Grail of trading — there is no such thing as a perfect trading system which has 100% winning trades.  With this in mind understand that it is a waste of time and energy to seek out such a Forex trading system.  The most successful and profitable Forex traders in the world do not have trading systems with 100% winning trades.  That in and of itself should tell you something. 

The Forex trading tips that we have just reviewed have truly withstood the test of time.  It’s a good idea to review these from time to time to remind yourself to stay on track.  By staying on track and maintaining your trading discipline you will be well on your way to successful Forex trading.

A broker’s financial standing is extremely important.  One of the best places to get a quick financial snapshot of a Forex broker is to contact the Commodity Futures Trading Commission or CFTC.  This information is available online at their website at CFTC.gov. 

Another important factor in choosing a Forex is the ease of placing orders.  Even though most of your trades will be done online it is advisable that your broker has an order desk that you can reach by phone.  If there happens to be an interruption in Internet service the ability to place orders via the telephone can be very useful. 

The broker’s transaction cost is quite obviously very important.  This will definitely affect your bottom line so it is always wise to keep your transaction costs as low as possible.  Most Forex brokers receive their compensation through the spread and spreads can vary widely between different Forex brokers.  It’s smart to shop around for the lowest possible spread on the currency pairs that you trade most frequently. 

Of course, the broker’s online trading platform is quite an important factor.  You need an online trading platform that will do exactly what you wish.  The platform also needs to be simple to use.  If it’s too complex and can get very confusing and that is the last thing you need during your trading day.

In general the system is a set of rules designed to carry out a specific purpose.  So a Forex trading system can be viewed as a set of rules designed to trade Forex successfully.  Forex trading systems have the decision-making process already built into them.  Here’s a simple overview of how a simple technical analysis-based trading system might work. 

The first thing a system needs is data.  The system will take the data of the currency pair to be traded and evaluate it based upon its internal set of rules.  After the data has been evaluated the Forex trading system will do one of three things. 

Issue a buy signal 

Issue a sell signal 

Do nothing 

When a trader receives a Forex signal telling them to take some action than the trader has two choices: 

1 – Take action and place to trade – this is known as manually placing the trade

2 – Let a Forex robot place the trade – this can be done if the Forex trading system is integrated into a Forex trading robot. 

Successful traders use Forex trading systems that they have evaluated to be profitable.  In order for you to be profitable it will be important that you take the time to properly evaluate any Forex trading system before trading with real money.  One good way for you to see the system in action is to trade the system using a Forex demo account.

A Forex robot is software created to make trading decisions for you.  It is called a robot because it carries out its instructions with “mechanical” precision.  In the traditional sense a Forex robot can not only decide when to buy and sell, but can also place your Forex trades for you. 

In order for a Forex robot to work properly and automatically place your trades for you it needs to be connected to a compatible online Forex trading platform.  A very commonly used online Forex trading platform is called MetaTrader.  MetaTrader is compatible with many of the commercially available Forex robots on the market today. 

In order for your Forex robot to automatically place trades for you your Forex broker will need to be compatible with MetaTrader or which ever platform your robot is designed to work with. 

A Forex robot can provide the ultimate in hands-free trading.  One that works properly can generate income for you while you play golf, relax in your favorite easy chair, or spend the day at the beach.  It is this hands-free trading lifestyle that has made Forex robots extremely popular.

What currency pair to trade — a Forex signal will always specify the currency pair to be traded.

What quantity to trade — you will need to know the number of Forex lots to be traded. 

How much capital to risk — knowing how much capital to risk on each trade is an absolute must.  Good Forex signals always give sufficient information in order to control risk. 

Which direction to trade — if you receive a bullish signal then you will want to buy it and if you receive a bearish signal then you want to sell. 

When to get in — this is the first component of timing the market. 

When to get out — this is the second component of timing the Forex market. 

Forex signals are generated by Forex trading systems.  Most of the Forex trading systems in use today come in the form of Forex trading software. Forex trading system software takes Forex data and uses this data to make the calculations which then generate the Forex signals. 

Good Forex signals can withstand the test of time.  This means that the signals will work in many different market conditions and this is important for the longevity of your Forex trading success.

Those who master any skill will quickly tell you that they are constantly in the process of learning… always absorbing and digesting new information.  Forex trading is no different.  It makes perfect sense that to master Forex trading you will need to become a student of the markets.  Here are a number of ways that you can learn a Forex trading and take your trading to the next level. 

Forex forums — forums can be a great source of information and will often have a mix of beginners, intermediate, as well as highly advanced traders. This makes for a highly interactive and enjoyable learning environment. 

Forex brokers — most all Forex brokers provide some type of basic Forex education.  A broker will also provide free demo accounts.  These demo accounts allow you to see price action as well as give you an opportunity to practice with and evaluate your Forex trading ideas in real time. 

Forex courses — there are numerous Forex trading courses currently available.  When looking for course make certain that you find one that is suited to your particular experience level.  Forex courses are available in a variety of formats.  Some courses you can simply take online in the convenient setting of your home or office.  There are other Forex courses which are home study courses.  With these you are get the physical course books as well as audio or video CDs and/or DVDs. 

Whichever route you choose to learn Forex trading understand that by taking the time to do this you are building a solid foundation for you Forex trading success.

Forex trading system software — it is necessary to have a reliable Forex trading system in order to trade successfully.  Forex trading system software comes in several different forms.  You can either get software that allows you to develop your own trading system, software that is programmed to generate the Forex signals for you, or a combination of both. 

Forex trading platform — online Forex trading has become the de facto standard in Forex trading today.  Most traders enjoy the efficiency and convenience of being able to place the trades online.  Unless you plan to call your Forex broker’s order desk via telephone and place every trade you will need an online Forex trading platform. 

Forex robots — Forex robots provide the ultimate in hands-free Forex trading.  Forex robots not only make the trading decisions for you, but place the trades for you via your brokers compatible online trading platform. 

To answer the question do I need Forex trading software to trade Forex successfully… the answer in most cases would be yes.  While it is possible for long-term Forex traders to call-in and place their orders via telephone, most would still choose to use an online Forex trading platform. 

Advances in Forex trading technology can definitely help traders trade more efficiently and thusly more successfully.