It's possible to trade profitably on the Forex, the nearly $2 trillion worldwide currency exchange market. But the odds are against you, even more so if you don't prepare and plan your trades. According to a 2014 Bloomberg report, several analyses of retail Forex trading, including one by the National Futures Association (NFA), the industry's regulatory body, concluded that more than two out of three Forex traders lose money.
This suggests that self-education and caution are recommended. Here are some approaches that may improve your odds of taking a profit.
Prepare Before You Begin Trading
Because the Forex market is highly leveraged -- as much as 50 to 1 -- it can have the same appeal as buying a lottery ticket: some small chance of making a killing. This, however, isn't trading; it's gambling, with the odds long against you.
A better way of entering the Forex market is to carefully prepare. Beginning with a practice account is helpful and risk-free. While you're trading in your practice account, read the most frequently recommended Forex trading books, among them
Currency Forecasting: A Guide to Fundamental and Technical Models of Exchange Rate Determination, by Michael R. Rosenberg is short, not too sweet and highly admired introduction to the Forex market.
Forex Strategies: Best Forex Strategies for High Profits and Reduced Risk, by Matthew Maybury is an excellent introduction to Forex trading.
The Little Book of Currency Trading: How to Make Big Profits in the World of Forex, by Kathy Lien is another concise introduction that has stood the test of time.
All three are available on Amazon. Rosenberg's book, unfortunately, is pricey, but it's widely available in public libraries. "Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude," by Mark Douglas is another good book that's available on Amazon, and, again, somewhat pricey, although the Kindle edition is not.
Use the information gained from your reading to plan your trades before plunging in. The more you change your plan, the more you end up in trouble and the less likely that elusive forex profit will end up in your pocket.
Diversify and Limit Your Risks
Two strategies that belong in every trader's arsenal are:
Diversification: Traders who execute many small traders, particularly in different markets where the correlation between markets is low, have a better chance of making a profit. Putting all your money in one big trade is always a bad idea.
Familiarize yourself with ways guaranteeing a profit on an already profitable order, such as a trailing stop, and of limiting losses using stop and limit orders. These strategies and more are covered in the recommended books. Novice traders often make the mistake of concentrating on how to win; it's even more important to understand how to limit your losses.
Be Patient
Forex traders, particularly beginners, are prone to getting nervous if a trade does not go their way immediately, or if the trade goes into a little profit they get itchy to pull the plug and walk away with a small profit that could have been a significant profit with little downside risk using appropriate risk reduction strategies.
In "On Any Given Sunday," Al Pacino reminds us that "football is a game of inches." That's a winning attitude in the Forex market as well. Remember that you are going to win some trades and lose others. Take satisfaction in the accumulation of a few more wins than losses. Over time, that could make you rich!
MIGAS: EGGS AND TORTILLAS RECIPE (PLUS BACON!)
MIGAS: EGGS AND TORTILLAS RECIPE (PLUS BACON!)
This could easily become your default breakfast dish for lazy weekend mornings, so consider yourself warned! They are addictive and once you’ve had a home-cooked version you’ll be left wondering why eggs n’ bacon in the States are served up so…boring?
Green sauces work wonders on eggs so we’re bombing these Migas with a freshly made Salsa Verde. It’s worth giving the Salsa Verde a try if you’re new to it — it adds life to the dish and you can easily make it on the side while the Migas are cooking.
Migas are the perfect Mexican breakfast dish for lazy weekend mornings. We're topping this version with a freshly made Salsa Verde and it is delicious! \
Ingredients
- 6 eggs
- 4 slices bacon
- 3-4 corn tortillas
- 1/4 onion
- 1/2 jalapeno
- 1 garlic clove
- 1/2 cup shredded cheese (Jack or Cheddar)
- 1/2 teaspoon salt
- freshly cracked black pepper
- 2 tablespoons olive oil
- 1 tablespoon butter
- freshly chopped cilantro (optional)
For the Salsa Verde:
- 4-5 tomatillos
- 1/2 onion
- 1 garlic clove
- 10-12 sprigs cilantro
- 2 jalapenos
Instructions
- Start by rinsing and de-stemming the tomatillos. Add them to a baking sheet along with 4 slices of bacon. Cook in a 400F oven for 20 minutes. I line the baking sheet with parchment paper for easy clean-up.
- Finely chop 1/4 onion, 1/2 jalapeno, and single garlic clove.
- Cut the corn tortillas into thin strips approximately 1/4" wide.
- Heat up a skillet over medium-high heat. Add 2 tablespoons of oil and a single tablespoon of butter. When the oil is hot add the tortillas strips and cook until they are crispy and brown, stirring regularly, approx. 5-7 minutes. I usually add a pinch of salt here too.
- Add the onion and jalapeno to the pan and saute until they are softened. (You can add a glug of oil to cook the onion and jalapeno if you need to.) Add the minced garlic and cook briefly, 30 seconds or so. Turn the heat down to medium-low.
- Whisk together 6 eggs and add them to the pan along with 1/2 teaspoon of salt and some freshly cracked black pepper. Stir regularly as the eggs cook over medium-low heat.
- Meanwhile, add the roasted tomatillos to a blender along with 1/2 onion, 2 jalapenos, 10-12 sprigs cilantro, and a single garlic clove. Combine well and take a taste. I rarely add salt to this Salsa Verde but you can add a pinch if you think it needs it. Note: 2 jalapenos creates some real zip so feel free to dial back on the jalapenos if you want a milder version.
- When the eggs are just about done, add the cooked, chopped bacon and 1/2 cup shredded cheese. Combine well and take a final taste for seasoning. (Note: if you're not using bacon you might need to add a pinch of salt.)
- Garnish with chopped cilantro and serve immediately next to a bowl of your freshly made Salsa Verde so people can add a few spoonfuls at a time.
Recipe Notes
We typically make Salsa Verde using serranos so feel free to use those if you have some on hand, but this version uses jalapenos and they work just as well.
