Unless you have a crystal ball or a genie with an unexpired wish, you will be competing with the best (and worst) when you trade in the foreign exchange market. Ever hear the saying risk vs. reward? Well, other than playing naked stock options or open futures contracts, you will be in the fast lane and the risk/reward pertains 100%.



Step One: DO NOT start trading with a live account. Choose a trading account that has a "demo" account. Trust me on this. Let me rephrase, "TRUST ME ON THIS". Get your feet wet with monopoly money before you use your real money. Do your best to pretend that these monopoly dollars came out of your retirement account and will really hurt you if you loose them. It is REALLY important that you convince yourself of this.

Step Two: Follow Step One until you "feel" that any losses or gains are out of your retirement account. If you are trading and taking risks that you would not with real dollars, how can you believe you would have the same results with real money?

Steps Three thru Ten: Follow Step One.

Step Eleven: This is the golden area where you have achieved "nirvana" you are ready to put your actual retirement funds in play. In Step One, you already selected your FOREX broker. While you were getting your mind right during Steps Two thru Ten, you probably looked at other brokerage companies to see if they could provide better service. I am not going to recommend my favorites, maybe later; do your due diligence. Demo account, no fees, long record, free charts with good options, low expenses, etc.

Steps Twelve through Eight Thousand Four Hundred Thirty Three: Remember the lessons you learned in Step One. I don't care if you bought a $6000 course like I did. If your course did not teach you Step One, immediately get your money back.

Step 8434: Concentrate on any currency against the United States Dollar. All of the other currencies are really a function of how they are performing against the benchmark, the USD. International reports and news, wave patterns, internal affairs, interest rate swings, etc. affect all currency pairs, but they all are really defined by the USD.

The volatility of the FOREX when the periodic reports for the countries you are trading come out can be huge. This is fine as long as you are not in a trade at the time. Even if you are in a trade and the initial spike is in a favorable direction, there are many times that your order will not get executed before the currency pair swings the other way. Small players are at the mercy of the system. If it sounds like I am speaking from experience, you have guessed correctly. I made out poorly in every instance, mostly from being stopped out on the gyrations.

The service that you select as your broker should provide you with a calendar of upcoming reports and news. This never fully protects you from a major news story hitting the street, but those are relatively rare.