The Key to Make Money in Currency Trading

What is the key to make money in currency trading? Some people believe it is the ability to predict the market. They work day and night with Fibonacci methods, Elliott Wave methods, trends, charts, fundamental analysis, technical analysis, intuition, dreams, you name it. They work very hard to predict the exact moment to get in and the exact moment to get out.

Do they make money? Hardly.

The key to make money in foreign exchange trading is not predicting the markets, but having a sound strategy to manage the cash flow and control the risks of losing money.

You can have the most specific fundamental and technical analysis, the best software in the world, the most detailed charts, the best tools ever, but if you do not have a money and risk management strategy in place, all your tools are not worth much. You will most likely to lose money in your trades.

And here is the difference between a successful trader and an unsuccessful one: the ability and the discipline to set and to follow solid strategies to manage your money and control your risks.

Discipline means knowing when to enter the market and why, when to exit it and why, and where to place stops and why.

Every successful trader does not care if the indicators look good or not, but watches his/her cash flow and the level of risk on each trade. A successful trader is in control of his/her money and risks, not of the market and its behavior.

If you are new to currency trading, it might be difficult to follow a money management discipline. But it is precisely how you manage your cash flow what will give you the confidence and the wisdom to trade the markets correctly, minimizing your risks of losing money.

You cannot predict the foreign exchange market. Nobody can. But what you can do is trade the market correctly applying solid strategies and getting rid of emotions like anxiety, fear or greed. Those emotions only make you react and make decisions by impulse, with no reasoning, and just hope your reaction was the correct one. Most likely it was not.

My best advice to you is, detach yourself emotionally, set up a solid money management and risk strategy, be in control and start making money today