Learn Forex - Essential Tips From a Group of Millionaire Traders to Lead You to Huge FX Profits!

If you want to learn Forex and win, you need to get yourself a good currency trading education. In this article, we will look at a group of people who had never traded, learnt to trade in two weeks and went on to make millions of dollars. Let's take a look at these traders in more detail and see what we can learn from them and get on the road to trading success.

Richard Dennis wanted to prove anyone could learn to trade and make money with the right trading and he set up an experiment. He advertised for people who wanted to learn to trade and thousands replied so he picked a cross section of people from all walks of life and the group contained - a security guard, an actor, a young boy just out of high school, a lady accountant and a professional card player. These people were then given two weeks training and after that Dennis gave them live trading accounts.

These traders went on to make hundreds of millions of dollars and the experiment had shown that educational ability, sex or age were no barrier to success and even better trading could be learned quickly. So what can you learn from these traders? Let's take a closer look.

- The group showed that anyone could learn to trade and they were only taught a simple strategy and any trader needs to learn the best Forex trading strategies are simple because my a strategy to complex and it will have to many elements to break. Anyone has the capacity to learn a simple trading strategy which can make money and you don't need a college education to do so.

- The strategy also focused on the long term and its a fact that most traders don't trade long term, they like to scalp and day trade, take low odds trades and lose. If you want to win, focus on the long term trends that make the really big profits. If you this, you can spend less time on your trading and make more money.

- Perhaps the major lesson a new trader can learn from these super traders is money management. Money management and trading with discipline is the key to success and these traders actually LOST over 70% of their trades yet still made huge gains because they kept their losses small.

- Most traders think they can win most of the time and believe the laughable message of Forex robot vendors who tell them they can enjoy a 95% success rate, of course its not true but that doesn't mean you can't make big gains you can, just keep your losses small and run profits and you will do just fine.

The above story was an inspiration to me, when I first started to learn to trade and I hope it inspires you to join the exciting world of Forex trading.

Learning Forex Trading - Why Opening a Demo Account Can Maximize Your Profits

So you have decided to enter the world of forex trading. You've chosen your preferred method, most likely an automated Expert Advisor type software package and you have researched which software you want to purchase. What next? Well you have two basic options. Option one, jump straight into live trading and see what happens. A natural response if you are feeling optimistic, and why shouldn't you? After all the software works doesn't it? All those results that the vendor showed you demonstrated that perfectly. Well actually, most of the results you are shown are probably the result of back-testing. This doesn't necessarily make them wrong or inaccurate but we must understand that the trading rules have probably been specifically optimised to ensure the best possible results for that particular data set.

The second option is to open a demo account with your broker. What this allows you to do is effectively test drive your chosen software without the risk of losing any money. The first thing to recognise is that a demo account is a simulation of the real thing, and to make your experience as realistic as possible you need to look for three key components. The first point of note is to ensure that the platform that hosts your demo account of choice is compatible with your software. An obvious assumption perhaps but it is important that you get into the habit right from the beginning of taking nothing for granted and making sure you do not become the victim of costlier assumptions farther down the track

Secondly, you want to look for an account that allows you to trade on margin. This is the only real way to trade as an individual trader, using your own sources of capital, so it is important that you get a feel for this. It can be a daunting experience for some to gear their investments into a much larger trading position. Start small and always have sufficient funds to cover your position. As your funds increase, you can increase your position to match and begin to enjoy larger and larger profits per transaction. Get into the habit of respecting your broker and ensure you always respond to losses quickly by making sure that your position is always covered. This means having enough cash to pay your debts.

Thirdly, you want an account that allows you to trade using real-time exchange rates. Whilst some might argue that it doesn't matter exactly what the exchange rates are but how you respond to them that matters, my personal view is that the whole point of running a demo account is to see how well you would have done in as real a simulation as possible.

Opening a demo account is a great way to test drive your software before committing to live trading. However, a word of caution must be noted here. Demo accounts are only simulations in the same way a flight simulator is to a trainee pilot. It is a whole different ball game in real life. That said getting used to margin trading and evaluating your trade set-up rules in real-time exchange rate scenarios is a valuable experience, and for my money a great way to ease your self into a profitable forex trading career.

Forex Trading Sentiment - Learn How to Gauge it For Huge Profits and a Live Example

The most important variable in forex price movement is not the sentiment of the participants who ultimately determine the price. Humans are creatures of greed and fear and if you watch and know how to gauge extremes in sentiment you can make huge profits here's how and a huge immediate profit opportunity.

Markets tend to really when there most bearish and crash when there most bullish and this has occurred throughout history and is human sentiment at work. All markets exhibit price spikes which are simply peaks in sentiment when greed and fear pushes prices to far from fair value.

But how do you spot them - let me give a live example now that could pile up huge profits of 1,000 pips or more.

Let me first start with a quote:

"If you can hold your head around you when everyone is losing theirs you probably haven't heard the news"

In forex trading this can be translated as:

You have but your seeing the news from a different angle and let's take the euro/US dollar pair as an example. Most analysts and investors are bearish the dollar and it's been hit by a lot of bad news over the last few weeks including:

Interest rates have dropped by 1.25%, the housing and jobs market look terrible, GDP has crashed, consumer confidence is low and the Government is trying to put together a $150 billion rescue package - so the dollar is going to fall into oblivion - RIGHT?

Dead wrong!

This is old news and discounted by the market and if you look at a chart, the euro has hit chart resistance and is FALLING. Why?

Because the news is discounted and traders who were gripped by fear and selling the dollar have sold as much as they can and sentiment is at a bearish extreme - that's why the dollar is rallying, in the face of what appears to be bad news.

Furthermore, the market will soon look ahead and think the Fed has been proactive and things must improve. Sure euro zone has better interest rates - but it to has a struggling economy which needs interest cuts and traders will realize this will sell the euro and buy the dollar.

Remember what I said earlier:

Markets always rally when they appear most bearish and the dollar is no exception.

The fact that bearish news cannot send the dollar lower, points to a turn and it could be 1,000 pips or more in profit. If you get up a forex chart and look at it, you will see the reality of the dollar getting support and euro momentum falling.

All markets do this and forex markets are no exception.

Always Remember This:

Traders push prices to far up or down based upon the emotions of greed and fear and when the buying or selling frenzy ends, the market turns and a counter rally starts.

Check out a forex chart of the US Dollar and euro and you will see exactly what I mean and if you take into account what we have said on sentiment above you could get in on a huge profit opportunity.