I know this is a little bit of back tracking, but I think that Forex Trading is a great home based business to be involved in. As has already been discussed in this blog the Forex exchange is the biggest financial market around the globe traded by millions of currency traders daily. According to the BIS study Triennial Central Bank Survey 2004, average daily turnover in traditional foreign exchange markets was estimated at $1,880 billion. That was in 2004, it's even bigger now.

Why choose Forex Trading online as your favorite business model?

• Make money from the comfort of your home.
• Operate your online business from anywhere.
• The currency market is open 24 hours a day => work whenever you want.
• Successful currency traders earn BIG PROFITS.
• No worries about a part- or day time job
• No inventory to manage.
• No customer support.
• No employees.
• Low start up costs.
• YOU ARE YOUR OWN BOSS.

Ok, I am interested. How much does it cost to get started?

All you need is a computer and a stable connection to the internet. That's the only cost.

What do I need to know about Forex?

Before you open a LIVE Forex Trading account with a broker, you need proper education and a free Forex Trading demo account to start practicing Forex trades that you have learned. As with anything in life, if you wish to become a successful currency trader you must invest the necessary time. It is extremely important to have a good understanding of this market before going live.

For example: Do you know what a pip, forex chart, mini account or margin call is? To succeed as a currency trader, you must have a very good understanding how the forex market works, without a strong foundation of forex core market knowledge, you can never take yourself to the next levels of currency trading. If you have been following this blog or have just started most of these topics have been covered already. If you are new, start from the beginning of this blog and read though it. I will be adding to it and trying to cover most of the topics as I understand them as the blog grows.

Avoid Making Predictions in the Market

Most people make a big deal out of market prediction. They think they need to be right 70% or better in order to "pass" the exam that the market gives them. They also believe that they might get an "A" if they could be right 95% of the time. The need to predict the market steps from this desire to be right. People believe that they cannot be right unless they can predict what the market is doing.

Among our best clients, I have traders who continually make 50% or more each year with very few losing months. Surely, they must be able to predict the market very well to have that kind of track record. Well, I recently sent out a request for predictions and here is what I got back from some of the better traders.

Trader A; "I don't predict the market, and I think this is a dangerous exercise."

Trader B: "…these are just scenarios, the market is going to do what the market is going to do."

Ironically, I got these comments from them despite the fact that I was not interested in any of their specific opinions, just the consensus opinion.

So how do they make money if they have no opinions about what they market is going to do? Well, there are five critical ingredients involved:

• They follow the signals generated by the system.
• They get out when the market proves them wrong.
• They allow their profits to run as much as possible—meaning they have a high positive expectancy system.
• They have enough opportunity so that there is a great chance of realizing the positive expectancy any given month and little chance of having a losing month.
• They understand position sizing well enough so that they will continue to be in the game if they are wrong and make big money when they are right.

Most traders, including most professionals, do not understand these four points. As a result, they are very much into prediction. The average Wall Street Analyst usually makes a large six-figure income analyzing companies. Yet very few of these individuals, in my opinion, could make money trading the companies they analyze. Nevertheless, people believe that if analysts tell you the fundamentals of the marketplace, someone can use that information to make money.

Others have decided that fundamental analysis doesn't work. Instead, they have chosen to draw lines on the computer or in their chart book to analyze the market technically. These people believe that if you draw enough lines, and interpret enough patterns, you can predict the market. Again, it doesn't work. Instead, cutting losses short, really riding profits hard and managing your risk so that you continue to survive is what really makes you money. When you finally understand this at a gut level, you will know one of the key secrets to trading success. In the meantime, we will continue to make predictions in our column, so that you will begin to understand that they are entertaining, but nothing more.