Successful Forex Trading – It's Not All About Day Trading

There are many preconceptions about what it actually takes to become a successful trader. However here are a couple of points to consider if you want to become a profitable forex trader.

Firstly you should try and forget about trading short-term / day trading strategies. Many people believe that if they want to make big profits from forex trading, then they need to trade lots of positions every single day. However this couldn't be further from the truth.

Day trading in itself is very difficult. You have to make quick decisions and deal with highly volatile markets, particularly during times when economic data releases are announced. You also have to deal with increased spreads during these busy periods which can seriously deplete your overall profits. You also have to deal with the random noise that occurs when the price isn't trending in one direction or the other, so overall it is far from easy.

A much better strategy is to use much longer time frames such as the 4 hour or daily charts, for instance. In general you will often find that technical analysis is much more reliable when you use these longer time frames.

This is something that is endorsed by many top traders such as Bill Poulos who has actually devised several trading strategies that only use end of day charts. (More details can be found by reading this Forex Profit Accelerator review).

Anyway the point is that although you can make money from day trading, it is so difficult to consistently make money in the long run. Scalping systems will often generate short-term profits but there are very few systems that will continue to be profitable in the long-term. Longer term systems are usually much more dependable and are often much more profitable because each trade usually has much larger profit targets.

Why Do A Lot Of Forex Systems Ultimately Fail?

There are many reasons why the majority of forex systems simply do not work, as I'm about to discuss.

Firstly you will often find that many forex systems you come across online are incomplete. They will go into great depth describing the basics of forex trading but when it comes down to the finer details of how to trade the system in question, it will very often leave the trader wondering how they actually trade the system.

Another reason why a lot of systems fail is because they completely disregard risk management. This is just stupid because it's no good outlining a system if you don't mention when you should admit defeat and cut your losses. No system is perfect and they will always generate some losses, so they should always mention how you can keep these losses as small as possible.

A third reason why a lot of systems fail is because they are based on trading important news events. By that I mean things like interest rate decisions and important economic data releases which have such a major impact on the major currency pairs. These systems are based on trading highly volatile markets which often means increased spreads as well, so it is very hard to actually make money trading this way on a consistent basis.

The final reason is simply because they are short-term trading systems. Consistently making profits from day trading the forex markets is extremely difficult, and although a lot of systems may make profits in the short-term, in the long run the vast majority of these systems will end up losing money.

So if you are looking for a profitable forex trading system, you should ideally look for ones that use the longer term charts such as the daily charts. The systems included in the Forex Profit Accelerator course are examples of such systems but there are lots of others out there as well.

Here's A Few Useful Forex Links...

In today's post I just want to provide you with a few useful resources I've recently come across. The first explains the steps you need to take in order to become a highly profitable forex trader.

The second site lists 10 top forex sites that every forex trader can benefit from. Included in this list are blogs, news resources, forex systems and useful trading tips. I'm sure you will find it useful.

Forex Autocash Robot Review

Forex Autocash Robot, the automated trading robot by John Burroughs, has created quite a buzz amongst the forex community, mainly because of it's outstanding performance record over a substantial period of time.

It claims to have made 597 consecutive winning trades with not a single loser in it's entire history, which dates back almost 9 years.

To find out more about this product I suggest reading this Forex Autocash Robot review that I recently discovered on Squidoo.

Forex News Trading

Many forex traders rely on technical analysis to trade the markets, but you can make equally impressive profits by trading the regular news releases and sticking to the fundamentals that ultimately move the forex markets.

These economic data releases, particularly the more important ones like interest rate statements and non-farm payroll data, will often move the major currency pairs quite signifcantly, particularly the dollar pairs.

This creates an opportunity for the news trader because they will often either go with the immediate trend and the momentum that is generated after an announcement or they will take an opposite view and look to take a position based on the price over-reacting to a particular announcement.

For information about forex news trading I recommend checking out a new trading course that's recently come onto the market called News Profiteer. This is an excellent course and is the best course I've come across that deals entirely with trading the news. Click here to read a full News Profiteer review.