- How to trade Forex Are You a Risk Taker?

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How to trade Forex Are You a Risk Taker?

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How to trade Forex Are You a Risk Taker?

Wednesday, 10 October 2007

By Charles Delvalle
The Foreign Exchange (FOREX) market is probably the most lucrative market around. You can make a lot of money quickly, you rarely have any liquidity problems, and anyone can join. But before dipping your toes into the biggest money pile in the world, you must first understand how much to risk.
If you’re not a risk taker, then don’t play FOREX. Period.

Any given currency could swing down within minutes and wipe out your position (especially if you are heavily leveraged). Then again, that currency could swing the other direction and give you a nice 300-percent gain.

That’s why every time I play FOREX, I go in understanding that I may lose my entire initial investment (at 10-to-1 leverage). But to me, that’s fine because I could easily win 4-5 times that initial investment on that trade.

But in order for that system to work, you have to make sure you only put 10-20 percent of your funds in any trade. And you should also avoid using 20-to-1 leverage.
Next week, I’ll start covering the skills you need in order to profitably make money on FOREX.

Before I go…

I’m shocked that Bernanke might be right on inflation. Of course, I still don’t believe he’s an inflation fighter by any means. I still picture him atop a helicopter, screaming over a megaphone as he drops $100 bills to rioting citizens of America, proclaiming the new ‘Bernanke Stimulus’ package. Hey, they don’t call him ‘Helicopter Ben’ because it sounds catchy.

Honestly, I think he was going down the same path Alan Greenspan did, but the banks just didn’t let that happen.

So really, Bernanke did the right thing by mistake. Kind of like rolling a strike the first time you go bowling.

But will Bernanke roll a strike the next time he’s up? I doubt it.

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Source : Investors Daily Edge

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