FOREX DAY TRADING

I get a lot of questions posed to me each day by beginning traders, and the one I seem to hear most frequently is "Can I really make a good living with Forex Day Trading?"

There are really two answers to that question.

The first answer is simply "Yes."  There are literally thousands, if not tens of thousands of people worldwide whose primary source of income comes from Forex Day Trading.  Whether they are making $1-2,000, or $10-20,000 per month or more, they make that money from day trading the Forex markets.

The second answer that comes to mind immediately is "I don't know."

I don't know if you have the patience and discipline to sit on the sidelines for a day or two (or 3 or 10) waiting for a trade to setup for you.  So many traders start with the best of intentions, using a good trading method that will win more often than not.  But when the setup for that trading method does not form in the first 24 hours, they get antsy and start throwing in trades on whims and hunches.

These are the traders who will go broke long before they ever start showing a profit from Forex Day Trading.

I also don't know if YOU will be successful with Forex Day Trading because I don't know what you know about using sound principles of Money Management.

Money Management is probably THE most important aspect of Forex Day Trading.  If you know how to properly size your trades so that you minimize your losses and maximize your opportunities to earn as many pips as the market will give you, then it really doesn't matter what system or method you use to trade the Forex markets.  You will make money in the long run.

The reason for this is Money Management protects your trading account (your "bankroll" if you will) from taking major losses.  If you structure each trade so that the most you will lose in a bad trade is 2-3% of your account, and you adjust your trade sizes daily to account for recent winning and losing trades, you cannot help but make money trading Forex.

As an example, my Free Trade Call Service (which is a bonus I offer to anyone who purchases my book) releases a single trade each morning as the London markets open.  There are three possible outcomes for this call:

1. The price points we were looking for to enter the trade were never reached within the timeframe I set for the trade, and we end up with a "No Trade."  This means we never executed a trade based on that call, and our account balance remains unchanged.

2. The price points we were looking for WERE hit, but the market reversed course prior to us reaching a point where we moved our stop-loss to break even, so we end up losing pips on that trade.  I use (and recommend) a 40 pip fixed stop-loss for anyone who follows my trades, so on loser days we lose 40 pips.

3. The price points we were looking for were hit, and the market moves in our favor for an extended period of time.  Sometimes this means we make a few pips on the trade (15-50 pips) and other times we make a large number of pips on the trade (51-300 pips).

Although we don't have a long period of time from which to cull statistics, in the period we have been making these calls, we tend to have two winning calls for every losing call, and at the end of the month are up between 400-800 pips.

But even if those statistics were reversed, and we had two losing calls for every winner, the fact that we limit our losses to a maximum of 40 pips and allow our winning trades to run into the 2-300 pip range on occasion, means we can still show a profit at the end of the month from Forex Day Trading, simply because we are patient and use sound Money Management principles when placing our trades.

So if you are considering taking up Forex Day Trading as a hobby, a part-time source of income or a full time occupation, take the time to learn everything you can about proper Money Management, and force yourself to remain patient and disciplined when looking for trade setups.  If you can do these two things, you are a long way down the road to becoming prosperous and successful as a Forex Day Trader.

And if you want a head start on your success, jump over to www.simple4xsystem.net and check out the package of information and trade calls I make available to all my subscribers for the one time low price of $97.  In my book , "A Simple 4X Trading Plan and Money Management System" I teach you everything you need to know about using Money Management and a solid Trading Plan as a foundation to becoming a successful Forex Day Trader.