Easy Forex - Learn Currency Trading

Everyone wants to learn currency trading, or so it seems from the number of people being drawn into the foreign currency, or forex, craze. But, as with most things, there's a right way and a wrong way. And the right way has three vital ingredients.

1. A Demo Account.

Nearly all brokers supplying foreign exchange services offer demo account facilities. You can usually open and run as many demo accounts as you like, but one should be enough for most people. You'll have an opening balance of usually $10,000 of make-believe money to trade with.

You should treat your demo account very seriously. It's a most invaluable learning tool. To be sure, you can have fun with it as well, but you have to use it to learn how to make real money in this most treacherous market.

It's tempting to start trading at $10 or $20 a point just to see how much money, albeit make-believe money, you can make in as short a time as possible. But that's a mistake. If you're to learn how to trade currencies profitably then you should treat your $10,000 of make-believe money as if it were real.

Don't start by trading every currency pairing every day, as if you were compelled to trade, no matter what the market conditions are. Successful traders don't always have positions open. They pick and choose when to trade and which currencies. They usually specialise in no more than two or three currency pairings, which they know intimately. So copy them.

The objective is very simple - to show a consistent profit from one week (or month) to the next. You can learn to do this trading at no more than $1 a point. Over 95 per cent of newcomers to currency trading fail to do this, and most of them will have skipped or severely shortened the period when they actually learn currency trading by way of a demo account. Don't let this happen to you.

2. The Simple Moving Average

Believe it or not, the simple moving average is the only indicator, out of the dozens available, that most highly successful financial traders, like Vince Stanzione, use. It is invariably used in double format, e.

g. a 5 day moving average and a 75 day moving average. When the shorter moving average crosses the longer one it is often a signal - to buy (or close a short position) if moving up, and to sell (or close a long position) if moving down.

Even if you learn nothing about any of the other indicators, make sure you learn this aspect of currency trading thoroughly. Decide early on which currency pairings you are going to profit from and keep to those. Work out which two lengths of simple moving average give the most reliable indication of imminent moves in price, whether you're day trading the currency market, or trading longer term.

3. A Mentor who is a Successful Currency Trader

This is your third vital ingredient, and is to be differentiated from someone simply selling information or software on how to get rich in forex. I mean someone who actively trades in the foreign exchange market and can prove that he has made consistent profits.

There are such people, and Vince Stanzione is one, who are willing to teach others how to trade successfully in the financial markets, including foreign exchange. It's a mistake to think you can succeed on your own. Even the most successful traders have invariably had expert guidance at important points in their career.

To learn currency trading properly is a most profitable and worthwhile activity undertaken by a tiny minority of traders in the currency markets. Make sure you become one of that minority.