Posted By isaac. On 10 March 2015

The foreign exchange markets are situated all around the world. Every country in the world uses money and needs to change that money into other currencies to trade or interact with other nations.

When youre a Forex trader it doesnt have to mean that you work for a bank in one of the worlds financial centers. The beauty of Forex is that today you can trade from your home, or wherever else you would like. Since the rise of internet many people are earning money online in their spare time, from their homes, and making a nice income.

As you already know, a Forex trader deals in currencies. The traders will buy a currency that seems to be rising in value, against another pair that seems to be falling. In other words: the trader will buy the currency of the currency pair that has more potential to become stronger than the other.

When you start Forex trading, it is best to concentrate on one currency pair. Most Traders will start trading the EURUSD (Euro against the Dollar). This currency pair is the most traded currency pair, and one of the more stable pairs. For this pair there is enough market information available and it often has a low spread with most brokers.

The Japanese yen currency pairs are considered as being the most difficult pairs to trade, because of the high sensitivity for news and spikes. You always have to be careful with the Forex markets, for sudden price rises and falls.

As a Forex Trader you must have a winning mindset, and you cant be disappointed by a set back because or some temporary losses. In fact, its said only 5% of all the currency traders succeed, and the rest will not. This does not mean that 95% of all traders lose all the time, but they cant manage consistency.

Consistency is a state of mind, it is not only having the skills to analyse the charts, but you also have to analyse yourself. As a Forex trader you must be very disciplined, patient, and focused. Know when you can trade and when you can not trade!

In the Forex markets there is a risk involved, but only you can manage that risk. Sometimes the markets can be very volatile, and this means that price can rise and fall in a short time. Trading when the market is very volatile, like with major news events, can be very risky and its easy to lose a lot of money. In fact, some losses cant be avoid, so you should have strict money management rules.

You can use stop losses, which means your broker will automatically stop the trade if youre losing too much money. Using a stop loss is very important and it is the number one mistake traders make. You set a stop loss at a point where you want to stop the trade automatically, because the trade didnt work out the way you thought it would do.

The target is not to trade without losses, but to trade with bigger profits than your losses so you end up with winning on the long run.

To perform as a trader you need a computer with a high speed internet connection. Its recommended to have at least 2 screens, so you can compare charts or read news on 1 screen and keep an eye on the rates on the other screen. You will also have to create an office where you can concentrate on your trading.

Its best to trade in a room where there is no possibility to be disrupted for at least for a couple of hours a day. You can understand its no good trying to trade from your desk at your day job where there is a lot of distraction, or using a computer in the living room with the kids running around.

You have to be 100% concentrated on the charts and news, or you could miss trade opportunities or make wrong decisions. You have to be fully focused and concentrated on your charts, being an emotionless, cool, analytic robot.

It is important that you analyse the markets from a completely objective point. Dont get euphoric if you have a winning streak of trades and dont get frustrated if you get a losing streak. Always be patient and let the markets come to you!

If youre interested to earn a massive income with Forex, I strongly recommend you to become a member of Forex Mentor Pro!

They give a full course, and everyday interesting blog posts and instructions. You even can try a limited period  trial of $1 for a complete month. I am a loyal member, and when I joined them, my trading skills went in a short time to the next level!

Trading foreign exchange carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment goals, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.