Forex trading has fast become one of the hottest topics around these days as a way for people to invest and get rich. But is forex trading really an easy and surefire way to grow rich or is it just another risky venture? Undoubtedly, there are key fundamentals that anyone interested in forex trading should know before even attempting it.

Forex, also known as "FX" for some, is short for foreign exchange. Forex trading doesn't get in the big press like stocks, options or commodities trading. However, it is the biggest market in the world and it presents investors with an amazing opportunity for profit.

Forex trading involves the buying and selling of currencies between various countries. This is unlike stocks or commodities trading where money is used to buy a certain stock or commodity. In forex trading, you either make or lose money based on the exchange rate between a pair of currencies.

Unlike other forms of trading, forex trading is not investing in any single company or even a group of companies. Forex trading is the investment in the economy of a nation. What you are doing in forex trading is laying a bet that the overall economic wellbeing of the first nation will improve in relation to that of a second nation.

Let’s take for example that you are analyzing the Japanese Yen and the US Dollar. The research you did seems to indicate that the US dollar is quite undervalued and is going to rise in price, while at the same time you anticipate that the Japanese Yen will be dropping in value. Then now would be a time for you to execute a trade to buy US dollars and sell Japanese yen. If your predictions are correct and the US dollar rises in value while the Japanese Yen drops, you will turn a profit!

Now, you may be asking: “Is forex trading really that simple?” In actual fact, it is not as simple as that. The prices of different currencies are amazingly difficult to forecast because there are a lot of factors that can contribute to a change in exchange rates. One of the most important aspects to remember in forex trading is that you always trade in pairs of currencies. You will always buy one currency and sell another, so in order to make an accurate decision, you can not just look at one nation's economy; you need to look at both.

Obviously, there is no need for you to limit yourself to only one pair of currencies in forex trading. There are dozens of different currencies to choose from on the forex trading market. However, if you are a beginner in forex trading and is just starting out, I would strongly suggest that you stick to the seven major currencies:

With the growth of the Internet and its accessibility to the general masses, every FOREX broker maintains a software package for his clients to transact and get information about market prices online. With the increasing popularity of online trading with traders, the FOREX brokers are improvising their tools keeping in mind the clients needs in terms of software tools.

The two basic types of the FOREX trading software are - web based and client based. Since the most crucial functionality of the online trading tool must be the ability to provide market information at real time and updating it in the flash of a second; the software must be able to perform with minimal processing delay and must be accurate to deliver the entry and exit points for the trade.

The web based software is the one which is on the broker's website. There is no installation required on the client’s computer. The client based software is the one which is first downloaded and then installed on the client’s machine which is in synch with the broker’s. The web based client software is considered to be more popular due to their convenience, safety and reliability characteristics as the users can log in to them using their unique account from any computer and from any location over an Internet connection. Whereas the client based software has the restriction of using one chosen computer for every trade.

Another mandatory requirement for trading software is security or protecting the user’s critical data over the net. In the web based software the user information is secured with high-strength encryption to prevent viruses, intruders or hackers to access or modify the user’s data during transmission. Although the client based software is also secured during transmission, it has the shortcomings of the usage of a single trader’s computer and hence the possibilities for data loss are higher in this case.

The FOREX software is aided by a series of data servers which hold the web site content and user transactions. These servers are reliable in securing the user information and data integrity and ensure accurate transaction processing. Since servers are subject to power outages and natural disasters, at least two sets of servers in separate locations are maintained to ensure maximum uptime and data backups guaranteeing the integrity of the user’s financial data in case of server failure.

Technical analysis may be used as either an alternative to or as a supplement for fundamental analysis. Technical analysis looks at the past performance and history of an investment. It relies on data showing this history and current trends and patterns to make predictions of future market activity. It ignores the intrinsic value of the investment in favor of its statistical abstract.

The Forex market lends itself to technical analysis rather well. The history of the value of currency pairs is a matter of statistical record and can be easily accessed. Its supporters claim it is the only sure way of understanding the market and predicting its future. This is especially true in the Forex market. Fans of technical analysis say that the economies of modern nations are so very complex that they can not be accurately predicated. It is only in the study of the past history of the currency and the trends that are revealed that a possible glimpse of the future be found.

To better understand the difference between fundamental analysis and technical analysis consider this example. If you were interested in determining what flavor of ice cream was the best to buy, the fundamental analyzer would go into the ice cream store and try several different types. He seeks its intrinsic value. The technical analysis man would sit outside the store and take notes on the flavors others are buying to decide which was the most popular and therefore most likely the best. He does not look at the intrinsic value, but relies on the data he gathers from others to make his decision. Of course, in the end, it is going to be his own preference that settles the question, and this is true of the market. Both fundamental analysis and technical analysis are mere tools that help you make the decisions that in the end only you can make.

Forex trading holds significant differences to stocks trading. Understanding these differences will aid a trader in deciding the right market to enter. Forex trading itself has several advantages over stocks trading and is ideal for the beginner and individual small investors.

1. Low Transaction Costs for Forex Trading.
There are no hidden fees for forex brokers as they are not paid by the traditional commission based fees. The fee paid to the forex broker is calculated directly from the trade in the form of the bid ask spread. In forex trading, the spread is the difference in how much you pay for a currency and how much you sell it for. This spread is commonly expressed in "pips" or points.

2. Forex Trading is a 24 Hour Market.
Forex trading can be done anytime of the day, the forex market is open for business twenty-four hours a day. This is considered a huge advantage for individual small investors who are just starting out forex trading in their spare time. This allows forex traders to juggle their schedule around their trading opportunities; they can schedule their forex trading when it is convenient for them.

For those of you who are night owls and prefer to trade at 1am, then forex trading is just right for you. Depending on where you stay, there are banks opposite the globe open for you to trade.

3. Fast Trade Execution and High Liquidity in Forex Trading
Trading forex means that you are trading in cash. No other form of investment has more liquidity than cash and as such, trades are executed almost instantly. There is no lag time in forex trading.

4. Having Leverage and Margin in Forex Trading
One of the significant advantages that forex traders have is the ability to trade on margin. This gives them a huge leverage in their trading and presents the potential for extraordinary profits with relative small investments. Let’s take for example; with a forex broker that allows a margin of 100:1, you can buy $100,000 in currency with only a small $1,000 deposit. A word of caution for the uninitiated, leverage can go both ways and may lead to large losses if you are not careful.

5. Forex Trading Requires Only a Small Sample to Study.
Stocks trading present thousands upon thousands of stocks to trade. Small and large companies, international companies, newly issued IPOs etc. It is highly impossible to follow them all.

Forex trading, on the other hand, presents only seven major currencies to follow so that you can devote more time to each of them. Many successful forex traders do not even trade in all seven major currencies; they just choose three or four and master them to achieve success in forex trading.

6. No Bear Markets in Forex Trading.
In forex trading, since you can trade either short or long, you will be able to make money whether the prices go up or down, that is if your predictions are accurate of course.

7. Forex Market is Not Easily Influenced.
The forex market is so amazingly huge that no one individual, bank, fund or government body can influence it for a long period of time. Forex trading is the opposite of stocks trading where one negative television appraisal of a company's stock could possibly send it into a tailspin.

Based on the above advantages, forex trading is a clear winner for the beginner and individual small investors. If you are deciding on a form of trading to enter and master, then forex trading is the choice for you.

So it's called "Electronic Currency Exchanging" or "e-Currency Trading".

E-Currency is simply it’s own form of currency that has been developed and utilized on the Internet. It's also known as 'Internet money'.

You probably haven't heard of "E-Currency Trading" before. Simply put, E-commerce (commerce on the Internet) has really only started to grow in the last 2-years. This has caused exponential growth in the use of e-currency, and therefore, more people are getting involved, and greater profits are being made for those who invest.

For a long time E-Currency Trading has been a simple but secret 'money pipeline' for a few 'in the know' people. But all this is about to change. And you'll discover why in just a moment.

But first, let me say that this is NOT Forex, HYIP or Day Trading of any sorts. (And don't worry - you don't need to know what those systems are).

E-currency trading is a relatively unknown business. It's not something you'd read about in a home business magazine. Truth is, not many people know about it. And that's why the few who do, are raking in all the profits! (You can too. Read on to find out how).

What's more, you DON'T need to understand all the details of this business in order to profit from it. Do you think Bill Gates knows every thing about software? Of course he doesn't. But he's still made an utter fortune from that business!

I'm sure you can see my point. The simple truth is ... You really don't have to understand how this business works, in order to profit from it.

There really is only one thing you need to understand. And that's the simple instructions I give you. And they really are simple. I mean, if you can cut-and-paste, then you'll have no trouble following these easy instructions.

Now, let me take a brief moment to explain how it works ...

How E-Currency Trading Works, And How You Can Make Money While You Sleep ...

In a nutshell, you're investing in an "e-currency" which is actually a type of shares. They are referred to as, "Currency Exchange Companies" and they're located in the US and around the world.

By buying these 'digital shares' with your money, you are providing the liquidity (hard cash backing) to allow the e-currency company to trade in the marketplace.

The company that you're temporarily "lending" your money to is able to borrow funds based on the dollars you make available to them. You then share in a proportionate amount of the commissions from the transactions they make (which is how you make money).

I like to use the analogy of the currency exchange booths at International Airports. These companies make money from transactions. It doesn't matter which way the currency markets move, as long as transactions are being made, these companies will always make money.

Building passive income is something that everyone wishes they could do, some people will spend countless hours and thousands of dollars searching for that one passive income opportunity.

Sadly most people never find it. In the end they get know where fast, and think everyone and everything is out to get them and their money. Well that isn’t totally true.

There are some real passive income opportunities out on the web. You just have to know where to look. However I am going to do the hard part for you and tell you about a great passive income opportunity that I am currently using to create a nice monthly income.

The passive income opportunity that I am currently raking in the money with is the e currency exchange program. That’s right you herd me correct. E currency trading has been around for years, and is a global business waiting for people like you and I to profit from it.

Most people have no idea what e-currency trading even is. This is why you might not have herd of his passive income business before. So few know about it, but it is by far one of the greatest ways to make a passive income online.

In the e currency system you can earn anywhere from 1 – 4% daily on your account. The money in your account will then compound every day for as long as you stay in the e-currency exchange program. At anytime you can withdraw money for spending or whatever you please to do with it. It’s that simple.

Building passive income online is a hard thing to do, and most people will not tell you how to do so. However I am not like everyone else. I want to help you create a wealthy lifestyle. So check out the e currency exchange program, and learn how you can build passive income online today.

Had enough of the stock exchange? Tired of options? Perhaps then the foreign currency exchange market, or Forex, is something you should consider. The Forex market has exploded in popularity recently and is by far the largest trading market in the world. How, then do you get started in this potentially lucrative arena?

The first thing you need to do is get some education and knowledge on how the Forex market works. There are several good books available on the subject, while the Internet also has many good resources available for the novice Forex investor. Once you feel that you are ready to begin trading Forex you need to find a broker to handle your transactions. Fortunately, most brokers on the Internet allow you to practice trading with play money so that you can experience what it is like to trade Forex without risking any real money. They usually also provide some instructional resources and software tools to help make your trading easier. You should be sure to check that your chosen broker has registered with the Commodity Futures Trading Commission.

Getting your account ready is similar to registering with your bank. You will need to fill out a form of your details and provide the broker with some identification to prevent fraud. The broker may also want to draw up a margin agreement. This allows them to step in if the think you are making a trade that is too risky. Then, depending on what your starting capital is you will choose an account size to open with. These can range from anything from around $250 for a mini account to a few thousand for a larger account.

Once your chosen account is funded you are more or less ready to begin trading. Trading is commission free but you should still be careful never to risk more than you can afford to lose by always using stop-losses to limit damages should things go wrong.

Online foreign exchange trading occurs in real time. Exchange rates are constantly changing, in intervals of seconds. This is what makes Forex trading such an exciting ride.

Quotes are accurate for the time they are displayed only. At any moment, a different rate may be quoted.When a trader locks in a rate and executes a transaction, that transaction is processed with immediate effect and the trade is completed for whatever profit (or loss) the user has made.

As rates change so rapidly, any Forex software must display the most up-to date rates otherwise the user may not achieve the level of profit they were expecting. To accomplish this, the Forex software is continuously communicating with a remote server that provides the most current rates.

The rates quoted, unlike traditional bank exchange rates, are actual tradable rates. A trader may choose to “lock in” to a rate (called the “freeze rate”) only as long as it is displayed. This means that if you see a rate on-screen that you want to trade at, once you hit the button to commence the transaction you will receive that very rate that was on-screen.

The Internet revolution caused a major change in the way Forex trading is conducted throughout the world.

Until the advent of the internet-Forex age at the end of the 1990’s, Forex trading was conducted via phone orders (or fax, or in-person), posted to brokers or banks. Most of the trading could be executed only during business hours. Additionally it was only major players such as banks and governments that were able to get involved, it was a highly lucrative but highly time-consuming business.

The Internet has radically altered the Forex market, enabling around the clock trading and conveniences such as the use of credit cards for fund deposits. The Internet has also opened the door for the average person to be able to join in the fun. Previously it took thousands of dollars just to open an account, not it needs less than $100 to start trading.

In general, the individual Forex trader is required to fulfill two steps prior to trading: • Register at the trading platform (Click here for the best broker reviews) • Deposit funds to facilitate trading

However, many online Forex market makers require the download and installation of software specific to their own trading platform. Consequently, accessibility is limited to those terminals that have the software. Since Forex trading is borderless, and may be performed at any given time, it is obviously advantageous to have access to trading from as many locations as possible.

Foreign Exchange market is influenced by several market and economic conditions, which makes it a complex processes. Its trading complexity is managed by employing a systematic approach derived from various aspects of international business, economics, geopolitics, mathematics and behavioral science.

Winning in forex market requires an efficient and effective strategy. Here are 7 guidelines to formulate your strategies as a successful forex trader.

1. Research and Analysis

Research and analysis are the key and fundamental ingredients of successful forex trader. Continuously research and analyze on important economic events, price movements, trends, and general market developments that impact currency pairs. You should incorporate both technical and fundamental analysis tools to analyze the market that would help you make trading decisions.

Technical tools will help you determine price action of the market, while fundamental analysis helps you predict price action and market trends by analyzing economic indicators, government policy, interest rate decisions and others.

2. Make a plan ־ Work a plan

One way of managing your trading activities is by working based on plan .Trading Plan should consist of why you enter, stop loss price and profit taking level.

3. Control Risk

As with every other trading, forex trading has its own risk. Achieving success in foreign trading market requires managing and controlling these risks.

4. Properly apply money Management techniques

Management in forex market requires proper capital management. Do not trade more than 10% of your deposit in a single trade. For example, if your total deposit is $100, 000 you should limit every trade to not more than $10,000. This would help you secure your account under worst market conditions.

5. Track your Trading Activities

Track every trading activities so that you will be able improve your performance. When you buy a currency, write down why you buy and your feelings at the same time. You do same when you sell. Analyze and write down the mistakes you have made, as well as things you have done right. By referring your trading journal, you learn from your past mistakes. Keep tracking your records and improve your performance accordingly.

Forex Trading continues to attract many people because of the quick profits that can be generated and the apparent ease of trading in the forex market. You see a neighbor or co-worker working only a few hours a week. And you see that they are living quite well. You find out they are traders and it is hard not to get excited and want to jump right into Forex Trading.

My advice is to hasten slowly. You need a solid foundation to reap the rewards of Forex Trading. Without some basic training and an understanding of the markets, there is an extremely good chance that you will fail. And the failure can be expensive.

You can gain a forex trading education on a do-it-yourself basis or take advantage of the experience of experts. The first method is not recommended. And you need to carefully evaluate any forex trading courses you buy. The problem with most forex training is that once you have studied a particular method, the odds are still against your success. Using indicators, subscribing to signal providers and buying "black box" systems still does not work for 90% of traders.

Veteran trader Avi Frister has taken a different approach and created his revolutionary Price Driven Forex Trading (PDFT) method. Frister teaches this method in his course "Forex Trading Machine". He teaches methods that are innovative, different and original. His strategies are not used by 99% of the traders.

But they are used by the top successful forex traders.

In Frister's own words:

"My objective as a trader is ALWAYS being in that top 1% group of traders and this is why I developed Price Driven Forex Trading. PDFT is the outcome of 11 years of trading, learning, testing, creating and designing and now a select group of traders can have access to this amazing Forex trading method."

"Price Driven Forex Trading (PDFT) is a method of trading the forex market without using any type of indicators, support or resistance levels, moving averages, pivots, oscillators, fibonacci, trend lines or ANY other trading tool you can think of. PDFT only uses the price of the currency pair and a time element. That's it!"

The same big question is always asked about any new system. Especially of a system that is so unique. That question is, "Okay, it works for you, but will it work for me?" If a trading system is not transferable, what good is it?

The short answer is, "Yes, it will work for you". The reason it will work for virtually anyone is that PDFT is a mechanical method of forex trading. There is no emotion involved. It requires no judgement, interpretation or discretion.

This is the main benefit of the system. Who would ever guess that forex trading could be stress free? As a general rule of thumb, high returns are purchased with a lot of stress and anxiety. As well as a healthy price tag in real money for the system.

One veteran trader had this to say about the Price Driven Forex Trading method: "...your method of trading the forex market is incredible!...I recommend your product to any trader who wishes to profitably trade the forex market"

Are there any good free online forex trading courses on the Internet? It all depends who you talk to. Before you decide to believe everything that you read after you download free online forex trading courses there are a few issues that you should be aware.

First of all, the best things in life are not always free and the same can be said of these free online forex trading courses. Consider who is offering the free online forex trading course. Why are they giving the book away? Are they promoting a particular forex trading site or trying to get you to enroll it? How pushy is the material inside the book when it comes to getting you to invest on a certain website? The answers to these questions could all be factors regarding the integrity of the information you are being handed for free.

Another mark of better quality free online forex trading courses is a lack of replication of widely available information. You know you are reading a book that is probably not written by a good expert if most of the information in it can already be easily found by surfing on the Internet. You might be better off simply sticking with the advice and how-to articles offered on the company sites rather than being guided by a badly written e-course or e-book.

The best free online forex trading courses will not be limited to the discussion of how just one company trades. It will give you a comprehensive view of how all of the sites run by major corporations work when it comes to the process of futures trading.

Many sites that offer futures trading also offer free online forex trading courses. This is part of their incentive to get you to sign up with them. These courses are invaluable, especially if you have decided you will already sign up with a company as a futures trader.

There are tons of ways that you can learn forex online currency trading without having to spend a lot of money. The first way is to simply research the subject. However before you do this try reading some glossaries (online alphabetical dictionaries that supply essential definitions) to give yourself a primer in the subject.

Online you will also find lots of glossaries that can provide a quick study if you are planning to learn forex online currency trading. In fact one learning tip might be to read a glossary first before you try to learn forex online currency trading. Many of the big forex currency trading companies offer glossaries like this as part of their website and so do many of the big informational brokerage style sites about this topic. Perusing these company glossaries can really help you be familiar with some of the terms, acronyms and because it is really helpful to learn some of the popular terms used in the practice before you start trying to understand any of the materials that you will find on the internet.

Of course another way to learn forex online currency trading is through a course or workshop. These are often offered by self-styled gurus on the subject through organizations such as the Learning Annex. However this is not as good as having all of the online tools, calculators, calendars and feeds that are often part of a true currency trading learning experiencing.

If you prefer to learn forex online trading in a very structured way there are plenty of forex futures gurus online who have concocted all kinds of courses to show you how to get rich quick investing in this way. You can often buy these types of courses as a download or burned onto several CDs.

Online you will find hundreds of how-to articles, free e-courses, programs, charts and interactive tools online that can help you quickly and easily understand this subject. All you really need to do is just type in “learn forex online currency” to find the type of tutorial that bests suits your skills and budget.

Building a diversified portfolio gives you a lot more stability with your investments and enables you to keep on the profit side of things more easily. But if you already have a rather diversified portfolio and think you are now rather knowledgeable of the stock market, then you may be ready to expand your investments into FOREX - the foreign exchange. When currencies in the United States may take a plunge, or a lack of growth, markets in other countries are doing quite well and this is something that you can draw a profit from.

The FOREX market, listed simply as "FX," is the biggest market of all. A lot of money can be gained from it - and rather quickly, too. This market deals entirely with the exchange rates between two currencies on 5 days of the week. Two currencies are always in every exchange and they are exchanged the one for the other with a buy rate and a sell rate - at the same time. For instance, if you believe that the Japanese yen is about to increase in value, then you may offer to buy it at $1.10 and sell it at $1.25 - making a possible $.15 per yen purchased. Here are a few things you need to know about how to get started in the FOREX market.

Learn The System

Trading on the FOREX is generally more difficult than the regular stock exchange. It is easier to lose money if you do not know what you are doing. In order to prepare people to learn to deal with the FOREX, though, most online brokerages have specialized software that provides training - up to about 30 days, with "free money" to use to practice until you start being able to regularly see a profit. Only then is it wise to start doing some real trading. You also need to know how to determine the state of national economies and be able to predict their fluctuations. Other online companies provide many free booklets that they will mail to you only for the asking.

Potentially Safer Investing

Since all deals with the FOREX require a broker, your money is potentially safer. Every contract made with a broker will have a clause in it that allows the broker to actually stop the transaction if they feel it is a poor investment. The primary reason for this is because you are actually using the broker’s money to make the deal. When you use FOREX, you create a sort of "loan" that gives you an operating ratio of up to 100:1. This means that, for $3,000, you are actually controlling $300,000.

The FOREX is also a better investment because there cannot be any insider trading. Dealing with currencies means that the things that effect it would make national news. This kind of event would be known almost instantly around the world - and everyone has access to the same news.

Easy Liquidity

Trading in currencies occurs every single day - many trillions of dollars worth of it. Because of this feature, there is always someone who will buy or sell dollars, enabling you to have a very quick liquidity when needed.

No Fees

Brokers do not charge you a fee when you make a FOREX transaction. This enables you to be able to control even better the amount of money that you invest and it allows you to chart it a little better. Brokers make their money through the spread of what is sold, the difference between what is bid and the actual selling price

"If you have no confidence in self, you are twice defeated in the race of life. With confidence, you have won even before you have started."
Marcus Garvey

The first step in controlling fear is to face it. If you are not willing to face your fear, then fear, not you will control your life.

Courage is moving ahead even though you're afraid.

Use fear as an opportunity to learn and progress.

A trader can choose not to fear losing money and accept that losing money is a part of the trading business.

It is very important that the trader completely and honestly accept the risks involved in trading. Trading is a business of percentages. Not every trade will make money. If a trader cannot accept the risk, he cannot fully commit himself to the trade. If he cannot fully commit himself, taking the next trade can be a frightening experience.

Know the factors that give you an edge; pay close attention to them, and don't let outside distractions influence you.

In general, all traders and investors need to take periodic breaks from the markets to clear their heads. This is particularly important when you are making psychological mistakes or have personal issues that could potentially interfere with your trading.

Sometimes "doing nothing" is the most prudent action you can take!

The protective mind is like an over worried mother; it is constantly creating "doom and gloom" scenarios, trying to scare the heck out of us, in the hopes that we won't try anything new. Its favorite words are "what if." "What if this happens? What if that happens?" Even though none of these things have actually happened, and chances are none of these things will ever happen.

Unfortunately many people wait for their fear to subside before taking action.

Realize that successful people have fear. Successful people have doubts and successful people worry. The only difference between those who succeed and those who don't is that successful people act in spite of their fear, doubt, and worry. So can you!

A trading decision outcome has nothing to do with your self-worth, but is merely a profitable or unprofitable business decision.

Most people who struggle with their trading do so because they don't believe 100 percent in what they're doing.

Fear can be an opportunity to learn and progress. Learn from it and move on.

Winners trade systems with high positive expectancy, sound money management strategies, minimal degrees of freedom to avoid curve fitting, and then puts the system into his business plan for implementation. He lets the market determine the outcome.

A winner realizes that he produces the emotions he experiences related to trading and assumes responsibility to resolve deep-seated root causes for negative emotions that interfere with his trading business.

A loser has a continually changing system/methodology based on whether or not the last few trades were winners or losers. He is scared of what "may happen to him" in the markets in the future. His position size is controlled by whims and notions. His exit points vary depending on how fearful he is of giving up open profits or how hopeful he is that a losing trade will turn around.

New traders search for their Holy Grail because they get a sense of control when they use entry signals to open their positions. They want the point they choose to enter the market to be the point at which the market is doing exactly what they want it to do. If they can find this point, a novice trader will often feel like they have some sort of control, not just over the entry, but also over the market. Unfortunately, there is never a time when a trader has control of the market.

Once you are in a position in the market, the market is going to do whatever it wants to do. No one can control the direction of the market, or the extent of its movements. There is only one component of your trading system that you do have control over, your money management. Here is the true Holy Grail of trading.

Money Management:

Van K. Tharp, PhD, a world renowned leader in the unique area of professional trading says that "Perhaps the greatest secret to top trading and investing success is appropriate money management."

The most important factor in successful futures trading is money management.

The ability to take a loss and trade another day is the key to survival--and ultimate success-- in the futures trading arena.

A successful futures trader should be more an act of survival in the early going than scoring winning trades.

Successful traders set tight stops to get out of losing positions quickly; and they let the winners ride out the trend. On the balance sheet, a few big winning trades will more than offset the more numerous small losers. Good money management allows for that to happen.

Day trading is not a get rich scheme. It is serious business where you could lose everything within minutes because of wrong information. Before jumping into day trading, remember to do your homework first. Go to seminars on day trading, use simulations if possible and practice reading market indicators. To be a successful day trader, you do not just need luck. Knowledge and experience counts.

Pick a few classical chart patterns and specialize in trading with them. You must have discipline and patience to wait for the patterns to develop correctly using only markets suitable for you size account. Additionally, you must apply strict risk management and have great tenacity to let your profits run on the good trades.

Since strings of losses are inevitable regardless of your approach, you must control risk so you are not wiped out by consecutive losers. Experts agree that for proper risk management, you should limit risk to no more than about 1-2% maximum of your account equity. Make sure that no one trade is really going to affect your day trading float, positively or negatively.

While novice traders spend all their time working on entries, seasoned traders know that the really difficult decisions in trading involve exiting profitable positions. Letting profits run on good trades is absolutely essential to long-term success.

Winning traders understand that winning in the markets means "cash flow". More cash must come in than goes out, and anything that affects this should be considered.

ANYTHING that affects bottom line profitability should be considered as a viable area of study to improve performance.

The single best way to protect your profits is to lock them in. Really, you can either lock them in, or you can lose them.

Sometimes, if you think the market could travel a long way, some good money management advice you might want to follow is to plan several levels where you'll take profits. Firstly, take off half at a given target, and move your stop to entry. Alternatively, take off half your position and hold your stop at break even point, so nothing is lost and you also may not be taken out of the trade too early. Always have your exit strategy in place before you make a trade.

Never, never, never add to a losing position, and every trade should be taken with professional care and planning.

Losing traders focus on winning trades and high percentages of winners. Winning traders focus on losing trades, solid returns and good risk to reward ratios.

When winning traders have a bad trade they spend time figuring out what happened and then they adjust their current methodology to account for this possibility next time.

Keeping losses small keeps your capital intact so that when a trade does become profitable, you can make big gains.

A winner runs his trading business wisely-carefully managing his fixed and variable costs of doing business and making capital investments which provide a worthwhile return to his business.

A loser is sure he's almost worthless as a person after 5 losses in a row.

The most successful traders have a methodology or system that they use in a very consistent manner. Often, this revolves around one or two techniques and market approaches that have proven profitable for them in the past.

You need to make protecting your capital and developing money management strategies your priorities if you want to be successful.

While successfully trading commodities with limited capital presents the highest challenge in trading, you can do it if you recognize the problems and construct a trading plan to accommodate the realities.

You need to position yourself so that you can endure long strings of losses, and maintain your day trading system.

If you can survive some losses in your day trading, the profits will come.

CONSISTENCY is a key factor to profitability.

Money management rules include defining your trading float, setting your maximum loss, calculating your stop loss, and most importantly learning how to choose your position size. Once these rules are in place in your system it's important to follow them. They are a critical part of any effective trading system. Money Management rules are the Holy Grail, the magical object that will bring you success in the market

In 1982 the Chicago Mercantile Exchange brought out the S&P 500 and the life of an index trader was possible. You could buy or sell the equivalent of the 500 largest capitalization stocks in the country, stocks on the New York Stock Exchange, on the American Stock Exchange, on the Nasdaq stock exchange all in one index of 500 different issues. This index was composed of big corporations, utilities, and transportation companies. A smorgasbord of capitalism in its finest state.

Later the Nasdaq 100, an index of the 100 largest companies in the Nasdaq composite was created and offered by the CME. As well as the Mid-Cap 400 and others including the Russell 2000. No need to study company's balance sheets and financial statements to determine which one to invest in.

You need to study the charts for clues that would enable you to take a position long or short in the index of your choice and at the proper time, sometime later, neutralize that position with a profit for your efforts.

You know before hand what the cost of data feed and charting software will be on a monthly basis.

Your capital requirements and commissions per contract, per round turn. Overnight exposure can affect your ability to sleep as news events can cause dramatic moves in the market overnight. You never know what you are going to wake up to.

Daytrading may be accomplished with a smaller account than that which is required for overnight exposure. And at the end of the trading day, you have NO open positions to worry about, thus eliminating the overnight exposure