Avoid Forex Gambling - Proper Money Management

A mentor of mine once taught me, "the difference between gambling and investing is education".

In Forex, possibly more than anything else, this statement stands true.

I would like to add one aspect to that statement though. The difference between Forex Trading and Forex Gambling is not only education, but proper a money management plan.

So what do I mean when I say "a proper money management plan you may ask? Well, learning how to trade Forex is more than just studying technical analysis, creating a Forex trading system, and trading that system. Even the best Forex trading system will lose with out proper money management.

A money management plan is a plan to protect your account. The last thing a trader needs is an overly complicated system, a system which takes much too much of the traders time to figure out how to use, understand, and properly setup.

There are some very good systems out there that do not have an overly complicated setup. What I am talking about are the systems that use price action as their primary trading method.

Price action trading is still Brett's wave, but Brett unfortunately did not make millions off of his Wave Principle, and he is unfortunately broke.

But worse than Brett's failure, because he never intended to be broke, he is now broke. For the Forex newbie that doesn't know where to start, do not let this happen to you. Learn the way that the currency pairs move and move in relation to price.

Learn when and where they move. It may not be easy to understand, but learning will make you a better Forex trader.

Remember, Forex Trading is the Educated Trading. Brett reasonably educated himself, and he still failed. Learn. Use your Forex Trading System to make your currency pair trades.

Use price action only when the market is ready for it. Learn to cut your losses short, and let your winning trades run. Don't become a victim of overconfidence. Learn about money management and how to apply it.

The end goal of Forex trading is profit, but do not achieve this goal by using overly complicated systems. Do not buy systems because of the beautiful packaging that promises you instant wealth. Do not fall for the "it's not hard" sales page. Be realistic about your goals. Many Forex traders have failed as beginners, because they were looking for easy riches.

Remember, your goal is to make a sustainable income from your trading. All surface houses have doors that cannot be opened without tools. Take your time to get the tools that will help you succeed with your trading.

Take your time to find a Forex Education Software that will teach flexible forex trading. While you ideally want to learn how to do currency trading using a method that is simple, you don't want to use any of the complex technical trading methodologies that are out there.

When people try to make it harder than it is, it will be harder to clarify what they are doing and minimize your risk. Listen to your gut.

It is not exceeded by too many experts. Your gut is telling you that you can find less risk in the Forex market than you would in the commodities and stocks market.

You know you can trade short term if you know what you are doing, and you probably do not need to Join a managed forex account if you do not wish to.

Do not buy another automatic trading program find one that wins more than it loses.There are many automatic trading programs on the market. Five percent of people never make a significant living trading in the Forex market.

Trading is not an automatic job. You need to understand the market. The better you understand the market, the more profit you are going to make. Use a simple system and apply good money management rules, and the rest is out of the way.