Free FOREX Tips

• Foreign Exchange (FOREX) is the world's largest financial market with the equivalent of $1.9 trillion exchanged every day, according to the MG Forex "What is Forex?" overview. Foreign exchange is simply the exchange of one nation's currency for another's. Some Forex participants are organizations or trade channel members that need to exchange currencies for global business. Others are speculative investors looking to profit from currency exchange price movement.

Follow the Trend

• A basic Forex tip is to always trade in the direction of the overall trend of a currency pair, according to the Forex site's "Using Indicators" overview. Currencies trade in perpetual up-and-down wave patterns but typically move in a big picture trend direction. For instance, the currency pair EUR/USD, which represents the value of the euro and the U.S. dollar, can trade long, in favor of a stronger euro, or short, in favor of a stronger dollar. Your odds of correctly picking the direction in the short or medium term on a currency investment is much higher if your pick is in line with the big picture trend direction for the pair.

Limit Losses

• A small percentage of currency speculators make money, which is why every currency broker includes a disclaimer on their site indicating that currency trade poses the risk of substantial loss. Your ability to limit losses on a bad trade is important to your success as a trader, according to Deutsche Bank in its "Top 10 Forex Trading Tips" article that notes risk management as key. Every trade you make should have an exit strategy before you enter a position, or trade. Strategically placed trades should be made with the anticipation of a specific profit, and a limit order should be placed to limit losses if the currency pair moves in the opposite direction of your trade. Long-term success hinges on your ability to limit losses and overcome them with big gains on winning picks.

Trade with Discipline

• Within your overall approach to currency trade, you must be disciplined. You have little chance of making money in the long-run as a currency trader who trades on emotion. Deutsche Bank notes in its top 10 tips article that you are not going to win every trade and you have to "keep your emotions in check." Hanging on to bad trades too long gives you a deeper hole to dig out of when you pick a winning trade. It also sparks the emotional roller coaster of trying to make up for a major loss with a desperate and unprepared currency trade. This usually leads to trouble and is indicative of why some traders head down the wrong path and lose a lot of money quickly in currency trade. Successful trading requires discipline, crafted strategies and a willingness to take small losses on bad trades.