Late night infomercials are buzzing touting the latest and greatest Forex trading strategies. But buyer beware these high priced trading packages are not always what they seem to appear, many costing retail traders billions of dollars. Forex trading, the zero sum game that makes you a fortune but only if you understand what you are getting yourself into. This article provides you three proven strategies to better Forex trading.

Strategy #1: Develop Your Own Trading Style
Do you know the difference between fundamental, technical and hybrid trading? If not, you are well on your way to losing your trading account. Fundamental traders base trading decisions on their expectation of the economies of the underlying currencies. For example, the U.S dollar has been in a steady decline for much of the Bush Administration. This is largely caused by the commitment to the war in Iraq, trade policies and the general position that American assets are for sale to the highest bidder. The Technical trader will base their trading decision on the price movement of currency pairs. These lovers of charts and oscillators spend hours hovering over computer screens looking for any blip on the screen signaling the next trade. The mantra of these traders is, "the trend is your friend, trade it until it bends". The Hybrid trader will combine the two styles. In many cases these traders take a top down approach, first analyzing the economies of the currency pairs. Then utilize technical signals to trigger entry and sell points. Many well known traders like George Soros or Jim Rogers use this trading style when trading currencies.

Strategy #2: Adopt Excellent Money Management Skills
To be successful at trading any asset class (i.e. stocks, commodities, or currencies) you must adopt money management skills. This means using stops, letting your profits run and not over leveraging your account. Also, transaction costs can be brutal especially in Forex because of the high leverage used in trading currency pairs. Be sure to have your broker fully explain how leverage will impact your trading account. Most importantly look at the larger picture of the currency pair and where it trades historically. For example, if the US$/Yen pair is at a 25 year low and Fed Chairman Bernake is signally higher interest rates for US consumers. While at the same time the Bank of Japan is lowering interest rates. It might be safe to assume that the dollar will gain against the yen.

Strategy #3: Avoid Common Mistakes
The big three mistakes many new Forex traders make are - over leveraging, over trading and getting too aggressive trading short and intermediate tops or bottoms. Your biggest enemy that will cause you to lose money fast is feeling like the market owes you money. This engenders a psychological mind set that causes many beginning and intermediate traders to make too many trades that are too big in relation to their account size. To alleviate this problem always scale your trading positions and adopt rules that limit the number of positions you put on at any given time. Doing so will keep you out of the market when trades are going against you. Plus you will put on smaller initial trades helping you put the odds of success in your favor.

Adopting proven Forex trading strategies can help you become a successful trader. You will need to invest hours of study developing your own trading style that incorporates solid money management strategies. Practice using demo accounts to minimize mistakes and you will be one of the few who are successful at trading Forex.

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