The foreign currency trading market, better known as the Forex, is by far the biggest market in the world. In excess of two trillion dollars are traded on it each and every day, while 'only' 50 billion dollars are traded on the world's biggest stock exchange, the New York Stock Exchange, each day. This actually makes Forex bigger than all the world's stock exchanges combined!

It is possible to get a managed Forex account, which means that you pay a specialized Forex trader to manage your money and trades for you. You have as much say in your account as you like or none at all. However, this is not the way to make a useful amount of money unless you start with a lot of money.

If you want to earn a small fortune from a few hundred or a few thousand dollars, you will have to do a lot of study yourself. If this is your main occupation, because you are retired or unemployed, that is all very well. If you are working and treat Forex dealing as a leisure pursuit, that is fine too, but researching the markets of a few currencies is the key. Gambling wildly is not.

There are a few basic principals that you ought to be aware of, before you start to think about making up your own personal Forex trading system.

Firstly, a successful Forex trading system is usually fairly simple. Complicated trading systems with too many regulations are too hard to follow and it is a simple truth that simple systems work better than complex ones. They simply have a higher chance of success.

Secondly, a successful Forex trading system cuts losses and runs profits. Your system will need to be able to cut losses quickly, if not instantly.

Thirdly, a lucrative Forex trading system follows long-term trends. Focus on long-term trends and you will see better results.

The five tips to trade Forex effectively are:

1. Your trading system must be as easy as possible. Integrate only a a small number of indispensable rules and an extensive investment administrative system.

2. Only look for long-term trends. A week is not long enough, a long term trend will last for months, but take into account local events like elections, industrial relations and even the weather (for seasonal earnings).

3. Look for abrupt changes to trends and try to work out why they took place. Can you ride the trend, or will it reverse? This will take study and intuition.

4. Try to learn how to read charts. This is a subject all on its own and there is a vast amount of material on the issue. Read up on Stochastic charts to start with and then go on to others.

5. Specialize. Focus in a few currencies, the countries of which appeal to you too. Read all the news items you can get hold of, listen to TV reports and keep your ears open to every bit of intelligence that comes your way,

You do not have to act in response to everything you hear, but over time with any luck you will learn to distinguish between what can have an effect on a currency and what may not.