Make Your Move
You’ll need to know three prices before placing your order. First, the price at which you’ll sell. Look at the charts. How high or low will the price move? Will any economic indicators be released to interrupt the pattern? Watch closely, and remember history. “See how prices reacted to news in the past,” Herzfeld suggests. “Then use that information to predict the future. A good trader has a great memory.”

Second, enter your buy order. You don’t have to pay the market price; instead, instruct the site or broker you’re using to execute the trade at whatever price level you like. Will the price go lower? Check the charts. If it seems temporarily inflated, put your order in at the price where you think it’ll settle.

Finally, protect your downside with a “Stop Loss.” If the currency moves in the wrong direction, make sure the order system automat­ically dumps the trade when you’re down somewhere between two percent and five percent. Planning properly for all three variables should give you the sense of security you need in order to brave such a volatile market. “Hard-code your game plan and wait for it to happen,” Herz­feld says. “Don’t say, ‘Oh, my God! I just talked to my friend, and maybe I’m wrong.’ Just sit back and say, ‘I’m right.’ ”


The Big Money
Most amateur traders agree that a ton of cash isn’t required to join the game. “You don’t have to have big five- and six-figure accounts,” says Martin. “You’ll make more money if you do, but you can get into this thing for $1,000.” If you have more money to play with, however, and you feel confident enough to take on massive risk in order to hunt huge gains, there is one more weapon at your disposal: leverage. By borrowing from a broker, you can control $100 worth of currency for every $1 you actually have. It’s the tactic that allowed Herzfeld to gamble with $80,000—and rake in $5 million in profits. With the help of leveraging, any bozo can immediately become a player. And players can just as easily be ruined.

Almost any expert will tell you that leverag­ing yourself 100-to-one is financial suicide. Think about it: At that ratio, if you speculate with $10,000 and max out, you’re suddenly trading with $1 million. But if the currency price moves down just one percent—prices fluctuate like that continuously—your broker will immediately take what you owe from your account. In other words, you could be dead within hours. “You want to make sure you can recover from a reasonable string of bad trades,” Prosser says. “Leveraging 20-to-one is more than enough.”

Remember that leveraging is borrowing—and that means paying interest. If neither currency moves at all, you could be out those payments. So be smart. “There are no rules in this game,” Herzfeld says. “You can get kicked in the nuts, punched, horse-collared—and no one is there to call a foul. The big boys come to play. And lots of them win big.”