first thing someone needs when beginning in the Forex Trading market is
a well thought out Forex trading strategy. This is because those who do
not have a good Forex trading strategy usually end up failing miserably.
Of course those who are also in it just for a quick buck will invariably
end up losing in the long run. Those without a clear Forex trading
strategy will either lose constantly or just break even.
of times the Forex trading strategy will be different depending on
different Forex traders. This is because different kinds of Forex
traders needs require different kinds of Forex trading strategies. A
Forex trading strategy for a Forex day trader will reflect their need to
be concerned with day-to-day fluctuations than long-term data. This
means that someone who is deciding to become a Forex trader needs to
first decide what kind of Forex trader he or she are going to be. Once
they decide which kind of Forex trader they are going to be they will
better be able to plan their Forex trading strategy.
very important aspect of every Forex Trading strategy is to be able to
lessen any losses or eliminate them altogether. This part of the Forex
trading strategy is one that needs to be followed strictly or it can
make things a complete mess. Someone who is a Forex day trader will most
likely make smaller stops. On the other hand a Forex swing trader will
have stops that are less limited. These are both different kinds of
foreign exchange trading strategies, but can both lessen losses
immensely for either kind of Forex trader.
Another part of a good Forex trading strategy is to plan the size of
Forex transactions. This allows many different Forex trades to be made
at any time instead of just one huge Forex transaction. This will lessen
any loss, by dividing the Forex trades, so not all are affected. This
also brings in more discipline to the equation.
Following the Forex trading strategy that you plan out requires
discipline and following it to the letter, because the Forex market does
not always lend itself to the best opportunities in Forex trading. In
the Forex market it is mostly about timing, if not all about timing.
Understanding this and incorporating it into your Forex Trading strategy
is how you will benefit the most from it.
other things that need to be incorporated into a good Forex Trading
strategy is first of all acquiring accurate knowledge about the way it
works, different things that can affect Forex trade and what various
Forex software and services that are available to meet their needs for
Forex charting and such. One last thing that needs to be included of
course is what other Forex traders are doing, allowing the Forex Trading
strategy to be planned accordingly.
are many tools available to help analyze and understand the market
movements and patterns. As a beginning FOREX trader you should study
each tool independently to develop a good working knowledge of its
function and use. As you master each tool you can continue to use it
while you educate yourself on the next tool you want to learn. Since
many of these tools are similar you will find that the time it takes you
to learn a new tool continues to drop as you become familiar with more
will find many Forex trading strategies are based on "support" and
"resistance" levels. The support level is what is considered the bottom
price for a currency; the currency will drop to this level and then
eventually rise again. The resistance level is just the opposite this is
the top price that the currency will reach but does not normally exceed.
Once it reaches this point it will eventually drop again. It is normal
for support and resistance levels to gradually shift over time.
currency suddenly moves beyond it's normal support or resistance levels
then it is expected that the currency will continue to move in that
direction for a time. A currency is considered to be "bullish" when it
is moving up, if a currency becomes bullish and breaks through its
normal resistance level it is expected to continue moving upward for a
need to study Forex price charts to determine the support and resistance
levels for a currency. You study the charts looking for an unbroken
pattern of high and low prices that the currency does not exceed. The
longer time span you use for your charting the more accurate and
dependable your final analysis will be. You can then use these levels to
determine at what point you want to enter and exit a trade.
just one Forex Trading strategy that a Forex trader can use, this one is
based entirely on Forex technical analysis. To be truly successful a
FOREX trader needs multiple Forex Trading strategies that they can
employ based on market conditions.
Trading Strategy and Economic Indicators
promise of "Easy Money" captures the interest of many beginning Forex
traders. You can find offers all over the Internet claiming, "risk free
trading", "low investment", and "high returns". While there is some
truth in these statements you will find that they are over simplified
and the reality of FOREX trading is a little more complicated.
very tempting to dive right in and start Forex Trading as soon as you
open your FOREX TRADING account. Doing this will most likely lead you to
make the two most common Forex Trading mistakes of beginning Forex
investors. These are trading based on emotions and trading without a
philosophy or Forex Trading strategy. While watching the movements of a
currency pair you may feel that you are letting an opportunity pass by
if you don't get involved. So you buy only to see the price start moving
against you, in a panic you sell at a loss, to then watch the price
must have a rational Forex Trading strategy and not base any decisions
on emotion. Undisciplined Forex trading like the scenario described
above will only lead to losing money in the Forex trading
have to be well educated in Forex market movements to make rational
Forex trading decisions. You must be able to read Forex Trading
technical studies and Forex Trading analyses and use that information to
plot out entry and exit Forex Trading points. You must be able to use
the various types of Forex trade orders available to maximize your Forex
Trading profits and minimize your Forex trading losses.
first thing you have to do is to understand the market and the forces
that move it and affect it. Learn who trades on the FOREX market and why
do they do it. Who are the successful Forex traders and what do they do
that makes them successful Forex Traders. By doing this you will be able
to identify the successful Forex trading strategies and use them to help
you develop a Forex Trading strategy of your own.
Banks, Corporations, Governments, investment funds, and traders are the
major groups of investors in the foreign exchange market. While they all
have their own objectives four of these five all have one thing in
common. They have external controls; these are rules and guidelines that
control the Forex trades that they make and the basis that they can be
held accountable to. The exception to that is the individual Forex
traders, they are accountable only to themselves.
Forex trader that enters the market with out rules and guidelines is
setting himself or herself up to lose money. The "big boys" and the well
educated Forex investors all approach Forex trading with strategies, if
you want to play on the same field with them and be successful Forex
trader you will have to play by the same rules. You absolutely must have
a Forex trading strategy, and you will need to be disciplined and follow
management is a critical part of every Forex trading strategy. Along
with knowing which currencies to trade and how to recognize Forex
trading entry and exit points as successful Forex trader must has to
manage his available resources and make money in the Forex trading.
Trading Strategy Tips
you want a successful FOREX trading strategy, you should incorporate the
following tips into your existing Forex Trading strategy you should then
become a profitable Forex trader. The aim is not to just to make money,
but to make big profits consistently.
a Forex Trading Method you have Confidence in
need to have total confidence in your Forex Trading method - so you can
follow it with discipline. Pick a simple, Forex Trading technical method
– simple Forex Trading methods work best, as they’re more robust in the
face of brutal market conditions - complicated Forex Trading methods
tend to break. Just use a few rules and parameters, and they should work
across all markets – a technical Forex Trading system should work on ANY
market that trends.
Don’t Trade Forex Frequently
Forex trades only come around a few times a year, so
focus on them. Many traders think there is good opportunities everyday -
There’s no correlation between how often you trade
and how much money you will make - if you want to make
Forex profits, you need patience.
Focus on the Long Term Forex Trends
Forex day trading, and
focus on the longer-term
Forex trends only - how
can you make big profits in a day? - You can’t. Don’t forget you have to
cover your losing days as well. Always remember –
brokers interested in making the maximum amount of commission,
perpetrate the make money by day trading myth.
Forex trends last for months or years - focus on them,
and milk them for all they’re worth.
Trade Forex in Isolation
Forex trading with
anyone - the only way you’ll make big money is by doing it by yourself.
Have confidence in your ability and don’t let anyone put you off - this
is an essential character trait of all great
Work Hard not Smart
Forex traders think the
more effort they make with their
FOREX trading strategy,
the greater their
Forex trading skills
will become – this is not true! You can learn a
Trading method in a short period of time, and if you
have a simple robust
Forex Trading method,
you can do your
Forex Trading analysis
in about 30 minutes a day - and that’s it!
Trade Forex pairs, not currencies
any relationship, you have to know both sides. Success or failure in
trading depends upon being right about both currencies
and how they impact one another, not just one.
Knowledge is Power
online Forex trading,
it is essential that you understand the basics of this market if you
want to make the most of your investments in the
Forex influencer is global news and events. For example,
say an ECB statement is released on European interest rates which
typically will cause a flurry of activity. Most newcomers react
violently to news like this and close their
positions and subsequently miss out on some of the best
trading opportunities by waiting until the market calms
down. The potential in the
Forex Trading market is
in the volatility, not in its tranquility.
Unambitious Forex trading
Forex traders will place very tight
Forex Trading orders in order to take very small
profits. This is not a sustainable approach because although you may be
profitable in the short run (if you are lucky), you risk losing in the
longer term as you have to recover the difference between the bid and
the ask price before you can make any profit and this is much more
difficult when you make small
Forex trades than when
you make larger ones.
10.Over-cautious Forex trading
Forex trader who tries to take small
Trading incremental profits all the time, the
trader who places tight
Forex Trading stop losses with a retail
broker is doomed. As we stated above, you have to give your
Forex Trading position a fair chance to demonstrate its
ability to produce. If you don't place reasonable
Trading stop losses that allow your
trade to do so, you will always end up undercutting yourself and losing
a small piece of your
forex trading deposit
of the above
Forex Trading tips are
not conventional wisdom - but keep in mind that 90% of Forex traders
don’t make big Forex
Trading gains – and they follow the herd.
Trading Strategy Tips to Avoid Forex Trading pitfalls
1. Take it like a man
If you decide to ride a loss, you are simply displaying stupidity and
cowardice. It takes guts to accept your Forex trading loss and wait for
tomorrow to try again. Sticking to a bad Forex Trading position ruins
lots of Forex traders - permanently. Try to remember that the Forex
market often behaves illogically, so don't get commit to any one Forex
trade; it's just a Forex trade. One good forex trade will not make you a
Forex trading success; it's ongoing regular performance over months and
years that makes a good Forex trader.
about possible Forex Trading profits and then "spending" them before you
have realised them is no good. Focus on your current Forex Trading
position(s) and place reasonable Forex Trading stop losses at the time
you do the Forex trade. Then sit back and enjoy the ride - you have no
real control from now on, the market will do what it wants to do.
3. Don't trust Forex Trading
Demo Forex Trading often causes new Forex traders to learn bad Forex
Trading habits. These bad Forex Trading habits, which can be very
dangerous in the long run, come about because you are playing Forex
Trading with virtual money. Once you know how your Forex broker's system
works, start trading forex with small amounts and only take the risk you
can afford to win or lose in the forex trading.
4. Stick to the
Forex Trading strategy
When you make money on a well thought-out strategic forex trade, don't
go and lose half of it next time on a fancy; stick to your forex trading
strategy and invest forex trading profits on the next forex trade that
matches your long-term goals.
5. The clues
are in the details
The bottom line on yourforex Trading account balance doesn't tell the
whole story. Consider individual forex trade details; analyse your forex
trading losses and the telling losing forex trading streaks. Generally,
forex traders that make money without suffering significant daily losses
have the best chance of sustaining positive performance in the long term
Be very careful and wary about infamous "black box" Forex trading
systems. These so-called Forex trading signal systems do not often
explain exactly how the Forex trade signals they generate are produced.
Typically, these Forex trading systems only show their track record of
extraordinary Forex results – historical Forex trading results.
Successfully predicting future Forex trade scenarios is altogether more
complex. The high-speed algorithmic capabilities of these Forex trading
systems provide significant retrospective Forex trading systems, not
ones which will help you trade Forex effectively in the future.
7. Get to know one
cross at a time
Each currency pair is unique, and has a unique way of moving in the
marketplace. The forces which cause the pair to move up and down are
individual to each cross, so study them and learn from your experience
and apply your learning to one cross at a time.
8. Risk Reward
If you put a 20 point Forex trading stop and a 50 Forex trading point
profit your chances of winning are probably about 1-3 against you. In
fact, given the spread you're trading on, it's more likely to be 1-4.
Play the odds the Forex market gives you.
9. Trading for
Don't trade Forex if you are bored, unsure or reacting on a whim. The
reason that you are bored in the first place is probably because there
is no Forex trade to make in the first place. If you are unsure, it's
probably because you can't see the Forex trade to make, so don't make
10. Zen Trading
Even when you have taken a Forex Trading position in the markets, you
should try and think as you would if you hadn't taken one. This level of
detachment is essential if you want to retain your clarity of mind and
avoid succumbing to emotional impulses and therefore increasing the
likelihood of incurring forex trading losses. To achieve this, you need
to cultivate a calm and relaxed outlook. Trade forex in brief periods of
no more than a few hours at a time and accept that once the trade has
been made, it's out of your hands.
Once you have decided to place a Forex trade, stick to it and let it run
its course. This means that if your Forex trading stop loss is close to
being triggered, let it trigger. If you move your stop midway through a
trade's life, you are more than likely to suffer worse moves against
you. Your determination must be show itself when you acknowledge that
you got it wrong, so get out.
Forex Trading Moving Average Crossovers
This is one of the most dangerous forex trading scenarios for non
professional forex traders. When the short-term forex moving average
crosses the forex longer-term moving average it only means that the
average price in the short run is equal to the average price in the
longer run. This is neither a bullish nor bearish forex trading
indication, so don't fall into the trap of believing it is one.
Another dangerous Forex Trading scenario. When it first forex trading
signals an exhausted condition that's when the big spike in the
"exhausted" currency cross tends to occur. My advice is to buy on the
first sign of an overbought cross and then sell on the first sign of an
oversold one. This forex trading approach means that you'll be with the
trend and have successfully identified a positive forex trading move
that still has some way to go. So if percentage K and percentage D are
both crossing 80, then buy! (This is the same on sell side, where you
sell at 20).
14. One cross
is all that counts
EURUSD seems to be trading higher, so you buy GBPUSD because it appears
not to have moved yet. This is dangerous forex trading. Focus on one
cross at a time - if EURUSD looks good to you, then just buy EURUSD.
15. Wrong Forex Trading Broker
A lot of
FOREX TRADING brokers are in business only to make money from yours.
Read forums, blogs and chats around the net to get an unbiased opinion
before you choose your Forex Trading broker.
you can also visit our directory page to find some forex trading
brokers or visit
ask about them before you
16 Too bullish
Forex Trading statistics
show that 90% of most forex traders will fail at some point.
Being too bullish about your Forex trading aptitude can be fatal
to your long-term Forex Trading success. You can always learn
more about trading the markets, even if you are currently successful in
your forex trades. Stay modest, and keep your eyes
open for new ideas and bad habits you might be falling in to.
forex news yourself
Learn to read the source documents of forex news and events - don't rely
on the interpretations of news media or others.