Forex for a trader
How to trade forex successfully for beginners

How to trade forex successfully for beginnersHow to become a successful part-time forex trader. Part-time forex trading can be a successful way to supplement your income. There are enough hours in the day to trade in this potentially profitable market, even if you hold a full-time or part-time job. In this article, we've outlined some tips to help get you there. TUTORIAL: Forex Currencies. Keys to Success in Forex Trading. The key to success in the forex market is to specialize in the currency pairs that trade when you're available and to use strategies that don't require around-the-clock monitoring. An automated trading platform may be the best way to accomplish this, especially for new traders or those with limited experience. (Check out some common mistakes that often trip up forex traders in "Top Reasons Forex Traders Fail.") Three ways to hone your skills as a part-time trader include: 1. Finding the Right Pairs to Trade Although forex trading occurs 24 hours a day throughout the week, it's best to trade during peak volume hours to guarantee liquidity. Liquidity is a trader's ability to sell a position, which is much easier when the market is most active. Assuming that you work a nine-to-five job, you'll be available for trading either early or late in the day. Depending on the currency pairs you're trading, high volume may occur at either end of those timeframes to conduct trades. For small traders with mini accounts and beginners who lack experience, trading U. S. currency against various foreign currencies is advised. The great majority of dollar volume traded on forex markets occurs in the currency pairs below. It may be wise for part-time traders to restrict trading to these briskly-traded currencies due to the strong liquidity in these pairs.

(For more information on global currencies, read "Top 8 Most Tradable Currencies.") For part-time traders with more experience and time to research conditions and circumstances that may impact currency prices, the following pairs also offer high liquidity: Experts advise trading only the USDEUR pair for the part-time trader who has a limited trading window. This pair is most frequently traded and there's an abundance of readily available information on these currencies across all forms of media. Conversely, experts discourage part-timers from trading two foreign pairs that may require more sophisticated knowledge and lack the same level of information as the USDEUR pair. (To learn more about trading the U. S. dollar, check out "Play Foreign Currencies Against The U. S. Dollar – And Win.") 2. Set Up an Automated Trading System Part-time traders may opt to trade on their own or choose an automated trading program to make trades for them. (For more on automated trading systems, see "Forex Automation Software For Hands-Free Trading.") There's a variety of automated trading programs with a full spectrum of functions available on the market. Some of them may be able to monitor currency prices in real time, place market orders (impose limit, market-if-touched, or stop orders), recognize profitable spreads and automatically order the trade. Please note, however, that even if a trade is ordered, there's no guarantee that the order will be filled on the trading floor at the price expected, especially in a fast-moving, volatile market. A so-called "set and forget" program may be the best way for a beginning part-time forex trader, which allows the software to make automated decisions.

Several automated programs offer a simple "plug and play" capability – an easy way for part-time beginners to start trading. This is one of the major benefits of automated trading – it offers disciplined, unemotional trades. Experienced part-timers may prefer a more hands-on trading approach by selecting automated trading software with more programmable options. 3. Apply Disciplined Decision-Making Discipline and dispassion are essential for success for traders who spurn automated systems to make their own decisions. Part-time traders are advised to take profits when they materialize instead of anticipating wider spreads and bigger profits. This requires a degree of self-discipline in fast trending markets where favorable spreads can widen. Successful traders take profits when they can because a trend can turn around instantly due to unforeseen external events. Trailing stop and stop market orders may be imposed to protect against sudden market reversals and to minimize risk, but as mentioned previously, there's no guarantee that an order will be filled at the anticipated price. (For tips on how to analyze your trading and improve, read "4 Reasons Why You Need a Forex Trading Journal.") Part-time traders with little or no experience are advised to start trading small amounts of currency. By opening a mini forex account, which requires a smaller-than-standard cash deposit, traders can control 10,000 currency units (the standard currency lot controls 100,000 units of currency). Minimum cash deposits for a mini account may start at $2,000 and can be as high as $10,000. The potential profits and losses can be substantial due to the leverage offered to traders, which can run as high as 400-to-1. Leverage allow traders to buy currency lots on margin, permitting them to put up only a fraction of the cash represented in a currency lot. For example, only $1,000 is required to trade a currency lot worth $100,000 with 1% margin. However, traders should be aware of the inherent risks that come with taking in too much leverage.

(For more insight, check out "Forex Leverage: A Double-Edged Sword.") Discipline, dispassion and trading the appropriate currency pairs based on your daily availability are the hallmarks of a successful part-time forex trader. For beginners, an automated trading program is considered the best way to break into forex trading, at least until there is a greater level of comfort with trading procedures. However, there's no guarantee that you'll make a profit due to the volatile nature of currency markets. Smart, knowledgeable, experienced traders – and even beginners at forex trading – will have a better chance to profit if they follow the few simple principles described above. Forex Trading Tips – 20 things you need to know to be a successful trader. Forex has caused large losses to many inexperienced and undisciplined traders over the years. You need not be one of the losers. Here are twenty forex trading tips that you can use to avoid disasters and maximize your potential in the currency exchange market. 1. Know yourself. Define your risk tolerance carefully. Understand your needs. To profit in trading, you must make recognize the markets. To recognize the markets, you must first know and recognize yourself.

The first step of gaining self-awareness is ensuring that your risk tolerance and capital allocation to forex and trading are not excessive or lacking. This means that you must carefully study and analyze your own financial goals in engaging forex trading. 2. Plan your goals. Stick to your plan. Once you know what you want from trading, you must systematically define a timeframe and a working plan for your trading career. What constitutes failure, what would be defined as success? What is the timeframe for the trial and error process that will inevitably be an important part of your learning? How much time can you devote to trading? Do you aim at financial independence, or merely aim to generate extra income? These and similar questions must be answered before you can gain the clear vision necessary for a persistent and patient approach to trading. Also, having clear goals will make it easier to abandon the endeavor entirely in case that the risksreturn analysis precludes a profitable outcome. 3. Choose your broker carefully.

While this point is often neglected by beginners, it is impossible to overemphasise the importance of the choice of broker. That a fake or unreliable broker invalidates all the gains acquired through hard work and study is obvious. But it is equally important that your expertise level, and trading goals match the details of the offer made by the broker. What kind of client profile does the forex broker aim at reaching? Does the trading software suit your expectations? How efficient is customer service? All these must be carefully scrutinised before even beginning to consider the intricacies of trading itself. Please refer to our forex broker reviews to find a reliable broker that suites your trading style. 4. Pick your account type, and leverage ratio in accordance with your needs and expectations. In continuation of the above item, it is necessary that we choose the account package that is most suited to our expectations and knowledge level. The various types of accounts offered by brokers can be confusing at first, but the general rule is that lower leverage is better. If you have a good understanding of leverage and trading in general, you can be satisfied with a standard account. If you’re a complete beginner, it is a must that you undergo a period of study and practice by the use of a mini account.

In general, the lower your risk, the higher your chances, so make your choices in the most conservative way possible, especially at the beginning of your career. 5. Begin with small sums, increase the size of your account through organic gains, not by greater deposits. One of the best tips for trading forex is to begin with small sums, and low leverage, while adding up to your account as it generates profits. There is no justification to the idea that a larger account will allow greater profits. If you can increase the size of your account through your trading choices, perfect. If not, there’s no point in keeping pumping money to an account that is burning cash like an furnace burns paper. 6. Focus on a single currency pair, expand as you better your skills. The world of currency trading is deep and complicated, due to the chaotic nature of the markets, and the diverse characters and purposes of market participants. It is hard to master all the different kinds of financial activity that goes on in this world, so it is a great idea to restrict our trading activity to a currency pair which we understand, and with which we are familiar. Beginning with the trading of the currency of your nation can be a great idea. If that’s not your choice, sticking to the most liquid, and widely traded pairs can also be an excellent practice for both the beginner and the advanced traders. 7. Do what you understand.

Simple as it is, failure to abide by this principle has been the doom of countless traders. In general, if you’re unsure that you know what you’re doing, and that you can defend your opinion with strength and vigor against critics that you value and trust, do not trade. Do not trade on the basis of hearsay or rumors. And do not act unless you’re confident that you understand both the positive consequences, and the adverse results that may result from opening a position. 8. Do not add to a losing position. While this is just common sense, ignorance of the principle, or carelessness in its employment has caused disasters to many traders in the course of history. Nobody knows where a currency pair will be heading during the next few hours, days, or even weeks. There are lots of educated guesses, but no knowledge of where the price will be a short while later. Thus, the only certain value about trading is now. Nothing much can be said about the future. Consequently, there can be no point in adding to a losing position, unless you love gambling. A position in the red can be allowed to survive on its own in accordance with the initial plan, but adding to it can never be an advisable practice. 9. Restrain your emotions.

Greed, excitement, euphoria, panic or fear should have no place in traders’ calculations. Yet traders are human beings, so it is obvious that we have to find a way of living with these emotions, while at the same time controlling them and minimizing their effect on our lives. That is why traders are always advised to begin with small amounts. By reducing our risk, we can be calm enough to realize our long term goals, reducing the impact of emotions on our trading choices. A logical approach, and less emotional intensity are the best forex trading tips necessary to a successful career. 10. Take notes. Study your success and failure. An analytical approach to trading does not begin at the fundamental and technical analysis of price trends, or the formulation of trading strategies. It begins at the first step taken into the career, with the first dollar placed in an open position, and the first mistakes in calculation and trading methods. The successful trader will keep a diary, a journal of his trading activity where he carefully scrutinizes his mistakes and successes to find out what works and what does not. This is one of the most importance forex trading tips that you will get from a good mentor. 11. Automate your trading as much as possible. We already noted the importance of emotional control in ensuring a successful and profitable career. In order to minimize the role of emotions, one of the best of courses of action would be the automatization of trading choices and trader behavior. This is not about using forex robots, or buying expensive technical strategies. All that you need to do is to make sure that your responses to similar situations and trading scenarios are themselves similar in nature.

In other words, don’t improvise. Let your reactions to market events follow a studied and tested pattern. 12. Do not rely on forex robots, wonder methods, and other snake oil products. Surprisingly, these unproven and untested products are extremely popular these days, generating great profits for their sellers, but little in the way of gains for their excited and hopeful buyers. The logical defense against such magical items is in fact easy. If the genius creators of these tools are so smart, let them become millionaires with the benefit of their inventions. If they have no interest in doing as much, you should have no interest in their creations either. 13. Keep it simple. Both your trade plans and analysis should be easily understood and explained. Forex trading is not rocket science. There is no expectation that you be a mathematical genius, or an economics professor to acquire wealth in currency trading. Instead, clarity of vision, and well-defined, carefully observed goals and practices offer the surest path to a respectable career in forex. To achieve this, you must resist the temptation to over explain, overanalyze, and most importantly, to rationalize your failures. A failure is a failure regardless of the conditions that led to it. 14. Don’t go against the markets, unless you have enough patience and financial resilience to stick to a long term plan. In general, a beginner is never advised to trade against trends, or to pick tops and bottoms by betting against the main forces of market momentum.

Join the trends so that your mind can relax. Fight the trends, and constant stress and fear will wreck your career. 15. Understand that forex is about probabilities. Forex is all about risk analysis and probability. There is no single method or style that will generate profits all the time. The key to success is positioning ourselves in such a way that the losses are harmless, while the profits are multiplied. Such a positioning is only possible by managing our risk allocations in accordance with an understanding of probability and risk management. 16. Be humble and patient. Do not fight the markets. Recognize your failures, and try to accommodate them if they can’t be eliminated completely. Above all, resist the illusion that you somehow possess the alchemist’s stone of trading. Such an attitude will surely be ruinous on your career eventually. 17. Share your experiences.

Follow your own judgment. While it is a great idea to discuss your opinion on the markets with others, you should be the one making the decisions. Consider the opinions of others, but make your own choices. It is your money after all. 18. Study money management. Once we make profits, it is time to protect them. Money management is about the minimization of losses, and maximization of profits. To ensure that you don’t gamble away your hard-earned profits, to “cut your losses short, and let profits ride”, you should keep the bible of money management as the centerpiece of your trading library at all times. 19. Study the markets, fundamentals, and technical factors leading the price action. That we have placed this so low in the list should not surprise the experienced trader. Faulty analysis is rarely the cause of a wiped-out account. A career that fails to begin is never killed by the consequences of erronerous application or understanding of fundamental or technical studies. Other issues that are related to money management, and emotional control are far more important than analysis for the beginner, but as those issues are overcome, and steady gains are realized, the edge gained by successful analysis of the markets will be invaluable. Analysis is important, but only after a proper attitude to trading and risk taking is attained.

Finally, provided that you risk only what you can afford to lose, persistence, and a determination to succeed are great advantages. It is highly unlikely that you will become a trading genius overnight, so it is only sensible to await the ripening of your skills, and the development of your talents before giving up. As long as the learning process is painless, as long as the amounts that you risk do not derail your plans about the future and your life in general, the pains of the learning process will be harmless. 9 Tricks of the Successful Forex Trader. For all of its numbers, charts and ratios, trading is more art than science. As in artistic endeavors, there is talent involved, but talent will only take you so far. The best traders hone their skills through practice and discipline. They perform self-analysis to see what drives their trades and learn how to keep fear and greed out of the equation. In this article we'll look at nine steps a novice trader can use to perfect his or her craft. For the experts out there, you might just find some tips that will help you make smarter, more profitable trades too. 1. Define Your Goals and Choose a Compatible Trading Style. Before you set out on any journey, it is imperative to have some idea of your destination and how you will get there. Consequently, it is imperative to have clear goals in mind, then ensure your trading method is capable of achieving these goals.

Each trading style has a different risk profile, which requires a certain attitude and approach to trade successfully. For example, if you cannot stomach going to sleep with an open position in the market then you might consider day trading. On the other hand, if you have funds you think will benefit from the appreciation of a trade over a period of some months, you may be more of a position trader. Just be sure your personality fits the style of trading you undertake. A personality mismatch will lead to stress and certain losses. 2. Choose a Broker Who Offers an Appropriate Trading Platform. Choosing a reputable broker is of paramount importance and spending time researching the differences between brokers will be very helpful. You must know each broker's policies and how he or she goes about making a market. For example, trading in the over-the-counter market or spot market is different from trading the exchange-driven markets. Also make sure your broker's trading platform is suitable for the analysis you want to do. For example, if you like to trade off of Fibonacci numbers, be sure the broker's platform can draw Fibonacci lines. A good broker with a poor platform, or a good platform with a poor broker, can be a problem. Make sure you get the best of both. 3. Choose a Methodology and Be Consistent in Its Application. Before you enter any market as a trader, you need to have some idea of how you will make decisions to execute your trades. You must know what information you will need to make the appropriate decision on entering or exiting a trade.

Some people choose to look at the underlying fundamentals of the economy as well as a chart to determine the best time to execute the trade. Others use only technical analysis. Whichever methodology you choose, be consistent and be sure your methodology is adaptive. Your system should keep up with the changing dynamics of a market. (For related reading, see: 4 Investment Strategies to Learn Before Trading .) 4. Choose Your Entry and Exit Timeframe Carefully. Many traders get confused by conflicting information that occurs when looking at charts in different timeframes. What shows up as a buying opportunity on a weekly chart could, in fact, show up as a sell signal on an intraday chart. Therefore, if you are taking your basic trading direction from a weekly chart and using a daily chart to time entry, be sure to synchronize the two. In other words, if the weekly chart is giving you a buy signal, wait until the daily chart also confirms a buy signal. Keep your timing in sync. 5. Calculate Your Expectancy.

Expectancy is the formula you use to determine how reliable your system is. You should go back in time and measure all your trades that were winners versus losers, then determine how profitable your winning trades were versus how much your losing trades lost. Take a look at your last 10 trades. If you haven't made actual trades yet, go back on your chart to where your system would have indicated that you should enter and exit a trade. Determine if you would have made a profit or a loss. Write these results down. Total all your winning trades and divide the answer by the number of winning trades you made. Here is the formula: W = Average Winning Trade L = Average Losing Trade P = Percentage Win Ratio. Example: If you made 10 trades, six of which were winning trades and four of which were losing trades, your percentage win ratio would be 610 or 60%. If your six trades made $2,400, then your average win would be $2,4006 = $400. If your losses were $1,200, then your average loss would be $1,2004 = $300. Apply these results to the formula and you get E= 1+ (400300) x 0.6 - 1 = 0.40, or 40%. A positive 40% expectancy means your system will return you 40 cents per dollar over the long term. 6. Focus on Your Trades and Learn to Love Small Losses.

Once you have funded your account, the most important thing to remember is your money is at risk. Therefore, your money should not be needed for regular living expenses. Think of your trading money like vacation money. Once the vacation is over, your money is spent. Have the same attitude toward trading. This will psychologically prepare you to accept small losses, which is key to managing your risk. By focusing on your trades and accepting small losses rather than constantly counting your equity, you will be much more successful. (For related reading, see: The Art of Cutting Your Losses .) Secondly, only leverage your trades to a maximum risk of 2% of your total funds. In other words, if you have $10,000 in your trading account, never let any trade lose more than 2% of the account value, or $200. If your stops are further away than 2% of your account, trade shorter timeframes or decrease the leverage. 7. Build Positive Feedback Loops.

A positive feedback loop is created as a result of a well-executed trade in accordance with your plan. When you plan a trade and execute it well, you form a positive feedback pattern. Success breeds success, which in turn breeds confidence, especially if the trade is profitable. Even if you take a small loss but do so in accordance with a planned trade, then you will be building a positive feedback loop. 8. Perform Weekend Analysis. On the weekend, when the markets are closed, study weekly charts to look for patterns or news that could affect your trade. Perhaps a pattern is making a double top and the pundits and the news are suggesting a market reversal. This is a kind of reflexivity where the pattern could be prompting the pundits, who then reinforce the pattern. Or the pundits may be telling you the market is about to explode, hoping to lure you into the market so they can sell their positions on increased liquidity. These are the kinds of actions to look for to help you formulate your upcoming trading week.

In the cool light of objectivity, you will make your best plans. Wait for your setups and learn to be patient. 9. Keep a Printed Record. A printed record is a great learning tool. Print out a chart and list all the reasons for the trade, including the fundamentals that sway your decisions. Mark the chart with your entry and your exit points. Make any relevant comments on the chart, including emotional reasons for taking action. Did you panic? Were you too greedy? Were you full of anxiety? It is only when you can objectify your trades that you will develop the mental control and discipline to execute according to your system instead of your habits or emotions. The steps above will lead you to a structured approach to trading and should help you become a more refined trader. Trading is an art, and the only way to become increasingly proficient is through consistent and disciplined practice.

(For related reading, see: Forex Trading: A Beginner's Guide .) FOREX FOR AMBITIOUS BEGINNERS. 5 Forex Beginner Tips That Will Save You Money. The 5 forex trading tips listed below are mentioned throughout this book. That's because even though they can't guarantee success ? nothing ever can, otherwise everybody would be successful ? they can save you a lot of money. Experience shows that many beginning forex traders bleed money mainly because they fail to follow the next five principles: Forex Beginner Tip 1. Money Management. Rule number 1 for every forex trader is to survive. Every trader has losing trades, but when you go broke you can put yourself in a position where you can no longer have winning trades. Therefore, before everytying else you have to make sure you stay in the game. Many beginning andor consistently losing traders focus exclusively on having a profitable trading strategy. But even though a good trading strategy is definitely important, using solid money management and having a rational, disciplined trading attitude will get you further at the end of the day. Two rules of thumb for good money management are not to risk more than 3% of your trading capital per trade and making sure you have enough trading capital for at least 40 trades when you are a beginner. Forex Beginner Tip 2. Always use a stop loss.

The stop loss is perhaps the most powerful weapon in your arsenal as a forex trader, just as the most powerful weapon of the professional poker player is the fold (if that means anything to you). The stop loss allows you to predetermine your risk down to the pip, therefore ALWAYS use it! There are really only advantages to putting in a stop loss. It forces you to think about when the trade you're about to put on would be considered a failure. After you've opened the position you might talk yourself into staying in a trade going bad, using all kinds of irrational excuses. But if you've set a stop loss before opening the trade (when you were still thinking rationally) you'll always have that shining beacon, reminding you that you'd be a weak, emotional idiot if you stayed in the trade after the stop loss is triggered. Setting a stop loss also forces you to think about your profitable tradeslosing trades ratio. Suppose you want to risk 50 pips to win 100 pips, that would mean you'd need a winning trade at least 33% of the time to break even. Does your trading strategy get you a profitable trade 33% of the time? Another advantage of the stop loss is that you don't have to be afraid that one badly chosen trade will kill your whole account in case the trade goes bad and for some reason you're not in a position to close it manually. So remember to always put in a stop loss and never move it further away after opening the trade. Forex Beginner Tip 3. Be realistic. Unless you are amazingly lucky you can't expect to close 80% of your trades profitably or turn a $500 trading capital into a $10,000 trading capital in six months. With those kind of expectations you're simply setting yourself up for disappointment, frustration and failure. (unless you're very, very lucky). Try to look at things realistically right from the start.

Determine an attainable percentage of winning trades considering your strategy and experience. Ask yourself how much time you can spend on trading and learning. When you have a clear view of your trading tools and conditions, you will find it much easier to work towards a profitable trading strategy. For example, suppose you're a day trader with a trading strategy where you risk, on average, 15 pips to win 30. After doing about 200 trades, it turns out that 50% of your trades reached their profit target of 30 pips; the other 50% of the trades went sour and triggered your stop loss. So you've won 100 x 30 pips = 3,000 pips and lost 100 x 15 pips = 1,500 pips, for a gross revenue of 1.500 pips total. Gross revenue, because you still have to deduct the spread, i. e. the transaction cost you pay your broker, remember? Let's say the spread is 2 pips per position, meaning your 200 trades costed you 400 pips. Your net revenue then, was 1.100 pips over 200 trades, or 5.5 pips per trade. Of course data on 200 trades isn't enough yet to be of statistical significance, but at least it would give you something to work with: on average, each trade nets you 5,5 pips. Forex Beginner Tip 4. Interact with other traders. For beginning traders an often overlooked source of information is other traders.

Of course, reading books about forex is important. Books can provide you with a solid basis in a short time, providing a foundation to build on. Practicing is another important factor to get the hang of things quickly, but you'd be surprised to find out how often fellow traders can give you valuable feedback about your trading strategy, or about alternative ways for putting on a particular trade. You should therefore become part of an online forex community and consider starting a trading blog, so people can comment on your strategy. Don't be embarrassed because you're a beginner; remember that we all started out as beginners at some point, and many of the traders you'll meet on online trading forums are also just starting out. Forex Beginner Tip 5.Keep your emotions under control. This last trading tip is perhaps the most important one. As previously said, trading on the forex is exciting, fun and dynamic, but it's crucial not to get carried away because of this. Successful traders approach trading like a business, not a hobby. You use your trading capital to make business decisions; some will make you money, others will cost money, it's that simple. But as soon as you lose sight of your rationality I promise you that the losses will stack up pretty quickly. I'm talking about those moments that you do move your stop loss, because you just can't get yourself to take the hit. Or those moments that you decide to get in right now, even though your trading plan tells you to wait, because you're so scared to miss the trade, or perhaps you're just bored. Those moments that you're so mad that you lost 10 trades in a row that you start trading with triple your normal risk, taking positions in currency pairs you normally never trade in. Those are the moments you lose in 30 minutes what it took you three weeks to build up. from: Forex for Ambitious Beginners , Jelle Peters, Odyssea Publishing 2012. How To Trade Forex Successfully For Beginners – 9 Tricks. How To Trade Forex Successfully For Beginners. For all of its numbers, charts and ratios, trading is more art than science. Just as in artistic endeavors, there is talent involved, but talent will only take you so far. The best traders hone their skills through practice and discipline. They perform self analysis to see what drives their trades and learn how to keep fear and greed out of the equation.

In this article we’ll look at nine steps a novicetrader can use to perfect his or her craft; for the experts out there, you might just find some tips that will help you make smarter, more profitable trades, too. Step 1. Define your goals and then choose a style of trading that is compatible with those goals. Be sure your personality is a match for the style of trading you choose. Before you set out on any journey, it is imperative that you have some idea of where your destination is and how you will get there. Consequently, it is imperative that you have clear goals in mind as to what you would like to achieve; you then have to be sure that your trading method is capable of achieving these goals. Each type of trading style requires a different approach and each style has a different risk profile, which requires a different attitude and approach to trade successfully. For example, if you cannot stomach going to sleep with an open position in the market then you might consider day trading . On the other hand, if you have funds that you think will benefit from the appreciation of a trade over a period of some months, then a position trader is what you want to consider becoming. But no matter what style of trading you choose, be sure that your personality fits the style of trading you undertake. A personality mismatch will lead to stress and certain losses. (For more, see Invest With A Thesis .) Step 2. Choose a broker with whom you feel comfortable but also one who offers a trading platformthat is appropriate for your style of trading.

It is important to choose a broker who offers a trading platform that will allow you to do the analysis you require. Choosing a reputable broker is of paramount importance and spending time researching the differences between brokers will be very helpful. You must know each broker’s policies and how he or she goes about making a market. For example, trading in the over-the-counter market or spot market is different from trading the exchange-driven markets. In choosing a broker, it is important to read the broker documentation. Know your broker’s policies. Also make sure that your broker’s trading platform is suitable for the analysis you want to do. For example, if you like to trade off of Fibonacci numbers, be sure the broker’s platform can draw Fibonacci lines. A good broker with a poor platform, or a good platform with a poor broker, can be a problem. Make sure you get the best of both. (For related reading, see How To Pay Your Forex Broker .) Step 3. Choose a methodology and then be consistent in its application. Before you enter any market as a trader, you need to have some idea of how you will make decisions to execute your trades. You must know what information you will need in order to make the appropriate decision about whether to enter or exit a trade. Some people choose to look at the underlying fundamentals of the company or economy, and then use a chart to determine the best time to execute the trade. Others use technical analysis; as a result they will only use charts to time a trade.

Remember that fundamentals drive the trend in the long term, whereas chart patterns may offer trading opportunities in the short term. Whichever methodology you choose, remember to be consistent. And be sure your methodology is adaptive. Your system should keep up with the changing dynamics of a market. (For related reading, see What is the difference between fundamental and technical analysis and Blending Technical And Fundamental Analysis .) Step 4. Choose a longer time frame for direction analysis and a shorter time frame to time entry or exit. Many traders get confused because of conflicting information that occurs when looking at charts in different time frames. What shows up as a buying opportunity on a weekly chart could, in fact, show up as a sell signal on an intraday chart. Therefore, if you are taking your basic trading direction from a weekly chart and using a daily chart to time entry, be sure to synchronize the two. In other words, if the weekly chart is giving you a buy signal, wait until the daily chart also confirms a buy signal. Keep your timing in sync. Step 5. Calculate your expectancy.

Expectancy is the formula you use to determine how reliable your system is. You should go back in time and measure all your trades that were winners versus all your trades that were losers. Then determine how profitable your winning trades were versus how much your losing trades lost. Take a look at your last 10 trades. If you haven’t made actual trades yet, go back on your chart to where your system would have indicated that you should enter and exit a trade. Determine if you would have made a profit or a loss. Write these results down. Total all your winning trades and divide the answer by the number of winning trades you made. Here is the formula: Step 6. Focus on your trades and learn to love small losses. Once you have funded your account, the most important thing to remember is that your money is at risk. Therefore, your money should not be needed for living or to pay bills etc. Consider your trading money as if it were vacation money. Once the vacation is over your money is spent. Have the same attitude toward trading. This will psychologically prepare you to accept small losses, which is key to managing your risk. By focusing on your trades and accepting small losses rather than constantly counting your equity, you will be much more successful.

Secondly, only leverage your trades to a maximum risk of 2% of your total funds. In other words, if you have $10,000 in your trading account, never let any trade lose more than 2% of the account value, or $200. If your stops are farther away than 2% of your account, trade shorter time frames or decrease the leverage. (For further reading, see Leverage’s Double-Edged Sword Need Not Cut Deep .) Step 7. Build positive feedback loops. A positive feedback loop is created as a result of a well-executed trade in accordance with your plan. When you plan a trade and then execute it well, you form a positive feedback pattern. Success breeds success, which in turn breeds confidence – especially if the trade is profitable. Even if you take a small loss but do so in accordance with a planned trade, then you will be building a positive feedback loop. Step 8. Perform weekend analysis.

It is always good to prepare in advance. On the weekend, when the markets are closed, study weekly charts to look for patterns or news that could affect your trade. Perhaps a pattern is making adouble top and the pundits and the news are suggesting a market reversal. This is a kind ofreflexivity where the pattern could be prompting the pundits while the pundits are reinforcing the pattern. Or the pundits may be telling you that the market is about to explode. Perhaps these are pundits hoping to lure you into the market so that they can sell their positions on increased liquidity. These are the kinds of actions to look for to help you formulate your upcoming trading week. In the cool light of objectivity, you will make your best plans. Wait for your setups and learn to be patient. (For information on determining what the market’s telling you, read Listen To The Market, Not Its Pundits .

) If the market does not reach your point of entry, learn to sit on your hands. You might have to wait for the opportunity longer than you anticipated. If you miss a trade, remember that there will always be another. If you have patience and discipline you can become a good trader. (To learn more, see Patience Is A Trader’s Virtue .) Step 9. Keep a printed record. Keeping a printed record is one of the best learning tools a trader can have. Print out a chart and list all the reasons for the trade, including the fundamentals that sway your decisions. Mark the chart with your entry and your exit points. Make any relevant comments on the chart. File this record so you can refer to it over and over again.

Note the emotional reasons for taking action. Did you panic? Were you too greedy? Were you full of anxiety? Note all these feelings on your record. It is only when you can objectify your trades that you will develop the mental control and discipline to execute according to your system instead of your habits. Bottom Line The steps above will lead you to a structured approach to trading and in return should help you become a more refined trader. Trading is an art and the only way to become increasingly proficient is through consistent and disciplined practice. Remember the expression: the harder you practice the luckier you’ll get. Don't Miss Pro Indicators And Trading Systems. Our community traders work with EasyMarkets brokerage company for over 5 years. If you are thinking to open Demo or Real forex trading account we recommend EasyMarkets. They currently offer up to 2000$ bonus on your deposit..

to find details click below: Forex Trading Guide for Beginners. Forex Trading Guide for Beginners. The currency trading market, also known as the Foreign Exchange Market, the FX, or the Forex is one of the largest financial markets in the world — with an average daily turnover of $5.1 trillion in April 2016. It is traded 24 hours a day, 7 days a week. The market is, for the most part, high risk, but the more a person knows about Forex, the more successful they will be in trades. How to Trade Forex Successfully for Beginners. Currency traders bet on the movement of exchange rates, and the movements of exchange rates are affected by many factors. First, the Forex, like any financial market, is really about speculation. No trader or group gets official information ahead of time that will indicate that a currency rate is going to change. There are many environmental impacts that affect the currency exchange rates for countries. Wars, coups d’etat, and changes in the economy of a country are just a few. In short, just about anything that affects citizens in a country affects the value of that country’s currency. Traders try to predict fluctuations in the exchange rate and bet on the pairs that will give them the largest gains on their bet. When one country’s currency is being traded against another country’s currency, it is called a “pair”. All of the major pairs that are traded involve the US dollar. When a currency pair is being traded that does not involve the US, it is called a “cross currency pair.

” An example of a cross currency pair would be EURJPY (EuroJapanese Yen). The most actively traded cross currency pairs are the EUR, JPY, and the GBP (sterling pound). There are a couple of important things to know about how the pairs are shown. First, the stronger currency is traditionally listed on the left. So, when you see EURUSD, you know that the Euro is stronger than the US dollar. This stronger currency is called the “base currency.” The base currency is what you buy or sell. So, if you buy 10000 EUR you are automatically selling 10000 USD. On paper, it would look like this, 10000 EURUSD. The currency on the right is called the “counter currency” or “secondary currency.” The value of this currency when you buy or sell your base currency will determine what the profit or loss is on your trade. Reading this does not convey the speed with which trades are happening. Trading is taking place throughout every day and night every day of the year.

The market can fluctuate by the minute with many of the currency pairs. There are pairs that provide less risk as well as extremely high-risk pairs. You will want to know which pairs fit in with the level of risk you are willing to take. Low-risk pairs are the best Forex pairs to trade for beginners. Now, this is only one tiny little piece of what you need to know to begin trading. There are strategies, methods, and much more that will be important in making successful trades on a consistent basis. Best Currency Trading Strategies for Beginners. Trend following – Trend following has been the mainstay of profitable stock, futures, and Forex traders for many years. Basically, trend following consists of determining the direction and momentum of a trend and placing a trade in the direction of the trend. One of the easiest ways to find the trend is to use a moving average.

Now before you stop reading and shake your head and say that a moving average is an indicator and indicators don’t work it would be smart to test moving averages out for yourself. As the legendary trader Robert Strakken says, “How can beginning traders hope to ever become successful without learning a few basic Forex analysis techniques?” So before you write simple technical indicators off as useless, realize that something as simple as a moving average has been responsible for billions and billions of dollars in profitable trades over the years. Breakout strategies – A breakout strategy works on the supposition that when market prices move outside of a trading range (break out), there is a tendency for them to continue in that direction. Breakout strategies were based upon the highest high and the lowest low over a period of time. If a trader is using a 10-day breakout system they will buy when the price moves above the highest high of the last 10 days. On the flip side of the equation, they will sell the market when the price moves below the lowest low of the last 10 days. 10 days was simply chosen as an example and you can construct a breakout trading system using any time period you wish such as five minute, four hours, 10 days, etc. Start with these Books. So exactly what are the best books for beginners?

The simple answer is a book written by a successful trader who has started from humble beginnings and will be able to guide you in the right direction. It is both exciting and informative to read their success stories. It’s also good to know that many of these successful traders had the same struggles and challenges as all of us do when starting out. Trading Systems – Techniques and strategies designed to trade Forex successfully. Good books will have plenty of trading system examples along with performance reports detailing how those systems have done. Trading Psychology and Discipline – Information on how to stay focused, disciplined, and profitable. Keeping the right mindset and keeping your emotions out of the way are as important if not more important than the trading methods themselves. Risk Control and Money Management – Methods to control risk so that you can preserve capital and keep on trading. Money management techniques will help you grow your account faster. Using proper money management is absolutely essential. No trader becomes super successful and wealthy without it. How To Trade Forex Successfully For Beginners – 9 Tricks. How To Trade Forex Successfully For Beginners. For all of its numbers, charts and ratios, trading is more art than science. Just as in artistic endeavors, there is talent involved, but talent will only take you so far. The best traders hone their skills through practice and discipline.

They perform self analysis to see what drives their trades and learn how to keep fear and greed out of the equation. In this article we’ll look at nine steps a novicetrader can use to perfect his or her craft; for the experts out there, you might just find some tips that will help you make smarter, more profitable trades, too. Step 1. Define your goals and then choose a style of trading that is compatible with those goals. Be sure your personality is a match for the style of trading you choose. Before you set out on any journey, it is imperative that you have some idea of where your destination is and how you will get there. Consequently, it is imperative that you have clear goals in mind as to what you would like to achieve; you then have to be sure that your trading method is capable of achieving these goals. Each type of trading style requires a different approach and each style has a different risk profile, which requires a different attitude and approach to trade successfully. For example, if you cannot stomach going to sleep with an open position in the market then you might consider day trading . On the other hand, if you have funds that you think will benefit from the appreciation of a trade over a period of some months, then a position trader is what you want to consider becoming. But no matter what style of trading you choose, be sure that your personality fits the style of trading you undertake. A personality mismatch will lead to stress and certain losses. (For more, see Invest With A Thesis .) Step 2. Choose a broker with whom you feel comfortable but also one who offers a trading platformthat is appropriate for your style of trading. It is important to choose a broker who offers a trading platform that will allow you to do the analysis you require. Choosing a reputable broker is of paramount importance and spending time researching the differences between brokers will be very helpful.

You must know each broker’s policies and how he or she goes about making a market. For example, trading in the over-the-counter market or spot market is different from trading the exchange-driven markets. In choosing a broker, it is important to read the broker documentation. Know your broker’s policies. Also make sure that your broker’s trading platform is suitable for the analysis you want to do. For example, if you like to trade off of Fibonacci numbers, be sure the broker’s platform can draw Fibonacci lines. A good broker with a poor platform, or a good platform with a poor broker, can be a problem. Make sure you get the best of both. (For related reading, see How To Pay Your Forex Broker .) Step 3. Choose a methodology and then be consistent in its application. Before you enter any market as a trader, you need to have some idea of how you will make decisions to execute your trades. You must know what information you will need in order to make the appropriate decision about whether to enter or exit a trade. Some people choose to look at the underlying fundamentals of the company or economy, and then use a chart to determine the best time to execute the trade. Others use technical analysis; as a result they will only use charts to time a trade. Remember that fundamentals drive the trend in the long term, whereas chart patterns may offer trading opportunities in the short term.

Whichever methodology you choose, remember to be consistent. And be sure your methodology is adaptive. Your system should keep up with the changing dynamics of a market. (For related reading, see What is the difference between fundamental and technical analysis and Blending Technical And Fundamental Analysis .) Step 4. Choose a longer time frame for direction analysis and a shorter time frame to time entry or exit. Many traders get confused because of conflicting information that occurs when looking at charts in different time frames. What shows up as a buying opportunity on a weekly chart could, in fact, show up as a sell signal on an intraday chart. Therefore, if you are taking your basic trading direction from a weekly chart and using a daily chart to time entry, be sure to synchronize the two. In other words, if the weekly chart is giving you a buy signal, wait until the daily chart also confirms a buy signal. Keep your timing in sync. Step 5. Calculate your expectancy. Expectancy is the formula you use to determine how reliable your system is. You should go back in time and measure all your trades that were winners versus all your trades that were losers. Then determine how profitable your winning trades were versus how much your losing trades lost. Take a look at your last 10 trades.

If you haven’t made actual trades yet, go back on your chart to where your system would have indicated that you should enter and exit a trade. Determine if you would have made a profit or a loss. Write these results down. Total all your winning trades and divide the answer by the number of winning trades you made. Here is the formula: Step 6. Focus on your trades and learn to love small losses. Once you have funded your account, the most important thing to remember is that your money is at risk. Therefore, your money should not be needed for living or to pay bills etc. Consider your trading money as if it were vacation money. Once the vacation is over your money is spent. Have the same attitude toward trading. This will psychologically prepare you to accept small losses, which is key to managing your risk. By focusing on your trades and accepting small losses rather than constantly counting your equity, you will be much more successful. Secondly, only leverage your trades to a maximum risk of 2% of your total funds. In other words, if you have $10,000 in your trading account, never let any trade lose more than 2% of the account value, or $200. If your stops are farther away than 2% of your account, trade shorter time frames or decrease the leverage.

(For further reading, see Leverage’s Double-Edged Sword Need Not Cut Deep .) Step 7. Build positive feedback loops. A positive feedback loop is created as a result of a well-executed trade in accordance with your plan. When you plan a trade and then execute it well, you form a positive feedback pattern. Success breeds success, which in turn breeds confidence – especially if the trade is profitable. Even if you take a small loss but do so in accordance with a planned trade, then you will be building a positive feedback loop. Step 8. Perform weekend analysis. It is always good to prepare in advance. On the weekend, when the markets are closed, study weekly charts to look for patterns or news that could affect your trade. Perhaps a pattern is making adouble top and the pundits and the news are suggesting a market reversal. This is a kind ofreflexivity where the pattern could be prompting the pundits while the pundits are reinforcing the pattern. Or the pundits may be telling you that the market is about to explode. Perhaps these are pundits hoping to lure you into the market so that they can sell their positions on increased liquidity. These are the kinds of actions to look for to help you formulate your upcoming trading week. In the cool light of objectivity, you will make your best plans.

Wait for your setups and learn to be patient. (For information on determining what the market’s telling you, read Listen To The Market, Not Its Pundits .) If the market does not reach your point of entry, learn to sit on your hands. You might have to wait for the opportunity longer than you anticipated. If you miss a trade, remember that there will always be another. If you have patience and discipline you can become a good trader. (To learn more, see Patience Is A Trader’s Virtue .) Step 9. Keep a printed record. Keeping a printed record is one of the best learning tools a trader can have. Print out a chart and list all the reasons for the trade, including the fundamentals that sway your decisions. Mark the chart with your entry and your exit points. Make any relevant comments on the chart.

File this record so you can refer to it over and over again. Note the emotional reasons for taking action. Did you panic? Were you too greedy? Were you full of anxiety? Note all these feelings on your record. It is only when you can objectify your trades that you will develop the mental control and discipline to execute according to your system instead of your habits. Bottom Line The steps above will lead you to a structured approach to trading and in return should help you become a more refined trader. Trading is an art and the only way to become increasingly proficient is through consistent and disciplined practice. Remember the expression: the harder you practice the luckier you’ll get. Don't Miss Pro Indicators And Trading Systems. Our community traders work with EasyMarkets brokerage company for over 5 years.

If you are thinking to open Demo or Real forex trading account we recommend EasyMarkets. They currently offer up to 2000$ bonus on your deposit..to find details click below:



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