Over past Ten years trading the forex has become available to everyone; this is for the most part down to the internet enabling trading organizations to provide forex data feeds right to anyone with an internet connection. Today the little guys can get some of the same opportunities that hedge fund managers, bankers and floor traders have had for many years. When learning forex trading it can be mind-boggling as there is a great deal of information on the net so here is some ideas regarding forex trading.
Day trading the forex which is also referred to as spot trading involves examining a number of currencies on a daily basis. It involves opening positions on a regular basis that can range from a couple of minutes to a few hours. There are 2 kinds of analysis that are used for the forex trading, the first is technical analysis, which involves the studying of charts for patterns and the use of different indicators such as moving averages, MACD, RSI, Fibonacci and so on.
The Second kind of analysis is fundamental analysis, which is the analyzing of economic situations of counties, searching for explanations why a country’s currency is rising and falling. The primary tool for this is the forex economic calendar which shows crucial news for each country on a weekly basis.
When you begin trading you have to be in the same mind set as if you were starting a new job. Trading the forex can be extremely lucrative and provide you with a comfortable income but you should remember that only 5% of forex trading profit. The reason being that those traders follow their trading plan and treat their forex trading like a profession not as gambling, which it is if you do not stick to a trading plan.
Here’s a few suggestions to help keep you on course. To accumulate profits you must protect your trading funds constantly, so don’t trade when you should not. Make sure your stops are always in to save you from any serious whipsaws or terrible trades. Never trade with money you can’t afford to lose as at the end of the day forex trading is still a sort of gambling. At the conclusion of your trading period, go over your charts; look at the forex calendar and prepare for the following day. When trading set yourself up so that you have no interruptions, this will keep your mind focused and help to steer clear of any stupid mistakes. Lastly follow your trading plan because your trading plan will keep you on track and on target for your improved future.
Losing trades are a a natural part of trading, it’s impossible to win each and every trade you place, because of this you must accept that losing trades are a aspect of trading. My own monthly trade success rate is in between 60 to 75 percent, my trading plan takes this into account by utilizing a 1:2 risk to reward ratio, what? Simply implies if I using a 15 pip stop lose for a trade I’ll aim to make 30 pips plus from that trade. Using this method I am in the green by the end of every month. The most challenging part of a losing trade for newbies is coping with their emotions, as soon as they let their emotions win control their trading plan goes out of the window and they start chasing trades and all that happens is they lose more money. A good quality trading plan will take into consideration loses which will help you handle loses and can remove emotions from your trading, since it is not possible to eliminate loses out of your trading.