October 4, 2013
Print

Tips For Success In The Foreign Exchange Market

Foreign Exchange Market Sample Chart

The foreign exchange market is exciting and could be profitable.  If you develop a suitable trading strategy and plan, you will find it extremely interesting.  You need to prepare to trade in this market as that is what will ensure your success.

Entering the Market

Before you start trading live, you have to prepare for the market.  You need to have set your personal goals and have a trading plan and style.  Your personality will be a determining factor in the trading style you adopt.  You need to ensure that you have had sufficient training, developed a risk management plan, developed a suitable strategy and are prepared to leave most of your emotions locked away.

Trading Timeframes

The trading timeframe you opt for will be determined by your temperament.  If you would prefer to trade on five minute charts, it shows that you are not prepared to do overnight trading because of the risks involved.  If you prefer weekly time charts, you probably feel more comfortable about the risks involved and you have the right temperament to sit back and watch your trades possibly lose ground over a number of days.

Before you commence trading, you need to determine the amount of time you have available for trading.  You may not want to trade all day long and may have a preference for doing research at night or at the weekend.  This will provide you with more time to base your decisions on the analysis you have done overnight or over the weekend.  This will allow you to do your weekly trades based on the analysis you have previously completed.  You should bear in mind that to make money in the foreign exchange market, you need to give up some of your time.  Short term trading often provides you with small profits or losses.  Short term traders have to enter more trades to make it worth their while.

Foreign Exchange Market Trading Methods

Once you have reached a final decision on your trading timeframe, you need to decide on your method of trading.  Some traders prefer to buy support and sell resistance, whilst others prefer to purchase and sell breakouts.  Others prefer trading on MACD indicators and trade on crossovers.

After choosing a particular trading system, it is vital you test it to determine its consistency and if you will profit by making use of it.  If your system is reliable and effective for more than 50% of the time you have spent testing it, you could become profitable by using it.  You should start to back test it to allow you to evaluate the outcome of it.  If the result shows that if you had entered a trade on every signal you received, and your profits would have exceeded your losses, you can be sure that you have a good system.  You should continue to test a few of your trading strategies and when you find one that is positive on a regular basis, you can go ahead and make use of it.  You should continue the testing process using different timeframes and variables.

Entering the forex market requires that you develop a suitable trading plan and strategy that suits your personality.  If you are not comfortable with your methods of trading, you will lose interest in the market and possibly walk away without any money at all.

 

Self-Education-Fortune


Get a free Forex PDF PLUS:

  • 14 Video Lessons
  • Free One-on-One Training
  • A 5000$ Training Account
  • In-House Daily Analysis
  • Get FULL ACCESS
Become a forex trader!

Comments are closed.

Free PDF and UNLOCK website features