Successful Forex traders know how to read trading charts and use them on a daily basis. Most Forex traders, however, are not familiar with these charts and this puts them at a disadvantage. Forex traders must be constantly on the alert for what is happening in the market. Since Forex consists of trading in foreign currencies, and currencies fluctuate according to the country’s social and political situation, understanding whether there is a bull, bear or ranging market is extremely important.
Success and confidence often go hand in hand. A Forex trader that has created a definite plan of action and knows he will stick with it will feel more assured of his trades than a trader who places his trades without the help of a defined goal.
Here are some tips for a successful plan of action:
- Start small-don’t rush in with all your money. Open your Forex account with an online broker using only the minimum required deposit and don’t take advantage of the proffered margin right up front.
- Monitor the market thoroughly. Read the financial news sites like and keep up with the political and economic situation in each country. Review available technical and fundamental reports which should be provided to you by your broker or sites like www.dailyforex.com. Stay abreast of world events. Since the Forex markets are open 24 hours a day, 5 days a week, knowing what is happening around the clock is easy. Setting alerts for the middle of the night will keep you on top of news on the other side of the globe. These alerts will inform you in real time of changes and developments which will be affecting Forex price movements.
- Once you have enough Forex trading experience, you should learn to master only one or two specific trading techniques and focus exclusively on them. Don’t attempt to trade the many trading methods that are available. Honing in on only one or two will make you an expert at that particular trading method and will lead you to successful trading. Don’t worry about missing trading opportunities; there are plenty out there at all times.
- Learn to manage your money. Develop a workable money management system and stick with it no matter what. Whether you are profitable or coming out with a loss, always follow your original money management system. In addition, before entering a trade, make sure you check the risk/reward ratio of the currency trade you are about to place. If the ratio is too high, consider abandoning the trade. Only put at risk what you can afford to lose.
Forex traders can learn additional trading techniques as they gain experience. The more time and effort put into trading, the better the outcome should be.