When you’re learning to trade the forex market there is a sharp learning curve which puts off numerous probable traders, what they are not aware of is after that initial learning curve actual forex trading is quite straightforward. The main problem for new traders is the amount of information that they’re bombarded with and what’s worse is most of that information they don’t really need to do well at forex trading. When you’re researching forex trading utilize the following to help direct you and remember to keep it straightforward.
When day trading it is essential to determine what the existing trend is for your selected market(s). When I was learning to trade the forex markets my coach told me to remember that the trend is your friend. The trend is used as a confirmation signal for a trade, but should not be utilized as a stand alone signal for trading. There are a lot of methods to determine the trend such as moving averages, MACDs and so on. The way I prefer to figure out the trend is by utilizing the Thirty minute chart and then having a look at the most recent highs and lows to determine if the highs are getting higher or the lows are getting lower. If the highs are getting higher and the lows are getting higher this suggests the market is in an uptrend or if the lows are getting lower and the highs are getting lower this implies the market is in a downtrend.
When you first start trading it is recommended you concentrate on one currency to build up your self confidence, then when you are comfortable with trading and your trading plan begin increasing the number of currencies you focus on. Personally I’d say to concentrate on no more than Three currencies at any given time, anymore than that you’re looking at information overload and having to manage multiple open positions at the same time, believe me I been trading for Several years and I would find that tough. When selecting your currencies to trade be aware of trading pair opposites? A trading pair opposite is 2 pairs that will always move the opposite of one another; a good example is the GBP/USD and USD/CHF. Instead of trading each separately merely increase your stake size in one will provide you with exactly the same results with a lot less of a headache.
To become a successful trader you will need to learn patience, with out patience you will find yourself trading when you shouldn’t off and you will wipe out your trading bank. The bottom line is not to be looking to jump into a trade; a professional trader would prefer to miss a trade then to loss pips. In your trading plan you need to have a set of indicators and signals for entering a trade, you should always follow those signal(s) and that involves patiences. Whenever you see a trade opportunity developing you have to hold off until your indicators and signals align and you feel conformable in setting up the trade. By trading with patience and to a plan you’ll eliminate emotions from your trading because you will deal with all trades the same and by eliminating emotions from trading you are going to improve your chances of making it by tenfold.