2. Trading currencies can be financially and personally rewarding if you know what
you are doing. If you’re planning on entering the market in the future or have
started trading weeks or months ago, here are things you can do to help you
achieve success in this undertaking.
Plan how you will trade - With no carefully laid-out plan, you won't make the
most out of your positions and may even find yourself losing money. The first step
to planning a sound strategy is to pick a currency pair. There are just a few
currency pairs to select from, with some currency pairs more volatile than others.
Select a currency pair according to your risk profile. Once you have determined
which pair to trade, work out how long
you'll hold your positions. You should
then determine your objectives for the
position. Read more about forex trading
please visit this website.
Analyze the Forex market - Forex
investors and traders employ two basic
types of analysis, namely, fundamental and technical analysis. Some people
pigeon-hole themselves into one analysis method, but in many cases, using both
can offer higher profit potential. The reason for this is that using both will help you
draw the complete trading picture. More specifically, fundamentals allow you to
determine targets, while technical data can be handy in coming up with trading
decisions.
Record what works and what doesn’t - One reason a lot of traders fail is because
they they repeat their errors. Recording your trading activity, like with the use of a
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3. diary, will help you see productive trading patterns and the ones that will only
bring about losses.
Manage your risk - Trading in the Forex market is risky. One thing you can do to
manage your risk is never to trade money you cannot afford to lose. It is best to
choose the appropriate lot size for your account balance and use leverage wisely.
Those who gain most from Forex trading are unemotional about gains and losses
and they understand when it is wise to cash out and when to cut their losses. You
can keep yourself from trading emotionally with the use of limit and stop/loss
orders. One good example is IC markets and you can learn more about them here.
Select the right broker - You cannot start trading in the Forex market if you don’t
have an account with a broker. You are going to have a much better chance of
making money as a Forex trader if you put the proper amount of time and research
into picking a broker. The best Forex brokers are those that offer small spreads,
rapid and high quality execution, user-friendly trading tools, and exceptional
customer service.
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