Learn How To Trade Forex
Learning forex trading is not difficult. With decent money management rules and a trading strategy, you are ready for conquering the forex markets.
Try to understand the big picture. Start each trading session by looking at the daily charts than zooming into 4hr, 1hr, 30min, 15 min etc. Forex trading is all about interpreting the past as it is about interpreting the future.
You need to know whether the market is ranging or trending before each trade. You should try to know any long term patterns that have developed by looking at the charts. By taking a general look at the different charts you will develop a feel of how the forex markets are behaving in the short as well as the long term.
Figuring out the general direction of the currency markets is easy. Candlestick analysis and moving averages are a good way to identify long term patterns and reversals.
Bollinger bands applied to 4hr charts can help you to identify the daily trading range. A daily trading range tells you where majority of price action is expected to happen. Any moves outside the daily trading range can be viewed as short term abnormalities and ignored.
You need to do some scenario planning, once you have a general overview of the market. You should know what news is scheduled to be released and what is the expected market reaction for that day.
Keep this in mind that understanding the big picture does not mean knowing the whole picture. You should only focus on your favorite currency pairs. It takes time and study to understand a currencys behavior, how it reacts to things like oil prices, interest rates etc. So focus only on a few currency pairs while trading.
You should always try to take notes and keep a daily trading journal. Start each entry in the trading journal by analyzing the general direction of the markets for that day. What you think how the markets are going to react to different news that is expected to be released that day? What should be your entry and exit for the trade. How many pips you are expecting to make?
After each trade, analyze what went wrong and how to avoid it in future! In case of a good trade, analyze how many pips you could have made more and how to tweak your trading strategy for better results in the future trades.
Keep these general tips in mind while you learn forex trading. Never ever trade without putting stop losses! Practice on the demo account for at least three months before starting live trading with your real money. - 23229
Try to understand the big picture. Start each trading session by looking at the daily charts than zooming into 4hr, 1hr, 30min, 15 min etc. Forex trading is all about interpreting the past as it is about interpreting the future.
You need to know whether the market is ranging or trending before each trade. You should try to know any long term patterns that have developed by looking at the charts. By taking a general look at the different charts you will develop a feel of how the forex markets are behaving in the short as well as the long term.
Figuring out the general direction of the currency markets is easy. Candlestick analysis and moving averages are a good way to identify long term patterns and reversals.
Bollinger bands applied to 4hr charts can help you to identify the daily trading range. A daily trading range tells you where majority of price action is expected to happen. Any moves outside the daily trading range can be viewed as short term abnormalities and ignored.
You need to do some scenario planning, once you have a general overview of the market. You should know what news is scheduled to be released and what is the expected market reaction for that day.
Keep this in mind that understanding the big picture does not mean knowing the whole picture. You should only focus on your favorite currency pairs. It takes time and study to understand a currencys behavior, how it reacts to things like oil prices, interest rates etc. So focus only on a few currency pairs while trading.
You should always try to take notes and keep a daily trading journal. Start each entry in the trading journal by analyzing the general direction of the markets for that day. What you think how the markets are going to react to different news that is expected to be released that day? What should be your entry and exit for the trade. How many pips you are expecting to make?
After each trade, analyze what went wrong and how to avoid it in future! In case of a good trade, analyze how many pips you could have made more and how to tweak your trading strategy for better results in the future trades.
Keep these general tips in mind while you learn forex trading. Never ever trade without putting stop losses! Practice on the demo account for at least three months before starting live trading with your real money. - 23229
About the Author:
Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading and swing trading stocks and currencies. Learn Forex Nitty Gritty. Read about Trend Forex System. Try Netpicks Forex Signal Service.
posted by X - Men @ 2:01 AM
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