Are you looking to make money? Have you thought about trading on the forex?
If you answered yes keep reading. Maybe you have thought that forex trading is just for people with a lot of knowledge and experience with traditional type of investments such as stocks, bonds and commodities.
The true of the matter is forex trading is for anyone. Forex traders, are made up of a large group of people. Ranging from everyday people to large corporations. The foreign exchange market offers you, as an investor the potential to make a lot of money. I don't want to miss lead you but, with any investment there is also a chance to loss money. So do bet the farm, educate yourself and get all the proper tools that you need be a successful forex trader.
I have come up with a few good reasons why you should start trading on the foreign exchange, which is commonly referred to as the forex or FX. More and more well informed, individuals and entrepreneurs are diversifying their traditional investments like bonds, stocks & commodities with FOREX
Here are some good reasons to start trading on the FOREX.
1) As a forex trader you will be trading in the world's largest financial market.
The FX market typically involves one party purchasing a quantity of one currency in exchange for paying a quantity of another. The foreign exchange market is the largest and most liquid financial market in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global forex and related markets is continuously growing and has been reported to be over $4 trillion US.
2) The FX market is open 5 days a week / 24 hrs a day.
The stock market has set business hours and closed on banking holidays and weekends. The forex market is 24 hrs a day except on the weekends. The hours of the FX are 22:00 Coordinated Universal Time (UTC) on Sunday until 22:00 UTC Friday. As one market is opening, another countries market is closing. This is appealing to traders because it gives them the flexibility of when they want to trade. This allows forex traders to trade before or after their daily obligations. Most forex traders are using automated forex software applications. The forex trader enters the data into the application and then lets it run. Amazing!
3) The FOREX market is never a bear or a bull.
As a forex trader you can have access to an array of currencies. When you trade on the forex you are trading currencies "pairs". For example, US dollar vs. CHF (Swiss franc), one side of every currency pair (for example, USD/CHF) is constantly moving in relation to the other. When you make a forex transaction you are buying a particular currency, but at the same time you are selling the other currency in that particular pair. As the market moves, one of the currencies will increase in value and other will decrease in value.
The key it is up to you to choose the correct currency to be long (the currency you bought) or short (the currency you sold).
4) The FOREX market offers a great amount of leverage.
You are permitted to trade foreign currencies on a highly leveraged basis sometimes up to 400 times your investment (400:1) with some brokers. The mini FX accounts allow you to trade with just 0.25% margin. This meaning, $25 allows you to control a 10,000-unit currency position. Now that's leverage. Futures traders, who are accustomed to margin requirements generally equal to 5%-7%-8% of the contract value. They will instantly recognize that the FX market provides much greater leverage. The stock trader, who must post at least 50% margin, there's no comparison. If you're looking for an efficient
market to trade in look no further, the Forex Market is the place.
5) Predictable Cycles and Trends.
Currency prices in the FX market generally repeat themselves in relatively predictable cycles, creating trends. The trends that foreign currencies develop are Advantageous for traders who use the "technical" analysis verse the " fundamental" analysis. It is my opinion that both methods should be used. But, as a technically trained trader, you can easily identify new trends and breakouts, to enter and exit positions.
6) Forex brokers commissions and FX liquidity.
There are none of the usual fees, which futures and equity traders pay. FOREX transactions are traded over-the-counter (OTC), via a global electronic network. When a FX transaction takes place, what you see on your trading screen, is what you get. Thus, allowing you to make quick decisions on your trades without having to worry or account for fees that may affect your profit/loss or slippage. But in the equity and commodity markets, you must pay both a commission and exchange fees. The OTC structure of the FX market eliminates exchange and clearing fees, which in turn lowers transaction costs.
Like all traded financial products, over-the-counter currency (OTC) trading involves a bid/ask spread. This spread represents the prices at which your counterpart is willing to trade. The broker receives a part of this bid/ask spread. What is traded, bought and sold on the forex market is something that can easily be liquidated, meaning it can be turned back to cash fast, or often times it is actually going to be cash. From one currency to another, the availability of cash in the forex market is something that can happen fast
for any investor from any country. Because the currency market offers round- the-clock liquidity, you receive tight, competitive spreads both intra-day and night. As you can see the FX market can be a very profitable market.
As a forex trader you do not need a degree or any special training. But you do need to educate yourself and be aware economic factors that relate to FOREX. Using an automated software application will help you get the ball rolling.
Questions, answers and a tip: Trade the eurgbp
Labels:
forex
1) Can the US Dollar Actually Go Up during this crises and soon?
Yes indeed! The fact that traders should realize is that this is a global crises. Its a contraction of confidence around the world. Just look at the GBP and the EUR and how its behaving. Britain and the Eurozone have their own problems as well! The DXY ( US Dollar Index is actually right in the middle at .78 2 points off its Sept 15th low and 2 points off the 9/11 high of .80. Thats telling you something.
2. What other signs are there that are dollar positive?
Well, its the fact that its bad everywhere. New Zealand is in a recession. Australia is slowed down. Asian markets are down fearing global slowdown. So its a set up soon for a rebound.
3. With all of this dollar turbulence is there a way to trade the currencies that we should know?
Actually, its a great time to look at Crosspairs. Look at the EURGBP in particular.With both the EUROZONE AND THE POUND STERLING facing major pressures, one of the best trading currencies is the EURGBP cross pair. It is in a great sideways range and bounce trades off Resistance and Support is now a high probability trade.
4. What is the best pair to trade in response to FEAR in the US markets.
I have stated that the USDJPY is behaving incredibly in sync with the S&P. Also look at the GBPJPY pair.
Sources: Learn Forex Trading Secrets
Yes indeed! The fact that traders should realize is that this is a global crises. Its a contraction of confidence around the world. Just look at the GBP and the EUR and how its behaving. Britain and the Eurozone have their own problems as well! The DXY ( US Dollar Index is actually right in the middle at .78 2 points off its Sept 15th low and 2 points off the 9/11 high of .80. Thats telling you something.
2. What other signs are there that are dollar positive?
Well, its the fact that its bad everywhere. New Zealand is in a recession. Australia is slowed down. Asian markets are down fearing global slowdown. So its a set up soon for a rebound.
3. With all of this dollar turbulence is there a way to trade the currencies that we should know?
Actually, its a great time to look at Crosspairs. Look at the EURGBP in particular.With both the EUROZONE AND THE POUND STERLING facing major pressures, one of the best trading currencies is the EURGBP cross pair. It is in a great sideways range and bounce trades off Resistance and Support is now a high probability trade.
4. What is the best pair to trade in response to FEAR in the US markets.
I have stated that the USDJPY is behaving incredibly in sync with the S&P. Also look at the GBPJPY pair.
Sources: Learn Forex Trading Secrets
Start Today Earning Thousands as a Successful Forex Trader
Labels:
forex
Everyone is talking about the Forex. The foreign exchange rate has changed dramatically or the last ten years. The change has taken place due to the internet and technology. As a forex trader you can trade 24 hours a day except on weekends (from 22:00 UTC on Sunday until 22:00 UTC Friday). The trading can be done anywhere there is an internet connection.
Sounds to good to be true you are thinking. The Forex is great place to trade. But, you do need to educate yourself with some basic knowledge. You don’t need any special degrees or diplomas to start training on the forex. There are a lot of great sites on the internet with forex tools that will help you to start your training \ education.
You will need some basic knowledge in the economic arena.
1.Payroll \ Unemployment
Strong job creation is a good indication of economic growth, as companies must increase their workforce in order to meet demand
2. The Discount Rate \ FOMC Interest Rate Decisions
The Federal Open Market sets the discount rate, which is the rate at which the Federal Reserve Bank charges member banks for overnight loans.
3. Trade Balance
The balance of trade measures the difference between the value of goods and services that a nation exports and the value of goods and services that it imports.
4. CPI – Consumer Price Index
The CPI is a key gauge of inflation, as it measures the price of a fixed group of consumer goods.
5. Retail Sales
Retail sales is a measure of the total goods sold by a sampling of retail stores. It is used as a gauge of consumer activity and confidence as higher sales figures would indicate increased economic activity.
This data is public information and easy obtained via government websites, newspapers and online resources.
Now that you have some basic knowledge of economics your next step is to open up a demo forex account. You will need to purchase an automated forex trading software application. Look for a forex software application that has a demo account. Using a demo account is a great place to start it is free. Who doesn’t like free. When you feel confident and ready to start trading you can open up an account and start making money.
The mini forex is a good place to start for people just entering the forex market. The mini forex allows you open an account that is at a reduced amount. It requires a smaller capital compared to regular forex accounts, a minimum of $300. With mini forex trading, you can control a $10,000 currency position. The key here is leverage. Because of leverage, a trader can trade in a commodity more than the money available in his account. Say with a $250 deposit, one could trade a maximum of 5 mini lots. This kind of leverage is greater than stocks or day trading. Of course, it is recommended to start with a manageable leverage that allows greater flexibility in transactions.
Now that you have started trading on the mini forex if that is the route you have taken there are few other concepts to learn. They concepts are moving averages, Fibonacci levels and Bollinger Bands. These are ratios and measurements used to determine the highness or lowness of the price relative to previous trades. You just need a working knowledge of these concepts. Your automated software will handle all the mathematical calculations for you.
Now that you have a good knowledge of these concepts, there is one other thing we must consider. Fear, which can be the worst enemy of the Forex trader. To become a profitable trader you must leave fear aside and stick to your trading plan.
In conclusion, the key to being a successful forex trader is to have the knowledge and proper psychological preparation.
Tracy Lenyk
Sounds to good to be true you are thinking. The Forex is great place to trade. But, you do need to educate yourself with some basic knowledge. You don’t need any special degrees or diplomas to start training on the forex. There are a lot of great sites on the internet with forex tools that will help you to start your training \ education.
You will need some basic knowledge in the economic arena.
1.Payroll \ Unemployment
Strong job creation is a good indication of economic growth, as companies must increase their workforce in order to meet demand
2. The Discount Rate \ FOMC Interest Rate Decisions
The Federal Open Market sets the discount rate, which is the rate at which the Federal Reserve Bank charges member banks for overnight loans.
3. Trade Balance
The balance of trade measures the difference between the value of goods and services that a nation exports and the value of goods and services that it imports.
4. CPI – Consumer Price Index
The CPI is a key gauge of inflation, as it measures the price of a fixed group of consumer goods.
5. Retail Sales
Retail sales is a measure of the total goods sold by a sampling of retail stores. It is used as a gauge of consumer activity and confidence as higher sales figures would indicate increased economic activity.
This data is public information and easy obtained via government websites, newspapers and online resources.
Now that you have some basic knowledge of economics your next step is to open up a demo forex account. You will need to purchase an automated forex trading software application. Look for a forex software application that has a demo account. Using a demo account is a great place to start it is free. Who doesn’t like free. When you feel confident and ready to start trading you can open up an account and start making money.
The mini forex is a good place to start for people just entering the forex market. The mini forex allows you open an account that is at a reduced amount. It requires a smaller capital compared to regular forex accounts, a minimum of $300. With mini forex trading, you can control a $10,000 currency position. The key here is leverage. Because of leverage, a trader can trade in a commodity more than the money available in his account. Say with a $250 deposit, one could trade a maximum of 5 mini lots. This kind of leverage is greater than stocks or day trading. Of course, it is recommended to start with a manageable leverage that allows greater flexibility in transactions.
Now that you have started trading on the mini forex if that is the route you have taken there are few other concepts to learn. They concepts are moving averages, Fibonacci levels and Bollinger Bands. These are ratios and measurements used to determine the highness or lowness of the price relative to previous trades. You just need a working knowledge of these concepts. Your automated software will handle all the mathematical calculations for you.
Now that you have a good knowledge of these concepts, there is one other thing we must consider. Fear, which can be the worst enemy of the Forex trader. To become a profitable trader you must leave fear aside and stick to your trading plan.
In conclusion, the key to being a successful forex trader is to have the knowledge and proper psychological preparation.
Tracy Lenyk
The Forex Market Can Be A Lucrative Market But Don’t Obsess
Labels:
forex
Have you ever thought about making money trading in the stock market or in the forex? If you aren’t living under a rock you have heard about the stock market. But have you heard about the FX. The foreign exchange (currency or FX) market is where currency trading takes place. FX transactions typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another.
With the easy access to the internet many people are getting involved with forex trading. With in the last few years the forex market has really taken off. The forex market is 30 times larger than the US stock market. In order in trade in the forex you don’t need any special degree, license or diploma. What you need is to educate yourself, have money that you are willing to invest and even willing to loss, an internet connection and a forex software application.
How big is the FX you ask? The forex market is the largest in the world. With so many countries involved the daily turnover is 1.5 million dollars. The FX is extremely liquid which makes it very desirable for traders. The FX has long trading hours: 24 hours a day except on weekends. The hours are 22:00 Coordinated Universal Time UTC on Sunday until 22:00 UTC Friday. This is a great benefit for the fx trader. You can make you trades after, before or inbetween your daily obligations.
As a stock trader the market is only open 8 hrs a day. Any event over night can cause a stock to go up or down. But with the forex there are no gaps in time during the week. Forex traders and day traders find this appealing.
As a forex trader you always trade in pairs and usually against the US dollar. There are 7 major currencies which are; EURO (EUR), The British Pound (CGP), Swiss Franc (CHF), Japanese yen (JPY) Australian Dollar (AUS), New Zealnad Dollar (NZD) and the Canadian dollar (CAD). You can enter these pairs into a currency calculator.
Currencies are always going up and down and you can trade in either direction. This course that the currency takes is due to how the world perceives the value of a currency. Economic factors of a country is a real key. You don’t have to be economic guru but you should know where to get the information and be familiar with the data. When you make your forex trades your forex software application with be able to take over. The application is a mathematical program you put in a few setting and it takes over.
Sorry to bust your bubble but there is a downside to Forex trading. The forex is a great place to make money but it can also be a war where you loss your money and confidence. You must be wise with your money and trades. The great and famous military leader, Sun Tzu once said, “the obession for victory is a state of mind that benefits the enemy” These wise words are applicable to the FX trading arena. There is nothing more damaging to a trader or for that matter any business owner than the obsession of winning or victory. Making a profit is always sweet but there will be times when you lose as a forex trader. You must be aware and realistic about this as a forex trader.
Don’t trade with the mind set that you must never close a trade until you turn a profit. It is my opinion that you should never obsess with forex trading, be wise with your stops and forex indicators. Good luck and happy trading.
With the easy access to the internet many people are getting involved with forex trading. With in the last few years the forex market has really taken off. The forex market is 30 times larger than the US stock market. In order in trade in the forex you don’t need any special degree, license or diploma. What you need is to educate yourself, have money that you are willing to invest and even willing to loss, an internet connection and a forex software application.
How big is the FX you ask? The forex market is the largest in the world. With so many countries involved the daily turnover is 1.5 million dollars. The FX is extremely liquid which makes it very desirable for traders. The FX has long trading hours: 24 hours a day except on weekends. The hours are 22:00 Coordinated Universal Time UTC on Sunday until 22:00 UTC Friday. This is a great benefit for the fx trader. You can make you trades after, before or inbetween your daily obligations.
As a stock trader the market is only open 8 hrs a day. Any event over night can cause a stock to go up or down. But with the forex there are no gaps in time during the week. Forex traders and day traders find this appealing.
As a forex trader you always trade in pairs and usually against the US dollar. There are 7 major currencies which are; EURO (EUR), The British Pound (CGP), Swiss Franc (CHF), Japanese yen (JPY) Australian Dollar (AUS), New Zealnad Dollar (NZD) and the Canadian dollar (CAD). You can enter these pairs into a currency calculator.
Currencies are always going up and down and you can trade in either direction. This course that the currency takes is due to how the world perceives the value of a currency. Economic factors of a country is a real key. You don’t have to be economic guru but you should know where to get the information and be familiar with the data. When you make your forex trades your forex software application with be able to take over. The application is a mathematical program you put in a few setting and it takes over.
Sorry to bust your bubble but there is a downside to Forex trading. The forex is a great place to make money but it can also be a war where you loss your money and confidence. You must be wise with your money and trades. The great and famous military leader, Sun Tzu once said, “the obession for victory is a state of mind that benefits the enemy” These wise words are applicable to the FX trading arena. There is nothing more damaging to a trader or for that matter any business owner than the obsession of winning or victory. Making a profit is always sweet but there will be times when you lose as a forex trader. You must be aware and realistic about this as a forex trader.
Don’t trade with the mind set that you must never close a trade until you turn a profit. It is my opinion that you should never obsess with forex trading, be wise with your stops and forex indicators. Good luck and happy trading.
FX Psychology For The Successful Trader
Labels:
forex
Taking responsibility of your capital
It is amazing how many people are happy to place their hard earned savings in other peoples hands, accept the losses as its easier to blame someone else than to take responsibility of those funds ourselves.
The first step in any financial success is to believe in yourself and your own abilities. Have you ever notice how the experts on stock exchange get it so wrong to often. It is a real boost to your ego and confidence level when you grasp the trading concept and acquire a real solid forex education.
With this new found knowledge and confidence you can often outperform many professionals with years of experience.
The forex market moves several times faster than any other financial market and with leverage, the rewards and losses compound many times. The best way to overcome the thought of using your own money and the volumes you will be trading is to think in terms points and not in dollars, rubles or pounds. Don’t calculate your profit and losses in terms of hard earn currency talk in terms of profits and losses in points. If you implement this psychology from the beginning it will feel as if are trading a demo, a mini or 10 contacts of a full account.
It is common practice for FX traders to refer to gains and losses as points. We don’t refer to the currency as the benchmark of our own performance. We reference our losses and gains in points and measure our performance against this.
When trading via a forex demo account most people do very well. Why? Its psychology 101 they are trading without fear. When the real money comes into play; even on mini forex trading account they suddenly find themselves not thinking clearly and trading with fear. The outcome can be many missed opportunities and accumulated losses. They quite simply loose their nerve and give into fear and greed. I have seen this happen to forex traders when they step up from a mini account to a full account. Same thing can happen for a forex trader when they decide to stop trading single contracts and start trading multiple contracts.
Easier said then done, stop thinking about how much money you may gain or loose. Think points not money no matter how many contracts you are trading. Try this approach in a demo account.
Cut your losses and run with the profits.
Simple concept but is one of the most difficult to implement for most forex traders. It can also be the demise for most forex traders. Most traders violate their predetermined plan and take their profits before reaching their profit target because they feel uncomfortable sitting on a profitable position. These same people will easily sit on losing positions, allowing the market to move against them for hundreds of points in hopes that the market will come back. In addition, traders who have had their stops hit a few times only to see the market go back in their favor once they are out, are quick to remove stops from their trading on the belief that this will always be the case. Stops are there to be hit, and to stop you from losing more then a predetermined amount! The mistaken belief is that every trade should be profitable. If you can get 3 out of 6 trades to be profitable then you are doing well. How then do you make money with only half of your trades being winners? You simply allow your profits on the winners to run and make sure that your losses are minimal.
Another good forex strategy is to move stop losses (the point the trade will be sold if it goes the wrong way) behind the trade to a level where a pull back can be accommodated but a reversal will lock in at least some profit.
Self-discipline
Use discipline when trading. Ask yourself this question. If my next retail purchase is over $400 how much research will I do prior to making the purchase. If you take your shopping serious take your trading seriously. The point to be made here is be sure that you have a plan in place before you start to trade. The plan must include stop and limit levels for the trade, as your analysis should encompass the expected downside as well as the expected upside.
Information over load
Keep your trading simple. Most traders start out with a simple trading strategy that is successful. But later on find themselves trying to find a better and more profitable system. They also allow themselves to be influenced by other opinions and too much fundamentals. It is not too different from going to a race track where everyone has a sure thing or the information available becomes so confusing you can no longer see the wood from the trees. Trading the stock market is often similar in this regard. Have a simple forex trading strategy, stick to it and keep it simple. The golden rule here is to keep it simple…don’t allow yourself to become confused with too much information and if you’re not sure or not in the right emotional frame of mind, don’t trade.
You are not married to your trades
The reason trading with a plan is so important is because most objective analysis is done before the trade is executed. Once a trade is in a position don’t analyze the market differently in the “hopes” that the market will move in a favorable direction. Look at the changing factors objectively that may have turned against your original analysis. This is especially true of losses. Learn from your mistakes. Forex traders with a losing position tend to marry their position, which causes them to disregard the fact that all signs point towards continued losses. Don’t take more trades in the hope that the market will turn in your favor. Your losses will accelerate.
Do not bet the farm
Would you over pay for a retail product? So why would you over trade. One of the most common mistakes that traders make is leveraging their account too high. They start by trading much larger sizes than their account and they don’t trade prudently. Leverage is a double-edged sword. Just because one lot (100,000 units) of currency only requires $1000 as a minimum forex margin deposit, it does not mean that a trader with $5000 in his account should be able to trade 5 lots. One lot is $100,000 and should be treated as a $100,000 investment and not the $1000 put up as margin. Most traders analyze the charts correctly and place sensible trades, yet they tend to over leverage themselves. As a consequence of this, they are often forced to exit a position at the wrong time. A good rule of thumb is to trade with 1-10 leverage or never use more than 5% of your account at any given time. Forex currency trading is not easy. If it was everyone would be trading forex.
Now that you have mastered the psychology of forex you will need a good forex trading software application to start making money. Some of the best forex software application are; forex auto cash robot, forex autopilot, forex killer and forex loophole.
It is amazing how many people are happy to place their hard earned savings in other peoples hands, accept the losses as its easier to blame someone else than to take responsibility of those funds ourselves.
The first step in any financial success is to believe in yourself and your own abilities. Have you ever notice how the experts on stock exchange get it so wrong to often. It is a real boost to your ego and confidence level when you grasp the trading concept and acquire a real solid forex education.
With this new found knowledge and confidence you can often outperform many professionals with years of experience.
The forex market moves several times faster than any other financial market and with leverage, the rewards and losses compound many times. The best way to overcome the thought of using your own money and the volumes you will be trading is to think in terms points and not in dollars, rubles or pounds. Don’t calculate your profit and losses in terms of hard earn currency talk in terms of profits and losses in points. If you implement this psychology from the beginning it will feel as if are trading a demo, a mini or 10 contacts of a full account.
It is common practice for FX traders to refer to gains and losses as points. We don’t refer to the currency as the benchmark of our own performance. We reference our losses and gains in points and measure our performance against this.
When trading via a forex demo account most people do very well. Why? Its psychology 101 they are trading without fear. When the real money comes into play; even on mini forex trading account they suddenly find themselves not thinking clearly and trading with fear. The outcome can be many missed opportunities and accumulated losses. They quite simply loose their nerve and give into fear and greed. I have seen this happen to forex traders when they step up from a mini account to a full account. Same thing can happen for a forex trader when they decide to stop trading single contracts and start trading multiple contracts.
Easier said then done, stop thinking about how much money you may gain or loose. Think points not money no matter how many contracts you are trading. Try this approach in a demo account.
Cut your losses and run with the profits.
Simple concept but is one of the most difficult to implement for most forex traders. It can also be the demise for most forex traders. Most traders violate their predetermined plan and take their profits before reaching their profit target because they feel uncomfortable sitting on a profitable position. These same people will easily sit on losing positions, allowing the market to move against them for hundreds of points in hopes that the market will come back. In addition, traders who have had their stops hit a few times only to see the market go back in their favor once they are out, are quick to remove stops from their trading on the belief that this will always be the case. Stops are there to be hit, and to stop you from losing more then a predetermined amount! The mistaken belief is that every trade should be profitable. If you can get 3 out of 6 trades to be profitable then you are doing well. How then do you make money with only half of your trades being winners? You simply allow your profits on the winners to run and make sure that your losses are minimal.
Another good forex strategy is to move stop losses (the point the trade will be sold if it goes the wrong way) behind the trade to a level where a pull back can be accommodated but a reversal will lock in at least some profit.
Self-discipline
Use discipline when trading. Ask yourself this question. If my next retail purchase is over $400 how much research will I do prior to making the purchase. If you take your shopping serious take your trading seriously. The point to be made here is be sure that you have a plan in place before you start to trade. The plan must include stop and limit levels for the trade, as your analysis should encompass the expected downside as well as the expected upside.
Information over load
Keep your trading simple. Most traders start out with a simple trading strategy that is successful. But later on find themselves trying to find a better and more profitable system. They also allow themselves to be influenced by other opinions and too much fundamentals. It is not too different from going to a race track where everyone has a sure thing or the information available becomes so confusing you can no longer see the wood from the trees. Trading the stock market is often similar in this regard. Have a simple forex trading strategy, stick to it and keep it simple. The golden rule here is to keep it simple…don’t allow yourself to become confused with too much information and if you’re not sure or not in the right emotional frame of mind, don’t trade.
You are not married to your trades
The reason trading with a plan is so important is because most objective analysis is done before the trade is executed. Once a trade is in a position don’t analyze the market differently in the “hopes” that the market will move in a favorable direction. Look at the changing factors objectively that may have turned against your original analysis. This is especially true of losses. Learn from your mistakes. Forex traders with a losing position tend to marry their position, which causes them to disregard the fact that all signs point towards continued losses. Don’t take more trades in the hope that the market will turn in your favor. Your losses will accelerate.
Do not bet the farm
Would you over pay for a retail product? So why would you over trade. One of the most common mistakes that traders make is leveraging their account too high. They start by trading much larger sizes than their account and they don’t trade prudently. Leverage is a double-edged sword. Just because one lot (100,000 units) of currency only requires $1000 as a minimum forex margin deposit, it does not mean that a trader with $5000 in his account should be able to trade 5 lots. One lot is $100,000 and should be treated as a $100,000 investment and not the $1000 put up as margin. Most traders analyze the charts correctly and place sensible trades, yet they tend to over leverage themselves. As a consequence of this, they are often forced to exit a position at the wrong time. A good rule of thumb is to trade with 1-10 leverage or never use more than 5% of your account at any given time. Forex currency trading is not easy. If it was everyone would be trading forex.
Now that you have mastered the psychology of forex you will need a good forex trading software application to start making money. Some of the best forex software application are; forex auto cash robot, forex autopilot, forex killer and forex loophole.
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