Learn How To Trade Forex
Learning forex trading should not be difficult. With decent understanding of money management rules and a good trading strategy, you should be 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.
You should try to understand the general direction of your favorite currency pairs. You can use candlestick analysis and moving averages (simple as well as exponential) to identify long term patterns and reversals.
Bollinger bands applied to 4hr charts can be used to identify the daily trading range. Most of the price action is expected to be within the Bollinger bands. Any moves outside the bands can be viewed as short term abnormalities and ignored.
Do some scenario planning, once you have a general overview of the market. Make sure you know what news is scheduled to be released and what is the expected market reaction.
Understanding the big picture does not mean knowing the whole picture. You should only focus on your favorite pairs. It takes a longtime and effort to understand a currencys behavior, how it reacts to things like oil prices, interest rates etc. So concentrate only on a few pairs in forex 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 try to analyze what went wrong and how to avoid it in the future! In case of a winning trade, analyze how many more pips you could have made and how to tweak your strategy for better results in the future trades.
Keeping these general tips in mind while you are learning forex trading will help you a lot. Never ever trade without stop losses and practice on the demo account for at least three months before starting live trading. - 23222
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.
You should try to understand the general direction of your favorite currency pairs. You can use candlestick analysis and moving averages (simple as well as exponential) to identify long term patterns and reversals.
Bollinger bands applied to 4hr charts can be used to identify the daily trading range. Most of the price action is expected to be within the Bollinger bands. Any moves outside the bands can be viewed as short term abnormalities and ignored.
Do some scenario planning, once you have a general overview of the market. Make sure you know what news is scheduled to be released and what is the expected market reaction.
Understanding the big picture does not mean knowing the whole picture. You should only focus on your favorite pairs. It takes a longtime and effort to understand a currencys behavior, how it reacts to things like oil prices, interest rates etc. So concentrate only on a few pairs in forex 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 try to analyze what went wrong and how to avoid it in the future! In case of a winning trade, analyze how many more pips you could have made and how to tweak your strategy for better results in the future trades.
Keeping these general tips in mind while you are learning forex trading will help you a lot. Never ever trade without stop losses and practice on the demo account for at least three months before starting live trading. - 23222
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 @ 1:42 AM
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