Hello friends
Whether We're new to Currency Trading or a seasoned trader, We can always improve your
trading skills. Education is fundamental to successful trading. Here are six steps that I want to share with you
which could help to improvise our Currency trading skills.
Step 1: Strategize, Analyze and Diarize
Successful professional traders do three things that amateurs often forget. They plan a trading
strategy, they follow the markets, and they diarize, track, and analyze each of their trades.
1: Plan How You Will Trade
=> Choose the currency pairs that are right for you.
=>Decide how long you plan to stay in a position.
=> Set your targets for the position.
2. Follow the Forex Market
=>Use Forex Charts
=>Follow Forex News
3. Keep a Forex Diary
=>The date and time you took the position.
=>The rate at which you took the position.
=>The reason you took the position.
=>Your strategy for the position.
=>The date and time you exited the position.
=>The rate at which you exited the position.
=>Your profit/loss on the position.
=>Why you exited the position. Did you follow you strategy?
Step 2: Next Step .Learn to Manage Your Risk
Step 3: Next Step .Choose Your Approach
=>Technical, Fundamental or both
=>Technical, Fundamental or both
Step 4: Chart Your Course with Technical Analysis
=> Only Support & Resistance
Step 5: Be In The Know with Fundamental Analysis
=>Look out for What influences prices in the currencies market?
=> Factors such as Interest Rates, Employment data, Geopolitical Events
Step 6:Beware of Psychological Pitfalls
=>Don't Marry Your Trades
People are emotional. It is easy to do objective analysis before taking a position. It is much
harder when you've got money invested. Traders holding positions tend to analyze the market
differently in the hope that it will move in a favorable direction, ignoring changing factors that
may have turned against their original analysis. This is especially true when losses are being
taken on a position. Traders tend to 'marry' a losing position, disregarding signs that point
towards continued losses.
=>Don't Bet the Farm
Do not over trade. A common mistake made by new traders is over-leveraging an account. Just
because one lot (100,000 units) of currency only requires $1000 as a minimum 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
10% of your account at any given time. Trading currencies is not easy (if it were, everyon would
be a millionaire!).
be a millionaire!).
;-)