Start with the basics. The first thing someone needs is very good education. And it requires a lot of extensive research, because there are many sources, but not all are worth the money for their services. So in this sense, a forex course online might be a good idea with some books. But this is the first major problem. What is the course and what books, what are the aspects to be covered? The question is Technical Analysis? The maxim goes along with the trend? The analysis of candlesticks? And what system to use and follow? There are thousands of them! So before you even start a trader is confused. And confusion is a very bad enemy, but it can be arranged. How it can be expected? With a few simple steps. Such as simplicity. The more you know the more chances you have to succeed forex trading and it all boils down to probabilities.
Education is a must for all commercial aspects of the stocks of foreign currencies. But forex has two peculiarities. High liquidity and very high leverage. And although liquidity is a very good leverage high point is not. At least not until you know what you are doing. Here, we focus again on education. In addition to participation in a forex course online or not an amount to be set aside as an investment in education is the first thing a trader should do. Here are some ideas to focus on the analysis of current market conditions and have a bias for a specific currency pair. Such a system following the trend could be the basis for a trading strategy. And a demo account with virtual as many jobs as possible for a long period of time is the next step.
Now the most important part of the commercial action is to make a plan, stick to it and apply strict financial rules, because if the capital is over and it is very easy to happen then our trading career will end in a few days, months or even a few hours.
Lets face the truth that the negotiation is not easy. Unfortunately, it is much easier for someone to lose his account rather than making wild profits beyond every expectation. This is because the emotions and psychology are very important for success. Some of the most important emotions are fear, uncertainty, euphoria and revenge. However very often comes into play when someone loses an amount is desperately trying to recover, and often the result is that more loses come simply because the trader is on the wrong side of the trend!
Discipline and patience are virtues that distinguish a good trader from a mediocre trader. Without specific goals and a written procedure is a merchant as a cargo ship sailed without destination. One day, the fuel is exhausted and many dangers of weather potential physical damage may occur. There are risks all the time. The point is how to deal with them.
One of the most useful phrases from the movie Forrest is Gump.Life is like a box of chocolates, you never know what you'll get!
It is true. Be as prepared as possible. Do not let brokers excite you promising very high returns and exploit high? Do a little research very thoroughly before opening an account funded with real money. Compare bid-ask spreads and technical support to name a few.
Be very skeptical with previous findings that the services offered from many signals. The main objective should be to learn to trade and make your own decisions and not blindly follow the decisions of others and their opinions. Confidence and experience come with the passage of time.
So, we mentioned it simple. Be realistic and having a controlled life balance is very important. A key objective must be consistent in order to have the ability to make a profit every month and keep.
Fundamental news is another important issue and, in essence, technical analysis is the mirror database. Rapidly changing expectations and emotions too. And if you think that emotions and expectations mainly move the forex market. Most of the time, such as the recent decision of the Fed rate hike a move is underway, but the danger is that when it's over, and certainly not get in at the wrong time, after all the move is complete .
The best approach to a trader would set targets and if achieved then stop trading. The worst idea is to share a volatile market where random noise, it is difficult to obtain specific profits.
Thus, a system tested with very specific rules such as entry and exit with stop-loss orders may not be a holly grail, but is certainly a very good approach to start and focus on it. The pivot points are of such a system. At least this is a good start. They include education, discipline, strict criteria and objectives and are a proven system that use the major players. They are not always infallible as nothing is certain, but they deal with high probability and this is very important.
Also a very convenient way is to act as organized as possible. This means that:
- Develop your trading journal where you write your trades and a brief explanation of what you passed a particular order to evaluate the performance. Note each day economic major releases where appropriate, as it is often wise to be off the market before the publication of news and trade after a clearer view of what may be a price action. Remember it is all about high probabilities.
- A risk / reward ratio of 1:2 which means that you may get an amount at least equal to twice if all go well but suggested sometimes it is better to be cautious and even apply a 1:1 ratio using risk management strict risk no more than 2-3% of total capital per trade. Survival is everything.
- It would be a good idea from time to time to have breaks from trading. Opportunities exist always so stopping trading when losses of 10-20% maximum of trading capital have accumulated is a good way to revaluate what is going on before a large amount of capital is lost. Trading is not gambling it is a way of investment. The philosophy should be to define realistic goals such as a number of pips per day and if achieved then stop trading. Greed is another bad enemy of traders. On the contrary the notion of compounding profits and retiring a portion of them each month is a good way to build a solid account and keep monitoring its growth.
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