FOREX Trading Tips
Making a profit by forex trading requires incredible patience; it’s a lot like surfing. If you have ever gone surfing then you know that sometimes you have to wait all day just to catch some descent waves, but you keep at it until finally the ocean rolls up and a beautiful wave effortlessly lifts you and your board almost endlessly. Similarly in forex trading if you want to make a profit you must and I mean must take your position with the trend of the currency pair that interests you and not against it.
Predict the trend
Improving your ability to read the signs to predict the trend or ‘riding the trend’ as its more affectionately known, of a currency pair you wish to trade in is what sets the amateur trader and the professional trader apart in Forex markets of today; this is not a guessing game or gambling, but decisions based on accurate understanding of the available information. If you are just starting out don’t be discouraged because in this market there is plenty of room to learn, grow and excel; and hopefully these tips will guide you.
Are you an intraday trader or a swing trader?
Don’t let the terms confuse you; basically a swing trader is one who takes a financial position in the market in the hope of making a profit when the trend tips to their favor after a few days to several weeks. This type of trading relies heavily on a deep understanding of the fundamentals of economics to be really profitable. An example where this type of trading was most profitable is in currency pair trading involving the USD or EUR during major shifts in the oil industry. I have personally been left in awe having seen swing traders make gains of over 400 pips with 30,000 dollars risked over several weeks, just from accurate speculation of a change in trend; selling big on a down trend and buying big on the uptrend.
An intraday trader on the other hand - aka scalper, which is what I am, is a trader that buys and sells currency pairs, but closes all positions within the day or market trading period. This type of trading requires constant watch of the volatility of the currency pair you have interests in. The contrast between the two is you can still make equally large amounts of money true but both require tremendous effort and discipline to succeed at. ‘Swingers’ are typically charged a nominal fee to keep their positions open into the next market trading day but the amount varies with the platform one uses. Also, you will expect a swinger to use weekly, monthly or even yearly charts to make their calculations where as we (intraday traders) use hourly charts that we meticulously scrutinize to find retracements and reversals (I will touch more on charts and retracements in later articles); it is at this point where your discipline is tested and you must decide whether to hold your position, sell and re-buy or sell completely.
Keep these trading tips in mind when deciding which type of trader you wish to become and take Forex trading in stride. Remember, it is all about your patience and diligence in analysis.
Here you will find a number of tutorials that will guide you in learning about forex trading. There is a lot of information about forex trading on the internet but it can be hard to find step by step instructions or suggestions about how to get started. Have a look at the free trading tutorials below for information about how to get started in forex trading.
To start with you need to be able to avoid the Forex scams. Unfortunately there are many scams out there to in the Forex world and this tutorial will give you more information about how to avoid them.