Be Successful in Forex Trading
Edited by estrella sacragon, Robbi, Eng, Lynn and 3 others
Forex trading can give you lots of cash. That sounds like a sales hook, and it is, but it is also true. If you're interested in earning money in a reasonable period of time, then this particular field is just right for you. Finding out more about the ins and outs of trading is important before you get started.
Forex trading in financial markets can be a daunting task since there really is no single formula for how you can trade successfully. Think of the foreign exchange industry like an ocean, and you, the trader, are the surfer. Surfing entails you to have the right attitude, talent, patience, balance, and equipment so you can gracefully go with the flow.
Steps to Be Successful in Forex
- 1Develop the Right Attitude.The attitude towards forex trading is similar to that of surfing. You need to have a good blending analysis, hand in hand with effective implementation. With a good set of skills and a combination of hard work and talent, you can dramatically improve your success rate in the foreign exchange market. Here are some ways how you can successfully build a strategy that will keep you up with the market.Advertisement
- 2The Right Approach.Before getting into trading, you need to understand the value of preparation. Align your goals and temperament with the market that you are most comfortable with. For example, if you are aware that you are adept and interested in retailing, then go for trade retail stocks instead of something you may know nothing about. Understand the three important components - the time frame, the methodology, and the market.Advertisement
- 3The Right Attitude.The right attitude in forex trading means you need to have the proper mindset and precise attitude: Patience, discipline, objectivity, and realistic expectations. When you already know what you can expect from your market, have enough patience to wait for the trading price to arrive at the level your system specifies for either your point of entry or exit. When you notice your system indicating a point of entry, but at some level the market fails to reach it, move on to the next possible opportunity. You can always find another trade elsewhere.
- 4Discipline is also very important.It is your ability to be patient, to wait until your market sets off an action point. In some cases, your price action may not reach your expected price point. And even though you notice the market is moving more than what you anticipated, always be realistic. You cannot expect to make $1,000 for a $250 trading investment, regardless of how big the move of the market is. Keep in mind that short-time frames in forex mean less profit opportunities.
- 5The Right Management.Professional traders will tell you that there is no such thing as profitable trades. Thus, no trading system will trigger a 100 percent assurance. Thus, profitability in foreign exchange solely lies on the execution and management of the trade.
- 6Risk Control.Successful forex trading is basically all about risk control. If possible, take your losses quickly. You need to get your trade in the right direction. If it backs off, try again. Most often, it is during the second or third try that your forex trade will begin to show moves in the right direction.
Why Do Investors Choose Forex and not Stock Trading
Foreign exchange, or simply forex trading, is quickly becoming one of today's best investment options. In fact, there has been a notable increase of people that are withdrawing their investments in stocks and transferring them to Forex.
What is forex trading? And why are people starting to realize that this is somehow a profitable market? Basically, the Forex (foreign exchange) market is the world's largest market where currencies are traded daily. With trillions of dollars exchanged every day, investing in the Forex market is truly a lucrative move.
Here are some of the most compelling reasons why people get into forex trading:
- 1Money.Forex trading is no doubt a lucrative investment market and what better way to increase your profit than to start investing and trading different currencies. But why should people consider getting into this type of business? Here are the reasons.Advertisement
- 2Unlimited trading time.Forex Trading occurs 24 hours a day. One of the few things that easily attract people to invest in Forex trading is the mere fact that the trading happen twenty-four hours a day. Meaning, your chance to earn can possibly happen anytime you want this thing to happen. This is specifically a plus factor for those who wish to take good advantage of the trading movement that occurs in the currency market throughout the day. This is also ideal for investors who have very busy day to day schedules that keep them from doing trading transactions during their working hours.
- 3Forex Trading is a very big market.Currency trading is deemed as the leading financial market in the globe today. In fact, there is an estimated USD$4 trillion is being traded on a daily basis. The forex market is certainly so huge that it can surprisingly dwarf all of the stock markets of the world, combined. With the sheer size of the Forex market, this means that is type of investment is virtually impossible to manipulate. Plus, the size of your investment accounts will not outgrow the market.
- 4There are certain Forex trading trends so it becomes more convenient for the trader to handle the same.Another great quality of the foreign exchange market is its movement trends. If one currency decreases or increases in value, that particular movement or change would go on for quite some time. This will then give you the chance to take full advantage of the movement or change, and not to mention that profits from these types of movements are relatively high.
- 5No Bearish or Bullish trends.In Forex trading you are trading in currency pairs, when buying currency, you are also selling another currency at the same time. This would mean that you have quite an equal chance to profit from either or both actions. Another benefit is that unlike stocks, there is a minimal number of currency which you can invest in foreign exchange market, along with futures and options, which are numerous and very hard to monitor.
- 6You will no longer worry about commissions.When trading currencies, you really won't have worries about commissions, as well as exchange fees and all those other hidden charges. The foreign exchange market is actually quite transparent. Brokers only take minimal percentage of your spread. You will not find complicated and difficult calculations for commissions. And this even applies when you are trading on your own and you use your own online trading platform.Advertisement
What's The Bottom Line?
Forex trading requires your discipline and patience. But once you get the direction right, you are generally safe. There is actually no right or wrong when it comes to trading. It's just a matter of understanding how the market goes around.
- If you have problems with any of these steps, ask a question for more help, or post in the comments section below.
Recent edits by: Graeme, Anonymous, Lynn