FOREX trading tips
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Read on to learn some tips if you are
new to Forex trading.
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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.
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.
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