Making money on the forex markets is not easy. It's not impossible either. Professional traders can sometimes only shake their heads in disbelief at the stupidities committed by novice traders. They forget that they made the same mistakes when starting out and that they also started trading without a proper forex currency trading system.
Why should one have a trading system? For the same reason you will never get behind the wheel of your car and simply start driving down the street without knowing where you are going. You are bound to end up in some place or other, but it might not be a place you like very much.
A trading system is a set of methods and rules that guide your trading activities. They help you to keep your head clear when things start to go wrong. Without such rules, you are bound to hang on to losing trades too long or get out of winning trades long before you should, thereby robbing you of most of your profits.
In the first place you will need trading software. There are numerous free trading packages on the market and also some excellent commercial packages. Which one you select will depend on your particular requirements. As long as the software can import live prices in different time frames and display technical indicators such as moving averages, RSI and MACD in graphical format, it should be enough for a newbie trader.
As soon as you are familiar with how the software works, it's time to set up your trading rules. As a general rule, don't rely on only one indicator to steer your activities. Don't only trade in one time frame either. A decision to buy should be confirmed by at least two technical indicators and the message should be the same in more than one time frame. This means you'll trade less, but you've got a much better chance of making money with the trades you do.
Once you have entered into a trade, you should have rules to determine when you will exit it. It's no use you hang on until you 'feel' the market is not going to turn around again. That's when you will make your biggest losses. Your system should for example tell you to get out if you have lost more than 30% of your initial profits. Accept the market has turned around and get out.
Any forex currency trading system should also include money management. You should have rules deciding how much you are prepared to risk on any single trade, how many trades you should have open at any time and how often you trade. - 31876
Why should one have a trading system? For the same reason you will never get behind the wheel of your car and simply start driving down the street without knowing where you are going. You are bound to end up in some place or other, but it might not be a place you like very much.
A trading system is a set of methods and rules that guide your trading activities. They help you to keep your head clear when things start to go wrong. Without such rules, you are bound to hang on to losing trades too long or get out of winning trades long before you should, thereby robbing you of most of your profits.
In the first place you will need trading software. There are numerous free trading packages on the market and also some excellent commercial packages. Which one you select will depend on your particular requirements. As long as the software can import live prices in different time frames and display technical indicators such as moving averages, RSI and MACD in graphical format, it should be enough for a newbie trader.
As soon as you are familiar with how the software works, it's time to set up your trading rules. As a general rule, don't rely on only one indicator to steer your activities. Don't only trade in one time frame either. A decision to buy should be confirmed by at least two technical indicators and the message should be the same in more than one time frame. This means you'll trade less, but you've got a much better chance of making money with the trades you do.
Once you have entered into a trade, you should have rules to determine when you will exit it. It's no use you hang on until you 'feel' the market is not going to turn around again. That's when you will make your biggest losses. Your system should for example tell you to get out if you have lost more than 30% of your initial profits. Accept the market has turned around and get out.
Any forex currency trading system should also include money management. You should have rules deciding how much you are prepared to risk on any single trade, how many trades you should have open at any time and how often you trade. - 31876
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Did you know that managed forex trading is considered the best investment strategy for the future? We have got the comprehensive inside info on currency trading for dummies .
