FOREX TRADING TUTORIALS

To succeed in

, chart analysis is a vital instrument. If
your chart analysis is not correct, you cannot proceed further.

Chart analysis is not just about plotting correct currency pair or
having most advanced indicators. It is about timing as well as having
a clear mind with no pre-conceived notions.

Let us look at some of the essential keys necessary for making sure
that you analyze charts correctly -

1. Timing of analysis – By this i mean that the period of entry is
very crucial. If for example you are analyzing close to a fundamental
announcement like Non-Farm Payrolls, then definitely placing a trade
at that time will be highly risky! Or if you are analyzing during
off-liquid hrs, then the analysis will not be correct.

2. Plotting the indicators correctly – This is an obvious one. But
often traders make mistakes while plotting the indicators. Sometimes
they either plot too many indicators and sometimes far too few. There
shouldn’t be more than 3-4 indicators plotted at any time. Out of
these one indicator should be primary and the rest as confirming
indicators.

3. Avoiding pre-meditated mindset – This is a big point. Let me give
you an example. Years ago when I was trading, I had a mindset that i
need to find a trading opportunity. So, I use to look at charts
differently and because of my pre-meditated mindset I use to find
trading opportunities when they do not actually exist. Most often,
such trades ends in loss.

However, A trader should always analyze the chart with a clear mind
and be ready for the fact that the trading opportunities may not be
available every other day. But when they do exist, he should not
second guess and should place the trade without any fear.

There are other aspects to doing correct

. But if
you are able to master the above 3 aspects, then you can be certain
that you have gotten at least 90% of analysis right!

Understand pairs, not currencies – Like any relationship, you have to know both sides. Success or failure in

depends upon being right about both currencies and how they impact one another, not just one.

Acquire Knowledge – When starting out

online, it is essential that you understand the basics of this market if you want to make the most of your investments. The main forex influencer is global news and events. Get to know how the news work on our ANALYSIS section.

Unambitious trading – Many new traders will place very tight orders in order to take very small profits. This is not a sustainable approach because although you may be profitable in the short run (if you are lucky), you risk losing in the longer term as you have to recover the difference between the bid and the ask price before you can make any profit and this is much more difficult when you make small trades than when you make larger ones.

Over-cautious trading - Like the trader who tries to take small incremental profits all the time, the trader who places tight stop losses with a retail

is doomed. As we stated above, you have to give your position a fair chance to demonstrate its ability to produce. If you don’t place reasonable stop losses that allow your trade to do so, you will always end up undercutting yourself and losing a small piece of your deposit with every trade Exiting Trades - If you place a trade and it’s not working out for you, get out. Don’t compound your mistake by staying in and hoping for a reversal. If you’re in a winning trade, don’t talk yourself out of the position because you’re bored or want to relieve stress; stress is a natural part of trading; get used to it.

Confidence – Confidence comes from successful trading. If you lose money early in your

career it’s very difficult to regain it; the trick is not to go off half-educated; learn the business before you trade. Remember, knowledge is power.

Stick to the strategy – When you make money on a well thought-out strategic trade, don’t go and lose half of it next time on a fancy; stick to your strategy and invest profits on the next trade that matches your long-term goals.

Trading for Wrong Reasons - Don’t trade if you are bored, unsure or reacting on a whim. The reason that you are bored in the first place is probably because there is no trade to make in the first place. If you are unsure, it’s probably because you can’t see the trade to make, so don’t make one.

Wrong Broker - A lot of

are in business only to make money unsuspecting

. Read forums, blogs and chats around the net to get an unbiased opinion before you choose your broker.Go to our introductory class to know how to choose the right

.

Forex Trading Tips

2. Don’t go in unarmed.Take the time to develop a solid trading system and find out that the secret to trading
success lies in hard work and constant learning.

3. Learn to use stops.

Respect your stops and don’t move them. Hoping

that market will turn in your direction is a very delusive hope.

4. Always take a look at the time frame larger than the one you’ve chosen to trade with. It gives the bigger picture of market price movements and thus helps to clearly define the trend. For example, when trading with 15 minute time frame, take a look at 1 hour charts. In the same way:

trading with 1 hour charts would require obtaining a picture of daily, weekly price movements. If a trend in Forex is
hard to spot; choose a bigger time frame. Up and down market patterns are always present. Make sure you know the dominant trend, unless you are a scalper.

5. Embrace money management. Even with the same trading system 2 traders can get opposite results in the long run. The difference will be again in the money management

approach.
6. Trade calm.Don’t try to revenge after losing a trade.

7. Choose the time frame that is right for you.

8. If you don’t know the direction of the market stay out. If it is not clear where the market will move don’t trade.

9. Trend is your friend. Trade with the trend to maximize your chances to succeed.

10. Always analyze the market before placing any trade.Any attempt to trade without analysis and studying the market is equal to a gambling

11. Think about risk/reward ratio before entering each trade. It should always be 1:2 or 1:3

12. Greed is an enemy, keep it at arms length.

13. Let your profits run. Let your position be open for as long as the market wishes to reward you.
14. Cut your losses short. It’s better to finish unprofitable trade quickly than wait for the situation to get worse. Don’t put a stop loss too far it’s your money you risk. Better calculate the best spot to enter when a potential loss would be minimized. Again: respect your stop and don’t move it “cherishing hopes”.

15. You must not trade daily. Only trade when your system gives you the go ahead.

16. A signaling bar/candle on the chart must be fully formed and closed before you enter a trade.

17. Do not Use a highly leveraged account, it comes at a cost.

18. Learn to measure trading success by the end of the day, week and then month and year.
19. Never invest money into a real Forex account until you practice on a Forex Demo account! Allow at least 2
to 3 months