Every successful forex trader employs a good forex trading strategy or method.This is no different for forex day-traders.A day-traders forex system needs to perform during any kind of current market conditions.
Starting out, you’ll have to learn about discipline and following your written trading plan.If you apply your knowledge and exercise discipline, you got a better chance of becoming a successful forex trader who makes money.
Start out by studying just one currency pair to keep things simple.Take the time to make sure you understand the simple price action of this currency pair. Is it trending down, sideways or up? How does today’s current price calculation compare to last month’s price? Study the charts.Take a look at the historical charts to determine the price action of this specific currency pair.
The more time you spend doing your due dilegence will help you remain focused and to move towards your trading goals.Research should be fun so take your time and enjoy the process.There is no need on your behalf to hurry things along. Which explains why you should start trading with small lot sizes on a real account or better yet, begin trading with a demo account.
Many forex traders use technical indicators to interpret historical prices. Whatever you decide to use, you must become familar with exactly how it’s done and how you’re going to use this tool to place trades, manage forex trades and exit these trades for profit or even loss.
You can read about your specific indicator or forex trading strategy of choice by reading books. Many large bookstores offer excellent trading books by many authors. My favorite bookstore happens to be Barnes and Nobles. You may read and study a number of these books for free while visiting the bookstore.
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After you choose your trading approach, you need to identify good price charts to interpret price data. Good price charts are normally provided by reputable forex brokers online. After you complete this, you’ll be in a position to investigate further in different aspects of technical analysis.
There are several reasons for price fluctuations in any given forex currency pair. Economic news reports such as Unemployment Rate, Retail Sales or even Natural Gas Inventory data can affect currency price. Political events and some social events even have an impact on specific countries currency exchange rate.You should try to stay informed with all of this economic news. You can do so by viewing a economic news event calendar for forex.
Day trading refers to the law of the opening and closing your forex trades on the same day.It is a fast and somewhat aggressive approach to trading forex. Forex traders can choose to try to scalp different forex currency pairs or swing trade. Scalping the forex markets usually occurs on the smaller time frames such as 1 minute or 5 minute charts. Swing trading usually occurs on 15 minute or 30 minute price charts. Nonetheless, all trades are opened and closed under the same day if you’re a day trader.
As I spoke of earlier, the forex market is volatile and has many risks. If you want to try day-trading the forex markets, you should have realistic expectations and keep everything in perspective. Manage your losing trades and try to keep your winning forex trades larger than your losing trades.This strategy allows a forex day-traders profitable even though they lose more trades than he or she wins. You will be better off if you are able to manage your risk and reward ratio along with following a written trading plan.
A disciplined trader with a not so good trading strategy will fare better than an un-disciplined forex trader with a large trading method.