Be Methodical and Disciplined

The first step that you must take is systematizing your approach, and fitting your trading into a disciplined pattern. An arbitrary approach to trading, a haphazard application of rules, random choice of trade sizes, and a careless attitude to risk control can be the death warrant for any budding traders career. The trader has no choice but to be disciplined and logical. Since the market is unpredictable and impossible to tame, he must have plans in place for when a trade can or should be activated, and avoid any reckless behavior. This is the first step that leads to success, and if it is neglected, there is almost no possibility of attaining the goal of profitability.

Manage Your Risk Conservatively

Nothing is certain about the market action. The price quote can go anywhere in the next moment. It can gap up or down, it can trend quietly, or do nothing at all. Since there is no way of correctly predicting the next moment, the prudent trader must always be very conservative about his management of risk, and be prepared for all kinds of unintended consequences by risking only as much as the amount that he can afford to lose. Any dreams of genius, or illusions about cracking the forex code will instead lead to a rapid descent to the land of disillusionment and lost hopes.

Always Consider The Market The Ultimate Arbiter Of Your Trading Fortune

You can have the best analytical mind the world, and perform the most rational, and comprehensive analysis of the markets, yet still be wrong if the market so decides. The market is the ultimate arbiter of the validity of any plan or conjecture about profitability. The trader has to be humble and realistic, and keep in mind that although markets may sometimes behave foolishly, a king is still a king even if he’s a fool, and the market is the king in trading.

Become The Perpetual Student Of Economics

You’ll never lose anything by studying economics, and will certainly improve your insight and intelligence while seeking the causes of the price action and the interaction between fundamental factors and market dynamics. The market changes all the time, and there’s always something to be learned. Be wise and treat the market with respect. In turn it’ll reward you generously.

Maintain A Patient, And Persistent And Determined Approach To Trading.

Persistence and determination are the keys to a growing account. You may be a genius, but before you gain some experience, and acquire the right mental attitude, you still need some humility. While you’re humble, you need to practice, and that will only happen if you’re patient, and willing to sacrifice in time and energy in order to achieve your goal of profitability.

Success in forex is not necessarily a very difficult task, but it does require consistency and commitment from the trader. When it comes to losing or winning in this game, there is nothing magical or ethereal. It is all about doing the right things at the right time. Some may acquire these skills with greater effort, and some with less, but ultimately, it is probably the case that most people can become great traders if they have the necessary drive and mental energy for this task.

Predictions are central to many forex strategies, and technical and fundamental studies use different methods for deriving them. The crucial difference lies in the fact that while technical analysis attempts to establish the future value of an asset (in our case, a currency pair), fundamental forex market analysis focuses on discovering whether it is undervalued, or overvalued at present.

Proponents of fundamentals analysis claim that it is difficult to be certain about the future value of any asset in the volatile environment of trading. The best approach is to concentrate on what the current prices are in the market, comparing those values with the theoretical prices determined by fundamentals, and on that basis deciding on the nature of our trade, fundamental analysts suggest. They blame technicians for using unreliable tools for predicting what is obviously unpredictable. At least in the short term, it is impossible to determine the direction of the price, they claim.

In fact, the difference between technical and fundamental analysis is not as deep as it will seem if we evaluate them based on their tools and mission statements. Where the fundamental analyst speaks of an imbalance of supply and demand, an irrational positioning of traders, or faulty risk perception, the technical analyst will speak of divergences, market overextension, panic, oversold or overbought levels, bubbles, and similar concepts, but in truth they all define the same underlying phenomena. The extreme imbalances of fundamental analysis are parabolic price trends in technical jargon. Irrational positioning may coincide with divergences. And panic may match a period of re balancing of fundamental factors.

The crucial point is that these equivalences are valid only when the analysis is correct. When, for instance, an economic situation is coupled to a technical phenomenon (let’s say for example, that the stock prices enter a strong downtrend as banks contract lending and bankruptcies occur, as dictated by theory), the strong relationship is unfortunately devoid of any causality that may facilitate predictions, at least in the short term. In other words, it is not possible to predict the technical configurations that will be caused by economic processes, although we can be pretty sure that something will happen.

In sum, technical and fundamental analysis are just mirror images of each other. But the mirrors work only when there’s something to show. If either of the mirrors is broken (that is, the analysis is faulty), there will be nothing to match. Consequently, instead of worrying about the efficacy of either school, it is better to focus on perfecting our skills so that the analysis that we perform is the best, regardless of the school to which we belong.

The three steps of development are:-

1. Emotions
2. Complexity
3. Testing

Emotions and intuition cannot be calculated mathematically. Mathematics is the only thing a trading system has to work with. So the first and most fundamental principal of trading system development is that every rule to enter or exit the market must be mathematically justified.

Trading systems grow into more and more complex ones by including rules that take into account more and more parameters. I believe that excessive amount of rules can ruin the successful trading system.

Testing is the absolutely necessary step. You need to have historical price data to test your system.

Happy trading

Choosing the right time to trade can make a differences between successful and hopeless forex trading.

It’s proved and highly recommended not to trade on Weekday, Mondays, when the Forex market has recently opened and is making first steps to form a new trend and on Friday’s afternoon, during the big volume of closing trades. The best days to trade are Tuesday’s, Wednesday’s and Thursday’s, So Basically trade between Weekdays.

Happy Forex Trading.

The costs of trading depend on several factors, including the instrument and market you are trading. Most of the costs you pay are to your brokerage firm. They need to make a living in exchange for the services they provide.

• Commissions
• Slippage
• Spread
• Platform Fees
• Expenses

However, if you want to look at trading as a business, you may have to minimize them and make sure you are getting the most for every dollar you spend to ensure your long-term survival.

Happy Forex Trading!