Currency Trading

3 Steps to Improve your Currency Trading

Whether you are new to Currency Trading or a seasoned trader, you can regularly improve your trading skills. Education is fundamental to successful trading. Here are six steps that help set your Currency trading skills.

[1] Plan How You Trade

Successful traders start with the sound strategy, and they stick to it at all times.

1. Choose the currency pairs

Some currency pairs are volatile and move a lot intra-day. Some currency pairs are constant and make slow moves over the longer time periods. Based on risk parameters, decide which currency pairs are best suited to your trading strategy.

2. Decide how long you plan to stay in a position

Based on currency pair selection, plan how long you want to hold the positions: minutes, hours, or days. Remember that depending on account type, having open positions at 5:00 pm Eastern Time may incur rollover charges.

3. Set the targets for position

Before you take the position, you should establish the exit strategy. If the position is a winner, at what rate you cash out? If the position is a loser, at what rate you cut your losses? Then, place your stops and limits accordingly.

[2] Follow the Forex Market

Use Forex charts and market analysis to control market information and technical levels that affect the positions.

1. Use of Forex Charts

Charts are an essential tool to improve trading returns. You can quickly recoup the money spent on a charting package from a single well-placed trade based on the analysis of the professional charts. Please keep in mind that the forex trading involves a high risk of the loss, and no guarantee is made that the investment on charting applications will be recovered.

2. Market Analysis

Market Analysis provides a breaking currency news and in-depth analysis where the currency market is, where it is going, and why it's going there. You can access detailed market commentary and trading strategies from the experienced Forex traders. 

[3] Keep a Forex journal

Most of the traders fail because they make the same mistakes again and again. A journal can help by keeping track of what works for you and what doesn't. Used consistently, a well-kept journal is your best friend. When keeping the journal, make sure that it contains at least the following:

1. The date and time you took the position.
2. The rate at which you took the position.
3. The reason you took the position.
4. Your strategy for the position.
5. The date and time you exited the position.
6. The rate at which you exited the position.
7. Your profit/loss on the position.
8. Why you exited the position.

Once you learn to understand successful trading patterns, you will be able to recognize them when they return.


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