Learn to day trade forex. But I want to make a few facts very clear before you embark on your journey of forex trading. These facts should be the foundation of any forex system that you develop.
The first most important thing that you should understand and make very clear is that forex is not a get rich quick scheme. Skilled currency traders can and in fact do make good money in forex trading. However like any other business or career, success just doesnt happen overnight or in a few weeks. You should use this great formula for success: Patience+Practice+Persistence=Profits.
You should know that there is no substitute for hard work and diligence. Practice trading on a demo account. Pretend that virtual money is your own real money when you trade on the demo account. Do not open a live trading account until you become profitable on your demo account. Double you account first demo trading. You can only be successful if you stick to a system and a plan.
When you start trading forex, just choose two major currency pairs that you will trade in the start. It will become very difficult to keep tab on the all major currency pairs in the beginning. You should start with a major currency pair. The spread on the major pairs is the best and they are the most liquid. EURUSD pair is the most commonly traded pair in the currency markets and usually has the best spread because of its liquidity.
USDCHF is the most volatile pair among the major currency pairs. It is highly volatile and moves the most during the trading week. However, USDJPY moves a lot only on the news out of Japan. GBPUSD is the most stable and least volatile among the major currency pairs.
Follow and understand the daily forex news and analysis of the professional currency analyst. It is important to get a birds eye view of the currency markets and the news that affects the prices. It is also important that you know and understand what the key technical support and resistance levels are in the currency pair that you want to trade.
Support is the price level when there are more buyers than sellers. It is at this point the currency pair price action moves up on the charts. You should buy at the support level. Resistance is the price level when sellers jump into the market and overcome the buying pressure. It is where the currency pair price action moves down on the charts. You should sell on the resistance level.
All the best forex news and analysis is available freely online. Most of the forex brokers provide this information on daily basis if you open an account with them. You should subscribe to an independent service as well. You can also go to forexnews.com and get 24 hrs news and analysis on the spot forex market free daily. Read the technical news and analysis. Write down on a piece of paper the direction the analyst is saying about the currency pair you are trading. Also note the key support and resistance level for that pair.
Learn how to use technical indicators and always trade with stop losses. It is worth your time to be patient and learn how to use technical indicators on the charts that you will be reading shortly.
It is important when you are trading to be disciplined. Stick to a plan. Dont just trade your gut feeling. Depending on your risk capital and strategy, set your stop losses accordingly.
