Forex Trading System
Forex: top 10 tips for getting the most out of the market
The Forex trading system is the most dynamic and liquid of all trading systems. Trading on the FOREX market can lead to significant gains if you research the market and approach it in the right manner. The following are a couple of tips for getting the most out of the Forex trading system:
• If you are new to FOREX trading, concentrate your efforts on the EURUSD pair. This currency pair is extremely liquid, non-volatile and allows for wide trading ranges that are perfect for novice traders.
• Once you are more experienced, experiment with different markets as opposed to sticking with the same market all the time. General consensus is that the Asian market is slower than the US and London markets. The US market is generally more volatile, while the London market is less choppy but still moves fast.
• When analyzing a chart, follow the 'mirror' rule. If when you turn a chart upside down it still looks the same, stay away from it.
• Always remember that the way in which particular currencies perform will depend on the time zones that you are trading in. You can get the most out of currencies by trading them within the correct time frame. If you trade during Asian market time the New Zealand dollar, the Australian dollar and the Japanese yen will be more active. By comparison if want to get maximum performance out of the Swiss franc, the UK pound and the euro you will need to trade when the London and US markets overlap. If you are in the US , Asian trading times will be in the evening and the London/US market overlap will be between 12am and 2am.
• If you have the capital, trading more than one lot at a time will significantly increase your chances of correctly interpreting the markets.
• Trade in the direction of trends as opposed to against them. You may be tempted to trade in more than one direction, but trading in the direction of a market trend will increase your chances of making a profit in the long run.
• Keep an eye out for reversal patterns. They appear often and are usually obvious, but are sometimes overlooked.
• Don't be afraid to trade at the extremes - this tactic will allow you to see if you are trading in the right direction or not.
• Trade real accounts and demo accounts simultaneously and trade the same markets in both accounts. Use your demo account to see if less conservative tactics would produce higher profits.
• Finally, stop looking for that magic sign that will predict future market trends for you. There is no such thing as a future market indicator and never will be. Read your charts, keep up to date with your research and trust your instincts. Happy trading!