Guidelines for the New Forex Trader

Guidelines for the New Forex Trader
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The Nuts and Bolts for Successful Trading

If you have recently become interested in trying your hand at foreign currency trading, you probably should be aware that only about 5% of the traders are successful at it. That being said, with the right amount of training and the right trading approach, you could be in that 5%. Trading currency pairs can make you a lot of money. But if you aren’t prepared and don’t have a trading plan you surely will end up with the loosing majority. Before you do anything, you need to consider the following.

guidelines-for-the-new-forex-trader

  1. Do you wish to be a day trader who will be trading several times a day and do you have the time to spend on the computer watching prices or are you better as a swing trader who makes a trade over a span of several days or a long term position trader who will hold a trade for several weeks? Each type of trader trades on a different time frame, and each method of trading is different. You will need to decide on the type of trader you envision yourself to be.
  2. You need to ask yourself next what kind of risk taker you are. Are you an aggressive trader or a conservative trader? If you intend on day trading you had better plan on being an aggressive trader. There is little time to contemplate your next move when you are making multiple trades in a day. Long term traders tend to focus the fundamentals whereas swing traders are well schooled in the technicals. If you know how much risk you are comfortable with, you will have a better idea of the type of trading that is best suited to you and what course of trading will best suit your needs.
  3. Choose a reliable broker. This has more to do with your success than you might imagine. The forex brokerage industry has a less than pristine reputation. Common complaints are brokers that hunt stops, hold money due for months until you get an attorney and huge spreads at news time. Do your research. Ask the question in online forums and good luck.
  4. Select a trading system or methodology and stick with it. Jumping from one system or method to another after a drawdown will guarantee you’ll go broke. But choosing a proven system or method is the key. There literally hundreds of trading systems and signal services available over the internet. Clickbank alone has over 50 forex related products for sale. Again, check out the systems available in online forums or revew sites such as Forex Trading Systems Review before making a decision. And make sure you use that system in your broker’s demo account and are comfortable with it before you trade with real money.
  5. Decide on a forex trading platform. The forex trading platform must be appropriate for the trading system you choose. You will need a news feed and the right trading indicators in the charting interface of your trading platform to implement in the trading system or methodology you chose.

If you follow these guidelines and take the time learn about trading in the forex market, you will be well on your way to becoming a profitable forex trader with a lasting trading income.

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