Becoming highly successful in fx trading is all about research and practise before you ever start trading with a real account. Depending upon your background, you may need to do a lot of reading in economics and finance – or, not. The same thing applies to charting. If you’ve been trading stocks, many of the charting patterns used in forex will be familiar. The internet is filled with friendly help. Central bank websites share a wealth of information about their monetary policies. Commercial banks issue forex forecasts and trading recommendations all the time. Websites, like stockcharts.com or kumotrader.com, can help you learn advanced charting techniques; and, forums, like the ones available at babypips.com, can answer most of your trading questions.
Don’t underestimate the power of practising what you’ve learned on a “demo account”. These accounts are perfect fx trading teaching tools. They are totally real, except you do not have to risk your own money. “Demos” are also good for testing new trading strategies in combination with different leverage levels and charting indicators.
Is Good FX Trading About Being Lucky Or Skilled?
Luck has very little to do with being successful in fx trading. Your competition virtually ensures this. For instance, all the central banks of the world are involved in forex activities. They have their agendas and are going to pursue them at almost any cost. This means that central bank fx trading patterns are fairly easy to discern and, if you’re smart, you will avail yourself of the opportunities presented. For instance, Governor Glenn Stevens, of the RBA (“Reserve Bank of Australia”), doesn’t beat around the bush when talking about inflation data. Neither does Haruhiko Kuroda, the current Governor of the Bank of Japan, for that matter. As a result, their contrasting views can make trading the AUD/JPY a rewarding exercise.
Building Up Your FX Trading Abilities
Using a “demo account” to sharpen your trading skills – or just test out new strategies – is an excellent idea. These accounts are available from most banks and brokers that offer “retail” (the finance term for the general public) trading accounts. They’re real in every sense of the word except they do not use your money (nor can you withdraw any of the profits that might accrue). This means that you can learn all sorts of trading mechanics and how to use advanced charting techniques, all without worrying that it’s going to cost you. Every “demo” is different. Shop around. If you enjoy doing your own programming, then think about using an account that features “MetaTrader” (version 5.0 is the latest).
Getting Those First FX Trading Returns
In finance, 1 point is a piece of datum; 2 points is a line; and, 3 points is considered a trend. If you’re an fx trading beginner, you want to strive for your first 3 trades to be profitable. Here’s a leg up. Open up your “demo account” and pick a 1-hour chart of a major currency pair (i. e., EUR/USD, GBP/USD, USD/CHF or USD/JPY). Put a “Williams Alligator” on top of the chart. Look closely at all the lines appearing on your screen. See how the shortest-period one is always scooting a little faster than the others? Well, that’s your trade signal line. So, when it crosses over all the other lines, trade in the direction of the crossover.
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