Foreign Exchange market is influenced by several market and economic conditions, which makes it a complex processes. Its trading complexity is managed by employing a systematic approach derived from various aspects of international business, economics, geopolitics, mathematics and behavioral science.
Winning in forex market requires an efficient and effective strategy. Here are 7 guidelines to formulate your strategies as a successful forex trader.
1. Research and Analysis
Research and analysis are formule the key and fundamental ingredients of successful forex trader. Continuously research and analyze on important economic events, price movements, trends, and general market developments that impact currency pairs. You should incorporate both technical and fundamental analysis tools to analyze the market that would help you make trading decisions.
Technical tools will help you determine price action of the market, while fundamental analysis helps you predict price action and market trends by analyzing economic indicators, government policy, interest rate decisions and others.
2. Make a plan ־ Work a plan
One way of managing your trading activities is by working based on plan .Trading Plan should consist of why you enter, stop loss price and profit taking level.
3. Control Risk
As with every other trading, forex trading has its own risk. Achieving success in foreign trading market requires managing and controlling these risks.
4. Properly apply money Management techniques
Management in forex market requires proper capital management. Do not trade more than 10% of your deposit in a single trade. For example, if your total deposit is $100, 000 you should limit every trade to not more than $10,000. This would help you secure your account under worst market conditions.
5. Track your Trading Activities
Track every trading activities so that you will be able improve your performance. When you buy a currency, write down why you buy and your feelings at the same time. You do same when you sell. Analyze and write down the mistakes you have made, as well as things you have done right. By referring your trading journal, you learn from your past mistakes. Keep tracking your records and improve your performance accordingly.
6. Control your positions
The numbers of positions you hold at a time is very important to control you trading activity. There fore, it is important that to should limit the number of positions you hold at same time in between 3 to 5. It I always recommended to hold the minimal amount possible, so that you will be able to control you performance.
7. Avoid Greed and Fear
You should never allow fear and greed influence your trade, because if you take emotional measures in your forex trading activities, you will badly lose your account. Be advised that, forex trading has its own process. You should avoid fear and Greed, and trade based on research and analyses of market trends.
You should properly implement the following guidelines in your daily trading activities. If you follow the guidelines explained above and formulate your trading strategies based on these bases, you will attain success in forex trading market.
John David is the owner of Forex Exchange Market Guide and has been working online for long time . John has helped many online forex traders with proven techniques and strategies. To learn more on proven techniques and strategies of online forex trading visit http://forexpro.atspace.com