5 Tips to Follow for Successful Forex Trading

There are two basic exchanges for investing and trading currencies --- the currencies futures market and the Forex market. Though they both operate based on the same underlying premise, namely exchanging one currency for another in order to make a profit. However, there are some basic differences. The Forex market is best known for its three key features:

1. High volume of trading
2. Extreme liquidity
3. Being available 24 hours a day (except weekends)

Unfortunately, not every investor or trader is successful in their first attempt at currency exchange trading, so here are five tips that could possibly help you be a little more successful at than others.

Tip #1 - Familiarize yourself with the Forex market.

Remember that gaining a good education is the key to attaining success in any endeavor. And that is especially true when it comes to currency exchange. You need to become as familiar as possible with the currencies that you are going to be trading. The more accurate your predictions involving the way a currency moves become, the greater your chance at success and the more likely that it will be profitable for you.

Tip #2 - Find the best Forex system to suit your needs and then stick with it.

The more savvy Forex brokers and traders will all tell you that a persons success is in the system. The best systems enable you to automate your trading based on history. The better systems will also track key aspects such as those peaks and valleys that currencies climb or travel through. This may take a bit of trial and error, but once you find the system that is providing you with a profit, stick with it. Remember, if it aint broke, dont try to fix it.

Tip # 3 - Repetition is not a bad thing --- practice does make perfect.

Despite the fact that it isnt the real world, paper trading is an excellent tool to help you learn the industry and develop your skills at it. Paper trading is a practice tool that you can use whenever you want to develop your knowledge of the industry without the use of real money. It is exactly what the name implies as you are trading on paper only.

Tip #4 - Always pay attention to the margin.

Unfortunately, trading using margins is a great way to lose a lot of money, and lose it very quickly. Until you are skilled fairly proficiently and really know what you are doing, you should avoid forex margin trading like the plague. Staying away from this also lowers your risk factors and enables you to put that investment to better use.

Tip #5 - With forex trading, the only thing that matters is the bottom line.

At the end of the day, all that matters is what you have profited from your efforts. Losing is not an option, and the more determined and steadfast that you hold your ground and maintain that attitude, the better off your bottom line will be. Its not how you win or lose those trades --- its all about dollars and cents.

Forex Trading Strategies

Forex traders almost always rely on analysis to make plan their Forex trading strategies. There are two basic types of Forex analysis – technical and fundamental. Here you will find Forex Strategy for both type of analysis.

Fundamental Analysis Strategy:

Fundamental analysis refers to political and economic conditions that may affect currency prices. FOREX traders using fundamental analysis rely on news reports to gather information about unemployment rates, economic policies, inflation, and growth rates.

Fundamental analysis is often used to get an overview of currency movements and to provide a broad picture of economic conditions affecting a specific currency. Most traders rely on technical analysis for plotting entry and exit points into the market and supplement their findings with fundamental analysis. Currency prices on the FOREX are affected by the forces of supply and demand, which in turn are affected by economic conditions.

Technical forex trading strategy focuses on price action and market behavior, especially on chart and technical indicators.

Generally speaking, fundamental forex trading strategy can only judge which direction the market will move, and technical forex trading strategy can supply both direction and rough currency rate., but from my point of view if you are new in Forex trading / you have less time for Forex trading then you should go for Fundamental forex trading strategy using simple forex trading strategy explain here, because by using this forex trading strategy you will know when you have to do Forex trading. But if you have time for Forex trading then you should go for both Fundamental forex trading strategy and Technical forex trading strategy. But for Technical analysis you should know the Basics of Technical Indicator.

Go Here for Forex Strategy without Technical indicator

Technical Analysis Strategy:

1: Stochastic with Fibonacci

Every Forex trader know the power of Fibonacci numbers and Stochastic in Forex Market, both are very popular and powerful indicator in the Forex market. Here we are going to combine both to make them more powerful.

What we required?

1) Two stochastic slow indicator with setting Red (14, 3, 3) and Green (5, 3, 3).

2) Fibonacci with level 200, 176.4, 161.8, 150, 138.2, 123.6, 100, 76.4, 61.8, 50, 38.2, 0, -23.6, -38.2, -50, -61.8, -76.4, -100.

3) Three different time Forex chart 30M, 1H and 4H.

Set-up (use GMT 00:00 and 24:00)
Draw Fibonacci line from the previous day's low to the high and draw it so the level lines extend into today (Yesterday is between 0:00 GMT and 24:00 GMT). Always Fibonacci level 0 should be at low and Fibonacci level 100 should at high. Don’t consider market trend while drawing Fibonacci line, just draw from low to high.

Go here for Stochastic with Fibonacci

2: Short term trade with good accuracy using Stochastic

This Forex strategy is for extremely short term trades to capture small pips (20 +), but its accuracy is very good. Our trades are always depends on stochastic position over multiple time frames stochastic (15M, 1H, 4H). If you need an explanation of stochastic you will not find it here.

In this Forex strategy 4H stochastic lead our entry and entry will depend on 15M stochastic.

Here we are going to use elasticity concept. This occurs when 15M Stochastic stretches away from the other 2 Stochastic (1H and 4H) and then snaps back. Here 15M Stochastic goes against the trend and then join the trend. You will understand better you will see example with picture.

What we require?

1: Three Forex chart with different time frame (15M, 1H, 4H) or custom stochastic indicator on 15M chart (download link is below).

2: Stochastic indicator with setting 14, 3, 3

Go here for Short term trade using Stochastic Strategy

3: RSI with Stochastic

This is not a Day trading system. Plan to be in positions for multiple days and possibly up to or more than 2 weeks. The goal is to build profitable positions, protect them (with Stop losses) and add more positions simultaneously while keeping your initial risk the same.

I trade the 4 hour and Daily Forex Charts based on momentum. After trial and error ( Research n Development) on short term (5min, 15 min, 1hr etc) Forex charts I've found the 4 hour and Daily Forex charts are best for this Forex trading Strategy.

Learn What is Forex and How to Trade

Why Should I Learn Forex?

If you hear from anyone that making money in Forex is easy, do not believe. It is a myth. The truth is – being profitable in Forex requires a lot of work, dedication, learn, practice, more than a good discipline, sharp knowledge of money management and understanding of the psychology of the currency market. Learn Forex before you start Trading, because to Earn you should Learn Forex.

If you are ready to Learn Forex / start Forex Trading, then this blog is for you. Here you will learn all details about forex / forex trading,

1) You will learn what is Forex and how to trade forex.
2) You will learn forex strategy / forex trading technique / forex trick.
3) You will learn how to draw forex trendline.
4) You will learn how to determine support and resistance.
5) You will learn how to use forex chart / forex indicator for entry & exit in forex market.
6) You will learn about risk management & money management.
7) You will learn how to calculate forex profit / losses and MORE.

Learn Forex: What Is It And How Does It Work? -

The currency (foreign exchange) market is the largest and oldest financial market in the world. It is also called the foreign exchange market, or "FOREX" or "FX" market for short. It is the biggest and most liquid market in the world with daily average turnover of US$1.9 trillion, and it is traded mainly through the 24 hour-a-day inter-bank currency market - the primary market for currencies.

Foreign Exchange simply means the buying of one currency and selling another at the same time. In other words, the currency of one country is exchanged for those of another. The currencies of the world are on a floating exchange rate, and are always traded in pairs

There are two reasons to buy and sell currencies. About 5% of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies into their domestic currency.

The other 95% is trading for profit, or what you call speculation. Investors frequently trade on information they believe to be superior and relevant, when in fact it is not and is fully discounted by the market.

Unlike the futures and stock markets, trading of currencies is not centralized on an exchange. Forex literally follows the sun around the world. Trading moves from major banking centers of the U.S. to Australia and New Zealand, to the Far East, to Europe and finally back to the U.S.

Currency Symbol / Currency Pair

EUR/USD = Euro / US Dollar

GBP/USD = Pounds Sterling/ US Dollar

USD/JPY = US Dollar / Japanese Yen

USD/CHF = US Dollar / Swiss Franc

USD/CAD = US Dollar / Canadian Dollar

AUD/USD = Australian Dollar / US Dollar

NZD/USD = New Zealand Dollar / US Dollar

Etc.

In excess of 85 percent of all daily transactions involve trading of the major currencies - Australian Dollar, British Pound, Canadian Dollar, Japanese Yen, Swiss Franc, and the U.S. Dollar.

Currencies are traded in pairs, meaning that you are really trading one currency for another. A simple way to understand this is to consider what you do when you go on foreign vacations. If you are an USA, and you plan to travel to another country, say Canada, then you might take say $10,000 USD to the bank to change it for Canadian dollars. Let’s say the exchange rate is 1.4000, then for your $10,000 USD they would give you $14,000 CAD. Now let’s say you didn’t spend the money and upon coming home you decide to change it back to USD currency. Now let’s say the exchange rate is 1.3700 (a change of 300 pips that could happen in a week), so your $14,000 CAD would convert back to $10,218.97 US. Therefore you just made $218.97, a 2.19% increase in funds.

Reading a FOREX quote may seem a bit confusing at first. However, it's really quite simple, when you see Forex quotes you will actually see two numbers. The first number is called the bid and the second number is called the offer/ask. If we use the USD/JPY as example 115.37/115.40 the first number 115.37 is the bid price and is the price traders are prepared to buy USD against the JPY. The second number 115.40 is the offer price and is the price traders are prepared to sell the USD against the JPY.

Here in USD/JPY the currency listed first (USD) is the base currency and & the value of the base currency is always 1. A quote of USD/JPY 115 means that one U.S. dollar is equal to 115 Japanese yen. When this currency quote goes up, it means the dollar has appreciated in value and the other currency has weakened. If the USD/JPY quote increases from 115 to 117, it indicate dollar is stronger because it will now buy more yen than before.

What Next

Well now we have a basic understanding of how Forex market works what next? Now you are going to decide best way to trade the Forex market. The most common approaches are Forex fundamental analysis and Forex technical analysis.

Forex Fundamental analysis: Usually everyday, and often more than once a day, the currency pair will be moving along slowly (sideways movement, consolidation) and then all of a sudden it JUMPS! It very quickly moves up ten or more pips, usually in just a minute, and often continues to move strongly for another hour or so.

This is due to the release of a “Fundamental Announcement”, and of course any experienced trader should understand that they usually create a market movement.

Forex Technical Analysis: It is technique to learn Forex market using chart and indicator to predict the future price of a security.

WHAT YOU NEED

**BROKER:

A broker that provide good platform to trade Forex. MARKETIVA provide very good platform for Forex trading and also give $5 free to open an account.

**Learn Forex Money Management and Risk Analysis:

However, it is common that one afraid of being involved in Forex market because of high risk in this trading field. Although every capital market involves certain level of risk, the risk of loss in foreign currency trading market can be extensive. It would be wise to learn about the potential risk (and managing it) if you wish to trade in Forex market.