Forex trading. What does it take to be successful?
“How to make money on Forex?” – every novice trader asks this question at least once. Is there a universal secret of success in this market, or perhaps there are certain rules for the game to win? Let’s try to find answers to these questions by talking about the basics, methods, and programs of trading on the FOREX market.
Trading on the Forex market
Quite recently, trading on “Forex” was considered a lot of the elite, large players. But times are changing: today almost anyone can try their hand at making money on the difference in currencies, and for this, it is not necessary to have an impressive capital.
So, trading on the Forex market is attractive, affordable, and provides an opportunity to earn money. So why is it that only a few manage to “hit the jackpot”, and the majority are in a state of variable success? Luck? Knowledge? Strategy? What is needed for successful trading?
Of course, luck, the right strategy, and knowledge are important components of success. But do not forget that the Forex market is highly volatile, and the possibility of making a big profit is always associated with considerable risks. Therefore, before you start gambling, you need to be willing to take risks, not gamble with the last money, have patience, and also know the rules of trading on Forex.
What do you need for successful Forex trading?
The main principle of Forex trading is to buy a currency at a lower price and sell it at a higher price, making a profit on the difference. But, despite its speculative coloring, Forex is not a game of luck, it is a serious job that has become a stable source of income for many traders.
The importance of financial education
Newcomers imagine trading on the stock exchange as an extremely complex and incomprehensible process, which makes no sense to delve into without special education. Of course, having a financial education is a huge plus, which can become one of the important foundations of successful trading in Forex, but if you don’t have it, it doesn’t mean that you have no chance. It is not necessary to know all the secrets of Forex trading for success. It is enough to have an analytical mindset, to study the main factors influencing exchange rates, to master the basics of trading on Forex, and also to know the basics of technical and fundamental analysis. It is not difficult to obtain the knowledge necessary for this in our time: almost all large brokerage companies offer their clients training materials, courses, and seminars, and general information on this issue can always be found on the Internet.
Practice and experience
If you do not have experience in Forex trading, this is not a problem. All at one time started with something. Therefore, in order to open a trading account with confidence, it is recommended that you first practice on a demo account. So you, without the risk of losing real money, get the opportunity to apply the knowledge gained in practice, understand the principles of Forex, and choose the most suitable strategy for you. A demo account can be opened in almost all bookmakers. And remember, most of the Forex aces are in the past people of various professions. The keys to their success are hard work, patience, desire to learn, and self-confidence.
Forex trading methods
Successful Forex trading is usually based on various methods to optimize the trader’s work and help him achieve the best result. In other words, these are all kinds of strategies. Let’s take a look at the most popular ones.
Intraday Forex trading, or scalping
This is a fairly young Forex trading system, which has already gained its popularity among beginners and professionals. The strategy was developed for short-term trades that last from a second to several minutes. Since it is impossible to make a large profit in such a short time period, and, accordingly, to lose a lot, this type of strategy is suitable for traders who do not have impressive start-up capital, but are ready to trade on Forex in order to earn a little, but often.
Of course, you won’t lose much with intraday trading in one trade, but be careful not to get carried away with frequent and meek trades. Remember that a short-term strategy is riskier than a medium-term Forex trading, and a long-term one, according to statistics, brings much more profit. And do not forget that frequent and minor losses in the amount can lead to a big minus. Undoubtedly, this strategy works, but it must be followed “wisely” and carefully.
“Night Forex”
If you prefer a more calm, unhurried trading, you can pay attention to such a method as “night Forex”. For example, if you trade overnight, you will find the market almost completely calm. At this time, almost all major players (the USA and Europe) are “sleeping”, only Japan is “awake”. Therefore, strong fluctuations in price occur only for pairs with the yen. The rest of the currencies have little volatility during this period of time. Thus, the rates change slowly, which makes it possible to make good money on “quick deals”. “Night Forex” is good for piping, and here you can successfully work in a flat.
Forex news trading
It is clear that many factors affect exchange rates: from the economic situation in the country and various fundamental indicators (GDP, inflation, unemployment, etc.) to statements from top officials of the state, natural disasters, etc. And if you master the art of understanding what consequences this or that news can lead to, then trading on the Forex news may well become the key to your success and bring good and constant income.
Forex trading software
In order for your trading on Forex to be successful, you need to be prompt, that is, know the quotes for currency pairs, keep abreast of the latest market news, analyze them and conclude relevant and profitable deals on time. It is clear that it is almost impossible to do all this on your own, therefore most traders use mechanical trading systems, that is, special computer programs for trading on Forex, which allow them to conduct transactions, analyze incoming market information and give a signal to action. These programs are called “trading platforms” or “trading terminals”. They are applications for a computer or smartphone and, as a rule, have a set of tools for technical analysis, e-mail, display news from a dealing center, and much more. There are a great variety of similar programs for trading on “Forex”, they can be easily found and downloaded on the net. Almost all of them are created according to the same principle, therefore, having mastered the functionality of one of them, you can freely work with others. The most popular software for trading in Forex at the moment is Meta Trader 4.
All of these products are designed to simplify the trading process but don’t think that they will make the right decisions for you. A mechanical trading system needs constant monitoring and tracking of its performance parameters. Remember that mechanical trading systems help in the work of the trader, but do not work for him. Thus, most traders use several mechanical trading systems at once in order to achieve the best combination of technical, fundamental, and computer analysis in their work.
Forex trading is deceptively associated with an easy way to make money. It takes a lot of effort to become a professional trader – it’s hard work that requires serious preparation.
