4 Steps to Make You an Awesome Forex Trader

 

Here are 4 simple steps to make you an awesome forex trader. Does that sound good? Then let’s get started.

Choose no more than 6 forex pairs to trade :

Brokers offer choice of up to 56 and more forex pairs to trade. That does not mean that you have 56 times more opportunities to trade and make money. In fact, just the opposite occurs. Too much information, tires out your brain. Imagine shopping for a running vest in a store the size of 10 football fields with a thousand rows of vests to choose from. You would probably not have the time or the willpower to view everything. At the end you may be more frustrated by too much choice and end up going to the smaller local sportswear shop to choose a suitable running vest for yourself from a display of six well known brands on offer.

Choose the Time frame you wish to trade :

Forex charts can be viewed from several different time frames. Yearly, Monthly, Daily, 4hour, 1 hour, 15 min, 10 min, 5 min  etc. Pick a time frame that suits you. Stick to your time frame. Different time frames depict different trends. A long term uptrend on a monthly time frame will look completely different to a short term downtrend on a daily time. An uptrend on the 1 hour chart may have a downtrend on the 5 minute chart. Don’t allow yourself to be confused with such things. If you visited a prison and interviewed 6 prisoners with sentences ranging from 6 weeks to 60 years they would all have a totally different outlook and perspective on what the future has in store for their individual futures.

Know the Time Zone you are trading in :   

To know the time zone you are trading in also means you need to know which players will be trading along in the markets. Traders in Asia get to start the trading week while the USA closes out the trading week. Economic news announcements from USA will commence on most days from two hours before the opening of the New York Stock exchange (while European markets are open and Asia markets are closed). All USA economic news is applicable to the USD. Economic calendars will tell you which news announcements are likely to have a  major impact on the currency. Be aware of volatility (fast price movement) once economic news is released, and be even more aware that economic news may reverse the prevailing trend and affect your positions. Read more about the Trappings of Time Zones for new Forex Traders here.

Relax with Risk Management : 

Once you have chosen your forex pair/s, chosen a time frame, and are aware of all the known economic news that can affect your current trade – or your willingness to enter a new trade, that’s it. There is no point being nervous or anxious about it. There is a saying among golfers that states ”Golf is a game that can be played, never won”

You cannot control or influence the way the forex market will move. Playing with the markets for the pips the market provides is all you can do. Don’t let it be a cause of frustration or stress. If you know how to manage your risk and position size in each trade you will be certain to keep stress far away from your trading desk.

If you found this article useful there are more articles on forex trading by visiting www.pipasylum.com

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