Successful Forex Trading – It's Not All About Day Trading

There are many preconceptions about what it actually takes to become a successful trader. However here are a couple of points to consider if you want to become a profitable forex trader.

Firstly you should try and forget about trading short-term / day trading strategies. Many people believe that if they want to make big profits from forex trading, then they need to trade lots of positions every single day. However this couldn't be further from the truth.

Day trading in itself is very difficult. You have to make quick decisions and deal with highly volatile markets, particularly during times when economic data releases are announced. You also have to deal with increased spreads during these busy periods which can seriously deplete your overall profits. You also have to deal with the random noise that occurs when the price isn't trending in one direction or the other, so overall it is far from easy.

A much better strategy is to use much longer time frames such as the 4 hour or daily charts, for instance. In general you will often find that technical analysis is much more reliable when you use these longer time frames.

This is something that is endorsed by many top traders such as Bill Poulos who has actually devised several trading strategies that only use end of day charts. (More details can be found by reading this Forex Profit Accelerator review).

Anyway the point is that although you can make money from day trading, it is so difficult to consistently make money in the long run. Scalping systems will often generate short-term profits but there are very few systems that will continue to be profitable in the long-term. Longer term systems are usually much more dependable and are often much more profitable because each trade usually has much larger profit targets.

How To Win With Forex

Trading in the forex market can be very intimidating. Every good currency trader is always looking for a way to increase profits and reduce risk.

What is your forex trading style consisting of? Do you trade in the forex market on the short term? If the answer is yes, you should be alert to the release of data and how it effects and moves the forex market on an almost daily basis. When you as a forex trader prepare for the upcoming trading day you need to be aware of the possible market moving events that present themselves. Here is an example of a market moving event that presents itself regularly and offers a great opportunity for forex traders to make a nice and quick profit.

CCI - Consumer Confidence Index

On the last Tuesday of each month, the Conference Board covers each individual month's data. The CCI is made up of a survey of five thousand households across the United States. It is well regarded as the most reliable indicator of confidence by consumers.

As consumer confidence is measured this number becomes incredibly meaningful to the forex trader because the Federal Reserve uses this number when considering whether or not to increase and decrease interest rates. Obviously, this has a huge impact on the United States Dollar. This even is a great mover of the market because 2/3 of the United States economy is consumption.

Now that you have one of the many opportunities before you as a trader, the question is what to do with it? The answer fortunately is clear: Get good trading signals from a software company that you can relay on.

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Successful Forex Trading

(by Martin Bottomley)

Forex trading is fast becoming one of the easiest ways to earn large amounts of money on your investment. Then again, it can also be the easiest way to lose all of your money in a short period of time. That is, if you do not know what you are doing. The fact is that even seasoned traders make mistakes and only through the understanding of basic principles and the application of sound strategies can you be assured of earning money in the long run.

One of the most basic things that you have to understand about Forex trading is that there will always be losing streaks along with the winning ones. Having this fact in mind will keep you going during those times that you do not get a good deal. The best way to handle Forex trading is to have a reliable trading system coupled with a rigid money management system.

There are many different strategies employed in Forex trading today. What you should do is either adopt one of them or come up with your own. No matter which path you choose to take, the important thing is that your trading system has been proven or can be proven to be reliable. How would you know that your trading system is reliable?

It is quite simple, really. A reliable trading system is one which gives you more winning trades than losing ones. More than this, your winning trades should be – in general – of greater value than your losing trades. You do not need to be a rocket scientist to figure this one out. More wins with greater value equals profits. No matter how you come up with your trading system, the bottom line is that you get consistent results.

Once you have come up with your trading strategy, try it out first. You can do this by using a demo account before trading live. Using a demo account is advantageous as you will be doing exactly the same thing as live trading – without real money. This way, you can test your strategy and pick out the flaws f there are any.

If, after you have tested your strategy, you are confident that you are getting consistent results, you could go live. Your strategy should not stop there, though. Once you engage in live trading, you must take care to instill strict discipline when it comes to money management. Do not deviate from your strategy once it is put in place. This is perhaps the foremost reason for traders to suddenly lose everything. Always remember that you cannot win all the time and that losses are part of trading. If you have a strategy in place, do not scramble to recoup your losses outside the boundaries of your strategy. The trend is that winning will come soon after your losses.

One rule you should stick to is never trading with more than 2% of your account at risk on a single trade. Whether you win or lose, this percentage is going to get you the long term results that you are aiming for.

Martin Bottomley is a co-founder of Stealth Forex Trading Systems as well as being a full time forex Trader. http://www.stealthforex.com . Article submission service by rcplinks team.

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