Prerequisites for Forex trading:
- Time, patience and practice
- Don’t come with money but a well practiced strategy
- Practice trading at least for a day in demo account of any of forex trader that you plan to start with
Trading Forex:
- Setup the currency pair graph with all your strategy settings (like indicators, labels, time periods, etc,.)
- Once you find a suitable signal best matching your strategy, place an entry order
- Set the Stop Loss and Take Profit values as per your strategy
- Strictly stick to your strategy and don’t get altered with the prices movements
Do not’s of Forex trading:
- Don’t switch from your strategy
- Don’t miss on setting Stop Loss
- Don’t expect all trades to succeed
- Don’t be too greedy, a simple 1:2 risk to reward ratio is very good
- Don’t risk too much even when you are working on a long term trades
- Don’t carry your negative trades but your positive one’s if your are very sure of the trend and your strategy suggests it
- Don’t move away while you handle short term trades
0 thoughts on “Trading Forex”
Hi,
Nice article.
Wanted to know what do you mean by the risk reward ratio? are you an active trader? what is your strategy? care to share the details?
Risk to Reward Ratio is the proportion between the amount you are risking for an anticipated return.
If I say risk to reward ratio is 1:2 for my $100 with plan to make $30 profit. It dictates that I am good to close my trade at loosing $15 and also at making profit $30.
Trade value: = $100
Stop Loss : Trade Value – Risk Value = $100 – $15 = $85
Take Profit: Trade Value – Reward Value = $100 + $30 = $130
Thanks.
Are you also into trading actively? do you follow any strategy?
I am a seasonal trader but actively follow the market. My strategy is to “do it simple” using Avg/Expo moving averages and trend lines.
Ok.
Which broker do you follow on? and what is your suggestion?
…there are lot many brokers out there and choosing one depends on one’s trading requirements. The factors like work hours/time-zone, offline/online trading platforms availability, lot sizes, brokerage charges and penalties, etc.,
Cool.. I was guessing by which you must have used many now and I was wondering which one particularly do you use and you suggest to use? by the way, whats your percentage gain so far?
looking at your blog, its a mix of all things you seem to be knowing, and I am amazed at such different and varied things you have posted ranging from technology, system administration, and then financial related topics.. what do you do actually? 🙂
I usually use 10-20-50-200 4-points moving averages indicator formula.
– 10 points (Exponential Weighted Moving Average – EMA),
– 20 points (Simple Moving Average – MVA)
– 50 points (Simple Moving Average – MVA)
– 200 points (Simple Moving Average – MVA)
So far it worked fine, formula doesn’t work on all days you need to be choosy and punctual in applying this. But it’s a quite easier one for a beginner. You can expect an average up to +$700 a day with few (say #10) standard lots using this strategy on a day with strong signals.
If you are a newbie, I suggest to take some time and explore all other strategies around. All strategies work, you just need to figure out which one is most comfortable to your thinking/attitude/calculations.
Well, MyFacebook says I am a learner!!!
All the best for your trading/learning.