Foreign exchange, forex or just FX are all terms used to describle the trading of the world's many currencies. The main centers for trading are Sydney,Tokyo, London, Frankfurt and New York. This world wide distribution of trading centers means that the forex market is a 24hours market.
A currency trade is the simultaneous buying of one currency and selling of another. The most important forex market is the spot market as it has the largest volume. It is called spot market because trades are settled immediately or on the spot. In practice this means two banking days.
GENERAL TRADING GUIDELINES
1. Plan your trade and trade your plan
2. The trend is your friend, do not buck the trade. When the market is bullish, go long. On the reverse, if the market is bearish you go short.
3. Do not trade for the sake of trading.
4. Do not over trade. If you have too many positions you tend to be out of control and make emotional decisions when there is a change in market.
5. When you are in doubt, stay out. Sometimes, doing nothing is the best.
6. Focus on capital preservation. This is the most important step you must take when you deal with your trading capital. Do not trade more than 10% of your deposit in a single trade.
7. Know when to cut loss. If a trade goes against you, sell it and let go. Do not hold on to a bad trade hoping that the price will go better.
8. Take profit when the trade is good. You can take the profit all at once or in stages.
9. Be emotionless. Two biggest emotions in trading are greed and fear. Do not let greed and fear influence your trade.
10. Keep a trading journal. When you buy or sell a market instrument, write down the reason while and your feelings at that time. Analyse and write down the mistakes you've made, as well as things that you've done right. By referring to your journal, you learn from your mistakes. Improve on your mistakes, keep learning and keep improving.
11. Do not trade on tips from other people. Be an informed trader.
MONEY MANAGEMENT
The most important part of investing, is money management. It involves determining how much of your overall portfolio you are willing to put at risk in any trade. Proper management can be the difference between a successful account and unsuccessful account that you are able to manage far into the future.
The investors who enjoy the greatest amount of success in their trading are those who have established clearly defined rules that govern their trading. This rule helps them avoid the money management pitfalls and keep their emotions under control.
Here are three money management rules:
a). Live to trade another day.
b). Know what you are willing to risk.
c). Know how to determine trade size.
Open a trading account today and start making money trading forex.
Just visit the following links to open an account:
1. www.agea.com/?gid=53541
2. www.instaforex.com/en/index.php?x=LGYM
GOOD LUCK! GOOD LUCK!! GOOD LUCK!!!
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