to trade forex, it is very easy,all you need forex trading account with money in it and then you enter the foreign exchange market and start trading, to become good forex trader you start from from point of little knowledge to the stage where you have trading plan,understand the concepts and behaviour of the forex market and be able to trade with cool head and understand that wins,losses are part of being forex trader
Steps to be good forex trader:
1-understand your place in forex market
you must understand that you are very small fish in big ocean,in the foreign exchange markets,the majority of liquidity is coming from big banks and experienced traders,these are the big fish,the big fish will happily enjoy you as alittle snack,you are fooling youself if you think it will be easy to take money off these big forex traders
you have to learn to swim alonside these big fish and catch the same currents they do
,swimming agains them just marks you as prey and sooner or later you will be eaten
2-learn to read forex charts and understand the foreign exchange market
many novice forex traders believe that these big forex traders have access to some secret forex trading strategy or use asecret set of indicators but the truth is this is just not the case,these major forex players are using simple technical analysis techniques.
3-money management
you must understand that you as anovice forex trader the emphasis is not on how much you can make from forex trading but on how you manage what you have,this is common downfall of all novice traders,it is common place to see astarting trading risk,the majority of thier account on one or two positions.
4-focus on the market
many novice forex traders open thier forex charting software and activate thier latest hot indicator or tool and proceed to place thier trades as per the tool recommendations, this style of forex trading is unlikely to have much long term success
When these indicators fail to generate the required profits then these traders then move rapidly on to another set of indicators.
You must focus on the forex market and understand what the indicators are telling you so that you can pick the forex trades which have the best probability of being winners.
5-plan your trade and trade your plan
This is a common saying that seems to get lost on novice traders. It should be every trader's goal to make pips on each forex trade as per their trading plan. Forex Traders must treat each trade as a business decision by calculating their risk and defining their entries and exits points, those that do not open themselves to big losses when a trade goes bad.
6-your mind is your strongest asset and weaknest link
Entire books have been dedicated to the subject of psychology and its role in trading. That doesn't mean they are all going to help you, but you should take this as a sign that the subject is not to be ignored.
First you must understand the role psychology plays in trading. You must learn to understand your personality traits and how they might affect your trading style.
Second you must make it your aim to never stop learning. You cannot get yourself to a certain level and then become complacent. Every day is a learning experience in some way or other and you must be prepared to learn lessons and invest time in improving your skills and experience. The day you stop learning is the day you should stop trading.
7-understand the forex market is always right or expect the unexpected
The forex market is an interesting place, but there is one thing every trader needs to learn. Always expect the unexpected and do not get wrapped up in past successes. No matter what your charts or indicators tell you; sometimes the forex market will just do the opposite.
Whatever happens in the market you must maintain an objective outlook on your strategy and the forex market and ensure that bubbles and crashes do not derail you in the long term.
article source:EZINE ARTIClES
