By Mark Stoker
If you want to make money from Forex trading then just like any other activity you will need to spend time learning how to do things the right way. Although you can make a lot of money from Forex trading, if you don't approach it with the right frame of mind then you won't get the success that is possible by following a few simple rules.
There are a lot of different factors that can contribute to your success or failure as a Forex trader. In this article i will suggest a few of the things you need to consider before placing your first trade - think about these factors first and you will save yourself a lot of grief in the long run.
Are you a fundamental or technical trader? These are the two main types of approaches that Forex traders take when considering whether to place a trade or not
Fundamental traders rely on the study of macro-economic data such as as a country's interest rate decisions, gross domestic product estimates, consumer price indices, trade performance etc in order to arrive at their trading decisions. However, whilst fundamental factors are helpful in understanding the very long-term movement of Forex markets they are not very useful in making short-term trading plans.
For this reason the majority of Forex traders rely on some form of technical analysis in judging when to trade the markets. As a result there are a huge number of trading products that rely exclusively on technical analysis to derive their Forex signals. Naturally some of these Forex systems are better than others and beginners Forex trading should consider the following factors in assessing whether a system is going to make money on a consistent basis.
1. Does it follow the trend?
2. Does it have clear setup and entry criteria?
3. Does it make use of protective stops?
4. Does it include specific money management rules?
In addition to these factors, if you want to make money from Forex markets then not only do you need a reliable system but you also need to work on your discipline and psychology. No decent Forex trading course is complete without a discussion of trading psychology and the important role that discipline plays in successful Forex trading.
Maintaining your discipline in Forex trading is vitally important, in fact if you can't maintain your discipline then even the best system in the world will not work for you. Trading discipline involves sticking to your trading plan and properly executing your trading system. This means taking every trade that you should take, standing aside when there are no profitable opportunities and and not trying to second guess your system.
Lastly, it's also a good idea to make certain that the creator of the course is qualified to teach you about Forex trading. Make sure that you don't get involved with anyone who suggests that Forex trading is an easy get-rich-quick scheme or something that is too good to be true.
There are a lot of different factors that can contribute to your success or failure as a Forex trader. In this article i will suggest a few of the things you need to consider before placing your first trade - think about these factors first and you will save yourself a lot of grief in the long run.
Are you a fundamental or technical trader? These are the two main types of approaches that Forex traders take when considering whether to place a trade or not
Fundamental traders rely on the study of macro-economic data such as as a country's interest rate decisions, gross domestic product estimates, consumer price indices, trade performance etc in order to arrive at their trading decisions. However, whilst fundamental factors are helpful in understanding the very long-term movement of Forex markets they are not very useful in making short-term trading plans.
For this reason the majority of Forex traders rely on some form of technical analysis in judging when to trade the markets. As a result there are a huge number of trading products that rely exclusively on technical analysis to derive their Forex signals. Naturally some of these Forex systems are better than others and beginners Forex trading should consider the following factors in assessing whether a system is going to make money on a consistent basis.
1. Does it follow the trend?
2. Does it have clear setup and entry criteria?
3. Does it make use of protective stops?
4. Does it include specific money management rules?
In addition to these factors, if you want to make money from Forex markets then not only do you need a reliable system but you also need to work on your discipline and psychology. No decent Forex trading course is complete without a discussion of trading psychology and the important role that discipline plays in successful Forex trading.
Maintaining your discipline in Forex trading is vitally important, in fact if you can't maintain your discipline then even the best system in the world will not work for you. Trading discipline involves sticking to your trading plan and properly executing your trading system. This means taking every trade that you should take, standing aside when there are no profitable opportunities and and not trying to second guess your system.
Lastly, it's also a good idea to make certain that the creator of the course is qualified to teach you about Forex trading. Make sure that you don't get involved with anyone who suggests that Forex trading is an easy get-rich-quick scheme or something that is too good to be true.
Mark Stoker is an experienced trader, who has studied Forex, futures and options markets for 15 years. If you want help to make money from Forex trading then visit http://www.beginnersforex.org for systems advice and a beginners tool kit.
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