Top Five Ways to Be a Successful FOREX Trader

Currency trading is no rocket science. With a few tips in place and an approach laced with patience and discipline is all that it takes to be a successful currency trader.

FOREX trading or currency trading has been the cause of huge losses for many inexperienced traders. Like any new market, currency trading also has a steep learning curve and the key lies in learning from the past mistakes as quickly as possible.

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Start with a plan

The foremost step is to analyze one’s own risk tolerance and the right amount of capital investment that can be allotted for trading. The currencies to be dealt with, the time frame of the trade including the trial and error period must be determined. Attach realistic expectations to the trade plan and include an exit strategy. An ideal currency trading plan must include all of these details. Failing to start the trade with such discipline is the major reason behind the failure of most traders.

Choose a suitable currency trading strategy

Currency traders use a number of techniques like the Fibonacci Indicator technique, ADX strategy or the Candlestick Charts FOREX trading strategy based on their level of experience. In general, a trading career must start with the right approach which is either based on the technical use of currency charts or a deep understanding of the market direction based on current events. A good trader masters the various techniques and applies them based on the demands of a situation.

Do not enter a trade if triggered by a news release

Certain news from the economic world like important speeches of political leaders or interest rate declaration may reflect instantly in the market. For instance, the G7 summit which was held in Germany during June 2015 brought a lot of unpredictable changes in the Euro market. Remember that news based changes in the FOREX market are not for the long term and will soon retrace back to pre-existing conditions.

Learn to spot a reversal trade

The most significant difference between a successful and a not-so-successful currency trader is his ability to spot a reversal trend. A reversal trend basically occurs when the number of buyers increases in the market and the selling pressure decreases simultaneously. Failing to spot a reversal currency trend or holding onto

a failing trend for too long may result in severe loss and can be extremely destructive if the trader has failed to set the protective stops.

Take notes, keep track

Maintain a record of the various positions taken in the trade, the reason behind the move, the outcomes and the strategy that lead to it. Mistakes are common but learning to not repeat them over and over again is the secret to success in currency trading.

While watching calls in the currency segment of India's Biggest Advisory Championship, remember that currency trading involves a very high level of risk and any individual must never invest more than he can afford to lose. Experts recommend reading relevant educational resources to acquire the latest and the best knowledge to handle this volatile market.

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If you want to read more about Pro Advisory Championship, the author of this article recommends Advisorymandi.com.