1. Focus on one or two currency pairs
first, focus on only one or two currency pairs. When you are new to the forex market, is the temptation to see opportunities in each pair, even those not familiar with.
The first time it started trading, I have tried some of the more unusual currencies like the nzd, aud and cad. I knew nothing about the coins, so I found myself watching the news events of a dozen countries, the analysis of all types of graphics, and lost my shirt in new and exotic. I got in after operations was over and was hit by the news events that never heard of. I managed my money very badly. In short, my concentration, capital, and time is too long.
Now I see only one pair at a time, and are usually overlapping pairs such as euro / yen and euro / dollar. I see development operations much earlier, and i'm better prepared to take advantage of them, and their management once i'm in business.
As a beginner in forex, I think you should stick to one or two currency pairs. What? I advise you to go with the other currencies that forex traders have changed beginning with great success.
2. Choose a currency pair is a winner
a couple of years, I have reviewed the success rates of 18 pairs with significant, and these were the most - and least - successful for operators fxcm forex mini.
Let's look at the worst first. The seven deadly pairs all have one thing in common: high volatility. This means that opportunities to make big profits - but also big losses. One of the seven deadlier, the pound-yen coin is actually the fourth place among traders mini. Volatility has been very - and its popularity as the carry trade - makes it very tempting. But it can be brutal.
In the last three years, has moved as much as 1,000 pips in one day on several occasions. The bet right that he realized a large profit. Those who bet wrong probably received a margin call. Focus of the seven deadly pairs with extreme caution and only after you've learned with other pairs moving slower.
Now, for the currency pairs friendly five. Notice that they are almost all pairs of euros. They also have one thing in common, with the exception of gbp / aud - low volatility. But what do you start? The gbp / aud has shown good results, but still do not recommend you start with. It is not heavily traded, is not known very well, and has fairly wide spreads. In fact, it seems to be the preservation of our customers better and more experienced - probably the reason why it has shown good results.
The remaining four pairs are known and, except for the eur / jpy, tend to be well wide of wheels.
Since these couples have had strong support and resistance lines, which tend to create a lot of, high probability low risk operations. And they are very liquid, have narrow bid / ask spreads, so inexpensive to trade, with margins of only 1 or 2 pips. As always in the forex market, you need to properly manage risk, and that is never a guarantee that benefits will be.
3. It's your choice what to trade
of course, you might have a good reason to trade a currency pair's friendly rather than five. For example, when I started trading forex, I went with the usd / jpy.
Why? Just because I had lived in japan for two years. I followed a lot of japanese news and became familiar with key economic indicators and events. So I thought I had a good start in understanding the yen pairs.
As the yen began trading, I met some of the patterns of the price. It was first formed by the patterns of currency trading, the most important factor in the movements of most of yen in the decade before the financial crisis. Speculators around the world had been the carry trade for years, borrowing low-interest yen to buy dollars in high interest rate in australia or pounds, and gaining the interest differential. This trade seems to move the yen pairs almost predictable pattern.
You can see the gradual increase, as speculators buy time and create jobs, earning large amounts of interest. Then thud speculators got scared at the same time and cash, and the price falls off a cliff. I have to be familiar with this pattern, as well as events that can bring down prices.
All that changed with the beginning of the financial crisis in 2007. Since then, I learned new patterns of risk aversion in the yen. Since I see the same coin all the time, I am familiar with their characteristics, even as they change over the years.
4. Forex trading research is vital
that everything I learned by looking at the price lists and trade in reality. But the experience of trade very far. To improve my business I needed to know much more about the behavior of the yen and the japanese economy. The importance of sales reports for japanese convenience stores, for example. Or how during my hours of the night when it's daytime in tokyo, an unusually large amount of volume comes from individual forex traders in japan, and they tend to be sellers of yen.
To really learn forex started researching seriously the couples that I wanted to trade. It was time well spent. And it was free. There are several sites online currency information, and although it might hurt, I recommend our free research site fxcm - dailyfx.Com, not only because it is comprehensive, but because it provides clear guidelines for trading currencies.
When using dailyfx, discovers not only a bargaining chip in any currency, but when a particular economic event happens, how important it is and the expected result.
5. No trade in the news
this brings me to a vital point which seems to contradict what I say. You should monitor media events. And analyze news events. But you should not enter into media events - especially ones that sound on the market, such as gdp and employment news.
The fact is that during the events of news, currency trading can be as capricious as rolling the dice. In the period prior to the event or the release of foreign exchange analysts have published estimates of the results or the number. If the estimates prove to be absolutely incorrect, traders often took by surprise the market panic and take an unpredictable direction - or no address at all, "whipsawing" up and down, hitting right and left traders with large losses.
Instead, wait until the market has settled a bit before choosing a store. In this way, you will be with the big traders and responsible. Wait for the chaos to fall before risking your money, and it should.
Another reason to avoid currency trading during news events is that liquidity often dries and spreads widen, which means that to enter and exit trades can be very difficult. It is much better than expected because of liquidity and yield spreads very quickly re-tightened after the event.
6. Trade in small lots
my final tip for today. Realize that going to make bad trades, and plan accordingly. Trade is a constant learning and want to ensure that his early education as cheaply as possible. So the small business and maintain its influence has been small until the hang of it. Then make larger operations. A forex account offers 1. 000 units "micro" lot is a good way to start.
7. Ready for forex trading account, get started?
The best way to start trading is to open a micro account. It allows you to start with as little as $ 25. 00 - and when you open an account with fxcm, you get a free interactive course takes you through the basics of forex trading, step by step.
8. Summary:
start with only 1 or 2 pairs, up to the good
choose good, low volatility, low dispersion pairs to begin
be sure to choose a partner who is comfortable
do a lot of research to learn from their par
do not trade during news events
start small
trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. Any opinions, news, research, analysis, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. Dailyfx will not accept any responsibility for any loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
