A Beginners Guide To Trade Currencies Like A Professional
With many people over the last few years having money just sitting in the bank earning next to nothing due to the very lower interest rates that the banks now offer, some have taken up trading on the currency markets. Once only the home of the big investors and governments, people can now get involved themselves for as little as $50 with some brokers. Now that amount is not something that is going to make you rich, but you need to start low and work your way up. Making money from trading the Forex markets can be as difficult as you make it.
When you do some research into trading on the Forex markets you have probably come across numerous pictures that show the currency pair moving up and down, and then it is probably covered in lines, and underneath is a number of graphs. Well unless you understand all of them and how they work, switch them off. Do not fill your trading screen up with all kinds just to try and make it look good. The best advice a professional trader will give a beginner is to setup the screen to show one currency pair that is trending, shown in candlestick mode, with nothing else on the trading screen.
This means that you are setup to just watch the way the currency pair behaves, and this will give you a feel for the way the markets move. If you are a beginner, then you should not be looking to be doing any scalping (very short term trades), so your timeline should be at least 1 hour, but preferably 4. This is to teach you to be patient, if you are watching shorter timelines and a market looks like it is going against you, then you are likely to bail out at a loss. Whereas people who have patience will have no interest when the market turns against them, as when they look at the screen after an hour it has recovered in their favor.
You may have to spend a long time staring at the market, but once you have entered a trade, walk away and do something else. You have either set a stop loss as a value, or you may time your trades, and bail out after a set time. It is recommend you use a set value though.
Some people prefer to set a trade and leave it for a day before they decide to take action on it, and if you really want to go for the long term then you would be looking at being in the marker for weeks. If you do that and get it right then it can really pay off big time. Whatever timeline you decide to start with though, stick with it, if you keep changing it then you will not get the feel for any of them. When you see a professional trader on TV, you will not see them flicking through various screens and constantly changing settings.