5 Things Do To Before You Start Forex Trading
How to understand the market before you start Forex trading and what you need to know to trade successfully.
Do you need to know much before starting your trading for the day? Can you just trade the price action without knowing whats happening ‘out there’? Well I would recommend doing the 5 things below before you start.
1. Check all economic data. You don’t want to be caught out in an open trade if a major news event is scheduled which you don’t know about. Take a look at www.fxstreet.com as the data is updated almost immediately and will send you an alert as the results come in.
2. Check to see which currency pairs correlate with each other. This means you can watch certain pairs as they move – either in the same direction or in opposite directions. If you are short on one pair you may be able to trade a long position on its opposite pair. Check out www.tradeforexfromhome.com for a great correlation chart.
3. Decide in which direction the trend is moving. Pull out to the larger time frames to understand the general direction. This is because if the direction is generally South, then a move North might just be a short-term correction before the price continues down. If you are looking for a good move, then perhaps a move North will only be short-lived.
4. Make sure you have Pivot Points, Spuurt, Resistance levels added to your charts. To a certain extent you can add a setting to MetaTrader but if not then I would recommend www.actionforex.com This means you can anticipate potential stalling points as the market moves. Fibonacci, Elliott Wave etc are all good ways of anticipating market moves, pullbacks and reversals.
5. Read reports of general market sentiment so you can better understand market moves. Sign up to a few newsletters and read them before you start trading. Don’t take them literally but it will give you a good sense of potential areas of support/resistance which may help you make better trading decisions.
I guess the above is there so you can arm yourself with a general over view of the market without getting yourself involved with too much information. If you find out that general opinion is that the EURUSD has strong support at 1.3550 then if the price stalls around this area, you will know why!
For more of the same tips, advice, strategies etc head over to www.tradeforexfromhome.com
To Your Success!
Best wishes
Annabel
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