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The Who, Why, Where, What, When & How of ForEx |
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WHO
Who trades forex? It is important that a trader understands who participates in the markets, why they are successful, and how they can be emulated. The most successful forex traders are those who possess the self-discipline to stringently follow their trading strategies. It is the successful, sophisticated investor who extracts positive returns from the forex markets.
WHY
Why should you trade in forex? While there are superior returns to be found in the market, it is not for all investors. It is important that you understand the risks as well as the benefits of trading before becoming invested in trading. Remember, you can build great deal of wealth in forex, but you can also destroy it as well.
WHERE
Where should you trade? When analyzing dealers, it is important to first understand the services they offer, and then rank their services in order of those that fit your trading style. Don't be tempted to go with the dealer with the best marketing campaign. The successful trader optimizes his returns by making sure he matches his trading style to his dealer.
WHAT
Do you know what you want to trade? This entails picking a currency pair, deciding on what events will trigger your market entry and exit, and your overall money management style. The successful trader systematically builds, tests, and deploys a comprehensive trading plan that generates reliable profit opportunities.
WHEN
When is a good time to trade? Although forex is a 24/7 market not every minute of the day guarantees great trades. The best way to validate a technical indicator is volume. Although there is no volume data available for the forex markets, utilizing trading ranges works fairly well in that regard. Having this data handy allows a trader to use timing to his or her advantage, thereby creating profit opportunities and limiting losses.
HOW
How should you trade? This is perhaps the hardest question of all. Once you understanding the external elements of trading you must come to understand that emotion is the bane of every trader. Emotion causes the trader to act differently following large wins or losses, act irrationally when large moves occur, and apply his trading system inconsistently. Successful forex traders normally trade extremely simple trading systems using conservative, well thought out money management philosophies, and they trade with complete consistency. Only through unfailing self-discipline or the use of an automated system can a trader hope to maximize his profits with a modicum of risk.
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| Symbol |
Rate |
| GBP:CHF |
2.007608 |
| GBP:JPY |
182.222212 |
| GBP:USD |
1.757198 |
| NZD:USD |
0.658397 |
| EUR:CAD |
1.503413 |
| EUR:CHF |
1.557680 |
| EUR:GBP |
0.775889 |
| EUR:JPY |
141.384148 |
| EUR:USD |
1.363390 |
| AUD:JPY |
80.415028 |
| AUD:USD |
0.775455 |
| USD:CAD |
1.102702 |
| USD:CHF |
1.142505 |
| USD:JPY |
103.700427 |
| USD:SEK |
7.185028 |
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History
