Thursday, August 21, 2008

Getting Started Forex

Step 1. Learn to forecast which way a market is expected to trend.

It is up to you what to choose: Fundamental Analysis, Technical Analysis, Elliot Wave theory, Candlesticks, Tomas Demark Theory, Chaos Theory or any other. Whatever you choose try to get as much experience as possible and never stop studying.

Step 2. Develop and test your trading strategy.

As with all trading, timing is critical. Sometimes it is not enough to know which trend prevails in the market. You need to learn how to determine the moment when it is more profitable to open/close a position because the difference in a few minutes can mean the difference between being a winner or a loser.

Step 3. Develop and test your risk management rules.

Follow your rules of risk management and know exactly how much you are ready to commit to the trade. If you do apply risk management rules correctly this could help you to increase your profit and at the same time to limit your losses.

Step 4. Be less emotional.

Try to make rational not emotional decisions. If you follow your emotions you are more inclined to make wrong and therefore unprofitable decisions. Make your trading plans before you open positions. Decide on your objectives, entry and exit points.

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