Forex trading made simple.
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Over past Ten years trading the forex has become accessible to everyone; this is mostly down to the net enabling trading companies to supply forex data feeds right to anyone with a web connection. Now the little guys can get some of the same opportunities that hedge fund managers, bankers and floor traders have had […]
If you are serious about becoming financially safe by day trading the forex you should take a moment and create a trading plan. A trading plan could possibly be the different between success and failure, it’s going to help keep you focus while you are trading, assist you in controlling your emotions when trades don’t go as planned and will give you targets and goals to aim for. What is a trading plan? A trading plan is a summary of how you will trade the forex. The type of details it needs to include is what type of indicators you are going to use, what are the situations for you opening a trade, how are you going to identify where your stop-loss is to be placed, your starting stake and bank, profit targets, what time scales you are going to trade and so on. You’ll want to review of your trading plan until you are satisfied with it, then you should test drive it for a couple of weeks to determine how it measures up against the forex. Then and only then can you think about using your trading plan to trade with really money.
When you initially begin trading it is recommended you focus on one currency to build up your confidence, then when you are comfortable with trading and your trading plan begin raising the amount of currencies you focus on. Personally I would say to focus on at most Three currencies at a time, anymore than that you will be looking at information overload and having to look after several open positions at the same time, trust me I been trading for 7 years and I would find that hard. When selecting your currencies to trade be mindful of trading pair opposites? A trading pair opposite is 2 pairs that will always move the opposite of each other; an example is the GBP/USD and USD/CHF. Instead of trading both merely increase your stake size in one will provide you with exactly the same results with a lot less stress.
When you’re putting together your trading plan one of the most important decisions to make is at what periods will you trade the forex. This will depend on the trading style you’re planning to adopt, were in the world you reside and just how much you want to make forex trading a success.
The forex market operates for 24 hours per day from Monday morning to Friday evening and is divided into 4 trading periods. You have the London session which is 8am to 4pm (Times in GMT), the New York session which is 1pm to 9pm, the Sydney period which is 10pm to 6am and final the Tokyo period which is 12pm to 8am.
So which is the better to trade? When choosing this you need to reach an equilibrium between when the markets have high liquidity and at a good time for you to trade. Among the best times to trade are at the start of the London period so between 7am to 11am and the cross over time of the London and New York session at 1pm to 5pm.
These periods are ideal for me as I live in England but on the west coast of The United States that’s 11pm to 3am and 5am to 9am which is not so great. Keep in mind at the end of the day it boils down to can you live around the trading hours you select? Only you can answer that.
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