Anyone can achieve currency-trading success – you can learn everything about trading currencies by simply investing the time necessary.
Fundamental Analysis
A currency trader who makes trades based upon fundamental analysis, will look at the supply and demand situation relevant to the particular currency studied, and try and predict the impact of such factors as:
. The health of the economy
. Interest rates
. Balance of payments
. Employment
. Trade deficit
. Other factors
Technical Analysis
Technical analysis is the study of a currency, based strictly on using only the price history of the currency.
Technical analysis uses no information about the currencies supply and demand situation - it simply focuses on price action. The secret of currency trading success is using technical analysis to spot them.
Long Term or Short Term Trading
For long term currency-trading success, is it better to be a long-term trader, rather than a short-term trader.
While traders can, and do make money with short-term methods of trading, the fact is, currencies trend longer term and these are the trends that yield the biggest profits.
Choosing a Trading Method
While there are many ways to achieve currency-trading success, all methods have the following salient points in common:
1. Simplicity
Most of the best trading systems are simple. There is no correlation between how complicated a strategy is and how successful it will be.
2. Liquidate Losers Quickly and Run Big Profits:
The basis of any successful trading systems that deals in leveraged products is:
You need to be able to run the big profitable trends and exit losers quickly.
3. Understand your Method
This may sound obvious, but you need to understand your trading method, and the logic behind it, so you can execute it with confidence and discipline.
4. The Importance of Discipline
Currency trading success is rooted in a successful method applied with discipline. This means a trader has a method and follows it. This however is much harder in practice than many traders believe.
The more disciplined you are in trading, the more profits you will make longer term.
You should not underestimate the need for discipline, if you want long-term currency trading success.
Robust trading method + discipline = currency trading success
There are a number of variables involved in longer-term currency trading success and the above are the salient points to keep in mind when deciding how to trade currencies.
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