Mastering Forex Trading

by : Daniel Spivey

The Forex market is an international arena for millions of buyers and sellers, to sell money in a certain currency, and receive an equivalent amount, in another currency. For example, you can sell Dollars and get the equivalent amount in Euros, based on that day’s trading rates. The forex market is open 24 hours a day. It indirectly determines the value of your money.

There are several Forex trading softwares available on the internet today. They analyze the daily rates and design a ready-to-use strategy, which can be immediately employed. Some of the popular ones are Forex Killer and Forex Autopilot. Do understand one thing before purchasing these softwares. IF these software were indeed returning good profits, the software inventor would not sell it for anything under 2-3 grand. If you are getting any of these for under 500$, it obviously implies that it is a hoax. This is a common mistake that most people commit, when they first start trading. Software is definitely essential, but do not depend on automated predictions, right from the moment you step in. Take time to learn the nuances of Forex trading and once you are settled, you can think about using softwares.

Pivot points are an integral part of the Forex market. Traders use pivot points on and off while trading, to determine support and resistance levels. So what are pivot points? A pivot point is actually a point of rotation. (As you would have already guessed). Pivot points can be calculated based on several charts. The lesser the time frame of the chart, the less accurate the pivot point is. For example, pivot points calculated off hourly charts are inaccurate whereas pivot points calculated on daily charts are less prone to error. Learning to calculate pivot points is essential because it helps you to get tuned to the fluctuations in the daily market.

Forex trading sounds really simple. Doesn’t it? But it is far from simple. Several online websites claim that they have readymade winning strategies. But Forex trading is not just a walk in the park. Here are some tips.

To be a good trader, you must first analyze the risk Vs profit characteristics. If the risk is too high, do not trade, even if the profit is very high. Never gamble your money. That should be embedded in your mind while you trade. Secondly, do some investigation prior to approaching a broker. There are a good amount of fraudulent brokers and it is important not to get duped by them. Lastly, never have any expectations because when it comes to the forex market, where millions of traders worldwide deal in trillions of dollars, you can never really predict the market behavior. So if you have a reasonably fat wallet, a keen eye, no expectations and a whole lot of patience, you might be one of those few who stick it out till the end in the Forex market!