Wednesday, January 29, 2020

Online Foreign Exchange Trading

March 1, 2010 by · Leave a Comment 

What is the success secret of expert forex traders?
Ask any of the experienced currency traders and you will most likely get the folling answer. Being systematic is the secret of their success at online foreign exchange trading.

Being Systematic, What does it mean?
Consistency and Focus! Being systematic means, following your currency trading system consistently. Stay focused and do deviate from your system even if you feel tempted to abandon your winning system when you see the price movements. The world of online foreign exchange trading can be highly volatile at times and being consistent is the key to be successful. I would say that is the only way to be successful.

Isn’t it difficult to stay Systematic in a highly volatile market like Forex?
If you are just staring in online forex trading staying consistent might seems hard. However if you have certain things in place before you ever start currency trading in a live account, it is lot easier to be systematic. The first thing that you need is a solid online foreign exchange trading system that is tested and proven.

How do you ensure that a forex trading system is profitable?
First perform back testing and then start trading in a demo account before you go live.
For the back testing you can rely on another trader’s results if you trust them, but testing on demo account must be done by yourself. You need to know how it feels to trade with this particular foreign exchange trading system before you go live.

Before you trade live it is vital to have complete confidence in your system. If there are still any doubts in your mind about it, keep testing in demo account. This is because online foreign exchange traders who go live without being entirely convinced about their trading system tend to start tweaking or changing systems as soon as there are few losing trades. Don’t do this. If you shift from system to system as soon you hit a loss, you will miss the moment when the forex market would have repaid you. Most probably you will try another system that has been doing well recently, only to find you have started using it just when that system is taking a downturn.

While you are testing the FX system in demo mode, you can be drawing up your online foreign exchange trading plan. Risk management is one of the most significant factors here. The risk per trade can vary according to the system and the trader but make sure that you keep it around 1% to 5%, never more than that. If you go for higher risk you are very likely lose the whole funds during one of the unavoidable bad spells that all trading systems go through from time to time.

Your trading plan should also include the level of profit that you are aiming for, stop loss levels on each trade, and of course the trading signals that point out when a trade should be opened. It is essential not to move away from these once you have determined on the system. Bear in mind that profits depend on a system being applied consistently.

Therefore never make decisions based on short term results. Do not take action on impulse either. Write down your trading plan in every detail and have it with you while you trade. This will eliminate your tendency to switch your trading system and help you to stay focused.

If you have trouble being systematic while trading manually, you may try an automated forex trading system, which is also known as a forex robot or EA (expert advisor). Examples of foreign exchange trading software are Forex Black Panther and FAP Turbo (Review). Once you have it set up this system right, the automated forex trading software which does not get affected by human emotions will be 100% consistent in applying your online foreign exchange trading system.

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