Forex basic course
Support tools and software
The right tools or software are part of the basic equipment of a successful trader. The quality of this equipment and its correct Application is often a determining factor in whether you make a profit or a loss in a trade. Many useful tools and addons are in the already integrated into most trading platforms.
Log your activities in a diary
Record your trades in a logbook. This proves to be very useful, especially over a longer period of time. And it saves you from making the same mistake twice.
Basic structure of the logbook:
- Date of trade
- Reason you opened the trade (news, signal, strategy)
- Reason for closing a trade (stop hit or own reasons)
The more activities you have noted, the easier it will be for you to understand why you succeeded or failed. So you can for perfect your strategy more and more in the future. It becomes easier and easier for you to recognize successful strategies and so you can develop your personal patterns for the Forex.
Expected course development
By setting a limit positions can automatically be closed as soon as the expected price target has been reached. If you assume a falling price (short), the trade can be closed by the limit as long as the price moves below the entry price. The other way around is when you expect a rising price and thus go long. Here you can trade with the limit be closed if the current exchange rate is higher than your purchase price. By setting limits one can develop a relatively safe trading strategy without having to constantly monitor the development of the market.
Stop Loss – whow much do you risk ?
With stop-loss orders, you can protect yourself against excessively high losses by determining yourself that an order will be canceled if a certain limit is exceeded loss is closed. With a long order, the trade would be closed automatically when the price falls below a certain level. Vice versa at Short: Here the trade is closed as soon as the price exceeds a mark.
Stopp Loss and Take Profit using correctly
Basically, the stop loss should be closer to the buy price than the take profit order. If you follow this rule, you don't even have to succeed in half of your trades. Exactly how much you use these limits depends on the time period and how risky you are. Just those Stop-loss orders should be chosen far enough away from the original price so that a position is not closed unnecessarily due to small daily fluctuations becomes. Of course, the take profit order should not be placed too far away from the opening price in order to allow realistic profits.
A distinction is made between 2 types of trading or carry out an analysis of the market. These would be the technical and the fundamental analysis. As the name suggests, technical analysis is directed says – exclusively according to technical indicators. The fundamental analysis, on the other hand, is based on political or economic events.
Economic background, political events or other stock market news are the basis of the fundamental analysis. Also ecological factors such as the unemployment figures or the key interest rate play a role. Of course, the weighting of the various factors can vary or be individual. This type of market analysis is therefore somewhat more difficult. Always be prepared for sudden changes.
The basis of technical analysis is simply the chart. By comparing past market trends and Current price movements can often be used to make very reliable forecasts. Careful chart analysis and spotting trends using various Indicators are the tools for technical analysis. Autotrader can also be used excellently due to the technical analysis.
It is important to have a basic understanding of how it all becomes one Course education is coming. As with other markets, the price is determined solely by supply and demand. There is a lot of data on what is happening every day published on the stock exchange. The economic situation and the key interest rate play an important role.
Influence of interest rates
The opinions on how the key interest rates affect the stock market are different. Sometimes even an insignificant change can have a significant impact on the market. Normally, a country's currency is also strengthened by raising interest rates. Since the investor gets a higher interest rate, this also increases volume in the financial markets. For the regular stock market, an increase in key interest rates often has a negative effect. Many investors are shifting their investments from the stock exchange to the financial markets. The impact of a change in key interest rates should always be assessed individually. A change in the key interest rate is Central banks always announced.
The financial liquidity of a country is calculated from how many goods or commodities are exported or imported. Are the imports higher than the exports, it always has a negative effect. For example, when the US imports cars from Japan, the US must pay for them in Japanese yen. This causes the dollar to weaken against the yen. However, if the US exports more than it imports, this strengthens the dollar. A trade deficit but doesn't have to mean anything bad for a country. However, if the deficit exceeds expectations, a negative price development can be assumed.
How does one become a successful trader ?
Before you start trading, you should make a plan where you set your limits. Be sure to stick to your limits. You often open a trade on a gut feeling out and then has to post losses. This is to be avoided by sticking strictly to your previously established plan.
Minimize losses and maximize profits
If you have a take profit limit, you should also wait for the limit to be reached and not close the trade before then. You often sympathize not comfortable in the current position and exits too early. If a course develops differently than expected, one should not wait too long and hope that the market will come back after all, but close the order in good time. Especially at the beginning it can happen that several stop-loss orders take effect and you have to watch how the price develops as expected. Then don't make the decision to stop using stops. stops however, they are there to protect you against excessive losses and should always be used. A first goal should be for a trader, make at least half of their trades profitable. Is 50% enough to make a profit? Yes, the aim of every strategy should always be Minimize losses and maximize profits.
Don't focus on one trade
You should always follow your plan consistently and always assess the market objectively. Opening a trade is often enough that one reacts somewhat biased and hopes the whole market would develop in the expected direction. Clear instructions and warning signals are so often ignored. Don't hold onto a position for too long when the market is going against you and stick to your plan.