forex info
Before we begin looking at the specifics of the FPS and how it works, let’s look at
4 building blocks that I believe to be foundations to the Forex Profit System.
Foundation #1: Currency Trading is not a Get-Rich-Quick Scheme.
Currency trading is a SKILL that takes TIME to learn. Skilled Traders
can and do make money in this field, however like any other occupation or
career, success doesn’t just happen overnight. Here is a great ‘formula’
for success:
Practice + Patience + Persistence = Profits
As they say, there is no substitute for hard work and diligence. Practice
trading on a demo account and pretend the virtual money is your own real
money. Do not open a live trading account until you are profitable
trading on a demo account. Stick to the plan and you can be
successful.
Foundation #2: I highly recommend that you follow 1 or maybe 2 major currency pairs.
It gets far too complicated to keep tabs on all four. I also recommend that
traders choose one of the majors because the spread is the best and they
are the most liquid. The Euro/USD is the most commonly traded pair and
usually has the best ‘spread’ because of its liquidity. The USD/Swiss Franc is
usually the most volatile and moves the most during the trading week. The
USD/Yen moves a lot on the news out of Japan and normally the Pound
Sterling/USD is more stable in it’s moves than the other three.
Foundation #3: Follow and understand the daily Forex News and Analysis of the
professional currency analysts.
Even though this system is based solely on technical analysis of charts, it is
important to get a birds-eye view of the currency markets and the news that
affects the prices. It is also important that you know and understand what the
key technical ‘support’ and ‘resistance’ levels are in the currency pair that you
want to trade. Support is a predicted level to buy (where currency pair should
move up on the charts), resistance is a predicted level to sell (where the
currency pair should move down on the charts).
Fortunately, all the best Forex news and analysis is offered free on the
Internet. Here is what you should do first:
*While you are reading the daily news and technical analysis, write
down on a piece of paper what direction the analysts are saying
about the major currency pair you are following and the key support
and resistance levels for the day.
A. Go to http://www.forexnews.com/ and you will find 24hr news and analysis on
the spot FX markets. The site will give you the big picture of how the
economic calendar and central banks affect the currency markets. A
great resource.
B. Then go to http://www.fxstreet.com/ and click on the ‘Top Forex Reports’. Here
there is a wonderful listing of all the major daily currency analysis and
forecasts with support and resistance and direction forecasts.
C. Click on http://www.currencypro.com/ and go to ‘Today’s Market Research’ and
there you will find more excellent analysis on the Major Currency pairs.
Another great Forex Portal.
Foundation #4: Learn how to use the technical indicators in this course and
always trade with stop losses!
It is worth your time to be patient and learn how to use the technical
indicators on the charts that you will be reading about shortly.
6 It is important when you are trading Forex, to be disciplined and to stick to
a plan. Don’t just trade your ‘gut’ feeling. Use the technical indicators
outlined and always enter in stop losses on every trade. Remember that
everyone who trades has a different tolerance for losses. Depending on
your risk capital, and strategy, set your stop losses accordingly.
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