If you are serious about learning how to trade currencies you have come to the right place. I am going to give you a brief primer on how to make small but consistant gains in the volitile currency markets.
- The first thing you need to learn is how to identify the evil twins greed and impatience. Once you identify these twins you must become intimately familiar with them. You must master these evil twins before you risk ANY of your hard earned money. If you do not have mastery of both greed and impatience, then you will LOSE your money. I speak from experience.
- Master ONE (1) currency pair. Thats right, only look at a single currency pair and master the nuances and quirks of this pair. Each pair has tendencies and certain patterns that they will display at certain times. You must put in the screen time and be willing to know how each pair behaves under varrying market conditions. I would strongly suggest that you start with EURUSD, but as long as you start with just one pair you should be alright.
- Pick a timeframe/style and stick with it! If you are going to scalp, pick a lower timeframe and master the short term trends. If you are going to swing trade, pick a relative timeframe and stick with it. DO NOT have multiple timeframes open at the same time. Pick one and stick with it! Be a specialist! You are going to war with other specialist and if you try to be a well rounded soldier you will die! Are you an swordsman who is good at hand to hand combat or are you an archer who picks off the opposition from a distance? Don’t try to be both. A seasoned swordsman will always beat an average swordsman who is also an average archer. Likewise an archer never wants to come face to face with a swordsman - thats not his game.
In reality. Some people will be able to take the three steps above and become master traders… if you are willing to put in the time. Others will need to add visual tools to help guide the way. There are many ways to profit in the markets and there is no right or wrong way, however, I belive the three steps above are the foundation to any technique.