In order to succeed in forex market, one can follow certain strategies like technical analysis, fundamental and economic analysis, combination of these two, different currency pair relationships etc.
Other more advanced techniques are SAR, CCI, Stochastics, MACD, Liner Regression, Bollinger Bands etc.
One should not be scared of the terminology involved. One should follow a strategy which one can understand and follow well.
The two most important strategies of technical and fundamental analysis are also used in stock markets. It may be advisable to use both of them while some people may use either one.
Fundamental analysis covers economic and financial factors like GDP, inflation, employment figures, devaluation, trade statistics, capital movements etc. In technical analysis one takes help of charts, graphs, bars, trends etc.
Whatever the strategy one adopts, one should learn to be a disciplined trader. For this, one should consider the following:
Always use stop losses of some kind
Dont use all of your balances, but keep some separately available for special situations.
Start with small lot sizes
Always have a win / loss limit
Adjust margin according to market conditions
Always get new training and education
Some people also use intra day strategy. With this, one can use multiple time frames for analysis like one minute, 15 minutes. 30 minutes and 60 minutes frames.
One noteworthy element of forex trading is risk management. This consists of stop losses and trailing stops. One needs to learn how to establish stops, fix initial stops and experiment with trading plans at the margin. One has also to learn trailing, breakeven and time stops.
Risk management seems to have become easier with more flexibility in forex trading rules. There is full transparency now in this, better ability to put bids and offers within narrow spreads and less cost per ticket. Some forex trading platforms automatically close all positions if an account declines 60%. This provides some added safety.
FX trading like commodity trading is always conducted on margin. The general ratio is 50:1 and can go up to 100:1 in some cases. This means that against every margin of $1000, one can hold a position of up to $50,000. In currency trading what one can lose at the most is just the amount of margin while as the potential for profits is substantial.
For more information and for a Free Online Forex Trading Report, please follow the following link:
http://www.businesses-jobs-careers.com/Forex/ForexSystems.html
The author has background in business, economics and finance. He is presently researching in finding ways to make money and working on the following website and blogs: