Top 10 Keys to Forex Success

This article is courtesy of eToro Education Center.

 Success in the Forex market is a dream of every trader. This is not something that just falls into a traders lap overnight but rather something that needs to be worked at. There are different facets to trading currency successfully and it is only through dedication, commitment and practice that a trader can hope to achieve that state.

Here are top ten key facets that require your attention if you want to be a success in the Forex market:

 1. Learn about the Forex trade A Forex trader entering the market will be baffled if he has not familiarized himself with the finer details of trading currency online. There are many different sources for gathering information about currency trading. Most of these are available online and can be accessed easily. Learning how to trade, when to enter the market, how long to hold on to the trade and when to exit are the most important areas.

 2. Get a good Forex broker This is important for every trader as it is the broker that will be guiding you through every step of the way. Reliability is one trait that he or the organization should posses as your success or failure will depend on it. It is best to do a background check on the proposed Forex broker before you entrust him with your money. Talk to different brokers before deciding on one an find out all the facilities and services offered by the broker.

 3. Plan your trading strategy Having a plan before trading is one of the best ways to ensure a clear path to profits. This can be done by using the many tools that are available to traders and then formulating your plan. It is also imperative that you keep to your plan rather than just ‘winging it’. Market analysis will help to formulate the trading plan and then it will be easy to execute it.

 4. Take note of signaling software This is one of the tools that can be used in trading currency online. You can choose from the many thousands of forex software packages that are there for Forex trading. Researching will allow you to find the software that is best suited for your style of trading. You can try these out on trial runs before deciding on one. Choose the one that gives the most suitable trading signals for the type of trading you hope to do.

 5. Learn with a demo account Using a demo account to learn the finer points of trading Forex will help you in the long run. This is an ideal way to test your theories and find out the exact way that the Forex market works without having to worry about potential losses. It is also ideal for building confidence in the trader.

 6. Practice with a mini account A mini account is an ideal way to practice live trading with real currencies. These are accounts with small deposits that allow traders to fine tune their trading strategies. It is only through constant practice that you will gain experience as a trader and this is the best way to do it.

 7. Read the news The news is made up of all events that take place in the world and is of importance to Forex traders as news can impact currency pair prices. For instance, even natural disasters or the breakout of war in a region can impact the currency of that country or currencies of that region. This may not be that important for short term transactions as the impact will be minimal. Long term trading tends to reflect the events that take place in that region.

 8. Try out your trading theories You should take every opportunity that you can to try out different trading theories as well as styles in order to find out the niche that you are most comfortable with. First of all you can start trading with a small amount of capital as this will limit the losses. When you gain confidence and experience over time you will be a better trader in the Forex market.


9. Heed advice It is invaluable to have a friend or advisor when you are trading currency. A second opinion is always helpful in the Forex market. Another way to get help is from forums where you are able to exchange views with other traders.

 10. Diversify your profits

 When you become successful in trading currency and is on the lookout for avenues of reinvestment it is better to diversify and invest in other markets as well. This will ensure that you survive over time and then you will be able to keep trading currencies for a long time to come.

Top 10 Safe Fx Trading Habits

This article is courtesy of eToro.

 Helping traders understand the top 10 safe fx trading habits. Safe fx trading habits are those habits a trader needs to imbibe in order to avoid giving away pips and money frivolously when trading currencies.

 The Top 10 Safe Fx Trading Habits

 1) Controlling Greed A major part of the problems of forex traders is how to suppress this dangerous emotion. Many forex losses are as a result of greed, which manifests in various ways.
 - Trying to manufacture trading conditions that do not exist.
 - Gambling on trades.
 - Trying to push profit targets beyond psychological and technical points of support and resistance.
 - Not knowing when to cut off obvious losing trades. Believe it or not, any trader who does the opposite of what has been listed above will save a lot of pips.

 2) Avoiding Overtrading Overtrading occurs when the trader tries to take too many trades in one day, or opens too many positions than he can control. A common occurrence of this phenomenon usually takes place soon after a losing trade in an attempt to recoup what has been lost. Traders who engage in this practice forget that there will always be better opportunities to recoup those losses on other trading days. Overtrading is bad and avoiding it will prevent many losing occasions.

 3) Trading with Low Risk and Appropriate Leverage It is generally agreed that the only way not to have your account battered by a potentially devastating loss is to use very low risk which should not exceed 3 - 5% of account size, and using a leverage of not more than 1:100. It is easier for an account to recover from a 5% loss than from a 20% or a 30% loss (which is the result of using too much capital exposure in an effort to maximize gains). It is very common to see many retail traders using up to 30% of their account size in a single trade in the hope of making a big hit. This is wrong and invariably leads to margin calls. Prevent this by using low risk and appropriate leverage.

 4) Trading with High Speed Internet Connection I am sure many reading this will ask why this should be a point of note. The speed of your internet connection will determine if your chart and currency quote data will come in real time, or experience a delay. In forex trading, timing is everything and a delay in the data can make the difference between a winning trade and a losing one.

 5) Trading Only at Specific Times Many traders erroneously think that 24-hour nature of the forex market is an all-day trading ticket. This is not the case. The market is only active at specific times (usually when there is an overlap between two trading zones), and those times represent the best opportunity to make money in the market. Trading should only be done at those times.

 6) Use Regulated Forex Brokers Make sure you use brokers whose activities come under strict supervision by the relevant regulatory bodies. This will ensure that your money is protected and all complaints regarding trades will be handled transparently. There are many scam brokers out there; protect yourself.

 7) Closing all Open Trades Prior to a High Impact News Release The news moves the market. There is no way of telling beforehand exactly how a particular news release will affect the market. I have personally seen good trades with unrealized profits reversed in an instant by a news release. One good example is the recent minimum currency peg of the Swiss National Bank that basically reversed all long trades on the CHF (which traders have always bought as a safe haven currency).

The EURCHF reversed by 1000 pips in 15 minutes (a very big move in forex). Always play safe by making sure you are not in the market when a high-impact news item is about to hit the newswires. Other safe fx trading habits are: 8) Consulting forex websites for market insight.

 9) Consulting the forex economic calendar to note times of news trades.

 10) Joining forex trading online forums to gain knowledge about various aspects of forex trading.

Get the Right Forex Training You Need to Trade Well

This article is courtesy of eToro Education Center.

Trading currencies is a balancing act as any other activity in a financial market. In order to be a successful currency trader you have to be able to train yourself in the art of trading Forex. The opportunities that are offered for the training of currency traders is numerous and range from the extremely useful to the absurd.

The first step here is to understand your requirements and find what kind of training you need. This of course, will depend on the type of Forex trading system you hope to do. Once you learn about the different types and styles of trading you can go with the style that is most suitable to your trading goals and your character in general. For example, a person who has a low tolerance level of handling pressure should not go in for day trading. This can be too much and a better style would be longer term trading.

Most of the Forex brokers offer ample opportunities to practice trading prior to trading in real time and with actual money. They offer demo accounts which carry as much as $50,000 in virtual currency to practice with. Everything else is real about these accounts other than the virtual money. This way you can train yourself to deal with the signals that are available to you, learn to read the charts in technical analysis and gather information from indicators in fundamental analysis. You also have to be mindful of entry and exit points as these often serve to trip up traders who do not pay enough attention.


Once you have mastered the practice accounts you can start off with a micro account and trade a small amount of money. This will give you an insight as to trading with real currency. Trading with real currency will bring on a level of anxiety that was hitherto absent when trading with virtual currency.

When you master the art of trading with the micro account you can move onto a mini account which is also designed to keep things simple and within a manageable level financially. With this type of account you can try out different strategies and styles of trading to find your comfort zone. Once you know what you want you can trade confidently.

The basic principle of trading Forex is that at the end of a given period you should have more winning transactions than losing ones. Right training in the art of trading currencies will enable you to become a successful Forex trader. This process is an ongoing one as we tend to learn wit each day of trading. If you want to keep trading it is best to keep track of your trading activities so that you are able to refer to these any time you require.

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