Fab Investing Five things every forex trader needs to know

One of the most powerful things a trader can do to improve their trading is by overcoming fear and greed. By becoming a more disciplined and focused trader, rather than relying on destructive emotions, a trader can survive and thrive.

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As you follow your passion to become a successful forex trader, there are a handful of things you need  to prepare yourself for.

 The following are five of the tips you should keep in mind, drawn from insights gathered by experienced traders over the years. Why make the same mistakes when you have forebearers to learn from right?

Conquer Fear

One of the most powerful things a trader can do to improve their trading is by overcoming fear and greed. By becoming a more disciplined and focused trader, rather than relying on destructive emotions, a trader can survive and thrive.

Spot the Trend

The key to making money in Forex is identifying trend and trending with it. If the trend of a currency pair is pointing up, If the trend of a currency pair is pointing down, sell.

If the trend of a currency pair is pointing sideways, you either need to alternate between buying and selling or wait until the trend points up or down.

Head-and-shoulders Tops

FB Post: Double tops/bottoms are reversal patterns that form as the price of a currency pair hits a support or resistance level two times before the currency pair turns around and moves in the opposite direction. Head-and-shoulders tops are reversal patterns that form as the price of currency pair hits a resistance level (forming the first shoulder), then breaks through the first resistance level and hits a higher resistance level (forming the head) and then hits the first resistance level again (forming the second shoulder).

Head-and-shoulders Tops

The moving average convergence/divergence(MACD) produces trading signals as it crosses above and  below the trigger line. When the MACD crosses above the trigger line you can buy the stock or CFD knowing that momentum has shifted from being bearish to being bullish. When the MACD crosses below the trigger line you can sell the stock or CFD  knowing that momentum has shifted from being bullish to being bearish.

Head-and-shoulders Tops

Moving averages provide useful trading signals for markets that are on a trend.

When an upward-trending stock or FX pair bounces back up after hitting an upward-

tending- moving average, or when a downward-trending stock or FX pair bounces back down after hitting a downward-trending moving average.

Money Management

The most important part of investing is money management. Money management involves determining how much of your overall portfolio you are

willing to put at risk in any one trade and how many contracts your risk tolerance warrants. Proper money management can  be the difference between a successful account that you are able to manage far into the future and an unsuccessful account that you decimate in six months.

 

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