1> Determining what trading style fits you best
2> Understanding the different trading
styles 3> Developing and maintaining market discipline Before you get involved in actively trading the forex market, take a step back and think about how you want to approach the market. There is more to currency trading than meets the eye, and we think the trading style you choose is one of the most important determinants of overall trading
success.We’re frequently asked, “What’s the best way to trade the forex market?” That’s a loaded question that seems to imply there’s a right way and a wrong way to trade currencies.
Unfortunately, there is no easy answer. Better put, there is no standard answer — one that applies to everyone. offer every trading style (long-term, medium-term, or shortterm)and approach (technical, fundamental, or a blend). So in terms of deciding what style or approach is best suited to currencies, the starting point is not the forex market itself, but your own individual circumstances and way of thinking.
Real-world and lifestyle considerations Before you can begin to identify the trading style and approach that works best for you, give some serious thought to what
resources you have available to support your trading. As with many of life’s endeavors, when it comes to financial-market trading, there are two main resources that people never seem
to have enough of: time and money. Deciding how much of each you can devote to currency trading helps to establish how you pursue your trading goals. If you’re a full-time trader, you have lots of time to devote to market analysis and actually trading the market. But becausecurrencies trade around the clock, you still have to be mindful of which session you’re trading, and of the daily peaks and troughs of activity and liquidity. (See Chapter 1 for tradingsessionspecifics.) Just because the market is always open doesn’t mean it’s necessarily always a good time to trade. If you have a full-time job, your boss may not appreciate your taking time to catch up on the charts or economic data reports while you’re at work. That means you’ll have to use your free time to do your market research. Be realistic when you think about how much time you’ll be able to devote on a regular basis, keeping in mind family obligations and other personal circumstances. When it comes to money, we can’t stress enough that trading capital has to be risk capital and that you should never risk any money that you can’t afford to lose. The standard definition of risk capital is money that, if lost, will not materially affect your standard of living. It goes without saying that borrowed money is not risk capital — you should never use borrowed money for speculative trading.
0 comments:
Post a Comment