Forex Trading Checklist - Answer These 3 Questions Before You Can Make Money Online
Do you already know the basics in forex trading when you get into it? Those basics are the necessity if you want to win in forex. Otherwise your forex investment may down the drain. A lot of forex traders who failed in trading all the time is because they lack of planning.
1. What skill level are you in? If you are a beginner in forex trading, then you might want to take a step at a time. Do not rush to trade because a good forex strategy is always using probabilities. In the first place you should know that in currency trading business, there are no certainties, only analysis and judgment no matter what kind of forex trading systems you are using. Professional traders are good in high probability trades by using simple trading system.
2. Are you a risk-taker? I have to remind you that forex trading involves some risk and do not go into trading if you can't take risk at all. Like I have said, trading will definitely involve some losses because you can't win all the time. But what I can assure you is that if you take the right approach in trading and follow all the rules, you will have much more winners than losers.
So be prepared to take some risk and make sure that your trading capital can withstand it. Minimize risk by looking out for high possibilities trades and not by quantity trades.
3. How do you target profits? If you want to trade forex the profitable and correct way, then you will have to follow the forex trading strategies that I give advice for. I recommend traders to have a healthy risk to reward ratio of at least 1:2, which means that if you risk 1 pip, you should target 2 pips of profits.
This may sound quite difficult to achieve when you are a beginner, but I can tell you that once you get experienced in the forex market, then you should not find that too tough. With a good risk to reward ratio, then you can develop a forex strategy that allows you to achieve that, e.g. a more advanced intraday or swing trading strategy.
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The author, Daniel Su, is the founder of http://www.ForexTradingPower.com where you can get free premium forex trading tips and resources.