One Way of Trading the Forex Market – Part 1

Filed under: Learn Forex Trading |

Screen shot 2013-06-15 at 11.30.54Okay – so there are many ways, methods, and systems for trading the forex markets, so many in fact that newcomers can often feel stretched and unfocussed, and bombarded by systems and different ways to trade. As such (and this is mainly aimed at newcomers, although some mid-level traders might also find this useful and of interest), I am going to publish a two-part article over the next couple of days summarising just one way in which you could trade the forex market. This will involve a clear set of rules, although some of the details for certain terminology will have to be read in other articles here at Forex System Reviews. So without further ado, let’s make a start.

 

STEP 1: Find a broker with competitive spreads and good reviews that allows you to use an MT4 platform (‘Go Markets’ is a reliable one, but there are many others too).

 

STEP 2: Create a template on MT4 for the forex pairs that you intend to trade. I suggest: GBP/USD, AUD/USD, USD/JPY, NZD/USD, GBP/JPY, AUD/JPY, GOLD, SILVER, EUR/JPY, USD/CHF, and EUR/USD. A nice clear black on white format will help to view the charts.

 

STEP 3: Decide what your risk levels will be. A good rule of thumb is to never risk more than 2% of your bank on any one trade. However, even this is quite risky. A better risk level is 1% of your bank on each trade, with some traders with big banks risking even less. So, if you have $10,000 to trade with, then think about risking just $100 per trade (and you will need to understand lots and how to calculate risk in order to do this).

 

STEP 4: Mark in any levels of support/resistance on all of your daily charts – and update these levels as often as you can.

 

(To be Continued…)

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