Most forex traders are scalpers. They scalp the smaller time frames even though they know the pips are in the larger time frames. Swing cycles on the H4 time frame and trending cycles on the D1 and W1 time frames is where the pips and ultimately the money is at. This is what we teach at Forexearlywarning and when you complete this course and move on to the intermediate level course we will go into more details on various trading styles.
When Are The Best Times To Trade?
The best time to enter trades is in the main session in a window of time starting 3-4 hours ahead of the New York Stock Exchange market open until about 1 hour afterward. Occasionally you can also enter trades on certain pairs in the Asian session. This topic will be covered in complete detail in the intermediate level course.
Entering trades on the fx market based on scheduled economic news drivers alone is risky and dumb. Many currency traders have blown up their accounts and lost millions of dollars with a mindless proposition like this. However, entering the trends of the market with verifiable entry points and no support or resistance nearby can be supplemented by timing off of strong news drivers. This is how we approach integrating strong economic news drivers that are on the calendar into the trades we consider at Forexearlywarning.
We use the news and “news setups” with multiple time frame analysis of trends to find solid trends and news setups in both trading sessions. This topic will be covered in complete detail in the intermediate level course.
There are some correlations between the fx market and other markets, For example when the US stock market is moving up the JPY is usually weak and when the price of oil is moving up the CAD is usually strong. There are other important correlations like correlations between individual currencies. This topic will be covered in complete detail in the intermediate level course.
Fundamental Analysis and Technical Analysis
Entering trades on the fx market using fundamental analysis has some merit, but you still need exact entry points. Fundamental information like interest rate direction will always drive currencies. Using technical indicators to trade the foreign exchange has been proven for years to be a massive failure leaving almost all forex traders frustrated. At Forexearlywarning we are trend traders who use exact entry points and a short but strict list of trade entry criteria. We also use support and resistance to determine if an entry is valid. We use logical techniques that work and can be easily learned and demo traded.
Psychological Issues Related to Trading
There are some fx traders who are afraid to pull the trigger on a real money trade to get overly emotional when trading. The solution is simple and it is what we profess at Forexearlywarning. First you must find a trading system that works, second you must demo trade. After that you must then start trading real money with micro lots. Anyone can trade 2 microlots with a stop in place to test their skills, manage their money, and move stops.
These are the same procedures you will use with larger amounts of lots and we strongly advise starting this way. Anyone who trades large amounts of live lots at the outset will be at the mercy of their emotions. Avoid these psychological and emotional issues by demo trading and micro lot trading then ramping up to full scale lots, and at some point logical habits will take over. Following these steps will cure any fear and greed issues.
Not all personality types can trade effectively. People who look at the big picture, are logical and like strategic planning will be good forex traders. Being detailed and independent and organized are other good qualities to have. If you can write a set of trade entry rules and stick with them you can be a forex trader, with little emotion involved.
Learning to Use A Computer
One of the biggest problems I have seen with forex traders is lack of computer skills. To be forex trader you need to know how to download a piece of software, basic browser operations, and basic typing skills or you will likely have to back up and start over. It will be a frustrating journey for sure if you don’t learn good computer skills first.
Don’t be afraid to take basic courses in typing, basic windows operations, computer maintenance and computer operations. Remember to get professional help if you computer has spyware, malware or other operational problems. Many technical vendors can now “take over” your computer and screen operations remotely to make repairs if you have an internet connection.