The forex trading basics you will always need

The beginner strategy is just the start of a whole world of trading. From indicators to chart analysis, there are many opportunities to learn and improve your trading.

However, there will always be a core group of principles that you need to comprehend. Grasping these three basic forex trading concepts allows you to make smarter decisions while you are trading:

Technical analysis

Technical analysis is a method of analysing price movement on a chart to determine possible future price action by using things like indicators, channels, divergence, and much more. At tradimo, we teach you how to analyse Japanese candlestick charts using many different methods. The strategy you use will depend on your personal trading style.

For example, one trader may prefer to use moving averages while another may choose to use the Fibonacci indicator.

If you would like to learn more about technical analysis and develop basic skills then you can go to our module:

Subject
From Japanese candlesticks to the Fibonacci indicator, technical analysis is the mathematical approach to trading.

Money management skills

Money management, also called risk management, is a core concept that protects your trading capital from losing trades. It should be part of your trading strategy immediately when you begin your trading career.

Money management encompasses concepts like stop losses, scaling in and out of trades, and risk to reward. Understanding these methods can help you maximise your profits and avoid losing your trading account.

For example, most professional traders do not advocate risking any more than 1% to 2% of an account on a single trade. This protects your account from performance downturns and allows you to trade safely with leverage.

If you would like to learn more about money management then you can go to our module:

Subject
Learn how to use important tools like risk-to-reward ratios and stop losses to maximise your profits and minimise losses.

Trading psychology

It is not analysis of the markets alone that allows a forex trader to become successful, it is the psychology of a trader. By overcoming psychological influences, such as fear and greed, a trader has a better chance of being successful.

A trader must stick to the rules of their system and not let psychological influences distract them. The path to becoming a good trader is not necessarily an easy one, however, working through your psychological issues will allow you to trade with a disciplined approach.

If you would like to learn more about the psychology of trading then you can go to our module:

Subject
Manage your emotions and improve your mindset. A solid understanding of psychology helps you stick to your strategy and the rules of money management.

If you would like to learn how you can benefit from the experience and skills of other forex traders, then go to our lesson:

Lesson
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Use your knowledge and join our challenge

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  • Here are a number of guidelines that I use, which will hopefully help you out too.

    Have a software system and adhere to it.
    Set quit failures unless you have a really big financial institution and are ready to take either a big reduction, or money cost regular on your place.
    Keep up up to now with the newest information. Currency trading newsrooms are a great starting point, but even search engines information can provide understanding as to when the main financial institutions are disrupting forex or when a big world occasion is going on.
    Business in the 30 moment to 4 time windows (see my video clips in part 2). Anything smaller than this is very hard to do and you will most likely reduce your cash.
    Begin off small a quantity. I individually feel that 0.05 is more than sufficient if you are dealing for a long period.
    A benefit is always better than a reduction, even a little one.
    You do not always have to be dealt, sometimes it is a wise decision to be patient waiting on the sidelines. I know it appears to be tedious, but if the signs are not all directing the same way you are betting with your cash rather than making an investment it.
  • Yes i agree with this posts
  • Hi,

    I just completed this Forex trading course. I prefer to trade only Forex in the foreseeable future?

    Which courses would you recommend to study asap to enhance my fx knowledge? (I personally would study the 3 subjects mentioned in this page)
  • Hi Gunesh,
    These 3 are THE most important topics and probably sufficient for you to start practicing. And that is the key. Once you get to a stage where there's very little point in continue reading because what you need is to DO it. Have you got a demo account? Here's how you open one easily:
    http://en.tradimo.com/brokers/demo-trading-accounts/
    Regards.
    Peter
  • Dear Peter,

    Thanks for the info. Currently I have One Financial demo account.

    Gunesh

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