Are You A Ready F-T-P-R Trader?

Trading is a complicated activity, its even more so if its currency trading. The governments of different countries uses interest rate and the strength of their currencies to control economic activities and adjust the level of GDP in their respective countries. Moving forward, these GDP results and balance of payment differences will affect the country's economic and social development. Hence the trading of money is controlled and manipulated.

 

So, having understand this, if you now want to trade and win in forex with a small capital. Its going to be Very Challenging. Its possible, but very challenging.

 

I am asked to write according to my personal view, what a trader should take note of in currency trading. The followings are my views generated from both my years in trading and in educating myself in this subject.

 

 

Fundamentals  

The fundamentals rule over my main decision to open any position in my chosen currency pair. I first have to understand the macroeconomic environment. Interest rate, economic data, central bank possible decision etc. All of which will determine the possible outcome in time to come.

 

 

Technical

Understanding of charts and how to read them are also key in making decision. These are especially important in the short term. Most retail trader tend to focus on the short term and the understanding of technical analysis are vital to their chance of success.

I do tend to scalp from time to time when the situation permits, hence I wouldn't be able to do it successfully without the understanding on the basis of these technical analysis.

 

 

Psychological

Fear is a double edge sword, it cuts both ways. I have met both traders and followers that copy trade,that are the extremes. There are those that are fearful and I have also met those others that are fearless. Logic and experience have shown me that emotion is the downfall of many. It is better to focus on the details and the facts and not on the noise. Better to remove your emotion away during the trade.

 

 

Risk Management

There is always a scientific approach to everything. The importance of capital perseverance cannot be over emphasis in my view. Hence lot sizes must only be of a reasonable ratio to the capital invested.

 

Hope I have been helpful in sharing my view, until next time, Happy Trading.