Posted by forex at 5:47 AM
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1. Identify which foreign currency pair and time zone you would like to trade. The U.S. dollar, the European euro and Japanese yen are the world's three largest reserve currencies and account for a large percentage of all currencies traded on any given day. The three major trading sessions of the day are as follows: the U.S. trading session, 8:00 AM to 5:00 PM EST; the European trading session, 2:00 AM to 12:00 PM EST; and the Asian trading session, 7:00 PM to 4:00 AM EST. The major currency pairs to trade during these times are the EUR/USD, for the euro and U.S. dollar, the USD/JPY, for the U.S. dollar and Japanese yen, and the GBP/USD, for the British pound and U.S. dollar. If you are new to FOREX, you may want to start your trading with EUR/USD.
2. Determine the time interval and charting style you want for displaying the foreign currency trades on your computer monitor. For example, you can chose to display currency trade data using a line chart, a bar chart, or even a Japanese candlestick chart for any time interval from as short as one minute worth of data to as much as one full trading day worth of data. A line chart displays the final trade for your chosen time interval, while a bar chart shows the entire trading range between the highest and lowest trade made during your chosen time interval. A Japanese candlestick chart shows in a color-coded manner whether or not the exchange rate finished the time period either higher or lower than when it started the time period, as well as the range between the highest and lowest trade.
3. Select a professional visual trading strategy. There are many different ways to visually trade the FOREX market online. For example, you may chose a scalping strategy, which consists of making many small trades throughout the trading session, attempting to capture small changes in the exchange rate on a currency pair. Traders employing a scalping strategy will want to use a short time interval such as a one-minute or five-minute time interval. Chose a trading strategy you are comfortable with and understand completely.
4. Write a trading business plan that describes your professional visual trading strategy in detail as well as the amount of risk capital you can commit to your trading business. Risk capital is the amount of money you will need to place on deposit in a brokerage account and that would not result in severe financial hardship if you were to lose it all as a result of your trading.
5. Select a broker that offers the software you will need to visually display the data in the manner you need based on your professional trading strategy, and complete all of the paperwork necessary to open the account.
6. Deposit your risk capital into your account.
7. Begin to trade according to your professional visual trading strategy.