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If you want to make money trading currencies, then we will show you how to do this in simple steps. Here we will give you the basics and help you build a currency trading system for long term trading success. Step 1 - Get the Mindset for
Success
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Step 2 - The
Methodology to Base Your System On
The best, simplest and easiest to understand
methodology, is to buy or sell breakouts of
price, to new market highs or lows.
Look at any forex chart and you will see
most major trends start and continue from
new market highs or lows. If you can go with
them, you can make a lot of money. Most
traders don't and that's why the majority
lose.
Most traders want to wait for a pullback, to
buy at a "better price" and of course prices
don't pullback and they sit and watch, as
the trend sails over the horizon and makes
thousands of dollars in profit and their not
in!
Go with breakouts and sure you miss the
first bit of the move - but if it's a good
break, you will have a lot of profit ahead
of you.
Step 3 -
Basics of Your System
You need to understand support and
resistance.
Look for levels that are considered
important by the market and the more times
the level has been tested the better. You
then need to confirm that when a break
starts, the odds are on your side and it
will continue and for this you need to use
momentum oscillators.
We have discussed these fully in our other
articles but for now, you simply need to
know they will help you determine price
strength through the breakout point. If
price momentum accelerating, the odds are on
your side and you can enter.
Look up the stochastic and RSI for this -
there great indicators and you can learn how
to use them in about 30 minutes.
Step 4 -
Money Management
You need to play great defence and defend
your equity. Just like all the great
football teams, if you have a great defence,
the offence will get the opportunities and
make them successful.
With breakout trading, your stop is close
and obvious (below the breakout point) and
you should trail it slowly as the market
moves.
Don't make the mistake of using too much
leverage.
You can get up to 400; 1 but 20:1 is plenty,
more traders lose due to over leveraging
than any other reason.
Putting it
all Together
You don't need a complicated currency
trading system, you need to keep it simple
so your trading system is robust, in the
face of brutal market conditions. The key
though is discipline; you must be able to
trade through losing periods, until you hit
a home run.
If you want to make money trading currencies
- you can. The above tips will help you and
remember, work smart not hard, keep it
simple, get the right mindset and you will
enjoy long term currency trading success.
Article Source: http://EzineArticles.com/Kelly_Price
