In the previous lessons of this Forex course, you already have a lot of knowledge about the functioning of foreign exchange on the open forex positions and analysis of good investments. This knowledge forms the basis for developing your own forex system. Every successful forex investor’s own investment system: the principles and principles he used to select currency pairs and to take positions.
Such forex system is very personal. It depends partly on how much risk you want to take, how much time you have, what currencies you find most appealing and what analysis tools you prefer to use. In this lesson we will help you to find out what system works best for you. Eventually you will develop your own system and based on your experience, improving continuously.
Your forex trading account
If you have not already done so, now is the time for an investment (in English: “forex trading account ‘) to open a forex broker. This is used to your buy and sell orders to pass and forex charts to analyze. There are many forex brokers on the internet to find that not all equally good. For novice forex forex broker, we recommend investors to Plus500. This is a reliable broker where your money is safe and very user friendly and easy to understand software. You can open an investment account with Plus500. If you first want to read more about forex brokers reviews and want to view, then it is in our forex broker section.
Most forex brokers offer except a real forex trading account is also a practice account (English: “forex demo account” or “practice trading account ‘) to. Such a practice account is useful for the software of the broker under the master and to see whether you like it works. Also you can be analytical or new additions to your forex system test them. However, we advise not to long with a practice account to continue working.
The reason is that when investing in forex psychology plays an important role. And when real money is at stake does that psychological thing with most people. There are many investors who first went effortlessly and successfully acted on the currency markets … on a practice account. However, once they switched to a real trading account, they felt the tension of the money was at stake. They dared not promising forex positions to open positions in panic locks on sudden price drops and let profitable positions long run. In short, good investors they turned into emotional gamblers, just because there’s real money at stake.
You should absolutely try to avoid. Therefore, it is a good idea from the beginning to get used to invest in the foreign exchange with real money. You do not need to start immediately with large amounts. Instead, start small works better and you risk less. But it must be somewhere to go (with an investment of 300-500 dollars you can start very well). That way you teach your own psychology better and you will stress and disciplined. That makes you eventually to become a better forex investor.
A system set up forex investment
To achieve a good forex system, you can be for yourself the following questions to answer:
Are you a technical or a fundamental investor?
You will after reading through lesson 7 lesson 8 on fundamental analysis and technical analysis have probably have gotten a pretty good idea what form of currency trading is the most. Are you someone who always is aware of the latest economic news? And use local knowledge in practice? Then investing based on fundamental analysis is for you. Please contrary of studying charts and finding patterns? Then you will feel at home in technical analysis. Although both forms of analysis you can use together, it is advisable to form as a starting point and the other more as a support for use with your decisions.
How much risk are you taking on the forex market?
You must decide for yourself how much money you invest in your forex investment. In our experience, a suitable amount to start with 300 to 500 euros. But if this is for a very large amount, you should start smaller. Invest in any case never, really NEVER, with money you can not miss! Although it is good if you let your capital grow, is investing a risky activity and there is always a chance that you lose money markets in the wrong direction. The importance of your investment capital also affects the type of positions that you can open. If the amount you have invested very important to you, do what conservative positions open with modest stop loss and take profit. If you can easily miss the money and like to want to experiment, you can also riskier positions open with a deep stop loss and high profit potential.
How much time did you and at what times?
Investing in forex is an activity that requires attention. You will have to decide how much time you want to spend it. Opening a position and not to worry about this for months, as the stock market, there is not in forex. But you can, for example in the morning before going to work the markets view, abort (think of the stop loss and take profit!) And in the evening when you come home the results. If you have more time, perhaps because you do not (at fixed times) have to work, you can also shorter-term positions open that you actively monitors.
Another aspect of this is that not all the currency pairs are active at the same times. This is because different currencies on international exchanges (such as New York, London and Tokyo) are traded and which are at different times of the day. We have made ??an overview of the opening hours of the forex market to give you a picture of it. Try at least as much as possible at the same time to act, so you develop a good feel for how the markets behave at those times.
What currencies you speak the most?
Once you’re working with forex, you will notice that different currency pairs behave differently. It is therefore wise not to start too many different currencies. Maybe you already immersed in, for example the U.S. or the UK economy, it is then obvious to the USD and the GBP to act. If you do not remember which currency pair to start, we recommend the EUR / USD. This is the most traded currency pair and there is much information available. A currency pair that usually shows a lot of movement and therefore of interest to riskier trades the GBP / USD.
What analysis tools you speak the most?
To really get the good effects of fundamental news and technical indicators to estimate you will need to become proficient in the use of these instruments. Begin therefore not identical with too many different indicators to select your positions. Are you a fundamental investor, for example, start with the action on interest rate announcements from the ECB or on the publication of the American non-farm payrolls. Look at the forex economic calendar to find the news you want to use for your analysis and learning from your head on what days and times they are published.
Are you a technical investor, for example, start with trend analysis and add in time techniques such as ‘moving averages’ and ‘fibonacci levels’ fields. In the strategy section on technical analysis will find much information on various technical indicators. However, ensure that the current indicators that you use fully understand before you make your forex toolbox expands. A good strategy is to create a new indicator to know, there is a time to experiment with, to decide whether you want to add your forex trading system, and then to the next indicator to watch.
What do you want to achieve with forex?
It’s finally good to dwell on what you actually want to achieve with forex. Is it a pocket money to earn? To save for a major purchase? Do you see it mainly as a hobby? Or do you eventually your profession. In the latter case you will next time to act too much time should prepare to study. If you just want some extra money with forex you can take more risk than if you want to build up capital savings. Keep track of spending your time in choosing positions so your goal in mind.
If you’ve answered these questions for yourself, then forms the basis of your personal forex trading system. This puts your system is not etched in stone. Perhaps you will eventually feel differently about one or more parts of your system. That is not surprising: after all wiser by experience and you’ll get your system can adapt to your needs. It is always a good idea to the above questions once in a while to establish yourself again. This gives you a clear basis for a successful investment strategy.
The next lesson
You are at the point now that you understand the basis of forex investing. From this point you will develop your knowledge and especially better through experience. Before you jump into the deep we want seven golden forex tips. These refer to the next and final lesson of the forex course.
so try it as well.
& Bank
