| To be a successful FOREX trader you will need to | | | | streaming rates available in real time on their |
| learn to use the various tools that are available to | | | | websites so you can be informed of changes in the |
| assist you. Some tools are designed to help you with | | | | market as they happen. |
| analyzing the market where as others will assist you | | | | While this information can help you decide which |
| in the actual buying and selling. Tools can be used to | | | | currencies to purchase and when there are many |
| help automate some of your trading as well as help | | | | more tools available to help you increase your profits |
| protect you against loss; these tools are quite | | | | and reduce your risk. |
| necessary due to the volume and volatility of the | | | | You can use the Risk Probability Calculator to find |
| FOREX market. | | | | trades that are more likely to increase than decrease. |
| Information is the secret to success in the market | | | | This same tool can be beneficial in determining your |
| place and lots of it. For a trader to make informed | | | | entrance and exit points. |
| and intelligent trades they need large quantities of | | | | You can use Pivot Points to determine which way |
| information, the going exchange rate is just the | | | | direction a currency price will move. They can also |
| beginning. Many of your FOREX brokers will provide | | | | help you determine if the price is in the normal |
| the necessary information on their websites. They | | | | trading range or not. Calculating an average of the |
| provide such information as historical data as well as | | | | currency's high, low and closing price determine Pivot |
| political and economic news. | | | | Points. |
| Frequently successful trading will depend on being | | | | PIP value calculators help you determine the actual |
| able to accurately predict if a currency is going to | | | | dollar value of a pip in a certain trade based on the |
| react negatively or positively to current economic | | | | lot size. This allows you to see the actual profit or |
| and political conditions. If the trader can determine | | | | loss associated with market movement. |
| whether the currency value will rise or fall then they | | | | Once a trader has decided which currency pair to |
| will be in a position to profit from it. | | | | trade, he logs on to his online brokerage account. |
| When you trade you will either be trading reactively | | | | The selected currency pair is entered and the current |
| or speculatively. If you trade reactively this means | | | | exchange rate appears on the screen. The amount |
| you react to the political and economic conditions. | | | | of the currency to purchase is entered. Some |
| The other alternative is speculative which means you | | | | brokers will also allow you to specify a risk amount, |
| attempt to predict the markets reaction in the | | | | which will automatically enter a Stop Loss order. |
| future. Most of the currency trading is speculative | | | | Then you will get a final confirmation screen, once |
| trading, but to perform either method of trading you | | | | you accept the information on this screen then your |
| need to have access to real time information. | | | | trade request is in place. |
| When trading you will need to use technical and | | | | You can use a Stop Loss Price to limit the amount |
| fundamental analysis. Fundamental analysis includes | | | | you can lose but you can also use a Take Profit Price |
| political conditions, economic conditions, interest rates, | | | | to automatically close your position when the |
| and unemployment rates. Technical analysis uses | | | | currency reaches a certain price. If you choose not |
| historical data to try to identify trends and patterns. | | | | to use these options then you will need to closely |
| All this information is available in real time via the | | | | watch the price of the currency and close your |
| Internet. Most brokers have news feeds and | | | | position to either reduce your lost or take your profit. |