Understand different types of trading styles
There are approximately 7 billion people in the world (including alien life disguised as humans), and no two of them are exactly the same. Even identical twins have different fingerprints.
Everyone has their looks, personality, talents and tastes. Our preferences are different, we are unique.
The same is true for transactions. Our unique personality makes our transactions different. Some people may be more aggressive, they are “A-type” traders, and some traders are more relaxed, they are “B-type” traders. Some traders want to be able to make small profits all the time, while some traders don’t mind taking a little loss in order to get huge gains.
The point is that no two traders are alike. Even if a group of people use the same system and rules to trade, the final result obtained by each person is likely to be different.
Is this a bad thing? Not at all.
Our uniqueness makes the world work, so knowing your own lifestyle and personality will help you grasp your strengths and weaknesses in trading. Forcibly executing a transaction that does not match your personality will frustrate you and hinder your continued profitability.
Treat foreign exchange trading as your most important investment
One of the most common mistakes new traders make is thinking they can make money quickly! In a short period of time, you can indeed make money, but this does not mean that you will eventually be profitable.
A common situation is that a new trader learns a little about foreign exchange trading, finds an online system that claims to make money quickly, and then immediately jumps into the transaction, because he thinks he knows enough Background knowledge can make a profit of tens of thousands of dollars.
Unfortunately, as soon as the “honeymoon period” ended and the excitement calmed down, the new trader realized that trading was not as simple as he thought. The system is not as claimed, and traders do not know why the market is doing this and what the market is doing.
As a trader, the most important thing you can invest is your time! Every trading day is a learning experience. If you stop learning, you will not be able to become a truly successful trader. Take into account how long you can spend learning the basics of trading. Next, think about how much time you can spend on daily routines, meter reading, browsing news reports, recording transactions and executing transactions.
For those who can trade “full-time”, this is not a problem. However, if you are like most people, you may need to work, do homework, learn Euphonium, and play Warcraft, so you can’t spend all your time trading.
This is not to say that you cannot trade, but that it can give you some practical references when you are sure of your trading style. You may not be a short-term trader or a day-closing trader, but long-term trading may be more suitable for your schedule.
Every day you spend time analyzing the market. Since news can cause market changes, it is important to take into account the development of the world economy, and it is best to include it in your daily routine.
Factors to be considered by market analysts:
Foreign exchange market development: look at the “hot topics” in the foreign exchange market. Understand what the analysts are doing and how the currency reacts.
Press Release: Learn about the news that will be released every day and their impact on the market. The more important the news report, the more currency changes. Make sure you check the economic calendar.
Market prices of other commodities: Oil prices or U.S. Treasury bond yields will affect currency movements, so it is very important to find out the reasons for the rise and fall of these asset prices and keep them in mind when trading currencies.
Current affairs: Browse news sites to learn about what is happening in the world. Major elections, military conflicts and political scandals will affect currency trends or risk sentiment.
Finally, after you have completed the daily economic analysis, you want to view the graphs. The chart will take you to understand important support and resistance, trends and possible prices for entry.
Ultra-short trading is like those high-level action movies, making you feel restless in your seat. It is fast-paced, stimulating, and active. This type of transaction usually lasts only a few seconds, up to a few minutes. The main purpose of ultra-short-term traders is to capture as many points as possible during the busiest time of the day.
Since ultra-short-term traders basically have to stare at the chart all the time, it is most suitable for those who can spend several hours trading continuously.
It takes great concentration and quick thinking to succeed. For traders who want to make big money, ultra-short-term trading is not applicable, it is suitable for those who accumulate small profits into big profits.