How do you make money trading currency? You have an idea. You think you know what you wanna trade Forex. But how do you really wanna do it?
Well, you have to go back to the fundamentals. About what makes a currency go up or down in value in the Forex market. Generally, it's whether that country is taking in more cash and paying out. Sort of like your home, if you see your checking account steadily going down in value, you are not feeling very good. And if you go to borrow money, you are gonna pay a higher rate of interest.
However if the value of your checking account is consistently going up. Well, the banks are gonna love you. They're gonna want to lend you money at the lowest rate possible. So, countries are sort of the same.
Now, how do you get that data? You can go back to Bloomberg or to Reuters to look for it. But the easiest way is to go to your bookstore and get the economist, the magazine. When you go to your bookstore and you go buy the economist, it costs about $4 dollars.
There is a table on the back of the magazine which comes out every two weeks. And talks about whether that country is bringing in more money than it is spending. Or spending more money than it's bringing in. It's identified as the current account. If the current account is negative, in our way of thinking you wanna short that currency. If the current account is positive you wanna be long with that currency when trading Forex.
An example, here in the United States, our current account today is about 5% of GDP. That to me means that you probably wanna remain short the US dollar, against other currencies that have more money coming in. Who would that be? The Yen certainly, the Euro and the Swiss Frank.
So the economist table is the best place to start.
Make sure you follow these rules when you are trading Forex:
1. Strive for 20 pips to begin with.
2. Use MACD indicator only for divergence and confirming a trend. Don't use it as a signal generator.
3. Make sure you use stop losses at 20 to 30 pips. I want to clarify that. When you put a stop on it. Make sure the stop is 20-30 pips away from a pivot point. However, if there is a long hammer. A distinct hammer. My rule will keep you away from that trade. But the exception is where you see a long hammer then this rule doesn't apply. Because when you see a long hammer, you know that the price is gonna change direction.
4. Specialize in one currency.
5. Keep a log.
6. Sit on your hands unless you see something to do.
7. This is not about scalping.
ليست هناك تعليقات:
إرسال تعليق