Important for a Forex Trader

A common mistake by many new traders is that they think they can make money… fast! While it’s true you can make money in a short amount of time, it doesn't mean you will end up profitable in the long run.

A typical scenario is that a new trader reads a little bit about trading forex, finds a system online that claims to make money quickly, and then jumps right into trading because he feels like he’s got enough of a background to make millions of dollars.

Unfortunately after the “honeymoon” period is over and the excitement settles down, this new trader now realizes that trading isn't as easy as he thought. The system doesn’t seem to be working like it claimed it would and he has no idea why the market is doing what it’s doing.

The most important thing you can invest in as a forex trader is your TIME! Every single trading day is a learning experience and if you stop learning, then you will never become a truly successful trader.

Take into account how much time it will take you to learn the basics. Then consider how much time it will take in your daily routine to read charts, news reports, record your trades, and be in the markets.

For someone who can dedicate a “full-time” job mentality to forex trading, then this is no problem. However, if you're like most people, you may have a job, school work, tuba lessons, World of Warcraft dailies, so you cannot exactly dedicate your entire day to trading.This doesn't mean that you can’t trade, but it should give you some realistic expectations when it comes to determining your trading style. You probably can’t be a scalper or day trader, but maybe longer term trades will work better for your schedule.

Each day requires your time to analyze the market. Because news makes the market move, it’s important to consider the economic developments going on around the world and to make it part of your daily routine.

• Forex Market Developments – Look at what the “talk of the town” is in the forex world. See what the analysts are buzzing about and how the currencies reacted.
• News Releases – Know what news reports are coming out each day and how they affect the markets. The more important the news report, the more movement you can expect to see in its currency. Make sure you check out Forex Calendar
• Market Prices of Other Commodities – The price of oil or U.S. Treasury yields can affect the way currencies move so it’s important to find out why these things are rising or falling and keep that in mind when trading currencies. 
• Current Events – Check out many news websites and get to know what is happening across the globe. Events such as major elections, military conflicts, and political scandals can all affect currency movements or global risk sentiment. 

Finally, after going through your daily economic analysis, you have to look at the charts. Charts will give you insights into key support and resistance levels, trends, and possible price points in which to enter the market.

Forex broker

 About Forex broker?

Your broker will offer a trading platform with a certain time frame (the time frame will depend on the country where broker operates). When focusing on market hours, you should ignore the time frame on your platform (in most cases it'll be irrelevant), and instead use the universal clock (EST/EDT) or the Market Hours Monitor to identify trading sessions.

Forex trading hours & trading time:-

New York opens at 8:00 am to 5:00 pm EST (EDT)

Tokyo opens at 7:00 pm to 4:00 am EST (EDT)

Sydney opens at 5:00 pm to 2:00 am EST (EDT)

London opens at 3:00 am to 12:00 noon EST (EDT)

There are hours when two sessions overlap:

New York and London: between 8:00 am — 12:00 noon EST (EDT)

Sydney and Tokyo: between 7:00 pm — 2:00 am EST (EDT)

London and Tokyo: between 3:00 am — 4:00am EST (EDT)

For example, trading EUR/USD, GBP/USD currency pairs would give good results between 8:00 am and 12:00 noon EST when two markets for those currencies are active.At those overlapping trading hours you'll find the highest volume of trades and therefore more chances to win in the foreign currency exchange market.

Chart Analysis in Currency Trading

Importance of chart analysis in currency trading:-
Basically, there are two major types of analyzing methods in predicting price or movement of currency in the forex market, i.e. Fundamental analysis and Technical analysis / chart analysis. Fundamental analysis involves the studies of the economic conditions of the country, for example the balance of trade, current account, GDP, unemployment rates and inflation index, government monetary and fiscal policies, interest rates, even social and political forces. Some investors rely on their analyses on these economic indicators, news and announcements to set their trading strategies.
Whilst we must admit that all these financial and non-financial factors are the actual reasons behind most the long term currency fluctuations, in other word is the reasons or causes about the movements, when it comes to short-term day to day trading, the role of technical analysis becomes much more important (and what is actually the reason does not really matter). In technical analysis, traders make forecast of price movements or future market directions by studying various types of charts of past market actions, the purpose of technical analysis is to identify a trend in its early stage so as to trade in the direction of that trend. Technical analysis is a very powerful method of forecasting, as the analyst is not influenced by prevailing market sentiment and he can make a more objective judgment of which way and how far the price is likely to move in the future.
Since forex market is the largest financial market in the world and is also highly leveraged, even minor price movements can have a dramatic effect on your trading performance, so traders need some effective plans and methods to set precise entry and exit points and this is also another very important aspect in technical analysis. By using certain technical indicators (e.g. moving averages or Ichimoku) and calculation techniques (e.g. Fibonacci percentage of retracements and projections) when formulating his/her trading strategies, one can identify more objective levels for setting entry, exit and stop-loss prices, which fundamental analysis is not capable of in providing such levels.
In short, technical analysis is not only an effective method in price-forecasting process helping traders to predict future market directions, it is also an indispensable analysis technique in order to find clear and precise timing and level of entry and exit in day to day trading, therefore, chart analysis or technical analysis
is a very valuable principle in formulating trading strategies.

Theory of chaos

“The organisation of the Universe demands that matters abandon itself to the games of chance.”
  H. Reeves - Atoms of Science
The theory of chaos is not a theory to help you make investment decisions, its usefulness lies in the greater understanding it gives us of the trading environment and how we should cope with it.

1. It shows us how human psychology influences price movement, why trends occur, and how they can end up being understood in terms of probability. The herd mentality is fully explained in our Special Situations Report available from the office. Human psychology has remained constant over time, and it is this fact that helps us predict the probability of price movement via technical analysis.

2. It disproves Random Walk theory; although market movements may appear random, under statistical tests they are not.

3. If it disproves that the markets are random, it also shows why the quest for the “Holy Grail” computerised or mechanical trading system is doomed to failure. It also confronts those disciples of such analysts as Gann and Elliott who believe the Universe is ruled by law.

4. It helps us to operate in an unstructured environment by giving us a greater understanding of it. The best you can do is understand the original conditions that give rise to probable future events, and act accordingly. This may sound disheartening, it is not. By understanding chaos, you will be able to keep the odds firmly in your favour. If you can do that, you will end up making a lot of money from your trading, year in year out.