To make money trading Forex you need both Forex strategies and resources. As Forex currency rates rise and fall traders use both fundamental and technical analysis in order to predict and profit from knowing the future course of currency prices. Many simply day trade a specific major currency pair taking profits from the back and forth activity of an active market. In this case Forex strategies and resources are aimed at predicting short term changes in market sentiment. Others take a longer view and engage in swing trading. They rely more heavily on analysis of market fundamentals and often use Forex options to stake out a position in advance of market movement. In either case there are Forex strategies and resources that all traders need.
Hardware, Software and a Trading Platform
Forex trading is online trading. The three major Forex markets are London, New York and Tokyo. As these markets are scattered across the globe Forex trading takes place nearly twenty-four hours a day every business day of the year. A trader needs a fast computer with lots of memory, a trading software program and a trading platform consistent with what his broker uses. In general one picks a broker and platform first of all and then makes sure that the trading software, hardware and internet connection are more than sufficient for the task at hand. A good trading program has a program and data for simulation trading which is where the beginning trader should be learning to use Forex strategies and resources until his skill set is sufficient for real time trading.
Having a Clue or Two about the Market
After learning how to run your trading software, you still need to get in sync with the market, what drives it, and how to make a profit. At this point the Forex strategies and resources you need are the daily business news at home and around the world. This is fundamental analysis of Forex pairs. In Forex one currency is traded for another. As such the world of the trader focuses on the balances of trade of two countries, employment figures of two countries, monetary policy, economic policy, and pronouncements of the central banks of two countries. Factors that drive all currencies, such as a rising price of oil due to scarcity, do not necessarily change the relative values of the two currencies that one trades. War in the Middle East may affect oil supplies. Japan which is dependent on foreign oil may see more of a change in the Yen than the USA which produces the majority of its oil domestically.
Fundamentals drive the Forex market and anticipation of the changes in fundamentals drive intraday pricing. The Forex strategies and resources that one applies to day trading focus on technical analysis of Forex currencies. In short, prices move up and down and create patterns on a Forex chart. These price patterns tend to repeat themselves. Some patterns are very predictable so that if one correctly reads the first part of the pattern he can trade successfully because he knows where the market is going.
The Business of Forex
Those who learn Forex trading well make money and those who do not pay attention lose money. Trading Forex is more than sitting at the trade station making savvy trades. It is managing trading capital wisely. Nobody makes perfect trades every time. Learn to manage your trades, always set your trading stops, and always follow a strategy that allows for recovery after a bad trading day, week, or month. Smart traders develop a strategy, stick with their strategy, change the strategy as needed and avoid falling prey to fear and greed, the twin demons of the Forex trader.