6 Critical Factors For Successful Forex Trading

6 Critical Factors For Successful Forex TradingForecasting currency prices in the foreign exchange market for the purpose of trading those currencies and accumulating a profit is very simple. After all, prices can go up, down, or remain constant.

This is not to say that Forex trading is easy. Most new traders, over 80% in fact, lose all their trading equity in one year or less and are forced to stop trading.

Here are six critical factors for successful Forex trading to consider if you want to be in the 20% of traders who last beyond the first year. They are listed in ascending order of importance, which is not necessarily the order in which they should be obtained:

Forex Training and Education

The first thing is Forex training and education. An easy, free way to do this is to sign up for a simulated account with a Forex access provider. This will enable you to learn the basics and gain insight into how you react in the Forex trading environment without actually risking your trading capital. In addition, Forex providers usually offer a variety of training materials to make it easy to become familiar with the terminology and trading strategies.

To Trade Forex Online …you need a computer!

The next critical factor is a computer, which can be a desktop or a laptop. There are many mobile applications for smart phones, but these serve as a useful accessory and should not be the only device available for accessing Forex price data. Any desktop or laptop manufactured within the last five years should be up to the task and even older computers might require only a minor upgrade to suffice.

Forex Trading Online Requires a Fast Internet Connection

A reliable, high-speed Internet connection comes next. Reliable is the key word here. One of the worst feelings a trader will ever experience is the one that comes from having an active trade or pending orders when an Internet connection fails. For this reason, many experienced traders have a redundancy factor that features two or more Internet connections so that if the primary one is lost there is another one on which to fall back.

Forex Trading Platform

Next, a Forex trading platform, that is software, that is intuitive, stable and contains a complete arsenal of trading tools, indicators and access to fundamental and technical analysis is required. For learning purposes, the free trading platforms made available by Forex providers are completely adequate. The critical factor is that it is easy to use and doesn’t require huge amounts of computer system resources.

Finding a Forex Broker

The fifth critical factor is a Forex broker. There are two main types, the Market Maker Broker and the Electronic Clearing Network (ECN). This decision requires time, patience and diligence. Be absolutely certain that you thoroughly understand the difference between the two types of brokers. Establish simulated accounts with as many of both types as is necessary to find the best one or two brokers for your trading preferences and strategies.

Forex Trading Capital

Finally, the most critical factor of all: trading capital. The risk of losing money trading Forex is very real. Any money risked on Forex trading must absolutely be money that the trader does not require for any other purpose. This cannot be emphasized strongly enough. The mindset required by Forex trading does not permit money that is needed for living expenses or other obligations.

Contact the Forex Experts

For more information about the critical factors required for successful Forex trading, contact LucrorFX today!

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