Are your trading or gambling?

Forex Trading Nigeria

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Posted by on Monday August 29, 2011 16:5:6:

There is a difference between experienced forex traders and newbies. Most newbies are actually gamblers while experienced traders are doing real tading.
What do I mean by gambling? It simply means that the person is not really sure of why he trades left or right - He trades blindly. Assuming you just witnsessed a price spike in your currency pair and then decide to buy just because it seems bullish, is that good trading or gambling. An experienced trader makes better trading decisions that a newbie or JJC. Most JJCs just trade on 50-50 probability, they either win or lose but most real traders trade on a better scale such as 70-30 such that their wins exceed their losses. A good trader can increase $100 to $1000 within a couple of weeks but a gambler would just be making losses and probably wins as he trades.

In order to be a good trader, you need to really understand why you would be taking a position at every point in your trade. Are you going Long or short because there is a bright outlook for your base currency? News reports can also help your decide on how to really trade that's why forex traders can make use of the news to trade better. Making use of economic calendars can also help as it tells you the market mood. Another good toll you can use to analyse the market is forex indicators such as bollinger bands, RSI and Moving average. However that does not mean that you cannot trade forex based entirely on the forces of demad and supply on which the market trend finally rests upon. You can make use of highs and lows to predict when the market is going up or down.
As a good trader, try to make use of high points your currency pair has made as well as its lows and also try to use the charts to help you make better decisions on deciding whether to wait, buy or sell. Don't be a gambler if you are into forex trading, improve your skill and become a better trader for lasting profits.