Tips to Improve Your Forex Trading

If you are interested in improving your forex trading, there are some things you can do to increase your success. Just realize that it takes time and practice to become truly proficient at currency trading. GFT's Kathy Lien offers these 5 tips to improve your forex trading:

1. Buy high and sell higher: Lien recommends that you trade with the trend: "Therefore by buying high and selling higher or shorting low to buy back lower, you put yourself on the side of the trend which should help to improve your trading. People who fight the tape on the other hand could be extremely frustrated if they try to do this with currencies."
2. Entries and exits are both important: Many people focus too much on the entries, and forget that exiting is also an art when it comes to currency trading. Lien recommends trailing stops.
3. Look past 2:1 risk/reward: Don't get to caught up in the idea of having to make $2 for every $1 you risk. In some cases, Lien suggests, a 1:1 ratio is just fine.
4. Pay attention to the fundamentals as well as the technicals: Don't get caught up solely in reading the charts: "On a more granular level, day to day economic data can also alter the short term trend in a currency pair or trigger a breakout. So it is extremely important for people employing technical analysis to be aware of economic data that will be released so that you can properly assess the risks to your trade."
5. Do your homework: You're the only who is on the hook for your decisions. Do your due diligence to make sure you are limiting your risk.