When trading forex, one must be careful because wrong expectation of price can happen. Two main points must be considered for successful trading. The first point is the strategy to be followed while the second pint is the trading time.

Let us consider the first major point: the trading strategy. When deciding to enter a trade, it must not be happened randomly. The trader must build some rules that form a strategy. The strategy is like a contract that contains many bands to be followed when trading. The more important thing after building the strategy is for the trader to train himself or herself to follow the bands in the strategy built. This is because any one who is beginner can build the strategy as he learns more but this strategy may be missed as a trade is entered.

A forex trading strategy requires three main basic bands. These bands are the time frame chosen to trade over it, the techniqual analysis used to determine if there is a price trend for the currency pair, and the entry and exit points.

The time frame is the time period used when analyzing the price chart. It represents the period between intermediate closing prices of the currency pair. Each trader can use the time frame that matches his personality but knowing that its one has t advantages and disadvantages. Generally, the higher the periods the more profits the trader can gain and also the more risks. This is because the price will change more at long time than in short time.

The techniqual analysis must also be determined by the forex trader. This is to predict the future trend of the price. Common indicators used are the moving averages, MACD, stochastic, RSI, and pivot points. Note that the previous indicators can be used in combination and not only one. This is to confirm that the price trend is true.

The final band in the forex trading strategy is the entry and exit points. The trader must be able to determine when to enter he trade and when to exit the trade. This can be archived for example by the moving averages crossover. The idea here is to draw a fast moving average and a slow one. When the fast one crosses the slow one, this will indicate a trend. When the rules are met, whatever it is, the trader can enter or exit the trading.

The second major point is the trading time. Generally, there are certain time periods that are perfect to enter a trade and time periods that are difficult to be profitable or very risky. The risky time periods are the times at which the price is fluctuating and difficult to predict. The most risky time periods are the periods at which economy new are arisen. The trader can enter a trade at this time because the price cannot be predicted. Also at the end day, the trader must not enter a trade. In the forex market, the end day is on Friday.

At the day level there are periods also that the price doesnt largely and periods that the price change largely. The risky time periods are when London stock opens ad when USA stock opens. Also there are large changes when Berlin stock opens. After each one opens, there are often large changes in the prices for a man hours. The most risky time periods is the time at which two stocks are overlapped in time.

About the Author:

Youssef Edward is an Electrical Engineer and he is the owner of tips-made-easy.info site He studied too much in Forex Trading.