In my opinion, the forex is a vastly superior trading market for newbies. There are just so many advantages to trading currencies that I think it is necessary for you to investigate them before you ever start trading stocks. I want to look at a few of the benefits now.

You can trade anytime you want

The forex is much different from stock or futures trading in that you can trade 24 hours a day. There is no central location for forex trading, so it never closes.

The currency markets follow the sun. This means that as long as there are countries operating during normal business hours, then you can trade the foreign exchange. In fact, the only time the forex is closed is on the weekends.

This 24-hour trading day is a huge advantage that currency trading has over any other type of trading.

Specialized trading

In the forex, you don’t have to worry about keeping up with dozens of stocks. There are only a handful of currency pairs that are really worth trading, and you can make a full-time living trading just one currency pair.

Wouldn’t it be nice to be able to focus on just one currency? You could learn it inside and out. You would know how it reacts to news, how it trends, and how it ranges. If you studied a single currency for a few weeks, you would have a distinct advantage that will definitely result in more profitable trades.

Leverage

The amount of leverage you have in currency trading is 100:1. This means you can control $100 with only a $1 investment. The leverage ratio in stock trading is 2:1. Just think how much more money you can make when you control 100 times your investment! That is the amazing power of forex leverage.

You know, we talk a lot about support and resistance in the forex markets, and we should! Support and resistance is so absolutely necessary to making a profit in the currency markets. I like to compare them to the map of money making. When you want to go somewhere but you don’t know how to get there, you look at a map to get the directions. Support and resistance are the maps to making money in the foreign exchange.

But exactly how do you identify support and resistance? Here are the most common ways.

1. Find swing highs and lows

The easiest way to find these critical levels is to find the market’s highs and lows. These high and low levels should be quite obvious. If you have to search for them, you are doing it wrong.

Just look at a higher timeframe (day, month, week) and see where the highs and lows are. You want to look for critical price levels like daily, weekly, and monthly highs and lows. These are places the market turned around, and they are the places the market will likely turn again once they are reached.

2. Use Fibonacci levels

Once you find these highs and lows, you can use them to draw Fibonacci levels. Fibonacci numbers are found all throughout nature – including human nature. Believe it or not, humans subconsciously tend to trade in patterns. Since the market is nothing more than a bunch of humans trading, you can use these naturally-occurring levels to help determine where the market will go next.

Now before you think I am talking the hocus-pocus here, do a little research on it. Fibonacci levels have been proven to give amazingly precise support and resistance levels.

3. Use Pivot points

Pivot points are used much like Fib levels. You draw pivot points using daily, weekly, and monthly highs and lows.

Pivot point indicators start out with a pivot point around which you base your trading decisions. Any levels below the pivot point serve as support, and any levels above the pivot point serve as resistance.

There are tones of technical indicators available for forex traders. The question is, which ones are actually working? How many should you include in your strategy? Does the rule the more the matter apply? Or you should keep it simple instead? What are the right forex tools for every day trading?

Even when there are all these elaborate choices of indicators available today, it doesn’t mean you should use them all. In fact, using too many indicators will only confuse you and most probably lead to bad trading decisions.

So, instead of making forex even more complicated than it already is, focus on combining the right set of indicators that will actually show useful information about the market and confirm your ideas about trades.

Why is it important not to use indicators that show the same data? Think about this, instead of getting a so-called “signal confirmation”, you basically look at the duplicated data, which by no means confirms anything.

Below are the indicators that can be used together to confirm your trading decisions:

1. Stochastic – the best timing tool (crossovers with bullish/bearish divergence, chart resistance/support, overbought/oversold levels).

2. Relative Strength Index (RSI) – shows the strength of the trend.

3. The Bollinger Band – shows volatility of the price.

4. Moving Averages – shows when to load in new trades or show the level to trail the stop.

There are other powerful technical indicators such as ADX line and, of course, MACD, however with the above 4 indicators, you are set towards a great trading strategy and profits.

Keep in mind that there is no short cut in forex. You have to blend into real trading and see those indicators in action. Practice, make mistakes, write it down, analyze what went wrong and get back on that bull! Experience is the only reliable indicator you will ever get!

It’s all about combining indicators for profit – no indicator works on its own, so you need indicators that complement each other. Now that you know which indicators to include in your daily trading, let’s see what can happen if you don’t use your indicators correctly.

Below is couple of tips to use the indicators correctly:

1. Don’t use indicators on meaningless data – indicators are pretty much useless on short time frame charts, since daily volatility is pretty much random and no technical indicator will be in any way useful.

2. Make sure you have enough evidence that price momentum is indicating the levels will hold. Good momentum indicators are ones such as, the stochastic and Relative Strength Index (RSI) and if used with pivot points or moving averages, you have a powerful combination

3. Don’t try to predict market direction. It is impossible to predict turning points. PERIOD! What you need to do is to find a confirmation and act accordingly. Only this way you can increase your chances of winning.

Forex trading is not a guessing game, fortune predicting system or perfect gambling technique. The above mentioned indicators have been doing their job for ages for many traders and still are equally effective today. These are the best forex trading indicators and if used correctly can dramatically improve your profits and decrease risks.

This article is all about Forex trading for beginners and if you understand the points enclosed, they will put you on the road to FX trading success and help you enter the elite 5% who make big profits. Anyone can learn Forex trading but most traders believe myths or get the wrong education so, let’s look at how to learn Forex trading the right way and win.

The first fact should be obvious but most traders make the mistake, of thinking they can make money with no effort which leads me to my first point.

1. Cheap Forex Robots Don’t Work

These systems give currency trading a bad name – they present track records which have growth rates to draw down which would be better than the super traders such as George Soros and Larry Hite and say you can do better, by buying their system for two hundred dollars or less! Don’t use them, they lose money, that’s why there so cheap. Instead, treat Forex trading seriously and get an education and learn skills.

2. Currency Trading is Simple

While you have to learn skills, the good news is Forex trading is simple – make a system to complex and it will have to many parameters to break. I have seen many highly intelligent people, think they can win by being clever and sure, their systems have had a lot of work put into them but they lose.

3. You Don’t Need to Work Hard You Need to Learn the RIGHT Education

While intelligence is no guarantee of success, neither is working hard. Some traders spend a huge amount of time learning and still lose. These traders very often think, the more often they trade the better chance they have of success but they also lose. Forex trading is all about getting the right education and being patient and waiting for the right opportunities not studying are trading, just to waste time.

4. Proper Money Management is the Key to Success

There are many ways to make profits but one certain way to lose is – to ignore money management, if you want to win you need to keep losses small. When you trade, never be tempted to run a loss, take it and don’t worry, you will get some nice trends which can cover your losses and make you big long term profits.

5. Emotions – The Enemy Within Which Causes Most Traders to Lose

If you let your emotions control your trading as most traders do, you will get wiped out. If you run losses, snatch profits to soon or get angry with the market, you will never win. You need to keep your emotions out of your trading and trade your plan with discipline. Always keep in mind, if you can’t follow your plan with discipline, you don’t have a plan.

Enjoying Currency Trading Success

Anyone can learn to be a trader and make money, you only need a simple system and if you can execute it with discipline Forex trading success can be yours – it really is that simple.