How to trade currency pairs

Many novice traders are always asking about how trade currency pairs. In fact, they want to know the forex trading secrets.

Today I will speak loudly, there are no secrets to success in forex market exchange. If there was, I think it comes from hard work and execution.

2 basic tips you should know about currency trading

First, I will learn how to trade forex with Babypips. It offers free online forex trading courses. 

Second, I will read the best forex trading books to make big profits. For example, Bird Watching In Lion Country or Jesse Livermore's methods of trading in stocks.

These first two pieces of advice help me to become a self taught successful forex trader. Keep in mind that the first step is to build a lifelong habit of learning.


Yes, every forex trader wants to make a lot of money in currency trading. I am no exception. So let's learn more forex trading knowledge and strategies.

5 steps to trade in forex

First, I have to develop a currency trading business plan.

• It can define the real profit targets for a successful trader
• It can define the forex trading strategy before enters into a trade. For instance, grid trading strategy, 4 hour forex trading system.
• It can define the entry and exit points
• It can define the money management rules.

Second, I am going to write a forex trading checklist. It is the fastest way to identify the trading opportunities.

Third, now you might think about how choose the luckiest currency pairs to trade. I think it should suit your personality and forex trading strategies.

• If you are trying to trade long-term trends, EURUSD would suit the moving average strategies
• The most popular cross currency pairs would suit the grid trading strategy. For example, EURGBP and EURJPY

Fourth, I have to open a demo account and test the currency trading strategies.

Fifth, I must write a currency trading journal spreadsheet. It can track, measure and improve my trading performance, especially help me build the disciplines.

In a word, if you follow the step-by-step guide, you will know how to trade currency pairs and make money. Now it's time to start your forex trading career.

More reading: Steve Burns's blog

How to trade currency pairs

Forex indicators every trader should know

Today I will show you how to use the forex indicators every trader should know. 

You probably have learned a lot of forex indicators from the popular trading books, but you are still losing money.

Perhaps you will say, there must be some secret indicators! Well, I don't think so.

First, novice traders try to use many forex indicators for trading. In fact, experienced traders only use three best forex indicators. For example, the moving averages, the relative strength index and the average directional index.

Second, you have to make a checklist before trading forex.

• the moving averages can identify the direction of the trend.
• The relative strength index can decide overbought and oversold.
• the average directional index can measure the strength of the trend

Forex indicators to find entry and exit points

Now I will use the three forex indicators to decide entry and exit points.

First of all, I will write a forex trading plan.

• I will use a 200-day moving average to identify the direction of the major trend on the daily chart.
• I will use the average directional index to measure the strength of the trend on the daily chart.
• If the ADX hovered below 20, I will use the bidirectional grid trading strategy.
• If the ADX rose above 30, I will trade with the moving average crossovers.

Second, open a demo account and test my forex trading strategy.

• I will use the EURUSD to test the moving average strategy.
• I will use the EURJPY to test the bidirectional grid trading strategy.

Third, after demo trading, I will keep a forex trading diary.

In a word, forex indicators are only technical analysis tools, you can't rely on them heavily to make decisions.

Futher reading: How to Use ADX (Average Directional Index)

Forex demo trading is important

Here I will discuss the importance of forex demo trading. 

Nearly 90% of forex traders lose their money. But they are still looking for a simple forex trading secret to make money easily.

I think the main problem of losing money is novice traders never try to use a forex demo account. But on the contrary, experienced traders are testing and practicing their forex trading strategies on it.

It is important that "success comes from hard work and execution". 

Therefore, I think beginners have to take forex demo trading seriously. 

The following five forex trading tips are things that I wish someone had told you

First of all, many beginners only open a $100 live account, but they test the forex trading strategy on a $50000 demo account. So you must trade the same amount of capital in the forex demo account as will be traded in the live market. 

Second, many beginners trade carelessly on forex demo trading. In fact, you have to write a forex trading plan, a forex trading checklist and keep a forex trading journal. 

Third, many beginners just open or close a position on the demo account. As a matter of fact, you should develop a solid, profitable forex trading strategy while on forex demo trading.

Fourth, novice traders don't have enough patience to develop a new forex trading strategy on a forex demo account. In fact, you should make profit consistently on it over the past year. 

In a word, Forex demo trading is very important for beginners.

• You should take forex demo trading seriously.
• You should write a forex trading plan and keep a trading journal with the demo account.
• You should develop a forex trading strategy with the demo account.