Now that you've studied the basics of technical and fundamental analysis, as well as the importance of proper risk management techniques, it's about time to take a look at another crucial component of forex success: trading psychology.
Trading psychology allows you to stay focused even in the middle of a long losing streak and gives you confidence to bounce back
from a large drawdown. It enables you to keep a clear head and manage your expectations when you're having a good run. This is what separates seasoned trading pros from beginners, as proper trading psychology makes you focus on the process and not the profits.

As with professional athletes that also have a sports psychology mentor that helps them keep their head in the game, traders also need guidance when it comes to having the right frame of mind, especially during ever-changing market situations. In a fast-paced trading environment, one can easily get distracted or stressed in trying to make money, but trading psychology ensures that one is focused on staying disciplined or keeping a level head. What's interesting about trading psychology is that it is a constant learning experience. While mastery of basic forex techniques such as market analysis or building on winning positions is possible, trading psychology takes a long time to master and even the best traders out there do need a little guidance every now and then.

It doesn't matter at what stage you are in your trading career. Even if you're a beginner just learning the ropes or an expert trader managing multiple trade positions, one's trading performance and overall well-being could benefit from trading psychology tips.
If you're a new trader trying to make sense of forex market movements and making money while you're at it, the whole experience can be exciting and overwhelming at the same time. This is why it is important to work on your trading psychology from the very start of your trading endeavor.

Perhaps one of the most important things to remember when you're starting out is to just take it easy. It can be tempting to try all technical indicators all at once or trade every single top-tier news release out there, but you might run the risk of overdoing it and feeling burned out later on. Stick with what you're comfortable with and just add what you learn along the way.
Another thing to keep in mind is to know yourself. Make sure you come up with a trading strategy that is in tune with your personality and your risk preferences. For instance, if you thrive in fast-paced movements and if you're comfortable with managing many open positions at once, then you could look into scalp trading techniques. On the other hand, if you get easily stressed with quick price movements and would rather just check your charts every now and then, swing trading might be better for you.

Risk management separates successful traders from those who wind up blowing their entire trading account. When you manage your risk properly, you take control of how much of your capital can be lost on a trade or set of trades. Risk management allows you to limit your risk even if the worst-case scenario takes place.

In order to make consistent returns, a trader has to make sure that he will be able to bounce back from a loss in case price action does not go in his favor. Determining how much to risk per trade depends on one's risk profile, as aggressive traders tend to risk more while conservative ones opt for a smaller exposure.
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To manage risk in Forex trading means to manage money. After all, this is what gets traders to this market: the desire to make a profit.
Therefore, risk management deals with understanding the factors that affect the trading account. And, positioning in such a way to diminish the Forex risks. However, there's no holy grail in trading. No strategy has only winning trades. Hence, learning to lose is a significant step forward in any Forex risk management plan. Yes, learn to lose, to learn how to win. Diminishing Forex risks means having a tight stop? No. Instead, it means to risk a proportion of the expected reward. And, the reward to outsize the risk.

That's the definition of an interesting concept called the risk-reward ratio. Savvy traders know that the higher the ratio, the better for the Forex risk management plan. A proper risk-reward ratio for the Forex market looks for about three times the reward. Of course, when compared with the implied risk. For example, if you risk fifty pips, look for one hundred and fifty in return. This way, a single winner allows for a few losers, and you'll still end at break even. What to do when you need a wider stop loss? Because some trading strategies (e.g., Elliott Waves Theory) require bigger stop loss levels, the Forex risks increase, right?

Wrong! The secret is to adjust the traded volume to the number of pips needed for the stop loss. Therefore, a bigger stop loss results in a lower volume. And, a tighter one, at a higher volume. This way, the proportion helps to protect the trading account. Moreover, such a simple Forex risk management strategy leads to profitable trading. But even the ones that do look at the economic calendar and the news ahead. If markets move, they move for a reason.

Any Forex risk management plan starts over the weekend. Or, when the previous weekends.
Savvy traders check the economic news ahead to see what the Forex risks are. The next thing they do is to adopt the strategy. For example, let's assume a major USD event is due. One great way to diversify is to…sit on your hands and not trade any USD pair. Keep in mind that having no position is, in fact, a position. Why not focusing on a cross pair, instead of a USD pair? Or, the ECB will have its regular press conference the next Thursday. Avoiding EUR pairs means avoiding unnecessary Forex risks. However, it also means missing on opportunities. Therefore, a balance should exist between the two.

Most of Forex news comes from the economic sphere. Job-related data, changes in the size of an economy, inflation, etc., offer traders clues about the economic performance of a region or country. Traders put the economic news together to find out the shape of an economy. Thus, the shape of a currency.
With its almost six trillion dollars daily turnover, the Forex market depends on Forex news to move.

Forex trading means buying and selling currency pairs. Hence, traders compare to economies for every currency pair.
It doesn't mean Forex traders need an economic background. Merely, it means looking at the major economies around the world, like: United States of America, Eurozone, Japan, Australia, Canada, United Kingdom, Switzerland, etc.

Now imagine that each economy has a currency:

• S. Dollar (USD)
• Euro (EUR)
• Yen (JPY)
• Australian Dollar (AUD)
• Canadian Dollar (CAD)
• British Pound (GBP)
• Swiss Franc (CHF)

Any discussion about Forex volatility and what causes it starts with the USD. As the world's reserve currency, it influences the entire Forex dashboard like no other currency.

Because of the dollar, the currency pairs form two categories: majors and crosses. Any major pair has the USD in its componence. Hence, a major don't. Only by splitting the pairs in such a simple manner, traders can avoid Forex volatility surrounding critical economic events. For example, one way to prevent wild swings in the trading account is to trade cross pairs during American Forex news.
After the Bretton Woods conference, the USD became the pillar of the world's financial system. Moreover, the Nixon shock in 1970's decoupled it from the gold standard. From that moment, it was only a matter of trust in the USD that kept foreign investors buying it.

The most important and relevant
The Forex calendar news out of the United States is one of the busiest of them all. Because of the dollar's role, every market depends on the shape of the US economy. More over, the Intermarket correlation means the dollar will move not only the Forex market but also other markets like bonds, stocks, options, and so on. Hence, it is all about interpreting the economic news.

For a currency, it is all about the interest rate level. Hence, the Federal Reserve interest rate announcement and press conferences move the dollar. And, the Forex market. The Fed meets every six weeks. On a Wednesday, right after the London's close, the Fed releases the FOMC (Federal Open Market Committee) Statement. This is a text describing the monetary policy. Trading algorithms or robots scan the document with lightspeed and react.

Here we have a few methods that will help you quickly change tactics and gain pips. We're going to provide you with an overview of strategies that have worked for many years, so that you can research the ones that are of interest to you. These are the Forex trading strategies that work, and they have been proven to work by many traders. Quite often, traders will rely on trading strategies that haven't been tested thoroughly, setting themselves up for a failure. The truth is, you can spend hours searching all over the internet for the right strategy – and have no luck finding one. The only solution is to try out the leading strategies for yourself and see what actually works.

Forex trade strategies and goals. Before discussing trading setups and possible strategies, we need to first understand why one would consider trading Forex in the first place. There are two main reasons: hedging and speculation.
Hedging refers to companies protecting themselves from losses. They get their daily profits from any overseas country (that has paid revenue in a foreign currency). Then, they transfer it back to their own country, expecting fluctuation in the currency.
This practice isn't really relevant to Forex strategies.

On the other hand, speculation refers to predicting a move that a company might make in a certain situation. If done correctly, these predictions greatly improve trading results. Speculation is what day trading is all about. With the help of decent strategies, you can progress in the Forex trading world and ultimately develop your own trading strategy. The downside is that this is a time-consuming and difficult process. The good news is that there are pre-made strategies available for you to try.

Although it is better to play it safe, especially if you're new to the game, you need to change your tactics from time to time. This may
allow you to see a profit margin you could have missed otherwise. The Bladerunner Trade. This is suitable for all timeframes
and currency pairings. It is, at this moment, one of the trending strategies in the market. The Bladerunner Trade is a price action strategy.

Daily Fibonacci Pivot Trade
This trade uses daily pivots only. However, it can be extended to a longer timeline. It combines Fibonacci retracements and extensions. Fibonacci trade can incorporate any number of pivots.

Forex Overlapping Fibonacci Trade
These strategies are a favourite among many traders. The reliability tends to be a bit lower, but used in combination with appropriate confirming signals, they become extremely accurate.

Trading the Forex Fractal
This is more of a concept rather than a strategy, but you need to know this if you want to understand what the prices are doing. This offer you a lesson in market fundamentals, which will really help you to trade more effectively.
Currency trading strategies are a game of trial and error. It may be worth trying out the strategies from list above to see if any work for you. However, we will look at two further strategies which tend to be more common than the ones previously mentioned.