In Forex trading, there are an almost limitless number of ways to trade. It’s a vast global network, incorporating hundreds of different currencies in markets that rarely close and that contribute trillions of dollars’ worth of trading every day. But despite all the inherent complexities, it may surprise you to know that most people trading Forex successfully actually try to keeps things very simple.
With all the data, charts and analysis tools available to Forex traders, there’s a very real temptation to analyse everything down to the last detail. The main problem with that approach is that, eventually, you’ll get to the point where you’re overanalysing things. Staring at a computer screen, analysing numbers all day and night isn’t something most people can do with any longevity. Eventually, there’ll be so much data swirling around in your mind that it might actually prevent you from making a definitive decision one way or another. Therefore, a key to trading is keeping a clear head. This is the KISS (Keep It Simple, Stupid) method that gets applied to so many things in life.
For the trading version of KISS, experienced traders tend to get into a bit of a routine, like knowing what times to trade and the key market indicators to look out for. Of course, it takes time to gain the experience you need to be able to operate in that way – you can’t, for example, expect to fully understand concepts like Forex leverage without seeing firsthand how it works. But at least you can take comfort in knowing that all the experience you gain will eventually save you time in the future.
Keeping things simple isn’t only important for top traders, it’s also very important for the bulk of traders who don’t trade Forex as a full time job. Most traders have ‘regular’ jobs and simply use Forex trading as a form of supplementary income. When that’s the case and time is short, you don’t want to be poring over reports or analysis graphs in your spare time; you just want to know the most important things so you can make a call on your trades.
Be sure to take some time to educate yourself about the main features of Forex and make use of demo accounts offered by Forex brokers. These let you trade in a practice environment without risking any of your own money. If you do this, you’ll have a much better chance of success – not to mention an awareness of the most important things about Forex trading – when you start trading live. And when it comes to putting your money on the line, there’s no doubt you’ll want to be making the best decisions you can. The key is to keep it simple if you can.