How to Manually Trade FOREX With Software
Many FOREX robots, which are automated trading systems, exist to make many or all of your trading decisions for you. But you won't understand how price action works if you rely on these systems. Understanding price action is essential to becoming a successful trader, whether you're using an automated system or trading manually. By trading manually with your broker's software, you learn to use indicators, make educated forecasts of price action and do what many traders consider the number one skill in trading FOREX: managing your money.
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Instructions
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Open a demo account with a broker. Demo accounts are those that let you place orders with simulated money, so you won't lose your own money while learning to trade manually.
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Download and install your broker's software for displaying currency charts and placing orders.
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Run the charting software and create a new chart for a currency pair. Read your software's help file for details. Examples of currency pairs include the Euro-Dollar, or EUR/USD; the Dollar-Franc, or USD/CHF; and the Dollar-Yen pair, or USD/JPY. Each pair's volatility usually differs from that of other pairs. Volatility is how much a pair's price changes over time. Pick a low-volatility pair such as the Australian Dollar-U.S. Dollar (AUD/USD) when you first trade. Doing so enables you to conserve the funds you'll be trading with.
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Place indicators on the chart, such as Fibonacci, RSI or Bollinger Bands. The Fibonacci indicators display prices that tend to attract currency pair. RSI displays a measure of price momentum and Bollinger Bands display a representation of price volatility.
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Place a buy or sell order with your software when your indicators display an entry signal. Place a buy order if your indicators forecast that price will rise. Place a sell order if they forecast a down move. For example, place a buy order when an uptrending price has dipped to the 38.2 Fibonacci level. Your software's documentation has details on the signals displayed by different indicators.
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Set a stop loss on your order, which means specifying a price to sell if you placed a buy order and a price to buy if you placed a sell order.
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Set a take profit price level, which means setting the price at which you think price will rise to for buy orders or sink to for sell orders.
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Repeat the previous steps for at least six months. Once six months have passed and you have at least one month of net profits instead of losses, open a live account with a broker.
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References
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