You should firstly examine the different types of trading methods that you have available to choose from. To understand these different types, you should firstly understand what the term pip means, when used within the context of the Forex market. A pip is a decimal change to the value of an exchange. It is a very small value, and usually only relates to a hundredth or to of a percent.

Now you know what a pip is, a Scalper is the simplest type of Forex trader. This involves little risk. You simply make an exchange, and then exit that trade within usually only a few minutes. This trade involves the exchange value changing by only a few pips, maybe 10 to 15 each transaction. You obviously would have to make a good few transactions of this type if you are to make any return on your investment throughout the day. A day trader makes trades over a few hours, and can observe changes of between 50 and 100 pips during that time. A position trader takes far greater risks, and leaves their investments for a few days at a time. If timed well, these types of trader can make exchange differences of 150 to 500 pips, and experience excellent profits. How much time you can spare with the Forex market will determine the type of Forex trader that you can be.

Once you have established the amount of time that you can spare with the Forex system, you should decide on the times that you can trade. It is best to trade euro/US dollar currency when London is opening for example, so the best time for you to trade this currency would be at about 3pm eastern time. You should research these figures carefully so that you can make the most of the most favorable times to trade.


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