Here we are going to look at the importance of currency research and how to implement in a trading plan for big gains over the long term.
Currency trading research falls in to specific categories - currency research before you trade, research for traders executing a vendors signals and research for traders who want confirmation for their own trading.
Getting the right currency research will have a big influence on your trading success, so lets look at each area in more detail.
Currency Trading Research - Before you start
All traders need to know the basics, you wouldnt try to drive a car without lessons, and neither should you try to trade currencies without a bit of study.
There are plenty of good books on trading and here we are going to give you some books that you may like to consider.
Good books to read include any by Larry Williams, Jake Bernstein and Ken Roberts while not specific to currency trading their easy to read and digest and give you an idea of what trading is all about.
You also need to read some good books on trading psychology and there is no better place to start than Jack Shwagers Market Wizards and New Market Wizards that complies some stories of some of the great traders of all time including: Ed sekoyta, Richard Dennis and the famous turtletraders. These books are essential reading for any trader.
Other good books on psychology include ones by Alexander Elder and Dr Van Tharpe
And the classic reminiscences of a stock operator by Edwin Le feuvre
Good overall reference books to have are fundamental market analysis and technical both again by Jack Shwager.
Currency Trading Research - Following Mechanical Signals
Many traders like to follow currency research in the form of newsletters and currency trading systems from vendors and then act upon the signals they provide.
If you are doing this make sure you:
1. Have full confidence in the method they are using to generate the signals and know as much about the logic as you can.
2. You also should study trading history to see how successful trades have been and make sure you are happy with the risk reward.
3. Keep in mind if you are following signals or trades you need to follow them EXACTLY and this means having full confidence in the method used.
Currency Trading Research - To help you with Entry and Exit Levels
If you dont want to follow someone else and you wish to make your own trades then there is plenty of currency trading research services on the net.
There are services that you can pay for, but much of it is available free and in many instances, this information is the best.
Many of the larger brokers and banks have great research and cover both technical and fundamental factors affecting currency movements.
Do a search, and you will be able to find good daily, weekly and monthly currency research reports.
A Word of Warning on Currency Trading Research!
The amount of currency trading research on the net is vast and many traders feel that the more research they have the better and try to use 5, 10 or even more different services to help them with their trading.
The result? - They end up with to much information, much of it conflicting and get confused and unsure what to do.
The best way to use currency trading research if you are trading for yourself is follow a few services only, that reflect your trading style and use them as a filter for your own trades.
Currency Research - Helping to Make your Trading Profitable
If you are simply following signals or trades of someone else, you need to spend time doing your homework, so you have full confidence to execute trades with discipline.
Research is needed regardless of whether the method is totally mechanical or reasons are given for the trades.
To get the most from this type of research you need to follow ALL the trades, not just a few! Otherwise, you may miss the best opportunities and your track record will not reflect that of the service, which you bought.
The real problem for traders who want currency research to just help them confirm their own trading material, is the sheer volume of research available.
You need to be SELECTIVE and just have a couple - too many will confuse you and give you conflicting information.
As stated there is no need to pay, many banks and brokers offer great research and its totally free and in many instances better than the paid for services.