Currency trading is the buying and selling of currency on the foreign exchange (forex) market with the intent of making money. Currency trading is not for everyone as it carries a high level of risk. Before you begin currency trading, you need to understand your objectives, your risk tolerance and your level of experience. Once you have worked out where you stand, you can begin trading; however, it is important to realize that trading requires skill. This skill can be honed through practice and discipline which must happen before you begin trading if you are to be successful. Follow these tips to improve your skill.

• Choose a style of trading based on your goals - It is also important that the style of trading that you choose, fits your personality. For example, if you would like your funds to appreciate from a trade over an extended period of time, consider becoming a position trader. If you would find it too stressful going to sleep with an open position on the market, become a day trader. Every style of trading has a risk profile and you need to understand these and be realistic about your comfort zone before you choose a style of trading for yourself.
• Be consistent in your style - Once you have chosen your trading style and worked out your methodology, you must make sure to stick to these plans. Work out a timeframe and a plan for achieving your goals.
• Calculate expectancy - You need to understand how reliable your system is and to do this you need to analyze all of your trades. This means that you need to go back and look at your winning trades and your losing trades and compare them. Look back at your last ten trades to see how profitable your system is.
• Choose your broker carefully - The broker you choose is very important and requires research. You need to understand how the broker goes about making a market and their policies and ensure that the broker’s trading platform will allow you to do the analysis you need. You need a good broker with a good platform.
• Have money set aside for trading - This will also help you to accept small losses. In other words, you should be trading with money that is specifically for trading and is not needed for any other purpose so that if you experience a small loss, it will be ok. You should also plan to only leverage your trades to a maximum risk of 2% of your total funds. This means that you should never let a trade lose more than 2% of the value of the account.
• Be prepared - You should always be learning and preparing. Whenever you have the opportunity, such as over the weekend when the markets are closed, you can prepare for the week ahead. Read the news and analyze the weekly charts to look for patterns that could impact your trades. Make your plans and then make sure to stick to them in the coming week.
• Be patient - Just as important as it is to make plans, it is important to wait for the market to reach your point of entry. This may take longer that you expected, but you need to be patient. Always remember that if you miss a trade, there will be another.
• Analyze your trades - To improve at anything you need to go back and analyze what you did and how you can improve. The same goes for currency trading. Keep a printed record and list all the pluses and minuses of the trade, as well as detailed comments that you can refer back to.