Brian Dolan

Foreign exchange (or forex) markets are one of the fastest and most volatile financial markets to trade. Money can be made or lost in a matter of seconds; at the same time, currencies can display significant trends lasting several days, weeks, even years. Most importantly, forex markets are always moving, providing an accessible and target-rich trading environment.

When it comes to trading options, knowing how to look for breaks is key. For more details on a zoomed-out look at this, read How to Find a Breakout in Trading.One way to trade a breakout is after the break has occurred. You may not have noticed the significance of a particular technical level, or you may not have left orders in overnight to exploit a break.

If you’re basing your trading strategies on trend-line analysis, you need to be aware that price levels derived from trend lines will change depending on the slope of the trend line. The slope of a trend line refers to the angle of a trend line relative to a horizontal line. The steeper the slope of the trend line, the more the relevant price level will change over time; the shallower the slope, the more gradually the price levels will change with time.

These "beginner" trading mistakes are made by everyone — from total newcomers to grizzled forex market veterans. No matter how long you've been trading, you're bound to experience lapses in trading discipline, whether they're brought on by unusual market developments or emotional extremes. The key is to develop an intuitive understanding of the major pitfalls of trading, so that you can recognize early on if you're letting your discipline slip.

Three things make you a good currency trader: platform, methodology, and psychology. Often traders have the first two covered, but they come up short in the psychology department. Do you ever think that trading is too hard? That you can't seem to make money or make a good decision? If so, that's good! It means you're a perfectly normal trader who shares the doubts and fears of traders all over the world.

You may think that the $5-trillion-a-day forex market may be too big to get caught up in the movements of other, smaller asset classes, but that's not the case. The forex market doesn't move in isolation — what other asset classes do can have big implications for currency prices. Here's how: Equity markets: If an equity market is rallying, check the domestic currency — sometimes it can follow suit.

The kind of trader you are will affect — or should affect — your trading strategy. It helps to know your trader type so you can trade effectively and in a way that feels right for you. To determine your trader type, take the following quiz. The quiz Which statement best describes you when you're competing? A. I'm aggressive, outgoing, and confident in my abilities whether I win or lose.

Here are ten rules that define the best currency traders. Many of these rules apply to traders in any market, but some of them are unique to the currency market. The important idea to keep in mind: No one is born with all these habits. The only way to acquire them is the way other successful currency traders have — through patience, discipline, and experience.