"An investment in knowledge pays the best interest." —Benjamin Franklin

Undoubtedly educating yourself about Forex Trading is the most important investment in your business and into yourself. If you want to achieve the financial freedom that you desire, it is imperative that you get to know everything related to the industry and how the Forex market operates. The statement "Trading is a journey that can last a lifetime" cannot provide a better description about the nature of the business and its full impact on you life. This journey however requires that you have full knowledge about all the weapons that you have available in your armory so as to win the daily battles. After all, Forex trading is a constant battle between the Bulls and the Bears. But while in any other war you have to choose one side only and stick to that, in Forex you can join any of the two forces anytime you want without any problem or negative implications. A common technique used by many traders in some cases is to take positions in both sides and eventually preserve the one that is winning the daily battle. Adhering to the Top Forex Trading Rules and by following my highly successful Basic Core Strategy - Personal Money Maker (PMM), you will become a profitable trader and you will make money online but still you must be aware and educated in the field of your online business. The whole essence of online trading is based on the following 4 pillars:

1.Technical Analysis

A popular way of analyzing the markets is through technical analysis. This method uses charts to study price movements based on information from the past. The purpose of technical analysis is to forecast the future direction of prices. We will be looking at the various tools and techniques used in this type of analysis.

Principles of Technical Analysis

Three key principles form the basis of technical analysis

Market action discounts everything
Prices move in trends
History repeats itself

Market Action Discounts Everything

This fundamental principle of technical analysis is the belief that a market’s price reflects all relevant information. This means that anything that can possibly affect price, such as economic, political, social or psychological factors, have already been taken into account by the market. All reactions of traders to such factors are represented in the charts.

Prices Move in Trends

Technical analysts believe prices move in trends and as such their goal is to identify the existing trend and follow it. This principle originates from the Dow Theory. The three main trends of price action are: up, down and range.

History Repeats Itself

Another basic premise of technical analysis is that investor behavior tends to repeat itself over a period of time. Technical analysts believe that this behavior will create identifiable price patterns on a chart which can be studied to predict similar future price patterns.

2. Fundamental Analysis

Fundamental analysis works by using economic variables that have the highest predictive value for a particular currency pair. In other words, it sets up a prediction model with focus on factors that had the strongest influence on currency pairs over the years.

These hints are derived from forex reports and real-time forex news such as central bankers’ speeches, macro-economic news, financial, political and economic press releases.

This is all useful because currency movements and interest rate movements go hand in hand. If you trade, you want to trade well. So you’ll be surely following all hints on how interest rates move, in which direction, and how economic data drives currency prices.

Fundamental analysis gives you an overview of the economic conditions that affect the value of a certain currency. Such major indicators are gross domestic product (GDP), retail sales, industrial production, and consumer price index (CPI).

3.Trading System

My system is trend following, which means that you should always trade in the direction of the trend. You will learn how to use various technical indicators to identify trend and find the correct entry and exit levels.

Always when you develop your system then it is best to build it based on the following 6 steps:

Step 1: Define your time frame.

Step 2: Identify the position of the market.

Step 3: Find support and resistance levels.

Step 4: Find your entry levels.

Step 5: Find your exit levels.

Step 6: Use multiple time frame analysis.

As you become more experienced you might want to develop your own system that would fit your knowledge, personality and risk tolerance. It is vital for you as a trader to have a trading system, as this will limit trading mistakes and minimize your losses. It will prevent you from making any irrational decisions in the heat of the moment. Instead it will allow you to trade with less emotion and stress.

A trading system is only effective if it is followed. You have to stick to it and in order to do this you need iron discipline. It sounds simple but most traders still can’t do it. You must write your trading system rules down and always follow them.

Remember to always test your system. The easiest way to do this is through the MT4 platform. Go back in time and move the chart forward to see how your system would behave. Record its performance and if you are happy with the results start trading on a demo account. If after a while you are still getting good results, then you can choose to trade your system on a real account. At this point, you should have confidence in your system and feel comfortable making trades with no hesitation.

4. Excellence in Trading

There are three key principles that you should by all means know about and that can turn you into a winning trader:

An efficient trading system
Sound money management
Proper mental approach

If you have set your mind on becoming a successful trader, you have to acquire an edge over the markets (i.e. trading system), develop a proper mental approach (i.e. psychology), and control risks in your trading account (i.e. money management).