Successful Forex traders all share many of the same characteristics.

1 - As with any business, being successful requires a plan. Forex trading is no different in this respect. To trade profitably requires planning and then reviewing, possibly revising, and definitely following that plan .

2 - To be successful you must have adequate capital. No one should go into any business for the long term without adequate working capital. No matter how good your trading methods are inadequate capital can take you out of the game right when things are starting to go well for you.

3 - Have realistic expectations. You will not profit in Forex trading if you don't start to trade until you find a trading method that yields 1000% per month.

There are two basic ways to approach the analysis of the FOREX markets: Technical analysis and Fundamental Analysis. Someone who is using a fundamental analytical approach will look at the current economic climate, political events, a variety of economic indicators, and so on to try to predict currency moves.

What we will examine is technical analysis, or the use of historical price patterns in economic data to predict future moves in the FOREX. We will also look at the tools used for technical analysis.

The three major assumptions underlying technical analysis are: