Currency trading looks deceptively easy, yet only a small number of traders succeed.

This may sound an odd statement after all the communications and information available is more advanced than ever before, but this is not help it can actually hinder your quest for currency trading success - Here's why.

Speed of information

Today, all participants in the market can get vast amounts of news in seconds via the internet and this creates volatility.

Of course, we all know volatility is needed to make money from any financial market -If there is no movement there is no profit potential.

Volatility and price spikes

However today, price spikes are a hindrance to currency trading success for a vast amount of traders.

How many times has this happened to you?

You take a position and it moves your way then suddenly, it recoils back hits your stop and your out of the market.

Then to really depress you, the market goes back up in the direction you had thought it would to make huge profits!

If that's happened to you don't worry your not alone, it has happened to most traders.

Information is discounted quickly and price moves and spikes are more volatile within the major trends than they have ever been.

So how do you combat these problems?

The best way is to avoid these common errors

Avoid Day Trading

The biggest myth is that to achieve currency trading success you need to day trade.

On the contrary, it's a guaranteed way to lose.

You can't predict short term moves so don't try.

Also, your inevitable losses will never be covered by your profits as you don't run them. Add in transaction costs and you will lose.

You need to trade longer term and limited you're trading only to the best opportunities and you also need to accept risk.

Here is what you should do.

- Trade the longer term trends only.

- Be highly selective in your entries - Don't trade for the sake of trading.

- Accept more risk!

Don't put your stop where everyone else does.

If you are confident in your trade give your position a wide stop.

This doesn't mean being rash but if you believe in a trade you are going to have to take risk.

- Don't diversify too much only trade the trades that you believe will make big gains and risk more on them.

- Don't move your stop to quickly leave it behind to cope with volatility.

- Have a profit target and once reached get out or then you can tighten up your stop

You need to be able to mentally accept big gains!

Traders who trade for small profits or day trade are doomed in the majority of cases to fail, as are the ones who cant accept huge profits.

This may sound an odd statement, but it's true.

It takes a lot of courage to sit on a position that's making thousands of dollars and watching short term volatility eat into them.

If you believe in your method you should stick with the trade and keep in mind that many currency trades last several months or years.

These are the trades that will make your currency trading a success so focus on them, hold them and risk as much as you can, so you don't get knocked out the trend.

In part 2 we will look at specifically how to do this and how you can catch the big moves and make big profits.