Monday, October 22, 2007

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Learn the basics of forex trading 3

Learn the basics of forex trading 1
Learn the basics of forex trading 2

45. Risk Control
A)Never risk more than 3-4 percent of your capital on any trade
B)Predetermine your exit point before you get into a trade
c)If you lose a certain predetermined amount of your starting capital, stop trading, analyze what went wrong, and wait until you feel confident before you begin trading

46. Don?t trade scared money. No one ever made any money trading when they had to do it to pay the mortgage at the end of the month. Having a requirement to make X dollars per month or you will be financially in trouble is the best way I know to completely mess up all trading discipline, rules, objectives, and leads quickly to disaster. Trading is about taking a reasonable risk in order to achieve a good reward. The markets and how and when they give up their profits is not under your control. Do not trade if you need the money to pay bills. Do not trade if your business and personal expenses are not covered by another income stream or cash reserve. This will only lead to additional unmanageable stress and be very detrimental to your trading performance.

47. Know why you are in the markets. To relieve boredom? To hit it big? When you can honestly answer this question, you may be on your way to successful forex trading
48. Never meet a margin call; don?t throw good money after bad.

49. Close out losing positions before the winning ones,

50. Except for very short term trading, make decisions away from the market, preferably when the markets are closed.

51. Work from the long term to the short term.

52. Use intraday charts to fine-tune entry and exit.

53. Master interday trading before trying intraday trading.

54. Don't trade the time frame. Trade the pattern. Reversal patterns, hesitation patterns and breakout patterns appear often. Learn to look for the pattern in any time frame.

55. Try to ignore conventional wisdom; don?t take anything said in the financial media too seriously.

56. Always do your homework and stay current on global events. You never know what's going to set off a particular currency on any given day.

57. Learn to be comfortable being in the minority. If you are right on the market, most people will disagree with you. (90% losers,10% winners).

58. Technical analysis is a skill that improves with experience and study. Always be a student and keep learning.

59. Beware of all tips and inside information. Wait for the market's action to tell you if the information you've obtained is accurate, then take a position with the developing trend.

60. Buy the rumor, sell the news.

61. K.I.S.S ? Keep It Simple Stupid, more complicated isn?t always better.

62. Timing is especially crucial in forex trading.

63. Timing is everything in forex trading. Determining the correct direction of the market only solves a portion of the trading problem. If the timing of the entry point is off by a day ,or sometimes even minutes ,it can mean the difference between a winner or a loser.

64. A ?buy and hold? strategy doesn?t apply in forex trading

65. When you open an account with a broker, don't just decide on the amount of money, decide on the length of time you should trade. This approach helps you conserve your equity, and helps avoid the Las Vegas approach of "Well, I'll trade till my stake runs out." Experience shows that many who have been at it over a long period of time end up making money.

66. Carry a notebook with you, and jot down interesting market information. Write down the market openings, price ranges, your fills, stop orders, and your own personal observations. Re-read your notes from time to time; use them to help analyze your performance.

67. Don't count profits in your first 20 trades. Keep track of the percentage of wins. Once you know you can pick direction, profits can be increased with multi-plot trading and variations in using your stops. In other words, now is the time to get serious about money management.

68."Rome was not built in a day," and no real movement of importance takes place in one day.

69. Do not overtrade.

70. Have two accounts. One real account and the other a demo account. Learning doesn't stop when trading real dollars begins. Keep the demo account and use it to test alternative trades, alternative stops, etc.

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