| EDUCATION |
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| 133 Trading Tips |
| Economic Indicator |
| NFA FOREX EDUCATION |
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| If you suffer a loss,don't try to immediately open a new position to "get
revenge" on the market-You are making your situation worse. Only if you see
that the direction you have chosen for that position was totally incorrect,then it
would make sense to quickly close that losing position and immediately
open a new position in the opposite direction. Don't play guessing games
with the market. It is better to lose opportunities,than to lose money. |
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| LET YOUR WINNERS RUN,CUT YOUR LOSERS SHORT |
| Always follow the ancient and universal rule of the market: cut your losses as
soon as possible,and hold your winning positions open as long as possible.
There is no more to add: never,under any circumstances,allow loss to occur
in a position which has been making profit .It is better to close it all together
without profit if the market suddenly turned in the opposite direction,rather
than allowing a profit to turn into loss. |
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| THE TRADER'S GREATEST ENEMY |
| The trader's greatest enemy is not the market,putting the blame on which is
the same as blaming nature. The trader's greatest enemies are-greed,
impatience,lack of control,oner emotions,insecurity it oneself,and a self-
centered nature of the trader. You should never open a position simply
because you get bored and want to do something,or because you haven't
open a position in awhile. There is no limits or restrictions on how many
positions you should open in a given period of time. Even if you open one
position during 2-3 days and that trade earns $600-800- you are in the right
track. |
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| LOYALTY TO 1-2 CURRENCY PAIRS |
| Concentrate on 1-2 currency pairs,not more. Research their behavior though
roughly. Do not trade different currency pairs, but observe and analyze the
behavior of all currencies-they are all dependent on each other. Understand
that cross rates have the greatest influence over the behavior of the currency
pairs,including the Dollar. |
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| IDENTIFY DEMO AND REAL |
| Try to think your demo as your real account. The sooner you are able to
convince yourself that demo account is trading the same real money as real
account, the sooner you will begin to develop the proper technique of trading
which you will eventually use in real trading. You must act the same way
when the demo trading, as you will when trading for real, because the
technique you develop determines your success in trading.* |
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| KEEP A DIARY |
| Keep a diary,where you will describe the conditions that led you to make the
trading decisions. Write about the market events that influenced your
decisions to open or close position. After every trade,analyze it and write
down the result in your diary. If you made a profit,it is important that you
understand and remember your flow of thinking that led you to the right
decision .It is even more important to understand why you lost. If you can
understand the mistakes you made in the past you can learn not to repeat
them. |
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| THE FOCUS OF ATTENTION |
| In order to become a successful trader,you must have a sufficient risk capital,
the loss of which will not affect you that much- you must be able to handle this
ordeal calmly and this should not affect your lifestyle in any way. Your mind
should be on the market more than on your finances. You must concentrate
on the task of trading and must remain calm,in order to pressure would be
too great,and your mind would stay towards your finances,and not towards
the market situation,thus greatly increasing the possibility of mistakes. |
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| AMOUNT OF WINNING TRADES |
| When the amount of winning surpasses the amount of losing trades,and your
account balance is increasing,that means you have achieved a positive a
positive result in trading. However,if you have 5 losing trades for $2,000 total,
and 1 winning trade for $3,000,that is nothing to brag about since you have
probably made it through only by lack,or by the fact that you taken an insane
risk to use the maximum number of lots for your trade. You should never
depend on luck-eventually it will come to an end . |
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| BUILDING A TRADING SYSTEM |
| 5 STEP PLAN: |
| 1)Start with a concept |
| 2)Turn it into a set of objectives rules |
| 3)Visually check it out on the charts |
| 4)Formally test it with a forex demo account * |
| 5)Evaluate the results |
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| MONEY MANAGEMENT |
| Money management is an extremely important topic. It is one of the keys to
successful trading, every bit as important as a good trading system. Money
management techniques should be well thought out. Accept the fact that
losses are part of the game. You must control your downside if you want a
chance to profit. |
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| *Simulated conditions may differ from real conditions, and traders should not
necessarily expect the same results from live trading. |
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