If you want to enjoy forex trading success, you need to avoid the 10 common myths enclosed and follow the 10 tips - if you do you will learn forex trading the right way and could make a lot of money so here they are.
Let's start with the 10 myths first:
- Day trading is a good way to make money
- You need to predict in advance to win
- Buy low sell high is the best way to make money
- The more knowledge I have the better knowledge is power
- The more complicated my forex trading system the better
- I don't have money management strategy I just place a stop
- I like to trade the news stories
- I follow an expert or guru as they know best
- Human nature is constant so markets are scientific
- You never broke taking a profit
Believe any or all of the above forex myths and you will lose!
Here are your ten tips to help you get on the right path and learn forex trading the right way:
1. Trade valid data
Forget day trading and forex scalping, trade longer term and get the odds in your favour. Day trading data is too short to get the odds in your favour and you may as well flip a coin.
2. Don't Predict
That's another word for hoping and guessing and will ensure you lose - act on the reality of price change only.
3. Use Breakouts
Buy low sell high great theory doesn't work in practice - it involves prediction. Use breakouts most major moves start from new market HIGHS Not market lows.
4. Work Smart not Hard
Working hard is a big myth - you get paid for being right with your trading signal and that's it - it doesn't matter how much effort you put in, only being right makes you money and that doesn't mean working hard, it means working smart.
5. Simple Currency Trading Systems are Best
Because they are more robust in the face of ever changing market conditions - make your trading system to complicate and it will break.
6. Money Management
Is the key to overall success and is much more than simply placing a stop! Forex success is based upon great defence first, just like the good football teams...
7. Don't listen to The News
It reflects the herd (who lose) and will get your emotions involved and that is a recipe for disaster. Use forex technical analysis and forex charts to trade the reality of price i.e trade the facts as they are not opinions.
8. Only You Can Give Yourself Success
By all means learn from others - but never follow blindly you will lose, as you need inner confidence to get discipline and this only comes from understanding.
9. Play the Odds
Markets are not scientific and don't let anyone tell you they are.
It's obvious they are not; as if they were we would all know the answer in advance and there would be no market!
Trading is a game of odds NOT certainties but if you learn to trade the odds you can make a lot of money.
10. Run Profits
Most traders can't accept a big profit even if it's staring them in the face.
Why? Because they try so hard to avoid risk they create it by trailing stops to quickly or snatching profits early. You need to discipline and right mindset to convert a trading signal into a huge profit.
FINALLY!
Before you embark on your trading career you need to ask yourself this question and have the answer ready:
My trading edge is (defined)
If you don't know what your trading edge is you don't have one! You need one you understand, have confidence in and you know will lead you to currency trading success - if you don't have one its back to and a continuation of learning forex trading the right way until you do.
Monday, November 10, 2008
Simple Tip to Increase Profits Dramatically in Forex
Here we are going to give you 2 simple tips that will instantly improve your overall forex trading results.
There simple to learn, easy to apply and could help you achieve big profits consistently of 100% or more annualized.
Consider this point:
Forex trading is all about being right with your forex trading signals and making money – You don’t get rewarded for the effort you put in to forex trading strategy the only thing that matters is profit.
Here we are going to focus on working smart not hard to make more money from trading.
Before we discuss our forex tips in greater detail, lets look at two key points in regard to currency trading.
1 The Big Trades Only Happen a Few Times a Year
If you look at any currency chart the really big strong trends only occur a few times a year and these are the trends that offer the best risk reward. The rest of the time the markets are either trending sideways with no clear trend, or showing high volatility which is hard to trade.
2. Trading The Odds
If you want to make money you need to trade the odds and get them on your side. The best way of doing this is to focus on set ups that give you a clear trading edge which is easy to see on any forex chart.
You need to look for valid support or resistance which has been tested numerous times over several months – you know if these levels are broken the likelihood of a new trend developing are high.
The two tips to make more from your forex trading system are:
1. Cut back the amount of trading you do
And only focus on high odds trades – look for valid breakouts of support and resistance and trade them.
Keep in mind, most big trends develop from new market highs NOT market lows so you need to focus on the breaks and go with them.
Use a breakout methodology and ONLY trade these high odds trades. You won’t trade often but each trade you go into will have the potential for triple digit gains.
If you like the excitement and buzz of trading this method is not for you, but if you want to make money from your forex trading strategy it is!
This now leads onto the second point:
2. Risk More Per trade and DON’T Diversify
You will hear a lot about diversification and cutting risk but all it does is dilute profit potential.
You will also read a lot of investment wisdom that says risk only 2% per trade, well if you are a small forex trader with a $5,000 account, that's just that’s $250.00!
Forex markets involves taking risks and with risk goes reward - the more you risk the more you make pure and simple. If you are trading a currency move that is a high odds one risk more – 10 – 20% is a good figure to aim at.
The above forex trading strategy focuses on making money nothing else and will cut the time you spend forex trading. Furthermore it's based on a breakout methodology which is simple to learn, easy to apply and is discussed in the next article in this series.
There simple to learn, easy to apply and could help you achieve big profits consistently of 100% or more annualized.
Consider this point:
Forex trading is all about being right with your forex trading signals and making money – You don’t get rewarded for the effort you put in to forex trading strategy the only thing that matters is profit.
Here we are going to focus on working smart not hard to make more money from trading.
Before we discuss our forex tips in greater detail, lets look at two key points in regard to currency trading.
1 The Big Trades Only Happen a Few Times a Year
If you look at any currency chart the really big strong trends only occur a few times a year and these are the trends that offer the best risk reward. The rest of the time the markets are either trending sideways with no clear trend, or showing high volatility which is hard to trade.
2. Trading The Odds
If you want to make money you need to trade the odds and get them on your side. The best way of doing this is to focus on set ups that give you a clear trading edge which is easy to see on any forex chart.
You need to look for valid support or resistance which has been tested numerous times over several months – you know if these levels are broken the likelihood of a new trend developing are high.
The two tips to make more from your forex trading system are:
1. Cut back the amount of trading you do
And only focus on high odds trades – look for valid breakouts of support and resistance and trade them.
Keep in mind, most big trends develop from new market highs NOT market lows so you need to focus on the breaks and go with them.
Use a breakout methodology and ONLY trade these high odds trades. You won’t trade often but each trade you go into will have the potential for triple digit gains.
If you like the excitement and buzz of trading this method is not for you, but if you want to make money from your forex trading strategy it is!
This now leads onto the second point:
2. Risk More Per trade and DON’T Diversify
You will hear a lot about diversification and cutting risk but all it does is dilute profit potential.
You will also read a lot of investment wisdom that says risk only 2% per trade, well if you are a small forex trader with a $5,000 account, that's just that’s $250.00!
Forex markets involves taking risks and with risk goes reward - the more you risk the more you make pure and simple. If you are trading a currency move that is a high odds one risk more – 10 – 20% is a good figure to aim at.
The above forex trading strategy focuses on making money nothing else and will cut the time you spend forex trading. Furthermore it's based on a breakout methodology which is simple to learn, easy to apply and is discussed in the next article in this series.
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