Here are 12 tips for currency trading success if you are new to trading each point is explained more fully in our other material, but these are the basics that can lead you to successful forex trading.
Use them in your trading plan, your chances of currency trading success will be increase dramatically.
1. You are responsible
You need to take responsibility for your actions only you can give yourself success. Don’t follow anyone else blindly.
2. Desire to Succeed
All the great traders have a burning desire to succeed and learn the right way to succeed and this involves getting a trading edge.
3. Work Smart - The amount of effort you put into currency trading has no bearing on how successful you will be and you can easily do all your trading in under an hour a day which leads onto:
4. Simple Systems are best
Many traders think the more complex a system is the more better it will perform, but the opposite is true.
Most of the top trading systems are simple. Why?
Because they are more robust in the fact of brutal market conditions.
5. Don’t day trade
This is the biggest myth of currency trading. You will lose the odds are against you read our other articles and you will see why this is a guaranteed way to lose.
6. Don’t follow the herd
Most of your most successful trades will be uncomfortable as the majority will not agree with. Keep in mind that’s no bad thing as most currency traders lose
7. Discipline
Many traders have good trading methods but they lack discipline to apply the method this is normally because they are following someone else’s system without having confidence in it. Which leads on to, you guessed..
8. Confidence
You must have confidence in your ability to make money longer term from the method you are using which means knowing exactly how and why it works.
9. Patience
Many traders think they always need to be in the market and want the excitement but there is no correlation between this and making money.
The big trends only come a few times a year so be patient wait for them and hold them
10. Risk Management
All traders know that money management is one of the keys to trading so you need a money management system that allows you to maximize risk and reward.
11. Be Realistic
Don’t be in to much of a hurry to make money or you will lose it quickly be patent and realistic in your trading aims.
12. What’s your edge?
By a trading edge we mean, what makes your system likely to succeed when 90% of traders fail to make money?
If you don’t know what your edge is you don’t have one and will lose.
Currency trading success looks easy to achieve but it is not. Of course you can succeed but you need to approach it in the right way, with the right method and have the confidence and discipline to succeed.
Monday, November 10, 2008
Currency Trading Education
If you want to win at currency trading, you can buy advice but most currency trading education you need you can get for free and here we will look at how to find the best and enjoy currency trading success...
Let's first look at currency education that needs to be avoided.
Forex Expert Advisors
Most who claim they are not - anyone who claims they can make you money with no effort should be avoided.
If you want to see if an expert is a not qualified, look for the words "simulated" or "in hindsight", on the track record presented - this is not real trading and the track record is made up, to sell currency trading courses and systems.
Forex Forums
Want to find losers? Then currency trading forums are great. What trader who makes money uses them?
I don't know any. It's mostly losers who are trying to make themselves feel better, by dispensing their wisdom, or vendors trying to peddle their products - most of which are junk. Avoid Currency forums!
News Sources
We have better news than ever but traders need to learn 30 years ago before we had lots of currency news sources 95% of traders lost and 95% lose today, so improved news hasn't helped.
Prices don't move to the news, they move to trader's perception of. Try and trade breaking currency news and you will lose.
Brokers
Most broker education won't help you - if brokers were good at trading, they wouldn't be brokers! Also, as brokers mostly trade against you when you take a position, it's a conflict of interest.
Good Sources
So what about the good sources? Well the good news is:
There is plenty of it and you can get a good solid currency education for free.
The best way to trade is to use currency charts and base your market timing on technical analysis. There is plenty of free information on the basics, all the different indicators and charts for free, so you can look at the indicators, try them and come up with a simple, robust currency trading strategy.
Any currency trader, who wants to win, should also learn breakout trading and you will find a lot of information on this as well.
The fast is anyone can learn currency trading, there are no secrets and the reason most traders lose is - lack of discipline and poor money management and there is plenty of information on this too.
Traders simply lack discipline and CANNOT keep their losses small or trade through losing periods.
Worth the Money.
You can get some great information on discipline for free but I Would recommend spending $100 or so, on some books, from the really great traders, to get more insight into the mindset to succeed.
These are traders who have walked the walk and don't simply talk the talk. We reviewed our top ten in other articles so look them up - this is money well spent.
So in conclusion, you can get all the currency trading basics for success for free and can build a currency trading strategy - your major challenge though is money management and discipline.
Its here I would recommend spending a few dollars, if you don't think you have discipline ( and most traders don't) and then, the combination of a simple, robust, currency trading system and the right mindset to apply it, can help you win at currency trading.
Getting the right currency education is easy; getting the right mindset is what separates the small number of winners from the losing majority.
Let's first look at currency education that needs to be avoided.
Forex Expert Advisors
Most who claim they are not - anyone who claims they can make you money with no effort should be avoided.
If you want to see if an expert is a not qualified, look for the words "simulated" or "in hindsight", on the track record presented - this is not real trading and the track record is made up, to sell currency trading courses and systems.
Forex Forums
Want to find losers? Then currency trading forums are great. What trader who makes money uses them?
I don't know any. It's mostly losers who are trying to make themselves feel better, by dispensing their wisdom, or vendors trying to peddle their products - most of which are junk. Avoid Currency forums!
News Sources
We have better news than ever but traders need to learn 30 years ago before we had lots of currency news sources 95% of traders lost and 95% lose today, so improved news hasn't helped.
Prices don't move to the news, they move to trader's perception of. Try and trade breaking currency news and you will lose.
Brokers
Most broker education won't help you - if brokers were good at trading, they wouldn't be brokers! Also, as brokers mostly trade against you when you take a position, it's a conflict of interest.
Good Sources
So what about the good sources? Well the good news is:
There is plenty of it and you can get a good solid currency education for free.
The best way to trade is to use currency charts and base your market timing on technical analysis. There is plenty of free information on the basics, all the different indicators and charts for free, so you can look at the indicators, try them and come up with a simple, robust currency trading strategy.
Any currency trader, who wants to win, should also learn breakout trading and you will find a lot of information on this as well.
The fast is anyone can learn currency trading, there are no secrets and the reason most traders lose is - lack of discipline and poor money management and there is plenty of information on this too.
Traders simply lack discipline and CANNOT keep their losses small or trade through losing periods.
Worth the Money.
You can get some great information on discipline for free but I Would recommend spending $100 or so, on some books, from the really great traders, to get more insight into the mindset to succeed.
These are traders who have walked the walk and don't simply talk the talk. We reviewed our top ten in other articles so look them up - this is money well spent.
So in conclusion, you can get all the currency trading basics for success for free and can build a currency trading strategy - your major challenge though is money management and discipline.
Its here I would recommend spending a few dollars, if you don't think you have discipline ( and most traders don't) and then, the combination of a simple, robust, currency trading system and the right mindset to apply it, can help you win at currency trading.
Getting the right currency education is easy; getting the right mindset is what separates the small number of winners from the losing majority.
Forex Money Management
If you want to win at forex trading, you need to like the good football teams - play strong defence first. If you do, the offence will take care of itself and you could soon be making some huge gains and protecting what you have at all times.
Many traders do forex money management as an after thought and think it takes care of itself - but with the leverage available, this is a sure fire way to wipe out your equity.
Forex money management is all about taking calculated risk at the right time and as the old gambling saying goes:
"To win you need to bet but you can't bet if you're not at the table"
As soon as you open a forex trading position, you are at risk.
How you manage this risk, will determine how successful you are and how much money you make.
Here are some tips on money management which will help you maximize gains and limit risk.
1. Trade only when the odds are in your favour
Many traders think the more they trade, the more they will make - but this is simply not true. High odds set ups don't come everyday and you shouldn't ever force the market to try and give you profits.
2. Remember the 80 - 20 Rule!
This applies in many areas of life and simply says 80% of your gains, come from 20% of your efforts. Look at your trading in this way and you will often see, you are trading for marginal profits.
Adjust your forex trading strategy to trade less and make more.
3. Placing Stops
These should be placed as soon as you enter a position.
Never run a mental stop chances are if you miss it - you will wait to see the market it turn around as most times it won't; leaving you with a big hole in your account.
Always place your stops behind support and resistance and not in "no mans land"- have the view if I get taken out so to will a lot of others.
Now lets look at the real problem most forex trader's face - trailing stops.
Most traders try so hard to restrict risk they actually create it, by moving their stop to quickly and getting caught by volatility. They get stopped out with a marginal profit, then see the trade go back in the direction they thought piling up big gains and there not in!
Forex trading is risky - don't let anyone tell you otherwise.
You need to risk money to make it, this isn't being rash this is just a fact of life.
Volatility is the enemy and to execute your trading signals for maximum profit, you need to take it into account.
If you want to learn currency trading the correct way, understand the concept of standard deviation of price.
Don't know what it is?
Then make it an essential part of your forex education!
When trailing stops always leave the market room to breathe.
For example, if you are following a big forex trend, you can leave your stop behind a key moving average (the 40 day is good) and while you will miss the last bit of profit, that's ok - if you got just 50% of every major trend, you would be very rich.
We quoted an old gambling saying earlier that applies to forex trading and here is another.
" There's a time to hold them, a time to fold them and time to get out of town fast"
If you have understood this article, you will understand that proper forex money management is essential and "getting out of town fast" will save and preserve your equity.
Many traders do forex money management as an after thought and think it takes care of itself - but with the leverage available, this is a sure fire way to wipe out your equity.
Forex money management is all about taking calculated risk at the right time and as the old gambling saying goes:
"To win you need to bet but you can't bet if you're not at the table"
As soon as you open a forex trading position, you are at risk.
How you manage this risk, will determine how successful you are and how much money you make.
Here are some tips on money management which will help you maximize gains and limit risk.
1. Trade only when the odds are in your favour
Many traders think the more they trade, the more they will make - but this is simply not true. High odds set ups don't come everyday and you shouldn't ever force the market to try and give you profits.
2. Remember the 80 - 20 Rule!
This applies in many areas of life and simply says 80% of your gains, come from 20% of your efforts. Look at your trading in this way and you will often see, you are trading for marginal profits.
Adjust your forex trading strategy to trade less and make more.
3. Placing Stops
These should be placed as soon as you enter a position.
Never run a mental stop chances are if you miss it - you will wait to see the market it turn around as most times it won't; leaving you with a big hole in your account.
Always place your stops behind support and resistance and not in "no mans land"- have the view if I get taken out so to will a lot of others.
Now lets look at the real problem most forex trader's face - trailing stops.
Most traders try so hard to restrict risk they actually create it, by moving their stop to quickly and getting caught by volatility. They get stopped out with a marginal profit, then see the trade go back in the direction they thought piling up big gains and there not in!
Forex trading is risky - don't let anyone tell you otherwise.
You need to risk money to make it, this isn't being rash this is just a fact of life.
Volatility is the enemy and to execute your trading signals for maximum profit, you need to take it into account.
If you want to learn currency trading the correct way, understand the concept of standard deviation of price.
Don't know what it is?
Then make it an essential part of your forex education!
When trailing stops always leave the market room to breathe.
For example, if you are following a big forex trend, you can leave your stop behind a key moving average (the 40 day is good) and while you will miss the last bit of profit, that's ok - if you got just 50% of every major trend, you would be very rich.
We quoted an old gambling saying earlier that applies to forex trading and here is another.
" There's a time to hold them, a time to fold them and time to get out of town fast"
If you have understood this article, you will understand that proper forex money management is essential and "getting out of town fast" will save and preserve your equity.
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