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You ever watch a court room drama on TV and have the judge order a recess just as things are getting hot and out of control? Have you ever been in a trade when things got hot and out of control? Well, that is the time to stop trading and time to regroup! Professional traders have a built in advantage in the form of a professional risk manager. These risk managers oversee the traders and monitor their trading activities. Once professional trader drops below a certain level they must cease trading activities and re-access the market and their trading criteria. Professional traders are not the only ones with a risk manager to over see their activities. In baseball, When a pitchers is having a rough outing the pitching coach will call time out and visit the pitcher. The pitching coach will discuss strategy and mechanics in an attempt to get the pitcher from the game. Better to stop the pitcher from continuing in order not to jeopardize the game further. We must also think about having a risk manager! Individual traders do not have a professional risk manager at thier disposal. The individual trader must rely on trading, discipline and a solid trading plan. Like a court room recess or a pitcher being taken out of the game. We must program into our trading plans rules for taking a time out and re-grouping after a series of poorly executed trades or market misreads. Loses are a part of trading. However, we should have a maximum daily and account size draw that would trigger a predefined re-evaluation of our trading activities. If we do not have a strategy to regroup built into our trading plan, then you risk letting emotions rule of trading decisions. That can only result in a downward spiral and a quick end of your trading capital and possibly to your forex career. Remember, the market is always right! But also remember that the market is not trying to punish you. The market is only providing you feedback! The market can be a great teacher, but only if you are prepared to take advantage of the lesson. "The expectations of life depend upon diligence; the mechanic that would perfect his work must first sharpen his tools" Thanks for your precious time.

Today We share Some rules that A trader must Follow to in order to become a successful trader: RULE # 1:USE MONEY YOU CAN AFFORD TO LOSE If you are trading With funds 1) You need for some family projects, you are doomed to failure.this is because you wont be able to enjoy the mental freedom to make sound trading decisions. 2)your trading funds should be viewed as money you are willing to lose. your position should be careful analysed so you don't jeopardize other funds or assets. 3)one of the keys to successful trading is mental independance. 4)you have got to trade outside influencing factors and that means your trading freedom must not be influenced by the fear of losing money you really have earmarked for a specific need. RULE # 2: KNOW YOURSELF 1)you need an objective temperament, an ability to control emotions and carry a position without losing sleep. Although trading discipline can be developed, the successful traders are unemotional about their positions. 2)there are many exciting things happening in the market everyday so it takes a hard nosed type of attitude and an ability to stand above short term circumstances.If you do not have this attitude you will be changing your mind and your positions every few minutes. RULE # 3: START SMALL 1)Test your trading ability by making paper trades. then begin to trade small.start with mini account. 2) beginning traders should learn the mechanics of trading before graduating to more volatile contracts. RULE # 4:DO NOT OVER COMMIT 1)One rule of thumb is to keep three times the money in your margin account than is needed for that particular position.Reduce your position if necessary to confirm to that rule.this rule helps you avoid trading decisions based on the amount of money in your margin account. 2) If you are under margined you may be forced to liquidate a position early at a costly loss that could have been avoided. RULE # 5: ISOLATE YOUR TRADING FROM YOUR DESIRE FOR PROFIT. 1)do not hope for a move so much that your trade is based on hope. The successful trader is able to isolate his trading from his emotion. Although hope is a great virtue in other areas of life, it can be a real hindrance to a trader. 2)When hoping that the market will turn around in their favor beginners often violate basic trading rules. RULE # 6: DO NOT FORM NEW OPINIONS DURING TRADING HOURS. PRE PLAN YOUR TRADE. 1)decide upon a basic course of action, then do not let the ups and downs during the day upset your game plan, 2)Successful traders prefer to formulate a basic opinion before the markets open. then look for the proper time to execute a decision that has been made. apart from the emotion of the current market. 3)When a trader Completely Changes his directions during the trading day it can confuse him ad may result in generating lots of commissions with little profits. RULE # 7: TAKE A TRADING BREAK: 1)trading everyday begins to dull your life and relations with your family members. 2)A trading break helps you take a detached view of market and tends to give you a fresh look at yourself and the way you want to trade for the next several weeks. So take some time off and spend it with your loved ones. 3)A break also helps you see the market factors in a better perspective. RULE # 8: DO NOT FOLLOW THE CROWD. 1)successful traders like breathing room. when everyone seems to be long, they loo for a reason to be short. 2)Historically the Public tends to be wrong. successful traders feel uncomfortable when their position is popular with the buying public, specially small traders. 3) periodic government reports on the position of traders of various size provide "overcrowding" clues. Another clue is " contrary opinion". When most of the advisory services are Long, for example, the successful trader gets ready to move to the sideline or to take a short position. 4) Some services give a reading on market sentiment determined by compiling opinions from many advisory services. If 85% of the analsts are Bullish, this indicates an overbought situation. If less than 25% are bullish, this indicates an oversold condition. RULE # 9: BLOCK OUT OTHER OPINIONS. 1)do not influenced in your trading by what someone says, or you will continually change your mind. 2)once you have formed a basic opinion in the market direction, do not allow your self to be easily influenced. 3)You can always find someone who can give you what appear to be logical reasons for reversing your positions.if you listen to these outside views,you may be tempted to change your mind only to find later that holding your opinion would have been more profitable. RULE #10:WHEN YOU ARE NOT SURE, STAND ASIDE. 1)do not feel that you have to trade everyday, or even hold a position everyday.the beginning trader is tempted to trade or hold a position everyday and this costly tendency.the successful traders develop patience and discipline to wait for an opportunity. After they have taken a position and begin to feel uncomfortable, successful traders either reduce the size of the potion or liquidate. RULE # 11: NEVER ENTER YOUR ENTIRE POSITION AT ONE PRICE. 1)If you want tio be long certain number of lots you may want to do it 4 or more installments to see if the market is moving in your direction before you become totally committed. 2)Successful traders use the fundamentals and various technical signals to guide their trading, but the most important key is market action. the successful traders tend to wait for the market to verify that the initial position was a good one before putting on their full position. RULE # 12: NEVER ADD TO LOSING POSITION 1)Regardless of how confident you feel, if you establish a position that shows a loss, do not add to it. it may mean that you are out of step with market. some traders do not agree with this rule, believing in a "Price averaging" Technique. 2)The successful traders interviewed believe this is a risky technique and a way to mentally justify adding to a position that only magnifies a mistake. RULE #13: CUT YOUR LOSSES SHORT 1)When the market moves against you, admit your mistake by liquidating your position. you can be successful if you are right on less than 50% of your trades if you keep your losses short and let your profits run. 2)Some successful traders have only three or four profitable position out of ten because through discipline or stop loss orders they get out early when they are wrong. 3)one of the most common failures of new traders is their inability to admit they're wrong. 4)it takes a great deal of discipline to overcome the temptation to hang on to a loss, hoping that the market will turn in your favor. RULE # 14: LET YOUR PROFITS RUN. 1)cutting your profits short can be the cause of unsuccessful trading.the slogan "you never go broke taking a profit" does not apply. 2)The reason, your losses will at the best cancel out or at worst outweigh your profits unless you let your profits run. 3)how do you know when to take a profit? Some technical rules on reversals and other chart formations can help. you should never take a profit just for the sake of a profit. have a reason to close out profitable position. RULE # 15: LEARN TO LIKE LOSSES. 1)this rule says just the opposite of what many traders think. Learn to like losses because they are part of the business. 2)When you gain the emotional stability to accept a loss without it hurting your pride, you are on your way to becoming a successful trader. 3)the fear of taking a loss must be removed before you become a good trader. That's it for today..happy Trading