5 Golden Tips for Forex Trading

[mohsinqureshii 10]

Close to 95% of all traders will lose money. We are not just talking about novices, either. Whether you trade Forex for a living, as a hobby or just for fun, odds are against you success. That's a simply astonishing fact. However. the remaining 5% of forex traders somehow manage to break even and there are those lucky few that actually make money in the currency market-- consistently!

 

Like the TV show says...."How'd they do that,anyway?"

 

That's the million dollar questions, isn't it? Countless books, seminars and expos have been hosted to answer this very question. That sad fact is that thousands of books have been written and countless seminars and interviews have been conducted in an attempt to answer the magic questions. The reality of the situation is that there is no magic formula; no one single holy grail of forex trading.

 

So what do the successful traders do that the rest of us have simple not comprehended. They have mastered a process of winning where they combine and customize several factor to produce consistent results.they have mastered the process of trading.

 

The process of trading is:

 

Strategy---- Money Management------- Self-mastery

 

Here are some simple Forex Education tips to help you master the process of forex trading.

 

Forex Success Tip # 1- You have Got to have a plan

 

You must have written business plan that will detail all aspects of your trading. When are you going to trade, how much to risk, strategies for entries and exits are just o name few. To become a consistent (profitable) Forex trader you have to plan your trade and trade your plan.

 

Simplicity rules! Don;t make this plan too complicated. One sheet of paper for your mission statement and another for your trading plan should suffice. Anything more is probably too complicated.

 

Forex Success Tip # 2------ Focus on your Personal psychology

 

Knowing yourself will allow you to master the discipline necessary to execute high quality trades with solid money management techniques. Lack of discipline is fatal in Forex trading. Go on a personal journey to identify your attitudes towards risk and money. Get intimate with your strengths and weakness as a trader and build in to your trading plan strategies to minimize those weakness and maximize your strengths.

 

Different personalities lend to different trading styles. Get familiar with all the different styles and over time you will begin to gravitate towards one particular style. Don;t fight the urge like I did. I insisted i was a day trader, but had only limited results. I found my winning percentages were much much higher when I entered swing trades. Guess what's my bread and butter strategy now!

 

Forex Success Tip # 3----- Be Realistic About Your Expectations

 

This is a hard one, i know! I am on the internet every day and the amount of advertising is staggering. Brokers are offering free education (Fox in the hen house if you ask me), forums of all different trading styles and points of view. Gurus pushing their system as "the one" that will make you the big bucks. How do you get through all that noise?

 

Let me tell you loud and clear right now. Every one is right and everyone is wrong,You have to make a personal commitment to become a successful trader, find a trading style that works for you and expect a slow and steady approach to wealth building through forex.

 

What works for me may not work for you. Expect to go through an exploratory period where you are learning and at the same time exploring yourself as a trader. Keep an open mind and do not pay attention to all the noise out there.

 

Forex success Tip # 4-- Be Patient

 

Rome was not built in a day and neither will your trading account. In fact, I tell all of my fellows that while they are studying to become successful Forex traders they Should not look solely at their account balance as an indication of success of failure.

 

By tracking and increasing your percentage of high quality trades you execute is a far better barometer of your progress than your account balance. Cause and effect rule here. Over time when you increase your probabilities thorough the execution of high quality trades your account balance will respond accordingly.

 

Keep the focus on the process and with time your results will blow your mind.

 

Success Tip # 5-- Money Management is Top Priority

 

I would rather have a shaky strategy and excellent money management techniques than the other way around. this Topic warrants its own blog post to do it justice. Limited your exposure (Risk) allows for you to stay in the game and allow the laws of probability to work.

 

Let's take casino for an example. They need gamblers to frequent their slot machines to make money . Why? They have a game that has a greater than 50% chance of making money for the house. The more people that play the slots, the greater the casino's profits.

 

The casino controls risk by payout tables (always favoring the house!) and increase their probabilities by keeping gamblers at the slot machines. As a trader you must limit your risk by committing only 1% - 3% of "available capital" to a single trade. When you execute enough trades with a high probability strategy you too can clean up like the casinos, but only by staying in the game long term.

 

In conclusion, Forex trading is not easy, It's hard work and will test the limits of your patience and perseverance. If anyone tells you otherwise, buyers beware! It can be a very rewarding and profitable venture if done correctly. In the end it is a profession that requires a learning curve and practical experience, no different than an airline pilot or engineer. Understanding how to approach and learn this game will allow you to reap all the benefits advertised. It is your Forex Education that you will master the Process of Forex Trading.

 

Thanks for your precious Time...

[Obsidian 10]

I think everything starts with having realistic expectations. This markets have seen many "players" who came with full pockets and left empty. There will be more people entering and leaving the markets in the future.

 

I think people who have realistic goals also have patience and a strong will to read and learn. Theory and reality may be too different. Also remember that if something is too good to be true then it probably is...

[joshdance 10]

Below are some of the many cliches found in your article.

 

*Close to 95% of all traders will lose money.

*You must have written business plan

*you have to plan your trade and trade your plan.

*Go on a personal journey to identify your attitudes towards risk and money.

*I would rather have a shaky strategy and excellent money management techniques than the other way around.

 

Did you really say anything new? Since you claim 95% of all traders lose money, could it be that part of the reason is that the same old things like what you posted are accepted as fact and followed blindly?

 

Interestingly, in your 5 tips nowhere do you actually mention learning how markets operate. I suppose it's kind of implicit in your tip #1 where you talk about having a plan though. I actually agree with much of what you said; definitely some kind of plan or approach is a good idea. And I agree psychology is important, as is money management. Both are necessary, without a doubt.

 

But I see so much of people these days focusing ONLY on their psychology or money management, when they really just don't understand how markets move. When one has confidence in his read of the market, the psychology and risk management will come much easier.

 

My main point is this: all of what you said above is quite important, but it's not really applicable for many traders. We all know those people who go overkill on the quality of their gear in sports. For example, the baseball player wannabe who goes and buys brand new cleats, a shiny new bat, a bucket of balls, the nicest glove money can buy, joins a local league, and does all of that stuff. Yet, he hasn't learned to throw a ball, or swing a bat.

 

New traders go and buy a brand new computer, several monitors, pay for high quality data and expensive software, buy and read a bunch of books, attend seminars, write a business plan, write rules, and do all this stuff. Then they sit down and watch the market, and have no real clue what to do next. So, they buy or develop a strategy, which doesn't work. So they assume the problem must be in their mind, so they go all in depth with psychology and how it's all about their attitude towards money and some childhood event, and so on. Yet they fail to give attention to the most important thing: how markets work. Sure, psychology is important; but when one is so new to trading that he doesn't get the basics, then all the healthy mental state in the world will not make him profitable.

[fx_rmotaz 10]

Same topic and article on a different forum. Seriously, forex isn't a centralized market. Unless you share a clients database with ALL the brokers, how do you know 95% of people lose their money?

[cfdtrading 10]

Tip 1 for forex traders– use mini-lot

Tip 2 for forex traders– Use low leverage

Tip 3 for forex traders– Use stop-loss orders

Tip 4 for forex traders–Risk 1 percent of your account for each trade

Tip 5 for forex traders– Use multi timeframe

Tip 6 for forex traders– Learn Fibonacci numbers

Tip 7 for forex traders – Overlapping support levels is a confirmation

Tip 8 for forex traders– Trend is your friend