Some interesting Forex Trading principles
Some interesting Forex Trading principles have been extracted from interviews with experienced successful traders and are listed below. These are bound to surprise many traders and may explain why 95 succeed.
1. You DON’T need to know the direction the price is going to go to trade the Forex market. The straddle trading techniques will help you to have successful trades even when you are unsure of the direction the price will move.
2 The probability of a transaction being successful is dependent on the potential volatility behind the transaction. The amount of PUSH behind the move is more important. Most traders spend 90 on volatility. What’s the use of getting the direction 100 of new traders start trading a technique that they have not personally tested. They go on the trust of what they have been told. Testing a technique ensures that you can apply it under any conditions and that you understand it. It also gives you an opportunity to add improvements.
9 Keep your safety stops out of the traffic. In appropriate placement of stops is a major cause of trading failure. In many cases an unsuccessful technique can become successful by just increasing the stop levels. Spend time finding your personal comfort level in this area. There are a number of techniques to not use stops at all.
10 Successful traders find the exit of a successful transaction is the most difficult part of trading. Exiting transactions optimally takes experience.
11 Assume that the market will trend in the direction that it is currently going until you see conclusive proof of a possible reversal The objective of trading is to enter a new trend and stick with it until it is over.
12 Money and risk management is essential to a long term relationship with the Forex Market Many methods used by successful traders are presented for your consideration. I don’t make recommendations or give advice in this area but knowing the alternatives enable you consider an appropriate one your way of trading
13 Technical Analysis techniques have strengths and weaknesses. Know both. Know then to use Technical Analysis and when not. Certain indicators only work in trending markets and others in trading markets. Some trades can be done without charts. learn as much as you can about trading. 14 A trading strategy contains the time frame traded, warning signals, trigger signals, ways of managing the transaction, way of exiting the transaction, money management approach and risk management. It is not only about the entry Find a personal trading strategy that takes your personal circumstance into account.
15 The trading process consists of doing an environmental scan, identifying possible future transactions, entering the transaction, managing the transaction, exiting the transaction, doing a post mortem and reviewing your trading strategy. Build competency in all these areas.
16 In general the longer term charts (Daily, 4 Hr and 1 Hr) give more reliable signals than the shorter term ones (30min, 15 min, 5 min and 1 min) which are subject to noise. Be aware of the many scalping (short term) and position trading (longer term) strategies available to trade the Forex market.Knowing the alternatives will help you develop a personal strategy.
These principles have been extracted for information contained on the Forex blog Forextradeoftheday which is sponsored by Expert-4x and submitted by Chris Doyle.
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About The Author, Chris Doyle
Chris Doyle is an experienced Forex Trader who uses mainly technical analysis to to day trade the Forex market. He writes regular articles for the forex trading blog www.forextradeoftheday.com, www.expert-4x.com and www.forextradersupportservices.com. He also reviews trading techniques used by highly successful Forex traders. Investment • Stock Trading Robot System • The 77th Richest Country In The World • Stocks Look Pricey • The Best Way To Do Stock Market Investment • Stock Market Investments: Secrets to Success • What is the Difference between a Ponzi and a HYIP?
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