Extra Forex Trading Tips
You can never have too many tips when you are trading!
Tip A. Trading strategies that work well in an up-market may not work in a down-market.
Same as: systems that work well in a good trending market may not be applicable at all to a ranging market. The solution is either to have a system for each type of the market or make sure that one solid system will work well under all market conditions — extensive testing is the way to know the truth.
Tip B. Do not try to pick price tops and bottoms.
It is a very wrong approach that unfortunately many traders have adopted. Searching for bargains is a good thing when you go shopping, but will put you in troubles if applied to Forex trading. Simply spot the trend and join it like other traders who are serious about trading do.
Tip C. Always remind yourself that the first and the last market bars/ticks are the most expensive.
Delay entering the market on the first ticks and be out of the market early. On the open, never trade in the direction of a gap.
Tip D. Never worry about missing out on a trading opportunity.
Do not provoke yourself to take a trade that does not meet all entry rules. Just because it seems to be too good to pass up is not an excuse for trading. You are never going to run out of trades, so be firm and stick to your rules.
Tip E. By using knowledge about currency correlation in Forex traders can easily avoid opening positions that cancel each other
(e.g. +10 pips on one pair and -10 on another = 0). Find out which currency pairs move simultaneously and which — in opposite direction.
Tip F. Did we say: "Have your stop loss order in place"?
Yes we did. Anyway, we will repeat it one more time. Even if your trading system needs no stops, still have it. Not that you are going to use it, but just for the safety of your capital. A sudden huge move in the market may cost you a big portion of your trading account especially if margin call is triggered.
We use insurance for many things in our life, why don't have one for your trading account? For trading systems without a stop loss order — put one on a decent distance, for example 100+ pips. Also do not use too tight stop orders as they will most likely be hit more often then you need to.
Tip G. Spend less time trading Forex but make it quality time.
Trade only when you can be 100% focused. Time spent in front of the monitor does not assume profitability, so don't fool yourself and do not trade half-ready.
Tip H. And finally, it is wrong to trade with the money that you cannot allow to lose.
That is also why traders switching from Demo to real account often may find themselves losing a trade after trade with a system that used to be profitable. This is because with a real account they've got fear to lose money, while on Demo account their minds were free.
Do not trade if you cannot afford to lose your money. Moreover, do not trade if you must make X amount of money per month to pay your bills in order to avoid financial trouble. Trading scared is the best way to mess up all trading rules, discipline and get additional stress.
Trading smart is what we wish you to achieve, and believe us, being focused and serious about the job you do will make you successful!
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