Welcome to part 2. Still reading about the forex markets are we? Looking for more forex trading tips to help you either get started or improve your trading skills? Maybe you are just curious about how the your friend is making a killing at the forex markets, and not getting killed like you are. Whatever your case, make sure you have read part one before you keep reading. So here, we continue on our journey of discovery about finding the secret of trading the forex markets successfully.
In the last article of forex trading tips, I said something about being ambitious yet humble. Well in other words, the type of trading you want to avoid is being overly cautious. Being over cautious tells me one thing about your trading. And that is, you aren’t confident enough about your trading and it is too risky for you to trade the markets effectively. When you take a position, you must be confident. And when you have confidently opened a position you should give your position a chance to give a result.
Be independent. You have your own personality, be yourself, don’t be someone else. Be true to yourself in your trading and you will succeed. If you pretend to be someone else in the markets, the markets will quickly take profits from you. When you start listening to too many people, people who may have more experience, or people who simply have opinions, be careful with the information and advice you receive. Make your trades by yourself, be accountable to yourself.
You are a loser. And will always be a loser. That is, be humble. Remind yourself, that every day spent in the market increases the chance for you losing. Be confident in your trading, but not too over-confident to consider yourself bulletproof. You will lose for sure – but it is up to you on how much of a realized loss you will take.
Greed with respect to leverage. Be careful with the amount of leverage you place in every forex trade you make. Question your motivation to increase your leverage amount – is it because you are mastering your system, and know that your system delivers or is it because of plain greed? Did you do the calculations in your head? “Hmm, If I put more money into the trade, with more leverage, IF I turn a profit, the profit will be HEAPS larger than simply putting XXX amount.” STOP! Question yourself – is this calculation due to greed? Thinking along these lines is almost certainly a trap due to greed. Watch out.
You must have a trading strategy. Trading without one, is simply gambling. Are you a gambler? Hopefully not, because it is almost a certain fact, if you do all your homework, backtest your system, and assess your system as you trade, you will make money. (Unless you are simply very unlucky) A strategy is a must. The strategy is the route map to your success in the forex markets. Your strategy should detail how you trade: how much leverage you use, what currencies to trade, and how you manage your risk. Have a strategy or be one of the 90% of losers.
Hopefully that’s enough forex trading tips for the moment. Come back for part three of our forex tips series.