Forex trading can be very exciting. Sometimes it is so exciting that I can get carried away and trade with no care in the world. The only problem with this is that when I get carried away, I tend to make losing trades. To take care of that, I have drawn up a few rules that I always follow before and after and a forex trade.
1. Trade less
Every time a forex trader places a forex trade, he incurs trading costs. These trading costs can add up to a large figure the more one is trading. I am lucky in this aspect as my automated forex system is very selective in the trades it makes. Over time, reducing my trading frequency has enabled me to make more profits and also have a life outside forex trading.
2. No News Trading
Since I discovered that trading the news can be very stressful, I have avoided it as much as possible. My automated trading system can also not be able to properly take advantage of any news events. I have programmed it to wait for some 20 minutes before making any trades after any news items.
The stress is now gone and the forex trading is more profitable.
3. Find the Trend
It’s very exciting to identify prices where the market turns. However, I am not into forex trading for excitement. I am after profits and trading in the direction of the market has been the most profitable thing I have ever done. Why would anyone wish to sell when everyone is buying anyway?
4. Get Out
This is the hardest thing to do. When a forex trade is done, it is important to get out. There is nothing more annoying than seeing a trade that was profitable turn into a losing trade just because you were greedy for more. If my automated forex signal tells me to get out of the market, I get out.
5. Have a Reason for a Trade
Trading for the sake of it is harmful to your pocket. One must always have a reason for each and every trade that one is making. If you only buy when the rsi is below 45, then that is your reason. If you have yet to get a reason for your trade, consider getting a forex trading robot. It will take care of this rule every time for you.
6. Losing is Ok
I used to beat myself up every time I would make a losing trade. That is until I realized that losing in forex trading is all part of the fun. Each and every loss brings me closer to a winning trade. Each and every losing period brings me closer to a long winning period. It actually becomes more fun to trade forex when you know that you might actually lose an otherwise perfect trade.
Every forex trader has their own basic trading rules that they use. I have mine next to my computer just incase I forget them. A good forex trader should find trading principles that allow him to profit without putting too much of their funds at risk.
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Forex Trading Rules To Live By
8 years ago