wealtharticles-32_rules_for_forex

32 Rules for Forex Traders

1. Never risk more than 2 - 5% of your current (not initial)
trading capital.

2. Always use protective stops in each and every trade you execute.

3. Never average a loss as this can lead to disastrous outcomes.

4. Preferably you should always trade in the direction of the daily
trend, holding a position against the daily trend should be done
with caution.

5. Never enter or exit a trade without a good reason, you should
have a well outlined trading plan and cross each signal out as it
unfolds.

6. Never get in or out of the market just because you have run out
of patience.

7. You should always see the market from a neutral perspective, be
willing to sell as you are willing to buy. Don't force your
opinions on the market.

8. Don't just sell because you feel the price of a commodity is too
high or buy because the price of a commodity is too low.

9. Never cancel or move your stop from its initial position, the
only exception is when trailing profits being captured.

10. Specialise in one currency pair at first, and when you get
really good at it you can expand your portfolio.

11. As a new trader you should stay away from trading at news time
because this can be very risky as the market tends to act in
unexpected ways at this time.

12. Always look for signals on higher time frame charts as they
provide more reliable signals with more room for errors.

13. Make your analysis with a top down approach, after confirming a
signal on a higher time frame chart you should look for
confirmation on lower time frames.

14. Never place a trade just because of a single indicator/ signal,
always look for at least three to four events occurring at the same
time to tell a story.

15. Once you loose an opportunity you should stay out and let the
trade be. More opportunities will come

16. When holding a position just focus on the charts and price
action, don't pay attention to the equities window as this will
only distract you from making logical decisions

17. Face your fears; don't think about loosing when placing a
trade. Simply put the trade on and let the possibilities play out.
We "are" speculators after all.

18. Keep a trading journal where you record all your trades, both
losses and winners. This serves as reference when analysing your
progress.

19. I f a trade turns out to be looser, just forget it at that
instant and move on to the next trade, as a trader you should
accommodate the fact that losses are part of everyday trading, even
professionals have losses and that they are only a bump on the road
to success.

20. Don't be greedy by trying to pick the exact tops and bottoms of
a market, let your strategy tell you when and how to close a trade,
and always be satisfied with whatever profit you bank from a trade
(no profit is too small).

21. When holding/ initiating a position, don't think about how much
money you stand to make/ loose. Just focus on the task at hand and
think about making sound decisions free from fear and greed.

22. There is no single trading formula in the FX market, always use
dynamic strategies for different market situations, and learn to
swiftly abandon a strategy/ close out your trade the moment the
market stops doing what you expect it to do.

23. Never let a loss go by without learning from it, if you learn
from your losses then it counts as tuition for a lesson learned,
but if you let it pass without learning from it. Then it is indeed
a loss.

24. Your trading plan must be followed with absolute discipline in
order to succeed. The trading plan should be tailored to suit your
personality, ability and resources. It should be YOUR plan and
unique to your style of trading.

25. Maximize profits not the number of trades.

26. Have a scheduled time specifically for studying the markets
before making trading decisions

27. Do not move with the crowd or do what everybody else is doing
because the majority (95%) are usually wrong. You should look to
buy when the majority are selling and sell when the majority are
buying. It's the basic law of supply and demand "it is an exchange
market after all".

28. Never blame others for your losses, always examine yourself
when your trading results are poor. Only by doing so will you be
able to improve personally.

29. Never doubt your trading plan, always trust and have faith in
it.

30. Price has a memory; if it did something at a certain level
possibilities are that it will do it again.

31. When trading the news, don't pay much attention to the news
itself but rather the charts reaction to the news. The answers are
always on your charts as the impact of that news event has already
been incorporated into the chart long before the news announcement.

32. You are your biggest mentor, you MUST believe in your analysis
and your decisions. Only by doing so will you be able to build the
necessary confidence you need to succeed in this business.

Success Always with You
Johnny Flair
Professional Forex Review
http://www.professionalforexreview.org