Less than 25 percent of all traders get stable profit in long time. And yet some traders earn more than a million dollars a year in profit. What’s so special about doing these successful traders? They just follow some rules of the “game”. Moreover, observe from time to time, but every day, every minute being behind the trading Desk monitor. Here are some of them. Of course, over time you yourself will have its own rules. But it will not be soon, for now just try to follow these:
1. Use the money that you can afford to lose If you speculate on the currency with the money that you need for some family project, such as to buy a new car, a fur coat for the wife, payment of College kids you are doomed to failure, as they will not be able to enjoy the true freedom to take sober trading decisions. Your money on speculation should be treated as money that you wish to lose. Your position will be closely reviewed, so you won’t risk losing other funds or assets. One of the keys to successful trading is internal independence. “You have to trade with a minimum of external influence factors, and that means your trading freedom must not experience the effects for fear of losing the money you have already saved for a particular need,” says one trader. “The market is not an arena for “scared money.”
2. Know thyself, You need an objective temperament, an ability to control emotions and trade without losing sleep. Although trading discipline can be developed, a successful merchant is always in relation to its position seems to be not emotional. Merchants offer to those who are not able to control emotions to find profit elsewhere. “There is a lot of exciting things that happen on the market every day, and therefore requires a stubborn type attitude and the ability to stand above short term circumstances, or you will change your mind and your position every few minutes.”
3. Start small Test your trading ability by trading on paper or a test account. Then start trading small lots 1 – 3 lot of currency at once. Novice traders should learn the mechanics of trading before start trading with real money.
4. Do not overdo it One rule of thumb is that you must keep account of the money three times more than necessary for a particular position. Reduce your position if necessary to confirm this rule. This rule helps you avoid trading decisions based on the amount of money in your account. If you take position more than in your account, you may be forced to liquidate a position early and you will suffer great losses, which could have been avoided.
5. Separate your trade from the desire to make a profit do Not expect a promotion if your trade is based on hope. A successful speculator can separate their trading from their emotions. “And although hope is a great virtue in other areas of life, it can be a real obstacle for a trader”. Hoping that market will turn in their direction, speculators beginners often violate basic trading rules.
6. Don’t form new opinions during trading hours Decide the basic course of action, then don’t let the UPS and downs during the day upset your game plan. The decisions taken during the trading day based on the price movement or the news, usually harmful, says a successful merchant. Successful traders prefer to formulate a basic opinion before the market opens, then look for the right time to enforce the judgment, which was adopted without much emotion in the current market. When a trader completely changes his direction during the trading day, it can mix it and result in the loss of fee with a low profit.
7. Take a trading break Trade every day dulls your judgment. One successful trader commented: “When I fall to 90% of mental efficiency, I begin to settle the score one to one. Any lower and I start to lose.” The trader takes a week for vacation every five or six weeks. If he was lucky, he was going to Florida. If not, it remains in Chicago. A trading break helps you take a look at the market abstractly and gives you a fresh look on you and how you are trading the next few weeks. “Sometimes you come so close to the forest, I see trees, break helps me see the market factors with the best angle of view.”
8. Don’t do like most Successful traders love the open space. When everyone thinks that they are opened for a long time, they are looking for a reason to open for a short time. Historically, the audience was mostly wrong. Successful traders feel uncomfortable when their position is popular with the buying public, especially small traders. Periodically, the government makes reports on the positions of traders of various sizes and gives the keys to “overcrowding”. Another clue is “contrary opinion”. When the majority of advice services are advised to take a long position, for example, the successful trader is preparing to move sideways to take a short position. Some services provide material for the market position on the basis of the opinions of many Advisory services. Если85 % analysts – bulls, then this indicates a situation of excessive shopping. If less than 25% bulls, this indicates a condition with excessive selling.
9. Block other manyane be effect in your trading what other people say, or you will constantly change their minds. Once you have formed a basic opinion in the market direction, do not allow yourself to be led by others. You can always find someone who gives you what seems like logical thinking, to change your position. If you listen to the outside opinion, you may be tempted to change your mind only to discover later that if you kept your own opinion, you would get a greater profit.
10. If you are not sure, stand aside, do Not assume that you should trade every day, or even hold a position every day. A beginner trader is tempted to trade or hold a position every day, and this is a costly trend. Successful traders develop patience and discipline to wait for his chance. After they have opened a position and began to feel comfortable, successful traders either reduce position size or liquidate it.
11. Try to avoid market orders the Rate of stop orders to buy or sell at market may show a lack of discipline. However, it happens that when he wants to liquidate a position immediately, then the market order helps. Your goal should be to reduce the use of market orders, traders say.
12. Trade in the most active months In respect of currency beginning and end of the year, the middle is very good, also the months that cover the quarter.
13. Trading difference between correlated goods Observe “families”: mark, pound sterling or Swiss. When you see a wide difference in the group, this might signal a trading opportunity. For example, if all major European currencies except the mark was moving up, I’d be looking for an opportunity to sell the brand as soon as the General begins to wane. Also true in reverse. Traders are buying the strongest currency in the group over the period of weakness.
14. Don’t trade too many currencies at the same time You yourself damage if you try to find the necessary information and “feel” at several markets. Learn to know your limits and trade within these limits. Few traders successfully trading as the yen and the brand name simultaneously as they are driven by independent factors.
15. Trade on the difference open It is a good direction key prices,especially after the main report. Layout when you open can tell you the direction of trade for the day or a few days. If the market opens in a big way, play for a long time. If you open in the bottom side, play short.
16. Trade on the difference of the previous day, This rule is used by many successful traders for the solution when ustanoviti to raise the position. This means that you can’t buy until the price trades above the previous day’s close, or not to sell below the closing price of the previous day. Followers of the “philosophy of the market of the moment” use this rule believing that market share is determined in their favor, when they expect trade to off trade the previous day and adding their position.
17. Trade on the difference in the weekly auctions This rule is similar to the daily rule, except for use in weekly numbers. When the market breaks through the upper position of the week, it is a signal to buy. When it falls below the previous day, it is a sell signal.
18. Trade on the difference in the monthly trading the longer the period until you see, the more market time for your decision. Therefore, the layout of the monthly prices are an even bigger key to price trends, and important for the position trader or a trader who monitors the border prices. When prices change in the direction of increasing compared with the higher monthly rate, it is a signal to buy. When the change is downward compared to the lower monthly rate is a signal for sale.
19. Build a sales “Pyramid” When You add the position, do not add more lots at one time than the number of lots in your original intention. Assume that your initial position was 2 lots on the stamp. The ideal situation would be to pyramid by adding 1 lot, 10 lots or 5 lots, provided that the market moves in your direction. The type of trade you want to avoid is the inverted pyramid, when every addition you add more than your initial position. This is a dangerous trading technique because the smallest turn in the market can wipe your profit for the whole position. Your average price closer to the market price in a situation with an inverted pyramid, which makes you vulnerable. Another danger in the pyramid is that you too are given a goal where you don’t have enough money for margin.
20. Never put your entire position at one price If you want to go long on 5 – 10 lots, you may want to do this five piece lot 1 to see if the market moves in your direction before you fully put the stamp on. Successful traders use fundamental information and various technical signals to guide their trading. But the most important key is market activity. Wait for the market to determine that the initial position is good before you Deposit this position.
21. Never add to a losing position How confident would you feel, if you set a position that shows a loss, never feed her. This may mean that you are not marching in lockstep with the market.Some merchants do not agree with this rule, believing in the technique of the average price.
22. Cut your losses When the market moves against You, admit your mistake by eliminating his position. You can work well if you are right less than 50% of your trading if you cut losses and increase profits. Some successful traders may have only three or four profitable trades out of ten because through discipline or stop loss orders they previously selected from their mistakes. One of the most common failures of new traders is their inability to admit that they are wrong, at this point in time. And maybe in a couple of days the position will be profitable, the only question is, how much money you have in the trading account and how strong nerves.
23. Let the profits go Cutting your profits can be the cause of unsuccessful speculation. The motto “never go bankrupt taking a profit” does not apply to currency traders. The reason: your losses will outweigh your profits unless you let your profits go further. How do you know when to take profits? Can help some technical rules on return, and other formations of the charts. You should never take a profit just for profit – you need a reason to close profitable positions.
24. Be patient when losing your position Never hold losing position more than two or three days and never leave her on the weekend. This rule is used one of the most successful traders as a method of self-discipline. And although it sounds quite simple to say: “Cut your losses”, it’s pretty hard even for experienced traders, that’s why I have direct rule in respect of losses. Over the last two or three years, blindly following this rule, I saved a lot on the losses.
25. Learn to love losses Is the rules says the opposite of what many traders think. Learn to love losses because they are part of the business. When you get an emotional stability taking loss without the humiliation of your pride, you are on your way to become a successful speculator on the currency. The fear to suffer losses, you need to remove before you become Horoshilova.
26. Use with caution stop Orders for stop losses easy disciplinary. They can help you to cut losses automatically. An important factor is that you want to place your stop when you place the order. If you don’t, you get tempted to give market “a few cents”, only adding a potential loss. But remember that you should use orders stop loss with caution because of the foot which are placed too close can get you out of the market with a loss very quickly. You can become a “cut off” poor placement of stops.
27. Within a month the price of the currency during the month may be more volatile, so novice traders should use the rule of “float”.
28. Ignore normal seasonal trends Although the price of a currency has historically lowered at one time or another, it is necessary not to let seasonal trends influence its trade. Too many people try to trade seasonal trends, so I’m looking for a place to do the opposite.
29. Traffic difference from the normal This rule is one of the big keys some successful traders use regularly. They sell to the difference, different from normal or from what is expected. If traders in General believe the market is higher, and it does not, then it is a sure sign to sell, especially after government reports. I’m waiting for the market traders in General leaned to one side, then calculate a trade in the opposite direction.
30. Avoid selecting the UPS and down When you go against the trend, believing that the market either went up or down, you become very sensitive. It can be quite a costly lesson that must be learned. They prefer to let the market price action prove that formed the top or bottom.
31. Buy news promotion, sell the fact If the market rumors are on the rise, then you should buy just after the news. But when the news turn into reality, then it’s time to sell the fact. Example to serve the news about the potential weakening of the brand. As the market has a tendency to bring news to the market price, this rule will tell you to buy immediately after the first news, then when the brand has weakened to sell.
32. Market bulls die from excess weight There is an old trading rule of the stock market which says the markets are going up can “fail” because of its sobstvennogo when prices will go up much. So be particularly sensitive to step-down the news, if you’re open for a long time.
33. Looking for good value Look for opportunities when the potential loss is small in relation to the profit potential. For example, if the currency is trading at a price close to the recent low, it could mean that the long position has a huge growth potential in relation to possible losses. Or if it is trading just above the level of government price support, there is the possibility to trade with low risk. The observation of the trading range of the currency for a year or a few years helps you to have prospects to determine the ratio. Fundamental market information also helps in the detection situation with a high ratio.
34.Always bring huge profit Sometimes you take a position and within 48 hours you have more profit than you ever expected. Instead of having to watch the market a few days to determine why the profit came so fast, “Take a quick profit and run away from the market!”
35. Learn to sell short the Most novice speculators trying to be bulls, that is, they buy currency they believe will go up. Since currency is often fall faster than they grow, you can frequently earn quicker profits by selling short, so it would be good to learn to trade short time frames.
36. Act quickly, the Forex Market is not for those who is very slowly working. So rule of thumb – act very quickly. This does not mean that you have to be impulsive, what if your judgment says that you have to liquidate a position, do it immediately.
37. Cool don’t change your position When your position is losing and you decide to get out of it, don’t do 180-degree turn. For example, if you played long and decided that the market is working against you, get out and get in side for a while before going short. If you change the position, you will be the loser – will suffer losses when the market goes down, and then lose the losses when the market moves up.
38. Don’t be a miser If you want to play long, do not put stop Los order 2 cents below the market in hopes of finding a good deal. People trying to squeeze that extra penny out of the market frequently find the market moves almost to their goal, and then slipping and falling. Therefore, in the hope the extra penny they can to give a pound. When you think that it is time to do something, do it.
39. Know the price trend You megateuthidinae major price trends using line graphs, one of the fundamental tools of a successful foreign exchange trader. The mistake made by the speculators is that they are trying to buy or go long while the market is still experiencing a down trend or sell short when the market moves up. If you will be charts the currency or sign up for service schedules, it will help you avoid costly mistakes sales with a clear trend up and buy when it trends down.
40. Looking for major breaks in the trend lines Some traders successful trading almost exclusively on this rule. They do the graphics. When prices break through tendentious line and sell out tendentious line for two or three days, it’s usually a good trading signal. It is a violation of the trend line down is a buy signal, the opposite is also true for the sell signal when it breaks the trend line up. The trend line then give annekatrin guidelines for determining stops.
41. Expect the retracement to 50% for the main course You often hear that the market is experiencing “technical reaction”, which means that after the basic movement in any direction the market tends to revert to 50% of this movement. For example, if the yen moved from 132 to 133 USD per yen mainly move up, and then began to slip down, the price will definitely reach 132.50 dollar yen.
42. Use the rule of half way when you select spots buy-sell means to find out how the rankings to be one or the innaya currency, then buy the lower half of the rankings or sell on the top half. This rule is especially useful in the market or a situation where the market is trading inside the channel graphs.
43. Watch the breadth of the market changes When the market moves lower, but in small quantities every day, it can be a signal for the trend up. When the market moves up each day, but smaller quantities, it is an early signal that the trend is down already somewhere.
44. The areas of thickening can mean support or resistance, These areas act as barriers that slow down price action. When you hear a market commentator says that there is good technical support at a certain price, there is a good chance that he’s looking at a line chart which shows the old area of thickening where the trade occurred at a narrow range for several weeks. Basic price movements may develop when the market breaks out of a trading region. Usually the longer the market stayed in a trading region,the longer the price moves after his release from him.
45. The basic moves often end key turn Key turn the trend up is usually indicated when prices reach a new top rates on high volume, then price erosion causes a lower close than the previous day’s close. Key turn trends down is a movement in the lower indicators, followed by a strong recovery during the day closing higher than the previous day’s close. Key rotation can come in the form of a two-day rotation, when the first day the movement goes up and finishes confidently to closing. On the second day the market may open near the top of close of the previous days, then sharply to close at a lower position. Rotary island is formed when prices jump to new high levels in one day, and then on low the next day.
46. Search for formation head-and-shoulders When you observe the structure of the graph, which resembles the “head and shoulders”, it usually is a sign that the market reverses. The structure of the “head and shoulders” is not a clear sign, the pinball will appear in the other shoulder.
47. Observe the increase in “M” and lower the “W” When the effect of the market on the price chart indicates a large “M”, the signal means – to sell. When formed “W”, it is a signal of upward movement.
48. Triple trading up and down After the market peak had a second and third time, it is a signal to decrease. The reverse is also correct when the lower peaks.
49. Watch for volume to find the keys to the prices When the volume and price rise together, this is a signal to buy. When the volume increases, and prices fall, it is a signal to sell. But when trading volume is decreasing without regard to the direction it is signal that we should step aside or expect the opposite movement of the market.
50. Open interest may be a good hint If the open percentage increases with the increase in the price it is a buy signal – especially if the volume is increasing at the same time. The reverse is also true. If the open percentage increases with lower prices and good volume, it is a sell signal.