The Forex market attracts new traders every day. Many of them have never traded in any type of market before. Forex is the largest market in the world and there are some important differences from other markets. I started my trading career over 20 years ago in the commodity markets, so I am not a newbie to trading. So here is a mini version of a Forex trading tutorial that may be of some benefit to new traders. Maybe some new traders can learn from some of the many mistakes I’ve made.
You must have a detailed plan before entering any trade. Never deviate from your plan because the market did not behave the way you expected. The market is always right.
To be a successful Forex trader, you must stick to your trading plan at all times and be disciplined in every trade you make. Undisciplined traders do not have long trading careers.
Always trade with the stops in place. Never adjust them to stay in a losing trade. Just adjust the stops to protect the profits already made.
You must learn that you and all other traders will lose. It is unavoidable. You are no different than other traders. There is no perfect trading system and there is no perfect trader.
Never try to determine your profit before entering a trade.
Both bulls and bears make money. Never be afraid to short a market if your trading system or indicators point to a market about to fall.
Refine your trading system as you gain more experience. No system is perfect and your system should adapt to your trading style as you gain more confidence in trading.
Don’t be afraid to step aside from time to time. New business situations appear every day. Wait until you feel the odds are more in your favor before placing an order.
Trading is not gambling. Don’t approach trading like a trip to Las Vegas. It’s a business. Treating is always as one.
Patience is a virtue. Most great movements take time to develop. Wait for the market to tip its hand before jumping in too soon.
Greed is a sure way to blow up your account. Always trade with a good reason to trade before entering a market. Trying to make additional profit from a trade can backfire if the market suddenly changes direction.
Don’t over trade. Overextending your account will lead to a short career as a trader. Too much leverage in any trade has been the downfall of many traders.
Control your emotions. Rationally study market conditions and look before you jump.
Study your trading system and become familiar with the indicators, chart patterns, or price movements that signal a trade. Wait for your trading methodology to give you a trading signal before entering the market.
Fashion is your friend. Sometimes a short-term trade against a trend can be profitable, but be very careful if you take a short-term trade against a strong trend. Temporary reversals of a major trend are traders taking profits and the trend will usually resume at full force. Have a quick exit strategy before the trend resumes.
Learn more about Forex trading and maybe some Forex trading secrets on the author’s website.