This post provides some practical tips and unwritten rules established among players in the market Forex.
Do not play against the market Trend is your friend
The market always has a certain direction. It is important to understand
the "mood" of the market and most of the positions open in the
direction of the prevailing trend. Other friends, except for the trend
in the market is no more.
Buy dips - sell the rallies. Do not catch the peaks - catch strategy
The first assertion is rather humorous character axioms. The basic
meaning of the market just is to buy low and sell at the top. It is
important to determine when to enter the market - where the bottom,
where the top. For the beginning trader should try to determine rather
than the top or bottom of the current trends, and correctly understand
the dominant mood of the market and build their game on this basis. In
this sense, the last statement resonates with the previous ones. For
successful games on the market must be more correctly predict the
expectations of its members at a time, rather than build the "right"
with the academic and technical standpoint forecast market movements.
Not traded on a schedule - a decision must mature. Determine in advance the action script act responsibly
A very important point in the trade is to determine the moment of entry
into the market, as well as, of course, and exit a trade. Do not enter
the market with an unclear situation or, if occurring fluctuations do
not fit into any of the expected scenarios, and try as much as possible
to fix the previously open position, as it is during periods of chaotic
motion is greatest risk of loss. Bad habit is when a novice trader,
sitting at the computer begins to frantically search tools and the
direction in which you can open. Starting work in this case is a
superficial analysis and a desire to begin to "work". Serious analysis -
is also a job, and its most important stage. Before opening a position
you need to pre-determine for themselves the level of choice for the
start of trading, to follow the development trend and enter the market
in the case of coincidence of trends with your expectations. Sometimes
it is not even a single day. And one more thing: defining a plan of
action for setting the order, it is important to adhere to these
decisions to close a position. Early or late entry into the market,
change orders without good reason often leads to unnecessary losses.
Ride on profits long. Cut off losses short. At least - equalizes loss and profits
These two statements are extremely important issue - risk management at
work in the market Forex. A novice trader, saw a small profit for the
position, often immediately takes her and at the same time can not be
solved for a long time to close a losing position in the hope of a
favorable change in the course. This is one of the main causes of losses
at the initial stage. It is important to be weighed and the approximate
volume closed by gains and losses, and the same goes for placing stop
orders. Otherwise, in the case of a constant excess of losses over
profits longer term lead to an undesirable result. Try "hard" to give up
lucrative positions and move to close the gap with a reasonable loss at
the slightest movement of the rate mismatch with the expected scenario.
Limit the amount of information. Do not read a lot, read Helpful. Do not mix trade with academic views
One of the most important points is to identify sources of information
that will benefit the trader in the transactions. Information on the
market for many, it is necessary to identify the sources which can have
practical value in transactions. It is important to determine what to
use and what to read for the understanding of the market, and not to
rush to find any information. Not all assessment information sources and
for individual instruments are trustworthy. It is necessary to create
an efficient trading system and follow its signals. And one more thing:
the real buying or selling is not the same, that the judgment of the
market, even if the right to an academic point of view. Some people
trade, others argue, and usually they are different people.
Stay cool and calm. Do not rush to sell - the market will never end
And the last. Always keep yourself in hand. A huge amount of loss is due
to loss of control. Moreover, excessive euphoria on the profitable
position or the total profits in the account is no less dangerous than
the nerves and lift up the hands at losses. Today you have lost, but you
always have a chance to win. Recorded a loss or a good profit, do not
try to immediately enter the market again to "earn more" or "revenge."
Try to cool down and reflect on the results, and only then with the
"cold" head re-enters the market.
