7 Steps To Improve Your Forex Trading Today

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Many new traders at this point give up and go back to their day jobs. Maybe I was
smart, maybe it was dumb of me to stick with it but I did and I’m glad every day that I
did. I went back to my demo account and figured out some trading systems that
worked for all occasions. I read some books, took some online classes and kept
plugging away at the demo account. After I felt confident enough that I knew what I
was doing I started slowly trading real lots again. And I started winning.

Occasionally I still will go back to demo accounts every once in awhile if I suffer too
many losses and I lose confidence. Usually though I just keeping using the same
systems I know to be profitable in the long-term and it works!

That being said, below are some things I’ve learned along the way that have helped
me go from a horrible trader to a consistently profitable one. If you can master these I
think you can make it in the currency exchange world too:

1) Use a demo account – and go back to a demo account every time you start to lose
confidence or a significant portion of your equity – you should use a demo account
until you’ve got your trades down to a science. You should get your trading style
down to a consistent, systematic approach. Do the same thing every time. The hardest
thing about trading real money is the emotions. When using demo account it is no
problem to trade 2 lots with a 50 pip stop – the setup and risk/reward looks good right?
When you start trading real money all you can think of is that you have 2 50-pip stops
(or $1000) at risk that you don’t want to lose. Practicing over and over with the demo
account gives you the confidence to say: “I’ve seen this chart setup over and over, I
know that it will probably move in my favor. If it doesn’t and I take a loss I know that
this trading technique is solid enough that over time it will be profitable.”

2) Keep a journal of every trade – and review them once a month or once a week.
Preferably take a screen shot of the chart when you make the trade so that when you
go back to review them you can see what you were looking at when you made the
trade. Write about what was good about the trade and what was bad. If you keep
doing this you will find that you start making less bad trades and more good trades.
You will also hone what techniques you like and what works for you.

3) Take a loss as a learning experience. Write about in your journal what went
wrong and what was right. Start making less bad trades and more of what you know
to be a good trade. Remember that failure, if analyzed and learned from, is just a
stepping stone to greater success.

4) Always use stop-losses. Every trade you enter you should have a stop loss. You
should also at a minimum know what your goals (limits) are. If you are a beginner
you should have both a predefined stop-loss and limits. Don’t be sorry if you miss out
on some pips because of it. Write it down in your journal as far as what went right and
what you could have done better. Remember this too: if you stop at at 40 pips and the
currency continues to go against your prediction for a total of 80 pips you can always
buy or sell then and skip the whole being 80 pips in the hole. Now you are only 40
pips in the hole! Only do this though if your original and follow-up analysis still hold
true (for example, that the trend you were trading with has not been broken).
5) Educate yourself. Read some books. Take some online classes. One of my favorite
books is “Forex Patterns and Probabilities:Trading Strategies for Trending & Range-
Bound markets” by Ed Ponsi. I keep this one on my desk at all times in case I need to
consult it.

6) Win at least 2:1 pips than you lose. Not in terms of number of trades (some great
traders lose more than 50% of trades) but in terms of pips. This is called money
management. If your wins are twice as big as your losses you will be profitable
winning just 50% of your trades. If you in a setup you can’t win twice as much as you
are risking don’t trade it. There are always other opportunities. For example, if you
make 4 trades and only two of them are successful that is a 50% win rate and doesn’t
sound great. But if you earn 100 pips on the wins and lose only 50 on the losses then
you just netted yourself 100 pips profit (100+100-50-50=100)!

7) Rinse and repeat. Keep at it! If you lose confidence, go back to demo trading until
you feel confident in what you are doing. Keep journaling every trade so that you can
keep learning and improving. Keep reading books and other people’s analysis like
that of PipHut.com. Try to see the charts how I am looking at them and understand
support/resistance and candlesticks. Come to your own conclusions about chart setups
and try them out on your demo account. Check other site’sm analysis and see how
they look at the charts.

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Description: Here are 7 important steps that you need to know and apply in order to optimize your profits for your currency investments!!!