Forex trading tips and tricks


Therefore, before everytying else you have to make sure you stay in the game. But even though a good trading strategy is definitely important, using solid money management and having a rational, disciplined trading attitude will get you further at the end of the day. The stop loss is perhaps the most powerful weapon in your arsenal as a forex trader, just as the most powerful weapon of the professional poker player is the fold if that means anything to you. There are really only advantages to putting in a stop loss.

It forces you to think about when the trade you're about to put on would be considered a failure. After you've opened the position you might talk yourself into staying in a trade going bad, using all kinds of irrational excuses. But if you've set a stop loss before opening the trade when you were still thinking rationally you'll always have that shining beacon, reminding you that you'd be a weak, emotional idiot if you stayed in the trade after the stop loss is triggered.

Another advantage of the stop loss is that you don't have to be afraid that one badly chosen trade will kill your whole account in case the trade goes bad and for some reason you're not in a position to close it manually. So remember to always put in a stop loss and never move it further away after opening the trade. With those kind of expectations you're simply setting yourself up for disappointment, frustration and failure.

Try to look at things realistically right from the start. Determine an attainable percentage of winning trades considering your strategy and experience. Ask yourself how much time you can spend on trading and learning.

When you have a clear view of your trading tools and conditions, you will find it much easier to work towards a profitable trading strategy. For example, suppose you're a day trader with a trading strategy where you risk, on average, 15 pips to win Gross revenue, because you still have to deduct the spread, i. Let's say the spread is 2 pips per position, meaning your trades costed you pips. Your net revenue then, was 1.

Of course data on trades isn't enough yet to be of statistical significance, but at least it would give you something to work with: It forces you to think about when the trade you're about to put on would be considered a failure. After you've opened the position you might talk yourself into staying in a trade going bad, using all kinds of irrational excuses. But if you've set a stop loss before opening the trade when you were still thinking rationally you'll always have that shining beacon, reminding you that you'd be a weak, emotional idiot if you stayed in the trade after the stop loss is triggered.

Another advantage of the stop loss is that you don't have to be afraid that one badly chosen trade will kill your whole account in case the trade goes bad and for some reason you're not in a position to close it manually.

So remember to always put in a stop loss and never move it further away after opening the trade. With those kind of expectations you're simply setting yourself up for disappointment, frustration and failure. Try to look at things realistically right from the start. Determine an attainable percentage of winning trades considering your strategy and experience.

Ask yourself how much time you can spend on trading and learning. When you have a clear view of your trading tools and conditions, you will find it much easier to work towards a profitable trading strategy. For example, suppose you're a day trader with a trading strategy where you risk, on average, 15 pips to win Gross revenue, because you still have to deduct the spread, i.

Let's say the spread is 2 pips per position, meaning your trades costed you pips. Your net revenue then, was 1. Of course data on trades isn't enough yet to be of statistical significance, but at least it would give you something to work with: For beginning traders an often overlooked source of information is other traders.

Of course, reading books about forex is important. Books can provide you with a solid basis in a short time, providing a foundation to build on.

Practicing is another important factor to get the hang of things quickly, but you'd be surprised to find out how often fellow traders can give you valuable feedback about your trading strategy, or about alternative ways for putting on a particular trade.