WOW!!!!!.....
.......so you decided to trade Forex. Good for you! Forex can be profitable, but you can also lose everything before you have time to blink. I know, I have been there, and there is no adrenaline rush in the world like watching a half a years salary go up in smoke in a matter of minutes. It will arrest you and leave you picking up your jaw from the floor two minutes later.
I just want to offer some TIPS, that I hope will be helpful in your trading experience.
1. Never trade against the trend if you are new. Learn the market like your own name first before trying such stunts. Use 4 hour, daily charts or longer to identify a true trend. Anything less may give you a false reading of the overall trend. KNOW THE PREVAILING TREND BEFORE YOU START TO TRADE.
2. Never trade on impulse. Impulse trading will KILL YOU. Never trade tired; tired trading create costly mistakes. Never do angry/revenge trading. That is when you trade in anger to try to get your money back when a position goes against you. It rarely ever works. Pay attention to what you are trading and how much. An accidental wrong click can be as costly an any other trading mistake.
3. Find a Forex company without a dealing desk, because they are always trading against you, waiting for you to make mistakes that they can pounce on. Forex companies like that stack the odds so far against you, that it makes it almost impossible to win. They will give you just enough knowledge to hang your self.
4. Don't trade with a Forex company that doesn't display your free margin, because most of these companies hide your free margin in your Margin Balance, so that you are fooled into thinking you have all of your balance as a free trading balance, but they will liquidate you. Remember, they are dealing against you, they are not your FRIEND, and they are not there to help you prosper. If they do accidentally liquidate your position, they will still keep ALL OF THE MONEY THAT THEY HAVE LIQUIDATED, then they put you back in at the position that they liquidated you from, even though it was their error, and try to tell you that the position they put you back into is the same because your marginal balance is the same as what it was when they liquidated you, but all of your real money that they stole, is gone, and you are left with a vulnerable open position praying that you can recover your money, which they well know that you probably won't do, that is why they will not give you a refund. THEY ARE CROOKS, SO BUYER BEWARE.
5. If you trade with a company that offers their opinions with the news, ignore the postings, it will scare you to death and often times cause you to lose out on good profit potential or take an unnecessary loss. Just be careful!
*Remember price action is everything and the longer term trend is your friend. Only the charts tell the whole truth. Learn to read them like a master musician reads sheet music.
6. Don't hold on to losers to long, it will eat you alive. If you are in a losing position wait until you recover some before you sell, or sell small lots of the position at a time. Ex: if you have an open position of $100,000USD, and the market has gone against you in a big way, you may want to sell $20,000USD when the market goes back in your favor some instead of the whole $100,000 lot.
7. Be very careful of advice you find on the internet! There is some good stuff out there. Do your own homework, and DO YOUR OWN HOMEWORK, and DO YOUR OWN HOMEWORK. The market will not reward your lazy attempts.
8. Realize and respect that it takes hard work to be successful in Forex.
9. Do not gamble with the market, make good calculated pre-planned entries.
10. When you are borrowing money from family, friends and credit cards for Forex, it is time to step back; look for new/better strategies and make sure that this is what you want to do.
11. THIS IS BUSINESS, ALWAYS RESPECT THAT FACT. YOU ARE HERE TO MAKE MONEY!
12. Never lower your margin with an open position, it could liquidate that position, be sure all of your positions are closed before you lower your margin.
(Allow me to explain margins a bit. I am going to try to make this as simple as possible, it is when your broker lends you $50.00, $100.00, $200.00 and even $250.00 on every $1.00 that you have, (50:1, 100:1, 200:1, 250:1) This is a great deal that can help you be more profitable(because it allows you to hold a bigger position in the market), but it can cause you to over leverage yourself, and if the market goes against you in a big enough way, it will drown you quickly, taking all of your hard earned money in the process.
13. Learn all of the major reports for your currency pair, and try to avoid being in the market before or during those releases, because the market can become so violently volatile that you can be liquidated in less than two minutes.
14. Maintaining your trading capital is more important than making a profit. Sometimes you just gotta save your butt. Minimize losses and your profit will take care of you!
15. Practice on a realistic size Forex demo account. if your initial investment is $250USD, then don't practice on a $50,000 demo account, it will give you a false confidence, and cause you to get your butt handed to you. Use a practice account that will allow you to trade as close to the actual amount you plan to trade as possible.
16. Please don't over leverage yourself, over leveraging will kill you quickly. Invest only 2-5% of your capital Maximum, Even when a trade looks really promising; something can happen to turn a trade against you quickly, and you want the room to ride the wave if you decide to ride, or of course you can get out, (which in a lot of cases is just wiser).
17. When you are looking for a good Forex trading platform, the NFA (Nation Futures Association), FCM (Futures Commission Merchant), (CFTC) Commodity Futures Trading Commission and all of other organizations designated to oversee these markets are good places to begin, but if you really want to find a good Forex Broker, Google "Reputable Forex Broker" and see how other real people feel about different brokers. You will be surprised at how forthcoming they are. You will be glad that you did. Also one of the reason people don't file complaints against these companies is because some of the companies designed to protect you, charge you a hefty fee just to file the complaint, so most people avoid the headache all together. Be wary, and look out for those unscrupulous Forex Brokers. With that said there are a few really good brokers out there! What you are looking for is a broker who is TRANSPARENT, and DOESN'T HAVE A DEALING DESK!
18. Don't panic trade, when you feel that antsy, desperate feeling that makes your mouth dry, turn off the computer and do something else until you are your best self. Trading requires confidence and a good clear head.
19. PRACTICE, PRACTICE, PRACTICE , PRACTICE, PRACTICE, PRACTICE ON YOUR DEMO ACCOUNT,.......... EVEN THAT WON'T BE QUITE ENOUGH,....... BUT GET AS MANY SCREW UPS AND BAD HABITS OUT OF YOUR SYSTEM AS POSSIBLE!!!!!!!
The biggest challenge in Forex is having the confidence that you are doing the right thing, and the discipline to see it through. As you watch those numbers dance in front of your eyes along with your profits, it gets though. It can make you down right panicky, learn the market, and if you pray, ( learn to trust that feeling of peace no matter what the market is doing). The news and the market will make you crazy, but what does your gut tell you in the mist of all of that noise?
20. Lastly if you are stressed, irrational and ready to throw the computer, turn off the screen, breathe and go do something that you really enjoy. (Just breathe, it will be ok, this too shall pass. Live in peace!
HAPPY TRADING
Remember to be thankful, be humble, be kind. I hope that this help. Thank you for visiting my blog. Wishing you every blessing of health, wealth, happiness, prosperity and peace for your life. (SMILE)
This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.
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