How to survive on Forex? 5 rules of successful trading
Forex trading is not an easy kind of online business and not everyone is able to make stable money here.
To some extent, this is due to the fact that the simplest rules become complicated for most traders if they have to follow them strictly every day. Monotony is exhausting and not only in currency trading. But the stability of algorithm is the main secret of success of even the simplest beginner forex strategy.
Not only you should know the rules of your own trading system, but also follow them meticulously, limiting the flight of fancy only within the framework of these rules.
Entry points are especially important for any trader.
Let us try to look at certain phases of trader's work through the prism of psychological factors that affect performance of a market participant none the less than errors in analytical calculations.
Basic rules of successful trading
1. Before you enter into a trade, you should adequately assess your psychological and intellectual state. If you are nervous, irritable, depressed, too gambling, there is a reason not to enter the market.
To work, a trader needs, first of all, calmness and the ability to think soberly and wisely. Although, it is not so easy to overcome the excitement.
2. The next factor to take into consideration when making a deal is working hours of American, European, Asian markets and release of important economic news.
If the deal planned by the trader will be executed during the peak hours of any of these exchanges - it is a probabilistic deal. If not, then, accordingly, by entering the market, the player is taking a big risk.
Before you open an order you should check if strong news is expected in the near future. It is risky to work during this period, if the TS (trading system) of the trader is not specially built for trading during the news impulses.
3. You should enter the trade only on the basis and within the limits of your TS.
Even if colleagues and partners persistently tell you there is a strong signal, but this signal does not match your trading system, do not enter into a transaction, because in any case, the transaction should be accompanied and respond to what is happening. And how to do it, if trading rules are unknown? Such work is a breach of discipline, and breaches of discipline are not forgiven by the market, sooner or later.
The fact that if you are lucky once get a profit on someone else's views on Forex trading, the luck will accompany you in the future. All the more reason not to enter a trade based on "intuition". Even intuition should work within the framework of the trader's TS.
4. You should only enter a trade when the stop loss protecting the position is consistent with the trader's money management policy.
After all, a stop loss can also trigger, and here it is important that this planned loss does not cause irreparable consequences to the trader's deposit.
Needless to say, money management issues should be considered in each trading system and polished exclusively on demo accounts.
5. It is not enough to take care of minimizing losses. You must determine the moment of exiting the trade even before you enter it.
You cannot predict 100% which values the price will reach, but the levels of expected profit should tell you how far the deal can potentially go.
If the levels for protective orders are further away than the profit targets, then it's best not to enter the trade. If the target levels are further away and you have received a strong signal from your TS, then enter boldly.
Of course, the market may go against the trader, but constant obedience to the trading rules, laid down in the algorithm of trading strategy for earnings on Forex, will in any case work profitably.
You should not be afraid of taking a loss, it is more important for a trader to take these unavoidable losses, without which forex trading simply does not happen.