Forex is not a market that one can jump in and out of at any time. It is not like you can switch on your PC, log into your MT4 and jump in and trade. It sure looks like that, with the PIPs going up and down by the second. But no one can tell if they are going up, and how much up, or if they are going down.
You have to have a strategy consisting of a number of indicators that attract your attention and alert you of a possible market movement in a certain direction. Just one or two indicators will not do. If people tell you that they have an indicator or two working for them they are lying.
People who jump in and out of the market with a few lucky pips are speculating, they are gamblers to the core and do not know what they are doing.
A set of indicators will tell the trader of a possible market movement; this is known as a 'set up.' A set up alerts the trader, who will then wait for two or more of the other indicators to give him the 'signal' to trade.
Every trader has his own strategy. Many strategies are wonderfully close to the 'holy grail' of forex and have made millionaires of forex traders. However, strategies also go wrong at times when the market moves too fast. The only thing that will save you in such a condition is a good risk management plan.
This is the next step after developing a strategy that will lower the risk of forex trading. Risk management includes having enough money in the account to prevent margin calls and gives the trader enough leeway in case the market drives the trade into a loss. The fact that the market will return to the previous levels in time, assures the trader of a losing trade turning into a winning one. In this condition only money equal to about 200 pips or more will suffice to prevent the losing trade being closed out automatically before the market returns to the entry level.
Remember, no one will sell you his winning strategy, let alone tell you for free. You will have to develop your own, and that will take time. It took me 9 years and I'm not going to tell you. So, get down to busting some of those demo accounts. Every day will teach you something new. Finally, you will find something that works 6 out of 10 times - that will be your strategy. If you keep the trade size, stop loss and take profit constant and you make 6 winning trades and 4 losing trades you have 2 winning trades - per day!
The averages are in your favour because you will have literally taken the 'gamble' out of your trading.
Hire Dexter C Figg, professional Forex Account Manager
Visit eWriterz Forex today to avail a special offer on trade management!
No comments:
Post a Comment