Now more than ever people are looking for ways to supplement their incomes, maybe even replace their day jobs. Many people realize that just being an employee is risky and to safeguard against the unpredictable they need learn how to forex trade. The only fx trading course that I recommend wholeheartedly is Peter Bain’s course. It does a thorough job of nailing down the initial concepts that are hard to explain to someone who has no investing experience.
In addition to understand the theory, you need to understand something else… yourself. Your discipline will ultimately determine your success as a trader. These are the rule you need to follow in order to develop that strict discipline and become a success.
The 10 Forex Coaching Rules
1. Always have a trading plan
Don’t ever put in a buy order without having clear objectives for the session. You need to plan when you will take profit and when you will cut bait if the market moves against you. Have as policy, the highest amount of capital you will ever risk during a trade. Don’t casually enter trades and fly by the seat of your pants. Sloppy trading results in little to no profits. Write your trading plan down on a piece of paper and follow it.
2. Filter your trades
You need to have a method that allows you to be selective of your trades. It should be based on trend and price momentum. Don’t guess and don’t be hopefully. Listen to what the chart is telling you and trade with the trend. Bear in mind the time frame you are trading and know your tolerance of risk. Don’t be desperate for a trade. The market will be there tomorrow but you won’t if you don’t screen your trades.
3. Review your charts
Never buy on news alone. Always do a top-down analysis of your charts starting with the daily down to the 15-minute. Use your tools to determine the trend and time your entry. Remember that current price anticipates the news and reacts when the results are something other than what was expected. Fundamentals give you clues, your charts give you signals.
4. Trade with the trend
When you first learn how to currency trading, you will have a higher degree of success if you trade with the trend. The market does move in cycles and getting in at a market bottom or top can be very rewarding but it is much more difficult for a new investor to do so than it is to trade with the trend. That is how to invest in forex with long-term success.
5. Have a money management system
When your trading account rapidly diminishes, it is call “drawing down”. It is like a water well that begins to run dry. The only way to prevent this is too have a strict money management system. You need to live to trade another day. For that reason, don’t ever let a losing trade take a large portion of your account. This means that you limit your trades, hedge and use leverage judiciously. Don’t ever have more than 5% of your account in the market at any given time.
6. Have confidence in your trades
If you are not sure about a particular trade, then don’t take it. Review your charts and only enter a trade when you see a convergence of buy or sell signals. Don’t try to talk yourself into the trade. You can pass it up because there will be plenty more trades down the road.
7. Only trade liquid markets and liquid sessions
Don’t trade anything where price action is stagnant. In order to make a profit you need volatility. Consolidations don’t offer enough opportunity to do that. You need to trade with a trend not with a pool of standing water. These are fx trading basics that you need to take to heart otherwise you’ll get frustrated and quit when nothing happens.
9. Always trade with a stop-loss
Nothing can decimate an account faster then unbridled price action going in the wrong direction. Consider the stop-loss as the first rule in your manual of table saw safety. As a carpenter you keep your fingers clear of the saw blade and as a trader you always put in your stop-loss. Avoid a painful lesson because the market is waiting to teach you one.
10. Learn from your success and your failures
Did a trade go as expected? Then you better make note of what signals you saw that led you to your decision. Did you get stopped out? Review and see there were clues to the adverse price action that you didn’t see before you put in your trade. Do this and you’ll refine your skills into the sharpness of a razor blade.
These are the rules. To what degree you succeed will largely be determined by how well you apply them. If you haven’t done any forex training courses then buy this one right now. Trust me, it will be money well spent. Study, practice and practice some more and you will find success in the forex market.
