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The Right Way To Make Money On The Currency Exchange: Six Golden Rules
Just as there are rules and guidelines for forex trading methods when you are learning how to make money on the foreign exchange market, there are also tricks for dealing with human factors and habits that undermine our success. Here are six golden rules for handling ourselves so that we can move smoothly from vacillating beginner to successful foreing exchange trader.
1. Keep Cool
Experienced traders do not let their trading depend on their emotions or their emotions be influenced by their trading. They do not risk more because they are feeling lucky, they do not hesitate when the signs are right, or get out of a trade too soon out of fear. Equivalently, they are unlikely to be overenthusiastic due to a gain, nor will they get mad, shout or kick the dog when they lose.
A person who is ruled by his or her emotions will not succeed as a forex market trader. Self discipline can be learned but make sure that you have totally mastered your emotions on a demo account before you think of going live. If you are still taking unplanned risks you are not prepared for real trading.
2. Think For Yourself
Different traders have different techniques. This means there is limited value in getting advice from anybody else. In fact, except you know that the person follows the same system and techniques, the advice is probably useless to you.
Do not copy somebody else's system just because they seem to be making profits with it. Do your own research and check everything that you are told. Even then, consider carefully before abandoning the system that you have followed before. There may be factors that you have not taken into account. Something that works for somebody else may not necessarily work for you.
3. Keep Records
Keep a spreadsheet detailing every deal so that you can see patterns in your own results. You do not necessarily have to use it to change anything, but refer to it often to remember of the many small trades that add up to success or failure.
What should you record? At a minimum, the currency pair, your position and the opening and closing prices. But, these bare facts will be much more informative if you can also add why you entered the position. Did it fit the criteria of your system? What made you assume that the trend would go your way? When you look back you will have a much better view of why your trading history is going well or not so well.
4. If In Doubt, Stay Out
Do not open a position if you are hesitant or unsure about it, provided of course that you have a reason different than fear for your hesitation. A trade can only go one way or the other, so if it is not absolutely right, it is wrong. Wait. There will be plenty of better opportunities.
5. Limit Your Trades
Do not be drawn into thinking that you must never miss an opportunity. You do not have to be on top of several different currency pairs and jump into every market regardless of what else you may be doing.
6. Don't lean only on your own judgement
Even if you are not a newbie trader, don't think you are unfailing. Find a good forex signal provider, who would cater to you reliable forex signals. Such accurate forex signals can be traded on a stand-alone basis, or used as a confirmation of your own trading decisions.
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