Trading Tips ( Part 2 )

A few last tips before you start.




1. Get Your Feet Wet Gradually. Most new traders start by opening loads of trades and then find it hard to monitor them all. As the Forex market allows you to profit from all directions, whether the pair is going up or down, as weird as it may sound, a trader can make enough money from just one currency pair. Focus in the beginning on one pair and gradually move to others.

2. Stop Forgetting Your Stop-Loss. The key factor to losses is incorrect portfolio management. Remember that a stop-loss is not there for decoration, either to prevent huge losses. Use it wisely!

3. Trading Plan/System. Every trader develops his/her own individual trading system, depending on the amount of time they have to dedicate to trading. Traders with more time may adopt a day trading system, while others might trade longer term. The important thing to remember is to stick to your trading plan. One or two loosing trades don’t necessarily mean that your system isn’t a profitable one.

4. Taking Profits. The number one problem that new traders encounter is closing their trades too early. Remember to stick to your trading plan; therefore you won’t reduce your potential profits.

5. Don’t turn a profitable trade into a losing one. Once the market is going your way and your positions shows a positive P&L, keep a close eye them. First of all move your stop loss to your entry point to secure your funds. Then move your stop loss in the direction of the trend to prevent the trade from turning into a loss.


6. “Scaling in”. Using a “Scaling in” strategy isn’t necessarily a bad thing but it can wipe out your account really fast if you don’t know how to use the strategy correctly.
“Scaling in” is a strategy where an investor increases his position size when the position is negative, hoping that it will retrace back and close all the positions in profit. The question is what happens when the currency doesn’t retrace? Sometimes it’s better to stick to a simple buy and hold strategy.

7. Plan Ahead. Never enter a trade because the price is suddenly rising or decreasing. Always plan your trade. Know your entry point, take profit and stop loss rates.

8. Capital preservation. Profits are there for the making, but the real key is not to make money; it is actually keeping it. Hold profitable trades and cut your losses quickly.

9. Momentum and the Trend. New Traders are often unaware that as a new trend starts, momentum tends to increase. Additional traders jump on for the ride strengthening the trend as it continues higher. Try to trade with the market’s momentum on your side, as it will often push your trades in the right direction, hitting your take profit sooner than you expect.

10. Don't waste your time on a losing trade. If you find yourself in a losing position, remember that sometimes it’s better to cut your losses and move on to the next trade. The Forex market is full of profitable opportunities, just waiting to be taken, so don’t waste your time on an unprofitable trade!

No that you've learn all the essential trading tips, all that's left to do is start real trading. Or practice your trading before you ues real money.