By Walter Madenford
Ask any professional forex day trader and they'll tell you that rules will become your best friend. There have always been rules, and by following them, you can ensure your own financial security. However, if you choose not to follow simple and successful rules, you may just end up broke by investing your money in the wrong way. Follow these forex tip trading secrets to make the most of your investing.
Rule 1 - Always Think Long Term
Once you begin investing, and put money into your account, forget about taking it out. You should be leaving it in there assuming that you'll never be using it as a cash fall back if things don't go as planned right away. If you're thinking on a shorter term basis, chances are you'll get emotional about your money or make bad decisions which lead to making less money on your investment.
Rule 2 -Use Investing Money Only
Remember, money that you invest should be used exactly for that purpose... investing. In essence, investing is similar to gambling as there are no guarantees for success. Don't ever put money you don't have or can't afford to lose into the forex market.
Rule 3 - You Must Use Resources Other Than You
This rule is harder to apply that most others. When you are a beginner investor, you'll believe you can attack this journey completely on your own. You should be thinking about who can be a mentor to you, ideally a person who's had years of experience in various other investment endeavors, to help you invest wisely. Once you begin to gain confidence in your own trading abilities, you can then expand to make your own decisions.
Rule 4 - Follow a Trading Plan
There's a reason why successful traders always have a strategy. And that's because it works. If you're going to trade, you need a trading plan. And if you want to trade profitably, you'll need to follow your trading plan. Because the forex market is so fast-paced, it's impossible to react real-time and make the right decisions, therefore follow a trading plan.
Your trading plan is an essential element because it removes any emotions and no thinking is necessary, which usually means you no longer have to analyze complicated graphs in real-time. There's all kinds of software that can analyze for you and the data it uses to calculated decisions is much more reliable than not using a system. If you choose not to use a system, might as well be rolling the dice and blindly guessing.
Rule 5 - Be Consistent
If you're going to trade forex, do it consistently. You will no doubt have some losses, but hopefully the number of wins will override the losses. Remember, that even the best traders lose all the time.
Rule 6 - Remove Any Emotion
This is the downfall of many a trader, but be certain that your trading system allows you to be emotionless about decisions to take with trades. Let your profits run, and kill your loses fast. Follow a system and you can easily remove any emotions that would otherwise lead you to make bad decisions.
Rule 7 - Diversify Your Investing
And finally, invest your money in several areas, making sure you distribute into different investment vehicles. When you do this, you protect your startup capital and ensure that no big portion of your funds can be lost at any given time, no matter how the market moves.
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