Posts Tagged ‘learn forex trading’
Low Knowledge Forex Trading
January 1st, 2010
It is said that about 85% of currency traders lose their money in the first three months of their trade, I think, in some cases higher than the market and can be hits 95%, most people say these losses are a result of shopping with no serious knowledge of the FOREX market I do not agree that the whole way.
For me, I think the most important reason is the trading style, including strategies for managing capital and risk management, another important reason is the congestion Up Your Mind with a lot of technical and fundamental tools and try to use them all at once.
Theoretically, all methods of analysis “wither this is a technical or fundamental” right way because they are only measuring tools, they differ in the accuracy of their results, and it depends on time, they just give you input and you’re responsible use of these inputs is why I do not mind indicator you are using, simply try not to crowd your mind with many of them.
To move to a successful 15% of you do not need to know a lot of analysis; you do not need a lot of capital, too. I urge you to remain calm, focus, look at your map and go the way they tell you, and such advice. We will be discussing, not the actual steps you can take to get yourself out of loss and list your name in the list 15% of successful traders. The best resource for FOREX trading is MoneyTec MoneyTec, – Traders Community Forum, Chat. MoneyTec is an online community of trade, which contributes to the mature, intelligent & respectful discussion in a positive & safe environment for everyone.
My strategy depends on simplicity, as only 2 include indicators on the technical part. Let’s see how it will work:
a) Money Management:
1. First of all, count your money, and I mean the money that you can afford to lose “is usually no. 1 in the investment, as well as relieve stress on you.”
2. Solve your monthly average expectation of the return of the money: This enables you to calculate the average daily and weekly returns, weekly and daily targets.
3. Decide what you do with your income if you achieve your goals, how much you get out of it, and how much you will be reinvested: That would be enough to have a permanent and stable trading strategy.
4. Most importantly, limit the size of the transaction; it should not exceed 5% of the balance, if you want to survive in this market.
That’s all we need from money management right now, this is a huge topic to participate in.
b) Risk management:
1. Limit your loss: All the money that you can afford the losses from the investment budget.
2. According to the daily and weekly goal, you can limit your daily and weekly losses, so if it touches, which limits you to stop trading until another time period, risking $ 1 to $ 3 the expected profit is good, and 1: 2 is taken.
3. Keep in mind that “If you lose the day, it means that you have lost profits that day arrived Whole month” Do not try and squeeze themselves on the day after to get double the profit, otherwise you will ruin your trading system.
c) Technical trading system:
This trading system is a common old trading system has been used to use it at random, we will use it in a more modern way, it consists of:
1. 2 exponential moving average (EMA) values of 7 – 15.
2. Relative Strength Index (RSI) as a tool for confirmation.
Well, now we have all the settings, it is not difficult to understand that the system normally used traders: “After the EMA-7 cross EMA-15 you go with him, so if it is a cross-up, you buy, otherwise If you are selling, it is absolutely true, but you need to confirm this signal from another instrument as the “RSI”, once you get moving averages the signal that you check your line RSI direction and value, if it is positive, you can start trading, if you do not should be ignored until we get a positive signal that all is well, your Stop Loss if EMA-15 back on the cross EMA-7, and your stop loss will be 20% of your available daily losses that you have decided to do, so you have the opportunity to trade at 5 times a day, if you lost all hands.
Keep in mind that you should not put all the size limits of trade “that you decide to set-up time money management section in just one transaction, you may need to support trade in later or add more funds to it.
The last thing we can say is the classic advice “Do not be greedy and do not feel panic, is the most attractive feature we have in the Forex, take the points and stop the loss of profit.
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