THE SIX SECRETS OF SUCCESSFUL FOREX TRADING.

MONEY MANAGEMENT TIPS FOR FOREX TRADING.

If you are a successful trader or novice, you will find is helpful my tips. I have to admit. Having a good trading experience, sometimes I make mistakes. And this concerns relate to money management. If  I can not predict the behavior of market, then the size of the deal and the size of the loss depends only on me. So check if you do not make mistakes which be very unpleasant for you.


If you are looking for a Holy Grail of successful trade then you have found it. This is a trivial management of funds! Yes! Trust me – the secret to success in the forex market is not in the precise prediction of the market. You will not succeed if you enter into risky deals. You will not succeed if you open one hundred deals one day. Success on forex comes only with simple compliance with the rules of money management. Ask any trader who make money in the market and he will confirm this to you. Forget about excitement and adrenaline as many people think so. The trade in market is a routine work. And proceeding from this rule first –  you must stick to the size of the trade position.

RULE 1. OBSERVE THE SIZE OF TRADING POSITIONS.

This is what you must determine by the rules of your trading system. It is risk 1, 2, 3, 5 or more percent of the deposit, or a fixed amount. Another system is possible. This is not important. It is important only one moment – you must follow accepted risk your system size per one transaction.

Accordingly rule 2, which is a continuation of rule 1. If you trade by sticking to the size of a position, you must know know how much money you risk for one transaction.

RULE 2. KNOW THE POSSIBLE SIZE OF LOSSES PER TRANSACTION AND ALL OPEN DEALS.

Why do you need it? You have to be psychologically ready for possible losses. You need to know the size of the transaction you want to open and other open deals. You need to know what will happen to your account in case of the worst scenario. You must clearly understand that in the event of a complete failure, you will lose 100, 500 or $ 100,000. This figure should be comforted for you. I tell you from my own experience. If you not follow this rule this will force the closing of trading positions at the worst time. And the market then goes where you were waiting. And it will come just when you did not expect it. You have to be morally ready for such developments.

Another sad conclusion for fast money seekers. Do not wait for quick enrichment from the forex market. Trends are changing. And the market starts to go against you. It’s simple.

RULE 3. SET REALISTIC GOALS.

Depending on the precision of your system, you must understand the probability of achieving the goal. The higher this level is the less likely that the market will come there in the near future. The probability of achieving a target from the size of the risk may be as follows:

1:1 – 65%  or  1:1,5 – 40%  or  1:2 – 15%

The question arises – is there any need to wait for such goals to be achieved with a ratio of 1: 2? Have you accuracy of entry into the market to get such a profit? Be sure to answer this question yourself. Explore your trading system. Make a tests. Optimize your trade system. You have to find the optimal relation of the accuracy of the entry in the right direction and the choice of trading goals. They differ for different currency pairs. This will significantly increase the efficiency of the trading system.

When choosing a goal, do not forget about the stop order. Perhaps you read about it or some time traded without stop order. This is your right. You lose your money. Therefore rule number four:

RULE 4. USE CORRECT STOP ORDER!

The purpose of the stop order is not just to close the deal. The purpose of the stop order is to stop the deal if it will go in a different scenario than you planned. When placing an stop order you must take into account three criteria:

The ratio of risk to profit

Location (above or below important levels).

Time (duration of the deal).

In case of violation of each of these criteria, the deal must be closed. Otherwise, you go from planned trading to gambling. And this game is against you.

As far as gambling is concerned, this is the following rule:

RULE 5. TRADE WITHOUT EMOTIONS.

You must trading only use the trading plan. Trade only in accordance with the established rules or indicators or other criteria on which you use for enter the market. No quick deals or great opportunities. And do not think about money. Let it be a computer game for you, the purpose of which is to strictly implement the rules of trading.

In spite of all your efforts you will make mistakes. This is the nature of people. This is a very difficult game where you must follow the rules of trading the forex market.

How to make it easier? Start write a diary.

RULE 6. KEEP TRACK OF TRADING HISTORY.

Put down your failures there. Conclude from each failure. When you will have statistics – you will find that the most typical are the following problems: the accuracy of entry, the size of the trade position, the time of maintenance of the open deals. Ask yourself – What do I have to do to reduce the number of these errors? At the very least, you will see what you have a problem and what to do to solve them. All of your further career trader lies in identifying problems and their effective solution. And best of all, it helps with the usual analysis of your trade deals.

The above rules are the basic requirements. You can accept or reject it. This is your right. From my experience, I certify that trying to comply with these requirements has a positive effect on my trade. Therefore, I recommend to take it into consideration.

How does it work? You can find out the results of trading my public account go  this link. Make sure it’s effective!

If you are interested in my trading result then you can order the copying of my deals or invest in my trading account. Detailed information on how to do you can be found go in these links. Copying a trading deals can be a good diversification for your trading account. When you have a series of failures, there is a probability that the results of trading signals from another traider will compensate it.

So the main rule of trade is to trade in compliance with trading rules!

RULE 1. OBSERVE THE SIZE OF TRADING POSITIONS.

RULE 2. KNOW THE POSSIBLE SIZE OF LOSSES PER TRANSACTION AND ALL OPEN DEALS.

RULE 3. SET REALISTIC GOALS.

RULE 4. USE CORRECT STOP ORDER!

RULE 5. TRADE WITHOUT EMOTIONS.

RULE 6. KEEP TRACK OF TRADING HISTORY.

Ihor Hrytsai for AFForecast.com


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