In order to trade forex successfully, you have to trade forex according to some plan or system. The reason for this is that without a plan – or, a system – you run the risk of having your emotions take over and, unfortunately, human emotions are not known for being astute financial guides. Technical analysis and advanced charting techniques can stop this kind of thing from happening. They take the emotion out of a trading situation and are good at pinpointing trends, resistance and support levels plus entry and exit points. In fact, in Japan, there’s an indicator called the “Ichimoku cloud” which provides all the data you need – in order to trade successfully – on 1 chart. If you’re thinking of trading the USD/JPY, you might want to investigate “the cloud” before you start trading because many Japanese traders trade off of it.
You only need 1 winning strategy in order to profit from trading forex. Keep it simple, like using the crossover of 2 moving averages on a 15-minute AUD/JPY chart.
Trade Forex In The Best Way
Experienced traders always have a trading plan and at least 1 winning trading strategy. Stay with a “demo account” until you have a well thought out plan and a trading strategy that can make a profit at least 6 out of 10 times. It doesn’t have to be that fancy. In fact, it could be as simple as this: on a 15-minute AUD/JPY chart, trade the crossover of a 10-period exponential moving average against a 20-period exponential moving average, using a “Linear Regression” to show you where the trend is, an “Awesome Oscillator” to monitor momentum, a “Fisher Transform” to confirm trade entry and exit points and a leverage ratio of 50:1 or less, with a 20-pip trailing stop.
Trade Forex With Lower Risks
There’s a school of thought that says that the use of high leverage ratios in forex trade is the source of all wrecked trading accounts. Upon investigation, you’ll discover that’s only partly true because the overall degree of financial risk inherent in any particular trade really depends upon how long a trade is in the marketplace and how well the stops are placed. For instance, if you are involved in 1-minute “day trading” and the global economic calendar does not have any significant events due for quite some time, then your overall risk is relatively low, even if your trade is highly leveraged. If you have well placed stop losses protecting your position, then your overall risk is even lower to trade forex.
How Greed Can Prevent Success As You Trade Forex
One of the main reasons for having a trading plan and a strategy is to prevent your ego from getting in the way of making a profit. Egos tend to be reactive. In forex, profitable trades are usually the opposite (i. e., pro-active). In other words, a good trade is one that is set up to take advantage of an unfolding pricing discrepancy – not one that is just already finished. Use a trading system that signals the existence of potentially profitable trades coming up. Pay no attention to any egotistical screams that “everyone else is long” (or short or squared, etc., etc.). That trade is almost already over. You want the profitable trade forex that no one is talking about – yet.
Get a free Forex PDF PLUS:
- 14 Video Lessons
- Free One-on-One Training
- A 5000$ Training Account
- In-House Daily Analysis
- Get FULL ACCESS