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Tips and tricks

FOREX tips and tricks

general guidelines

Common Sense Guidelines for the Average Trader

Look for a reputable broker
• Ability to trade effectively depends on consistent spreads and ample liquidity
• Anyone can establish a position
• Ability to close out a position at a fair market price is more important

Live to trade another day
• Apply prudent money management skills
• Avoid using excessive leverage that puts your investment capital at risk
• Always trade with a stop!

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Don't trade emotionally, stick to your plan and maintain discipline
• Establish a trading plan before initiating a trade
• Set reasonable risk/reward parameters
• Don't override your stops for emotional reasons
• Don't react to price action : means don't buy just because it looks cheap or sell because it looks too high, Have supporting evidence to back up your trade

Trading with and against the trend
• When trading with a trend, consider the use of trailing stops.
• When trading against the trend, be disciplined taking profits and don't hold out for the last pip

Treat trading as a continuum
• Don't base success on one trade
• Avoid emotional highs or lows on individual trades
• Consistency should be an objective

Forex trading is multi-currency
• Watch crosses as they are key influences on spot trading
• Crosses are one currency vs. another, such as eur/jpy (euro vs. jpy) or eur/gbp (eur vs. gbp)
• Crosses can be used as clues for direction for spot currencies even if you are not trading them

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