A couple of years ago, the opportunity of making money in the Forex market was only limited to those people who already acquire a lot of money to get started with. However, at present, it is not the same as it’s used to be. With the pace of time and rapid enhancement of technology, it’s now possible for everyone to participate and make a decent income in this industry. Actually, forex trading online made it possible for general people as well.
Forex trading online is allowed for everyone access who seriously wants to earn some money with lowered deposited amounts. By the help of Forex trading online, the smarter trader, at present, are benefited with tons of opportunities to invest in trades. For your kind information, traders from all across the US are trying their best to avail advantage from this outstanding opportunity and walking through those formerly closed doors. However, before walking blindly through those doors, you’ll need to gain maximum knowledge about what exactly is waiting for your arrival on the next side. There is nothing better than a ton of opportunities arriving to you without any sort of risk.
Forex trading online is continuously offering all its possible wealth, and so are with Forex trading online trials. Actually, these trials are something that almost every experienced trader is probably aware of, has undergone and gained victory as well. No matter you choose to go through Forex trading online or Forex trading online trails, it’s absolutely safe for you as no venture is always 100% failsafe.
However, the possible Forex online trading trials don’t mean that it’s necessary for you to play it safe, avoiding trading in the present market at all. In fact, it actually means that you should practice the way to stand longer and stronger in the market with virtual moneys before investing up real money to get started with.
You’ll need to create a demo account first if you want to learn Forex trading online with virtual funds for practicing purpose. There are several advantages of preferring to choose a demo account when it comes to learning the way to succeed in Forex trading online.
A demo account allows you to purchase and sells trades without having you to spend a cent. By doing so, it’s possible for you to see firsthand the trials in Forex trading online. You’ll be able to have access to the precise market details as others before you have accessed at past. It’s something like you are climbing a huge mountain knowing that you’re absolutely safe with the safely gear. In case you make any mistake, you won’t have to risk your money.
Once you think your practice with a demo account is quite more and you’re now good enough to deal with Forex trading, it’s now your time to take the next step –Entering into real Forex trading world.
By: Kevin Nga
Article Directory: http://www.articledashboard.com
vendredi 26 juin 2009
How To Profit From Forex Trading With No Previous Trading Experience
You can profit forex trading even if you are not an expert trader, but you must keep in mind that the forex market can be a dangerous place to be in if you do not know your way around the trends and movements of the currency pairs.
If you want to profit forex trading you need to have a plan, a strategy or at least a set of rules that you intend to follow in order to achieve a certain result.If you are an expert trader, that plan will come out of your own skill and knowledge, and therefore you will likely execute it effectively.
But if you have no previous experience as a trader, that plan must come out of what I call your "forex toolbox". You need then a set of resources to back you up in that planning endeavor thus taking the guesswork out of the equation.
When I think of an expert forex trader and an amateur forex trader, I picture the expert trader as being Superman and the amateur trader as being a mortal. If Superman wants to lift a car he will need nothing but his arms, whereas the amateur trader -that is you and me- will need a car lifting jack to get the job done.
This means that you can and will profit forex trading if you want to regardless of any previous experience, but unless you are Superman, you will need a "forex toolbox" filled with at least the basic tools and resources designed ensure you will get the job done.
Nowadays you can build that forex toolbox with several resources that will enable you to profit forex trading with the accuracy and effectiveness of an expert trader. Among those tools you can find automated forex softwares, semi automated forex softwares and educational resources like online trading courses.
Your choice will depend on your style and needs as a trader, however, it is important that you make one before you enter the forex market, otherwise you will be off to a sour start. Forex trading is without a doubt one of the most profitable businesses you can run from your computer, but only if you are well equipped to face and beat the risks involved thus making your forex trading operation a profitable one.
By: ALEX CADENS
Article Directory: http://www.articledashboard.com
Learn more about this and other ways to Make Quick Money at MakeQuickMoney.Info
If you want to profit forex trading you need to have a plan, a strategy or at least a set of rules that you intend to follow in order to achieve a certain result.If you are an expert trader, that plan will come out of your own skill and knowledge, and therefore you will likely execute it effectively.
But if you have no previous experience as a trader, that plan must come out of what I call your "forex toolbox". You need then a set of resources to back you up in that planning endeavor thus taking the guesswork out of the equation.
When I think of an expert forex trader and an amateur forex trader, I picture the expert trader as being Superman and the amateur trader as being a mortal. If Superman wants to lift a car he will need nothing but his arms, whereas the amateur trader -that is you and me- will need a car lifting jack to get the job done.
This means that you can and will profit forex trading if you want to regardless of any previous experience, but unless you are Superman, you will need a "forex toolbox" filled with at least the basic tools and resources designed ensure you will get the job done.
Nowadays you can build that forex toolbox with several resources that will enable you to profit forex trading with the accuracy and effectiveness of an expert trader. Among those tools you can find automated forex softwares, semi automated forex softwares and educational resources like online trading courses.
Your choice will depend on your style and needs as a trader, however, it is important that you make one before you enter the forex market, otherwise you will be off to a sour start. Forex trading is without a doubt one of the most profitable businesses you can run from your computer, but only if you are well equipped to face and beat the risks involved thus making your forex trading operation a profitable one.
By: ALEX CADENS
Article Directory: http://www.articledashboard.com
Learn more about this and other ways to Make Quick Money at MakeQuickMoney.Info
How To Explode Your Forex Profits By Selecting The Best Forex Broker
Consideration must be given to a great variety of topics when you are starting out with your online forex trading career.To choose the best online forex broker takes a great deal of research and this article gives you 7 steps to review
The question is how do you select the best forex brokers. There are at least 7 criteria points to be considered when you are deciding where best to shop for a forex currency trading broker.1. Dependable
This works on multiple levels. You need a broker that you can rely upon to be trustworthy and who will not all of a sudden vanish like a puff of smoke from the internet taking with them all of your hard earned money. Please satisfy yourself that your forex broker is a member of a professional trading association as the fx market is largely unregulated so take care to ensure your broker has impeccable credentials.
The first step is to check up on the reliability of the currency trading broker and to confirm your online forex broker is regulated. In the USA this means that you want a forex trading broker that carries a current registration with the Commodity Futures Trading Commission (CFTC) and also the National Futures Association (NFA).
The National Futures Association should be consulted to make sure that your forex currency trading broker has a good record regarding complaints. Other countries have their own regulatory bodies for example the same function is performed by the Financial Services Authority in the UK.
Another consideration is whether the online forex broker's trading platform is reliable. The forex trading platform is the financial software that will connect you to the FX markets whenever you want to trade. If the online forex trading platform is often offline then this will cause you some major problems. There could be a time when you miss out on an opening price or closing price because of the forex trading platform experiencing some downtime.
Some good advice is to check what others say about the forex broker and go online and check the relevant forex forums on the web and see what experience they have of downtime. Remember it is like with all online forums do not listen to the loudest voice as they may have a vested interest either way in recommending or not recommending who in their opinion are the best forex brokers
2. Services Provided by the Best Forex Brokers
The forex markets trade 24 hours a day from Sunday night to Friday afternoon EST. You will need to check that your forex broker's trading platform is available all of this time, and certainly the best forex brokers are and they will also offer 24 hour customer support on forex trading days.
Check that they cover at least the seven major currencies USD, AUD, CAD, GBP, EUR, CHF, JPY and again the best forex brokers certainly will.
The best forex brokers should offer you financial trading charts, technical analysis charts and instant execution of your forex trade at the price displayed.
3. Forex Broker Costs
Online forex brokers do not make commission charges but will make their income from the forex trading spread. The forex spread is the difference between the buy and sell prices on any currency pair. The forex trading spread can be anything from 1 pip or less and up to about 3 pips although this will depend upon the online forex brokers terms of service and the currency pair being traded.
The piece of the pie taken by the spread can make the difference between achieving a profit or making a loss in your forex trading account over both the immediate and also the longer term so you will need to check closely at what level the spread is calculated. If you can decide which pairs you are likely to trade most often, for example I prefer the USD/GBP trading pair which is known as cable, the spread on those pairs will be more important to you than on others.
Beware of special marketing tricks like special offers of lower forex trading commissions that may not last long once you have committed your funds.
Consideration need to be given on how much is the minimum amount of capital you can invest. The accepted advice given to new forex traders is to start your forex trading with small lots so you will need to consider a forex broker who will let you open an account with less than $250.
4. Margins which are also known as Deposits
Margin requirements vary from forex broker to forex broker. A lower margin requirement means higher leverage, and higher leverage gives you greater profits or losses on the same fund size. So low margins seem great when you are doing well, but losses will be bigger if things go badly.
5. Lot size
Lot size varies from one broker to another. Generally 100,000 units of currency is a standard lot, 10,000 is a mini lot, and 1,000 is a micro lot. Some brokers offer fractional lots which give you more power to set your own lot size. You may consider this to be of an advantage to you or if you prefer a less complicated approach this may well be an unnecessary complication.
There are other considerations including the interest paid on your margin account, rollover charges and other FX trading policies. However, these are the main points that you should be looking out for when choosing the best forex trading broker.
6. Customer Service
This is very important especially when you have just started out using a forex trading platform. Like with all new things there will inevitably be teething troubles and you will want to be able to speak or email someone and get an instant response. The best forex brokers will provide this service.
7. Forex Exit Strategy
There will be a time when you want to realize some of the profits that you have made and be able to withdraw your money quickly and easily. Make sure that you are able to get your money within a couple of days as some online forex brokers insist on a 14 day delay which is totally unnecessary
By: James Roshwood
Article Directory: http://www.articledashboard.com
If you want some online forex trading tips visit James blog at For more Forex Trading Tips visit James Blog at www.greatforexworld.com
The question is how do you select the best forex brokers. There are at least 7 criteria points to be considered when you are deciding where best to shop for a forex currency trading broker.1. Dependable
This works on multiple levels. You need a broker that you can rely upon to be trustworthy and who will not all of a sudden vanish like a puff of smoke from the internet taking with them all of your hard earned money. Please satisfy yourself that your forex broker is a member of a professional trading association as the fx market is largely unregulated so take care to ensure your broker has impeccable credentials.
The first step is to check up on the reliability of the currency trading broker and to confirm your online forex broker is regulated. In the USA this means that you want a forex trading broker that carries a current registration with the Commodity Futures Trading Commission (CFTC) and also the National Futures Association (NFA).
The National Futures Association should be consulted to make sure that your forex currency trading broker has a good record regarding complaints. Other countries have their own regulatory bodies for example the same function is performed by the Financial Services Authority in the UK.
Another consideration is whether the online forex broker's trading platform is reliable. The forex trading platform is the financial software that will connect you to the FX markets whenever you want to trade. If the online forex trading platform is often offline then this will cause you some major problems. There could be a time when you miss out on an opening price or closing price because of the forex trading platform experiencing some downtime.
Some good advice is to check what others say about the forex broker and go online and check the relevant forex forums on the web and see what experience they have of downtime. Remember it is like with all online forums do not listen to the loudest voice as they may have a vested interest either way in recommending or not recommending who in their opinion are the best forex brokers
2. Services Provided by the Best Forex Brokers
The forex markets trade 24 hours a day from Sunday night to Friday afternoon EST. You will need to check that your forex broker's trading platform is available all of this time, and certainly the best forex brokers are and they will also offer 24 hour customer support on forex trading days.
Check that they cover at least the seven major currencies USD, AUD, CAD, GBP, EUR, CHF, JPY and again the best forex brokers certainly will.
The best forex brokers should offer you financial trading charts, technical analysis charts and instant execution of your forex trade at the price displayed.
3. Forex Broker Costs
Online forex brokers do not make commission charges but will make their income from the forex trading spread. The forex spread is the difference between the buy and sell prices on any currency pair. The forex trading spread can be anything from 1 pip or less and up to about 3 pips although this will depend upon the online forex brokers terms of service and the currency pair being traded.
The piece of the pie taken by the spread can make the difference between achieving a profit or making a loss in your forex trading account over both the immediate and also the longer term so you will need to check closely at what level the spread is calculated. If you can decide which pairs you are likely to trade most often, for example I prefer the USD/GBP trading pair which is known as cable, the spread on those pairs will be more important to you than on others.
Beware of special marketing tricks like special offers of lower forex trading commissions that may not last long once you have committed your funds.
Consideration need to be given on how much is the minimum amount of capital you can invest. The accepted advice given to new forex traders is to start your forex trading with small lots so you will need to consider a forex broker who will let you open an account with less than $250.
4. Margins which are also known as Deposits
Margin requirements vary from forex broker to forex broker. A lower margin requirement means higher leverage, and higher leverage gives you greater profits or losses on the same fund size. So low margins seem great when you are doing well, but losses will be bigger if things go badly.
5. Lot size
Lot size varies from one broker to another. Generally 100,000 units of currency is a standard lot, 10,000 is a mini lot, and 1,000 is a micro lot. Some brokers offer fractional lots which give you more power to set your own lot size. You may consider this to be of an advantage to you or if you prefer a less complicated approach this may well be an unnecessary complication.
There are other considerations including the interest paid on your margin account, rollover charges and other FX trading policies. However, these are the main points that you should be looking out for when choosing the best forex trading broker.
6. Customer Service
This is very important especially when you have just started out using a forex trading platform. Like with all new things there will inevitably be teething troubles and you will want to be able to speak or email someone and get an instant response. The best forex brokers will provide this service.
7. Forex Exit Strategy
There will be a time when you want to realize some of the profits that you have made and be able to withdraw your money quickly and easily. Make sure that you are able to get your money within a couple of days as some online forex brokers insist on a 14 day delay which is totally unnecessary
By: James Roshwood
Article Directory: http://www.articledashboard.com
If you want some online forex trading tips visit James blog at For more Forex Trading Tips visit James Blog at www.greatforexworld.com
How To Earn Money Online In Forex
Forex Trading System well it is a really risky and difficult business to understand and a lot of people especially those who are just starting out with Forex trading tend to lose a LOT of money. Mostly because these people think they have a good understanding of the system and try to go big when really they never had a chance to begin with! It takes a lot to understand everything about Forex and that's why they came up with this tool called FAP Turbo.
FAP Turbo is basically an automatic forex trading system that when used right can bring you the paycheck of your life. Or if perhaps you already have a solid understanding of the forex system this program will help take out a lot of the dull work and leave you with a lot of free time to spend with your family or loved ones!The great thing about this is it's not just some get rich quick scheme like most of these things are. If you understand forex at all you will know how great this tool really is and how proven the methods are. FAP Turbo was created after months and months of vigorous testing and research and that's why it works.
Even though it's incredibly easy to use FAP turbo it's still jam packed with great features that even the most advanced forex traders would find useful.
Basically most people use forex programs but they don't know about the secret that I am able to reveal now.
The more higher risk level you set in the configurations....the more accurately it will double or even tripple your initial investment. But there is a drawback which many people don't understand and then end up losing money. That even it is a perfect system still all trades won't be winning trades so if you set high risk, then you need to have decent $$ in your account to back it up.
Once you use the settings and act on the information I have provided then you will be on your way on making some serious cash in forex trading system.
By: Alicia Bogard
Article Directory: http://www.articledashboard.com
All the latest forex robots are compared on www.makemoneyonlineforex.com/ and we tell you which one works best for us. so you don't have to waste money on anything useless and you won't risk your money, because if you follow our guide. you will get the best and high quality AI robot for your money which will make your life easy by earning you money even while you sleep. :)
FAP Turbo is basically an automatic forex trading system that when used right can bring you the paycheck of your life. Or if perhaps you already have a solid understanding of the forex system this program will help take out a lot of the dull work and leave you with a lot of free time to spend with your family or loved ones!The great thing about this is it's not just some get rich quick scheme like most of these things are. If you understand forex at all you will know how great this tool really is and how proven the methods are. FAP Turbo was created after months and months of vigorous testing and research and that's why it works.
Even though it's incredibly easy to use FAP turbo it's still jam packed with great features that even the most advanced forex traders would find useful.
Basically most people use forex programs but they don't know about the secret that I am able to reveal now.
The more higher risk level you set in the configurations....the more accurately it will double or even tripple your initial investment. But there is a drawback which many people don't understand and then end up losing money. That even it is a perfect system still all trades won't be winning trades so if you set high risk, then you need to have decent $$ in your account to back it up.
Once you use the settings and act on the information I have provided then you will be on your way on making some serious cash in forex trading system.
By: Alicia Bogard
Article Directory: http://www.articledashboard.com
All the latest forex robots are compared on www.makemoneyonlineforex.com/ and we tell you which one works best for us. so you don't have to waste money on anything useless and you won't risk your money, because if you follow our guide. you will get the best and high quality AI robot for your money which will make your life easy by earning you money even while you sleep. :)
jeudi 25 juin 2009
Expensive Beginner Forex Trader Mistakes- How To Learn Your Lesson And Move On
Hi Traders
Learning anything new can lead to mistakes, but making mistakes can be the natural part of the learning process. When learning to trade or invest in the Forex, mistakes can lead to lose of profits and can become expensive. A good investor will understand the market they are using for trading. Whether you are new or experienced, you can still make mistakes. There are common errors that many traders and investors make when trading on the Forex. With a little research, you can learn how to avoid common Forex trader mistakes and how to learn to move on.
Learning anything new can lead to mistakes, but making mistakes can be the natural part of the learning process. When learning to trade or invest in the Forex, mistakes can lead to lose of profits and can become expensive. A good investor will understand the market they are using for trading. Whether you are new or experienced, you can still make mistakes. There are common errors that many traders and investors make when trading on the Forex. With a little research, you can learn how to avoid common Forex trader mistakes and how to learn to move on.
Using too much margin when trading or investing on the Forex can lead to costly mistakes. Margin is the use of borrowed money to purchase securities. While it is true that using margins can help you make more money, it can also make your losses bigger. When new investors look at margins as "free" money, they have the potential to lose much more money in the Forex. Margin is not free money and using is too much can end up making more debt than profits. You would not buy stocks using a credit card, so you would not use margins to trade currency. When investors use margins when trading on the Forex, it requires the investor to have to watch their investments much more closely than when margins are not used. Margins should never be used if the investor does not have the experience or time to closely monitor their trades.
Another common, but costly mistake is when investors buy and trade on unfounded tips. This is one of the most common mistakes, even with more experienced traders. It is easy to be tempted to buy or trade currency or even stocks when you overhear someone talking about the next big "thing". Sometimes this can be helpful, but more often than not, it will only lead to losses, not profits. Do not fall victim of investing and trading based on tips you hear or read about on television or on the Internet. If you hear about a trade that interests you, then best tip is to do some research and talk to your broker before trading or investing. You can also benefit from getting a second opinion about a Forex tip before buying, selling or trading any form of currency.
Not understanding how the foreign exchange market works is yet another costly mistake that new traders and investors make. Understanding the terminology and terms used in the Forex is very important to new traders. There are tutorials and free demos widely available on the Internet that allows traders and investors to learn how to use the Forex to their advantage. In addition, it is wise to choose an experienced broker that can help you trade and invest in the Forex. These brokers should know everything about the Forex and can help traders and investor make wise choices. Find a broker that is tied with a good financial institution and that has experience in the Forex.
Also, another common mistake is when traders and investors buy or sell when the rate on currency is cheap. Sometimes this is a good move, but just because the rate is low, does not mean that it will profit the investor. Instead of choosing a currency to buy or trade, it is best to look at all of the factors that affect the exchange rate and look at the trends and history. Avoid buying or selling any currency just because the rate is low. Most of the time, there is a distinct reason why these rates are low. Research the trends of the currency and find out, which ones are the best profit makers when trading on the foreign exchange market.
Last of all, another common mistake that costs money for both new and experienced traders is that they underestimate their trading abilities. Some investors feel that they do not understand the Forex well enough to trade to their fullest ability. Anyone with willingness to learn the Forex can profit with some education and research. It can take some time to learn the aspects of the foreign exchange market, but even new investors can learn how to trade with success.
Article Directory: http://www.articledashboard.com
The 411 On Forex Trading Online
A couple of years ago, the opportunity of making money in the Forex market was only limited to those people who already acquire a lot of money to get started with. However, at present, it is not the same as it’s used to be. With the pace of time and rapid enhancement of technology, it’s now possible for everyone to participate and make a decent income in this industry. Actually, forex trading online made it possible for general people as well.
Forex trading online is allowed for everyone access who seriously wants to earn some money with lowered deposited amounts. By the help of Forex trading online, the smarter trader, at present, are benefited with tons of opportunities to invest in trades. For your kind information, traders from all across the US are trying their best to avail advantage from this outstanding opportunity and walking through those formerly closed doors.
Forex trading online is allowed for everyone access who seriously wants to earn some money with lowered deposited amounts. By the help of Forex trading online, the smarter trader, at present, are benefited with tons of opportunities to invest in trades. For your kind information, traders from all across the US are trying their best to avail advantage from this outstanding opportunity and walking through those formerly closed doors.
However, before walking blindly through those doors, you’ll need to gain maximum knowledge about what exactly is waiting for your arrival on the next side. There is nothing better than a ton of opportunities arriving to you without any sort of risk.
Forex trading online is continuously offering all its possible wealth, and so are with Forex trading online trials. Actually, these trials are something that almost every experienced trader is probably aware of, has undergone and gained victory as well. No matter you choose to go through Forex trading online or Forex trading online trails, it’s absolutely safe for you as no venture is always 100% failsafe.
However, the possible Forex online trading trials don’t mean that it’s necessary for you to play it safe, avoiding trading in the present market at all. In fact, it actually means that you should practice the way to stand longer and stronger in the market with virtual moneys before investing up real money to get started with.
You’ll need to create a demo account first if you want to learn Forex trading online with virtual funds for practicing purpose. There are several advantages of preferring to choose a demo account when it comes to learning the way to succeed in Forex trading online.
A demo account allows you to purchase and sells trades without having you to spend a cent. By doing so, it’s possible for you to see firsthand the trials in Forex trading online. You’ll be able to have access to the precise market details as others before you have accessed at past. It’s something like you are climbing a huge mountain knowing that you’re absolutely safe with the safely gear. In case you make any mistake, you won’t have to risk your money.
Once you think your practice with a demo account is quite more and you’re now good enough to deal with Forex trading, it’s now your time to take the next step –Entering into real Forex trading world.
Article Directory: http://www.articledashboard.com
10 GOLDEN TRADING RULES FOR SUCCESS IN FUTURES & FOREX TRADING
It is a well known fact that 90 percent of investors lose money in futures and forex trading, 5-7 percent break even and only 3-5 percent make money. Given the high casualty rate, it is all the more important for investors to approach futures and forex trading in the correct manner. Below are some of the rules that traders should consider following if he is to make money consistently in the futures and forex market:
RULE 1 : USE MONEY THAT YOU CAN AFFORD TO LOSE
Trade only with "extra" money, i.e, money that is not earmarked to pay bank loans, car installments, housing loans, telephone and electricity bills, etc. One of the major reasons for investing only with extra funds is that your trading judgment will remain objective.
RULE 2 : DON’T OVERTRADE
Inexperienced traders can easily become overconfident after a number of winning trades. This can lead to overtrading – which is dangerous. One can be right 7 times out of 10 but the three times that you are wrong can wipe you out if you had overgeared yourself because of overconfidence. Success comes from prudence in money management. Never overtrade.
RULE 3 : CUT YOUR LOSSES SHORT, LET YOUR PROFITS RUN
Learn to be very impatient with losing positions. Learn to resist the temptation of taking your profits too early. Success comes from holding on to profitable positions and riding with the trend for maximum gains while keeping losses small by getting out quickly when you are wrong. One way to protect you from suffering catastrophic losses is to place stop loss orders for every trade entered.
RULE 4 : IF YOU GET INTO A LOSING STREAK, TAKE A BREATHER
When things don’t work out right, when your best forecasts fail you – get away from the market and take a trading break. A period away from the market can be refreshing and will recharge you.
RULE 5 : BUILD A PYRAMID WHEN ADDING TO A PROFITABLE TRADE
As the market moves up and you are long much earlier, you must learn not to double up your positions. Instead, reduce your positions each time you add to a position. If at first you had 10 contracts, the second should not be more than 5-6 contracts and the third should be 50% of your second (i.e. 3 contracts). An upside down pyramid will be top heavy and could wipe out all your hard-earned profits should the market reverse.
RULE 6 : NEVER ADD TO A LOSING POSITION
Adding to a losing position by averaging is very dangerous. Remember you are investing with "margin" and did not pick up scrips. The contract is not yours; you merely paid a percentage of the total value. Averaging a losing position is equivalent to not admitting your mistakes, that you were wrong in the first place. Successful traders cut their losses short.
RULE 7 : DON’T RISK YOUR ENTIRE CAPITAL ON ONE TRADE
Divide your trading capital into 10 equal parts and never lose more than 10 percent on one trade. If you lost the first trade, you still have nine more opportunities to be right. Putting all your capital on one trade is suicidal.
RULE 8 : NEVER MEET MARGIN CALLS
When you are wrong about the market, get out. Once you start procrastinating, very often prices will go against your position, further triggering a margin call from your broker. A margin call simply means that you are wrong in the market and your position should be closed out. Margin calls are made because people do not want to admit being wrong and take a loss; they hope the market will eventually go in their direction. To avoid this mistake, you should never meet margin calls. Just cut your losses and "get the hell out".
RULE 9 : REMOVE PROFITS FROM YOUR ACCOUNT
Probably no more than 1% of traders have a rule to take profits out of their trading account. The few wise investors I know have bought a house, a car or simply put part of their winnings into a fixed deposit account, otherwise the chances are high that they may lose them all back.
RULE 10 : HAVE A GAME PLAN
Lack of a game plan is not knowing what to do when you are wrong – and not knowing what to do even when you are right.
Here are a few guidelines:
1. Know when and at what price you are going to enter the market.
2. Know how much money you are going to risk on each and every trade.
3. Know when and at what price you are going to get out when you are wrong.
4. Know when and at what price you are going to take your profits if you are right.
5. Know how much money you are going to make if you are right.
6. Have a safety stop in case the market does the unexpected.
7. Have an approximate idea of when the market should meet your objectives or when it should begin to make a move; and if it has not done so, get out.
SUMMARY:
You will note that none out of the ten rules of trading mentioned above are on money management. Only Rule 10 describes the importance of having a trading system to determine "when to enter and exit". This just goes to show that good money management is the key to your success in making money in the stocks, futures and currency markets. A good trading system comes second. Nick Leeson, the rogue trader for Barings in Singapore, got into trouble because he did not respect some of the 10 golden trading rules.
SUMMARY
You will note that none out of the ten rules of trading mentioned above are on money management. Only Rule 10 describes the importance of having a trading system to determine "when to enter and exit". This just goes to show that good money management is the key to your success in making money in the stocks, futures and currency markets. A good trading system comes second. Nick Leeson, the rogue trader for Barings in Singapore, got into trouble because he did not respect some of the 10 golden trading rules.
RULE 1 : USE MONEY THAT YOU CAN AFFORD TO LOSE
Trade only with "extra" money, i.e, money that is not earmarked to pay bank loans, car installments, housing loans, telephone and electricity bills, etc. One of the major reasons for investing only with extra funds is that your trading judgment will remain objective.
RULE 2 : DON’T OVERTRADE
Inexperienced traders can easily become overconfident after a number of winning trades. This can lead to overtrading – which is dangerous. One can be right 7 times out of 10 but the three times that you are wrong can wipe you out if you had overgeared yourself because of overconfidence. Success comes from prudence in money management. Never overtrade.
RULE 3 : CUT YOUR LOSSES SHORT, LET YOUR PROFITS RUN
Learn to be very impatient with losing positions. Learn to resist the temptation of taking your profits too early. Success comes from holding on to profitable positions and riding with the trend for maximum gains while keeping losses small by getting out quickly when you are wrong. One way to protect you from suffering catastrophic losses is to place stop loss orders for every trade entered.
RULE 4 : IF YOU GET INTO A LOSING STREAK, TAKE A BREATHER
When things don’t work out right, when your best forecasts fail you – get away from the market and take a trading break. A period away from the market can be refreshing and will recharge you.
RULE 5 : BUILD A PYRAMID WHEN ADDING TO A PROFITABLE TRADE
As the market moves up and you are long much earlier, you must learn not to double up your positions. Instead, reduce your positions each time you add to a position. If at first you had 10 contracts, the second should not be more than 5-6 contracts and the third should be 50% of your second (i.e. 3 contracts). An upside down pyramid will be top heavy and could wipe out all your hard-earned profits should the market reverse.
RULE 6 : NEVER ADD TO A LOSING POSITION
Adding to a losing position by averaging is very dangerous. Remember you are investing with "margin" and did not pick up scrips. The contract is not yours; you merely paid a percentage of the total value. Averaging a losing position is equivalent to not admitting your mistakes, that you were wrong in the first place. Successful traders cut their losses short.
RULE 7 : DON’T RISK YOUR ENTIRE CAPITAL ON ONE TRADE
Divide your trading capital into 10 equal parts and never lose more than 10 percent on one trade. If you lost the first trade, you still have nine more opportunities to be right. Putting all your capital on one trade is suicidal.
RULE 8 : NEVER MEET MARGIN CALLS
When you are wrong about the market, get out. Once you start procrastinating, very often prices will go against your position, further triggering a margin call from your broker. A margin call simply means that you are wrong in the market and your position should be closed out. Margin calls are made because people do not want to admit being wrong and take a loss; they hope the market will eventually go in their direction. To avoid this mistake, you should never meet margin calls. Just cut your losses and "get the hell out".
RULE 9 : REMOVE PROFITS FROM YOUR ACCOUNT
Probably no more than 1% of traders have a rule to take profits out of their trading account. The few wise investors I know have bought a house, a car or simply put part of their winnings into a fixed deposit account, otherwise the chances are high that they may lose them all back.
RULE 10 : HAVE A GAME PLAN
Lack of a game plan is not knowing what to do when you are wrong – and not knowing what to do even when you are right.
Here are a few guidelines:
1. Know when and at what price you are going to enter the market.
2. Know how much money you are going to risk on each and every trade.
3. Know when and at what price you are going to get out when you are wrong.
4. Know when and at what price you are going to take your profits if you are right.
5. Know how much money you are going to make if you are right.
6. Have a safety stop in case the market does the unexpected.
7. Have an approximate idea of when the market should meet your objectives or when it should begin to make a move; and if it has not done so, get out.
SUMMARY:
You will note that none out of the ten rules of trading mentioned above are on money management. Only Rule 10 describes the importance of having a trading system to determine "when to enter and exit". This just goes to show that good money management is the key to your success in making money in the stocks, futures and currency markets. A good trading system comes second. Nick Leeson, the rogue trader for Barings in Singapore, got into trouble because he did not respect some of the 10 golden trading rules.
SUMMARY
You will note that none out of the ten rules of trading mentioned above are on money management. Only Rule 10 describes the importance of having a trading system to determine "when to enter and exit". This just goes to show that good money management is the key to your success in making money in the stocks, futures and currency markets. A good trading system comes second. Nick Leeson, the rogue trader for Barings in Singapore, got into trouble because he did not respect some of the 10 golden trading rules.
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