Top 10 Rules For Successful Trading

Make a Golden Fortune Now! That was rly more than amazing.. The high degree of leverage can work against you as well as for you. Why would anyone not want to simplify? To establish true self-esteem we must concentrate on our successes and forget about the failures and the negatives in our lives. For example, if you start your trade with a 30 pip stop you must be trying to get at least pips from that trade potential reward.

Simple Trading Rules – what does that mean? It means two things: Your trading rules must be straightforward and simple. They must be Simple Trading Rules, so you can follow them without fail. is no guarantee of future results. While there is great potential for reward trading commodities, futures, stocks, or forex, there is also.

Be Like Tom

The more traders understand the past and current markets, the better prepared they will be to face the future. Before a trader begins using real cash, it is imperative that all of the money in the account be truly expendable. If it is not, the trader should keep saving until it is. It should go without saying that the money in a trading account should not be allocated for the kid's college tuition or paying the mortgage.

Traders must never allow themselves to think they are simply "borrowing" money from these other important obligations. One must be prepared to lose all the money allocated to a trading account. Losing money is traumatic enough; it is even more so if it is capital that should have never been risked to begin with. Develop a Trading Methodology Based on Facts Taking the time to develop a sound trading methodology is worth the effort.

It may be tempting to believe in the "so easy it's like printing money" trading scams that are prevalent on the internet. But facts, not emotions or hope, should be the inspiration behind developing a trading plan. Traders who are not in a hurry to learn typically have an easier time sifting through all of the information available on the internet.

Expect that learning how to trade demands at least the same amount of time and factually driven research and study. Always Use a Stop Loss A stop loss is a predetermined amount of risk that a trader is willing to accept with each trade. The stop loss can be either a dollar amount or percentage, but either way it limits the trader's exposure during a trade.

Using a stop loss can take some of the emotion out of trading, since we know that we will only lose X amount on any given trade. Ignoring a stop loss, even if it leads to a winning trade, is bad practice. Exiting with a stop loss, and thereby having a losing trade, is still good trading if it falls within the trading plan's rules.

While the preference is to exit all trades with a profit, it is not realistic. Using a protective stop loss helps ensure that our losses and our risk are limited. Know When to Stop Trading There are two reasons to stop trading: An ineffective trading plan shows much greater losses than anticipated in historical testing.

Markets may have changed, volatility within a certain trading instrument may have lessened, or the trading plan simply is not performing as well as expected. One will benefit by remaining unemotional and businesslike. It might be time to reevaluate the trading plan and make a few changes, or to start over with a new trading plan.

An unsuccessful trading plan is a problem that needs to be solved. It is not necessarily the end of the trading business. An ineffective trader is one who is unable to follow his or her trading plan. External stressors, poor habits and lack of physical activity can all contribute to this problem. A trader who is not in peak condition for trading should consider a break to deal with any personal problems, be it health or stress or anything else that prohibits the trader from being effective.

After any difficulties and challenges have been dealt with, the trader can resume. Keep Trading in Perspective It is important to stay focused on the big picture when trading. A losing trade should not surprise us - it is a part of trading. Likewise, a winning trade is just one step along the path to profitable trading. It is the cumulative profits that make a difference. Once a trader accepts wins and losses as part of the business, emotions will have less of an effect on trading performance.

That is not to say that we cannot be excited about a particularly fruitful trade, but we must keep in mind that a losing trade is not far off. Setting realistic goals is an essential part of keeping trading in perspective. If a trader has a small trading account, he or she should not expect to pull in huge returns.

Work with what you have, and remain sensible. The RSI is a tool which is useful but it is not effective on its own in our view and should be used as a back up tool and we like to use it in terms of supporting our favorite timing indicator the stochastic. This is an indicator which was developed by George C. Lane in the late s and while its been around for half a century, we still consider it the ultimate indicator for timing trading signals and its based on a very simple concept:.

Below 20 is considered oversold and above 80 is overbought. However, reading below 20 or above 80 does not mean that the market will reverse. When using the stochastic by its very nature you will get a lot of false signals so you need to trade extremes if using it on its own — you can trade levels which are not extremes and we will look at how to do this in a moment and how to filter signals.

Therefore, it is recommended to read that article to learn about Bollinger Bands in details: How to Use Bollinger Bands. This simple method combines the volatility of the Bollinger Band to isolate overbought and oversold levels to set up possible swing trading scenarios and adding the RSI and Stochastic in as the timing indicators to enter the trades.

Lets take the graph we have just looked at above and add these indicators in:. Please read it to learn about MACD and the way it can be used: Now lets take the above chart and add in the indicators above and see what the combination looks like and how the indicators come together.

We use the stochastic as our main tool to enter trades and the advantage of combining it with the MACD is that it will allow you to filter trades better in terms of entry — this will become clearer if we look at some charts.

Look at the MACD lines in view of — the further away from the centre line the better in terms of spotting trading opportunities. If the stochastic is at an extreme and the MACD line is losing momentum — your signal to sell, can be from the stochastic so long it is overbought or oversold.

You should also on all highs and lows, watch the MACD histogram for additional confirmation of falling momentum. When setting a target, this will depend on how extreme the move is — but as a general rule, we always look for support or resistance levels, around the mid Bollinger Band in strong trends.

I salute your article, Mr Peter M. The technique is rather specific. I have learnt a lot. My views on reading the physcology of the candle sticks behaviour couple with this other systems will give me a less risk decision. It is good to have good Teachers. My Plato and Socrate. Swing trading is best for novice but I have heard many saying that big money in trading is in riding the trend. Can one trade for a living using swing trading?

Thank you very for all these helpful and great articles. I would like a one one with you Mr. Peter regarding my trading strategy. Is there an email address or skype id I can reach you through?.

If yes reach me via …. What time frame do you recommend for this type of trading? I plan to learn this system as my default debut one. Also, you mentioned you get about good setups a month per currency pair, what would you say is the success rate of the good setups? I have a passion to peruse trading but a little time poor waiting for setups, is there a signal service you can recommend? This article, building upon what I already have, was precisely what I needed to round out my swing trading.

I just found it, and at a good time. Thank you sincerely for this and all the other great articles you produce. Which Stochastic are you referring to? Really a great article for newbies like me. Really appreciate FxKey team for such wonderful service. I am learning a lot from LuckScout.

After following this type of strategy, i slowly started gaining profits. Once again thanks a lot for being a good teacher. Thank you so much Peter M. The reason for this is obvious: This eBook shows you the shortest way to acheive Financial Freedom: Just before you go, did you check This System? Make sure to do it now, otherwise you will regret.

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Conclusions About Rules Based Forex Trading – Any forex trader can take this article and use the five basic forex trading rules for trade entries and three basic rules for money management. For example, Forex trading offers high leverage in the sense that for a small account requirement, you can control a huge amount of money. Forex trades can be or leverage. Check with your broker or the product listing to determine the leverage available for the instrument you are trading. Forex Trading Rules: No Excuses, Ever by Boris Schlossberg and Kathy Lien Why Trade in Currencies? There are 10 major reasons why the currency market is a great place to trade: 1.