Tuesday, November 17, 2009

5 Easy Steps to Turn You Go Elite Forex Trader

These 5 simple steps will help turn you become confident, disciplined Forex trader. By using the steps below you can be above 10% of all Forex traders. That would be a few who actually make money.

There will be two things you notice about these steps:.

They are clear.
They're simple.

All aspects of Forex trading should fall into two categories. In fact, one of the biggest mistakes I see Forex traders do is try to learn and use too much.

However, it is a different discussion. Back to the 5 simple steps.

Step 1 - Get Yourself Ready To Trade

In my experience with hundreds of traders who have impressed me with how few of them know how to get their game on the face.

They forget trading is a job. One of the largest in the world, but work remains. Difficult for them to become self-motivated. Like most of the world they need someone on their shoulder telling them what to do.

So, find something in or around you that can be used to prepare for the trade.

Drinking coffee
Reading books
Do Yoga
Anything to clear my mind

Once your mind is clear, proceed to Step 2.

Step 2 - Look to your last couple of trading

Your trading success, such as Forex itself, will have the momentum and pattern. As you gain experience you will learn to see patterns YOU. You may catch yourself making the same mistakes time and time again.

As you will learn later, you must keep a journal of all your trade. I do not mean the notes that came with your trading software. Your journal should be as clear as possible.

Why do I enter the trade? Why do I get out of the trade? Am I close support? Am I close to the resistance?

Just to mention a few questions that should answer your journal for each trade. Notice any mistakes you have made for a trade.

Once you have a transaction that identifies trends, proceed to Step 3.

Step 3 - Fundamental and Technical Analysis

Fundamental analysis refers to something else then the price action. In this case means the news.

Technical analysis refers to all things related to the price action. The price itself, formulas, patterns, etc. ...

There's a reason why I mentioned both of them in one step. I'm not going to waste all the steps on fundamental analysis. Did not take me 3 minutes. I look to see what piece (s) is the news released today to determine the type of volatility is expected in the next session.

This helps me when that determine support and resistance levels I expect to play.

As far as technical analysis gone. I do not care what tools, indicators, graphs you see. However, be consistent. Do not use the MACD and the CCI one night, and other RSI and Stochastics. Do not keep changing the average length of your move, or switch from simple to weighted to exponential.

The fact is, find out what makes the most sense for you. I think it's good to understand what these indicators means, but there is no need to analyze.

I would like to add one thought here ... using Fibonacci Lines.

Once you have completed your analysis, both fundamental and technical, proceed to Step 4.

Step 4 - Money Management (trade Specify size)

You must have a well-defined money management system. For example, never risk more than 4% / 5% / 10% of your account on one trade. Increasing the size of the trade by one of the mini for every $ 400 / $ 800 / $ 1200 in profit.

It always amazes me how some traders randomly make this decision. They change their approach day after day. This is a sure fire to failure.

Determine what makes the most sense for you and stick with it.

Once again, I want to add a thought here. You can not live trading account until you can consistently make money in demo account. At least 2 consecutive weeks of gains, and not because you're making $ 10,000 a day while losing money on 9 out of 10 days.
So, assuming you live trading accounts, adjust your position size to meet predetermined formula.

Once you have determined your trade size, proceed to Step 5

Step 5 - Make a Trade!

You've done all your homework. You have to use all your skills and knowledge. The only thing left is to make a trade.

Now, you know exactly what you expect will happen with the currency pair you are watching. You only need to remain patient until your chance comes.

However, after that happened, like a lion to pounce on its prey. Do not hesitate if you see what you expect to see.

Do not forget, of course, to place a stop order with your entry order, or soon after. Also, if you have one, make sure to place your profit target.

After you enter or exit the trade, began to write. Record trading in a journal, with all the reasons for entry and exit. Be specific as possible. You'll be amazed how much valuable information you will gather from time to time.

Using these 5 steps you should be able to make a drastic step in Forex trading. However, if you do not feel comfortable with one part of your trading is very important that you consider a Forex trading course.

Remember, you are only as good as your knowledge and knowledge is only as good as your education.

By: Eddie Yakubovich

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