Guest post from Jason Madison of beatwallstreetnow.com
1. Develop a trading plan and stick to it.
Trading is just like any other business if you don’t have plan of action you are destined to fail. A trading plan is a necessity because without one you are just gambling. A good trading plan will have defined rules that tell you: when to take a trade, how much to risk, and when to exit a trade. It is important that you develop a trading plan and adhere to its rules if you hope to be a successful trader.
2. Learn To Accept Losses.
Losing is a part of trading and you will never escape it. As human beings we seek perfection we want to believe that if we can just find the right method we can trade the markets flawlessly and never take a loss. Unfortunately that is not the case as even the best traders in the world take losses it’s a part of the game. The key however is to not fear these losses but to simply expect them to occur and to manage your risk accordingly
3. Use Proper Money Management.
The key to lasting in the world of forex trading is to control your risk. You have resist the temptation trade to maximize gains and to instead trade to minimize loss. You have to treat your capital as you would a loved one. You wouldn’t risk a family member’s life would you? So don’t risk your capital unnecessarily because your capital is the life line of your trading career. Keep your maximum risk to between 2-3% per trade and you will ensure that even if you suffer a string of losses you will live to trade another day
4. Don’t Be Greedy
When you open a trade and the market does exactly what you thought it would do you are going to be tempted to hold on to the trade because you figure its going to keep moving in the same direction making you more money. This however could backfire as the market could quickly reverse and wipe away all your gains. To avoid this you need to take profit once the market has given you a certain amount of profit. This amount should be defined in your trading plan and should be strictly adhered to.
Forex Trading may seem like an impossible thing to learn but with these tips you will be well on your way to a successful forex trading career.
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