100 Forex tactics (45 - 90)

45. Risk Control
A)Never risk more than 3-4 percent of your capital on any trade
B)Predetermine your exit point before you get into a trade
c)If you lose a certain predetermined amount of your starting capital, stop trading, analyze what went wrong, and wait until you feel confident before you begin trading

46. Don?t trade scared money. No one ever made any money trading when they had to do it to pay the mortgage at the end of the month. Having a requirement to make X dollars per month or you will be financially in trouble is the best way I know to completely mess up all trading discipline, rules, objectives, and leads quickly to disaster. Trading is about taking a reasonable risk in order to achieve a good reward. The markets and how and when they give up their profits is not under your control. Do not trade if you need the money to pay bills. Do not trade if your business and personal expenses are not covered by another income stream or cash reserve. This will only lead to additional unmanageable stress and be very detrimental to your trading performance.

47. Know why you are in the markets. To relieve boredom? To hit it big? When you can honestly answer this question, you may be on your way to successful forex trading
48. Never meet a margin call; don?t throw good money after bad.

49. Close out losing positions before the winning ones,

50. Except for very short term trading, make decisions away from the market, preferably when the markets are closed.

51. Work from the long term to the short term. Kiss Kiss

52. Use intraday charts to fine-tune entry and exit.

53. Master interday trading before trying intraday trading.

54. Don't trade the time frame. Trade the pattern. Reversal patterns, hesitation patterns and breakout patterns appear often. Learn to look for the pattern in any time frame.

55. Try to ignore conventional wisdom; don?t take anything said in the financial media too seriously.

56. Always do your homework and stay current on global events. You never know what's going to set off a particular currency on any given day.

57. Learn to be comfortable being in the minority. If you are right on the market, most people will disagree with you. (90% losers,10% winners).

58. Technical analysis is a skill that improves with experience and study. Always be a student and keep learning.

59. Beware of all tips and inside information. Wait for the market's action to tell you if the information you've obtained is accurate, then take a position with the developing trend.

60. Buy the rumor, sell the news. Wink Wink

61. K.I.S.S ? Keep It Simple Stupid, more complicated isn?t always better.

62. Timing is especially crucial in forex trading.

63. Timing is everything in forex trading. Determining the correct direction of the market only solves a portion of the trading problem. If the timing of the entry point is off by a day ,or sometimes even minutes ,it can mean the difference between a winner or a loser.

64. A ?buy and hold? strategy doesn?t apply in forex trading

65. When you open an account with a broker, don't just decide on the amount of money, decide on the length of time you should trade. This approach helps you conserve your equity, and helps avoid the Las Vegas approach of "Well, I'll trade till my stake runs out." Experience shows that many who have been at it over a long period of time end up making money.

66. Carry a notebook with you, and jot down interesting market information. Write down the market openings, price ranges, your fills, stop orders, and your own personal observations. Re-read your notes from time to time; use them to help analyze your performance.

67. Don't count profits in your first 20 trades. Keep track of the percentage of wins. Once you know you can pick direction, profits can be increased with multi-plot trading and variations in using your stops. In other words, now is the time to get serious about money management.

68."Rome was not built in a day," and no real movement of importance takes place in one day.

69. Do not overtrade.

70. Have two accounts. One real account and the other a demo account. Learning doesn't stop when trading real dollars begins. Keep the demo account and use it to test alternative trades, alternative stops, etc.

71. Patience is important not only in waiting for the right trades,but also in staying with trades that are working.

72. You are superstitious; don't trade if something bothers you.
73. Technical analysis is the study of market action through the use of charts,for the purpose of forecasting future price trends.

74. The charts reflect the bullish or bearish psychology of the marketplace.

75. The whole purpose of charting the price action of a market is to identify trends in early stages of their development for the purpose of trading in the direction of those trends

76. The fundamentalist studies the cause of market movement, while the technician studies the effect.

77. Rising commodity prices generally hint at a stronger economy and rising inflationary pressure. Falling commodity prices usually warn that the economy is slowing along with inflation.

78. The longer the period of time that priced trade in a support or resistance area,the more significant that area becomes.

79. There are three decisions confronting the trader ?whether- to go long, go short or do nothing. When a market is rising ,the best strategy is preferable. When the market is falling, the second approach would be correct. However ,when the market is moving sideways ,the third choise ?to stay out of the market- is usually the wisest.

80. Channel lines have measuring implications. Once a breakout occurs from an existing price channel ,prices usually travel a distance equal to the width of the channel .Therefore, the trader has to simply measure the width of the channel and then project that amount from the point at which either trendline is broken. Roll Eyes

81. The larger the Pattern ,the Great the potential. When we use the term ?larger? ,we are referring to the the height and the width of the price pattern. The height measures the volatility of the pattern. The width is the amount of time required to build and complete the pattern. The greater the size of the pattern-that is ,the wider the price swings within the pattern (the volatility ) and the longer it takes to build ?the more important the pattern becomes and the greater the potential for the ensuing price move.

82. The breaking of important trendlines . The first sign of an impending trend reversal is often the breaking of an important trendline. Remember however ,that the violation of a major trendline does not necessarily signal a trend reversal.The breaking of a major up trendline might signal the beginning of a sideways price pattern ,which later would be intedified as either the reversal or consolidation type.Sometimes the breaking of the major trendline coincides with the completion of the price pattern.

83. The minimum requirement for a triangle is four reversal points. Remember that it always takes two points to draw a trendline.

84. The moving average is a follower , not a leader. It never anticipates;it only reacts. The moving average follows a market and tells us that a trend has begun, but only after the fact.

85. Shorter term averages are more sensitive to the price action ,whereas longer range averages are less sensitive.In certain types of markets ,it is more advantageous to use a shorter average and ,at other times , a longer and less sensitive average proves more useful.

86. When the closing price moves above the moving average , a buy signal is generated. A sell signal is given when prices move below the moving average. Smiley

87. A buying signal on a two-moving average combination occurs when the shorter term of two consecutive averages intersects the longer one upward. A selling signal occurs when the reverse happens, and the longer of two consecutive averages intersects the shorter one downward. Cheesy Cheesy

89. Shorter average generates more false signals ,it has the advantage of giving trend signals earlier in the move .The trick is to find the average that is sensitive enough to generate early signals, but insensitive enough to avoid most of the random ?noise?.

90. Cutting losses is painful for every trader.The ability to cut one?s losses in time is the sign of a seasoned trader. Cheesy Cheesy