Currency Trading Tricks - Confessions of a Millionaire Forex Trader

Posted on May 11, 2009
Filed Under Finance |

Everyone has their own style and spotting trends in the Forex trading
market. If you are hanging out with six different traders, they may all
have their own angle to day use in each and everyone of them may be
profitable.

I have a friend who has made a fortune doing forex trading online for
years. I once asked him if there are any common principles of success
when it comes to currency trading. My millionaire forex trader friend
told me most successful currency traders tend to use forex trading
techniques that they are comfortable and confident with.

He emphasized that what works for one person may not be so attractive
to another individual and vice versa. However, successful traders do
have a few things in common when setting their guidelines. He went on
and confessed to me the top 10 forex tips and tricks to succeed in
forex trading as follows:

1. Establish a plan and stick to it - you made a plan for a reason. You
did research, you probably track investments over a long period of time
and then finally identify the forex trading system that worked for you.
Staying with this system and using good money management is a way to
keep the money rolling in. Don’t make radical changes for no good
reason.

2. Trends or transfer a reason - Use a good forex trend system and
stick with it. If you’re trying to buck the system and go against a
trend or predict one because of a gut feeling, you’re going to find
yourself out of the forex market before you know. Follow trends and use
them to make money.

3. Keep your money safe - you can do this by limiting your forex
investment to 3 to 5% of your overall bankroll. Think about it, this
allows you to have 20 dead deals before you would ever be out of the
market. If you’re doing your homework, the likelihood of this is very
slim. Those that get overconfident because they have had a succession
of profitable deals may decide that they can increase their
profitability by committing their entire bankroll to one trade. You can
all but guarantee that trade will be a loser and they will be broke.

4. Don’t push a bad position - when you’re faced with a losing deal,
cut your losses and get out as soon as you can. There is no shame in
admitting that he lost a little money as it happens to everyone sooner
or later in this market. The key is to minimize your losses and get
your money back out into a more profitable situation.

5. Take the Money and run - a lot of traders don’t know when to get
out. They get involved in a trade and don’t set target profit and have
no idea when the right time to sell is. Your research should give you a
good idea of how much money you can make on your deal. Know what the
limits are and set yourself target profit even before you enter the
trade. Regardless of how fast you get there, take your profit before
the trend reverses and you get buried.

6. Be emotionless - it may sound a little cold, but there is no room
for emotions in the forex trading. Trading is cut and dry, you win some
and you lose some. Any trader worth their salt will sit there and
you’ll have no clue if they just made a fortune or got buried. You
simply need to keep your emotions out of the game.

7. If it doesn’t come from you, don’t use it - this is a pretty basic
rule and won the absolutely must follow. Do not trust any information
that comes from anyone else other than your own research. When people
try to give you tips, say thanks but no thanks and avoid the pratfall
of trying to make easy money.

8. Keep a log - everyone has to learn from their successes and
failures. Keeping a journal of what you bought, how much you bought it
for and when you sold will enable you to look back at all of your
previous deals and break down better what worked and what did not. This
will make you a much better trader in the future.

9. Where there is doubt, there should be no trade - you’re going to
have too many positions that you feel strongly about to make a mistake
and investing in something that you are not 100% sure is going to make
money. This is not to say every deal that you do make is going to be
profitable, but risking your money in a doubtful situation is never a
good idea.

10. Don’t over extend - some traders get themselves into a position
where they are looking at several different profitable opportunities
all during the same period. While it would be great to be involved in
them all , it is simply not realistic. Spreading yourself out too thin
will end up with your investments being out of control and you not
being able to manage them. The best way is to only enter the second
trade when the first trade has breakeven or have protected some profits.

About the author

To learn how to trade forex successfully using a simple, proven forex
trading system, download my FREE 56-page ebook at
http://www.forextradingpower.com now.

The author, Daniel Su, is the founder of
http://www.ForexTradingPower.com where you can get free premium forex
trading tips and resources.

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