Know The Rules in Forex Trading

December 19, 2009 by  
Filed under Forex Trading

Behavior fulfills excessive emotions when trading on the forex market can be fatal.

If fat loss, emotional behavior can sometimes push the inexperienced trader to come back too quickly on the market at an inopportune moment to try to recover money that has been recently lost. The trader thinks he can catch up by multiplying the number of operations.

The best way to address these problems is to establish a list of rules to follow in the trade of forex and never deviate from these principles.

Here are some rules that every trader could follow to increase its chances of success:

1. Leave your emotions aside.
The currency trading is like any other busines, and should be treated as such. As it is difficult to separate from the emotion caused by a loss, consider that once the loss written in the books, there’s nobody who can change that. So the best course of action is to try to learn from all the mistakes that have been committed, and process the next transaction in the same manner as if the money had been earned on the previous transaction.

2. Never make over trade. This is due to rule number 1 where often, the emotions have been running a forex trader to trade too. By trying to compensate for its loss, the forex trader beginner tends to make hasty decisions that may be detrimental to his position of account. Thinking that more transactions generate more money, too many transactions based only on intuitive decisions can quickly deteriorate the status of your account.

3. Follow the trend.
One thing that thousands of traders who practice fundamental analysis or technical analysis (or both) agree is that the Forex market follows trends. The identification of these trends may mean the difference between success and failure. Following the general trend of the currency, you can seize the opportunity to take advantage of the trend until it is reversed.

4. Stay out of the market if there is any doubt.
If a trader can not identify the trend that follows a currency, it is better to avoid a time until a better image can be formed on what is happening on the price trend.

By following these basic rules, the tarders Forex stay away from problems caused by hasty decisions based on emotion or lack of analysis.


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