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Trading Tips: Part Two |
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1.Let profits run while cutting losses short.
2. Don't let greed get out of control. Once a trader has realized a nice profit from a trade, they should think about either taking a portion of the money, if not all of it, and move on to the next trade. While it is tempting to hope that one trade will "hit the lottery", trading is not that simple. Traders who hold their positions too long inevitably end up losing all their profits back to the market.
3. Use protective stops to limit losses.
4. Use appropriate stop-loss orders at all times to cut losses and never, ever sit back and allow losses to run. Nearly every trader makes the mistake, at one time or another, of doing this in hopes that the market will eventually change in his or her favor. However, all this usually leads to is even greater losses. It is important that a trader learn to cut their losses and move on to the next trade. To avoid losses getting out hand, determine a suitable profit target as well as an tolerable risk level for each and every trade before entering the market, then place a stop-loss order at the appropriate price. Be careful not to make it so tight that it could take you out of the position before the market has an opportunity to move in your favor.
5. Protective stops on long positions should be placed below round numbers (10, 20, 25, 50, 75, and 100) and on short positions, above such numbers.
6. When placing a stop loss the trader should combine technical factors on the price chart with individual money management concerns. One size does not fit all.
7. Remember: Everyone makes mistakes, but it only the fool who fails to learn from them. Analyze and learn from your losses.
8. The first loss is always the smallest loss.
9. It is recommended that traders new to the market start off with a mini account for at least a year before stepping up. Analyze both the good trades and the bad ones made over the year, and don't be afraid to learn from your mistakes.
10. Don't get into forex trading unless you can afford to do so. Market action, not personal financial conditions, should dictate a trader's entry and exit from a market. While no one becomes a trader to lose money, the simple fact is that losses will occur now and then, no matter what. Don't get involved if it means beggaring your family.
11. Be objective, not emotional, when it comes to trading.
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| Symbol |
Rate |
| GBP:CHF |
1.747703 |
| GBP:JPY |
155.484239 |
| GBP:USD |
1.638403 |
| NZD:USD |
0.627050 |
| EUR:CAD |
1.545998 |
| EUR:CHF |
1.516857 |
| EUR:GBP |
0.867915 |
| EUR:JPY |
134.947096 |
| EUR:USD |
1.421994 |
| AUD:JPY |
76.394373 |
| AUD:USD |
0.805000 |
| USD:CAD |
1.087204 |
| USD:CHF |
1.066711 |
| USD:JPY |
94.899879 |
| USD:SEK |
7.613010 |
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