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Trading Tips: Part Three |
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1. Always use money management principles, as it increases the odds that the trader will survive to reach the long run.
2. Diversify, but keep it within reason.
3. Use a 3:1 reward-to-risk ratio.
4. Before putting on a trade, gauge the risk/reward, and then be careful you don't hold it too long.
5. Have a plan when trading; never trade impulsively.
6. Have exact goals and intentions.
7. When building a trading system start with a concept, then turn it into a set of objective rules. Next visually verify its validity on the charts, and then test it with a demo. Thoroughly evaluate the results before putting the system into practice.
8. Traders should plan their work and work their plan.
9. Plan on where you will get into the market, how much you will risk on the trade, and where you will take your profits. Never allow hope, greed, or fear to interfere with your plan.
10. Once you have a plan, follow it. Once you have established a position and selected stops, do not get out unless the stop is reached or the fundamental reason for taking the position changes.
11. When structuring a trading system take into account price forecasting, timing, and money management.
12. Trade every signal.
13. Remember: trading systems that work in an up market may not operate in a down market.
14. Profits are for those who act, not react. Establish trading plans before the market opening to eliminate emotional reactions, subject decisions to only minor changes during the session. Don't change during the session unless there is a very good reason.
15. Double-check everything.
16. Always think in terms of probabilities, not certainties. Don't go into trading with the expectation that you will never have negative trades, as they are an essential part of the plan and are inevitable.
17. Start your market analysis by determining the general trend of the market.
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| Symbol |
Rate |
| GBP:CHF |
2.007608 |
| GBP:JPY |
182.222212 |
| GBP:USD |
1.757198 |
| NZD:USD |
0.658397 |
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History
