It is time to read some rules again. While working on my Forex trading strategies, I visit forums regularly. There are indeed some brilliant people out there sharing their work and ideas (though there are garbage and nonsense as well). In Forex Factory, user lever70 caught my attention when he/she shared his/her own compilation/e-book freely. The book is called Rules for Forex Trading. I decided to quote the summary of his rules here, since I found it to be useful and interesting. For details, please check out his e-book. Credit goes to lever70.
- Define your long-term goals
- Treat trading as a business
- End every day in profit
- Every trade must conform to objective criteria
- Never force a trade
- Theres nothing wrong with getting out early if you are in profit
- Always have a profit target for the day
- Always stick to a small daily profit target
- Your initial trading stake should be small
- Do not enter a trade without a profit target
- Always set a hard stop
- Do not trade unless you are nearly 100% certain about what will happen
- Do not trade when signals are mixed
- Follow your system
- Dont lose your head
- Identify key support and resistance levels
- Look at longer timeframes for both support and resistance, and for clues regarding future price direction
- Be aware of peak market times
- Be careful when trading in the Asian session
- Dont trade thin or directionless markets
- Be careful when trading forex on non-news days
- If you trade intraday, dont enter a trade unless you can actively focus on it
- Avoid reversing trades
- Stay out of the market near news release time
- Watch your broker like a hawk
- Dont go crazy with leverage
- Stop trading after two consecutive losses
- Take profits quicker after a losing streak
- Dont gloat over your winners
- Be wary of chat rooms and online forums
- Dont buy systems
- Stay healthy
- Dont give up
Hi Trader Gav, Here are my views on these tips:
* I am in complete disagreement with 42% of them.
* There are a further five tips that I agree with but they are of the ‘don’t do xxx’ or ‘don’t be xxx’, or ‘be careful when’ variety, and these are quite meaningless as they could go on forever. Eg: don’t be x where x is any bad quality, and be y where y is any positive quality, and be careful when z when z is any situation (ie always be careful).
* ‘Don’t give up’ is the worst tip of all, and it’s in direct opposition to the idea of capital preservation. Trading is not for everyone, and it’s surely better if they find this out before they have run through all their capital?
I think it’s important to be realistic. I have nothing against the author and I also appreciate that all of these tips may have worked well him, so he is genuine in putting them forward. Nevertheless, I believe a big problem with this game is that a large percentage of trading results are the product of chance, and people who end up on the right side of the ledger may over attribute the role of their own actions in determining the p l. This can lead to false association between beliefs with outcomes – the equivalent of breathing on dice before rolling them.
Hi Trader Gav, Here are my views on these tips:
* I am in complete disagreement with 42% of them.
* There are a further five tips that I agree with but they are of the ‘don’t do xxx’ or ‘don’t be xxx’, or ‘be careful when’ variety, and these are quite meaningless as they could go on forever. Eg: don’t be x where x is any bad quality, and be y where y is any positive quality, and be careful when z when z is any situation (ie always be careful).
* ‘Don’t give up’ is the worst tip of all, and it’s in direct opposition to the idea of capital preservation. Trading is not for everyone, and it’s surely better if they find this out before they have run through all their capital?
I think it’s important to be realistic. I have nothing against the author and I also appreciate that all of these tips may have worked well him, so he is genuine in putting them forward. Nevertheless, I believe a big problem with this game is that a large percentage of trading results are the product of chance, and people who end up on the right side of the ledger may over attribute the role of their own actions in determining the p l. This can lead to false association between beliefs with outcomes – the equivalent of breathing on dice before rolling them.
Hi Caravaggio,
In fact, I am with you. I don’t totally agree with all these rules as well.
What I can say is, the author wrote these rules from a part-time, well capitalized trader’s perspective. While you are reading from the perspective of a full time trader,who experienced up and down in trading career. I see conflicts.
Hi Caravaggio,
In fact, I am with you. I don’t totally agree with all these rules as well.
What I can say is, the author wrote these rules from a part-time, well capitalized trader’s perspective. While you are reading from the perspective of a full time trader,who experienced up and down in trading career. I see conflicts.
Hi Gav-
This is JP from TradingMarkets.com and TheMoneyBlogs.com. We wanted to invite you to be a part of our new site, TheFXMarkets.com. TheFXMarkets will have a Blogs section, which is currently under development. We are bringing together the best Forex blogs, educators and commentators that are on the internet today, in the hopes of providing a free, educational community of Forex-related blogs.
Your main benefit as a member of TheFXMarket blog community would be increased exposure and links back to your site. Our other blog site, TheMoneyBlogs, pulls in thousands of page views a day, and we expect more of the same for TheFXMarket blogs.
I look forward to hearing back from you, please ask any questions. Thanks!
Hi Gav-
This is JP from TradingMarkets.com and TheMoneyBlogs.com. We wanted to invite you to be a part of our new site, TheFXMarkets.com. TheFXMarkets will have a Blogs section, which is currently under development. We are bringing together the best Forex blogs, educators and commentators that are on the internet today, in the hopes of providing a free, educational community of Forex-related blogs.
Your main benefit as a member of TheFXMarket blog community would be increased exposure and links back to your site. Our other blog site, TheMoneyBlogs, pulls in thousands of page views a day, and we expect more of the same for TheFXMarket blogs.
I look forward to hearing back from you, please ask any questions. Thanks!
I trade off a Daily chart which means that at 10 am each morning (I’m in Melbourne) I take a look at the open, what happened overnight, see if there’s a pattern indicating a possible breakout, and if so, move to a 4 hour chart to see if I have an entry.
I’m all done in 30 minutes whether I have a trade or not. If there’s a trade I set my stop and spend the rest of my day making websites, talking on skype with friends and if the weathers kind, I go enjoy it.
Rule #1… don’t be greedy.
Rule #2… don’t be afraid of losing sometimes.
Rule #3… don’t forget to feed the dogs.
Rule #4… enjoy yourself.
Hey, great blog!
Hey there! Nice to hear from you. I am in Melbourne as well.
I like the rule#3, DON’T forget to feed dogs! 🙂
I trade off a Daily chart which means that at 10 am each morning (I’m in Melbourne) I take a look at the open, what happened overnight, see if there’s a pattern indicating a possible breakout, and if so, move to a 4 hour chart to see if I have an entry.
I’m all done in 30 minutes whether I have a trade or not. If there’s a trade I set my stop and spend the rest of my day making websites, talking on skype with friends and if the weathers kind, I go enjoy it.
Rule #1… don’t be greedy.
Rule #2… don’t be afraid of losing sometimes.
Rule #3… don’t forget to feed the dogs.
Rule #4… enjoy yourself.
Hey, great blog!
Hey there! Nice to hear from you. I am in Melbourne as well.
I like the rule#3, DON’T forget to feed dogs! 🙂
Agree with the last rule, it’s all a matter of trial an error, eventually you’ll get there 🙂
Agree with the last rule, it’s all a matter of trial an error, eventually you’ll get there 🙂
Trading the markets is definitely a risky business, but being patient and not being greedy its possible to make a steady flow of income from trading currencies. Its just another form of risky investment. But it has advantages over equity markets.
Some very interesting comments and suggestions over here. Love to read them !!
Trading the markets is definitely a risky business, but being patient and not being greedy its possible to make a steady flow of income from trading currencies. Its just another form of risky investment. But it has advantages over equity markets.
Some very interesting comments and suggestions over here. Love to read them !!
I have always found the Forex market a hard concept to grasp. No matter how many books I read I can never quiet decide on the type of trader I am and therefore am fairly reluctant to start.
I have always found the Forex market a hard concept to grasp. No matter how many books I read I can never quiet decide on the type of trader I am and therefore am fairly reluctant to start.
Hi Gav
I totally agree with all these rules. Happy to read them. Thanks for giving the summary of his rules. Should be followed who want to make huge profits in Forex marketing. A good blog.
Thanks again.
http://www.dailyforex.com/
Hi Gav
I totally agree with all these rules. Happy to read them. Thanks for giving the summary of his rules. Should be followed who want to make huge profits in Forex marketing. A good blog.
Thanks again.
http://www.dailyforex.com/
I’m new to forex and have been suckered into buying a lot of the ebook/autotrade crap that is out there. I’m looking for a successful investor that might be interesting in starting a mentoring program with myself and several other investors. lemme know if you would like to share your inputs.
Regards,
Josh@ forexfreedownload.com
I’m new to forex and have been suckered into buying a lot of the ebook/autotrade crap that is out there. I’m looking for a successful investor that might be interesting in starting a mentoring program with myself and several other investors. lemme know if you would like to share your inputs.
Regards,
Josh@ forexfreedownload.com
Hi
Rule #1… don't be greedy.
Rule #2… don't be afraid of losing sometimes.
Rule #3… don't forget to feed the dogs.
Rule #4… enjoy yourself.
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I am happy with these three slogans. That is, the scope of the slogans can be very extensive, not only for the field of forex trading. Also necessary in carrying out other areas. Thank you.