Computer Handbook

Currency Trading Handbook – 7 Rules of Trading

Many traders go around searching for that one perfect trading strategy that works all the time in the global forex market. Frequently, they will complain that a strategy doesn’t work. Few people understand that successful trading of the forex market entails the application of the right principles of trading. It takes much more than just a good trading strategy to succeed in forex trading. Here are the 7 rules of trading (Currency Trading Handbook) :

#1 Never Lie to Anyone

Be true to yourself. Hold yourself responsible for your actions. Never lie to yourself or anyone about your trading performance.

#2 Take Your Time

Never rush into a trade because you do not want to miss a great opportunity. Never trade with real money before you have tested your strategy on a demo account for at least 3 months or 200 trades. Racing into a trade is usually the result of emotion taking over. You never want to trade based on emotion. Trades based on emotion lack the kind of analysis that goes into profitable trades.

Remember, that the market comes and goes. There is always another opportunity. You will get another chance. If you enter a trade and it’s one that you entered based on emotion, then you should strongly consider backing out. Take your time to learn and practice. Learn to trade currency market takes time and learning curve is steep. When you think you know enough is the moment you stop learning.

#3 Successful Trading is Boring

Trading successfully requires 100% commitment in the long term. Learning to trade requires a lot of time reading and in front of the computer. There will be times where you do not trade at all while still spending hours in front of computer analysing charts. It requires discipline to stick to your plan. Work your plan and improve your plan from time to time.

After which you test the plan in a demo account for a period of time before trading it with real money. This process takes time and patient. Some time, you may need to develop a feel trading plan before you find a good plan.

#4 Exits are More Important than Entries

Trading plan determines your entries but it is how you exit that brings in profits. It is important that a trader plan more on where to exit his trade rather than where to get in. Partial close, break even or trailing stops are strategies most used by advanced currency traders to manage and exit trades.

#5 How Much You Risk Matters Most

How much you risk determines how long you stay in the market. Many traders get involved in the forex market because they want to make a lot of money quickly. This requires one to either start with a lot of money or risk a lot on each trade. Never risk more than 5% on any single trade. The key of the game is survival. A forex trader will survive longer if he can weather the big swings in the market.

#6 Keep a Journal

Keep proper records of past trades made. This allows a trader to learn more about himself and to test his system these records. This information will help a trader build a history of good trades. He will make better trades if a trader keep proper records.

#7 Work As a Team

Trading with a team encourage a trader to stick to his trading plan. When you trade with a team, you are accountable to live up to what you promised the team. If you say you are done trading for the day, and you take more trades, then you are going to have to explain yourself to the team.

This process instill more discipline and compliance for a trader and ensure he sticks to his plan so that emotions are reduced to the minimal.

Currency Trading Handbook is written in a straightforward and simple manner. It outlines a practical way to integrate the rules and principles of trading to currency traders. Filled with in depth insight and practical advice, “Currency Trading Handbook” will prepare currency traders the realities of currency trading, and help them evolve and achieve success in the dynamic market.

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About the Author

Warren Seah

“Introducing 11 Exit Strategies, What Every Disciplined Traders Need … Go Without It You Could End Up Being A PIP VICTIM Just Like Thousands Of Traders Out There.”

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