PDF document (22 pp.) detailing my rules for successful forex trading, no matter what the system. Enjoy.
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DislikedI appreciate the compliments thus far. However, I am puzzled as to why what I have written would be viewed as "cliche." In particular, the information on position sizing and money management is geared specifically to forex traders. The reflections in this e-book are on the basis of my own experiences as a trader, and are not merely copied from elsewhere. Please give it a fair chance.Ignored
IMPORTANT NOTE: Many traders will read the following and say, "yeah I already know that". They will gloss over it and not put any more thought into it. I can however tell you with certainty that if you don't live by the above rules you will have a hard time succeeding in the long run. I have seen countless traders blow out their accounts because they ignored one or more of the above principles.
1. Don't trade when you are tired, sick, anxious or worried.
2. Don't make your trading system more complicated then it is.
3. Make sure you paper-trade before you risk real money.
4. Don't get greedy. As they say… "Hogs get fed, pigs get slaughtered."
5. Always put a protective stop in place.
6. Losses are part of this game and you must be able to accept them. If you can't stomach the idea of losing money, then don't trade.
7. Decide on your exit strategy, before you enter the trade. In other words, where and how will you get out? Also decide how many contracts you will trade and whether you will scale out of your trade. The bottom-line is make sure you plan your trade and trade your plan!
8. Don't bail out of your trades prematurely. Ride them until you hit your target.
9. If the risk is too big on a trade then don't take it.
10. Don't force trades that aren't there. There is no need to rush into a trade as there are always new ones forming.
11. Don't sit at your PC more than 90 minutes without a break. You need to get up and stretch and move around. This will keep your mind sharp and focused. It will also relieve trading stress and tension.
12. The hardest time to take a trade is when you have just had a few losers in a row. This however is exactly the time you need to jump right back in there as odds are that the next one will be a winner.
13. Don't trade if you are using the rent money or are down to your last few dollars. Trading with "scared money" never works out.
14. Don't be unrealistic. While trading can provide some amazing returns, don't expect to turn $2000 into $1,000,000 in a year. (Please read rule #4.)
DislikedPDF document (22 pp.) detailing my rules for successful forex trading, no matter what the system. Enjoy.Ignored
DislikedHi lever70 !
My short comment on your document AWESOME !!
I don't know your background and experience but your statements
mirror exactly to the point what I've experienced during my years
of mastering the forex world.
It's a must for all beginners and even the "old" traders.
With respect
BernhardIgnored
DislikedFourteen Laws To Prosper By
1. Don't trade when you are tired, sick, anxious or worried.
2. Don't make your trading system more complicated then it is.
4. Don't get greedy. As they say… "Hogs get fed, pigs get slaughtered."
5. Always put a protective stop in place.
6. Losses are part of this game and you must be able to accept them. If you can't stomach the idea of losing money, then don't trade.
7. Decide on your exit strategy, before you enter the trade. In other words, where and how will you get out? Also decide how many contracts you will trade and whether you will scale out of your trade. The bottom-line is make sure you plan your trade and trade your plan!
8. Don't bail out of your trades prematurely. Ride them until you hit your target.
9. If the risk is too big on a trade then don't take it.
10. Don't force trades that aren't there. There is no need to rush into a trade as there are always new ones forming.
11. Don't sit at your PC more than 90 minutes without a break. You need to get up and stretch and move around. This will keep your mind sharp and focused. It will also relieve trading stress and tension.
12. The hardest time to take a trade is when you have just had a few losers in a row. This however is exactly the time you need to jump right back in there as odds are that the next one will be a winner.
13. Trading with "scared money" never works out.
Ignored
QuoteDislikedTrends always go further than rational people expect, or even imagine. Most investors don’t have the stomach for extended rallies or declines. The philosophy of not having a predetermined profit objective allows us to continue with a trend for its full duration and then some. We try very hard to avoid the pitfalls of liquidating a trade too early, even at the cost of giving back large profits...Trends exist and they endure for a specified time, longer than most imagine. In a very uncertain world, perhaps nothing makes more sense than simply following trends.
John W. Henry
Disliked
I was about to point out 8. when I read in the PDF
"There’s nothing wrong with getting out early if you are in profit".
Yes, you can't go broke from closing in profit it would seem, BUT you can totally ruin your system and profits. And if you constantly close for less profit than the size of your losses, how are you going to be net positive?
I can completely agree with all of the quoted above and a lot of the stuff in the PDF.
However, one could dispute
"Always have a profit target for the day / Always stick to a small daily profit target". and
"Take profits quicker after a losing streak"
If I am holding a trade that is up 50 pips and in direction of the main trend - why close it at 50? Holding on to a trade, if entered at crucial junctions, can mean one trade, one entry - 1-20 days of profit day in and out...
20 may be an extreme, but I have held things for over 2 weeks before - actually am, since I mention it. Shorted USDCAD at 1.1500, 1.1200 is dealing now. Had I closed that at +50, I would have never gotten here.Ignored
DislikedSeekingLight articulated better than I could have the limiting nature of some of the points in the PDF.
The below quote explains it a bit more:Ignored