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Attachments: My Rules for Forex Trading
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My Rules for Forex Trading

  • #21
  • Apr 26, 2007 9:08am Apr 26, 2007 9:08am
Quoting FXexpat
I concur.

My only comment is that you, being an academic, tend to use flowery and effusive terms which took my small brain some time to process when reading the document.
Once again,

Awesome.

Congratulations.
Thank you. As to my academic use of language, I plead guilty. I'm afraid there's just not very much I can do about it. In the words of Popeye, "I yam what I yam!"

http://img175.imageshack.us/img175/5899/ayamvc2hx3.jpg
  • #22
  • Jun 2, 2007 10:01am Jun 2, 2007 10:01am
Quoting FXexpat
Fourteen Laws To Prosper By

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.)

Your 14 commandments will likely not be followed. When Moses ( Musa ) first tried interpreting the ten commandments he did a good job at the beginning.
1 Love the Lord your God with all your heart and all your soul. ---- Until today the atheist population is still below 1 % . Some how 99% and above still believe and defend their believe in a “God”.
When Moses started to – thou shall not…..many people stop listening.
Things started to be better when the ten commandments was some how revised to. Love the Lord your God with all your heart and all your soul. Love your neighbour as yourself.

So if you wish more success in your 14 rules, Try to start with – Trade when you are well slept and…
Like kids, tell them not to do… They will certainly do it.

Hope the Sunday joke is correctly preached.

................. .........................

  • #23
  • Jun 3, 2007 2:15pm Jun 3, 2007 2:15pm
I just ran across your PDF booklet. Great job, Doc!

I understand what you were trying to communicate to your target audience and believe that you did it beautifully.

I expect to share it with some folks who will benefit from using it as a foundation or road map for their learning process.

I only noticed one typo - and wouldn't bother mentioning it - but it's in a pretty important sentence (top of page 6), and it threw me for a loop until I realized it was actually a typo.

"Successful business ventures are not born out of aspiration, not desperation, and trading is most definitely a business."

I frequently make that type of error while modifying already written sentences. And I hate when that happens!

But you've still produced a Grade-A product.

P.S. I much enjoy your Cornflower thread. Thanks for your contributions.
  • #24
  • Jun 17, 2007 6:15am Jun 17, 2007 6:15am
Quoting lever70
PDF document (22 pp.) detailing my rules for successful forex trading, no matter what the system. Enjoy.
Thank you Lever for your excellent contributions, very much appreciated.
  • #25
  • Jun 19, 2007 7:41pm Jun 19, 2007 7:41pm
Thanks felecia, This was a really good thing, sharing your rules, and I appreciate it. Bob
Hej.
  • #26
  • Jun 19, 2007 10:12pm Jun 19, 2007 10:12pm
Hi Lever!

Loved your pdf! (hope you don't mind that I saved a copy to re-read weekly, before my trade review ).....Philosophy and trading have a lot in common.....and allows you to use all sides of the brain equally!!!

It was very obvious that the document was aimed at short time frame traders. Your use of language was also straight forward (after the into where I liked the use of philosophy in the discussion ).

Also, I think you did a good job in explaining the protect profit concept presented on page 8. If you are unsure b/c the market is not giving clear indications you should exit....most likely you entered prematurely (review your plan to make sure the trade wasn't forced). The discussion on the traders who exit early solidifies the concept. Additionally, it can be argued that protecting profit doesn't mean one has to exit the trade...only move the stop to insure the a winner doesn't turn to a loser.

Now, this is the best sentence ever (besides the K-Mart Traders)......(please don't be offended, b/c it really hit my funny bone, even though it wasn't supposed to).....

(trading) "not as an end in itself, but a means to the end of freedom."

Kinda scary....(please, don't be mad.... )

Thanks again for a great document that can only benefit those who read it and apply the principles of goal setting and treating trading as a business where aspiration is the true motivation!

Best wishes to you for making all your dreams a reality,

Pips

ps. I paint when the market isn't moving....wish I could play an instrument.
  • #27
  • Jun 20, 2007 5:06pm Jun 20, 2007 5:06pm
Quoting lever70
PDF document (22 pp.) detailing my rules for successful forex trading, no matter what the system. Enjoy.
Thanks so much, Felicia!
I hope that this doesn't just sink into the depths of
the forum. Needs a sticky to keep it afloat.

FXS
  • #28
  • Jun 20, 2007 5:36pm Jun 20, 2007 5:36pm
Excellent work, thank you!

I do take exception to the "nearly 100% certain" rule. I took the following notes from the Robin Dayne video last week (some of it is paraphrased):

Never enter the market with a preconceived idea that you know what is going to happen. Your judgment will be clouded, you will be defensive of this mindset; you’ll tend to fight the market trying to prove you’re right.

An experienced trader enters a trade with a different mindset than a novice. He does not enter a trade thinking he is going to win; he enters the trade with 3 possibilities – could go in their favor, could go against them, could go sideways – and they have 3 different management plans for that trade.

This made sense to me when I listened to it. Being nearly 100% sure will make you ride a losing trade long after the signals have clearly said to get out. Many times I have lots of signals telling me it HAS to go my direction, even though it is clearly not. What I think I'm learning is that entries are relatively easy; managing the trade and then exiting take some looking, seeing, thinking, and knowing a thing or two about price action. You have to react; go with what is happening, not what you think should happen.
  • #29
  • Jun 21, 2007 3:18am Jun 21, 2007 3:18am
Quoting blueruby
This made sense to me when I listened to it. Being nearly 100% sure will make you ride a losing trade long after the signals have clearly said to get out. Many times I have lots of signals telling me it HAS to go my direction, even though it is clearly not. What I think I'm learning is that entries are relatively easy; managing the trade and then exiting take some looking, seeing, thinking, and knowing a thing or two about price action. You have to react; go with what is happening, not what you think should happen.
Excellent point. Stubborn refusal to accept that my trade analysis could be wrong has cost me dearly in the past. I now always place a healthy yet manageable stop loss on every trade and TRY VERY HARD to exit a bad trade as far in advance of the stop as possible, at least that is, as much as my ego allows me......
  • #30
  • Edited Jun 25, 2007 1:04pm Jun 24, 2007 4:00pm | Edited Jun 25, 2007 1:04pm
lever70,

I really enjoyed reading your trading rules document. However, I am perplexed of one book you left off on your list of Suggested Reading material. "Trading In The Zone", by Mark Douglas, is one of the top books in existence about the pyshcology of trading. It is a must have for ANY trader!

Also, as brentmack pointed out earlier, the sentence in your document -- "Successful business ventures are not born out of aspiration, not desperation, and trading is most definitely a business." - really is a bit confusing.

I also agree with the person who previously pointed out that it can be a mistake of exiting too many trades just because the trades are in profit. Even if you have a small stop loss - such as 10 pips - and you exit many trades at +2 or +3 pips, then whenever you DO have a loss then it is going eat up much of those "wins". And that is with a small stop. Imagine having a stop of 20 pips or more and often only getting around +3 pips on a trade! Remember... risk/reward ratio is always important.
"Trading is a mental sport." - Ziad Masri
  • #31
  • Jun 24, 2007 6:17pm Jun 24, 2007 6:17pm
Quoting goonergonebad
TRY VERY HARD to exit a bad trade as far in advance of the stop as possible

...to then see the reason why you had a stop where it was remained valid, you closed, the trade ends up working and you are forced to watch as the pips pass you by due to manually messing up a perfectly fine trade due to shaky nerves and premature exiting..
Trust price. Know yourself.
  • #32
  • Jun 24, 2007 6:51pm Jun 24, 2007 6:51pm
All I can say is Amen. It took me 2 years to figure out a trade consists of 3 elements: Entry Stop Target. I call it EST since i am in the EST time zone. Since I applied EST I have done a LOT better.
  • #33
  • Jun 25, 2007 3:04am Jun 25, 2007 3:04am
Quoting SeekingLight
...to then see the reason why you had a stop where it was remained valid, you closed, the trade ends up working and you are forced to watch as the pips pass you by due to manually messing up a perfectly fine trade due to shaky nerves and premature exiting..
Of course you are right. I am referring to those day trades that you were not 100% certain about in the first place, i.e. nagging doubts about news reaction, affect of carry trade, etc.
I have come to realise that if I got it wrong by stopping a trade in advance of my stop loss and the trade eventually transpires as expected, then it isn't necessary to beat myself up about it. Another trade will come along and I know that patience will pay off eventually.

However I agree, it's still hard not to feel frustration as that candle moves rapidly in the direction you predicted.

C'est la vie..........
  • #34
  • Jun 25, 2007 3:14am Jun 25, 2007 3:14am
Quoting IRISH37
All I can say is Amen. It took me 2 years to figure out a trade consists of 3 elements: Entry Stop Target. I call it EST since i am in the EST time zone. Since I applied EST I have done a LOT better.
Hey Irish,
I like it!
But, what do you do in the Winter?

FXS
  • #35
  • Jun 26, 2007 7:02am Jun 26, 2007 7:02am
I spent 2 days but couldn,t find recomended here ebook Igor Toschchakov "Beat the odds in forex trading". Who has? Please email:[email protected]
  • #36
  • Jun 26, 2007 7:05am Jun 26, 2007 7:05am
Quoting meromar
I spent 2 days but couldn,t find recomended here ebook Igor Toschchakov "Beat the odds in forex trading". Who has? Please email:[email protected]

http://www.forexfactory.com/showthread.php?t=21887
quote of the day: . It's like deja-vu all over again
  • #37
  • Aug 17, 2007 11:09am Aug 17, 2007 11:09am
I just stumbled upon this by accident and found this short e-book fantastic. Been actually trading forex for quite a number of years but not suprisingly still fall into my bad habits sometimes. Remaining vigilant at your methods is key to surviving in this market. I'm posting this so others may stumble upon it as well and it may "remind" them that there is a method to this madness.
Has what you wanted to see made you blind?
  • #38
  • Mar 18, 2008 6:14am Mar 18, 2008 6:14am
thanks for this massive info,how i wish i had seen this 3 months ago i would not have blown my 3rd account.
  • #39
  • Mar 19, 2008 5:15am Mar 19, 2008 5:15am
hello,

thanks for sharing your knowdledge!
will keep them in mind once i start trading on my own.
  • #40
  • Mar 20, 2008 4:21am Mar 20, 2008 4:21am
Nice Job!
Thanks for sharing .

I'm quite amazed at 'winning should be the normal state of trading' and 'we must aspire to very specific goals in accordance with the rules that follow. If we do this, the pips will actually follow quite naturally'. -- Exactly the point!
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