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How to survive in the forex market 1.
Published by Geir Laastad in Trading Tips • 24.05.2009 14:25:23
How to survive in the forex market the easiest way as a trader (1).
This is the first article in a series of articles of how you best can survive trading the forex market using the higher time-frames. Although this article is focused around forex trading. It can also be beneficial for other traders.
it is a well known fact that the average trader which start up with forex trading will sooner or later blow his or hers trading account. In fact, about 95% of the new aspiring forex traders are going to loose their money. The 5% which is left have learnt the hard way, but somehow managed to survive. They probably survived because they have done some self-education, bought some books, read about money management and trading psychology. There is no free lunch and it is a common disbelief that you as a new trader can make quick money easily by trading forex. But there are hope. Please read on, below I will give you some do's and dont's you can follow if you want to heighten your odds for surviving in this business.
Three words can really say it all: Trade Longer Time Frames!!
There exists some reasons why the longer time frames are better and more safe, and why the shorter time-frames are more dangerous and I will go into them now.
The most common error a new trader does, is wanting to trade all the time. He or she thinks by staying out of the market for a while, is the same as letting the train pass without being in it. Now, that is very wrong and it is probably one of the main reasons why new traders looses so fast.
The technical explanation is simply that you enter the market at the wrong times when either there is no clear buy or sell signal, or you enter the market in the wrong direction, or you enter the right direction but with wrong timing right before that big juicy move you saw actually is over and a big retrace or trend change is due. So the next thing is that your stop-loss is hit or if you have no stop-loss, you just sit there and look at your losses just growing bigger and bigger in the hope that the market soon will turn around and make you profit. This is very dangerous and if you are unlucky, you can blow most of your trading account by just a few trades this way.
So what can you as trader do? Well, the first thing you can do is to switch to the daily or the weekly charts and forget about scalping and daytrading. Don't sit glued to you screen and watch the market all day (and night) long. This will just stress you and drag you into new bad trades again sooner or later. By switching to the longer time-frames, you can actually trade very well just by using 5-15 minutes in front of the daily charts. But you need a system you follow and that system should be well focused around the longer time frames.
Geir Laastad
GL-Software
Click here to join Cash4Offers.com and get paid up to $300 in less than 72 hours for trying special promotions.
This is the first article in a series of articles of how you best can survive trading the forex market using the higher time-frames. Although this article is focused around forex trading. It can also be beneficial for other traders.
it is a well known fact that the average trader which start up with forex trading will sooner or later blow his or hers trading account. In fact, about 95% of the new aspiring forex traders are going to loose their money. The 5% which is left have learnt the hard way, but somehow managed to survive. They probably survived because they have done some self-education, bought some books, read about money management and trading psychology. There is no free lunch and it is a common disbelief that you as a new trader can make quick money easily by trading forex. But there are hope. Please read on, below I will give you some do's and dont's you can follow if you want to heighten your odds for surviving in this business.
Three words can really say it all: Trade Longer Time Frames!!
There exists some reasons why the longer time frames are better and more safe, and why the shorter time-frames are more dangerous and I will go into them now.
The most common error a new trader does, is wanting to trade all the time. He or she thinks by staying out of the market for a while, is the same as letting the train pass without being in it. Now, that is very wrong and it is probably one of the main reasons why new traders looses so fast.
The technical explanation is simply that you enter the market at the wrong times when either there is no clear buy or sell signal, or you enter the market in the wrong direction, or you enter the right direction but with wrong timing right before that big juicy move you saw actually is over and a big retrace or trend change is due. So the next thing is that your stop-loss is hit or if you have no stop-loss, you just sit there and look at your losses just growing bigger and bigger in the hope that the market soon will turn around and make you profit. This is very dangerous and if you are unlucky, you can blow most of your trading account by just a few trades this way.
So what can you as trader do? Well, the first thing you can do is to switch to the daily or the weekly charts and forget about scalping and daytrading. Don't sit glued to you screen and watch the market all day (and night) long. This will just stress you and drag you into new bad trades again sooner or later. By switching to the longer time-frames, you can actually trade very well just by using 5-15 minutes in front of the daily charts. But you need a system you follow and that system should be well focused around the longer time frames.
Geir Laastad
GL-Software
Click here to join Cash4Offers.com and get paid up to $300 in less than 72 hours for trying special promotions.
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