Forex trading rules

Ricex

Sergeant
Messages
359
Hi,
I've just added a list of general trading rules to my blog FOREX DAWN and thought I'd start a thread here as well.

This is twenty rules that I've compiled from my own rule book and from around the internet, please add to the list any that you feel I've missed or that you've found important in your trading.

1. Trade a weak currency against a strong currency

2. Accept losses as part of trading

3. Never risk more than x% per trade (x is what you consider acceptable, generally 1-5%)

4. Do not add to losing trades

5. Trade with the flow not against it

6. Keep your trading simple, complication breeds confusion

7. Keep your losses small and your profits large

8. Use technically placed stops, either mental or hard

8.a. If you are using mental stops, place an "emergency" stop loss farther out to prevent a disaster if your internet connection or trading platform goes down.

9. Never believe you know better than the market, the market is always right

10. Be patient and wait for the right trade set-ups

11. Always trade your strategy and avoid temptation by not over trading

12. Be aware of news times if your intraday trading

13. Be aware of world stock market opening times

14. If you hit a losing streak stop trading for the day and try to analyze the problem

15. Always know what the market condition is before trading

16. Trade healthy and don't trade if your ill, stressed out....... or hungover!

17. Be profitable but not greedy

18. Be organized, confident, disciplined and above all consistent in all aspects of your trading

19. Do not become obsessed with trading, keep a healthy mix of interests in your life

20. Do not create rules that you have no intention of keeping.... that's pointless
 
Last edited:

Pharaoh

Colonel
Messages
19,722
I would add:

8.a. If you are using mental stops, place an "emergency" stop loss farther out to prevent a disaster if your internet connection or trading platform goes down.
 

cowmadagan

Sergeant
Messages
393
I'd also add to judge profits by rising margin balance, not rising account balance. It's an often overlooked point in web advice.
 

Forexwatchman

Sergeant
Messages
198
I love rules 16 and 19, very true indeed! One I might also add, although it's implied when you take all of these rules together as a whole, is to leave your emotions out of it. Fear and greed destroy all the potential one has at being successful at this, and that's why it takes such a long time to master this profession. BTW, I just revisited the blog and love the Swing-O-Meter.
 

Ricex

Sergeant
Messages
359
Hey man it's the newest! greatest! bestest! latest! piece of useless crap to shake the Forex world. Not only does it do f@ck all most of the time and make you think it's not working, it actually creates a very fine toxic mist which when inhaled starts to dissolve any common sense that you may have had left in your brain.

I think you'll agree that I've priced it quite reasonably as well somewhere between "that's pricey" and "ah what the heck let's give it a go", should fly off the shelfs. Of course you know it's real value is at least 4 times what I'm willing to sell it for today, but it's a bargain for such a revolutionary new way of trading don't you think?

lol! anyway thanks for dropping by, I see you've added a video now, but it says it's private...... are you going to charge me to watch it!!! lol (just kidding)
 

Forexwatchman

Sergeant
Messages
198
Yeah, I was wondering why I actually had subscribers popping up on YouTube all of a sudden, then I happened to click on the video from my website this morning (I needed some amusement I guess) and it said I couldn't watch it because it's been set to private. I fixed it now, but thanks for the heads up.

As far as the swing-o-meter goes, I think the mist part sounds exactly like what I've been looking for, so I'm prepared to pay you whatever it takes to be the first one to own it! ;)

Also I wanted to tell you that I like the approach that you've taken of showing technical analysis daily and breaking it down. Your website felt more informative form a newbie trader's prespective than my own. I'm going to take that approach as well now and add more technical analysis than what I've done in the past. I think that's better for new traders anyway since when I first started trading, I just ignored fundamentals because I was already having a hard enough time understanding the technicals. And all of the questions I get revolve around technical analysis and not the news. Seems kinda obvious now! Thanks, and enjoy your weekend!
 

Awais Rasheed

Private, 1st Class
Messages
45
Point 1 says, "Trade a weak currency against a strong currency".. How would we decide which currency is strong and which one is weak?? Don't you think there always a fluctuation, a currency which is showing some strength at the moment suddenly changes the course and gets weaker.

And you are suggesting this to the fundamental traders or the technical ones? I think a technical trader will only look what his/her system says and moves in the trade and will never consider looking at the fundamental side. How would you comment on that?
 

cowmadagan

Sergeant
Messages
393
The principle is that a currency that's showing strength can't keep doing it forever, and one that's showing weakness is the same.
Scroll up to the top of this page to where it says 'Forex Calendar & Tools' and then click 'Currency Strength Meter'
After you have this info, cross reference with your charts and fundamentals, and make sure you stay consistent with your money management rules.
 

Awais Rasheed

Private, 1st Class
Messages
45
The principle is that a currency that's showing strength can't keep doing it forever, and one that's showing weakness is the same.
Scroll up to the top of this page to where it says 'Forex Calendar & Tools' and then click 'Currency Strength Meter'
After you have this info, cross reference with your charts and fundamentals, and make sure you stay consistent with your money management rules.


Thanks for the tip. One more thing that i would like to ask, point 5 says that to keep up with the flow and not against it, but how would one decide that? I have seen many times a currency trading bullish suddenly changes its course and turns to bearish. How would you decide about the flow of the currency? If this is that easy, everyone around will see the waves coming and surf on it, and never loose the trade.
 
Top