Forex Pip Machine

Archive for December, 2009

There are iron rules in each business and ignoring these rules will make the players kicked out quickly from the game, this is also applied in forex trading. Following these forex trading tips can help you to make profits, keep your funds. So here are the rules:

1. Never Make An Entry Without Doing Analysis First
There area always times when you will stumble upon something that looks very promising, perhaps from news or trends. These ‘hunches’ may bring you profits once or twice, but it just coincidence, you will never survive in forex trading if all that you got is ‘hunch’ instead of proper analysis and logical decisions.

This has happened to most of the traders when they started; they manage to gain profits by guessing, thinking that they already master the secrets of forex trading, and start giving forex trading tips to their friends. This attitude is the same as a gambler in a casino: throw the dice and pray. You will wipe out your account in no time with this behavior.

2. Learn One Trade at a Time
Forex trading has many factors and elements; it is purely impossible to master it overnight. If you are a novice, do not deposit USD10,000 in your new account and have various tests with it. Trading forex is like gambling; when someone loses, there’s always a winner at the other side. These winners will finish your USD10,000 in no time and by reading this forex trading tips you have learned to avoid it.

The best approach is to take it slow. Start with a practice/dummy account while learning. You can test various strategies, currency pairs, robots, and signals there without worries. If you have found a system that works, you can move to a mini account for further test. However, if you have confidence in your system, go ahead and open a real account.

By “system that works”, I refer to a system that can generate profits on regular basis at the end of the month without you have to spend your entire time maintaining your open positions. If you have confidence in it, learn to control your emotion and let it do the work.

Of course, if you have fund and don’t have time to learning slowly, you can always ask someone/trading company to trades for you. However, it also has high risk if you don’t know how to select the real company, read about it at managed forex trading.

3. Utilize Trusted Forex Trading Platform/Forex Broker
No matter how good your system, trading in a poor quality platform will kill your chance to gain profits. Usually, you will get free trading platform from your broker; these are what you need to look in your trading platform/forex broker:
- Provide access to your favorite currency pairs. At the very least it must support common currency pair such as EUR/USD, GBP/USD, and USD/JPY.
- Allow you to put take profit and stop loss order; this is very important risk management method.
- Access to charting, news, research, and advices; basically all the resources that you need to decide a transaction. If possible, a daily forex trading tips will be useful too.
- Customer support available. If possible, get the one that provide 24 hours support so you can contact them any time when you get problems.
- Forex trading is a global business, so it will be good if your broker accept deposit in multiple currencies.
- Simple procedures applied in their services, including withdrawal.
Read about online forex broker that equipped with the world leading trading platform at 4XP Review.

4. Learn to Use Stop Loss and Take Profit Order
Stop Loss and Take Profit are orders that you put to close your position at certain price. Example: you buy GBP at 1.678; then you place a Stop Loss order at 1.648 to limit your loss by 30 pips. You also put Take Profit order at 1.708 which means you will close it when you get 30 pips profit.

This is important in order to prevent your emotion to take part on the close decision and screw it up. When the market is moving against you, you won’t close the position since you are hoping the market to swing back to your side, thus turn potential loss into profits. Most of the time, this kind of of behavior will only create more losing trades. I can’t stress this enough; this has made many traders fail miserably. If you don’t remember anything I said in this forex trading article, remember this: emotion will only make your trade career short.

The other scenario: The market moves as you wish and you see potential profit, but you won’t close it since you want as much profit as you can get. Nobody knows when the market will turn against you and when it does, it’s usually already too late. In both scenarios the two emotions are greed  and fear. But if you rely on logic, you can suppress greed.

Bottom line: no need to rush everything when you are learning to trade forex. Take your time to learn the rules, test, practice, analyze, and read various forex trading tips for the day. However, I don’t recommend you to do it by yourself since it can be a long and painful process. Find someone withthe qualified material to help you speed up the process. Learn to identify such material in forex trading course.

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