How to trade successfully on the market FOREX
Thursday, 24 July 2008
This article is about money management and trading psychology. That is the lesson that you have never obtained with 99% of Forex other systems that you met.
I find it interesting that most systems there do not understand this because if they actually succeeded traders, they know that this is the key to success and to give an incomplete system that will not work! This tells me that the people who wrote or sale are traders are not at all. They are only in the sale of hope!
Well, if you have not already noticed, I am a businessman, and I am different than others. Do not get me wrong, there are honest trainers there, I learned one and I am eternally grateful to him.
We must go '. First, it is my own interpretation of several sources, and practices that have worked for me. Please read everything you can find on the psychology of negotiation, management and money. There are many points of view slightly different but in general they are very close and the main issues are almost all the same.
There are two main issues that cause 99% of problems. Can you guess what they are?
If you answered by fear and greed, you're right. These two emotions are probably responsible for 99% of the world's problems as well, but that is beyond the scope of this Course.
So, now that we know what the obstacles are great, we will try to determine how to overcome them. During my lessons, I just listed a few but I'll put them all together here in a place so it is easier to follow, and maybe make it easier for you to develop your own system to help you better trade.
We can not eliminate fear and greed. They are always in your heart and mind, but we can make certain rules so as not to interfere with your success. We can find systems and procedures to follow, because we know in advance that fear and greed are major problems. I'm sure you've heard the statistics that 95% of all operators speculative leverage FAIL. That is absolutely true. Here is another statistic which, in my opinion ... 100% of operators who do not know how to overcome fear and greed are doomed to failure. So does that mean that if I can learn how to overcome these problems that your chance of success is 100%? Of course not. But I can tell you that you can not be successful if you do not you protect yourself.
1-3 In lessons that I just described a trading system. The first thing you have to do, if you follow my system, another system or your own system is to follow the rules of the system without fault. If your system requires a certain point of entry, do not enter until there is a signal to enter.
The systems are designed for a reason. That is why it is called a system. What do we learn from this? Patience. Perhaps the stupidest thing you can do is enter a trade on an intuition.
This brings us to our first FACT:
The odds are in your favor before entering a job. This is true for most trading systems. Void of fear and greed, if you follow exactly each system, you profits. Some systems May offer better benefits than others, but overall, you should be able to take advantage of any system, if you do not fear, not greed.
This brings us to THE GRAND SECRET. By failing other than trading psychology, other systems are not as you say you play a game of odds. Say, for example, that we play "draw." In theory, for 100 flips of the coin, will face 50 counts, and 50 come up the tail. Of course, the first 100 May be 55/45, but the more you play, plus 50/50 get the number. Our system of "draw" is as follows: We play for 20 hours, and return the piece exactly 5 times per hour, and all leaders who come, we do pay $ 2, and for all queues just we pay $ 1. This should be a profitable system. After our game, we see that the heads are up to 50 times the tail and were up 50 times. (Stay with me here). Thus, at the end of 100 throws, we paid $ 50 and received $ 100. A benefit of $ 50.
So, let's say, during our second game of draw, we decide that we will let the flipper (hint: the market is the flipper) keep flipping the coin for an hour while we take lunch, but we will not pay or be paid for those flips. During our lunch hour, heads east up 5 times in a row (which is theoretically possible, not unlikely). And now we're back at lunch, and we are $ 10 for an hour. Now, in theory, the chances of 5 tails in a row coming after 5 heads in a row are very good because, for every ten scraps, you should have about 5 heads and five tails. Now, we obtain 5 tails in a row and we are now at another $ 5 for a total of $ 15. So, not counting 5 launches during lunch, leaving 90 launches that we have yet to account for and tell us they were 45 heads and 45 tails. Our benefit of these launches is $ 45 (45x2 least 45x1), now if we take immediate $ 15 for the spear, we did not take, and this string of losers, we are left with a profit if $ 30 . Thus, lunch and ill-5 laps has cost us 40% of our profits.
Now, this theory is quite, but it applies to this market. If you're picky about what jobs that interest you and crafts that you do not want to take, you are playing with the CHANCES. My point to all this great history of "drawing lots" is as follows: If the conditions are met, TAKE THE TRADE without hesitation. The odds are in your favour, but only if you take ALL businesses who meet the conditions. When I say all the trades I know that the market is open 24 hours a day and you can perhaps not take all exchanges. You must choose a schedule and stick to the same period of time every day and take all transactions during that time.
I can tell you that in the month before, I realized that (my first month of negotiating the money actually), my total profit was 92 pips. I had an idea of what I was doing poorly so I was keeping track of all trades that I did not take those with what I did. I have included entry point, day, hour and if the profit target was hit or whether she was arrested. Do not get me wrong, I was very happy to be in profit after trading for only one month with real money. But then I went back and looked at the figures for "what might have been." Guess what? If I had taken all the exchanges that met my conditions, my profit for the month would have been 355 pips! I was not happy. But soon I realized that I had messed with opportunities. After achieving what I had done wrong (or not done right in this case) I started to have more confidence in my systems. The next month, very my total benefit is 515 pips, or an improvement of 560% only to take all operations which fulfilled the conditions. I think that is enough said about it.
Sorry to stay with the coin flip Thursday here, but it works very well in teaching these principles.
This brings us to:
FACT # 2. You do not need to know what's going to happen to make money. If we know we'll do $ 2 fifty times and pay $ 1 fifty times longer than we return the piece, are we going to play? Of course! Well, all trading systems have the same opportunities. In my essay, I know that this system, on average, will produce 9 wins 20 pips for 1 loss of 40 pips (May this number vary, but which is the maximum loss I ever take). So we know in advance that 9 wins to 20 pips is 180 pips and less loss of 40 pips, leaves us with 140 pips profit. Now keep in mind that you May 8 and 2 this week and 10 and 0 next week. You never know when a loss is going to come. We May even lose all exchanges for a week, but not lose a trade for the next 9 months. Believe me, it happens. You do not need to know exactly what will happen, you just take all the trade which meets the conditions and then count your profits at the end of the month / week / year etc.
This section deals with money management and psychology. Back in the draw for a minute. We know that each win brings us $ 2. And we know that for each victory in this trading system, we get 20 pips. We know that each tail that has cost us $ 1. And in our system, we know that each loss is 40 pips. If we know what our loss will be ahead of time, we know what it will cost us to know "what will happen." From this we can decide how we want to risk on the basis of our account size.
FACT 3: You know how much it will cost to find out. I decided not to risk never more than 5% of my account on any one trade. Thus, knowing that I can know how many batches of trade before the hour depending on the size of my account. It May cost $ 250 a margin of 1 lot position, but that's not what we risk, we are in fact the risk of dollars ten times the number of seeds in our judgement. If our judgement is 40 pips, we are risking $ 400. Now we know better than we have at least $ 8000 in our account to take a position of this size. If this trade proves to be a loser, our balance and fell to $ 7600, we know that we can not afford to take again as trade, because a loss of $ 400 is greater than 5% of our balance. We would need to adjust the number of lots down accordingly to keep our peril.
Labels: forex
posted by Master @ 02:00,