Learn the rules that govern the forex markets
Tuesday, 8 July 2008
A behaviour fills with emotions excessive trading on the forex market can be fatal.
In case of big loss, emotional behavior can sometimes push the inexperienced trader to return too quickly on the market at an inopportune time to try to recover money that was recently lost. The trader expects to be able to catch up by multiplying the number of operations.
The best way to deal with these problems is to establish a list of rules to follow in the trade of forex and never deviate from these principles.
Here are some rules that each trader could follow in order to increase its chances of success:
1. Let your emotions aside.
The trading currency is a busines as another, and should be treated as such. As it is difficult to separate the emotion caused by a loss, it should be considered only after this loss written in books, there is nobody who can change. Thus the best course of action is to try to draw a lesson on all the errors have been committed, and treat the next transaction in the same manner as if the money had been earned on the previous transaction.
2. Never make overtrade. This is linked to the rule number 1 where often the emotions running a forex trader to share too. A would compensate his loss, forex trader beginner tends to take hasty decisions that may be harmful to its case. Thinking that more transactions generate more money, too many transactions based solely on intuitive decisions can rapidly deteriorate the situation in your account.
3. Follow the trend.
One thing that thousands of traders who engage in fundamental analysis or technical analysis (or both) agree, is that the forex market follows trends. The identification of these trends could make the difference between success and failure. Following the general trend of the currency, you can seize the opportunity to take advantage of the current trend until it is reversed.
4. Stay out of the market if there is any doubt.
If a trader can not identify the trend that follows a currency, it is better to depart a time until a better image can be formed on what happens on the price trend.
By following these basic rules, tarders forex remain on the sidelines of the difficulties caused by hasty decisions based on emotion or lack of analysis.
Labels: forex
posted by Master @ 02:10,