When I started trading in forex, my first real trades were really lousy and I made lot's of stupid (at that time it did not seem to me so) mistakes and decisions, which I regret now. Luckily enough, I did not blow my account in the first year, which was quite satisfactory, but I still struggled to make any kind of profit, not mentioning making it for a living.
At that time I found out some info about one forex trader who sold his market entry and exit signals for a monthly fee of 100 dollars per month. I read about this trader some reviews on the internet and finally decided to pay for just one month and "see how it goes". Anyway, I had nothing to loose - I was going nowhere with my trading strategy and time was passing by. I just felt, that I needed some guidance from a much more experienced trader. His market entry signals were quite simple and clear, his strategy was classical and could be described in just one phrase - buy on a dips, sell on highs.
What I learned from his signal service and some lessons that he provided - money management is the most important part in any strategy and tactics. He always stressed that you cannot risk more than 3% of your account by trading one currency pair. Another thing that he did, was distributing the trade in four equal portions. First portion or position was always closed at the profit of 30 or 50 pips, another position had a higher profit target - 70 pips, third had to be closed at 100 pips profit and the last position was closed only when some serious support or resistance point was met. This way he gradually distributed his profit targets which almost always were achieved. At the same time he was moving his stop loss to smaller amount or even entry, in case the market would turn against him.
It was simple, yet very powerful strategy, which made me some good money. I learned some important things, while watching him trade. The most important thing was managing your losses, making them as small as possible and extending your profits. Another point was sticking to your strategy, even if it does not work for a day or two. It has to be profitable in the long term, that's true, but some drawbacks or losses are unavoidable and have to be dealt with carefully. After a while I started trading on my own, and the results are quite pleasing to me. What is my point here? To put it shortly:
1. Always have some trading plan.
2. Always stick to your trading plan and strategy (which has to be profitable).
3. Always manage your trades, move your stop losses to smaller amounts and extend your profits.
4. Enter the market in several portions which have to be closed at different prices.
5. Always trade in the direction of a trend.
6. Never trade against the trend.
7. Never risk more than 3-5% of your capital.
Those are only basic things which were shortly reviewed here. However, just sticking to what I said may prevent you from huge losses that I had and lead to success.
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If you want to know more about my trading and strategies that I use, you can visit my forex signal service website here where I give signals for free (so far).
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