Forex

Trading Rules

Hi there!

Losing money in Forex is a very painful experience and it usually leads the trader to one of two decisions:

1- Giving up trading and you return to your old safety job.
2- To set up your rules.

It’s very strange that the most of traders had lost a lot of money before learning the lesson that “there’s no way to make profit trading Forex (or achieving any success in any field) without firmly established rules and the discipline to obey them”.

I’m wondering why don’t you set these rules before gambling your hard earned money and practice your rules and discipline examination in a demo account before going to trade real account? Anyway nothing is free in this world and you have to pay to learn before gaining from the paid lessons “no pain no gain”.

How to set up your rules:

I’ll write down my trading rules which I’m not recommend or ask you to use them (you can use them if you want) but I’m writing them to tell you what’s the kind of rules you have to set up.

Whatever the kind of you trading style you have to answer the most important three questions in trading Forex:

1- When to enter a trade?
2- When to exist a trade?
3- Why should I trade?

These are the 3 must(s) your rules have to answer them:

When to enter a trade?

Betting on the price raising or failing is the only strategy that the losers uses. To trade Forex one of the most important questions you have to answer “Why should I enter a trade?”.

You have to know what should happen to enter a trade, for example your collection of indicators giving you the entry signal. And you have to know how much of money (lots) you are going to trade.
If these questions have no answer how can you except to have trading rules??

When to exit a trade?

“Swimming is the art of breathing control” these words fit the Forex trading too. You have to know when to leave the Forex ocean and control your breath while you are swimming in this ocean.

Exiting in the correct time without hoping of more profit or hoping that the loss decreasing is one of the very important points that you rules have to include!

Why should I trade?

It maybe strange to ask this question to a Forex trader, Why should you trade? The question itself needs to be clearer!

The question means “There are times that you have to enter the market, and there are times that you have to exit the market, right, Huh? well, there are times that you should not trade at all?”

Yes, You have to stop trade when you make a lot of loss and you have to do the following in this case:

1- Ask yourself: did you obey your rules? If no! you have to ask yourself Why? Was is it a problem in myself or it was a problem in the rules (The rules wasn’t clear or wasn’t profitable) and How in the future I’ll obey my rules

2- If you have obeyed your rules and made losses you have to examine your rules again and again to know what was the wrong.

3- In any case you have to stop for awhile to take your breath and continue your swimming. Losing money is a good time to stop trading not to try to compensate them! I heard these words from ages “Don’t cry on whom loss, but cry on whom want to compensate”