Another tip is to address the 3 Ms in your trading. Money – money and risk management, Method – plan your trade and then trade your plan. Don’t enter a trade unless you have planned it first. Entry, Stop, Exits, Risk:Reward, Lots size and number of positions, How you will scale in and out etc. Write it all down until it becomes second nature. If you do the above then the last M which is Mind will be taken care of, as you will know what to do and be far less emotional if you strick to your proven plan/method (backtesting & Demo account).

Hope that helps

Martin

Before you take a trade always look to your left on the chart and make sure you are not buying into a supply or resistance area/zone/level. When selling make sure you are not doing so into a demand or support level/zone/area. If you can master that you will be on the way to success.

Take any currency pair and start on the Daily chart, mark up significant support and resistance levels/zones (demand & supply), then go down a time frame and do the same again and so on, you should then see where price is likely to turn in the future. If price enters and exits a level rapidly it means there are plenty of orders yet to be filled at that level and it will likely occur again.

Hope that helps.

P.S. Learning to trade Forex is a marathon not a sprint and once a consistently profitable trader one’s expectations should be to get rich slowly, as it is Not a Get Rich Quick endeavour. Make consistent profits and at the end of each month take a percentage of your winnings out and pay some bills, so you grow your account and reap the benefits at the same time.

Martin

Start with 200K, set a goal of 1/2% per day = 2.5% a week = 10% a month = 60% or 120K in 6 months.

An interesting exercise for Aby, might be to go back to those trades in his backtesting that are a string of losers and examine them. How many days/weeks/months did it take to turn around? How much profit did it wipe out? How long did it take for the system to recover?

It’s easy to look at years and years of backtesting and say, “Well, it works over the long term.” But much more difficult to accept those results when we’re stuck in the middle of a losing streak. And believe me…we ALL have losing streaks.

But looking closely at that chunk of testing that was so easily dismissed during backtesting, might give a frame of reference for what that might have felt like and what you may be able to expect in terms of turnaround.

Al : I am not sure what your money management system is to be able to use your comments, i assume that you mean to say that your first position is very small, so then how do you make your money, when do you add further positions, do you never get out of a position ? and do you just let it ride 2000 pips against you till it hits profit ? … is your system shareable ???

MysticFX : I agree with you absolutely, it is all down to testing, and i have tested a lot, whats happened is that things haven’t been going according to testing, loser after loser … what do you do then ? PS so just between you and me can you really make $100,000 in 6 months … cough cough … my doctor says my cold is bad real bad … cough cough

Regards,

Aby

Aby, and Al…
I don’t know how long either of you have been trading. What you are describing is something most people go through in the beginning. I went thru a period where I believed if I thought price would go up, I should sell.

A successful trader must develop a Mind Set, remain detached and unbiased. It is a constant battle with your emotions, Fear and Greed. It is a battle I had to fight every day for a long time. Develop confidence, by backtesting, backtesting, and more backtesting, until you know the system you are using wins more times than it loses. Combine that with good money mgmt, and you are on your way. Don’t ” Hunt” for trades, let the trades come to you.
And, Patience !
A short story:
My Partner and I operate a signal service. I received an email from a prospective client asking me to call him, I did. The gentleman told me that he had a successful business, but also wanted to get into Forex. He asked me if he started with $5K, could he make $100K in 6 months with our service. I asked him how old he was, he was 38. I asked him if a Doctor had recently told him he had only 6 months to live? He said no. I told him I didn’t think our service was right for him. I could have went on to explain that turning 5K into 100K is not really realistic, but it was obvious that this gentleman would only hear what he wanted to hear.

Chri

However, what I learned very quickly is the art of money management. Since I am usually wrong on my first entry into a trade, I trade a position that even if the trade moves against me 2000 pips, it will not have any significant consequence to my account. If I choose not to use a stop and it goes against me, I wait for another opportunity to enter again. Depending on the pair, I have had to wait at times over 500 pips to reenter. Then through cost averaging or winning on other trades, I will usually come out ahead. I want to be clear that I did not stumble on this by accident but by many hours back testing. I hope this helps.
Al

Why Why Why is it that when I buy something it tanks 200 pips ??? I bought the GBPCHF then it tanked! I bought the USDCHF it tanks 200 pips ??? Is my middle name “Recession” ????

Apologies everyone … I am in an odd mood today