Losing money in Forex is very easy. There is no technique to stop you from making losing trades in the forex market. Truth is, making profit consistently is different from never having losing trades. Trading is like a game of probabilities. The odds are simply in your favour or against you and it can be felt and seen only over a period of trades, not necessarily one specific trade.
The way to stop losing and to start winning is to first shift your thinking:
- Take your focus off of money and profits-focus on learning
- Set a reasonable profit goal for each trade instead of holding onto a trade until it eventually retraces into a loss
- Trade less and only take high probability trades which meet very strict criteria you have developed for your style of trading
- Trade when there is alot of liquidity in the market during London and New York sessions and don’t trade when the market is slow and consolidating
- Use a reasonable stop loss based upon your style, time frame, etc. so you don’t get stopped out on every trade
- Keep a journal of what works and what doesn’t and keep doing more of what works and less of what doesn’t
- Keep learning about order flow, market structure, auction market theory, how Smart Money dominates all financial markets, and don’t get caught up in software, indicators and sales pitches
- Read the following books:
“Reminiscences of a Stock Operator” by Edwin Lefevre
“Art of War” by Sun Tzu (Not a trading book but the best reference book to understand the nature of trading as a war of wits)
“The Trading Methodologies of W.D. Gann” by Hima Reddy
“Time Compression Trading: Exploiting Multiple Time Frames in Zero Sum Markets” by Jason Alan Jankovsky
“The Game in Wall Street” by Hoyle
These books will help you to start to think like a professional trader.
- Write a trading plan. Keep a trading journal. Always trade small and always manage risk. Good luck.
Experience has taught me that the greater the number of times you trade on a day, the higher the chances of losing.
So trade only when you get the perfect set up (signal) according to your strategy. Below are 3 highly recommended forex trading systems and strategy…
- Highly Effective Forex TOPTREND Trading System with Moving Average Convergence Divergence
This is Highly Effective Forex TOPTREND Trading System you have to know – TopTrend or also known as BBands Stop indicator default settings (20, 2). TopTrend indicator can be your helping hand in confirming a trend, identifying trend change and setting stops.
TOPTREND appearance is pretty much self explanatory. What should be added is that TOPTREND if used alone won’t be able to save traders from losing in the Forex market. While it performs outstandingly well during good trends, it faces a fiasco during sideways channeling market.
- Forex ATR Ratio Trading for Strong Movements and Higher Probability of a Trend Change
Forex High Probability Trading System – ATR ratio often reach high values after the prices quick and strong movements. Low indicator values often correspond with long periods of flat that can be observed on the market top and during consolidation. It can be intepreted according to same rules as other volatility forex trading indicators.
Forecasting method using ATR ratio is as follows: the higher is the indicator value, the higher is the probability of a trend change; the lower is the value, the weaker is the trend movement. In case the indicator value climbs above the blue horizontal line, it is time to buy or sell.
High ATR ratio price levels often correlate with high volatility. Low ATR ratio price correlates with low volatility, as the prices stabilize or move along the channel flat movement up to the possible breakout point.
- Forex Fiji Trend Trading System with Solar Wind Joy and High Low Activator Indicator
Forex Maximum Profits System – Forex Fiji Trend Trading System with Solar Wind Joy and High Low Activator Indicator. This is high profits and high accuracy forex trading system.
The Forex market consistently attracts traders of all skill levels and strategies. This is probably one of the most advanced basic strategies out there. It is also highly adaptable, can be traded on any timeframe, any currency pair, long-term, medium-term, even scalping (although scalping is it’s least suitable use).
To apply this Forex Fiji Trend Trading System with Solar Wind Joy and High Low Activator Indicator we must first be aware of the existence of a trend. Without identifying a trend we would be gambling, and that’s not the purpose of trading forex.
Remember that when the signal is not good, not trading is a good trade because you won’t lose any money. When you are looking at a set up, good enough won’t do, it has to be perfect from every angle. So learn to wait for the perfect signal, which may come once or twice a week.
Patience is the key to success in Forex trading. Sun Tzu, ancient Chinese philosopher, wrote in his book ‘Art of War’, “He will win who knows when to fight and when not to fight.” He also wrote, “The opportunity to defeat the enemy will be provided by the enemy himself.”
Think of yourself as a warrior and recite these lines every time you sit down to trade. You will not fail.