The Strategy Of a Successful Trade

There are many different methods, systems and strategies used by traders as a beginner, and the "pros" to get a profit from price movements. Each trader will argue that his method is the best and most profitable, but the truth is that each trading system has its strengths and weaknesses. The real keys to making money on the Forex market as follows:

1. The existence of a clear and simple system of trading and the consistent use of
2. Clear discipline in asset management
3. Control over their emotions

This article is devoted to the study of each of these three key points separately, in addition, it offers some simple principles that can help traders avoid the pitfalls that inevitably arise in the market.

1. Trade system
There are essentially two types of systems used by traders:
a). Systems following the price.
b). Prices System predictions.

Briefly explore each of them.

Systems following the price
These systems, which rely on dynamic indicators, oscillators and moving averages, simply follow the direction of the market. The simplest of these is the selection of appropriate moving averages and trading in the direction they indicate, with the price on the right side of this medium.

You can add to the diversity of other types of indicators MACD, Stochastics, RSI and Bollinger Bands, etc. Any graphics program that uses traders, has dozens of different indicators, leading to overloading of infinite possible to use combinations. In addition, there are approximately 20 different time formats. Not hard to understand why traders are finishing a well-known "analysis paralysis", which is manifested coma hand with the mouse and osteklenevshimi eyes trader sitting in front of the screen for 12 hours without signing vtorgovlyu.

The key here is simplicity. Select a temporary format, which you will sell ( "skalpiruyuschie market may prefer 5 or 15 minute charts, while the session or day traders may prefer to 1 or 4 hour shift) and find a very simple system, which combines a maximum of 2-3 indicators . Such systems may also include the study of simple trend lines, with trade in the direction of the prevailing trend of a straight line.

When your system fed signals, confidently and consistently go to the trade. Do not give up their practice and do not start looking for another after the first loss.

System price predictions
This system, which are generally longer in duration, applied to a session, day or longer. They are based on the overall direction of the currency pair over a long period of time and then are traded on a "Buy to rollback" or "sell on the reconstruction, depending on the chosen direction. There are various tools to trade for this strategy, such as horizontal lines, trend lines, the levels of Fibonacci, moving averages, and so on. They help:

a) determine the direction of trade.
b) determine the logical point of entry.
c) determine the logical point of exit.

These approaches can then be programmed in software, which itself would serve them, allowing the trader to spend your time on other things. This form of trading requires more skill and experience, but it can be studied over time and some practice.

In fact, for the price of the system are more short-term systems, such as "skalpirovaniya, which include monitoring the screen most of the day. System price predictions are based on strategies for a duration of 8 hours to several days and allow the trader to move away from the screen and enjoy more free time.

Everyone has their preferences, but many observations indicate that the intensive monitoring of the screen can not last too long for most traders, otherwise they would "burn" yourself through what is not weeks or months.

2. Asset Management
While most traders can invent, or explore a reasonable trading system that suits their style of trading, many can not manage to score well enough to prevent large losses or the closing of positions on the margin requirement. Even the best traders are the world suffer from a temporary lack of sanity in this field. For example, interesting historical incidents described in the book Jack Shvadzhera "Market wizards: Interviews with top traders.

There are three simple rules that can be applied:

a) Do not trade with leverage over 10:1, and when your account gets bigger, reduce leverage below 5:1;
b) Never risk more than 5% of your assets in one day, and as your account grows, reducing the rate to less than 2%;
c) Do not enter into commerce, where you risk more than 50% of the projected gains from trade with your "stop-loss". In other words, the ratio of gains / losses (target profit / limited loss) should be 2:1 or higher.

Follow these simple rules, even with half the perfect trading system, will ensure that you may incur losses in 2 out of every 3 transactions and your account will still remain a loss-free.

3. Control of emotions
All are subject to two (often opposing) forces - reason and emotion. The key to successful trading psychology should prevent your emotions dominate your mind.

Emotions that you experience will vary greatly from fear to greed, of self-doubt to the delight. They are all enemies of a trader and must be suppressed by clear, objective and logical reasoning.

Develop your trading strategy based on its pre-defined system. Implement a system to secure the rules of asset management and eliminate the emotional noise that will try to convince you to close early, limited leverage, too risky etc.

4. Conclusion
It is clear that the best traders are seeking small and constant profits, not looking for "perfect" system, giving a huge profit. Just do not have systems that work reliably day in and day out. Carefully manage your assets and keep their emotions under control in order to succeed.

And in conclusion - a good education really worth the money spent on it. Visit the seminar really active traders and teachers, and read a lot of material on the subject. Do not think that you can go from zero to hero "in the market of Forex, do not spend time, effort and money to study. The money you could save the original, are likely to be later lost repeatedly during the work on the market.

Forex Magazine
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