Rules Of Trading in the Forex Market

The following are not simple rules; however, they are helpful in every way in the trading business.

1. If you are on a losing posing do not add to it, it is illogical and very unwise to add to a losing position.

2. Trade with an attitude like the mercenary warrior. This means that you must fight until the end and you must be on the winning side at the end.

3. Mental and Actual are the two varieties of capital. Mental is important, however, it is expensive as well.

4. Your objective is simple, to buy low and to sell high. In trading you cannot really known which prices are low and which prices are high, but you can be reasonable enough to know the trend.

5. If you are on a bull market you can be either of the two; whether you are long or you are neutral. While on a bear market you can be either short or again, neutral.

6. Markets are often illogical and sometimes inefficient no matter what traders believe in academically.

7. Buy a market that evidently shows their greatest strength and then sell markets with greatest weakness. This also shows your involvement in bull and bear market.

8. For the first few days of the gap try to trade; this can either be lower or higher. The important thing is that the gap shows a violent movement in prices.

9. Trading is moving in circles; sometimes it is good and oftentimes it is bad. The nature of trading is simple. Good times can be profitable and even your worst error can turn to cash. While in bad times even your most well prepared plan for trading can go wrong.

10. Trade like a technician but think like a fundamentalist if you want to be successful in Forex.

11. After bear runs or extended bull always value outside reversals.

12. Always maintain a simple technical system in trading. Oftentimes complicated system can be confusing and therefore unproductive.

13. Value and accept the 50-62% retracements. It is at the very least normal that it can take a price back from a minor to a major trend.

14. Investing of mass psychology learning is important rather than investing in economics learning.

15. Build your first position in a strong bull market and your weakness positioned in bear market. Your addition, if necessary, should be placed under a strong position.

16. Keep in mind that the bear market is often more violent as compared to the bull market.

17. If you are on a winning trade, be patient. If you are in a losing trend be the opposite.

18. The market wisdom is the totality of human perception. The ignorance, the unthinkable and the wisdom; it is in the nature of the market and no human can ever argue with that.

19. If you learn something working in trading do it more, and do less with systems not working. This means that if the market is strong purchase more and if the market is weak this is the time to sell more.

20. Remember that no rules are to be broken. Stick to the rules and remember that knowing is a good advantage to winning.

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