I read a lot about how difficult forex trading is, but making money from Forex trading is essentially simple if you keep in mind the following 4 points.
I have tried to illustrate this live and showed 3 trading opportunities and all made great profits and had low risk.
Lets look at this simple way to make profits more closely:
1. You Are responsible
If you think you can buy an e-book and make yourself rich by paying $100 think again.
Most of the advice sold on the net is not worth the paper its written on. If you want to buy a system keep in mind the following:
1. Make sure the vendor trades it and has made real money and the track record is NOT just a simulation.
2. If you do buy a system make sure you know how and why the logic works:
THIS IS CRITICAL!
If you dont know why it works you will not have the discipline to follow it and discipline is essential when trading.
If you dont have discipline to apply it you dont have a method in the first place.
2. A simple method
If you follow a system or build your own keep it simple.
Simple systems work best and are far better than complicated ones.
Why?
Because they are less likely to break in the face of ever changing brutal market conditions.
How simple?
We use support resistance and just 3 indicators:
Stochastics, Bollinger bands and RSI.
The best methodology to use is to utilize breakouts and sing trade within the trend.
Note: Never day trade this is a great way to lose your money quickly as you have no valid data to work with.
Finally, if you use a system like the above - always trade on confirmation from your charts to get into your position so price momentum is on your side:
Dont guess or try and predict!
This is a mistake made by many novice traders.
3. Money management
Trading using critical support and resistance means that stops are easy to place and risk can be kept low. 4. Targets
Trade with a target where you want to take profit.
Resist the temptation to trail stops to quickly that will simply see you knocked out the trade by volatility.
Once you have reached you target you can liquidate, or trail your stop then but not before.
Dont make money management complicated or try and lock in profits to quickly or have stops to close this is a major reason traders lose.
This sounds to simple!
Yes it is simple - but it works.
Many traders think the more effort they put in the more they will get out of trading, but there is no correlation between the effort you make and profits you achieve.
Work smart not hard.
Trading is essentially simple and relies on a logical robust method you understand.
You will then have the confidence to apply it with discipline.
Many people try and beat the market or think they can win all the time and buy bottoms and sell tops You cant!
The aim of forex trading is simply to make above average profits and if you keep it simple you will.
If you try and be to clever, or get to complicated in your approach you will lose.
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