Forex Trading Tips - Part II

This is the second part of Successful Forex Trading Tips article.

If you whined or got fidgety while you read this list, then you share two obvious characteristics with many other traders:

A. You have traded long enough to recognize that you (not the market) make mistakes, and you try to overcome them.

B. This fact is awkward, you have become part of the market and you can never leave. No matter where life takes you, you will always  check the market and you will also always want to continue being a part of it.

1. For small accounts ($25,000 and under), like I said before you need to trade with the trend. Many beginners look for trades that flow in any direction. While forex trading easily permits bi-directional trading, trading in the direction of the trend improves your odds over the long run.
   
   
2. You should have at least two accounts. One real account and the other a demo account. Learning doesn't stop when trading real dollars begins. Keep the demo account and use it to test any alternative trades etc. For example, you can shadow your real trades with identical ones in your demo account, but you will want to widen your stops in the demo in an effort to see if you're being too conservative.
   
   
3. You have to stop looking for leading indicators because there aren't any. While some firms make a lot of money selling software that predicts the future, the reality is that if those products really worked, they wouldn't be telling you about it.
   
   
4. Examine the daily charts, the four-hour charts and one-hour charts are there to assist you in timing your trades. While you are trading at 30- and 15-minute time increments, it takes a great deal of dexterity.
   
   
5. Don't trade the time frame that is offered. Trade the pattern instead. Reversal patterns, hesitation patterns and breakout patterns show up a lot. Learn to look for the pattern in any time frame.
   
   
6. If you have the right amount of money, trading two lots is safer than just trading one. Trading three lots is safer than two etc. Trading is a big pile of emotions, technical analysis and money management. One lot alone makes it difficult to weigh these elements in deciding to enter or exit.
   
   
7. Extreme trading can be the most conservative trading when you think about it. Trading at the extremes increases the odds that you have chosen the right direction.
   
   
8. You should fully check the Big Five  the dollar/yen, euro/dollar, Swiss franc/dollar, euro/yen and pound/dollar  before you decide to take a position in any one of them. There might be something obvious that you’ve missed.
   
   
9. Follow the Upside Down Rule. If you can turn a chart upside down and it still looks the same, avoid it all together.
   
   
10. Don't keep count of your profits in your first 20 trades. Keep track of the percentage of wins instead. Once you know you can pick direction, profits can be increased with multi-plot trading and by using variations in your stops. In other words, now is the time to get serious about your personal money management.

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