first steps for the foreign exchange market Forex: move from simple to
complex, to make decisions, learn from your mistakes, but rather the
mistakes of others, your system - your benefit, discipline - the key to
success, a reasonable risk - acceptable risk, let profits grow properly
build the pyramid of trade, commerce - Marathon for life, use the
cyclicity of the results, study the psychology of traders.
1.Move from simple to complex. Choose any one market (for example, USD / JPY) and learn its history at least the last ten years (the more stories the better). Scroll to chart trends, support and resistance levels, see how prices behave in the approaches to these levels. Analyze the predictive functions of indicators: trend, signal and psychological. Of all the more than 110 currently known indicator first select one from each group. As a trend we can take a histogram of MACD, which gives the best results at time intervals of hours or more.
Of flagmen at first to work better with the indicator rate (Momentum),
which gives a buy signal, if creates a trough and begins to grow, and a
sell signal - when it reaches a peak and turns down.
Psychological indicators characterize the general mood on the stock exchange, ie, allow to predict whether the market is "bullish" or "bearish". These are the volumes that are important when making such important decisions as the opening position.
Increasing the volume shows an increase in the interest of market participants in the dynamics of prices.
Appear prerequisites for strengthening the existing dynamics in the
market, or to the emergence of a new trend of price changes.
Sometimes a gradual decrease in volume is accompanied by a change in the dynamics of the price. It is possible to control the termination of one of the parties (bulls or bears), the actual surrender to their new trend.
Watch closely for changes in volume in the afternoon (in the major
stock exchange centers, especially in Western Europe) and at night, when
not working most of the market operators (mainly in Western Europe -
London, Frankfurt, Paris). At this time, even small amounts can lead to volatility in exchange rate, the market becomes a little predictable. The decline at this time - not necessarily decline of interest in deals with the dynamics of the course. Fear of the market after 17 hours CET.
Initially, work with line graphs, then go to bars with their theory of fractals and "chaos."
Having acquired sufficient experience of Eastern exotica lovers can
learn Japanese chart as candles and absolutely gorgeous Ichimoku Kinko
Hyo indicator to determine market trend with its clouds.
Try to find the chart you familiar and unfamiliar pieces of technical
analysis and carefully examine the conduct of the course in these
figures. Include imagination, trying to "hear the melody of" exchange rate, represented as a graph of prices. Doing these exercises on a different scale charts (monthly, weekly, daily, hourly), you will discover many useful patterns.
2.Make their own decisions. Trader - a person who is responsible for the results of their work a hundred percent. Therefore, a trader always has a game plan and making decisions.
Only distanced themselves from the majority opinion, a trader can
understand the truth or falsity of their actions, and this is the key to
3.Learn from your mistakes, but rather the mistakes of others. Carefully analyze not only its profitable, but that is no less important, losing positions.
The bitterness of loss is much less, if you understand your mistake
and, therefore, confident that no error again in the future. From a losing position in time to get rid of, until she brought another big loss. The trader is able to benefit from the work done on the bugs, is doomed to success.
4.Your system - your benefit. To succeed in stock trading, you must have some advantage over other traders. So the advantage is its own trading system, tested on historical data, showing a positive result. Below are some general guidelines for creating such a system:
- When you open a position sure to set your stop and limit orders.
- When setting the stops and take-profit, consider that the ratio of profit / loss should not fall below 2 / 1.
- Stop-loss should be no closer than 40-50 pips from entry points. More tight stops sentenced since entering the market, you certainly will not be able to catch the very bottom-to-peak. The error is usually 10-15 pips. Plus 5 pips spread.
If we take into account market noise (10-15 pips), we obtain that stops
on display at a distance of at least 40-50 pips from the entry point,
there is little chance of surviving the position.
- Based on points 2 and 3, we find that take-profit orders should be no closer than 80-100 pips from the entry point. This money management system to minimize the factor a broker, ie, attempts to reduce your profit at the expense of the slip (quotations against moving the client to close the position). The amount of slip will become an irrelevant factor. You can win from any broker.
- If the value of stop-loss of 40-50 pips and take profit about 100 pips to hold positions open for no longer than two days. If the price does not go in your direction, then it must go against you. Why in this case, wait for response stops.
- Keep an open position, risking no more than 10% of the deposit.
- Do not make deals that could result in losses greater than 5% of the deposit.
- Move stop loss and / or take-profit only in the direction of reducing losses, increasing profits. To get involved this is not necessary, because
You run the risk that some stray tick slizhet your foot (bring him too
close to the current price), and the price hike will make your limit
already without you.
The trading system should not be complicated, as all genius - just! It should be easy to adapt to constantly changing market conditions.
5.Discipline - the key to success. Many traders fail, even with the hands of "dangerous weapon" - his own trading system.
The secret to success is self-disciplined trader and his ability to
follow the signals of the system, not missing a moment of opening and
closing positions. Fear, greed and hope can be reduced to "no" to the benefits of your trading system.
6.Reasonable risk - acceptable risk. In order to start trading, a trader needs to have some money initially. In determining the size of this sum should be guided by the following considerations:
1) The total amount of investment should not exceed 50% of the cost of
capital that you have selected to work in the foreign exchange market.
2) The total amount of money invested in one market should not exceed 10-15% of the size involved in the capital.
3) The rate of risk for each market in which you invest your money,
should not exceed 5% of the funds with which you operate on it.
4) The total amount of guarantee fees to be made when opening a
position, one group of markets (currency pair), should not exceed
A professional trader risks only the money he can afford to lose without financial ruin for themselves or their families. This must be a trader to make calm and rational decisions. So, first of all, decide what amount of risk you are willing to sleep in peace. If you're afraid of losing money - you always lose them.
7.Give the profits grow.
A professional trader will never profit for profit, it is important to
correctly predict changes in exchange rates, and only as a consequence,
to obtain financial reward. For successful trading is necessary "to take profit" only if your trading system signals you of this. Give the profits grow and you will achieve maximum results. Moreover, the risk of returns. Profit can and must take risks. In the case of a trend reversal losses can be reduced "to zero", if they continue to earn even more.
8.Correctly build a pyramid trading. Do not forget to increase the open position if the market moves in your favor and you feel vindicated. The trick in building a pyramid of trade is that each new addition to the position was less than the previous one.
Only with such an average rate of the pyramid of your open position
will allow you to lossless ride out short-term rate movement against
9.Trade - a marathon of a lifetime.
Think of the speculative game as a serious matter that you want to have
more than one year, receiving the material and moral satisfaction.
Newbie seeking first deal with double or triple your bill, "is likened
to a teenager who escaped from a house in Hollywood to become a star of
screen," and, as a rule, was defeated in the first months of operation. Your goal - to learn how to competently sell and become a true professional. Only in this way you will achieve sustainable positive results.
10.Use the cyclical results. Many events happen in the world repeatedly. Life as a trader goes through periods of victories and defeats.
Increasing the size of their positions during the synchronization with
the market and reducing otherwise, we can achieve a positive result of
trade. Skillful management of your account (money management) used by most successful traders (if not all).
11.Learn the psychology of traders. Traders, and they form a currency market - particularly people with their emotions and psychology. What is the plot of the exchange rate? It is not nothing but a graphical representation of the views, hopes, desires, fears, global community of traders. For a successful trade, the study of human psychology and its impact on trading decisions. Analyzing the pricing schedule, try to understand the feelings and thoughts that overwhelm traders at a time.
This approach will allow you to leave the ranks of the cowardly and the
weakening and join the ranks of the bold and aggressive "bulls" or