The FOREX market is war. The most powerful weapon you can take into this raging battle is a keen mind, fully loaded with knowledge. Here are 3 basic tips for investors, new to the FOREX market, looking to expand their mental arsenal!
1. Create a personal trading journal. Write in this journal every trading day to write down your trades, a brief explanation of what made you place the trade, and an evaluation of that particular trade's performance. Make notes of any upcoming major economic events or news which may cause market volatility for a particular day and avoid trading until you have a clearer picture of that days market action.
2. Determine your risk/reward ratio. A risk/reward ratio of 1:2 means that you are risking an certain amount to receive at least the twice that amount in return, if all goes according to plan. When you are new to the FOREX it is sometimes better to trade conservatively and apply a very strict ratio closer to 1:1 and risk no more than 2-3% of your total capital per trade execution. In this battle survival is everything.
3. Don't burn yourself out, take breaks from trading. While it is essential to study as many FOREX resources as possible when you begin trading the FOREX, don't kill yourself doing it. It is a good idea to take a break from trading ever now and then. Remember, the FOREX is open 24/7, so there are always great opportunities out there and they'll still be there waiting for you after you take some time out for yourself. All that great knowledge you have is useless if you are too stressed out to efficiently use it. Set daily goals, such as X-pips per day up or down and then stop for the day. This helps battle greed and chasing losses, two of your most mighty enemies!
Follow these essential tips and apply them to your daily trading routine and don't forget the golden rule of FOREX trading...
MAXIMIZE YOUR PROBABILITIES, MAXIMIZE YOUR PROFITS!
If you would like to learn more about Forex Trading come and visit http://investing4dummies.googlepages.com/ for more information on currency trading and to learn how to trade like a pro!
Source: http://www.ArticlePros.com/author.php?Zach Ford
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