Common Mistake We Must Avoid In FX Trading

The purpose of this method is to make sure no single trade or single day of trading hurts the traders account significantly.........

By adopting a risk maximum that is equivalent to the average daily gain over a 30 day period, the trader knows that he will not lose more in a single trade/day than he can make back on another.....

A news headline hits the markets and then the market starts to move aggressively. It seems like easy money to hop on board and grab some pips......

If this is done in a non-regimented and untested way without a solid trading plan behind it, it can be just as devastating as placing a gamble before the news comes out.......

News announcements often cause whipsaw-like action because of a lack of liquidity and hair-pin turns in the market assessment of the report.....

Even a trade that is in the money can turn quickly, bringing large losses as large swings occur back and forth........

Stops during these times are dependent on liquidity that may not be there, which means losses could potentially be much more than calculated.....

Day traders should wait for volatility to subside and for a definitive trend to develop after news announcements. By doing so there is likely to be fewer liquidity concerns, risk can be managed more effectively and a more stable price direction is likely.....

A trading plan is essential for all traders, new and old. A trading plan should lay out not only the setups the trader will look to trade, but also the risk management strategy of the trader.....

a trading plan should include weekly, monthly and quarterly pip targets, the maximum amount of capital a trader is willing to lose in a given week,....

........Trading plans don’t need to be overly complicated, but they do need to be created and followed......
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A trader should know exactly what he or she is looking for, how much they are willing to risk, and how much they are looking to make.......

A trading plan is essential for trading success. Sticking to that trading plan is equally important..Sometimes sticking to a trading plan will mean passing on trades,...

Lots of new traders prefer smaller time frames, like the five minute and fifteen minute charts, because those time frames have more movement, more setups, and more trades than the slower, longer term charts....

Unfortunately for those new traders, those slower, longer term charts will nearly always trump the shorter timeframes.....