Forex Trading

Structured Freedom For Success In Forex Trading
It's kind of strange in a world with no rule (like forex trading) that it's so important to have a specific set of rules that you follow religiously. I mean let's be honest, trading really doesn't have any rules. You can get in whenever you want. You can get out whenever you want. You can add and subtract to your existing position, and you can obviously decide simply not to trade.

The only thing that could prevent you from participating is the lack of required money to trade. Other than that, you get to decide what you want to do and when you want to do it. If you decide to trade without any rules, I promise you will not be successful. Freedom is good but you need to have what I call a "structured Freedom." Basically, that means you should be able to trade when you want to, but the trades you do need to fall under your set rules.

Rules will help you be more consistent with your trading. They'll help you avoid mental mistakes that can drain your account. About once every six months I write a new set of trading rules for myself. These rules help me to be structured with my trading. And you know, it's the strangest thing, when I have a bad day, it's because I didn't follow one or more of my rules. And of course, the opposite is usually true.

If I've had a good day trading, it is because I did follow my rules. No matter what type of trading you are doing (swing trading, day trading, long-term trading), you'll need to come up with your own set of rules to keep your trading structured. The problem is most people don't want to make up their own rules, because if they if they did they would have to take responsibility for their results. And as we all know, most people don't want to take responsibility for their action.

But as we all know, the only way to be successful in trading is to take 100% responsibility and act in our own best interest.

Examples of my trading rules are as follow;
(1 ).Always use a stop order.
(2.) After 3 losing trades in one day, stop trading.
(3.) If I get 25pips + profits in a trade, I will move my stop to break-even.
(4.) Only use a signal to get into the market. Don't just take a shot.
(5.) Do not trade on holiday type volume. Too slow bad opportunities. Go outside, watch a movie, whatever.
(6.) Always act with your best interest in mind.
(7.) Relax with your trades. If it's not fun and enjoyable, it's not worth doing.
(8.) You don't have to trade everyday.

Those are some of my rules that I use each and everyday, and it's almost automatic. After a bad day trading, I will look at my rules and see that I did not follow them like I should have. And again, the opposite is true. After a good day, I'll look at them and see that I followed them very well. Avoid at all costs getting caught in the trap.

Doing a trade because you are afraid of missing out on a big move is not acting in your best interest. I've got news for you, there are big moves almost everyday.. The more you follow your rules, the more you'll trust yourself and the better your results will be.

Remember, only you are responsible for your trading results, good or bad. Having a set of rules will help you get more good than bad.

By: Timothy Kolawle