How To Trade Forex
Foreign Exchange Trading
There are a large amount of Forex expert advisors online today, in truth lots of them. It almost makes it impossible to identify the expert advisors that actually work. With so many decisions and such a lot of different Currency exchange robots trading on multiple currency pairs there must be an answer to identifying the right trading robot.
The first thing one must ask themselves when looking out for a quality Forex expert advisor is, what kind of previous performance will the trading robot have? What kind of trading accuracy are we dealing and which currency pairs will the trading robot trade on?
The worst cock up that most expert advisors make is making an attempt to supply a solution or mathematical formula that works for each currency pair. It's simply not possible to have a Forex robot be an expert on each currency pair due to the fact that each pair has it's own patterns and daily ranges. Thus when identifying a trading robot one of the first things we look for is an expert advisor that concentrates on only one currency. Secondly we investigate it's previous performance over the last 5 years. If the trading robot has performed well with minimal draw down and has sustained profitable months, than we are 1/2 way there.
Next, we research the Foreign exchange robots money management. We have to ask ourselves, what was the maximum drawdown over the past five years? Anything with less than thirty percent draw down over the past five years is a definite positive. Another question we'd ask ourselves is, will the trading system employ a stop loss? Some trading systems will not employ a stop loss and agree with it not can be extraordinarily profitable. A system that doesn't use a stop loss has to have a trading accuracy of 80% or higher where the winners clearly out weight the losers by more than half in terms of dollars.
Finally, determine how much risk you are willing to take. Trading with an expert advisor or any system at that matter does require a bit of risk, yet if handled properly can be extremely profitable. Never employ a trading robot without first testing it in a demo account. Only after the trading robot is ready to sustain profits after 3 months should one think about employing the trading system in a live account. Be certain to find a system which has a very high success rate, uses correct cash management and has been entirely back tested and you'll be sure to end up a winner.
Profits Run - Mentoring Program
Why are such a lot of forex traders NOT succeeding?
I had a chance to discuss with Bill Poulos today and posed that question to him. Did you know what he said?
'most experienced forex traders wait too long to move stops to protect their positions and frequently watch their profits disappear.'
And that wasn't all -- he went on to elucidate an easy concept, similar to Gambler's Ruin that permeates the forex trading world.
Basically, once a trader sees profit in a trade begin evaporating they get only focused on getting back the lost profits. They forget to understand the need to protect the profits that they continue to have in the trade. The result? A reversal continues, the once-profitable trade becomes a losing trade and the trader's frustration mounts.
I've seen this myself and it's the easiest trap to fall into, because you persuade yourself that the EU Buck just hit that intra-day high and it can get back up there! Except - it does not and it continues to tug back until your 20 or 30 pip gain turns into a 20 or thirty pip loss.
that could be a pretty dreadful example - but have you had that happen to you?
What do you do?
Bill had an answer for that, too!
he said most traders have no idea what the available profit potential is for any single trading event -- that is, they do not set profit targets which let them take what the market gives them and then exit the trade in multiple steps. And, without a method that protects capital first and manages profits second, there is no way the average forex trader can survive in the foreign Forex markets.
to position yourself correctly, traders MUST have a multi-part technique -- one that teaches them the way to identify the BEST available trades, obviously sets out a profit target, helps manage the taking of those profits and from the outset, teaches traders how to protect their precious capital!
He calls this managing risk first, taking profits second - and it's actually groundbreaking thinking.
Watch the first part of his new, free video series on this here [*CO].
Download Forex Time Machine - Bill Poulos
By learning to control risk FIRST, traders will find their trading transformed as they may be able to approach forex trading with a completely different mind-set, a plan for erasing risk and a solid set of rules by which to trade.
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