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Forex Trading Principles
Written by: PaxForex analytics dept - Thursday, 13 October 2016 1 comments
The truth about forex is that it can be an intense and stressful undertaking that requires a strong control of your emotions. Those who lack discipline or make decisions that are not carefully thought through will quickly find themselves in a negative investment position. Those who do not adhere to sound investment principles or who allow emotion to govern their thinking will quickly find themselves losing a grip on their investments. However, those who follow sound investment principles will reap the benefits of one of the world's most liquid and influential markets.
All traders who joined forex, seek to reach best results. However, to trade with profit traders need to know and follow some forex principles. The attitude to trading in the markets is no different than the attitude required for surfing. By blending good analysis with effective implementation your success rate will improve dramatically and like many skill sets good trading comes from a combination of talent and hard work.
Have your own trading strategy. Develop your system, which is based on some significant factors for trading on forex. Control your emotions. Unstable emotional condition may disturb the process of making
decisions. Learn how to control your emotions and wishes. Have your own historical data. Write down under which circumstances and on what factors your decisions to open/close orders are based and your comments on every situation. Constantly review the results of your work.
Analysis and work on mistakes are among the most important components of successful trade. It is important to be self-critical in the analysis of loss positions. Having dealt with loss positions, you can avoid repeating these mistakes. With the lack of experience it is better not to take the risk. In the process of price movement in a particular direction market starts jumping up or down. To learn how to use short – term fluctuations you must gain experience thus minimizing risks.
Trade only when you are confident about it. It is better to wait for the appropriate moment to enter the market, than open the order when you do not understand the situation. It is important to enter and leave the market at the right time. If you do not feel confident, you better not take the risk. A couple of lost pips cannot be compared with the large loss, which may be caused by rash action. Just open the order later: the market is not going anywhere.