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The mojority of the content on this website is provided in a video tutorial format so please ensure that you follow all the rules described in each video. Whilst you might think following the rules is quite easy; it can be quite easy to forget what you have been taught when you are in a live trading environment. If you find yourself in this position, watch the relevant videos again and make sure the rules are cemented within your trading style.
Forex trading is a 'rule following' environment. Without the rules, traders may end up trading blind. Making up your own rules or breaking the ones you have been taught is simply not how traders should behave. With this in mind we have set 3 major rules that you should follow:
This is by far the most important characteristic of any trader. Discipline comes in many formats but simply put, you must follow all the rules that you have been taught. As we mentioned earlier, rules need to be followed but if you have solid data that supports your own rules then you should apply it. If you have no supporting data, wait until you find it. Never double-up on re-investment after a losing trade in order to regain those losses. You have to be disciplined enough to be patient and regain those losses with proven money management techniques. Never trade set-ups that are ‘almost’ correlative with your rules. Only trade those that are in a 100% agreement with the rules you have set. If you don’t do this then it is the same as trading someone else’s strategy as soon as you hear about it without any practice.
Most traders think that if you fully follow the rules of trading that their success rate will be 100%. That is not true. There are plenty of factors outside of your control such as a natural disaster or a speech that a highly ranked political figure may say; that will reverse your trade in the opposite direction. The way to make sure that you are not a victim of such events is to place a stop loss at the required price level that will take you out of the market if reached. We will discuss stop losses at a later stage in this course. With this in mind, you must understand that every trade comes with a risk. Do not replace the strategy because of this. Only replace it if you have solid data that it is not good enough because the next one you chose will have exactly the same results during such events. Adapting to the market is crucial here.
Markets are very volatile so don’t let your emotions be the same – up and down. You have to be a solid thinker and be able to control your emotions in every trade. Forex trading is not a battle between yourself and the market. It is a battle between yourself and your thoughts. Your emotions must be kept at bay because the market does not care about you. It does not care about how many wins or loses you had and you should do the same – do not care about the market but you should respect it. You should follow the rules that you have been taught and apply solid emotional control in every single trade. There may be times when you have to stay away from the market and this is when trading can become boring. Do not trade just because you are bored. Chances are that you will have a losing trade and you will kick yourself that you entered. One thing that you need to bear in mind is that new opportunities to trade arise all the time and tomorrow is no different.
Whilst individuals may have their own set of standards that they follow, we suggest that the above three rules are heavily stampted somewhere in the middle. Without them, traders are running the risk of treating the Forex market as a game, rather than a platform that can provide tremendous success. Forex trading will not make you into an overnight success, but following the 3 rules we set out for you will certainly speed up your learning process and develop a confidence required to trade in the live environment. Watch the full video to understand the concept of each rule.
For a summary of our Forex trading course and advice on how to approach it please visit our Forex training page.