#1251 Dikirim: Thu Aug 03, 2006 3:40 pm ⇧

Four Principles for Becoming a Better Trader

Trade With A DISCIPLINED Plan
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The problem with many traders is that they take shopping more seriously than trading. The average shopper would not spend $400 without serious research and examination of the product he is about to purchase, yet the average trader would make a trade that could easily cost him $400 based on little more than a “feeling� or “hunch.� Be sure that you have a plan in place BEFORE you start to trade. The plan must include stop and limit levels for the trade, as your analysis should encompass the expected downside as well as the expected upside.


Cut Your Losses Early and Let Your Profits Run
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This simple concept is one of the most difficult to implement and is the cause of most traders demise. Most traders violate their predetermined plan and take their profits before reaching their profit target because they feel uncomfortable sitting on a profitable position. These same people will easily sit on losing positions, allowing the market to move against them for hundreds of points in hopes that the market will come back. In addition, traders who have had their stops hit a few times only to see the market go back in their favor once they are out, are quick to remove stops from their trading on the belief that this will always be the case. Stops are there to be hit, and to stop you from losing more then a predetermined amount! The mistaken belief is that every trade should be profitable. If you can get 3 out of 6 trades to be profitable then you are doing well. How then do you make money with only half of your trades being winners? You simply allow your profits on the winners to run and make sure that your losses are minimal.


Do Not Marry Your Trades
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The reason trading with a plan is the #1 tip is because most objective analysis is done before the trade is executed. Once a trader is in a position he/she tends to analyze the market differently in the “hopes� that the market will move in a favorable direction rather than objectively looking at the changing factors that may have turned against your original analysis. This is especially true of losses. Traders with a losing position tend to marry their position, which causes them to disregard the fact that all signs point towards continued losses.


Do Not Bet the Farm
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Do not over trade. One of the most common mistakes that traders make is leveraging their account too high by trading much larger sizes than their account should prudently trade. Leverage is a double-edged sword. Just because one lot (100,000 units) of currency only requires $1000 as a minimum margin deposit, it does not mean that a trader with $5000 in his account should be able to trade 5 lots. One lot is $100,000 and should be treated as a $100,000 investment and not the $1000 put up as margin. Most traders analyze the charts correctly and place sensible trades, yet they tend to over leverage themselves. As a consequence of this, they are often forced to exit a position at the wrong time. A good rule of thumb is to trade with 1-10 leverage or never use more than 10% of your account at any given time. Trading currencies is not easy (if it were, everyone would be a millionaire!).

#1275 Dikirim: Fri Aug 04, 2006 2:07 pm ⇧

great post,

translate in dong mbak mary, mbah rak mudheng...

#1279 Dikirim: Fri Aug 04, 2006 8:12 pm ⇧

iya neh mbah...apalagi bagi saya ya...translate dooong..!!!,but thanks for share.

#1297 Dikirim: Sat Aug 05, 2006 11:34 pm ⇧

ini emang penting banget...yah...

intinya...

trading plan emang....

#1311 Dikirim: Sun Aug 06, 2006 3:26 pm ⇧

Buat Mary ... makasih banyak yach ... karena emang 4 prinsip ini sangat mendasar bagi trader.

Sementara buat rekan2 trader silahkan menggunakan webster online bila mengalami kesulitan dalam pencernaannya, mudah2an ini juga menjadi salah satu cara memperlancar pengertian terhadap bahasa yang dipergunakan sebagai basis komunikasi di dunia forex secara umum.

Setuju yah

#1343 Dikirim: Mon Aug 07, 2006 3:16 pm ⇧

Buat mbah, lha wong bisa bilang 'great post' tandanya ngerti toh ?!

Buat manusia..., yang penting kita bisa nangkap intinya, udah cukup koq! Seperti yg dibilang Arkad, intinya 'trading plan'.

Buat Aaron, ur welcome actually saya cuma copy paste doank from fxcm.

#1355 Dikirim: Mon Aug 07, 2006 9:18 pm ⇧

kalo si mbah ya suka gitu mar, biar udah makan juga suka ngakunya belom kok ... muaklum dah ...