Saturday, November 18, 2006
Forex Day Trading System - Rules to follow
Forex Day Trading System - Important Rules to keep in mind
Before we start going through another system, I think its important to learn the rules of the game. Thanks Charlie for asking this question
Lets go through these points to keep in mind while day trading -
1. Use the broker that offers you tightest of all spreads. On the majors (EUR/USD, USD/CHF, GBP/USD etc.) the spread offered by most of the brokers is 3-5 pips..
2. Keep the profit expectations real - If someone tells you that you can make 100-200 pips in forex day trading system using 1 single trade, its not correct..In a day trade keep your profit levels as 20-25 pips generally..
3. Trade only those currencies that have the tight spreads..Since your profit is going to be 25 pips per trade per contract, don't trade the currency pair that ask for more than 5 pips as spread..since that eating 20% or more on your profit.
4. Trade with the trend - Never swim against the river flow since making a profit in that case is very remote..Important point to learn in forex trading online.
5. Trading during fundamental announcements (NFP or Non-Farm Payroll etc..) can be very risky since these news are very volatile and can hit your bank very hard..If you have to trade during news time, I would suggest you to avoid at least the NFP..
Thats all in this session to learn..We'll continue to understand some more rules in next post on forex day trading system
Before we start going through another system, I think its important to learn the rules of the game. Thanks Charlie for asking this question
Lets go through these points to keep in mind while day trading -
1. Use the broker that offers you tightest of all spreads. On the majors (EUR/USD, USD/CHF, GBP/USD etc.) the spread offered by most of the brokers is 3-5 pips..
2. Keep the profit expectations real - If someone tells you that you can make 100-200 pips in forex day trading system using 1 single trade, its not correct..In a day trade keep your profit levels as 20-25 pips generally..
3. Trade only those currencies that have the tight spreads..Since your profit is going to be 25 pips per trade per contract, don't trade the currency pair that ask for more than 5 pips as spread..since that eating 20% or more on your profit.
4. Trade with the trend - Never swim against the river flow since making a profit in that case is very remote..Important point to learn in forex trading online.
5. Trading during fundamental announcements (NFP or Non-Farm Payroll etc..) can be very risky since these news are very volatile and can hit your bank very hard..If you have to trade during news time, I would suggest you to avoid at least the NFP..
Thats all in this session to learn..We'll continue to understand some more rules in next post on forex day trading system
