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Below I present my philosophy and some of the key elements to consider when trading forex markets.
 

Why I choose Forex:
Forex trading is a 24-hour access market with superior liquidity to all the equity markets in the world combined, providing the flexibility to trade the Asian Pacific, European and/or U.S. trading sessions. Plus it can be trade from home, office or virtually anywhere in the world and receive rapid, accurate trade execution (under normal market conditions). FX dealers offer no commission trading (cost of the spread only) and substantially exceed the common 2:1 margin offered by equity brokers or 15:1 margin of the futures market, with most offering up to 100:1 leverage. Leverage is a powerful tool, and without proper risk management a high degree of leverage can lead to large losses as well as gains. In Forex, I suggest you just familiarize yourself with 1 or 2 currency pairs only and trade on the daily market volatility or the longer term trends. Currently. I am just focus on three: EUR/USD, GBP/USD and USD/JPY. FX Decision provides short term daily signal only. Trading the major currencies provides more security then any company or commodity can offer. Once you experience the freedom of trading Forex, it is hard for you to trade other financial instruments. It is true for me.

Philosophy of my method:
I assume the market only move in two directions either rising market or falling market. I do not take side trend as a directions as I want to simplified my idea to fit into my statistical model.

Most of the time, I set aside the fundamental factors and focus totally on the strategies that extract profit out of the currencies fluctuations.

The market move in a certain trading range each day.

From the facts above, I combine it and come out with my FX Decision model which is based on statistical data to predict a given the market will move in a given direction at a given moment. This is the basic ideas and foundation of my model.


Money Management:
Let’s now look at the money management system.

    1) Establish an Account Recording System:
    Most money management systems tell you that must have a record set aside for the sole purpose of trading in forex market and that this money should not be needed for any other purpose (like paying the rent, petrol, food, etc.). While having money set aside solely for the purpose of trading forex is a concept that I agree with, many forex investors don’t have the luxury of having money that they can set aside for trading forex only purposes. My advice to you is to find an amount that you can afford to lose that would still enable you to live the lifestyle you wish to live without stressing it. In other words, if losing $5,000 over the month will put you in a serious trouble, then find an amount that you could lose and still live your life without too much stress. Nobody is immune to being in the hole, no matter how good of a trader they are. Prior to starting a FX's service, I had traded my way through university my final 3 years. In the first two years, I was never seriously in the hole at any point in the year (I started one year with 5 straight winning weeks and the next year with 3 straight winning weeks) and had won 64% of my trades in forex those first two years. I never imagined that I could have a losing month let alone a losing year. That third year was different, however. I started the year with just one winning week in my first 10 weeks and had a record on my trades. I owed my roommate rent money and tuition was due for the next semester. I had to borrow money from my dad to bail me out (I remember him being pretty pissed off). Due to the many hours of research that I did and my consistent success on my trades in my first 2 years trading, I thought I was immune to losing and I was trading more lots per trade than I could afford, figuring each week was the week that I was going to rake in tones of profits. That year did turn around, as I went break-even. The point here is that I learned that even good traders can get in the hole. Therefore, it is important to know how much you can realistically afford to lose without getting yourself or your family in financial trouble. Once you have come up with that amount, you can consider that to be your maximum bankroll. For those of you that do have money that you can set aside to trade, pick an amount that you wish to invest knowing that it is possible to lose most of that amount. Now that you have established a bankroll, we can move on.

    2) Do not bet the farm:
    Once an Account is established, set a realistic expectations on the number of trades that you will make, here I suggested one trade each day. No matter what is the result, profitable trade or losing trade, accept it, as losing is part of trading. And STOP TRADING for that day. I feel better control in that sense. I met a lot of traders who burst their account within few hours or within an hour. How come this can happen? The attitude of human being which do not amid our own failure always think can make a come back by betting more lots and double up. When the first trade is wrong that means we need to figure it out what was going wrong and sit calmly to set for tomorrow trading.

    3) Do not hold a position long:
    I think the more time you spend in the market, the riskier you are. Once the target achieved , I always close my position and plan for the next round.

     

 

 

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