Getting a Jump on Trading Personal Recommendation forn Success
I recommend that traders with small accounts ($25,000 and under), always trade with the trend. Many beginners look for trades that flow in any direction, which can be somewhat unreliable. While FOREX trading easily permits bi-directional trades, trading in the direction of the trend will improve your odds over the long run.
Another way to improve your odds is to have at least two accounts, including at least one real account and one demo account. You don’t stop learning when you start trading real dollars. Use your demo account to test any alternative trades you might be considering. For example, you can shadow your real trades with identical ones in your demo account, but you can widen your stops in the demo to see if you're being too conservative.
If you have the right amount of money, try trading two lots rather than one. Or even three lots. This is safer than only trading one. When everything is riding on one trade, it’s hard to make good decisions. Having a few positions going is a good way to take the intensity out of a trade. Conversely, you may also want to consider extreme trading, which can be the most conservative trading, when you think about it. Trading at the extremes increases the odds that you have chosen the right direction.
Take the time to examine the daily charts, the four-hour charts and one-hour charts. These exist to help you time your trades. When you are trading at 30- and 15-minute time increments, it can take a great deal of dexterity, and it’s good to have this knowledge at your fingertips.
But don't trade the time frame that is offered. Trade the pattern instead. Reversal patterns, hesitation patterns and breakout patterns show up a lot. Learn to look for these patterns in any time frame. While the patterns are always there if you look for them, leading indicators aren’t there. Don’t spend all your time looking for them there simply aren’t any. Some firms make a lot of money selling software that predicts the future, but the reality is that if those products really worked, they wouldn't be telling you about it. Also, try and follow the Upside Down Rule. If you can turn a chart upside down and it still looks the same, avoid it all together.
You should fully check the Big Five: the dollar/yen, euro/dollar, Swiss franc/dollar, euro/yen and pound/dollar before you decide to take a position in any one of them. There might be something obvious that you’ve missed.
And finally, don't keep count of your profits in your first 20 trades. Keep track of the percentage of wins instead. Once you know you can pick directions, your profits can be increased with multi-plot trading and by using variations in your stops.