By: Rampagoe Fx
High Reward Trading
45 WAYS TO AVOID LOSING MONEY TRADING FOREX
By: Rampagoe Fx
By: Rampagoe Fx
Who is Rampagoe Fx?
Rampagoe Fx Are Signal Provider professional FOREX trader with over in zulutrade 7 years of hands-on FOREX trading experience.
1) Knowledge
Deficiency – Most new FOREX traders don’t take the time to learn what
drives currency rates (primarily fundamentals).
2) Overtrading
- Trading often with tight stops and tiny profit targets will only make the
broker rich. The desire to “just” make a few hundred dollars a day by locking
in tiny profits whenever possible is a losing strategy.
3) Over
leveraged - Leverage is a two way street. The brokers want you to use
high leverage because that means more spread income because your position size
determines the amount of spread income; the bigger the position the more spread
income the broker earns.
4) Relying on
Others – Real traders play a lone hand; they make their own decisions
and don’t rely on others to make their trading decisions for them; there is no
halfway; either trade for yourself or have someone else trade for you.
5) Stop Losses
– Putting tight stop losses with retail brokers is a recipe for disaster. When
you put on a trade commit to a reasonable stop loss limit that allows your
trade a fair chance to develop.
6) Demo
Accounts – Broker demo accounts are a shill game of sorts; they’re not
as time sensitive as real accounts and therefore give the impression that time
sensitive trading systems, such as short-term moving average crossovers can be
consistently profitably traded; once you start dealing with real money, reality
is quick to set in.
7) Trading
During Off Hours – Rampagoe Fx traders, option traders, and hedge funds
have a huge advantage during off hours; they can push the currencies around
when no volume is going through and the end game is new traders get fleeced
trying to trade signals. There is only one signal during off hours – stay out.
8) Trading a
Currency, Not a Pair – Being right about a currency is half a trade;
success or failure depends upon being right about the second currency that
makes up the pair.
9) No Trading
Plan - 'Make money' is not a trading plan. A trading plan is a
blueprint for trading success; it spells out what you see your edge as being;
if you don’t have an edge, you don’t have a plan, and likely you’ll wind up a
statistic (part of the 95% of new traders that lose and quit).
10) Trading
Against Prevailing Trend – There is a huge difference between buying
cheaply on the way down and buying cheaply. What was a low price quickly
becomes a high price when you’re trading against the trend.
11) Exiting
Trades Poorly – If you put on a trade and it’s not working make sure
you exit properly; don’t compound the damage. If you’re in a winning trade,
don’t talk yourself out of the position because you’re bored or want to relieve
stress; stress is a natural part of trading; get used to it.
12) Trading Too
Short-term – If your profit target is less than 20 points don’t do the
trade; the spread you pay to enter the trade makes the odds way against you
when you go for these tiny profits.
13) Picking
Tops and Bottoms - Looking for bargains works well at the supermarket
but not trading foreign exchange; try to trade in the direction the price is
going and your results will improve.
14) Being Too
Smart – The most successful traders I know are high school graduates.
They keep it simple and don’t look beyond the obvious; their results are
excellent.
15) Not Trading
Around News Time – Most of the big moves occur around news time. The
volume is high and the moves are real; there is no better time to trade
fundamentally or technically than when news is released; this is when the real
money adjusts their positions and as a result the price changes reflect serious
currency flow (compared to quiet times when Bank traders rule the market with
their customer order flow).
16) Ignore
Technical Condition – Determining whether the market is over-extended
long or over-extended short is a key determinant of near time price action.
Spike moves often occur when the market is all one way.
17) Emotional
Trading – When you don’t pre-plan your trades essentially it’s a
thought and not an idea; thoughts are emotions and a very poor basis for doing
trades. Do people generally say intelligent things when they are upset and
emotional? I don’t think so.
18) Lack of
Confidence – Confidence only comes from successful trading. If you lose
money early in your trading career it’s very difficult to gain true confidence.
The trick is don’t go off half-cocked. Learn the business before you trade.
19) Lack of Courage
to Take a Loss – There is nothing macho or gutsy about riding a loss,
just stupidity and cowardice. It takes guts to accept your loss and wait for
tomorrow to try again. Getting married to a bad position ruins lots of traders.
The thing to remember is the market does crazy things often, so don’t get
married to any one trade. It’s just a trade. One good trade will not make you a
trading success; rather it’s monthly and annual performance that defines a good
trader.
20) Not
Focusing on the Trade at Hand– There is no room for fantasizing in
successful trading. Counting up and mentally spending profits you haven’t made
yet is mental masturbation and does you no good. Same with worrying about a
loss that hasn’t happened yet. Focus on your position and have a reasonable
stop loss in place at the time you do the trade. Then be like an astronaut –
sit back and enjoy the ride. No sense worrying because you have no real
control. The market will do what it wants to do.
21)
Interpreting FOREX News Incorrectly – Fact is the press only has a very
superficial understanding of the news they are reporting and tend to focus on
one element and miss the point. Learn to read the source documents and
understand it for real.
22) Lucky or
Good – Your account balance changes don’t tell you the whole story
about your trading. Fact is if you are taking a lot of risk and making money
you will eventually crash and burn. Look at the individual trade details. Focus
on your big loses and losing streaks. Ask yourself this, "If I had a
couple of consecutive losing streaks or a couple of consecutive big losses, how
would my account balance look?" Generally, traders making money without
big daily losses have the best chance of sustaining positive performance. The
others are accidents waiting to happen.
23) Too Many
Charity Trades – When you make money on a well thought out trade don’t
give back half on a whim. Invest your profits from good trades on the next good
trade.
24) Courage
Under Fire – When a policeman breaks down the door to a drug dealer's
apartment he is scared but he does it anyway. When a fireman climbs onto the
roof of a burning building he is scared but does it anyway, and gets the job
done. Same with trading. It’s ok to be scared but you have to pull the trigger.
No trigger – no trades – no profits – no trader.
25) Quality
Trading Time – I suggest 3 hours a day of quality, focused trading
time. That’s about all your brain allows. When you are trading, be 100%
focused. Half way is bullshit - it doesn’t work. Don’t even think that time
spent in front of the computer watching the rates has any correlation to
profitability - it doesn’t. Spend less time but when you're trading, be 100%
focused on trading.
26)
Rationalizing – Killer. Absolute Killer. Put your trade on and let it
run. If it hits your reasonable pre-determined stop, you're out. Think of
yourself as a prizefighter. You just got knocked out. Moving your stop is like
getting up after being crushed with a knockout blow. It’s pointless. Things
will only get worse. Don’t ignore the obvious. You're wrong – get out. Come
back the next day and try again. A small loss will not hurt you - a
catastrophic loss will.
27) Mixing
Apples and Oranges
– Have you ever done this? You see the EURUSD trading higher so you buy GBPUSD
because it “hasn’t moved yet”. That’s a mistake. Most of the time the reason
the GBPUSD hasn’t moved yet is because it's already overbought or some 4:30am UK news was bearish. Don’t mix
apples and oranges. If EURUSD looks bid, buy EURUSD.
28) Avoiding
the Hard Trades – Bank FX traders have an axiom "the harder the
trade is to do the better the trade". This I learned from experience. When
I needed to buy EURUSD and it was hard to get them, that’s when it’s necessary
to pay up and get the business done. When it’s easy to get them, then sit back
and wait for better levels. So if you are trying to get into a trade, or more
importantly get out of a trade, don’t putz around for a few points - get your
business done.
29) Too Much
Detail – If your trading more than 2 indicators then you need to clean
house. Having many indicators stifles trading and finds reasons not to trade. A
setup and a trigger is all you need.
30) Giving Up
Too Easy – Your first trade of the day may not be your best but
certainly it’s no reason to quit. I have a preset daily trading limit and I use
it. You can’t make money by making excuses. Getting trades wrong is natural and
should be expected.
31) Jumping the
Gun – Don’t be penny wise and dollar foolish. Wait for your trade
signal to be clear. Put on your trade and give it a decent size stop loss so
that you don’t get knocked out by random noise.
32) Afraid to
Take a Loss - trading is not personal, it’s business. Don’t think that
a poor trade is a reflection on you. It could be you're just ahead of your time
or a commercial order hits the market and temporarily creates a small
unexpected move. Again, place your stop beforehand and NEVER increase your
pre-determined risk. If it’s going bad, it will probably get worse. I think
that’s Newton 's
“body in motion tends to stay in motion…”
33)
Over-Relying on Risk Reward – There is zero advantage in risk reward.
If you put a 20 point stop and a 60 point profit your chances are probably 3-1
that you will lose. Actually with the spread its more like 4 to 1 (from entry
point if it goes down 17 points you lose, or up 63 - you win; 17/63 is close to
4-1).
34) Trading for
Wrong Reasons – Because the EURUSD is going up is not in itself a
reason to buy. Buying EURUSD because it's not moving much is even worse. You’re
paying the toll (spread) without even a hint that you will get a directional
move. If you are bored, don’t trade; the reason you're bored is there is no
trade to do in the first place.
35) Rumors
– Rumors are rumors almost 100% of the time. Think about where in the motion
you heard the rumor. If EURUSD is up 50 points in last 15 minutes and the rumor
is dollar negative, well - then you missed it. Whenever you in motion with the
trade, determine where you are entering.
36) Trading
Short-term Moving Average Crossovers – This is the money sucker of the
century. When the shorter term moving average cross the longer term moving
average, it only means that the average price in the short run is equal to the
average price in the longer run. For the life of me, I cannot understand why
this is bullish or bearish. Easy to set up on software, complete with lights,
bells and whistles, and good for the seller getting thousands for the software
but in terms of creating profit - it’s a zero.
37) Stochastic
– Another money sucker. Personally I think this indicator is used backwards.
When it first signals an overdone condition, that’s when I think the big spike
in the “overdone” currency pair occurs. To be overbought means strong and
oversold means weak. Try buying on the first sign of overbought and selling on
the first sign of oversold. You’ll be with the trend and likely have identified
a move with plenty of juice left.
38) Wrong
Broker – A lot of FOREX brokers are horrible. Get a good one. Read
forums and chats in several different places to get an unbiased opinion.
39) Simulated
Results – Watch out for “black box” systems. These are trading systems
that don’t divulge how the trade signals are generated. Great majority of them
are absolute garbage. They show you a track record of extraordinary results but
think about it. If you could build a trading system with half a dozen filters
using the benefit of hindsight, couldn’t you too come up with a great system.
Of course going forward is an entirely different story. High-speed number
crunching capabilities allows for building great hindsight trading systems, so
BEWARE.
40)
Inconsistency – Every business (FOREX trading included) requires a
business plan (trading plan). Unless you have taken the time to write down a set
of rules that you can and will follow, it’s likely your trading will remain
unfocused and directionless. Make a plan, have rules, follow them. Set goals
that are realistic and you will achieve them.
41) Master of
None – Focus on one currency for technical trading. Each currency has a
unique way of trading and unless you get intimate with it, you will never truly
understand its underlying idiosyncrasies. Don’t spread yourself too thin –
focus, master one currency at a time.
42) Thinking
Long Term – Don’t do it. Stay in the moment. Especially if you’re a day
trader. It doesn’t matter what happens next week or next month. If you are
trading with 30 to 50 point stops, restrict your thought process to what’s
happening right now. That is not to stay the long-term trend is not important.
It is to say the long-term trend will not always help you when your trading a
significantly shorter time frame.
43)
Overconfidence – Trading is simple but not easy. Statistics show 95%
failure rate of those attempting to become traders. If you're doing well, don’t
take your success for granted. Always be on the lookout for ways to improve
what you are already doing.
44) Getting
Pumped Up – The trick is to maintain an even keel. When you are in a
trade, you want to think exactly as you would if you didn’t have a trade on. To
do this requires a relaxed disposition. This is not a football game. Don’t get
psyched up. Relax and try to enjoy it.
45) Staying in
the Game– I don’t recommend demo trading because traders learn bad
habits when trading with play money. I also don’t think “letting it all hang
out” right away is wise either. Start off doing trades and taking risk that is
relatively small but still makes a difference to you if you win or lose. About
a quarter to a third of what you expect to reach as your trading matures is
reasonable.
02:37
ZuluTrade Signal Provider RampagoeFx_SS
Definition of 'Forex System
Trading'
A method of trading forex that is based on a series of analyses to determine whether to buy or sell a currency pair at a given time. Forex system trading could be based on a set of signals derived from technical analysis charting tools or fundamental news-based events. The day trader's currency trading system is usually made up of technical signals that create a buy or sell decision when they point in a direction that has historically led to a profitable trade.
Both automated and manual day trading systems and signals are often available for purchase. It is important to note that there is no such thing as the "holy grail" of trading systems. If the system was a perfect money maker, the seller would not want to share it. This is why large financial firms keep their "black box" trading programs under lock and key.
A method of trading forex that is based on a series of analyses to determine whether to buy or sell a currency pair at a given time. Forex system trading could be based on a set of signals derived from technical analysis charting tools or fundamental news-based events. The day trader's currency trading system is usually made up of technical signals that create a buy or sell decision when they point in a direction that has historically led to a profitable trade.
Rampagoe Fx Explains
'Forex System Trading'
Forex trading systems can be either manual or automated. A manual system
involves sitting at the computer screen, looking for signals and interpreting
whether to buy or sell. In an automated trading system, the trader
"teaches" the software what signals to look for and how to interpret
them. It is thought that automated trading removes the emotional and
psychological components of trading that often lead to bad judgment. Both automated and manual day trading systems and signals are often available for purchase. It is important to note that there is no such thing as the "holy grail" of trading systems. If the system was a perfect money maker, the seller would not want to share it. This is why large financial firms keep their "black box" trading programs under lock and key.
18:10
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