If you want to increase your profit potential and achieve currency trading success then the simple tips will help you.
Some are at normal investment wisdom, but as the bulk of traders don't ever achieve long term currency success, so that's Good!
Here are your 7 tips for greater currency trading success and bigger profits.
1. Focus on the long term trends
Currency trends mirror the health of the economy generally and economic trends last years and these are reflected in currency trends.
Forget day trading, it's the equivalent to flipping a coin. You can't predict such short term movements so don't try.
When flipping a coin the odds are even, but keep in mind in currency trading the fact that you have to place a stop and you have to overcome both slippage and commission, means you will take a thumping loss.
Day trading won't lead to currency trading success for you, but will simply make your broker rich.
2. Trade in frequently
Many traders want to be in the market all the time and act like gamblers trading for the sake of trading if you DON'T want currency trading success do this!
Only trade this moves with the best profit potential.
Keep in mind you may need to be patient - You can't hurry the market, so don't try.
3. Don't diversify too much
If you don't risk anything you won't make anything.
Diversification is the enemy of making really big gains.
To make really big profits you have to have the courage to take calculated risks on the really good trades and go for maximum profits.
This is the only way you will make really big gains - Period.
4. Use a simple system
There is no correlation between how complicated a system is and how much profit it will make.
On the contrary, simple systems are more robust than complicated ones and will cope better in the face of brutal market conditions.
A good example of a simple system is a breakout system, which anyone can understand.
You must always make sure you understand the system's logic.
If you do, you will have the discipline to follow it through inevitable losing periods, so never trade a system where the logic is not revealed.
A great method to learn is the Gann method of trading, its different, it's revealed and it made him $55 million.
In conclusion, get a system you understand, that's simple and that has been proven to be successful.
5. Never Seek or Give Opinions
If you win at currency trading you will often be trading in the opposite direction to the majority so don't discuss your trades with other people, they will put you off and don't give opinions either.
Trade in isolation.
Independent thought, is one of the keys to currency trading success so don't get distracted.
6. Stay with the majors
Stay with the major currencies: US $, British Pound, Euro Swiss Franc and Japanese yen.
These all have good liquidity and good trends.
Don't trade minor currencies that can feature erratic moves or currencies that don't have a long history.
The majors will give you plenty of opportunities so use them.
Above are six general rules for currency trading success and bigger profits.
By W D Gann
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