Friday, May 9, 2008

The (unwritten) laws of Forex trading

After been in Forex trading for almost 3 weeks, I've discovered some unwritten laws in this fascinating and exciting world. You may or may not agree with me but here they are.
1. The currency pairs that you put a buy order will move down almost immediately after you hit the buy button.
2. Conversely, the currency pair that you put a sell order will move up almost immediately.
3. After you have manually closed a losing trade that is rapidly coming down, it will miraculously move up almost immediately.
4. Conversely, after you have manually close a losing trade that is rapidly going up, it will (again) miraculously move down.
5. The stop loss that you set is always only a few pips away from the reversal that starts after you have been taken out by the stop loss.
6. The charts that you see after making a losing trade looks totally different from the one that you see when you place the order. (Another RSI, Relative Sight Illusion!)
7. Your wife (or husband) will always just appear to look over your shoulder after you have made a losing trade. (And you have to think of a quick reason for this, like "it must have been the after effects of the Cyclone Nargis............" or something similar.)
7. Your demo account will make more money than your live account.

Luckily for us Forex traders, there are also some golden written rules.
1. Losing is part of the game
2. Nobody wins 100% of the time.
3. Even successful traders have stretches of losing streak.
4. A pro is able to take a break and come back stronger.

So folks, I'm no pro but I'm taking a break so that I can become stronger. And I can have an excuse now to look more into my PIPS there since I'm not getting any pips here.

Ronald Kwok
http://cbpirate.com/s/cbp/ronaldkwok

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