Tuesday, May 5, 2015

Financial Market's Maze Surival Guide

To survive in Financial Markets You have to learn how to walk in the Maze. There are pits. There are traps. You can slip into the pit once trading too heavily. Or You can fall into the trap when letting Your position in negative profit. Or You can be trapped in losing streak.

To resist You need discipline. Do not hesitate to close Your position once You'll see nothing but loses for several candles. Use daily limits. Set it to capital divided by days You want to survive. Imagine You have 600$ capital. You want to survive for 30 days. So trade as many as 20$ loss per day at maximum.

Stick to winners. Once You'll see the position is winning move the stop loss to break-even as soon as possible. Set the target as multiply of initial stop loss. When Your stop is 50$ take as near as 200$ when possible.

Choose one or two markets and learn them well. You will experience that once You'll know the behaviour of the Symbol You'll get the advantage across other profit willing traders.

Choose Your style. Either You can buy low, sell high or You'll try to go with the trend. Generally the lower timeframes are more suitable for the prior one. So when on FX 5-minutes chart buy low and sell high. While on the Daily S&P catch the bull market and buy. Of course when stalking the trend it's best to buy pullbacks. So just wait when the market will come lower and buy.

Watch the Volume. It gives a lot of information regarding what are the smart money doing. High spikes volumes in oversold zone could potentionally mean reversal. Lowering volume in uptrend can signal it's losing breath.

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