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I didn't really write an e-book but most of the e-books I've seen out there should be combined into a big pile and burned. If I were to write a forex e-book, it would probably be less than a page long. Here is my e-book replacement. If you're a beginning trader, then go out an invest in a currency related book on technical and fundamental analysis. There are tons out there that cover both and they're a lot cheaper and easier to read than an e-book. If the book doesn't go in depth enough on a particular subject you're interested in, do a Google search and you'll find all the information you will ever need. After getting some book smarts on the subject of forex trading, jump right in and start trading. Trade a demo or put a small amount of money that you can afford to lose at a broker that offers variable sized lots. Being able to trade in variable sized lots or micro-lots is critical. If you don't have the ability to do this, most likely you'll be overleveraging which will most likely lead to ruin. Try different strategies, either ones you've picked up on forex forums or ones you've created on your own. Experimentation is key and success will only come with experience. Consistent profitability isn't going to happen overnight. The goal is to stay in the game for as long as you can without getting discouraged. I hate to sound like a walking cliche but there will be many bumps in the road. You'll have to prepare yourself to take the punches and keep getting up. Take a break when you feel overwhelmed by the market with the intention of jumping back in when you feel like you're ready. My brother is a pilot for a major US airline so I know how many hours he had to have flying an airplane before he was considered proficient enough to fly a large passenger jet. Why would trading be any different? Get those trading hours. Even then, there is no guarantee that you will be successful but you'll never know if you don't get the experience. If you trade long enough, you'll start to see consistencies in the forex market. Your style of trading will also appear even if you weren't trying to find it. You'll also start creating trading systems that match your trading style. With this experience and increased ability, I'd like to think the rest is this simple. - Size your position. Keep your risk low on each and every trade. I like the risk per trade to be less than 2% of my total account balance. Use my position size calculator at http://www.forexcalc.com if you don't know how to calculate it.
- Execute your trading system(s) knowing their criteria for trade entry and exit.
- Tune and tweak your trading system if needed. Continue to search for additional trading systems that you feel may give you an edge in the market.
- Repeat step #1.
Maybe I have a case of trader muscles but I don't think it should be much more complicated than this. There may be a time when you decide to look into carry trading or more exotic trading strategies which complicate things a bit more but even then, I feel the basic principles still apply.
Forex Trading
entry
exit
february 2008
forex ebook
money management
position size calculator
I think your 3 rules are good.
Especially the first one. Risking more then 2% in a trade is almost guaranteed to send you to ruin eventually. Gosh, this forex e-book must be no good. It doesn't even promise to reveal amazing trading secrets that will allow you to earn a million dollars a day for the mere price of $99.95. This is profoundly simple. Although I think one can get by with 3% risk. As regarding risk, You want enough to make it worthwhile but not enough to affect your trading judgement. If your pulse starts rising once the trade ticks against you it is probably too much. Some sound advice. The only thing I would add is to forget about scalping 1 and 5-minute charts as longer term charts conform much better to technical analysis, and it's a lot less stressful. Good point James. I never mention anything about trading timeframes. I don't trade anything but hourly and longer. |
