Forex Tips & Forex Advice

Don't move your Stop Loss further away, stick to your original plan

Hoping that market will turn in your direction is a very delusive hope. By moving a stop loss further away a trader increases his chances to end up with a much bigger loss.

When holding to a losing trade too long (even if funds permit) traders as a rule are very reluctant to accept big losses, thus often continue "hoping for the best". In the meantime invested money is stuck in a trade for unknown period of time (weeks and even months) and cannot be used for opening new positions. Not working money = dead money. Also this will result in constant interest payments for holding open positions (good if that interst is paid to you, but not good when you have to pay).

Simplicity applies to your entire trading environment

Too much information will create a controversial picture of when to trade and when not to.
To avoid lots of confusion create a simple but working method of trading Forex. Keep it simple with indicators, signals and trading strategies.

Evaluate risk/reward ratio before entering each trade.

How much money can you lose in this trade? How much can you gain? Now, make a decision if the trade is worth entering.
Example: if trader is looking for possible 35 pips gain and possible 25 pips loss, such conditions are not worth trading. Compare it with the situation when a trader has 50-100 pips of potential gain and only 10-20 pips of possible loss. This is the trade to open!

Do add more positions when a trade goes your way

Don't allow a couple of losing trades in a row become a snowball of losing trades. When it is obviously not a good day, turn the monitor off. Often not trading for one day can help to break a chain of consecutive losses. Trying to get revenge can often make things worse.

Let your position be open for as long as the market wishes to reward you

Move your trailing stop to protect earnings.
This means having an exit plan/strategy in place, or risking to give back all profits on market reversal...
Running two or more open trades gives an option to close some positions earlier and keep others running for higher profits.

Don't delay or deny, take a small loss and move on

It's better to finish unprofitable trade quickly than wait for the situation to get worse. Don't put a stop loss too far — it's your money you risk. Better calculate the best spot to enter when a potential loss would be minimized. Again: respect your stop and don't move it "cherishing hopes".

Trade currency pairs in respect to their active market hours

Learn about overlapping market hours: when two markets are open and highest volume of trades is conducted.

For example, Australian and Japanese trading sessions are overlapped from 8pm to 1 am EST. At that time trader can successfully trade AUD/JPY currency pair.