A TRADER’S 10 COMMANDMENTS

1. You can’t predict the future. 

Long-term technical analysis is useless in
the short term. It is not designed to predict, but rather to explain past
behaviors of the market. It can be used to have a probable idea about
the possible future behavior and chances that the past will repeat itself.

2. Don’t be prejudiced.

You always must examine both sides of the
picture. Having a bullish or bearish bias can cloud the obvious signals
that your system will present. Plan accordingly so that you can be
prepared for both sides in any eventuality. Don’t try to find signals
where they are not to justify your particular and subjective point of
view. The market has no feelings.

3. Be flexible. 

Follow a logical and structured thought pattern instead of
pure intuition and instinct. This will help you in limiting losses over
time based on a plan. Do not cling to your positions; assume the
losses, and move on.

4. Trade with the main trend. 

Although you can trade against the trend if
you are aware of the probabilities and ratios of pullbacks and
corrections, it is better to trade with the major trend unless you are
just looking for a few pips. You will have more chance of success and
will be able to get more pips in a much safer manner and faster. Do
not chase the market. Let it come to you.

5. Trust your analysis.

 If you have carefully planned your trading session,
that is all you need to build confidence and operate according to yourown rules. Design your system, test your strategies, and calculate your money management with respect to your available balance. If
everything is ready and you feel right with what you have designed,
work with confidence and discipline.

6. Have a plan. 

Never face the market without having a plan. It has to
be based on a working methodology that you will be developing day
by day, which includes what your working conditions are for that
specific trading day. If you don’t have a plan, you put probabilities
against you.

7. Know “How much” and “When.”

Always keep track of and readjustyour money-management rules as needed. You should not change the
percentage or amount of capital that you can afford to risk too much
(“How much”) in each trade. You also have to study carefully
“When” to increment that risk to obtain more benefits, using
leverage in your favor.

8. Keep it simple. 

Thinking that the more complicated a system is, the
better results you will get is a wrong belief. Simple is always better.
At first, it can seem to you that something is missing if you use only
one or two indicators; you will have the impulse to add another, and
yet another, and can end up with a chart in which the price is no
longer visible under so many lines and signs. Besides, following too
many indicators can lead to trading paralysis because many will
contradict each other, and it will be more difficult to get them to a
consensus, so no trade and no profits.

9. You will not get rich quick.

 Don’t even try FOREX trading if you
are wishing to become rich in one night: Greed can blind you.
The FOREX is a profession, and as such, it needs to be studied as
thoroughly as any other career. You have to invest time and money to
become a real professional.

10. Keep control. 

Keep your emotions under control. Keep your trading
under control with a proper plan. Emotions are one of the most
important aspects of FOREX trading; at least they represent 60 to
70 percent of a trader’s activity. Those who succeed understand that
they have to handle their fear and greed and eliminate anxiety and
stress before starting the workday, checking the trading space and
keeping it clear of any negatives, and understanding the daily
impulses and emotions that influence them at the moment. Leave
your ego out of the picture, reeducate your natural impulses, and
add a great deal of healthy discipline.