So finally you have GRADUATED from your DEMO School and is now ready to engage in the real battle. Before you start charging forward, let me show how you can set up your very own trading system to ensure you will win each battle:
1.Choose Your Desired Time Frames
Decide what type of trader do you wish to be: a Day Trader or a Swing Trader.This will help you to determine the appropriate time frames.( For further information, you may read the article on this subject in this blog)
2.Find The Indicators That Help To Identify A New Trend
This is to ensure that you are able to exactly identify the emergence of a new trend as early as possible before you enter any trade.There are many indicators that you may choose and one of the most popular one is the MOVING AVERAGE.Note: like the other indicators, MA is not perfect.
3.Find Indicators That Help to Confirm The Trend
MACD, Stochastics or RSI are used by traders to confirm a given trend. You may have used other indicators during your DEMO session so the choice is yours.
4.Don't Forget To Look At Today's Economic Calendar
A professional trader NEVER miss to check the ECONOMIC CALENDAR before he starts his day. Those technical indicators alone WILL NOT help you to close a winning trade unless you enjoy scalping. Please read an article on the ECONOMIC CALENDAR in this blog to help you understanding further.
5. Define Your Risk
A good trader thinks about what he/she may potentially loose BEFORE thinking about how much he/she can win.So always remeber the 2% LIMIT RULE i.e trade only 2% of your equity. If you start with USD 10,000, then 2% is 10,000 x 2%=USD 200. NEVER exceed this percentage or you may end up with a margin call from your broker.
6. Define Entry And Exit
You should wait until a candle completely closes before entering a trade.
Set an exit target and exit when the price hits this target.
Choose Support & Resistance Levels as your price target.
7.Write Down Your System Rules And FOLLOW it strictly
HAPPY TRADING!!!
