What i have personally learnt is that price action is King. I have tried hundreds of indicators, standard ones in MT4, ones posted on FF, ones on russian forums, u name it, i have used it…..thru all this, i have found that price action is the best…indicators seem to work but they work only for specific periods and for specific types of markets, they dont always work….so one week, they work very well, u make a lot of money and u start trusting it….so next week, cos of ur trust, u start to overleverage when u take trades and what happens ? the indicators dont work and u lose whatever u earnt and more….
Studying price action is not easy…it takes time, it takes experience to understand how the price moves, when and why…forex is not a get-rich quick scheme…..but when we are ready to spend so many years in our respective work areas (manufacturing, automobile, software etc.) to get some money, its amazing how people tend to get impatient when they enter into forex and they tend to over leverage.
Lesson no. 1 is ‘dont ever over-leverage’….u should not risk more than 3% of ur account in any trade…ever….if u do, u are bound to lose in the long run…u could win in a week or mnth but u will lose in the long run….thats for sure….
reason why people over leverage is cos of greed….lesson no. 2 is to control greed….but its a contradictory thing….lets face it…most of us trade cos we are greedy…we are not happy with the money that we are earning and we want more…thats why we move to trading…but, the trade experts say that we should not be greedy….how can u avoid something which was the very reason that u entered into forex in the first place?? its tough….its really really tough….it took me about 3-4 yrs to control greed….
but just remember this, do u realise that by earning just 50 pips a day using a $1000 account using 3% leverage, u could be making $1000 a mnth after just 5 mnths? and $2000 a mnth after just 7 mnths?? $2000 a mnth is more than enough for a lot of us…and i could go on and on on how we could keep building this amount….
what i have said is not impossible…anyone could afford $1000….3% leverage is a standard leverage…and 50 pips a day is very much possible if u know what u r doing….so, all that i have said above is possible for all of us….but it keeps a lot of self control…
u could make 50 pips a day just by trading for 2 hrs a day during the euro or the US session…..but being patient and waiting for the right trade is the key…thats where everyone loses….
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