The Rules of a Successful Forex Trading System

For some people, forex is the most exciting and rewarding career any one can enter. For others, it is the most difficult and the hardest market to trade. In this article, I am going to try to demystify the secrets of forex trading (if there is any) and try to see if I can help someone become better trader.

This article is the first in a series of 6 parts training article designed specially for the tinypipfx traders. Hope this will help clear some issues you may be having in forex trading.

All over the internet, people are selling and promoting trading systems. Buyers who are eager to make money are buying these systems in the hope of making money in forex trading. Unfortunately, they soon realize that it easier said then done.

During my years as a forex educator and trader, one question that people always ask me: "How come I cannot get the same results that you are getting using the same strategy that you are using"? The answer sometimes is very simple; "You are not me".

What I mean by that is that your emotion is not my emotion. When I pull the trigger and place a trade, I am a totally different individual then what you see when I am teaching or doing anything else.

There was time when every trade I placed was lost. It doesn't matter which direction I place the trade, it will lead into a losing trade. I become paranoid by thinking somebody was specifically targeting my trades.

When I finally control myself and understand what was going on, I become a better trader and can trade without fear.

In order to become a better trader, you must mastered, control and understand the following 6 Golden Rules of Forex Trading.

· Knowledge

· Fear

· Greed

· Patience

· Money Management

· Trading System

In this article, I will start with the most basic questions:

How much you really need to know to trade forex successfully. Is there a magic to the game? Do you really need to know much about forex trading to make to trade effectively?

The answer to all these questions may vary. To make it easy for you, I will tell you that you do not need to know much about forex trading. The less you know the better. Knowing too much will lead to confusion and in turn will lead to your destruction. Trust me. I have been there. I have seen people with MIT degrees stocks and currency trading that cannot trade. I have seen other that spent year trading demo account and the moment they open a live account they loose everything.

So what exactly is the secret? There is none. You just need to know what it takes to be successful.

The success of forex trading is based on following the Golden Rules That I mentioned above, noting more. Knowing theses rules will surely increase your chance in the market.

Now let's start with the knowledge.

As far as knowledge is concern, to trade forex, you need to know 4 things:

1. What exactly is forex trading

2. Learn the platform you are going to use to trade forex

3. What strategy you will use to trade forex.

4. What is your trading goal

What exactly is forex trading?

There are millions of books and resources devoted to the knowledge of basic forex trading. I am not going into details of teaching you about the basics. It is already done and can be access online. All you really need to know is that forex trading is the process of buying or selling a currency in the hope that the currency will gain or lose value. If you buy a currency, you hope that it will gain in value. If you sell it, you hope it will depreciate in value.

The forex market is a 24 hours a day market which makes it the most flexible market to trade. If you need more information about basic forex trading, you can do to baby pip website. They have an excellent database of information for any new trader who wants to learn forex trading. They have an excellent course in basic forex trading which I think is the best for anyone who want to take a jump start into the forex trading. In addition, you can access thousands of other information online about the subject. Just don't be overwhelmed by all this information. You only need to know the basics.

Learn about the Platform you are using.

I cannot tell you enough how important it is to be comfortable with the trading platform you will be using to place your trades. Beside, this is where you will make or loose your money so you need to be very familiar with the software. Believe me; it is easy to learn. You need to spend some times with the software to learn how to operate it. You need to understand the function that you will be using most when you are trading. The most important function you need to learn is as follows:

· How to place trade

· How to close trade

· How to take profit

· How to place stop loss

· How to place pending order

· How to place a limit order

· How to use trailing

Most forex broker will provide you with a trading Platform. The most popular is the Meta trader version platform. It is widely use by most brokers and can be freely download on their website. I like to download the free version because it gives me a chance to learn about the platform without the pressure of broker asking me to sign up for a live account.

What strategy are you going to use to trade forex.

Trading forex is serious. You need a strategy that will help you trade forex effective. This should one of the most important pieces of your trading career. It most is carefully crafted to fit your trading style and personality. It must be flexible and fit into your everyday lifestyle.

I know there are thousands of forex trading systems out there. However, you need to find your own way of trading. You need to find a trading strategy that fit your style and make it your own.

What is the ideal trading system?

To me, my ideal trading system must be easy to set up, easy to understand, no complicated chart and profitable. It must be able to be traded in any market conditions and any time frame.

Finding such a system can be very hard. Even after you find such a system, you need to tailor it to your specification.

Finally, what is your goal?

Do you want to build wealth overtime? Do you want to diversify your portfolio? Do you want to make a living trading forex; do you want to trade for a company? Do you want to trade part time, full time?

What exactly the reason you want to get into forex trading? Knowing the answer to these questions will definitely help craft your trading journey. You will soon realize that knowing your goal will help you determine what trading system is best for you.