What I have personally learned is that price action is King. I have
tried hundreds of indicators, standard ones in MT4, ones posted on FF,
ones on Russian forums, you name it, i have used it. Through 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 don’t always work. So one week, they work very well, you make a
lot of money and you start trusting it. So next week, due to your
trust, you start to over-leverage when you take trades and what
happens ? The indicators don’t work and you lose whatever you have
earned 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 ‘don’t ever over-leverage’. You should not risk more
than 3% of your account in any trade…ever….if you do, you are
bound to lose in the long run. You could win in a week or month but you
will lose in the long run….thats for sure….
The reason why people over leverage is because of greed. Lesson no. 2
is to control greed, but its a contradictory thing. Lets face it. Most
of us trade because 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 you
avoid something which was the very reason that you 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 you realize that by earning just 50 pips a
day using a $1000 account using 3% leverage, you could be making $1000
a month after just 5 months? and $2000 a month after just 7 months??
$2000 a month 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 you know what you r doing. So, all that i have said above
is possible for all of us. But it needs a lot of self control.
You 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 and that’s where everyone loses.
By Karthik Subramanian Follow Karthik on Twitter.
Winner’s Edge Trading, as seen on: