*Always Trade With VIRTUAL Money Before
Attempting ANY REAL Money Trades!*
One of the questions I get quite often is......When do I jump in and start to trade?
In my last blog I talked about the best "time" to trade and why.
This question deals with the actual trade itself....when should I initiate a trade and why.
Personally I like to use line charts to tell me which currencies to trade and whether to buy or sell. When you look over the various time frames, you get a feel for the flow (trend) and it becomes apparent what you should do. 90% of the time, you follow the flow (trend).
I look at the 1 hr, 24hr, 7day and 30 day charts of all the currencies I am interested in. Generally I like to trade Euro/USD or USD/Canada or sometimes USD/JPY..........but no matter which currencies I choose, I ALWAYS look over the corresponding charts prior to executing the trade. I am looking to see whether there were any really big drops or increases in each timeframe and whether the real time trade I am about to execute will be caught in the middle of one of them. This is very important because it will determine whether you make money or lose money.........its that simple.
After looking over the charts I decide whether to buy or sell OR if I am unsure, I do BOTH. When you buy and sell the same currencies at the same time for the same amount of money, your trades cancel each other out. Now that may not sound like a good idea because you don't make any money, but in reality it gives you the ablitity to ride a wave to the top or bottom without losing any money and then cash out the profitable trade. THEN you can ride the wave up or down with the other trade, thus giving you the profit you are looking for. When that trade starts going in the opposite direction, you can now jump back on and ride the wave over and over until you are satisfied with that days trades.
Always remember to have your stop loss and take profit set to the amount you are willing to lose or profit, especially if you are going to be away from the computer for any length of time. Fluctuations happen fast and if you are not paying attention, you could lose your profits OR you could lose the amount of your trade......which is much worse for obvious reasons. Using your stop loss or take profit functions ensures you are protected while you are doing something else.
Have a great week trading!
Regards,
Brian Jerome
Give EToro a Test Drive! Its FREE and its what I use EVERYDAY.
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