Draw the Fire Line in the Sand When Trading Forex
Rob Tovell of DailyForex.com offers some educational tips he feels are most essential to try and put the odds of succeeding in the newbie forex trader's favor and sheds some light on a trading technique involving what he calls, "Fire Lines."
Trading is, without a doubt, one of the most alluring and exciting professions an individual could ever embark upon. It is also, arguably, one of the most dangerous. A career as a trader can be over in a heartbeat if the trader has not been properly educated to the market's fickle ways. It is the potential of unlimited riches and income that seduce so many, yet the odds of success are heavily stacked against them. What is it that makes the difference? Why do so few succeed, where most others fail? The answer can be summed up in four words: discipline, education, hard work. It is the purpose of this article to equip you, the budding trader, with some of the education necessary to help you put the odds of succeeding in your favor. As for the discipline and hard work part, that is up to you. I would be willing to guess that success in trading is probably close to 10% knowledge and 90% discipline/hard work. Perhaps this is why the mortality rate of would-be-traders is so high. Not everyone is suited to short-term trading. Many brilliant people have been shot down in flames while trading. My theory is that they try to out think the market, out maneuver it. They also try to re-invent tried-and-true trade plans and end up making things more complicated than they need to be. Both are usually very bad ideas, which-for the most part-end up failing, and worse, lightening your wallet, sometimes by quite a lot! I mention this only to make a point. That being true, the trading method you are about to learn about here in these pages has been developed, traded, optimized, and adapted in the real world of trading. This program is not some theoretical algorithm that some mathematician somewhere has dreamt up. No, this plan has earned its stripes the hard way. Through blood, sweat, and tears, through failures and success. It is the backbone of how I personally trade.
Getting Ready to Trade
It would probably be wise at this point to have a little discussion on a few important and key elements to our trade plan before we jump into the trading rules and set-ups themselves. These would be; our primary tool, the chart-which markets to trade and why-the individual-that being you-and lastly, funding and risk.
The Chart-Part 1
The chart that we tend to favor for this style of trading is what's known as a candlestick chart. Because of how it is physically constructed, it is very easy to read and interpret in the chaos of a trading frenzy. We'll take a closer look at it shortly.
Now comes the important decision as to what-or which of the many-markets to trade. Not all markets are suitable to the average trader to trade and not all are created equal. When it comes to short-term trading, there are three market traits that the individual must pay very close attention to and look out for before he/she begins trading it. To see the charts and to read about trading forex with Fire Lines, click here.
By Rob Tovell, Contributor, DailyForex.com