Forex And Daytrading

by: Frank Hague

Online trading is great way for serious investors to make money, but inexperienced traders often wind up with big losses. A good set of instructions can minimize the risks and save months of expensive trial-and-error learning.

Day Trading

Day Trading had its heyday during the bull market of the 1990's. All the amateurs have since dropped out, but day trading is still being practiced by professionals. There are fewer opportunities in the current market, but skilled investors can still find them if they know what to look for.

FOREX Trading

The Foreign Exchange Market (FOREX), the world's largest financial exchange market, originated in 1973. It has a daily turnover of currency worth more than $1.2 trillion dollars.

Unlike many other securities, FOREX does not trade on a fixed exchange rate; instead, currencies are traded primarily between central banks, commercial banks, various non-banking international corporations, hedge funds, personal investors and not to forget, speculators. Previously, smaller investors were excluded from FOREX due to the huge amount of deposit involved. This was changed in 1995, and now smaller investors can trade alongside the multi-nationals. As a result, the number of traders within the FOREX market has grown rapidly, and many FOREX courses are appearing to help individual traders increase their skills.

As a matter of fact, it's advisable to take FOREX training even before opening a trading account.
It is vital to know the market mechanics of FOREX, leveraging in FOREX, rollovers and the analysis of the FOREX market. Due to this fact, potential FOREX traders would do well to either enroll in a FOREX training courses or even purchase some books regarding FOREX trading.

There are pros and cons to enrolling into a FOREX course. For beginners a FOREX course is a rapid method of learning the basics of FOREX trading. Not much time is spent on history of the market or arcane economic theories. Often, on-line or phone support from a skilled FOREX trader is available to answer any questions. Also, the information is condensed and practical, often with graphs and charts.

The disadvantage is the price, as courses are more expensive than a paperback from the bookstore. Also,
the course may just teach the approach of the trader who wrote it, and individuals have different trading strategies. The student may grow accustomed to the logic and focus of the teacher without coming to realise that nothing is predictable in the FOREX market, and many different strategies will bring profits in varying market circumstances. Also, knowledge of practical applications may not be enough, as the FOREX is highly unpredictable and there are many external factors, such as political issues, affecting the flow of finances in the market.

The best advice would be to do some background research on the FOREX market first, and then enroll in a course.

About the author:
Frank Hague has always been interested in the Stock Market. http://www.forex-now.info- http://www.lazytrader.com- http://www.business-software-now.info- http://www.accounting-software-now.info


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Playing a Game You Can Win

by: Paul King

Imagine a simple coin-tossing game where you win whatever you stake if heads comes up, lose what you stake if tails comes up, and you are charged 1% of your stake each turn to play. Can you win money at this game? If you are familiar
with the concept of expectancy, then you will probably answer �No� since over many turns the amount won will be equal to the amount lost (assuming the coin is a fair one) and after factoring in the 1% cost of playing you will lose money overall.

In fact, there is a way to win this game, and that is to understand that the longer you play, the more you will lose, so the optimum strategy is to bet everything you have on just one toss of the coin; just like Ashley Revell did when he sold everything he owned, took the $135,300 to Las Vegas, and bet it all on �Red� on one spin of the roulette wheel. Mr. Revell was fortunate and he won, but I am not recommending that you bet everything you have on one trade!

Obviously risking everything on one trade is not a useful strategy since we want a game we can play for long periods of time to generate a consistent income. So how can we change the game so that we can win? There are three aspects to the game which can be adjusted to increase our chances of winning consistently:

� We can tip the chance of a winner in our favor from 50/50
� We can increase the size of the payout from 1:1
� We can reduce the cost of playing the game

Tipping the chances of a winner is not possible in a fair coin toss game, but it is possible in trading. There are two ways to approach this: identify conditions that are more favorable to your winners and include them in your system definition, or identify circumstances where a loser is more likely, and skip those trades. For example, if you notice that most of your winners are entered on days where the overall market has moved in the same direction as your trade, then only enter trades when the overall market is moving in the correct direction. This means that your trade is in the same direction of the overall market, rather than against it.

Another example might be that trades that are entered just before major news announcements, like earnings calls, often get stopped out as losers due to increased volatility, so you should skip those trades.

There may be many patterns of winners and losers that you can identify for your own systems and careful study of past trades is definitely worthwhile. Note that we do not want to increase our win percentage too significantly (i.e. to greater than 60%) since this would indicate that we have �curve-fitted� our system to historical results that are unlikely to continue into the future.

It is also important to note that for some types of trading (i.e. long-term trend following strategies) it may not be possible to have a win percentage that is greater than 50% (and it may be much lower) and that is where the second aspect of improving your system comes into play: the average size of winners versus losers.

Increasing the size of the payout so that the winners win more on average than the losers lose depends on the way you handle your stops. Having large winners in relation to losers can make up for a low win percentage, and mean that you will still make money playing the game. One method is to have a trailing stop that moves up as a trade becomes a winner. If you have fixed stops for losing trades that limit losses, but trailing stops for winning ones that allow winners to grow, then you are increasing your chances of your average winner being larger than your average loser. Generally it is better to be strict on losers by having tighter stops that keep losses to a minimum and generous with winners by having stops that allow profits to grow. In any case you want to make losers small and winners large, so never add to a losing trade � that would be doing the opposite of what you want to achieve.

Lastly, reducing the costs of trading is probably the simplest change you can make, and can mean the difference between winning and losing overall � especially for systems that have lower expectancy. There are many online brokers now that charge 1c per share for equity trades (and comparably low fees for other instrument types) and there is no reason why you should be paying more than this if you are trading electronically.

Every trader should do whatever they can to maximize the expectancy of their trading system or method by considering each of the 3 aspects just described. If we do some, or all, of these things then the amount we win now becomes a
factor of how much we stake, and how often we play because we have created a true �edge� where we know that the system we are trading should make money (if traded accurately). Calculating the expectancy of your trading system or method
tells you whether you are playing a game you can win, and is a very important piece of information that every trader should know before they risk real money.

If the game is rigged against you because your trading methods lose money regardless of how accurately you implement them, how can you ever be a successful trader?

About the author:
Paul King is owner and head trader of PMKing Trading LLC, a Vermont-based proprietary trading company founded in May 2002. Paul has published a series of eBooks and articles about what he considers to be the important aspects of trading.

Visit www.pmkingtrading.comfor more details.


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E-currency Exchange Trading

by: Tim Rohrer

I have searched high and low and tried MLM's such as Market America, Quixstar, Trek Alliance and Amway. The business idea works, however people need to sell products and build their downline to be successful. I hated the idea of trying to convince people that Market America, Quixstar and all the other MLM's worked. In fact, that was the hardest thing to do was to convince somebody that these MLM's worked!

I have finally found a system that involves no selling, no downline and and garunteed profits with a little learning involved. I thought this couldn't be true, I actually don't have to sell something and didn't have to build a downline!

Let me explain how it works. There are hundreds of companies on the internet that deal with electronnic funds, such as Netpay, PayPal and INTgold. Currency exchanging is relatively unknown but incredibly lucrative business opportunity. While Currencies are traded all over the world (like with Forex), there are both US-based and offshore trading houses that need your flow of dollars to facilitate their business operations.

This is where you,"The Merchant" comes in. By making funds temporarily avaliable to the Global Exchange Network creates float. The company we work with is able to borrow against this dollar amount and the commissions come back to us. The funds you lend to the network are typically returned in a 24 to 36 hour time frame. For example, by pushing $100 in INTGold to another person in exchange you recieve a fee of $3.50. This process takes about 30 seconds. When the funds come back into your account you make another $1. $4.50 isn't bad for something that takes 15 seconds to do. There are other ways to cycle this money back through the system and reinvest profits to your bottom line. On top of building float, your investment is compounded daily and you easily make gains of .35% off of your investment per day. How much is that? Well if you invested $100 that would be 35 cents per day profits. Now imagine when your investment grows to $1000 and $5000.... even $10,000 your daily profits are easily $35 per day. Remember the best part about this is that is compounded daily!

How much can you start with? You can start with as little as $25.00 I recommend a few hundred dollars until you get to know the system and become more comfortable with the exchange network.

I learned the e-currency exchange network through a group of friends online. It is extremely difficult trying to learn how to do this sitting in chat rooms and reading posts. I finally gave in and purchased a guide that literally enabled me to double my investment in under a month. I am very pleased with my results and I can now kiss those MLM's that require downline building and selling goodbye forever!



About the author:
If you would like to inquire more information about e-currency exchange visit our website at wwww.mazumoney.net

If you have any questions don't hesitate to e-mail us at onlinesupport@mazumoney.net I am very down to earth and would not have any problems speaking to you personally if you request a phone call through our support e-mail.

URL: www.mazumoney.net
E-mail: onlinesupport@mazumoney.net

Please don't hesitate. Take a look at this opportunity, I can garuntee as long as follow the steps to invest properly you will not be sorry!

How To Win In Futures Trading With This Simple Tactic

by: David Jenyns

Surprisingly, many profitable speculators have success rates between 30% and 50%. Futures traders are not successful because they predict prices well. They`re winning because their profitable trades far exceed their losses. The truth of the matter is all Futures systems win and lose.

Psychologically, this can make following a system difficult. Futures market professionals achieve success in this environment by controlling risk with money management rules. But, controlling risk goes against our natural tendencies. Most Futures traders don`t want to manage risk, they want to be right. Despite the proven fact that money management is so important, when Futures traders first come to me, many of my clients focus their time looking for the perfect entry. It`s their search for the Holy Grail. They want a perfect Futures indicator.

Not only is this Futures indicator going to get them in right at the bottom of the trend, but it`s also going to tell them at the exact point at the top of the trend when to get out. Here`s the best part and about this indicator: apparently, it can guarantee success and it`s never, ever wrong.

Unfortunately, though I don`t like to disappoint my clients, I need to let them know the hard truth. It does not matter whether you are trading in the Futures or any other market, the simple fact is this; there is no perfect indicator. Instead, there are carefully set money management rules that will place you in control. With this control, you`ll be able to follow the two cardinal rules in your Futures trading – you`ll be able to let your profits run and cut your losses short.

Once these money management rules are in place your system can be set on autopilot. You won`t need to worry…

"Should I be holding this stock?"

OR

"Shouldn`t I be holding that type of stock?"

This uncertainty is what people are confronted with when they don`t have their rules set for the Futures market. The end result is that small losses end up being big losses.

To make matters worse, a few of these big losses strung together can have a detrimental effect on your Futures trading capital. Unfortunately, it`s much more difficult to trade to gain back money you have lost then it is to trade with profits that you already have in hand. If things go to the absolute extreme, you run the risk of wiping out your entire Futures trading float, as many traders do when they first get started. But, with your money management rules in place, you can ride out the ups and downs of every Futures trading system and succeed where many fail.



About the author:
-=-=-==-=-=-=-==-=-=-=-=-=-=-=-=-=-=-=-
David Jenyns is recognized as the leading expert when it
comes to designing profitable Future trading systems.

Discover the "secret formula" of trading that anyone can use
to consistently generate BIG profits from the market by
downloading your FREE copy of David's new Ultimate
Future Trading Systems course.

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Benefits of Trading the Forex Market

by: Raul Lopez

Trading

the Forex market has become very popular in the last years. Why is it that traders around the world see the Forex market as an investment opportunity? We will try to answer this question in this article. Also we will discuss come differences between the Forex market, the stocks market and the futures market.

Some of the benefits of trading the Forex market are:

Superior liquidity.

Liquidity is what really makes the Forex market different from other markets. The Forex market is by far the most liquid financial market in the world with nearly 2 trillion dollars traded everyday. This ensures price stability and better trade execution. Allowing traders to open and close transactions with ease. Also such a tremendous volume makes it hard to manipulate the market in an extended manner.

24hr Market.

This one is also one of the greatest advantages of trading Forex. It is an around the click market, the market opens on Sunday at 3:00 pm EST when New Zealand begins operations, and closes on Friday at 5:00 pm EST when San Francisco terminates operations. There are transactions in practically every time zone, allowing active traders to choose at what time to trade.

Leverage trading.

Trading the Forex Market offers a greater buying power than many other markets. Some Forex brokers

offer leverage up to 400:1, allowing traders to have only 0.25% in margin of the total investment. For instance, a trader using 100:1 means that to have a US$100,000 position, only US$1,000 are needed on margin to be able to open that position.

Low Transaction costs.

Almost all brokers offer commission free trading. The only cost traders incur in any transaction is the spread (difference between the buy and sell price of each currency pair). This spread could be as low as 1 pip (the minimum increment in any currency pair) in some pairs.

Low minimum investment.

The Forex market requires less capital to start trading than any other markets. The initial investment could go as low as $300 USD, depending on leverage offered by the broker. This is a great advantage since Forex traders are able to keep their risk investment to the lowest level.

The liquidity of the market allows us to focus on just a few instruments (or currency pairs) as our main investments (85% of all trading transactions are made on the seven major currencies). Allowing us to monitor, and at the end get to know each instrument better.

Trading from anywhere.

If you do a lot of traveling, you can trade from anywhere in the world just having an internet connection.

Some of the most important differences between the Forex market and other markets are explained below.

Forex market vs. Equity markets

Liquidity

FX market: Near two trillion dollars of daily volume.

Equity market: Around 200 billion on a daily basis.

Trading hours

FX market: 24hr market, 5.5 days a week.

Equity market: Monday through Friday from 8:30 EST to 5:00 EST.

Profit potential

FX market: In both, rising and falling markets.

Equity market: Most traders/investor profit only from rising markets.

Transaction costs

FX market: Commission free and tight spreads.

Equity market: High Commissions and transaction fees.

Buying power

FX market: Leverage up to 400:1.

Equity market: Leverage from 2:1 to 4:1.

Specialization

FX market: most volume (85%) is made on major currencies (USD, EUR, JPY, GBP, CHF, CAD and AUD.)

Equity market: More than 40,000 stocks to choose from.

Forex market vs. Futures market

Liquidity

FX Market: Near two trillion dollars of daily volume.

Futures market: Around 400 billion dollars on a daily basis.

Transaction costs

FX market: Commission free and tight spreads.

Futures market: High commissions fees.

Margin

FX market: Fixed rate of margin on every position.

Futures market: Different levels of margin on overnight positions than day time positions.

Trade execution

FX market: Instantaneous execution.

Futures market: Inconsistent execution.

All this makes the Forex market very attractive to investors and traders. But I need to make something clear, although the benefits of trading the Forex market are notorious; it is still difficult to make a successful career trading the Forex market. It requires a lot of education, discipline, commitment and patience, as any other market.

6 Tips FOREX Trading Strategy

By Stephen Todd

If you want a successful FOREX trading strategy, you should incorporate the following tips into your existing strategy – you should then become a profitable currency trader. The aim is not to just to make money, but to make big profits consistently.

Six Essential FOREX Trading Strategy Tips:

1. Get a Method you have Confidence in

You need to have total confidence in your method - so you can follow it with discipline.

Pick a simple, technical method - simple methods work best, as they’re more robust in the face of brutal market conditions - complicated methods tend to break.

Just use a few rules and parameters, and they should work across all markets – a technical trading system should work on ANY market that trends.

2. You need to have the Mindset to Take Risks!

You will read a lot about money management - but keep in mind risk = reward.

If you don’t take reasonable risks, you won’t make big profits.

2% is a commonly touted figure to risk per trade - but if you’re trading $10,000 that’s just $200.

Risk more if you’re confident - 10% is fine - you just need to be selective with your trades. You can have the best FOREX trading strategy, but you need to take calculated risks to make big gains.

3. Don’t Trade Frequently

The good trades only come around a few times a year, so focus on them.

Many traders think there are good opportunities everyday - there aren’t.

There’s no correlation between how often you trade, and how much money you will make - if you want to make big profits, you need patience.

4. Only Focus on the Long Term Trends

Forget day trading, and focus on the longer-term trends only - how can you make big profits in a day? - You can’t. Don’t forget you have to cover your losing days as well.

Always remember - brokers interested in making the maximum amount of commission, perpetrate the make money by day trading myth.

Currency trends last for months or years - focus on them, and milk them for all they’re worth.

5. Trade in Isolation

Don’t discuss your trading with anyone - the only way you’ll make big money is by doing it by yourself.

Have confidence in your ability and don’t let anyone put you off - this is an essential character trait of all great traders.

6. Work Hard not Smart

Many losing traders think the more effort they make with their FOREX trading strategy, the greater their trading skills will become – this is not true! You can learn a method in a short period of time, and if you have a simple robust method, you can do your analysis in about 30 minutes a day - and that’s it!

A Strategy for Big Gains

So there you have it - a FOREX strategy designed to make you big profits.

Many of the above tips are not conventional wisdom - but keep in mind that 90% of traders don’t make big gains – and they follow the herd.

Step away from the crowd, and incorporate the above tips into your existing FOREX trading strategy – you could become very rich!

The 10 Golden Rules of Trading

by: Paul King

1 Introduction

In this article we cover the few important rules that should never be broken in trading. If you can apply these rules consistently, and with discipline, you will be well on the way to being a profitable trader.

The rules we cover are:

• Have specific goals and objectives
• Be consistent and disciplined
• Let profits run
• Cut losses short
• Never add to a losing trade
• Don’t take too much risk
• Only trade positive expectancy systems
• Minimize all trading business costs
• Be well educated
• Don’t trade scared money

Each of the rules will now be discussed.

2 The Golden Rules of Trading

The following sections outline a set of rules that can significantly improve your chances of success if they are understood, practiced, and implemented consistently in your trading. These rules have been learned the hard way, by study, research, trial-and-error, and the inevitable mistakes that everyone makes when they start a trading business.

We hope that you can learn from the work we have done, and benefit from our experience. The rules will now be discussed.

2.1 Have specific goals and objectives

Few things are more important to your trading success than having set (i.e. written) goals and objective for what you are aiming to achieve. It is amazing to me how often we hit our targets, meet our objectives, and reach our goals only when we articulate them and write them down.

For any business to be successful it must have measurable objectives that are actually achievable. In trading (obviously) the primary objective is to make money, but it is important to have other objectives that are not purely cash-related. We must always remember that reward and risk go hand-in-hand in trading and that we cannot expect to achieve high returns without planning for high risk (i.e. draw-downs).

Your objectives and goals will be very specific to you, but they must have the following characteristics to be useful:

• Be measurable (in completion and timeframe)
• Be achievable
• Be worthwhile
• Be positive

As an example, here are some of our current objectives (this is only a partial list):

• Develop 2 new positive-expectancy trading systems each year
• Make fewer errors implementing our trading systems each year
• Achieve a return to maximum draw-down ratio of 1.5:1
• Take 2 weeks vacation each year

Note that only one of them is about making money, and that has a measurable objective that is relative to draw-down, not absolute (i.e. make 100% per year). If you know what you are trying to achieve, and when you are trying to achieve it, the whole business will be focused on meeting
your objectives and help guide you to only pay attention to things you really want to achieve with your limited time and resources. This will also give you a way to measure the success and progress of your trading. Generally traders with well-defined objectives will be much more successful than those that do not have pre-defined goals.

2.2 Be consistent and disciplined

In order to realize the full potential of your trading systems it is critical that you take every trading entry, adjust every stop, and close out every trade as and when your system says you should do. This takes extreme confidence in your trading systems, good robust reliable technology, and the mental discipline to stick to your trading plan whatever happens (assuming it is complete).
An underlying assumption about being consistent and disciplined is that you have a pre-defined plan for every situation you may face in your trading, so that you know how you are defining what being consistent is. Your plan needs to include at least the following items:

• All your trading rules for entering, adding to, and exiting positions
• What you will do if your trading computer, internet connection, broker, power, telephone
etc. fails
• What you will do if you are unable to trade
• What you will do if you lose X% of your account
• What you will do if all the markets are closed and you can’t exit your positions

Unless you write the answers down to all these issues, you cannot be consistent and disciplined in your approach to trading and if you lose money you will not know whether it is because you didn’t follow your plan, because your plan is incomplete, because your systems do not work, or simply because you are going through a losing period.

2.3 Let profits run

This simple rule is the key to being a successful trader. It is three simple words that are very hard to actually implement. When we get a profitable trade our natural fear of losing the unrealized cash kicks in and we truly want to close it out now and take the money. Most trading consists of long periods of small winners and losers followed by a few huge winners that make the difference between overall profitability and simply breaking even or losing due to trading costs(commissions, spread, and slippage).

It is our ability to let the huge winners become just that - huge - that determines how we will perform overall during the year. The key to letting winners run is to have trailing stops that are outside the daily noise of the market so that they are not tight enough to get stopped out during ‘normal’ trading. This means being prepared to give up a significant portion of a winning trade’s open profit and is the thing that makes this so hard to implement. In fact, we should be adding to a winner and widening stops rather than working out how tight our stops can be to capture maximum profit. The trade has already shown you that it intends to be a winner, and the chances are it is a low-risk idea to add to the position now rather than ‘strangle it’ with stops that are too tight.

It is very important that your position management rules allow for large winning trades, and that the rules are pre-defined and understood before you place the trade. This will allow you (if you have confidence in your method and discipline) to stick to your rules when you do get the big
winner.

2.4 Cut losses short

This is the sister rule to the previous one, and is usually just as difficult to implement (although it
is very easy to define). In the same way that profitability comes from a few large winning trades, capital preservation comes from avoiding the few large losers that the market will toss your way each year. Setting a maximum loss point before you enter the trade so you know before-hand approximately how much you are risking on this particular position is relatively straightforward. You simply need to have a exit price that says to you ‘this trade is a loser and I will exit before it gets any bigger’. Due to gaps at the open, or limit moves in futures we can never be 100%
certain that we can get out with our maximum loss, but simply having the rules, and always sticking to it will save us from the nasty trades that just keep on going and going against our position until we have lost more than many winning trades can make back.

If you have a losing position that is at you maximum loss point, just get out. Do not hope that it will turn around. Given that trades are either winners or losers, and this one is shouting ‘Loser’ at you, the chances that it will turn around and become a large winner is tiny. Why risk any more money on this losing trade, when you could simply close it out (accept the loss) and move on. This will leave you in a much better place financially and mentally, than holding the position and hoping it will go back your way. Even if it did do this, the mental energy and negative feelings from holding the losing position are not worth it. Always stick to your rules and exit a position if it hits your stop point.

2.5 Never add to a losing trade

One of the few trade management rules that we can state we never break is ‘Never add to a losing trade’. Trades are split into winners and losers, and if a trade is a loser, the chances of it turning right around and becoming a winner are too small to risk more money on. If indeed it is a winner disguised as a loser, why not wait until it shows it’s true colors (and becomes a winner)before you add to it.
If you do this you will notice that nearly always the trade ends up hitting your stop loss and does not look back. Sometimes the trade turns around before it hits your stop and becomes a winner and you can count yourself very fortunate. Sometimes the trade hits your stop loss and then
turns around and becomes a winner and you can count yourself unlucky. Whatever the result, it is never worth adding to a loser, hoping that it will become a winner. The odds of success are just too low to risk more capital in addition to the initial risk.

2.6 Don’t take too much risk

One of the most devastating mistakes any trader can make is risking too much of their capital on a single trade. One thing is certain in trading and that is if you lose all your capital you are out of the game. Why risk so much you could be prevented from continuing? There is a saying in
poker than going all-in (risking all your chips) works every time but once. This is true of trading.

If you risk all your account on every trade it only takes one loser to wipe you out (and no trading method is 100% accurate), so you will be out of the game at some point – it is only a question of time.

In general, we only risk 1-3% of the available capital allocated to a system on any individual trade. This is calculated using the size and, the difference between our entry price and our maximum stop price, and the amount of capital allocated to the system. With the win probability
and ratio of size of winning trades to losing trades we are almost certain never to lose all of our trading capital. In fact, the chance of us hitting our maximum drawdown for the year is tiny.

All trades should be of a size that almost seems insignificant. If you are worried about the size of a trade then it is too big and you should reduce the size immediately. Remember that longevity is the key to making money by trading – slowly over a long time with minimal risk, is always preferable to rapidly with too much risk.

2.7 Only trade positive expectancy systems

If you have a positive expectancy trading system, the only factors that determine how much money you will make per year are the number of trades the system generates, how much capital you allocate to the system, and how accurately you implement the trading signals. If you do not know whether your trading system is positive expectancy then why are you trading it? Expectancy is calculated using the profit or loss on each trade (net of trading implementation
costs) divided by the initial risk (using your stop loss) and then taking the average of this number of a series of trades. Systems that have positive expectancy will make money on average and those with negative expectancy will lose money.

Successful traders only trade systems where the odds of success are in their favor (i.e. the system is positive expectancy) so they know that making money is the result of accurately implementing the system and not just pure luck.

2.8 Minimize all trading business costs

Some trading systems have only marginal profitability, and trading implementation costs (commission, spread, and slippage) can be the difference between profitability and making a loss. With the easy availability of modern electronic brokers, and fully-automated trade processing and
execution, it is definitely worthwhile looking for a very low cost way to implement your trading system. High commission, wide spreads, and large amount of slippage can be reduced considerably simply by carefully choosing a broker. This can be the difference between a system
(especially a high frequency one) being useable or not. Paying too much for trade implementation is an avoidable way to lose money.

2.9 Be educated

In order to compete at the highest level in the trading business and be one of the few truly successful participants you must be well-educated about what you are doing. This does not mean having a degree from a well-respected university – the market doesn’t care where you were educated.

Being well-educated means that you have thoroughly researched and tested your trading ideas and know why your trading system worked in the past and is continuing to work now. It means understanding all the technology and applications that your system needs to perform accurately.
It means understanding your goal and objectives and how trading will achieve these. It means understanding yourself and how your personality affects your results. It means understanding the markets and instruments you trade.
In order to succeed you really need to become an expert in your own trading business to understand how it all fits together, when it is broken, and how it can be improved. As with all worthwhile endeavors, this takes commitment, hard work, dedication, and more hard work.

2.10 Don’t trade scared money

Lastly, no one ever made any money trading when they had to do it to pay the mortgage at the end of the month. Having a requirement to make X dollars per month or you will be financially in trouble is the best way I know to completely mess up all trading discipline, rules, objectives, and
leads quickly to disaster.

Trading is about taking a reasonable risk in order to achieve a good reward. The markets and how and when they give up their profits is not under your control. Do not trade if you need the money to pay bills. Do not trade if your business and personal expenses are not covered by
another income stream or cash reserve. This will only lead to additional unmanageable stress and be very detrimental to your trading performance.

3 Summary

In this article we have covered the rules that we believe should never be broken in trading. If you work on never breaking them, your trading should improve dramatically.

We sincerely hope this information has helped you to improve your trading performance.

Good luck in yout trading.

About the author:
Paul King is owner and head trader of PMKing Trading LLC, a Vermont-based proprietary trading company founded in May 2002. Paul has published a series of eBooks and articles about what he considers to be the important aspects of trading.

Visit www.pmkingtrading.comfor more details.