Fundamental and Technical Analysis give you higher chances of more winning trade in the forex market. Money management is very important too in forex trading. Remember to protect your money and the risk reward ratio involve during every trade.
Protecting yourself as you trade is called a protective stop-loss order in the market at the same time as you execute a trade. You need to know how much you are willing to lose ahead of time before you enter a trade. This needs to be a subconscious habit.If the trade does not work out according to your plan, you will be able to emotionally and financially survive without that loss affecting your life and financial security. Events that move over 500pips in a directions don't happen everyday, but a surprised fundamental announcements happen all the time.
Scientists say it only takes three repetitions to form a habit. If you trade two or three times with a mental protective stop-loss order or even without one, you will start to feel that you have harnessed the market and figured out how it moves. You will start to feel happy, confident and proud of your new trading breakthrough. A costly mistake most traders make is that they enter the market and instead of placing an actual protective stop-loss order with the computer, they used 'mental' stop loss confidently.
Congratulation, you have just formed a new self-destructive habit. The forex market can liquidate you in less than five hours. Every trade involves risk. It is not surprise to know that in the forex market a move of 500pips is possible should any unforeseen news happen. If you are just started out with a $5000 account and just bought 1 standard lot your account will be wipe out in your very own eyes.
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