Concentrate on one currency. Get to know it. Don’t jump back and forth. Get to know your chosen currency. Become intimate with it. Later, when you become more proficient, you can trade several currencies. But remember, no one currency is better, or easier than another.
2. One Lot
Low gearing. Small position size. If you are too highly geared you will fall. Understand this, and you are nine tenths of the way to trading success. I don’t literally mean one lot. I just mean “low gearing/leverage”. In other words I am talking about a small position size relative to your capital.
The major advantage of low gearing is that it allows you to use multiple entries. Your chances of making money by entering on two levels at 2:1 gearing is better than entering one level at 4:1 gearing. [Assuming you trade with the fundamental trend]
I distinguish between an “entry” and a “trade”. An entry is one position at one specific price. A trade may consist of multiple entries at different prices or times. This is a one aspect. I use a multiple entry strategy. These entire together make up a trade.
3. One Direction
Trade in the direction of the “fundamental” trend. Be disciplined and patient. My first reason for trading in one direction only is because it teach you discipline. If for no other reason than this, have a plan and execute that plan with discipline. In a certain sense two ways trading is like playing chess against yourself.
The second reason is patience. A one directional trading approach teaches you the important virtue of patience. Patience allows your entries to mature.
The third reason is that buying and selling, trading in both directions sounds nice in theory but in practice it is very difficult.
4. One Percent
Understand profit-what it is and when to take money off the table. A profit a day keep the bailiff away…
So, remember this: Choose one currency to focus on one-way-play in the direction of the trend, keep your gearing low, and set yourself a target. Remember that low gearing implies the flexibility of several simultaneous entries, all with low gearing. Losers most often violate the one direction strategy. They will buy in the morning and sell in the afternoon. Pretty soon they have no view, no patience, no discipline, lot of confusion and no money. Be patient, allow the market retracements. These are dip buying opportunities. Take your profit.
