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Basic Principles For A Long Term Profitable Trader
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There are several key differences between a beginner trader and a professional trader. This is true for all money trading areas, and especially true in Forex trading.

These principles you are going to read about here, are all principles that I lacked when I started my journey in trading Forex, and it took me a long time to identify them and acquire them.

Principle #1: Don’t be right, be profitable. Yes, it is extremely difficult to admit that a trade you did was wrong and cut its losses while it is losing money, However it is extremely a waste of money to hold on to that trade just to prove to yourself that you were right. It is much wiser to cut it and maybe even join the trend in the opposite direction. I have had many times occasions where I have had to reverse my trade. In Economics the bad trade is called sunk cost – you already lost that money, don’t count it in the reasons to go or not go the opposite direction. You should always consider a possible trade as if you were standing aside, and ask yourself is it a good time to get in right now in this direction. If you answer NO, don’t take the trade, and close existing trade, if exists.

Principle #2: Find profitable strategies, and invest less in trading psychology Psychology issues are overrated as a major reason to failure in trading. However most of the traders fail because they are using strategies, which are not profitable, or that they are risking too much money for each trade. The psychology aspect is important, however it can be minimized by using automatic strategies, and by understanding what are you doing, by having a reliable statistics about the performance of your system.

Principle #3: Measure your performance in months, not in days. Everything can happen during a day or even within several weeks. If you have a profitable strategy with a reliable edge, you should look for the long term to see how you are doing. Even the best strategies have periods where they are losing money. Don’t let that stand between you and the more profitable periods. You should be familiar with the system you are trading, and know its profit potential, maximum draw down, and more relevant history data such as number of consecutive losing months, weeks, days, and number of consecutive winning months/weeks. days, etc.

The above principles are framed over our wall at powertrendsystem.info, because they are so basic and yet so easy to forget while you are trading. Those who are serious about keeping them have a much better chance to become consistently profitable traders.


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