If you want to make money from forex trading and achieve currency trading success you need to make sure your forex trading strategy is objective as possible and keeps subjectivity out.
Many traders make the mistake of including to much subjectivity in their trading plan and lose; lets look at why this can be fatal.
Why Subjectivity will ensure you lose.
Many traders need to make a lot of subjective judgements about their trading signals before executing them – The problem is, the subjectivity that they have in their judgements sees their emotions come into play and they lose.
Let’s look at an example.
Elliot wave and cycles are supposed to objective yet you have to spot the set ups and make subjective judgements.
This means that you can be tempted to over ride signals, take signals you shouldn’t and generally let your emotions dictate your forex trading strategy.
The same goes for those traders who want to trade by following online news wires.
They need to decide how much the news has been discounted and how valid it is – this is difficult or near impossible and again, emotions come into play and the trader losses.
Be objective! and Create Rules
A better way to trade is to create a set of objective rules for your currency trading system, which mean you do NOT have to make subjective judgements – you simply follow the rules.
This keeps you focused and disciplined and keeps your emotions out of trading.
Here us a simple system that is an objective set of rules and consist of three main components.
1. Look For Valid Support or Resistance
This is support and resistance tested several times, that line up on the weekly and daily charts at the same critical levels.
2. Look For Tests of the Above
When the price moves towards the support and resistance – You should then have a timing indicator to either indicate it will hold or fail.
3. Timing a Trade
If price momentum falls into the levels using the stochastic and Relative strength Index (RSI) a short trade is taken.
If the support or resistance is broken and confirmed by the previous two indicators then a long trade on the breakout is taken.
That’s it no guessing or subjective judgement used, this currency trading strategy is a simple set of rules that are followed
Trading signals are executed in line with the trading rules.
Sounds simple?
It is! Most traders can’t do this they want to subjectively decide if the trade looks good and impose their own judgements upon the trade - in forex trading this is fatal!
Discipline goes out the window and emotions dictate the trading strategy and trading equity is lost.
Destructive Emotions
The enemy of any trader is his or her emotions. This is why most novice traders lose, they can’t get an objective plan and set of rules they can follow with discipline.
If you want to achieve currency trading success, make sure your currency trading system is objective as possible and keeps subjective judgements and emotions out or you will lose to.
Got a Question? Ask.
Ask the community a question about this article:
Frequently Asked Questions
Is there a way to play Final Fantasy XI online ...with a (slim)PS2?
By: kygamer | 21-04-2008
Is there a way to play Final Fantasy XI online with a PS2(slim) being that it needs a 40G Hard Drive? If so, How?
Pl reply
By: deejay | 10-04-2008
I have ps2 console (U.S). Wat is the procedure to download a ps2 game and able to play in my console? pl help me...
Virtual online games
By: hello5 | 01-04-2008
What are some awesome online game? No downloading and one you make accountts on.
Where can I find beading recipes online for free?
By: Tamarry | 29-03-2008
Where can I find beading recipes online for free?
Internet addict?
By: BethH | 27-03-2008
I think I may be addicted to the internet. I check my email at least twice a day. Is this normal? How often do you check your email or go online?
Java install problems
By: oinky645 | 26-03-2008
after playing online games from pogo it now says i need to install java plug play.when i try it says the insalatoin package could not be opened verify that the package exists and that you can access it or contact the application vender to verify that this is a valid windows instilation package any ideas how i can get java back?thanks anyone who can help
Q&A Powered by:
Latest Investing Articles
Investors Guide To Bulgaria
By: Karl Hopkins | 10/10/2008
Bulgarian country guide providing useful information, history and property investment tips.
An Investors Guide To Canada
By: Karl Hopkins | 10/10/2008
Canadian country guide providing useful information, history and property investment tips.
Bloodletting
By: MTnews | 10/10/2008
Daily Market Commentary for October 10, 2008 Written for day traders, active traders and investors. A review of the market activity for the day, economic data plus, world news from Millennium-Traders.Com
Understanding The Investment Power Of OTC Stocks
By: Nir Dotan | 10/10/2008
For someone who is not very well-versed with financial terms and jargon, trying to jump into investing in OTC stocks is a hard thing. You will have to deal with a lot of different terms and principles which might be confusing in the beginning, but as you get the hang of it, it will be easier and more manageable.
What Should I Do If I Intend To Invest In Penny Stocks?
By: Nir Dotan | 10/10/2008
Many kinds of stocks are traded on stock exchanges. The price, market capitalization, and the stock exchanges where these stocks are traded vary. Penny stocks are stocks with a low value and a low market capitalization.
SEC Filings To Check When Choosing Small Cap Stocks
By: Nir Dotan | 10/10/2008
Companies are obliged to produce and made publicize, fundamental information and statistics for their shareholders and prospective investors. This will eventually provide them with essential facts and information that may guide them in investing.
Are You Investing 401(k) Money in Real Estate?
By: Gordon Hall | 10/10/2008
First of all, What is a 401(k)? I will try and give you a shortened version. A 401(k) is an employer sponsored retirement plan run under section 401(k) of the Internal Revenue Code. A 401(k) lets an employee save for retirement and at the same time defers taxes on his savings and the earnings associated with them until he retires.
A Simple Guide To Buying OTC Stocks
By: Nir Dotan | 10/10/2008
OTC Stocks or over the counter stocks are usually offered by startup companies who have not yet met the requirements needed to be publicly listed in registered stock exchange companies. OTC stocks are offered through Pink Sheets or Over the Counter Bulletin Board or OTCBB.
More from Sacha Tarkovsky
Facelift Costs – the Secret of Reducing the Cost by 70% Instantly!
By: Sacha Tarkovsky | 11/08/2007 | Women's Issues
Many people would love to have a facelift ( Rhytidectomy) but cannot afford the cost of around $10 – 15,000, however informed patients are getting face lift costs reduced to as little $3,000!
How are they doing it? The answer is quite simple they....
Breast Enlargement - Get a Womanly Sexy Look at a Cost That May Well Suprise You!
By: Sacha Tarkovsky | 11/08/2007 | Women's Issues
Breasts are one the major identity features of the women and all women are concerned about this area and many want a breast enlargement operation.
Until now many have been put off by the cost, but the cost of breast enlargement has recently fallen dramatically in price.
This article is all about getting the operation of your dreams at a cost that may well surprise you.
Liposuction Costs – Why you Should Consider India to Get the Look you Desire
By: Sacha Tarkovsky | 11/08/2007 | Women's Issues
Tummy Tuck or abdominoplasty, Liposuction of fat deposits has become hugely popular as an instant way of improving physical appearance.
Many patients are however put off by the high prices in Europe and the US and are traveling to India to get the same treatment at vastly reduced cost of 60% are more!
Arthritis - Cure it Now at a Cost That May Surprise You!
By: Sacha Tarkovsky | 11/08/2007 | Diseases and Conditions
Arthritis is a debilitating disease that causes severe physical pain and emotional turmoil for millions of people who suffer with it.
Many do nothing about it, simply because they feel the cost of joint replacement surgery is too high...
Overseas Property Investment - Choosing the Best Destinations
By: Sacha Tarkovsky | 23/07/2007 | Real Estate
When looking at overseas property you need to first be careful in the country you pick to invest in and you also need to be careful in terms of location. Let's look at some points to consider and a great destination, recently voted one of the top ten in the world.
A Novice Forex Traders Guide to Fundamental Analysis
By: Sacha Tarkovsky | 23/07/2007 | Currency Trading
If you are new to forex trading you have access to a lot of fundamental analysis as the click of a mouse from banks brokers and news wires you can look at and trade upon it – let’s look at forex fundamental analysis and how to use it.
Primorska Property – Slovenia an Investment for Above Average Growth
By: Sacha Tarkovsky | 22/07/2007 | Real Estate
Slovenia property is attracting more foreign buyers than ever before, as it has emerged as one of the worlds best investment property destinations and was recently voted as one of the top ten, with estimated growth in the next 10 years being as much as 300%!
Slovenia Houses - Why Savvy Investors are Buying
By: Sacha Tarkovsky | 22/07/2007 | Real Estate
Slovenia is a country that many people are unaware of as a property investment destination however this is all about to change, as Slovenia has recently voted one of the top 10 places in the world to buy investment property and buying houses in Slovenia is "hot" and becoming more popular with overseas property investors.
Finance 
| Posted: 08-06-2007 | Comments: 
