Technical analyzes and strategy is the essential for profiting from trading but not enough for being successful for a long time. Psychology is the factor that impacts our trading the most. I mentioned this in my earlier articles. We may have internal reasons or reasons from outside that impact our psychology, which in its turn impacts our trading. We can be cautious about it or not. For keeping emotion away and achieve stable profitable trading we need to build rules. In this article I will share rules that help to stay successful in trading.

“Trading is not guessing, feeling! Trading is not creativity and breaking rule! Trading is about following rule and recognizing patterns and signals!”

1st rule: Follow the rules!

This looks very simple but it is not! We all have gut feeling that guides us. Sometimes it works but mostly it does not. We tend to think that we are smarter than others and can fool others, even market. We tend to hurry and take earlier decision and then lose. If we don’t want to get surprise move and lose then we have to follow our tested and proven rules.
TIP 1: Read the rules before starting the analyzing the market and second time when you want to open a trade.

2nd rule: Analyze chart before trading!

We shouldn’t rely on earlier analyses. It does not matter if we had well analyzed yesterday or two days ago. We should analyze chart properly by checking all signals according to our strategy and method.
TIP2: Prepare checklist of indicators and signals. Trade when you have two confirming signals at least.

3rd rule: Trade with trend!

As mention earlier we tend to trust our gut feeling. And usually our gut feeling says that something different will happen. In this case we feel that trend will change. But usually gut feeling gives false signal and we lose. Trading with trend will increase wins and decrees losing trades. Our strategy may give signal of trend change but it does not mean that we have to start trading. We should see trend confirming signals to start trading.
TIP 2: Enter on trade confirming signals and search for trend changing signals only for exiting market.

4th Rule- Don’t trade during news!
Trading news is another trading strategy which demands special knowledge, skills and method. It is very attractive because give chance to earn more money in short time. But this risk, you can lose much more money if you are wrong. And we can see it happens a lot. Price may move against the indicators’ signal during news. But we will trade technical indicators and need to avoid trading 20 minutes before and after news.

5th Rule – Control of Finance- 2% with 40%

Do not risk more than 2% in one trade. Do not use more than 40% at the same time. When we get angry or have overconfidence we tend to use all equity which may leave us with 10-20% money at the end.

7th Rule - Accept failed trades and stop trading on the day with 6% lose.


People don’t like losing. We want to be right and win all the time. It’s hard for people to accept failure. But nobody wins all the time. We should accept the reality that we will lose some to gain some. We will accept the failure for not to lose all.

TIP 3: Do not wait for Stop Loss to get hit for closing losing trade. We mostly have a market sense and can feel when market is not moving in predicted direction. If you see that price is moving against you and you understand that you were wrong then you shouldn’t hope price to move in your direction and just close the trade before hitting your stop loss.


6th Using martingale in a clever way!
Martingale is increasing in percentage or doubling the next contract. It is done mostly for recovering earlier loses. Trader should use it in clever way. Otherwise he/she will end just recovering equity or have small increase.
TIP 4: Mostly traders use martingale when they are having losing trades. But rarely use it in winning trades. If we want to increase our profit then we should definitely add to winning trades. If you see that you have identified the trend and are on right side and have winning trade then why not add another trade? Of course you do it with proper Stop Loss and Take Profit levels.


EXAMPLE
Equity: 3000
Daily lose: 2%=60$
Trade amount: 1200$

With martingale in mind we can risk:
$7.5 on 1ST trade, $15 on 2nd trade and $30 on 3rd trade
Also in the same way we can use:
$300 on 1st trade, $600 on second trade and $1200 on 3rd trade.

EMA + Stochastic Strategy Setup:
3 EMA: 34, 55, 144
Stochastic: 13

Sell:
EMA 144 has to be in down slope. Stochastic should be above 50 line. If price is around 34 and 55 EMA we look for volume. If volume increase and price fails to rise then we open sell on support or trend line break.

Buy:
EMA 144 has to be in rising up slope. Stochastic is below 50 line. If price is around 34 and 55 EMA then we look for volume. If volume increases and price fails to fall then we open buy on support or trend line break.

In this latest EURUSD fall we could open three sell position. First and third one looks good but the second can trap traders. You could ignore volume and open sell on retrace trend line break. You can see that price moved sideways, even a bit up after breakout. You may close with or your SL could be hit. Trader could wait until volume signal and open two times more per martingale strategy.
Note: It is good to open trade and sell on retrace but the right way would be to add new trades on the direction of the trend on every price retracement and hold the trade until price breaks main trend line or 144 EMA and.
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