How to survive using long time frames in the forex market 1.

It is a well known fact that the average trader which start up with forex trading will sooner or later blow his or hers trading account. In fact, about 95% of the new aspiring foreign exchange traders are going to loose their money. The 5% which is left have learnt the hard way, but somehow managed to survive. They probably survived because they have done some self-education, bought some books, read about money management and trading psychology. There is no free lunch and it is a common disbelief that you as a new forex trader can make quick money easily by trading the fx. But there are hope. Please read on, below I will give you some do's and dont's you can follow if you want to heighten your odds for surviving in this business.

Three words can really say it all: Trade Longer Time Frames!!There exists some reasons why the longer time frames are better and more safe, and why the shorter time-frames are more dangerous and I will go into them now.

The most common mistake a new 1fx trader does, is wanting to be in the market all the time. He or she thinks by not trading for a while, is the same as letting the train pass without being in it. Now, that is very wrong and it is probably one of the main reasons why aspiring forex traders looses so fast.

The technical reason is simply that you enter the market at the wrong times when either there is no real buy or sell signal, or you enter the market in the wrong direction, or you enter the right direction but with wrong timing right before that big juicy move you saw actually is over and a big retrace or trend change is due. So the next thing is that your stop-loss is hit or if you have no stop-loss, you just sit there and watching your losses growing bigger and bigger in the hope that the market soon will stop and turn around and recover your losses. This is very dangerous and if you are unlucky, you can loose all of your trading account by just a few trades this way.

So what can you as trader do? Well, the first thing you can do is to switch to the daily or the weekly charts and forget about scalping and daytrading. Don't sit glued to you screen and watch the market all day (and night) long. This will just stress you and drag you into new bad trades again sooner or later. By switching to the longer time-frames, you can trade very well just by using 5-15 minutes in front of long term charts. But you need a strategy you follow and that strategy should be well focused around the longer time frames.

Geir Laastad

About The Author:
Geir has been a Software developer since 1980 and a currency (forex), futures and stocks trader since 1997. CEO and owner of GL-Software, whith main focus is based around making software for the financial (forex) market. Just a little part of this is their own products offered on their web site. They also do all kinds of software development and nice web designs. www.gl-software.no. You are also very welcome to visit Geir's Forex Trading Blog.

Tags: FOREX TRADING

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Title:	How to survive using long time frames in the forex market 1.
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How to survive using long time frames in the forex market 1.