Here is the Skinny on Trading Success.

Look at the chart below, these are the key systems that you need in place for Consistent Profits In Currency Trading or Commodity Trading. You need a Good money Management System, one that slows you down when you are trading poorly, and Revs you up when you are doing well.

Your Money Management system also should keep you in the trade for optimum profits. Once you have your Money management in place  you can test your Trading System. As long as the system that you have developed, has a positive expectancy, you will be able to trade the system with Confidence.  When you do you will get Consistent Profits.

If there is a flaw in any one of these steps you will fall into the negative loop funnel.  For example with system one Money Management. If you have no Money Management that will bread confusion while you are trading and give you stress. Stress will cause you to become frustrated. When you are frustrated that produces non adaptive behavior. Non Adaptive Behavior produces poor decisions. Poor Decisions Produce Losses.

If you have not tested you system and don t know that it has a positive expectancy or what its parameters are you will once again fall into the negative loop funnel. You will once again produce stress. Stress will cause you to become frustrated. When you are frustrated that produces non adaptive behavior. Non Adaptive Behavior produces poor decisions. Poor Decisions Produce Losses.

Of course the same situation will happen if you have no confidence. The reason you have no confidence is because you lack the first two steps. In order to trade effectively and consistently you need to trust yourself. That trust can only be accomplished when you have tested you system, and have a solid Money management system in place.  Reason?  You have an escape plan and exit strategy and you now know you will not drive yourself into the financial abyss.

Article Source: http://www.articlesbase.com/day-trading-articles/forex-trading-the-small-steps-needed-for-success-3804020.html

About the Author

Thomas Strignano is a retired Chief Foreign Exchange Trader for a major Italian Bank. His 20 plus years of trading (Market Making) in the commercial Forex market makes him an expert in the field. He has developed his own proprietary trading systems and tested them real time in the interbank market. He has trained a number of Forex traders to be profitable, some who are still active at Major International Banks. Tom s major focus is on market timing techniques with technical analysis, forecasting(future) pivot points for major market moves. His overall objective in trading Forex, is use of good Money management, low risk, high reward positions. Please see http://www.tomstrignanoforexexclusive.com

The markets jumped higher today at the open, rallying on a sharp drop in the Dollar once again. Commodities were off to the races, with gold and silver leading the charge. The SPDR Gold Trust (ETF) (NYSE:GLD) hit a high at the open of $139.54 while the iShares Silver Trust (ETF) (NYSE:SLV) hit a high of $30.00.  This move was driven by the hype over the last week and yesterday.  Amateur traders and investors were buying with reckless abandon, after hearing rumors that JPMorgan Chase & Co. (NYSE:JPM)  was caught short and an inevitable short squeeze on silver was looming. Even the media and talking heads on TV were all over the squeeze.

When I hear this nonsense I start to salivate on the short side. Always go the opposite way of the crowd. That was all hype on JPM being caught short. The average investor who bought this morning was plainly fooled and took the bag from institutional smart money.  Please, do not be so dumb average investor! It drives me crazy. Learn the game. As an expert trader and Chief Market Strategist, I implore you all, do not get caught in the hype.

Like clock work, these commodities jumped higher at the open in a frenzy of buying by amateurs, while institutions gladly sold to them. This marked the high of the day. Since the GLD hit its high of $139.54, it reversed and turned negative, dropping to a low of $137.32. The SLV collapsed from a major gap higher to turn negative. It went from $30.00 to a low of $29.12.

Never fall into these foolish tricks. Trust me, if JPM was truly short, they are powerful enough with powerful friends to push it in the direction they wanted. I would dare say, now most institutions are short silver and a small pull back has begun.  Learn the tricks, do not get caught with your pants down.

Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
#1 Rated

Article Source: http://www.articlesbase.com/day-trading-articles/do-not-get-caught-with-your-pants-down-3803838.html

About the Author

Gareth Soloway has been an avid trader since his days at Binghamton University where he studied Economics. After receiving a BA in Economics he began work as a financial adviser. While working as a financial adviser, Gareth continued to study the markets and trade for himself. Following his work in the financial sector, Gareth went on to trade alongside professional traders learning the ins and outs of technical and fundamental analysis. After years of trading, Gareth decided to partner with his friends and colleagues, Nicholas Santiago and Lou Cardinali to form InTheMoneyStocks.Com.