TIPS
TRADING T
RAGEDY
TIPS
TRADING TRAGEDY
TO HELP AVOID A
1
LEARN THE RULES
OF THE ROAD
We simply can’t overstate the importance of educating yourself about the markets.
Take the time to study the markets and learn the intricacies of trading before
risking real capital. GFT offers a number of free seminars to help you learn how to
get started.
— Kathy Lien, Director of Currency Research, GFT
You would never buy a car without
test - driving it, so you shouldn’t
place your first real trade without
learning the ins and outs of the
financial markets.
Short on EUR/USD @ 1.8670
Stop @ 1.8750 (80 pips)
Limit @ 1.8565 (105 pips)
Bear Left into
2
PICK A ROUTE
AND STICK TO IT
How can you get to your destination if you veer away from your path? Create a
plan to guide your trading. It should include your profit goals, risk-tolerance level,
methodology and evaluation criteria. Once you have a plan in place, make sure each
trade you consider falls within your plan’s parameters because you’re most rational
before you place your trade and most irrational once your trade is live.
3
PRACTICE
We can’t give you a permit to trade, but we can help you get plenty of practice.
Put your trading plan to work in real market conditions with a risk-free
practice account. You’ll get a chance to see what it’s like to trade in real
market conditions, while also taking your trading plan for a test drive —
without risking your capital. GFT offers free, no-risk practice accounts so
you can get a feel for the markets and our trading platforms.
Whether you’re a fundamental or technical trader,
never trade without checking the economic calendar.
Data like employment reports or central bank rate
decisions can mean the difference between a winner
and a loser.
Fundamental traders prefer to trade based on news and other financial and
political data. Technical traders prefer technical analysis tools like Fibonacci
retracements and other indicators to forecast market movements. Some traders
even use a combination of the two. No matter what your style, it’s important
to know how to use technical and fundamental tools to help you find higher
probability trades.
4
CHECK THE CONDITIONS
BEFORE PLACING A TRAD
E
5
KNOW HOW FAR YOU
CAN AFFORD TO GO
You wouldn’t take a week-long vacation on a day-trip budget. Develop a
risk-to-reward ratio that fits your financial situation. Know your limits, and
how much you are willing to risk on each trade. Never risk more than you
can afford to lose. Always make sure you have enough capital to trade another
day. Which brings us to the next point…
6
KNOW WHERE TO
STOP ALONG THE WAY
Stop and limit orders can help manage risk and protect potential profits by
helping you get in or out of the market at specified prices. With GFT you can
even place automatic trailing stops, which trail your position at a specific
distance as it moves, helping to protect any profits should the market reverse.
Parent & contingent orders can help you set up an entire trade, including
entry and exit points and risk management, in one quick step.
*stick to
the plan!
7
AVOID ROAD RAGE
Check your emotions at the door because “revenge trading” is never sweet.
When you have a losing trade, don’t go all-in to try to make it all back in one
shot. Stick with your strategy. It’s smarter to make it back a little at a time
rather than being stuck with two crippling losses.
— Martin Slaney, Director of Global Dealing Ope
rations, GFT
As a trader, you really need to b
e prepared. The key is to
not only expect the unexpected - su
dden news announcements,
changes in market sentiment or g
eopolitical developments - but
also to employ a sound risk ma
nagement system that provides
8
KNOW WHAT
TYPE OF DRIVER
YOU ARE
Understand your tendencies and personality traits so you can combat your weaknesses
and maximize your strengths more effectively. For example, if you know you tend to
be a more emotional person, you’ll want to be extra careful to trade based on analysis
and your trading plan rather than fear of losses or the excitement of potential profits.
9
REMEMBER,
SLOW AND STEADY...
One key to trading is being consistent. All great traders have lost money,
but as long as they maintain a positive edge, they may still come out a
winner. Educate yourself, stick to your trading plan, manage your risk
and practice discipline and patience. However…
10
NEVER BE AFRAID TO
EXPLORE A NEW PATH
Although consistency is important, don’t be afraid to re-evaluate your
trading plan if it’s not working for you. As your experience grows, your
needs may change. Your plan should be a reflection of your goals. If your
goals or financial situation changes, so should your plan.
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GFT refers to Global Futures & Forex, Ltd. and all of its divisions, branches and subsidiaries, including Global Forex Trading, GFT Futures, FX 360, GFT Global Markets Asia Pte. Ltd., GFT Global Markets UK Limited and GFT DMCC. Global Futures & Forex, Ltd., doing business as Global Forex Trading and as GFT Futures, is registered with the U.S. Commodity Futures Trading Commission as a futures commission merchant, and is a member of the National Futures Association. In Japan, Global Futures & Forex, Ltd. is registered with the Financial Services Agency as a financial instruments firm and is a member of the Financial Futures Association of Japan. In Australia, GFT refers to Global Futures & Forex, Ltd., ARBN 103 508 461, Australian Financial Services License number 226625. For Australian investors, a Product Disclosure Statement (PDS) is available from the company website www.gft.com.au. Interested parties should read and consider the PDS before making any decision to deal in GFT products. GFT is the issuer of these products. In the United Kingdom, GFT is the business name of GFT Global Markets UK Limited, which is registered in England and Wales (Registration No. 5394757), with registered address of 34th Floor CGC 34-03, 25 Canada Square, London E14 5LQ, and is authorised and regulated by the Financial Services Authority. In Singapore, this information is made available to you by or for GFT Global Markets Asia Pte. Ltd. (Unique Entity Number 200717665N). The contents hereof is available or accessible for informational purposes only and is not to be regarded as an offer or a solicitation to deal in any investment product or to enter into any legal relations, nor an advice or a recommendation with respect to such investment product.The information provided here should not be relied upon as a substitute for extensive independent research before making your investment decisions. GFT is merely providing this information for your general information and the information does not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision based upon any information contained within. Trading of foreign exchange contracts and other investment products, which are leveraged, can carry a high level of risk, and may not be suitable for all investors. In Dubai, GFT is the business name of GFT DMCC, where GFT is Registered & Licensed as a FREEZONE Company under the Rules and Regulations of DMCCA, License Number DMCC-31136. ™, ™, GFT™, CFD 360™, Chart Studio®, DealBook®, Foresight-A.I.™, FX 360®, Spread Betting 360™, are either registered trademarks or trademarks of Global Futures & Forex, Ltd., in the United States and/or other countries. The absence of a name or logo in this list does not constitute a waiver of any and all intellectual property rights that Global Futures & Forex, Ltd. has established in any of its trademarks, service marks or logos. All other trademarks, service marks or logos are the property of their respective owners. Each investment product is offered only to and from jurisdictions where solicitation and sale are lawful, and in accordance with applicable laws and regulations in such jurisdiction. Trading of foreign exchange contracts, contracts for differences (CFDs), derivatives and other investment products which are leveraged, can carry a high level of risk and may not be suitable for all investors. It is possible to lose more than the initial investment. The risks must be understood prior to trading. Past results are not necessarily indicative of future results. © 2010 Global Futures & Forex, Ltd. All rights reserved. CD04G.011.072210.
