Forex Scalping

Are you tired of the same old day trading tips? Like, “cut your losses and let your profits run.” “Never let a gain turn into a loss.”, or the most repeated tip, “Buy low, sell high.”

So how about something new? Let me give you some specific day trading tips that will turn your trading around.

A good defense beats a good offense over the long haul. If you want to stay in the Trading "game", then developing a good defense is a MUST.

Rule Number One: Cut your losses immediately when the trade doesn’t go your way. There’s nothing harder to learn and nothing better. I’ll be even more specific. The average “run of the mill” day trading advisor will tell you to enter a trade, place a stop of 2 to 4 points, place a target that’s equal to your stop, or 2 to 3 times greater, and then wait for your stop to get hit. This is a big mistake that is going to end up costing *you*.

The time to wait is before you enter the trade, not after.

I’ve been trading for over 20 years, and I don’t trade like the crowd. The crowd waits for their stops to get hit. They sit there hoping their trade comes back from negative to positive territory, but it usually doesn’t and they lose money. They believe that the edge (probability of success) isn’t good enough on their entries. This is the crowd’s approach and it just doesn’t work. My day trading advice for you is to use radical soft stops that go against human nature.

In trading, your entries and your exits must NOT come naturally at first. Human nature is responsible for the fact that 90% of those day trading eminis lose money. If you follow the herd, you’ll lose money too.

Some of my subscribers tell me it seems impossible to get out of a trade early, just because it doesn’t move immediately into a profit. They worry about commissions. They worry that the trade will turn around and go their way in a few more seconds and they’ll lose opportunity. In fact most of the people reading this right now will try it for a few minutes (hopefully on a trading simulator) and decide it can’t be done.

Like I said, my techniques and day trading tips fly in the face of the untrained “gut feeling.” And that’s precisely why they work. Exiting my way is not the whole picture when it comes to the method I use for day trading support and resistance. Any complex process has to be broken down into small chunks at first, a person has to learn one thing at a time, especially when you want to learn day trading.

Always demand that the trade goes profitable immediately. When it doesn’t, get out immediately.

Radical, but it works.

My day trading advise for them is don’t wait for the market to prove you wrong, instead, if the market doesn’t immediately prove you right, run for the exits.

Example: Let’s say you enter a day trade. In the first 5 seconds it goes 3 or 4 ticks against you. What is your course of action?

1. Give it a chance, don’t waste the commission.
2. Sit and hope that it turns around before it hits your stop.
3. “Knowing” your entry was excellent, sit tight and / or move your hard stop away.
4. Add to the position (scale in) to bring your break-even point closer.
5. Get out of the position NOW!!! Don’t think about it, just get out.

Believe it or not, “e” is the right answer in my book. You have to be flexible with everything, but this is the foundation of my trading style. This is the default procedure.

Does it work?... YES it works! But it only works IF you know where and when to enter.

About The Author

Mike Reed is author of TradeStalker's RBI Trader's Updates. He has been trading the Market for 23 years. His support and resistance numbers have been published on the internet since 1996. Mike's nightly support and resistance zones are specific and incredibly accurate. He offers an unlimited free trial of his nightly TradeStalker RBI Trader's Updates. http://www.TradeStalker.com.

Copyright 2005 TradeStalker.com and Mike Reed

I'm a trader just like you. I make a living trading FOREX, not by selling a system or seminars. Many members consider FxBootcamp like an internship or apprenticeship in the currency department of a bank. You learn by trading under the guidance of the bank's Senior Trader. FOREX can be a profitable business. If you treat it like a business, then you can build and grow it over time. Like a business you need to plan and then exucute that plan. I will teach you how. To learn more click here: Forex Scalping

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