I trade with IG Index, although their spreads and margin have gone up considerably under new EU finance laws.
Trading is tough and no-one has a crystal ball. However, on a 50:50 chance of being right on a trade, if you can run your profits some 3x where you cut your losses at every time, then you will make money over time. Problem is, people being people, all too often run their losses and cut their profits i.e. they do the exact opposite of what they should do.
No matter whether you're trying to trade forex, stocks, commodities etc. Some other golden rules:
- Do not over trade. This means you're doubting yourself and incurring massive brokerage charges. Stupid.
- Once entered a trade, forget about the outcome. Divorce yourself from it. Use an automatic stop loss. The universe rewards those who are not emotionally attached to the outcome. Sounds woo woo but it's true.
- As a trader you are going to incur capital gains. Which should not be problem. Just factor it into the cost of doing business.
- Use some basic technicals to time your entry. MACD is probably the most useful to highlight basic oversold / overbought conditions. Look for MACD crosses. This is when the different velocities of investor / trader money usually align (i.e. long / medium / short term trades). You want to ride these concurrent waves. Stay out when market is crosscurrent i.e. the wind blows against the current - it only creates choppy sideways conditions.
- Your exit is always mathematically determined! Read the 1st paragraph again if you don't understand why.
