My Forex Foundation

I have been trading since 1990 and trade foreign currencies. I started off trading the commodities market, subscribed to chart services and made hand made charts plotted from the daily prices from Wall St Journal! It was fun and I made good money but became even more profitable when Internet online trading came around.

When I started trading Forex I was ignorant and had a mixture of feelings - fear, greed and hope. I had a very incomplete approach which was based on my incomplete knowledge of how the Forex markets worked. Over the years I would fine tune my strategy and have written many trading plans. Doing this was very cumbersome and I couldn't follow my own plan/advice. I did notice a few things brought me success and over time have evolved into my TRADING PHILOSOPHY.

I believe a trading philosophy is better than a plan as it allows for interpretation and is flexible! As I learn more and grow I continue to add tools and methods which fit in terms of my philosophy.

Here's my current Currency Trading Philosophy

Trading Purpose : I trade to make money and do not gamble. This means I wait and have patience for high probability, lower risk trades that are likely to make me 1.5x to 2x+ more than I risk.

My style of trading is both simple and flexible but it's also disciplined. I do not trade with my emotions and have patience to wait for the BEST trades. When I see a good trade I fearlessly take the trade.

I only take trades I feel are 50% or more likely to work and ONLY when the likely profit target is 1.5x or more of what I'm risking. Thus if I have a 10 pip stop the target has to be 15 pips or farther away. If I lose on a trade I am not worried due to the very low amount I risk, typically 8-12 pips.

For exits I use major support/resistance levels as well as chandelier trailing stops.

My Forex Trading System Rules

I use money management and proper position sizing where I risk no more than 2-3% of my account on any given trade. The wider the stop the fewer lots I trade, smaller stops allow me to trade larger and when right make even more.

Avg Stop Loss - 8 to 15 pips

Target based on next level of support & resistance and if its 1.5x farther away then my stop I'll CONSIDER trade.

Avg Risk Reward 1.5x to 2x or better!

Trailing Stop Loss - Chandelier trailing by 3x volatility

Fibonacci Profit Targets are best places to exit with maximum profit.

In conclusion I try to FOCUS on things that are most important and lead to increased trading profits, smaller and fewer losses. Once you become profitable having a trading philosophy will allow you to maintain that consistency.