Basic Principles In FOREX TRADING

Basic Principles In FOREX TRADING

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Many people run forex trading without understanding a valid rule of the game.

Forex trading is a business. Just like the others, it makes no difference. Therefore, forex trading also “follow” rules / principles that apply in the business world in general.

If you really understand this basic principle (and practice it with discipline), I’m sure our chances of success have reached 80%.

What are these basic principles? Let’s take the surgery one by one.

READY RISK OR READY FOR LOSS.

Why do I put this principle as the first point? Because in any business (including forex trading), loss is a certainty / certainty.

This statement is not a form of apathy and pessimism, but a reality that must be faced. We must be aware and ready to face the possibilities that can happen (including loss).

Even in the extreme, I can say “loss is SURE THERE”. Here’s the proof:

In the airline business / airline ticket, there is a moment where the ticket price becomes very cheap. Usually during low session. How did it happen ? Whereas the salaries of employees and their operational costs are not reduced.

The answer is that these airlines dare to lose so that business can still run. They already count in the low session is definitely a loss but later losses can be covered in the high session moment (holiday / school holidays).

Another example is, the hospitality business. His condition is similar to the airline business.

When the low session is usually very cheap hotel rates. They dare to slam the price and ready to lose for the sake of business activities can still run. They believe, not forever loss and overdraft. In high session they fix the price more expensive and get profit and able to cover the losses to the low session.

Here is the process of “cross subsidizing”. Profit in high session conditions can cover the loss in low session conditions. Likewise in the forex trading. Profits and losses are always there, the most important total profit greater than total of loss (within a certain time range).

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