Over the years, many forex traders have found themselves in trading situations which have a tendency to repeat over time. A number of these situations have had the honor of meriting a trading maxim or adage from which a novice trader can learn from the wisdom of seasoned traders.

Often, traders will appear to be poking fun at trading with these maxims. Nevertheless, many times they are stating timeless truths about trading that many traders have had to learn the hard way.

In essence, while many of the sayings have a humorous point of view, they also contain a certain type of wisdom about the world of trading that a new trader will eventually come to understand and will probably want to apply in their forex trading process.

Some of these common trading maxims which have been handed down over the years are listed below that not only provide a dash of humor, but also illustrate a key element of trading strategy wisdom that merits paying attention to.

Buy Low and Sell High

This market adage summarizes the intention of every forex trader who wishes to be profitable, as well as the goal of just about any other type of trader. If this maxim could be observed and put into practice every time a trader initiates a position, then they would truly be able to say they were making money "hand over fist."

Of course, the hidden joke behind this saying is that buying low and selling high is so much easier said than done. Nevertheless, some technical indicators like the Relative Strength Index can help traders determine when the market is high and when it is low, as can support and resistance levels.

The Trend is Your Friend

This maxim recommends trading along with the market trend which consists of the predominant direction of the market in the currency pair of interest. Basically, the phrase is a statement to avoid going against the predominant directional trend, which could be compared to swimming against the current or going against the flow.

This phrase is the basis for the trend traders' overall strategy of identifying the major trend and then seeking to position their trading accounts in the same direction.

Don't Stand in Front of a Train

Rather than trying to pick a top or a bottom, which often ends in tears, a wise trader according to this adage should instead wait for the market to run out of steam and reverse before taking a position in a contrary direction to a prevailing trend.

This philosophy is especially relevant to swing traders who often seek to trade and profit from counter-trend corrections, as well as the prevailing trend.

Bulls Make Money, Bears Make Money, but Pigs Get Slaughtered

This saying is pretty much self-explanatory once you know the significance of the market animals it refers to. In general, it offers a warning to avoid allowing greed to predominate in your trading decisions.

Many traders get greedy in taking profits, and instead of taking and locking in a reasonable profit, they will hold out for more money. This can have disastrous results for their account, sometimes even turning winning trades into losers.

Incorporate This Wisdom in Your Trading Plan

Forex traders who take the above words of trading strategy wisdom to heart will have a considerably greater chance of success over the long term in their trading activities. One way to incorporate these guidelines into your trading process is to put rules in your trading plan consistent with their teachings.

Furthermore, no matter what trading strategy you ultimately decide to use, you will want to learn to manage the emotional reactions that might arise when trading forex. A trading plan can help considerably in this regard, and will help you learn to treat your trading activities more as a business than as a hobby.

Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.