Category: Forex Basics

Forex Basics category contains articles about the basic concepts of the forex world: Pairs, lots, pip, spread, slippage, and volume are covered in simple to understand articles.

Categories
Forex Basics

What Is a Recotization in Forex?

When you are trading in Forex, you will come across the term “recotization” sooner or later. While it’s not that common, it can happen and you should be aware of what it means and how to avoid it. What is an recotization? Read on to find out. A recall in the Forex world means that […]

When you are trading in Forex, you will come across the term “recotization” sooner or later. While it’s not that common, it can happen and you should be aware of what it means and how to avoid it. What is an recotization? Read on to find out. A recall in the Forex world means that […]

When you are trading in Forex, you will come across the term “recotization” sooner or later. While it’s not that common, it can happen and you should be aware of what it means and how to avoid it. What is an recotization? Read on to find out.

A recall in the Forex world means that the broker you are dealing with is unable or unwilling to give you trading based on the price you have entered. This usually occurs in a fast-moving market, usually around the time of a major news event affecting the market or some kind of a shock to the system. Basically, you decide to buy or sell a currency pair at a certain price and press the button to do so. By the time your broker receives the order, the market has already moved too fast to run at the advertised price. The recall notice then leaves the platform telling you that the price has been moved, and gives you the option of being able to think whether or not you are willing to access that price. It’s almost always a price that’s worse than what you originally ordered.

What Causes Recotization in Forex?

As mentioned above, markets are normally moving very fast, but they can move faster all of a sudden when a scoop is announced. This makes it can be tricky for the broker to make the order at the price you request. The broker you deal with has its own brokers dealing with it. The liquidity pool, or broker, may push orders, raise prices, or simply refuse to acknowledge anything if it so desires. Your broker considers the price available, not the one you ordered – and warns you that you will have a worse deal than you expected.

How to Protect Yourself from a Recotization

With a trusted Forex broker, it’s easier to protect yourself from recovery. We can put a limit order, and with this, we are telling the broker that he is only willing to make an order at a specific price or better. In this way, you are being told in advance that you are not prepared to pay more than this trade-determined price and that you are prepared to abandon the transaction if it cannot be done on these terms. Re-branding is very common in certain markets and is part of any Forex career. However, if you find in your Forex broker recounts often (especially in calmer markets) your broker may have a lack of liquidity. If that is the case, you will most likely want to find a new Forex broker. However, if we find recotizations mainly during the non-farm payroll report, give your broker a break – all brokers are flooded in times like these.

More Information about Recotizations

It is important to make it absolutely clear that, while stop and limit commands can work to avoid recotizations, both could be subject to sliding. The slide is where the stop or limit command is fired, but it is not executed at the specified price. Sliding is a fact of life, and it is tolerable as long as it is reasonable. Sliding should not occur in a slow market. Once your broker accepts a stop or limit order, you may slide, possibly giving you a worse price (or in some cases possibly a better price), but your order will be executed. This is why such orders can be a defense against unscrupulous brokers who use recotizations to keep it off the market when they want it off the market. However, it must be said that if you are in this position with your broker, you have a problem and should be looking for another broker instead of trying to find a way to work around your practices.

ECN brokers should never offer recotizations- if you enter an order to purchase at the prevailing market price, well, as soon as the price arrives there your order is executed. Of course, you may suffer from slippage, but if you have a good broker it should not be too damaging, as long as you are not negotiating in a crazy way during periods of extremely thin liquidity.

Large Trades and Recotizations

Another common problem that can trigger a broker that gives a customer a recotization is when the size of the trade is very large (in or near the maximum size of the trade that the broker stipulates from time to time in its terms and conditions) or bigger than the trades the customer normally does. Many brokers have a security feature embedded in their trading platforms, where if a customer enters a trade much larger than usual, then the platform asks them to confirm that they want to do a trade of this size, offering protection against a typical “big toe.”

Although this last scenario is not, strictly speaking, a recotization, it has the same effect: a delay in the execution of the trade that results in a potentially different price being available when the order is finally executed.

Flexible Brokers of Forex

There are some brokers, although they are hard to find, that allow their customers to take control and ownership of the recotization issue to some extent. These brokers have some mechanism through which customers can enter how much slip they are willing to tolerate, beyond which they demand a recotization. Thus, for example, if a customer says that he will tolerate up to 10 pips of negative slip in the EUR/USD currency pair, the broker will allow a sliding trade to pass without a recotization unless in this case, the negative slip is greater than 10 pips.

Forex Brokers Without Recotizations

But also, there are some forex brokers that follow the “market manufacturing” model (i.e., they are not ECN or STP brokers) that simply guarantee that they will never give recounts. Using this type of broker is another way to eliminate the problem, although you must then wait and see how much negative slip happens when you run trades. After all, any broker can eliminate recotizations as long as it is made 100% at the customer’s expense!

Categories
Beginners Forex Education Forex Basics

The Importance of Having a Solid Trading Routine

It is no secret that good habits are very important to most aspects of our lives. People with good dental hygiene habits have fewer cavities and fewer dental problems. People with stable exercise or healthy eating habits tend to suffer less disease. The same can be extrapolated to Forex trading: traders with the best trading […]

It is no secret that good habits are very important to most aspects of our lives. People with good dental hygiene habits have fewer cavities and fewer dental problems. People with stable exercise or healthy eating habits tend to suffer less disease. The same can be extrapolated to Forex trading: traders with the best trading […]

It is no secret that good habits are very important to most aspects of our lives. People with good dental hygiene habits have fewer cavities and fewer dental problems. People with stable exercise or healthy eating habits tend to suffer less disease. The same can be extrapolated to Forex trading: traders with the best trading habits tend to have longer and more profitable trading careers.

Good Forex trading habits are not born simply but develop over the years, often with the expense of losses along the way. Managing good business habits involves a very important decision to work toward the goal and put in the time and energy to build the right habits. Think of the professionals you know or have met in the past: – doctors, lawyers, athletes, accountants, and pilots, among others. They have all spent many hours developing the skills and habits necessary to master their trade. The same is true for currency traders.

The Importance of Daily Forex Habits

Make no mistake, without healthy daily (or regular) trading habits, it will not be profitable in the long run. Good business habits are different from your business plan. Business habits are the engine that will give you the strength to implement your business plan. Solid business habits include sleeping well, eating well, meticulously keeping your business successes and failures in writing, and always keeping the plan in mind even when a voice inside is telling you to quit smoking.

A solid trading routine will likely include identifying key levels of support and endurance at the beginning of each week and regular monitoring of markets to track the daily trends of your favorite peers. A routine will include checking markets at the same time each day to ensure accuracy and observe how trends develop or block. Most traders check markets at least when they open and close. They establish trades that meet the criteria of their strategy, or they move away if the opportunity does not present itself.

In the routine described above, note that the trader does not spend hours on his computer analyzing possible entry and exit points. He/She makes a strategy and monitors it at constant moments throughout the day without obsessing over possible opportunities that have been lost or could be created with a little bit of force.

If you are working to achieve a beneficial currency trading routine, be sure to build one that suits your specific lifestyle and not get stuck ‘thinking too much’.

Is he an “End of the Day” merchant? Should he be?

Some professional traders believe that end-of-day trades will help you to have a trading routine in the foreign exchange market that will be very successful without spending too much time. This sounds great, theoretically, because the reality is that becoming a full-time merchant has to be more flexible than having an ordinary job, right?

End-of-day traders basically only use strategies that can be implemented at the end of the day, so they’re not tied to their computers all day. This may sound like an excellent opportunity to make money with a few minutes a day, but be careful: this kind of trading routine can be very risky and can cause you to miss out on good opportunities, or to quit if markets suddenly change. End-of-day trading can be implemented with the right stop losses and entry settings, but it’s one of the most difficult to master Forex trading routines, and it’s not necessarily beneficial to all, but could be suitable for you depending on the lifestyle you lead.

The Advantages of Routines

If you’ve been living a routine free life so far, the concept of building a Forex routine can be horrible for you. However, there are advantages to building daily routines that should be examined even beyond the trading world.

According to health experts at Northwestern Medicine, building a daily routine will help reduce stress, improve bad eating habits, improve the quality of your sleep, and improve your physical condition. Routines will also eliminate the inefficient use of time and allow you to use your time more optimally.

Routines can be tricky to be carried out at first, but if they approach slowly and concentrate on the specific results you are trying to achieve, it is quite possible that in reality, you look forward to your daily rituals.

Points to Consider

For anyone looking for Forex trading as a way to escape the routine of everyday life, building a Forex trades routine may seem an antithesis to what they are trying to accomplish. But, it is important to be clear that without a routine, your trading will be less focused and, as a result, less successful. Before developing your trading routine, consider the following questions:

-When is the best time to focus on my trading without interruption?

-Do I have a healthy lifestyle that gives me the energy and momentum to trade successfully?

-Can I give you the time needed for my trading strategies with some small modifications in my current routine?

If you consider the answers to these questions and think you are willing to modify your existing program to spend some time in a correct Forex trading routine, you will realize that your current trading strategies will be sharper and your approach will be sharper, And hopefully, you’ll find more long-term gains.

Categories
Forex Basics

What is Slippage in Forex Trading?

When you start trading with Forex, you’re flooded with a lot of new terms. One of those you will surely encounter is what is known as “sliding” or slippage. In short, sliding is the difference between the price you see and the price you pay. For example, you can find yourself looking at the EUR/USD […]

When you start trading with Forex, you’re flooded with a lot of new terms. One of those you will surely encounter is what is known as “sliding” or slippage. In short, sliding is the difference between the price you see and the price you pay. For example, you can find yourself looking at the EUR/USD […]

When you start trading with Forex, you’re flooded with a lot of new terms. One of those you will surely encounter is what is known as “sliding” or slippage. In short, sliding is the difference between the price you see and the price you pay. For example, you can find yourself looking at the EUR/USD pair with a selling price of 1267 by pressing the button. However, you note that it was filled in 1269. This is what would be sliding, by two pips. You might be surprised to learn that this is not necessarily harmful.

The fact that a price has slipped during a trade is not necessarily a bad thing. Unfortunately, in the past, there were several foreign exchange brokers who took liberties with their clients. This happened before Forex became much more common, and perhaps regulated in major countries. Finally, even countries like the United States were a little behind investors’ protections in foreign exchange markets, because it was a surprising explosion of interest that surprised many regulators. Beyond that, it is a non-centralized market, so it is very easy to see how difficult it was for regulators to control the whole situation.

We are moving forward today, and most Forex brokers are heavily regulated. (In fact, if you are working with an unregulated Forex broker, you should withdraw your money immediately and place it in a more reputable broker). Although it could be argued that it is very tempting to slip your customers at all times, try to perform an operation, the reality is that most accounts are not large enough for the broker to accept the risk, even if they are less honest. The fines that some of the regulators have imposed on brokers in recent years have been huge and have cleaned up the industry drastically.

Since the average retail account is about $2000 in the United States, a few cents here and there will simply be worth the millions of dollars a brokerage would face. Research shows that accounts worldwide are also roughly the same size on average. The math just doesn’t work. Most of the time, there’s a perfectly easy explanation.

I would be willing to state that more than 95% of the time I read some kind of negative online review about the slip at a brokerage firm, it has something to do with news sharing. Trading in news is a fool’s game, and while you may be very lucky occasionally, you must understand that liquidity is a major problem. What this means is that there are not as many orders. Let’s take an example, if you want to buy the Swiss franc, there must be another trader willing to sell it. When you issue a market order, you are ordering the broker to buy the Swiss franc at the best possible price. What do you think it means if the best price is three pips away? Exactly. You just bought the Swiss franc at three pips the price you’re looking at. This is totally independent with the broker, they’re just there to fulfill orders. If there is no one to sell you the Swiss franc at the amount you want, they are simply facilitating the order you gave them.

During normal operations, the slide is almost unknown, because currency markets, of course, are some of the most liquid in the world. There are some fairly thin pairs that tend to slide more than others. Let’s take another example. If you’re trading something like the USD/JPY pair, the most reasonable thing is that you don’t have volume in one of the most important pairs like the EUR/USD pair. (This is why the spread is higher in these pairs).

The solution? If you do not want to be slipped while performing your operations, you can place a limit order, tell the broker that you agree to pay this amount or more for a coin. If the markets skip their price, they’re just not full. At least you have the consolation that you haven’t paid more than you finally wanted.

Categories
Beginners Forex Education Forex Basics

Activities That Can Help You Be a Better Trader

Trading can be a long process, it can be draining and it can also be unforgiving. Sitting at a computer for hours on end is never a great way to spend your day, but more often than not it seems like a necessity. When the markets are slow, or you have just lost a couple […]

Trading can be a long process, it can be draining and it can also be unforgiving. Sitting at a computer for hours on end is never a great way to spend your day, but more often than not it seems like a necessity. When the markets are slow, or you have just lost a couple […]

Trading can be a long process, it can be draining and it can also be unforgiving. Sitting at a computer for hours on end is never a great way to spend your day, but more often than not it seems like a necessity. When the markets are slow, or you have just lost a couple of trades, it is important to be able to take a step back. Do something to refresh yourself, and then come back. That is why we are now looking at a number of different activities that have nothing to do with trading, but they can still help your trading performance.

Playing Sports

This may be obvious to a lot of you, but you would be surprised how many traders either give up their physical activities in order to trade full time. Without going into the really scientific side of why sports is beneficial for you, the main aspect is the energy that it provides, you may be feeling tired straight after, but the long term effect of exercise includes boosts in energy, better concentration levels which then allows for more patience and discipline. Taking part in sport is also a great way to teach your body different aspects of discipline and preparation, important aspects of trading. Some sports like Boxing are also great for getting id of any underlying frustrations that you may have about the markets and your trading.

Yoga

A little like sports but slightly less physical (no less challenging though). Yoga can be used to help relax and focus your mind. When you have come off a few bad trades, it is hard to get out of that cycle, so being able to refocus your mind and relax is important. Being able to take what you learn in Yoga into the markets can also be fantastic, being able to channel your focus into the markets and your strategy can really help boost your productivity and profitability.

Reading

You probably thought this would be number one, it would be if we were looking at trading related books, but we aren’t, that would still be an activity to do with trading. A good book can take your mind away from your trading, to completely remove it from your mind so you can relax without the stresses.

Having said that, you can often find elements of trading in a lot of books, not necessarily related to trading, these could give you ideas of new trading strategies or ways you can adapt your own, often when your imagination is working (reading books) you can come up with ideas that you never would have before.

Talk to Other Traders

This one may seem obvious, and to be fair it is, but it is something that a lot of people do not do, many traders, especially the newer ones get absorbed into their trading, they forget about the other thousand traders around them that are going through the same thing. Talk to them, if you are having trouble with something, someone somewhere will have a solution for it, talking can help you find it, it is also a great feeling to help others, so giving your own wisdom to others can help the overall trading community.

Travel/Get Out of the House

Heading to a sunny shore or a snowy mountain may seem like a bit of an extreme, but giving your mind that extended break from trading can help refresh your mind. It can also give you a completely new and fresh perspective when you get back, often coming up with ideas you had never thought of before due to being stuck in a routine. If you cant get away for long, just get out to the local park, do something completely different, even a few hours can refresh your mind.

So there are a few different ways that you can help to refresh your mind or gain knowledge away from the trading platform, it is always important to add a bit of variety to your life, trading all day every day is not a healthy habit to get into, how you add that variety though, is up to you.

Categories
Beginners Forex Education Forex Basics

Can You Start Trading Forex With Only $200?

Can you really start to trade Forex with as little as $200? Let’s take the short and sweet answer here, yes you can. Many brokers allow you to open up accounts for as little as $10, so it is incredibly accessible, however, should you be trading with just $200 let alone the $10 entry requirement? […]

Can you really start to trade Forex with as little as $200? Let’s take the short and sweet answer here, yes you can. Many brokers allow you to open up accounts for as little as $10, so it is incredibly accessible, however, should you be trading with just $200 let alone the $10 entry requirement? […]

Can you really start to trade Forex with as little as $200? Let’s take the short and sweet answer here, yes you can. Many brokers allow you to open up accounts for as little as $10, so it is incredibly accessible, however, should you be trading with just $200 let alone the $10 entry requirement? This is where the answer is not quite as straightforward and we need to consider a number of different things before deciding whether to go ahead with such a small balance.

Many people often ask the question of how much they are able to make with a balance such as $200. Forex and trading as a whole is very much a have money to make money industry, so you may well be held back by your capital at one point or another. But we aren’t here to look at how to get rich, we are simply going to look at whether or not it would be advisable or sensible to trade with a balance as low as $200.

The first thing that we need to consider when going for such a low balance is how your risk management skills are and whether they are at the standard that you will require. The lower your balance, the stricter they need to be and the less wiggle room you will have. Have you actually tested with a balance similar to what you want to go into? Many people get the wrong idea when they sign up to a demo account and it comes with a balance of $50,000. The risk management that you can do on that account is far higher than you can on a small account, the little mistakes are hardly noticed, while on a small account, those little mistakes could potentially blow the entire account. One thing though, is that it would be a real credit to your risk management skills if you are able to grow a small account. Many people try and the vast majority of them fail, so if you are able to then it simply means that you have a knack for trading and know what you are doing.

You won’t be making millions on your $200 account, that this is perfectly clear. You can, however, make money and in the future, that may be considerably more than it is now. The wonders of compounding, this where you add whatever profit you have onto your next trade to trade slightly larger. Over a long period of time this can add up and that $200 account can grow to something substantially bigger, it will take time but it is possible. So having the motivation to carry on and to start small can mean in the future you are doing quite well for yourself.

So starting with a small account you should still be thinking about the usual risk management, things like only risking 1% of your account per trade as an example, of course, 1% of a “400 account is only $2, while on a $10,000 account it is $100, so the wiggle room is a little smaller. The good thing is that it will really allow you to hone your skills and to develop much stricter management of your funds and your account. Something that you can use in the future to really benefit yourself. Then whatever you have learned to do on your small account, it should be pretty easy to use the same techniques on a larger account in the future should you get there.

More than 20% of traders these days start with accounts lower than $999 which is often referred to as a micro account, so you are certainly not alone in starting with a smaller balance. Not everyone has the money available to trade and some are simply not serious about it, simply dipping their toes in to try it out, there are many reasons why people open up smaller accounts. It is important to remember that the higher the balance, the more flexibility that you will have. Build your account up with patience, do not risk more than you need to, and simply take your time, treat this as a long term business, and not a short term get rich quick scheme. 

We touched briefly on a demo account, something that you should have been using before going into a live account. Try and get one set up that is at a similar balance to what you are going to be using with your live account. This way, the risk management that you are using on the demo account can simply be transferred over to a  live account. There is no point practicing on a $50,000 demo account if you are going to be using a $200 account, as when you transfer over your skill, the account will most likely blow pretty quickly.

So some final thoughts to think about. If you are thinking of joining with a small balance, it is certainly possible for you to be successful, it will simply take a lot longer to achieve than it would if you start with a larger balance. It is important that you are on point with your risk management skills, do not try to push them as your account will not have the wiggle room available to do this, stick to the plan and do not deviate from it. One of the benefits of having a small account is the damage is limited, you can only lose what you have put in. So the loss of $200 will be much easier to take than the loss of $10,000, however, we know for some, that $20 is an awful lot, even or reason to ensure that you are taking your time.

So to answer our original question, yes you can trade with a $200 account. It will simply be a long and rather slow process, but something that if you are able to achieve. You can be proud of saying that you have achieved something that a lot of traders have tried but failed at.

Categories
Beginners Forex Education Forex Basics

Is Forex Trading Easy Or Difficult To Master?

So you want to be a forex trader? Before you start, you may have already come up with an idea of what it is that is involved with trading and what you will need to learn. Let’s get one thing straight from the get-go, there is a lot to learn. For a complete beginner, it […]

So you want to be a forex trader? Before you start, you may have already come up with an idea of what it is that is involved with trading and what you will need to learn. Let’s get one thing straight from the get-go, there is a lot to learn. For a complete beginner, it […]

So you want to be a forex trader? Before you start, you may have already come up with an idea of what it is that is involved with trading and what you will need to learn. Let’s get one thing straight from the get-go, there is a lot to learn. For a complete beginner, it can be incredibly overwhelming, we are talking about things like charts, numbers, trends, rates, pips, spreads, leverages, and many other terms and ideas too. For many, it may simply seem like it is too much and there is no point in trading. But when we break it down, is it actually as complicated as it seems? That is what we are going to be looking at today, we are going to work out exactly how hard or easy it is to learn to be a forex trader.

So what exactly is it that makes trading look so difficult? When we look at things from a sample statistic viewpoint, the forex markets can span over $2 trillion each and every day. This straight away gives the impression that reading is most likely just for those that you would consider mega-rich or at least rich who simply use their hired expert to do their trading for you. While this is true, it is for them, it is also a little deceiving, it is also for pretty much everyone else. While a few big fish such as the banks have large amounts of money in the markets, there are also millions of individual retail traders in there too, each with a much smaller amount. Pretty much anyone with access to the internet is now able to trade.

The main thing that would separate those so-called experts and the average trader is simply their knowledge and experience, not simply the amount of money that they have available to trade with. We need to remember that the markets are the same for everyone, regardless of how much money is in your trading account.

If we look at trading in simple terms, it consists of two different teams, the buyers and the sellers. The buyers are simply trying to push the price and value of a currency or asset up while the sellers are trying to push the same currency or asset down. Due to this tug of war, the markets are constantly moving up or down. A successful trade is simply a trade where you have predicted the movement of the markets the correct way which then means that you can close your trade in profit. It is a very simple concept, but this doesn’t mean that it is necessarily easy to implement.

You have also probably seen the various warnings that are up on pretty much any site to do with trading, the fact that the majority of people that trade end up losing money. Again, this does not on its own mean that trading is hard, but it certainly gives the perception of it, after all. If it was easy, surely the majority would be successful. The main reason why people fail is either the lack of knowledge and understanding or they are simply not disciplined or dedicated to their cause. Learning things before you actually start could help to reduce some of the early losses (and there will be losses) when you decide to start trading. The one thing that you cannot do is to simply expect to be successful and profitable.

The number one reason why a lot of people get into trading is simply the fact that they can potentially make a lot of money. Yet the reason why people should be getting into it is to simply be in control of your money. If we take your current balance and simply leave it in the bank, the value on your money will actually go down, due to things like inflation which are often higher than the interest rates that you will be receiving, the value of your money will potentially go down by about 2% per year.

Managing and maintaining your finances is an uphill battle, pretty much everyone out there is designed to part you with your money. Learning to trade gives you the opportunity to manage your own finances and to even use it to your advantage to allow it to grow. Finance causes stress to many people, so being in control and using that stress to give you added determination and drive to be a good forex trader is a fantastic thing and this is of course a great opportunity.

So back to the question of whether or not forex trading is hard to learn, well technically no it is not, there are vast amounts of information out there which can help you and can teach you to trade. The issue is that many people do not want to go through it all. Trading can be very simple, as long as you are putting in the effort to learn and taking your time. When you have bad results, you get through them and carry on instead of giving up. It is those that give up after a loss or two that make it seem harder than it is, just stick with it and continue learning and you should be fine.

Learning to trade is much like anything else in life, it is generally harder to do the older that you get. However, this does not mean that you should be put off if you are slightly on the older side. The best way to learn is to simply try to clear your mind, come at it fresh without any of your preconceptions in the back of your mind and do not use your own opinions during your learning, use only what you are reading or being taught.

A lot of what makes learning to trade easy or hard is the way that you are learning, there are various methods available and so you need to find the one that works for you, as it may be different to the person next to you. If you simply try and force yourself into trading, forcing trades, and not putting in all the required work, it will be a hard journey, but it will also be an unsuccessful one. This also goes for simply endlessly and aimlessly looking at information on the internet. This won’t help, it will be too much information and it will all be jumbled up. You need to have a plan and a reason for what you are learning. It is also worth having the right people around you, people with a similar mindset or goal. Use them to work out what you are doing well or not so well, use them to analyse what you have done, and to also get ideas from them about what else you could be doing.

Something that a lot of newer traders do is to make things too complicated, far more complicated than it needs to be. Knowledge is a fantastic thing, but it can also be overused, or at least it can be attempted to have too much of it too quickly. If you begin to read everything around, you will be reading far too much, and it won’t be in order, this can confuse you and can make working out what information you actually need pretty complicated. Many people also have their own ideas and assumptions that lie in the back on their mind, you need to get rid of these, as these are what can cause you to second guess what it is that you are learning or they can even make you misunderstand what it is that you are reading.

So the question as to whether or not forex trading is easy and hard is complicated and it will all come down to the individual that is looking to trade. Take in as much information as you can, but do it in a methodical manner, not simply reading as much as you possibly can. Do Things slowly, do things properly and trading can be easy, but do it out of order or without a plan and you will certainly struggle at becoming a profitable trader.

Categories
Beginners Forex Education Forex Basics

Helpful Habits For Forex Newbies

Many new traders come into it not really knowing much about it, they have often seen or heard something about it, something that is a great way to make a bit of extra money on the side, or even as a carer. Coming into it with this expectation or lack of knowledge can put you […]

Many new traders come into it not really knowing much about it, they have often seen or heard something about it, something that is a great way to make a bit of extra money on the side, or even as a carer. Coming into it with this expectation or lack of knowledge can put you […]

Many new traders come into it not really knowing much about it, they have often seen or heard something about it, something that is a great way to make a bit of extra money on the side, or even as a carer. Coming into it with this expectation or lack of knowledge can put you on the back foot right from the start. Another issue that comes with this is a lack of understanding of the process and also a number of bad habits, nothing against the person, but certain habits come in with new traders. Due to this, we have come up with a list of habits that you should try and get into as a new trader. They will help in your trading and also with your chances of becoming a profitable and successful trader.

Using a Trading Journal

We appreciate that you may not actually know what this means, as someone coming into trading it may have been mentioned but it is becoming more and more apparent that people are not using them and this is a big negative against their trading. A trading journal is simply somewhere that you jot down everything that you do, and we mean everything that you do, the trades you make, the reasons behind them, the results, and more It then gives you the opportunity to look back at toys trading to see that you have been doing well and what you need to work on. It is an invaluable tool, so the sooner you get into the habit of filling one out and then keeping it up to date, the better your trading will develop.

Using Stop Losses

Part of your trading plan should have been a risk management plan. This would include using stop losses which are a way to automatically close trades when they go a certain distance into the negative. Using them is a habit that you need to start getting into, the amount of money that they could potentially save you is incredibly high and they can even save an account entirely. Losses are a part of trading, you will have a lot of them, especially as a new trader, so being able to limit those losses and to control the amount that is being risked each trade is vital. You cannot control the markets, but you can control how much you will potentially lose with each trade. It is ok to widen or tighten those stop losses as things go and as the markets change, but the one thing you must do is have them in the first place.

Set Trading Times

The markets work 24 hours a day, but that does not mean that you need to work those hours. Give yourself some set times when you want to be trading, having these set times will help you to keep concentration and will also ensure that you are not wasting your time. Don’t try and trade all your free time, treat it like a job, work certain hours and it will be easier to keep those times in the future, and to keep your discipline.

Preparing for Trades

Having your trading plan and strategy all set up before you start trading can make things much easier now and also in the future. If you start trading without a plan then what are you actually trading? You won’t know which means that the majority of your trades are going to be bad trades, whether you know that or not, there will be far more losses than wins. Having your plan will also set out certain trading rules for you, these rules are what you will follow with each trade, doing so keeps you in line with your strategy and as long as your strategy was created properly, it will help you to become profitable and successful in the long run. Having things planned beforehand also helps you to prepare and cope with the results on a psychological level which can keep you happy and will help to lower and reduce stress levels which is a major psychological issue when it comes to trading.

Specialise

Forex and trading as a whole is a huge beast, there is so much to it that if you try to do a bit of everything then you will be overwhelmed and won’t be able to do anything to a decent level. You need to be able to specialise, to pick a certain trading style and certain instruments that you wish to trade. This will then allow you to pinpoint your strategy, to get it working well for those particular instruments and timeframes. If you are a scalper, then there is no point trying to place some swing trades, stick to scalping, specialise in it and you will have a much better chance of being successful. 

So those are some of the things that you can be doing as a new trader, not everything will work for you, in fact, many of them may not, but the more habits that you try to get into the easier and quicker your trading will become. Even if you do not get into three specific habits if you notice a bad habit that you are doing (and there will be some) try and get out of it before it really sinks in and you are stuck with it for a long time.

Categories
Beginners Forex Education Forex Basics

Can You Make A Living By Forex Trading?

Can you earn a living from Forex trading? The short answer is, of course, yes, the forex markets offer fantastic opportunities with its high level of liquidity, 24-hour availability and the ease that there is in accessing the markets in the first place. It allows anyone with a dream to get involved and to allow […]

Can you earn a living from Forex trading? The short answer is, of course, yes, the forex markets offer fantastic opportunities with its high level of liquidity, 24-hour availability and the ease that there is in accessing the markets in the first place. It allows anyone with a dream to get involved and to allow […]

Can you earn a living from Forex trading? The short answer is, of course, yes, the forex markets offer fantastic opportunities with its high level of liquidity, 24-hour availability and the ease that there is in accessing the markets in the first place. It allows anyone with a dream to get involved and to allow people to trade at any time that suits you, so those all over the world are able to be involved with the markets. These things make it an incredibly attractive prospect for those looking to get out of their current day job.

It is important that before we look at how much you can make from it, we need to understand how it actually works. Forex is basically just the transaction and exchanging of currencies, someone will buy a currency for a certain price and so someone else is selling, the price moves, and that person that purchased the currency will then sell it on to someone else, this happens thousands of times per second with millions of different traders both buying and selling. The markets move for all sorts of reasons, natural disasters, political movements, tweets, institutions selling, and many other reasons, pretty much anything in the world has the opportunity to affect how traders feel which will then cause the markets to move. We aren’t going to go into any form of education here, as we would be here all day, but getting a general and basic knowledge of what trading is and how it works, what pips are, what spreads are, and more before even considering placing your first trade. There is so much to learn, so we suggest that you start as soon as possible.

So we want to make enough to live off, to have as our full-time income, we need to consider how much capital we need to begin with. Yes, you can start trading from as little as $10 or even $1, but can you really expect to make much from a $10 account? Even a 10% increase would only be $1. Many traders state that you should start with at least $1,000, not only does this mean that you can make some profit, but it also means that you are able to use proper risk management. Having said that, you still aren’t going to be making enough for living off an account that small, it does mean however that if you stick with it, this pot can grow to an amount that you may well be able to use to live off.

Ultimately, the more money that you have in your trading account, the more money you can make, but you need to ensure that you are applying proper strategies and proper risk management, as you need to be able to protect what you have if you want to make that amount grow. The moral of the story is simply that you need money to make money, so feel free to start with a small amount, just do not expect yourself to be making enough to quit your job with a small capital balance.

In order to be successful and to be able to make enough profit to live on you will need to have a pretty solid trading strategy and plan in place. You need to work out what your own preferred style of trading is as each of us has a completely different personality and so different styles would be suited to us. Along with the style, you will need your strategy within that style, this is basically the rules that you are putting in place that you need to follow in order to ensure that your trades are the right ones and that you aren’t simply putting on random trades.

Finally, there is your risk management plan, this is how you protect your account when to take losses and how much of your account to risk with each trade. Without all three of these things in place, you will have pretty much no chance of surviving long enough to make the money that you require. It is important to keep in mind at if you have proper strategies and risk management in place, you don’t even need to be right for 50% of your trades in order to be profitable, some strategies you only need to be right 25% of the time, so ensure that it is in place properly and that you know what you are doing.

So how much can you actually make? The good news is that there is not actually a limit, you can go as high as you need or want to. Of course, you do not want to instantly jump up to trying to make thousands a month straight away, you need to start small, it will also expand on the capital that you have in your account, the more you have the more you can potentially make. If we look at what many other traders go for, some are going for 5% per month, some 10%, and some even as high as 20% (slightly more risky). So your increases won’t be seen in monetary value, instead of as a percentage. So let’s assume that you make 10% per week, with an account of $1,000 you will be making $100 per month, the second month though your account balance is $1,100 so you will now make $110 per month ad so on, this will continue to increase as long as your account is still in tack and as long as you are sticking to your plans. With this increase, it won’t take too long before you will be making enough to live off, of course, the higher your starting balance, the higher your profits will be each month, increasing the further.

Another thing to think about is the stress that comes with trading for a living, when you are trading part-time with a full-time job as well, the pressure of needing the money within the account is pretty much negated, you have your income and so you will be able to survive whatever happens. The problem with trading for a living is the fact that you need that money, if things aren’t going well then it will cause all sorts of stress and anxieties, how will you buy food? How will you pay the rent? All questions that will cross your mind. So you need to ensure that you have some money on the side that can help cover these costs should you need them and you need to ensure that even on a bad month, you would be making enough to cover those costs, do not jump into full-time trading when you simply make just enough, you need to make more than enough each month.

Trading is however full of risk, and a lot of it. You need to get a good understanding of the risks involved and how to help negate them. Every penny that you put into your account is at risk, there is always a chance of losing it and so any money that you put into your account you should try to consider that as a loss, this will help you to remove at least some of the emotions from your trading. Developing your strategy around these risks and to help reduce them will make your journey a lot smoother. Do not go for quick profits, as this will only lead to losses and bad trades down the line, so stick to your pan and manage your risk, protect your account over making quick profits.

So the original question that we had was whether or not you are able to make a living forex trading, the answer is again yes. It Does however come with a few hurdles to get over, to have rough money in the first place, to understand the different risks involved and how you can help avoid them, and finally that you will need to build up your account over a long period of time, you will not make enough overnight, so stick with it and you may well be able to leave that 9-5 jobs of yours in order to trade full time.

Categories
Beginners Forex Education Forex Basics

The Golden Rules of Forex Trading

If we look around the internet we will see a lot of different tips and hints being thrown around, some are pretty good, while others seem like they are simply plucked out from thin air. There are however a few things that are true across the board, no matter your experience level and no matter […]

If we look around the internet we will see a lot of different tips and hints being thrown around, some are pretty good, while others seem like they are simply plucked out from thin air. There are however a few things that are true across the board, no matter your experience level and no matter […]

If we look around the internet we will see a lot of different tips and hints being thrown around, some are pretty good, while others seem like they are simply plucked out from thin air. There are however a few things that are true across the board, no matter your experience level and no matter how long you’ve been trading. There are a few little rules that you should always take into consideration. We are going to be taking a look at a few of them and why they are so important if you want to become a successful trader.

Understand When to Limit Your Losses

One of the major areas of trading is risk management, this is simply the way that you protect your account. Without it, your account is liable to be blown with pretty much every single trade that you make, so it is vital that you have a risk management plan in place. As well as this plan is the need to understand why you should be cutting your losses. This is not something gotta anyone likes but it is a very important part of trading. When you have a trade going the wrong way, what do you do? Do you hold on to it in the hope that the markets reverse or do you deceit to cut the loss and then rebuild the account from the loss position? 

There isn’t an exact right or wrong answer here because everyone is different, we all have different abilities to handle risk and stress so ultimately it is going to come down to you. A lot of your profitability will come down to your ability to get out of, losing trades before they go too far. There are a few ways of doing this, either watching the trade manually, setting stop losses, or one of our favourites, setting up trailing stop losses. These are good because they act the same as a fixed stop loss, except for the fact that they move with the market, as your trades go up, the stop loss will follow them, when things reverse the wrong way it will hit the stop loss and you will close the trade. Just ensure that you have things in place along with your risk management plan in order to get out of trades before it is too late.

Understand and Accept Your Limits

When we first start out we just want to get started, we want to start placing some trades in order to get the ball rolling, but this is not exactly the smartest thing to do right from the very beginning. Simply thinking that a trade is a good one is not enough, instead, you will need to look at each trade with a clear mind with a set amount that you are going to be risking on this trade. Doing it this way will enable you to know exactly how much you have to use and so you can limit your position to be within your own boundaries.

It is important that you then stick to these limits, there is no point in making him just to break then the next minute. You will need to be strict with yourself and to have a lot of self-discipline in order to do this, but in the end, it will certainly pay off. If you have set yourself a weekly loss limit or a monthly loss limit, if you hit that amount, then no matter what else is going on, you will need to stop trading and then use the remaining time to analyse what it is that has gone wrong and to work out ways to avoid it happening again in the future.

Develop Your Trading Style and Stick With It

Unless someone is simply copying someone else trade for trade, no two traders are exactly the same, they may take very similar trades, but this does not mean that they are using the exact same strategy, we all create our own variations of them that suit our own personalities better. You need to build up your own knowledge base and to work out exactly what it is that you enjoy about reading and what you are good at. Once you have done this you need to select a strategy and a style of trading that suits you and that you have a good understanding of. Once you have done this, you will then need to continue to learn more, but the important thing is that you stick to that same strategy.

The importance of sticking with it is that you gain a much better understanding of the ins and outs, chopping and changing is never a good thing when it comes to trading as results can only be considered over a long period of time, and not simply after one or two trades. So be sure that once you have your strategy, you stick to it and work on it.

Patience

Patience is something that a lot of people unfortunately lack, yet it is such an important trait to possess when it comes to trading, without it, you will become stressed, frustrated, and will most likely start putting on trades that you probably shouldn’t. Patience allows you to wait for the right moment to put on your trades, if the markets are not yet in the correct state or they do not line up with your entry requirements, then you need to exercise patience and hold off making any trades, if you do then it will be considered a bad trade which could lead you to lose out and having some potential losses.

Make a Plan and Follow It

This is probably one of the more important rules to remember, once you have created a plan, it is paramount that you stick to it. This is relevant for a number of different reasons, the first being that you are not able to work out whether a strategy has been successful for a longer period of time. You cannot judge a strategy unless you have been using it properly for at least one month. The other main reason why you need to stick with it is that your strategy and trading plan will also have your risk management plans built into them, as soon as you start doing things differently it is putting this out of whack. This can then result in larger losses or smaller profits, making your overall strategy far less profitable in the long run. The moral of the story is to simply stick to your trading plan and strategy once they have been created.

So those are just some of the rules that you need to be considering when you start or continue to trade. There are of course many more and most likely some that you have made up for yourself, once you have your rules, keep to them and it will make your trading journey a lot simpler and hopefully a lot more profitable.

Categories
Beginners Forex Education Forex Basics

Forex Trading Is A Scam!

Forex trading is a scam! That is something that you hear thrown about the internet quite a lot. We are here to take a look to find out whether not trading and forex is actually a scam. Before we even get started, we are going to point out that the answer to this question is […]

Forex trading is a scam! That is something that you hear thrown about the internet quite a lot. We are here to take a look to find out whether not trading and forex is actually a scam. Before we even get started, we are going to point out that the answer to this question is […]

Forex trading is a scam! That is something that you hear thrown about the internet quite a lot. We are here to take a look to find out whether not trading and forex is actually a scam. Before we even get started, we are going to point out that the answer to this question is both yes and no, confusing maybe, but it will all begin to make sense as we go. There are so many different aspects to trading, so many different expectations from individuals and companies that it can make it pretty hard to work out, so we are going to do the working out for you, so let’s jump in and work out whether forex trading is a scam or not.

So to begin let’s take a very brief look at the history of forex trading, forex trading is simply the exchanging of one fiat currency for another and has been around for centuries. Bartering has been around since the year 6000BC, under this system, goods were exchanged for other goods. If you have looked at history, you most likely would have seen the massive ships cargo items across the sea, simply to trade what they have for something that they need, this was the first form of foreign exchange, as they sailed out to different countries and continents. In the 6th century BC, gold coins were starting to be produced which were then used as a currency due to their portability and durability, along with their limited supply. In the 1800s the gold standard was created, this meant that governments would redeem any amount of paper money for its value in gold. The foreign exchange market was backed by the gold standard during the 1900s, countries traded with each other as they were able to convert the currencies they received into gold. During the wars, this was abolished due to the needs and so the standard currency exchange resumed.

So for something that has been going for so long, it surely can’t be a scam right? In principle, no, forex is simply the exchange of currencies as we saw, so this in itself is not a scam and never can be, what could potentially cause it to be one, are the people behind it. When we talk about the people behind it, we are referring to everyone that has any part in it, this includes the brokers, investors, so-called educational gurus, and even the traders.

When it comes to retail trading you will need to go through a broker, and this is our first stop when it comes to potential scams. There are a lot of brokers out there, in fact, there are thousands of them if not more. Each one offers you the chance to trade on the financial markets with very little effort needed. Each broker offers different features, each one is run by a different company or individual (of course some are the same) and each one has a different level of trust within the trading world. A broiler is basically an entity that allows you to request a trade, they will then push that to their liquidity providers who will match the other side of the trade, the broker will then show you the value of your trade going up and down, you can then close it.

The problem comes from the brokers that are a little less trustworthy. Some brokers trade directly against their traders, so if you put in a trade, they will take the sell counterpart, it is then in their interest that you lose your trade, so they will do what they can to potentially influence the price in order to make your trade stop out, this is a tactic that used to happen a lot more in the past, it is quite rare now due to the way the brokers work and many people now go for STP or ECN accounts which do not allow this or at least make it far harder to achieve. Other brokers have been seen to manipulate prices, and others even worse, have simply outright refused to send their clients any money when they have requested to withdraw them.

Any traders would suggest that you look for a regulated broker, these are governed by bodies who are there to try and protect their clients, yet even this is not enough to completely prevent brokers from pulling little tricks on their clients. The best thing that you can do when it comes to a broker, is to look for one that has a long track record, good reviews, and one that you are able to talk to the support team of, in order to get reassurances and to know that they are still active and there to help.

The next things to look out for are the so-called experts and gurus that you find all over the internet and especially all over social media, there seems to be a lot of experts out there willing to help you make a lot of money, for a price. The first alarm bell should be coming from the fact that they are asking for money to help you make money. You need to consider the fact that if their strategy and information is so good, they should be making enough to not need to charge for it. Some will claim that they want to give back to the community or to help others become rich, but that is nonsense, if they were rich they would simply do it for free in order to get that satisfaction. If you see someone offering ridiculous results or returns, run the other way, there is no way they are real. If you want a mentor, then go for someone with a track record, with information about them available for the public, and someone that others have used, not a random person on social media promising the world. 

Have you ever realised that the majority of people shouting on the internet about something being a scam, regardless of what it is are those that have lost their money, yet they do not actually say what has happened, just that they have been scammed. This is something to look out for, many new traders who come into trading and then lose due to a lack of understanding will instantly shout scam. When you see this, look to see whether there is actually anything to their story, if it is simply a scam, then they probably just messed up and are too embarrassed to admit it. It’s good to look for scam warnings, but be sure that you take them with a pinch of salt and actually read them, many legitimate brokers and companies have the same warnings about them even though they did absolutely nothing wrong.

Those are probably the three most prevalent forms of scamming or vocalisation of scams, if you are able to avoid them then you should be on a good track, there area  few different tips to think about though in order to help avoid scams:

  • Avoid brokers that are offering guaranteed returns.
  • Avoid brokers that are offering ridiculously large deposit bonuses, you won’t ever be able to withdraw them.
  • Any opportunity that seems too good to be true, probably is, they often prey on your desires or desperation to make you pay up.
  • Ensure that you have good knowledge and education when it comes to trading and trading terms.
  • Do not send money to anyone unless you know them or have done some proper research.
  • Read the fine print for any sneaky bits that have been hidden within them.
  • Do a background check on both individuals and companies.
  • Be diligent, look after your money and look after yourself.

So we have now seen that trading and forex in itself is not a scam, the opportunity is there, you can make a lot of money, the problem comes from the people within the industry, so use our tips in order to try and avoid those scams and best of luck on your trading journey.

Categories
Beginners Forex Education Forex Basics

As a Forex Trader, Get Used To Being Wrong

Trading is a game of probabilities, ultimately you will either get something right or you will get something wrong, when we look for trading opportunities, we are actually looking for a number of different probabilities, each thing that affects a trade will add a probability towards the markets going up or down. We correlate these […]

Trading is a game of probabilities, ultimately you will either get something right or you will get something wrong, when we look for trading opportunities, we are actually looking for a number of different probabilities, each thing that affects a trade will add a probability towards the markets going up or down. We correlate these […]

Trading is a game of probabilities, ultimately you will either get something right or you will get something wrong, when we look for trading opportunities, we are actually looking for a number of different probabilities, each thing that affects a trade will add a probability towards the markets going up or down. We correlate these into a buy or sell, the one with the higher probability we go for. Sounds simple, and it is, the problem comes from the fact that the markets don’t always do what they are supposed to do and that you cannot take every single probability into account so you may miss one, but that one is a major one that would have gone against you.

So considering the fact that we look at so many different probabilities you would expect that we would get the majority of our trades right, but it is actually the complete opposite, you should actually be planning to get the majority of them wrong, especially when you are first starting out in your trading career. There is a reason why the majority of people fail and lose the money that they put in. However, one of the best defences to losses is to expect them in the first place, we are going to take a look at why it is so important to recognise that you will make losses, lots of them, and why you should be prepared for them.

The question of why we need to be able to prepare ourselves for losses is so simple to gain an understanding that you will have losses and a lot of them. People see the big numbers that others have gotten or have said that they have gotten (don’t believe everything you see on the internet) and so come into the trading game with the expectation that they will do the same with very little issue along the way. There needs to be an understanding that even the most consistent and most profitable traders will have losses, or multiple in a row, in fact, people can be profitable even with a very low win rate. So if even the best traders in the world are making losses, then you should certainly expect to make a few too.

Just because you have made some losses does not mean that you are doing anything wrong or that you are bad at trading, it does not mean that your analysis was bad or wrong, it simply means that the markets moved against all the positive probabilities that you had found, and this happens, a lot. Sometimes it can be something completely out of the blue, a natural disaster somewhere, or a certain president putting up a new twitter post. These things are out of your control, they are not available to be analysed and simply happen, throwing the markets out of synch and potentially causing your stop losses to be hit. You cannot really blame anything you have done for that.

You need to be in the state of mind where you are able to accept when you are wrong, you need to be able to see what you have done wrong or whether or not it was out of your control, as long as you are able to accept it, then you will be putting yourself in a good position for getting past it and for changing your own ideas to be slightly more successful. Your losing trades can give you an idea of certain assets or trades to avoid in the future, it can tell you if you are risking too much and they can ultimately help you to become a better trader.

So what we need to do next is to recognise that trading is not all about the ideas or the overall strategy that will make or break your account, it is your own personal skills as a trader. Of course, it will take those things mentioned above into account, but it will be looking at you as a whole and your overall understanding of what you are doing and trading. If you have confidence in what you are doing, confidence in the risk management that you have pt in place, you will be far more open to being wrong and to having losses, as you understand that those losses are a part of trading and that you are able to get through a number of losses without too much issue.

If you are still not used to the losses, then try keeping a trading journal (you should be doing this anyway) in order to document those trades that have lost, this will then give you a good insight into why it went wrong which can allow you to alter things in the future to help minimise your future losses.

There are a few things that you can think about to help reduce losses and to enable you to better accept those that you have. Consider how long you hold onto trades before they hit your targets, are you holding them too long or for not long enough? Consider what level of losses will be enough for you to consider altering your strategy or your own biases within the markets. Remember, that your job as a trader is not there to be right every single time, you are there to be profitable, while they do go hand in hand, you do not need to be right in order to be profitable We mentioned before, that many profitable traders have a very low win percentage, but because the rest of their strategy is on point, they can still come out with some money.

If you are not able to accept losses when they occur, it can lead to a number of different issues, it can put you into a slump or create emotions that could jeopardise your trading. If you feel that you have lost too much then it can make you want to get it back by increasing your risk, which is not a good thing at all. Make sure that you learn how to accept those losses so you do not fall into a slump which could potentially put your account in danger.

So those are our views on accepting losses, you will be experiencing a lot of them as you trade. It is paramount that you are able to accept those losses and that you are able to get through them. The earlier that you are able to do that, the earlier you can get through them, and the quicker you can become a profitable and successful trader.

Categories
Beginners Forex Education Forex Basics

10 Steps To Starting to Trade Forex

Forex trading is complex, there’s no doubt about it. However, it is an absolutely fantastic opportunity to get yourself some financial freedom to get out from under that horrible boss that is holding you back and making your life hell. While it is a great opportunity, it also isn’t an easy one, if it was, […]

Forex trading is complex, there’s no doubt about it. However, it is an absolutely fantastic opportunity to get yourself some financial freedom to get out from under that horrible boss that is holding you back and making your life hell. While it is a great opportunity, it also isn’t an easy one, if it was, […]

Forex trading is complex, there’s no doubt about it. However, it is an absolutely fantastic opportunity to get yourself some financial freedom to get out from under that horrible boss that is holding you back and making your life hell. While it is a great opportunity, it also isn’t an easy one, if it was, there would be millions of more successful traders out there. Many people end up giving up or losing whatever it is that they have invested, this is down to the simple fact that they simply did not know what they were doing, or at least not properly. They have not had any guidance and so they do not have any obvious routes of progression.

We have come up with 10 steps that you can follow that will help guide you through the starting points of your trading journey. They are not perfect and there may be some things that you feel you want to do differently, but stick to at least a similar track, and it will make the process of learning and developing yourself as a trader a lot easier. So let’s get on with 10 steps to start your forex trading career.

Step 1: Learn everything!

Ok, so maybe not absolutely everything, that would be impossible, but you need to be willing to learn everything that you need to, which may actually turn out to be a lot more than you are expecting. If you are just starting out then you probably don’t know much about it, you probably only know what you have been told or what you have seen from the outside. There are a lot of different terms and phrases out there that will make little to no sense to you, these are things that you are going to have to learn. 

Forex is a game of probabilities, many see it as gambling, you need to come in with the mentality that it is not, you are there to play the game, not to gamble. You should never place any trades without first understanding why you are placing it and what your chances are of it being a good trade. One thing that you need to understand is that you will never really complete this stage, there are always new things to learn when it comes to trading so you will be constantly learning throughout our trading career, but coming into it knowing that you are required to keep learning and to learn pretty much everything you can is a great first step.

Step 2: Get a broker

There are a lot of brokers out there, thousands if not potentially millions, so it would be unreasonable to have you look at every single one in order to work out which one is right for you. As you were going through the first step, you most likely would have come across a number of different brokers In an ideal world you would go with one of the more trustworthy and well-known brokers, checking reviews from independent sources and also asking any actual traders that you may know who they use. Try not to look for special offers or bonuses, instead go for one with better trading conditions and ones that others give good recommendations for, these in the long run will work out a lot better.

Step 3: Open an account

Each broker that you find will most likely have a number of different account types available, each one offering slightly different trading conditions Our favourite type of account is an #eCN account as they generally come with low spreads and if the commissions are kept low they can be a dream to trade on. As You are just starting out we would suggest opening up an account that does not have a hefty initial deposit limit, in terms of leverage, it is not too much to worry about at this point as again, you are just starting out so you do not want to over-leverage yourself. Be sure to play around with demo accounts too, try to get a demo account that does not start with a million bucks, this is not realistic, you want a demo account with a similar amount to what you would be trading live. Just bear in mind that while this is your first account, it certainly won’t be your last, so it is not the end of the world if it isn’t perfect, you can always open up another one before going live.

Step 4: Download a trading platform

Different brokers will offer different trading platforms. The most popular ones around the globe at the moment is from the MetaQuotes company, they have two platforms, the most popular MetaTrader 4 and the slightly less popular MetaTrader 5. MetaTrader 4 dominates the retail trading market and is one of the best supported by the various brokers. It also comes with tons of documentation as well as addons through the form of indicators and expert advisors (automated trading robots). Try out a couple of different platforms, but if you are really not sure, we would say to play it safe and stick with Metatrader 4 as your trading platform of choice. This is an important choice as not having a platform basically means that you cannot trade, however, much like with the accounts, it is not the end of the world if you start with one which you end up not liking, you can very easily switch to one of the other available platforms.

Step 5: Get a risk management plan

It may seem like a relatively small thing to do and it doesn’t actually take much time, but creating your risk management plan is one of the most vital things that you can do. It can be the make and break of your strategy, it is the thing that stands in the way between a small loss and a blown account. You can of course trade without one, but it is not something that pretty much anyone would recommend. The risk management plan is simply a set of rules that you have put in place to protect your account. Many people look at risking 1% to 2% of their account per trade, the risk management plan ensures that no more than this is lost with each trade, without one that 1% loss could in fact turn into a 100% loss. Try to make it in like with your own risk tolerance so things do not get too stressful for you.

Step 6: Learn to analyse the markets

This is where you can work out which trades to actually make. There are a lot of different ways to analyse the markets and each person will probably tell you differently. We are not going to instruct you on exactly how to do it, that will be up to you to learn the way that suits you, but we will give you some ideas on what to look for. Many forms of analysis will fall under one of two categories, fundamental analysis or technical analysis. Fundamental analysis is all about looking at how things like news events will move the markets, things like GDP or unemployment rates. Technical analysis is where you look at the markets as a whole, many people use indicators to gather this information, they can measure a number of different things and many traders seem to edge towards the technical analysis side of things. It is important that you go for the one that better suits you, so try out a few different techniques.

Step 7: Place some trades

Hopefully, you now have a grip of some of the basics, you have a broker, an account, and a trading platform, you also know how to do some basic analysis and have a risk management plan in place, the next thing to do is to actually place some trades. You should be doing this initially on a demo account, of course, and this is where you will really get a feel for trading. This is where you will work out what has worked for you and what has not, giving you the opportunity to change things and improve. Make sure you do not have the expectation of being able to win straight away, many go approximately a year before they have winning months, so you should be expecting something similar. Use these trades as a gauge for the level you are at, use them to improve.

Step 8: Look at trading styles

There are a number of main trading styles, the shorter-term day trading and scalping and the long term swing trading and position trading. Being able to find the one that both matches your personality but also works for the amount of time that you have to trade. Generally the shorter the trading timeframe the more time you need to be sat at the front of the computer. So if you only have a few minutes each day, scalping will not really work for you. Starting out, you are probably doing it part-time along with your job, so try out the longer-term ones initially, of course, if you have days off during the week, scalping could still work for you. Try out all four styles before deciding though, you may find that you enjoy one of the ones you otherwise thought you would not.

Step 9: Start and keep a trading journal

A trading journal is a vital bit of kit, it is basically where you write down everything that you do when it comes to trading, the trades you made as well as the ones you did not. You also include the reasons why you made it or didn’t, how long it was kept open, the profits, the losses, and more, pretty much everything. This gives you the perfect document to review when things have gone well as well as when they have not. It can tell you of your trading habits, making it easier to find the bad ones and get out of them, it can also tell you whether you are sticking to your trading rules, all very valuable information when looking to improve.

Step 10: Learn some more

We said that step one was going to be ongoing and so it is here at the end too. You will never stop learning, as soon as you think that you know everything you will be in trouble. Always consider yourself as available for learning, do not be afraid of things that you do not know, embrace them, and take on the new knowledge.

So those are out 10 steps to start forex trading. There are, of course, other things that you should be doing, but those will become apparent as you go along. Follow the steps above and you’ll get off on the right foot for when you decide to start your trading career.

Categories
Beginners Forex Education Forex Basics

Achieving a Livable Trade-Life Balance

You often hear the phrase “maintaining a work-life balance” being thrown around by those that have a normal full-time job, or even two jobs. The whole idea of this phrase is that many people find it hard to juggle their work life and their home life and believe that they just do not have enough […]

You often hear the phrase “maintaining a work-life balance” being thrown around by those that have a normal full-time job, or even two jobs. The whole idea of this phrase is that many people find it hard to juggle their work life and their home life and believe that they just do not have enough […]

You often hear the phrase “maintaining a work-life balance” being thrown around by those that have a normal full-time job, or even two jobs. The whole idea of this phrase is that many people find it hard to juggle their work life and their home life and believe that they just do not have enough time to do both., this is one of the draws of forex trading, people see it as a way of getting away from the work grind, to be their own boss and to only work the hours that they want to. The problem is that this is not exactly the case, many traders actually find things harder than they would with a normal day job. You are now relying on your trading, every win and every loss has a much greater meaning, one that could affect your life.

So if people are finding the trade to life balance difficult, why do they continue? The problems that once you have made the plunge into full-time trading, it is very hard to actually get out of it. Remember, you are now reliant on income and your results. It will take time to find another job, so the only thing that you can do now is to work out a way to help you balance your life between your trading and your own time. There are a number of things that people do which make this difficult, we will be looking into them as well as looking at things that you can do to help give you a slightly better balance between your trading and everything else going on in your life.

Let’s jump straight into some of the downsides to having a bad trade to life balance, the first is pretty obvious, something is going to have to give. You cannot have either a lot of trading time or a lot of your time. If you put too much into one, then the other is going to suffer, so if you trade too much, you may lose other aspects of your life like time with your friends and family, or gym time, the things you enjoy doing. On the other side, if you have too much free time or time with your family, then you will not be able to trade as much and so may not be able to make enough to keep you afloat this month in terms of bills. So a balance needs to be met. 

It is also not good for your health. Doing something for a long time can give you a number of different medical conditions. Long term or chronic stress can set in, especially if there is a lack of exercise in your day. Sitting in the same position for long periods of time can have a negative effect on your muscles, bones, and posture, something that you would want to try and avoid through movement and taking regular breaks. The problem with trading is that anything can happen at any moment which could affect the markets, this gives you the impression that when you have a trade on, you need to be there and ready to react to things that happen. In a sense this is true if you have not put things in place, however, there are ways to avoid this that we will look at later. Unfortunately, many people do not use them and so are stuck sitting at the computer or if not, constantly checking their phones which will no doubt annoy their partner.

Another thing that causes you to go a little off track in relation to your work-life balance is if you have set up your trading terminal at home. When you are working a job you have strict start and end times, something that is monitored by your manager or boss, this is not something that you experience at home. You chose when to start and so for many when first starting out, they may find their bed a little too comfortable, so comfortable that they do not want to get out of it, pushing your start time back and simpy meaning that you do not have enough time to trade and analyse properly.

So we have looked at some of the negatives, there are of course more of them, showing how tricky this can be, but there are other things that you can do to bring yourself back and to strike a much more healthy trade to life ratio, one that should keep you floating and your family and your wellbeing happy. So let’s take a look at what some of them could be.

The first thing that you need to do is to create a simple schedule, this will include some of the basic things like the time that you will start trading and the time that you will finish. It is important that you set this up as a work schedule, make it realistic, something that you will easily be able to stick to, if you make it too complicated or at different times each day it will be far harder to stick to and you will more likely start to slip out of it. Treat It like a job, you are going to work still, believe that it is like that and it will be easier to stick to and to force yourself out of that comfy bed.

So you have set up your schedule, but some of your trades go longer than your finish time, what can you do? You can either completely ruin the work that you have it in by constantly monitoring your trades when you are not meant to be, or you could use the simple things known as a stop loss and a take profit level. These allow your trading platform to automatically close trades when they get to a certain level, either positive or negative. This means that you no longer need to be actively monitoring your trades and terminal, you can let it do that for you, so now you can go off and concentrate on whatever it is that you were planning to do.

Some people wake up in the night wanting to trade, if this is you, then you need to be able to force yourself to stay in bed, do not get into the habit of getting up in the night to check your trades or to check the markets, not even on your phone. The more you do it, the harder it will be to stop at a later date, so this is a habit that you need to get rid of straight away.

When you are trading, ensure that there aren’t too many distractions around, remember, you are trading now to live off the money you make. The last thing that you want is to get distracted and to then not make enough, this will in turn mean that you need to work late and long hours in order to make up for it, so ensure your trading environment is distraction-free.

Take regular breaks in your schedule, but make sure you plan them. Think about your strategy, there are going to be certain times of the day where the markets just do not suit it, such as when the markets change over from London to New York as an example. This is the perfect time to plan your breaks. Use that hour to go off and spend time with the family, or to do something that has nothing to do with trading. Use this as a way to add a little balance into yo day. Once you have brakes planned, stick to them and come back when you are meant to.

The most important thing to remember is to set your schedule and then stick to it. You need to treat trading like a job, I know we have mentioned it before but it is vital that you understand this, treat it like a job. Afterall, it pretty much is your job now, you use this to pay your bills and to buy your food, so the sooner you act like it and stick to a working schedule, the quicker you will be ready to continue this journey and to have a much healthier work to trade balance.

Categories
Beginners Forex Education Forex Basics

Common Problems (and Solutions) For New Traders

The forex markets are complicated, there is a lot of information that is constantly changing, being able to keep up is a challenge, especially if you come into it wanting to learn and do everything, which let’s face it, is practically impossible. As a new trader, you would have come across losses, probably a lot […]

The forex markets are complicated, there is a lot of information that is constantly changing, being able to keep up is a challenge, especially if you come into it wanting to learn and do everything, which let’s face it, is practically impossible. As a new trader, you would have come across losses, probably a lot […]

The forex markets are complicated, there is a lot of information that is constantly changing, being able to keep up is a challenge, especially if you come into it wanting to learn and do everything, which let’s face it, is practically impossible.

As a new trader, you would have come across losses, probably a lot of them and a lot of them in a row, the reasons behind these losses can be difficult to work out due to a number of different reasons which are not necessarily your fault but they may be things that you are able to counter in the future with a bit of learning and experience.

So what exactly could these issues be and how can you help to get around them?

Not having a set trading plan: Normally when people start out, they want to try a bit of everything, it is great to experiment and it is great to find the style that suits you, but a lot of new traders take this to an extreme level and can try a different strategy every single day or even every single trade. N order to truly test out a strategy and to see whether it is right for you, you need to give it at least a month of trading, this will let you see both the ups and downs of the strategy and also help you to work out whether you have the right mentality for that type of trading system.

Emotions: Emotions are a part of trading, there is no doubt about that. What is different about newer traders and experienced traders is how raw those emotions are. If this is your first or second loss, it is going to hit you both psychologically and motivationally very hard, much harder than those that have traded for a while. These hits can cause a lot of different emotions, one of the most damaging is the desire to win that lost money back, this then takes us into the realms of gambling and can eventually lead to a lot of financial issues, not something you want to be doing.

Lack of training and education: Starting out you are going to have gaps in your knowledge, heck, people who have traded for years have gaps in their knowledge, however, when starting out, there is a very steep learning curve, going from 0 to 100 in an instant. There is so much to learn, but you should be ensuring that you have some knowledge on the thing you are planning to trade, whether that is a currency pair, a certain strategy, and even knowledge on how your trading platform works, we have seen plenty of questions with people trading and not actually knowing how to set stop losses or even how to close a trade.

Not using a demo account: You have probably been told that you should be using a demo account to try out new strategies rather than risking your own money, well this also counts for new trades, you should be spending an extended amount of time, in the beginning, using a demo account, this means that there are no risks to your equity when practicing and learning the basics. Don’t take it for granted, use a demo account.

Using an EA straight away: An Expert Advisor is a piece of software or code that will make trades for you, this has made forex trading extremely accessible with many being marketed as a way for someone with zero knowledge to trade, however using these robots without any knowledge can be dangerous, you do not know how it works and there is not one single holy grail of EAs, they will all have their issues and so knowing how it works will allow you to alter it when things are going wrong, having no knowledge means you are putting all faith in the software which can often lead to disaster.

Not knowing the markets: This is something that you can never actually master, but having a basic understanding of how they work, both in regards to trends and reversals, but also things like how economic news can affect trades, not watching out for news events has caused a lot of accounts to blow and a new trader may not know that they should be looking out for them, or what they actually mean. So this is yet another learning area for newbies.

So those are some of the reasons why new traders may be caught out, have a think, did you come across any of these issues, and do you still fall for them, some of these are still relevant to experienced traders too, which shows us how large the forex trading world is and how much there actually is to do and learn.

Categories
Forex Basics

Rules That Most Professional Traders Follow

Professional traders are the people that are putting the food on their table with what they make with trading, so they must be doing well. They have gotten to this stage through a lot of dedication and learning. While the learning and time that they have put in helped them get there, they are able […]

Professional traders are the people that are putting the food on their table with what they make with trading, so they must be doing well. They have gotten to this stage through a lot of dedication and learning. While the learning and time that they have put in helped them get there, they are able […]

Professional traders are the people that are putting the food on their table with what they make with trading, so they must be doing well. They have gotten to this stage through a lot of dedication and learning. While the learning and time that they have put in helped them get there, they are able to stay there by following a number of different rules, of course not every trader will follow every single rule, but they most certainly will be looking at a number of them and following them on a day to day basis.

So let’s take a look at what some of rules that the professional traders may be following:

Keeping discipline: Discipline is an incredibly important trait and aspect of trading. Without it anything can happen, trades will be going in left right and centre and they will be going in without any actual reason. Discipline ensures that you will always be following your trading strategies and the rules that have been created by them. Once that strategy has been realised, they must remain on it, any sort of deviation can cause a loss and ultimately cause a strategy or even an entire account to fail. So maintaining self-control and discipline is one of the most valuable traits that a professional trader could have.

Not being influenced by others: A professional trader has their own plan and their own trading ideas. This is why when actively trading, a professional trader will not be accessing forums or chat rooms, they will not be talking to others about their trades, instead, they will be concentrating on their own plan and their plan alone. As soon as they start looking at others or talking to others, the information that they have will start to become muddy, so sticking to themselves and avoiding others while actively trading can be vital to staying on the straight and narrow line.

Updating their trading plan: A trading plan will not stay the same forever in fact it shouldn’t stay the same for long at a time. A professional trader will constantly be updating and adapting their strategies. If you were to just stick with the original plan without making any additional changes, as soon as the market conditions begin to change, then your strategy won’t be able to cope with the changes. A professional trader will constantly be changing bits of the strategy to meet the current trading conditions and to be adaptable to work in whatever state that markets are currently in.

Not cutting corners: A trader should not cut corners, this is particularly relevant when we look at both the analysis and the placing of trades. When doing your analysis, you cannot cut corners, as soon as you do, there is an opportunity that something will be missed, and no matter how small it is, it has the potential to make a good trade go bad. It is the same with making your trades, as soon as you cut a corner and enter or exit a trade without all criteria being met, it can cause a good trade to end up as a loss, so maintaining your plan and following it through completely is vital.

Not always going for the obvious: Sometimes when trading there could be a pattern forming or some news coming out that makes things look pretty obvious, there is nowhere that the markets can go apart from down. However, there have been plenty of times where the obvious has not happened, a lot of political news, economic news, and the consensus can all make it appear that something will go down, yet it continues to rise. This is why you cannot just follow the obvious, further analysis is always needed and you should not just blindly follow the crowd.

Not breaking rules: Rules are there for a reason, they are there to keep you on the short and narrow and to ensure that all of your trades are staying consistent with each other. Your Strategy has set these rules to ensure that you are profitable overall, as soon as you break a rule you are also breaking that ratio that was generated. As soon as a rule is broken, the overall strategy is thrown out of sync. Sticking to the rules is paramount if you have any hope at remaining profitable in the long run. This is why professionals always stick to their rules and very, very rarely break them.

Avoiding the gurus: Gurus claim to have the knowledge that a lot of other people do not. They claim to be able to predict the markets at a greater level to most people, so you need to ask yourself, why are they spouting their information over social media instead of trading it themselves? Professional traders know things, they know that the gurus do not have any more knowledge or information than anyone else and so they ignore them, using your own analysis and information is far more valuable than letting someone else cloud your judgment with their information and analysis.

Regular breaks: One of the things you would have been told about is the need to take regular breaks, a way to clear your mind and refresh yourself for some more trading. Professional traders will often plan their breaks, taking them during times where the markets are a little quieter, this can often be the times near to a market changeover or during times of no active trades. What is important is that breaks are being regularly taken as any professional trader will know that sitting in front of the computer for hours on end is not healthy for your mind or body.

Organising your personal life: If there are issues and stresses in your personal life, it is only a matter of time until those issues and feelings bleed into your trading., Having other things in the back of your mind can create distractions to your trading. Coming into trading stressed about something else can cause you to make mistakes or to cut corners which will only start to lead to losses. It is important that you are able to get your personal life in order so that you can fully concentrate on your trading It can be hard sometimes if you cannot fully sort it, find a way to separate the issues from your trading, so you can focus 100% on your trading when you are there to trade.

Not hating the markets: When the markets decide to move against you, you cannot begin to hate them and you cannot feel like you need to get even with them. The markets do not care about you, and they do not know who you are. You should be feeling the same way about the markets. You are there to make money, not to make a new friend, if they go against you, you need to be able to move on, as soon as you start to want to get back at it, your strategy will go out the window and further losses will be on their way.

Chasing losses: Do not do it, do not do it at all, leading on from the previous points, if you have made a loss, do not try to win it back This is one of the most dangerous things that you can do and simply leads to gambling. Your risk management will go out of the window, how would you chase losses? You chase them by either putting on additional trades or by putting in a larger position, whichever way you do it, you are increasing your risk and increasing the potential for more losses.

Control your confidence: Another aspect of your personality that you need to be able to keep in control is your confidence levels. It is great to be confident as this normally means that things are going the right way, what we do not want is for you to be overconfident. Overconfidence can cause you to take additional risks with larger trade sizes and can even encourage you to take shortcuts with your strategy, entering trades when the criteria aren’t fully met, something that a professional trader would avoid at all costs.

Don’t use too many tools: Tools are fantastic, they can give you a lot of information and they can help you to analyze the markets a lot quicker. The unfortunate thing is that if you use too many indicators or other tools, then you are taking your own thoughts and personalities out of the trading system. If you are not thinking about what you are analysing or trading, then you have no knowledge as to why you are doing it, and no way of adapting should things start to go the wrong way. It is fine to have some tools to help you, but you need to be able to limit them to ensure that you are still fully invested in your own strategy and trading.

There is no holy grail: New traders come into trading thinking that there must be a holy grail of trading, a strategy that can always be profitable and will make you rich. A professional trade knows that this is not real, there is no such thing as the perfect strategy. One strategy will work in one trading conditions but not another, so understanding that your strategy will not always work is paramount to protecting yourself.

Build an arsenal: A beginner trader may have a single strategy, it will work in one condition and maybe on a couple of assets. A professional trader will build themselves an arsenal of strategies, this allows them to be far more adaptable, using different strategies for different market conditions and also allowing you to focus on more currency pairs or assets as each strategy can be optimised for the characteristics of specific assets.

You are not here for a paycheck: Many traders come into trading to try and get rid of their day to day job, while this is a great goal to set yourself, a lot of professional traders will tell you that they are not taking a wage each month, the markets do not necessarily allow for it. You need to work to increase your equity, as soon as you start taking out money, you are taking out your equity, you need to be able to build without taking out capital to begin with. Once you have built up a decent level, then you can start to think about taking some money out.

Simplicity can be better: Sometimes it is the simple trades that make the most profits, there is no point in overcomplicating things with thousands of indicators or little bits of information. A professional trader will tell you that sometimes simply using your own analysis and just one or two indicators is more than enough, as soon as you bring in too much information, it can cloud your judgment and bring in a lot of contradicting information that can completely throw your trading game and strategy completely out of synch.

Accepting our losses: Losses happen. No matter how good you are, you will experience losses. You will always make losses. What you need to be able to do is to accept the, do not let them cloud your future decisions and choices. Every loss that you make should be a chance to learn, why did it go wrong? What caused it to change? There are always questions that you are able to ask yourself that can help you to be a better trader in the future. Be sure not to chase those losses, just learn from them, clear your mind, and move on to your next trades.

Avoid false reinforcement: Sometimes you can be thinking of a certain trade, things seem to be going ok, but there are a few bits of your criteria which are not being met, hearing other say something similar can give you the reinforcement to take the trade, unfortunately, as your criteria still have not been met, it is false reinforcement, you should not use what someone else has said to overrule one of your trading rules. Trust your own strategy and analysis, and don’t take reinforcement from those outside of your own strategy.

There are a lot of rules there, some things you are probably already doing, something probably not. There are of course additional things that raiders do on a day to day basis. It is important that you set your own rules that you need to be following, it is important to create your own, once you have created them, it is vital that you stick to them. Your rules of trading are how you trade and why you trade, create them, stick with them, be successful with them.

Categories
Forex Basics

How to Rejoin the World of Forex Trading

Starting again with anything in life can be a bit of a challenge, after all, how can you start from fresh when you already have some knowledge and have most likely already built up some biases within the markets and for certain trading strategies. It can be difficult, no doubt about that, it will take a lot of work too, do you remember how much reading you needed to do, how many websites you had to visit to get the knowledge that you currently have, well we will be doing that all over again.

Starting again with anything in life can be a bit of a challenge, after all, how can you start from fresh when you already have some knowledge and have most likely already built up some biases within the markets and for certain trading strategies. It can be difficult, no doubt about that, it will take a lot of work too, do you remember how much reading you needed to do, how many websites you had to visit to get the knowledge that you currently have, well we will be doing that all over again.

Starting again with anything in life can be a bit of a challenge, after all, how can you start from fresh when you already have some knowledge and have most likely already built up some biases within the markets and for certain trading strategies. It can be difficult, no doubt about that, it will take a lot of work too, do you remember how much reading you needed to do, how many websites you had to visit to get the knowledge that you currently have, well we will be doing that all over again.

So why would you want to start over? There are many reasons why someone would want to, maybe you had an extended time away from trading, if you have stopped doing something for a year, when you come back you still have the knowledge of it, but a lot of things have changed, or you have forgotten certain parts of it, sometimes it can be easier to just start from scratch and start learning again rather than trying to find the little bits of information that you are missing. You could be in a situation where your current strategies just aren’t working and you don’t have the motivation to fix them, starting again can help drive more motivation into your learning and trading as you will see far more progress over time if you have started from the start again.

Learn the Markets Again

Relearning the markets from ground zero can be a little daunting and challenging at the same time, you are trying to re-learn things that you already know, or at least think you do, this is probably the most boring part of starting again. It is important that when doing this, you do not get held up on your own learning, what you knew before is now irrelevant, we want everything fresh, things may have changed from when you last learned it and so we do not want your past biases to take effect on your learning, learn everything, even if you do not think it would be relevant.

Remember Your Strengths and Weaknesses

While we are starting from scratch, one advantage that you will have over someone who is entirely new is the fact that you know your strengths and your weaknesses. You need to remember these and keep them, not only does this help you with building the first strategy of your restart, but it also helps you to focus your learning, there is no point on concentrating on the bits that you are good at, instead it allows you to focus some more of your time on your weaker parts, thus bringing your overall trading abilities up, you never know, these weaknesses could have been the parts holding you back before.

Use a Trading Journal

You have probably had people tell you to always use a trading journal, a lot of traders do, but a lot of treaders started them well into their trading journeys. This is your opportunity to start one at the beginning (of the re-start). Why would this benefit you, it will allow you to see exactly how your trading is developing, you will begin to see patterns forming, but also even the most subtle of changes will be brought up, you can then look at the figures and see where you are going right or wrong. If the changes are good, keep with them, if they are bad, you can revert back to the point where things were going right. Keep entries of everything you do and it will help guide you to far better trading in the long run.

Keep on Trading

Keep trading, the best way to learn is to do it, trade, trade, trade, of course, you want to be trading in line with your strategy. As all professionals or experienced traders would say, use a demo account to practice, this is your way of honing your skills, practice your established strategies and new strategies alike. The more that you trade the more used to trading you will become and your data you will gather in order to analyse your own trading abilities.

It is never easy starting over, you will feel like you have lost all the time you spent learning before, but this is not the case, you will still have knowledge of your strengths and weaknesses, you will still have a decent understanding of the markets and various strategies. Starting over is more of a way of refreshing your knowledge and getting a fresh view on things, especially if they have changed since the last time you traded. Practice and record everything you do and you will soon find the motivation to go much further than you did before.

Categories
Forex Basics

How to Recover From a Blown Trading Account

The worst-case scenario for the many traders is a blown account, this is where your broker has decided to close all of your trades as the amount of margin left in your account has decreased to a level so low that the broker needs to close the account to help prevent you from going into […]

The worst-case scenario for the many traders is a blown account, this is where your broker has decided to close all of your trades as the amount of margin left in your account has decreased to a level so low that the broker needs to close the account to help prevent you from going into […]

The worst-case scenario for the many traders is a blown account, this is where your broker has decided to close all of your trades as the amount of margin left in your account has decreased to a level so low that the broker needs to close the account to help prevent you from going into a negative balance. This is the law of the law, you cannot lose any more and your account is now pretty much useless so the only thing left to do is to withdraw the little money that is left in it and move on, right?

For many that is the reality, they have lost all the money that they have put in, for some, that money was money that they actually needed and so are now in a situation where they are in serious financial issues, so there is no coming back. For some others it is the opposite, they will now plow back in with even more money in the hope to try and win back the money that they had lost. This is a dangerous game and those that play like this are often burnt a second or third time until they either give up or have lost everything that they had. This of course goes against everything that you would have been taught about trading and risk management, but after a blown account, emotions can take over and this sort of behaviour is a regular occurrence.

We need to remember that over 90% of traders seem to fail within the first year of their trading, so that is a lot of blow accounts. There are many reasons why someone may end up blowing their account, the lack of discipline, not following trading plans, gambling, revenge trading, and more. Even though a lot of us experience it, we need to remember that even some of the best traders in the world right now have at some point hit rock bottom and own an account. This is an indication to those in a similar situation that it is not the end of the world, there are ways to improve and to try again and to then be successful.

So we are going to be looking at some of the things that you will need to do in order to get through a blown account, things that you can do once you have a blown account, how you can get past it and then back on track to becoming a profitable and successful trader.

Accepting the Loss

The only way to really get over something bad happening, in this case, the loss of an account is to simply accept it. This is far easier for some than it is for others though. For many it is hard to accept things they like to blame the markets rather than themselves, they let the negativity sink in, they then may even begin to blame themselves, telling themselves that they are not good enough and that there is no point in continuing to trade.

What we need to do instead is to accept that these things happen, we need to have an understanding that losses happen, losses are a part of trading, every single trader in the world has experienced them and will continue to. We need to accept this, and then we need to be able to talk to ourselves, tell yourself that we are able to do better, we are able to learn from this and we are able to improve. Use this loss as a learning tool instead of something to beat ourselves up about.

Review

So we have accepted the loss, now we need to work out how we are going to move on. For many, the best teacher is where we get something wrong. We can look back at exactly what we did and work out where we went wrong. Hopefully, you have a trading journal on the go, if you do not then make sure that you get one set up as soon as possible. We can use the trading journal to look back at our trades, why we took them when we got out of them, and more, this gives us a good insight into our trading habits as well as the individual trades that have been made.

We need to look at some specific aspects of our trading, the risk management that we are implementing is one of the major ones. Normally when an account blows it means that something within our risk management went wrong, as the entire reason it has been put in place is to prevent an account from blowing. Work out whether you were distracted when you were trading or if you actually stuck to your trading plan. These things need to be looked at and reviewed in order to ensure that you are consistent with your trading and not letting emotions or greed get the better of you, especially after a large win or loss.

Going Back to Demo

For many, this may be seen as a step back, but it shouldn’t be, it should be seen as an intermittent, a break in the live account to work out some of the kinks that we are experiencing. There is nothing wrong with going back to a demo account, think about all the best athletes in the world, they don’t only take part in competitions, they are constantly practicing and training in a non-competitive environment which to us is the demo account. There is absolutely o shame in going back to a demo account, in fact, it should be encouraged.

Every time that you make a change you need to try it out on a demo account, in a situation where the market has humbled you, they have caused you to blow an account. This does not mean that you are necessarily a bad trader, it just means that something is wrong with something that you are doing. Due to this, we need to go back to test things out again, to find what was wrong, to change something and to then work out whether the changes are effective or not. Just do not be afraid to take that step back to a demo account, we all need to do it at one point or another during our trading careers.

Open Up a New Account

So we have been practicing on a demo account, we have worked out some of the things that went wrong and we have been consistent when practicing with the changes. It is not time to open up a new account. We suggest a new account for a couple of reasons, starting fresh means that the past is not looming over you, when you look at your account history you do not see the losses and so it is easier to analyse the current trading that you are doing. It also allows you to keep that blown account separate as a reminder of why you are doing what you are doing now and that you still need to remain vigilant and careful when trading. This time, stick to your trading plan and the changes you have made, do not let your emotions get the better of you and you will see a lot of improvements.

So those are a few of the things that you can do if you have blown an account, getting back on your feet is not easy, but it is certainly possible. Learn from your mistakes, practice, and implement them without allowing the emotions of the most money to take over are key. Do this and you will be on your way to becoming far more profitable and consistent in the future.

Categories
Forex Basics

Different Forms of Forex Trading Scams

When it comes to money, the one thing you can be certain of is the fact that there will be some trying to take advantage of others, either through deception or outright scamming. It is the same in any industry when money is involved, fak clothes, fake concert tickets and you would be correct in […]

When it comes to money, the one thing you can be certain of is the fact that there will be some trying to take advantage of others, either through deception or outright scamming. It is the same in any industry when money is involved, fak clothes, fake concert tickets and you would be correct in […]

When it comes to money, the one thing you can be certain of is the fact that there will be some trying to take advantage of others, either through deception or outright scamming. It is the same in any industry when money is involved, fak clothes, fake concert tickets and you would be correct in assuming that there are trading and foreign exchange related scams. In fact, there are a lot of them, so many that we won’t be able to go through them all, but we will be looking at some of the more prevalent scams that you see about and the ones that are most heavily advertised. So let’s take a little look at what they are.

Fake mentor/account manager:

We have combined these into one as they are pretty much the same thing. If you have been on Facebook, Instagram, or Twitter, I am 100% sure that you would have come across at least one of these people. I am sure you have come across a post similar to this:

“I see a lot of people’s chill and wait for the right time, My friends the truth is if you keep waiting for the right time, you will never get things done. Invest in Forex and Binary Options to earn massive profit weekly ($600 to earn up to $6000 return of your investment or more) Everyday is an opportunity to get started, just give it a try . Invest in yourself and start now, Dm me for more info. I would guide you through the financial free lifestyle”

Looks legitimate right? Anyone offering this kind of money is not a real mentor and they certainly aren’t an account manager. In fact, their only purpose is to try and get your hard-earned money. It is as simple as that, if you come across anyone offering this kind of service, or offering to look after your money and trade for you, avoid it like the plague. Legitimate account managers will not use social media to try and get you to invest. You will simply send your money and never hear from them again.

Trading signals/expert advisors (not all):

I will start by pointing out that not all signal providers and expert advisors are scams, in fact, there are some out there which can be very profitable and are there to legitimately help otters to earn, the problem is that they are often the diamonds in amongst the thousands of pebbles. There are so many expert advisors and signal providers available that it is impossible to find the real ones from the fake ones, and the scammers love this as it makes it so much harder to spot the fake ones. It also does not help that some statistics and account monitoring sites actually let you upload your own data, meaning that all results can be completely fabricated. It also does not help when they want you to sign up with a specific broker that they either work for or get compensated for bringing in new clients.

It can be quite hard to work out what is real and what is not, people will also look at the reviews, but they can be just as fake as the software. Our only advice for finding legitimate signals or EAs are to look at the statistic sites that do not allow for manipulation of the data, only go with personal recommendations from people you know, and also try looking for the ones that don’t require you to sign up with a certain broker or to pay a subscription fee.

Ponzi schemes:

You have probably seen these being advertised, sign up for $xxx and get a monthly return of 40%, well let’s face it, you won’t, or if you do, the first will be the only payment that you get, you get that initial return as a goodwill gesture to try and get you to deposit more. If you do, that money will be gone and any further payouts will be delayed. These are seriously popular, which is unfortunate as they all eventually fail. There are some legitimate MLM companies out there, but these are all about selling and not the actual product that they are advertising unless you are a marketing guru, you are almost always guaranteed to make a loss, so our advice is to avoid them at all costs.

Fake broker:

This is where some of the cammers go the extra mile, they will set up an entire broker in order to try and bring in customers, who will deposit into the accounts and place some trades. The broker will then either trade against them and cause a stop out so the customer loses, or they will simply make up excuses as to why they cannot payout. These sorts of brokers also often use scare tactics or harassment to try and get their customers to deposit more money, something that unfortunately can scare a lot of people into doing, any money you put in you will not be getting back.

In order to avoid this it is important that you do your research, always check for reviews on reputable sites (not just any review site), check the trading communities where people often post their honest views about things, and check for various scam warning such as limited ways to contact, the location, and who the owners are, often scammers are serial scammers so you may find the same names popping up in a number of different places.

Those are just a few of the many ways that people try to scam others when it comes to trading, it is important that you are frugal with your money, do your research before ever departing with any, and while it may sound counterproductive, always assume something is a scam until you are able to prove that it is not. This way you will be able to keep both your money safe and your mind at ease. There are a lot of scams out there, so stay alert and diligent, then you will be fine.

Categories
Beginners Forex Education Forex Basics

Finding Your Personal Trading Style

An important part of trading and learning to trade is being able to find your own trading style. If you do not and instead try to simply copy someone else’s, you can run into a large number of issues that could set you back quite a long time and a lot of work. When people […]

An important part of trading and learning to trade is being able to find your own trading style. If you do not and instead try to simply copy someone else’s, you can run into a large number of issues that could set you back quite a long time and a lot of work. When people […]

An important part of trading and learning to trade is being able to find your own trading style. If you do not and instead try to simply copy someone else’s, you can run into a large number of issues that could set you back quite a long time and a lot of work. When people start out they normally see a style, try it and that is what they stick with, regardless of the fact that there are many other styles out there that may actually be more suitable for that trader. Without knowing that they are there, they carry on none the wiser. We are going to be looking at a few of the different trading styles that are available and who they are best suits for, so you can hopefully find the one that is right for you.

The first thing that we need to clarify is the difference between a trading style and a trading strategy, while they may sound pretty similar, they are actually quite different. The trading styles that are most known are day trading and swing trading, there are of course the two other main styles that are growing in popularity which are position trading and scalping. Trading style refers to the way in which you trade, or at what speed to make trades, a trading strategy is about how you make your trades, what you reply to enter and exit your trades, and the rules that you use. So while they sound the same, they do have very different meanings.

So let’s take a look at what some of the main different trading styles are, we can divide them up into two categories, long term styles, and short term styles. The long term styles would include swing trading and position trading while the short term styles would include day trading and scalping. 

Swing Trading

Swing trading is often considered as a part-time style. The style often has the trader open up a large or medium-sized trade and then leave it there for a considerable period of time, sometimes for days or even weeks. The main problem with this style and the reason why a  lot of people do not like it is the fact that a lot of brokers will add on some charges known as swap fees for holding trades overnight, this can add to the cost and depending on the pair and the broker it can be quite expensive. This is a style of trading that can be seen as a little more sensible for those traders who want to trade less frequently, or that do not necessarily have enough time to be constantly checking the markets and their trades. As with any style, risk management will be key to help prevent a trade from going way into the negatives once you have set it and walked away.

Position Trading

Position trading is kind of a more extreme version of swing trading, so with string trading, you are holding something for days or week, with position trading you can be holding it for months or even years. A position trader is not interested in small movements, instead, they are looking for some huge movements, the sort of movement that can make history. Traders using this trading style do not need to watch the markets much at all, instead, they need to have a belief that the markers will go up or down in the long run and so they let it do its thing rather than constantly monitoring it.

Day Trading

Day trading is often referred to as the opposite to swing trading, people who are using this style of trading will open up multiple positions throughout the day and will close them before the end of play each day. This style of trading will take a lot of dedication and can result in you being in front of the computer for extended periods of time. You are required to be quick to spot opportunities to take and it can often be quite hard to find times to do this as they can occur at any time during the day, easily missed when making some food or popping to the toilet. It is a very popular trading style and many people like it due to the ability to compound any profits in order to earn a little more each time.

Scalping

Scalping is a more extreme version of day trading, scalpers can make a lot of trades per day, sometimes even in the hundreds. Every single movement in the market is an opportunity to make a trade and to make a little bit of money, they are not looking for big profits, they are looking for little bits at a time. It is a very intense style that takes a lot of concentration but if it is done well, it can be very profitable, and much like day trading, the profits can be reinvested in order to help increase future profits. This style of trading is growing in popularity, especially through the use of expert advisors and it is something that a lot of people are now starting to take notice of.

So those are the four primary styles of trading, but how do you know which one is right for you? The first thing that you need to do is to decide whether you want a long term or a short term style of trading. The problem is that it is not exactly an easy question to answer, as what may suit you one time may not suit you the next week. It is important that you get a little bit of experience with each of them and get an understanding of what is actually involved in them. You should also consider the requirements, the longer the trades for a style often means that they also require more capital in order to trade them, they are bigger trades being held for a long period of time and so require the money in the accounts to cover that.

Short term trading styles require a lot less patience, and less capital, the profits are also received a lot quicker and so can be compounded in order to increase the amount of profit or trades next time around. The trades are generally smaller in size so the account balance in the account does not need to be quite as high.

If you are an impatient trade that does not want to wait, then the shorter-term trades are best for you, if you have a lot of time on your hands then the shorter styles could again be a good choice for you. If you want to set and forget, then the longer-term styles would suit you a lot more. Remember to keep things simple though, something being more complicated or giving you more to do does not necessarily make it any better.

Having said all that, you should certainly try each style at least once, there may be one that you are certain you would not enjoy, but once you actually try it, it feels natural to you and is the one that you want to go for. It is hard to judge exactly how much time you will spend on each one, but you should feel straight away whether one could potentially be good for you or not, just ensure that you try them all. Some people swap between different styles depending on the markets, so having a choice of multiple is not always a bad thing.

Whatever you chose to do, try and stick with it for a longer period of time, simply trying something for a week is not enough to get a full understanding of what it is that you are doing. Of course, if you are absolutely hating it then it is better to change earlier than later as it could put you off trading completely. Once you have found the style that is right for you, make sure that you set up a trading journal, that you are recording what you are doing. This is completely new to you so you need to work out what your natural habits are and this can be done through a journal, only then will you be able to start adapting the style of your trading to better suit you and the markets together.

Categories
Beginners Forex Education Forex Basics

How Long Does It Take To Learn To Trade Forex?

It’s an interesting question, how long does it take to learn to trade? The fact of the matter is that there is not a set amount of time. You could technically learn to trade within the time it takes you to sign up with a broker, download the trading platform, log in, and push the […]

It’s an interesting question, how long does it take to learn to trade? The fact of the matter is that there is not a set amount of time. You could technically learn to trade within the time it takes you to sign up with a broker, download the trading platform, log in, and push the […]

It’s an interesting question, how long does it take to learn to trade? The fact of the matter is that there is not a set amount of time. You could technically learn to trade within the time it takes you to sign up with a broker, download the trading platform, log in, and push the trade button. Having said that, it is far easier to simply put on a trade than it is to actually know what it is that you are doing and why you are putting on that trade. So that is what we are going to be looking at today, how long it can take for you to become efficient and to have the knowledge required to trade properly. Of course, it will be different for everyone, so take it with a pinch of salt, but this is our idea of how long it will take to learn to trade.

For many, picking up the basics, things like how to actually place the trade within the trading platform, gaining the knowledge needed to look at the charts, and work out at least the basics of what is going on can happen pretty quickly. The basics are there all over the internet, simply reading about forex will mean you probably gained enough knowledge for a basic understanding of what is going on and why things are moving the way that they are. What isn’t so simple, is actually trying to master what it is that you know, gaining the experience to really understand how things work and how you can use what you know to improve on your own trading skills.

There is one main aspect that we need to think about when it comes to learning to trade, and that is simply how much time it can take. There is not one person when it comes to trading who knows everything that there is to know, nor will there ever be. No one person will be able to tell you exactly how long it will take for you to learn or how long it will take for you to become profitable. There are a few different questions that you are able to ask yourself though, which may give you a little idea as to how long it may take you and whether or not you are up to the challenge.

How much time and work are you willing to put in?

We are going to throw this out there straight away, there is a lot of work ahead of you, and when we say a lot, we mean A LOT. Forex and trading as a whole is an exercise that you will never fully master, there will always be things to learn and things to improve on. Due to this, you will be required to put in a lot of effort and a lot of time, you need to consider what some of your other commitments are. If you are working full time, then you may well find that you struggle to find enough time to effectively learn and develop yourself as a trader. 

When you are just starting out, you will be coming into it excited and eager to learn. However, you will need to limit the amount of time that you are putting into it. This sounds counterproductive and goes against what we stated above, but if you put all of your time into it, you will be attempting to learn things a little too fast which will lead to missed information, it could also cause you to simply burnout. Doing something every minute of every day will make anything see and feel a little boring, so you need to limit yourself a little when it comes to learning.

How much money do you have available to invest?

We will of course give the usual warning, do not invest anything that you cannot afford to lose. If you want to be truly successful in trading, then you do not actually need a lot of money, you do however need a lot of time. The more money you have to begin with the less time it will potentially take for you to reach your target. Having a higher capital within your account will offer you a lot of additional options when it comes to available assets to trade and the risk management plans that you are able to put in place, it also helps to increase your profit potential. Having some extra money also gives you access to trading courses and education that those without a lot of money may need to miss out on, giving you another avenue for some more education and learning.

We must point out again though do not invest anything you cannot afford to lose, we have seen a lot of people put all their savings into their accounts or to even borrow money in order to trade and to pay for courses. Don’t be one of these people.

For many traders or wannabe traders, they do not want to put in years of effort before becoming profitable, some don’t even put in a week. If you want to truly experience trading and to know whether or not it will be for you, then you need to give it at least a month, that is the absolute minimum, the longer you give it the better. Going through the basics, getting an understanding of styles, strategies, and risk management will probably take you that initial month, then you have to practice on a demo account and finally actually attempt liv trading. So it will take time, you need to give it time. It will differ from person to person. We all learn at different paces and we all manage to get past our natural habits at different paces. So if you see someone doing better than you, just remember that they are different, you may be doing things at a slower pace, but this does not mean that you are doing them any worse.

So it takes time to become an expert trader, or even just a profitable one (unless you are one of the few that get incredibly lucky early on), but it takes more than just that and there are also other aspects that will make things take a little longer or a little less time. We briefly spoke about the dedication that you will need to put in, the time you need to set aside to learn and to do it consistently, if you take regular long breaks, as in days at a time, then it will take you far longer than someone who has set aside an hour or two each day, doing irregularly helps to keep the info fresh and allows you to retain a lot more of it. If you are easily distracted, then this can again make things take a little longer, make sure that your trading environment is free from distractions, and that it is an environment where you will be able to focus and keep focus during your time of learning and trading.

There are also the psychological aspects of trading, being able to remain calm in stressful situations, and being able to control your emotions, especially ones like greed and overconfidence can keep you on the right track. As soon as you let one of those emotions take over then it can set you back quite a considerable period of time, especially if it leads to a lesser two. Learn to control your emotions, do not allow them to influence your analysis or trade taking thoughts and processes, they will only hinder you.

Risk management is another thing that if you get it wrong, it will set you back a long way and even has the potential to make you want to quit. You need to be able to protect your capital if you are thinking of becoming a successful trade, a single loss without a proper risk management plan in place will have the potential to completely blow your account. It does not take long to learn or to develop your own trading risk management plan. You will need to get this in place before you start trading on a live account, so take the time (it won’t be a long time) to create one and do not be afraid of making alterations to it as you go, that is what a good trader does.

Ultimately, trading will take you a long time to get good at, it is easy to trade but certainly not easy to trade well. You will need to be prepared to put in a  lot of effort, to be able to put certain other aspects of your life aside if you want to learn it quickly, otherwise, be prepared for a long process. There is no set time as to how long it will take you to learn to trade profitably, it will be different for everyone, so do not try to compare yourself, simply focus on your own career, if you are enjoying it then it won’t matter how long it takes, the time will fly by and you will be enjoying yourself doing it. So we cannot give you an exact answer as to how long it will take to learn to trade, but we can say that you should simply not expect it to be a quick process.

Categories
Beginners Forex Education Forex Basics

Tips for Improving Your Forex Trading Skills

More often than not, when someone begins trading they are looking at a single aspect of it, they are setting their strategy up to work with what they are comfortable and for a lot, this is what they will be sticking with for the majority of your trading career. While it is certainly not a bad thing if you have something that works, in fact, that is what a lot of traders are aiming for. It can however potentially stifle your potential, it can hold you back from doing other things that could be just as profitable if not more.

More often than not, when someone begins trading they are looking at a single aspect of it, they are setting their strategy up to work with what they are comfortable and for a lot, this is what they will be sticking with for the majority of your trading career. While it is certainly not a bad thing if you have something that works, in fact, that is what a lot of traders are aiming for. It can however potentially stifle your potential, it can hold you back from doing other things that could be just as profitable if not more.

More often than not, when someone begins trading they are looking at a single aspect of it, they are setting their strategy up to work with what they are comfortable and for a lot, this is what they will be sticking with for the majority of your trading career. While it is certainly not a bad thing if you have something that works, in fact, that is what a lot of traders are aiming for. It can however potentially stifle your potential, it can hold you back from doing other things that could be just as profitable if not more.

Being able to expand on your trading abilities and skills is vital if you want to be able to adapt to the changing markets and you want to be able to use new skills in order to take advantage of other parts of the markets. So let’s take a quick look at some of the things that you can do that will help you to expand your list of trading skills and that can ultimately lead you to better results.

Trading Other Pairs

This one sounds pretty obvious but you would be surprised how many people simply stick to a single currency pair or asset when they trade, they stick with it because they understand how it works, they are able to be profitable when trading it. The problem is, when you get stuck on a single pair or asset, you will struggle to adapt should that pair change, or should you need to use a new one. Different pairs and assets all act differently to one another, yes, they do have some similarities, they are all affected by similar things, but the reactions that they give can be very different.

It is important that you expand your arsenal to new currency pairs and assets, not only due to the fact that this gives you another avenue and a new way to make a bit of money, it also helps you to develop new skills, a new understanding of how things work and what affects what within the markets. Having a good understanding of a number of different assets allows you to adapt to the changing markets a lot better, it can also help you improve your understanding and trading of the pairs that you are already using as it can give you another view on them. Of course, it is important that you do not try to trade as many as possible, this won’t allow you to actually gain an understanding of them, so begin to expand at a slower pace, chose a single new currency pair or asset to learn, once that is done, chose another, this is a fantastic way of increasing your overall knowledge and ability to adapt.

Use Different Timeframes

A lot of strategies that you read about out there are based around a single timeframe, scalping strategies stick to the lower ones while swing trading strategies often stick to the higher time frames. While your strategy may be linked to the 5-minute timeframe, there is no hard time looking at some others. In fact, it should actually be encouraged. If you are trading a lower time frame, start looking at the higher time frames. You could even incorporate this into your own strategies. You can use the higher time frames to check out the larger trends and general directions of the markets, this can then be used to help give you a new way of looking at your current strategy and could even help you to make it more successful. So yes, while the majority of strategies are created to be used with a specific timeframe, there is no harm in looking at others and learning how others work in order to give yourself an advantage and even some additional confirmations before making a trade.

Look Into Other Strategies

We get it, you have a strategy that works, so there is no reason for you to learn another one right? Wrong. It is important that you expand your understanding of how other strategies work. Let’s make it clear, the markets will not remain the same for a long period of time. In fact, they can change on a regular basis, trends move and economic events take place, each one can cause the markets to rapidly change., Most strategies are designed to work in certain conditions, they can be adapted to match the markets when they change, but how are you going to be able to do that if your strategy is the only one that you know?

Learning about new and different strategies will allow you to use what you have learned to help adapt your own strategy when things start to turn, it will allow you to adapt yours using aspects from other strategies. You will always have your preferred strategy and that is fine and encouraged, but having a good understanding of other strategies will simply allow you to be more productive and potentially profitable during times when your current strategy may not be entirely effective.

Talk to Other Traders

The simple act of talking to other people can be a fantastic way to learn about new skills, you could also learn them outright should that person be willing to help teach you. Talking to people, even if they use a completely different strategy to you can give you further ideas on how you can trade and how you can adapt your strategies. No one trader will be exactly the same, even people using the same strategy will be doing things differently, talking to them will allow you to understand this and you may well learn something new that you are able to use with your strategy to ultimately improve it. Who knows talking to others about your own strategy and teaching people how it works can allow you to develop some confidence and also may well show that you have a knack for teaching and could move into some form of mentorship, of course, you will need a consistently profitable strategy for a while before thinking about doing that.

Watch the News, Read Economic Articles

This is one that you need to be a little wary of as if it is done the wrong way it can actually be detrimental to your trading. Getting a good understanding of what is going on in the world, reading the news or economic articles can give you a wider knowledge of what is going on and this can be used to your advantage. If you are trading blind but a huge event is coming up, if you are not on top of the new and the current affairs then things could potentially go wrong, very quickly. If you have been reading and have an understanding of what is coming up, you can prevent disaster by changing your trading to suit the events coming up, if EURUSD could jump up or down, avoid trading it, this is a way of protecting your account and is an important skill to have.

Of course, we mentioned that doing it wrong could damage your strategy or account, this is basically when you do just too much reading or you base your entire strategy around these news events. This is not something that you want to do, trading the news can be dangerous and many people have blown their accounts trying to do it, so we would suggest not basing your trades on what may happen in the news. Stick to your strategy, do not let the news completely change it, it’s working for a reason, simply use the news as a tool to understand what is coming up, not to dictate your trading habits.

Seminars and Online Courses

This is something that you need to be a little more cautious about, not all seminars and online courses are worth it. In fact, the majority of them are not. There are a lot of people out there that just want your money and maybe hosting these courses with very little knowledge. Having said that, if you are able to find a legitimate one, they can be a very valuable source of information. Not only are you getting the knowledge and experience for the person hosting these events, but you are also able to meet and talk to other traders who have a similar mindset and may be at a similar level to you. Use this as a chance to find out what others are doing, gain knowledge and understanding of things that you do not currently know, and don’t be afraid to leave some of your own understandings with others. These places can be very valuable, but once again, it is important that you take care and ensure that the one you are paying for is in fact a real one and not a form of scam.

Demo Account

The final way to develop and learn new skills is to simply use a demo account, this is something that you should have been doing when you first started out and it will be an invaluable tool throughout your entire trading career. In fact, it will probably be the thing that you revert back to the most. Any changes that you make to your strategy should be tested on a demo account first, any new strategies that you are trying to understand should be tested on a demo account first and so forth. The demo account is there for you to experiment, through that experimentation you will be developing your trading skills, your chart reading skills, and pretty much all other aspects of trading. Use it as much as you can, use it when you are not sure of something and use it to ultimately become a profitable trader, they are there to be used, so use them.

So those are a few of the things that you can do to help find new skills or to simply develop the skills that you already have, it is vital for traders that they keep on looking to improve, there needs to be a constant progression and improvement of skills and understanding if you want to remain profitable and to be successful. The markets are always changing, so you need to do the same in order to keep up with them.

Categories
Beginners Forex Education Forex Basics

Non-Trading Activities That Can Help Your Trading

Many people think that in order to improve on your trading you need to be sitting in front of your computer, reading and analyzing. While this is true to an extent, it can also be the source of stagnation and failure to actually improve any further, this can be for a number of different reasons including burning out, not having a clear mind, and being influenced by things you have previously read.

Many people think that in order to improve on your trading you need to be sitting in front of your computer, reading and analyzing. While this is true to an extent, it can also be the source of stagnation and failure to actually improve any further, this can be for a number of different reasons including burning out, not having a clear mind, and being influenced by things you have previously read.

Many people think that in order to improve on your trading you need to be sitting in front of your computer, reading and analyzing. While this is true to an extent, it can also be the source of stagnation and failure to actually improve any further, this can be for a number of different reasons including burning out, not having a clear mind, and being influenced by things you have previously read.

So we are now looking at a number of different things that you can do which are not related to trading but could potentially help you improve your trading for a number of different reasons.

Sports

Taking part in sports can have a number of benefits, and not just for your own body and health reasons, which we would point out are great reasons to be taking part in sport anyway. The sport also helps encourage certain attributes that help with trading, these are things like discipline, competitiveness, preparation, and patience, anyone that has taken part in sport and team games knows that these things form a big part of them.

Reading

Now you probably assume that we mean reading some trading books, however that would then be related to trading which is not what we are looking at. Reading a good novel, or even a magazine is a great way to clear your mind, it will allow you to come back to your trading with a completely clear and fresh mind. It has also been known that some of your best ideas for anything in life can be created when reading, even when they have nothing to do with the book you are reading, your brain is still subconsciously analyzing and looking at what you have done previously in the day. The imagination peak caused by reading can cause these thoughts and new ideas to come to the surface.

Yoga

You have probably been told about Yoga at least 100 times in your life, but does it really help? It just looks like a bunch of people making funny poses, doesn’t it? Well, you will get out of Yoga what you want to, many use it as a way to balance their body and mind, others to simply clear their mind of thoughts. It can be a way to refresh your mind before heading back to the markets, and also as something to do while the markets are acting a little slow. It also helps you to learn patience which is vital for trading in the markets of today.

Taking a Holiday

A little more on the extreme side, but sometimes it is good to get away, to have an extended break from trading. This will completely clear your mind of it, give you some fantastic experiences and when you come back you will be completely fresh. The good thing about doing this with a holiday is that you will be far away from the computer and the markets, so your mind shouldn’t keep coming back to it even when trying to relax. Just remember not to take your laptop with you.

Talking to Others

This seems simple, and that is because it is, talking to others is a great distraction, and this is where we will break our rule, but actually talking to others about trading, including other traders is a good way to grow new ideas or to develop your own further. Trading can be a lonely experience which can cause frustration and stress to build up, so venting and talking to others is a good release for these emotions and feelings.

So those are a few different things you could do, while none of them will help you to become an expert, each one has its own merits which can help to improve both your health, but also your mind when it comes to trading.

Categories
Beginners Forex Education Forex Basics

Not Earning Enough from Forex? Consider This…

Not every trader will be profitable to begin with, in fact not all traders will be profitable at all, the majority will lose, this is the warning that you see wherever you are looking when it comes to trading forex. Trading is accessible now, it is incredibly easy for almost everyone to open up an […]

Not every trader will be profitable to begin with, in fact not all traders will be profitable at all, the majority will lose, this is the warning that you see wherever you are looking when it comes to trading forex. Trading is accessible now, it is incredibly easy for almost everyone to open up an […]

Not every trader will be profitable to begin with, in fact not all traders will be profitable at all, the majority will lose, this is the warning that you see wherever you are looking when it comes to trading forex. Trading is accessible now, it is incredibly easy for almost everyone to open up an account, to deposit money, and then to trade, but it is a lot harder for them to do it profitably.

There are hundreds of questions that you could ask yourself in regards to your trading, to help work out why you are not being profitable. We always consider things like whether we are good traders if our strategy works and why we are having some losing streaks, but we need to be able to ask ourselves the right questions. When we answer rhythm honestly, it should give us an indication of where we are with our trading and potentially what we need to do to improve it and to then become profitable.

One thing that you have to keep in mind is that these questions and answers will not suddenly make you an expert, or prevent you from making any losses, losses are as much a part of trading as the wins are, so bear that in mind, these questions are tools to help you improve, not solutions.

Are you making basic mistakes?

There are a lot of mistakes that people make and there are some which are far more common and basic than others Some of these basic mistakes include things like trading without a stop loss or take profits, risking too much with each trade, having the wrong profit to loss ratio set up, letting emotions like greed and overconfidence get the better of them and more. These mistakes are very easy to commit without even realising that you are doing them, so it is even more important that you take notice of what you are doing. If you find that you are doing these things, then take a step back and think about why you are, there is no room for them and so you will need to stamp them out. Do not let yourself become too overconfident, 95% of traders quit or go bust in the first month, do not think that you are invincible, if you commit these mistakes, you will be one of the 95%.

Do you have a proper system and strategy?

You would be surprised how many people actually trade without a properly formed trading strategy or even a strategy at all. Those people will lose, and they will lose quickly. Consider whether you trade specific pairs or do you trade the first thing that looks interesting to you? What makes you pick your indicators, is it the colors, the names, and do you use that for your trading signals? Do you use specific timeframes or do you just select any of them and trade?

If you have a proper trading plan in place then there should be a very clear answer to those questions, your plan should be detailing everything about what you need to do to trade, the time frames to use, the pairs to trade, and the conditions needed to trade them. If you do not have one of those things in place then you do not have a fully formed trading plan which can make trading profitably quite difficult. If your plan is not complete then before doing any more live trades, get it complete. If it is already done, great, you can move on to the next question, that is as long as you have tested it properly on an emo account and it is working correctly.

Do you check your trading journal?

A better question may actually be, do you have a trading journal? A trading journal is where you jot down everything that you do when you trade. It will tell you which trades you took and the reasons why, it will tell you your exit points, the reason for exits, the risk on each trade, the different indications used, and more. Pretty much everything about every single trade. You can use this journal to help you to better understand your trading habits. It can help you to find the good points and the bad points within your trading. It is also a fantastic way to help you to see the progress that you are making, if you are using one, then look at it now, check to see what your habits are, are there any similarities with the losses which are different to those trades that you win? If not, then continue to look at it, see if your trading is evolving, if it remains consistent even with the losses, then it may show you that there is something that needs tweaking in order to become profitable.

Do you manage your risk?

The risk that you are taking should match your trading strategy and what is required by it, it should also be in line with your own risk tolerance levels. You need to work out whether your risk to reward ratio is right for you and your strategy and whether or not you are coming out of trades too early or late. It is very easy to get this wrong, so if you have it is not a problem. It may take some time to get exactly right though. This is where you need to take a demo account, it is far too risky to change things up on a live account, you need the demo account so that there is no danger of you losing any money as you fiddle with your settings, stick to the demo account until your risk management has shown to have improved over a months period and hopefully over a number of different trading conditions.

Is trading right for you?

You may need to ask yourself the big question, whether or not reading is right for you. For a lot of people, this is a difficult question as you may want to trade, you may want to be good at it and profitable, but for some, it just won’t happen. It takes a certain kind of person to be profitable and consistent over a long period of time. If you are finding yourself constantly bored or distracted, or are constantly stressed by the markets, then there is a chance that this is not the right hobby or career for you. You need to consider this, it is hard to do, but it is the most important question that you can ask yourself.

Those are some questions that you need to be asking yourself, you are not answering them to show whether or not you are doing anything wrong, it is more to look at what you can change to be more successful. It can sometimes be hard to tell yourself that you are doing something wrong, but as soon as you are able to, you will be able to trade to a much higher standard as soon as they are remedied.

Categories
Beginners Forex Education Forex Basics

Setting Up Your Trading Environment

As with any job in life, the place that you are going to be working, or in this scenario, the place where you are going to be trading, needs to be set up in a particular way. We can’t tell you exactly how it should be done as it will be different for everyone, but […]

As with any job in life, the place that you are going to be working, or in this scenario, the place where you are going to be trading, needs to be set up in a particular way. We can’t tell you exactly how it should be done as it will be different for everyone, but […]

As with any job in life, the place that you are going to be working, or in this scenario, the place where you are going to be trading, needs to be set up in a particular way. We can’t tell you exactly how it should be done as it will be different for everyone, but there are some considerations that you should take into account no matter who you are and no matter how experienced you are at trading.

So while Bob may want to have the world’s most high tech office, all the latest gadgets and equipment, Sarah may want a simple pen and paper and a nice potted plant in the corner of the room. Each person will have different preferences, so if yours is looking different to someone else’s, then there is no need to fret, just remember that your room is right for you and theirs is right for them.

So what are the sorts of things that you need to think about? We are going to be looking at what you need to consider before you set up your trading office and workstation.

Separated Space

This may not be possible for everyone, but being able to separate your workstation and trading area from the rest of your hour and personal spaces can be a regal benefit Not only does it help you to separate your work and home life, but it also helps to remove some of the distractions that could potentially take your focus away from your trading. This also helps you to get into trading or work mode as soon as you step into the office, rather than having to be constantly reminding yourself that you are working and not simply using the computer at home.

Keep Things Simple

This one can come down to personal preference, for the majority, keeping things simple is vital. Do you need 3 screens if you are only needing one? Do you need that extra pad of paper, or that rather distracting little ornament or picture on the wall? Start with what you need, and only what you need. As you begging to become more successful you can start to add little things to help with your trading or as a reminder of what you have achieved, but when starting out, you only need to have what you actually need to trade, keep things simple to keep the distractions away, especially when you are just starting out.

Remove Distractions

We touched on this earlier, but being able to remove distractions from your trading environment and workstation is vital, especially during the early stages of your trading career. Anything that could cause a distraction should be removed. This does not just could for your environment, think about your actual computer too, there is nothing more distracting than looking for a trade, doing the analysis, and in the middle, you get a Facebook notification that is designed to grab our attention so you lose all focus on your trading. Use a clean and fresh computer, only for trading so it does not have any distractions on it.

In terms of your environment, there is no point in trying to trade with the tv on in the background, something will inevitably come up that will take your attention away, this goes for anything that has the potential to grab your attention, bright and abrasive pictures should be removed, little toys, if you have children, their toys should not be there either. Remember, this is a workplace, not a playroom, keep the distractions for your personal life, not your working one.

Invest in What Matters

We mentioned that you should be keeping things to a minimum, to begin with, but this does not mean that you cannot invest in having some decent equipment or things that will benefit you, what we meant is that you do not go out spending your money on things that will simply clutter up the room. There are certain things that are vital, a good strong desk, a supporting chair, and a decent computer for trading, those are some of the most vital things that you should be worried about spending a little bit of cash on.

There are other things that could be worth the money, things like a subscription to a high-quality forex or trading journal, pen, and paper, anything that could help to give you an edge over the markets. Remember, having a clean and simple trading environment does not mean that it needs to be empty, it just means that the things in it need to be relevant to what you are doing and not just there for the sake of being there.

Declutter Your Trading Terminal

Something that we often see which baffles us a bit is the amount of clutter that people have on their trading terminal. We aren’t talking about the games or social media on the computers that are being used, but the actual trading terminal. When you first load up a chart, it is often nice and clean and clear, then you add an indicator to it, it’s a little less clean now, then another and then another. At some point, the chart can get very busy, so busy that it can actually be quite hard to see what it is that you are actually looking at.

How are you meant to trade like this? The simple answer is that you can’t. You need to be able to keep your charts and your terminal clear. Look at the indicators that you have, which ones are actually relevant to your strategy, if you require more than 3 or 4, then your strategy is probably far more complicated than it needs to be. Try to keep 3 or 4 indicators maximum, this way there is plenty of information on the charts, but it is never overly complicated and does not distract you from your actual analysis and trading.

A Clean Computer

This goes in line with the above point about the trading terminal, so you have cleared up your terminal, but what of the actual computer. We mentioned the games and social media on the computer, are they relevant to your trading? Do they actually serve a purpose? Probably not the only notifications that you should have coming up should be related to your trading notifications or from your mentor or tutor, you should not have any other. We do not need to mention why it is not a good idea to have games installed, they will only be a distraction and should not be on the computer at al.

A Trading Schedule

Setting yourself a proper schedule is also important, this is not just for you but for the people who live with you too. There needs to be an understanding that between certain hours it is your trading and working time, not a time for someone to come in and start making conversation with you. Get one set up and stick it on your office door, this way people will know whether they should be coming in or not. It also helps you to plan your day, so you aren’t halfway through another task before you trade which will only lead you to think of that instead. When you are in your trading time, you know what you are meant to be concentrating on your trading.

So those are some of the things that you can do to help stop your trading environment ready to trade. It will be different for everyone, some people will need some things that others may not and some will have far more space than others. What is important is that you are able to get things set up the best you can with the resources and tools that you have available for you Once it is all set up correctly, your trading productivity and ultimately results will see the benefit.

Categories
Beginners Forex Education Forex Basics

Learn to Trade Forex Based On Your Strengths

When it comes to Forex and trading, there is a lot to learn. In fact, there is so much that not one person will ever know everything that there is. There is no single database that contains all of the information that one would need, especially as Forex is always changing and the amount of […]

When it comes to Forex and trading, there is a lot to learn. In fact, there is so much that not one person will ever know everything that there is. There is no single database that contains all of the information that one would need, especially as Forex is always changing and the amount of […]

When it comes to Forex and trading, there is a lot to learn. In fact, there is so much that not one person will ever know everything that there is. There is no single database that contains all of the information that one would need, especially as Forex is always changing and the amount of information expanding.

Due to this, it is important to understand that you will not be able to learn everything. In fact, you will most likely never learn more than 10% of what there is to know. What is important is that you learn what is relevant to the trading that you are wanting to do, and that you learn it in a way that is relevant to the way that you learn and that will allow you to use your strengths to assist your trading.

Some people love to learn by simply reading, they love to sit down with a big book and just read, they take in the information as they go, sometimes re-reading what they have already gone over to help cement the information into their mind. Others will sometimes learn better by doing. Actually, trading is the best way that they can learn, whatever you are more suited to is how you should be trading and learning.

So let’s imagine that you learn best by doing things, reading is boring and can’t hold your attention for long, that is fine, a lot of people feel that way. So how can we learn when there is not much information? You can simply break down the information into bite-size chunks, you then take that information and try it out on a demo account, this way you are not getting stuck in reading page after page and you are actively trying out what you have been learning, cementing that information in and more importantly, doing it in a way that suits your own learning style.

In general, there are seven main learning styles, we will briefly look at each one and what they involve, this can help give you an idea of how you prefer to learn so you can adapt the way that you are learning to trade to better suit your own style.

Visual

Visual learning is all about what you see, you learn well by looking at images and pictures, have a spatial understanding of what is going on and simply watching someone else do something can be enough for you to pick up a lot of information. This sort of style is often accompanied by an audio explanation. However, images and pictures can often be enough to learn. There are plenty of places online that help you learn trading via images and examples.

Aural

This is all about what you hear, you learn by listening, one of the reasons audiobooks came out was to help those that do not like reading get into listening to books. The same can go for learning, you do not like reading but listening to the information helps you take it in and learn, this is all about sounds and music. Listening to YouTube or podcasts can be a good way to pick up information on trading that suits this style of learning.

Verbal

Verbal doesn’t just mean what someone is saying, it can also refer to written words. This means that you are able to learn through words, either reading them or having someone say them to you. This is the most common style of learning, it takes place in school, university, and training courses. It is also the most prevalent when it comes to learning to trade, there are hundreds of resources online that can help you to learn in this manner.

Physical

This is all about actually doing things, while trading is not actually a physical thing to do with your hands, you are actively taking part and having to do things in order to trade. A demo account is a perfect way to learn this way. If you have read or heard some information, try it out on a demo account, this will help you to see how it works and what was told in real-time and in a real-life scenario, doing is often a great way of learning, so demo demo demo.

Logical

Logical learning is all about using logic and finding the reason behind the things that you are doing, in regards to trading, it is working out why certain things move the markets or why you should be placing certain trades. This looks into each subject in a lot more detail, but it allows you to get a much more in-depth understanding of each subject matter. There are sites available that go into the real nitty-gritty details of trading and those are the sites that you would want to look out for.

Social

Some people love to learn in groups, be it one other person or a group of 10. These people thrive on relaying information between them and by discussing what is being learned. There are sites south here for learning in groups, forums are also available and offer great places to talk and learn with others. Team members often push each other to achieve and learn more.

Solidarity

The opposite of learning in a  group, learning by yourself can also be someone’s choice of learning style. You do not want the distractions that come from others, you want to be able to concentrate on what you are doing and are easily able to self-motivate yourself to get the learning and work down. Too many people mean too many distractions, this allows you to learn at your own pace. So those are some of the learning styles, there is one key part of learning that we have not mentioned yet, that is simply the learning that you can get from mistakes and losses.

When we are trading, there will be mistakes being made as well as losses being accrued. It is important that we use these opportunities as a new way to learn. If you think back to school, some of the knowledge that you have would be simply from making a mistake, as soon as that mistake was made, you learned what made it right and have most likely never forgotten it since. It is exactly the same as trading.

Every single time that you make a mistake or make a loss, take a look at why that loss occurred, what was the curse, you can then use what you have learned to better understand what happened and to help prevent it from happening again in the future. Doing this enables you to become a much better trader, prone to making far fewer mistakes. It can also give you an insight into subjects and topics that you would have never looked into otherwise.

So those are a few of the learning styles as well as the importance of learning to trade in a way that suits you. There is no point trying to follow the footsteps of someone that learns or tutors in a way that does not suit your own style, use your strengths to learn, you will then be able to learn a lot more and a lot quicker.

Categories
Beginners Forex Education Forex Basics

Good Habits for a New Forex Traders

Being new to Forex can be exciting, there is this whole new world out there of financial markets that you know in the back of your head can make you rich, but it’s all very complicated. We have come up with some habits that it would be good to get into as a newcomer to trading, they may not work for everyone, but even incorporating one new habit into your trading, can make a world of difference.

Being new to Forex can be exciting, there is this whole new world out there of financial markets that you know in the back of your head can make you rich, but it’s all very complicated. We have come up with some habits that it would be good to get into as a newcomer to trading, they may not work for everyone, but even incorporating one new habit into your trading, can make a world of difference.

Being new to Forex can be exciting, there is this whole new world out there of financial markets that you know in the back of your head can make you rich, but it’s all very complicated. We have come up with some habits that it would be good to get into as a newcomer to trading, they may not work for everyone, but even incorporating one new habit into your trading, can make a world of difference.

Finding Your Strategy

There are hundreds if not thousands of strategies out there with all sorts of strange names. If you tried to learn them all, you would either be the smartest person alive, or the information would all become a muddled mess within your head.

You need to be able to find the one strategy that suits your own style, it may take a while to get it right, some traders it can take weeks, other years, but testing out various strategies on a demo account, as soon as you find one that you seem to take a liking to, learn more about it, learn it inside and out and use that as your future baseline. Using the same strategy regularly helps you hone your skills, and also helps to prevent the mistake of getting into the market with no knowledge of the current conditions or knowing where to exit.

Use Stop Losses

This one probably seems obvious right? You would be surprised at how many traders (both new and experienced) trade without stop losses. This is technically a form of gambling rather than trading. When you are new, you most likely sit around watching your screen to see how the trade is doing, I know I did and I am sure most newer traders do too, this may lead you to believe that because you are watching the markets, you will be able to get out when you need to. 

This is a mindset that you need to grow out of, the 60 seconds that it takes you to run to the toilet, or a sudden unforeseen news event can bring your trade into losses very quickly, the human mind will always doubt itself and you may stay in the trade, seeing it move further and further into the red. Having a stop loss means you are only risking a certain percentage of your account on each trade, rather than the entire balance without a stop loss. The stop loss saves accounts, so be sure to use them.

Record Your Trading

When a trade goes well, how do you know that it did? When a trade goes wrong, what caused it? These are a thing that you should be recording, it can seem like a daunting task, people used to write down everything, each entry, exit, movements, profits, losses, and more which is a lot of work. Luckily there is now some software that can do most of the work for you, be sure to use one, seeing your full history is a fantastic way to learn from your mistakes and to ensure you know exactly what is working to improve and better replicate those results.

Set Time Each Day

Trading needs to be seen as a job, while the markets are open 24-hours a day, it does not mean that you need to be trading it at all times, no one wants to be sat up at 3 am staring at the charts hoping something happens to match your strategy. Give yourself an allotted time each day, an hour or two in the morning, a couple of hours in the evening. This was you begin to work yourself into a routine, eventually, you will work out (by using the records stated above) what times of the days work best for your strategy, working only those times will keep you fresh, give you a clear mind, and you won’t feel bored or overworked, it will also ensure that you are free from distractions and can fully focus on your trading during these times.

These are just a few of the great habits that you could look into, getting your own routine which incorporates healthier trading conditions are always a positive thing to attain.

Categories
Beginners Forex Education Forex Basics

Need to Know Forex Terminology

Forex traders need to understand certain terms to fully comprehend trading articles, other educational information, and to know exactly what is going on from a trading aspect. Below, we have outlined some of the most important terms that will undoubtedly pop up throughout one’s trading career.  Bear Market (Bearish) – a market where prices are […]

Forex traders need to understand certain terms to fully comprehend trading articles, other educational information, and to know exactly what is going on from a trading aspect. Below, we have outlined some of the most important terms that will undoubtedly pop up throughout one’s trading career.  Bear Market (Bearish) – a market where prices are […]

Forex traders need to understand certain terms to fully comprehend trading articles, other educational information, and to know exactly what is going on from a trading aspect. Below, we have outlined some of the most important terms that will undoubtedly pop up throughout one’s trading career. 

Bear Market (Bearish) – a market where prices are trending downwards. 

Broker – the company that you open an account and trade through.

Bull Market (Bullish) – a market where prices are trending upwards.

Candlestick Chart – the most common type of trading chart that represents a lot of information, including the opening price, closing price, and how much a currency pair rose or fell. 

Carry Trade – purchasing a currency with a low inflation rate and then using it to buy a currency with a high inflation rate. 

CFD – “contract for difference”. 

Copy Trading – traders can see the trades that others have made and choose to copy them. 

Day Trading – a trading style that involves daily trading, where one usually opens trades in the morning and closes them before the end of the day. 

Dealing Desk Broker – this type of brokerage sets their own prices, which makes their prices less volatile. Also known as a ‘market maker’. 

Demo Account – a type of trading account that allows traders to practice in a live environment while using pretend currency. 

ECN – ‘Electronic Communication Network’. This is a type of market access that may be provided by no dealing desk brokers. 

Economic Calendar – keeps track of important events that might affect the price of a currency pair. 

Exotic Pair – usually consist of a major traded alongside a thinly traded currency, like the Mexican Peso (MXN), Hong Kong Dollar (HKD), Chinese Yuan (CNY), Singapore Dollar (SGD), South Korean Won (KRW), South African Rand (ZAR), Russian Federation Ruble (RUB), and Indian Rupee (INR).

Fundamental Analysis – predicting what will happen in a market based on current news.

Indicator – measures different things about the market that can inform traders of whether they should make a trade. 

Inflation – the general increase in the price of products over time. 

Leverage – borrowed capital from one’s broker that allows them to make larger trades. 

Liquidity – how easy it is to buy or sell a forex pair. 

Major Pair – the most-traded forex pairs, always including the US dollar. This includes CAD/USD, GBP/USD, EUR/USD, AUD/USD, JPY/USD, NZD/USD, and CHF/USD.

Managed Account – someone trades on your behalf through this type of account. 

Margin – when you execute a trade, your broker will keep a portion of your funds off-limits in case the trade fails. This margin is kept to cover losses if the trade loses. 

Market Cycle – the four stages that the forex market seems to go through: ranging low, uptrend, ranging high, downtrend. 

Minor Pair – made from currencies that don’t include the US dollar. For example, EUR/GBP. 

Mirror Trading – traders can select a trader and have their trading activity copied automatically on their own trading account.

Naked Trading – the act of trading without using any indicators. 

No Dealing Desk Broker – these brokerages do not set their own prices and allow traders to trade in ‘real’ market conditions which are usually more volatile. 

Pip – “percentage in point”. The pip is usually the fourth digit after the decimal on most currencies. For example, in 1.3446, the 6 at the end of the number is the pip. 

Portfolio – contains all of one’s trading positions.

Price Action – a currency pair’s change in price over time. 

Ranging Market – a market where prices don’t fit into the bullish or bearish categories; prices are not trending upwards or downwards. 

Resistance – a point where a currency pair won’t go any higher.  

Risk Management – the precautions one takes to avoid losses when trading, for example, using a stop loss. 

Scalping – a trading strategy where one opens and closes multiple trades quickly. 

Slippage – when the price at the opening or closing of a trade is different than the quoted price. 

Spread – the difference between the asking and selling price. For example, 1.5 pips is an average spread.

Stop Loss – a risk-management tool that will exit a trading position if the price gets too low to avoid large losses. 

STP – ‘straight-through processing’. A type of market access that may be provided by no dealing desk brokers. 

Support – a point where a currency pair won’t go any lower. 

Swing Trading – unlike with day trading, swing traders leave positions open for days, weeks, or months before closing them. 

Take Profit Order – closes out the trade when a certain level of profit is reached. 

Technical Analysis – making predictions about what will happen in a market based on the analysis of historical charts. 

Trading Bot – automated software that executes trades on the trader’s behalf. 

Trading Journal – used to keep track of one’s trades and to get a general idea of the success of the chosen trading strategy. 

Trading Platform – the program that one uses to input their trades. MetaTrader 4 & 5 and cTrader are common examples. 

Trading Psychology – has to do with the way our mental state affects trading decisions and the way that emotions like excitement, greed, and anxiety change our choices. 

Trading Signals – this informs traders of when they should make a trade through notifications like SMS, email, or other alerts. 

Trading Strategy – refers to the strategy one will base their trades on. There are many strategies out there, like scalping or news trading.

Trend – an overarching direction in which a pair is moving. The pair can be moving upwards, downwards, or sideways. Traders should always trade with the trend, rather than against it.

Volatility – in a volatile market, prices change from extreme lows to extreme highs rapidly. 

Categories
Beginners Forex Education Forex Basics

A Quick Introduction to Forex Trading

Forex trading has a lot of appeal – you get to work from home, set your own hours, and be your own boss. There’s a lot of information on the internet about trading, from the mechanics behind it to trading strategies, tips and tricks, and warnings about what not to do. All of this can […]

Forex trading has a lot of appeal – you get to work from home, set your own hours, and be your own boss. There’s a lot of information on the internet about trading, from the mechanics behind it to trading strategies, tips and tricks, and warnings about what not to do. All of this can […]

Forex trading has a lot of appeal – you get to work from home, set your own hours, and be your own boss. There’s a lot of information on the internet about trading, from the mechanics behind it to trading strategies, tips and tricks, and warnings about what not to do. All of this can certainly be overwhelming for beginners that would like to get involved with trading but don’t know where to start. 

One of the first questions you might ask yourself is “what exactly is forex trading?” or “what makes forex trading unique?” Forex is short for “Foreign Exchange” and it revolves around trading currencies against each other. The US dollar is one of the major currency pairs you’ll see traded against other currencies like the British Pound (GBP), Canadian Dollar (CAD), Australian Dollar (AUD), or others. Traders must decide whether the price will go up or down and the goal is to profit from the difference.  

One of the main reasons so many people choose to trade forex is because it is very liquid. Liquidity means that there is a lot of price movement that provides traders with many opportunities to buy or sell. People also get involved with forex trading because the market doesn’t close, and they can set their own hours. You get to be your own boss, don’t have to worry about government tax cuts, and you can essentially work from anywhere if you have a laptop, phone, or tablet. 

To get started trading, you need to find a broker and open a trading account. The broker gives you access to the market through a trading platform so that you can trade. MT4 is the most common platform and it can be accessed through your web browser, mobile apps, or with a desktop application. Before you open an account with a broker, be sure to do thorough research about the company and read through their terms and conditions. Opening an account that comes with high trading costs and fees can quickly become a costly mistake. 

Although the benefits of trading are attractive, there are some cons as well. First, profit is never guaranteed. It is always possible that you will lose your investment. You must have a good education in forex trading before you get started, but many beginners simply don’t understand how much time you will need to put into learning. They open a live account too soon and become overwhelmed. Figuring out when to make trades can also get complicated. There’s a lot that goes into those decisions, including fundamental analysis, which involves making decisions based on the news, and technical analysis, which is based on data and charts that can be analyzed. Then you should consider a trading strategy, risk-management precautions to minimize your losses, and so on. 

Making an initial investment is another factor that turns many hopeful beginners away. Many of us don’t have thousands of dollars sitting in the bank, and if we do, the thought of investing that money with the potential to lose it all can be sickening. There is a compromise here in that many brokers will allow you to open an account with somewhere between $5 and $100, so you aren’t risking your life savings. However, the downside to making a smaller investment is that you will never make the same amount of profits as someone that has invested around $30,000 or more. Investing $5 will not be enough to keep you afloat and it certainly wouldn’t be able to support someone that preferred to quit their job in favor of becoming a forex trader. Of course, you could always start small to see if you’re good at it and then make larger investments later. 

If you’re looking to start forex trading, you’re off to a good start – reading articles like this one and doing research online is the first step. Things can go into much more detail than our introduction, however, so be sure to keep doing research online to find out more. Start with forex beginner information and later move on to more complicated categories like strategies and psychology. Hopefully, our article has helped to outline what forex trading is and to help one decide if trading is something they would be interested in. 

Categories
Beginners Forex Education Forex Basics

How to Become a Successful Forex Trader

Becoming a successful Forex trader is a great goal to have, although the intimidation of learning the ropes and investing real money into a trading account keeps many from even attempting to try. A good start is a key to later success when it comes to trading, but many traders don’t even know where to […]

Becoming a successful Forex trader is a great goal to have, although the intimidation of learning the ropes and investing real money into a trading account keeps many from even attempting to try. A good start is a key to later success when it comes to trading, but many traders don’t even know where to […]

Becoming a successful Forex trader is a great goal to have, although the intimidation of learning the ropes and investing real money into a trading account keeps many from even attempting to try. A good start is a key to later success when it comes to trading, but many traders don’t even know where to begin.

First, you need to understand that you aren’t going to become a successful trader overnight. It can take months and even years for traders to figure out which strategies work best for them and to tweak their routine to perfection. Once you’ve accepted that this will take time, you can get started with the following steps:

Educate yourself: Many beginners are eager to start trading from a real account, which leads them to make the mistake of opening an account before they’re ready. Within a week or two, those accounts are usually wiped clean and the person walks away from trading for good, thanks to their bad experience. This is why educating yourself beforehand is crucial. Start with basics, like terminology. Then you can move on to more difficult concepts like trading strategies, trading psychology, etc. Some brokers offer helpful educational resources directly on their websites for free, but the internet is also filled with articles that teach these subjects. If you have trouble with a specific subject, try looking for a YouTube video on the subject, or read an article that was written by a different writer. You can also trade from a demo account to get a feel of the live environment and to get a sense of how prepared you are. 

Choose a good broker: There are tons of brokers to choose from. Some offer low spreads, fee-free funding, bonuses, and other perks. However, there are far more scammers out there than there are good brokers. Don’t let this scare you – you’ll simply need to put some effort into conducting research to find the best, most legitimate broker possible. 

Only invest what you can afford to lose: Beginners shouldn’t feel pressured to deposit $300, $400, or more just because a broker doesn’t accept a lower deposit. Many brokers will allow you to open an account with just $5. Ideally, you’d want to invest more than that, but it’s a good idea to start out small. You don’t want to risk your life’s savings on a trading account, especially in the beginning. Figure out your maximum deposit limit and find a broker that can work with that. 

Develop your trading strategy with risk-management in mind: The internet can also be of great help with this step. A quick web search will pull up several different detailed trading plans, like the Breakout Strategy, Swing Trading, Scalping, and so on. Once you find a strategy you like, be sure to account for risk-management. Stop-loss limits and trailing stops are important when it comes to limiting losses. 

Keep a trading journal: Once you get started, it is a good idea to journal every trade that you make. Write down the reasons why you made the trade, the entry price, stop loss level, and so on. Be sure to note whether the trade was a winner or a loser as well. Having everything logged can help you to see how you’re performing overall and where changes might need to be made. 

Becoming a successful Forex trader is an achievable goal with time and dedication. Educating oneself thoroughly and researching risk-management methods and trading strategies are some of the most important steps that a beginner should take. Making smart investment choices is equally as important – it’s better to start out small when you’re just getting started. Once you’re ready, choosing a good broker, and keeping a trading journal will help on the road to success. If you’re reading this article, then you’re obviously considering becoming a Forex trader. Free educational resources are available all over the web, so there’s no reason not to get started right now!  

Categories
Beginners Forex Education Forex Basics

How Much Should You Invest in Your New Trading Account?

Deciding to become a forex trader is often the first step on the path to financial success and freedom for many investors, as long as one has educated themselves and is entering the field with realistic expectations. Once you decide to get started, you’ll find that there are thousands of brokers to choose from, with […]

Deciding to become a forex trader is often the first step on the path to financial success and freedom for many investors, as long as one has educated themselves and is entering the field with realistic expectations. Once you decide to get started, you’ll find that there are thousands of brokers to choose from, with […]

Deciding to become a forex trader is often the first step on the path to financial success and freedom for many investors, as long as one has educated themselves and is entering the field with realistic expectations. Once you decide to get started, you’ll find that there are thousands of brokers to choose from, with new options popping up every single day. Each broker offers their own conditions and account types that have been tailored to the needs of different kinds of clients.

If you’re wondering what you absolutely HAVE to deposit to get started, the answer may surprise you. Some brokers will allow you to open an account with just $5, while others might not require a specified starting deposit at all. Do keep in mind that this will usually get you a mini, micro, or cent account, which might come with slightly higher spreads while allowing you to implement the smallest trade size, one micro lot (0.01). These accounts are usually good choices for beginners.

Other accounts might offer slightly better conditions but will require a larger deposit. The exact amount varies widely, but common asking amounts are around $100 – $500 for a standard account, $300+ for the next level account, and then deposits in the thousands for the best accounts that are offered, which are commonly named “platinum”, “diamond”, “VIP”, and so on. It is common for the VIP account to be the best account offered through the broker and for deposit requirements to be quite large, totaling around $50,000 or more. 

Now that you know about the different types of trading accounts and how much it typically costs to open one, you still need to know how much you should personally invest. This answer differs for everyone. Here are some things to consider when figuring out how much you’d like to start with:

  • What type of account would you like to open? If your heart is set on a better account type, what is the typical minimum for that account and can you afford it?
  • How much experience do you have? Beginners might want to stick with a lower amount until they get used to trading.
  • What are your profit goals? If you’re okay with very small profits at first, a small investment will suit you. On the other hand, those that want to make more money faster will need to make larger deposits. 
  • How much can you afford to invest? This money should come from extra funds, not money that you need to live off of.

The final question is probably the most important, as you should never invest money that you actually need. This rarely ends well. First and foremost, you could lose this money and you’d be left in a bad predicament. Or you might need to withdraw these funds quickly, only to find that withdrawal times are slower than expected, which could leave you in a panic. Remember that customer support might be able to process your withdrawal more quickly than usual, but your broker can’t expedite your funds in an emergency as they will be subject to bank processing times. This is why you should never deposit money that you might need back quickly. 

Once you’ve decided how much you can and want to invest, you’ll be ready to compare trading accounts so that you can choose the best one for your personal needs. Don’t feel discouraged if you have to start small, because your investment will eventually build, and you’ll be able to afford a better account type in the future. If this is a big goal for you, then you could choose a broker offering a tier-based account system where you advance to the next tier once your account reaches a certain balance. Other brokers will often allow you to transfer your funds over to another account type when you’re ready.

Categories
Beginners Forex Education Forex Basics

Guide to Developing a Forex Trading Plan

If you’re going to be a successful forex trader, you’ll need a trading plan. Trading plans are notoriously helpful because they help traders to remain disciplined, trade consistently, keep emotions in check, and they can help you to improve your trading strategy.  These are the key factors that need to be taken into consideration: Your […]

If you’re going to be a successful forex trader, you’ll need a trading plan. Trading plans are notoriously helpful because they help traders to remain disciplined, trade consistently, keep emotions in check, and they can help you to improve your trading strategy.  These are the key factors that need to be taken into consideration: Your […]

If you’re going to be a successful forex trader, you’ll need a trading plan. Trading plans are notoriously helpful because they help traders to remain disciplined, trade consistently, keep emotions in check, and they can help you to improve your trading strategy.  These are the key factors that need to be taken into consideration:

  • Your trading plan structure and financial goals
  • Research and education
  • Strategy (using fundamental and technical tools)
  • Risk management
  • Timing
  • Trade mechanics, documenting, and testing 

Before you even begin to develop a plan, you need to figure out what type of trader you should be. You’ll want to think about how much time you actually plan to spend trading, for example. Some only trade part-time, while others trade full-time. Your motivations are another important item to consider. Are you trading to become successful in the long-term, as a hobby, to have more time to spend with friends and family, or for some other reason? Defining your goals and expectations is important when figuring out how you should trade and how much you will need to invest. This is what you need to figure out:

  • Why do you want to become a trader? What are your motivating factors?
  • How much time can you carve out for trading?
  • Do you have an appropriate amount of money to achieve your financial goals? 
  • What are your strengths and weaknesses? An example of a trading weakness would be anxiety. 
  • Figure out whether you are a fundamental or technical trader.

Once you’ve figured out all of the above, you’ll be ready to start investing time into research and education. From there, it’s time to develop a trading strategy that fits with your goals, the amount of time you have for trading, your education level, and what type of trader you are. These are the concepts that need to be included in your trading strategy:

  • Types of analysis tools that will be used (technical or fundamental – or both)
  • When and how those tools will be used
  • Timeframes to use the tools
  • Sequence of analysis
  • Types or orders that will be used (market, trailing stop, etc.)
  • What types of trades to place

Once you have a set plan, you must remember to use it. Many traders spend a great deal of time working on their plan but fail to use it later down the road. Also, don’t forget the last step. Once you have a plan, you’ll need to test it and document your results. A trading journal is the best way to keep track of this information and to get an overview of how your plan is or isn’t working. 

Categories
Beginners Forex Education Forex Basics

Methods of Change: Becoming a Better Trader

It is not uncommon to talk to traders to only realise that they have been set in their eyes, they have developed a number of different habits that they are not too keen to change, or they actually do not know how to change them. Some habits can be very beneficial, especially if they are […]

It is not uncommon to talk to traders to only realise that they have been set in their eyes, they have developed a number of different habits that they are not too keen to change, or they actually do not know how to change them. Some habits can be very beneficial, especially if they are […]

It is not uncommon to talk to traders to only realise that they have been set in their eyes, they have developed a number of different habits that they are not too keen to change, or they actually do not know how to change them. Some habits can be very beneficial, especially if they are set around their trading plans and following rules, however, some can be detrimental to your trading strategy, there are also times when you just need to be able to change things up, especially when the markets are starting to change themselves.

You are often able to work out what your trading habits are, even if you are not conscious of them by simply looking at a tour trading journal. If you do not have a trading journal yet then we would suggest getting one set up, this is where you will detail the in and outs of your trading, everything that you do will be recorded, this enables you to check what you are doing and the outcomes of each action and trade. This will allow you to find your habits and is also an opportunity to see where it may benefit you to change things up a little bit.

It’s very easy to simply state that you need to make a change, anyone can do that, the issue comes from the fact that making those changes, in reality, can be hard, in fact, some people find it so hard that they do not bother, but you are looking to make a change for a reason, so it is important that you are able to battle through the difficulties in order to make that change. We are able to look into different stages of changing, these are often looked at towards addicts of certain substances, so while traders may not be addicts, the same model and techniques can be used to help synthesis change in their trading habits. So let’s take a look at different methods that can help you to change.

There is something called contemplation, this is basically where you do not know that there is a problem or simply deny that there is something that you need to change. This is often seen in addicts when they simply refuse that there is anything wrong, they have no issues with what they are doing so they do not want to change, or they simply do not realise what their addiction is doing to their life. The same thing can work for traders, there are traders out there that go against one of the golden rules of not trading what you cannot afford to lose, they are using up their savings or even borrowing money to do it, but they do not see this as an issue or they simply refuse to see it as one as they know that they are going to earn it all back.

This can also be seen with those traders who do not follow their plans or do not record what it is that they are doing, you have sustained a number of losses, but you do not know the reason why and cannot see where you went wrong. If you continue to trade like this those losses will only multiply. Often those that are in this stage will need some help from someone in order to make any changes. Someone who is in denial or does not see that there is an issue will not make changes on their one, so it is important that you always have someone there with you or someone that you talk to regularly who may be able to sport the problem signs and then step in as an intervention to help you initiate some changes.

The next stage of change is contemplation, as the name suggests this is all about knowing what you need to do in order to make or facilitate a change, but you have set up some barriers in your mind or there may, in fact, be some physical barriers preventing you from making the actual change. So what sort of barriers may there be? The main one that most people come across is within their own mind, they have a good understanding of what it is that they need to do, they know that this change needs to happen if they are going to be a successful trader but they just can’t do it. The time comes to make the change but your mind is set in two different ways, you could do it, or you could not, something is making you reconsider before you make the change, thinking of the god and bad parts of the change, moving away from what you are comfortable with is going to push you out of your comfort zone which can put a lot of people off.

There are also some physical barriers at this stage of change, things like the possibility of not having enough money in order to make the change that is needed, or if you want to trade during a certain trading session, you may not be able to wake up in time for it, especially if it is in the middle of the night. While these things are more than achievable, it can sometimes take a lot of time to make the cage due to these constraints, during that time of not changing, you will only be pushing yourself further into your hole. It is important that during this stage, you create a plan for the change, write down exactly what is needed and what stage you are currently at towards achieving it, this will give you a better idea of what you need to do next and can also help to motivate you to make that change.

The action stage is next, this is where you actually make the change, you have created your plan for it and so now is the time to do it. Depending on the problem that you needed to change, this can be a relatively small thing to do such as adding stop losses to your trades if that is something that you never used to do, it could also be a little bit bigger, such as taking out entire trading assets from your portfolio. Once you have made a change, it is so important that you stick with it, when things are not going to plan, take a step back away from the markets. This change will be for the better, but sometimes it can take time for that change to have a real effect, so stick with it. Wanting to change is not enough, you need to be able to put into action, there is no harm in tweaking things if they are not working exactly as planned.

The final stage is maintenance, this is all about after the change has been implemented or at least after part of it has. Part of this stage is about turning those new changes into new habits, once you have started to implement the changes, you should find yourself beginning to naturally make those changes without thinking about it, if not then you need to have that plan in mind for you to keep an eye on before making each trade. Some traders may need some outside support to stick with it, and that is perfectly normal, joining groups or talking to a  mentor can help you to maintain and stick with the changes that you have made. Of course, not every change will go perfectly, so you are always able to tweak things if they are no going exactly as planned, some changes can take a long time which others can be very quick to implement, what is important is that you stick with them and do not revert back to the problem behaviour.

There is another stage of change, this is often where things have gotten far too out of hand and you need an intervention, this can either be from yourself or from others, it is far easier for other people to see if you have an issue or not, this is due to behaviour that may seem normal for you will look incredibly strange or dangerous to someone else. If you are risking hundreds per trade, that is normal for you as you have been doing it for a while, but for others, it could look like madness. If someone tells you that you may have an issue, you can either accept it or deny it, it is always best to accept and listen, even if you do not actually believe, as listening may actually help you reveal the issue to yourself. In terms of intervention from yourself, this will normally involve going cold turkey, taking a complete break away from trading to look at how it has affected and changed your life. Taking that break can clear your mind and really allow you to put things into perspective and will allow you to see exactly what it is that you need to change.

Change can be hard, there is no denying that and anyone that says that it is easy has never really had a problem that they need to change for. It can be hard, and it can take time, do not feel disheartened if things are not changing or improving within the first few days of making a change, just understand that it can take a while. Being able to pinpoint the problem and work out a way to change it is the first step and is often the hardest step, the next stages are the ones where you need to remain mindful of why you made the change and then to stick with it. Keep a written note of it and this will help you from falling back into the bad habit and then keeping it at bay.

Categories
Beginners Forex Education Forex Basics

Pitfalls that New Traders Need to Avoid

We have all been a new trader at some point in our lives or at least considering becoming one. We have seen all of the amazing results that people are getting over the internet (top tip, not all the results that you see posted are real). Trading is becoming more and more accessible to pretty […]

We have all been a new trader at some point in our lives or at least considering becoming one. We have seen all of the amazing results that people are getting over the internet (top tip, not all the results that you see posted are real). Trading is becoming more and more accessible to pretty […]

We have all been a new trader at some point in our lives or at least considering becoming one. We have seen all of the amazing results that people are getting over the internet (top tip, not all the results that you see posted are real). Trading is becoming more and more accessible to pretty much anyone around the globe. With amounts as little as $1 or $10 being the minimum accepted deposits, this means that pretty much anyone with a computer or access to one can trade. 

Due to this, there has been a huge influx of new traders into the trading world, these traders are coming into the industry with an expectation that they will be able to make money, and a lot of it very quickly. This is of course a dangerous mindset, but it is what has been blasted into their minds. Due to this, many come in without the knowledge or experience required to be successful. So today we are going to be looking at some of the pitfalls around that newer traders (and some experienced ones) fall into on a regular basis. If you have been in one, do not fear, there are always ways out of them and ways to improve, if you have not yet started trading, then take them as a warning of what to avoid once you do take the plunge and start your trading career.

Spending More than You Can Afford

One of the main warning signs that you are told by pretty much all of the brokers is that you will probably lose and that you should not be using money that you cannot afford to lose. Many people come in with the hope that they will be able to make a lot of money, the really sad thing is that a lot of these people have been given the wrong information. The countless adverts and social media posts showing off wealth, showing off accounts that have seemingly made from a small deposit of $5. Their desperation has made them want to trade to make money so they have put everything that they have got into it. That is the worst case, there are others who are much better off in life who are also trading more than they have to play with. You should not be trading with anything that you would miss should you use it. Any money that you put in should be considered lost until you withdraw it back to your bank account. If you need the money for rent or food, then do not trade with it, it should be as simple as that, and please, do not borrow money to trade with, that is another course towards disaster, do not put yourself in debt for the hope of making more money.

Lack of Knowledge

When you start anything in life you are starting with it with very little knowledge, you may have heard something here and there or seen how it works, but your actual understanding of how it works is not fully there yet. Yet this does not stop people from getting involved and it does not stop people from starting straight away on a live account. Some may not know that demo accounts are sexist, some may not want to use them, but the real issue comes from those that do not want to learn first. They simply want to start making money without trying to gain the knowledge and experience needed first. There needs to be an element of learning, reading, and practicing before going live. If we tried to play chess with no knowledge of the rules, things wouldn’t go well. The same works for trading and pretty much anything in life, so ensure that you get to know what you are doing and why before you actually try to do it.

Going too Fast

This one leads on from the previous point, some people do gain some knowledge, but then they decide to move a little too fast. Simply knowing something does not mean that you will be good at it and it certainly does not mean that you will be able to be profitable. The old phrase of walk before you can run is certainly relevant here. If you have made a successful trade, that does not mean that everything is perfect, so do not jump straight to larger trades. If you have learned something new such as a new strategy, then do not simply jump straight into the live markets, try a demo account. It is important that you take things slowly, do not jump the gun and get ahead of yourself. Take things one step at a time, learn something new, then one more step, do not try and jump the gun and escalate your trading too quickly.

Overconfidence

Getting overconfident is one of the big sins of trading, as soon as you act in a way that is above your current level you will begin to experience losses and the risk management that you have put on your account goes out the window. Overconfidence normally comes from a win or a number of wins in a row, this makes you believe that your own opinion is the best bet and so you follow it. You then begin to increase the trade sizes, the trade frequency, and more just because you think that what you know is more and better than others. This is not the case and overconfidence will only lead to losses. Remember that it is the markets that are in charge and not you.

No Emotional Control

Emotions can get the better of us, they can get the better of anyone, when you first start out you may be starting to experience certain emotions that you have not really experienced before. Things like regret, greed, overconfidence, and doubt are some of the main ones. Each one can have a different effect on your trading and overall profitability. It is important that you get familiar with them, it is also important that you work out ways that you can either avoid or get around them when they pop up, because they will. When you learn to control your emotions you will be able to concentrate once more on the trading and your strategy rather than worrying about the emotions that you are now feeling.

Going Live Straight Away

Demo, demo, demo. Those are important words, yet they are often ignored completely. If you want to be a successful trader then you need to be able to utilise demo accounts properly. When you are starting out with a new strategy, test it for an extended period of time before going live. If you have a working strategy but need to adjust it, then test it on a demo account first. If you need to change your risk management, test it on a demo account first. You should be getting the drift here. Always test everything you do on a demo account before you make changes, if you don’t add you make a change directly onto your live account, then it can lead to losses due to not knowing what effect the changes will have on your strategy.

So those are some of the pitfalls that newer traders seem to fall into the most, there are of course others and these are of course not only for new traders, experienced ones also still manage to fall into these traps. If you have an understanding of them, it will be far easier to work out how you can avoid them in the future to help better your trading.

Categories
Forex Basics

Reasons Why Forex Traders Often Lose Trades

It has been said time and time again that the majority of people that decide to trade i’ll lose, the chances of becoming a successful trader are stacked against you but it is certainly possible. Having said that, even the most successful traders make some trades that end up with a loss. This is simply a part of trading, even good trades can lose, but what we will be looking at today is some of the reasons why people end up making bad trades that lose. There can be many reasons for it, some are user error and some are based around the markets. So let’s take a look at some of the reasons why some people lose their trades.

It has been said time and time again that the majority of people that decide to trade i’ll lose, the chances of becoming a successful trader are stacked against you but it is certainly possible. Having said that, even the most successful traders make some trades that end up with a loss. This is simply a part of trading, even good trades can lose, but what we will be looking at today is some of the reasons why people end up making bad trades that lose. There can be many reasons for it, some are user error and some are based around the markets. So let’s take a look at some of the reasons why some people lose their trades.

It has been said time and time again that the majority of people that decide to trade i’ll lose, the chances of becoming a successful trader are stacked against you but it is certainly possible. Having said that, even the most successful traders make some trades that end up with a loss. This is simply a part of trading, even good trades can lose, but what we will be looking at today is some of the reasons why people end up making bad trades that lose. There can be many reasons for it, some are user error and some are based around the markets. So let’s take a look at some of the reasons why some people lose their trades.

Not striking with a tried and test strategy:

Consistency is a major part of trading. The problem is that when you experience a title downturn it is very easy to just consider that the strategy that you are using just does not work and so you need to look for something else. This Is a bad move, most strategies are created with losses in mind and they are able to get through a series of losses with little damage to the account. So as soon as you jump ship and start a new strategy, you are simply writing off the losses that you have already incurred which is not a smart thing to do.

What you need to do is to do a little bit of experimenting, try using different timeframes, different currency pairs or assets, try trading during different trading sessions. Do this until you find the strategy and style that works for you. Once you have done this you need to stick with it, build a strategy around what works for you, as soon as you start using untested strategies or jumping between different ones, you are putting your account at risk and it will be far harder for you to be consistently profitable as even though you will have losses, a tried and test strategy will be able to get through that to become profitable in the long run. There is no need to rush to find the perfect strategy, the markets aren’t going anywhere, it should also be noted that you should be doing this testing on a demo account so you do not risk your own capital during this testing period.

Risking too much per trade:

Many of the so-called standard strategies out there will have you risking between 0.5% and 2% of the account. This is designed to keep the account safe, the problem comes when people start to go higher, there are those outta here that decide to risk 10%  of the account per trade or even more, some risking everything with a single trade. We are sure that you can work out what happens next, with a lot of strategies you are bound to lose more trades than you win, as you are risking so much per trade this puts your account in a lot of danger. You need to be using proper risk management, as soon as you risk more, your strategy is no longer effective and you are putting your account in danger of both losses or completely blowing.

Make sure that your account has a proper risk management plan in place, this is designed to ensure that your account remains safe and includes things like the risk to reward ratio, your strategy may only require a 40% win rate, so do not get disheartened with each loss and ensure that you stick to the risk plan, do not start placing larger trades due to a loss, this will only lead to eventual losses overall.

Not being mentally prepared:

Being mentally prepared to trade is a huge part of trading and certainly trading successfully, the problem is that most people are not mentally prepared for it and simply go in blind. When we put some of our money on the line there are a lot of different emotions that come with it, things like fear, greed, and other emotions that can make trading quite hard. They can also cause you to make mistakes, so being prepared and knowing how to circumvent these emotions is vital for becoming a successful trader.

Not understanding the indicators, times, and the markets:

Trading and forex is an incredibly complex machine, in fact, it is so complex that there is not a single person on earth that knows everything, and there most likely never will be. What you can do however is to specialise on a small bit of the markets, to create your own niche that you will trade in. So once you have your little corner, you need to work out which indicators are relevant to your strategy, there is no point in putting 100 different indicators, this will simply make your charts a mess and impossible to read, instead, learn how a few of them work and how they impact your trades, then learn them and put them on, you should also work out the best times to trade for your strategy, all of these things are vital to understanding should you wish to become successful and profitable.

Simply having a bad day:

Sometimes we just have a bad day nothing is going right, it could be our fault or it could not be, but if you feel that everything you do is going wrong, it may be time to take a step back. Things outside of trading are causing you stress which you then bring into trading, step back, there is no harm in taking a day’s break from trading should you feel that you are not up for it, the markets will still be there tomorrow so you won’t be missing out.

So those are a few of the things that can cause people to lose trades, we have most likely done or experienced all of them at some point in our trading careers, but it is good to get an understanding of what they are so you can hopefully help prevent them from affecting you in the future.

Categories
Beginners Forex Education Forex Basics

SMART Goals For Forex Trading

You have probably come across the term SMART goals before, it is used all over the world in pretty much every profession that you can think of. Why is it used so much? Simply because it works. SMART goals are a way of creating targets in a way that ensures that you will be able […]

You have probably come across the term SMART goals before, it is used all over the world in pretty much every profession that you can think of. Why is it used so much? Simply because it works. SMART goals are a way of creating targets in a way that ensures that you will be able […]

You have probably come across the term SMART goals before, it is used all over the world in pretty much every profession that you can think of. Why is it used so much? Simply because it works. SMART goals are a way of creating targets in a way that ensures that you will be able to achieve them and that you will be able to monitor them along the way. These sorts of goals can also be used when trading in order to plan and achieve your trading targets.

So what exactly are SMART goals and what does it stand for?

SMART is an acronym for setting goals it stands for :

S – Specific

M – Measurable

A – Achievable

R – Relevant

T – Time-bound

So now we know what the letters stand for, let’s look at what they mean.

Specific:

The goal that you set needs to be both clear and specific, this enables you to focus on it fully and you will know exactly what you are aiming for, this can help to promote motivation towards achieving it. There area  few questions that you can ask yourself in order to work out what your specific goal should be:

  • What do we want to achieve?
  • Why is this goal important?
  • Who will be involved?
  • What resources or limits are there?

In relation to forex, this could be a specific goal aimed at achieving certain profits or profit levels, or to achieve the completion of a trading strategy with a certain win percentage.

Measurable:

The goal needs to be measurable, this will enable you to monitor and track the progress that you are making towards the target. Being able to monitor and assess the goal and your progress towards it will help keep you motivated towards achieving it. You can work out what your measurable goal would be by asking a few questions:

  • How much?
  • How many?
  • How will I know when I have achieved it?

In relation to reading, this could be related to the goal that we thought about above, if we are looking to achieve a certain percentage of profit or monetary value, then this is a measurable target, as we are able to measure our progress by looking at the current profit levels.

Achievable:

The goal that you set needs to be achievable, this basically means that it needs to be realistic, it needs to be something that you have the ability and the capacity to achieve, there is no point in setting a goal that is way too high, as you will never actually be able to achieve it. You can work out this section of the goal by thinking about:

  • How can I accomplish the goal?
  • How realistic is the goal based on my circumstances?

If we take the same example that we have been looking at, we want to achieve a certain profit percentage or monetary value. So what would we set this at If we have a starting balance of $1,000, there is no point setting a target of $1,000,000. While that would be very nice, it would be more realistic to set your initial goal as $2,000 or $5,000 at a push. Remember this needs to be something that you are able to achieve.

Relevant:

The goals that you set need to be relevant, they actually need to be related to what you are doing. It needs to be relevant to you, it needs to be of interest to you, there is no point having a goal that you aren’t interested in, or that won’t actually help you achieve anything in relation to the activity. You need to ask yourself a few questions:

  • Is it worthwhile?
  • Is this the right time for the target?
  • Am I the right person for this target?

Once again when we look at this in relation to trading, the target of gaining a monetary value is very relevant to the task and also our overall interests, wheat would not be relevant is something like gaining muscle mass while trading. That is a little extreme of an example, but you get the idea.

Time-bound:

You can probably guess what this is referring to, it is all about having a timeline and an ending point at which point you wish to have achieved the goal, this could be a few days for a small target, or it could be a year away for a long term goal. What is important is that it remains realistic. You should ask yourself a few different questions:

  • When do I want it done?
  • What can I achieve in 6 months?
  • What can I achieve in 12 months?
  • What can I do today?

Looking at the same example that we have been using throughout, we want to gain a 100% profit on our account, $1,000 to $2,000. Is it realistic that we can do that by next week? It is possible, but not very lightly. What is more likely is that we can do it in 1 year, 12 months to achieve this goal. That seems realistic, so let’s put it down.

So as we went through the meaning, we kind of set out a SMART goal of our own, we want to double our account and go from $1,000 to $2,000 within a year. Is this goal specific? Yes, we know exactly what the target is. Is it measurable? Yes, we are able to see our account balance increase as it goes. Is it achievable? Certainly, we have a good strategy and it can definitely be done. Is it relevant? Yes, it is part of both trading and it is of interest to us. Finally, is it time-bound? Yes, we want to achieve it within 1 year.

Now that we have a goal, we can write it down, set up the method of measuring, and set ourselves on a path to achieving it.

SMART goals are a fantastic thing to set, both in trading and in pretty much everything that you do in life. It is certainly worth sitting down and setting some of these goals yourself, it will give you a lot of motivation seeing that progress is being made as you go along.

Categories
Beginners Forex Education Forex Basics

An In-Depth Guide to Forex Demo Accounts

A demo account is a type of trading account offered by Forex brokers. Demo accounts simulate trading in a live trading environment. The main difference between a live and demo account is the fact that traders are using fake, virtual funds to trade with on demo accounts, thus eliminating all risk to the client. In […]

A demo account is a type of trading account offered by Forex brokers. Demo accounts simulate trading in a live trading environment. The main difference between a live and demo account is the fact that traders are using fake, virtual funds to trade with on demo accounts, thus eliminating all risk to the client. In […]

A demo account is a type of trading account offered by Forex brokers. Demo accounts simulate trading in a live trading environment. The main difference between a live and demo account is the fact that traders are using fake, virtual funds to trade with on demo accounts, thus eliminating all risk to the client. In addition to serving their main purpose as a hands-on education tool, demo accounts also offer several other benefits:

  • Demo accounts allow traders to get more acquainted with a broker’s supported trading platform. Traders can learn to navigate, place and close trades, apply stops and limits, and view margin requirements. 
  • Demo accounts offer traders of different skill levels the ability to practice using different types of strategies and leverages with no financial risk.
  • Practicing on a demo account can give an entry-level trader a better idea of whether they are prepared to open a live account, or if they need more practice beforehand. 
  • If demo accounts mimic the broker’s live account types, traders can test out different accounts to find out which one is preferable. Spreads, commissions, and other broker-specific qualities can also be checked out. 
  • A demo account can be used to monitor and watch certain markets and spreads. 
  • Demo accounts can be used to test technical indicators and to utilize charts, while learning to look at chart patterns. 

While demo accounts are one of the best trading tools out there, traders should try to avoid falling victim to some of their downsides:

  • Many brokers start traders off with a million or so dollars in virtual funds, without any option to select a smaller starting deposit. Try to find a broker that offers more realistic demo deposits for a more realistic experience. 
  • Since traders know that they aren’t investing their hard-earned money, emotions won’t play a factor in the way that they would on a live account. When real money is on the line, fear, excitement, greed, and a whole host of other emotions will affect the way that trades are handled.  
  • Keep in mind that demo accounts will usually fill an order at the quoted price, with no slippage. Demo accounts can receive early fills when making bids or offers as well, which could give different results than what one would have received on a live account. 

Overtrading and more risky trading are also prime examples of how demo accounts might give one an unrealistic experience. Always remember that demo results can be a good indicator of one’s progress, but you’ll still want to exercise caution when switching over to a live account. 

Creating a Demo Account

You’ll want to choose a potential broker and check out their website to see if demo accounts are available. Most Forex brokers do offer demos, but there are some that don’t. Opening a demo is usually quick & easy – once you find a broker that offers them, you can sign up from their website with a few details, like your name, email address, and possibly your location.  Account details including a specific username and password are often emailed to clients but do make note of these details, as most brokers will advise you to create a new demo account if you lose your login details. From there, you’ll follow instructions to install the specified trading platform and you’ll be ready to start trading. 

The Bottom Line

Demo accounts are undoubtedly one of the best tools for Forex traders, serving as a hands-on trading environment simulator. Creating a demo account is usually very quick and easy, so there’s really no reason not to take advantage of the opportunity if you could use some practice. Although these accounts offer some realistic practice opportunities, traders should always remember that there are some differences between demo and live accounts, especially when emotion is playing a role. Once you’re ready to switch over to a live account, don’t make the mistake of feeling overly-confident because of good demo results – be safe and take it slow before taking larger risks.  

Categories
Beginners Forex Education Forex Basics

Tips for Limiting Distractions While Trading at Home

Working from home is one of the perks to becoming a forex trader, along with the chance to be your own boss, setting your own flexible hours, and so on. However, some home-based traders might struggle to adjust to working from home instead of being in an actual workplace environment. After all, there are a […]

Working from home is one of the perks to becoming a forex trader, along with the chance to be your own boss, setting your own flexible hours, and so on. However, some home-based traders might struggle to adjust to working from home instead of being in an actual workplace environment. After all, there are a […]

Working from home is one of the perks to becoming a forex trader, along with the chance to be your own boss, setting your own flexible hours, and so on. However, some home-based traders might struggle to adjust to working from home instead of being in an actual workplace environment. After all, there are a lot of distractions in our home, like the sounds of television or the radio in the background, kids playing, a significant other trying to talk to us – any of these distractions can be frustrating for a trader that just needs to concentrate. If you’re struggling to focus while trading from home, try following these pro tips to help yourself cut back on distractions: 

Tip #1: Set a Predefined Time to Trade Each Day

The first thing you should do is decide when is the best time of day to trade in your household. You’ll want to avoid chaotic times and trade when you’re feeling focused. For some, the best time might be after having a morning cup of coffee, for others, it may be better to get a late-morning or early-afternoon start. Although trading offers flexible hours, having a predefined time to trade also helps with the ever-important discipline that traders need to master. Another plus is that trading during the time of day when you feel most productive has been proven to provide better results.

Tip #2: Get Away from Background Noise

If you live alone, this shouldn’t be much of a problem, but you should still think about background noises that might be distracting you, like a leaky faucet. If you live with someone else (especially children), it’s a good idea to dedicate your own space to trading so that you can have some peace and quiet. If you already have an office or can change a room in your house into one, that would be the best option, but your bedroom or back porch could work just as well. Try asking your loved ones not to disturb you whenever you’re in the place where you work, simply let them know what time you’ll be finished and ask them to wait until then if possible. After all, trading forex is still like a job and requires focus. 

Tip #3: Only Visit Certain Websites While You’re Working

It’s easy to get distracted online. Maybe a Facebook notification pops up at the bottom of your screen and you decide to check it really quickly…only to find yourself mindlessly scrolling your news feed for hours instead. Or an interesting news article could come up and grab your attention. We’ve all been there. Whatever it is that usually takes your mind off your work, you need to restrict yourself from it during trading hours. Stick with trading-related websites and consider putting your phone on silent and turning off notifications when you need to concentrate. Remember that one distraction can really take away from your focus and cause you to lose money. 

Categories
Beginners Forex Education Forex Basics

Five Important Stats to Log in Your Trading Journal

Whether you’re only considering trying out forex trading or you’re already a trader, there’s a good chance that you might have heard tips mentioning the importance of a trading journal. If you haven’t, you should know that these journals are essentially logs of all your trading activity. They are used to keep track of one’s […]

Whether you’re only considering trying out forex trading or you’re already a trader, there’s a good chance that you might have heard tips mentioning the importance of a trading journal. If you haven’t, you should know that these journals are essentially logs of all your trading activity. They are used to keep track of one’s […]

Whether you’re only considering trying out forex trading or you’re already a trader, there’s a good chance that you might have heard tips mentioning the importance of a trading journal. If you haven’t, you should know that these journals are essentially logs of all your trading activity. They are used to keep track of one’s performance over a certain period of time and can be used to evaluate your strategy, check out your profits and losses, look for any recurring issues, etc. However, what you keep track makes a huge difference in how effective your journal will be. If you’re not sure what stats to keep track of, take a look at our suggestions before for a quick guide. 

Win Percentage

Your win percentage is pretty straightforward, as it shows you if you’re winning more trades than you’re losing. Most of the time, a higher win percentage will mean more profits. However, this statistic might not be the best indicator of success if your losses are greater than your wins. For example, winning 1% on each winning trade but losing 2% on each losing trade would mean that you weren’t doing as well.   

Risk/Reward Ratio

Your risk/reward ratio revolves around the amount of money you’re willing to risk on each trade and how much you could profit. It’s important to figure out how much you want to risk on each trade so that you can ensure you could gain enough to make the trade worth it. 

Market Observation

In many cases, journal entries wind up more in the direction of one’s own self-analysis about the ways they were feeling or what they were thinking when entering or exiting the trade. It’s important to log this, but you’ll also want to include data about the market itself for the best results. 

Thoughts/Feelings

What were you thinking when you entered or exited each trade? Emotion is at the heart of trading psychology and it can really wreak havoc on your trades if you allow it to. This is why you should always log any feelings you might have that affected your trade. Did you pull out before hitting your stop loss because you were anxious? This would be an example of emotion you should log. 

Mistakes

You might want to beat yourself up over a silly mistake, but these things happen. It’s still important to log any losses that were caused by your own error, however, so that you will be able to see if it’s a big problem later on. One example of a common mistake many beginners make involves forgetting they’ve entered a trade. This might seem like a crazy mistake to make, but it is worth noting. You might just realize that avoidable mistakes are causing you to lose more money than you thought once you go back and check out those results.

A Few Quick Tips

  1. Always begin the journal entry before the trade and end it afterward.
  2. Write down everything in detail so that you won’t be missing any crucial information later.
  3. Remember to include market data and possibly screenshots, rather than only focusing on a self-analysis.
  4. Know that it’s important to log mistakes – if you forgot you entered a trade, be sure to write down what you were doing that caused you to forget.
  5. Don’t forget to log any emotions that might have affected your trading decisions.

 

Categories
Beginners Forex Education Forex Basics

How to Successfully Trade Forex Part-Time

Forex trading can be a lucrative investment with knowledge and dedication, however, it’s no secret that you actually have to invest time into learning and trading if you want to make money doing it. For many of us working 9-5 jobs, taking care of children, or dealing with other responsibilities, it might seem like we’d […]

Forex trading can be a lucrative investment with knowledge and dedication, however, it’s no secret that you actually have to invest time into learning and trading if you want to make money doing it. For many of us working 9-5 jobs, taking care of children, or dealing with other responsibilities, it might seem like we’d […]

Forex trading can be a lucrative investment with knowledge and dedication, however, it’s no secret that you actually have to invest time into learning and trading if you want to make money doing it. For many of us working 9-5 jobs, taking care of children, or dealing with other responsibilities, it might seem like we’d never really find the time. This keeps a lot of people from even trying to trade because they have already decided that they wouldn’t be able to keep up. Fortunately, there is a possible solution for those that don’t have the time, or who may not want to spend hours trading every day. The solution would be trading part-time, rather than full-time. 

The great thing about forex trading is that you can set your own schedule, so there’s no reason why you couldn’t check your account in the morning, during a lunch break, or even in the evening after work. Even if you don’t work or attend school on an average 9-5 schedule, it’s possible to work trading around your daily agenda. This is the best solution for those that want to make a smart investment without quitting their regular jobs. After all, it takes a lot of experience and a significant investment to make enough money trading that you could quit your job. Part-time trading is like a middle-ground, where you can continue to bring in your guaranteed income while adding to it.

To take up forex trading, you’ll need to model your trading plan around the amount of time you have to trade and choose a strategy that doesn’t require constant attention. Swing trading is a good example of a low-maintenance strategy because traders typically place a medium or large trade and leave it open for days or even weeks to accumulate. One plus to using this type of strategy is that it fits in with the “less is more” mindset that many experts bring up about trading. It’s been said that trading less often is less dangerous and can actually make you more money in the long run. 

Those that are interested in part-time trading do need to understand ahead of time that it may take longer to actually get started if you have less time to invest in your education. Opening a trading account without being well-educated about trading is actually one of the top mistakes that beginners make. If you can, try to devote time on the weekends or spend more time in the evenings learning until you’re ready to open your trading account and make that first investment. Devising your trading plan and strategy will also take some time, but you shouldn’t let this dissuade you from trading. Once you’ve completed these tasks, you won’t have to devote as much time to trading and you’ll be able to sit back more and collect the profits from your efforts. 

In conclusion, those that are interested in part-time trading should take up the opportunity. It does require some time invested in learning beforehand, however, part-time traders can really take advantage of the flexible schedule that forex trading offers. This is one of the best ways to invest your money and to receive quick returns on that investment. We’ve often said that beginners shouldn’t rush to quit their day jobs to take up trading full-time, but part-time trading is a great middle-ground that allows you to keep your life the same while making money. Who could argue with that!

Categories
Beginners Forex Education Forex Basics

How to Cope with Forex Losses

Forex trading is inherently risky. It is known for churning out billionaires while others are left with less than they started with. Watching our hard-earned money disappear is difficult, and the aftermath can leave us in an emotional state where we don’t always make the best decisions. However, letting yourself fall victim to these emotions […]

Forex trading is inherently risky. It is known for churning out billionaires while others are left with less than they started with. Watching our hard-earned money disappear is difficult, and the aftermath can leave us in an emotional state where we don’t always make the best decisions. However, letting yourself fall victim to these emotions […]

Forex trading is inherently risky. It is known for churning out billionaires while others are left with less than they started with. Watching our hard-earned money disappear is difficult, and the aftermath can leave us in an emotional state where we don’t always make the best decisions. However, letting yourself fall victim to these emotions every time you lose will put you in a position where you are more likely to make mistakes. Traders must learn to deal with losses in a positive way to avoid falling victim to common trading problems based on a negative mindset. 

First, you need to know that even experts can’t be right 100% of the time. The best traders have a lighthearted, “oh well” attitude about losses and can find the humor in them. Yes, losing money is tough, but it isn’t the end of the world. Every winning streak has to end at some point. As long as you’re making more than you’re losing, then you’re on the right track and if you aren’t, then it only means you need to work on your strategy. 

When you lose money, you should start by analyzing what happened. Did you make a solid decision based on your trading strategy, only for the market to make an unexpected move? If so, know that this is an unavoidable part of trading. On the other hand, if you made a move that wasn’t thought out or based on nothing and lost, you should take responsibility for the mistake. Learn from your mistakes and move forward, rather than becoming fixated on what you lost. 

If you don’t learn to let go of your losses, then you’re bound to fall victim to other trading problems, like revenge trading. Many traders want revenge on the market for taking their money, so they begin to make highly leveraged trades that aren’t based on anything in order to frantically win their money back. Others fall into different patterns. For example, experiencing a large loss might leave you feeling anxious or afraid, which could cause you to avoid entering trades when you normally would or to pull out of trades before you hit your stop loss. 

Once you learn to cope with losses in a healthy way, you will find that trading doesn’t have to be so stressful and you’ll be able to improve your results. Here are some helpful tips related to losing money trading forex:

  • Analyze your losses: was it caused by a dumb mistake, or was it unavoidable? 
  • Learn from your losses and move on. There’s nothing you can do to change what happened, but you’ll know what not to do next time if the problem could have been avoided.
  • If you find yourself losing often, consider keeping a trading journal. This can help you to narrow down the problem.
  • Practice relaxation techniques if you’re becoming overwhelmed. If this doesn’t work, know when to take a break so that your emotions don’t interfere with your trades. 
  • If you’ve taken several losses in a row, this would be another good time to take a break so that you can come back to trading with a better outlook. 

Everyone hates losing money, but it is an unavoidable part of forex trading. Even the richest traders in the world have lost before, but they achieved greatness because they kept going and didn’t give up. The best thing you can do is learn to manage your emotions and learn from your mistakes so that small losses don’t turn into big problems for you down the road. Once you learn to cope with your losses in a healthy way, you’ll be a better forex trader. 

 

Categories
Forex Basics

Tips for Choosing a Forex Account Type

If you’re looking for a Forex broker, you may have noticed that there are multiple account options out there. Some brokers may stick with Standard/Classic accounts, while others may offer these in addition to Mini/Micro/Cent accounts, Premium accounts, VIP accounts, or even tier-based accounts (Silver, Gold, Platinum, etc.). The exact names may differ, but most accounts fall into one of three categories: Mini/Micro/Cent, intermediate (Standard, Silver, etc.), and VIP/Premium accounts. 

If you’re looking for a Forex broker, you may have noticed that there are multiple account options out there. Some brokers may stick with Standard/Classic accounts, while others may offer these in addition to Mini/Micro/Cent accounts, Premium accounts, VIP accounts, or even tier-based accounts (Silver, Gold, Platinum, etc.). The exact names may differ, but most accounts fall into one of three categories: Mini/Micro/Cent, intermediate (Standard, Silver, etc.), and VIP/Premium accounts. 

If you’re looking for a Forex broker, you may have noticed that there are multiple account options out there. Some brokers may stick with Standard/Classic accounts, while others may offer these in addition to Mini/Micro/Cent accounts, Premium accounts, VIP accounts, or even tier-based accounts (Silver, Gold, Platinum, etc.). The exact names may differ, but most accounts fall into one of three categories: Mini/Micro/Cent, intermediate (Standard, Silver, etc.), and VIP/Premium accounts. 

Starting Deposit

The size of your initial investment plays a huge role in the type of accounts that you will have access to. Most brokers set an initial deposit requirement for each of their account types, which could be from $5 to $100,000, or more. Here’s a quick overview of what you should expect:

  • Smaller accounts, like Mini, Micro, or Cent accounts, should require smaller deposits of around $100 or less. You should never have to pay $500 or more for one of these accounts.
  • Mid-level accounts, like Standard/Classic accounts, or possibly Silver, Gold, etc. can also offer starting deposits of $100 or less, although these accounts often require at least $100 or more to get started. This could even go towards the $500 range, or higher for tier-based accounts.
  • The best accounts offered are usually VIP or Premium and initial deposit requirements typically fall in the category of thousands of dollars, or even into the hundreds of thousands of dollars. 

Entry-Level Accounts

Mini/Micro/Cent accounts restrict the trade size to around 0.01 lot (one micro lot), which helps to control the risk factors on those accounts. The smaller trade sizes and lower starting deposits can be good for beginners, but these accounts aren’t without their faults. Most brokers don’t offer benefits to these account holders, and you can expect to see higher spreads on smaller account types. 

Mid-Level Accounts 

If you’re trading with a good broker, it is possible to find some benefits and nice spreads on a typical Standard or Classic account. Of course, any more expensive account offered by the broker will likely have more advantages, but this is a good place for novice traders to start, especially if you don’t have a ton of capital to invest. Many brokers offer deposit bonuses and other perks to these account holders. 

VIP & Premium Accounts

These accounts are the best of the best. Traders get the most benefits, best spreads, and lowest commission rates. The downside is that the deposits required on these accounts are often extremely high, placing them out of reach for many entry-level and even intermediate traders. 

Choosing the Best Account Type

Before choosing your brokerage account, be sure to take the following things into consideration:

  • Figure out how much you’d like to invest and do some comparing to see what that will get you. $100 might get you a Micro account with one brokerage, while it could get you a Standard account with better spreads through another.
  • Always check the spreads and commissions associated with each account. Average spreads fall into the 1.5 pip range. VIP and Premium accounts will often offer much lower spreads, but you’ll need to pay closer attention to smaller and mid-level accounts.
  • You will need to check the minimum and maximum trade sizes for any account you’re considering. Most Mini/Micro/Cent accounts offer a minimum trade size of 0.01 lot with lower maximum trade size. Some high-tier accounts require a minimum trade size of one lot. 
  • Check leverage options for any account you’re considering to be sure that options are suitable for your trading style. Accounts with lower deposit requirements usually offer the highest leverage options with brokers.
  • Know that some advantages shouldn’t be based on account type. For example, fee-free withdrawals are offered by many brokers, but some may only offer this to VIP account holders while forcing lower-tier account holders to pay large withdrawal fees. 
  • Remember to look at other factors of any broker you’re considering. Available funding methods, fees, educational options, and other important factors will affect your experience, regardless of how good of an account you’ve chosen.

Conclusion 

Choosing a live account is an important decision, as it will undoubtedly affect your profits and trading opportunities. You’ll need to figure out how much you have available to invest and do some comparing to find the best brokerage and spreads possible. As you move up in your Forex career, you will likely be able to afford better account types or to advance to higher tier levels if your broker operates on a tier-based system. Once you’ve considered deposit requirements, leverage, trade sizes, spreads, commissions, and other factors, you’ll be ready to choose an account type and get started trading.

Categories
Forex Basics

Are These Issues Causing You to Fall Short of Your Goals?

As a forex trader, you should always be working on self-improvement to make a better impact on your trading decisions. Making an effort to address problems like allowing negative emotions to interfere with your choices or not spending enough time researching trading topics you could learn more about are a couple of examples of things […]

As a forex trader, you should always be working on self-improvement to make a better impact on your trading decisions. Making an effort to address problems like allowing negative emotions to interfere with your choices or not spending enough time researching trading topics you could learn more about are a couple of examples of things […]

As a forex trader, you should always be working on self-improvement to make a better impact on your trading decisions. Making an effort to address problems like allowing negative emotions to interfere with your choices or not spending enough time researching trading topics you could learn more about are a couple of examples of things that can impact your trades. If you find that you aren’t meeting your trading goals, ask yourself these questions:

Are You Setting Realistic Goals?

When setting trading goals, many beginners start out with one thing in mind – making money. The truth if this is your only goal, you aren’t doing yourself any favors. It’s also a bad idea to set goals that focus on making exact figures, as it’s nearly impossible to predict that you will make a certain amount of money in x amount of time. It’s ok to have long-term goals, as long as you understand that it will take time to reach them. However, even your long-term goals need to be obtainable. If your goal is to make a million dollars and you’ve only invested $100, you aren’t setting a realistic goal. In the meantime, you should set short-term goals that are possible to reach. Here are a couple of examples of good short-term trading goals:

  • To spend x amount of time each day researching different trading topics
  • To actively log each trade in a trading journal and to review those results after a certain period of time, like a week or a month
  • To invest x amount of money into your trading account each time you get paid, even if it is only $5 or $10. 
  • To finish reading a book that was written by a successful forex trader

As you can see, the above goals can be reached fairly easily, but it will take some effort to get there. The reward centers in your brain will thank you when you complete one of these goals, which is better than feeling stressed out because your only goals are long-term and out of reach. 

Do You Have a Plan to Actively Meet Your Goals?

Sure, you might want to make money, but how do you plan to get there? You’ll need an active trading plan, which covers the following topics and more:

  • How you will find and execute trades
  • How large of a position you will take (i.e. your risk-tolerance)
  • What assets you will and won’t trade

Your trading plan basically covers what and when you trade, including decisions that involve entering and exiting trades. From there, you’ll also want to think about a trading strategy. A strategy is different from a plan because it outlines what type of trader you are. For example:

  • Day traders typically open a few positions each day and close them before the end of the trading day
  • Swing traders might open one large position or a couple of medium ones and leave them to accumulate for days or weeks
  • Scalpers open several positions a day (sometimes even 100 or more) and attempt to profit off very small price movements

The strategy you choose can offer benefits and drawbacks. For example, a scalper only makes a small profit off each trade, so one big loss can wipe out their earnings for that day. A swing trader is subject to swap fees, which are charged by brokers for leaving positions open overnight. Day traders don’t have to worry about these fees, but each person might not have the time or patience to take up day trading. 

The point is that you need to have a good trading plan and strategy set up to reach your goals. You won’t be able to make money without putting thought into the how’s and why’s of the way you trade. If you’ve been trading without a real plan, now’s the time to figure it out. If you already have one and aren’t meeting your goals, perhaps it’s time to look at your plan as a whole and to see if any changes need to be made.

Are You Tracking Your Progress?

We’re referring to a trading journal here. Some traders might start out using one, only to abandon it once they get a little more experience under their belt. Others might never use one at all. When you keep a trading journal, you log information about each trade you make, including your profits/losses, why you entered or exited when you did, any emotions you were feeling at the time, and so on. Later, you can go back and review that data to look for reoccurring issues that may need to be addressed. Sure, you might notice if you lose money, but without a trading journal, you may not be sure of your total profits or losses for a certain period of time. Once everything is in front of you, you might realize that something else is causing you to fall short of your goals. For example, maybe you exited several trades too early after losing money because you were feeling fearful after taking those losses. From a bird’s eye view, it’s easier to pinpoint where the real problems are coming from.

Categories
Beginners Forex Education Forex Basics

Were You Aware of These Benefits to Trading Forex?

Forex trading is often thought of as a gamble, as many potential investors are afraid that becoming a trader will lead to nothing but wasted time and money. While we’d agree that trading isn’t guaranteed to make you rich, there are actually several clear benefits to becoming a forex trader! Allow us to get straight […]

Forex trading is often thought of as a gamble, as many potential investors are afraid that becoming a trader will lead to nothing but wasted time and money. While we’d agree that trading isn’t guaranteed to make you rich, there are actually several clear benefits to becoming a forex trader! Allow us to get straight […]

Forex trading is often thought of as a gamble, as many potential investors are afraid that becoming a trader will lead to nothing but wasted time and money. While we’d agree that trading isn’t guaranteed to make you rich, there are actually several clear benefits to becoming a forex trader! Allow us to get straight to the point…

#1: Working on Your Own Clock

Perhaps one of forex trading’s biggest advantages is its flexibility. You can choose to be a day trader that religiously begins at the same time every day if you’d prefer, or you can choose to trade whenever because the market never sleeps. This is also something that can be more of a hobby in your free time that helps you make money, or it can become your full-time job. The great thing about being a full-time day trader is that you no longer have to worry about sick days, vacation time, being late to work, and other problems that affect people working regular jobs. It’s true that you might miss out on some opportunities if you don’t trade enough, but the beauty is that your work schedule is entirely up to you. If you want to take a sudden vacation, you can do that. If you need the day off for some reason, there’s no reason to stress. Finding a regular job that has this much flexibility is nearly impossible.

#2: No More Boss!

This one only applies to those that actually quit their jobs to become a full-time forex trader. Let’s be honest – most people just don’t like their boss. In a regular workplace, you have no choice but to allow your supervisor to bark orders at you and watch your every move if they’d like to, or else you’ll find yourself jobless in a hurry. Forex traders don’t have to worry about the pressures of having a boss to impress, because they are their own boss. They decide when to work, what time to work, what to wear, when and how long their breaks can be, and everything in between. At the end of the day, you get to decide if your performance was up to your own expectations, nobody else’s. 

#3: Everyone Can Do It

Trading forex isn’t something that is reserved for people who are already rich or born geniuses. The only things you need are a computer or other devices like a phone or tablet, an internet account, and an account with a broker. Experience isn’t even required to open a trading account; you only need to be at least 18 years old with a starting deposit that can be as low as $5. Sure, some intelligence will definitely help you to be more successful, but the good news is that the internet is filled with free resources that can help anyone learn to trade. If you want to become a trader, everything you need is practically at your fingertips. Think about how hard it would be to become a doctor, lawyer, astronaut – if you’re good at trading forex, then you can skip some of the stepping stones like getting a college education and years of required work experience and get straight to making money.  

#4: The Size of the Market

More than $4 trillion dollars are exchanged in the foreign market every single day, providing forex traders with plenty of opportunity for profitability. Across the world, traders are buying and selling currency pairs and other assets day and night, so you don’t have to worry about a lull in activity. Plus, knowing that many people have invested in forex trading is reassuring, as this can tell you that there is money to be made by trading. High liquidity also providers traders with more opportunities to buy and sell. 

#5: Transaction Costs are Low

Transaction costs are low…as long as you’re using a good broker. It doesn’t cost much to enter the market and most brokers will charge you low prices for trading. Oftentimes, these costs are built into the spread, which is the difference between the bid and ask price. There may be some other costs to look out for, like commission fees that would be charged when placing a trade. Still, most brokers will allow you to open an account with a small deposit and provide good conditions and low fees. 

#6: Leverage

One of the major advantages that set forex trading apart is the ability to use leverage. This is basically borrowed capital from your broker that allows you to make trades worth more than what you have available in your account. Leverage is expressed as a ratio that can range from levels like 1:5, 1:30, 1:100, 1:500, up to whatever leverage cap is offered by your broker. Do know that using leverage can be dangerous, and we wouldn’t recommend using a high option when you’re just getting started. Still, leverage will allow you to make larger trades, which can be a big plus when you don’t have a lot of funds to start with.

#7:  Innovative Technology

Forex trading is at the center of many recent technological advances that improve the process and make trading more convenient. Mobile apps, platform updates, trading robots, and technical indicators are some of the best examples of ways that technology is improving for forex traders specifically. Humans are always drawn to convenience, so the constantly developing updates and upgrades are an undeniable advantage that will continue to make the lives of traders across the world easier. 

#8: Free Stuff!

We’ve all heard the phrase “nothing in life is free”, but forex trading has proven that this phrase isn’t always true. Brokers are willing to provide free educational resources in order to build better, well-educated traders that will hopefully sign up for their services later down the road. You can also access free demo accounts that allow you to trade with pretend money. Then there are actually ways to earn cash. For example, a broker might offer a 50% deposit bonus, meaning that the broker would give you $50 in your trading account on top of a $100 deposit. Another example would be a demo contest, where traders can earn real prizes just from trading on a simulation account with no investment. Do know that there are rules that make sure you can’t just claim this free money and withdraw it – you actually have to use it for trading, and you can withdraw profits if you make them. However, anyone that is serious about trading should feel ecstatic about receiving free money in their trading account.

Categories
Beginners Forex Education Forex Basics

Six Seriously Damaging Misconceptions About Forex Trading

Have you ever seen a flashy video, ad, or website where forex trading is promoted by a billionaire? The luxurious lifestyle of a successful forex trader isn’t always as luxurious as it’s made out to be. This isn’t to say that trading can’t make you a great deal of money or help you become rich […]

Have you ever seen a flashy video, ad, or website where forex trading is promoted by a billionaire? The luxurious lifestyle of a successful forex trader isn’t always as luxurious as it’s made out to be. This isn’t to say that trading can’t make you a great deal of money or help you become rich […]

Have you ever seen a flashy video, ad, or website where forex trading is promoted by a billionaire? The luxurious lifestyle of a successful forex trader isn’t always as luxurious as it’s made out to be. This isn’t to say that trading can’t make you a great deal of money or help you become rich because it can. Unfortunately, however, there are some misconceptions out there that throw many beginners in the wrong direction. If you start with unrealistic expectations, you are likely to feel disappointed.

Thinking You’ll Get Rich Quick

The amount of money you make depends on many factors: your trading knowledge, strategy, how much money you invest, the leverage you use, your broker’s fees, how often you trade, and so on. You should know that it does take time for your money to add up, especially if you’re starting out with a smaller investment. Think about how many people would take up trading if it were that easy to get rich. The truth is that many people just don’t want to dedicate the time and don’t have the patience to stick with it in the beginning before profits become significant.

That You Can Start Immediately

Some people might see one of those flashy ads we mentioned and make an immediate decision to open a trading account. There’s nothing wrong with feeling inspired, however, you certainly aren’t prepared to trade from a whim. You need to invest time into educating yourself about trading first, no matter how eager you are to get started.

That it’s Better to Risk More

When one is gambling, they might make the decision to risk more because it can lead to a larger gain. Of course, you can also suffer a big loss. Forex trading and gambling are similar in this respect, but it’s better to risk less when you’re trading. Although you will base your trades on something, like fundamental or technical analysis, the market is still unpredictable. If you risk less, you might not earn as much, but you will also avoid wiping out your account. 

The More Leverage the Better

Different brokers offer different leverage caps. Some regulators restrict the cap to 1:30, while others offer much more flexible leverage options of 1:300 and higher, even up to 1:1000 or more. Since leverage increases your buying power, it’s a common misconception that more leverage is better. On the contrary, leverage can actually cause significant losses, especially for beginners that don’t have much experience. Stick with lower options unless you’re a seasoned trader that has a lot of money to gamble with.

That Trading is Fun

To be honest, trading can be quite boring. Many hours are spent in front of a screen waiting for a good move, and you may have days where you barely do anything at all. You might have a misconception about the life of a forex trader from movies that depict the fast-paced action on Wall Street, but this just isn’t the case for traders working from home. On the bright side, trading does offer some advantages, like the ability to work from anywhere with an internet connection. 

That you Need a Lot of Money to Get Started

Some might think that trading forex is not within their reach because they just don’t have a lot of money to invest. It’s true that the more you invest, the more you can make, but this doesn’t mean that you can’t get started with a small amount of money. Many brokers even offer special accounts that will allow you to get started with $5 or so. This misconception doesn’t end trading careers, it stops them before they start. Never be ashamed to invest in your future, even if your first investment is only a few dollars.

Categories
Beginners Forex Education Forex Basics

Trader’s Guide to Islamic Trading Accounts

An Islamic account or swap-free account is a special type of trading account that is offered by some forex brokers. These accounts were created to adhere to religious Islamic beliefs that prohibit the accrual of interest, meaning that Islamic traders cannot pay or receive interest rates. These accounts must respect these Islamic principles: Payment or […]

An Islamic account or swap-free account is a special type of trading account that is offered by some forex brokers. These accounts were created to adhere to religious Islamic beliefs that prohibit the accrual of interest, meaning that Islamic traders cannot pay or receive interest rates. These accounts must respect these Islamic principles: Payment or […]

An Islamic account or swap-free account is a special type of trading account that is offered by some forex brokers. These accounts were created to adhere to religious Islamic beliefs that prohibit the accrual of interest, meaning that Islamic traders cannot pay or receive interest rates. These accounts must respect these Islamic principles:

  • Payment or receipt of interest rates is prohibited
  • Exchanges must be executed immediately
  • Gambling is not allowed

Although Islamic accounts have many similarities to regular trading accounts, they do differ in some ways. For example, Islamic accounts cannot be charged swap fees for holding positions overnight, but some brokers might apply administration charges if a position is left open after a specified amount of time. Each broker has its own terms and conditions for its Islamic accounts and might offer different spreads, fees, or make other changes. Always be sure to read the terms and conditions for any account before making the decision to open one. You also might want to compare a broker’s Islamic account versus their regular trading accounts to make sure that there isn’t a big difference with spreads or other conditions. 

Finding a broker that offers Islamic or swap-free accounts is possible, but you should know that these accounts aren’t available with every forex broker, mainly because some brokers feel that they don’t make enough money through these accounts. If you’re trying to find out if a specific broker does offer them, start by checking out their ‘Account Types’ page and check out other areas of their website for information. If you can’t find any mention of an Islamic/swap-free account, try reaching out to ask support if this is offered before you move on to another option. Some brokers might require you to sign up for these accounts by speaking with an agent first and it’s common for proof of religion to be requested before an Islamic account can be opened. 

While Islamic/swap-free accounts can be beneficial to those that often leave positions open overnight, they are only meant for traders of the Islamic faith and you will have a hard time opening one without proof that this is your religion. If you are Muslim, then the good news is that you do have options to trade without breaking any religious guidelines related to interest charges, gambling, and so on. These account types have many similarities to traditional trading accounts, although the ways that fees are paid can differ so that the accounts are compliant with Muslim beliefs.

Categories
Beginners Forex Education Forex Basics

Six Key Steps for Beginning Forex Traders

If you’re considering forex trading as a potential way to add to your income, you aren’t alone. More and more people have been opening up trading accounts lately and for good reason. A trading account is a great way to add to your savings, help you through retirement, or simply add money to your pocket. […]

If you’re considering forex trading as a potential way to add to your income, you aren’t alone. More and more people have been opening up trading accounts lately and for good reason. A trading account is a great way to add to your savings, help you through retirement, or simply add money to your pocket. […]

If you’re considering forex trading as a potential way to add to your income, you aren’t alone. More and more people have been opening up trading accounts lately and for good reason. A trading account is a great way to add to your savings, help you through retirement, or simply add money to your pocket. As the nation is currently more than 5 months into the Coronavirus pandemic, there’s no better time than now to think about trading as a potential part-time or full-time career. 

While trading can be profitable, there are some things you’ll need to know before you get started. There’s a lot of information out there, so getting started can seem daunting and the process might even dissuade some potential traders from ever starting their career. If you want to become a successful forex trader, take a look at our 7 key steps below for an easy-to-follow guide on how to get started.

Step #1: Get Educated!

You should start your forex career by learning about trading, which can be done by reading articles, watching videos and webinars, or attending seminars, taking an online course, and taking advantage of other free educational resources that can be found online. The sheer amount of information out there might seem a little overwhelming, but you can simply start with the basics by searching “beginner forex resources” or “how to trade forex”. From there, you’ll be ready to move on to more technical subject matter like risk-management, trading strategies, mechanics of using a trading platform, and so on. Also, be sure to do some research on trading psychology and try reading tips and advice from a few established traders that inspire you. 

Some might want to jump in headfirst by opening a trading account and learning at the same time, however, this isn’t the way to go about it. If you open a trading account too soon, you might choose the wrong broker, and you’ll be more likely to want to start trading before you’re ready. Another downside to opening an account too early is that some brokers charge inactivity fees. This means that you would be charged because you opened the account and deposited money but didn’t make a trade within a certain timeframe. Overall, it’s much better to ensure that you are prepared to start trading before you open your account.

Step #2: Test Your Knowledge

Once you feel that you’ve learned enough, you still may be eager to open your trading account. It’s great to be excited about trading, but you should really test your knowledge first. There are two good ways to do this, one of which being quizzes and the second being demo accounts. Quizzes can help you gauge your knowledge before you make that first investment. If you notice that you don’t understand a lot of the terminology and you’re failing the quizzes you take, then you probably need to spend more time learning. Try writing down any questions you get wrong or anything you don’t understand for guidance when you go back to researching. Demo accounts offer a more hands-on approach and can be opened for free through most forex brokers. These accounts simulate a live environment by giving you a virtual account balance so that you can practice trading. This is a good way to see if you’re ready for trading and can help you learn to navigate a trading platform. You can also test out your strategy to see how it performs before risking real money. Once you get good results, you’ll be ready to move on to step 3. 

Step #3: Choose a Broker and Open a Trading Account

Choosing a broker is a big decision and deserves careful consideration. If you make a bad choice, you could wind up paying way too much in fees, be forced to deal with lackluster customer service, have issues withdrawing your own money, and the list goes on. Fortunately, there are a lot of trustworthy brokers out there that won’t charge you an arm and a leg or try to take advantage of you. Remember that your broker’s fees will eat into your profits, so it’s important to compare your options and read reviews about any potential choices.

Once you’ve found a suitable broker, you’ll be ready to open a trading account. This doesn’t take much effort; you’ll simply need to register an account and make a deposit. The amount of your initial deposit will depend on the broker and account type you’ve chosen. You’re also likely to be asked for a POI (proof of identity) document, like a driver’s license, and a POA (proof of address) document, like a bill in your name that displays your address. Providing these shouldn’t be difficult, as you can usually take a photo of the document on your phone and upload them that way. If you have issues finding these documents, your broker’s customer service team will likely help you to find a solution. 

Step #4: Create a Trading Plan

Your trading plan has to do with the way you trade. The reasons why you will enter and exit trades, the time of day you’ll trade, your goals, how much you’re willing to risk, etc. are some examples of the topics that your plan should cover. Starting with a good plan is crucial for success because it helps you to outline the things that will define what type of trader you are. 

You’ll also want to come up with a trading strategy, which is different from your trading plan. Scalping is an example of a strategy. Scalpers open and close many trades per day, essentially aiming to target small price changes in the market. Day trading involves making multiple trades per day and closing those trades before the end of the trading day, while swing traders leave their positions open for multiple days or even weeks at a time. Each strategy offers unique benefits and disadvantages, so be sure to choose one that works the best for you. 

Step #5: Start Trading

As you begin trading, you should try to remember everything you’ve learned and be sure to look up anything you might be struggling with. Don’t give up if you get off to a bad start – simply take a look at what’s going wrong so that you can fix the problem. As long as you’re making money, you have something to be proud of, as many traders lose some money in the beginning. Know that you’ll have better success and make more profits as you spend more time trading. All of your hard work and dedication will pay off in the long run. 

Step #6: Analyze Your Performance

You might think that the last step is completed once you start trading, but this isn’t the case. After you have some trading activity, it’s time to look at your performance and your profit/loss ratio. Have you made money or lost it? The best way to keep track of this is to keep a trading journal, which details each trade you made. You would list the reasons why you entered and exited the trade, how much you made or lost on the trade, and so on when listing journal entries. Then, you can go back and figure out what’s going right or wrong, what you need to change, and what needs to stay the same. A trading journal can really help to see the bigger picture so that you can perfect your trading strategy over time and make as much profit as possible without losing money.

Categories
Forex Basics

Bill Williams – Psychological Analyst, Author, and Trader

Bill Williams is well-known in the forex industry because of his input from an educated psychological standpoint and because he has created multiple trading indicators. Here are a few facts about him. Bill Williams has received a bachelor’s degree in Engineering Physics and a doctorate in Psychology. This helped him to gain a better understanding […]

Bill Williams is well-known in the forex industry because of his input from an educated psychological standpoint and because he has created multiple trading indicators. Here are a few facts about him. Bill Williams has received a bachelor’s degree in Engineering Physics and a doctorate in Psychology. This helped him to gain a better understanding […]

Bill Williams is well-known in the forex industry because of his input from an educated psychological standpoint and because he has created multiple trading indicators. Here are a few facts about him.

  • Bill Williams has received a bachelor’s degree in Engineering Physics and a doctorate in Psychology. This helped him to gain a better understanding of trading psychology.
  • The influential author gained recognition with the publication of his book series Trading Chaos, which tackles psychological aspects related to trading and what affects the market.
  • Bill Williams has created more than 6 trading indicators for MT4, including the Alligator Indicator, Gator Oscillator, Awesome Oscillator, Accelerator Oscillator, Fractals Indicator, and Market Facilitation Index. 

The Trading Chaos series of books detail the chaos theory, the first version of which aims to make unpredictable aspects more understandable and to improve one’s ability to make financial decisions. The second edition looks at the way Chaos Theory and psychology effect on the markets. Together, the books help readers to gain a better understanding of the market. Think of the books as a practical guide that explains how seemingly random market events are actually caused by certain factors and that can be used to help one make more accurate and profitable investment decisions. You can purchase the books on Amazon for around $50 and options include the hardcover book or Kindle version. Google Play Books, Barnes & Noble, and other retailers also sell the Trading Chaos books. 

In addition to publishing the Trading Chaos books, Bill Williams has also created several different trading indicators, including:

  • Alligator Indicator: This is the most popular indicator that Bill Williams has released. It consists of three balance lines which are moving averages of varying lengths. 
  • Gator Oscillator: Using the balance lines from the Alligator Indicator, the Gator Oscillator calculates two values of both positive and negative and plots them beneath the main price chart as a dual histogram. 
  • Awesome Oscillator: This indicator compares a short-term moving average with a long-term moving average to determine whether the market is bullish or bearish.
  • Accelerator Oscillator: This indicator uses values from the Awesome Oscillator minus a 5-period moving average. It is intended to give early warnings for predicted changes in market momentum. 
  • Fractals Indicator: This indicator is intended to help traders understand market behavior. 
  • Market Facilitation Index: Measures price changes per tick and plots the values on a histogram below the main price chart. 

As you can see, some of these indicators work alone while others are best used in combination with each other. While these indicators have been created by an educated man, you’ll want to make sure that they will work well with your trading strategy before deciding to use one. 

Bill Williams has contributed a great deal to the forex world as both an author and indicator creator with a strong background in psychology and trading experience. His book series is definitely worth reading if you’re interested in trading psychology or market behavior. One of the above indicators created by Bill could also help you to make more informed trading decisions if they work with your strategy. Of all the contributions to forex knowledge, Bill Williams is definitely a noteworthy contributor.

Categories
Beginners Forex Education Forex Basics

Answers to the Most Googled Forex Trading Questions

If you’ve ever used Google to seek out answers to your Forex trading questions, you’re certainly not alone. Here, you’ll find some of the most frequently asked questions that traders put to Google, as well as the answers. Question #1: What is Forex Trading? Traders buy and sell currencies through the foreign exchange market. Currency […]

If you’ve ever used Google to seek out answers to your Forex trading questions, you’re certainly not alone. Here, you’ll find some of the most frequently asked questions that traders put to Google, as well as the answers. Question #1: What is Forex Trading? Traders buy and sell currencies through the foreign exchange market. Currency […]

If you’ve ever used Google to seek out answers to your Forex trading questions, you’re certainly not alone. Here, you’ll find some of the most frequently asked questions that traders put to Google, as well as the answers.

Question #1: What is Forex Trading?

Traders buy and sell currencies through the foreign exchange market. Currency rates are predetermined by a variety of factors, such as political stability, government debt, news releases, and other driving factors behind that country’s economy. Traders try to capitalize off these prices essentially by selling one currency to purchase another.

Question #2: Is Forex Trading Profitable?

The answer to this question is yes, although it is subjective. Someone that makes a larger deposit is likely to make much more money and having an education and understanding of trading also helps one to make profits. In some cases, traders can lose money as well, so be sure that you’re ready before you start.

Question #3: How to Trade Forex

Once you’ve educated yourself about forex trading, you’ll need to choose a broker and make your first deposit. There are a lot of resources online that will teach you the mechanics of using a trading platform (especially the popular MT4/MT5 options). Ensure that you are familiar with the things that affect prices and other trading knowledge first. 

Question #4: What Do you Need to Trade Forex?

The good news is that it doesn’t take much to get started and essentially everyone can become a forex trader if they apply themselves. You need a device like a phone, laptop, tablet, etc., a working internet connection, a trading account, and a starting deposit of at least $5-$100. 

Question #5: Which Broker Should I Use?

There are thousands of forex brokers out there, which makes choosing the right one so much more difficult. The truth is that every trader has different needs, so what’s best for one trader may not be the right fit for another. The best thing you can do is figure out how much you want to deposit and then to compare account options with multiple brokers. Check for regulation status and read user reviews online, along with checking terms & conditions to find the broker with the best offer.

Question #6: Will Forex Trading Make me Rich?

It could. This depends once again on several factors. A well-educated trader with a solid trading strategy and plan is likely to be successful, while someone that jumps in without much knowledge isn’t likely to make it far. This isn’t something that will make you rich overnight, it does take a lot of hard work and patience to get there. You also have to invest money to make money, so don’t think of forex trading as a magic answer.

Question #7: Can you Make a Living Trading Forex?

Many people have managed to quit their jobs to become full-time day traders and the switch comes with some benefits like working from home and being your own boss. Everyone needs a different level of income to survive, so the first thing to do is to figure out how much you would have to make enough money. If you’re just beginning, it isn’t a good idea to quit your job yet, however, you should give it some time to see how well you do. You also might need to make a significant investment in order to turn enough profits.

Question #8: How Much Should I Invest?

This depends on how much money you’re trying to make and how comfortable you are with trading. You might not want to start out with a $5,000 investment just because you can. There are a lot of different minimum deposit requirements out there, some starting at just $5 and some brokers don’t require a minimum at all. You could start small and test the waters or come in with a big investment if that’s what you’re comfortable with. 

Categories
Forex Basics

A Lesson from Bill Lipschutz: Professional Forex Trader

If you Google “top forex traders” or anything close to the phrase, Bill Lipschutz is bound to be on the list. This professional trader was born in Farmingdale, New York, and began his trading career while attending Cornell University. He earned a bachelor’s degree in Fine Arts while simultaneously enrolled in business classes and also […]

If you Google “top forex traders” or anything close to the phrase, Bill Lipschutz is bound to be on the list. This professional trader was born in Farmingdale, New York, and began his trading career while attending Cornell University. He earned a bachelor’s degree in Fine Arts while simultaneously enrolled in business classes and also […]

If you Google “top forex traders” or anything close to the phrase, Bill Lipschutz is bound to be on the list. This professional trader was born in Farmingdale, New York, and began his trading career while attending Cornell University. He earned a bachelor’s degree in Fine Arts while simultaneously enrolled in business classes and also walked away with an MBA in finance back in 1982. Bill’s strong background education undoubtedly contributed to his success with trading forex. Lipschutz is one of many professional traders that can serve to inspire us all; however, this big-league trader learned a very important lesson early on in his career. 

Everything began when Bill inherited $12,000 worth of stock after his grandmother died. It’s true that many others might not be lucky enough to inherit a large sum of money, but it is still possible to follow in this traders footsteps by starting small, saving up, or waiting until you receive a larger sum of money from taxes or other events so don’t feel discouraged by his large start-up fund. Remember that you can open a trading account with as little as $5. 

Eventually, Lipschutz managed to turn his inheritance into $250,000 after spending countless hours researching the stock market in his free time. While we’d hope for a happy ending, things didn’t go so well from there. Bill lost his entire portfolio balance on a single bad decision when the market turned on him. A failure to use appropriate risk-management precautions contributed to this large loss when it could have been reduced to a less devastating blow. After countless hours working to build his investment, everything was gone. This is the point where many traders would give up, closeout their accounts, and turn away from trading for good. 

Fortunately, Bill Lipschutz only became more interested in trading after learning this huge lesson from his early mistake. He went on the work for the newly formed Foreign Exchange department through Salomon Brothers with a plan to learn about currency trading. In 1995, he formed his own company named Hathersage Capital Management with some of his previous classmates. Today, he is regarded as one of the top 5 forex traders with an unknown net worth, although he was once making $300 million per year. 

In a nutshell, this story is quite inspiring with a lesson behind it. A college-educated person receives an inheritance, decides to invest it into the stock market, and increases his investment by more than $238,000. Then, one bad decision wiped out everything in a move that would have caused most to give up on trading for good. Instead of walking away, Bill Lipschutz became more inspired, continued investing, went on to make $300 million per year for the company he was working on, and later went on to create his very own investment company. We can learn the following lessons from this millionaire’s success story:

  • Don’t give up on forex trading, even if you make a bad trade and lose a significant amount of money! Even if you’re feeling frustrated, you should try to learn from your mistakes and continue to search for inspiration. Perhaps a loss is a sign that you simply didn’t do something right, or you might need to take a break and focus on becoming more educated. Either way, this doesn’t have to be a career-ending mistake. 
  • Know that Bill Lipschutz lost his entire portfolio because he did not use appropriate risk-management precautions. This is the difference between blowing $250,000 in one trade or only losing about $2,500 for a balance of this magnitude. You typically want to risk about 1% on each trade, so about $1 would be lost per $100 for traders that have smaller balances. 

Bill Lipschutz teaches us a good example of how determination can pay off when it comes to trading forex. Even if you get off to a rough start, it doesn’t mean that you can’t be one of the best traders out there someday. Learning this valuable lesson in risk-management and motivation should be an inspiration to us all, so remember to think of Bill Lipschutz anytime things don’t go in your favor.

Categories
Beginners Forex Education Forex Basics

The Importance of Keeping a Trading Journal

A trading journal is essentially a log of all of one’s trading activity, which is used by traders of all different skill levels to help improve their trading strategy. While beginners might benefit the most from journaling, we can always get better, therefore more advanced traders need to consider journaling as well. When you have […]

A trading journal is essentially a log of all of one’s trading activity, which is used by traders of all different skill levels to help improve their trading strategy. While beginners might benefit the most from journaling, we can always get better, therefore more advanced traders need to consider journaling as well. When you have […]

A trading journal is essentially a log of all of one’s trading activity, which is used by traders of all different skill levels to help improve their trading strategy. While beginners might benefit the most from journaling, we can always get better, therefore more advanced traders need to consider journaling as well. When you have all the data in front of you, it will be easier to note whether things are going right or wrong. 

First and foremost, you’ll need a good trading plan and system. Your trading journal comes in after you’ve accomplished some trading activity so that you can review and improve your trading plan. However, you need to track important information in your journal for it to work. If you don’t log some of the most important details about your trades, then you might miss crucial information when you go back to analyze that data. This is what most traders log in their journals:

  • Why did you decide to enter the market with a trade?
  • What time did you enter the trade?
  • What (precise) price was it when you entered the market? Enter this to the last exact pip. 
  • How long was the position open?
  • Why did you exit the trade?
  • How much did you win or lose?

Be honest when logging details about why you entered or exited a trade. If you got caught up talking, cooking, or doing something else and you simply forgot, write that down. If your emotions played a role in your decision, you’ll also want to note that. Were you feeling the excitement? Did anxiety cause you to close the trade before you initially intended to? Be sure to include information about the market that affected those decisions as well, rather than only focusing on your personal feelings. Otherwise, you might blame bad trades on yourself when it was really caused by the market’s behavior. Always be honest when logging information, even if it makes you look bad. Keep logging this information, even if you forget to use the journal sometimes. Don’t make the mistake of abandoning your journal once you improve in skill. 

Having a trading journal can be a key to success in the Forex market. If you log information in detail, the journal will become an excellent tool that can really help to hone your strategy over time. Remember to be honest with yourself and don’t forget to note the way that the market is behaving. Keep using your journal, even if you forget to log a trade or two because it will be helpful for long-term success. Your trading journal will prove to be one of the best, most customized tools in your trading arsenal.