Categories
Beginners Forex Education Forex Basics

Important Lessons from Four Successful Day Traders

When it comes to trading forex, making mistakes can cost you your own hard-earned money. This is why it can be helpful to learn from traders that have already tested out different things in the market, so that you may avoid making some of the same mistakes on your own dime. The experts can also provide insightful tips that can help those that are struggling to perfect their trading plan. Take a look at some of the best lessons we can learn from 4 successful day traders below:

Ross Cameron

Ross Cameron is the founder of a day trading chat room named Warrior Trading that was designed for day traders to meet and learn from each other. He has more than 500,000 followers online and more than 415,000 people have subscribed to his YouTube channel. In 2016, he reportedly made $222,244, although he doesn’t boast about his earnings. Instead, it seems that this successful trader spends a lot of time helping others.

Cameron uses a strategy that focuses on trading momentum in the market on stocks that are priced below $20. If you asked him for advice, he’d tell you that day traders need to learn their limitations, which includes taking a break from trading if you’re becoming overwhelmed. He also suggests figuring out what time of the day that you work most productively. For him, the time slot between 9:30 and 11:30 am seems to be the best time to trade. Next, he recommends that day traders work out how much they are willing to lose on each trade and use a tight stop loss to prevent further losses. Another pointer from this successful trader is to keep your strategy simple, as he believes that day trading is an exercise in repetition. 

Sasha Evdakov

Sasha Evdakov is the founder of the website Tradersfly, which offers courses, articles, and educational resources for traders. He is also a published author who has written more than 10 books since 2013. If you prefer to watch videos, you can join the 123,000+ subscribers on his YouTube channel.

Evdakov believes that the ‘real money’ can be found in the trading style of swing trading, although he does spend time day trading when he feels that the market calls for it. Sometimes, he will spend months day trading before reverting back to swing trading. This successful trader’s advice is to figure out which type of trading the market calls for and to switch up your strategy accordingly. 

Brett N. Steenbarger 

With a bachelor’s and Ph.D. in clinical psychology, Brett N. Steenbarger has published a number of books that focus on the subject of trading psychology. In addition to writing, Steenbarger is also an associate professor at SUNY Upstate Medical University, has a trading blog named TraderFeed that offers tips, and mentors traders that work for hedge funds and investment banks. 

As you might have guessed, Steenbarger’s advice relates to the psychology of trading and he has written his own trading rules. He focuses on breaking bad trading habits, teaches traders to become their own coach/psychologist, and covers several other topics in his books. If you haven’t spent much time learning about trading psychology before, we would strongly recommend picking up a few of his books.

Rayner Teo

Rayner Teo is very active online, with more than 500K views and nearly 200K subscribers on his YouTube channel, and more than 30,000 traders have joined the online community he built named TradingwithRayner. The website was created to provide trading secrets to help traders succeed.

Teo places a large focus on preventing traders from losing money by pointing out mistakes and teaching ways to overcome them. He also spends time on the basics, along with teaching traders about more technical elements related to trading. Price action trading, where to put a stop-loss, and focusing on setups with a higher percentage of return are some of the other important topics he discusses with traders. 

Categories
Forex Basics

How to Make Real Money with a Forex Demo Account

A demo account serves as a simulation account that traders can use to practice trading in a live environment with virtual currency. Opening a demo account is completely free and you never have to invest a dime into the account, regardless of how many you open, what company you use, or how long you use it. These accounts are one of the best ways for traders to test their practical skills with zero financial risks. Since demo accounts are completely free, many traders would assume that there is no possible way to make money from them. The good news is that it is entirely possible to profit from trading on a demo account.

So, how can you make money off a demo account? Participating in a demo account contest. You might not have heard of this before because many brokerages don’t offer this. Those that cannot afford to offer bonuses and promotional opportunities often stay away from this type of contest because it doesn’t bring them any income and only takes money out of their pocket. However, it is possible to find several of these contests online through different companies. Do note that many of these brokerages require you to register a live account to take part in their contests. 

Each participating brokerage offers its own unique contest with different rules and prizes, but many of these contests follow the same pattern. Anyone that would like to can open a demo account through the broker and trade for a specified amount of time, usually around a month or so. When the time is up, the trader that made the most profit is usually crowned the winner and given the main cash prize. Sometimes second, third, and other placing traders will earn lesser prizes. 

If you are looking for an ongoing contest, you can search for “forex demo contest” on any search engine to find results. Some companies offer contests periodically while others offer them monthly. There are also cases where a demo contest is offered as a one-time promotion. It’s a good idea to check online for any updates periodically so that you don’t miss out on a good opportunity. You’ll want to participate as soon as the contest starts so that you don’t get behind. 

Before you register for any demo contest, it is important to understand the unique rules that apply. You need to make sure that you qualify to enter so that there are no issues claiming your prize if you win. It is also important to look at the prize(s) and to make sure that any cash prize is fully withdrawable, so you don’t waste your time. If there are requirements for a certain trading volume to be met or other rules before the prize can be withdrawn, make sure that you’ll be able to meet those guidelines. You have a better chance to win a prize if you can find a contest that rewards 2nd and 3rd place winners. 

To give our readers a better idea of their options, we’ve provided a few examples of current demo contests that are currently available as of the summer of 2020. Keep in mind that these contests may expire or change over time, but this should give you a general idea of what’s out there. 

  • HotForex holds monthly demo contests that reward 1st place with $2,000, 2nd place with $1,000, and 3rd place with $500. Traders can view the current rankings online but be aware that all rewards are credited on a live account.
  • Atirox offers a monthly demo contest named Chasing Mavericks. The goal is to maximize prosses while incurring as few losses as possible. The monthly reward is $5,000 for the winner, but you need to register a real account with the company to participate. 
  • OctaFX holds periodic demo contests with the next one taking place on June 8th. The 1st place prize is $1,000, 2nd place wins $600, 3rd place receives $200, and 4th and 5th place takes home $120 and $80. The participant with the highest balance at the end of the round wins. You do have to register a live account to participate. 

These are only a few examples of demo contests that are out there, so be sure to look at other options. If you decide to open a trading account through a company for one of these contests, you’ll need to make sure that they offer attractive trading conditions on their live accounts. Also, know that it isn’t easy to win these contests. Most of them look for the highest profit or the most growth, so beginners will have a hard time winning. Still, this doesn’t mean that you shouldn’t participate, since these contests will help improve your skills and you could still win a prize with hard work and determination. 

Categories
Beginners Forex Education Forex Basics

How to Open a Trading Account with Only $5

If you’ve ever compared forex brokers, you might have noticed that some companies require a large amount of money to open a trading account. Many beginners just can’t meet insanely high deposit minimums, or if they can, they would prefer to invest a smaller amount at first before jumping in headfirst. So, are you wondering if it is possible to open a trading account with only $5? The short answer is yes – but there are some important things you’ll need to know. 

First, you’ll need to find a broker that offers $0 minimum entry deposits. Some brokers might offer several account types, with one option that doesn’t require a minimum deposit. Others might offer one standard account without a deposit requirement. 

  • If the broker offers multiple account types, then the account with the $0 deposit requirement is often an entry-level account, such as a Micro, Mini, or Cent account (but not always)
  • If the broker only offers one standard account with no deposit requirement, this can be a good option that will give you the same perks as those that can afford to make larger deposits

As you can see, there are a lot of different types of brokers out there with different account setups. Each broker offers its own account type(s) and requires a specific deposit minimum for those accounts. You’re looking for options that don’t require a minimum or that set the minimum at only $5.

There are some other things you’ll need to know before choosing a broker and making a deposit. Here are some tips that can help you choose the best broker:

  • Some brokers charge very high fees on their entry-level accounts. Even though you don’t have a huge amount to start with, you should still have access to average conditions. Don’t make the mistake of thinking that better options aren’t out there. Always compare options.
  • You should deposit more if you can. While $5 is enough to get started, it won’t go very far. Maybe you want to try making that first trade, test out funding options, or feel the accomplishment of making a real investment into your future. This is all fine, just know that you’ll need to deposit more in the near future. 
  • Check for limitations on your chosen account type, as some brokers set a restrictive maximum trade size on certain entry-level accounts. You’ll want to make sure that you can deal with any restrictions. 
  • Look for a broker that offers some type of welcome or deposit bonus to get more out of your initial investment. Make sure that your small investment will also qualify for any such promotion as some brokers require the deposit to reach a certain minimum to become eligible. 

The Bottom Line

It is entirely possible to open a trading account with average or slightly better than average conditions with a $5 deposit. Eventually, you’ll need to invest more, but there’s no shame in starting small and working your way up. Know that every broker out there doesn’t offer an account with a $5 funding minimum, but there are many recognizable options that do. You’ll also want to make sure you choose the best broker possible without paying unreasonable fees and keep our other tips in mind.

Categories
Beginners Forex Education Forex Basics

Is There a Shortcut to Trading Success?

Many people have wondered if there is some sort of shortcut to becoming a successful trader. The short answer is no. In fact, many times trading shortcuts can backfire and hurt us rather than help. But as a forex trader, it is important to understand why shortcuts do not work. 

First, getting a good trading education is key to making good trading decisions. While there is a never-ending stream of information online, you must make yourself put in the time to learn. Even if you plan on using an automated robot, it is important to understand the market and how it works. You need to know how trading psychology affects our trades and you should understand risk-management precautions. It will take you weeks, months, and possibly even years to take in all this information, and you should never stop pursuing knowledge about trading even once you consider yourself to be an expert. Remember, if trading were easy, everyone would be doing it. Most people don’t want to put in the extra time to learn the things they need to make good trading decisions, which causes them to lose everything. 

Many beginners make the mistake of thinking that forex trading is a fast way to get rich. On the contrary, it is very much like a job, requiring time, dedication, and experience to profit. If you’re looking to make a few thousand dollars a month, it even requires a large investment of somewhere around $30,000 and full-time day trading hours. The mind-frame that trading is easy is what leads many beginners down the path to failure. Scammers take advantage of this idea with flashy promises and guarantees that they will help you become rich. It is important to remember that nothing is guaranteed when trading, and no company can promise to help you profit.

Forex isn’t a scam, but there are scammers out there. Always research any company you plan on dealing with and be wary of things that sound too good to be true. Forex brokers are looking to make money themselves – and while they may dangle real incentives like bonuses or promotions in front of you to get you to open an account with them, they still must make a profit.  These brokers should give you a realistic idea of your earning potential and encourage you to seek education if you’re just a beginner. Many trustworthy brokers offer free educational resources on their websites and offer demo accounts for practice. 

Another scam that often takes advantage of those seeking a get rich quick scheme is false trading signals. To clarify, a trading signal is a notification of when you should open or close a trade. Trading signals can be helpful, but you still need to check behind them yourself to be sure that they are based on strong information. Another similar scam involves trading robots, otherwise labeled as Expert Advisors (EA). These robots automatically trade for you, but many of them don’t work successfully. Remember, robots cannot make judgments the way we do. They can only think the way they are programmed to think without seeing the bigger picture or taking other factors into account.

Trading signals and EAs can be helpful tools, but you shouldn’t use them unless you understand the market and have ensured that the company or individual providing them is legitimate. Once again, promises or guarantees of profits are signs of scammers. Beginners often make the mistake of thinking that using these tools can help them become successful overnight. Many even leave forex robots running for long periods of time, only to find their account has been wiped out quickly afterward. There is no magic answer when it comes to trading robots or trading signals – these are all just interpretations of the market. 

There are a few other mistakes that beginners make under the assumption that they will profit quickly. Overleveraging your trades is one of the most common mistakes that will disrupt your trading career. Using high leverage should be reserved for experienced traders, so don’t think that using the highest leverage will ensure a great deal of profit. In fact, it will do the opposite. Others might use too many indicators, which results in information overload. Some may fail to keep a trading journal because they are being sloppy.

If there were a shortcut to becoming rich, we would all do it. Unfortunately, forex trading may look like the answer, but becoming a successful trader takes a lot of time and dedication that many people aren’t looking to invest. It can also cause traders to lose out on a significant amount of funds if it isn’t done correctly. Scammers are always looking to take advantage of people that want a quick solution, so you should always be on guard when dealing with brokerages, trading signals, or EA providers.

The good news is that becoming a successful trader is possible and it can be quite profitable with a lot of hard work. Many traders have even managed to quit their day jobs and take up full-time day trading. Of course, it takes time to work up to this. You can get started on the road to success today by educating yourself, and always remember to keep an eye out for scams and opportunities that seem too good to be true. There are no guarantees or promises of profits in the world of forex trading.

Categories
Beginners Forex Education Forex Basics

Our Top 10 Reasons to Trade Forex Today

You might have doubts about becoming a forex trader, after all, thoughts of losing money, not having the time, and other dilemmas can make trading seem daunting to those that haven’t tried it before. You also might be thinking that the whole thing seems too good to be true after viewing flashy videos that show the luxurious side of trading. Still, there are a lot of reasons why you should open a trading account as well! Some might be more obvious than others, while you might not have considered some of the following benefits:

Working from Home: Having the option to work from home is one of the biggest benefits of becoming a full-time trader. You no longer have to set an alarm, get dressed, commute to work, deal with scheduled lunchtimes and breaks, and so on.

Work from Anywhere: Forex traders also have the ability to work from anywhere through their phone or laptop with an internet connection. You could log into your trading account while at lunch, doing errands, or even while you’re on vacation. This virtually eliminates the need to plan trips and outings around your work schedule.

You can start with a Small Investment: There’s no need to invest hundreds or thousands of dollars into your trading account if you don’t want to. Instead, you could start with a deposit of around $10 – $100.

No Need to Pay Taxes: Your forex earnings won’t be taxed like those earned on a regular paycheck, which means more of your money winds up in your pocket.

You Get to be Your Own Boss: A lot of people dream about quitting their job, especially if their boss is a nightmare. If you become a forex trader, you no longer have to take orders from anyone. If you sleep in, decide to take a day off, want a long lunch – there isn’t anyone to answer to but yourself.

Flexible Work Hours: Different trading styles support different amounts of time spent glued to the computer screen, so you could always choose a style that doesn’t require constant attention if you’d prefer to have more time off. Even if you trade often, you can get a late start or stop early on some days when you need to. Another option is to purchase a forex robot that will automatically trade for you.

You’ll Make More Money: This one isn’t guaranteed; however, it is likely that you’ll make money if you have a good trading strategy and you know what you’re doing.  There’s no need for us to explain why having more money in your pocket is a plus!

Low Transaction Costs: You do have to pay some fees to your broker, however, fees for forex trading are relatively low.

Leverage: Forex trading offers traders the ability to use leverage, which is essentially borrowed capital from your broker that increases your buying power. 

It Doesn’t Take Much to Start: Some may assume that it’s difficult to get into trading. On the contrary, it doesn’t take much. All you need is a device with an internet connection, like a laptop or smartphone, a deposit of around $10 or so, and a trading account, which can be opened easily as long as you are at least 18 years old. With such easy barriers for entry, everyone could try out forex trading if they wanted to.

Categories
Beginners Forex Education Forex Basics

Six Quick Tips to Improve your Trading

Looking for some straightforward tips that could help you improve your trading results immediately? Here, we’ve provided 6 helpful tips that every trader should definitely know about. 

Tip #1: Learn to Take a Break (Sometimes)

There are certain times when we need to take a short break from trading. Experiencing strong emotions would be a good example of one of those times. Anxiety, fear, excitement, and greed can really interfere with our thoughts and cause some unwise trading mistakes. Anxiety can cause us not to place a trade because we’re overthinking, excitement can make us take more risks, fear can cause us to doubt ourselves, and so on. Experiencing a “lucky” streak is another less obvious example of a time when one needs to take a break. This is because those that have been winning tend to trade too much and risk more than they should. Having a bad streak can cause one to become anxious and could make you pull out of trades too soon. Whatever the emotion, step away when you need to and try yoga, listening to music, or whatever helps you keep calm until you’re feeling more level-headed. 

Tip #2: Understand that it’s Okay to Lose

Traders make choices based on probabilities, not facts. It isn’t possible to win all the time and even the best traders have misjudged the market at times. This doesn’t mean you should go risking all your money without fearing the consequences, but you shouldn’t beat yourself up when it happens. Try to learn from the bad trades and let go of the blame. If things go against you, consider whether the problem is something that you should have done differently, or if it was unavoidable. If you made an error that could have been avoided, use the mistake as a learning experience.   

Tip #3: Keep a Trading Journal

Traders use trading journals to log their trades in detail, including entry and exit times, reasons why they entered and exited the trade, how much they made or lost on the trade, and so on. The idea is that you can then look at the bigger picture of how your strategy is working and what you should or shouldn’t change. Trading journals can point out flaws that might not be obvious to us in general. For example, maybe you have a problem with getting overly anxious and exiting your trades before they reach their stop loss. This could be a big problem and you may not realize how often you’re doing it. A trading journal will bring these types of issues to light so that you can figure out what to work on.   

Tip #4: Never Stop Pursuing a Trading Education

Traders need a solid understanding of the market before they even begin trading, from basics like terminology to the mechanics of how things work, to more complex information about strategies and different types of analysis. Unfortunately, some traders get too eager and start trading without a proper understanding of all of these concepts. Even once you’ve done a lot of research, there will always be more to learn. You should never stop reading articles and brushing up on your trading knowledge and if you feel that you haven’t done enough research, then you should get online and get to work.  

Tip #5: Lower your Risk

Many professionals recommend risking around 1% on any single trade. Even though this may not result in a lot of profits, it helps stop losing trades from being a big problem. If you go risking 15% on one trade, 20% on another, and so on, then chances are that you’ll wipe out your account quickly. Even if you aren’t risking a lot, you should consider lowering the amount of money you’re risking on each trade if you’ve been experiencing a lot of losses lately. 

Tip #6: Use a (Proper) Stop Loss

Hopefully, you’re already using a stop loss. If not, you should know that using a stop-loss is one of the best ways that a trader can manage their risk. If your trade hits a certain loss target, then the stop loss will close it out and prevent it from losing too much money. When you set your stop loss, you also need to make sure that you place it properly or you’re still in danger of losing a lot of money. Try reading articles online about where to place your stop loss if you think yours should be adjusted. 

 

Categories
Beginners Forex Education Forex Basics

Trading Bias or Actual Prediction?

Financial advisors or investment guides might have discussed the dangers of trading bias with you before. If not, you should know that a trading bias has to do with an investor making a trading decision based on preconceived ideas about what will or won’t work without taking the actual evidence into consideration. This is a psychological phenomenon that can negatively affect your trades, as someone that is making biased decisions does not carefully consider the real factors that could affect their trade.

The most common example of this issue is confirmation bias, in which an investor looks for evidence that specifically supports their preconceived idea. This would also involve actively ignoring signs that their idea is wrong and only looking at the evidence that makes it seem plausible. Another example would be sunk-cost bias, which occurs when an investor sinks a lot of time, money, and/or energy into an investment and refuses to cut their losses, even if it is obviously a bad move. Both examples can cause you to lose money.

If you want to avoid trading bias, the first place to start is by recognizing it. Think about the things that you look for when you decide what trades to enter and ensure that you are taking in all of that information, not only certain factors that support a preconceived idea. Consider technical analysis, which has to do with historical price movements on charts, or fundamental analysis, which analyzes economic, social, and political data. Both of these take real information into consideration and can be helpful if you’re trying to make more solid trading decisions.

The bottom line is that it is easy to fall into trading bias without even realizing you’re doing it. If you develop an idea of what will work and ignore information that suggests otherwise or refuse to pull out of a losing position after investing a lot of resources into it, then you’ve fallen victim to this problem. Once you realize this, you should think of the bigger picture as far as what you base your trading decisions off of. Remember to look at concrete facts that support your ideas without ignoring any red flags that suggest things could go another way. Also, don’t be afraid to pull out if the market is moving against you, otherwise, you will only increase your losses.

Categories
Beginners Forex Education Forex Basics

Forex Beginners: The Right Approach for a Technical Swing Trader

If you are a complete beginner considering a forex trading career, a skilled individual experienced in trading stocks, commodities, or other equities, or a dissatisfied forex trader wishing to start all over again, you are probably wondering how to embark on this journey of exploring the abundant forex market with the best possible tools and advice. Naturally, any developed market, such as the one you desire to enter, has its own set of rules and needs, and it is your task to absorb whatever available material you can get by. As you may have already noticed, forex has been extensively researched and the age of technology has made this topic only more susceptible to misinterpretation, often causing confusion and concern among the interested parties. 

Sometimes any such misperception originates from inexperienced authors sharing their faulty thinking while, in other cases, the level of clarity and precision is jeopardized because of traders trying to copy the same practices they used in some other market. As the number of individuals wondering how to set off or jump-start their forex trading careers keeps growing, this article will clearly and directly provide the basics for you to start assessing the prospects of having and growing a career as a forex trader. Most importantly, you will learn about how to choose the approach to trading currencies that have not only proven to be successful in real trading but vouched for by professional traders around the globe as well.

Some experienced traders state that they required a minimum of five years to reach the professional level of trading in this market, during which they invested not only in learning but also in testing their strategies and tools of choice. Although trading at a high level, the trading elite still made mistakes and endured periods of tough learning of how to avoid some common mistakes. These learning stages sometimes involved completely destroying traders’ accounts, endangering their finances, but also the determination to differentiate between the good and bad approach, understanding that devoting time and effort will gradually give results. 

Testing thousands of indicators and applying various pieces of advice allowed them to discover fine nuances that eventually pushed them right to the top. On this path of discovery, these traders made numerous adjustments to indicators’ settings and learned how to make necessary calculations to keep their trading in line. What is more, they also learned how not to get involved too deeply in their trades and take emotions out of the equation. Owing to the variety of these steps and the extent of their willingness and eagerness to learn and grow, professional traders managed to develop their own trading systems and commit to following their plan religiously. 

With the increased number of free and unrestricted material nowadays, you can rest assured that the odds of becoming a successful trader of currencies are higher than ever before. Nonetheless, to reach this stage and to really give yourself the chance to prosper, you will ultimately need to incorporate mindset, plan, and strategy as the key concepts which inevitably determine the level of any trader’s future success. The quantity of material you have come across so far may seem to be truly overwhelming, and not knowing how to integrate the vastness of data may hinder your development as well as increase the risk of failure. Moreover, the inability to discriminate between accurate and incorrect resources can additionally hamper your attempts to be good at trading. And, last but not least, the degree of willingness and openness to being further molded by the market will either facilitate or impede your psychological growth on your path to adopting the right mindset that trading requires. So as to help you take in and absorb as much relevant information as possible, without compromising quality, each relevant piece of information in this article is going to be disclosed in a simple and linear fashion. 

Firstly, the approach that this article advocates for is inclined towards the use of indicators, as opposed to price action or naked chart trading. People’s choice of indicators will undoubtedly determine the quality of their trading experience, and the financial reward as well, which is why a portion of traders who did not choose well in the past vehemently objects to the use of these tools. Some of the most prosperous participants in this market developed highly successful systems based on the use of indicators, which further proves the point that your selection of indicators requires special attention due to which it will lead to lucrative outcomes. Any good approach to trading in this market should heavily address the topic of trading psychology that should embody the essence of every endeavor to trade in this market. 

It is so vitally important that traders grasp which traits and abilities constitute a good forex trader because the more recognition you give to this matter, the healthier and more sustainable your trading will be. By relying on the right approach to trading, you will additionally discover how, together with a suitable mindset, proper money management also forms the foundation for lasting success and is one of the crucial elements each trader needs every step of the way. Although these topics are not discussed by many, the failure to adopt the right mindset and the lack of money management skills are certainly the most common reasons why traders get disappointed and are pushed to stop trading, which is why these topics must be part of any desirable type of approach. 

Approaches to trading may differ significantly and this does not reflect the belief that necessarily only one method is good. You should always feel encouraged to keep searching for tools and tactics to fulfill their own needs and goals, but different people can have varying degrees of acceptability. Moreover, we cannot expect to assign equal significance to the same factors as other traders do. While on the surface you may find different sources to support seemingly identical values, once you dig deeper you will see how any existing differences also entail the difference in what they prioritize or hold as relevant. With the help of the general guidance provided in this article, you should be on the lookout for the system which will help you to manage your time and enjoy your day without having to sacrifice your freedom for money. You will thus increase your effectiveness without having to work long hours by default or put excessive amounts of energy into trading. 

Such an approach will also help you reduce the number of mistakes you are making, which are often caused by highly conflicting or even downright inapplicable advice. Even if you are using the best indicators that are specifically developed for trading currencies, although this is quite often fertile ground for improvement in this regard, making the same mistakes repetitively will keep pulling you back. Unless you differentiate right from wrong, you may never achieve the level of expertise even after investing great amounts of time and energy, and the approach you choose to use should be able to provide you with such assistance. What such an approach does, in comparison to the majority of others, is to offer you a self-sustaining system where you will need to put in very little effort to see tangible results. 

As you can see, by implementing the tips we reveal here, you will reap numerous benefits and the only precondition is that you invest in learning before you really start trading. Having to trade for approximately a quarter an hour a day from the moment you acquire knowledge onwards probably seems like a fair deal and, what is more, you are always advised to run demo trades to confirm the efficacy and efficiency of the tips you come across. After you discover a system like this one, you will feel confident enough to put your emotions aside, knowing that you no longer depend on the hours you invest, but precisely on this system that you have previously developed through learning. Besides learning beforehand, you should also bear in mind that an approach like this is not intended to serve as a quick solution for impatient individuals wanting to amass a fortune overnight. Such an approach, in fact, does not rely on luck and, therefore, does not advise traders to follow sources that disclose signals. 

People who are ready to take time to learn and are eager to explore whatever advice is offered to them are the ones who will benefit the most from this article. Compared to the time when forex was an entirely new market and there were no available materials and resources to turn to, traders had to learn how to develop such a system the hard way. As a result of the tips provided here, you will be able to come by a genuinely amazing functioning set of rules and tools you can use to build up your own algorithm and strategy, which are compulsory for growing your forex trading account

The first step for every beginner in this market is learning how to trade. Some of the best websites, blogs, podcasts, and YouTube channels will not assist you in understanding the key trading/financial/investment terminology, so you will have to devote some time before to study what terms such as pip or trend line stand for. Understanding how this market functions is equally essential, if not even more so, for the traders who are coming from other markets, such as the crypto market, because they often wrongly assume that the same strategies and tools are applied just because both markets revolve around the topic of trading. This assumption is often the reason why the rate of failure is so staggeringly high among these cross-overs, causing them to give up almost at the very beginning. 

Learning is hence the number one step in even attempting to take up trading in the forex market not only because of its specific mechanics but also because knowing the basics will help you construct a system you will then be able to use forever. After learning about core concepts, some of the most important topics you should also focus on include money management, trading psychology, and technical analysis. However, whatever you read, watch, or listen, always strive to fully understand why forex trading requires a unique approach and this will shorten the time your learning will require, help you opt for the right tools, and prepare you for the challenges that trading in the forex market imposes.

While the number of tips offered here may still be very high, you are advised to use a notebook/laptop and start documenting all pieces of information that you find useful. Remember to always think of forex trading from the perspective of indicators and, most importantly, trends because such an approach will lead to sustainable results. In order to maintain success and prosperity, you will also need to set up and keep improving your own toolbox as it will make the algorithm you will use in your trading. While searching for advice on how to develop your own approach to trading, make sure that you understand what this system should comprise. 

Always test whatever information you come across and, once you feel like you have found the right indicator or strategy, strive to use it consistently until something better comes along. Maintain a level of curiosity because it will keep you active and prevent you from failing to see some innovative and creative solutions to existing problems. In addition, give yourself the freedom to adjust and accommodate anything you use in trading if you feel that you could gain more success after some improvement. Last but not least, practice being patient because this characteristic will allow you to stay positive, preserve your mental health, and prevent you from endangering some long trade just because you cannot wait to see the end results. All in all, you now know that successful forex traders worldwide always invest in knowledge and tools to design the best possible strategy and algorithm, and you are thus ready to set sail and continue exploring this market to reach mastery.

Categories
Forex Basics

Is Part-Time Trading Really Worth It?

Something that a lot of people tell you when you start out or let them know that you are thinking of reading is the amount of time that it is going to take, and it is true that to become a successful trader does takes a long time, but what we want to look at is whether or not you can become a successful trader if you are doing it on a part-time basis.

Most people look to get into trading as a part-time thing, something to do after work to make a little extra money on the site. Doing a little bit before work, after work, or just before bed, or maybe you just have not done enough to have the knowledge or the confidence needed to get rid of your job to trade full time, and that is perfectly understandable as it is a huge step.

The problem is that it can be incredibly hard to fit all of this around your job, not many people will want to get up early before heading out to work, or to get home from work and then immediately start working on your trading, you need a break and you will be tired. Most people also have a certain routine before bed that they probably do not want to interrupt with a bit of trading. Your family, your job, and education are all things that take up a lot of your time and would also take time away from any potential trading activities.

A lot of people who work spend a lot of their time sitting down, of course, this depends on the job that you do, but if you do, then it probably isn’t the first thing on your mind to want to come back home and then sit down in another chair for an extended period of time. Instead, you probably want to do something that is as far away from a computer and a desk as [possible, this is where the additional motivation and discipline needs to come in. Are you able to sit down again and are you able to motivate yourself to do it, this is something that a lot of part-time traders can struggle with.

The next thing that you need to consider is your time, we briefly touched on it above, but do you feel that you have enough time to put into trading. You do not need to spend the hours and hours every day in order to learn, something that you often hear from people telling you how hard and time-consuming trading is. In fact, there have been plenty of people who have been trading and started trading by just studying an hour a day or even an hour every two days. You won’t learn as much as quickly, that much is obvious, but there is nothing saying that you aren’t able to learn just as much as anyone else, it will just be over a longer period of time.

One real positive to trading part-time is that there is no expectation or necessity to make money, if you were to be trading full time, there would be a lot of pressure and stresses that come with the trading. When trading part-time, you are doing it as a hobby or to earn a little bit extra, you are not relying on the money to pay your bills or to pay your mortgage, so the real pressure of being successful is not here. This allows you to concentrate on learning and improving and will not have your mind focused on the profits and nothing but the profits. It will also help you get over loose, as that is not taking food out of your mouth, any loss as a part-time trade is more likely a learning experience rather than something that could potentially hurt you.

One thing you need to consider with trading is that when you are doing it part-time, you are needing to make some sacrifices, we mean this in regards to spending time with your friends. If after work you are used to hanging out with friends or going to the pub, you won’t be able to do that at the same time as trading, you will need to make some sacrifices in regards to how you spend your time and this could potentially increase the risk of you being in a form of isolation. While not total isolation this can have a negative effect on your well being and mental health, so having that balance between trading, social life and work life is vital.

Try and think back to the last time that you wanted to try something new, how did it go? Did you manage to fit it around your life, or was it too much for you to fit in, many people take up hobbies and then subsequently find out that you do not have enough time for it, or it is too much work to handle, this is fine, trying is the first step, but understanding what it is possible a vital part of starting and understanding the limitations of what you are doing.

If you are thinking of trading part-time, you really need to consider whether you are able to make the sacrifices that are needed, whether you are able to fit in around the other things that you are doing in your life. It will take time to work, it will take a lot of dedication and discipline, but you can certainly be successful when trading and learning part-time. So if you are up for it, go for it, take that first step, the worst thing that can happen is that you work out what it is not for you, but you may find that it is perfect, you won’t know until you try.

Categories
Forex Basics

How to Successfully Start Your Forex Trading Career

18With many things in life, it is actually beginning which is the hardest thing to do. So the question that you see pretty much everywhere that you go is simply “How do I get started?” or something along those lines. The reason that this question comes up so much is simply that people have been blasted with adverts and promises about the profits that they can make and how much it can change your life. They are then looking towards these profits before they actually know the basics, what a pip is, or even what a broker is.

Trading is a huge beast, and when you are thinking of starting out, it is a daunting beast, a huge one which anyone coming into will not really know where to start. There are certain things that you need to do before you jump in iht both feet, things to learn, and things to set up. Some of those promises are of course a little or even greatly exaggerated, but there is certainly potential out there to get things right if you start out on the right fit. So we are going to be looking at some of the things that you can do in order to get the best start possible for your trading journey.

It is important to point out that there is no one perfect strategy, here is not on holy grail, and there is not a single order that you should be doing things in. every trade is different, so something that works for someone, may not work for you. So do not take this list as gospel, the same that you should not use anything that anyone else says as gospel, simply use it as a way to get an idea of what it is that you could be doing and as a way to get elf on the right fit, rather than simply follow it blindly in the hope of becoming a successful trader. So let’s jump in and see what some of the things that you could be doing in order to start your trading career.

Learn the basics:

Seems a little obvious this one, but you would be surprised at how many people actually seem to skip this, we are talking about the basics of the basics here. Do you know what a pip is? Do you know what a broker actually does? Do you know how to work out your profit and loss? These seem like they would be incredibly basic things, things that any trader should know, but there are people out there trading with real money who do not know one or more of these very obvious questions.

Think about it, would you enter a swimming race if you hadn’t yet learned how to actually swim? That may be an extreme example but it plays out pretty much the same way, you are entering something that is incredibly competitive, yet you have no idea how any of it actually works. You need to ensure that you have learned at least the basics, get an understanding of pips, leverage, risk management, all of these things before you even think of signing up anywhere and especially before putting any of your money anywhere., Take a look around to see what people are doing, indulge yourself in knowledge and just try and learn.

Trade on a demo account:

When you do finally decide to sign up with a broker (which you should have done a lot of looking around and research to find the right one), you will want to ensure that you are on a demo account. The demo account will try to mimic the trading conditions of a real account the best that it can, but the main advantage for trading on this account is that you will not be risking any of your own money.

The demo account is perfect for trying out new strategies or when you are just starting out, it is perfect as a way to get a better understanding of how the trading platform works, but also how trading actually functions. How to put on trades and how to close them. It is recommended that you trade on a demo account for at least the first few months, six months is the number that we often see thrown about. Use the demo account to learn what you are good at and what you need to work on. You won’t make money, but if you are not able to become a profitable trader on the demo account, then there is no point in moving to a live account as you will only lose money. So stick to dem until you are profitable for at last a few months in a row,

Learn to recognise trading and forex patterns:

This will come with doing things over and over and using that demo account that we mentioned above can certainly help with this. You can also do this by looking back on the charts, how far you go will depend on the timeframes that you are thinking of trade. If you are going to trade on the 5-minute charts then look back a few weeks to see if you can see any patterns if you are trading the daily charts, then you may need to look back an entire year or more in order to see if you can recognise the patterns.

I can take time, and it can be quite difficult to begin with to actually recognise what it is that you are looking for. You will need to put this time and effort into working this out if you want to be successful as it is these patterns that will be allowing you to trade successfully when you do finally go live. Do not be afraid to get explanations from others for the sort of patterns that you are looking for, but it is vital that you are able to recognise them yourself before going live.

Create a trading system:

One of the primary things that you would have been told when you were thinking of starting was that you need to create a trading system. This system will have a number of different aspects in it, it will detail what you need to trade, what you need to look for, your risk management, the profit to loss ratio and more. This is basically what dictates your trading. If this has not been created properly there is very little chance that you will end up as a profitable trader. Many people start out by trying to use someone else’s strategy as a shortcut, but you do not understand it, and should the markets change, you will not know how to adapt it properly.

You need to create your own, it is not an easy or quick process but it is one that is vital and it is also vital that you do this while on your demo account. This is important because you will be making mistakes and you will be making a lot of losses as you are creating it. Even the best readers in the world would have had a hard time creating this and would have made a lot of mistakes as they are doing it. So take your time, get it right and it will really help you to get on the right path.

Ready your mind:

If you want to trade like a trader then you are going to have to think like one too. You need to remember that everyone is there for exactly the same thing, so having a new and unique view of the markets does not necessarily mean that you will do any better, traders think in a particular way because that is how you need to think in order to become successful. This is not something that you will be able to do overnight, it will take time, through both practice and by reading or observing others. Learn what it is that you are looking for, how you analyse what it is that you are seeing. Try getting involved in a trading community or two in order to talk to others that are actually trading in order to get their views and opinions on the things that you are looking at.

Track and journal your progress:

This Is the part that most people miss out, yet it is also probably the most important thing that you can do. Creating a trading journal or at least writing down what it is that you are doing. When we say to write things down, we mean everything. The reasons you have entered and trade and the reasons you have not, why you closed a trade, the results, how long you help it, and more. All of these little bits of information will give you a real insight into your trading. This allows you to see both your strengths and weaknesses, it will tell you how you are trading and whether you are following your strategy properly.

This seems like a lot of work and it is, but if you want to be a successful trader then you need to be doing this, and the earlier that you start the better. If you want to be successful then you need to do this, you need to understand why you are trading what you are trading and how you are performing when you do it.

So those are some of the things that you can be doing to help yourself get off on the right foot. Trading is not an easy beast to tame, many will try and subsequently fail. What is important is that you do what you can to get yourself going and to help yourself become successful in the long run. It is a long and hard process, but if you really want it and are willing to put in the time and work, there is no reason why you cannot become a profitable trader.

Categories
Forex Basics

Do You Trade or Do You Gamble?

If you ask someone that doesn’t know much about sport or anything to do with Forex trading, they will tell you that it is exactly the same thing, and from an outside view, we can see why they would think that. There are however huge differences between those that gamble on the markets and those that trade.

The majority of people get into Forex trading for a simple reason, to make money, if we look at it at a base level, there is no reason to trade apart from gaining money. So we all have the same goal, so why do people go about it differently. Ultimately it comes down to mindset, some people have the patience to learn, the drive to improve, while others want the easy get rich quick version, which the vast majority of the world will see as gambling.

So what would the differences be? Let’s take a look at EURUSD, it’s the worlds most traded currency pair, its currently moving horizontally, a trader will have a strategy with certain criteria that need to be met, the majority of strategies won’t take a trade while it is moving in a horizontal manner, however to a gambler, it doesn’t really matter, it is a 50/50 to them, in terms of gambling, those are pretty good odds, you only need one trade more in the right direction than the wrong to make money. Of course, the forex markets are not that simple, there are thousands of different things that can have an effect on the markets, things a trade will know but a gambler will not.

Trading and gambling are not exclusive from one another, a trader can very easily be sucked into the world of gambling, you just made a losing trade, you may want to win that money back , so you trade with a little bit extra, this is a form of gambling. You see someone make a lot on a trade, you want the same so you put in trade following them or that does not work with your own strategy in the hope to make a bit more money, again this is gambling.

The main difference between the two is the patience and learning that comes with trading, having your own strategy with strict entry and exit criteria will make you a trader, each trade that you make is calculated and is not fuelled by the thought of making some extra money.

Trading takes a loot at the probabilities that are within the markets, they are are always more likely to move one way or another, these probabilities are the driving force for the prices. News events add probabilities, technical and fundamental analytical information add probabilities, the market consensus adds probabilities, you get the point. A trader will take all of these into consideration before making a trade, so it is no longer a 50/50 trade it is not an 80/20 trade. That is where the main difference comes from, taking the probabilities and only taking trades that are in your favour rather than trading ad hoping.

You can create the mindset of a trader rather than a gambler by using tools such as trading journals, learning from past trades one of the best things a trader can do, recording entries, exits and reasons for the trade, while a gambler will simply trade without any records being kept.

So are you a gambler or a trader, do you plan your trades, do you record things? Or are you just here to try and make a bit of quick and easy money?

Categories
Forex Basics

What’s the Deal With Forex Influencers?

If you have been around on social media for more than a few minutes you have probably seen the vast numbers of people who are showing off their expensive houses, their flash cars, and more often than not, piles of money. So how have they got these things, how long did it take them, and more importantly, are they even real?

An influencer is classed as someone who has a large following and is able to make movements within a market by recommending a product or asking people to perform certain tasks. There are some very legitimate influencers out there, who have worked hard and have made themselves a success. However, three or a lot of people who have seen this and tried to fake it, the old phrase of fake it till you make it is relevant here. So we are now going to have a look at ways that you may be able to work out whether someone is a real influencer or a faker.

Their Age

One thing you need to look at is their age, would you believe an 18-year-old (or sometimes even younger) that they have made millions trading, considering that you are required to be 18 to actually trade, we find it hard to believe that they have already managed to make millions. While there are of course those that are 18 who are millionaires, either through inheritance or businesses, it is far less likely that those posting on social media about their fortunes, especially showing them off in the form of piles of cash are real.

Duplicate Photos

It is absolutely fine to post the same picture on your account several times, what you do need to look out for though is those that are posting pictures from other accounts. If someone has millions of pounds, why would they need to be taking photos from other accounts instead of taking it themselves? What is even worse, is that a lot of these so-called influencers may have been taking photos from places like Google. If you are ever feeling like something could be fake, simply download the photo, go to google images and do a reverse search. If it is real there may be only one photo (or a few if others have copied it), but when you have a fake, there may be hundreds of them and it may well have been taken from another site completely.

Ridiculous Claims

I am sure you have seen some of the claims that they are making, send us $500 and within 7 days you will have $5,000 or for just 0.0001 BTC you will get 1 BTC in 2 weeks. That would be fantastic wouldn’t it, well this simply means that they are not real and are just looking to take your money. Please never ever send money to anyone on social media, there is never a need for it, even a professional account manager will not ask you to send them money directly or to a random crypto wallet, so if it looks too good to be true, it most certainly is.

Follower/Like ratios

This can be an obvious one, does someone have 10,000 followers but only 1 or 2 likes? Or do they have 10,000 likes and only a few hundred followers? Often those that are trying to fake it till purchase followers or likes, they do it to make it look like they are popular and that they have a following, mainly because if a lot of people follow you, it makes you seem a lot more relevant and genuine. Simply take a look at their profiles, their posts and their likes and you will certainly see some discrepancies if they aren’t the real deal.

The Fake Hours and Cars

There are some beautiful houses out there, and a lot of people on Instagram and Facebook seem to own them. In fact, we are pretty sure that a lot of them live in the same house. Those that are faking it aren’t buying these houses, they are simply renting them for the day and taking photos, it’s the reason why they often have the same weather and lighting in every photo. Just be wary of those posting huge houses with very little evidence of how they got it.

Some are Real

Of course, there are some people that have made this money or the popular ones that aren’t throwing their cash about, they do exist. If people are posting genuine content along with their fortunes, they could be more real than the rest. Those posting courses that they run are often quite knowledgeable, however not all. Often those offering genuine services will have a business with reviews online, be sure to check them out before ever departing with any of your own money. A lot of the legitimately rich people would have made their money through MLM schemes, recruiting others, so this is another thing to look out for.

So those are just a few of the ways to work out whether an influencer is real or fake, it is important to note that the vast majority of the people on social media are simply trying to make money off you, so stay alert and keep your wits in order to avoid falling into their traps. There are the real ones, but they are far and few between, so be careful when looking for people to follow.

Categories
Beginners Forex Education Forex Basics

Avoid these Common Trading Blunders

There are a lot of blunders and mistakes that you can make as a new trader and also as an experienced trader. What we need to remember is that mistakes happen, both small ones and large ones, sometimes it can be our own fault and sometimes it is completely out of our control. What is important is that we learn from those that we have done, and try to avoid those that we have not, so we have come up with a list of some quite common mistakes that traders make, but also ones that you should keep an eye out to try and avoid.

Not having a trading plan:

You are probably bored of hearing this now, but a trading plan is wanted, in fact, it is needed. If you are trading without a trading plan, you are putting your trades and your account in danger. When first starting out, you won’t have a full trading plan created, but it is important to get one started, as you continue down your trading journey and learn more you can add to it and adapt it to the new things that you have learned. What is important is that you have one, it will detail the requirements to get into a trade and how to get out, as well as everything in between. Without it, you will be trading blind and this will only lead to ruin.

Chasing results:

Please don’t do this, chasing results leads to overtrading which leads to loss. If you start to chase results, you won’t be taking the very specific rules that you have created into account, you will begin to start making bad trades or even completely guessing your trades, this will only lead to losses as you cannot predict the markets. You need to stick to your trading plan, do not chase results, they will come in time and in a controlled manner as long as you continue to follow your trading plan.

Forgetting your risk tolerance:

Every single person in the world has a set risk tolerance, this is how much they are willing to risk or how much they can risk without it consuming every thought that they have that day. You need to remember yourself, pushing yourself too hard will begin to cause unnecessary stress that you really do not need. When you created your trading plan, you should have taken your risk tolerance into account so that you always remain around it or below it. If you go too high, you will begin to hate trading and it will feel far more like gambling, which is not a good route to go down.

Forgetting the time:

This is more about getting obsessed with the markets, they can be exciting and then can be boring, but one thing we can be sure of is that once you are in them, you don’t always want to get out. What you do not want to do is to get obsessed, you need to be treating trading like a job, you would not want to sit at your job 14 hours a day, so do not do it with trading, be sure that you have set times, especially when starting out and things generally take longer to do. It’s not healthy for you or your relationships if you are spending too much time by yourself on the computer.

Not using stop losses or take profits:

You most likely have been told by someone that you should be using stop losses, you should be using them to help limit the amount that you can lose, and they are right. Stop losses are essential, they limit the amount of risk that you are putting on each individual trade. They are also there to save your account. Not setting stool losses basically allows a single trade to potentially blow your entire account should it go too far. Always use stop losses, they should be cemented into your trading plan, if not, go and put them in right now.

A similar thing can be said about take profits, while not as potentially devastating to your account, not using take profits can cause you to lose out of profits, some may argue that they can actually reduce profits, but a take profit used is that money banked. If you created a risk/reward plan within your trading plan then there should be take profit levels taken into consideration, others may refer to use a trailing stop instead, but that still acts as a form of take profit, be sure to use one, especially when starting out.

Not cutting losses:

This goes along with not using stop losses, but let’s imagine that you do not have the set and your trades have now gone into negatives. What do you do? Do you hold them and hope that they will turn around or do you cut the loss and move on? Knowing when to cut is vital and also a very important thing to understand. You do not want to let your losses start to run and control your account. In your head, you should have a percentage that you are willing to cut, once it gets there cut it, regardless of what you think. That is your set target and it is to protect your account, so cut it, do not let it run or you will be risking your entire account instead.

Using grid or martingale strategies:

One of the easiest strategies to learn is the grid strategy or the martingale strategy, mainly because there is very little strategy to it, they are also the ones that you see the most around the internet. So if it’s so easy, and so popular, why don’t we all use them? Simply because they are also the riskiest strategies around. The strategy is simple if a trade goes against you, you simply open up a trade going in the same direction as your original, now you have two, trades, it continues further, you open up a third, you continue doing this until either your account blows or it reverses and you close everything once the overall position is profitable. The only real difference between grid and martingale is that with martingale you increase the lot size each time and with grid you keep it stable.

You can probably see how dangerous it is, as soon as you start adding positions or lot sizes, the drawdown starts to grow exponentially, not a safe thing to do at all and it has blown hundreds and thousands of accounts in the post and they will continue to how many more in the future.

Being influenced by others:

You have your strategy all setup, it is working for you, so why would you suddenly listen to a random person on a forum somewhere that the analysis that you have done or even that your overall strategy is wrong? What do they know? They don’t know how your strategy works or how you can do the result of your analysis. Your strategy has been working so why would you second guess it because someone else said something. Stick to your guns, do not change things just because someone loses things differently. You are here to trade your plan, not someone else’s.

Blindly following signals:

Sometimes signals can be a godsend, it is a way to put on trades that someone else has done all the analysis for and so you just need to place it a reap the regards. Unfortunately, it isn’t quite as simple as that, placing trades from signals completely blind means that you have no idea why it was placed.would you give your money to someone to place on the horses? Probably not, as far as you know, they are just posting random trades, if you are going to follow signals, be sure that you understand the reasons behind the trades and how they came to those conclusions. This will allow you to do some of your own analysis to help confirm a signal before putting one on, allowing for far greater accuracy and confirmation of each signal.

Too much risk per trade:

Your trading plan should cover this, it should have a risk management plan and get into it also, this will detail exactly how much you are willing to risk with each trade. Depending on your strategy this could be between 0.1% per trade up to 2% per trade. Of course, some can go higher, but that is putting a lot of risk on your account, and the higher you go, the more likely you are to blow the account. If you have not got anything set, then you are risking the entire account with each trade, make sure that you limit the risk that each trade takes, this is one of the primary ways of keeping your account safe and alive.

Too much emotion:

Motions are extremely powerful, they are powerful enough to take over your entire mindset and to alter the way that you trade. Emotions like greed and overconfidence can cause you to through your trading plan completely out of the window. They can cause you to trade outside the plan on what you think will happen, you need to remember that the markets do not care what you think. You need to be able to control your emotions, when things are going well, remember that it is your plan giving success, not you when things are going wrong, the plan works and will turn things around to give an overall profit. Always trade with the plan and not with your emotions.

Following the herd:

Many new traders will pretty much blindly follow what other traders are doing, if they see a lot of people going long on EURUSD then they most likely will too, why? Simply because others do, they have no knowledge behind whey they are going long or what other people see in the markets as to why they have gone long. You need to be able to do our own analysis and to come to your own conclusions. Do not just do things because others are doing it, in anything in life, make up your own decisions and then own those decisions that you do make.

Not continuing to learn:

One thing that a lot of traders do is that they learn their first strategy, once they understand it they stop at that. They have their strategy and so that is all that they need. However the markets are an ever-changing thing, you always need to be able to adapt and the only way to do this is to continue to learn. As soon as you stop, you are being left behind, there are always more things to learn, from new strategies, risk management, various elements of the markets, it is a never-ending course and one that you should not take for granted, you can never learn everything there is to it, but a continuous learning plan is the best way forward.

Losing track of your goals:

When you started trading you would have set yourself a set goal, something that you want to aim for. You need to keep that in mind and in perspective. If things going well, do not suddenly move your goal ten steps ahead, if things are going well, use that goal to remember why you are here and what you want out of it. That goes needs to stay at the forefront, write it on your wall if you need to, that is your source of motivation and why you are here, so do not lose sight of that and keep working towards it, no matter how hard things are at that point in time.

Diversifying too much:

A lot of strategies that you see out there say that they can work with any currency pair or asset available, those sorts of strategies are just hitting and hoping, instead, when creating a strategy, you need to focus on one or two currency pairs or assets. This way you can ensure that your strategy works with those pairs and that it will be able to deal with its movements and changes. Every single asset and currency pair moves differently and is influenced by different things, so a single strategy cannot work for all of them, instead, focus on learning a few of them and make them your bread and butter.

Not asking for help or advice:

We mentioned earlier that blindly listening to others is a bad thing, of course it is, but so is not asking for help when you need it. Sitting in front of the screen and markets not knowing what you should be doing or not knowing why something went wrong is not a good position to be in, instead ask for help, others may be able to give you an insight into what went wrong and reasons why your strategy may not be working. So not just kindly do what they suggest, instead use the knowledge and information that they have given you to look deeper into what you did so you can know exactly what went wrong. Do not sit there by yourself wondering forever.

Not asking for support:

The last point that we will point out can actually be one of the most important, trading can be stressful and it can be lonely. If you ever feel that you are becoming overstressed, frustrated, or lonely, get out and ask for help. The most important thing in life is your health and your well-being, do not let that suffer for your trading. Friends and family are important, so keep them close and keep in touch with them, do not lose them over trading Look after yourself. A lot of traders let trading take over their lives, do not let that happen to you.

There are of course more things that a lot of traders get wrong, but we don’t want to give a list of 10,000 different things that makes it sound like you can’t actually do anything when trading without doing things wrong. You will make mistakes, that is the course of life and anything that we do, what is important is that when you make one of those mistakes, you are there to make it better again and to learn from the mistake that you have made. Do not fear that you have done any of these, as soon as you have realised that you have done something that you should not have, or that something didn’t go your way, that is the time to make the change and improve. Of course, some things here may actually suit your style, so it is up to you to decide what is actually good or bad and what you need to change, but change is the catalyst for success, so do not stick with something that isn’t working as well as it used to.

Categories
Forex Basics

Do You Ever Force Your Trades?

Throughout the career of a trader there will be days where the markets go against you or there isn’t much happening with all the markets moving sideways, the sensible thing to do in this situation is to sit it out and wait, but this can cause boredom, people can become addicted to the excitement of the markets and so they will decide to force some trades, but this is never a good idea.

Forcing trades basically means that you are taking trades outside of your usual strategy or risk management plan, they are often not planned for and carry a much higher level of risk when comparing them to your usual trades. This is often performed by someone who really wants to do something, even if the conditions are not right for it, it is a little like that toy we all had as a kid, trying to force the square piece through the circle hole, you may actually get it through, but if you do it will come out of the other side a little damaged.

Making these spur of the moment or forced trades can lead to a few psychological complications also, as they aren’t planned, they may be larger than usual or you may have more trades, increasing drawdowns or causing fear of loss as well as other anxieties about the unplanned trades.

So when the markets are dull, what can we do? These are the perfect times to plan, look at future potential trades, learn more about your strategy or even start looking at entirely new ones, these lulls in the markets are quite rare, so you should take advantage of them away from actually trading.

In order to avoid the habit of making forced trades, you should try and turn your strategies rules into habits themselves, so when you see that something is not matching up, you won’t take it. In order to do this, you need to find a set of trading rules that match your personality and needs, having one that stresses you out or doesn’t suit you can lead to additional forced trades either through frustration or boredom.

Don’t forget when trading that it is the market that leads you, you are simply reading what it is doing and going along with it if you try to force trades in markets that do not want to play, then the markets will eventually begin to move against you resulting in losses. Let it take the lead and follow its rhythm, do not force them.

This is far easier for people who have traded for a long period of time, they get into habits, as a new trader, it is your responsibility to build those habits into your own trading, focus on your strategy and the success that it brings and try not to think about what trades you could be made outside of that strategy, do not damage the progress and profits that you have already made by forcing some extra trades for no good reason.

Categories
Forex Basics

What Constitutes Good Trades and Bad Trades?

When you trade there are good trades and bad trades, from the outside this may seem obvious, but what is actually considered a good or bad trade is a little different from what you may think. If you were to ask most people, they would simply state that when you win it is a good trade and when you lose it is a bad trade. In relation to your account balance, this is pretty much true, a good trade will obviously make it increase. However, when we look deeper into a trade, this is not what defines a good or bad trade, instead, there are a number of different things that contribute to whether a trade was good and bad, and to find them we need to look deeper into how the trade was made and for what reasons.

So before we look at anything else, what would make a good trade? Well simply put, a good trade is a trade that follows all requirements of the trading plan, this includes the entries, exits and also the required risk management, regardless of the outcome, as long as it follows the correct criteria, it can be considered a good trade.

We mentioned earlier that even a winning trade can be a bad one, this sounds a little counterproductive as the overall aim of trading is to make money, so of course, a winning trade would be a good thing. Not quite, remember what we said about a good trade, it needs to follow the trading plan properly. Let’s imagine that your trading plan allows you to risk 2% of your balance on each trade, you put in a trade but the stop loss is a little lower or the trade size is a little higher than usual, this has increased your risk, so whether or not it goes on to win or lose, you have risked too much and it would now be considered a bad trade.

Other examples of bad trades include ignoring certain indicators that you may use, if you normally require the RSI to be at 80%, taking a trade at 60% or 70% would be considered a bad trade as you have gone against the planned trading strategy, again the outcome does not matter. A major downside to bad winning trades is that it can give you false confidence, it can make you think that your own opinion is greater than the strategy and this could potentially lead to further bad trades which will ultimately lead to losses.

There is a little hope when in a bad trade, there are ways available that can help get you out of them, for instance, if they are in profit, you can simply close them or add a trailing stop to protect it from going into losses, if it is currently negative then you will need to ensure that you do not lose more than the planned percentage of trade as outlined within your strategy. It is important that any changes you make to the trade are in fact going along with your trading plan and not an additional unplanned or bad decision. If however, it is past the stage of fixing, then it is important to use it as a learning point, and a reason not to make a similar trade in the future.

If there are bad winning trades, the three must also be good losing trades, these follow much the same idea as the bad trades, as long as they follow the trading plan, they can be considered a good trade. Trading is full of ups and downs, not every trade can be a winning one, your strategy was designed to take both wins and losses into account. Keeping to the strategy regardless of a loss is showing good discipline, and it is something to be proud of. Of course, having losing trades can make you question your strategy, but losses are a major part of trading and any strategy, so stick with it and those losses will soon be overshadowed by the wins.

So how do you work out whether your trade was a good one or a bad one? Well, you should be creating a trading journal. This is something that will detail exactly which trades you made, which ones were profitable, and the reasons behind each trade. You will be able to use this journal to see which trades you moved away from the planned strategy. It is important to use this as a learning and development tool, why did you move away from the plan and what were the results. The majority of the time, you will find that the bed trades have more sporadic results to them which the good trades are far more consistent. If you were to make a bad trade that made a loss, there is nothing worse, and you should use those examples as reasons why you do not want to do them in the future.

So have a think back to your last few trades, were they good or bad trades, if you performed some bad trades, try and have a look at why you did them. Trading is a long process and it will take mistakes to help you truly learn. It can be tempting to make some additional trades or to make your trades a little larger, but try to use the bad trades in the past to prevent you from making them in the future. Look at the bigger picture, you are here for the long haul and not for the quick profits that these bad trades could make.

Categories
Forex Basics

Signs That You Are Ready To Trade Live

Trading on a live account and doing it well is the ultimate goal of many traders, well apart from the dream of owning a private yet of course. There are however a number of different things that you need to consider before you can think about going live, so we have come up with a number of different signs that point to the fact that you are ready to go live and to trade with your real money in order to start working towards that financial goal that you are looking for.

Are you consistently making a profit?

People often get a little confused when it comes to being profitable and winning. When we talk about being consistently profitable it does not mean that you need to win every trade, in fact, many traders lose more trades than they win but still remain profitable overall thanks to their strategy and risk management plans. We need to make it clear that losing is a major part of trading and is not avoidable at all.

If your strategy is set up correctly then it really doesn’t matter too much if you have lost a trade or two the previous week, it does not mean that your strategy doesn’t work and it certainly does not mean that you are not a good trader. What you should be focusing instead is continuing with your strategy in order to find some new higher probability trading setups for future trades, you should also come up with strategies and risk management plans that can help to minimise the losses that you incur with a losing trade and maximise the profits that you make with a winning trade.

You need to monitor your profitability over a long period of time, most like to say six months, once you have done this and you have remained consistently profitable over that sort of period of time, it can be a great sign and indicator that you may well be ready to go and move onto a live trading account.

Do you have clear risk management plans in place?

If you ask 100 traders what the most important part of trading is, you will probably find that quite a few of them will tell you that it is risk management, and for good reason. Proper risk management is one of the major things that stands between you losing a little with a losing trade or losing your entire account. You need to ensure that before you even think about going onto a live account that you have a clear cut risk management plan that you are consistently following and stick to it at all times. It is relevant that you stick to it, as the moment that you deviate from it, the overall profitability of your trading strategy will shift and this can have a detrimental effect on your overall trading.

So before you consider going live, ensure that you have a set of rules for your risk management set up. Something that is easy for you to follow and also easy for you to stick to, if you are finding it difficult to always follow it, then you may need to think about potentially changing a few things so that you can. If you have this setup and you are able to stick with it, then this may be another sign indicating that you are ready to move onto a live account.

Do you panic when a trade is losing?

Are you able to keep your cool when a trade is going the wrong way? If so then you are on the right track. If you do still panic then you may want to think about how much you are investing and whether or not you are risking and investing a little too much. It’s not an easy thing to do, to keep things cool when you can see your money going down, but it is something that you will need to get used to because it is going to happen a lot. In order to get around this, create a trading plan, a detailed one which includes your risk management plan and this will help you to keep focused and to have a broader view of how things are going, rather than just concentrating on the current trade. Once you are able to stay cool even with those losing trades, that is a sign that you may be ready to go into some live trading.

Do you still take your losses hard?

A loss is never seen as a good thing (unless you can learn from it) but you need to look at how you take these losses. Does it really upset you? Does it make you want to win back the money? Or are you simply able to shrug it off and move onto the next trade? If it is the latter, then you may be ready to move onto some live trading. If you are still struggling with losses you need to find out why, whether you are simply risking too much or for some, trading is just not for them, especially if they are so risk-averse. As soon as you are able to take them well, you can tick this off as a sign that you are ready to progress.

You have found the right broker.

For many, finding the right broker is easy, because they do not have many requirements, but for others, it can be a long process to find the one that is right for you. Before you go live, you need to be sure that you are happy with the one that you are using, afterall you are going to be depositing some of your hard-earned money into it. You need to ensure that you are happy with the spreads, the commissions, and the slippage that may occur. You should also ensure that you have spoken to the support team and that the appropriate deposit and withdrawal methods are available. Only deposit your funds into an account that you are actually happy with, if you have friends already using one that can vouch for it, then that is even better. Just be careful of the not so friendly ones that are just after your money.

So those are a few things to think about, if you are able to tick them all off then it is a good sign that indicates that you may well be ready to head out into the big world of live trading. Remember to take your time, there is no rush to get there, but once you do, stick to what you were doing in the demo account, do not get carried away and you should be able to become a profitable trader.

Categories
Forex Basics

The Importance Of Trading Statements

A trading statement may sound like a strange phrase, it can give the impression of simply stating trading, which is not exactly what we had in mind. Instead, a trading statement should be your overall target and goal for your trading.

Think about business, most of them were set up with a mission in mind, something that they wanted to chive. Your trading statement is set up in very much the same way. It should detail exactly what your overall aim is with your trading, for some this may be simple, others it may be complex, but it should be kept short to a single statement, something that you can always refer back to as the reason why you started trading in the first place.

Before we get into it too much, let’s take a look at some of the mission statements that are out there from various businesses and companies around the world.

Google: “To organize the world’s information and make it universally accessible and useful.”

Microsoft: “to empower every person and every organization on the planet to achieve more. We strive to create local opportunity, growth, and impact in every country around the world.”

Amazon: “We aim to be Earth’s most customer-centric company. Our mission is to continually raise the bar of the customer experience by using the internet and technology to help consumers find, discover and buy anything, and empower businesses and content creators to maximise their success.”

ASDA: “At Asda, our mission is to be the most trusted retailer. We help our customers to ‘Save money. Live better’. Learn how helping our customers to live better means Asda helps the planet too.”

As you can see, the mission outlines what their overall goal is, it helps to describe the organisation’s broad view for their future and the sort of image and reputation that they will be aiming for. More often than not it will be a very broad statement, not giving details on how it will be achieved or the steps along the way, just the overall image and endpoint that is desired.

So how can this be brought into the trading world and how exactly will you be able to make a trading mission statement of your own?

The first thing that you need to think about is exactly what you want to achieve from trading. Some people want to be able to quit their job, others just want a little bit of extra money, this will be the starting point of your mission statement. So have a think, if you wish to quit your job and to trade full time, have that as your main mission, if you just want an extra $100 per month, then set that as your mission, everything that you do from this point onwards will be to try and achieve these targets and to reach your mission’s goal.

Your mission needs to be realistic, there is no point setting a mission statement of being a billionaire through trading, it just isn’t going to happen. You need to set it to a realistic level, if you want to turn your balance of $1000 into a balance of $10,000 or $50,000 then these are more achievable targets, they may seem a long way off and that is not necessarily a bad thing as it gives you something o really aim for and to aim for it for a long time to come, keeping you focused on that target. Just remember that once you hit that target you will need to keep yourself there and not to then slip away again.

Once you have worked out what your trading statement is, you need to get it printed out and put up on the wall. This will then be a constant reminder of what it is that you wish to achieve. It needs to be there as a constant reminder so it needs to always be there for you to refer back to.

It is also important to understand that once you have hit your mission or that you are at the level that you want, you do not let things slip. You need to be able to maintain it, if you simply hit the target of the mission and then let it drop off, you are not achieving your goal, so hit it and keep it, this is the main aim of the mission, to maintain it for as long as possible, as soon as it falls, the mission has ended and it will be quite hard to then get back to it again.

So remember your mission statement should be your overall aim, something that you wish to achieve and then maintain, so have a think about yours, make sure it is realistic, and then get working towards it.

Categories
Forex Basics

Top 9 Rules For Successful Trading

Everyone wants to be a successful trader, that is the entire reason why they got into it, but for most, this is just a dream and it never actually becomes a reality. This may not be through a fault of their own, but more often than not it comes down to the way that they were trading or the way that they had their trading setup. Due to this, we have come up with a number of rules that you should be setting yourself when trading, they are there to keep things in line and on track and should make becoming profitable and successful far easier than if you are trading without them.

Rule #1 – Treat trading like a business.

One of the first things that people may tell you is that you need to treat trading and forex like a business, the money that you are using is no longer your own and so you need to look after it. This is a way to try to rid yourself of some of the emotions that can ultimately get in the way of trading, things like greed which has caused countless numbers of people to blow their accounts. It can be a little frustrating as, to begin with, it is not a paid job, but put in the time like you would a business, learn, work hard, and eventually, it will begin to pay you like a business.

Rule #2 – Use a trading plan.

When you first create your strategy, it is created in the form of a trading plan, these are a set of rules that you must adhere to in order for your strategy to be successful, it will contain your strategy as well as things like risk and money management. The plan has been created for a reason, it works, maybe not all the time but it can be profitable, if it is, then you should follow those rules at all times, otherwise, the risk will increase and there could be a risk of making losses, so once the plan has been made, always stick to it no matter what your mind or heart is telling you.

Rule #3 – Make use of technology.

Years and years ago, you had to be there on the trading floor shouting out your orders and requests, nowadays it is all down from the comfort of your own home, there are also other technological things available that can help you. Let’s look at indicators for example, there are hundreds of them available each with multiple different varieties, use them to your advantage. Do not spend hours working out the bollinger bands when an indicator can do it for you in the blink of an eye. If there is something out there that can help with your strategy (as long as it is still in line with your trading plan) then do not be afraid to implement it into your trading, it can only help speed up the process of trading.

Rule #4 – Keep learning.

Forex and trading are a never-ending classroom, there are always things changing and there are always new things to learn, as soon as you become complacent and no longer willing to learn, as soon as something changes, you will start to incur losses. Keep learning new strategies that suit different trading conditions, this way you will always be able to deal with whatever the markets are throwing at you. You could also start to try and learn the sorts of effects that different news events can have on the markets, useful when there are a number of large economic announcements coming up.

Rule #5 – Only trade what you can afford to lose.

A pretty straight forward one here, do not trade what you need. Before you make a deposit, think about the money that you are going to put in, if you were to lose that money now, how would you feel? Would you still be able to pay your rent and buy the things that you need to buy? If the answer is no, then do not deposit it and do not use that money. As soon as that money leaves your bank account it should be considered lost until it comes back in.

Rule #6 – Protect your account.

We are basically looking at risk management here, when you created your trading plan, you should have also created a risk management plan, this is how you will protect your account. It will contain things like how much you will risk on each trade, the sort of trade sizes that you will use, and the maximum number of open trades that you will have at any one time. Once you have this plan made, you need to stick to it, stick to it to the number, as soon as you start to break the rules for whatever reason, it will only lead to a downward spiral straight towards losses.

Rule #7 – Know when to take a break.

Trading can take up a lot of time, in fact, a little too much at times as it can be quite addicting. You need to be able to protect yourself from burnout though by taking regular breaks, and not just during the day, take days off at a time every now and then to completely free your mind of trading, this is when you are able to recharge your batteries and clear your mind. Your overall wellbeing will need it as sitting in front of a computer for extended periods of time and obsessing over the markets will only lead to both mental and physical health.

Rule #8 – Always use stop losses.

This goes along well with your risk management plan, using stop losses allows you to limit what you are able to use, many traders have blown accounts and lost everything because they did not use stop losses. Once you use a stop loss, do not change it, doing so will result in you gambling instead of using your predefined and analyse stop loss positions.

Rule #9 – Keep your goals in mind.

You started trading for a reason, so keep those in mind when you start to feel frustrated or like you want to give up, look back at why you started. The entire reason why you are here should always be present, it will help to give you the motivation and the drive to continue to learn and improve and will ultimately drive you to your success.

So those are a few things that you should keep in mind when trading and setting up your plans. Always trade with a plan, the importance of that cannot be stated enough, but build up a set of your own rules and stick with them, that is the best way to grow and to become a successful trader.

Categories
Beginners Forex Education Forex Basics

Thinking About Getting A Forex Mentor? Here’s What You Need to Know…

One of the things that a lot of newer traders think of when starting out is whether or not they need a mentor. Mentors are often seen as someone who you can learn from, someone that you can go to should you need any help, and someone that is there to help you to become profitable, but are they as good as they are supposed to be?

There are a number of different things that you should think about before you consider getting yourself a mentor, some are based around you, and others are based around the mentor themselves, so let’s take a look at what some of them are.

Are they credible?

There are a lot of people out there that will tell you how fantastic they are at trading, and how profitable they are. The problem is that they often have no figures to back these things up, there are often very exaggerated results, they sometimes do this to try and suck people in who want to make a quick or large profit, these often lead to scams. Before you think about approaching someone or signing up for a course, be sure that they have a history available to view, check for reviews, any mentor that has been around for a while or is actually helping people will have a lot of very positive reviews on the internet, just be on the lookout for the shill emails that are present.

Do they want you to copy them, or develop yourself?

There are mentors out there that are profitable traders, the problem with them though is that they aren’t very good teachers. In fact, a lot of them simply want you to copy their trades or to copy their trading strategies, which this is good in a way that you can become profitable very quickly, what will happen when they decide to stop or you decide to leave them? If you have just been copying them, you will not be able to deal with the changing markets on your own.

It is important that a good mentor will be able to teach and help[ you to develop your own style. To create your own strategy from scratch, this is a fantastic way to learn and will enable you to improve and to fully understand what it is that you are doing. If you are able to understand your strategy, then you will be able to adapt it to deal with the ever-changing markets.

Are you good at listening?

Part of having a mentor is having them instruct you and teach you various different aspects of trading, so you are going to need to listen to what is being said, a lot of people do not like this style of learning, it can be quite hard to keep focus. So it is important that the personality of the mentor matches your own, this can make it far more enjoyable and will allow you to keep focus a lot easier.

Are you inspired by them?

When you look at what the person has achieved, does it inspire you? Does it make you want to achieve the same things? There is no point using someone as a mentor if you are not inspired by what they have achieved, where would your motivation come from? If you are trading with someone where you look at their results and instant yeast the same, you want to work so you can achieve the same, this is the sort of mentor that you want. Having this mentor will give you a huge boost in motivation, being able to talk to them directly and work with them will keep you pushing on in order to achieve the same success as they have.

What does it cost?

When you look at a course, some of them can be quite expensive, while this in itself is not necessarily something to avoid, what is important to look for are any upsells, as soon as someone tries to sell you something on top of the original price, be it software or a VIP group, then the alarm bells should be ringing. This is often the sign of someone just trying to make as much money as they can rather than being there to genuinely help others to learn to trade.

So those are some of the things that you should be looking out for, there are a lot of people claiming to be mentors out there, it is important that you look into them a little deeper before choosing one and certainly before you part with any of your money.

Categories
Beginners Forex Education Forex Basics

Should Forex Trading Be Fun?

There are a number of different arguments going around as to whether trading should be fun, some seem to think that you should be concentrating and being serious the whole time, others feel that you need to enjoy something that you are going to be a lot of. There are pros and cons to both of those arguments and the truth is that there are times when it should be fun, and times when it should be taken seriously. So when do you know when you should be doing what and should you be having fun when trading?

There are a number of different stages to trading and the development of a plan and your trading mentality, these different stages often have different emotions that come with them. If we look at when you just started out, you are probably having a lot more fun, things are new to you, they are exciting, so you want to enjoy this stage in your trading career. It is a time when you are able to experiment in order to find what works for you, and this experimentation can be the most fun that you will have with trading, there are far fewer rules, and you are free to do what you want. However, it is important that you do not get carried away with it, and you should certainly be doing this on a demo account and nota live account.

This is also the stage when you may start to look for some guidance, how this goes will depend entirely on the sort of trainer or mentor that you decide to use. There Are some that are very light-hearted, allowing for mistakes and having fun and banter along the way, then there are the more serious ones, they are not there to have fun, they are there to make money and will expect you to have the same mentality. If you chose this sort of trainer then you will be expected to work hard and not simply mess about finding your feet.

This brings us to the second phase of your trading planning. This is where you are going to be creating your actual plan, for many this is the least fun and least exciting part of trading, yet others find it fascinating as this is going to define everything that you will be doing going forward. This is where there needs to be a lot more focus, you need to be able to decide with some conviction what you are going to be doing, messing about and just having fun in this stage could cause a lot of issues in the future, so you will need to buckle down, even if it does feel a little boring and tedious to do.

So the final stage of your trading plan and mindset is basically looking to always improve and to master your own strategy while working on this, it will take a lot of hard work, there will be many ups and downs, but what is important is that you remain consistent and that you develop discipline in order to remain on track and hopefully profitable. At this stage of your trading career, it won’t necessarily be the most exciting or the most fun, you will be going through a routine, which a lot of people often find a little boring, so while the trading may not be fun, the results certainly can be.

When we talk about results, we are of course referring to the potential profits that you can now be made using these on things that bring you happiness or to pay off bills which gives you some financial freedom. This is the part of trading that most enjoy the most and this is the result of your hard work beforehand. All those not so fun things you had to do and not so fun nights are finally starting to pay off and you will be able to have some fun with your trading.

Of course, for many, the actual trading is not necessarily fun, just the rewards are. However, for many traders, the actual trading can also be a great aspect to it, if this is you, then trading could be the perfect thing for you. If you enjoy the hard work, the numbers, and the creation of a strategy, then trading certainly can be all fun for you, but you still need to understand that there will be times where you need to step away from the fun and to be a little more serious.

One way that you can look at trading is in a similar way that you do to an elite athlete, they are required to put in a lot of work, a lot of work that may not actually be that enjoyable, while some athletes may like running laps, many do not, but hey know that they are required to do it if they want to be the best and if they want to make their living. Trading is much the same, you need to put that work in, you need to practice your strategy over and over until you have perfected it, but once you have done that, you will begin to see the rewards and it will all be worth it and you will finally begin to enjoy your trading.

Categories
Beginners Forex Education Forex Basics

Can We Still Be Successful with Bad Tools?

Everybody has a different opinion on how forex works and how exactly we should trade. There will always be some group of people that take issue with the things are said and done. We will always be surrounded by people who tend to discredit certain strategies. With something complex as forex is there will always be expressions of disapproval. We like to say that there are 2 types of people who really stick out in the trading parliament. Those are complainers and arguers. With complainers is simple, if we don’t do and say things exactly the way they want, then they are going to take the issue with it. With these kinds of people, disagreement will be the most possible outcome. Life goes on.

With arguers is much different, here we have just people with a contrasting opinion which is perfectly fine. In the end, we are all trying to figure out what is happening in the market, the world economy, and how big banks are affecting our trading. If we ask 1000 people the same question we would probably get 1000 different answers on the same topic, it’s just like that and that is how is going to be in most cases. So the best thing we can do is to give our own opinion after the research and try to back it up as much as we can. Constant pursuit for a better understanding of how forex works behind the scenes should always be one of our main goals.

Is it still possible to ride on big waves even if we use bad tools? There can be some winnings for sure, but it would be a lot more difficult to trade with bad tools. Because at their core these are sub-standard tools to use and by using them we would certainly have an uphill battle ahead of us. There have been a lot of traders that still became professional traders despite this fact. Even with sub-standard tools if our trading strategy is in place we might do some damage. The traders with good money structures who have their emotions well-settled might do good even with wrong tools. Way too often the game is over before even starts because some of us might be using terrible, outdated technical tools on our chart. But even with the almost perfect money-making algorithm, there is a big chance for messing up if we don’t have good trading psychology and adequate money management.

Surely there are tools and indicators invented a long time ago so we can reasonably assume they were not made for the market that we trade. They are certainly not the only options among more than 10.000 indicators and tools that we could put on a chart at any given time. There is no need to be trapped using the same tools if they don’t do the job as they should. We want to keep our chances as higher as possible and honestly, we are not going to score with outdated tools. We should always try to eliminate a lot of stuff before we can even think about moving forward but following the same tired advice, the same tired old technical tools being used every time is not going to get us anywhere. We need to be aware which tools could be totally useless for our trading and that we might be way better without some of them. Also, we need to distinguish which parts of some potentially bad tools we could actually use because there are tools with the most parts that we could not declare as beneficial.

There is a whole new horizon of indicators out there so just by being aware of their existence could put us in a very exclusive company. Most people, even professionals don’t know that there is a whole new world out there. Depending on a different type of tool or indicator that we are discussing, all types of arguments are falling into a few categories. Firstly, people like to say: “Well my friend, you just didn’t use it in this setting, that’s what you have to do”. Our response on that would be that the chances are we did try on that setting because of our through nature of approaching to forex and it didn’t just work for us. If something works for someone else that’s great but systems are different like we all know. If someone has a success in the particular setting then that somebody has figured something out. We always like to give applauses of admiration for those who manage to discover something revolutionary. Friends traders, please do share.

We have people typically connected to the Fibonacci tool. The Fibonacci crowd might say: “Oh you are just not using it this way, maybe you should try this method…” or “If you use the Fibonacci from an intraday stand of point it will work better”. Well, some don’t trade intraday because they have great success with the daily chart and that would usually be one of the main ingredients for the right way of trading forex as we like to point out. Still, it may not be for everyone. Further, there have to be at least 50 different ways we could use the Fibonacci in our trading like there are a lot of different ways we could use a bunch of other tools and indicators. The problem is that the explanation of any of those deserves a book or two. We could often see similar arguments when we debate about other tools. But all we care about here should be our personal success, no matter which tools took us there.

If somebody found a way to make a bunch of pips consistently, for example, using the RSI we could only salute to that person. If somebody has overcome a gigantic obstacle, well deserved. Here we are putting our systems to work and testing them as much as we can therefore our directions in trading are based on our great effort and long experience. So if someone has the method that works better, something like moving average crossovers mixed with the support and resistance lines, we wouldn’t have much to say than to be forever grateful if that somebody shares his knowledge with us. Do we think that our method is superior? Of course, everybody thinks that their method is better. We all see the values in our methods because we appreciate the benefits they give us. We should stay unpopular, we have wisely allocated our time, and we have a system that gets to take some emotions out of the game. These are some of the things that we endorse.

Traders, our advice on this would be to always keep improving on what you have. If somebody is an RSI trader and he is getting good results over time, he should never stop searching for better options out there. There is no reason to stop searching for improvement. If the results are not there it’s ok to jump from the ship, but traders, be honest with yourself, make sure that the results are there, and then try to upgrade your system. There is a whole brand-new world of tools out there, relevant tools, created for the forex market that we trade and they are certainly worth discovering and testing out. Successful or not we are not stuck, we could start to make money if we educate ourselves properly or we could make more money if we dare to embrace more education. We should try to discover the best tools around, we should closely observe our results and never stop improving our system. That might be the only way.

Categories
Beginners Forex Education Forex Basics

Should You Trade Forex Completely Alone?

When you see traders in the movies, they are either portrayed as one of two things, a single person sat in their bedroom or office, glued to the computer with very little interaction with anyone else. The other is in a loud and busy room, shouting down the telephone, even though they are surrounded by others, they are fixed on their own task, ignoring all around them and simply trying to complete their current task. While they are very different environments and situations, the traders are very similar in the way that it is only them trading, they are not working with others.

This is the view that a lot of people come into trading thinking, they are assuming that trading is a job for those that do not like to interact, or if you do pick it up, you are not meant to be talking with others. The truth is, that this is both the case and it is not the case. It is true that you should be doing your trading for yourself (not using signals for expert advisors to do it for you), but there is nothing to say that you should not be interacting with others, in fact, we would recommend it as it brings in a lot of different benefits, and so we are going to be looking at the advantages of both trading alone and trading with others, as both bring different advantages to the field.

Let’s start with one of the major reasons as to why a lot of people trade alone, it’s the simple fact that the fewer people that there are around you, the fewer distractions that there are. Distractions can be a real killer for a trader, it can completely take you out of your stride and can even cause you to make mistakes and so ultimately can make you lose money. So being able to get rid of those distractions can help. When it comes to trading with others, this is simply about others talking to you, asking questions, or simply making noises around you which can distract you from what you are doing and take your concentration away from what is important. If You are one of the many people that get far too easily distracted by others, then maybe doing the majority of your trading alone will help. Of course, this does not mean that you need to seclude yourself completely.

Having said that, even if you trade completely alone there are still reasons to try and get in contact with others, the main would be to get opinions on your ideas or to get ideas from others in order to find new trade setups and to develop your own style with the input of others. If you are simply trading by yourself. How are you going to get feedback on your trading, you could, of course, use your trading journal, but if your basic understanding of something is wrong, then to you, your journal would be telling you that you are doing something right and doing it well. When in reality, that thing that you are doing may be detrimental to your trading, the only way that you will get to learn this is if you are talking to other people about what you are doing. So while people can be a major distraction, it is important that you do interact with them, just do it outside of your trading time. You can also get ideas from others in trading communities, ideas of good assets to trade and good trade setups, even completely new strategies, so make sure that you use people for knowledge again, just do this outside of your trading time so it does not become a distraction.

While we have stated that getting ideas from others can be helpful, it can also be counterproductive and can make things a little complicated. Let’s imagine that you have your idea already, you go online and there are others showing you that this is not a good idea or giving you little things to add, this causes you to go back and change things. You may end up changing quite a lot, so now your strategy and risk management plan is nothing like it was before. This can make it harder for you to actually understand what it is that you are trading anymore. So while talking to there may be fine, you need to be sure of your own strategy, make sure that anything that you do change, you understand exactly why, otherwise you need to stick to your original strategy, this is what you set up and it is in line with how you wish to trade, after all, it is your strategy, so don’t let others dictate it.

A lot of people who have come into trading have come from their previous job, being able to get rid of your boss was one of the major draws of trading so being involved with others is not really what they are looking for. This is perfectly understandable, trading by yourself means that you are in charge, you are taking responsibilities for your trades, your wins, and your losses. This is a good situation to be in as you do not want to be blaming others. If something goes wrong, you did and so it is up to you to find out what went wrong and to rectify it, the same goes for wins, the wins are your own and so you should feel proud of them. If others have given you the trade ideas or changed the way you trade then it can feel like a hollow victory and like you are back at your old job listening to your manager. Having said that, listening to others is not necessarily bad, just don’t let them influence your trading too much.

We are going to throw this one in there, other people can be very valuable when it comes to their trading signals or even copy trading. You should really be trying to develop your own style of trading so that you can trade yourself, but there are those out there that prefer to bypass that and simply copy other people’s trades without really understanding why. If this works for you then there is no problem with it, but it is important that you get to know the person that you are putting your trust in. Keep in constant contact with them, get to know them better, and what it is that they are trading. The last thing that you want to do is to simply blindly follow the trades, so there ain’t really much interaction, but it is important that you make the most out of the interaction you can have with the trade provider.

So those are some of the reasons why you should, or possibly shouldn’t trade alone, each person will have a different opinion of it, some will love being by themselves while others will need the human interaction that they get from others. What is important is that you trade the way that is right for you, just do not be afraid of being out of your comfort zone every now and then, especially if your trading demands it.

Categories
Beginners Forex Education Forex Basics

Why It’s Sometimes Better Not to Trade

We are always on the lookout for that new trading opportunity and ways to give us more trades and therefore more profit. It’s great when we find one, all of the requirements set out by your trading strategy have fallen into place and it’s the perfect trade. The problem is that pinpoint perfect trades don’t come along all the time, in fact depending on your strategy it could take a week for each one to fall into place. So if things aren’t there, how do we put on enough trades to ensure we reach our targets? Well, they will come, what you do not want to do is force them, so sometimes it is actually better for you to miss that trade, sit it out and let the opportunity pass and you will be better for it, take the trades that are there, not the ones that you want to take.

So let’s take a look at some of the reasons why it may be better to not take those trades.

There are days when trading when you just do not feel up for it, we all have our off days we have days where we are that little bit extra tired, or maybe a little worse for wear after a heavy drinking session. Do you think that it would be appropriate to trade in these conditions? Probably not, you are far more likely to miss things or to read something incorrectly on the charts which could then lead to mistakes and bad trades being made. If you are not feeling like you are up for trading and are not at least 90% of your best, you should avoid it. Mistakes can and will be made when you are feeling tired, so it’s best to avoid trading entirely in this condition. You can, of course, look at the markets, but we would advise not putting that trade on, at least not on a live account.

Another reason to possibly avoid putting on trades is if you have had a number of different trades lose in a row, known as a losing streak. While these losses may not have anything to do with you doing something wrong, it is often a good idea to take a step back. While you may not have been doing anything wrong when it comes to your strategy, those losses can have a psychological effect on you which could potentially put you at risk of making some bad trading decisions. There is no harm in avoiding a trade or two to reevaluate your strategy, just in case something may be wrong or in case you are feeling the stress. Do not be afraid to take those breaks and skip those trades.

Another good reason to avoid putting on that trade is the simple fact that you are just not certain about the trade. If you are not 100% that a trade will work, then there is no harm in not trading it. In fact, this behaviour is probably advised over taking something you are not fully sure of. Even if you are sure, if there are different things in other technical or fundamental analysis that you have done which could suggest otherwise, this could be a reason not to take that trade. If they are indicating some uncertainties then this should actually be a warning sign that your trade may not be as safe as you may think it is.

If your risk to reward ratios are not right, or you have been placing trades with lot sizes that are too high, then this is a good time to stop your trading, do not put on any more trades, you need to get this sorted. Even if you have been profitable and the majority of your trades are right, it does not mean that it is right. You need to reevaluate your trading and the lot sizes that you are using.

Sometimes things just do not work for you, there are days where you just can’t seem to work out the markets, this is nothing bad on your side and the markets are not acting any stranger than usual, you are just simply out of synch with them. There Is no harm in using this as a time to learn instead, do not place trades when you are in this situation, they will only end up being bad trades as your concentration levels are just not there. If you feel like you don’t have the attention span for it, or you are struggling to remain focussed, do not try to force trades, you will surely miss something which will only lead to losses.

So those are a few of the things that could and should cause you to potentially miss out on some trades and to not place them. There is no harm in not placing trades, in fact, it can help you, not only will it prevent you from making any potentially bad trades, but will also give you more opportunities to learn and develop as a trader.

Categories
Beginners Forex Education Forex Basics

Why Popular Tools are Bad for Your Trading

A vast majority of people keep using certain tools that a portion of successful forex traders describe as utterly futile. In this article, we are going to assess the basis of such opinions and possibly shed some new light on the topic of technical analysis tools in spot forex trading. More specifically, we are going to provide ways in which you can stop yourself from squandering any more money by offering some direct and practical advice. If you keep finding yourself in a precarious situation where you cannot seem to prosper or grow as a trader, learning about these 12 tools may provide you with new and innovative ideas and perspectives you can incorporate in your trading in this market.

Some references go as far as to say that the number of traders who are experiencing financial hardship, constantly spiraling downward, is as high as 99%, if not above. Some of the reasons behind such lamentable statistics may have a lot to do with one’s money management skills. At times traders have quite a good idea of which entries they should make, but they lack the investment mindset to back these skills up in a more sustainable manner. As one of the essential topics in the world of trading, this is unfortunately seldom discussed, along with today’s topic. Aside from possibly lacking an efficient system to support your intelligent investment and trading decisions, you may be also lacking the knowledge or experience regarding tools, often unfoundedly glorified by various people.

While educating yourself on tools, techniques, and strategies is key in this world, we may often come across information suggesting the use of some outdated tools and indicators, which can be even quite detrimental to your attempt to follow current trends. What is more, some of these were not even developed for forex trading in the first place as they are based on concepts used in trading equities and gold, among others. It is these basic concepts which forex market revolves around that you strive to grasp and apply intelligently and strategically: understanding the nature of fiat currencies, the impact of money management skills, the role of big banks, the importance of trend trading, and the detriment of trading reversals to a trader’s overall success. At this point, every trader must accept the need to eliminate the information which is not beneficial because no professional algorithm can overpower flawed thinking. You can now begin to grasp how disinformation and misinterpretation can impact your development and finances, which naturally involves the necessity to discriminate between different tools and indicators you can use in your chart.

Started in 1996, the spot market is only a little over one decade old, which is why we currently have approximately 10 thousand indicators and tools at our disposal. Nevertheless, we must be aware of the fact that most of these were not specifically invented for the needs of forex trading. Like with various other gadgets that lost their importance or were simply replaced by more modern versions (e.g. pager vs. cell phone), we can logically conclude how even the world of trading requires modernization to be able to produce realistic results. A tool designed in the 70s for the stock market can possibly render some success, but you know that an innovative tool can lead you to a much better, and much more secure, outcome. Therefore, let us see which 12 indicators fall under this category and why we should consider turning to some other tools at this time.

ADX Indicator

The average directional index (ADX) was developed in 1978 and the reason why traders use it is twofold. People mostly use it for the purpose of measuring volume, which is absolutely understandable and needed in forex trading; however, the volume meter is simply too slow and, even if you try to make it work faster, the information it provides can become severely inaccurate. Another important component of this indicator, Directional Index (DI) which tells traders whether their currency pair is bullish or bearish, has such a major lagging issue that it affects the whole process. Therefore, due to using this indicator, you are not only at risk of making entries based on false data, but you also enter the market too late, which together make this indicator increasingly unreliable.

Trend Lines

As there is no one correct way to draw trend lines, which involves a great degree of imprecision, this approach may easily be least worthy of your time. Differences between the way trend lines are drawn can be so vast that a trader may not know how to surpass this seemingly unsurmountable problem – show the focus on price tops or where the price closed and what should they do if a price has broken the trend line? Everyone seems to have their own idea of what to do in this case, but these opinions differ to the extent that forming a uniform approach seems impossible. Furthermore, with such a great number of possible options, we may be able to draw several trend lines in any chart. Unfortunately, most trends are already over by the time we discover them. If you experienced a situation where a price did not align with your trend line, it is because the notion of diagonal support or resistance is entirely nonexistent, which supports the belief that trend lines should not be used in charts to gain any relevant information.

Stochastics

Developed way back in the 1950s, this tool is based on terms such as overbought and oversold that meaningfully and essentially have no relevance to trading fiat currencies, which alone is a proof strong enough for you to opt for another indicator. Moreover, it is highly unreliable in trading stocks too because the majority of signals it gives are false even in case of range-bound prices. What is more, traders inevitably face disappointing results whenever the prices are trending because, with a commonly vast number of reversal traders, stochastics will simply keep giving inaccurate information. This further implies that all the money traders make during the range-bound periods will go to waste once the prices start trending. Therefore, regardless of whether you are using the slow or the fast version of this indicator, there is a high chance that your investment will not go as planned.

Price Levels

Although this is not a tool per se, a number of traders believe that they should place special attention on trading when they come across a round number (e.g. 1.2000 EUR/USD or 1.5000 NZD/USD). Because the same happens when a price ends in this way, traders must understand the vastness of options this standpoint entails. Moreover, price levels are commonly interpreted as psychological levels, which some professional traders consider downright false. Another reason why this may not be your best approach is the fact that the big banks will always show interest in a surge of activity in the trading market, and should they any of these catch their attention, they may decide to step in. Traders simply cannot predict how the price will go from this point onwards, which is why putting your faith in price levels may be unwise.

CCI Indicator

The Commodity Channel Index (CCI) is commonly used for both trends and reversals. Built in 1980, this indicator is mostly criticized for its tendency to push traders into making a move too early. A number of traders claim to have attempted to make use of this indicator and failed because of its mechanics. As this market does not react well to any untimely activity, entrusting your financials to an imprecise indicator may take a toll on your trading and possibly your future prospects of succeeding in forex trading.

Support/Resistance Lines

Despite this indicator being so frequently used by spot forex traders, we need to address the fact that it leaves room for too many possibilities. Unlike trend lines, these lines are quite easy to draw and, at the same time, almost every trader can have access to the exact same information. Such ability diverts a lot of attention in a very narrow direction and this immediately sparks big banks’ interest. The moment this happens, the price is redirected the opposite way and everyone using this indicator ends up losing a lot of money.

Japanese Candlesticks

One of the oldest indicators dating back to the 18th century, Japanese Candlesticks, is also one of the easiest to see and thus used by large numbers of traders. Once they are noticed, everyone decides to react to the same signals and, quite naturally, big banks interfere once again. Due to the fact that a price reversed, you may even find a hammer you believe functions well, but so did other participants in the market. Many traders find themselves very excited at this point that they cannot seem to notice several points in the chart where other hammers previously failed. To keep traders motivated, the big banks will always allow them an occasional victory, but this only further instills casino mentality in traders intended to maintain a constant surge of individuals hungry for another win.

Chart Patterns

Chart patterns, which function similarly to the previously mentioned indicator, can be quite useful in trading stocks because it focuses on traders’ sentiment. Forex trading does not favor this approach unless we decide to go against the flow, because traders in this market are by default bereft of the information where the money is actually going as the big banks are the only ones entitled to possess this kind of knowledge. In addition, chart patterns are quite easy to see and, as we have seen with the other indicators above, big banks take traders’ orders, trigger them, and whipsaw the price. Only once these traders exit the trade will the banks actually decide on the price’s direction, and the vast number of people who use this indicator allows for this perpetual motion to keep happening over and over again.

Bollinger Bands

This indicator created by John Bollinger in the early 80s is another tool largely dependent on the subject of overbought and oversold, the trap which reversal traders keep getting themselves into. As discussed above, this approach is not viable in trading currencies although some individuals make use of them in calling trends. Unfortunately, this again has its drawbacks because you may be pushed out too early. Successful forex traders commonly look for long runs where they can get a great number of pips, which is why this indicator often does not make their algorithm.

Fibonacci

Similar to support/resistance lines, with any given timeframe, any trader can draw several Fibonacci retracements on any chart. Having several lines on one chart entails that there are too many possibilities, especially considering the fact that we cannot know which line the price is going bounce off of. As Fibonacci revolves around the patterns which occur in nature, the spot forex market naturally cannot make use of this indicator.

RSI

The Relative Strength Index (RSI) was created in 1978 for the purpose of trading stocks, which implies that concepts of overbought and oversold are again used extensively with this indicator. Considering the fact that a number of stock traders do not find it to be useful in reality, we can wonder why traders would even attempt to use them in trading currencies. As RSI is one of the most researched and widely used indicators, traders now have access to a great quantity of data which can save them from experiencing failure while trading currencies.

Moving Average Crossovers

Despite the fact that this indicator proved to be useful at times, it still does not give you an exclusive insight into any market activity. Even if you can draw an SMA (simple moving average) of 50, 100, or 200, you become one of many who focus on the price nearing one of these levels or on the two moving averages crossing. Moreover, as the spot forex market requires traders to be alert and timely with their decision-making, this indicator is probably not the best choice because it simply gets you in too late.

Whichever indicator you want to use, make sure that you do not lose sight of the need to enter the market and start trading just on time, which some of the tools discussed today evidently cannot grant you. If you want to become a successful trader, explore whatever available information you can and work on your trading toolbox understanding what trading currencies essentially means. Last but not least, think of the percentage of people doomed to fail just because they have not invested time and effort in researching and analyzing the indicators they entrust their financial stability with.

Categories
Forex Basics

Setting Realistic Trading Goals

Everyone that decides to try out forex trading enters the market with goals in mind. Often times, our goals revolve around turning a profit, like making a set amount in a given timeframe or earning enough income through trading to sustain our lifestyle. Others might want to become one of the very best traders out there and to have their name associated with the likes of George Soros, Paul Tudor Jones, and other trading legends. While being ambitious and setting goals shows that one has the self-determination and positive outlook, many traders set unrealistic goals that lead to disappointment. Some traders enter the market with starry eyes, only to give up on trading for good if things don’t meet their expectations. This is why it is important to set reachable short-term goals for oneself when trading forex. Below, we will provide some real examples of what you should expect.

Have Realistic Expectations for Profits

No matter how inspired you are or what you’ve heard, you can’t expect to become rich overnight or make a lot of profits from a small deposit in forex trading. The best goal starting out is to turn a profit rather than losing money. If you do this, then you’ll be off to a better start than many others. Once you are more comfortable trading, a realistic goal would be to see returns of 5% or less. Eventually, you will improve, and you’ll have more money to invest if you invest your profits, so you’ll see larger gains and you can set higher goals. At first, simply remember to focus on not losing money and know that some profit is better than nothing.

Don’t Think Trading is Easy!

A few minutes of research cannot possibly prepare anyone to become a forex trader. There’s a lot you need to know, so don’t make the mistake of opening a trading account too soon. Predicting market behavior isn’t easy, it takes a lot of knowledge to make good trading decisions. If trading were a quick way to get rich, everyone would be doing it. If you’ve already started and you’ve lost money, don’t give up. Just take a break from trading until you’re better prepared. Don’t think you’re going to become the best trader overnight just because someone you read an article that makes it sound easy.

Don’t Quit Your Job (Yet)

Forex trading inspires many people to quit their jobs. There are a lot of benefits to becoming a trader, including flexibility, not having a boss, being able to work from home or anywhere with an internet connection, and so on. Unfortunately, some people quit their job believing that forex trading will allow them to make enough to sustain their lifestyle. If you’re only starting out with a couple of hundred dollars or even a few thousand, you aren’t likely to make enough money to pay all your bills and take care of a family if you have one. Try out trading part-time for a while so that you can see firsthand how much money you’re going to make. Then you can decide if that amount meets your requirements. Don’t feel discouraged if you can’t afford to quit your job yet because this could be a longer-term goal.

Focus on Being the Best You Can Be

It isn’t about making the most money at first. The primary objective is to learn from your mistakes and to be the best trader you can possibly be. You don’t have to get the same results as someone you know so don’t beat yourself up over the little things! If you don’t understand something, research it. Keep a trading journal to log your mistakes. You won’t become the best trader out there with a little bit of practice, this is a long-term goal that takes a lot of time and hard work. If you aren’t willing to put in the effort, don’t become a trader. If you’re ready to make the commitment, then you should focus on short-term goals rather than only seeing the big picture.

The Bottom Line

Many traders walk away from trading for good because they come into the forex world with unrealistic expectations. This isn’t an easy way to get rich, it takes a lot of hard work and time. Starting with short-term goals and realistic expectations will make it easier to celebrate small victories. Remember that making something is the first goal, even if you don’t make much, you still worked for that profit and you should be proud of yourself. Don’t feel discouraged if you’re feeling more ambitious – eventually, you could make enough money to quit your job, become a well-known trader, or meet any other long-term goal you have set. Simply know that it might take more time to achieve those goals and that you’re off to the right start.

Categories
Beginners Forex Education Forex Basics

The Best Forex Deposit Bonuses in 2020

Several different brokers offer deposit bonuses to clients as an incentive to open and fund a trading account through their company. This isn’t something that is always expected, but it does provide a perk that helps clients get more out of their initial deposit. Traders that only have a small amount to deposit benefit because the broker adds to their deposit and those that make large investments can earn thousands of dollars’ worth of bonus funds through these promotions. Some deposit bonuses are very small, while others are much more generous. We’ve provided the very best bonuses we could find for the summer of 2020 below.

CapitalStreetFX

In one of the most generous promotions we’ve seen, CapitalStreetFX is offering a 650% deposit bonus when you open a trading account with a $1,000 minimum deposit. Be sure to request this promotion from your client dashboard AFTER opening and funding your account, then reply to the acknowledgment email that the company sends to fully apply for the promotion.

Just2Trade

Just2Trade is offering a bonus of up to $2,000 until July 31st, 2020. The bonus amount starts at $50 on any deposit of up to $199, climbs to $100 on any deposit of $200 to $999, and then comes in amounts of $400, $750, and $1,000 before topping out at $2,000 on deposits of $10,000 or more. You’ll need to fill out an application to receive the bonus.

AETOS

AETOS is offering a Welcome Bonus of up to 20,000 AUD ($13,960 USD) to those that open an account, make a deposit, and achieve an outlined trading volume. The smallest bonus reward is on a 25-9,999 AUD deposit with a trading volume of 7.5 lots and the biggest reward is for deposits of 200,000 AUD or more with a trading volume of 4,000+ standard lots within 7 months.

Accuindex

Accuindex is offering a 50% deposit bonus when you open and fund a trading account with at least $250. The maximum bonus reward tops out at $4,000. Conditions surround withdrawals and the bonus is valid for 30 days from the date that it is applied.

VideForex

VideForex is rewarding any trader that opens an account with a deposit bonus from $250 up to an impressive $50,000. The bonus amount is based on the amount of your deposit, with a 20% bonus applied on $250 deposits, 50% applied on $1,000 deposits, and 100% applied on deposits of $3,000 or more. In order to claim the maximum bonus, you’ll need to deposit $50,000 into your trading account.

Xtreme Forex

Xtreme Forex is currently offering a 100% Credit Bonus that tops out at $20,000 that runs indefinitely. This bonus is only applied to new Standard accounts and requires an initial deposit of at least $100. The company does have special rules for withdrawals when a bonus is active on an account.

FX Primus

FX Primus has an ongoing promotion that applies a 100% deposit bonus on deposits of $500 or more for a limited time. Traders can also earn up to $4 cash back for every lot traded. The maximum bonus amount one can earn tops out at $10,000 on a $10,000 deposit. An end date for the promotion has not yet been announced.

*Although we’ve provided a basic outline of the promotions above, be sure to do thorough research on the broker’s website before opening a trading account or participating in any bonus offer. Brokers might apply other conditions regarding timeframes, withdrawals, or other matters that we have not discussed here.

Categories
Beginners Forex Education Forex Basics

Practice Makes Habits, Not Perfection

The phrase that you most likely would have heard plenty of times throughout your life is that practice makes perfect, but we are here to tell you that this is not the case, especially when it comes to trading when you can never actually be perfect, you may have a perfect trade every now and then, but you overall as a trader will never be perfect. This is not to say that you can’t be great and that you can’t be consistently profitable, of course, you can. What war referring to is the definition of percent: “having all the required or desirable elements, qualities, or characteristics; as good as it is possible to be.” No one can be perfect, there will always be things to improve on and there will be mistakes being made.

This is all very normal, so instead of looking to become perfect, why not look to develop habits, habits that make things easier, habits that ensure that you are doing things the right way, or at least the way that you are meant to bad on your strategies and plans. What we need to be careful of though, is developing habits which do not help us, if we are consistently doing something wrong then it is not going to be good for our overall trading is it? Programming your mind into doing something wrong can make it very hard to change it in the future, so it is important that we get this right from the start.

So let’s look at some of the things that you can do that will help you to develop some good habits that you can start doing straight away.

Start with the basics…

It’s logical to start from the very beginning with the core trading skills and so that is where we will begin. You need these basic skills in order to be a beginner let alone an expert. You need to get yourself a good understanding of different currency correlations, basic economic movements, learn how to identify trends and chart patterns, and to then learn and know the ins and outs of managing risk, which is a big one and something that is paramount to your success as a trader.

It is vital that you do not try to take any shortcuts when doing this first step, you need to be able to perform all of these things easily and quickly. So continue to practice them, you need to be able to do them without really thinking about them, once these have been cemented into your head it will simply come naturally to you when you go to do it for real each time. This is simply building the foundation for the rest of your trading so it is important that you get it right.

Test your skills…

So we have some knowledge and understanding, but we need to be able to test this somehow and the best place to do this is on an account with live conditions. Of course, you do not want to jump straight in with your own money so we need to take a look at a demo account, you should be using one of these to practice for quite a while before you go with your real money, and also back to the demo account any time ta you make changes to your strategy.

For those just starting out, you need to use the demo account in order to help establish some routines, these routines should allow you to identify different trade opportunities, and in order to place trades. You need to test them and practice them in different trading conditions such as quieter times, times of high volatility, trending markets, ranging markets, and more. Ensure that you are logging any results that you get into your trading journal so you can easily look back at them and analyse them to find out what has worked and what has not worked.

Once you have your possessor working out (or more than one) you can then start to think about going into a live trading situation, start by taking very small trades, get comfortable with what you are doing, and the new emotions that come from trading on a live account. You are now risking your own money so it is important that you try to stick to the routines that you created within the demo account, ensure that you are consistent with them and that you are doing it consistently across the different trading conditions that you are experiencing.

Create a feedback system…

The last thing that we are going to talk about is the creation of a feedback system, this is a way that you will be able to see exactly what it is that you are doing and how effective it has been. There Is no point in doing something if you are not able to measure how successful it has been, this will also be a way for you to work out exactly what needs tonnage and the best way of going about that change.

By practicing, analysing and then adjusting and adapting your trading will quickly hasten up the learning process. It will make things a lot easier for you in the short and long run. If you notice something that is consistently holding you back, change it, and test again, keep doing this until you are happy with your progress and your current trading. There Will always be things to improve, you will never be perfect but with each little change, you are gradually making yourself a better trader. You can do this in the form of a trading journal which is something that you’re probably tired of hearing about now. Jot everything down in this little journal and you will instantly get feedback on what it is that you are doing, a vital tool for the future of your trading career.

So those are some of the things that you can do to help you gain some good habits that will ultimately help you to become a better trader. It is a good idea to start doing these as soon as you can, if you are already partway into your career then it is not an issue, you can still work on these things and you can still create those habits that will help you on your journey of becoming a great trader.

Categories
Beginners Forex Education Forex Basics

Is Forex Trading Taking Over Your Life?

Trading can be an addicting thing, both in a good way but also in quite a negative way, it can be in your head no matter what you are doing and you can wake up in the middle of the night wanting to trade, these are signs that may be trading and forex is taking up just a little too much of your life.

This is quite a common thing, especially for newer traders, so we are going to look at ways that you can tell that trading is taking over your life.

You wake up thinking of trading.

When you wake up in the morning, what do you normally think about, it is normally about needing to use the toilet or something that you have coming up in the day or over the next few days. If you suddenly start waking up and are constantly thinking about the markets, what you can trade, or what a certain currency value may be, then you’re probably getting a little addicted to trading. What is even worse is if you manage to wake up in the middle of the night, for no other reason than to think about trading, not a great sign and not something you will be thanking your brain for.

You dream of trading.

So waking up thinking about trading is bad enough, but when trading starts to invade your dreams too, you know that things may be going a bit too far. You will dream of wins, you will dream of losses and you will dream of different ways that you are able to alter your trading plan and strategy to be a little more successful. When it gets really bad, you may well begin to dream of trading pretty much every night, this is the stage where you need to find something else to think about, surely it can’t be that healthy to think about it every time you dram, but then again, at least it means you are interested and it is actually something that you enjoy. Dreams can also give you an unconscious view of how you are actually feeling about your trading at that point in time.

You start to check the financial sections of a newspaper.

If you are a newspaper reader, there is probably a section of it that just makes you roll your eyes, for most that would be the financial section if you have no interest in it, it doesn’t really mean much, it’s just a bunch of numbers and statistics or news about things that really have no effect on your life. Now that you trade though, you are finding yourself looking through that section for things of significance, things that could give you an idea of what you could be trading next. It still might not be interesting to you, but you will constantly find yourself checking it out whenever you have a newspaper in your hand.

You take note of the exchange rate in a currency exchange shop windows.

No doubt you have walked past hundreds of currency exchange shops, you know the ones on the high street allowing you to change your funds from one currency to another. They always have an electronic board pointing out that shows you the currency exchange rate that they are offering, most of the time you take no notice of it whatsoever, but now that you’re a trader, you take note of the exchange rates being offered. Of course, they aren’t the most accurate considering the shops are adding on quite a hefty spread in order for them to make any money, but you still take note of anything that may look out of the ordinary and can use that to research things once home.

You always think of trading.

The last time you watched a film, what were you thinking of? Probably the film right? Well not anymore, now you will be thinking about trading and thinking about trading no matter what you are doing. Watching a film, cooking dinner, washing the car, no matter what you are doing you will be thinking about what your next trade could be or that you hope that the markets will begin to turn soon. It will begin to creep into your thoughts no matter what you are doing, it can be a little annoying at times, especially when the thoughts just won’t go away. You will need to try and distract yourself with something, but that is far easier said than done.

You overthink your trades.

This one is actually about the trading part of trading when you start out, you probably take a while to place your trades, just because you are being so careful. Then you get a bit quicker at it and each trade only takes a minute or so. What can then start to happen is that you get to learn a lot more in-depth things about trading, and so you start to think a lot more about your trades, you may have the perfect setup but then you think of something and so want to check it out. This can add a lot of additional times

You talk to your friends about trading.

Let’s be honest, the majority of your friends have no interest in trading and the majority of them probably don’t know anything about it either. So now that you have learned a bit and have some experience, it is natural to want to talk to people about it, unfortunately, your friends are not the people to be talking to. They have no interest, so anything you say will go right over their head and it could also create a few awkward periods of silence here and there. You should stick to talking to them about things you all have in common, keep the trading talk to those that actually trade, although we don’t blame you if you keep on trying.

You use your trading rules in other things you do.

When you started trading, you would have created a trading plan and a trading strategy, this would have included a number of different rules. When you have been trading for a while, those rules would have been cemented into your mind, so much so that you start to implement those same rules into different aspects of your life. It can make your decisions a little slower to make and could also have absolutely nothing to do with the decision or choice that is being made. You just seem to naturally think of the same rules that have been burned into the back of your mind.

So those are a few of the things that can show you that trading may well be taking over your life. It is natural to have these thoughts and occurrences when you are really into something, learning new things and generally just enjoy doing something. So if trading is getting a grip on your life, don’t fret, just try and limit the amount of it that you are thinking of.

Categories
Beginners Forex Education Forex Basics

How to Avoid Missing Out on Great Trades

If you have been trading for any period of time, you would have come across the scenarios where you have looked at the markets, analyzed them and found a good trade, but you never took it, an hour later you are back looking at the markets and noticed that if you had taken that trade, it would have hit its take profit and more, so why didn’t you take it? You have no idea because you didn’t write it down. We have been told 1,000 times to write down everything about your trades, why you entered, whey it won or lost, but we are very rarely told to write down why we don’t make a trade, and this is often a great indicator as to why we are missing trades. It’s like the long-standing saying of “If it isn’t written down, it didn’t happen.”

It is important to understand that while you do not need to take every trade opportunity that is available, and some of them you may not be able to take for one or many reasons, but consistently missing good trade opportunities will only hurt you in the long run, both your account and your own psychology as a trader. It can lead to discrepancies between your actual trading and the backtesting that you have performed where most of the trades have been taken. There is also the law of averages if your strategy generally wins 60% of the time (and that is generally what is needed) and you miss out of 5 out of the next 20 trades, those 5 trades would have been winners, you are now getting towards a losing average which doesn’t mean your strategy is bad, it just means that something happened to cause you to miss trades.

So let’s take a little look at some of the reasons which could cause you to miss trades.

You lost your last trade

Losing a trade is never easy, it stays in your head and if you lose a few in a row it can be hugely demoralizing and may even make you want to give up. Don’t, you have a strategy, a strategy that works, so why stop? Every strategy has its winners and losers, in fact, every industry in the world has its ups and downs, if Universal Studios gave up after its first loss on a film, we would have some of the great films that came afterward. It is important to accept the loss as a loss, its part of the strategy, try to remove it from your mind and move on to the next one which as you just watched, was profitable, but you didn’t take it.

Use a journal

You should already be making a journal entry for the trades you make, but now you need to start making a journal for the ones you do not take. Why didn’t you take it? What hade you avoid it? What were you thinking? Was it still in line with your strategy? Asking questions like this will enable you to understand exactly why you didn’t take it, it is also a way to look back and reflect. It can help to identify some of the major reasons why you are missing trades and help you to overcome those obstacles in the future through planning.

Not enough margin

There isn’t much we can say on this one based on your psychology, this is down to your risk management or strategy as a whole, if your strategy is asking you to make more trades than your margin can take, then you may need to change it up, either by scaling down the lot sizes or changing criteria to produce fewer trade signals. Not having the capital to make a trade can cause negative thoughts in your mind, thinking that you need to make some larger trades or trades outside of your strategy so you can build up your capital to be able to afford the new trades, do not do this, instead adapt your own strategy to suit your current account balance.

No confidence

A loss can cause your confidence to take a knock, that is natural and it happens for anyone who has emotions. However, if you are suddenly feeling low and are not taking trades because you are no longer sure of your strategy. Do not skip the trades, simply lower your trade sizes, this will allow you to risk less per trade, reducing the risk can give you back a bit of your confidence that you won’t lose as much on a losing trade.

Not setting alerts and orders

Most trading platforms now come with some very handy features, they can allow you to set up alerts that get sent to your email, phone, or simply give off a message and alert tone. We know that you can’t always be right next to the computer 24/7, so the alerts allow you to get on with your life and as soon as a trade setup comes up, you will be alerted and can then make the trade. Not having these set up will cause you to miss those trade opportunities that come up while you are cooking the dinner or out at the shops.

Looking at individual trades instead of Forex as a whole

This is relevant to anything in life, if you look and concentrate on a single aspect of trading, then you will either be extremely happy or extremely down. You need to look at the big picture, look at your account, strategy and yourself as a whole, there will be losses that are part of trading, there will be winning, another part of trading. The ups and downs are what makes Forex exciting. Your strategy has been built to be profitable in the long run, so look at it like that, don’t get discouraged by a single loss or two.

Don’t shrug off a missed trade as something that you could have taken but didn’t, use it as a way to learn why you didn’t take it, this will help to benefit you in the future and will help to make your strategy far more profitable than it currently is.

Categories
Beginners Forex Education Forex Basics

Are You Forcing Your Forex Trades?

While trading, you’ve most likely come across a stage in time when there is not a lot of thing happening, in fact, nothing is happening, the markets have flatlined or your strategy just simply is not picking up any trades.

When these times are happening, there are a few things that you can do, you can use this as an opportunity to take a step away from trading, use it to take a break and refresh, you could use this time to learn something new about trading, such as a new strategy, or you could try and make some trades in order to make up a few extra pips and profits.

Hopefully, you didn’t choose the last option, if you did, then you are most likely guilty of trying to force trades when you should not be making any.

So what exactly is forcing trades? When you created your trading plan, you would have also created certain trading rules that you would stick by. When you make a trade that goes against any number of these rules, then this would be considered as forcing a trade. Traders are most often forcing trades when the markets are relatively slow, or that a trader has gotten a little bit greedy and is looking to make some additional profits.

It is important that you remember that you set up these rules for a reason, so why would you now start to break them?

Think back to the last time that you broke one of your trading rules, what was the reason behind it? The temptation to break the rules when things are quiet can be very strong, in fact, it is one of the most common ways that traders manage to hurt their accounts. Things are slow in the markets, it’s a bit boring, I will just place a small trade, it goes wrong, now you want to make that back so you place a larger trade, this can continue until an account goes bust. When the markets are not a match for your strategy, you simply do not trade.

Why did you create a trading plan if you aren’t going to follow it? Trading and Forex is all about consistency, you cannot be consistent if you are forcing trades and breaking rules. The markets come with exciting trends and boring horizontal movements, you need to be able to fill the quiet times with something that won’t potentially hurt your account.

If you are constantly experiencing times where the markets do not suit your strategy, that is fine. What you could do instead of forcing trades is to have a look at a new strategy that suits the kind of market conditions that your other one does not. This will then give you the opportunity to trade in these quieter times too. Create two separate plans that can be used during different conditions, this is simply adapting, and as you have a full plan for the new system, you will not be forcing any trades.

When starting out it can be hard to stick to your plan all the time, especially when you see others making money. Stick to it, it is all about consistency and when you are able to build up your levels of patience and self-discipline, it will greatly benefit you in the future and will ultimately make you a much more successful trader.

Do not try to anticipate the markets, do not try to lead them and do not try to force them, these are some of the golden rules of trading, you are not in control, the markets are. Trading is a long haul exercise, you do not need to make money the first day or week, you want to make it over the next 20 years, so do not damage your progress by trying to place trades when they should not be placed.

Categories
Beginners Forex Education Forex Basics

The Forex Trader’s Starter Kit

Everyone wants to get into trading these days but there is just so much to it, when you finally get in you will be bombarded with tons of information, far too much for you to work out what it means, let along learn any of it.

To make things a little easier, we have bright together some information and tips on what sort of things you should be focussing on to begin your trading journey, this should help you to get a grip with things a little quicker and to help avoid the information overload that you would otherwise suffer with.

Learn the Basics

Sounds simple enough, and pretty obvious to most, but what exactly are the basics? Learning what a buy order is, what a sell order is, what pips mean, what a stop loss is. These are things that you will be using in your everyday trading life, they are the bones of trading and something that you certainly need to learn early. Going through these basics will give you a good foundation that you can build the rest of your strategy on top of.

Without this knowledge you will not be able to succeed or to learn at a reasonable pace, it will help with working out what your profits will be or what your potential losses may be.

You can get this information from a number of different sources, there are loads of basic guides out over the internet, mentors are available and there are also both free and paid courses. What is important is that you get your information from a single source, to begin with, this will help you learn in a consistent manner. Once you have a decent understanding of what things mean, then you can try looking at some additional sources to see if there are any discrepancies. However, when looking at the basics, most places should be providing you with pretty much the same information.

Develop Your Own Strategy

It can be pretty easy to find a strategy online and then try to follow it, while it may be easy, it is unfortunately not a good way of going about it. Initially, it may work, but when things do not go the right way, you won’t actually know what is causing it to go wrong and as you do not fully understand the strategy or how it works, you will not know how to adjust it in order to meet the changing demands of the markets.

You can start creating your own personal strategy as soon as you gain some of the basic knowledge that we mentioned above. The trading plan and strategy take everything into consideration, your risk, your profits, the currencies to use, and more. It will tell you how to get into the markets and how to get out, it will be your rule book when trading.

Due to this, starting it early will help to cement these rules into your mind and will make them far easier to remember and to stick to, so be sure that you are ready to get your strategy started as soon as possible.

Finding a Broker

There are a lot of brokers out there and you will see a lot of people constantly promoting the one that they are currently using, so it is understandable that it can be quite confusing as to which one you should go with.

The best way of choosing a broker would be to get one that suits the strategy that you are now creating, so you need to match up the requirements of your strategy with the features of the broker If you have a strategy that is going to be taking small profits then you do not want a broker that it offering rather large spreads. So let’s look at what sort of things you should be looking out for to match with your strategy.

Leverage: It is great to have high leverage, but you want to avoid going too high, if you go too high, it can start to put your account at risk as it lets you place trades far larger than you should be, we would suggest not going any higher than 1:500. If your strategy does not need high leverage, then the lower the better.

Commission: Most brokers with low spreads will charge a commission, the range of these charges can have quite a big difference between brokers. You want to avoid those that are charging exceptionally high commissions as this will very quickly start to eat into your profits. Commissions of $6 per lot traded or lower would be what you want to aim for.

Spreads: The spread is the difference between the Ask and Bid price that the broker is offering. Normally lower means better, however, you need to compare them to any added commissions also, most traders are now going for ECN brokers which offer low spreads. If your strategy only aims to take a few pips each trade, then a broker with high spreads will not be very effective.

You should also be looking for various other things that aren’t necessarily related to the strategy that you are using. You want to look around at the various reviews of the broker, whether it is regulated or not. You should also offer a demo account, demo accounts are incredibly important and something that you will require from your broker, it allows you to test out your strategy, so getting a broker with one is paramount to your success.

Get a Demo Account

This goes along with what we mentioned above, you need to get yourself a demo account. You can use this account to test out your brand new strategy, it also allows you to get a feel of how the markets actually work. If you read and learn something new, you can use the demo account to test it out and to see exactly how it works in the real world.

The demo account is invaluable, be sure that you have one and use it as much as you can, it is a fantastic tool for learning.

There is of course a lot more that you can be doing, but those are some of the basic things that you can do and the ways that you can do them to get you started on the right foot.

Categories
Beginners Forex Education Forex Basics

14 Ways You May Be Hurting Your Trading

There are some things that we all do, either consciously or without us even knowing that will have a negative effect on our trades and overall trading strategies, so what are these things and are you guilty of any one them?

Getting out of trades too early: I am sure we have all done this, you are watching the trade move in the right direction, it is moving up and up but then it falters a little bit, our strategy dictates that we should wait, but in the back of your mind you think it could reverse here and so you get out, the trade then continues up and would have hit your take profit level. Getting out early just cost you a little bit of extra profit.

Fear of taking a loss: We all hate to lose, some more than others, especially if you haven’t already calculated losses into your strategy, or maybe you are a very risk-averse person. When we see a trade going in the wrong direction it is only natural that there is a little bit of anxiety that goes along with it. The difficult part though is to leave the trade, a lot of newer traders get this anxiety and will then c,.lose the trade, normally just before there is a turn in the market, you have now made a loss whereas if you followed the strategy, it would have ended up in profit. Your strategy made that trade for a reason, let it work its magic.

Adding to losing positions: This is often referred to as a grid system or Martingale, a trade is going the wrong way but you either do not want to accept the loss or you have a certainty (whether justified or not) that the markets will turn. You add an extra trade going in the same direction as your first, this is common, it can also be classed as loss chasing and is why a lot of gamblers get into so much debt. If the markets do not change, then you are far deeper into the red than you would have been without the additional trades.

Wishing things change: Sometimes, taking no action is the worst thing you can do, especially if you have not placed proper risk management, if you see things going in the opposite directions, don’t just sit there hoping and wishing that it will change, make a decision, can your balance sustain the loss or are you going to risk things, indecision can lead to further and greater losses.

Being too compulsive: The markets can be exciting, we know, but there are times when there are no trades to take. Just because you want to trade does not mean that you should, do not trade just for the sake of trading. These sorts of trades won’t be part of your strategy, you may not have even done any analysis, you just want to trade because you feel like it or want a bit of fun. Don’t do this, it will only lead you down a more gambling route and could lead to a lot of losses.

The joy of winning: Winning is a great feeling, both the fact that you were right and the monetary value that you gain. However for some, this feeling can be a bit overwhelming, in fact, it can be an addiction, if you feel this way, take a step back, allowing this to take over will result in you making additional trades that you should not be doing, these sorts of trades are not analysed, they are impulsive and will only end up in losses, gamblers often have this feeling when they win and it is why they keep gambling, so step back and have a break if you are getting a little too pumped up.

Self-doubt: The strange thing about self-doubt is that it often comes when we are doing the best that we have. A few wins in a row and you may begin to wonder why you are doing so well, it must just be luck, it won’t continue, these sorts of thoughts are more common than you may think. The problem with these thoughts is that they will take away all of your motivation to continue, it will make you want to stop as you are ahead and you won’t be able to continue. If you are following a strategy, just remember that you made that strategy, you are doing well and you certainly do deserve it.

Not following your strategy: You have created a strategy, it is your strategy for a reason, so why would you think about deviating from it? Your strategy has its risk management built-in, so as soon as you deviate from the rules you have created, the riskier our trading becomes which could ultimately lead to losses that you have no justification for. Sometime sit can be boring trading with the same strategy all the time, but when it is, that is the time you should take a break, move away from the markets for a bit until you are ready to follow the strategy again.

Overthinking: Some trades are time-sensitive, they need to get taken at a certain time, but is it the right trade? Am I risking the right amount? Am I sure it is the right trade? These are all things that we ask ourselves and answering them takes up time, by the time you have answered them all, the trade opportunity has passed. So while it is good to question and analyse, sometimes you can overthink things and miss out on potentially profitable trading opportunities.

Excessive trading: Greed, it’s a common trait amongst some traders, especially the newer ones, you have a few wins under your belt and now you want more. So how do you do that? But putting on more trades, or putting larger trades, larger and more than your risk management can handle. Your strategy is built around a certain number of trades or a certain trade size, changing this up and creating larger or more trades can put your account at risk, stick to what is working and do not get greedy.

Afraid to trade: This is particularly prevalent for people who are risk-averse, people who do not like risks may find it hard to make that initial trade, especially if there is a doubt in their mind that they do not know what they are doing or if their trading strategy is not fully complete, so while those last ones would be valid reasons not to make the trade, having the doubts even with a fully fleshed-out strategy can prevent some people from making the trades. Your strategy should cover all possible scenarios, so trust in it.

You are irritable or tired: The vast majority of traders do not trade full time, they trade in their spare time after work or on their day off, unfortunately coming home from a hard day’s work can leave us tired and irritable, this is not the right time to start trading. If you are in a bad mood, making decisions is often not your strong points, it could make you rash and not follow your strategy properly, causing you to make trades that you would not have originally made. If you are feeling irritable or tired, take a rest, the markets will still be there once you have recovered.

Trading more than you have: This is a cardinal sin of trading, you will see warning all over the place, do not trade more than you can afford to lose and it is key. This will lead to other things like greed, emotional trading, lack of discipline, and more in the hope to either make more or get back anything that has been lost. The last thing you want to do is get yourself into some financial issues. If you think you would miss the money if you lose, then it is not money you should be trading with.

So those are some of the major ways that we can limit and damage our trading, some are far easier to avoid than others, but through hard work and discipline, looking after your self and your account can become a lot easier to do. These things normally centre on the fact that you are quite new to trading or the human nature of wanting more, once you have traded for a longer period of time a lot of them would not really affect you anymore, but when you are starting out, be sure to try and recognise any of the signs and stamp it out before it manages to take hold.

Categories
Beginners Forex Education Forex Basics

Six Questions To Ask Yourself Before Trading Full-Time

The aim of many new traders, as well as those that have been trading for a while, is often the desire to go full-time, to be able to trade instead of working a 9-5 job, getting rid of your boss would be a dream come true. It is certainly something that is possible with trading, but there is a lot that needs to happen before you can even consider going full time, a number of questions that you need to answer before you know whether going full time is right for you. It also comes with many risks and things that you need to consider.

So let’s look at a few of the questions that you will need to ask yourself, of course, which ones you want to take notice of are up to you, and each individual will put a different weighting onto different questions, but consider them all to see whether they are actually ready to go full-time.

Are you consistently profitable?

Let’s be honest, the prospect of getting rid of your job is a strong pull to going full time, but are you currently making enough to sustain your lifestyle without a job? We have seen people jumping into full-time trading when they are just about breaking even or making a few hundred dollars each month. That is not exactly the same income that you were making with your job. So you need to consider whether what you are bringing in is enough to keep you going, if it is not, then I would strongly suggest that you wait before going full-time until you make enough to cover your entire living costs and have a little extra for yourself afterward. Quitting your job to trade and not making enough will only land you in some serious financial issues with the potential of actually losing where you live from not making enough for rent or mortgage payments.

Do you have any savings?

This kind of works along with the previous point, do you have some savings that you can use in case things do not go the right way every single month. It is vital that you have a little on the side in a savings account that you can use to help subsidize the months that you did not make enough, we would suggest that you have around 6 months worth of bill and food money available in a saving account before even considering that you are going to go full time. The last thing that you want is to go full-time and to then realize that you aren’t quite making enough and you are short of your rent this month, not having those savings available will mean you will be forced to go into debt and potentially look for another job, so ensure that you have that backup available, it will help reduce a lot of the stress that comes with trying to financially support yourself through trading.

Do you have enough trading capital?

Once again we are looking at money, so let’s imagine that you have some decent savings available, three to six months worth of your rent, but do you also have enough to trade with? There is absolutely no point going full-time if you have a trading account balance of $1,000, you are not going to be able to make enough to sustain your lifestyle. You need to ensure that you have enough money available in your trading account to allow you to make enough profit to live off. The more you have the more consistent and better risk management you are able to use. It would be far more sensible to have a trading account of $100,000 rather than $1,000, so make sure you have enough to realistically make the amount that you will need to live off.

Are you mentally prepared for trading full-time?

Trading full time can be stressful, it can be very stressful. When you trade at the moment, the only thing that you are risking is the balance in your trading account, but when you go full-time, you are risking not only that balance of that account but also where you live, in terms of the rent and being able to pay it. This adds a whole new level of stress to your trading, it can cause frustrations and it can be a very stressful and difficult situation. How do you deal with stress? How do you deal with loss? Do you easily become frustrated? If you struggle with any of these then there will certainly be times when trading full-time really puts you under pressure, and if you are not able to deal with it or work out ways to reduce them then you will surely struggle long term. So ensure that before you go full-time that you are able to deal with these emotions and feelings.

Do you have support around you?

Trading on the best days can cause a lot of stress on you, and trading is also quite a lonely experience which is not a great combination as it can lead to a number of different mental and physical illnesses. Due to trading being such a secluded activity, it is important that you have people around you that you are able to talk to, this can be people on line, family or friends, as long as there are people there that you can talk to and to vent some of your frustrations and ultimately to get a little help, especially when feeling stressed or frustrated. Simply talking to someone allows you to get that out and can often act as a distraction and a way to clear your mind, you will certainly need those times and those people to help you through your trading career.

Do you understand the risks?

There are a lot of risks when it comes to trading full-time, we have spoken about some of them above but are using this opportunity to really push the idea of how risky trading as a living actually is. There are so much pressure and risk in it, your entire livelihood is being put on the line If you do not have enough savings to sustain you through the months that are not profitable (and there will be some) then you will seriously struggle with paying for basics such as rent which could ultimately cause you to lose your home. You will also lose a lot of your social interaction, trading is a lonely job, so doing it for hours each day can isolate you from others, causing all sorts of potential mental health issues. You will be under stress and you will have financial issues if you have not planned for it properly.

So those are some of the things that you will need to think about. Going full-time is a huge thing, it is something that a lot of people aim for and dream of. However, it has such high requirements and the risks that come with it are huge, it can ultimately make or break your trading career and if things go wrong, even your current lifestyle. If you are thinking of going full time, then make sure you are ready for it and make sure that you have a backup plan ready, it is vital for your survival and to make the transition as smooth as possible, if you do decide to go full-time, then we wish you the best of luck.

Categories
Beginners Forex Education Forex Basics

Should You Be Trading Forex?

Should you trade? That is a big question, it is something that you need to ask yourself, in fact, it is something that everyone who is thinking of treading will need to ask themselves, this is for the simple reason that trading really is not for everyone, in fact, it is for the few due to the number of requirements that it requires and the stresses that it can put on you. So let’s take a look at what sort of things are required, so you can work out whether it is the right thing for you.

Do you have disposable income?

One of the main rules of trading is to never trade with money that you cannot afford to lose, so you need to be able to say yes when asking yourself whether you have disposable income. This is money that will not affect your life in a negative way should you lose it. As soon as you get into the territory where you will be missing out on things or even worse not being able to pay bills if you were to lose the money, then you need to take a step back and wait. Do NOT trade on money that you need, if you lose it, it can lead to a very dark spiral, so be sure that any money that you are willing to trade with, you can consider lost as soon as you deposit it into your broker account.

Do you have a lot of free time?

Time, something that a lot of us complain about not having enough, the unfortunate thing about trading, is that you need quite a lot of it. You need it for both learning and for actual trading. While you can make do with an hour two each day, and a lot of traders actually do. This will dramatically slow down the process of learning and developing your own plans. Trading takes a lot of time, the initial learning can be so intense that it can take a couple of hours to learn even the basics, so if you are struggling for a time through work and family life, you may struggle to pick it up. This is not to say that you cannot, just expect it to be a long process.

Can you deal with stress?

Stress, a major factor with trading and for a number of different reasons. A lot of people find it hard to deal with stress, when they are put under a lot of it they can either freeze up or the quality of their work takes a hard hit. With trading, you need to be able to deal with it, as soon as stress begins to take over, it will inevitably lead to mistakes and ultimately a loss of money. There are certain techniques that you can use to help reduce it such as taking breaks, but ultimately if you are not good at naturally dealing with it, you could find trading to have quite a negative effect on your stress levels and overall well being.

Do you like math?

The majority of people when you ask them whether they like math or not will simply state no, most people hate it. Trading has a lot of similarities with math and uses it in pretty much every aspect, working out take profit levels, how much to risk, currency changes, resistance levels, all of it requires an aspect of math, yes there are calculators for a lot of these things, but you will need to be able to get a grip on the underlying equations and statistics if you want to become successful. So if you dislike maths, there is a chase you could dislike trading too.

Do you get lonely easily?

Trading is not really a social thing, of course, there are ways that it can be, but for the majority of people it is quite a lonely experience, you will spend a lot of time by yourself looking at a computer screen, reading, learning, practicing. The only way to get a better understanding of that experience is to do it, so there can be extended times of being by yourself You can break these up by taking breaks, going out and those sorts of things, but that doesn’t change the fact that there will be a lot of lonely nights by yourself, just you and your computer screen.

Are you a rule breaker?

A lot of trading is about making rules, when you first start you will be told that you need to create a trading plan, this plan will contain a lot of rules that you will need to follow, in fact breaking any one of them will result in what is known as bad trades. If you are something that does not have the discipline to stick to the rules, then you will end up making a lot of mistakes and bad trades.

Can you control your emotions?

Are you able to control all of your emotions, we are thinking about emotions like greed or overconfidence, one is a very negative emotion of wanting more while the other is a good emotion of believing in yourself, but both can have the same devastating impact on your trading. Trading is an emotionless thing, it doesn’t care about how you feel or what you want, it cares about the money. If you let emotions get the better of you it can cause forced trades for more risk, which ultimately will lead to losses.

Do you like risk?

Trading is risky, there is no other way to mention it, there is a reason why any service that offers trading opportunities needs to note on their site that there are a lot of risks to it. There is a good chance that you could lose everything you put in, and there is a certainty that you will lose some of your trades, the majority of them when starting out will be losses. If you are afraid of this, then trading is not for you. If you are not happy with a minimum of 1 out of 3 trades being a loss, then trading is not for you.

Do you understand that it is not a get rich quick scheme?

With its rise in popularity, also comes the rise in its advertising. The majority of adverts you see these days are from brokers offering low entry limits and great leverage, or from affiliates stating how easy it is to make money, not to mention the thousands of scammers and lies out there. You need to understand that trading is not a get rich quick scheme. In fact, those that are profitable now, probably took over a year to break even. There will be losses, there will be wins, but one thing for sure, you won’t wake up rich the next day, it will take a long time to get there.

There are of course many other things that you will need to ask yourself, but these are some of the major ones., Trading is certainly not for everyone, the majority of people who start trading will quit after a month or two, either from losing the money in their account or by finding everything a little too much. It can be overwhelming, but if you found that you are able to cope with a lot of things mentioned above, then it may be something worth trying. Start with a demo account, work your way up, it is a slow and long process, but ultimately a fantastic opportunity to make changes in your life.

Categories
Beginners Forex Education Forex Basics

Some Uncomfortable (and Painful) Truths About FX Trading

When it comes to trading, there are a lot of ideas and rumors flying about which are coming from both those that have traded for a long time, those that are just starting out and those that do not trade at all. Some of what you hear is about what it is like to trade, how easy it is to trade, and what can be made with trading. Some of it will be real, and some of it will be simply rumors. Today we will be looking at some of the uncomfortable truths about trading.

It takes money to make money.

Many of the people who start trading do it to try and make money, the problem is that a lot of them do it with the expectation that they can make a lot of money if they deposit $10 or $20. While trading is becoming more and more accessible, with brokers allowing people to trade with as little as $1 or $10, this has given people the idea that you can make a lot with such a small deposit. The truth is that you require a larger balance if you want to make anything worthwhile. You will need an account of $10,000 or more if you really want to make enough to live on, which is one of the goals that many people want to achieve.

Don’t get us wrong, you can make money with a $10 deposit, but you will be making pennies, not the sort of profits that have been promised to you on some of the adverts that you see about. #Trading needs to be viewed as a business instead of a hobby, for a hobby you may put in $100 but if it is a business you will be putting in a lot more money and you will then trade it like a business, resulting in much better profits.

You will make a lot of bad and wrong trades.

If we could be right 100% of the time, then you would be the most successful trader of all time, and you probably wouldn’t be reading something like this. You will make some bad trades and you will make some mistakes. In fact, you will make a lot of them, especially when you are just starting out. In fact, when you first start then the majority of your trades will probably be bad ones, this does not mean that you’re bad at trading, it just means that you are still finding your feet, something that everyone needs to go through. The unfortunate thing is that many newer traders do not realize that you are not going to make money to begin with and that you will be making a lot of mistakes, so if you are, do not be disheartened, everyone goes through the tough start, get through it and you will be able to move on to your journey of becoming a successful trader.

There is not a perfect strategy.

This is something that everyone is looking for, that perfect strategy that they can learn and then use for the rest of their life, the truth is, this type of strategy does not exist and will never exist for a number of different reasons. The first is that the markets will always be changing, they do not remain the same and will always change, they always have and they will continue to do so. Due to this, a strategy may work during one condition, but as soon as it changes, that strategy will not work anymore, you will need to adjust it so that it can adapt to the new conditions. The second reason is that if everyone had the same strategy, the markets would not movies ta all, everyone would be among the same trades and so no one would make any money, this is because you can only make money if there are people trading the other way to you, so if we all used the same strategy there would be no one to trade against, and so no money to make.

You need to be there at the right time.

This one is both true and not so true at the same time, it all comes down to the strategy that you are using for some you will need to be there at the right time, this can, unfortunately, mean that depending on where you live. You may need to be up in the middle of the night in order to catch the trades. If you live in a country that is active during the Asian markets, it can be a lot harder for you to be active in the London or New York sessions which are where most of the liquidity in the markets is. If you want to be successful in these situations then you will need to be able to be there to trade. This can be countered slightly by using trader orders, put them in, and then they will automatically take the trades, but these do not take live events into their equations so things can change while you sleep which could put your trades in danger.

Trading may not be for you.

Trading is a complicated and very difficult thing to become good at, so while it may be highly accessible these days, being profitable is far from accessible. Around 95% of traders quit or lose thor money in the first month if this is you, then it says nothing against you, trading takes a lot of time, effort and patience to be good at it, the majority of people will struggle to have all three of those things available to them. Work, family, and just life can very easily get in the way and make things harder for you. For some, trading is just not for you, and there is nothing wrong with that.

Robots, Signals, and Expert Advisors are not hands-free.

Something that a lot of people think is that all of the robots and signals that are being shared about mean that you do not need to learn how to trade, you do not need to do anything and you can still make money. This is not the case, have you wondered why there are not a load of millionaires out there that made their money from expert advisors? The truth is that they just do not work for a long period of time, the same can be said for the signal providers out there. Yes you can make some money over a short period, but things will inevitably go wrong when the markets shift in a way that the EA or signal provider is not able to deal with, this is when they blow and people lose their money.

You will not be rich tomorrow.

Trading is a slow process, in fact, it is a very slow process, so slow that you will most likely not see any progress towards your goals for a couple of months. People think that they can get rich quickly, but that just won’t happen, you will only be disappointed if you go into trading with that expectation. Lower Them, take your time and you can be a success, just don’t go in expecting the world overnight.

So those are a number of the truths that people do not know or simply do not want to know. Trading is not for everyone and it is not your ticket to financial freedom, at least not yet anyway.

Categories
Beginners Forex Education Forex Basics

The Old But Gold Rules Of Forex Trading

There are a lot of rules out there that people say that you need to stick by, some of them are simply an opinion, others have been around for years, we are going to be looking at some of the original rules set out by early traders which still ring true today, they are all things that are regularly told to people, yet people still manage to not take them seriously.

Create a Plan and Stick With It

You must have been told about this one when starting up, but you need a plan, a plan that you can stick to. So what does this actually mean? The plan that you create needs to contain a few different things, the strategy that you will be using, a risk management plan and a money management plan. If you have these three things then you have a recipe for success, however, it will only be a success if you stick to it, as soon as you deviate from the plan, you will begin to experience far more losses than when trading with it.

Use Stop Losses

Any trading strategy with its weight will have stop losses built into it, these enable you to limit the number of losses that you will be able to take on a single trade, they are also part of what works out the risk and reward ratio of a strategy. Stop losses are vital, they have saved thousands of accounts and will continue to save thousands more, as a trade goes against you, it will help to protect your account by closing before you get too far into the negatives. Never trade without them, when they get hit it can be a little disheartening but you should understand that they may have just saved your account.

Learn How to be Patient

The markets can be boring at times, really boring. When they are not doing what you need to do for your strategy to work, you can’t really do anything. The last thing that you want to do is to get bored and start to place trades that are outside of your strategy, instead you need to learn to wait. Having the knowledge that your strategy will work when you need to deploy it should be enough, otherwise, take a break and walk away from the markets. Being patient will enable you to get into the markets only at the optimal times instead of increasing risks and forcing trades.

Only use Techniques and Analysis that Suit Your Strategy

Part of learning and developing a strategy is that you know it inside out, you know everything that there is to know about it and the analysis that is required for it. So why would you use something else that doesn’t actually fit in with your strategy? The easy answer here is that you shouldn’t. You should only be working with things that actually fit in with your strategy, it is what you know and it is actually relevant to the trades that you will be making, using things that arent is just wasted energy and time.

So those are a few of the older rules with trading, there are of course plenty of other rules that are just as relevant to trading and for newer traders. It is important that you find a set of rules that work for you, but sticking to your plan, using stop losses, learning patience, and using techniques that are relevant to your trading plan should be top of that list.

Categories
Beginners Forex Education Forex Basics

Tips for Taking Your Trading Game to the Next Level

There are times when we just feel like we have gone as far as we can for the level that we are at, so now it is time to take out trading to the next level in order to start achieving more. Of course, the first thing that you are going to need to do is to work out exactly what level you are currently at. Think about it, are you a new trader? Are you playing with millions or simple hundreds of dollars? You need to know what level you are on in order to work out what it is that you are going to be doing next.

The best way to do this would be to analyze our current trading performance. This can be done by using your trading journal which we really hope you have been keeping. Take a look at your past trades and results, review the performance that you have had over the past few months. Are they consistent? These results will tell you a lot about the level that you are at as well as your style of trading.

This journal and analysis of it will enable you to look at what your most profitable assets are, the times of these trades, the sizes, the risks involved, and more. It will also tell you how well you do in actually sticking with your strategy, something that is paramount if you wish to move up another level. You need to be able to gather and understand your strengths and weaknesses before you try and move up to the next level, as not having an understanding of them could put you in a potentially dangerous situation for your account.

We have now come up with a number of different ideas that you could use to try and raise your trading game, you may well already be doing some of these things which is fantastic and this will put you in a good position for moving up, some you may not want to d, but at least trying some will help put you in a great position for stepping up our trading game.

Use a trading journal: We aren’t going to say too much on this as you are probably tired of hearing it, but ensure that you have a trading journal setup and that you are using it. It will tell you all sorts of things about your trading and will give you fantastic insights into your strengths and weaknesses. This is something that you will require if you want to improve. So set one up and ensure that you are constantly and actively filling it in. Getting this knowledge is the main step to improvement and you will find it hard to properly scale up your trading operations if you do not have a good understanding of your own strategies and your own trading habits. It is also a great way to help you stamp out any bad trading habits that you may have.

Improve your ratios: When many people think of scaling up their operations they often just think about placing bigger trad sizes. While this is a valid strategy and certainly can help youtube make more money, this does increase the risk that you are putting on your account. So instead, let’s look at improving some of the ratios that we have. The first is your win/loss ratio and the second is the risk to reward ratio. The problem comes from the fact that while they are separate, they can also have a direct effect on each other.

It may seem like a good idea to improve your reward to risk ratio, by narrowing down the stop loss to make it a little tighter, this would mean that you won’t need to win as many trades to be profitable, but it will potentially make your win and loss ratio look horrible, so it may not be worth making a change. You will need to work out a balance between the ratios so that any changes that you make do not damage the other too much. It is the same if you wanted to increase your win rate, you should not sacrifice the risk to reward ratio as this will decrease your overall profits. It is a difficult thing to do, but if you are able to improve these ratios, either one without affecting the other or even both of them, then it will help you jump to the next level of trading.

Keep doing the good things you do: This may seem obvious but there are a lot of people out there that aren’t doing this, as soon as they make changes they seem to forget about all the things that they were doing right before. Do not forget them, they are the reason why you are here so you should continue to do them for as long as you possibly can. Even if you are changing up other aspects of your trading, try and remember the good parts and keep them going along with what you are changing, this way you will only be bringing the good parts and changing the potential bad parts.

Expand your skillset: One of the best things that you can do as a trader is to continue learning, you can never know everything and so there will always be something new for you to learn. By doing this you are better equipping yourself for when the markets decide to change and your current strategy just doesn’t cut it anymore. This can be in the form of different strategies or simply learning to trade a new currency pair. Whatever it is, you should always be on the lookout for new skills and new knowledge to learn. It is simply adding a new weapon to your arsenal, allowing you to trade in situations that you may not have been able to do so before, thus increasing the potential of your success and profitability.

Trading and forex is a huge thing, you will never learn it all and you will never actually master it, there will always be things to trip you up, no matter what level of trading you are currently at, you will always be able to take it higher, whether through your trading or your learning. So neve target complacent, keep an eye on the level that you are at and always work on getting to the next level where possible.

Categories
Beginners Forex Education Forex Basics

Start Trading Forex with These 4 Easy Steps

Step #1: Educate Yourself

The first thing you need to do on your journey as an aspiring forex trader is to get educated. The internet is filled with free resources for traders, or you could choose to pay for a training course if you’d prefer. Keep in mind that many failed traders only gave up because they didn’t invest enough time into their education before they got started. Here are a few quick tips that can also help with this step:

  • Start with forex terminology (leverage, spreads, bid/ask price, etc.)
  • Try searching “forex basics
  • Learn about the mechanics of trading
  • Research different strategies
  • Take in information from a variety of sources
  • Learn about the factors that affect prices in the market
Step #2: Develop Your Trading Plan

A trading plan takes several factors into consideration:

  • The time you have to trade
  • Your goals
  • How much you’re willing to risk
  • How you will find and execute trades
  • The size of positions you will take
  • Other rules for when and how you will trade
Step #3: Open a Trading Account

First, you’ll need to choose a good forex broker to trade with. Know that there are many trustworthy brokers out there but remember that scammers are out there as well. This is why it’s important to do research about a broker and to read through their terms & decisions before making a decision. You’ll also want to compare brokers to make sure you find the most attractive conditions available for the deposit you’re willing to make.

Step #4: Start Trading!

Once you’ve made it to this last step, you’re ready to begin trading. Be sure to analyze the markets before entering trades, while keeping your trading plan in mind. Some might prefer technical analysis over fundamental analysis and vice versa. Everyone trades differently, but your trading plan should help guide you when it comes to making trading decisions. If you have any trouble getting started, try looking online for tutorials. Video tutorials can be especially helpful.

Categories
Beginners Forex Education Forex Basics

How to Start Trading Forex with Only $100

If you’re going to become a forex trader, one thing’s for sure: you’re going to have to make an investment. You can’t trade without any funds in your trading account, obviously, and many brokerages don’t even offer accounts for less than $500. While many beginners dream of opening a trading account, the thought of investing such a large amount of money into something that may not be profitable is scary. After all, you can do a lot more with that money. Others simply don’t have that much in disposable funds, so trading seems impossible. The good news is that it is possible to open a trading account and to be successful with a small starting deposit of about $100. Some brokers will even let you get started with around $5 or even $1, but it is best to make a slightly larger investment if you can.

Before you make the decision to start, you’ll want to have realistic expectations. It is highly unlikely that your $100 investment will turn into thousands of dollars quickly. You aren’t going to make the same profits as someone that has invested $20,000 into their account. Beginners need to ease into the market. If you lose your entire investment, it doesn’t mean you should quit. Instead, you need to look more into education and base your trades on more evidence.

Indicators, economic calendars, charts, graphs, and so on can give you more information from a technical and fundamental standpoint. The good thing is that if you lose your $100 investment, it won’t break you, and you can start again. Losing a larger amount of money could scare someone away from trading for good. If you find that you’re well-prepared and you start making money, you could always invest more later.

Here are a few quick tips for opening a trading account and getting started with around $100:

-Try to find a broker that offers some type of bonus. Some even offer $30 welcome bonuses or simple deposit bonuses that would add to what you’re investing. Just make sure that your deposit is large enough to qualify.

-Make sure you sign up with a broker that offers good conditions. You should have access to average spreads and fees with a $100 deposit. Don’t open an account with insane fees just because it is the only option with a certain broker. Look for better options and compare what you can get for what you have.

-Don’t use too high of a leverage! This is important because overleveraging your trades can cause you to lose a lot. Many beginners use too high of a leverage to increase their investment power, but this usually backfires. Start smaller and work your way up over time.

-Never risk much on any one trade. Many professionals recommend risking 1% or less of your total account balance on a single trade. This might lead to slower profits, but it is safer. If you go risking 10% on one trade, 20% on another, and so on, you could quickly blow your account.

Once you get started, you should focus more on trading and less on how much you’re making. Opening a trading account with a small amount of money isn’t going to make you rich overnight. It’s going to take a lot of hard work and dedication before you get there. You can plant the flower by opening a trading account, but you need to water it by doing research, getting an education, taking risk-management precautions, and keeping a trading journal to log your progress. You’ll also need to treat your small account the same way you would a large one. You might not feel as worried about losing $1 compared to how you’d feel if $100 was on the line, but it still matters. Understand that it is normal to lose some money, but every dollar lost adds up.

In conclusion, you should be aware that opening a trading account with as little as $100 (or less) is possible and it can be profitable. If you have realistic expectations, you can be successful with an account that has a low initial investment. Remember some of our tips about finding a good broker that offers bonuses and using risk-management precautions so that you can make the most out of your account. Don’t get discouraged if you’re only making a small amount at first. Every trader must start somewhere, and seeing profits is much better than seeing losses! If you manage to increase your account balance by even a few dollars, then you’re doing better than many others that have tried. As you work your way up, you’ll likely gain access to better accounts and have more money to invest, which will help to grow your account more quickly in the future.

Categories
Beginners Forex Education Forex Basics

Should You Invest In a Forex Robot?

A forex robot is a computer program that automatically places trades on one’s trading account, based on predetermined factors that are unique to the specific robot that is trading for you. The software is used by both beginners that may not understand exactly how to trade and more experienced investors in an effort to maximize their earning potential. On the other hand, some traders have had bad experiences with automated software and will tell you to avoid it at all costs. Are automated trading robots money-making machines, or a bad investment all around? Deciding whether to invest in a forex robot really comes down to one’s personal opinion after weighing the pros and cons.

We’ll start by looking at some of the positive benefits associated with using a forex robot:

Forex robots eliminate the psychological burdens of trading. After all, a computer program won’t feel anxiety, grief, excitement, or any other emotion that can affect a human. This allows the robot to trade without making human errors based on emotions.

-The software can scan and analyze multiple sources of data much more quickly than a human possibly could.

-Trading robots can monitor and place trades on multiple accounts at the same time.

-The computer program can’t get tired or distracted, so it won’t miss opportunities. A forex robot never sleeps.

-A robot can backtest different strategies to figure out which is the best.

-Beginners can rely on forex robots while they’re learning, although you should have a good idea of what you’re doing before you get started.

Forex robots can provide us with an advantage because they aren’t subject to human emotions, distractions, or fatigue. The program does exactly what it was designed to do, and it can analyze multiple sets of data and place multiple trades at the same time. It just isn’t possible for a person to do all of this at once or as effectively.

With the benefits of using a forex robot in mind, one also needs to look at the disadvantages. We gave a lot of credit to this software because of its lack of humanity – but that can also be the catch. A robot can only consider the factors that it is programmed to, while humans can think about other things that might affect their trades, such as news releases or economic reports. If things change, the robot will continue trading the same way as before and might wind up losing a lot of money if there is no interference. Here are the main disadvantages to using a forex robot:

While the lack of human emotion can be a good thing, the robot cannot consider things that a human could.

A lot of forex robots were created by scammers that promise to make you rich, even though their product will wind up losing your money. Once you pay for it, they’ve made their profit and don’t care that you will only lose more.

Many of these products cost a good bit of money if they work. This can put the software out of reach for many beginners or investors that just can’t afford it.
Most robots run on your device and need a connection to the internet 24/7 for trade execution. Otherwise, they can experience problems. You can purchase VPS to help with this, but this adds another cost to using a forex robot.

Forex robots can automatically trade on your behalf and can be very profitable, but each robot was not created equally. There are a lot of scammers out there aiming to take advantage of beginners with flashy promises and impressive-sounding programs that just don’t work. If you’re going to use a robot, you need to do a lot of research before making a purchase, test it first, ensure that risk-management procedures are followed (like setting a take profit or stop loss), and keep an eye on the robot’s activity. You’ll also want to turn off the robot when certain news data or other market affecting information is released to avoid losing money during those times.

Whether or not to invest in a forex robot is a personal choice. The best developers will explain how their software works, allow you to test it or perhaps to access a free trial, and might even offer a money-back guarantee in some cases. You also want to check for user reviews to get an idea of how the product has worked for real traders. Keep in mind that some might lose money because of their own personal interference, but user reviews and comments can paint a bigger picture of whether the robot is profitable or not. Don’t buy into claims of instant riches, instead, do your research and invest wisely, and remember that forex robots can be profitable, but they are not the magic answer to becoming rich.

Categories
Beginners Forex Education Forex Basics

The Best YouTube Channels for Forex Traders to Follow

Traders can get information about forex trading from a variety of sources, including articles, eBooks, audiobooks, and paper novels, training courses, webinars, seminars, videos, and more. In today’s day and age, one of the most popular sources for learning trading information comes from YouTube. There are a lot of different channels that can offer interesting trading advice; however, some videos just aren’t worth watching. This is why we’ve taken the time to put together a list of the best YouTube stars you can follow right now so that you won’t have to wade through the bad channels.

Warrior Trading is the YouTube trading channel with the most subscribers, which is currently up to 582K. The channel was created by well-known trader Ross Cameron back in 2013. Since then, his videos have racked up more than 58 million views. The channel focuses on educating traders and teaching one how to make a living trading stocks. Ross provides live day trading watchlists along with his courses and uploads an impressive number of videos each month. If you’re only going to check out one YouTube star, this is the one to watch.

Trading 212 comes in 2nd on our list, with 524K subscribers and more than 48 million views. This channel is powered by the London fintech company that demonstrates the financial markets with free, easy to use smart apps, including the UK’s #1 trading app. If you’re interested in using any of the company’s products or in learning to trade in general, you can really learn something from the channel’s in-depth videos that cover a variety of topics.

Adam Khoo is another notable YouTube contributor for trading information. He isn’t far behind our first two channels with 513,000 subscribers and 203 videos, and he’s been doing this since 2014. The channel focuses on providing insights into investing in stocks and forex with profitable outcomes. Adam Khoo is also the author of multiple books and has helped to further the education of thousands of students.

Rayner Teo covers trading information for beginners with 429,000 subscribers. Although his number of subscribers places him in the fourth position on our list, this creator has contributed more than 500 videos to the cause. Instead of focusing on the luxurious aspects of trading, like fast cars and mansions, this trader explains that he’d rather stay realistic by providing helpful educational videos that can really help you to become a better trader.

Although UKspreadbetting is the last option on our list, the channel has 230K subscribers and the largest selection of videos, with more than 3,000 options. This channel focuses on spread betting with the goal to inform, educate, and entertain aspiring traders. If you like the videos found on this channel, you can also follow the creator on Facebook and Twitter.

There are a lot more YouTube channels out there that cover important trading information, but we found the above options to be some of the top channels with the most subscribers and impressive amount of videos. While you can always learn to trade from a variety of sources, videos are one of the best ways because they allow authors to really explain concepts with audio and visual information.

Categories
Beginners Forex Education Forex Basics

Top 6 Forex Questions Answered

Forex trading can be a profitable way to spend one’s free time, while some make their living by working as a full-time day trader. Although trading forex has become more popular over the years, it is still surrounded by some confusion and myths. Some wonder if you can really make money doing it, if trading is really worth it, or if the whole thing is a scam. Below, we will answer some of the most common questions that beginners ask when considering becoming a forex trader.

What Does it Mean to Trade Forex?

This one is basic but important. Forex trading involves making transactions that involve different currencies on the foreign exchange market. The currency pair EUR/USD is a recognizable example. Investors would try to determine whether the value of the euro would appreciate or depreciate in value versus the US dollar in order to try to make a profit. A person that trades forex is known as a trader. In order to trade, you need to open an account through a broker, who provides you with access to the market.

How Much Do I Need to Get Started?

Perhaps you’ve avoided trading because of the assumption that you’d need thousands of dollars to get started. Fortunately, this isn’t true. Some brokers do require larger deposits, but there are companies out there that will allow you to open an account with as little as $1-$5, or around $100. Do keep in mind that your expectations need to match the amount of your investment. You won’t make as much as a trader that has invested $20,000 if you only put $20 into your account. It’s actually better to start out small in the beginning as you perfect your strategy and improve your skills. Then you can worry about growing your investment and bringing in noteworthy profits.

Is it Really Worth it? Can I Actually Make Money?

You can absolutely make money as a forex trader. However, you need to know that trading isn’t going to make you rich in a short time span. It takes a lot of hard work and effort to become a successful trader and to bring home enough profits to support yourself, quit your job, or meet other financial goals. If you’re looking for an easy or quick way to get rich, then trading probably isn’t for you. On the other hand, if you’re willing to work for it, trading will prove to be worth it if you put in the effort.

What Do I Need to Start Trading Forex?

The good news is that you don’t need much to get started. First, you’ll need an education so that you understand basic terms and concepts related to trading, along with more advanced information like setting a stop loss or trading psychology. You can learn everything you need online for free, so there’s no excuse not to do it. Once you’re ready, the next step is to open a trading account through a broker. You’ll need to do some research to make sure you choose a trustworthy company with attractive costs. Of course, you’ll also need to make a deposit into your trading account. As we mentioned earlier, some brokers accept deposits as low as $1. You should try to make a larger investment if you can, but you can still get started with a low amount. Along with obvious necessities like a computer, phone, or tablet and internet connection, this is all you need to become a trader.

Are There Benefits to Trading Forex?

Forex trading is popular because it offers key benefits over working a real job. The best part is getting to be your own boss. You get the perks of job flexibility and you can work from anywhere with an internet connection on your PC, laptop, smartphone, or tablet. Unfortunately, there is one main disadvantage to forex trading – you aren’t guaranteed to make money. A real job offers you stability and a guaranteed paycheck for the hours you’ve worked, while forex trading may or may not be profitable on any given day. This is why many traders start out doing it part-time before quitting their jobs or making larger investments. It’s a good idea to test the waters and get an idea of your profit goals first.

How Risky is Forex Trading?

The forex market is risky. It is affected by news releases and other factors and can experience volatility at certain times of the day. However, you can make trades based on certain data, so trading offers more of a probability for winning than gambling. Nobody knows what the market is going to do, but having a good trading plan, learning to use indicators, read charts, devise a strategy, and so on will improve your odds for winning. If you’re losing money, you can always change your system and fix the issue, so trading isn’t a complete gamble. Avoiding trading during more volatile times is another helpful way to avoid taking as much risk.

Categories
Beginners Forex Education Forex Basics

Trading Frequency: Which Is Better – More or Less?

Some traders spend their entire day watching the market without a break. Others only make a few trades every week and don’t spend nearly as much time watching their computer screen. You may already have an idea of whether it is better to trade more often or less often, or you might be here because you’ve heard traders talk about both.

It is often said that trading less is better. Many traders might wonder how that can be true, considering that it would seem like more trading equals more money. One common argument that supports the less is more theory is as follows:

If you enter fewer positions each week or month, you’ll naturally put more thought into the trades that you take, thus increasing your win rate.

This would also decrease the chances that you could lose, although you would hope to win most of the trades that you do take. Another advantage to trading less often is that it is less time consuming and doesn’t require you to be constantly glued to your computer screen, although you do need to keep an eye on the market so that you know when to close your trades.

You also want to consider your trading strategy if you’re thinking of trading less often. While day traders typically open multiple positions per day, you might only want to open one or two trades a day or around 5 trades per week. Position trading and swing trading fit best with trading less often because traders open positions and leave them for days, weeks, months, or years in extreme cases, making these styles ideal for those that want to limit their trades.

On the other hand, some traders will argue that trading more often is better. Scalpers and day traders definitely come to mind here, as both trading styles involve opening multiple positions per day. On some days, a scalper might even open hundreds of positions in an attempt to profit from small price movements in the market. It could also be said that trading more could help reduce your losses, as you would have more chances to enter winning trades. Even if the market moved against you on some trades, there would likely be enough winning trades to keep you from going into negative territory.

The bottom line is that trading more or less often comes down to your trading style and personal preference. We won’t argue with the fact that trading less often makes it more likely for traders to put more detailed thought into their actions when it would be difficult to be as precise if you’re opening hundreds of positions per day. Yet a scalper or day trader would argue that there’s no way for them to make a profit without entering multiple positions per day. This is why it’s important to consider all of the pros and cons when it comes to this topic. In the end, only you can decide whether trading more or less often suits you better.

Categories
Beginners Forex Education Forex Basics

What Do I Need to Trade Forex?

We know why you’re here – you’ve heard about forex trading, and you’re looking to get involved. Forex trading can be a great source of future income and it can even replace your real job in some cases. With so many articles and tips out there, you might be wondering what you need to get started. It can’t be as easy as opening a trading account and becoming a millionaire, right? If it were, then most people would be doing it. The good news is that most of the things you need can be acquired easily if they aren’t already in your possession. Below, we will detail the 4 things you absolutely need to become a forex trader.

An Education

The first thing you need is to be educated, everything else comes later. There is no reason to open a trading account if you aren’t prepared to start trading because some brokers will charge you inactivity fees for letting your investment sit there untouched. You need to start with basics, like terminology. Then you’ll have to understand the mechanics of trading, as in how to do things like place orders, set your stop loss, and so on. Reading about trading strategies, risk-management options, trading psychology, how the news affects trades, etc. are equally as important. This is something anyone can do for free, so long as you have a working internet connection.

There are even different mediums out there for learning, like articles, eBooks, videos, webinars, seminars, trading courses, and so on. If something just isn’t making much sense to you at first, don’t give up. Try researching that subject through a different medium, for example, if reading the material doesn’t make sense, try watching a video. Otherwise, you could try looking on a different website to see if another author can offer a clearer explanation. Anyone can get a trading education if they put their mind to it, but you’ll need to understand that this will take hard work and dedication. You can’t learn everything you’ll need to know in an hour, an evening or even a day. It can take weeks and months to take in everything you’ll need to know. As a forex trader, you should always pursue a better education and continue to improve your understanding.

An Investment

Another must-have item every trader needs is an initial investment. The good news is that many brokerages will allow you to get started with as little as $5, or maybe around $100 or so. This shouldn’t be too difficult to come up with, so this still leaves the door open for everyone. However, you should note that you’ll probably be stuck with a Mini/Micro/Cent account or a regular Standard/Classic account if you’re making a smaller deposit. Most brokers market these accounts towards beginners and save better conditions for Premium, Platinum, Gold, VIP, or other similarly named accounts. Better accounts can ask for deposits in the thousands or even hundreds of thousands, which puts them out of reach for most traders. Fortunately, you can get started with as little as $5, just have realistic expectations. Don’t expect to make as much profit as someone that has invested $20,000 or more. You also need to be investing your disposable income, never try to invest the money you need to live off of. There’s nothing wrong with saving up over time if you’d prefer to enter the market with a larger investment.

A Device with Internet Connection

This one is somewhat obvious, but still worth noting. You need a smartphone, laptop/desktop, or a tablet/iPad with a working internet connection to be able to run the trading software. This won’t be too much of a problem for most traders – if you can read this article, then you probably have what you need. Of course, if you’re using someone else’s device or internet connection, you’ll need your own before you can get started. Try to be sure that your internet connection is strong as well, otherwise it could cause issues. Note that some providers will allow you to upgrade your package if it isn’t working fast enough.

A Broker

The last thing you’ll need is a forex broker. There are hundreds and thousands of them online and readily available. You’ll need to do some shopping and comparing, however, as some of them might charge high fees or require a deposit that is larger than what you’re looking to invest. Choosing a good broker is essential for success, so be sure to put a lot of effort into this step. Some brokers are more interested in individuals with a lot of funds to invest, but you should be able to find a beginner-friendly broker easily.

Conclusion

If you want to become a forex trader, the good news is that the things you need are fairly accessible. A device with a working internet connection and a broker are easy to obtain, and you can get your education online for free if you put in the effort. Coming up with an initial investment might be more difficult, but you can still get started with around $5 and work your way up to investing larger amounts later on in your career. Becoming a successful forex trader is an obtainable goal for anyone that is determined and willing to put in the hard work.

Categories
Beginners Forex Education Forex Basics

What We Can Learn from Billionaire Trading Legend George Soros

If you want to get really good at something, it helps to take a few tips from the professionals. In this case, we’re looking at professional trader George Soros and the methods that have made him successful. If you haven’t heard of George Soros before, here are a few quick facts you should know:
George Soros’ current net worth is 8.3 billion dollars.

-Institutional Investor Magazine named him “the world’s greatest money manager” in 1981.

-He earned the title of “the man who broke the bank of England” in 1992 when he made more than a billion dollars selling the pound sterling.

-George Soros is co-founder and manager of the Quantum Endowment Fund, which is an international hedge fund worth more than $27 million dollars.

As you can see, George Soros has had a lot of success and experience in his 40+ years of trading. Many traders aspire to be sitting in his place one day in their future. The best way to follow in this successful businessman’s footsteps is to study the way he trades and manages his funds.

George Soros is a short-term speculator, meaning that he purchases assets for short periods of time and uses strategies to profit from changes in the price. His strategy involves making huge bets that are highly leveraged in the direction that he believes the market will go. The hedge fund we mentioned earlier is famous for making large, one-way bets on the movements of assets based on macroeconomic analysis.

Macroeconomics combines economic trend analysis, long-term projections, analysis for alternate trends, the impact of fiscal/monetary measures, and simulations of the economy. There’s a lot to it, but the internet has a lot of helpful information that covers macroeconomics so that all traders can familiarize themselves with the concept. Soros believes that traders themselves influence the market fundamentals and that their irrational behavior leads to booms and busts, which offer investment opportunities.

Although we can learn a lot from this investor, everyone can’t mimic his strategy. In fact, most wouldn’t be able to do so effectively. This is partly because he makes massive trades that would be beyond many trader’s abilities. The man is a billionaire after all. Another thing that could stop one from copying him is the fact that he uses high leverage on his trades. Leverage can obviously work to one’s advantage, but it is often referred to as a double-edged sword.

Overleveraging trades has caused many traders to wipe out their accounts completely because it is very risky. We would only recommend using a high leverage ratio if you are a skilled investor that can afford the risks that go along with it. A good way to become more acquainted with leverage would be to trade from a demo account using different leverage options.

If you aspire to be one of the greatest traders in the world, it helps to take notes from the experts. George Soros is the perfect example of a self-made billionaire that has launched himself to success through trading. Many traders look up to the businessman and want to copy his strategy. The bad news is that his game plan cannot be mimicked by just any trader. Making huge, highly leveraged bets requires experience, bravery, and obviously one would need a large sum of money in their account. Some traders might have the resources to do this, but those that don’t can still take some very helpful tips from the billionaire.

Consider his belief that booms and busts are caused by trader’s irrationality. You could also study macroeconomics and plan your trades based on that information in order to trade with the same thought process as George Soros. In conclusion, every trader could one day find themselves sitting in the same place with a lot of hard work and determination. Even if you can’t follow Mr. Soros’ strategy exactly, his success can still offer some important trading lessons.

Categories
Beginners Forex Education Forex Basics

What You Need to Know to Succeed as a Forex Trader

Forex traders spend a great deal of time educating themselves before they are truly ready to begin trading. However, its easy to miss out on some important tips because there are so many sources floating around on the internet. Below, we will provide some of the most important facts that you need to know to succeed in your career as a forex trader. Be sure to take a look, just in case you’ve missed anything!

Be careful with leverage: There’s a big range of leverage caps being offered by different forex brokerages. Some limit their maximum leverage to a safer amount around 1:30, while others push their cap to 1:1000 or higher. It’s true that using a higher option can result in a large win, however, it can also cause you to lose a lot of money very quickly. Our best advice is to proceed with caution and think of the highest leverage options as off-limits if you have a small account balance or don’t want to take a lot of risks. Many professionals prefer a leverage of 1:100, so try this or start lower until you become more acquainted with the ways that leverage can affect your balance.

Start with a demo account: Almost every forex broker offers free demo accounts to their potential clients. These accounts allow you to practice trading in a live environment without risking any real money and can even give you insight into what conditions are like trading for that particular broker. Being that these accounts are absolutely free, and a real account is not required to open one, there’s absolutely no reason why beginners shouldn’t take advantage of the opportunity before investing real money.

Be careful how much you risk: This might sound obvious, but you might not realize how small of an amount experts recommend risking per trade. The answer is actually only 1% of your account balance, so for every $100 in your account, you only want to risk a dollar. It’s better to risk less in case you lose than to risk more in case you win because the latter usually leads to a blown account.

Some brokers will work against you: This also might seem obvious, but the ways that you identify scammers aren’t quite as so. Always check terms and conditions and look at reviews online from other users. Know that some of the worst brokers will hold your withdrawals and refuse to give them back thanks to crazy terms in their contracts. Don’t get this confused with regular procedures, however – requiring a photo of your ID, requiring you to verify that you’ve requested a withdrawal, and other means are common guidelines with most brokers.

Only invest what you can afford to lose: Some people go crazy and invest every penny they have into their account. This will only lead to problems. For example, some customers become very upset because they have no other money and want to immediately withdraw funds from their account, even though it can take at least a few days or more. Some brokers will even charge you to withdraw your money with no trading activity.

Don’t believe in “get rich quick” schemes: Some people will tell you that they have the magic answer to becoming rich as a forex trader. This person might be referring to a strategy, indicator, forex robot, etc. Regardless, you can’t put all your faith into these promises. If it were that easy to become a trader, everyone would do it. This doesn’t mean that their strategy isn’t profitable, however, but words like “guaranteed” don’t mean much considering that the market is volatile, and nobody can predict what will happen.

Make sure your expectations are realistic: A billionaire has more money to invest and will make profits more quickly than someone with a $100 investment. Instead of feeling discouraged, you should simply have a realistic expectation instead of basing your expected results on someone that has a lot more money or experience than you do. You can still make a lot of money; it will just take some time. Some traders start out with heightened expectations because of something they’ve heard or read about trading, only to walk away quickly because they feel that they should be making a lot more money.

Categories
Beginners Forex Education Forex Basics

What’s Your Forex Trading Style?

If you don’t already know what your trading style is, it’s important to spend the time learning about the different styles so that you can figure out what type of trader you are. Finding the right trading style is one of the first steps on the journey to becoming a successful forex trader. Once you’ve found it, you’ll be ready to start working on your trading strategy. To be clear, there are differences between a ‘trading style’ and a ‘trading strategy’. Your trading style refers to the way you trade, for example, swing or day trading, position trading, and scalping. Your trading strategy revolves around the way that you make your trades and goes into more detail about the reasons why you decide to make a trade when you choose to enter and exit a position, your risk-management precautions, and other factors.

Novice traders should begin by choosing a trading style before moving on and choosing a strategy. If you skipped this step and already started trading, don’t worry, you can still go back and work things around. Below, we will describe the four main trading styles to help you decide which is the best fit:

Day Trading

As the name suggests, day traders trade during the day, often opening several positions per day. In most cases, day traders close out all of their positions before the end of each trading day. This style can be time-consuming – some day traders even complain that they can’t leave their computer to eat or use the bathroom, otherwise, they might miss a good opportunity. Still, this is a popular style, even though it is considered to be risky because of the number of positions one opens per day. We would recommend this style to traders that have enough time on their hands unless you’re considering using a forex robot to trade for you if you don’t have the time.

Swing Trading

Swing trading is essentially the opposite of day trading in that traders usually open one medium or large trade and leaves it open for a period of days or weeks so that it can accumulate. There are some advantages to this style because it is considered part-time and can be taken up alongside regular job hours if you wish. On the downside, most brokers charge fees for leaving positions open overnight, and this can really add up if you’re leaving your position open for several days, especially considering that triple charges often apply on a certain day of the week. The positive side of swing trading is that it doesn’t require much effort and it’s even been said that the best traders trade less often.

Position Trading

Position trading is similar to swing trading; however, traders actually keep their positions open for months or years instead of days or weeks. These traders are looking for more historic price movements and can really capitalize off of those movements. This doesn’t require much time, as you barely have to watch the markets, but you do need to have a strong belief that the market is going to go up in the long run.

Scalping

Scalping is our fourth trading style and is like day trading, with the main difference being that traders can make hundreds of trades per day where day traders make less. Each and every market movement is an opportunity for a scalper, and they attempt to make small profits from those movements. Over time, profits add up to a substantial amount, although one of the downsides to scalping is that one large loss can eliminate the multiple wins that the trader worked so hard to obtain. This style is considered to be intense but rewarding when done correctly.

The Bottom Line

There are several different trading styles out there and it is important to find the one that suits you best. One of the first things to think about is how much time you actually have to trade, considering that day trading and scalping require more time spent at the computer while swing trading and position trading don’t require as much attention. The pros and cons of each style are also important, as some styles are riskier but can be more profitable as well. Once you figure out which trading style is the best option for you personally, you can put much more time into perfecting your trading strategy.

Categories
Beginners Forex Education Forex Basics

The Absolute Worst Mistakes You Can Make In Trading

You can make small mistakes in trading without it having too much effect on your account or your overall trading plan. There are however mistakes that could end up costing you the entire balance in your account or even your livelihood. If you are guilty of any of these then you need to ensure that it was a one-off. So let’s look at what some of these mistakes are and the consequences that can come with them.

Trading too Much

Otherwise known as over-trading, this is where you simply trade too many times. You need to ask yourself a question before putting on every single trade you do, is this a good trade? If you are certain that it is then you can trade it, but if you are placing a lot of trades, it is most likely that some of them are not, and if they are not, you should not be making the trade. When you place too many trades you are putting a lot of risk onto your account.

There are different reasons why you may be making too many trades, if you have just set up a new trading plan or strategy then you may be making the trades to test it out, but you should be doing this on a demo account. You should only be trading trades that are exactly in line with an already complete trading plan. You may also be trading because you are bored, do not do that, stick to your pan, and only trade when it is relevant, even if that ends up being just once a week.

Risking too Much

This can be done in a couple of different ways, primarily when we think about risking too much it is based around using lot sizes that are too large, f your strategy (as long as you have one) suggests that you should be making trades at the size of 0.05 lots, making trades at the size of 1 lot is not exactly the smartest idea you can come up with. More often than not, trading at sizes too large is a result of either trying to make up for previous losses or by giving in to greed in order to try and make more money. You can also risk too much by making too many trades which we have already outlined in the section above regarding making too many trades.

Thinking too Much

When doing most things in life, not thinking is normally the issue, but with trading, it can often be the opposite, if you decide to think about each trade too much, then this is where the issues can arise. Thinking too much can potentially self-sabotage your own trading strategy. Think about why you made that strategy, it was to make things simple, and to keep your account safe. So the rules that you set up with the strategy were put in place to ensure that you stick to them. Sticking to them keeps things on track, second-guessing them and thinking about the possible reasons why the trades may not work, or whether you should change something can only hinder the overall results.

Thinking too much can also cause delays, delays in your trade can cause you to miss those trading opportunities that you would have normally taken. Do not try to read into the markets too much, doing so also causes delays but may also cause you to start double guessing your trading strategies and current trades. Overthinking can also have an effect on current trades, causing you to take losses or profits too which will ultimately start to mess up the entire profit and reward ratio of the strategy that was created. So it is important that you trust the system that you are using and do not overthink the trades that you are making.

Gambling

Gambling can be exciting, it can cause something that is boring to become quite exciting, however it has no place in trading. When we think about gambling in a trading sense, it is simply when we place a trade without doing the usual analysis or using our trading plan. We are simply guessing whether the markets will move up or down. The unfortunate thing about gambling is that it is often not just a one-off. If you win, it’s easy, let’s do another one, if you lose, you want that money back so let’s put on another one and win, it is a vicious cycle and something that you should do everything you can to avoid. Always stick to the rules of your trading plan and do not start to gamble without it.

Trading Based on Articles and Opinion Pieces

Opinion pieces and articles are just that, an opinion. A lot of them do not necessarily have the information or knowledge to back up their opinions, what is worse is that a lot of them are simply regurgitating information that they may have seen elsewhere. Be sure that you are doing your own analysis along with your trading plan is the best source of information that you can get.

Not Paying Attention to Economic News Events

Some news events do absolutely nothing to the markets, others however can have dramatic effects, if you are trading then you need to know what news events are coming up and how they may potentially affect the markets and your current open trades. Many accounts have been blown in the past due to people not knowing about upcoming news events or by people who have been trying to trade the news, which again is not a smart thing to do unless you really know what you are doing. If you have doubts about the effect that an upcoming news event is going to have, it would be advisable to not be trading at the time shortly before or after that news event.

Reading too Many Websites at Once

It’s a great idea to continue to try and learn, however, you need to be careful how you do it and you need to choose your sources carefully. How many websites should you read from? One or two at the most. As soon as you start looking at too many, you will begin to cloud the information that you are taking in, the more opinions and discrepancies that you come across the more confusing it can be. It is very easy to start to mix things up as there is so much information out there with very small variations in it. Once you have found a website that has information that suits you, and they provide it in an appropriate manner, stick with it, do not just between it and lots of other sites at once.

Not Continuing to Learn

Forex and trading is a constantly evolving business, there are new things being developed and new things being understood about the way it works. What works for you now, may not work in 6 months, when it stops working, what are you going to do? You need to be constantly learning and working out what you can do in different situations, keep learning, you will begin to learn new things that can help with your own trading plan and strategy and could help you to become more profitable now, and in the future.

Overconfidence

Being overconfident can be a dangerous thing, it can cause you to make mistakes or to take risks that you probably should not be doing. Overconfidence normally comes from having a number of successful trades in a row, once you have this feeling of overconfidence the next trade may be made at a larger lot size or you may begin to put in additional trades that aren’t necessarily related or in line with your trading plan. If you are starting to feel this emotion, it is important that you step back and remind yourself why you are currently being successful, it is because of your trading plan, so continue to stick with it and do not take any additional risks.

So those are some of the worst mistakes that you can make when trading, are you guilty of any of them? They are very easy to fall into, most traders would have experienced at least one of them during their careers, what is important is that you are able to recognize if you are doing any of them so you can then begin to move away from them.

Categories
Beginners Forex Education Forex Basics

Accept It, There Is No Holy Grail In Trading

The Forex markets are its own beast, many traders will say that at times, it just does what it wants with no real reason behind it. It is also something that can be influenced by the big banks (to a degree) so why are we still looking for what we would call the Holy Grail? If something cannot be tamed, if its conditions cannot always be mastered, then would such a thing actually exist?

The short answer to those questions is no. It does not exist and it never will exist. A huge part of trading is losing and any profitable trader will tell you that they still make plenty of losses, their strategy just allows for it and they make profits overall. So why can’t there be a holy grail of forex?

The market is uncertain and unpredictable. The markets are fluid, they are prediction and there are thousands of factors that come into play that can cause it to shift up or down. A human mind is an incredible tool, but even that will struggle to take into account and calculate the thousands of variables that come into play when looking at the markets. Unless you are told by a major bank what will happen (which is illegal), you won’t be able to predict certain events such as economic news events and certainly not natural or man-made disasters. So, the mind cant do it, why cant a computer? People have tried to create robots in order to trade, but again, the computing power and the number of information sources needed would involve a lot of computing power, not to mention that even the robot won’t be able to predict the aforementioned news events and disasters that often rock the markets.

And then there are market influencers. The markets are full of thousands if not millions of people trading, and due to this, they have control over the movements in the markets. So this doesn’t necessarily mean that humans are deciding where the markets will go to, but we are certainly influencing it in ways which according to data would seem unnatural. There have been times where the data has been incredible negative, all signs points to a fall in price, however, the markets continue to rise, against all the available data. This is simply because the traders in the markets are still buying, of course it should eventually come down, but due to its nature, this is unpredictable and no one can say exactly when it would.

A strategy cannot be profitable in all scenarios.The reason there are so many strategies out there is that no one strategy can be successful in all situations if there was one, then it would be the only strategy being used, and unfortunately, that would completely kill the markets and they would be at a standstill as everyone is using the exact same strategy. Patterns often repeat themselves over time, the markets can be seen as cyclical which is only broken by huge events. Most strategies that we know work for certain patterns in the markets, as soon as it shifts to another the strategy no longer functions to its fullest and so adaptations or completely new strategies will be needed for the new pattern that is forming.

So while there is no holy grail to trading, no way to be 100% profitable and no way to always win, it doesn’t mean that you cant be a profitable trader overall, the losses are part of trading, adapting strategies and having multiple at hand is the key, but also knowing when not to trade. Control your risk, protect your account and whatever the markets are doing, you will be able to profit in them.

Categories
Beginners Forex Education Forex Basics

Why Do Trade Losses Occur?

Trading is full of ups and downs. In fact, that is pretty much all that it is, the markets will continue to move up and down based on the strengths of the currencies or assets that are being traded. The sad thing is, around 90% of all traders will lose, which means that only around 10% of people are winning, so why is this? Let’s have a little look at why most people tend to lose when trading.

Lack of Equity

We will get this one out the way to begin with, we are constantly seeing more and more brokers allowing people to trade with increasingly small amounts. Some brokers are now allowing you to sign up and trade with just $1 or $10 which is great for accessibility, but not great for keeping accounts active. You need at least a certain amount in order to take risk management and money management precautions. The markets will always turn, no matter when you put in your trade, however no person willing to trade will put enough in to be able to cope with the longer trends, so this is why risk management is key and why having such small amounts can make it almost impossible to succeed.

Not fully Understanding Indicators, Market Entry, and Other Aspects

There are hundreds of people over the internet recommending different indicators to use, they are designed to help you analyze the markets. However, just sticking a lot of them on to the charts will not give you much indication of anything. In fact, it will most likely confuse you even more. Having indicators can be good but you need to understand what they actually mean, trading blindly on what others have told you or what an indicator tells you is not a good way of doing things. You need to ensure that you fully understand what you are looking at before you take action on any of the information that was given.

Blindly Copying Others

A lot of new traders are now coming into trading with the hope of not actually putting in the work, so they look to signal providers or a so-called mentor in order to get some trading signals. The problem with this is that they do not give you an understanding of why the trades are being made, this means that you are trading them completely blind, with no knowledge of the risks behind them. The majority of these signal providers are doing it to make money from subscribers rather than from their actual trading, these sorts of providers do not last long and eventually go bust, and so will those following them.

Not Sticking to a Tested & Proven Trading Plan

When you first start learning to trade, you are often told that you need to create a trading plan, this will involve your strategy as well as any risk management that you are going to put in place. Once you have one working, you will need to stick with it. As soon as you step away from the plan things can start to go wrong. Taking trades outside the criteria or risking too much on a single trade are both recipes for disaster. Once you have a plan, stick to it and don’t deviate from the pan.

Greed

A simple one, but a lot of people get into trading for a quick and potentially easy way to make a lot of money, this leads them to making trades far riskier than they should be, this will ultimately lead to losses. Risking too much portrayed, and putting on too many trades at once are two of the main mistakes being made and two of the main reasons why people end up blowing their account.

Not Using a Demo Account

Demo, demo, demo. This is one of the most used phrases when it comes to trading, you should always start on a demo account, learning the ropes, and testing your strategy. Those that decide to jump straight into live markets are destined to fail, they do not yet have a solid understanding of the markets or what causes them to move up and down, so not using a demo account is a sure-fire way to blow an account.

Having a Bad Day

Sometimes we just have a bad day, things are all going against you, your analysis was spot on, you checked your risk management but things just go the wrong way. This is simply a part of trading, the good news is that because you did everything right, your losses will be reduced and limited to a certain amount and this can just be put down as a part of trading. Nothing can be done about it but to move on to the next tread, just try not to allow it to cloud your judgment on your next trades.

So those are a few of the things that can cause traders to lose, there are of course other things that can cause you to lose, trading is all about planning, preparation, and risk management, get those right and you will have a fantastic chance to start making some money with trading.