Category: Forex Basics

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

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Beginners Forex Education Forex Basics

The Importance of Initiative

The initiative could be defined as an emotional skill, attitude, or act of anticipation and proposing solutions before someone asks for it. Being aware of the initiative is a proactive behavior where we have the ability to put ourselves in a better position. The initiative is a skill we learn in childhood but one we […]

The initiative could be defined as an emotional skill, attitude, or act of anticipation and proposing solutions before someone asks for it. Being aware of the initiative is a proactive behavior where we have the ability to put ourselves in a better position. The initiative is a skill we learn in childhood but one we […]

The initiative could be defined as an emotional skill, attitude, or act of anticipation and proposing solutions before someone asks for it. Being aware of the initiative is a proactive behavior where we have the ability to put ourselves in a better position. The initiative is a skill we learn in childhood but one we can develop in adulthood. It is about making things happen, overcoming difficulties and barriers that appear when we are trying to achieve a goal. It is a dare to thinking differently, it is a flame that lies inside all of us. To have initiative is the difference between optimistic and pessimistic, between active and passive, between direct or be directed.

Why is it important to have initiative? One of the first elements that we need to have in our trading psychology is initiative because there is going to be different times in our life where we could be lost without it. When someone attempts to become a professional forex trader someday, he is separating himself from everybody else. The ability to act or to take charge, understanding the rewards of movements, and try to learn more is what makes a difference. Most people, almost everybody we know doesn’t do this because they are too lazy or too scared to take that jump. As forex traders or potential forex traders, we don’t want to be like everybody else. Most people don’t have the motivation to ever even look at that direction or so many people know exactly what it is but wouldn’t be caught dead trading it because they are scared. You guys decide what is worse. Forex involves risk, we can lose every last cent we put into it, most traders were there a lot of times but only a few were able to shake it off because they were fearless and studious in their game. Everybody wants to come up with excuses. Excuses like: “I wasn’t born here”, “I am a female”, “I’m an immigrant”, “I don’t have enough money to start this”…

The problem is, nobody cares. No matter the situation is we need to educate ourselves, we need to work smart and we need to be relentless. In a world we live in, there are multi-billion dollar industries that are created to keep us unmotivated, lazy, and unproductive and they really work, they are pretty good at what they do. A significant majority of people around us are lazy and they never take initiative. The reason most people don’t even bother jumping into forex trading, even if they’re a little bit interested in it, is just because of the fear of losing everything. This is no different from any other investment out there. The fear of losing everything and having serious responsibility for something are probably the two main feelings that could mess with our motivation. The truth is that most of our fears are often just illusions and they might be completely illogical. The worst-case scenario is never as bad as we think it is going to be. There is a small story in the book called “The 4 Hour Workweek”. Back in the ’80, a guy goes to Ghana to do some volunteer work and there he finds out that Ghana starts to fall apart. Major turmoil hit that country and he got stuck there, he couldn’t come back. He was stuck there eating just cornmeal and spinach every day for breakfast, lunch, and dinner.

That was only available, even there was a problem with clean water. So his worst fears of going to a place like this were pretty much realized. Soon after he was like: “Ok, this is not the end of the world, I have everything that I need to survive. Apart from that, I have a lot of new friends and I am actually having fun”. Years later not only does he look fondly on his time there but he knows that if for some reason he were to fell into abject poverty it wouldn’t be that tragic. When he was there, the things he learned and the friends he made were irreplaceable. From this story, we can learn that our absolute worst-case situation can be temporary especially if we are in some developed country. If we are smart enough and if we have resources we can get out of any bad situation. So at the recession-proof market like forex is, our progression could be unlimited and we should stop worrying about losing everything. We don’t want to let that fear be on our way.

Another reason that we have heard from people is that forex is too complex and overwhelming to learn. Surely that forex is not an overnight thing to learn but there are tons of online material out there that is easily accessible and completely free. Forex is around 4 trillion dollars a day market that traders are trying to go in and extract money from over and over so there could be a lot of benefit for those who are persistent and want to build a career in trading. Honestly, the worst thing is not doing anything. The biggest risk we can ever take is simply not taking any. Why? Because we could end up with no retirement money. Most people have absolutely nothing saved. Relying on someone always and all the time might not be the safest house for us, nobody wants that.

Unfortunately, that is probably the path of many levitating souls around us. We need to believe that we are capable of achieving wonderful things and if we don’t attempt them and follow through them, then we might completely fail. We don’t want that to happen. We don’t want to grow old with regrets in our eyes. The initiative is not one time only action. We need to understand even if we had that initiative to get started and that part wasn’t a problem, it is going to come into play again. We will need initiative more than once, probably more than twice in our trading career. There could be a few different phases on our trading path where we might need a firm initiative. Many of us trading demo account right now which is great but there will come a time where we need a transition into real money and that is going to be a serious challenge for us. We could try to lay back and not even maintain demo trades, but if we try to carry that strategy over into transitioning to real money, we might end up destroyed. Watching our money going up and down in a real money account knowing that is actually our money could largely play tricks on us.

The fact of going from the demo into the real account is a big leap for many people. That might be too much for some people so we need to be ready and not off-guard when that moment comes. But simply some people don’t feel comfortable about investing, they don’t want to do it themselves. They feel more secure to hand it over to somebody else. Eventually, we are going to walk in that fire where we trade with our real money and it is not going to be easy. So we could try to trade our own money and hope we can get good enough return year after year to compound interest and maybe get our retirement savings or our spending money. We could also try to trade other people’s money whether it means setting up our practice and trying to draw clients or join up with the big company, prop firm, or hedge fund. So transitioning through these different phases we will need strong initiative if we want our mindset to evolve. Just a simple walk through these stages is a big psychological leap but if we want to be professionals one day these are the routs we need to take. Knowing that we are going to be tested, judged and that we are going to deal with real money are some factors that are part of the process but the potential rewards could easily outweigh any fears we might have of underperforming.

We need to take the initiative and give ourselves a chance. For some of us who still struggle with initiative, a good thing to do might be to read the book called “Rich Dad Poor Dad”. This might have an impact on some people to try to approach differently to certain things in their life. The mentality, approach, end-game, and mindset are some of the key elements that we should be always trying to upgrade in our trading psychology so we could hopefully be in the right headspace. After those progressions, we just need to make sure not to leave that headspace ever. So for all of you guys, good luck and never give up.

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Beginners Forex Education Forex Basics

Tips for Trading During the Holidays

Most of the fellow traders have the same question on their minds around the new year. They have doubts about their way of trading when holidays start to knock on our doors. Some traders have been gaining pips throughout the whole year and they were constant in trying to sharpen and refine their game as […]

Most of the fellow traders have the same question on their minds around the new year. They have doubts about their way of trading when holidays start to knock on our doors. Some traders have been gaining pips throughout the whole year and they were constant in trying to sharpen and refine their game as […]

Most of the fellow traders have the same question on their minds around the new year. They have doubts about their way of trading when holidays start to knock on our doors. Some traders have been gaining pips throughout the whole year and they were constant in trying to sharpen and refine their game as much as they can. They were dedicated and they were making smart moves. With that kind of approach to forex, there will be very few worries on our minds. Naturally, we have the ones who are not that focused on their pairs and they’re practically gambling without any decent knowledge whatsoever.

Some people claim that the holiday season might be unprofitable for those with bad trading skills not just because they have poor trading manners but simply because the holiday is time for the break and that we shouldn’t chase money at that time no matter how our trades were successful. But we all need money all the time and especially during the holidays and somebody who wasn’t scoring constantly will try to make silly unrealistic trades around holidays just to catch that feeling of satisfaction and try to finish the year on positive vibration. So for all traders with different kinds of strategies and levels of dedication, is the forex climate any different during the holidays? Is December really a month where things dry up?

In our money playbook, we should aim for a 10 to 15 % yearly return. The stock market averages around 11 % a year but 10 to 15 % we consider as pretty good, of course, we would like to go higher if we can. This kind of consistent return year after year is something we should seek out for. The prevailing thought is that most people are away for the holidays and people are closing a lot of their long-term positions before the new year ends for tax reasons so because of that we have less volume. Less volume is bad for trend traders. How do we approach this? Historically observing, we don’t see a very good reason to make a whole lot of adjustments just because of the time of year we’re in. For example, December 2018 was pretty slow in terms of volume and overall movement in the market that we traded.

The stock market was near crashing back then and people were not officially panicked because they didn’t take their money out of the stock market and placed it into the forex market. There were sharp downward movements in the economy. But other Decembers before that have not been slow. According to our long experience, we have just not seen enough consistency year after year to warrant doing anything unusual in our own trading just because it’s December. This could be for a lot of reasons, we could have a lot of economic news that goes on in December that actually makes a difference. Also, most of Asia which is the most populous continent in the world doesn’t celebrate Christmas or Hanukkah or Kwanzaa so their world just keeps right on turning. This is where our volume indicators come into play.

Even if the numbers do add up and December is the slowest month of the year compared to the other months, the volume can certainly be there. Certainly enough volume to trade with. Volume indicator is crucial because it helps eliminate losses that we take along the way thus making our account making go up and up. The volume moves the market, we could say that volume is its fuel. The price has a high possibility of trending when there is a volume in the market and particular currency pair. When there’s no volume in the market or currency pair then the price has a little chance of trending. It is possible that for the price to trend without volume, but hardly, therefore we want odds to be on our side. They say that the good volume indicator is the main figure in a trading system and that we are not going to reach high branches without it. So we need to test as many as we can until we find one that consistently gets the job done as we want.

Once again, if there’s any lacking in volume, we might consider trade with less risk or simply not trade at all. So if we could determine these times around the holidays where volume is slow we should maybe take a break and do nothing. So far according to our research, there really wasn’t any significant difference between December and other months. On new year’s eve, we usually close out all of our open trades and wait for the new year’s break to pass, and soon after we re-enter the market. Better not to take losses if we don’t have to. This could be one voluntary day of inactivity out of all trading days of the year.

In the end, does it really matter when we trade? Probably not, because if we have the appropriate set of tools and indicators they will show us day by day if we should be trading. Even in late December, if there’s an opportunity out there our system is going to visualize that for us. Here we prefer to trade the daily chart exclusively. We believe this could be an advantage. For example, intraday traders could find themselves in a very difficult situation if volume occurs to be slow for an extended period of time. The volume they need is not going to be there and this could cost them a lot. If we trade the daily chart we could potentially recognize these times and know where are the opportunities as well in these slower months.

We need to eliminate the losses the best we can. We need to eliminate the situations that have a higher probability of giving us losses. We don’t want to control something if we don’t have to. So not trading during the holiday sessions and around December might be overrated. The most important thing that we could do is to stay disciplined no matter what happens. Traders, have patience, eyes on the prize, and you’re going to be just fine. During the holiday season if you have time to go in the market and check on your trades and charts go do that. And if your system is telling you to enter new trades go right ahead and enter them no matter what month it is. Go with confidence, always.

Categories
Beginners Forex Education Forex Basics

Staying in the Zone While Trading

When you get into the zone it is a fantastic feeling, everything seems to work and you have 100% of your focus on the task at hand, it is what people strive for, not just with trading but with pretty much anything in life, when you need someone done, getting into the zone makes it […]

When you get into the zone it is a fantastic feeling, everything seems to work and you have 100% of your focus on the task at hand, it is what people strive for, not just with trading but with pretty much anything in life, when you need someone done, getting into the zone makes it […]

When you get into the zone it is a fantastic feeling, everything seems to work and you have 100% of your focus on the task at hand, it is what people strive for, not just with trading but with pretty much anything in life, when you need someone done, getting into the zone makes it incredibly easy and quick to complete.

More often than not, we don’t actually know how to get into that zone, it just seems to happen, it’s not always something that you are able to force, people try, but that can often result in you trying too hard and thus missing out on the zone and even potentially making some mistakes from that strong desire to get into it.

Once you manage to get into it, it is important to try and stay in it, it can be quite easy to fall from that zone, you can be knocked out of it by someone else, you can get distracted or you can simply lose steam. So we are going to be looking at ways and things that you can do to help you to stay in the zone for as long as possible and so that you can be as productive as possible.

Confidence

There is something called recency bias, in the back of your head, your past experiences and your past results will be sat there haunting you, especially if the majority of your most recent events are negative and losses. Understandably, if you are constantly thinking of the negatives and your losses, your confidence will take a hit, and this is something that can be quite hard to get over. Unfortunately, this is a major killer for those that have entered into the zone, as soon as you have thought about your previous losses, you will be taken straight out of the zone and will be back at 1st base.

Confidence is something that needs to be built up over time, it can’t be created overnight and can take some people years to have real confidence in their trading abilities. It will come with time and it will come with consistency, the more consistent your results are, not on a day to bay basis but on a monthly basis, if you are consistently profitable at the end of the month and you fully understand your strategy (that there will be losses and wins) then those little losses along the way will have a much smaller effect on your confidence levels.

You can help to build our confidence yourself, things like keeping to a routine is a fantastic way, if you do something a lot of times and make it a requirement, you will become good at it which will, in turn, improve your confidence on that aspect of your trading. Simply being optimistic can help, for some, this is easier than it is for others, but setting targets that are achievable, putting up reminders of your successes can help motivate and give confidence as they are a reminder that you can be successful.

Control Stress Levels

Stress is something that can instantly take you out of the zone, stress can cause you to completely lose track of what you were doing and can cause you to focus on completely the wrong things. Being able to control your stress levels is far easier said than done, it is a powerful emotion that often shows its head if things are either moving too quickly or shortly after a loss or string of losses.

Stress can however also be used to your advantage, stress can actually make things exciting, it can keep you on your toes and can make you want to do more, that rush will keep you focused. The problem is that stress can very easily get the better of you, so you need to be able to keep your stress levels at an appropriate level, you cannot remove it, nor should you try, but have some measures in place just in case it tries to take over completely.

Avoid Distractions

Distractions are one of the main things that can take you out of the zone, think about how many times you have been concentrating on something and then you hear something on the TV that makes you focus on that, or someone comes in and tries to talk to you, or simply something shiny in the corner of the room catches your eye. It is important that you get an idea of what sort of things more easily distract you, each person can be distracted by different things so it is important that you get to know what it is that can more easily distract you.

Once you manage to work out what they are, being able to remove them from your trading zone is important, get rid of them from your zone. This does not mean that your office needs to just be a computer and a desk, you can have things in there, in fact, you need things in there that make you feel calm and make you feel comfortable, but the things that you have identified as your main distractors need to be removed. The worst thing that can happen when you are in the zone is for something simple and something silly to distract you and to take you out of that zone, as we all know that you won’t be getting back into it any time soon after coming out of it.

Preparation

When we talk about preparation, we aren’t just talking about preparing for each trading session, we are more talking about the preparation that you need to put into your overall trading. Your trading plan is one of the major parts of this, if your plan has been properly laid out and is clear, then it will be far easier for you to not only initially follow it, but to learn it by heart, doing this allows you to be able to focus fully on it, to perform your actions and analysis quicker and this can ultimately help you get into the zone as a more regular occurrence.

Being prepared also helps you to remain calm which can help to reduce the stress that we mentioned earlier in this article. Having everything ready, your plan, your workstation, and the room, can really make a difference when it comes to getting into the zone and then staying in it.

Getting into the zone can be difficult, but it can be even more difficult to stay in it for more than a few minutes, but if you have things prepared, you know what you need to do and you can avoid the distractions, you should be able to stay in it for a far longer period of time which can help you to become a fantastic and very successful trader, just remember that being in the one does not happen all the time and that you cannot force it, so just enjoy it when it does eventually happen.

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Beginners Forex Education Forex Basics

Overcoming the Challenges of Trading at Home

Trading from home, or just working from home, in general, can have its issues and it is something that a lot of people seem to struggle with. It is becoming easier and easier to trade at home, there are hundreds if not thousands of online brokers accepting retail clients, giving anyone with a computer, tablet […]

Trading from home, or just working from home, in general, can have its issues and it is something that a lot of people seem to struggle with. It is becoming easier and easier to trade at home, there are hundreds if not thousands of online brokers accepting retail clients, giving anyone with a computer, tablet […]

Trading from home, or just working from home, in general, can have its issues and it is something that a lot of people seem to struggle with. It is becoming easier and easier to trade at home, there are hundreds if not thousands of online brokers accepting retail clients, giving anyone with a computer, tablet or phone the opportunity to trade in the forex markets.

While it is fantastic that it is becoming so accessible, being able to trade from home does come with some downsides, both to you as an individual, your bank accounts and also your ability to focus on the job at hand. So we are going to be looking at some of the issues and challenges that people face with the ability and procedures of trading from home.

Access to Your Money

Trading from home rather than in an office has the downside that you are in your own space and anything that you are going to be trading will feel a lot more personal, due to this, it is often harder to differentiate between your own money and the money that you are using for your trading. It is very easy to get sucked into the idea that adding some of your own money could help you increase your profits. This is a dangerous game to go down, you need to be able to treat trading like a business, even when at home, this way you can protect your own money and will help you stop yourself from adding any of it to your trading funds.

Create an Office Space

When working or trading from home, it is paramount that you create a working space, an office space. It may sound like it defeats the point of working from home, but having that dedicated office space is important for a number of different reasons.

Having that dedicated space will allow you to differentiate between home life and work, it will allow you to remove a lot of the distractions that would otherwise be there if you decided to trade in the front room in front of the TV. Ensure that the office area has all your reading materials and everything that you need to keep you going and to get you started. Do not include things that could distract you, that would not be beneficial to your trading abilities. Remember, you are at home, but you are also working (or trading in this case).

Get Rid of Distractions

Working in an office is perfect for doing work, it has been designed in such a way that the number of potential distractions is kept to a minimum and they are able to completely remove some of them. When trading at home, you, unfortunately, are not in such an environment and so there may well be plenty of distractions still around. You can get rid of some of them by using our above tip of creating a dedicated office space, this will enable you to have an area of your house which is much more like an office environment.

Things like TV, people, and others are all there and available for you when at home, some of it will take a bit of self-discipline to stay away from, in terms of people though, make sure to inform them that you will be working during certain hours and so they should not come in and distract you. Give yourself set working times and set break times, use those break times to get on with whatever distractions that you are interested in, once your break is over, back to work until you allotted breaks or end time.

Take Breaks to Socialize

When you are at home you are probably socializing with those that live with you or over the internet, however, when working and trading at home we have already described how you need to cut that out during your working hours. So when you do have breaks, either before, during or after work, you should certainly use these times to socialize, it will keep your mind healthy and stop you from going mad from loneliness, so use those opportunities to socialize as much as possible.

Set a Schedule

Working and trading at home is fantastic, you can trade at whatever time you want, take a break whenever you want and if you feel like it, not trade at all. Wrong! If you want to trade and home and still be successful, you need to be able to treat it like a job, you need to set yourself some fixed trading and working tikes and then stick with them. Set a time that you will start in the morning, when your brakes will be and when you can finish in the evening and then tick to it. Of course, there may be things here and there that you need to leave the desk for, such as someone at the front door, but apart from that stick to these times.

This will teach you to stay disciplined and dedicated to trading, it will also help you adjust if you ever go back to the office. If you start to do it less and less, your dedication and motivation levels will drop.

Do Not Work or Trade Too Much

One thing that a lot of people struggle with is managing their time. When you are trading from home, it is very easy to get sucked into working longer hours or even loading up the charts in the middle of the night. This is something that you are going to need to train yourself not to do. It is not healthy to spend every waking minute on the charts and it is not healthy to wake up in the middle of the night to check out the charts. You need to be able to separate your social and home life to that of your working life. As soon as you clock out, that should be it for the day, it can be very tempting to want to just jump on for 10 minutes here and there, but that 10 minutes could very easily lead to hours. Once you have finished for the day, you are finished, there is no other way of keeping that healthy home and work balance.

Go Outside

For a lot of people, the majority of the time that they go out are part of their commute to and from work, when you work at home, you are missing out on that commute and that opportunity to go outside. Due to this, it is important that you are able to force yourself to go outside, even if it is just a 10-minute walk or to go shopping, getting out will really benefit your health and it will also help clear your mind of work. It is a way to completely disconnect from the work that you may not be able to do should you just walk from your office space to your living room.

If You are Sick, You are Sick

One thing that a lot of people seem to forget is that you are still working and still trading, even if it’s just for yourself. If you are not feeling well, then you need to take a sick day, the markets won’t be going anywhere, so if you do not well do not force yourself to trade. You are far more prone to making mistakes or taking shortcuts with your trading because you do not feel great or you are feeling too tired. If you are sick, take the day off, take the time to recover, when you come back you can then fully focus instead of trying to trade through the sickness and making mistakes.

Maintain Discipline

Staying disciplined is vital to working at home, this is not in regards to simply avoiding distractions and working. If you work for someone else, you will most likely have some targets that you are required to meet. What happens if you do not meet them? There is probably some sort of performance review if you do really well there may be some kind of reward. You need to keep this mentality when at home too. If you feel that you are not doing well, evaluate what you are doing, and look at how you can improve. If you are doing well, give yourself a reward, a little time off, or a new pair of shoes, something that you would be looking forward to. What is important is that you are constantly evaluating what it is that you are doing so you can keep your productivity and performance levels up.

So those are some of the things that you are able to do that can help you to cope with the change to working from home. It can be a very difficult change for some and a change that can take a long time to adapt to. You need to show a lot of self-discipline in order to be successful with it and strong-willed in order to stick with it. For many, it would be a dream come true, but just take it seriously, plan your days and work times and working from home can give you a lot of freedom that so many people look for.

Categories
Beginners Forex Education Forex Basics

The Honest Truth About Forex Trading

From the outside, trading can look a little secretive, and without an actual understanding of it, when someone tries to tell someone else about what it is and how it works, it often goes straight over their head. This is understandable due to its complication and the amount of information that is available out there, […]

From the outside, trading can look a little secretive, and without an actual understanding of it, when someone tries to tell someone else about what it is and how it works, it often goes straight over their head. This is understandable due to its complication and the amount of information that is available out there, […]

From the outside, trading can look a little secretive, and without an actual understanding of it, when someone tries to tell someone else about what it is and how it works, it often goes straight over their head. This is understandable due to its complication and the amount of information that is available out there, all giving slightly different views and opinions on it.

What we do often get though, is people giving the more glamorized version of what trading and forex is, they seem to only tell others about all the wins, the profits and the excitement, not all the other parts that also come along with it. The stress, the losses, and the risk, those parts always seem to be neglected, it is understandable why though, when you are telling someone about something you like or enjoy, you aren’t going to tell them the bad bits, are you? You are going to tell them why you like it in the hope that they then also like it or can see why you like it. If you start or end the conversation with the negatives, they are often going to remember that and be put off.

So we are going to be looking at some of the truths of forex trading, some of the things you may not have been told as well as removing some of the sugar coatings that may have been put on. Don’t get us wrong, while there will be some negatives in this article, forex and trading as a whole is a fantastic thing and brings many amazing opportunities to people who otherwise would not have had the chance to trade. So let’s look at what some of these truths are.

Trading is a slow process.

One of the things you may well have heard is that you can become rich overnight with trading, well maybe not overnight, but it has been made out to be quite a quick process. The truth is, it is not, in fact, it is a marathon, more than a marathon even. If you go in with the idea that you will be able to make a lot of money quickly, you will only be left with disappointment and even potentially some losses. It takes a lot of time to learn and an even longer period of time to become profitable. You need to have the expectation that you will be doing this for at least a year before you have any sort of profits, it is a long process, so do not listen to those that say they make a lot each day, they are either exaggerating their results or just simply lying. Of course, there are some that make hundreds each day, but they either have huge balances or have been doing it for many many years.

There is risk involved.

This one isn’t exactly a secret, every website that has anything to do with trading and forex has a little disclaimer written somewhere telling you about how risky it can be, the problem comes from when people talk about it. People just mention their results and how well they are doing, they do not tell you that they had to risk quite a lot to get it. New rules came out for posting on social media to say that people need to display text about the risks, this was simply due to people losing money because others did not tell them of the risk and just the rewards. There is a risk, a lot of it, especially if you do not know what it is that you are doing. Do not trade with any money that you can not afford to lose.

There is no hands-off trading.

The new craze that has entered the trading and forex world is no hands trading or copy trading. This is where you simply copy the trades that someone else, more often than not described as an expert (whether they are or not you will never know) and so you just deposit your money, sit back, let them trade and you get the profits. The same goes for Expert Advisors, there are lots out there that allow you to set them up and just leave them. The problem with this is that the majority of people using them are people who have no knowledge of trading. They are blindly letting the robot or trader do their thing, there has not been an EA or copy trader where it hasn’t eventually gone bust, so without knowing or keeping an eye on things, it will go bust. You need to have an understanding of how it works and also be able to step in should things go the wrong way, total hands-off trading is just not a thing.

You cannot predict the markets.

No matter what anyone tells you, you cannot predict the way that the markets will move or react to different news events. Sometimes it does the complete opposite of what the logical move would have been. We have seen many times a positive bit of news making the markets go down, it doesn’t always make sense, and that pretty much sums up the markets. No one is able to predict what it will do, there are things that you can look at and analyze which can give you a better idea of how it should move during normal trading conditions, but again, this is not a certain thing. If anyone could actually predict them, then they would be a billionaire, but alas, this is not a thing and no one is able to do it.

Regulated brokers are not always safe.

Choosing the right broker when trading is vital, it needs to be one that you can trust, and that has a decent reputation. What many people will tell you will be to go for a regulated broker because they are safe, but are they really that safe? Well yes and no, the only thing that regulated brokers really offer in terms of safety is protection for your money, that is one of the requirements of the regulation, the thing is, some unregulated brokers have also protected your money. People seem to think that a regulated broker won’t ever try to cheat you out of your money or that they will always do what they can to help you, but that isn’t actually part of the requirement to become regulated, there are a number of cases where these regulated brokers have received fines or warnings for their not so user-friendly actions. Go with a broker with good reviews and a good track record, not one just because of their regulated status. It should also be noted that there are a lot of different regulations, some far better than others, so be sure to check which one your broker is regulated under before assuming what protections may be there.

You cannot be successful with a $10 deposit.

Something that you see people saying these days is how you can be a successful and rich trader with just a $10 deposit. We have to admit, it is great that brokers are allowing you to sign up and try things out with a deposit as low as $10, but if you want to be successful, you will need to deposit quite a bit more than that. Risk management is key in trading and you won’t be able to do anything effective with a $10 account. In fact, you won’t be able to do too much with anything else that $1,000. With a higher deposit, you are able to protect your account a lot more, so while you can start with just $10, you won’t be successful with it. Having said that, some people have grown it, but the initial stages take a lot of luck to get through with such a small account balance.

You will have plenty of losses.

Losses are as much a part of trading as a win, in fact when you start out you will most likely have more losses than wins. Being able to deal with them and bouncing back from them is one the most sought after traits when it comes to being a trader. When you go into trading, you need to have an understanding that there will be a lot of losses, small ones, large ones, whichever ones they are, they will be there. People will only tell you of their wines and not their losses, so it may seem like they are few and far between, don’t take that for granted, there will be some, and lots of them.

So those are some of the truths about trading and forex, there are of course other things that you hear which may not quite be the truth, you will always hear the exaggerated truths from people who enjoy trading or want to get their hands on your money. We hope that we have opened up your eyes a little bit, trading can be incredibly life-changing and rewarding but do not get ahead of yourself and do not take things for granted. Work hard and you will be able to be successful.

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Beginners Forex Education Forex Basics

Eight Things That Can Prevent You From Trading Successfully

There are a lot of things that can be potentially holding you back from being successful, these can be both physical or mental things, there are always ways to overcome them, some easier than others, but there is always a way to overcome them. When you look at your trading career so far, you can […]

There are a lot of things that can be potentially holding you back from being successful, these can be both physical or mental things, there are always ways to overcome them, some easier than others, but there is always a way to overcome them. When you look at your trading career so far, you can […]

There are a lot of things that can be potentially holding you back from being successful, these can be both physical or mental things, there are always ways to overcome them, some easier than others, but there is always a way to overcome them. When you look at your trading career so far, you can probably think of a few points where things went wrong, or where you made a mistake, these all add up and can prevent success in the long run.

So we are going to be looking at some of the things that can cause trading to be a little harder than it should be, or things that you are doing that are making it harder than it has to be.

Not Enough Money

Starting with the most obvious one, if you are trying to trade with a balance of $100, there is next to no chance that you will be able to be successful, the more trading capital that you have, the more potential that you have to be successful, this is often through the ability to use much better and more realistic risk management tactics with your trading. When you have a small balance, even small movements in the markets can cause your account to blow and each trade will be risking quite a large proportion of your account balance. So having larger trading capital is vital to being a successful trader. Having said that, there have been successful traders starting with small amounts, but it is far harder and far less likely that you will succeed.

Live Trading too Early

When we start trading, we just want to get right into it to try and make some money, unfortunately, trading takes a bit longer than that, in fact, it should be taking you a few months before you jump into a live account at all. A mistake that a lot of new traders make is to try a live account straight away or after a week of using a demo account, this leads to some pretty quick losses which can then put someone off trading for quite a while, this is a reason why so many quit at the start of their trading careers. It is important that you only start on a live account when you are ready, when your plan is complete and you have tested it for a while, do not just jump straight into a live account, it will only end in losses.

Not Using a Demo Account

Similarly to the point above, you need to be using a demo account, and you need to be using it for quite a while before you even think about making any money. The demo account is there for you to test out your strategies and to ensure that you have got them working properly before actually risking any of your actual capital. It is vital that you use these accounts properly and use them to ensure that you are ready for live trading.

You Haven’t Created a Trading Plan

When you start off trading, one of the first things that you will be told is that you need to create a trading plan and a strategy. This strategy is full of information that is about the way that you will be trading and the strategy that you will be using. Without this trading plan, there is nothing keeping you in line and giving you certain rules to follow which are what you need to keep in order to ensure that your trades are good trades. Trading without a plan is called a bad trade, regardless of profit or loss, as a bad trade is more about luck rather than analysis. Ensure that you have a plan that has your trading strategy, risk management, and anything else that is involved in your trading.

Bad Risk Management

Risk management is one of the most vital parts of trading, it is what allows you to survive a number of losses in a row if you are trading without one, then even a single trade could potentially cause your account to blow. The risk management plan will include things such as the amount of your balance that you are able to risk with each trade, it also details how far your stop losses and profit levels should be. Without one of these, you are simply trading on borrowed time. Ensure that you put a lot of work and time into getting your risk management plan up to scratch and into a position where it can comfortably keep your account alive after a number of consecutive losses.

Letting Emotions Get the Better of You

There are a lot of emotions that come with trading, they can be relatively little things like being annoyed at a loss or a missed trading opportunity, but there are also some emotions that can cause you to make silly mistakes. Things like greed, overconfidence or simply wanting to win back lost money can cause a lot of issues. It is vital that you are able to control them, they often lead to making trades that either does not follow the trading plan that you are using, or they throw risk management out of the window, placing larger trades or more trades than you should be placing. If you allow these emotions to continue, they will ultimately cause you to risk too much candy can very easily make you blow your account. Keep emotions in check, if you feel like one is getting a bit too strong, then step away for a bit, take a break, clear your mind, and then come back.

Trading Too Much / Not Taking Breaks

Trading can take a long time, in fact, it can take up pretty much all of your time. There is an almost unlimited amount of information available and different ways to trade, so it is expected that you do not learn it all, but learning takes time, people seem to trade for hours on end, this can work for some, but for the majority, this will only cause stress. You need to be able to take regular breaks away from trading, do some sport, cooking, anything, as long as it clears your mind from the stresses and frustrations of trading. This is a vital part of keeping your mind fresh and healthy, your body will thank you for it at a later date.

Focus, Do Not Diversify too Much

We mentioned that there are incredible amounts of information on trading so you will not be able to learn it all, you need to be able to focus on the parts that are relevant for you. If your strategy is about a certain price movement, learn that first, do not look at other things, as soon as you do it will begin to confuse you and you may even start to get things mixed up that can lead to eros in your trading. Ensure that you focus on what you need to learn first, do not try to do too much at once or it will all be far too confusing and stressful.

So those are a few of the things that people often do or scenarios that can potentially prevent you from trading successfully, some can even throw you off track instantly. Ensure that you take things slowly, ensure that you have everything in the palace and your trading experience will be a lot more enjoyable, and a lot more successful.

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Beginners Forex Education Forex Basics

The Seven Worst Ways To Trade Forex

There are good strategies and there are bad strategies, there are smart ways to trade and there is, unfortunately, the not so smart way to trade. When you started out on your trading journey, you were probably told of a few things to avoid, this doesn’t, however, stop everyone, in fact, it is quite commonplace […]

There are good strategies and there are bad strategies, there are smart ways to trade and there is, unfortunately, the not so smart way to trade. When you started out on your trading journey, you were probably told of a few things to avoid, this doesn’t, however, stop everyone, in fact, it is quite commonplace […]

There are good strategies and there are bad strategies, there are smart ways to trade and there is, unfortunately, the not so smart way to trade. When you started out on your trading journey, you were probably told of a few things to avoid, this doesn’t, however, stop everyone, in fact, it is quite commonplace to see people doing things that any experienced trader or anyone with any sort of understanding of risk knows that you should not do.

So we are going to be looking at some of the more silly and certainly more risky ways of trading, they aren’t necessarily attached to a specific strategy, more of a mindset. So let’s look at some of the things that you should definitely try and avoid doing.

Trying to Pick the Tops and Bottoms

If it was possible to warm out where the top of a climb is or the bottom of a dip, then we would all be millionaires, then again, there wouldn’t be as many tops or bottoms around. It is never a good idea to wait until what you think is the top and bottom, the majority of the time you won’t be close. Instead, you need to get into the markets when your strategy tells you to. As soon as you try to guess the tops and bottoms, you will miss your entry, and the trade will no longer be a good one.

If you genuinely feel that it is the top or bottom, it can cause you to put on trades larger than your risk management plan details, this can put your account in danger and this form of overconfidence is never beneficial to an account. So stick to your strategy and don’t try to predict the tops and bottoms of the markets.

Trading Without a Plan

Something that a lot of newer traders do, or those that are simply too lazy to learn or develop their own trading strategies. This is one of the cardinal sins of trading, you need to have a plan, as soon as you trade without one you are on a slippery slope to gambling and ultimately lost accounts. Always have a plan, its best to have your own plan, but if you really can’t make one, at least take one from someone else, while you may not fully understand it and may not be able to adapt it to the changing markets, it will at least give you something to work on and not everything that you do will be complete guesswork.

Adding to Losing Trades

Have you been in a situation where you are in a trade, unfortunately, it has started to go the wrong way? If you have ever traded then you would have, but what is important is what you decided to do next. Did you:

A: Leave it.
B: Close it:
C: Add another position in the hope it turns around.

If you chose C then you made the mistake that we are looking at. If the trade started going the wrong way, it should be closing at your stop loss, adding to the position will just potentially increase your drawdown further, many people who add to positions will continue to add to it, as soon as you start doing that, it will continue to grow at an exponential rate and will eventually blow your account if there is an extended trend (which is more common than you may think.

This is such a dangerous way of trading and is known as either a martingale or grid strategy, it is something that you should be warned off very early into your trading career if you are thinking of doing this, don’t. Reevaluate your plan and work out where you are going wrong instead of just adding more trades to a losing position and hoping for the turnaround that may never actually come.

Guessing or Gambling

A lot of people like a good gamble, but you should stick to sports or the casino, forex, and trading really is not the place that you should be making those bets. If you are only interested in throwing your money at a certain outcome without any regard for anything else going on, then it would be better to avoid trading altogether. Trading is all about working out the probabilities and then seeing which side has the most and so which way the markets are more likely to move. Just randomly choosing a direction without knowing them is the same randomly betting on a football team while not knowing the players. The moral of the story is to simply not gamble, do not trade in this way, it will only lead to losing your account,

Blindly Following Others

If a random person walked up to you on the street and told you that the EURUSD market will move up, are you going to hear that and then suddenly trade it? Probably not, so why would you listen to some random person on the internet? If you blindly follow the suggestion from someone else, then you will literally have no idea why they are telling you to trade that way. What if things go wrong? What are you going to do? You do not know what the decisions behind entering this trade were, so you have no way of knowing how you should adjust it should the markets begin to change.

The other thing you need to think about is the fact that you do not know what the credentials are of the person making the trade. Have they been trading for a long time or is this literally their first week of reading? You have no idea, so it is a really risky thing to follow others without knowing anything about them or the trades that they are making.

Sending Money for Others to Trade

This is such a bad way to trade that it isn’t even classed as actual trading, however, it is something that a lot of people do. You have seen adverts all over the web, people asking for you to invest so they can trade your money, the only advice that there is would be to avoid giving any money to anyone, the moment you do it is lost, are they even real? Do they actually trade? You do not know so do not give your money to the, instead learn to trade yourself and you will at least know what your money is doing and what the strategy behind the trades are.

Increasing Lot Sizes

There are a few different strategies that actually revolve around this such as the martingale strategy, you have most likely heard about it before and have also probably been warned off of it too, and for good reason. As soon as you start to add additional lots sizes and trade sizes to each trade, you are increasing the danger to the account, each trade puts the account in danger and can potentially make you lose it all. Basic risk management will dictate that your trade sizes should not be increasing with every trade, instead, it will keep things steady, if that is good risk management then clearly constantly increasing the lot sizes is not good risk management, so it would be best to avoid this at all costs.

So those are some of the ways that you really should not be trading, if you find yourself doing them, reevaluate what it is that you are doing, step back and start again, you need to work via a strategy and not just trading whatever it is and however you feel, that will only lead to disaster.

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Beginners Forex Education Forex Basics

Five Actions That Can Ruin A Good Trade

Having a good trade idea is a fantastic position to be in, whether it comes from your own analysis, your own trading plans, a signal provider, a mentor, or anywhere else, a good trade idea is a good trade idea. Now that you have it, what do you do with it? You have it, you […]

Having a good trade idea is a fantastic position to be in, whether it comes from your own analysis, your own trading plans, a signal provider, a mentor, or anywhere else, a good trade idea is a good trade idea. Now that you have it, what do you do with it? You have it, you […]

Having a good trade idea is a fantastic position to be in, whether it comes from your own analysis, your own trading plans, a signal provider, a mentor, or anywhere else, a good trade idea is a good trade idea. Now that you have it, what do you do with it? You have it, you place it, and…. It goes wrong, you lose the trade. Why?

There are a number of different things that may have gone wrong, so we have come up with a few different things that you may have done that can cause a good trade to go bad.

#1 – Timing: A good trade is a good trade, but it won’t be a good trade forever, the markets are constantly moving and so are the entry and exit positions. More often than not you will head online and see someone posting analysis, the trade looks good, their analysis looks spot on so it must be a good trade right? Well at the time, yes, but we may be an hour or more later than when the analysis took place, so placing that trade now will put us in a position which is very different from the one suggested. It is important to take action as soon as the opportunity comes up, even with your own analysis, you are analyzing for that period in time and not for the future, so if you have the trade, ensure that you take it in a timely manner.

#2 – Lack of preparation: No matter where the trade idea comes from, it is important that you make the right preparations before actually taking the trade. Have you looked at the history of the pair? Has it changed since coming up with it? What is the price action like? Questions like these are required, you need to know the answers and they all need to point to the trade being active before actually making the trade. Do your own analysis on someone else’s trade signal and double-check your own before putting the trade on.

#3 – Risking too much: Most people will constantly go on about using proper risk management and for good reason. Not using good risk management can cause a good trade to go bad and it could potentially go very bad. When creating your trading plan, you should have worked out exactly how much you should risk per trade and also the size of the trades that you will use. No matter how good a trade setup is, a good trade will be instantly considered bad if the risk management is not properly adhered to. You are putting your account in danger because even the perfect setup could still lose, but it would still be considered a good trade if it loses but all other parts of the trading plan are kept in line with it.

#4 – Dwelling on previous trades: When you come up with a new trade idea, you need to give it 100%, if you are still thinking of the previous trades whether they won or lost, you are not giving the current trade the amount of attention that it requires. If you are not looking at it with 100% of your attention then there is a good chance that you may miss something, in fact, the chances of making a mistake go up dramatically. Coming off a previous loss can also cast doubt and cause you to hesitate when putting on another trade, this wastes valuable time and can potentially cause you to miss the timing completely when you do eventually put on a new trade, it’s no longer a good trade. The same can go for thinking of winning trades, it can give you a lot of confidence which could cause you to place the trade without fully satisfying the trading conditions required by your trading plan.

#5 – Not treating trading like a business: You have probably been told a number of times that you should be treating trading like a business, this puts you into the mindset and will help to make you far more responsible for your trading. When we are using our own money we are far more likely to add a little extra or to place trades that we would not normally trade, so keeping things professional will help us to avoid those pitfalls.

So those are a few things that can ruin a good trade, it is important to place your trades in a timely manner and only if they are in line with your risk management and trading plans, that way, you can ensure that any good trades that you analyze or come across, you can place with confidence knowing that they are all good trades.

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Beginners Forex Education Forex Basics

Is Forex Really Just a Game of Probabilities?

Many things in life are all about probabilities, forex is no different. The most well-known game of chance is the simple coin flip, it is thrown up into the air and you need to say whether it will land on heads or tales, a 50 50 chance, breaking down the markets into their basic form, […]

Many things in life are all about probabilities, forex is no different. The most well-known game of chance is the simple coin flip, it is thrown up into the air and you need to say whether it will land on heads or tales, a 50 50 chance, breaking down the markets into their basic form, […]

Many things in life are all about probabilities, forex is no different. The most well-known game of chance is the simple coin flip, it is thrown up into the air and you need to say whether it will land on heads or tales, a 50 50 chance, breaking down the markets into their basic form, there are only two possibilities on the direction that the markets will move, there is a 50% chance that the price will rise, and a 50% chance that the price will fall, but it isn’t that straight forward.

Every aspect of analysis within the forex markets adds a little probability one way or another, so the analysis is all about finding all the possibilities that there are and putting them on either the buy-side or the sell-side.

So what sorts of things could be seen as these probabilities? Well, everything, the current trend, news events that are coming up, the market sentiment, any analysis tools that you are using such as Bollinger Bands, Fibonacci levels and so forth all add to the probabilities that you have.

Probabilities also come into your trades, you have spent time creating that strategy that you are using, it has a 70/30 win/loss ration, so with the current market conditions you have a 70 probability of a win, you may lose two or three trades in a row, but the law of probability will dictate that you will win enough to bring your ratio back up to 70/30. One bit of newbie psychology is that a lot can put a dent into your confidence and can make you doubt the strategy, but looking at it from a mathematical perspective, you are in good shape for profits and will continue to win.

Being able to think of trading as a game of numbers rather than your actual money is the best way going forward, this will allow you to concentrate only on those probabilities in the long run and not individual wins and losses. Professional traders are not worried about the next trade winning or losing. What they care about is making money long term and over time. They want to maximize their profits by thinking in probabilities. Your edge, applied with consistency, should allow you to inch the probabilities of a winning trade slightly in your favor, this alone is what will allow you to win over time.

We know it is hard, but look at trading as small sections of probabilities, it will help to improve your trading and also help to take some of the emotion out of it.

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Beginners Forex Education Forex Basics

Are You Using these Excuses to Avoid Trading?

Actually starting a task is often seen as the hardest part, once you have gotten going, things are pretty easy. So why do we find it so hard to actually start a task? Why do we always look for excuses to do the housework or some exercise? These excuses do not avoid trading either, there […]

Actually starting a task is often seen as the hardest part, once you have gotten going, things are pretty easy. So why do we find it so hard to actually start a task? Why do we always look for excuses to do the housework or some exercise? These excuses do not avoid trading either, there […]

Actually starting a task is often seen as the hardest part, once you have gotten going, things are pretty easy. So why do we find it so hard to actually start a task? Why do we always look for excuses to do the housework or some exercise? These excuses do not avoid trading either, there are a number of different excuses that people use to stop themselves from starting to trade, either actually trading or beginning to learn about it. So let’s take a look at some of the more common excuses that people make in order to avoid trading.

Not Enough Money

This is one of the more acceptable excuses, not having enough money could make it impossible to actually start trading, what it doesn’t do though, is prevent you from learning, considering that learning is the first part of trading, there is no reason why you cannot begin doing this while you save up some money. As the years’ progress, however, the excuse of not having enough money has become almost obsolete, there are brokers allowing you to open up accounts with just $10, we know that you cannot execute proper risk management with such a small account, but it is a way to begin and to get a feel for the live markets.

Not Enough Time

When you talk to a professional trader, they will often tell you how long they have to trade each day, how much of their time it takes up just for them to break even. This may be true for those that are doing it full time, but when starting out you are not going to be looking to make up your wage, you are simply there to learn. There is more than enough time to dip your toes in after a usual job, spending an hour or two per day is more than enough to analyse the markets and put some trades on, once the trades are on with a stop loss and a take profit, there is no need for you to stick around, get on with whatever it is that you need to do and allow the trade to do its thing. Yes, you need a lot of time to be a professional, but certainly not if you are just starting out as a beginner.

It’s Too Complicated

I would agree with this statement if there weren’t 1,000 different user-friendly resources out there that can teach you pretty much every aspect of trading. If you were just thrown into the markets with no information, then yes, it being too complicated would be a very valid excuse, but in this day and age, the excuse is no longer valid due to the resources out there. In fact, there are courses that walk you through the trades in person, there can’t be anything more straight forward than that.

Trading is all about learning, taking time to read and understand what is going on before jumping int other markets will help things seem a lot less complicated, any guide or advice would be to learn and demo before going live. Doing this will help you understand what is going on and everything will be a lot clearer for you, read, learn, and then trade, nothing complicated about that.

It’s Gambling

One of the misconceptions is that trading is a form of gambling, from the outside it looks like the markets can just go up or down, of course, in reality, there are far more probabilities that you need to take into account which tips things in one favour or another, there are reasons why the markets move and knowing them greatly reduces the risks. Of course, there are some risks, but there are also a number of different risk management techniques available that people can use to reduce the potential risk that they are in and to protect their accounts. So from the outside, it may look risky and like gambling, but once you gain an actual understanding of what is going on, it is clear that there is an amount of strategy behind it, if there want then why would there be so many different strategies out there? Don’t forget that there is risk in everything you do in life from crossing the road to trading the markets, life is about mitigating those risks and this is more than possible with trading too.

It’s a Scam!

More often than not, things that involve money that you do not necessarily understand would be classed as a scam, it is too good to be true and so it is a scam. However, with a little learning and knowledge of what trading is, you will understand that it is not a scam. A lot of people who jump in and then lose will call it a scam, but this is simply down to their lack of understanding about what they were doing and how things work. Many brokers out there are regulated by various different regulatory bodies based all around the world, these pout restrictions on what brokers can do and also offer certain protections for your money, why would there be government-backed agencies regulating something that is considered a scam?

Having said that, there are scams out there, certain trading systems or products that promise to make you money in trading, some are real, some are not, so it is best to avoid them outright, if you put the effort in and learn how trading works so you can trade yourself, trading is certainly not a scam and not something that you should avoid just because you think it could be too good to be true.

So those are a few of the reasons why people may try to avoid trading or starting to trade, while from the outside they do seem like valid concerns, in reality, they are not, trading is becoming more and more accessible and easy to pick up, the only person or thing preventing you from trading is you. So if you are thinking of trading, jump in, start reading, its easy, quick, and free to learn and use a demo account.

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Beginners Forex Education Forex Basics

Forex Ponzi Schemes To Be On the Look Out For

You have probably heard about Ponzi schemes or at least the fact that a lot of people have lost a lot of money to them. To the outside world, they are an opportunity to make a lot of money very quickly, however in reality they are a ticking time bomb that will only make money […]

You have probably heard about Ponzi schemes or at least the fact that a lot of people have lost a lot of money to them. To the outside world, they are an opportunity to make a lot of money very quickly, however in reality they are a ticking time bomb that will only make money […]

You have probably heard about Ponzi schemes or at least the fact that a lot of people have lost a lot of money to them. To the outside world, they are an opportunity to make a lot of money very quickly, however in reality they are a ticking time bomb that will only make money for the owner and no one else.

A Ponzi scheme is basically a financial service or activity that aims to give you a very high above market return on your investment. In reality, they simply use investments from newer investors to pay the older ones. The percentage being offered is often far beyond anything reasonable with things like 1% to 5% per day being offered. A Ponzi scheme will ultimately fail once the number of investors starts to slow down, at this point, they are no longer able to payout the earlier investors, at this point the owner normally shuts up shop and runs, leaving all those that have invested with the loss.

So how do you tell whether something might be a Poni scheme? There are a number of warning signs that you should look out for, some of them include the following.

Guaranteed High Returns – Anything that is offering you guaranteed returns is a bit of a red flag, what makes it even more obvious is when the returns are far higher than most reputable places such as banks or building societies.

Consistent Returns – If you have already traded, you will know that you do not make exactly 1% per day or week, each day is different as it depends on the markets, so when someone is offering the exact same return every day it can send out a few warning signals.

Not Licensed – The majority of Ponzi schemes will not have any regulations around them and they won’t have been registered with any governing bodies, so if you are thinking of investing somewhere, be sure to take a look to see if they are in fact regulated, you could also call the regulator to double-check as some have been known to put that they are regulated even when they are not.

No Information Of Strategy Or Process – If a scheme is using the Ponzi method of paying their investors, then there may not actually be a strategy or process available. Not knowing how they will be generating their money to pay back investors should be a huge red flag and something that should certainly make you think twice.

So what makes a Ponzi scheme different from a Pyramid scheme? Both are primarily built around the idea of recruiting new people into the system in order to make money, both often have a product attached to it which is pretty much nonexistent or useless to the customer. The main difference between the two is that for a Pyramid scheme, recruitment is done at all levels, while with a Ponzi scheme, it is normally just those at the top that do the recruitment. So there isn’t much difference between them, and they should both be avoided as much as each other.

If you are ever in doubt or you see any of the warning signs, the best advice that you can be given is to stop and find something else, investing into such a scheme will only result in a loss of everything you have put in.

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Beginners Forex Education Forex Basics

Things that Forex Traders Take for Granted

When you start out with trading, you are often given quite a few different tips and anecdotes that people tell you. These are often things that are to do with your trading to things that you should be looking out for. They are more than helpful and they are things that you should always keep […]

When you start out with trading, you are often given quite a few different tips and anecdotes that people tell you. These are often things that are to do with your trading to things that you should be looking out for. They are more than helpful and they are things that you should always keep […]

When you start out with trading, you are often given quite a few different tips and anecdotes that people tell you. These are often things that are to do with your trading to things that you should be looking out for. They are more than helpful and they are things that you should always keep in mind, the problem is that when we have been trading for a while we often lose sight of them, or stop putting as much effort or sometimes simply ignore them completely which can have an overall negative effect on your trading. We are going to be looking into some of the things that traders take for granted but really shouldn’t.

One of the major things that traders often take for granted is the importance of proper risk management, it really doesn’t matter if you are new or an experienced trade risk management should have been ingrained into your mind. The problem is that as you see others making a lot more money or many extra pips each month, it can make you want to grab some of those yourself. It would be great getting all those pips right? The problem is that you are not currently in a situation to do this, so the only way for you to achieve that in a short amount of time is to throw your risk management out of the window, something that we know can have disastrous effects on your account and trading strategy.

So why is it that so many traders seem to forget about the importance of it? It can come from a few things, greed, envy, and overconfidence are the main three. They can all make you want more and to want to make more quickly. It is important that you are able to stick to the plan that you originally created, understand that it is paramount that you stick to it, it should always be one of the main things that you are thinking about when you trade and should never be put on the backfoot, so whatever you do, do not take your risk management plan for granted, it will only lead to disaster and the potential loss of your profits and even your entire account.

When you started trading you would have created a trading plan, much like any other person would have been instructed and recommended to do. That trading plan is what details everything about your trading, the entry requirements, the exit requirements, the risk management that you have in place, and your risk and reward ratios. This plan should be the thing that you follow for every trade, but you will be surprised at how many people take this for granted and begin to make trades that are notably in line with their trading plan.

When this starts to happen, things can begin to go downhill pretty quickly, and that is not a position that you want to be in. Your plan is there for a reason, your entry requirements are there for a reason, as soon as you start moving away from it you are making bad trades. People take their plans for granted and they also take for grants the reason why they have this trading plan. It is there to be followed so it is important that you follow it, if you don’t and you take it for granted, a good chance that you will begin to make some of the more common trading mistakes.

Another thing that people often take for granted is consistency, consistency is one of the most important things that can help to make or break a trader and a trading plan. Many traders completely underestimate the importance of staying consistent and sticking with your trading plan. Consistency is what allows a strategy to be profitable and to remain profitable over a longer period of time. Consistency also allows you to learn more about their own mentalities and the system that they are using. Consistency also allows traders to keep their results more consistent, as soon as you break that consistency you are skewing the results of your trades and account, you are also potentially putting your account in some additional risk which will ultimately only lead to losses in the long run.

There are also those that make things a little bit too complicated, keeping things simple can often make your life a lot easier and your overall trading experience a lot more enjoyable. When you start to overcomplicate things wither through too much analysis by looking a little too deep into the numbers, then things can begin to confuse you, you will begin to see contradicting information which can either confuse you or make it hard to actually make a trade. Try to keep things simple, use your basic analysis, and the requirements of your trading strategy only, do not try to add too many different variables into it. Keep things simple, do not take the simplicity for granted by adding a large number of additional variables or requirements, this I’ll only make your trading less fun and more tiresome.

The dangers and also your expectations can kind of be looked at with the same stroke. When we are starting out, we often make some expectations that are a little too high, a little bit unrealistic and we take for granted how important it is to set our expectations to a more reasonable and at an actual achievable level. Without doing this we are putting ourselves in a position where we may not actually be able to achieve what we want and this will only lead to disappointment and a loss of motivation. You need to set your goals at a level that you are able to achieve within a set timeframe, where you are able to measure it and also at a level that is realistic to your current skill and knowledge level. These goals cannot be to make $1,000,000 overnight, as that just won’t happen, see them properly and you will continue to have the motivation to reach them as well as being able to see the progress towards them, which is vital for someone working towards any sort of goal in their life.

So those are just some of the things that [people seem to take for granted, often on a subconscious level, they look past them or completely ignore them in their pursuit of better profits or better results. It is important that you never take the things that you have learned for granted, always use them in your everyday trading, use them to develop your own trading skills, and use them to help you remain profitable and consistent. Taking things for granted at any time in your life will put you in danger and this is very true for things like trading in forex, taking things for granted and you are risking your account and any money that your currency has in it.

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Beginners Forex Education Forex Basics

What You Can Expect to Learn During Your First Year of Trading

When you are just starting out, you don’t really know too much about trading, after a year, we would hope that you know a little bit more. There are a number of things that you only really learn by actually trading, reading and studying the markets is a fantastic way to start, but there really […]

When you are just starting out, you don’t really know too much about trading, after a year, we would hope that you know a little bit more. There are a number of things that you only really learn by actually trading, reading and studying the markets is a fantastic way to start, but there really […]

When you are just starting out, you don’t really know too much about trading, after a year, we would hope that you know a little bit more. There are a number of things that you only really learn by actually trading, reading and studying the markets is a fantastic way to start, but there really is no substitute to the experience and learning that you get from actually trading.

So now we are looking at a few different things that you only really learn from trading and hopefully things that you would have learned within the first year of your trading experience.

Sticking to Your Trading Plan

This was most likely drilled into your mind before you actually started trading, but as you actually trade and as you make mistakes, this should have been cemented in there. Every single mistake that you made, and you would have probably made a lot of them, would have reminded you that you should be sticking to the plan that you created.

Your guidelines and rules are there for the reason of keeping you on track, ensuring that you remain profitable even with losing trades. After a year, you will know exactly how it feels to lose and how it feels to win, you would have experienced what happens when you break one of your trading rules and you will know what it feels like to win. Sticking to your plan is how you remain profitable and win in the long run, after a year of trading you know this and so find it a lot easier to stick to that plan.

Of course, with the year of experience, your plan will be at a much better stage than it was when you started, as you trade you would have continued to adapted it, continuing to change things for the better so that the overall results that it produces are of a much higher standard. Something that only comes with experience and actual trading.

Being More Patient and Having Discipline

One of the hardest things to learn when trading is the discipline and patience that you need in order to trade successfully. When you first started out, you could have had all the excitement and enthusiasm that comes with starting something new, especially when it could potentially make you some money. When you are in these early stages it would have been quite hard to keep yourself in check, to prevent yourself from putting on additional trades through either excitement, greed, or overconfidence.

After a year of trading, you should have learned how to better control those emotions. You are far more disciplined, able to restrain yourself, and not put on any trades that you should otherwise not be putting on. You have a much better understanding that trading is a marathon and not a sprint, so you are able to wait out the markets for the correct conditions to be met, this is such a vital skill and it should have developed nicely after a year of active trading.

Better Risk Management

When you first start trading, you understand what risk management is, but you don’t necessarily know how to implement it properly. A year of trading would have helped you to work it out, mainly through mistakes and learning from getting things wrong. You should now have a really good understanding of how it works and the different methods available to you for keeping your account safe. The fact that your account is still running after a year shows that you have a decent grasp of what risk management is and how it works. You would have worked out the optimum stop loss positions as well as take profit levels for your strategy and also the best trade sizes for your balance. Your overall risk management would have improved and so your account should be a lot safer compared to a year ago when you first started out.

Listening to Others

When you first start out, it is easy to listen to those that you perceive to have more experience than you, however, after a while of listening to people and seeing that their predictions aren’t quite as magical as they initially seemed to be, you will begin to become a little wearier of listening to others. Instead after a year, you are far more confident in your own abilities to analyze the markets and to trust in your own judgment. Listening to others only leads to muddled analysis or bad trading signals, and after a year you will know this first hand and trust your own abilities over those of others.

Treating Trading Like a Business

As a new trader, you would have started your journey full of excitement and willingness to both learn and earn. At that stage of your trading career, you would have been excited, and thus a little bit too eager to put in your money and place some trades. Over the past year of trading, you would have matured in your trading and your outlook. Now you will be treating trading much more like a business. You will be looking deeper into each trade, taking more time to plan your trades and the risk management that goes with it and will be a lot warier of the potential risks of each trade. You will now be looking at trading as a business for your future, rather than a quick way to make a little extra money.

Additional (and More Complex) Strategies

When starting, you would have been concentrating on a single strategy, ensuring that you have an understanding of how it works., The issue with this is that it will only work with specific trading conditions. Now that you have been trading for a year, you would have picked up some knowledge of a number of different strategies that will allow you to trade in multiple different market conditions. This will give you a lot more flexibility and the ability to be profitable at more times during the day, week, month, and year.

So those are a few different things that you may well have learned from your first year of trading. You would have been through a lot of things, learned a lot of new techniques, and had the chance to develop your own understanding and methods for trading. Hopefully, you should be able to see the progress that you have made and can use that as an encouragement to continue to improve and learn over the next coming year.

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Beginners Forex Education Forex Basics

The Importance of Being Consistent While Trading Forex

Just like with many things in life, being consistent in what you do can pay off, and deviating from your standard routine and style can leade to disaster. While it may be valid for most things in life, achieving it within the forex trading markets is far easier said than done. When starting out, you […]

Just like with many things in life, being consistent in what you do can pay off, and deviating from your standard routine and style can leade to disaster. While it may be valid for most things in life, achieving it within the forex trading markets is far easier said than done. When starting out, you […]

Just like with many things in life, being consistent in what you do can pay off, and deviating from your standard routine and style can leade to disaster. While it may be valid for most things in life, achieving it within the forex trading markets is far easier said than done.

When starting out, you will often be told that you need to find your own strategy, you need to stick to your plan and that you should not trade outside of it. These are all fantastic tips for staying consistent, but they do not really help you to do it, as the temptation to deviate can get the best of us into trouble within the choppy waters of the forex markets.

So why is it so important to stay consistent?

To put it simply, it helps you to maintain your strategy, your confidence, and your results. Let’s imagine that you have just spent the last six months perfecting your very own strategy, you use a number of entry criteria and a number of different exit criteria which are all based on certain patterns or values within the markets. You put it into practice and have now started making small, but consistent profit, for the sake of this example, let’s say £100 per week.

You are using a fixed lot size of 0.1 lots for each trade, and risk a maximum of 2% of your account per trade. You have now been making £100 per week for about two months, which is fantastic, but you want to scale up. How would you do this? Many would simply increase their lot sizes. However, you need to consider how this affects your risk to reward ratio, remember that your strategy only risks 2% of your account if you double the lot sizes to 0.2 lots, this increases the risk percentage, or the stop losses become shorter, wither way, your strategy has changed. So now your stop losses are shorter, trades have started to close in losses.

You have very set entry requirements, there are four or five that need to be met, they have been very accurate and very profitable, but the markets have not been optimal for your strategy, there have not been any trades for a few trading days. Would you stick to your plan and wait, or has the idea of making more profit got the better of you? You change your strategy slightly and get into some trades, but something did not match your criteria, now some trades are going up and some down, you broke your plan, and things aren’t going how you are used to, this can negatively affect your own psychology.

Even when sticking to your plan, there will be losses, it is important that you do not let this change the way you are trading, five profitable trades and a loss is still fantastic going, far better than many would do, so a few losses are simply the markets telling you not to get too confident, but rest assured that your plan is working.

Should you decide to change something, test it out on a demo account first, when you are sure the changes are effective, change them for all future trades, not just one or two, being consistent in your changes is also important.

Having these rules of trading is set by yourself and no one else, often these rules are created from mistakes, and as we all know, a mistake is the best learning tool. So when starting out, experiment, do things a little differently to find those rules, but once you have them, stick to them, you will thank yourself, and your account balance will thank you too.

The moral of the story is to simply stick to your plan, be consistent, and do not change things just because you want more or you are bored.

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Beginners Forex Education Forex Basics

Why Am I Not Reaching My Trading Goals? Here’s Why…

The first thing that I want to ask you is whether or not you actually have any trading aims? You would be surprised at how many people have not actually made any when we start out trading, there is often an overall target that we want to achieve. For some, it will be to be […]

The first thing that I want to ask you is whether or not you actually have any trading aims? You would be surprised at how many people have not actually made any when we start out trading, there is often an overall target that we want to achieve. For some, it will be to be […]

The first thing that I want to ask you is whether or not you actually have any trading aims? You would be surprised at how many people have not actually made any when we start out trading, there is often an overall target that we want to achieve. For some, it will be to be able to quit their job. For others, it may be to make $1,000,000 overnight, some will be far more modest than others, just to make an extra $100 a month as spending money. Some will be far more realistic than others, but what is important is that you have one and that you have defined them.

It is important to ensure that you have defined your aims and goals properly, these should be set out in a way that makes them easy to understand and that they are achievable. There is no point putting down that you want to be a millionaire when you are starting from $100. It could be your overall aim, but you need to have stages along the way, make your first $100, the first $10,000, become risk-free (remove initial money) and so forth, these are what you will be doing at different milestones and these are what you will be aiming for rather than the overall millionaire status.

So this leads us to the first reason why you may not be achieving your aim, they are simply too big and too ambitious. As we mentioned above, there is no point setting your only aim as $10,000,000 profit, it may happen one day but that won’t be for a long time, if you set things too high they will not be achievable in a sensible timeframe. Set your aims lower, at least the initial ones, they need to be achievable, even if it may seem pretty low and potentially easy compared to your overall aim.

The next thing that you need to consider is whether or not you have a trading plan that goes along with the aims that you want to achieve. There is no point in having a goal to create a trading plan if you are just going to copy other people’s trades. Whatever your aim is, you need to be able to set out a plan which will detail how you are going to achieve it, this should contain the steps that you need to take and by what time you are wanting to achieve them. Ensure that the plan and the aims within it are achievable, have a timed deadline and that they are relevant to what you want to achieve.

Leading on from the previous point, you need to be able to show some dedication and commitment to the trading plan and the aims that you have created. Sometimes it can be pretty hard to keep doing something especially if it is not going the way that you want it to. Q lot of traders will quit after a number of losses in a row, or completely change their trading plan and style. It is important that you are able to stick with it, through both the good and the bad times, and there will be bad times. Being able to remain on track and following your plan will allow you to get through those hard times and your results will be much more in line with the expected results that you detailed when creating the plan in the first place. Sticking to the plan will make your aims and targets much more achievable and much more realistic to reach them.

How about distractions, are you easily distracted? We are not thinking about the TV or the person sitting next to you, they can of course put you off your trading game, but we are talking about distractions from your trading aims. You have them set, but you are on your way to achieving one and suddenly you think of something else, you want to alter those goals to something else,l but everything has been set up to achieve this, so do not let these new thoughts get in the way of your trading and to get in the way of the achieving those aims. Once you have made your goals, set your sights on them, and do not let anything make you doubt or change them. You set them for a reason, remember that reason and remember those goals, do not change them partway through as it can completely throw your trading game out of sync.

It is important to take breaks when trading, to move away from the markets in order to clear your mind, but what it is not ok to do is to take breaks from your aims and your trading plan. Every trade that you make should be with your trading plan in mind, you should be making each one in order to get a little closer to achieving that target. Do not take a break from this and make trades that are nothing to do with then, based on a gamble, a thought, or simply for fun. This will only take you further from achieving your target and will put your account in additional risk. Stick to your plan, stick to your aims, and keep your trades focused on them.

Something else that can really make you lose track of your targets and certainly make them harder to achieve is if you are not tracking them. Tracking your aims and your progress towards them can give you a lot of motivation. In fact, it can help push you to follow them and push yourself to achieve them. Where the issue comes from is when you are not tracking them, how will you know how close you are to the target if you are not marking down each result or where you are in relation to it? This can cause you to lose focus and also a lot of motivation for it. Regularly revisiting your results and your progress towards your aims are paramount to actually achieving them.

The last thing that we wanted to look into is the fact that some people look at their target as a quick thing, where in reality, your targets should be a marathon and not a sprint. Take your time to achieve your targets, as soon as you begin to try and rush them, mistakes will be made which will only take you further and further away from achieving the goals. Be sure that you take your time, one step at a time and you’ll be in a much better position and mindset for achieving your targets.

So those are a few of the things that could be causing you to miss out on this target, remember to set them in a way that they can actually be achieved and that they are measurable. Stay focused on them, do not get distracted and you will be in a fantastic position to achieve them or at least to be on the right track to achieve them down the line.

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Beginners Forex Education Forex Basics

Reasons Not to Compare Yourself to Other Traders

This is all about distractions and is relevant to any aspect of life. People often look at others to see how they are doing, are they doing better than me? Are they making more money than me? Do they look better than me? The main question we should be asking is “How am I doing?”. […]

This is all about distractions and is relevant to any aspect of life. People often look at others to see how they are doing, are they doing better than me? Are they making more money than me? Do they look better than me? The main question we should be asking is “How am I doing?”. […]

This is all about distractions and is relevant to any aspect of life. People often look at others to see how they are doing, are they doing better than me? Are they making more money than me? Do they look better than me? The main question we should be asking is “How am I doing?”. It shouldn’t matter what others are doing or what trades they are taking, so why are we obsessed with comparing ourselves with them?

There are those of us that look to others for inspiration, this is not a bad thing within itself, gaining inspiration can give you the motivation to try harder, to work harder and to achieve more, but at what point does that become an obsession or when does it start to turn unhealthy? Generally speaking, when we gain inspiration we begin to try and mimic certain things that they are doing, in regards to trading, it may be the trades that they are taking or to try and mimic the profits that they are making.

The thing that we forget is that they have years more experience than yus, they also most likely have a much larger starting bank, so being able to mimic them is impossible, you won’t be learning about why they are making the trades, just blindly following. So what would happen if they stopped? You would stop too and you would have no knowledge or experience to fall back on, this is why it is important to learn along the way, and not blindly follow.

Some may look to others for competition, there is nothing unhealthy about a little competition, you and your friends want to see who can make the most pips, the most profits or to just have the most accurate trades. This in itself is not bad, however, if you are a very competitive person, you may start looking at the results of your competition and then doing things outside of your proven strategy to try and beat them, taking extra trades, larger trade sizes or anything else, these can lead to disaster and take away all the hard work that you have achieved. Stick to your own plan, even ina competition, it has worked for you before and it will work for you again.

If you are observing others who are making tons of money, more than you can imagine, it can have both a positive and negative effect, we spoke about the inspiration, but there is also the negative elements of jealousy or demotivation. Seeing someone else do well can make you want to give up, “Why can they do it but I can’t?”. This can lead to either you giving up completely, or taking rash and dangerous trading experiences.

All of these things are important reasons why you should concentrate on your own trading, don’t worry about others, its fine to look around and see what people are trading, but it is important that you understand why they are trading it and not just what they are trading. Stick to your own plan, has it been working in the past? If yes then there is nothing to change, it does not matter how someone else is doing, as long as you are working to your own strategy and improving your own abilities, that is all that is needed.

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Beginners Forex Education Forex Basics

Losing Trades: What They Have to Teach You

You have probably heard it before, a losing trade is the best teacher, but what does this actually mean and who does it apply to? Well, it applies to everyone and it is actually true, a losing trade can tell you a lot about what went wrong, and using that information can help you to […]

You have probably heard it before, a losing trade is the best teacher, but what does this actually mean and who does it apply to? Well, it applies to everyone and it is actually true, a losing trade can tell you a lot about what went wrong, and using that information can help you to […]

You have probably heard it before, a losing trade is the best teacher, but what does this actually mean and who does it apply to? Well, it applies to everyone and it is actually true, a losing trade can tell you a lot about what went wrong, and using that information can help you to adapt your strategy and can even be a lesson to stick to it.

It should be pointed out that this will only work if you are keeping a trading journal, this journal will detail different aspects of why you entered the trade, what the conditions were like, what the entry criteria were, stop losses, take profits, what happened in the markets and many more aspects, using this information we can look at exactly what went wrong, so be sure to record each aspect of what you are doing, you won’t regret it.

Having a bad trade does not necessarily mean that you lost a lot of money, in fact, some winning trades could be considered bad, especially if they go against the strategy that you are meant to be using.

When a trade goes the wrong way and hits your stop loss (because you are obviously using stop losses), we need to know why that happened, was your entry criteria not fully met? Was there some economic news that you did not know was coming? We need to ask questions like that and with the aid of your trading journal, it will make it far easier to pinpoint the exact place where the trade went wrong. We won’t always win, and the markets won’t always react in a predictable manner to some news, so understanding what you have done is paramount for your own learning.

Sometimes a trade may go well and you make a profit, however, if you did not stick to your strategy, it was mainly just luck that it didn’t go the wrong way. Have a look at the reasons why you deviated from the strategy, were you distracted? Were you bored? Any of these reasons is not a good reason to get into the trade, use this as a reminder, you got lucky, but you need to stick to your plan.

We have all been in that situation where we did something and we either automatically regrets it straight after putting in the trade, or a day later wonder why we did it. Askingthr4se questions and consulting your trading journals will help you answer these questions adn hopefully allow you to avoid making the same bad trades in the future.

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Beginners Forex Education Forex Basics

Trading Quotes To Help Focus Your Mind

You often see quotes thrown about the place that sounds really wise or helpful, but a lot of people throwing them out there are doing it because they simply sound cool, but they don’t necessarily understand the meaning of those quotes. There is often a reason behind each one and some of them will resonate […]

You often see quotes thrown about the place that sounds really wise or helpful, but a lot of people throwing them out there are doing it because they simply sound cool, but they don’t necessarily understand the meaning of those quotes. There is often a reason behind each one and some of them will resonate […]

You often see quotes thrown about the place that sounds really wise or helpful, but a lot of people throwing them out there are doing it because they simply sound cool, but they don’t necessarily understand the meaning of those quotes. There is often a reason behind each one and some of them will resonate with you a lot more than others will. We are going to be taking a look at a few quotes that could help to focus your mind or to help motivate you to learn and become a better trader.

“Trading doesn’t just reveal your character, it also builds it if you stay in the game long enough.”
― Yvan Byeajee.

This quote really hits home for those that have attempted trading and then found that it really is not for them. Trading is a hard and stressful job or hobby, many come into it and find that it just does not suit their style or personality. Those that manage to stick with it are developing different skills, things like patience and determination, and that is what this quote is talking about, the building of those skills as you trade for longer periods of time.

“Confidence is not “I will profit on this trade.” Confidence is “I will be fine if I don’t profit from this trade.”
― Yvan Byeajee

There are different versions of confidence, one that many people see is the confidence that any trade that you make will be successful, this certainly is a form of confidence, but then it comes to trading, this mentality can be dangerous and can very easily lead to bad trades and losses. The confidence that this quote refers to is the confidence in your strategy and your risk management. If you are able to take losses and it does not affect your psychology or have a negative effect on your overall strategy then you have confidence in your trading and your trading plan. This is the position you want to be in, to have the understanding that your strategy is good and is working, which in turn keeps you under less stress and pressure.

“The goal of a successful trader is to make the best trades. Money is secondary.”
– Alexander Elder

When you first start out in trading you would have hopefully created a trading plan which details all of your own rules for trading. This is the most important thing to follow, you will not start out making money, but each time you make a trade using your rules, then you are making good trades. Do it for long enough, hone your god trades and you will become profitable, too many people focus only on the money and the profits. This then leads to bad trades and ultimately losses. Concentrate on making good trades and then profits will follow.

“Yesterday’s home runs don’t win today’s games.”
– Babe Ruth

Taken from Baseball but very relevant to trading. Whatever happened yesterday, is irrelevant to what you will do and trade today. If you had a fantastic day yesterday, it does not automatically mean that you will have a good day today, the same goes for a bad day, having one does not mean that the next day will be a bad one too. You need to focus on the present, use the past as a learning tool but do not use it to make your trades today. Treat each day as an individual day and trade on the merit of that day, not the past days.

“The biggest risk is not taking a risk. In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”
– Mark Zuckerberg

Every trade is a risk, no matter how well you have planned it or how good the probabilities are, there is always an essence of risk involved. This does not necessarily mean it’s a bad thing though, if you want to be successful you need to take risks, every successful person ( apart from those born into it) has taken risks in order to get to the stage that they are currently at. What is important is that you control those risks, put things in place in order to help mitigate the downsides to that risk, control it and you can be successful too

“In order to succeed, you first have to be willing to experience failure.”
― Yvan Byeajee

We have touched on this briefly before, but in order to become a successful trader, you need to be able to both experience and tolerate loss. If a loss causes you to stress out and worry, then trading may not be for you. Your trading plan should support losses, it should enable you to get through them without much loss. Once you can accept losses you ‘ll be in a much better position for becoming profitable and successful in the future.

“You will never find fulfillment trading the markets if you don’t learn to appreciate and be satisfied with what you already have.”
― Yvan Byeajee

This quote is looking more towards those that suffer from greed, always wanting more than you have. You need to be able to appreciate what you have already, the money you have made, and then to be appreciative and to have acceptance of it. Asking for too much creates additional risks to you and your account. Do not let greed take over and constantly want more, if you do this, it will lead to bad trades and ultimately losses.

“Win, lose whatever emerges in the short-term, place and manage your next trades untouched, unattached… always keeping your eyes on the long-term picture.”
― Yvan Byeajee

This is again touching on the fact that your previous trades, in or loose should not influence your next trade. Every single trade is an individual, it should be analyzed, separated, and placed separately, nothing to do with each other, completely independent. Do not let the emotions from the previous trade sway your other trades, stick to the plan you made.

“It is not the strongest or the most intelligent who will survive but those who can best manage change.”
– Charles Darwin

The forex markets are constantly changing, they can change at any time, the next week, the next day, the next hour or even the next minute. What will make you successful at trading is having the ability to adapt to those changes, as soon as you are able to do that, you will be able to keep up with the markets which will give you a lot more opportunities to be successful as a trader. Those that stay rigid and are not willing to adapt their strategies will eventually get into a situation where the markets have changed and their strategy no longer works, this will lead to losses. So it is vital that you are able to change yourself when the things around you change.

So those are some of the quotes that are relevant to us as traders, they should help you to get a better understanding of how people think and how certain mentalities help us to become a more successful trader. Of course, not all of them may be relevant to you, but hopefully, it has given you a better insight into how you trade yourself and could have helped you to understand what you may need to change in order to be the success that you want to be.

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Beginners Forex Education Forex Basics

Trading Expectations That You Should Avoid

When you set out onto your forex and trading journey, you would have most likely set yourself a number of different expectations, either from what you have seen online or that are in line with what you wish to get out of trading. What is important is what the expectations that we set ourselves actually […]

When you set out onto your forex and trading journey, you would have most likely set yourself a number of different expectations, either from what you have seen online or that are in line with what you wish to get out of trading. What is important is what the expectations that we set ourselves actually […]

When you set out onto your forex and trading journey, you would have most likely set yourself a number of different expectations, either from what you have seen online or that are in line with what you wish to get out of trading. What is important is what the expectations that we set ourselves actually are. We do not want to aim them too high, especially if it is unrealistic, we also do not want to set them too low, or motivation could be an issue. So we have come up with a number of different expectations that you should try and avoid.

I will be able to quit my job:

You may be able to, that is true, however, the timescale that you have set yourself is most likely highly unrealistic, many people who trade full time now have been doing it for the past 10 years, they did not get into it and then 6 months later they are a full-time trader. If we look at other jobs, becoming a doctor, there are years of studying and practice required before you can even think about performing on live patients, after that there are years of actual practice. It is exactly the same for trading, you need to learn, practice and then trade, when you begin trading you will be trading small trades and small amounts, not enough to give up your job.

This should not even be an expectation when you come into trading, it may be a reality in the future, but it is not something that you should be thinking of when starting out.

I will learn more if I trade more:

Why? Why would you learn more just because you trade more, there is a pretty important saying of quality over quantity, just because you are doing a lot of something does not mean that you will learn more or even become good at something. Overtrading can lead to a few disappointments, firstly you won’t necessarily be learning anything, secondly, overtrading can put your account at risk and proper risk management is most likely not being applied to each trade.

If you make 1 trade but fully understand why you have made it, it is far more valuable than making 10 and not really knowing what you are doing. Make a trading journal and use it to log everything that you are doing, this helps you keep the quality high and also you will know exactly why you did something, it will also help you to slow down to avoid making too many trades at a time.

I am going to be rich:

Unfortunately, this is an expectation that a lot of people come into trading with, and it has been brought on by the hundreds of adverts or fake Instagram influencers that are out there. They give an unrealistic view of what sort of money you can make, no they do not own those cars, horses, or boats and that money they hold up is all 1s or fake. Yes, you can make a lot of money, but you won’t do it quickly and you will start off making very small amounts, especially when learning.

All of these expectations are things that could, unfortunately, start to lead towards greed, trading too much, wanting too much, and ultimately causing you to lose whatever you have put in. It is important to understand that this is a slow process that takes time, it begins very slowly and takes a lot of effort. Come in with the expectation that you will be learning and starting small and things will start to grow before you know it.

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Beginners Forex Education Forex Basics

Top Tips For Newcomers to Forex Trading

The world of Forex and trading can be a daunting one, it is full of information on how much you can lose, how difficult it can be to be profitable and that it just is not for everyone. While the latter may be true, there are a number of different things that you can do […]

The world of Forex and trading can be a daunting one, it is full of information on how much you can lose, how difficult it can be to be profitable and that it just is not for everyone. While the latter may be true, there are a number of different things that you can do […]

The world of Forex and trading can be a daunting one, it is full of information on how much you can lose, how difficult it can be to be profitable and that it just is not for everyone. While the latter may be true, there are a number of different things that you can do to get yourself off on the right foot. We have gone through a number of different tips that we have that can help you get off the floor running, you may not be able to do all of them, but any combination of them will give you a good headstart over those that are starting completely fresh.

Get the Right Broker

When you first start out trading, you will do a lot of reading, but the first step to actually trading is getting yourself the right broker. There are a lot of them out there, a lot of great ones, but also a lot of bad ones. It is important that you get one that suits you. We feel that it is important that the broker that you use has a good reputation, you can use a number of independent customer review sites, just be cautious of the potential for fake reviews. It is also good to get one that suits your needs and one that definitely offers demo accounts so you can practice with the same broker that you are planning to use once you go live.

Create a Trading Plan

Before you actually start trading, you will need to build yourself a trading plan, this is not something that you can do in a day or two, it will take a while to complete and will involve a lot of modification and alterations as you learn new things or find things that do not work with it. The strategy that you create will include your trading strategy, risk management, and other information about how you will be trading. Begin it early and it will save you a lot of time in the future, you can start to create it as soon as you go through your initial learning as you will be gaining valuable information for the start of a plan.

Start Slowly

Trading is a long term project, it is certainly not the get rich quick thing that you often see advertised so if you are here for the quick win, it may not be for you. Understand before you start that you will be taking things slowly, pick one topic per day, do not try to overload yourself as this will only lead to burnout and frustration. Learn little by little, it is the best way to absorb the information that you are learning and you do not wish to miss anything important. Remember to also go back to the things you have already learned in order to ensure that you have understood it.

Practice

Practice is important, extremely important. We mentioned when looking for a broker, to ensure that they have a demo account, it is these demo accounts that you will be using to practice. They will often be mimicking the trading conditions that the live accounts do, so any strategies that you use on the demo account should have similar (not exact) results on a live account. Any changes that you make to a strategy should be tested on a demo account before you try it on a live account, any change, no matter how small, should be used on a demo account first.

Controlling Emotions

Emotions can be powerful things, when it comes to trading they can be pretty devastating, in fact, it is possible to completely blow the account because you were not able to keep your emotions in check, due to this it is important to learn to control them. There are various ways to do this, through discipline, and dedication you should be able to overcome them. Some of the more damaging emotions include things like greed and overconfidence, however, these can be controlled with the help of the trading plan and your strategy that we mentioned above, sticking to that plan will help you keep your emotions out of your trading.

Set Realistic Targets

You should not be coming into trading with the expectation that you are going to be a millionaire next month, so instead, you need to set yourself some realistic goals When starting out, your goal should simply to finalise your own trading plan, or to be a break-even trader, do not even think about setting profit targets until you are able t break even. Once you are at that stage, you can start to think about making profits, but realistic profits that are actually achievable. Do not set your goals based on what other people are doing, they should be specific to the stage that you are currently at in your trading career.

Keep Learning

You need to keep learning, it is important that you keep on learning, there are always things that you are able to learn, whatever your strategy is, you should always be looking to become an expert at what is involved, it is also important to learn a few of the other strategies, as the markets will always be developing and changing you need to be able to adapt yourself to the changes. Studying takes time, so it is important that you are able to make time for you to do it, you need to have the dedication to trading and learning if you want to succeed. It is a non-stop part of the trading, so you should always be willing to learn.

Remember to Take Breaks

Trading can be stressful, in fact, it can be very stressful and it can cause a lot of potential mental health issues from the isolation and the time it takes. It is important to remember to take breaks, this is an opportunity to clear your mind, de-stress, and talk to others. It is all well and good having the dedication to learning and trading, but if you are wearing yourself out, it will only hurt you in the long run. Trading will be around for a long time, so there is no need to push yourself too hard.

Only Trade Under the Right Conditions

It can be tempting to want to trade all the time, trading is very exciting, it can make you want to trade all the time. The thing is that you have created a trading plan, the plan works within certain conditions, it will not work all the time and it won’t be able to find trades all the time. When this happens, you should not be trading. Instead, you should use this time to learn, do not try to force your trades in conditions that do not suit your strategies conditions.

Plan Your Trades

This ties in with your strategy, it is important that you stick with it and that you use it to properly plan your trades. You need to ensure that the entry criteria. Take profits, stop losses, the risk you will use, all of these things are important for you to recognise and to plan before placing a trade. Planning your trade will help to ensure that you are sticking to your plan and that each trade actually meets your trading plan requirements.

Do Not Overtrade

It can be tempting to overtrade, either through boredom, greed, or overconfidence. Greed often occurs when you just want more, or that you have made a few losses and want to make up the loss. Overconfidence can occur when you have made a few good wins in a row and so you feel that you are able to win more. Whatever the reason is, it will only lead to losses. Do not trade any more than what your train strategy and plan allows. If you trade extra, it will only result in losses in the long run.

Use Stop Losses

Stop losses help you to protect your account, it is a way of ensuring that you are only risking what you need to risk and limit the potential losses. If you do not set stop loss, there is a chance that even a single trade could cause you to lose your entire account. Setting them is extremely important and you should not be trading them without it. When you create your trading plan, you should also create your risk management plan which will detail how much of a stop loss you should be suing, just remember to stick to it

Don’t Be Afraid to Experiment

You should not be afraid to try new things, just remember that we spoke about demo accounts, so if you are thinking of experimenting then you should always do this within a demo account, this way you can test and experiment as much as you want without risking any of your capital. Experimenting and testing will allow you to alter your current trading plan and also create new ones, it is also a fantastic way to learn by doing rather than reading.

So those are a few different things that could help you get started, remember, you may not be able to do all of them, in fact just doing a few will help you to start on the right foot and could help you to become a profitable trader a lot quicker than without.

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Beginners Forex Education Forex Basics

Where to Direct Your Focus During a Losing Streak

People do not like to think about losses, the problem with that is that losses are a major part of trading, they will happen. There is no one strategy out there that is loss proof and you will experience them, you will even experience losing streaks of 2,3 or even more losses in a row, […]

People do not like to think about losses, the problem with that is that losses are a major part of trading, they will happen. There is no one strategy out there that is loss proof and you will experience them, you will even experience losing streaks of 2,3 or even more losses in a row, […]

People do not like to think about losses, the problem with that is that losses are a major part of trading, they will happen. There is no one strategy out there that is loss proof and you will experience them, you will even experience losing streaks of 2,3 or even more losses in a row, this is a part of trading, this does not mean however that you won’t be profitable or successful.

There are a number of different things that you need to think about when you take a loss, some of them will have you questioning your strategy, others your abilities, but thinking about these things will enable you to better understand why you had a loss, or even multiple losses in a row and will enable you to better understand what it is that you need to do in the future to hopefully reduce the risk of having another loss for the same reason. If you are having multiple different losing streaks, then there is probably something that needs changing, not necessarily a major change, just a small tweak could be enough to remove those streaks from your future,

Are there patterns in your trading journal?

When you started out at trading, most places would have told you to keep a trading journal, the entire purpose of the journal is to help you out in this exact situation. As you would have been writing down your entries, exits, reasons for the trade, and anything else that you can think of, you can use this to help look for correlations between your losses and any potential differences that there may be to the wins. It is able to highlight mistakes that you may be making and will allow you to see this and then adapt your future trades to hopefully avoid making them again in the future.

If you are not using a trading journal, start using one, it is the only way to truly understand what your trading habits are and whether there are any similarities when you take a loss, it will allow you to focus on something that is clearly causing you to make a loss and will ultimately make your trading lot more transparent and easy to analyse. Use it and review it, make sure that you also note down any changes that you ake due to the losses, as you need to know exactly what you did and the effect that it had, this was if it works you can continue to use it and if it does not work, there is a record of trying it and the result of the change, so you can avoid trying it again in the near future.

Do you have a trading system?

This may seem like a silly question to you, why would we be trading if we did not have a proper strategy? You would be surprised how many people actually do this, it is mainly done by those that are either new to the trading game or those that have kind of given up and are now just simply gambling and hoping. You need to look back over what you do and what your plan says. Does it have specific entry requirements? Does it have proper risk management on those trades? Does it take losses into account in regards to overall profitability? These are some of the questions that you may need to ask yourself about your trading strategy.

The importance of ensuring that your strategy is complete is vital. The trading system is designed to give you your trading rules and your risk management and is overall designed to help keep you profitable overall and over a long period of time. If you trade without a system, it will only lead to losses, you may get a win here and there from a little bit of luck, but your overall results and your overall account will be in danger and we can be pretty sure that you will end up in the pile of the majority of traders who have tried and failed without a proper strategy in place.

Is your risk managed properly?

Risk, the voodoo word in trading, if you have got your risk management all set up correctly, then you will be able to survive a number of losses, hopefully, a lot of them if set up correctly. You need to think about how each of the losses is affecting your strategy, how much of your account is at risk with each trade? How much is the overall daily loss that you will allow? How Many losses in a row can your strategy sustain with your current leverage and margin levels? These are things that you will need to ask yourself if any of the answers concern you, then there may be something that you need to change.

Risk management needs to be one of the things that need to remain consistent throughout our trading, as soon as you change it, it can result in larger and more damaging losses. This does not mean that it can never change though, it just means that any changes that you make you will need to ensure that the change is there consistently for all future trades. Remember, the risk management plan is there to protect you and your account, ensure it is sorted before you start to trade for real and also make sure that it suits your strategy, there is no point trading with real money without one of these sets in place.

Classic Trading Mistakes

There are a number of different mistakes that people class as the classic trading mistakes, these include things like trading without a journal (we mentioned this above), not using stop losses or take profit levels, revenge trading, letting losers run and having some unrealistic expectations about what you want to achieve and how you will achieve them. These are all things that can lead to losses and will be far more common than you may think.

We would not be surprised if you had made one or more of these mistakes and unfortunately they can very easily lead to losses being main and then sustained. You need to be able to notice when you are making these errors and then correct them, but simply not doing it, that may not seem helpful but it is the truth, you just need to stop. Get your plan, journal, and risk management in place and trade using that, these will help you to avoid a lot of the mistakes that people often make.

The Wrong Expectations

Coming into trading with an unrealistic expectation can have some pretty bad effects on your trading and also the results that it brings. If you set your expectations too high then there is a much higher chance that you will over leverage or over risk your account which can have some very dangerous results, if you set them too low then you won’t see much difference or increase to your account balances. You need to ensure that you have got them set at the right level for both you and the strategy that you have been creating, this enables you to trade at a much more consistent level and you will also see some consistent results.

Is trading right for you?

Let’s be honest here, trading is not for everyone. Some people do not like the stress, others do not like how long it takes to actually become successful, others just simply don’t like the numbers involved in it or the risks that you need to take. There is nothing wrong with this at all, not every activity or job is right for everyone, some people will like it and others will not. If you find that you are getting bored or easily distracted then this is probably not the right thing for you. Having said that, it can also grow on you, give it a couple of months, if after those two months you are still bored or not really looking forward to your next day of trading then you may want to start looking for something else to do with your time as this may not be right for you.

So those are a few of the things that you need to think about when you are making some losses, it can be very easy to get swept up in the anxiety and stress that comes with a loss, but with the right things in place a loss is simply just another step in your trading journey, ask yourself these things, look at your journal to find those connections and work on getting rid of them. Use each loss as a learning experience and you will become a much better and much more consistent trader.

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Beginners Forex Education Forex Basics

Ready to Quit Trading FX? Answer These Six Questions First

Quitting can be tempting, when things begin to get tough, boring or you simply do not have enough time and money, it is very easy to put your trading tools down and walk away. But should you be doing that? Probably not. So why is it so easy to quit? There are a lot of […]

Quitting can be tempting, when things begin to get tough, boring or you simply do not have enough time and money, it is very easy to put your trading tools down and walk away. But should you be doing that? Probably not. So why is it so easy to quit? There are a lot of […]

Quitting can be tempting, when things begin to get tough, boring or you simply do not have enough time and money, it is very easy to put your trading tools down and walk away. But should you be doing that? Probably not. So why is it so easy to quit? There are a lot of reasons for it, but there are also a lot of things that you should be considering before you decide to throw in the towel. So let’s take a look at some of the things to consider before you quit trading.

Are you losing money?

One of the main reasons why people begin to trade in the first place. It can take a long time before you actually become profitable, what you need to be able to do is to consider whether or not you are at the position that you feel you should be for the amount of time that you have put in. Losing money is a normal part and we would consider it normal to still be potentially losing money when you are a year into your trading journal, if you are profitable by then, it is great, but many won’t be. If you are still losing money after two or three years, then maybe it is something that you need to consider. It will take time, but you need to have in mind how long you are willing to give it, you cannot continue for the next 10 years being unprofitable, that won’t be good for you or fun to do at all. So give yourself a timeframe for when you need to be profitable, if you are still not when you reach that point, then it could well be the time for you to consider leaving and giving something else a go instead.

Are you frequently changing strategy?

Another thing that can cause people to give up is simply not sticking to a single strategy for long enough. Most strategies will take time for you to learn them properly and so they will take time to become profitable. If after the first or second loss you are jumping to a new strategy then you may need to consider that you do not have the patience or dedication to become successful at trading. If you want a strategy to work, you need to be able to stick with it for an extended period of time. Not only will this allow it to actually be effective, but it will also increase your confidence levels in using it and trading as a whole. If you are constantly jumping between them, then you may need to find a hobby that doesn’t take so long to learn or to become competent at.

Do you plan your trades?

Many people get into trading without knowing all the effort and time that goes into or at least should go into each trade, and that is a problem. Those that are starting now want to get in and just start trading, you need to consider whether this is you or not. If you are the sort of person that just wants to go in and trade, without planning for it first then trading may not be for you. Trading in that way without the plan will only lead to losses and bad trades, this is not something that you want to be aiming for. Just jumping through timeframes looking for a trade, jumping between different trading signals, and simply not putting the effort in, trading may not be for you. You may get some short term gains, but trading like this, in the long run, will only lead to losses which will kill your motivation, if you are not willing to put the effort to plan your trades, then trading is not for you.

Do you have a trading journal?

I know what you are thinking, why would this be a reason to quit? Well, the simple fact is that if you do not have a trading journal, then you will struggle to ever become profitable. A trading journal is there for you to write down and record everything that you do, the trades, the analysis, the profits, losses, and more. You are then able to outlook back on it in order to find trends or errors in your trading, this allows you to adapt and develop your own trading to help negate any errors that you may have been making. Without one, you are pretty much trading blind, not something that is recommended at all, so if you do not have one and are unwilling to create one, your chances of becoming successful are very slim, and something that you should potentially think of giving up.

Are you excited by trading?

You would think that anyone that trades would be enjoying it, but they are not. Many people have a very black and white mentality, if they are making money they are happy if they are losing then they are unhappy. Then there are the people that enjoy it regardless of the outcome, those are the people that will eventually make the best traders. There are also those people who just do not enjoy it at all, these are the people who find it hard work to actually trade and these are the people who should not be trading at all, if you do not enjoy it, do not do it. Even those that are only happy when winning will struggle at times and may find it too hard to bear when they have multiple losses in a row, which is more common than you may think and everyone will experience these losing runs at some point during their trading career.

Are you expecting to get rich quick?

This is a false expectation that a lot of new traders come with, they have seen all the adverts and the scams stating that they will be able to make a lot of money overnight. If this is you, then we would suggest closing down that trading terminal and walking away, it just is not going to happen. Trading is a long process, if you are just here for the money then you need to move away, again, it just won’t happen, we do not need to say much more than that.

Those are some of the things that you need to consider when you are thinking about quitting. Trading and forex is not an easy thing to do, there will be times when you struggle and times when you are not happy, you need a lot of dedication and it is hard work. If you are happy with all of that then it’s great, it can be a fantastic opportunity for you, but if you struggle with them, then this may not be the hobby for you.

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Beginners Forex Education Forex Basics

What Forex Trading Offers (In Addition to Money)

For many, the idea of trading is about just one thing, the money, it can help to make us financially free, it can help us to pay our bills and for some, they hope that it can make them rich. Of course, this is all true, there is a lot of money available to be […]

For many, the idea of trading is about just one thing, the money, it can help to make us financially free, it can help us to pay our bills and for some, they hope that it can make them rich. Of course, this is all true, there is a lot of money available to be […]

For many, the idea of trading is about just one thing, the money, it can help to make us financially free, it can help us to pay our bills and for some, they hope that it can make them rich. Of course, this is all true, there is a lot of money available to be made with trading, but have you ever thought about the other things that it gets you? There is far more to trading and it can offer you a lot more than just the money.

There is one thing that everyone will agree with when it comes to trading, this is that it is hard to be consistently profitable, so if it is so hard to make money, why do so many people do it? The truth is that there are other benefits to it too, there are a lot of psychological benefits to trading that we will look at. So let’s take a look at what some of the other benefits are that you can get from trading.

The first skill that trading can teach you is patience, this is a virtue that will benefit you in pretty much everything that you do in life. Patience allows you to get through those boring stages in life, this is taught to us during our trading life as our trading plans have very specific requirements for each trade, when they aren’t being met, we need to wait, we need to be able to wait for the correct setups as trading without them is what we know as a bad trade. This patience that we build up allows us to do many other things in life without the usual irritation that we would have otherwise had, waiting in line at the post office or waiting for a bus to arrive, it will make these experiences a lot more bearable for you.

Trading can also teach us about dedication and determination, it can take a long time to become profitable and so we need to be able to keep at it, to keep learning and developing ourselves as traders. This can teach us ways that we can do this with things that aren’t to do with trading also, things like getting fit, one of the things that people struggle with the most when it comes to getting healthy is being able to stick with it, having the determination to stay with it and to keep on pushing until they reach their goals.

This leads us into self-motivation, you will most likely be trading alone and by yourself, so it is vital that you develop and learn how to self-motivate yourself. This is you telling yourself about why you are getting up each day to trade. This is particularly powerful when things are not currently going the right way. When things are wrong and things are hard, it takes a lot of strength to motivate yourself to work and to continue working. This can then be used in the world outside of trading too, motivating yourself to work or to achieve something that you have always wanted to do, self-motivation is incredibly powerful and is a fantastic tool to have in your arsenal.

The final skill or virtue that we will be looking at is your risk tolerance, you often see people come into trading hating risk, not wanting anything to do with it, ell if they want to become a successful trader they are going to need to develop a slightly more tolerant stance on risk. Trading is all about risk, so the more you do it, the more used to taking that risk you will be, this can then be taken into the world. Maybe you will now take part in more dangerous activities that you would otherwise have said no to and avoided. Being more tolerant of risk can open up a lot of very exciting does for you.

So those are some of the skills that you can make from trading and use in your everyday life, some will be easier to develop than others, but what is important is that you are able to transfer the skills.

Categories
Beginners Forex Education Forex Basics

Top Tips For Part-Time Forex Traders

There are a lot of people out there that are trading part-time, these traders are doing it after work, before work, between child care or simply just don’t want to put the effort into it in order to become a full-time trade, and that is perfectly fine, many people would not like trading if they […]

There are a lot of people out there that are trading part-time, these traders are doing it after work, before work, between child care or simply just don’t want to put the effort into it in order to become a full-time trade, and that is perfectly fine, many people would not like trading if they […]

There are a lot of people out there that are trading part-time, these traders are doing it after work, before work, between child care or simply just don’t want to put the effort into it in order to become a full-time trade, and that is perfectly fine, many people would not like trading if they did it all the time, so having it as a hobby on the side is perfect. Trading is becoming increasingly accessible to those that would not have been able to trade 10 years ago.

The problem is that trading can take a long time, it can be difficult and it can be a slow process, there are a lot of obstacles that need to be scaled in order to become successful. This makes it far harder for someone who is trading part-time rather than full time. Due to this, we are going to be looking into a few different things that you can do as a part-time trader to help improve your chances of being a successful trader.

Choose a Style that Suits your Schedule

If you work in the middle of the London session, then there is no point in developing a strategy that requires you to work during that session, you just won’t be able to get on. If you arrive home at the start of the New York session then it would be far more appropriate that your strategy reflects this and you trade during that session. The same thing can be said for the style of trading. You have limited time, so do not devise a strategy that requires you to spend an hour plus analysing the markets before each trade, instead you will want one that is slightly more quickfire, this will allow you to fit it into your own schedule and work and home life balance.

Plan Out Your Time

Something that is a very valuable asset to part-time traders is time, there just is not a lot of them and so a part-time trader will need to be able to make the most out of the time that they have. This is more prevalent within the first stages of trading, the learning, and developing of a plan, two of the things that take the most time for any trader. Once you have this done, you need to ensure that you can maximise your time, avoid distractions so that you can be concentrating 100% of the time that you are trading. Ensure that you have something to do when the markets are quiet and slow, learn something, just make sure that you’re not saying they’re doing nothing. Once your strategy and plan are in place, it will become a routine that will make the process a lot quicker and a lot easier to fit into your busy life.

Use Your Commute to Learn

Not everything that you need to learn has to be done in front of a trading terminal or computer. What are you doing on your commute to and from work each day? If you are a driver this is slightly less relevant, but if you use the train or the bus, you can use this time to help you to develop your understanding and mindset. There are a lot of fantastic books out there, books that can help you to better understand what it is that you are doing and why you are doing it. Use this time to read and to learn, get up to date with the world news that could affect the markets. What is important is that you are able to use the time that you have to continue your trading development.

Use a Trade Journal

A trading journal is an incredibly valuable tool for any trader, and even more so for a part-time trader. The trading journal basically details every single thing that you do to do with your trading, the trades you put on, how long you hold the trade for, the result of the trade, the reasoning behind entering and exiting, and much more. The journal can also offer you a lot of valuable feedback in regards to your trading, it helps you to understand whether you are still following your trading rules, it also helps to remind you of both the good and bad things that have happened with your trading and allows you to work out why. Ensure that you use it and use it a lot, it will help you improve on your trading tenfold compared to someone not using one at all.

Developing the Right Mindset

To be honest, this is something that you either have or you do not. The right mindset will enable you to be patient, even when you have little time, you need to be sure that you are not trying to force any trades, you need to be able to be patient, even though the slowest and most boring times. You won’t be in front of your computer 24/7, so you will miss opportunities, just don’t allow that to take over and to then force a trade to make up for it, this will result in your losing more often than not.

Take Part in Trading Communities

You do not have a lot of time to get acquainted with a lot of traders on a personal level, but you can certainly join a number of different trading communities. This will give you people to talk to, people to question things that you are not sure about, and a place to get support when you need it. These online forums allow you to get involved at any time, when you are sitting on the toilet, on your way to work, or in the doctor’s waiting room. It is a valuable resource for feedback and help and something that you certainly should be using.

Prioritise your Trading and Time

You do not have a lot of time as a part-time trade, so it is important that you are able to work out how you will use that time. Prioritize the things that need them. You also need to prioritize your own life, if you have a job and a family, they should always come first, look after what you have before you look for more. Once you are trading, prioritise on your learning and your strategy on what you need to do to improve, not what you think would make you the most money.

So those are a few of the things that could help you as a part-time trader, you may not be able to do all of those things, but the more that you are able to do, the more successful that you will be able to become a part-time trader. It is not an easy process, but if you manage to plan your time and workload properly, then there is no reason why you cannot become profitable and successful.

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Beginners Forex Education Forex Basics

Trading Support Groups: Where to Find Help & Support

Trading can be tough, really tough, it can also be stressful and lonely. Spending hours in front of the computer, not really talking to anyone else can be detrimental to both your mental and physical health. It can also be lonely, but it doesn’t need to be. When we look at most successful people, they […]

Trading can be tough, really tough, it can also be stressful and lonely. Spending hours in front of the computer, not really talking to anyone else can be detrimental to both your mental and physical health. It can also be lonely, but it doesn’t need to be. When we look at most successful people, they […]

Trading can be tough, really tough, it can also be stressful and lonely. Spending hours in front of the computer, not really talking to anyone else can be detrimental to both your mental and physical health. It can also be lonely, but it doesn’t need to be. When we look at most successful people, they often have a team of others around them, not only is this for their professional careers, but it is also for their well being, having people around can keep you sane and can also help you stay motivated to do whatever it is that you are doing, in this case, trading.

It is well known that having a good network of support around you is beneficial for things like reducing stress and anxiety, which will give you better coping skills, and an overall sense of well-being. So when trading, we need to ensure that we have these support groups around us, they will make learning and trading a lot more bearable and will keep you going and motivated for a lot longer than you would be doing it by yourself.

Friends and Family

When you move into a new industry such as trading, you often feel that you need to find people who have the same interest, people who are already trading, but this is not necessarily the case, in fact, the people who are best to keep around are the people who are already there There are reasons why they are your friends, they may be easy to talk to, they may understand how you think, they are the sort of people that you need to keep close and to be available to talk to. You don’t need to force them to learn and understand trading, the feelings that you get from trading are the same as anywhere else, so they will understand what you are going through.

Your friends and family are there to support you, if you let them know that trading is important for you if they truly care for you then they will be there to support you through it, they won’t necessarily understand what you are talking about, so getting too technical may be a bit much for them, but for general and emotional support, they are some of the best people for it.

Other Traders

You cannot become a successful trader by yourself, there is never enough time for you to learn everything or to fully understand things without the help of others. While friends and family members being around is great, they do not have the understanding of the more intricate things to do with trading, this is why it is important to find a group of other traders that you can also call on. These people actually know what you are talking about when you mention pips and spreads, so when you have questions about something or need to rant and rave about something in the markets, these people are the ones to call on.

They will also be able to give opinions on your trades, your strategies and you will be able to use their trades and ideas to create new techniques and ideas of your own, using their knowledge to help compound your own, it is also healthy to have debates, to works out what something works the way it does and to ultimately have people around who have a similar mind and interest to your own. There are plenty of places around, forums, message boards, even physical trading groups are available, so it is easy to find others with the same interest, so be sure that you do.

A Mentor

Not something that is a necessity, but if you are learning to trade through a course or program, the mentor and tutor that is teaching you should be an expert in the field and for that reason, they would be a great person to talk to when you need support. Whether it is learning a new strategy or you are going through a stressful and hard time, they will know exactly how you feel and may have ideas on how you can get out of it and start to feel better. The only problem with this is that there are so many dodgy and scam mentors out there, but if you manage to find a legitimate one through your course, they have a wealth of information and tips, and they are certainly a source that you should be utilising.

Support Charities

There are official support groups out there, if you are feeling under constant stress or are feeling that you are removing more into the realms of gambling than trading, then there are support groups out there, in the UK there are gambling support agencies such as GambelAware, in the US there is NCP Gambling, wherever you are there is help available. There is also plenty of stress and anxiety-related services available. Do not feel shame if you need to use their help, it is what they are there for and there are many others going through the exact same thing, otherwise, they would not exist in the first place.

It is important to remember that you are not alone, whether someone has an understanding of what you are doing or not, they are there to help, talk to people, do not let yourself fall into a hole that you cannot get out of, talk to others about how you are feeling, talk to others about your trading and most importantly, do look after both your mental and physical health.

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Beginners Forex Education Forex Basics

How Forex Trading Is A Bit Like Hunting

Depending on the way that you trade it could be considered a lot like hunting, here are a lot of similarities around the two. When hunting your prey is an animal, but with trading, it is a completely different type of beast, it’s the markets. We can take a lot of the skills required to […]

Depending on the way that you trade it could be considered a lot like hunting, here are a lot of similarities around the two. When hunting your prey is an animal, but with trading, it is a completely different type of beast, it’s the markets. We can take a lot of the skills required to […]

Depending on the way that you trade it could be considered a lot like hunting, here are a lot of similarities around the two. When hunting your prey is an animal, but with trading, it is a completely different type of beast, it’s the markets. We can take a lot of the skills required to be a good hunter and adapt them to be used with trading which could potentially help bring you in some successful trading. So let’s have a look at what sort of skills and traits could carry over from hunting to trading.

Understanding Your Prey

When hunting, you need to get a good understanding of the prey that you are going for, the way it behaves, the way it may react to certain things, and also how it moves. The markets are very similar, each market and currency pair will behave in a completely different way and different things will cause them to act in different ways. Getting a good understanding of the one you are looking at is vital for analysis purposes and also to know about where to place your stop losses and take profits. So before placing a trade, get to know what influences the market that you are looking at and which economic reports or news events may cause it to run in a certain direction.

Create a Plan

When hunting, you aren’t just going to charge straight in with your gun or knife and fire at the prey. You will instead come up with a plan, a way to lure the beast, or a way to hide and wait. The markets are very similar, you cannot just jump in with both feet and begin placing trades. You need to create a plan, how you will trade, how you will analyse the markets, and how you will protect the account should the trade get away from you.

Wait for an Opportunity

Hunting can require a lot of patience, as you cannot just charge in or fire at something that isn’t there yet, you must be able to wait until the opportunity comes. Trading is very similar, there won’t always be opportunities to trade, there will be times when the markets are very quiet, in these situations you need to be able to display some patience, wait for the conditions to change into your favor and then when they do, it will give you the opportunity to strike.

Monitor the Situation

Things do not always go exactly to plan, maybe your trap didn’t catch it, or your first shot missed, this is the time where you will need to adapt in order to get the kill. It is very similar to trading, the markets won’t always move the way that you expect them to and things may need to be changed. Hopefully, your trading plan has a contingency in it and tells you what to do if something doesn’t go right or if things change. Maybe you need to let the trade or prey go, or maybe you need to adapt and go at it another way. It is exactly the same with trading, constantly analyse the markets, and adapt your trade to suit the markets, don’t try to force the original trade that you had planned.

Learn from Mistakes

You do not start hunting as a master hunter, in fact, your first few hunts you probably won’t come back with anything, this is the same with trading, you will make mistakes, there is no doubt about that and you will make some initial losses at the start. When a mistake is made, then learn from it, use it as a learning experience, maybe certain lore didn’t work or maybe your entry wasn’t quite right, so learn from them and adapt it for the future. This also goes for things that work, if something went well, write it down and remember it, it could make the hunt or trade a lot easier in the future as it will most likely work again.

So those are a few little things that are similar between a hunter and a trader, it is all about planning, execution and then adapting to changes, the markets will always be changing, so having those traits in your arsenal will help you to adapt with them and to remain profitable.

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Beginners Forex Education Forex Basics

Trading Outside Your Comfort Zone

Humans are things of habit, they will create their safe space, a place where they feel comfortable, they are happy with what they have, and stepping out of can cause extra work and stress, so why would we want to get out of it? This applies to the forex trading world too, once you have […]

Humans are things of habit, they will create their safe space, a place where they feel comfortable, they are happy with what they have, and stepping out of can cause extra work and stress, so why would we want to get out of it? This applies to the forex trading world too, once you have […]

Humans are things of habit, they will create their safe space, a place where they feel comfortable, they are happy with what they have, and stepping out of can cause extra work and stress, so why would we want to get out of it?

This applies to the forex trading world too, once you have created that strategy that works, you want to stick by it, and that is good advice, but if you never make changes, never step away from the strategy you will be stuck with it for life, and you cannot guarantee that it will always work when the market conditions change.

When you talk about getting out of your comfort zone, a lot of people will be thinking of jumping out with both feet, you don’t need to double up your lot sizes or jump into an entirely new strategy, instead, it is best to ease your way, one toe at a time out of your comfort zone and into something new, not only will it allow you to expand your arsenal, but it will also help to increase your knowledge of different strategies and the markets as a whole.

Stepping out of that zone though, no matter how small will cause you to stress, it will bring you into contact with things that you do not know how to deal with, this is perfectly normal, but there are aways to help prepare yourself and to get out of that zone in a more steady and less stressful way.

One way to lower the stress levels is the old true and tested demo account, using the demo account will allow you to try out that new strategy, or change to your current strategy without having any actual risk, this takes out the stress part of the change, this isn’t revolutionary as I am sure you have been told plenty of times that you should be using a demo account to test things out, and that is for a good reason, it allows you to look at the changes without any added emotion giving you a much clearer view of what has gone wrong, but also what has gone right.

Take a slow step out of that comfort zone rather than jumping, we know that some people do not want to wait for change, you are excited about trying something new and the possibilities that it could bring but don’t jump out with both feet. Take a small step, increase that lot size by a small amount instead of doubling it, change just one aspect at a time to ensure it still works rather than changing the strategy entirely, this enables you to keep risks low, but also to learn about how each individual change actually affects your trading.

If your change isn’t successful, do not let this put you off, a loss is often the best lesson you can have, use the experience of loosing as a way to learn about why it didn’t win, why your trades lost and what you could do differently to help adapt it to win. Part of stepping out of your comfort zone is losing, its not the best part, but it is the best way to work out exactly what you need to do to expand that safe bubble you have.

So do not be afraid to get out of that comfort zone, those that are hugely successful have done it hundreds of time, if you don’t you will begin to stagnate and your trading won’t go anywhere else, so taker that first step and start learning more about your own trading and the forex trading world around you.

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Beginners Forex Education Forex Basics

What Are Islamic Trading Accounts?

In general trading in Islam is often considered as haram. However, it is still possible to trade through something called an Islamic account, which is also sometimes known as swap-free accounts, they have been designed specifically for those of Muslim faith. What is an Islamic Account? Also known as a swap-free account, an Islamic account […]

In general trading in Islam is often considered as haram. However, it is still possible to trade through something called an Islamic account, which is also sometimes known as swap-free accounts, they have been designed specifically for those of Muslim faith. What is an Islamic Account? Also known as a swap-free account, an Islamic account […]

In general trading in Islam is often considered as haram. However, it is still possible to trade through something called an Islamic account, which is also sometimes known as swap-free accounts, they have been designed specifically for those of Muslim faith.

What is an Islamic Account?

Also known as a swap-free account, an Islamic account is a halal trading account that is offered to the clients that wish to respect the Quran and wish to invest in the Islamic stock markets or on the forex markets with Islamic friendly accounts.

The accounts differ from a traditional account in a number of ways. The main difference is the fact that Sharia law does not allow for someone to accumulate interest, so traders who are using an Islamic account do not pay or receive interest rats on their account. The accounts also dictate that the transaction must take place immediately, and any additional transaction costs must be carried out at the same time in order to avoid any potential interests.

The good news is that these Islamic accounts sare now being offered by more and more brokers making trading a lot more accessible for those of Islamic faith, sometimes you may need to look a little deeper to see if your broker offers it, if it is not advertised, be sure to contact the support team to find out as some are still willing to set up these sorts of accounts even if they are not actively advertised.

The Principles Behind Islamic Accounts

There are four main principles for Islamic trading, these are:

  • Prohibition of payment and receipt of any interest rate (Riba)
  • Immediate exchanges in the context of trading operations
  • Prohibition of gambling
  • Distribution of Risks and Benefits

Unfortunately, these four principles do not always fit into the modern banking system that is found in the majority of western countries. This is the main reason why these Islamic accounts were created and offered to those who wish to take part in halal Forex trading without having to separate their investments from their religious principles and beliefs.

Islamic Account Commissions

One of the main reasons for the creation of the Islamic accounts is the fact that under Sharia law they are not able to receive or pay swap interest charges. This is often paired or received when holding a position overnight, this is what makes currency trading haram.

So instead of paying these interest rates, those using an Islamic account will pay their charges in the form of the margin, commissions, and administration fees, the latter of which are often not found on those accounts that have swap fees.

Whether you are on the side of believing that trading is haram or not (as there seems to be a divide amongst those of Islamic faith), these accounts have been created specifically for those that believe that it is but still wish to trade on the markets. Many brokers are now offering these accounts so they are becoming more and more accessible with more brokers now offering them. They are a little more expensive due to the addition of administration fees or an additional commission, but overall they are a fantastic opportunity for those that would otherwise be excluded to trade with the rest of us.

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Beginners Forex Education Forex Basics

Overlooked Techniques That Can Help You Be a Better Trader

When we think about all the things that we do or professional traders do to be successful, it is normally based around reading. Things like creating their strategies, following certain rules, and controlling their emotions. Those things are vital, but there are also things that we need to do which actually have nothing to do with trading, they are things that can benefit our life, which can then subsequently benefit our trading. Here, we are going to be looking at some of the stranger things that traders do that can help with your trading.

When we think about all the things that we do or professional traders do to be successful, it is normally based around reading. Things like creating their strategies, following certain rules, and controlling their emotions. Those things are vital, but there are also things that we need to do which actually have nothing to do with trading, they are things that can benefit our life, which can then subsequently benefit our trading. Here, we are going to be looking at some of the stranger things that traders do that can help with your trading.

When we think about all the things that we do or professional traders do to be successful, it is normally based around reading. Things like creating their strategies, following certain rules, and controlling their emotions. Those things are vital, but there are also things that we need to do which actually have nothing to do with trading, they are things that can benefit our life, which can then subsequently benefit our trading. Here, we are going to be looking at some of the stranger things that traders do that can help with your trading.

Eating Healthy

This is an easy one for us, eating, we love eating, most people love eating. What we do not mean though is eating just anything you want, you need to be eating the right stuff, you need to be eating for your success. So why is eating so important? A large percentage (around 20%) of the calories that you use on a daily basis is used by your brain, what you eat is what fuels your brain and you then use that brain for your trading. It is important that we are able to keep our brain healthy and functioning properly, not just for trading, but for our overall living. Eating better does not only help your brain, but it also helps your body, losing weight, building muscle, all of these things help you overall well being and can subsequently give you more energy for trading.

It should be obvious that there are some foods that you want to eat more of and some foods that you want to eat less of, we have broken them down below, it is, of course, a non-exhaustive list and you do not need to restrict yourself to just these foods.

Good: Those lovely green leafy vegetables, lots of good fats such as eggs, nuts, and some fish. French fruits that have not been processed and preferably organic.

Bad: High sugar content drinks or those with high levels of fructose corn syrup. Refined carbs, alcohol, high levels of trans-fat, and highly processed foods.

Waking Up Early

This is not going to be the most popular thing that traders do, but getting up early can have a number of different benefits for your trading performance. Many people can struggle to get up for 9a, so if we were to recommend getting up at 5 am it would probably make you laugh, well that is exactly what we are suggesting that you do.

Teaching yourself to regularly get up at the same time, especially at a time that you do not like is an incredibly powerful way or touching yourself with high levels of discipline, a trait that is vital for becoming a profitable trader. If you look at those that are extremely successful, do you think they lie in until 10 am or 11 am? Probably not because they are up early, going through hair routines ready to make more money.

It is a good idea to start your day with a routine, this builds up your discipline but it also helps you develop your own understanding of things, you often learn best in the mornings, creating a routine to help your own growth is vital and a perfect way to start the day.

Do not think of getting up early as a punishment, think of it as a push towards your success. If you feel that getting up in the morning is too hard work, then you will certainly find that keeping your composure and discipline when trading will be even harder.

Meditation

This will seem weird to some, but not so much to others, meditation is a fantastic way to clear your mind, in fact, it can completely clear it which can help you to come back with a fresh mind. Stress is a natural feeling when trading, as is frustration. Being able to meditate and clear that mind will enable you to clear yourself of those stresses and frustrations and allow you to better analyse the markets without any of the previous results or stresses still in the back of your mind.

Medication can also work as a way of focusing your mind, it can allow you to focus on specific issues and to work out exactly how to resolve them, it also helps to free other parts of your mind to explore new ideas and horizons which can create new opportunities for you in the markets.

It does not need to take up a lot of your day, but if you start to feel that you are becoming stressed and frustrated, step away for just 30 minutes, try to clear your mind, and then come back and take another look at the markets with a fresh look.

Exercise

This sort of goes hand in hand with your eating habits, exercise is fantastic not just for your body but your mind as well. What do you feel once you have finished a workout or the next day, apart from the aches and pains, you probably find that you have a lot more energy, not to mention that you probably sleep a lot better.

Exercise helps blood flow, the thing that your brain needs. There have been a lot of studies that have looked at the correlation between exercise and brain function, it can increase the function of the brain by up to 30%. Having that extra 30% to help with your trading could be of a real benefit, making you sharper and more likely to spot small deviations.

Consistent training and exercise, doing it regularly, and doing it at the same time each morning will help you to build up your discipline, a skill that is vital for trading.

Reading

Reading is a fantastic thing to do and has been proven to help increase the motor functions of the brain, it does not have to be trading related reading, just reading something would be enough to stimulate your mind. Of course, reading anything is good, but reading books related to what you are doing, in this case, it would be trading, can both stimulate your mind and give you new ideas that you can implement into your own trading.

A lot of us may not like reading, but if you understand that it is now a part of trading, you should be trying to get yourself into the mindset that you are reading to improve your trading and that it will help your overall profitability.

Beware of Too Much Multi-Tasking

A lot of things in life require you to be able to multitask, it allows you to complete more and at a quicker pace, however, when it comes to trading it doesn’t really help you too much. The majority of very successful traders will focus on a single task. At a high level of trading, you are not able to focus on so many different things at once, in fact, it will be hard to focus on more than one. When you are analysing the markets, you can only analyse one at a time, as soon as you start to look at more than one, it will begin to smudge your analysis and they will begin to bend into one.

You need to be able to focus fully on just one, you need to focus all of your energy onto a single asset or currency pair so that you can fully analyse it, not try to analyse multiple things at once. Instead of trying to multitask, simply work for 45 minutes every hour, fully on one element, then take a break, come back and work on the next thing, doing it all at once will confuse you and then make you take a longer period of time to complete all required tasks.

So those are some of the things that traders do that actually have very little to do with trading or are things that you may not have thought about. It is important that when you set yourself a routine, that you stick to it to build up your discipline. Are there things that you do that others may think it is strange, probably, but there are a lot of strange things that people do that really do work and really do improve your trading performance.

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Beginners Forex Education Forex Basics

FX Trading Skills That Are Used In Everyday Life

While Forex and trading there ultimately make money, and that is, of course, a huge benefit of it, there are a few other things that you pick up along the way that can then be transferred into your everyday life. These are skills that you can, of course, pick up in other ways, some people […]

While Forex and trading there ultimately make money, and that is, of course, a huge benefit of it, there are a few other things that you pick up along the way that can then be transferred into your everyday life. These are skills that you can, of course, pick up in other ways, some people […]

While Forex and trading there ultimately make money, and that is, of course, a huge benefit of it, there are a few other things that you pick up along the way that can then be transferred into your everyday life. These are skills that you can, of course, pick up in other ways, some people also naturally have them., but traders are often forced to improve them and they can be very beneficial in your everyday life.

Discipline

Probably the most obvious skill that you will pick up is discipline. Trading and Forex are both very long processes, yes people come into it wanting to get rich quick, but those people are very quickly removed from the pool as they blow their accounts. Instead, the ones that are left are the ones that are able to wait, they are able to show great levels of patience. When you start out, you will create a trading plan, you will then be required to stick to that plan, even when things are very quiet, there will be times with no trades at all, even possibly days without any. Staying patient and preventing yourself from forcing trades that you shouldn’t put on is a fantastic skill to have.

You can then take that skill out into the real world, it will make you far more tolerable of a lot of things that are happening around you. People walking slowly, the bus taking a long time to come, or your food at a restaurant is still not here. Having developed these strong skills and discipline will allow you to cope with these everyday situations in a much calmer and much more sustainable way.

Controlling Emotions

There are a number of very strong emotions that you will experience when reading in the markets, the majority of them can actually have a negative effect on both your trading and your own mental health. When things are going well, it can cause a feeling of overconfidence, this emotion can cause you to start placing additional trades or increasing risks to your account, overconfidence can also take place in your everyday life, causing you to take additional risks in the things that you are doing.

Another strong emotion is greed, we all want more, but being able to control that emotion will do a fantastic job both in trading and within your own life. Wanting more than you have and throwing rules out the window is not a good direction to go in, we learn to avoid this by using rules within our trading plans, the same can be done in real life, learning to work with what you have rather than what you want can help to keep this in check.

When you let your emotions get the better of you, you often end up making some bad decisions, in anything you do, when you let your emotions take control, you won’t be thinking about the consequences of your action and so bad decisions are made, this is true for both trading and everyday life, so learning to control them is paramount.

Getting Out of Your Comfort Zone

Homans like to feel safe, we like to do things that we are comfortable with and when we need to leave that area of safety, it can create feelings of stress and anxiety. Trading forces you to leave that comfort zone, either by taking risks with your money or learning new things. Being able to do it regularly within the trading world will teach you how to weigh up the risks and rewards of doing so. You can then take that same mentality out into the real world.

Being able to push yourself to try new things will enable you to experience a lot of things in life that you otherwise would have missed out on, new foods, new activities, all these things that you are now able to experience.

So those are just a few skills and traits that you could learn from trading that you can take out into the world, there are of course many more, trading can teach you a lot of things about yourself which can benefit you out there too. So do not take the skills that you are learning for granted, they may be helping you far more than you think.

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Beginners Forex Education Forex Basics

Why Do Some Forex Traders Ultimately Give Up?

The unfortunate truth about trading is that it is not for everyone, in fact, it is for the very few. Thousands of people take up trading each year but it has been estimated that one a very small percentage, around 2 to 5 percent of new traders actually continue to do it long term and […]

The unfortunate truth about trading is that it is not for everyone, in fact, it is for the very few. Thousands of people take up trading each year but it has been estimated that one a very small percentage, around 2 to 5 percent of new traders actually continue to do it long term and […]

The unfortunate truth about trading is that it is not for everyone, in fact, it is for the very few. Thousands of people take up trading each year but it has been estimated that one a very small percentage, around 2 to 5 percent of new traders actually continue to do it long term and actually make money. It takes a lot of time, money, and patience to actually become a successful trade and this is most likely why most people do not continue and stick with it.

So why exactly is it so hard to keep going, we will now look at a few of the most common reasons as to why new traders are so often giving up and why so few of them actually continue on to be profitable.

A Blown Account

Let’s get straight into the big one, they managed to blow their account, we have all been in this situation, coming in with wide-open eyes, thinking of all the possibilities and all the money we are going to make. Then things go wrong and we blow our account, most likely due to our inexperience, but whatever the reason is, it’s gone. Now we are annoyed, trading clearly isn’t what was advertised, we just lost our money and so we no longer want to trade. At this point some quit, others, they try again and inevitably the same thing happens all over again, some quieter and the cycle continues. Without wanting to put in the proper learning to understand why they lost their account, they will just give up instead and move onto what they think the next big money-making opportunity is.

Information Overload

We can see exactly where they are coming from, on the outside, trading can look pretty simple, the markets can go up or down, the news can affect it and so can Donald Trump, but once you actually get into trading, it is a whole other beast. In fact, we haven’t really come across anything which has more information available and different scenarios of things that can happen, of course, that is not including things like quantum physics or storyline from the Metal Gear games.

There is a lot, and it is enough to overwhelm anyone, especially someone coming into it that didn’t really know what to expect. Many people see all the information, the hundreds of indicators and then decide that it is too much, they do not have the time or the energy to start going through all of it, not to mention it is pretty hard to work out where to start too. So this bombardment of information is another thing that can cause people to step back and walk the other way.

They Suffered Some Losses

This is similar to the blowing on an account but often comes once someone has actually put in some of the work of creating a full or at least partial trading plan and strategy. They have put in a lot of effort to get it to the stage that it is at, then they begin to trade and they experience a string of losses, it may only be two or three, but it could be five or six in a row. This will hit their confidence, it would hit anyone’s confidence. Having put in all that work and then losing, it can make you wonder what the point was and if it is worth putting in any more. Those that feel that it is not worth it will stop at this point, others may realise that losses are as much a part of trading as winning, but the disheartening feeling of doing all that work just for losses is just too much for some newer traders. The good news is that at least they will have something to take out at this point before actually blowing an account.

A Bad Signal Service/Trading Robot

These days, trading is being advertised as being extremely accessible, and it is, the unfortunate thing is that it is being advertised this way by a lot of scammers and people who want to make a quick buck. They often do this by realising and then advertising either a trading signal service or an expert advisor that will enable someone with no knowledge of the markets to trade them successfully. Now, there are some legitimate robots and signal services out there, but those ones aren’t really advertised as aggressively, instead, most people see the ones promising returns of 20% per month or 90% accuracy of trades. When you see numbers so high, avoid them. New traders get into trading for quick money without having to put in any work, but like anything in life, the less work you put in, the less quality you get in return. These trades or robots go bad and an account is blown, it’s not as easy as it looks and the new traders leave.

Forex Trading is Simply Not Suitable for Them

Forex is not for everyone, in fact when I started, I hated it, but I stuck with it and grew to love it. Not everyone wants to stick around in order to get past that dislike stage. Often when you start doing something that you do not like, you simply put it down, walk away, and don’t look back. This is what people especially those that hate numbers often do with trading. This is perfectly fine, it won’t be for everyone just as sport isn’t for everyone, those that don’t like it will often leave within the first week or two.

The Profits are Too Low

A lot of people come into trading in order to make money, what they do not realise is that they actually need money to make money, which in all honesty, is how the rest of the world works too. Many people don’t realise that if you come into trading with just $100 to $1000 you are only going to make a couple of dollars a day at the most (unless you get lucky or risk too much per trade). So after a week or so, people begin to realise that this is not the get rich overnight thing that they believed or was told to them, this can put them off and so they will leave to look for something that can generate them some money a little quicker. Those coming in knowing that it is a very long term thing will be far more successful and more likely to stick around.

So that are a few reasons why people decide to leave, they are all very valid reasons, some slightly more unfortunate than others. Trading is a niche, either you will like it and stick with it, or you will not and leave. Whatever your decision, trading will be around for a long time, so even if you leave, there is no harm in trying again in a few years.

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Beginners Forex Education Forex Basics

Trade Your Way Forward: Your Personal Path to Profit

Trading is a huge industry and there are thousands of different ways to get involved and ways to actually trade. It is a never-ending educational process and it has a never-ending learning curve. It takes a lot of dedication and practice, however, it is something that you need to be able to develop your own […]

Trading is a huge industry and there are thousands of different ways to get involved and ways to actually trade. It is a never-ending educational process and it has a never-ending learning curve. It takes a lot of dedication and practice, however, it is something that you need to be able to develop your own […]

Trading is a huge industry and there are thousands of different ways to get involved and ways to actually trade. It is a never-ending educational process and it has a never-ending learning curve. It takes a lot of dedication and practice, however, it is something that you need to be able to develop your own style and your own way of learning.

“But Bob has a good system, I can use that one!” You can indeed use that strategy, but do you actually understand it, what would you do if things do a little wrong, do you know how to get out of those trades successfully, do you know what the risk management of that system is and would you be able to properly and accurately explain it to someone should they need you to?

If the answer is no to any one of those questions then you should not be using that strategy, for the simple reason that you do not truly understand how it works to how to use it. Bob has probably spent the last six months learning and honing this strategy, he has an in-depth knowledge of it and knows exactly how it works.

So now you need to learn and develop things your way, the first thing you need to do in order to do this is to work out exactly how you prefer to learn, how do you best learn? Some people learn best by writing while others learn best by doing, you can incorporate either of these ways into your learning and development, but it is important to recognize this as if you do not learn well by just reading, then just reading will kill all motivation and may put you off trading altogether.

While there is nothing wrong with listening to others and seeing how they went on their learning journey, it is important that you don’t try to follow them step by step, for the simple reason that they are learning the way that they need to learn, and this won’t suit the majority of other people. Taking tips is fine, these can lead you in the right direction or get an understanding of what you need to learn, but how you learn it should be entirely up to you and should suit your own individual style.

So why is it important to make your own style and strategy, this is pretty simple too, if you create something from scratch, you have a full understanding of how it works, you know the methods behind it, you know how the risk management works and just as importantly, you know what to do if something goes wrong. We have seen thousands of traders lose their accounts because theta re trying to mimic another trader with a strategy that they just do not understand, creating one yourself gives you the knowledge that you need., Of course, you can take aspects from other strategies, but if you do that, learn what it is that you are taking, do not just blindly add it to your strategy.

One final tip we would also add, is that you need to be creating and learning on a demo account, we have seen a lot of new traders who are copying others jump straight in with a live account and they always end up blowing that account, the amount of value that you get from using a demo account is well worth the time that you put in, you can tweak, try out and develop things with no actual risk and in conditions that are similar (not exactly like) to the live trading environments, use the demo accounts as much as you can, especially when learning and developing your own strategy.

The moral of the story is to simply be yourself, and learn the way you need to learn, take ideas from others, but develop them into things yourself instead of just copying or trying to follow the footsteps of someone that has done it before. Just remember that just because it works for someone else, doesn’t mean it will work for you.

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Beginners Forex Education Forex Basics

Why Do Some Forex Traders Cut Their Profits?

There is a brief moment of panic for many traders, especially when they are new, surrounding when they should take their profits. They can see that a trade is currently blue, it is giving them a bit of profit but it is fluctuating, do we take the profit or do we let it run in […]

There is a brief moment of panic for many traders, especially when they are new, surrounding when they should take their profits. They can see that a trade is currently blue, it is giving them a bit of profit but it is fluctuating, do we take the profit or do we let it run in […]

There is a brief moment of panic for many traders, especially when they are new, surrounding when they should take their profits. They can see that a trade is currently blue, it is giving them a bit of profit but it is fluctuating, do we take the profit or do we let it run in accordance to our trading plan. Those that are new to trading may well cut the trade and take the profits, regardless of the market sentiment and general direction.

I am sure that within your trading career you have had a situation where you have asked yourself whether you should take the profits in their current position. At times taking it early could be beneficial, other times it may not have been, it depends on the way the markets move afterward, but the one thing that is clear is that you have broken your trading plan.

So why exactly do people cut their trades early in order to take profits, it could be to do with their trading plans or their mentality towards risk and rewards. Let’s take a small look at some of the reasons that it could be.

Their plan has no profit targets: Part of creating a trading plan is to also create a risk management plan, while many will think that this is only to do with stop losses, it also incorporates the take profit levels as this is what indicates what the risk and reward ratio of your strategy is. These take profit levels are set for a reason, without them,, you have no idea where you should be getting out of the trade and so you take a guess and close the trade. Always have a clear take profit level set, then let the trade run.

They heard someone say something different: You have a trade on EURUSD, it has gone into a little bit of profit but still has quite a way to go before it hits your take profit levels. So while you wait you head out onto the internet, you notice in a forum that a couple of people are talking about it reversing and going the other way. What do you do? Do you trust your system or do you listen to them? Some people will ignore them, but those, not 100% confident in their own trading system may well listen to them and come out of the trade, just to see it continue in the right direction. Do not let others influence your decisions, your plan is there for a reason, stick with it, and do not be influenced by others.

They do not like risk: There are a lot of people out there that absolutely love risk, then there are others that hate it. If someone is trading who really doesn’t like risk, then there’s a chance that they will close out trades early in order to guarantee profits. If a take profit level is set for $50, but the trade gets to $20, someone who really does not like risk may take that $20 as they do not want to risk potentially losing it on the way to $50. You need to remember that these take profit levels were set for a reason, let the trade do its thing, taking a trade early only messes up the results of your strategy and could result in overall losses.

No confidence in the trading plan: If someone has created a trading plan but does not actually have any confidence in it, this can cause them to double guess the choices that have been made and the levels that have been set, this can cause them to cut their profits just to get out of a trade. You should not be trading on a plan that you are not confident in, if you are not confident then work on it, work out why you are not and then fix that issue before reading on a live account. Only trade a system that you know you are confident and that you can leave alone to do its thing.

It can actually be a good feeling to lock in those profits, to be able to say that you made some money on that trade. There is however something known as unrealised profits, these are the profits that you would have made should you have stuck with the original trade ideas and the original take profit levels.

When you created your plan, you set a very specific risk to reward ratio that was based on the strategy being used. As soon as you take a trade early, even if it was ultimately going to lose, you have destroyed the integrity of the trading system, it was built this way for a reason, you need to let it work the way it was designed to do. It is also a horrible feeling to take those profits and then watch the trade go on to hit your take profit levels, this is why we always allow the markets and the set trade to work its magic.

It can be hard, we know that, but when trading, a plan is always set before a trades execution, let it work the way it was designed to and you will get a lot of satisfaction out of the overall results knowing that it was your original plan that succeeded.

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Beginners Forex Education Forex Basics

The Most Harmful & Potentially Costly Forex Trading Myths

As with anything in life, there are a number of different myths that have been created around trading, the thing about myths is that they are not real. A myth is defined as “a traditional story, especially one concerning the early history of a people or explaining a natural or social phenomenon, and typically involving […]

As with anything in life, there are a number of different myths that have been created around trading, the thing about myths is that they are not real. A myth is defined as “a traditional story, especially one concerning the early history of a people or explaining a natural or social phenomenon, and typically involving […]

As with anything in life, there are a number of different myths that have been created around trading, the thing about myths is that they are not real. A myth is defined as “a traditional story, especially one concerning the early history of a people or explaining a natural or social phenomenon, and typically involving supernatural beings or events.”

When it comes to trading there are a lot of them, in fact, there are too many for us to actually go through, but we have looked at a number of them, some you may have heard of or even been told personally, some you may have never heard before, what is important to understand is that these are myths and so they are not actually real, there may be a little truth behind them, but overall they are things that have been made up by someone at some point in time-based on what they see but do not fully understand. So let’s take a look at what some of the myths are.

Trading is Gambling

Trading is gambling, something that you have probably been told quite a few times, this is normally said by those that do not actually have an understanding of how trading works. We can certainly see from the outside why it may look like trading, without having knowledge of how the markets work, it can look a little like it is random movements up and down. When you begin to learn a little more about it, you know that this is not the case, in fact, there are hundreds of aspects to trading that influence the markets, none of them come down to gambling. If you learn, you can spot the things that will cause it to move and can take out a lot of the potential for losses. Trading is based on probabilities and not guesswork.

With Enough Money I Will Be Safe

If you have $100 your account is always in danger, if I have $1,000,000 then my account will be a lot safer. If you are using 0.01 lots sizes on both accounts then yes, your account certainly will be safer, however, are you going to stick to trade sizes that low? The majority of trading strategies are based around risking a certain percentage of your account. If you are risking 1% of your account, for a $100 account this will be $1, for a $1,000,000 account this will be $10,000. You will be able to make the same amount of losses with either account before there is a margin call. (of course, leverage and margin will be slightly different but the idea remains the same). Having more money will not reduce the amount of risk that you are taking. Having a larger balance can allow you to trade with smaller lot sizes in comparison or to risk less 0.5% as an example, but if you stick to the strategies, then you will be risking the same amount, and having more is not necessarily safer.

More Leverage Means More Profits

If we are only looking at the positives, then technically this myth is true if you have higher leverage than you are able to make higher profits if things always go the right way, but what happens when they go the wrong way? If they go against you, you can also make much larger losses and it can potentially put your account in a lot of additional danger. Leverage is a tool to allow you to trade more, but it is something that you need to have an understanding of and to not go crazy with. If you choose an account with a maximum leverage of 1:2000 then you are massively over-leveraging your account and we would expect it to blow at some point as you will be trading far more than your account should be. You should be sticking to modest leverage that suits both your account size and the strategy that you are using.

What Goes Up Must Come Down

While technically true, the questions that need to be asked are when. Sometimes the markets seem to do what they want, everything indicates that it should turn but it just does not want to. The markets can remain on a trend for a much longer period of time than you will be able to remain solvent, the markets will be able to beat you, if you jump into a trade and simply hope that it will turn, you will be on a path to total losses, you need to know when to get out. Do not sit there and simply hope that it will turn, that could be a long way away.

More Indicators the Better

You have probably seen images where people have 100 different indicators on their charts, it looks a little bit of a mess, doesn’t it? It is a good idea to have a number of indicators, they should be ones specifically chosen that suit your strategy, 3 or 4 max should just about do it. As soon as you get into the territory of having 101 different indicators on your charts, you are simply making things too complicated, you cannot properly understand what all of them are saying, many will be contradicting each other and your chart will be a mess. Stick to just a few, too many is just too many, as soon as you start to get confused or it takes more than a few seconds to find and read one, that is too many.

Keep Trying and You Will Be Successful

With a lot of things in life, the more you do something the better you get at it. This is slightly true when it comes to trading, you may get better at what you are doing, the problem with this is that you will be doing the same thing and getting good at it regardless as to whether it is good or not. Trading is more about learning, and not simply doing. If something is not working, constantly doing it will just make you better at doing something wrong, you need to learn why things are not working in order to resolve it and improve. It is also important to note that time spent does not necessarily mean improvement, you could sit for hours in front of the charts and learn nothing, you need to organize and plan your time and learning if you want to be successful.

Emotions Are Your Worst Enemy

Emotions get a lot of bad sticks, you are often told to try and get rid of them when trading, for some this is certainly something that you need to be doing, but not all of them. Emotions are a way to show that you are normal, if you did not experience any stress then there may actually be a problem. You can actually harness things like stress as an indicator that you need to change something and potentially adapt your strategies.

Discipline Will Always Protect You

Discipline is vital when it comes to trading, but it is not something that will keep your account safe on its own. Discipline allows you to stick to your plan, it allows you to ensure that you maintain proper risk management. The problem is that being dedicated and disciplined to something that may not be working does not help you, it will just ensure that you continue to do the thing that is losing. You need to first ensure that you have a working strategy, one that can be consistently profitable, that is then the stage where you need to ensure that you are disciplined, but be sure that you also have the understanding that things will need to change at some point when the markets change, so do you.

There is a Holy Grail Strategy

You may have heard of the holy grail, the one strategy that is better than all the others, well we are sorry to tell you, that this holy grail strategy does not actually exist, if it did, there wouldn’t be hundreds of other strategies, there would be just the one. The markets always change, each trader has a different balance and economic events mean that no one strategy can be successful all the time. This is why it is often recommended that you learn a number of different strategies, as a way to be able to adapt when the markets do change. Do not simply rely on a single one and certainly do not go out there looking for the perfect strategy, you just won’t find it.

You Can Get Rich Quick

You have probably seen hundreds of posts all over whichever social media accounts you use, people promising to make you rich, bad news I am afraid, these are not real. You can actually get rich very quickly, the problem is that you have a 0.000001% chance of it happening. Trading is a very slow process, it can make you rich, but that will be 10s of years down the line, not overnight. Do not go into it thinking that you will be rich, you will overleverage your account and this will only lead to losses. Please, don’t listen to those saying they can make you rich, they cannot and will simply run off with your money.

Complex Strategies are Better than Simple Ones

Sometimes things can get a little too complicated, if you have a strategy that requires you to look at 3 different things or one that requires you to look at 20, people will often think that the more in-depth one will be better, but how long will it take you to look at all 20? And how long will it take you to look at 3? You are far more likely to be able to master the 3 point strategy and to always remember to do them all than you will the 20, when you make things too complex, things will be missed and it will take far too long to actually put on a trade. A strategy only needs to be as complex as it needs to be, do not over complicate them, it will only hinder your trading.

So those are some of the many myths that exist in trading, there are of course more, and there will be more created as time goes on, what is important is that you do not let any of them influence you, some are positive and some are negative, but stick to your own plan, take no notice of them and you will be in a much better position to become a successful trader.

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Forex Basics

A Detailed Look at Forex Bonus Types & Scams

When choosing a Forex broker, we look at many different aspects of their services, including available account types, deposit requirements, fees, and so on. While bonuses are not enough of a reason to choose a broker on their own, traders should know that a good bonus opportunity can provide several benefits. Unfortunately, some brokers advertise […]

When choosing a Forex broker, we look at many different aspects of their services, including available account types, deposit requirements, fees, and so on. While bonuses are not enough of a reason to choose a broker on their own, traders should know that a good bonus opportunity can provide several benefits. Unfortunately, some brokers advertise […]

When choosing a Forex broker, we look at many different aspects of their services, including available account types, deposit requirements, fees, and so on. While bonuses are not enough of a reason to choose a broker on their own, traders should know that a good bonus opportunity can provide several benefits. Unfortunately, some brokers advertise opportunities that seem amazing, when the bonuses are almost impossible to earn or withdraw realistically. Within this article, we will cover the various types of Forex bonuses and how to avoid being scammed.

Types of Forex Bonuses

Deposit Bonus

One of the most common types of bonuses available are deposit bonuses, which add a certain bonus percentage based on the amount of one’s initial deposit. The exact amount varies by broker and usually falls in a range from 25% to 100%, although we have seen higher offers in rare cases. For example, if you deposit $100 with a 50% deposit bonus, you should have $150 available in your trading account.

Welcome Bonus

A Welcome Bonus is something that brokers offer to attract new clients; however, terms vary by brokers. Some offer a certain bonus amount (typically around $30 or so, but sometimes higher) for a trader to open an account without requiring that they make a real deposit. This is the best scenario for beginners and may help one to see if they are truly prepared to begin investing real money. Of course, the money must be used for trading, and bonus funds cannot be withdrawn. The other scenario works like a deposit bonus, where the Welcome Bonus is awarded if the trader meets an initial deposit requirement, or fulfills a set requirement when signing up, such as selecting a certain account type.

No Deposit Bonus

This bonus works very much like the Welcome Bonus, except the broker never asks for an initial deposit. Traders can simply open an account and start trading with the bonus they are given, without risking anything or owing to the broker if the bonus funds are lost. Once you’ve used up all of the bonus funds, the brokerage would hope that you would then decide to make a real deposit into the account, but this is optional.

Reload or Re-deposit Bonuses

These bonuses are more beneficial to existing traders who have deposited with the broker at least once before. It works very much like a regular deposit bonus by applying a certain percentage onto the deposit. In some cases, a broker may offer a different percentage than they would with the initial deposit, which allows traders to rack up bonus funds in larger quantities.

Special Bonuses

These bonuses fall into more of a miscellaneous category and often require certain tasks to be performed on the website before being earned. For example, one might need to trade a certain number of lots to earn the bonus. In many cases, these bonuses are reserved for certain account types and usually focus on VIP accounts or other high-tier accounts.

Avoiding Bonus Scams

While there are many reputable brokers out there, traders need to be aware that scammers are among them. Throwing out unrealistic sounding bonuses to lure customers in is just one of many ways that an untrustworthy brokerage may try to trick potential clientele. Here are a few tips to avoid being scammed with Forex bonuses:

Always read the terms and conditions in full, both for the broker in general and for each bonus opportunity outlined on their website. Write down any conditions or alarming facts that you find for reference.

Check to see if there is a limit on the number of bonuses that can be earned. If a broker offers various deposit bonuses and other options, then chances are that traders will only be allowed to claim 1-3 of them, so you will need to choose the ones that will benefit you the most.

Check to see if certain bonuses are only available to certain account holders. Many brokers reserve the best options for VIP accounts or accounts that require the largest deposits. In some cases, micro/mini/cent accounts are not allowed to take part in any special bonuses, or their participation is severely limited. On the contrary, we have seen some special bonuses that are only offered to low-tier accounts. This is something that varies widely by the broker.

Look in the terms & conditions to see what needs to be done for the bonus to be withdrawn. Many brokers will require you to trade a certain number of lots. There are always limitations on Welcome and No-Deposit Bonuses as well that keep traders from simply withdrawing those free bonus funds into their bank account. You will need to trade so many lots, make a profit from a real deposit, deal with some type of profit limitation, or deal with other restrictions before brokers release these funds.

Check to see if there are any restrictions that will wipe out the bonus. For example, many brokers will not allow the trader to make a withdrawal until the bonus has been completely earned. Other times we see limitations on what leverage can be used when trading with bonus funds.

Conclusion

Traders should always figure out their potential broker’s pros and cons before opening an account, and this decision should never be made based on a bonus opportunity alone. However, good bonus options offer several benefits, such as helping a beginner ease into trading without using their own funds, by simply providing one with extra money based on the amount they deposit, and so on. Once you have identified which types of bonuses are available with a certain broker, always be sure to read through those terms and conditions to be sure that earning and withdrawing will be within possible means. Be sure to write down any conditions or rules related to the bonuses that you will be able to earn.

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Beginners Forex Education Forex Basics

What is the Number One Forex Trading Mistake?

Are you eager to become a successful forex trader? Many people read stories about successful traders online and begin to daydream about quitting their desk job in favor of being their own boss. Others might come into a deal of money and look to invest it for more profits. Or maybe you’ve read a trading […]

Are you eager to become a successful forex trader? Many people read stories about successful traders online and begin to daydream about quitting their desk job in favor of being their own boss. Others might come into a deal of money and look to invest it for more profits. Or maybe you’ve read a trading […]

Are you eager to become a successful forex trader? Many people read stories about successful traders online and begin to daydream about quitting their desk job in favor of being their own boss. Others might come into a deal of money and look to invest it for more profits. Or maybe you’ve read a trading article that makes it seem like starting your trading career is easy. Regardless of the reasons why you want to get started trading, the top mistake you can make is opening a trading account without a proper trading education.

You can’t learn everything you need to know overnight. Many beginners spend a little bit of time reading articles or conducting research, but they jump into trading too quickly. If you don’t use the proper risk management and a good trading strategy, you’ll never make money. Being well-educated in this field will help to set you up for success.

Forex traders need to be able to analyze technical and fundamental data. Traders should be able to tell how the news might affect the market, interpret the data on charts, understand different trading strategies, and so on. You’ll also need to understand trading mechanics like how to place orders, exit positions, etc. There’s a lot that goes into perfecting a trading strategy and making accurate trading decisions. It’s impossible to do this without any background knowledge.

Those that are in a hurry to get started are also prime targets for scammers. If you don’t understand what types of fees and things you’re looking for, how can you know that you’re opening an account with a reputable forex broker? Many scammers offer flashy promises or guarantees of profits to lure in traders that don’t really know what they’re doing. Those traders lose their entire investment quickly.

We do have good news for traders that are willing to put in the effort. The internet is filled with free information about trading, like forex articles, webinars and seminars, eBooks, and other resources. Many brokerages even offer educational resources to their future clients directly, free of charge. Try searching Google or another search engine for this information:

–Forex basics: terminology, principles, theories, and calculations.

-Forex Trading Mechanics: how to place an order, exit a position, change your leverage, operate a trading platform, etc.

–Forex analysis: look at technical and fundamental analysis

–Forex Strategies: there’s a lot of them, like scalping, day trading, news trading, etc.

-Risk-management: look at ways to minimize your losses, such as setting a stop loss

Reading articles like this one that revolve around trading mistakes and trading psychology can be helpful as well. When you think you’re ready, you can even practice on a demo account before opening a real account. This can give one an excellent idea of where they stand and if they are truly ready to make an investment.

Learning forex trading requires time and determination, it isn’t something that can be done quickly. Rushing to open a trading account without a proper education is the number one trading mistake that most beginners make. If you read something online that gets you excited about forex trading, then that’s great – you should keep that enthusiasm while understanding that there is no ‘get rich quick scheme’ or shortcut to becoming a successful trader.

Even if you have the money to invest right now, do yourself a favor and get a solid education before you open a live account. If you’ve already opened one and don’t know what you’re doing, try switching to a demo account and take a break from live trading until you’re ready. Your brokerage should hold your funds for you but be sure to check for any inactivity fees. Some brokers charge these fees after a month or more with no trading activity.

Categories
Beginners Forex Education Forex Basics

Top 7 Tips for First-Time Forex Traders

Forex trading can be a profitable endeavor, but it tends to be so primarily for those who invest time in education before diving into the markets. Time and time again we see that the best traders are the most educated traders. With this in mind, check out the following tips for first-time traders looking to […]

Forex trading can be a profitable endeavor, but it tends to be so primarily for those who invest time in education before diving into the markets. Time and time again we see that the best traders are the most educated traders. With this in mind, check out the following tips for first-time traders looking to […]

Forex trading can be a profitable endeavor, but it tends to be so primarily for those who invest time in education before diving into the markets. Time and time again we see that the best traders are the most educated traders. With this in mind, check out the following tips for first-time traders looking to enter the amazing world of Forex trading.

Tip #1 – Know the Markets

Forex traders need to know what makes the markets move in order to make more informed decisions about when and how to trade. For example, a country’s economic standing is the main driving force behind that currency pair’s price. If big economic news is expected to hit, then the market is likely to become volatile. Successful forex traders always stay up to date on the news and are aware of the factors that can affect prices or when they might need to hold off on trading if volatility is on the horizon.

Tip #2 – Have a Plan

Creating your trading plan is one of the first tasks that any new trader should have on their list. Your plan includes your trading strategy, which is very important, but it also deals with who you are as a trader and what goals you have, your evaluation criteria for making trades, how much you want to risk, and your methodology. Without this plan, your trades will likely seem erratic and might not make much sense.

Tip #3 – Practice First!

Have you ever practiced on a demo account before? If you already have a trading account and you haven’t, then you skipped a very important step to beginning the trading process. These accounts are offered by most forex brokers and are completely free, so there’s no excuse not to use one. Demo accounts don’t only allow one to practice without risking real money, but they can also be used to figure out the MT4/MT5 platform, gauge your understanding of how to trade, and whether you’re ready to open a live account, test strategies and indicators, and more.

Tip #4 – Only Risk what you Can Afford to Lose

While we hope that each investment you make into your trading account is a profitable one, this is rarely the case in the world of forex trading. There will be some losses along the way, as this is a fact that even billionaire traders have learned. This is why it’s important to only risk funds that you can afford to lose. If you risk money that you needed to pay bills with or to live off of, then you must think of the ramifications if those funds are lost.

Tip #5 – Research Trading Psychology

You’ve likely heard of the ways that emotions can affect your trades. If not, just think of the ways that anxiety, fear, and stress could negatively affect one’s trades. When you’re feeling these emotions, your head can get cloudy and you don’t make the best decisions, which can result in a loss of money. Even happier emotions like confidence or excitement can cause you to make mistakes when it comes to trading. We could spend all day talking about the psychology behind trading, so you should spend more time researching this topic so that you’ll know if it starts to affect you.

Tip #6 – Stay Consistent

Once you’ve created your trading plan, it is important to stay consistent. Remember that you will have good and bad days when trading, as this is simply part of it. You shouldn’t erratically switch plans every time you lose money, otherwise, you won’t be able to perfect your strategy. Instead, consider keeping a trading journal so that you can see the bigger picture of how your strategy is working along with anything that might need to be changed.

Tip #7 – Choose the Right Broker

With so many forex brokers out there, it’s easy to want to simply choose one and be done with it. Much like with the way that we need to compare car insurance or cable services to get the best deal, we also need to compare multiple brokers as well. This is even more important than the other examples as you are hopefully choosing a broker that you will spend years or decades working with and that will help you make a ton of money. If you don’t put much thought into the process, you could wind up losing way too much money in fees, dealing with poor customer service, or facing other problems down the road.

Categories
Beginners Forex Education Forex Basics

The Forex Experience: What to Realistically Expect

What is makes you an experienced Forex trader? Is it because you have tested thousands of indicators? You have built a system with positive backtesting results? You are have invested a lot of time onto becoming one? If you are not exceptional, you will not be a good one until you have the last element […]

What is makes you an experienced Forex trader? Is it because you have tested thousands of indicators? You have built a system with positive backtesting results? You are have invested a lot of time onto becoming one? If you are not exceptional, you will not be a good one until you have the last element […]

What is makes you an experienced Forex trader? Is it because you have tested thousands of indicators? You have built a system with positive backtesting results? You are have invested a lot of time onto becoming one? If you are not exceptional, you will not be a good one until you have the last element – experience.

Now, you should not be discouraged if you have put a lot of time into making yourself a better trader, even if your system does not show great results. If you got up to that level, you are on the right path, for the next 30, 40 years and more, your life will be financially free. This also induces stress-free and even can be said a healthy life for the long term. Fortunately and unfortunately, depending on how you look at it, money solves many of the problems today. Forex is a blank slate, the internet is also, giving you the opportunity, it comes down if you want it.

And, yes, there are no shortcuts, no easy way to get to this level. Those that seek that easy path will ultimately meet failure. You have invested so much time into Forex trading that you now have a chance to be very close to what is regarded as a “dream job”. Those that reach it are very few, just look around and see all those busy people on the street hasting to get to their workplace in time. A sad truth, many will be frustrated and wonder “why I could not achieve that life I have always wanted”, and they see others do it, just why not me. The opportunity was there, you just didn’t act. Forex is that opportunity, and it will allow you to start again, everyone has the same unpreferred window to study it as long as you live.

Many traders who put in the work, a lot of work, experienced frustrations, and many other negative emotions that are just part of gaining experience. Traders will run into things for what they are not ready yet. It is just a matter of experience, there is no substitute for it. Going forward this article will give you a bit of insight into what to expect, addressing to those who are already into forex trading. All this comes from professional forex prop traders some tips and a practical tool many prop traders use.

Never forget the three pillars of trading: The most important ones are Money Management and Psychology. Trading Analysis is secondary, a far secondary. There is a proven methodology that shows this is the truth. You can throw a coin for every decision to go long or short in a trade, with good Money Management which is followed to the letter, you will still have positive results. Without the right mindset or Psychology, all this can go to waste. Unfortunately, most people just focus on the secondary part, Trading Analysis. Not a surprise the 99% of people do not make it far to reach that stress-free life.

Just to make sure you are on the right trading, your trading system should have three stages. The first test is when you are just building the system and backtest it to make sure you have a much better winning rate than 50-50 as with a coin-flipping. The second stage is where your good-to-go system is put on a demo account and forward-tested. In the third stage, when you step up and say you are ready, you go to a real-life test. You will make different kinds of mistakes in the third stage, and that is alright. This is the experience stage where you will mature as a professional trader. The experience will unavoidably forge you to avoid future mistakes.

At this point, you may think you will not make mistakes, you have made the system that works, but, once it gets serious with serious money put in the trades, it is a completely different world. Forex will be the same market as before but now you have new challenges you have to be ready for. These challenges will be emotions. You better make these emotions happen in the past before you move on but still, some will be new to you. You may have just started to trade your system/plan and you have 4 bad losses right away. The mistakes made will be remembered especially if these decisions were emotional. But this is a good thing and part of gaining experience in a real professional career. Whatsmore, you will have a huge motivation to improve your system.

Know that your system should always be perfected, it is not a holy grail for eternity. Your system is no just a series of indicators for analysis/signals, it is also your emotional control anchor. Trading your system sounds easy but it is not, experience gained from this is essential. Once you realize you had overcome the new emotional challenges, you will realize the Psychology element is the grease for your trading machine. Stop greasing it and it will halt. Confidence will also grow with experience, as well as your balance. Once you have done 1000 trades you will know that the series of big losses you had before was just a normal or nominal statistic.

Every gaining equity curve has these drawdowns, it just happened the drawdown was peaking when you started. Of course, you did not have the experience so you were living in that moment, you doubt is the system works in the first place. At that moment traders do not look at the long game. Once you overcome this, the next series of losses will not shake your confidence. As you move on you will face new challenges yet with every one of those “unforeseen” events patched up in your rule book and the system, you have improved. Those bad situations on the market will trouble you less and less until a few very rare things can surprise. Forex will go out of bad bullets eventually for you.

If you are on to a professional Forex trading career, your path was probably in four stages. The first one is all about demo trading. If you skipped right into real money trading, the odds are it was a huge loss. Consider a lucky event if you have withdrawn after a few great winning trades. It would be smart to stop at that point because you lack experience and the system for the long game. Do not return to live trading before building a system and demo trading. The experience will tell from the demo trading your system works but live trading is now very emotionally different. The third stage is when prop companies want your trading results (note that not every proprietary company needs this when selecting traders).

The best way to impress is by having a demo and live account trading results. At this stage, you have some experience and the system is tight for most of the market situations. However, your trading might be different. When you want to impress, some trades that made you successful off the stage might be missed. After overcoming this obstacle comes the fourth experience stage – actual live prop trading. This is a completely different set of emotions again. This happens to responsible traders, those who are not responsible and do not respect the money are filtered out. At this stage, someone is giving out their capital so your trading can enjoy the “economies of scale” effect.

Bigger equity, bigger trades, bigger responsibility. Losses will happen, they always do, and you might become risk-averse because of a higher scale of responsibility. From an inexperienced trader who went to live trading, risking too much and trading too much now has a risk aversion and trading fear. These emotions will catch you off guard, you might deviate and change your system. There is no other way except to face them, for experience requires time. If you are at this point know the worst thing you can do is turn back. The success rate in this business is so low you cannot afford to drop everything.

Here is a pro tip for traders at this point. These traders should have a system which is backtested, forward tested, and is used in live trading. This system should be considered that will last for life as a profit-making machine in the forex market. Even if you are trading for a prop company or still in the admittance process, put yourself to test – trade an uncomfortable amount of money with your system. By uncomfortable is meant an amount that will seriously hit your home funds balance if you lose everything. This may sound crazy and irresponsible but this money should be recoverable, especially if you have a job or other sources of income. When big money is on the line, this test will help you. Take it as a sacrifice now for the next 50 years or so of your life.

Once this is dealt with, there is not much that can stand in a trader’s way to become a true professional. This emotional experience is so important that it even can be crucial to becoming a professional trader. Forex requires you to lose before you can win. Loses will still be sour and winners sweet but the experience will control the emotions so your final P/L line is just a number. Most coaches will tell traders to hide the dollar amount tied with their trades and trade for the pips. Putting yourself in a very uncomfortable position or out of the comfort zone is beneficial, there is no substitute for that experience gained. This accelerates your learning curve. Some of the great coaches will also say traders are not born but forged. They are forged because they had to go through fire to get to the top.

The tool related to the situation where your system might not work for some time, especially if you are a trend following trader, is the $EVZ. Just a side note, if you are not using any known trend-following strategy, trend following is a way to go for almost all of the proprietary traders. CBOE EVZ volatility is a very important tool for trend following traders, especially on higher timeframes. Since the world where we live is cyclical, so is forex. There are periods of high, choppy, chaotic, low, and other volatility patterns on the market. Trend following strategies need momentum, volatility, or volume to work, this is how trends are created. Most of the traders will find that their system does not work very well during these low volatility periods. Losing streaks will emerge and traders will dip into the emotional zone. Experienced traders will recognize this period and probably will not trade until the volatility/volume picks up again. 2019 was the year of extremely low volatility on the forex market while in 2020 COVID-19 stirred extreme volatility spikes.

Extreme situations are new to you and your system. Do not question your system during these periods, take the $EVZ, and compare your results relative to the $EVZ value. As one prop trader suggests, his trend following system does not work well for anything below the 7.5 $EVZ. If the situation prolongs, like in 2019, he will cut the usual position sizing. If it goes below 6, he completely avoids trading. He may go to Metals markets or Indexes. Simply, the odds for a trend to run in the forex market on his daily timeframe are low so all he gets is breakeven at best. Another tip and always good for Risk Management is diversification. When you perceive low trading volume in the forex market, you can still gain trading Gold or Silver, for example. Metals market requires additional knowledge as they move differently but gains will also affect your emotional state. From a different perspective, the 2019 low volatility is a perfect testing ground for your system, traders that have endured and adjusted are now even more prepared, they have gained experience from an uncomfortable situation.

To conclude, never forget the importance of the Psychology pillar, 99% of people do forget. Experience is a failure and trying again, every top trader went through the forge. Embrace this fact and sky is the limit. Pay attention to the $EVZ and adapt to the situation, markets and economy are cyclical. Finally, do not panic if you make consecutive losses, it is just part of the long game if your system is proven to work.

Categories
Forex Basics

Best Advice from Forex Prop Traders

Most individuals working as independent contractors for proprietary funds are oriented to proven scientific methods not to just what is the best general advice for trading, but other activities as well. It may sound too broad to be useful but it is very practical. As per their words, this information or advice is very obscured […]

Most individuals working as independent contractors for proprietary funds are oriented to proven scientific methods not to just what is the best general advice for trading, but other activities as well. It may sound too broad to be useful but it is very practical. As per their words, this information or advice is very obscured […]

Most individuals working as independent contractors for proprietary funds are oriented to proven scientific methods not to just what is the best general advice for trading, but other activities as well. It may sound too broad to be useful but it is very practical. As per their words, this information or advice is very obscured in on the internet. You will rarely find forex trading “coaches” talk about this crucial mindset element to a trader who wants to constantly improve or even become a professional trader for a company. It is so important that your potential to become one of the best on the market will be shadowed if you have habits that will bust any trading account sooner or later.

This method is used by the most successful professionals in many different activities. Champions, tacticians, presidents, and millionaire investors know this, and they have become over time the masters of their game. The advice is simple: You need to avoid, eliminate, or improve factors that take your trading account into negative! Now, when we look at this it sounds like you already know this, no eureka here. But, surprisingly, most trading advice is oriented towards what could bring your trading balance up, completely putting the losses you will make out of the scope. Understanding and identifying looses is the first step and the work on measures that will cut them down.

 

Now let’s bring this into practice. Speaking of bad habits, every elite professional has them when they start their career. Over time, with good coaching and persistence, they eliminate bad habits that influence their trades. The same can be said for any other profession, our brains tend to react the same way over and over to the same situation or stimulus. Cutting the losing trades caused by these habits out of your balance has the same importance as finding a new rule or a trading tool to improve it. For example, let’s say you have 10 trades, 5 losses, and 5 wins equal in value, 100 for example. If your trading has this breakeven result, you are doing better than the majority of traders.

Now, you have incorporated a rule or a new indicator to your trading system that was able to provide you a new signal and another positive trade on top, increasing your balance to +100. Great, now let’s say you have avoided one of the losing trades by integrating a rule no to trade more than 2 trades on a single currency, for example. This avoidance made your balance +100, the same as when you find a better indicator. The problem is, we treat them differently. We will focus mostly on new and better tools disregarding the impact bad habits have on our account. The reason behind this could be your ego, it could be more interesting to focus on new tools or it could be that subconsciously you have a hard time changing your habits.

What is great about trading and forex is that it will ultimately be a reflection of yourself. How you cope with the randomness of the market and how you seize the momentum. Avoiding losses and finding tools that work well on your balance are what separates the elite from average and from those that never come back to forex. Finding the losing trades is easy, but having a tool or a rule to exclude them is what every professional trader works on throughout his career. When you incorporate a tool that brings you an extra win and one that cuts one of the losing trades your balance will be +200, and this will be a game-changer.

Having a bad habit will always turn your trading balance down, no matter how good your tools are. One of the ways to cope with them is by following three rules. These rules could be a shocker for you since there many videos and mentors that teach and rely on what is essentially wrong, as criticized by some prop traders.

Do not use popular tools, they do not work! Most of those tools you have used in the beginning are not effective. And these cover the internet all over for various reasons. One of them is just because we do not know for any better so we stick with them. The tools regarded obsolete by some professional traders are:

  • The very popular RSI
  • Also, very popular Trend Lines plotting
  • Support and Resistance lines
  • Chart Patterns
  • Bollinger Bands
  • Moving Average Crossovers (doesn’t mean MAs do not work per se, just crossovers)
  • Fibonacci
  • Fundamental Analysis (essential only to investors)
  • Japanese Candlesticks
  • Stochastic Oscillator
  • CCI indicator
  • Price Levels

You are probably familiar with at least one of these when starting and using some of them, if not all. It is not a surprise since the abundance of material based on them is just obscuring what could be a better solution for you. For die-hard RSI traders, this is hard to believe, but it could also be a habit of sticking to a tool they have used since doing their first baby steps into trading. Searching out for a better tool should not be too hard, at least for some of the above-mentioned tools. Many alternatives just work better. As to why these are not good enough is a separate article for each.

Trading on intuition. How many times you have traded like this on various aspects and had a feeling someone is rigging the market when it does not go your way? Many like this way, it is that feeling what rewards them when they trade positively, pushing them to do it again until they bust the account. These traders create gambling out of forex trading, it is probably just a substitute for a casino to them. This is a very undisciplined way to trade. Here is what usually drives a trader to go into the “feeling” trading:

The Fear of Missing Out – FOMO

The market will play tricks on your mind, you may start to feel some hesitation after a few losing trades. Let’s say you pass on the long trade you felt was right on some currency pair. After a calm price movement, you suddenly see that spike up, and it is going strong, fast. The price is already way over your initial entry level but you feel this is the one that will recover all of your previous losses. Of course, many of these trades will be just another loss. The probability is against you when you are late on the move, further reducing your outcome of a positive trade, and later on your ability to save your account. To cope with this, a well-made trading system with specific signals when to enter or close is something we have to build and rely on. This is how confidence will also grow to a point we do not have FOMO trades ever again. Also, eliminate losses produced by intuition trading.

The Overbought and Oversold guess by observing the chart. This is another common habit where traders just feel some currency is Overbought when they see some sharp rally. They do not have a definitive reason why that point is the right opportunity to open a reversal position. On top of that, currencies do not have limited supply like Gold or stocks to have Overbought economic pressure.

Exiting a trade on a feeling. Indicator telling you to exit or a news event could be a reason good enough, but exit on a feeling is probably just you wanting to have a “humble” reward instead of facing remorse of losing a profit trade you once had. The point here is that you have just limited yourself to have small winners that will not matter to your balance much in the long term. Reinforcing your feeling of exiting is further complicated when you guess the right moment. This prolongs the wrongful conviction of your intuitive abilities. Intuition simply does not have a place in forex trading.

Emotions

You cannot rid of this since we are all emotional in some capacity. It is easy to say do not be emotional when trading. To manage them you will need time, and most of all, the system. Relying on a system that works is a remedy for your emotions. The system should be your final answer to all the questions the forex market will ask you. Even the professionals have moments of doubt when a series of bad trades come in, or even worse when an extreme loss hits them without any warning. Trading with a demo account may give you a feeling you have finally eliminated emotional trading with a good system. The emotions will come back again when you decide to put in your money, and again when you trade someone else’s money. The final master of your emotions will be your confidence based on your system that simply works, just stay out of the way.

Trading without a Trading System

When you have a definitive answer to all market situations, all of your guesswork, intuition, and other bad habits are swept away. All you have to do to keep that account growing is to read your plan and trade accordingly, without exceptions. Whatever your initial plan may be, it’s a great start and it will show results right away. Over time and with testing, your plan will evolve and bring more and more gains. Before you make your first Trading Management plan, which is not hard to do, you will need to avoid certain aspects as per the prop trader’s advice.

Not having a flexible or adaptive system. To elaborate, every currency behaves differently on the market and will have different pip sizes of trends, range periods, news event moments, etc. Having the same Stop Loss distance, for example, to all of them does not make any sense and will certainly impair your ability to do well on most of them. That 50 pips Stop Loss may work on the EUR/USD pair but will certainly be triggered more often on the GBP/USD simply because the GBP moves a lot more. Different timeframes also set different price action, your 50 pip Stop Loss on a 5-minute timeframe does not have any practical use since you will have many trends and spikes that could be cashed in with the proper Stop Loss.

Reversal Hoping

A trade does not go your way, but you feel it is going to reverse and you move your Stop Loss, again and again to the point your trade is a big loss now. You have just made your Stop Loss useless, and your Trade Management plan. The best advice on this is, apart from avoiding moving your Stop Loss, is let that trade hit it, wait for it and if it happens, move on. Now you have that losing trade that may help you improve your system later, losing is a part of trading. Like before, moving a Stop Loss and experience a reversal will just prolong your conviction you were right and go back to emotion trading. Resist this habit, you will most likely do it again but in time you will understand. Similarly to the intuition exiting when the trade is positive, exiting out of fear of Stop Loss being hit when a trade is negative is not going to help you become a consistent gain trader.

Limiting Winners

If you are familiar with Stop Loss and Take Profit management then you know about the Risk-Reward ratios. Most of the traders cap both sides of a trade, using a Stop Loss and Take Profit. This is a disciplined way to trade as you have defined positions for both according to the plan. Risk Reward ratios of 2 to 1 mean your potential profits exceed the amount of loss twice fold. Similarly when you put Take Proft to 10 pips distance and Stop Loss 5 pips distance. Unfortunately, this approach also limits your gains twice fold. Trends can extend way more than 10, 100, or even 1000 pips. These trades with extreme gains are the ones that will make an impact at the end line, no the small ones and you have just capped that possibility never to happen. This is why the ratios are not a good way to start your plan. There are better approaches to how you can have great Risk Management based on scaling out or partial position closing and moving the Stop Loss to breakeven.

The Trading Plan is easy to create following all these points. Let us say you are adaptive and have an indicator that measures volatility (ATR), set the pip value accordingly as the Stop Loss distance, for example, say it is 10 pips. Set your Take Profit to be 10 pips too but only to partially close 50% of your position and leave the other half uncapped. This way you can capture extreme trend moves and profits. Once your Take Profit is hit you can only win because you will also move your Stop Loss to breakeven, the price level you have entered. Even if the trend reverses and hits your Stop Loss at breakeven, you have captured that 50%. You have set up the first Risk Management plan that will evolve and work in conjunction with other tools you will develop. Prop traders usually have an indicator for every situation, when to exit, when to continue trading, when to enter a trade, when to avoid trading, and so on. Having this rule list by your side is not your pillar of confidence, every time you open a trade, follow this plan. Now, compare your results with and without a plan.

Source: No Nonsense Forex channel

Categories
Beginners Forex Education Forex Basics

Top 7 Reasons Why Forex Traders Quit Trading for Good

The sad truth about trading and forex is that the majority of traders give up, there are many reasons why they may be giving up, some from lack of funds, other from lack of time, but there is a wide range of these reasons which we will be looking at today. Some reasons will be […]

The sad truth about trading and forex is that the majority of traders give up, there are many reasons why they may be giving up, some from lack of funds, other from lack of time, but there is a wide range of these reasons which we will be looking at today. Some reasons will be […]

The sad truth about trading and forex is that the majority of traders give up, there are many reasons why they may be giving up, some from lack of funds, other from lack of time, but there is a wide range of these reasons which we will be looking at today. Some reasons will be unavoidable, others completely out of choice, so let’s jump straight in and take a look at some of the reasons why some people stop trading.

Lack of Funds

Let’s be completely honest, trading forex can be an expensive business, the problem is, that it has been made so accessible with accounts being able to be opened from as low as $10. The problem with this is that $10 is just not enough money to trade with. It’s fantastic that it is so accessible, allowing those to trade who never would have been able to 10 years ago, but what they do not tell you about these low deposits is that it just is not enough to trade safely with. Even with leverage of 1:500 which is what a lot of people go for these days, you will be able to put on just one or two trades before being margin called, it just is not worth it and it is a sure-fire way to lose that account. The other problem is that those coming in with $10 deposits are those that do not have a lot of money, so as soon as that money blows, that is everything that they had available to trade gone.

In order to have a safer account, you need to have a deposit of at least a few hundred dollars, otherwise, you cannot use proper risk management, so while trading is looking more and more accessible, in order to do it successfully and for a longer period of time, you will certainly need more than the minimums that a lot of brokers are suggesting. Without money, you cannot trade, so one of the main reasons why people stop trading is a simple lack of money and funds.

Boredom

Trading is a long process, a very long process, in fact, there aren’t many things out there that take longer to either learn or perform. So it takes a long time to learn and to trade which will already put a lot of people off who jumped into trading in order to get rich quickly. You have probably seen a lot of adverts and people posting about how they have gotten rich overnight or within a week, people come into trading expecting this, but it just is not going to happen, and so they get bored of the fact that they are actually required to learn things and to put in both time and effort in order to make any money. They often decide to simply quit once they realise just how long it is going to take to actually make some money.

The other reason people can quit due to boredom is the fact that on occasion it can take hours or even days for a proper trade setup to show up. Trading was promised to us as being exciting, so why are we just sitting in front of the computer for days at a time with no trades being placed? Sometimes people even try to force some trades in order to build up a little bit of excitement, not something that you should be doing as this will only lead to losses which will put you off trading even more. People do not come into trading realising that it is a marathon and not a sprint. If you are bored, then do something else for a few hours, there is no need to sit in front of the computer for all this time, but people just want to trade, so they do and they then become bored and often this is enough for someone to give up entirely.

Overconfidence or a Lack of Confidence

To many being overconfident or having a lack of confidence may sound like completely different things, while they are on the opposite side of the spectrum to each other, they also have a lot in common and are both reasons for why someone may actually quit trading. Let’s start with the obvious one, having a lack of confidence is common when it comes to trading. This is especially prevalent when we look at people who have just started out. You have the excitement to begin, but do you really know what you are doing? When you have not done something before you often lack the confidence to do it, you can also lose any confidence that you did have when you experience a few losses in a row. If that confidence drops enough then you may even find it hard to put on any trades at all, second-guessing your analysis and trade ideas to the extent where you go days or even weeks without a trade being put on. When you are in this situation it is hard to build up your confidence as you are not trading and this can lead to someone quitting completely.

So the opposite of that is overconfidence, not something that you would normally consider something that would make someone quit doing something. You will normally gain the trait of being overconfident once you have had a few successful and profitable trades in a row. Confidence is a good thing, but when you get overconfidence it can start to cause issues. When you have this much confidence you start to think that you are invincible or that anything that you do will work. This can cause you to become sloppy, to start taking trades that you think will work rather than the ones that your strategy states that you should be taking. These out of strategy trades will eventually lead to losses that will then go against you. Either dragging down your confidence levels or making you think about running with whatever profits you currently have, for more serious cases, overconfidence can make you trade so much that you completely blow your account.

Too Many Distractions

It takes a lot of effort and concentration in order to trade successfully. If you are not able to concentrate on what you are doing then mistakes are going to be made and you will inevitably end up losing some money. So if you are the sort of person that is easily distracted, then you may need to reevaluate what it is that you are doing and the environment that you are trading in. If your computer is full of notifications from Facebook or Reddit then you may need to remove them, if you can hear the TV in the background then you may want to turn it off or remove it entirely from the room. If you are distracted, you will make losses, not something that you want to happen. These distractions lead to a loss of focus which can completely take away your excitement and motivation to trade, if whatever is on the TV is of more interest to you than the markets are, then maybe trading just isn’t for you.

Tiredness and Fatigue

If you have been trading for a long time, multiple hours in a row then you can begin to feel a little tired, this can make you quit for the day but it certainly won’t make you quit trading entirely. Fatigue, on the other hand, can, is where you are constantly tired of trading, you will wake up and not really fancy trading due to being tired of it. When people begin to feel this over a longer period of time, it can be one of the catalysts for them to quit. Think back to the last time you had a hobby, are you still doing it now? Probably not, either from boredom, lack of interest or you got tired from doing it too much. When you do something over and over again, it can become tiresome and can cause you to fatigue. So it is often suggested that you should take regular breaks, to help prevent you from burning out.

Blown Brokerage Account

One of the more obvious reasons to quit trading, a blown account is as low as you can get, it is the thing that all traders dread. Unfortunately, it is far more common than you may think. In fact, the majority of traders manage to blow their account and one time or another, if you haven’t so far, then congratulations, you are doing far better than a lot of other people have. When we do manage to blow an account, it can cause a complete loss of confidence, motivation and willingness to trade. This is the point where people often give up, especially if they put all their available money into that account. Those that stick with it can use this loss of an account has a huge learning opportunity, as long as you do not use all your money at once, understand that you can learn from it and have the motivation to continue to learn, you can get passed a blown account as a better trader, just make sure you don’t try to win that money back too quickly, that will only lead to another blown account.

Lack of Time

Trading can take a lot of time, a lot of it, to learn, to trade, to do pretty much anything. When you start a journey as big as trading, from the outside it may look pretty simple. As soon as you get into it though, you soon begin to realise just how much there is to learn and how long it may take for you to do it. This can instantly put a lot of people off, especially as it is simple stuff. People these days do not want to sit down and take time to learn, they want things to work quickly and straight away, when it doesn’t they give up and move on to something else that they think will be a quick process instead. Trading takes a lot of time, people often want to do it after work, coming home tired and then getting into something so complicated can often make people give up from not having the time to learn it all after work. It is more than possible to learn part-time, many do, but it will take up most of your free time.

So those are just some of the things that can cause people to quit trading. There are of course many more, each trader is different in their goals, their abilities and their willingness to put in the effort. If you want to be successful, you need to be able to guard yourself against some of the reasons why people quit and you also indeed to be able to push yourself through them, as at some time in your trading career you will experience them, the important bit is getting through time and then pushing on to be a successful trader.

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Beginners Forex Education Forex Basics

The Ultimate Beginner’s Guide to Forex Trading

Forex stands for Foreign Exchange and it is also known by its short name FX. It is a process of trading various currencies all around the world. So why is Foreign Exchange so significant? The most obvious and probably most important reason behind its existence is that it keeps businesses as well as foreign trade […]

Forex stands for Foreign Exchange and it is also known by its short name FX. It is a process of trading various currencies all around the world. So why is Foreign Exchange so significant? The most obvious and probably most important reason behind its existence is that it keeps businesses as well as foreign trade […]

Forex stands for Foreign Exchange and it is also known by its short name FX. It is a process of trading various currencies all around the world. So why is Foreign Exchange so significant? The most obvious and probably most important reason behind its existence is that it keeps businesses as well as foreign trade going on, on a global scale. You participate in global foreign exchange market every time you convert let’s say Dollars (USD) to Pounds (GBP) on your trip to the UK, and same applies if you are a British citizen going on a vacation in Greece, but in that case, you will convert Pounds (GBP) to Euros (EUR).

Forex is a good place to earn money as it is a type of investment, and people all around the world are trading currencies daily. How much you can earn depends mostly on how much you invest, basically, like any type of investment. Profits can range from a couple of dollars to thousands and more every month. That is the obvious reason why some people are only trading on FOREX for a living. Where there is money there are always some risks and it is not uncommon for people to lose almost all of their money invested, but you have to have strong foundations to make it. You can’t build Empire State building on a shallow concrete slab. That is why you have to read a lot and inform yourself about Forex. You will probably learn about various trading strategies you can use which can minimize risk and maximize your profit.

Forex presents the market where you trade the currencies. Before we even start elaborating on the term of the Forex market, it is good to know that it doesn’t have its central place. There is no for example physical place such as building, where the trade is happening. Forex market consists of online trading and it can be done all across the world, where only Internet access is required. For instance, if you are working with cryptocurrencies, the only thing you need is access to the Internet so you can proceed with obtaining access to the Forex market. Bear in mind that you would have to check the timezones, depending on the country and currency you are working with. The forex market has its working schedule. It starts from Sunday at 5 pm EST until Friday at 4 pm EST. This market is constantly changing and moving, therefore it is expected to see the change in the price quotes of currencies throughout the whole day.

Forex Market Levels

Two levels create the Forex market. The first one is called the interbank market. In this case, banks are the ones that trade. The second one is called the over-the-counter market, or just shorter OTC and it is the place for the regular traders and their FX activities. The most important thing before you even start trading online is creating an account with the Forex broker. This is the person who can give you the platform that you can use for further trading. When we talk about currencies, it is the US dollar that is majorly traded. It is estimated that more than 80 percent of the trades are covered with the US dollar.

We also need to mention Euro and Japanese Yen as currencies that are also used in trades but not as much as the US dollar. This market is well known for being one of the most vibrant in the world where a lot of things are happening and changing each second. Most importantly, highly skilled traders can earn a lot, but on the other hand, there are investors whose profit soared in a short amount of time and then plunged even quicker. It requires dedication, concentration, and experience to embrace all necessary skills for trading in this market, but if you try a little bit harder, the expected profit can be guaranteed.

Being devoted to learn and study and expand the knowledge about this market has shown as the most important factor. People usually take this for granted and use this market as a gambling game that led them to the serious loss of money they invested. This is why the dedication and effort you make is crucial to get the profit. Analyzing the opportunities and reasonable predictions are also key factors that will make you a serious and good trader. By expanding your knowledge and experience, you will definitely be able to increase your profit.

As we mentioned earlier the most used currency in the Forex market is the US dollar. That leads us to the term currency pairs. The most important thing is that the paired currencies have to be liquid in the market. For example USD/JPY, EUR/USD, USD/CAD, AUD/USD, GBP/USD… present the major currency pairs. There are also currency pairs that are not often used even though they are liquid. They are known as minor currencies and their pairing is not very common such as GBP/JPY, EUR/GBP, EUR/CHF.

Furthermore, as a future Forex trader, it is essential to recognize and determine the base and quote currency which creates the currency pair. For example USD/JPY. The first currency in the pair (USD) is the base currency and presents bid price. The second one, which is in our case JPY is quote currency and stands for ask price.

It’s All About the Numbers

When it comes to currency trading you will note that the currency pair is always followed by a number. Let’s take an example from above, USD/JPY 108. In our case, the base currency is USD and is always equal to 1. Therefore, we have this proportion of 1 USD/JPY 108. This example shows that 1 USD and 108 JPY are equivalent. On the other hand, if we use JPY as the base currency according to the forex convention it will look like this JPY/USD 0.0092. Bear in mind not to swap two currencies and their values. Even though they at first glance seem different, dividing 1 with 0.0092 we will have 108 as the result, which means that the mathematical relation shouldn’t change.

A few more things need to be said regarding bid and ask price. The most basic way to describe ask and bid is that it is a two-way price quotation, the bid price being the maximum price a buyer is willing to pay and ask price being the minimum price seller is willing to take. As for Forex, profit is made when your broker asks for a price that is higher than he would be willing to bid, if, for example, you were the seller. Now that we know this, it is also important to know that that, let’s call it “area” between the bid price and ask price is known as the spread.

What do buying and selling currencies look like? First of all, there is always someone buying a pair of currencies and someone selling a pair. The process of making a profit by buying and selling goes like this: You buy US $3000 by selling 2000 euros. This means that you are predicting the value of the US dollar will increase against the euro. If you were right, then, another step needs to be taken to make a profit. You need to sell your US $3000 into euros. Now you will obtain more than 2000 euros. The process as you can see is quite simple.

As we mentioned earlier the spread is the difference between the bid and ask price. It is a bonus, or more specifically a commission you broker receives for the trade. So how do we know if we earned or lost money? It is quite simple, as we are using something called pip, and it stands for Percentage in Point. If you have a currency pair, and due to fluctuations in the market there is a change from 1200 to 1202, which means there is a 2 pip change. If you buy the EUR/USD currency pair, to profit, you want EUR to increase against USD. If you bought EUR for $1.7500 and you sell when the price reaches $1.7550, you made yourself a profit of 50 pips. On the other hand, if it lost value, it is a loss of 50 pips, and it would show as -50.

If you are asking yourself what should be your goal regarding pips, the answer is simple. It is a matter of your preference. Someone can be happy with 20 pips or 60 pips. Your main goal is to make a profit. It is true, though, that the longer you hold a currency pair, there will be more pip value changes. To help you achieve your goals and be a successful FX trader, you will use certain orders which you will give to your broker to buy or sell currency pair at their best price.

Order Types

The first order we will mention is Market order. It’s the most widespread type and is used to buy or sell the currency pair at the best possible price. An entry order is used to enter the market when the price reaches a certain target price. Since you can’t spend hours and hours looking at the fluctuations on the market, this type of order will help you save time.

A limit order is the type of order you can use to exit the market once you reach a certain profit. This way your broker will buy or sell a certain currency pair at a specified price. If you are taking a short position, it means you will have to set your limit order, somewhat lower than the market price, and vice versa, if you are taking a long position it would be good to set a limit order higher than the current market price.

Another type of order commonly used is Stop order, also known as Stop-loss order. It is used to minimize your losses. Once the price reaches a certain point, a trade will be closed to prevent more losses.

Importance of Leverage

Before we start elaborating on the importance of the leverage, we need to discuss the risk and reward ratio. It presents the result of a comparison between the risk involved in the trade and the profit that you are making from it. For instance, you can use the stop loss at 20 pips and then you place your in-profit at 40 pips. That means that your risk/reward ratio will look like this- 20:40. According to this example, you can earn 40 pips while risking 20 pips.

It is essential to analyze the opportunity, so the reward can overcome the risk. It would be even better if your reward can always overpower the risk, but it’s not something that happens every time. We all need to be aware that the prices on a market like this are fluctuating and things are rapidly changing, therefore the theory about high reward and low risk is not always viable. There are no specific rules that you should stick to. It is your strategy, knowledge, and ability to recognize opportunities that can lead you to profit.

In the previous paragraph, we have mentioned the term leverage. It is important to say, that people join the Forex market because it provides them with higher leverage, which is different from other financial instruments. This means that you can borrow a higher amount of money from your broker for your investments. Furthermore, borrowing the money from your broker and higher investments will provide you with the bigger potential to make a profit, because you will earn a precise percentage of your investment.

Forex provides you with high leverage, which allows you to trade a big amount of money even with the initial margin. That margin depends on your broker and the size of your position and it can go from 50:1 up to 200:1 in some cases. Again you will need to set-up a margin account with your broker. So, what do these leverages mean? If there is a 50:1 leverage, that means that the minimum margin requirement is only 2% or 1/50 of the total value of trade in a trading account that is available as cash. Usually, people rely on 1:50 and 1:100. The leverage 1:200 is used when it comes to positions of $50.000 and less.

To trade 100.000$ with a margin of 1% which is 100:1, you will have to put 1000$ on your margin account. Even if it looks a bit higher and goes along with risk, have in mind that foreign currencies do not change significantly on the day of trading. They usually drop less than 1% daily. The leverage can be exceptionally helpful when you’re a beginner in the Forex trade market. The most proficient traders reckon that $1000 of investment should be the minimum starting point. The thing is that not many traders are willing to risk that much, but the leverage can allow them to increase their trading power.

If you are concerned about trading foreign currencies without the leverage, we can tell you that some great traders in the market do not use leverage. The following example will illustrate how this can still work. For instance, you buy $2000 with the 1600 EUR. So, in the worst case, if the price of USD drops by 50%, you are not bad. In this case, you are still left with 800 EUR. On the other hand, if you use the leverage ratio 100:1, bear in mind that you will lose all of the money. Even if you earn something without using the leverage it cannot be anything significant. Only wise decisions can lead you to serious profit.

And Lot Sizes?

A lot presents the minimum that you can trade in the Forex market and is in correlation with the risk. If you are a trader, you will have to check and look for the most convenient lot size that matches your current trading account. Again, be aware that the market is very active and is rapidly changing. Therefore, if you don’t have any huge trade, a 100 pip movement won’t affect your account. On the contrary, a huge lot with the same pip movement (100 pip) will definitely result as a loss. It is significant to recognize which lot size is the most convenient for you.

The smallest lot that is on offer by a vast number of brokers is called a Micro lot. It equals 1000 units of a currency. So if we are taking into account, for example, EUR, that micro lot will be equivalent to 1000 EUR. A 2 pip, in this case, would be worth 20 cents. It is suggested if you are new to Forex trading, that you use this type of lots. If you have more capital to invest, then Mini lot would be a far better way to make a profit. Let’s say you have a dollar-based account and are trading a dollar-based currency pair. In this instance, 1 pip is equivalent to $1. Since the market fluctuates, and pips can skyrocket or plunge, profits or losses can be far greater.

A whole lot of traders only use micro and mini lots. The thing is, large accounts are using Standard lots as these can bring the most profit. If we use the dollar example from above, it would mean that 1 pip equals $10. If there is a 20 pip movement you would have an equivalent of $200. This shows great potential for both profits, and, unfortunately, losses. Like we already mentioned, Standard lots are only for larger accounts, and you would need to have a larger capital to be able to invest in these.

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Beginners Forex Education Forex Basics

The Importance of Remaining Flexible While Trading Forex

Don’t you hate it when you are trying to get something done but need a bit of help, so you ask your colleague for a hand but they won’t help because they are doing something else, they don’t know how to do it and they are not willing to try. This lack of flexibility can […]

Don’t you hate it when you are trying to get something done but need a bit of help, so you ask your colleague for a hand but they won’t help because they are doing something else, they don’t know how to do it and they are not willing to try. This lack of flexibility can […]

Don’t you hate it when you are trying to get something done but need a bit of help, so you ask your colleague for a hand but they won’t help because they are doing something else, they don’t know how to do it and they are not willing to try. This lack of flexibility can cause issues in life, and it can also cause issues within the trading world.

This can most clearly be seen in people’s strategies, often a newer trader will create a new or adapt someone else strategy in order to successfully trade, they manage to get it to a stage where it is being profitable, whether it is slightly or majorly profitable it doesn’t matter. The problem is that the markets change, they are constantly changing, so a strategy that worked yesterday may not work today? The new trader does not want to change anything because it has worked in the past. While the professional trader that the new trader based their strategy off has adapted it to the new market conditions. The experienced trader is being flexible changing things as needed, trying out new techniques, while the newer trader is not being flexible and the trades are starting to move against them.

Being able to change your own bias, such as the direction that you think the markets will move is paramount to being able to trade successfully. Constantly analyzing the markets and changing your stance and approach is what can make you profitable. If you choose one direction and just stick with it, there is no saving your account once things start to move against you.

Flexibility is what allows certain animals and plants to survive while others die out, it is also what allows certain traders to be successful while others blow their accounts. Having a short term memory can often be a bad thing in life, but when it comes to trading it is actually perfect, the short term memory will mean that you are looking at the current trade from a fresh perspective, each trade is it’s own and so your bias towards previous trades is reduced and it is far easier to adapt and be flexible towards any new market conditions that may have come up between now and the last trade you made.

If things have started going against you, or the outlook of the markets has changed, there is no harm in changing part of your strategy, or if your strategy will no longer work, there is no harm or shame starting from scratch, create an entirely new strategy that is adapted to the current market conditions. Don’t forget that old strategy though, you will need to continue being flexible as the markets continue to change, so having that previous strategy that worked, it could either be used again or adapted to yet another new market conditions.

So have a think, do you consider yourself to be a flexible trader, or do you get stuck in your ways and find it hard to adapt to changes?

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Forex Basics

Reasons Why Your Forex Losses Might Actually Be A Blessing

Out in the real world, telling someone that your losses are a blessing might get you a few funny looks. However, in many walks to life, a loss can be one of your greatest tools, it can teach you far more about yourself and the performance than a win ever could. Some of the worlds […]

Out in the real world, telling someone that your losses are a blessing might get you a few funny looks. However, in many walks to life, a loss can be one of your greatest tools, it can teach you far more about yourself and the performance than a win ever could. Some of the worlds […]

Out in the real world, telling someone that your losses are a blessing might get you a few funny looks. However, in many walks to life, a loss can be one of your greatest tools, it can teach you far more about yourself and the performance than a win ever could.

Some of the worlds most famous investors, Warren Buffet, George Soros and many more have made some pretty huge losses, but that didn’t discourage them, instead, it taught them, after those losses they became a lot more successful at what they do and in the long run, they are thankful for those mistakes that they made.

When you make a loss in Forex, it is important to treat that loss with respect, this means not just shrugging it off as a loss, this will not benefit you at all. Instead, it needs to be treated as a blessing, it is a chance for you to fully understand why it went wrong, why the trade lost and what you did wrong, then again, you may not have done anything wrong, it may be something in the markets, but the only way to know that is by looking at and analysis why that trade lost.

It is important to remember not to get too high or low over a losing trade, keeping your emotions in check and stable will allow you to properly develop your strategy and style in line with the loss.

Many traders will pick a strategy that they like, they will trade with it for a while and it’s great, it is making some decent profits, then the first loss comes, then another, now the strategy is trading negatively so the trade gets rid of it and picks up a new one which is profitable for a while, then it starts to make losing trades, the trader will drop it and pick up another one. You can see the cycle, and it is a never-ending cycle.

Most strategies are created with the current market conditions in mind, they will work while the markets remain consistent to the strategy, but as soon as thing start to change, and they always will, the strategy starts to make losing trades, instead of getting rid of the strategy and getting a new one that works now, we need to start looking at what has changed and why the strategy has stopped working. We know the strategy works, so why get rid of it, instead we need to start adopting it.

You should be keeping a journal of your trading, this is a fantastic source of information and we should be able to analyze it and work out exactly why the trades are now going wrong. Using this, you can adapt the strategy to the changing markets, change certain parameters, entry points, exit points and so forth, it is a much more economical way of doing it and it will increase your knowledge of the markets far more than just starting over with a different strategy that you hardly know.

Forex will always be changing, that is a given, it is important that you understand that you need to be moving with it, this means learning and adapting from your losses, it is the best way to learn and those losses truly are a blessing in the long run.

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Beginners Forex Education Forex Basics

What is a Forex Deposit Bonus?

There’s a lot to compare and consider once you start looking for a forex broker. Account types, fees, and funding methods are some of the most common items traders look for. Finding a broker that offers good bonuses and/or promotional opportunities is a big perk. Every broker has its own unique rules and conditions for […]

There’s a lot to compare and consider once you start looking for a forex broker. Account types, fees, and funding methods are some of the most common items traders look for. Finding a broker that offers good bonuses and/or promotional opportunities is a big perk. Every broker has its own unique rules and conditions for […]

There’s a lot to compare and consider once you start looking for a forex broker. Account types, fees, and funding methods are some of the most common items traders look for. Finding a broker that offers good bonuses and/or promotional opportunities is a big perk. Every broker has its own unique rules and conditions for any promotion that is offered, but most deposit bonuses work in the same way: the trader opens a live account through the brokerage and makes a deposit.

The deposit bonus is then applied as a certain percentage to the deposit that has been made. For example, if the broker is offering a 50% deposit bonus and you deposit $100, you would actually have $150 available in your trading account. Deposit bonuses can be very helpful to traders that don’t want to make a large deposit because they add to your account balance and can be used freely for trading. Here are a few quick facts about deposit bonuses:

-You must sign up for a live account and make a deposit before you receive the bonus unless the broker is offering a no-deposit bonus, which does not require a deposit.

-Most brokers will allow you to withdraw bonus funds or profits made once you reach a certain trading volume.

-Your deposit might need to be of a certain amount to qualify for the bonus. Always check to see if each deposit qualifies or if you need to meet a certain minimum for the bonus to be applied.

-Some bonuses are provided as soon as you open your account, while others are only credited with a certain amount of trading activity. Deposit and no-deposit bonuses are usually applied once the account has been opened, while rebates are applied later on.

While deposit bonuses are more common, some brokers offer no-deposit bonuses as well. This applies a certain balance to your account once you sign up for an account without requiring you to make a deposit. If you lose the entire bonus amount, you can simply walk away without owing the broker anything. This is sometimes labeled as a welcome bonus.

It’s important to read the terms and conditions for any bonus you want to receive before opening your account or making a deposit. Some brokers are very transparent, but others might have impossible requirements that keep you from ever being able to withdraw your bonus funds if you turn a profit. Some might allow you to open an account with $100, but only credit bonuses to those that deposit $500+. Other brokers require traders to reach out to one of their customer support agents within so many days of making their deposit in order for the bonus to be claimed. Conditions can vary widely, so this is why one should always be cautious and read the fine print.

You might be wondering why brokerages would offer free funds in the first place. The general idea is that traders will open accounts to take advantage of the promotion and would then continue to trade through the broker. A broker that offers a no-deposit bonus would hope that the trader would decide to deposit their own money after using up the bonus or making some profit from it.

Either way, these bonuses are good for the company and the trader alike. A word of warning, however – some scammers offer bonuses that seem too good to be true to convince traders to open an account with them. Getting a good bonus is always a perk, but you shouldn’t open an account with a broker for promotion alone. Always check out the company thoroughly and make sure that they offer attractive trading conditions, otherwise, the bonus won’t be worth it once you’ve paid out extra fees.

There are always conditions that require the funds to be used for trading, so don’t think that you can simply claim a no-deposit bonus, withdraw the cash, and walk away. You’ll usually need to achieve a certain trading volume to withdraw the funds, so if you manage to profit from the provided bonus, you will have the option to withdraw your profits once you meet the terms.

Everyone loves free stuff, and forex deposit/no-deposit bonuses are great perks. However, traders should always make sure a broker is legitimate with decent trading conditions no matter how good their perks seem. It’s also important to read the fine print to ensure that you know exactly what you need to do to qualify for any bonus and that you’ll be able to withdraw your funds eventually. Many beginners might lose their bonus funds trading, but these bonuses do offer one the chance to profit on the broker’s dime and to withdraw their cash once conditions are met.

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Beginners Forex Education Forex Basics

What Kind of Investor Are You?

Our personalities are one of the main factors that affect the way we do things, especially when it comes to trading. Are you shy and timid, or aggressive, determined, anxious, confident – most likely, fall into one of four main personality types with some possible overlapping. Author and CEO Michael Pompian has contributed some helpful […]

Our personalities are one of the main factors that affect the way we do things, especially when it comes to trading. Are you shy and timid, or aggressive, determined, anxious, confident – most likely, fall into one of four main personality types with some possible overlapping. Author and CEO Michael Pompian has contributed some helpful […]

Our personalities are one of the main factors that affect the way we do things, especially when it comes to trading. Are you shy and timid, or aggressive, determined, anxious, confident – most likely, fall into one of four main personality types with some possible overlapping. Author and CEO Michael Pompian has contributed some helpful information in his book Behavioral Finance and Investor Types: Managing Behavior to Make Better Investment Decisions in order to provide us with an idea of which of his four outlined personality types we fit into. Keep in mind that knowing this can give you an idea of your strong suits and where you need to improve when it comes to trading habits.

In the book’s questionnaire, traders are asked which statement is the most agreeable:

“Losing money is the worst possible outcome.”

“I should act quickly on opportunities to make money.”

“I need to be satisfied that I have taken the time to understand an investment I plan to make, even if I miss opportunities by doing so.”

“I should not be in charge of overseeing my money.”

According to Pompei, those that answered A likely fit into his Preserver type, while those that answered B are called Accumulators. These are both considered to be extreme personality types. Here’s a summary of how these traders are described in the book.

Accumulators are often determined and confident traders, but their mistakes come from believing that they have more control over their investments that they really do. This personality type is prone to overtrading, which can lead to losses.

Preservers find themselves worrying about their losses too much and can fall victim to making trading choices out of fear or anxiety. These traders need to understand that you won’t win every time, and that’s perfectly fine.

Those that answered C to the above question are labeled as Independents, while Followers most likely answered D.

Independent investors have their own original ideas but fall victim to confirmation bias by giving more credit to certain factors that support their own way of thinking. These traders are more likely to contribute wins to themselves, rather than thanking the bull market.

Our last personality type has been labeled as Followers in the book. These traders aren’t as motivated and often follow their friends or chase the fad. Many of these traders make decisions based on past history and might overestimate their tolerance for risk if they have received good results in the past.

As you can see, each of the four personality types are apt to fall victim to specific problems related to the way that they think while trading. The more aggressive Accumulators and Preserves might be too worried about losing money, or they could be overly confident, which leads to trading too often. The more relaxed personality types labeled Independent and Followers either come up with their own ideas or follow others, but either personality can make mistakes when analyzing data, making them overly confident and less likely to worry about their risk tolerance.

Of course, we’ve only based your results on one question from the book, so it might be a good idea to read Behavioral Finance and Investor Types: Managing Behavior to Make Better Investment Decision and to answer the entire questionnaire to see if you get different results. Still, the information provided here should hopefully help you to have a better idea of the type of trader you are and where you need to make changes.

Categories
Forex Basics

Comparing Popular Forex, Crypto and Penny Stocks Trading Methods

From podcasts to blog posts, we are constantly exposed to countless pieces of information. Everyone is nowadays sharing their opinions on the best investment strategies that should get you from zero to professional in no time. As we can at times rely a little too much on other people’s thoughts and ideas. You should know […]

From podcasts to blog posts, we are constantly exposed to countless pieces of information. Everyone is nowadays sharing their opinions on the best investment strategies that should get you from zero to professional in no time. As we can at times rely a little too much on other people’s thoughts and ideas. You should know […]

From podcasts to blog posts, we are constantly exposed to countless pieces of information. Everyone is nowadays sharing their opinions on the best investment strategies that should get you from zero to professional in no time. As we can at times rely a little too much on other people’s thoughts and ideas. You should know that there is a particular indicator which grants success regardless of what one decides to trade – profit. The final outcome and goal of every trade anyone ever does is one thing – money.

So, if you happened to be wondering if your investment strategy is the right one, just ask yourself the question of what is more important – being right or being profitable. While this is often easier said than done, we should first put effort into understanding which skills can help you begin or jump-start your career as a cryptocurrency trader. If you are a successful crypto trader or a forex trader attempting to trade cryptocurrencies, you will find that specific knowledge unique for the world of forex may be the one thing you have not given a try yet.

Firstly, we must acknowledge the fact that, to be able to understand how any form of trading functions, we really give ourselves the opportunity to compare and contrast as many different types of trading as possible. Not only will such an approach generate more knowledge, and therefore more insight, expansion across several markets will also lessen the chances to severely endanger your financial stability. While sources we turn to in order to learn more about trading often point to one of the popular markets, such as stocks, metal, etc., exploring the options to cover more than one market can give you an advantageous position as the truth is always somewhere in between.

By focusing on a single market and references which only praise that particular type of trade without acknowledging the power of a more comprehensive standpoint, you both deprive yourself of the opportunities to increase your profit and reduce your prospects of becoming a truly prosperous trader. Moreover, if you have already faced some challenges and experienced some losses trading in one or more markets, you are that much more apt to decide for yourself what your next step should be. Although they say we should learn from other people’s mistakes, even if you have made the mistakes we are going to discuss here, you probably know that almost every professional trader undergoes some level of disappointment in the process of gaining invaluable experience, which in itself is a reason strong enough for you to diversify your array of trading knowledge and skills.

Quite interestingly, the experiences of penny stock traders appear to be quite comparable to the ones of crypto traders. Both are often pushed to respond to quite pressing invitations to invest, further entailing an idea that one should not miss such rare opportunities to earn a profit. What is more, the common sites traders use to track trends and exchange ideas on lucrative investments are frequently the very places where the most enthusiastic supporters share inconsequential conclusions and thus mislead others into making unwise investment decisions. With such elevated emotions and stories which are blown out of proportions more often than not, penny stock traders become susceptible to hidden psychological manipulation. Because they are so closely involved with the group, these traders start trusting far-fetched ideas which their peers keep reinforcing one after the other.

As the underlying reasons for such miscalculations are mainly related to hope, shared by all participants jointly highlighting their wish to succeed, an individual can slowly start distrusting their own analytical skills. Placing one’s trust in the wrong hands can even lead to overlooking some real investment opportunities just because of the lack of hype surrounding these monumental events. In assessing various pieces of information traders come by, many times traders mistake interest for value, failing to recognize that some of the news receiving the least attention can actually indicate some very real lucrative investment opportunities. As a result of being so caught up believing whatever information available, these traders’ sense of what is right and wrong becomes heavily impaired. At this point, such traders are so oblivious to the accompanying risks that they in fact resemble poker players who invest $100 to earn 20 times more only to lose everything by the time the night ends.

This parallel between penny stock and cryptocurrency traders’ experiences should only serve as an example of how you can protect yourself from harming your financial stability and repetitively falling for the same trap. Therefore, to safeguard future investments, every trader should strive to implement some essential skills, which successful forex traders appear to display more prominently than those in other markets. With so many individuals having become deeply immersed in the cult-like crypto community, you may want to begin to assess how much your decision-making depends on groupthink.

While drawing constructive conclusions does entail a substantial degree of research, relying on a single-perspective source both deprives you of valuable insight and limits objectivity to a great extent. Moreover, although investing does imply a certain level of risk, deciding to go all-in actually goes against some basic trading principles. Besides, to be able to secure some stable, sustainable profit, you should start thinking about a strategy before you set out to reach your goals, as this will prevent some very probable misfortunes. As a crypto trader, you may have already missed some steps discussed here, but if you perceive your failures as invaluable lessons, you will help yourself to adopt a powerful mindset that allows the experience to transform into success.

You can always extend your cryptocurrency portfolio and turn to some other markets as well since you know now how experience in one market can affect your chances of amassing a fortune in some other ones. As we could see from the examples above, so many crypto and penny investors had to learn the hard way which key skills they require to avoid common trading mistakes. Nonetheless, due to the extensive array of experiences, lessons, and trading examples, you may now begin to grasp the importance of sensibly and logically analyzing one’s strategies, devising a strategic and well-thought-out plan, and intelligently growing an independent investor mindset, which are all considered essential forex trading skills.

Categories
Forex Basics

Trader’s Guide to Proprietary Forex Firms

What’s the hottest trend in Forex today? Did you know that somebody else is willing to risk their own money instead of yours, and be paid for it? Forex prop trading – no risk of losing your own money, firms battling to give you large figures to trade, you get a nice piece of that […]

What’s the hottest trend in Forex today? Did you know that somebody else is willing to risk their own money instead of yours, and be paid for it? Forex prop trading – no risk of losing your own money, firms battling to give you large figures to trade, you get a nice piece of that […]

What’s the hottest trend in Forex today? Did you know that somebody else is willing to risk their own money instead of yours, and be paid for it? Forex prop trading – no risk of losing your own money, firms battling to give you large figures to trade, you get a nice piece of that trade, and the cherry on the top, they will always want more if you do well, a never-ending circle. Going forward know this is just an opinion and advice from certain prop traders. So, everybody is already doing it, and that means there are a lot of shady companies out there. Companies that you don’t want to do any business with. Let’s see what you need to know about prop firms, what to look for, sort of general rules for everyone.

What are proprietary trading firms? What they do is, they give you their own money to trade, and, at first, you give them payments, every month or some other kind of fees. It’s always some kind of exchange, helps them insure themselves because they are not familiar with you and they are taking the risks. Of course, you have to assess, what kind of a deal they are offering to you, does that fill your criteria. You can also bring your money to trade and earn more. There are no restrictions, this way you can snowball it up.

Which firms are worth your attention? The ones that don’t take people from the streets to do their business. They will take anybody and that’s a recipe for failure. These companies are first to filter out. Most firms will provide trade training, that correlates with their business style, but good firms will give you options on how you trade, enabling you to trade in a successful, proven way with good exit strategies. Depending on the firm, money fees are going to scale, and it is going to be upfront because firms have training fees, they take all the risk. So be prepared to invest some money first. Successes come gradually, so expect that you will not be making sustainable money for some time.

Explosive income is not real. Training is thorough, nobody’s going to give much money to novice and it’s going to take time to earn credit. And that’s the moment of showing character, going through the grinder. This is the display of trading in the long term, it will show you if you are up to it. Building a system and going again through it, repeatedly, is what trading is – it’s a long game. Today’s novice doesn’t have to have a good resume, it used to be required to show good results for at least a year of trading, to be at least remotely interesting to a firm.

Although it doesn’t hurt to have good trading results, today’s firms will not even ask for it, since many people can produce fake good resumes, you just have to be a good trader. But, if you do have the experience, all that learning and testing won’t go to waste, as firms today tend to release you into the wild, they will test you through their platform and trading. If you produce good results under pressure they will hire you for a long time. Everyone’s experience is different. These lines are just recommendations, showing you options, providing you with more chances for success.

A Few Things to consider…

Prop firms are not a new thing, they ‘we been around since circa 1970, and most of them got modernized in their way of doing business. Those that didn’t should be avoided. Most of them will have desk fees, and you should watch for your expenses on these, as they can get wild. Follow your criteria and financial capability. Be careful with your expectations, set realistic criteria, don’t let scammers take advantage of you with promises of quick and high turnarounds. Firms insisting on using their trading systems are to be avoided, as there is no perfect system and your developed systems go to waste. Also, avoid multi-level marketing structure firms. More on MLMs later.

Structure of the old prop firms formed in the ’90s is still in use today, but they were infamous for a poor working environment. Firms that still work in those conditions are easily spotted and should be avoided, although, some people may thrive in that. Besides that disadvantage, you were required to be present in the office, sacrifice comfort of life, time, even when it wasn’t needed. Simply put, nobody stays with those firms for long as conditions are horrible and it’s hard to make any money because of high desk fees. These fees as horrible as they sound they have a purpose, other than to annoy you. Desk fees allow the firm to operate normally, without affecting the prop trader’s success. Not to trade with your money – something that early prop firms did practice.

Early prop firms would account for traders’ high desk fees as profit, instead of investing in support. These fees are usually higher the more expenses the firm has, for example, a rented office. The Desk fees are usually paid monthly, enabling firms to support employees and pay bills. Most importantly, after all, negative things on desk fees, by paying them you are granted the ability to trade with that firm. Desk fees are a common business practice, and there are many variations to them, but it is best to avoid the “old” firms and those that are not disclosing the fees.

If something sounds too good to be true, it’s probably a scam. Promises of fast unrealistic gains are signs of a scam firm. Scam firms charge upfront and set you up for a test you can’t pass. Why would they do that? It’s not to see into your character, to see how you handle pressure, it’s because they are not there to make a selection, they just want your upfront money. They will promise large trading capital, just to bait you in and once they get your money you are of no interest to them, and they disappear. Those kinds of firms are all over the internet. Do your research first. Avoid firms that impose time limits for targets, another unrealistic expectation, because the market can go up and down and sometimes be completely dead, giving you no chance to make reasonable trades and therefore reach their targets. Giving you monthly targets means that such a firm simply doesn’t understand how Forex market works or they want you to miss trades.

Why? They are just after your money, luring you in with promises of large funding and insisting on high desk fees. They are Incompetent or simply scammers. In both cases, not a healthy environment. Some firms might understand that more time is needed for reaching the targets, for example, 3 or 6 months. So when you see firm with unrealistic expectations, stay away. Ask yourself, do you have a chance to prosper when you are in such a firm. The worst thing that you can do, is set yourself in a position you lose time and don’t get paid.

Firms that won’t let you trade outside their way, is an uncommon practice. Almost all these firms use the popular and ineffective indicators like the RSI (some variations of the RSI are much better and applicable for current Forex conditions), and different risk structures that you should avoid. A lot of prop firms may think they have a method that works and will force this. They teach people their way, fund themselves with your desk fees, and this way the prop firm gets a big tax write off. But in the end, that doesn’t benefit you, the trader.

MLM’s, multi-level marketing, widely known as pyramid schemes. It can be a legitimate business but mostly it’s a form of scam. It is a structure without good traders, sometimes they even don’t care about trading at all, just to grab your money. It never ends well for people at the bottom of the pyramid, while those on the top make large sums of money. There can be some exceptions when people at the bottom actually make money, and they will get praised for it, but it’s just so that scammers can show some legitimacy. MLM structure created their bad reputation, there are so many options other than MLM-s, you can choose whoever you like for trade.

All prop firms take a skim of the trade, it varies in percentage, that is how they make their money. Takes vary from firm to firm, you may expect 30-60% on initial stages, and as you get to higher tier takes will drop. There are a lot of firms with different options. Some give attractive prices, up from a few hundred dollars, with a one-time fee. Others give full experience, with direct support but will take you back for several thousand dollars US upfront. Cheaper doesn’t mean bad, they just may be more reserved to allow you to potentially earn more. They might have several divisions, for stocks, options, and Forex.

All firms that take trading seriously, will make some kind of candidate elimination process. You will be interviewed and tested several times and that will result in high-quality traders. Of all tested, maybe 5% will be funded, and they will be trained on technical analysis, strategies, etc. It will take up to 6 months before you get any funding. After about 6 months your gains should be in a range of 6-9%, anything less and you are done. Other prop firms do not have a “failure” possibility but they keep your initial deposit until you prove yourself. These numbers will make you advance to the next step.

Make preparations before you make any decisions. Calculate fees, see how it works for you. There is a bunch of prop firms out there, probably one for everybody’s taste. Make sure to avoid things like MLM-s or “old” firms. You can call yourself a professional trader when you get funded, and then understand that trading is a long game, full of emotional challenges.

Categories
Forex Basics

Top Four Questions For a Professional Prop Trader

Becoming a professional prop trader is not easy. The positive results of trading and effort come after a few years. Whatsmore, they may not even come at all. Investors commonly have a crafted mindest when it comes to decision making. They will put all the possible outcomes of an investment or action on one side, […]

Becoming a professional prop trader is not easy. The positive results of trading and effort come after a few years. Whatsmore, they may not even come at all. Investors commonly have a crafted mindest when it comes to decision making. They will put all the possible outcomes of an investment or action on one side, […]

Becoming a professional prop trader is not easy. The positive results of trading and effort come after a few years. Whatsmore, they may not even come at all. Investors commonly have a crafted mindest when it comes to decision making. They will put all the possible outcomes of an investment or action on one side, and the negatives on the other. When we want to decide if Forex trading is a good venture, it may be hard to measure that investors balance. The final question we have to ask, the question that covers all the others, is can we dedicate ourselves to Forex, can we persist and endure the challenges this market will throw at us? If you have doubts when you fully understand what you are facing, turn away, find some other options, only financial or psychological frustration will await you. Every trader feels these challenges.

Proprietary traders mastered these emotions, persisted, and have built trading systems that put them on the top, consistently squeezing the profits out of forex. They are rewarded for their years of endurance. Traders that are just starting can greatly shorten their path to becoming consistently profitable for the first time by learning from these masters. Yet, few of proprietary traders share their knowledge as a goal, creating valuable and rare resources for the starter traders who have decided to walk this path. This article contains their opinions and answer to the top 4 questions asked by traders, some of which are already experienced.

US citizens seem to be the ones that ask the most although even more surprising is the fact Forex is not that popular in the US. The US is the most economically developed country and since the stock market is the first place to go for investors. Whatsmore, the media has a great contribution to this, shadowing what other markets are there. Still, such is the habit in the US, where the rest of the world seems far, unrelated, not important to the lives of US citizens. This creates ignorance and therefore makes some of the questions funny and uninteresting for experienced traders.

A good analogy to this is comparing the NFL to the UEFA Champions League, in addition to the football and soccer being completely different sports for the US citizen, while abroad it is the same for most. Soccer is Forex for the rest of the world and the NFL is a stock market for US citizens. Most of the proprietary traders are trend following strategy traders in many variations. These strategies are scientifically proven to be, according to their sources, the most successful ways to trade. As such, the questions asked do not primarily come from traders who are trend followers.

So, starting from the number 4 top frequent question:

Where do you think the EUR/USD is going to go?

The EUR/USD is the most popular currency pair to trade (which prop traders avoid) and the pair could easily be substituted with any asset on the forex market. Prop traders are masters of analysis, psychology, and systematic approach to trading. But they cannot see the future. The shortest answer to this question would be – I do not know. The question is also not very well defined for them. They need more information, they need precision. Prop traders would ask you back about the timeframe, then how far into the future, what risk tolerance, and so on. Still, the answer is the same. They will also say that it is a good thing they do not. If you can know the future, there would not be any profit to be made in a perfectly balanced market (since everyone knows what is about to happen). And it would ruin all the fun. This answer is shocking to people, who have probably just entered into forex. The answer also turns them away, discredit the prop trader, making prop traders question if the effort of sharing the knowledge is worth the trouble. However, this is the extension of the answer – prop traders use technical analysis (not all of them).

Charts, indicators, and tools show them using math where are the points a trade can be entered. These signals are not extended into the future, they are in real-time, what is going on right now. Prop traders have a daily routine, they wake up, eliminate any distractions, and have precise time when it is time for trading analysis and operations. There are three options the charts or tools can tell them, trade long, short, manage already open trade (partially close, exit, scale in, move Stop Loss, etc), or do not trade at all. Then, they move on to the next asset and repeat. Sounds simple right? They have worked hard for the system to work, once it is all set and they are ready, it becomes one of the best “jobs” in the world. Yet again, this is not the answer most will be satisfied with. Another reason why people fail is that they seek something to consume right away, something to use, a takeaway that will make them pips. It will not work.

Forex will filter these attempts, you may try again, differently, fail again. Those that remain have a great chance of becoming good at extracting profits from forex. There is another group who like to get informed this way just to sound smart in front of other people, and have no idea how to trade. One more thing prop traders want to add, making forecasts is a bad way to trade. Weird as it may sound, predictions will be met with a bust account, sooner or later. Forecasting is extremely popular. Just turn on the TV and enjoy all the smart speeches by renowned financial figures. They are terrible traders. They are good analysts, say smart things about the market conditions.

In practical trading, they are not good. Guess that is why being on TV is a better business option for them. Similarly can be said for certain brokers account managers or recruiters. This may be hard to believe. If you need some proof, we can quote Ray Dalio, one of the best hedge investors in the world estimating over 17 billion in net worth. In reference to his book, “Principles”, aside from being the classic on investments, on page 42, he says:

“Truth be known, forecasts aren’t worth very much, and most who make them do not make money in the markets.”

It is not uncommon to find professional traders that have aligned their trading methods with the Ray Dalio ideas. A certain group even dares to say fundamental analysis and forecasting is a waste of time! So prop traders do not care to please the masses with this answer, they do not trade Forex to impress people, they do it for financial freedom, effective use of their time and this should also be a genuine reason for future traders too. Moving on to the next question, which is:

Based on _____(some elections, economic news, reports, etc) happening in the world, where do you think _____(some forex asset, EUR, USD) will go?

Now, thins question is very similar to the first one, just a bit expanded to new aspects. The answer by a prop trader is not the same. Let’s fill in the blanks with Trump elections and the USD moving as a consequence because the question was posed soon after the US elections. There is an answer to this but it is somewhat complicated. Trump elections can be regarded as surprising. Trump was never “supposed to” win. When he did, investors are on the rampage to find good opportunities. The market was already expecting Hilary Clinton’s victory and went in the corresponding price direction. Hilary did not win, investors looked for the surprise piggyback. This move can be predicted by prop traders because they know how forex works and how the big banks work.

If you are not familiar, the Big Banks article explains how the price is set by these big players on forex. The Big Banks and institutions decide how the price is going to move. Any serious trader must know this. In the case of the USD prospect when Trump won, the long term is bearish. But the exact time when this trend is going to take fold is on the big players of forex to decide. Basic logic says weaker USD opens up the economic expansion and Trump is a businessman first, money-making mindset. At no point is he going to allow equity markets plummet during his mandate.

The result until now in 2020 is exactly this, Indexes rise even quickly after the trade war and COVID-19 pandemic. The move when the USD is going to start trending down was not expected to start right away. Banks know that this logic is evident to many, even to the inexperienced investors. The EUR/USD move up was not to be seen, on the contrary, the big banks pulled it down, sharp. There were just too many long positions big banks could not let go by, investors who went in too soon were met with a surprise they could not handle. Even the ones with a deeper Stop Loss tolerance were not spared.

A slight correction took place to give out a slight hope of the logical bull (USD weakening) move they have expected. Well, this hope was chocked along with the investors’ positions until the bing banks ran out of long positions to flush. This answer is also not for the common people. Even more, the answer will not change much, the same will repeat. Other events, like the Brexit and its consequences, are not this easy to predict. Most prop traders would not even try, they will focus on the present. The final point to all this is to know that massive directional trades because of a major event are transparent to you, other investors but to the big banks too, and their word is final.

The second question is: Do you trade cryptocurrencies?

Crypto assets are new to the scene and they come with several risks. Therefore, prop traders still need to adapt to this risk so they can trade it as they would forex. The idea of cryptocurrencies is great, it is the new age of money. Traders who entered early deserve their share of the fortune, although this market has a different kind of rule(s). It is an alien with many unknowns and it is not adapted to the world yet. Prop trader likes the environment with proven track records, movements, actors, and information resources. This is how they can have an edge – when all rules are known. This knowledge is trader specific, you should not invest with a market you are not familiar with. Of course, some games are designed players only can lose in the long run. Casinos have many of them.

Luckily for prop traders and others who know how to play, forex is not one of these games. Forex can also be thrilling as the casino games but you are probably reading this article for the money-making reasons too. The Crypto market simply does not come into play with careful traders yet. This does not mean you should not test it or build the trading system for the crypto world, you would be limiting yourself an opportunity.

The number one question for a prop trader is (and the most ridiculous one):

I have some Iraqi dinars here, a lot of them. Do you think they will go up in value sometimes?

Prop traders would smile awkwardly, they get this question a lot. This question is posed mostly by US citizens that served in Iraq or have this currency from a relative. This could be a souvenir they would like to be valuable, carrying the mystic feeling of a secret-treasure they never knew about sitting in the attic. Or, they bought the currency notes off a scamming seller claiming its worth in the future, building up this treasure in the attic feel. You can check the USD/IQD chart and analyze if this is going to happen. To prop traders, this idea could stay just as an idea for a very long time. The country like Iraq has a very different history, culture, government, economy, and everything in between to consider rebounding the value of the IQD soon. Unfortunately, forex brokers and other actors around this market are not always honest, similarly to the seller of IQD with a story to back it up. Keeping your reason open will identify this. Forex scams are present and not hard to fall into one, but this is a subject for a separate article.

*Source: No-nonsense Forex Channel

Categories
Beginners Forex Education Forex Basics

Inside the Daily Routine of a Forex Trader

What does it mean to be a forex trader? What is like to be a trader who is brand new and just starting in pursuit of a carrier? What does it mean to be a professional forex trader who has traded for years and who is going to trade until he dies? Answers to these […]

What does it mean to be a forex trader? What is like to be a trader who is brand new and just starting in pursuit of a carrier? What does it mean to be a professional forex trader who has traded for years and who is going to trade until he dies? Answers to these […]

What does it mean to be a forex trader? What is like to be a trader who is brand new and just starting in pursuit of a carrier? What does it mean to be a professional forex trader who has traded for years and who is going to trade until he dies? Answers to these questions are not easily accessible. These are the things that we can’t really learn from a book or Google. This is just something that we can learn from someone who has already walked down that road or something that we simply need to experience. Luckily, we were surrounded by a lot of different types of traders over the past years so we had a chance to perceive forex trading from many angles.

Surely, it is different when someone is just a beginner, where everything is new and exciting apart from some trader who is in the game for fifteen years. After the fifteen years, a lot of sleepless nights have gone, foolish mistakes are no longer involved and the excitement is pretty much perishable. For someone, it becomes a legitimate business and number one priority of income and for 99% it is just temporarily flame. There is a big difference between incorporated traders and a skill-less guy who trades occasionally trying to make a little bit of money. We want to dive deeper into this topic because we think it’s such a huge piece of the puzzle of becoming a good forex trader.

First thing, if we want to go to any business that is thriving and succeeding we need to have a schedule of working hours. A methodical approach where everything is set and where everyone has a specific role is crucial. Treating forex trading as a business is a basic rule. The problem with trading is that most people treat it as a hobby with the absence of any kind of structure to their trading schedule which might be the worst thing to do.

Let’s take an example of a professional gambler, the person who makes the living of gambling. If we talk with professional poker player, he doesn’t go sit down on a poker table all day long, that is not how he makes his money. He plans out: “OK, I am going to play on Friday nights from 9 pm to 2 am because that’s when all the drunk tourists are in town, that’s when I’ve got my edge” or “I am going to play these eight tournaments during the year, no more no less and that’s my schedule.”

In contrast, we have a recreational gambler who sees a blackjack table and say: “Oh cool, I could play, I’m feeling lucky tonight”. The professional gambler is on that table as well but he has crystal clear goals. He is like: “I am going to play for 4 hours or until I lose 2000 bucks”. Eventually, If he loses this amount of money or after 4 hours he will get up and leave. Those people have a schedule, they have planned out their business. Here we have all these analogies because we want to point out how important it is that we have to have our business schedule. The stock market is open only seven and a half hours a day, when we speak about currencies one of the great things and the worst things is that is always open. So there is a chance where we can sit at any time and ruin our trade with just one click of a mouse.

From experience, we know that without a plan we might sit inevitably in front of the system all day long. This is something we will try to avoid because we could easily fall into the trap of over-trading. Most of us are used to going to a job, putting hours and getting paid for it. At some point in life, we all have done that. In trading, we will probably have some days where we are not going to make any trades, so we might feel like we are not really working because when we are actually working we are clicking buttons, we are making money. These moments can often be very irritating for traders, therefore out of inconsistency most people might start to over-click and get into a trade to justify their presence. So working 24 hours as a fulltime trader on the open market is a very unique type of job where we simply need to have our working hours well planned.

How exactly you are going to customize everything is completely up to you guys because everyone has a different lifestyle. We need to understand how to fit trading into our life. The market shouldn’t have control over our time we should try to dictate the tempo of our trades. How we might do that? It will be good to look at the upcoming news reports or events and identify times during the week where there is likely to be a huge move in the forex market. That is how we could plan in advance to be in front of the system during those times and stay away from the system during the other times. It’s always better to plan out the week ahead and try to avoid times where the market is just chopping around without clear direction and high volume.

Of course, we can’t always predict when that is going to happen. The market is a big wild animal and it tends to do crazy things that we couldn’t even expect. So if we want to be successful on the market it will be good to structure our life to where we can follow our routine based on great research and discipline. Routine is very important. Which is why we will try to reveal some of the rituals and habits of successful traders. So for dedicated traders, first thing in the morning we could do is to check overseas markets (Europe, China, Nikkei) and US equity futures. Of course, we are not going to deal with details like when is the best time to hang out with your friends and family or when is the perfect time to swallow your vitamins, that is totally up to you guys. Here we just want to focus on some trading routines that we might implement in our lifestyle.

Further on, we could check news reports like forexfactory.com or fxcm.com, there are plenty of resources out there. Keeping ourselves up to date and integrated into the market is a great thing to do. Our job should be to know as many details as we potentially can and constantly educate ourselves about all the features. Considering the risk domain, we should try to look up for relative strength or weakness, what are the strong currencies, what are the weak currencies. This should be an automatic thing we do every time.

We want to trade when a good opportunity is there and just because there is a good chart pattern. Looking for high-percentage setups is one of the routines that we might do as well. So staying up to date to the news is super important. We also need to make sure to be familiar with the upcoming week’s economic news. For example, watching or reading financial news (CNBC) every day for about 20 minutes is highly recommendable. This is a great medium to stay involved because they always talk about currencies there.

Next what we want to point out is that we might consider downloading The Trader Work Station App, so-called TWS, MetaTrader 4, or MetaTrader 5. Professional traders often like to say that these apps turn out to be the best things that ever happen to them because before mobile trading they were handcuffed to the system. Before the TWS they didn’t even know what was happening out there and if they did know they couldn’t make a change. In today’s world with mobile devices we could stay dialed in the market all day long. One more time, starring at the screen all day long is a very bad thing however being dialed in the market all day long is a great thing.

What we want to do here is to try to check prices periodically. The cool thing that we might do is to set the app to alert us when prices do something or when volume does something. We don’t want to sit all day and watch, so setting alert through our mobile trading assistant is a good way of saving our precious time. Signing up for service that delivers news to our phone or email is recommendable as well. Again, CNBC.com or Marketwatch.com just keeps us dialed in for the big news.

One of the hardest things to figure out as a trader is when to trade and when not to trade. Everyone at the end has to go through the process when they trade too much and then when they really start to understand the notion, they actually swing too far another way where they find all the reasons to not make trades. This pattern from over-trading to under-trading is quite familiar for most of us, it’s part of the process and the great thing about this is that people eventually might consider the risk. Before that they were just thinking about the money, they were never really cautious. Therefore, one of the hacks that we might implement in our daily routine is to find a hobby or some activity that can occupy our time.

We don’t want to click buttons too many times. We don’t want to fall into the trap and make trades out of boredom. Learning how to read a chart is not that hard, there are calculators that can point us what to do but knowing when to stop and how to allocate our time is the hardest part of trading and we should take it seriously. So what we all need to develop is a strategy and routine that is unique for each one us and that works in a way that is comfortable and profitable. We need to approach forex trading as a business and we want to do that with discipline and a plan.

If we develop certain routines we might master ourselves and our emotions by not subjecting ourselves to every single move up and down in the markets. We should trade by dictating our terms with well planned hours of activity and that might be a great base to start and continue trading. Strategy and routine are the two main words we want to remember if we strive for improvement and control over our trading system. Apart from this, we need to allow ourselves to have a balanced life outside of trading.

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Beginners Forex Education Forex Basics

How Much Money Do You Need To Trade Forex Professionally?

How much should we invest in Forex trading? Too much, we will end up broke, too little, we won’t make anything. What is the amount of money, right enough, to start trading professionally on Forex? There are a lot of answers out there on the interwebs, and most of them are bad advice. Lines you […]

How much should we invest in Forex trading? Too much, we will end up broke, too little, we won’t make anything. What is the amount of money, right enough, to start trading professionally on Forex? There are a lot of answers out there on the interwebs, and most of them are bad advice. Lines you […]

How much should we invest in Forex trading? Too much, we will end up broke, too little, we won’t make anything. What is the amount of money, right enough, to start trading professionally on Forex? There are a lot of answers out there on the interwebs, and most of them are bad advice. Lines you are about to read, are not here to make you happy, they are here to represent the truth, without sugar-coating it. Plain straight. 95% of podcasts, YouTube videos, forums, tweets are just white hum static in the air. How do you know this isn’t? Don’t get depressive, read it to the end. There might be light at the end of this tunnel, even it is not something you were expecting.

So, how much money do we need to trade professionally? And what does it mean, professionally? That means you are trading actual money, the amounts are not important, big or small. When you hear someone presents themselves like trading professionals, take it with a grain of salt. Professionals are not kids playing with their demo accounts. Having a real trading account doesn’t make you a professional. You have to live on the money you earn by trading. Someone has to see you are good enough to hire you to trade their money.

Back to the money. Depending on a broker, the least amount of money needed would probably be $500 in the US. Globally, some might go lower than $500, even up to $1 micro account. Does 1 dollar account sound reasonable to you? Here is the part you don’t want to read. You are young, you want easy money. You heard over this thing on the internet, you dig a little, you learn how to read a chart, tinker with tools to predict prices with the RSI or Fibonacci indicators and it seems to work. And so you awe and think to yourself – I’ll use this for my trading, and get 50 to 1 dollar invested. Just imagine, it’s even better if outside of the US, a $100 for 1 invested. Millions are waiting, just repeat. And with that belief, you set yourself for failure, because the system you have set up is unreliable, works sometimes, 50% at the best. It leads you to believe you can leave your job, gives you unrealistic expectations.

Your system doesn’t work because you have never developed money management skills. A combination of confidence and undeveloped skill is deadly. For example, you trade short, and the price is long, and instead of abandoning with loss, you follow indicator with the belief it is going to straighten itself, but, it didn’t and you burn the account. This is what we are trying to avoid. Some people will follow the same patterns even if they don’t work perpetually, some will drop after only one bump. Sometimes one mistake is there to teach us and give us a better position. To succeed, confidence and motivation are both needed, and you cannot burn somebody else’s money to do it. To build those attributes think beyond those 500 dollars, see it just like a drop in an ocean. They are just a guide to help you ease trade with real money, to let yourself of emotions. You will not turn that initial deposit into anything remarkable, regardless of what internet tells you. We see a lot of scammers today, with promises of 100 pips a day. Experienced traders can confirm that the market conditions will not allow for this amount of pips to be made each day.

So what do we have to toy with now? We have tested and proven our system. How much money do we need to trade professionally? How much is enough to have good revenue and let you live by trading on Forex? Let’s play with a sum of $100000, that’s burning a hole in your pocket. You are in the top 2% of all earners in the US, globally in the 1%. That’s a really narrow percent of people. With that amount of money, what would be a good rate of return per year, on Forex? 11% per year is average. And that is already unreal for a new trader, as it takes a lot of time to get to that percentage. Compound interest over time will grow your fortune over a longer time, but as a young trader, you don’t have that luxury. So, what have experienced traders get per year? 13-14% per year return is top for very best financial advisors. A very rare and small group. Unique occurrence in the form of Warren Buffet will profit with a 20% return per year.

So at best, on $100000 you profit 20%, and that’s 20000 dollars per year before taxes. Or to bring it more into the perspective of monthly living, which is less than 1700 dollars per month. Can we go with 1700 dollars per month? Does that sound like a comfortable life, or can you even say you can make ends meet on that amount? As a professional trader, that would be all you get and if you spend it on daily living, you would be limited in investing further. So, after many years, what you have to work with is less than average yearly income, and that is if by some miracle you get a 20% return. So, that’s the direct answer to the question. Don’t despair, read the rest.

Luckily, there are companies out there, that are willing to invest in you and give you money to trade in their name. Of course, they are willing only if you prove yourself worthy, with properly setup systems and consistent results over time. But first, understand, that to master Forex trading it is necessary to suppress emotions, to be able to easily overcome losses and deal even with wins. That will start providing consistent results. Consistent results will give you an in-depth view of your system, and you will be able to fine-tune it to out give even better results.

Now, starting with demo accounts or small accounts is beneficial to smooth out the trading process, see where you are thin, and to show that you can do good trading in the long run with steady results. This is how we want to present ourselves to trading companies. When they engage you, trading companies will arrange their own tests. They will set a test period and see how you do under pressure, which is usually about 6 months. Don’t be upset by this time period, there is no other way for them to expose lesser traders that can’t maintain steady results. Constant results are hard to achieve, and that will separate a “trader” from a professional trader.

So, back to the question, how much money do you need to trade Forex professionally? Here is a more extensive answer. Not that much. There are a lot of trading firms out there, with lots of different options, and joining them can cost no more than a couple of hundreds of dollars. You just have to have the good sense to trade and be patient enough to build a good system that will attract trading firms. Then you have to be able to prove that system and stay consistent. If you want, you can also start a small account and trade in parallel with your trading firm.

Hopefully, you will see these lines as a guide, to help you save a fortune on burnt accounts, time, and unrealistic expectations. We hope, with this article, to shorten the amount of time to create good traders. Long term traders, that are not all about “easy money”, and in that way enable a dream of sustainable, comfortable living.