Forex Forex Education

How to Master Forex In One Month Or Less

“How long does it take to learn how to trade on Forex?”… There are many different variables to answer this question, which really boils down to the circumstances of each individual. But, there are different ways of understanding the subject that can help you pass the learning curve much faster. Unfortunately, some people never really learn to trade, but others do it very well and more when you understand that you never stop learning. What we want is that you can learn to trade Forex as quickly as possible but with minimal mistakes.

The importance of mentality…

Every day there are hundreds of traders entering and leaving the markets. Without a doubt, one of the advantages for successful traders has been their mindset. Unfortunately, they often take us to the market with the misunderstanding that it is easy to make a profit. We are also told that getting rich is not only easy but is to be expected. Actually, that’s not the real reality for the people involved. Usually, when traders look for quick and easy money, they end up ruining their accounts.

Most new traders find it disturbing if they “only win” a couple of percentages over the course of the month. Most traders see it as insignificant. However, professional traders are perfectly satisfied with that because they have much more information and strategy as well as tools at their disposal.

Trading is something that requires an extreme amount of patience, strategy, and of course education. You have to understand what you’re getting into. You’re negotiating against professionals who have studied for years and have many more tools than you. However, there are some benefits of being a retail trader as you are able to get in and out of a position pretty quickly. Fortunately, the retail trader doesn’t have those problems as someone who is trying to move US$20 million.

If your mentality is to know that you have a lot of work to do, but you can also get great rewards, it will serve you well in the future. Also, you have to understand that you must “love trading”. Perseverance is much easier for those who are doing something they really love. If you don’t really love trading, it will be very difficult to deal with the ups and downs of a trading career.

Is it very difficult to learn how to trade on Forex?

One of the best things about Forex trading is that you have a lot of free information on the Internet. You have the facility to search and find an immense amount of information and you may have the possibility to try several systems. Additionally, you also have the possibility to open a demo account, which means you don’t have to lose money in the process. These are the main advantages of trading on Forex, well above any other asset.

Most experienced traders will say that the best trading systems and methodologies are relatively simple. What we need to be clear about is that the simpler the methodology or the system, the more likely you are that it can be executed when the time comes. After all, the biggest problem that many traders have to overcome at first is “analysis paralysis,” which means they have too many things or indicators that come to them simultaneously to make a decent trading decision. Simplification is very often the way to make money in the long run because it clears up many things in the way of confusion.

Let’s not kid ourselves, success takes time…

Unfortunately, many retail traders will try to force time, and therefore lack of patience will almost certainly lead to very bad results. After all, there are many psychological obstacles when it comes to trading on Forex or any other kind of assets. Markets will move unpredictably, the most important thing is not how well your trading is planned. That is why re-testing a system in understanding its merits and weaknesses will become one of its greatest works.

To test a system, you’ll need to place theoretical trades in market conditions that simulate the returns you can expect. You can do this through various platforms and the like, or you can just look at a historical action chart and simulate what your operations would have been over several months, if not years. By testing the system, you will understand what the expected returns might be in the future. However, most people don’t make their way through this.

If you don’t have faith in your system, this is where you’re going to look for the next best thing. This is a cycle in which many new traders will fall, which means they may have come across a system that works in the long run, but they just haven’t given it a fair chance. This is where psychological means and knowledge of your system come into play. Everything will run through a demo account in the first place because it is too expensive to risk the trading capital in a real account for a hunch or some new methodology that you are dabbling in.

How to accelerate the learning curve…

Twitter is full of experienced traders who can offer an insight into how markets move. Certainly, we should not have excuses not to learn the necessary about the markets, because the amount of information that is freely available out there is really staggering.

Also, although most people want to hurry up and start earning money, there are no real shortcuts to learn from those who have already been there. That’s the strange thing about currency traders: they expect to be able to enter markets and clean up immediately. This is like hoping to be a great doctor by just showing up at the hospital. It takes some training and experience to become a profitable and successful trader. 

Going where people have already succeeded, that’s the advice that anyone who succeeds will tell you, and Forex trading will be no different. Although there are no shortcuts, taking a mentor or learning from a professional can help you avoid some of the easily avoidable problems that exist. You can learn many disciplines such as trading systems, fundamental analysis, money management, risk indices to reward, things like Sharpe indices to measure a system, and so on. In short, someone who “has already been there” can help you avoid many of the most common mistakes.

Final thoughts…

There are no two traders who will work the same way, and it is important to understand that those who work harder will get better results. But, one thing that helped me a lot when I started out was checking the charts every night. After all, if you’re learning to operate with technical analysis, the graph and time don’t really matter. If you look at the graphics and notice a flag to bullish, it shouldn’t matter what market you’re trading in. This is where finding a graphics package or a website that gives you many opportunities to read the graphics over the weekend will speed up your progress. Think like this: if an average trader looks at 10 charts each day, you should look at a minimum of 30 charts. This will make you gain experience 3 times faster.

Another thing to think about is that some traders have a much more analytical mind than others. Those who understand the statistics of their trading system will understand that over time they will make money. They will not be shaken by the series of losses that will almost certainly come sooner or later. That being so, they understand that if they just stand firm, they will ultimately make a profit. Also, don’t get bogged down in the idea of jumping from one system to another, which is a long-term losing attitude.

Beginners Forex Education Forex Basics

You’ll Kick Yourself for Not Knowing This About Forex…

While many stock enthusiasts who turned forex traders assume that currencies behave in the same fashion, this is far from true. First of all, currencies, unlike stocks, run from any money influx. If you take a look at any currency pair in the chart, you will see that the price eventually always goes in the opposite direction from where most traders are found. This happens because the forex market does depend on money flow as the stock one does.

The currency market is only governed by big baking institutions that make a profit when traders lose. They always step in when they find that most traders are going to give up so they can earn more. This often happens with reversal traders because they are so bent on trying to call a reversal that they chase the price going in one direction. However, the price won’t move until most traders give up. This is the essential mechanism of how prices change in this market – through big banks’ manipulation. That is why it is absolutely necessary that you build your system and do not do what the majority does. Of course, this article is just an observation.

Can we beat the big banks?

Our short answer is no. You cannot and you should not even attempt this because it is pointless. Many traders already tried to achieve this by acquiring volume information. They thought that the DOM indicator, for example, could tell them how to play the big banks’ game. Unfortunately, they failed to understand the numbers concerning volume. The DOM will never tell you anything about the type of orders that comprise the volume, whether they are limit or stop orders, or if the majority is entering long or short trades at the time. Not only is the missing information a crucial component but this approach will inevitably put you in the losing group. 

The majority of traders attempted to do exactly what the big banks were doing, which is the reason why so many traders lost most trades and accounts. The role of the big banks has always been clear and attempting to outsmart the one entity with more information than anyone else in the forex market possesses at any given time is a sure way to experience great losses. Hence, to beat the game, you should learn how to use and interpret the information you come by so that you can rise above their radar and focus your attention elsewhere.

Are there any indicators forex traders shouldn’t use?

Spot forex as we know it was created in 1996. Today, just over a decade later, we have about 10 thousand indicators at our disposal. Interestingly enough, we still use tools that were either designed specifically for stock trading or so old and outdated that using them makes no sense. Let’s see which ones made it to our top worst list (most will be surprised).

ADX (average directional index) is still pretty popular. It is also worth mentioning that it was created in 1978 (!) and that it lags so badly that it can barely do what it’s supposed to – measure volume. 

Trend Lines are also one of the more favored tools traders use to this day. Still, as different traders can draw different trend lines, the variations can be so drastic that no consensus can be made. This approach leaves too much room for mistakes in particular because most trends are over by the time we discover them.

Stochastics dates back to the 1950s. It’s interesting to note how even stock traders, for whom this indicator was firstly designed, avoid using it. Most signals are false and traders can hardly follow trends because of inaccurate information.

Price Levels may not be an indicator per se but they still attract a lot of attention. Traders seem to believe that there is something more to round numbers in trading, but they fail to see how many options this thinking leaves. Price levels won’t be able to tell you where the price will go, but they will probably pique the big banks’ interest.

CCI (Commodity Channel Index) developed in 1980 is not your best choice because it will probably force you to make a move too early.

Support/Resistance Lines are quite easy to draw, which only makes you a part of a much bigger crowd if you use them. The moment any group activity is noticeable in the chart, you will see the price go the other way, so this approach definitely isn’t worth the effort. 

Japanese Candlesticks are the oldest indicator of them all (XVIII century) and also one that will directly get you under the big banks’ radar. Mind you, even if you got an occasional win here and there using this tool, it happened because these banks want you in the game for as long as it’s possible.

Bollinger Bands, another stock-trading tool from the 80s, will most probably make you exit trades too early, so you definitely won’t be able to enjoy long trades.

Fibonacci is similar to support and resistance lines in that you can draw different lines and you can hardly know which line the price is going to balance off of.

RSI (Relative Strength Index), created in 1978 for trading stocks, is still widely used. Let’s just say that even stock traders refrain from using it nowadays. 

MAs (Moving Average Crossovers) won’t give you an exclusive insight into market activity. What is more, it won’t get you in the game on time and you will often be too late.

Chart Patterns focus on sentiment, which is absolutely the least favored option for any forex trader. They are exceptionally easy to spot so after big banks take traders’ orders, they will trigger them and whipsaw the price.

Can we fix any old indicators?

Some indicators have different varieties, like Stochastics that has a slower and a faster version. Still, what you will often see is that some basic problems do not change. While one problem is tackled (e.g. lagging), another one remains (e.g. inaccurate information). 

Some traders like to combine different indicators from this list to yield better results; for example, ADX and MAs are often combined for improving the volume indicator. Nevertheless, this is still pointless when you can in fact find one indicator that can give you what you are looking for without having to go to great lengths. 

Is the USD the best currency to trade?

The USD is one of the most traded currencies as well as a global reserve currency. Besides the forex market, all commodities are generally traded in this currency. All this points to is the currency’s liquidity. Did you know that the EUR/USD pair accounts for 37% of all trading volume in the world? However, there is one thing they rarely tell you – the USD is the absolute first when it comes to the big banks’ radar. Big banking institutions love this currency and they will track traders twice as much as in any other currency. Does this mean that we should avoid USD pairs? No, but we should pay extra attention to money management and risk management. Novice traders, however, may consider delaying any trades involving this currency to a later date when they gather more experience because of the expected volatility that the USD entails.

This article is a small contribution to the forex community in an attempt to make things more clear. Just don’t believe everything you read and demo test every tool and currency pair before risking your own money. Just because one thing works for someone else does not mean that you have to use it.

Beginners Forex Education Forex Basics

Fundamentals of Forex Trading You Didn’t Learn in School

This is what trading should be about. It should give you the freedom to not depend on the money you are getting but to be in control of it. Sometimes, this is easier said than done. That is why we have selected a few critical points that need to be reiterated for every beginner trader to read. With the present-day market expansion and ease of internet access, novice traders can read about lots of things that really aren’t that relevant. We have a different agenda. Today, you will read the things they don’t teach you. We will show you the bigger picture.

“If you work for money, you give the power to your employer. If money works for you, you keep the power and control it.” (Rich Dad, Poor Dad, Robert Kiyosaki)

Who runs the world?

Traders often miss this one key fact about trading – not all markets are governed in the same way. With stocks, things are quite clear. The money flow will dictate how the prices are going to be determined. But that flow can be out of the context of the free market sometimes (printing). In spot forex, however, when the money flows into the market, everything works mostly how the banks set. The prices will always go the opposite way traders go because this is how the big banks (i.e. Citibank, Deutsche Bank, Chase Bank, and HSBC, among others) manipulate the market. 

Get educated and don’t let the prevailing thought affect your critical thinking.

“One of the reasons the rich get richer, the poor get poorer, and the middle class struggles in debt is because the subject of money is taught at home, not in school.”  (Robert Kiyosaki)

What’s money worth?

When we think of stocks or commodities, we think of balance sheets, assets, and products that help us assign a price to any equity. What traders often fail to understand is that currencies act differently. So, when experienced stock traders wish to expand their portfolio and start trading forex, they overlook the nature of today’s currencies. The currencies we know now are fiat, which means they don’t have the value of their own like they did during the gold standard. The currencies’ value is nowadays solely determined by big banks. 

Understand what you are willing to trade as well as the essential differences between various instruments, tools, and markets.

“A person can be highly educated, professionally successful, and financially illiterate.” (Robert Kiyosaki)

Where did everybody go?

When beginners first start trading, they look for valuable content and support for development. Still, many make the mistake of following groupthink that immediately puts them in the losing group. Why does this happen? Traders who develop herd mentality don’t rely on their own analytical skills, knowledge, and experience, which is one of the main reasons why they can’t remain traders long term. Secondly, if you are a forex trader and you just look for the areas in the chart where everyone else is, you will soon be disappointed because the big banks will soon step in and change the price direction. 

Look up IG client sentiment and avoid outdated tools that are likely to give you this type of information. Your system should tell you how to avoid big banks, not how to be under their radar.

“Most people go along with the crowd. They do things because everybody else does it.” (Robert Kiyosaki)

Become rich in 30 days

Your favorite YouTuber or your trading mentor won’t be there to hold your hand forever. You must get in the game on your own. Yes, wealthy people do have advisors to keep getting the lofty return year after year, but to get there you first need to learn how to trade on your own. Even trading robots (expert advisors/EAs) can’t help you much if you don’t know which strategy or style of trading you want to use. 

Know what you care about. Explore your options and don’t believe the promises of getting unprecedented returns. You owe yourself that.

“There are no bad business and investment opportunities, but there are bad entrepreneurs and investors.” (Robert Kiyosaki)

Who are you? 

This is a deal-breaker if you want to be good at trading in any market. As a human being, regardless of your gender, you are prone to feeling different emotions that will either make you go forward or tell you that something isn’t the best choice for you. Sometimes, however, these emotions push us to do things we shouldn’t. We overleverage or under leverage; we enter too many trades; we don’t sleep and so on. This is not sustainable and you, like anyone else, will break at some point.

↳ Get to know yourself and understand your triggers so you can have control over your actions. Do the trading psychology test to get more insight.

“Emotions are what make us human. Make us real. The word ‘emotion’ stands for energy in motion. Be truthful about your emotions, and use your mind and emotions in your favor, not against yourself.” (Robert Kiyosaki)

Do you put all of your eggs into one basket? 

What do the experts do? Besides relying on experience, successful traders always diversify. They never depend only on the profit they can get from one market, and so should you. If you are a crypto trader, you will firstly diversify your coins. If you are a forex trader, you will think of different currency pairs to trade. Still, to be free of having to depend on one source of income (as one market is one source), you will look for other markets to trade. 

Make sure that you understand the similarities and differences between the markets and always have money management in place.

“When it comes to money, the only skill most people know is to work hard.” (Robert Kiyosaki)

How can traders lose the right way?

At the moment of experiencing a loss, traders are often unable to stop overreacting. They chase losses and enter new trades, which only takes their accounts further into the abyss. If you’ve been there, you know that this isn’t the right way. Therefore, the first step is to accept the loss and step away from your computer. Then, you will be smart about this experience and learn as much as you can. 

Use testing and journaling to understand how a particular trade loss can be mitigated. Then, improve your system, strategy, and money management to change your future trading.

“Wealth is a person’s ability to survive so many days forward— or, if I stopped working today, how long could I survive?” (Robert Kiyosaki)

How can you become a pro?

Leave no stone unturned. Learn about yourself, your weak points, your algorithm, and your skills, and make room for development. Don’t cry over spilled milk but shift from thinker to doer. Also, if you really want to stay in the game, get rid of the casino mentality and learn to wait patiently while working diligently. There is no instant gratification in the long game, only demo trading, journaling, testing, and revising before you invest your real money. 

Professional trading is trading real money for a living. Still, everyone can try that. Be a trader who persists in the struggles. Be the one who sees the bigger picture.

 “There is a difference between being poor and being broke. Broke is temporary. Poor is eternal.” (Robert Kiyosaki)

And, finally…

If you always see yourself as lacking, you can see neither the market potential nor the potential that comes from losing. Sometimes we fear loss; other times, we fear success. The question is what you will do about it.

Beginners Forex Education

These Resources Will Make You a Better Forex Trader

If you’ve recently decided to become a forex trader, there’s a lot you’ll need to know before opening your first trading account. The truth is that there are hundreds of websites and resources that can be accessed (for free) online but some are more helpful than others. If you don’t want to waste your time reading pointless articles or surfing websites with incorrect information, you’ve come to the right place. Forex Academy provides thousands of articles, videos, training courses, educational resources, and more – all at no cost to you. But once you’ve seen all that we have to offer, feel free to check out this list of forex resources that can help make you a better Forex trader

Demo Accounts

Traders should never downplay the importance of forex demo accounts, as this is the best way to familiarize yourself with a trading platform, practice, test a broker’s conditions, test strategies, and more. Opening a demo account is truly the closest you can get to real trading because accounts mimic the same conditions you’ll find on the broker’s live account, except for the fact that you aren’t risking any real money, as demo accounts allow you to trade with fake currency to gain experience. A demo account is also a great tool to use if you think you’re ready to open your live account but aren’t quite certain, as you will be able to see whether you would be gaining or losing money on a real account. For all of these reasons, we just can’t overlook demo accounts as one of the best hands-on trading resources out there. 


If you’re looking for informational articles, news, a dictionary, updates on trends, popular stocks, personal finance information, broker reviews, training courses, a stock simulator, or anything else that can help you with forex trading, Investopedia is one of the best places to go. If you don’t know where to start, you can scroll down to find featured articles on the website’s homepage, or you could go straight to the Academy section of the website to jump right in with courses and investing resources for beginners and more experienced traders. Having related resources grouped together and organized into categories can help take some of the stress off of forex traders that no longer need to search multiple websites for different information, so don’t forget about this website when you’re looking for forex information.

Bloomberg TV

If you prefer videos or television programs with audio over reading articles or surfing the web for information, Bloomberg TV is a great option. The TV station can be streamed live online and covers important financial information, including breaking news, global business news, live exchange rates, and any type of subject that affects the financial markets. If you tune in, you’ll have the luxury of multitasking, as you can listen out for anything important you need to know while you get ready for work, clean, cook, or perform any other activity. 

The Balance

The Balance is a financial website that offers insight into budgeting, credit cards, banking, investing, taxes, loans, the US economy, and more. While everything on the site isn’t specifically related to forex trading, there are a lot of helpful ideas that can benefit traders, especially when it comes to budgeting, retirement planning, tips for using a financial advisor, stocks, and investment apps. The homepage also features a “Money Snapshot” tool that offers quick information about current mortgage rates, saving rates, credit card interest rates, and more. Overall, this is a great site that covers a broad range of financial topics that can affect forex traders. 


TradingView is yet another website that we found to be extremely helpful to forex traders. The site offers live market information updates in real-time on their homepage, news events that are updated every few minutes, crypto ideas, and more. Traders can even sort through different asset categories and find specific need-to-know information related to those categories. For example, under “Stocks”, you can choose from “Top gainers”, “Top losers”, “Overbought”, and more. Another section focuses on harmonic patterns, chart patterns, technical patterns, fundamental analysis, and many other subjects. This really only scratches the surface of the helpful topics you’ll find on the website. In a way, it could even be said that we saved the best website option for last, so be sure to check it out. 

Forex Education

Top 10 Best Books for Forex Training and Education

Forex trading is quickly becoming a popular topic online among people that are looking for a way to bring in extra income. For those that aren’t up-to-date, forex refers to the buying and selling of foreign currencies through the foreign exchange market. In today’s modern age, traders can conveniently open a trading account online without jumping through hoops, however, you’ll need good knowledge and understanding of forex trading and the factors that affect the market in order to succeed as a trader.

There are a lot of resources available that can help you along the way, including articles, forums, and videos. Yet another option comes in the form of traditional hardback books or audiobooks. Book lovers rejoice! There are hundreds of trading-related books out there, so get ready to curl up with a good book and learn about a useful skill that can help you make real money as we walk you through the 10 best books for forex trading education.  

Currency Trading for Dummies is first on our list because it covers all the basics you’ll need to know as a forex trader. Beginners should definitely read this one first to get the best start, as the knowledge you gain from this book can help you make sense of more complicated material later on. More experienced traders can learn a thing or two from it as well, so don’t discount this option if you need to brush up on the basics.

You can pick up a used copy of Currency Trading for Dummies for approximately $5 at or expect to pay $16+ if you purchase it new through a different seller. 

  • Forex Trading: The Basics Described in Simple Terms by Jim Brown

The title of this book does a great job of describing its purpose, which is to provide understandable explanations about some of the hottest trading topics. In his book, Jim Brown touches on basics, the benefits of forex trading, choosing brokers, strategies, and even dives into psychology-related content. The variety of topics can help beginners to gain a good initial understanding of what they need to know when it comes to a variety of helpful topics and this book can even help with building your trading strategy. 

If you’re willing to use an eBook, you can acquire Forex Trading: The Basics Described in Simple Terms for about $9.99 through Barnes & Noble. If you’re looking for a physical copy, the price is around $25. 

  • Japanese Candlestick Charting Techniques by Steve Nison 

This book focuses on providing an in-depth explanation of candlestick charting analysis and techniques, which can be used in many effective forex trading strategies. Information online can become confusing on this topic, so this book is a great go-to if you’re looking for a compiled list of information on the subject without having to watch a hundred different YouTube videos. 

You can pick up your copy of Japanese Candlestick Charting Techniques through the Google Play Store or eBooks online for about $15, while physical copies can sell for $40 or more. 

  • How to Start a Trading Business with $500 by Heikin Ashi Trader

Heikin Ashi provides a more specific guidelines that can help aspiring traders with limited capital get off to the right start. It explains how to get started with the $500 investment and helps with communication skills, learning and practicing good trading habits, and offers tips that will help you work in the market. This is a great pick for those that want to start trading with a lower initial investment.

If you’re interested in How to Start a Trading Business with $500, you can purchase it for as little as $5 through Google Play or order a new copy through Amazon or another seller for a starting price of $15. 

  • The Disciplined Trader by Mark Douglas

Rather than focusing on the more technical aspects of trading, author Mark Douglas dives into the often-overlooked psychological connection between emotion and trading decisions. Traders that understand the impact their emotions can have on their trading decisions are far more likely to pick up on this problem and to make wiser, more informed trading decisions. Trust us, trading psychology is not a topic you’ll want to skip if you’re looking for a complete trading education. 

The Disciplined Trader is available at Target and Walmart for $33.99, or you can pick up a cheaper used copy through sources like eBay,, etc. 

  • Technical Analysis of the Financial Markets by John J. Murphy 

Technical Analysis of the Financial Markets tackles the more difficult topic of technical analysis by providing detailed explanations and helpful visual examples of charts. This book does dive into more advanced topics, which makes it better for traders that have already read some of the books on our list. Still, this is a great way to familiarize yourself with technical analysis without jumping from topic to topic or missing out on any important information like you might when conducting self-guided research.

The cheapest option we found for technical Analysis of the Financial Markets was $3.99 for a used copy on eBay, with newer copies selling for $20+ through popular retailers like Target. 

  • Currency Forecasting by Michael Rosenburg

Currency Forecasting also tackles the subject of technical analysis, while also covering fundamental analysis concepts as well. The author formerly worked as an analyst and provides traders with insight into important factors that can help predict prices in the forex market. 

Unfortunately, it’s a bit harder to find this book because it is out of print with limited availability. Your best bet would be to watch used book sites or eBay to find a copy of Currency Forecasting. One wasn’t available when we checked, but you shouldn’t cross this insightful option off your list. 

  • Trading in the Zone by Mark Douglas 

Mark Douglas wrote this book in addition to our list’s #5 choice The Disciplined Trader. If you liked his first book, you’re sure to find this one to be a worthy read. It similarly covers psychology-related trading topics, but dives into different topics like the technique of control, while helping traders to recognize and monitor emotions that they feel while trading. 

You can currently pick up a used copy of Trading in the Zone for as little as $2.99 on eBay or acquire it for $14.99 through Google Pay. Expect to pay prices in the $40 range if you pick up a new physical copy through a retailer like Target. 

  • Day Trading and Swing Trading the Currency Market by Kathy Lien 

Globally acclaimed currency analyst Kathy Lien wrote this book to cover more advanced topics that relate to currency trading, including fundamental and technical strategies, interest rate differentials, and factors that affect the market’s currency prices. If you’re a beginner, you might want to read through a few of the other books on our list before moving on to this option, as it deals with impactful information that is more suited for advanced traders

When we checked online, we found used options for Day Trading and Swing Trading the Currency Market starting as low as $0.99, with newer options listed at $45+ on sites like Amazon.

  •  Market Mind Games by Denise Shull

You might be able to guess that Market Mind Games is another psychology-related trading book. Once again, we must dote on the importance of understanding the way that psychology and emotion affect trading decisions, and although this book is considered fiction, it serves as an excellent mind exercise for forex traders. You might want to save list one for last so that you can grasp the book’s concepts more easily as it covers some information that is a bit more advanced.  

You can pick up a new copy of this book for around $32 at Barnes & Noble, or you can order it online from Amazon for $20 if you don’t mind waiting for the book to be shipped to you.

Forex Market

The Top 8 Must-Know Features of the Forex Market

There are more reasons to have exposure to the forex foreign exchange market beyond currency diversification. Once you do your homework, you will realize that the foreign exchange market is among the best-performing assets for traders and investors. This guide will explain what is the forex market and will present the 8 main features of the forex market that every trader should know.

What is the Forex Currency Market?

The foreign exchange, foreign exchange, or forex market is where currencies are traded. Coins are important to most people around the world, whether they realize it or not because coins must be exchanged for trading and business. If you are living in Brazil and want to buy cheese from Europe, be it you or the company where you buy the cheese, you have to pay the Europeans for the cheese in euros (EUR). This means that Brazil, the importer, would have to exchange the equivalent in value of the Brazilian Real (BRL) in euros. This applies equally to travel. A Brazilian tourist in the USA cannot pay in BRL to see Wall Street because it is not the locally accepted currency. As such, the tourist has to exchange all the BRL for the local currency, in this case, the American Dollar, at the price that is in the market.

A unique aspect of the foreign exchange market is that there is no central market for foreign exchange. Rather, forex trading is handled OTC, this means that all transactions are carried out with computer networks between traders spread around the world, instead of a centralized market. The market is open all day  (24 hours a day), 5.5 days a week, and the coins are traded globally in the world’s leading financial centers such as London, Tokyo, New York, Frankfurt, Zurich, Singapore, Hong Kong, Paris, and Sydney- across all time zones. This means that when US trading day ends, the forex market starts in Tokyo and Hong Kong. As such, the exchange market can be extremely active at any time of the day, with quotations constantly changing.

Here we mention the 8 main advantages of the Forex market that make it one of the most attractive markets for investors and traders globally.

Characteristics of the Foreign Exchange Market

  1. The best Risk/Benefit potential

The foreign exchange market offers one of the best opportunities of any financial market in terms of risk/profit, YES ( and a large YES) you know how to exploit it. The availability of forex leverage means the use of borrowed funds to control large blocks of money and thus magnify the gains and losses, creates an unparalleled potential to make profits for those with limited capital YES(and, again a great YES) learn how to handle the risk of loss. Let’s take an example, with leverage 1:100, 1% move means a 100% gain. It also means a 100% loss.

This allows us to make substantial gains in small movements in prices. However, as mentioned above, this means:

  • For $1 risk in your account, you can control $100.
  • For $1,000 risk in your account, you can control $100,000.

Many of the following articles talk about how to minimize the risk of large losses while maximizing the chances of making a profit. That involves learning to cut down on lost transactions on time and letting the winning transactions run so that you can make a profit even if you’re down on most of your transactions.

  1. The most flexible hours

The exchange market works continuously for 24 hours, 5.5 days a week, from Sunday at 5:15 P.M. EST until Friday at 5:00 P.M. EST. So, for those who work or have family commitments, they can negotiate a fully liquid market at the time that is most convenient.

  1. The lowest costs to start and operate

Forex trading is among the financial markets with the lowest cost to start and operate in terms of time and money, referring to the capital to operate, training, and equipment to operate. Like most markets, you don’t need thousands of dollars to get us started. This is why, at Forex, we can perfectly trade with high leverage (borrowed money), usually 1:100 or sometimes more.

In theory, you can usually start with as little as $100. However, you will learn that you can reduce risks and be more likely to make a profit with at least a few thousand dollars (or its equivalent) if possible. As we will see later, small forex positions that are available like mini and micro allow traders with more limited funds to trade smaller positions, keeping the share of risk capital at acceptable levels. More about this later.

Training and cost of equipment: Forex brokers typically provide fully equipped platforms and data sources for free, and the best forex brokers offer an extensive amount of free training and market analysis files. With online brokers, traders usually keep a minimum or minimum transaction volume balance to obtain quality charts and platforms from their brokers or access worthwhile research.

Free practice accounts: Even better, they typically offer practice with all the real circumstances, or, demo accounts that allow newbies to simulate much of the trading experience and practice with virtual money until they are ready to risk their capital.

Low transaction costs: Most forex brokers do not charge fees, commissions, or hidden charges. They earn money in the difference, called the spread forex, between the purchase and sale price, typically a few tithes, called pips, of the price. Depending on the size of the negotiated lots, a typical spread of 2 pips, 4 pips will be the total to open and close a position, which can cost between $0.40 and $40. Transaction costs are usually competitive when compared to online stock brokers.

  1. The exchange market offers the best liquidity

A liquid market means you have many sellers and buyers. The more sellers and buyers there are at a given time, the more likely it is that you will get a market price just when you buy or sell. The more liquid it is, the less likely a few insignificant orders or players will move prices in a wild and unpredictable way.

Indeed, contrary to the stock market, even the biggest players would have trouble manipulating the price on the main exchange pairs beyond a few hours. There are 2 exceptions to this, a few crooked central banks and Forex brokers. In reality, dishonest brokers are easily identified and it is easy to avoid with some investigation, and the risk of a central bank intervention is usually known or discovered promptly after the first incident, making markets vigilant. The more liquidity a market has, the easier it is to make a profit.

Prices are more stable and fairer, and less related to sudden and unpredictable movements. Generally, you should avoid trading in illiquid markets, except rarely when you’re trying to enter into bargain-price positions offered by those desperate to close a position. The volumes of foreign exchange markets dwarf those of equities. The latest estimates report that the average daily forex volume was around 4.71 trillion, of which retail traders represent 1.5 trillion (USD). That is the importance of the foreign exchange market, that huge volume, circulating 24 hours a day, means abundant buyers and sellers at any time of the day. That means it’s much more likely to get a fair price no matter when you sell or buy. That means you rarely see that you can sell only part of your position.

  1. Advance warnings of changes in other markets

Foreign exchange markets generally react to changing conditions before other markets, providing a valuable warning of possible changes in trends. As we will learn later, certain currencies tend to move in the same direction as industrial stocks or raw materials, and others tend to act as safe-haven assets like bonds. When these correlations are broken, this can also be a warning of a change in the direction of other markets.

  1. There is no centralised exchange with specialists maintaining the monopoly power to regulate prices

In the vast majority of stock markets, the largest specialist is a singular entity that serves as a buyer and seller of last resort, which controls the spread, which is the range between the purchase price and the selling price of a share. In theory, they must be supervised and regulated in order to avoid them from abusing the be able to manipulate prices at the expense of the public, specialists are experts in knowing when they can manipulate prices to make you buy more expensive or sell cheaper. In forex, there is no specialist to regulate the individual prices of currency pairs. Rather, there are multiple currency centers and brokers that are competing for your business. Although lack of centralisation complicates regulation, competition and easy access to price information have resulted in competitive quotations.

  1. There is no rebound rule: Just as it is easy to win on a bearish market, it is easy to win on a bullish market

Just as it is easier to row with the current than against it, it is easier to win by negotiating in the direction of a market trend. Unlike stocks (and other financial markets), in forex, it is as easy to win from the bottom markets as bullies. This is a huge advantage in the forex exchange markets. During an upward trend, when prices are rising, most traders go long, which means they buy an asset in the hope of selling it at a higher price. They’re trying to buy cheap and sell expensive, the classic way that people think is to invest.

During a downward trend, when prices are falling, it is easier to win by trading with the downward trend. So, the more sophisticated traders try to take advantage of the bearish trend and sell short; that is, sell borrowed shares in the hope of buying them in the future at a lower price, to return them and earn by difference-For example, Sell loaned shares at $100 a share, buy them at $70, return them to the broker, and pocket $30 a share. However, most stock exchange centers are controlled and regulated by those who have an interest in keeping stock prices high with restrictions and high sales costs.

  1. Forex need not be riskier than other markets

Forex has earned a reputation for being overly risky due to a combination of:

  1. A high failure rate due to novice forex traders who failed to do their homework and know the risks associated with the high leverage usually used in most forex trading.
  2. Brokers who do not provide us with minimum training to deal with the risks of using leverage. But, you can manage and reduce risks.

There are:

-Brokers, which allow you to adjust to leverage to what you can handle, will provide you with mentoring at an appropriate level.

Ways to trade forex without levers, which are no more risky than an exchange-traded fund (ETF) or a share.

-A variety of strategies to reduce risk in Forex trading, as well as new instruments to make transactions simpler and safer.

As we will see later, making money trading forex can be easier than in stocks and other more traditional asset markets, particularly bear markets. However, you need to do your homework, especially if you do or will do leverage trading, which adds risk and benefit. Part of the task is to learn simpler and more conservative techniques to make it easier to be successful in forex than with those instruments that are used more commonly. Until recently, there was not a single source to learn this more sensitive and conservative forex. No more. This is the only source for bringing these methods together in a single collection of items.

Understanding what is the forex currency market and what are the 8 main features of the forex market, as you have seen, is very important.

Forex Education

What’s the Best Way to Learn about Forex Trading?

The opportunities to learn about the forex market and trading are getting increasingly diverse, expanding across different mediums of communication. Luckily, unlike before, we have written and oral records of professional traders sharing their trading experiences and development. With today’s ease of internet access, more and more eager participants enter the world of forex each day through various vehicles, which makes it possible for different personalities to grasp the complexity of this market in the manner that suits them the most. As we all look for the most effective ways to take in the greatest quantity of knowledge in the least amount of time, today we are diving deep into the most relevant instruments one can use to gather information about trading currencies efficiently.

Since people have become accustomed to using the internet, browsing for information, this is the first means of expanding one’s education we are going to tackle. Those who are more comfortable with reading may find blogs to be particularly useful, where topics are carefully and elaborately presented. As some people may find these records to be downright uninventive or simply too lengthy, social media outlets, such as Twitter, provide ample information on forex. Nevertheless, posts such as these might at times be excessively personal, susceptible to inaccuracy, and potentially too focused on current events, which may confuse beginner traders.

Another heavily relied upon source the majority turns to is YouTube where you may find a plethora of accounts specifically created to provide insight into the tools, strategies, and other relevant aspects of trading one can consider. These videos are sometimes supported by a written record in the form of linked blog posts from the same author, which can be quite useful for the learning process as people can relax and enjoy the video without needing to worry about note-taking. Even though forex channels are one of the most popular means to equip oneself with key facts and hear constructive advice, it is important not to confuse a large following with quality, which can be quite a difficult task in the beginning stages. 

Some individuals prefer to experience a proper learning environment rather than search for clues themselves, which is why it may also be useful to consider finding a professional trading company and look for educational courses. These are specifically designed to offer key lessons and answer the most important questions, guiding beginners from the very basics to the application stage. Such courses are usually constructed to methodically explain how the spot forex market functions, typically combining audio, video, and written materials to cover all learning types and provide the most comprehensive learning experience.

Aside from professional companies, some prominent figures in this market also offer 1:1 coaching programs, which some seem to prefer although it is vital to remember that any form of coaching or consulting should not lead to dependency. All individuals or companies can serve as long as traders accept their ownership in the entire process and see guidance as support and not as a crutch, which often proves to have a detrimental effect on overall trading performance and success in the long run. Therefore, if you are prepared to independently absorb and apply new lessons, signing up for a course or a program of this sort may be a perfect option for you.

Many beginning traders also ask questions regarding books that could help them gain knowledge and perfect their trading skills. If you refer to most professional traders, however, you will find that it is not trading books (or e-books) that they praise, but the books that helped them grow as a person. The topics that typically emerge as the most relevant are the ones concerning trading psychology, personal development, and money management. Beginner traders often focus solely on indicators, charts, and basic terminology, yet after a few, consecutive failures they start to realize that a key component is missing. To ensure that your toolbox and skillset are sufficient, understand that your preparedness also involves learning about yourself, your emotions, and the greatest personal triggers. As a result of one’s fear of investment, for example, the whole account may suffer and such people may not be able to increase their capital as they initially imagined.

Psychology books can allow beginner traders to get to know themselves and overcome hurdles that can have lasting consequences on their life. Besides, books on money management can help you rearrange your finances and change your perception of money and earning, which can only reflect positively on your life. Success in trading does not stem from understanding the market alone, but learning how you as a person interact with it to reach prosperity, freedom, and independence, which should be reasons strong enough to start exploring available books to help you grow. Nowadays, we also have numerous trading personality tests online that can prepare you or direct you well so that you know which area requires the most of your attention.

Now that we have listed all sources of information on forex that traders seem to find as useful, we need to openly discuss where and when real learning takes place. Traders can invest an incredible amount of time to process theory and they can do this in various creative ways (e.g. note-taking, creating reminders on the phone, etc.), but no knowledge can provide any benefit unless tested. The proven way for you to secure future success and monetary gains is to backtest and forward test your system via a demo account for at least six months. This process will also require you to keep a journal for each stage of trading so that you can use the data to make changes and improve your algorithm and your strategies.

You cannot run before you can walk, they say, and the same applies to trading. Real trading will test you, your abilities, and your emotions most rigidly and excruciatingly if you fail to recognize the importance of the testing period. A demo account should not, by any means, be perceived as a painful prolongation of the learning stage but as an invaluable opportunity to get an education like nowhere else. And, who knows, if your results turn out to be consistently positive, you may even present your achievements to a prop company or a banking institution and start earning money immediately.

While we all hope to obtain knowledge and skills on trading currencies the same way we take a pill, one source simply cannot give you everything you truly need, unfortunately. Learning about forex takes time and effort, so you cannot expect to sleep through the process. Forex education, no matter how you go about it (i.e. via reading, listening, taking courses, or else), demands from every trader to be present and involved in the process. This also entails that you will need to double-check the information you come by, exploit your mental capacities, and keep your emotional reactions under control.

Do not go looking for a walking stick in the form of a coach, but rather consider using this assistance as an opportunity to learn and expand your knowledge before you can carry on independently. Although some affluent individuals pay for advisory services to increase their return percentage, they also know everything there is about the market and they take the steps on their own. Therefore, the best way to learn about trading currencies is to apply the knowledge you absorbed, but you cannot expect to go far if you are aloof or plain lazy. Every forex expert will confirm that practical application led them to their greatest expansion, so now that you know where to start, you can start to develop a clearer vision of your path.


Forex Basics

Top 20 Quick Tips for New Forex Traders

Ready to join millions of others who are currently trading Forex for profit? Great! As you likely already know, education is critical to success and we’re here to help. Check out these quick tips before diving into the markets!

  1. Make sure you’re prepared before you open a trading account, or else you’ll be more likely to make beginner mistakes like risking too much and blowing your account balance.
  2. Develop a solid trading plan that covers topics like what you will and won’t trade, how much you’re willing to risk, how often you’ll trade, and so on.
  3. Practice on a demo account before you open your first live account and try taking forex quizzes to see if you’re truly ready to move on.
  4. Spend time researching trading psychology so that you will recognize any emotional issues that could interfere with your trades later on.
  5. Spend time doing research on any broker before you make a selection to ensure that you’re getting a good deal and doing business with a trustworthy company. 
  6. Set realistic goals beforehand without focusing so much on how much money you’d like to make. Instead, set short-term and long-term goals that focus on your growth as a trader, and money will follow.
  7. Never stop educating yourself on topics regarding trading. Always be on the lookout for articles, videos, new strategies, and other pieces of information.
  8. Take breaks from trading when you need to, especially during times of stress or when the market just isn’t giving you any good opportunities.
  9. Never enter a trade just to do something or for the rush if evidence doesn’t support that it’s a good move.
  10.  Know how to spot trends, even if it isn’t necessary to do so based on your trading plan.
  11.  Make sure your broker doesn’t charge ridiculously high withdrawal fees, spreads, or commissions if you want to bring home as much of your profits as possible.
  12.  Don’t fall victim to overtrading because it is a recipe for reckless trades that aren’t well-thought-out.
  13.  Never risk more money than you can afford to lose and never deposit money into your trading account if you need it for groceries, bills, etc.
  14.  Always take steps to manage your risk, like placing a stop loss and using reasonable position sizes. 
  15.  You should be confident in your trading plan, but don’t make the mistake of becoming too sure of yourself as it often causes one to make bad trading decisions. 
  16.  Experiment with new strategies and ideas on your demo account before trying them out on your live account – this way you’ll know beforehand if the strategy does or doesn’t work.
  17.  Figure out what time of day you are most productive and try to trade during that period, whether it’s first thing in the morning or later in the afternoon.
  18.  Always keep a trading journal to monitor your progress and to get an overview of how your strategy is or isn’t working.
  19.   Keep your emotions in check while your trading and don’t make the mistake of revenge trading, avoiding trades because of fear and anxiety, etc.
  20.  Know beforehand that losses are part of trading and don’t be too hard on yourself when you do lose. Instead, figure out what went wrong and learn from any mistakes you might have made.
Forex Basics

Top Quality Forex Education Is Essential to Success – Here’s Why…

Those that are looking for a source of primary or extra income can take advantage of the ability to buy and sell currencies online through the foreign exchange market. Through this unique opportunity, traders can place orders from any device with an internet connection thanks to electronic execution, which eliminates the need to place trades at a centralized location. The sheer accessibility offered by this electronic system has attracted more than 9 million traders from all corners of the globe. 

In order to make money by trading forex, traders attempt to profit from the differences in value between two currencies that they are buying or selling. The general idea is to buy when the price is low and to sell once the price goes up. For those that know what they’re doing, forex trading can help to make large amounts of money, and it has even produced many self-made millionaires. However, this isn’t something that can be accomplished without hard work and there are things to know beforehand if you’re considering becoming a forex trader.

First, you should know that there are risks involved with trading, just like with any other investment. You have the potential to make a lot of money, but you could also blow the money you’ve invested and wind up with less than you had in the first place. One of the best ways to avoid losing money is to secure a proper education for yourself, rather than simply jumping in feet first. Many beginners make the mistake of opening a trading account without knowing what they need to know, especially in light of the fact that it is notoriously easy to open a live account through a broker. If you’re 18 years old, have a little bit of money to invest, and you have access to a device with an internet connection, you can easily open an account within a few minutes. The sheer simplicity of this process leads many aspiring traders down the wrong path because they assume that trading will be easy since they can open an account without any hassle. 

If you want to be among the percentage of traders that achieve real success, you shouldn’t rush out and open an account after having only read a few articles. It’s important to take your trading education seriously by taking part in college-level courses that will help you excel. If you’re in the United States, you can find many of these courses offered by business schools with subjects that cover detailed information about trading in different financial markets. This training can teach you what you truly need to know to be successful and guarantees a much more thorough education that you could give yourself.

Reading charts is one of the most important topics that your courses should cover, so be sure to check that this is included with the curriculum. If you choose a highly rated business school, this shouldn’t be an issue. This skill is important because it will help you read charts to see where currency prices are going, thus aiding you in making decisions about which currencies to buy and sell. This is one of the best ways to make more accurate predictions that are founded on evidence, which increases your chances to profit significantly. 

Another thing to look for in your college courses would be a hands-on experience that helps you truly grasp the physical act of trading. Practicing on a demo or dummy account and trading with virtual currency is one way this can be accomplished, but you should also expect your school to ask you to open a real account (ideally with a small capital investment) to practice on once you advance further into the course. This practice will give you insight into which trading systems you prefer while increasing your confidence along the way. You’ll also have others to speak with if something confuses you and you will be more likely to avoid making mistakes later down the road. This is the best way for aspiring traders to be introduced to the trading world, rather than being forced to open a real account on their own after finishing their schooling. 

Those that are considering trading need to be aware that it isn’t something you can just jump into, despite how easily you can open an account. Investing in a good education will increase your chances of success in both the short-term and long-term, while failing to do so makes you more prone to mistakes and you will likely join the large percentage of traders that blow their accounts right out of the gate. It’s important to remember that forex trading is not a quick and easy way to become rich, as it requires a lot of hard work and dedication, but it does open a pathway to potential riches with the right education. 

You should take your education seriously and attend a good business school that teaches you important fundamentals like reading charts, which will help you to make smarter, more founded predictions when it comes to deciding what currencies to buy and sell. Your trading courses should also offer hands-on practice by trading on demo accounts or even on a real account to set realistic expectations and to truly prepare you for trading in the real world. At the end of the day, it’s up to you to take your forex trading education seriously and to make the right decisions that will lead you to success later down the road. 

Forex Basics

What Are the Best Soft Skills for a Forex Trader Develop?

Soft skills enhance our abilities to adapt to our work environment and enable a smooth exchange of information or services. While traders are not standard employees one can find at a typical workplace, they still need to exhibit skills related to personality, attitude, flexibility, and motivation, among others. As forex trading is a rather solitary endeavor, unless you are overly dependent on your Twitter forex community or your trading coach, you still need to develop such skills despite the lack of interpersonal contact.

Unlike hard skills, the soft ones cannot be mathematically measured, but their quality lies in their ability to increase traders’ potential to see benefit from trading. Many traders who failed in this line of business attempted to approach forex in a simplified fashion, downgrading it to betting and, hence, substantially affecting the end result. Therefore, to be able to understand forex and ensure prosperity, adopting a variety of soft skills is a requirement. Since trading currencies is a unique sort of business, we are going to highlight the skills that have proved to fortify healthy practices, boost self-development, and increase returns. You will find this article to be divided into three major sections that comply with the natural progression of every trader’s experience, which you can use as a guide to monitor your own development and ensure profitable trades in the future.

Stage 1: Learning

At the very beginning of a trading career, each individual intends to find proper learning materials that would best support the acquisition of new terms, understanding of the market, interpretation of charts, and acquaintance with concepts such as strategy, indicator, and algorithm. To be able to facilitate this educational process, you will need to exhibit the willingness to learn and employ research skills extensively. In addition, to further build resourcefulness, you will also need to make use of critical thinking to be able to discern whether the information you obtained is applicable or useful. Some people like to be creative in terms of how they adopt the knowledge, so they will use post-it notes or turn to drawing, thus showing their eagerness, motivation, and respect towards education.

If you learn how to value the opportunity to learn, you will much more easily go over all other stages of trading development because every step is a part of a bigger process that takes time, patience, and effort. Last but not least, you will need to start seeing yourself as an entrepreneur and demonstrate leadership and management skills so that you can properly assign times of the day/week when you will focus on learning, regardless of other responsibilities you may have. While intrinsic motivation is quite rare, exploit curiosity and envision your goals and potential changes that can support a balanced learning routine and reveal the importance of building forex education.

Stage 2: Practice

At this stage, traders are creating a demo account, through which they can practice technical analysis and fundamental market analysis as well as test their strategies and algorithms. As can be seen from the previous sentence, analysis is a vital skill, which can help you learn how to determine when and how exactly to enter and exit trades. By demo trading, you are testing your ability to make tough decisions and manage situations independently. While some people may find it easy to draw the line, others will come to realize that they lack emotional preparedness and confidence to proceed with a trade or to end it. This phase is ideal for reflecting on your emotional intelligence where you will need to show honesty and courage in determining how your own emotional responses affect your overall trading. Being sincere with yourself will also allow you to make necessary changes that can only help you down the line.

Of course, to be able to track your progress, you will also find journal keeping to be an absolute must, where the skill of discipline can help you build a proper routine. Lastly, understand that each trade is similar to a project, where you are the project manager, responsible for the technical, the emotional, the budgetary, and the organizational side of things, and it is thus also your duty to monitor whether each step is taken at the right time. If we overinvest and disregard the alarming risk levels, our projects will fail. However, if we invest too little, these projects will never come to fruition, so we need to exercise control as well as money and risk management. Remember that the ability to adjust to new circumstances and balance other life roles and responsibilities will also determine how well you can direct yourself, plan your strategy, control your emotional responses, and build your trading stamina. 

Stage 3: Professional Trading

The last stage, or the stage where you are finally ready to trade real money, is the moment when all your skills and knowledge of trading psychology will be tested. By now, you have already shown dedication, persistence, attentiveness, resilience, humility, the openness to change, and the ability to be corrected and trained, among others. Here you will need, more than ever before, to show faith in your system, regulate your compulsions to make changes in the middle of a trade, and monitor your risk and money management so as not to overexpose for example. While you may have a plethora of other responsibilities, you will demonstrate the skill to work under pressure but with a clear mind, which may require you to follow expert directions on how to relax and prepare yourself mentally/emotionally before trading.

Since real money trading tends to awaken our deepest fears, you know that you may at times need to build your attitude more devotedly and work on your positivity, and you should find comfort in knowing that have already proved to be able to troubleshoot anything that needs fixing. Remember to employ critical observation skills when it comes to assessing your technical skills, results, and psychology, but also strive to nurture tolerance and accept your flaws as areas where you can keep growing and enhancing your trading experience.

While forex does imply a different and possibly either stricter or more lenient schedule, depending on what reality you are used to, use your soft skills to perfect your technical skills and maximize your returns. Not everyone finds it easy to plan and strategize although every person needs to bear the responsibility for overcoming his/her shortcomings. Intrinsic motivation, control, determination, and critical thinking can get you far, as long as you accept the role of being your own leader. As you can see, leadership and management, together with all other skills, need to be used comprehensively in all areas of trading development. Therefore, these skills are not stage-exclusive, so the skills we use at the very beginning will probably need to be used later on as well.

Motivation is equally necessary for the early stages of trading where everything is new and complicated and later on when we need to record each trade to be able to track our progress to ensure sustainability. If we desire to build a lasting forex career, it is vital that we think of currency trading as a real job where we have the executive role. And, even though we do not have different people to manage, we have just about the same handful of duties trying to balance different sides of our personality, our goals, and technical knowledge. To summarize, in order to build your trading skills and increase your profit, you also need to develop soft skills that will allow you to control yourself and your trades, keep journals regularly, invest in practice and troubleshooting, support proper money management, and fortify your sense of responsibility regardless of your life circumstances. 

Forex Basics

Consider This Your Official Forex Education Checklist

Acquiring a forex education is an achievable goal, especially considering that information is just ready and waiting online for free. If you’re interested in becoming a forex trader, there’s a lot you’ll need to know before you get started.

On the other hand, if you’ve already begun trading, you may be feeling overwhelmed or thinking that you need to further your education for better results. As we mentioned, you can find everything you need online, but where does one begin? We’ve taken the time to highlight an education checklist so that every trader can start off with the best possibility of being successful. There’s a lot of ground to cover, but you shouldn’t have a problem if you follow our handy guide. 

Start with the Basics

What are the basics of forex trading? Obviously, you’ll need to begin here, or you might become confused and you won’t be able to understand more complex articles or tutorials. Starting with a firm base knowledge of the most basic forex information will make the complicated stuff easier to understand later on. Here’s what you need to know:

  • Terminology – this includes words and abbreviations that are commonly used in trading. Examples would be stoploss, NDD broker, leverage, and other phrases. You’ll need to be able to recognize most of these in order to fully understand other information out there, so this is the best place to start. Try Googling “forex glossary” to find a list. 
  • Understand what forex trading and the forex market actually is and how it works. This is usually outlined in beginner’s guides.
  • Learn about brokerages. How they make their money, what you need to open an account with one, including a starting deposit, ID, proof of address document, and so on. Look for information about choosing a trustworthy brokerage and what fees are reasonable.
  • Learn about the assets that can be traded, including currency pairs like EURUSD, minors, and exotics, CFDs, stocks, equities, and so on. You’ll need to know what drives the prices and which factors influence the market. 

Trading Mechanics

This involves navigating and using a trading platform, placing orders, exiting orders, different order types, calculating profit and loss, account balance, leverage, and margin. Anything that involves the physical act of trading would fall into this category. 

  • Watch video tutorials that explain how to navigate a chosen trading platform like MT4 or MT5, or whatever platform your broker supports.
  • Know how to place and close orders. Many trading platforms will allow you to do this with one click. 
  • You’ll need to understand how margin works when placing a trade. Margin, leverage, and your account balance are all tied together. 
  • Try trading on a demo account for a more hands-on experience navigating on a trading platform and Google anything you have trouble with. 

Research Strategies

It’s been said that a trader is never better than his trading strategy. If yours is bad, then you aren’t going to make money. Here are a few common trading strategies:

  • Scalping – This involves opening and closing many small trades and profiting from the small price changes. Over time, these profits add up. 
  • Day Trading – Day traders trade during the day and almost always exit their deals before the end of the trading day.
  • Swing Trading – Swing traders allow their trades to stay open for days or weeks at a time. 

There are so many strategies out there and each comes with its own advantages and disadvantages. You’ll want to put a lot of work into finding the strategy that will work best with the size of your investment, your trading account, the timing of when you can trade, and so on. You’ll also need to choose a strategy that you can wrap your head around, rather than choosing something that is too advanced for entry-level traders. Start simple and work your way up over time. 

Learn About Risk-Management 

There are several risks that forex traders are subjected to, including risks from using leverage that is too high, interest rate risks, and transaction risks. This is what you need to know:

  • You may have read about leverage briefly, but you’ll need to do more in-depth research about how leverage works. Know that using high leverage often backfires on beginners and can easily wipe out your account. Be sure to choose a leverage option that matches your skill and risk tolerance.
  • Learn about setting a stoploss and take-profit level. If your trade hits the stoploss, it will be closed by the system so that you don’t lose more than the specified amount. If your trade hits the take profit level, it will also be closed to avoid losing what you’ve just earned. 
  • Double-check to ensure that your trading plan accounts for managing risk.
  • Read about other risk-management strategies online.

Research Trading Psychology

You might not realize how much of a role psychology can play when it comes to trading forex. Of course, simply pointing this out is enough to make one think about the possibilities. Traders often experience a “rollercoaster” of emotions, from feel-good happy emotions like excitement when one wins big, to disappointment, anxiety, and other stresses.

  • Read articles about trading psychology, particularly the way that this affects your trades. 
  • Know that even happy emotions like excitement can have negative effects that can cause you to lose money.
  • Research “analysis paralysis” – this is a common problem that is rooted in anxiety when trading. 
  • Read about the ways that negative emotions like stress, anxiety, fear, and greed can affect your trading habits.
  • Look online for tips that can help you deal relieve stress if you need to. Know that it is okay to take a break from trading if you’re ever feeling overly emotional. 

Spend Time on Miscellaneous Information 

There is so much information online and some things may have made it to our list so far. This doesn’t mean that you should discount any of those articles, tutorials, or sources of information! As you move through your forex career, always keep open eyes for miscellaneous information that could help further your career. Reading about successful forex traders, trading tips, stories about other traders, etc. is always helpful. 

The Bottom Line

Beginning your education as a forex trader can seem like an overwhelming task at first, however, this checklist is intended to help give a big picture of what you’ll need to know. Making sure that you have a good understanding of these concepts before you really get into trading is important, as it can help you to avoid losing your money in the beginning and potentially ending your career. Becoming more educated about forex trading is a great goal that everyone can get excited about. Just think of how successful you’ll be later on and how much of a jump start you’ll have on other beginners if you take learning the various forex concepts seriously.

Forex Basics

Master Forex Trading In Just ONE Week! Here’s How…

Learning to trade is not a quick process. In fact, it can take many years to get a proper understanding let alone to be a profitable and successful trader. Having said that, many people want to take a faster route to Forex education. If you’re interested in diving headfirst into Forex, you’ll most definitely want to read this.

There are things that you can do that can help you get a grip on at least the basics within a week. It is, however, important that you set proper expectations, after a single week of learning and trading, you will not be a success, you most likely won’t be profitable, but the important thing is that you would have put your foot in the doorway of trading and will be at the start of a fantastic journey. So let’s take a look at what you can do and learn in your first week as a trader.

The first thing that you are going to need to do is to work out exactly how much time you have available to learn, it doesn’t matter how much it is, you just need to ensure that you know and have planned times for you to sit down and learn. If you only have one hour a day to learn that is fine, if you have 12 hours to dedicate to your learning then that is great too. Your expectations need to be set against the available time, if you have an hour per day, you won’t be learning as much as someone who has 10 hours per day, but it does not mean that you won’t learn, just not quite as fast, which is perfectly fine. Once you have worked out how long you’ll have and when we can start to look at what you can actually learn and do.

Before we begin to learn, you need to ensure that you have the right environment, even if you spend the first day of your first trading week making things right, it will make a huge difference for the rest of the week and for our future trading. Get a space in your house or flat setup that will be used solely for trading, this area needs to contain all of the things that you need to trade, your trading terminal (computer), some notebooks, a calendar, and anything else that you feel that you may need.

The things that it does not need are distractions, if you can see the TV from your trading station then this needs to be changed, there needs to be nothing that will take your focus away from your trading. When you are starting out it will take away your concentration and will slow down your learning, when you are trading, things can distract from your analysis and trading which can lead to bad trades, so getting this right early can be really beneficial to you as a trader.

On your second day, you are going to need to work out how and where you want to learn. Some people learn best from reading written content, others like to learn from visuals or videos, you need to work out what is best for you. There are resources whatever your preference actually is. There are plenty of really good tutorials on YouTube, there are plenty of sites with completely dedicated learning and coaching sections. Then there are those that require more human input, there are courses and there are mentors out there that can offer a mixture of written and visual learning, as well as some personal input from the trainers. The issue with this is that it often comes with a cost, and at this stage of your learning, you may want to avoid the paid routes before actually knowing whether trading is right for you. 

Your main learning priority this week is to learn the basics, to give yourself a foundation for your trading knowledge, there is a lot to learn. In fact, no one can learn everything as it is constantly changing and there is just so much information and variations to everything when it comes to forex and trading. Think about learning what things mean, learn about what pips are, the different currency pair types, what spreads are, those sorts of things. It seems pretty basic and it is, but if you do not know what these things mean then you will never be able to be successful, so as your first learning step, learn the different terms.

At some point in this first week, you will also need to get yourself a broker, there are a lot of them, and we mean a lot of them, you will need to find the one that is right for you. Do a bit of research and talk to others that also trade, while it is important to find the right broker for you, at this point in your career you are not going to be trading any actual money, so just ensure that you find a broker that offers demo accounts that offer similar conditions to what you want as a trader. Open up that demo account as this will be the place where you will be practicing the things that you are learning.

So your demo account is open, you also know some of the basics of trading, now it is time to put those things into practice. There are hundreds of different strategies, knowing what works for you is also important within this first week, as you do not want to put time and effort into learning something that simply won’t work for you. If you are planning to sit in front of the computer for hours then there are strategies for you, if you only have 30 mins a day, then there are strategies for you, once you have worked out what you want to try, we can put something into practice. There is no harm in trying multiple just to find out what is right and what feels most comfortable for you.

As the week progresses, you will be looking more into the strategy and potential risk management techniques to go along with them. You will need to be putting your learning into practice on the demo account that you previously opened up. Take your time to learn the strategy that you are starting out with and ensure that you continue to learn the basics and what is involved in trading.

The first week of your trading career will b a little slow ad you may not feel that you have made much progress, but this is the time where you are building up your base, there is no expectation that you will be an expert trader or that you will ever be trading on a live account, that will come with time. The important thing is that you are building up your understanding of what trading is and how it can be implemented into your life, getting your equipment and environment set up. Don’t push yourself too hard, this is of course the first week of your potentially very long trading career, so don’t feel disheartened if you do not see a lot of progress, stick with it, and over the next weeks and months, you will see the programs start to pick up.

Forex Psychology

Trading Psychology 101: A Complete Guide to Self-Actualization and Prosperity

When we start learning about trading, topics such as consistency and rules make it the last on our list, especially because, with the pace and the stress of everyday life, we make a profit our priority. However, if we are already eager to get to that financial freedom, there are specific points that we cannot turn a blind eye to and simply ignore. Experts in this field share how now, after several decades of trading, they have long stopped reading about trading itself. However, what they are still vigorously passionate about because of the benefits it brings is learning about trading psychology and about themselves.

Naturally, there is always room for improvement in terms of trading-specific knowledge, yet once you feel that you have covered enough to serve you consistently, it is time to truly focus on your actions and behavior. Today, we are going through this comprehensive list of lessons and tips which you can use as a guide to achieving self-actualization and prosperity.

Traders often see more benefits from short-term activities than what they can actually reap in real trading while heavily doubting the potential their actions can unlock over the long haul.

Lesson 1

At the beginning of a trading career, many traders are quick to assume that they can realize all of their potentials and surpass others faster than what is realistically possible. At the same time, beginners frequently miscalculate their steps and undervalue what they can produce in the long run. What this essentially means is that traders typically have a desired sum of money they wish to win in the shortest amount of time, but as it often turns out, this amount is usually equal to the overestimation of their skills and abilities at that particular stage of trading development as well as the underestimation of the success they can actualize from a long-term perspective.

Many professional traders have admitted to having had the same approach to trading at the very start, without realizing what this type of he/she wishes to attain and, for some people, this may be a dream house or a dream car, while for someone else the goal may have to do with overall financial stability that would secure a household. Especially for those with more pressing issues, everyday needs and challenges (e.g. raising children), or a strong vision of what their future should look like, the urge to reach a financial goal might make the idea of becoming a successful trader overnight that much more inviting.

What experts in this field always tend to stress over and over again is the perspective which most newbies seem to lack – if young traders could only take a step back and commit to a slower pace, they would be able to obtain increasingly greater freedom and finances. Therefore, instead of missing sleep over the initial $2000 a trader longs to earn, he/she would rather adopt a different mentality and take one step at a time to get to much more lucrative endeavors that would bring about sustainable capital just five or so years later. 

Growing as a trader is a process, not a matter of learning a few tricks.

Lesson 2

While traders are constantly surrounded and bombarded with dos and don’ts in every way possible, they also need to understand that the path to becoming a self-actualized and independent trader is also a developmental process. The same path of discovery can be found in different fields of work, so actors need not be able to play out all characters until they discover a sense of inner strength and control just because they read the plot or took acting classes before. Any form of brilliance is like a jewel whose outer layers need to be stripped off until it gets its form and shine to be of any use or to be sold.

Many successful professional traders have shared their own limitations and challenges in trading: some dealt with the excessive need to overtrade, some struggled with fearing the risk which often stopped them from entering good trades and making more money as a result, and some others found taking a loss too difficult so they felt compelled to immediately enter a new trade. It is important to understand that every trader has some part of the personality that demands more attention and that is likely to have a negative impact on trading if left unnoticed and unattended.

At the same time, no development can take place unless we are eager to look within and face our inner demons because without acceptance there can be no recovery and growth. It is in human nature to need to look and feel impervious, complete, and untainted and traders can find solace in the fact that this is a shared trait across all individuals regardless of their age, background, education, or else. 

The first step to growth as a trader is to acknowledge and accept one’s flaws.

Lesson 3

In order for any trader to be able to get over the hurdles caused by their own minds and emotions, he/she first needs to satisfy the number one condition and admit to being imperfect. If you are ready to recognize that you are, in this present form, less than what you need to be capable of producing the results you are hoping to obtain, you will also be able to accept yourself and leave space for improvement. Many traders are already aware of the mistakes they are making because they often stem from some unhealed parts of our minds or souls. If you are already able to notice that you feel tension building up in your body before you take some step (e.g. click the button to rush into another trade after a recent failure), you must also know that whatever action you are preparing yourself to take is not coming from a place of stability and control. However, many traders are also quite attentive and they already recognize these patterns that they feel obliged to repeat time and time again, so they feel tremendous guilt and shame for not being able to put an end to such behavior.

It is in the moment of realization that they will never be able to stop this continuous agony that helped some professional traders to discover a renewed sense of strength. Only once they gained this understanding of their inability did it become plausible for them to overcome such a tremendous challenge. Traders often keep putting more and more pressure onto themselves after they finally see traces and consequences of self-sabotaging behavior, but it is not through erasing or ignoring a specific behavior that leads to strength but through learning how to trade effortlessly in spite of it.

Trading will help you not only allow you to see the person you are but also help you build your character with time.

Lesson 4

The moment any true development is activated is after we acknowledge that we are “damaged” and accept the need to put the effort into finding a resolution to the existing problem. The gap between seeing the fault within ourselves and showing the willingness to do something about it is so vast that it is one of the key determiners of how successful a trader you can become. It is precisely this quality that will distinguish between high-achieving traders and the impulsive ones with an expiry date on their trading careers. Now that you have become aware of the triggers and situations which keep you in this perpetual loop, you are allowing yourself to get a different and more objective perspective where various creative solutions and ideas can emerge. You are growing tactics and methods that will put you out of that vicious circle, so you are no longer in need of exposing yourself to the things that used to trigger you before.

As trading is not exempt from everyday ailments and since it mimics life in all of its forms due to the shared human factor, it is easy to draw connections with some other real-life situations. We can see how some major life adjustments are carried out in the exact same manner, and any addict in recovery would also need to think of strategies to avoid provocations on a daily basis. Here we can prove to ourselves how despite the conscious assessment and recognition of our emotions, shady traits, and situations that may enable undesired behaviors and bring up more pressure and dissatisfaction, we can find peace through acceptance and focused action. When you are able to fully feel all the emotions that may range from exciting and positive to gloomy and scary and still keep moving towards your goals, you know that you have reached a new level of competency that will prevent all those hours of learning about technical tools and testing the algorithm from going to waste.  

Four key trading psychology terms we need to keep in mind are recognition, acceptance, investigation, and competency.  

Lesson 5

This journey is not easy, yet it is an exceptionally rewarding one in the sense of ensuring lasting changes that you will get to witness in different areas of your life. The entire introspection that you put yourself through will inevitably transfer onto your trades and your personal life as well because you will experience a renewed sense of self-confidence and self-reliance. Once you make a decision and commit to leaving no stone unturned until you see the causes of your actions, you will discover deep satisfaction and serenity that, looking back, you will know you have done the right thing. The fact that the best traders in the market keep bringing up the same topics, insisting on traders learning about trading psychology, is an indication that looking within is the only certain way to get to the top.

Even famous psychology book writers and scientists admit to there being two parts of us – one that makes an inherent part of our existence or what we call our nature and another that consists of the lessons and experiences we drew from our surroundings. Some people are, for example, born risk-takers and this is in the innate characteristic that can be further shaped or molded by the environment. Someone who was born in a family where financial literacy was openly discussed and stimulated will probably enjoy a massive head start in comparison to other trading beginners in the market. The keel will never be even and everyone will have their own share of deeply rooted beliefs that are blocking their progression towards expert-level trading. Especially since we cannot always be consciously aware of our subconscious beliefs, it is important to willfully try and test our assumptions about who we are and what we believe in. What you may discover is the realization that some ideas you firmly cling to have never truly served your best interest or helped lead to the results you are aspiring to achieve. And, of course, once we obtain new knowledge about ourselves, we can then take appropriate measures and become one or several steps closer to that ideal version of our future selves. 

Challenge your belief system regardless of where these teachings came from (family, school, etc.) because you may find out that the ideas you embraced so freely never served your highest purpose.

Lesson 6

Psychology tests are becoming increasingly available and resourceful, allowing for easy access and use to analyze how individual personality traits may affect one’s trading style overall. These evaluations typically assess the following four main areas: energy, mind, emotions, and perception. The analysis of one’s energy provides insight into how energy is generated and where it is directed. It reveals whether energy is focused inwards, which is characteristic of introverts, or if it is projected outwards, which we mainly find in extroverted personality types. Those traders who fall into the second group are, for example, much more likely to overtrade because extroversion is heavily drawn to a plethora of stimuli, activities, and achievement.

Having an introverted personality type, however, opens doors to some other patterns of behavior, which can prove to be equally detrimental to trading. The second level of analysis that covers the mind allows us to understand how we see the world and whether we are a more intuitive or a more observant type of person. Here we may find that we are not as detail-oriented as we might have initially assumed, and this knowledge of how we process information can prove to be of great benefit to all aspects of trading. It can reveal its potential in the process of creating your own trading system, which needs to match your own personality for it to be able to produce results. This is another reason why so many expert traders keep saying how some trading systems, despite their creators being extremely successful and affluent, never worked for them. The next point of assessment includes the analysis of one’s emotions, or the opposition between thinking and feeling, that determine our entire decision-making process.

Many professional traders always stress how important it is to acknowledge how you feel in some key points in trading to put an end to behaviors that sabotage your trades. The analysis of one’s perception is also extremely useful because it demonstrates whether traders make decisions based on perception or judgment, leaving room for a more advanced comprehension of their approach to work. And, it is now abundantly clear that one’s entire approach to trading reflects his/her unique set of values, thoughts, ideas, and emotions and these tests can truly help traders get to the core of who they are in order for them to interpret these results and use them intentionally to their benefit. 

Psychological tests do not only allow traders to learn about who they are but they also provide insight into how those traits might affect trading as a whole. 

Lesson 7

The study of epigenetics has shown how we all fall under the effect of different events that permanently influence our genetic makeup. It also proves how experiences that we have leave marks in our neurology, forever changing who we are. As human beings, there are many different causes of such epigenetic alterations as our nature is in constant interaction with our environment. Our experiences in time and place and our relations with other people inevitably impact how we think, what we believe, and how we feel. For example, all traders who have traded before now have this concept and experience of trading stored in their belief system, having thus become a part of who they are regardless of individual success. The events we experienced as children also created pathways for certain triggers to produce specific emotions as if we were trained to respond in a certain manner in similar situations.

Our biology is an equally strong determinant of how these external factors shape us, so someone who is a highly sensitive person may be more reactive to the surrounding stimuli than someone with a different biology. The brain is a powerful tool that stores information, and this process is likely to set off some reaction. The more these connections between a specific context or a situation and a responding emotion are made, the deeper the pattern becomes. That is how one day we may realize we are constantly rushing into trades without knowing the reason behind such behavior. And, while we cannot surgically cut through the lenses of our own neuroscience, we can find peace understanding that our responses seem to be out of control because they are not a conscious choice we choose to make, but a well-preserved bodily function.

Many responses to the external stimuli are of chemical nature, resulting in specific emotions that always provoke similar reactions. 

Lesson 8

In a Harvard study, carried out to assess altruism and fairness, the so-called Ultimatum Game was used to uncover different personality traits that take part in decision-making processes. The experiment paired two individuals, “the Proposer” who was tasked with making an offer and “the Receiver” whose role was to respond to the proposal. The players were given the sum of $100 which they were supposed to split after the Proposer decided on the amount willing to share with the other party. If both players agreed, each participant would receive the agreed amounts. However, if the Receiver refused to proceed, neither this person nor the other individual would earn any profit. During the entire process, both participants’ brains were monitored through an MRI to detect brain activity. The study has shown how, whenever the Proposer assessed how much money was to be gained, the prefrontal cortex was always activated. This particular region in the brain is responsible for various cognitive processes such as planning, decision-making, self-awareness, and problem-solving, among others, and is demonstrative of rational thinking. At the same time, whenever the Responder deemed the offer fair, the same part of the brain would lit up. While the Respondents consented with the offers they considered fair in most cases (close to 100%), the ones they believed to be unfair were rejected in approximately 50% of situations.

What is particularly interesting is that, in such cases, the MRI showed activity in a different part of the brain which governs emotional feelings such as fear or anxiety. This conclusion is extremely important because it proves how, despite the assumption that we are always coming from the place of clear, logical thinking, our decision-making processes are not necessarily always representative of rational thinking. The fact that another brain region activates when we make decisions proves how some of the decisions we make do not come from the right parts of the brain responsible for rational decision-making. Moreover, the study further suggests how in some situations people are utterly incapable of using the prefrontal cortex when they find themselves in a losing position, which should help traders understand why some of their reactions lead to losses. 

Even though we assume to be rational, studies have shown how some decisions are made in the part of the brain responsible for fear and anxiety.  

Lesson 9

Various other studies proved how different emotions activate different regions in the brain, which undeniably affects the decision-making processes. A study of hunger carried out at Ben-Gurion University of the Negev, Israel, researched judges and analyzed more than 1,000 parole decisions made across a period of 10 months. The judges who took part in the study had vast judiciary experience of 25 years on average, which also meant that they had attended numerous Parole Board hearings up to that point. What is interesting is that time of the day emerged as a crucial factor in determining the outcome of a hearing, and hunger directly proved to have a direct impact on the decisions made in the courtroom. The study has revealed how the best time of the day to go before the judge was between 9 and 11 in the morning, indicating a 25% higher chance of seeing a positive outcome. Nevertheless, the next time slot, between 11 and 12, turned out to be the least favorable period in a day, while the window of increased opportunity would only return after lunch. Another drop in parole rates was recorded after 3 PM, lasting until the next rise at 5 PM. These causal associations demonstrated in the above-mentioned study can also be found in the world of trading, where we need to use our systems to trade.

Things that happen inside the human body with all the processes and the connections that are established throughout our lives may have more to do with the sequential, repetitive decisions that we make without understanding why. Sometimes to quiet down their minds and get into a state of complete focus, some traders like to practice meditation which allows them to reach a state of complete centeredness. By doing so, traders quiet down their minds and emotions, thus heavily decreasing the potential of stress residue or any hidden emotional pile-up to affect the trading. Meditation is, however, only one type of activity that leads to improved physical, psychological, and of course physiological state, and traders should explore different pursuits and/or routines that would provide them with the peace and quiet their minds and bodies need before and during trading. 

If hunger can affect the decision-making in judges with over 25 years of experience, imagine what occurs in your body that you have no control over. Find an activity that can help you feel centered and relaxed before you start trading.

Lesson 10

The knowledge of the human body and mind we accumulate with time might make us feel that people are doomed in terms of the ability to fight against our own nature. However, it is only with this knowledge that we can willfully leave more room for acceptance. As more information is gathered, traders need to increasingly invest in exploring their own actions and which steps they choose to take at a particular moment in time. Often people fall for the same trap now commonly known as the Dunning–Kruger effect that makes them view their cognitive abilities as greater than what they actually are, which is the most vivid in those with the least amount of knowledge. Many traders feel exceptionally confident immediately after going through several books on trading, yet when they get immersed and explore the topic more thoroughly, they start to realize that trading is harder than what they had ever expected before. At this point, some traders decide to quit, whereas others choose to devote more time and effort into becoming more knowledgeable about this field. As the curve keeps rising, so does the understanding of the subject, with traders finally reaching a higher level of competency. The rationale of the chart below is to let traders know that if they continue to put energy and keep going further, they will inevitably accrue knowledge and experience and reach the level of expertise they need to be successful at trading. 

People are prone to having a cognitive bias in which the ones with low ability at a task overestimate their ability (see Dunning–Kruger effect). 

Lesson 11

The discoveries made in the field of homeostasis (or what we know as the Yerkes—Dodson law) indicate a connection between pressure and performance. This relationship is increasingly important for extroverted individuals who are usually fond of stress and a busy schedule. The ones who feel motivated by having a variety of tasks to complete may also feel less motivated if the quantity of stimuli is low. What these individuals perceive as a lack of challenge makes them put less effort as a consequence. On the other end of the spectrum, when the quantity of stimuli goes beyond a certain range, the levels of cortisol and some other hormones become increasingly high, thus affecting the natural homeostasis in the human body. At this point, these people may show signs of stress, anxiety, and impaired decision-making. The chart below also exhibits the mid-point where people at the peak of performance are found. The area in between the extremes exhibits the perfect homeostasis or the flow where we can find individuals who are sufficiently motivated and who may, at the same time, struggle if presented with a lighter workload. When transferred to trading, we may find direct implications of this study in the manner traders approach their trades, and it is becoming increasingly important to recognize these patterns our personality types bring into trading.  

The knowledge of how you work under pressure may tell you where your mistakes in trading are (see Yerkes—Dodson law).

Lesson 12

When you read about all the potential dangers of the human mind, the first thing you should not do is not fear yourself. Rather strive to be mindful before you sit to trade, enter that stage of homeostasis and flow through willful effort. Consider topics such as routine and steps to prepare yourself for whatever your next trade is going to bring along. It is vital that you think about the ways you can give yourself much room for allowing for good opportunities to occur, so clearing your mind should be made a priority. Here, at this stage of inner peace, you can actually go over the points where you have not acted in your best interest in the past without judgment. By facing the past challenges with a calm and open mind, you can come up with strategies to avoid any future repetition. All of these activities are there to support you and give you the strength to bring out your best qualities and potential. Without going deep, traders are not fully embracing who they are and are, thus, limiting themselves to a version of themselves that is simply “less than.” Trading skills are not a pill that we can just take to one day to reach success out of the blue. In the same way, we cannot see people as inherently, right from the start, good or bad traders, yet they have grown to become the best possible traders with time and with hard work.

Traders are not born but developed.

Lesson 13

As we can see from the information presented above, investing in learning general trading knowledge alone is simply insufficient and the sole focus on key trading terms can actually shift your perspective away from your real potential. This, naturally, does not imply that looking into charts and understanding the vast trading terminology is a negative approach but it does point to the need to pair it with the conscious effort to discover oneself. There is no fear or weakness in looking within because if you have already failed in the past, the results are there to remind you of the uneasiness of losing money and taking losses. Cut the strings of painful events and recognize your weak points. We cannot escape who we are, but we can endure the act of self-scrutiny if we know that the end result is going to be a positive one. When something hurts, the only way we can put an end to the continuation and the reverberation of its impact is through understanding why something happened in the first place. If something can serve as a lesson, it never truly was a mistake but an opportunity for growth. The purpose of any loss is to help us step into the individuals we feel proud of, helping us develop both as people and as traders.

If something helps us learn, we cannot call it a mistake.

Lesson 14

If you feel convinced now that introspection and inner work is the only real path to self-actualization and prosperity, you can follow the steps we are going to share with you here. Firstly, start off with identification and acceptance of your weaknesses, nurturing an understanding that we all have our own pile of dirt to tackle. Avoidance is not an option if you are serious about who you want to become, and it is also one of the easiest ways to fail as a trader. Secondly, devote time to the planning of how you will avoid repeating the mistakes of the past. Nevertheless, be mindful of the fact that jotting down a plan alone is not going to do the work. What all traders need is discipline that will create a completely new routine through the repetition of healthy strategies and techniques.

If you find discipline to be stressful, find comfort in knowing that numerous experts revealed how such a structure actually allowed them to feel liberated. Knowing what you need to do can put a lot of pressure off your chest and allow you to take up other creative endeavors in life too. Next, you do not need to fight your nature but embrace it in its full form. Learn to trade in spite of your shortcoming and, by all means, do not let yourself remain obsessed with your losses, letting the guilt and shame reside somewhere inside you. Instead, understand that your traits cannot be erased but can be guided and transmuted so as to serve you. Do not fall for the lie that you are ever going to be perfect because you will soon be in a fast lane going back to where you started. Keep reminding yourself of your weak points and maintain vigilance over your own risky behaviors through practicing discipline and consistency.

Discipline equals liberation.

Lesson 15

One of the last notes to remember is that the essence of success in trading lies in the combination of various key aspects which we all refer to as competence. Composed of experience, knowledge, skill, behavior, performance, and goal, competence is indeed both complex and layered. It is no wonder then that some believe how traders need 10,000 hours, or five years with a 40-hour week routine, to become experts. This, however, should not make you want to give up but the opposite because the benefits that you will grant yourself are immense and immeasurable. Aside from seeing the financial reward, you will get to learn about yourself in a way that you would hardly ever be able to. You will learn how to be successful and how to enjoy that success in every respect, applying it to all areas of your life. Now that you are fully equipped with all the knowledge, go ahead and start digging. It is worth it.

Forex Basics

Classic Quotes Relevant to Forex Traders

Often when we think about certain quotes in relation to forex and trading, we are thinking of ones that are solely from those that have been successful in trading. Afterall, those are the people that we are looking up to, looking to them for advice and so we should be doing what they’re doing. There are, however, lots of very relevant quotes from people who have nothing to do with trading at all. In fact, the vast majority of the quotes that we are going to mention below are not to do with trading and are involved in all aspects of life, the one thing that they have in common though is that a forex trader could take them and apply them to their craft.

Of course, we have thrown in some trading related quotes too as they are just as important to us as traders and come directly from experts within the field. So here are some of the quotes that we have come across and what others have posted around the internet that are very much applicable to you as a trader.

“Every battle is won or lost before it’s ever fought” – Sun Tzu

Sun Tzu was a Chinese military general who was born in 544BC, so quite a long time ago, yet the words that he spoke are still very much relevant today, and especially relevant to us as traders. While he may have been referring to battles, we can apply it to our trades, each and every trade can be won or lost before it is placed. This comes down to our trading plan and sour risk management, get something wrong and the trade could be lost before we even place it, however, if you do everything right, then it puts us in a much better position to have that trade win instead of losing. It is all in the preparation.

“Luck is a preparation meeting opportunity.” – Oprah

This quote is all about being in the right place at the right time for something good to happen to you. Of course, in order to be in the right place, you need to put in the preparation beforehand. It is very similar in a sense to the Sun Tu quote as it is all about ensuring that you have put in the work before making any trades. If you have done that, once an opportunity pops up you will be in the perfect position to take it and to take advantage of it. Whereas if you were not prepared and the same opportunity came up, you would more than likely miss it and then miss out on the returns too. Just remember, there isn’t actually any luck in trading, just good planning.

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

This is extremely relevant to us as traders, the market is a fluid beast, it does not stay the same for long. In fact, it is often changing by the day. When this happens, only those that are able to adapt are able to keep up with it and to remain profitable. You often see traders doing well, but as soon as the markets change they do not know what to do, their strategy no longer works and so they start to make losses. A good trade will have additional strategies and have an understanding of how they can adapt their current strategy to remain profitable in the new conditions. A good trader needs to adapt, much like many things in life as pointed out by Charles Darwin.

“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

Trading is a risk, there is no way around that, many people sign up, deposit, and then hesitate, do they really want to take this risk? The answer should be yes according to Mark Zuckerberg (owner of Facebook). If you want to make money with trading then you will need to take a risk, your money could either be sitting in a bank in order to generate 0.5% interest per year, or you can trade it, there is a chance that you could lose it, but the rewards far outweigh those risks, at least they should if you are using proper risk management. Do not be afraid to take that risk, it could be the risk that changes your life.

“Risk comes from not knowing what you’re doing.” – Warren Buffett

Another one about risk, they seem to like these ones. Warren Buffet is one of the world’s most famous investors so he probably knows a little about this subject. What he is referring to is the fact that you are able to mitigate a lot of the risk involved in trading by simply having an understanding of what it is that you are doing. You can use your knowledge to reduce the risks, you can also use things like your risk management plan to help reduce things also The key is to know what it is that you’re doing, if you go in blind then the risks are tenfold what they would be with a little bit of knowledge and preparation.

“Losers average losers.” – Paul Tudor Jones

A little confusing to begin with, but Paul Tudor Jones is known as one of the greatest traders that has existed, so he probably has a good idea of what he is talking about. This quote is actually quite simple, he simply means that if you have a losing position, you should not add to it. Things like grids and the martingale strategy are prime examples of this is exactly what he is warning you away from. If you have a losing position, close it, and then start again, do not add to it as this will only add to your losses and increase the risk that is currently put on your account.

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

Let’s put this simply, every day is a new day and every trade is a new trade. Do not think about what happened yesterday, concentrate on what you are doing today. Whether yesterday was profitable or you made a loss, it doesn’t matter, what matters is that you forget about that and concentrate on today. The past should not affect the present when it comes to your trading. This is easier said than done as there is a lot going through your mind, but the more you can forget yesterday, the more you can concentrate on today.

“The game taught me the game. And it didn’t spare me the rod while teaching.” – Jesse Livermore

To make this one a little simpler, it simply means that you will learn the most from actually doing it. In our case, it means just simply start trading (on a demo account to begin with of course). You will learn a lot more from taking action and seeing how it works than you will by simply reading. Of course, it will teach you some painful lessons too, but that is all part of the process of becoming a better trader. You can read 1,000 books but someone who has made a single trade whereas you won’t have will still have more experience than you.

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

If you come into trading with the sole purpose to try and make money, then things will not work well for you as you will be throwing a lot of caution out of the window and risking too much, If you come in with the idea of becoming a good trader, to follow the rules and to be good, then you will have a lot more success and the money will naturally come to you, meaning you do not need to think about it. Concentrate on being a good trader and the money will follow is the main take away from this quote.

So those are some of the quotes from various people around the world and from all sorts of times, they are all very relevant to us as traders, these are all people who have been and are successful in what they do, so do not take their advice or meanings lightly. Stick to the ideas that they bring and they should help you to stay on track with your trading and to hopefully one day be a consistent and profitable trader.

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Best Books for Beginner-Level Forex Traders

Once you decide to gain an education in trading forex, the task can become overwhelming, as there is a lot of information out there. Although many forms of education have taken a more technological approach lately, traditional books are still very informative and should not be discounted when it comes to providing traders with useful knowledge. Those that prefer the more technological means of learning can also benefit from these books by purchasing kindle or audio versions. Below, we will highlight some of the best books for forex traders on their beginning journey. 

#1: Currency Trading for Dummies by Kathleen Brooks

The name of this particular book is quite telling, as it starts by focusing on the most basic concepts related to forex trading. This user-friendly guide doesn’t only explain what the forex market is and how it works, but it also guides trader’s through more complicated topics like risk-management while explaining things in a way that is easy to follow. You can buy the book on Amazon for $19.49 or purchase a kindle-based version if you’d prefer. Try checking other major bookstores for copies if you’d prefer to buy this book in person without waiting for shipping. 

#2: Forex Trading 2020: Beginner’s Guide by Norman Davidson

This book offers secrets, strategies, and covers the psychology behind trading. According to the book’s description, it teaches traders to make $10,000 per month in “no time” – but we would recommend taking that comment with a grain of salt, as you’d undoubtedly need a large starting deposit and more developed skills to meet this goal. Still, this book has received a 4.7-star rating with most readers finding the book to be a helpful insight into forex trading. The audiobook is free with a 30-day trial on Audible, or it can be purchased for $14.95 without the free trial. 

#3: Forex Trading for Beginners: The QuickStart Guide to Successfully Investing and Make Profits in the Foreign Exchange Market with Simple Strategies. A Step by Step Trading Plan to Control Your Emotions by Paul Cohen

The number 3 book on our list is a great option for those that are inspired right now, as it can be purchased at your nearest Walmart for only $17.38. While this choice is also targeted towards beginners, it also covers some ever-important psychological aspects related to trading forex. These psychological tips can really come in handy later on as traders start to feel the pressures of trading. 

#4: A Beginner’s Guide to Day Trading Online by Toni Turner

This is a more specialized option that appeals to aspiring day traders. Day traders generally place trades during the day and closing all of their trades out before the end of the day, rather than allowing trades to rollover to the next trading day. If this strategy goes along with your time schedule, then this book could be a great purchase. You can buy the kindle version on Amazon for $12.99 or purchase the paperback book for $10.99. 

#5: Trading Forex for Beginners 2020 by Martin Satoshi 

This advanced audio guide can be purchased on Audible for $14.95, or you can listen for free by signing up for a free trial through the website. This book is described as being an excellent place to start for those that are new to forex trading, and it also gives more advanced advice that can help you down the road. More than 100 users have given this audiobook a 5-star rating with positive comments.  

#6: Forex Trading Made Easy for Beginners: Software, Strategies and Signals: The Complete Guide on Forex Trading Using Price Action by Marlon Green

This book is one of the top results on Google and can be purchased for only $0.99 through the Google Play Store. It serves as an introductory book that delves into more complex methodologies later on. One downside to this option is that some users have commented that they didn’t find it particularly helpful, but the book is worth mentioning for the fact that it focuses on novice traders and can be purchased for less than a dollar. Since you can download the book on your phone, it would be a good read while sitting in a waiting room, waiting for dinner, or while relaxing at home.  


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Is Forex Trading Easy Or Difficult To Master?

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

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

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

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

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

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

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

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

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

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

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

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

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How Long Does It Take To Learn To Trade Forex?

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

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

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

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

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

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

How much money do you have available to invest?

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

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

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

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

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

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

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

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Tips for Improving Your Forex Trading Skills

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

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

Trading Other Pairs

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

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

Use Different Timeframes

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

Look Into Other Strategies

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

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

Talk to Other Traders

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

Watch the News, Read Economic Articles

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

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

Seminars and Online Courses

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

Demo Account

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

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

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Important Lessons from Four Successful Day Traders

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

Ross Cameron

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

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

Sasha Evdakov

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

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

Brett N. Steenbarger 

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

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

Rayner Teo

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

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

Beginners Forex Education Forex Basics

Why It’s Sometimes Better Not to Trade

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

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

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

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

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

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

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

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

Beginners Forex Education Forex Basic Strategies

Forex Setup Sheets and Testing Guide

Building up a system of trading is one of the first tasks you have to overcome when you start learning to trade. However, the process doesn’t end there – indeed, it never truly ends because you will forever be developing, perfecting, honing, and adapting your trading system. The most basic building blocks of your system are likely to be the trading setups you have selected and integrated into your process.

A setup is a specific combination of price trends and movements that, in given market conditions, has a high likelihood of delivering an expected outcome. Every setup basically identifies certain market conditions that mean a trade is likely to succeed.
What Kind of Setup?

Forex traders come in all shapes and sizes and from all walks of life. People get into forex trading from just about any profession you can think of. Some start out as floor traders or market makers but others go into retail trading from their regular jobs, as a way to make some extra income or as a way to replace a job or profession in which they are unsatisfied.

Moreover, there are no real limits to the different ways it is possible to make money through forex trading. But, here’s the catch, you won’t be able to do many of them. Not because you aren’t smart enough or gifted enough but because they won’t suit your personality and your strengths and they will eventually frustrate you. This is not a comment on your abilities so much as it is a description of the fact that everyone will end up trading in their own very unique way. If you try to teach an impatient trader how to watch the market for weeks at a time, waiting for a rare set of circumstances to occur, they are going to struggle and eventually fail. The same can be said if you push a risk-averse trader to make high-risk, high-tempo decisions under pressure. They will become frustrated and ultimately they will fail.

Because forex traders come from different backgrounds and because trading is such a personalised skill, it is important to identify what kind of trading suits you. In many ways, it is the ultimate personality test. A teacher, mentor, or instructor may be able to show you a whole series of setups and will probably place an emphasis on those that suit them but, at the end of the day, you will need to figure out what works for you. You will end up making your own, unique style.

There are a couple of things here that are important to understand. Firstly, when you are starting out you will have a hundred questions about whether you should stay in a trade longer or shorter, whether you should enter earlier or later, and so on. The fact is that nobody can tell you based on one situation. It takes a much larger sample size – dozens or tens or even hundreds of situations – to reveal what works. And over such a long timeframe, what is revealed is not just what works better but what works better for the individual trader.

Everyone prefers to trade at different times. Some people have day jobs that mean they can’t trade early in the morning, others will want to trade at 4 am. Some people will have conservative position management strategies, others will be risk-takers. But the key thing is that if you try to apply an approach or strategy that goes against your needs and strengths, you may have some initial success but over the long term, you will deviate from it, twist it into something it isn’t designed to do and it will cease to be a system. In the worst case, it will cease to function at all and you will fail.

Once you do figure out what works for you, an important next step is to codify the information and start turning it into your own process.

Making Your Own Setup

Why is it important to write down your setups? There are several reasons. One is that you will probably be running several setups at the same time. Perhaps not at the beginning but eventually your strategy will include a plethora of setups that you have shaped and integrated into your system. Keeping all of these in your head is going to drive you nuts but, even if you can remember them all perfectly, you are more likely to make a mistake if they are not written down.

But there is a more important reason and it has to do with clarity and systemization. In your head, your thoughts are nebulous and hard to pin down. You may feel like they’re crystal clear but the real test of that is if you can convert them into words, into language and, even better, write them out. It doesn’t matter if when you write them down you are the only person that’s able to figure out what you meant, the act of writing down your thoughts makes their meaning crystalize. This is a crucial step in establishing a workable and consistent trading system. Clarity and systemization.

The actual process of writing out a trading setup is made much easier if you use a setup sheet. You can conceivably make your own but there are pre-made sheets out there that are perfectly useable.

Setup Sheet Blueprint

When you open up your blank setup sheet, it should include some of the following fields. Trend Analysis, Entry Criteria, Indicators, T.E.S.T., and others. T.E.S.T stands for Timeframe (how long you plan to keep a position open), Entry level, Stop Loss level, and Target or Take Profit level. Based on these Risk Ratios and other key stats can be calculated automatically. It doesn’t matter much what kind of trade you are going with, whether it’s a reversal, a pullback or an area breakout, you will need to fill in these fields accordingly.

Use the Trend Analysis fields to describe the market conditions that need to be taking place when you are looking for the setup to emerge. The conditions you are entering here are going to depend on the setup you have selected. In which direction is the market trending? Are you looking for it to be making new highs? If so, on what timeframe?

The Entry Criteria fields are where you write precisely what the price should be doing when the time is right to enter. If you are looking for it to break out of a consolidation, how long should that sideways movement last before the breakout? Are you looking for a low base or a high base? Are you waiting for the moving averages to approach and put pressure on the price to breakout?

You should fill out the Trend Analysis and Entry Criteria in language that you will later be able to understand. Again, it doesn’t matter if it makes sense to anyone else so much as it matters that it will make sense to future you. Under Indicators, list the indicators you will be using to help you identify the correct entry point and under T.E.S.T. enter your timeframe, stop/loss, and profit target. Remember, the first time you fill out a setup sheet for a given setup is not even close to being the last. The reason for this is that once you have these fields filled out with the criteria for your setup, it’s time to take it to the test range.

Tried and Tested

Until you test the setup you’ve outlined, nobody in the world can tell you if it’s going to be any good. What’s more, if you’re not testing your setups, you are going to struggle to make it as a trader because throwing them in the deep end is probably going to hurt you financially. All that is to say that testing is a fundamental activity of a smart forex trader. If you’re not testing, you’re not improving and your craft will stagnate.

There are several ways to put a setup through its paces. You can run tests in a simulator (TradingView replay feature) or through a demo account. Both have their advantages. Using a demo account is a real-world test (but remains risk-free) and has all the advantages that this entails but it can take a long time. This is particularly true if you are testing a setup that doesn’t occur with any great frequency. It can sometimes take months to build up a viable sample size for your test to yield any useful data. In that sense, simulator testing is much quicker and will give you a rough indication of how your setup performs.

Regarding sample size, opinions differ. However, you will want to generate a minimum of twenty times you traded with your setup to have a good enough dataset from which you can gauge results.

Test and Adapt

To be thorough, your testing process should have several stages. First, test your setup in a simulator and assess whether it yields a reliable win/loss ratio and lucrative reward/risk parameters. That is, are you winning often enough, and are the wins rewarding enough compared to the losses? Once your setup passes this first round, take it to your demo account and test it there. This will naturally take a lot longer but be patient. It is important to give every setup a proper real-world run-out.

Once you have been through at least these two stages of testing, you will have probably noticed changes you would like to make to your setup sheet. The first version of your setup is bound to have deficiencies that emerge when you run it through testing and your experience will also have improved to the point where you can see what can be changed. Feel free to tweak the trend analysis or entry criteria or any other aspect of the setup if you feel this would make a qualitative difference to how the setup performs.

To be truly thorough, you should then take this amended setup sheet back to the testing range. You can also run historical tests. That is, you can take your setup and check it against a given currency pair’s historical price charts and see how it performs in a real-world scenario. The advantages of historical or backtesting are (1) that it is quicker than demo testing and (2) can give you an insight over simulator testing, especially because you know or can crosscheck the news events that might have impacted market movements.

Closing Thoughts

Designing a setup is a two-step process (writing out a setup sheet and testing it) only on the surface. The reality is that your setups will evolve over time, even after they have successfully gone through testing. They will evolve with you as you grow as a trader. With that in mind, don’t throw out your old setup sheets, hold onto them because you might find that your trading habits change over time and you might want to resuscitate them from the reject pile. With a tweak here or there, of course.

Bear in mind, also, that there is such a thing as too many setups. Focus on those that work for you specifically and that you can successfully integrate into your system. You will be a better trader if you do not spread yourself too thin.

Beginners Forex Education Forex Basics

Practice Makes Habits, Not Perfection

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

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

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

Start with the basics…

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

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

Test your skills…

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

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

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

Create a feedback system…

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

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

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

Beginners Forex Education Forex Basics

The Forex Trader’s Starter Kit

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

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

Learn the Basics

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

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

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

Develop Your Own Strategy

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

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

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

Finding a Broker

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

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

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

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

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

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

Get a Demo Account

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

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

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

Forex Basic Strategies

Plan the Trade And Trade the Plan

This is something that you have probably heard a lot of times before, it is one of the most used phrases in Forex trading and it is also one of the most relevant. When you break it down, it is simply reminding you that each trade needs to be planned, analysis needs to take place and the right entry/exit points found, once this has been down, you should put in the trade and then stick to what you had planned before, do not start fiddling with it mid trade and changing the stop losses or take profits, you had them set for a reason, so let it do its work.

Some people may say that you need to deviate from the plan in order to make the most profit or to avoid losses, those are the people who have not created their trading plan properly and so need to micro-manage their trades, with a proper plan it will be able to get on with it itself and any losses will be negligible due to the risk management put in place for each trade (part of the plan). Yes, flexibility is important, but that flexibility needs to come in the planning stage, not the execution.

Use a trading journal:

You have probably heard this a thousand times, use a journal to record everything that you do, not only does this give you valuable information about the trade but it can also be used as a way to check that you are in fact sticking to your plan. Looking through your trades, can you see anything that deviates from it, any moves stop losses or early closures? These are the things that you will be looking for.


Discipline is key, but also sometimes hard to maintain. Sometimes you have to deviate from the plan and it goes well, it may happen a second time and so you will start to believe that making these changes with each trade could lead to more success, that is until it all goes wrong and you start to bring in some losses. You may notice a trade that you made changes to and it did well,m but it is important to stick to your plan, that is your plan for a reason, its reason is that it works, so why change something that works in the long run just for some quick gains. Stick to that plan, if you have noticed something that may work better, test the plan with the changes on a demo account, use the same changes with every trade and see whether it is more effective or not while doing this maintain the current plan on the live accounts until a full analysis of the changes has been performed.

Find the justified and unjustified wins and losses:

It is quite easy to work out which of your wins and losses are justified, you created the detailed plan for the trade, and you stuck to it, that is a justified trade. This means that an unjustified trade would be one that you deviate from the plan, it may be a large change or it could be a little change like changing the stop loss by a few pips, it doesn’t sound like much but it can really make a difference.

Maintaining discipline is vital when it comes to making justified trades, your trading journal can often make it obvious when trade was unjustified, there will be a random change that cannot be seen anywhere else, it is important to work out why that change happened and why you deviated from the plan, a lot of the time you will not be able to recall and most likely did not record it. You need to stay disciplined, your plan is there for a reason, each trade has been justified with analysis and reasoning, do not change that partway through because you have a feeling or someone told you something else.


You have probably heard this a thousand times, stay consistent with your trading, and this is certainly relevant. Your plan was created and most likely had each trade following a very similar path, so stick with it, consistence can be in regards to things like stop loss and take profit distances, lot sizes used. Do not just start adding to the trade size because the previous trade lost, your plan should have been created with losses in mind, so staying consistent to it will bring in far more regular results than potentially damaging your account with sudden changes.

So the moral of the story is to plan your trades, then trade that plan.

Beginners Forex Education Forex Basic Strategies

Anatomy of a Forex Scalping Strategy

Scalping is a type of trading strategy that revolves around profiting from many small price changes. A scalper focuses on making as many small profits as possible, rather than trying to win a large amount from a trade. Like every other strategy, the scalping method isn’t perfect. One of the strategy’s biggest downsides is that one large loss can wipe out all the smaller winnings that one worked so hard to make. Successful scalping involves having a higher number of winning trades versus losing ones, with the profit ratio equal to or higher than the losses.

Less market exposure limits one’s risks and reduces the chances that you’ll run into an unbecoming market event. There’s also more of a chance that a stock will move a few cents than there is that it will move a dollar or so. There are more opportunities for smaller moves than there are for larger ones and a good scalper can jump on these changes. These considerations make scalping a worthwhile strategy that can pay off. Of course, scalping involves making hundreds of trades, possibly per day. If you only have a limited amount of time to put into trading, this may not be the best method for you. Consider becoming a day trader or full-time trader if you’re ready to become a dedicated scalper.

Traders that don’t want to specialize in scalping may still find golden opportunities to use this strategy, like when the market is choppy or when there are no trends in the longer timeframe. Switching to a shorter timeframe can help one to see trends, so scalping can be beneficial here. There are several other ways that traders incorporate scalping into other, more long-term trading plans.

There are three main types of scalping strategies:

“Market making” is where the scalper tries to take advantage of the spread by putting out a bid and making an offer for a certain stock at the same time. This works best with immobile stocks that trade big volumes without any real price changes. It can be difficult to master this strategy as one would need to compete with market makers and the profit is small.

A trader purchases many shares and sells them for a very small gain on a price movement. The trader would wait for a move that is usually in cents and this requires entering and exiting 3,000 or more shares.

The more traditional strategy involves entering several shares and closing the position as soon as the first exit signal is generated. This would be around a 1:1 risk/reward ratio.

So, you may be asking yourself about the risks involved with scalping. One of the most crucial components of success involves having a strict exit strategy. If you don’t, then you’ll likely be one of those traders that loses all the money you worked hard to gain with one bad move. As we mentioned above, the “market-making” strategy can be difficult to pull off successfully, so it may be worth avoiding at first. Remember that scalping takes a lot of time and effort, as you’ll be glued to your computer screen making multiple small trades. You’ll need to be able to think and act quickly to master scalping successfully.


-Work with a direct-access broker for automatic instant order execution.

-Scalpers profit from the spread, so it is important to find a brokerage offering a tighter spread.

-Find a broker with competitive commission costs. Scalpers need to make many trades, potentially hundreds per day. Commission costs will add up quickly, especially unfavorable ones.

-Ensure your broker allows scalping and doesn’t impose restrictions that will hinder your strategy. Every broker isn’t scalper-friendly, but many are.

-It is important for scalpers to understand trading with the trend. Being able to identify a trend and momentum is important for successful scalping.

-You should be familiar with technical analysis, which involves looking at statistical data and charts.

-Most successful scalpers close out their trades at the end of the trading day and never carry them over to the next day.


Scalping can be a profitable trading strategy when it is used correctly, either as a primary or supplementary strategy. It does take a lot of time and dedication, along with a good understanding of trends, momentum, and technical analysis. If you’re a complete beginner, you’ll want to spend some time researching so that you understand these principals. It could also be a good idea for beginners to avoid the “market-making” strategy and to stick with the two more traditional scalping strategies. Scalping will likely continue to grow in popularity as many traders prefer the small profits in exchange for taking larger risks. This strategy isn’t for everyone, but it very well may be the key to success for those that understand how to do it effectively.

Forex Risk Management

The Importance of Risk Management in Trading

While forex trading comes with several perks, like being your own boss, flexible hours, and the opportunity to become wealthy, the biggest drawback is the risk factor. There’s always a chance that you’ll lose money, no matter how well-educated you are. If you want to minimize your losses as much as possible, then it is crucial to have a good risk-management strategy working for you. Otherwise, you could quickly become one of the many beginners that walk away from trading for good.

The first mistake many beginners make is overleveraging their trades. If a broker offers a leverage of 1:1000, that means you can multiply every $1 you’ve invested times a thousand. This would allow you to make a $1,000 trade with only $1 in your trading account. Leverage is one of the biggest draws to forex trading since it allows you to increase your investment power. However, you shouldn’t use the highest leverage just because you can, otherwise, it can backfire and cause large losses. Leverage is often referred to as a double-edged sword, and beginners often find themselves on the sharp edge. Resisting the temptation to use higher leverage at first is crucial for beginners to see success later.

Monitoring the size of your positions is another important step. Many professionals recommend that you only risk 1% of your account’s balance on any one trade. This may not equal a large amount of profits, but it helps to reduce losses if things don’t go in your favor. Remember that winning even a small amount is better than losing a lot of money. Setting a stop-loss order is a precaution that causes the trade to close if a certain loss level is reached. Traders would need to figure out how many pips they want to risk and then set their orders. Beginners should also recognize the point of when to take profits. Putting a close order position in place to take profits at the appropriate level of resistance or using candlestick recognition or moving average crossover strategies can help accomplish this.

One of the best things you can do to set yourself up for success is to have a good trading strategy. The internet is filled with different kinds of strategies that suit the needs and skill levels of every different kind of trader. Having a plan to follow will help you know what to look for and you can even monitor and improve your strategy with a trading journal.

Managing your risks in forex trading will keep you afloat where others have failed. Setting a good trading plan without risking more than a small percentage of your capital sets up a firm foundation. Then, you can set stop-loss orders and take profit levels to further minimize your risk. Choosing appropriate leverage is another important factor. If you go into the market without a strategy, risking 10% or 20% per trade, then you will likely wipe out your trading account very quickly. Likewise, if you’re a beginner trading with a 1:1000 leverage, you’re more likely to lose everything. Using the above risk-management strategies (and others) will help you to avoid losing all your money as it provides a cushion against losses.

Finally, know that you shouldn’t base your risk-management plan from this article alone. Do more research online and read about the ways that other traders minimize their risks. You’ll need to read about stop-loss orders, trailing stops, and so. Don’t make the mistake of using leverage that is too high, never risk more than a small percentage on any one trade, and be sure to do more thorough research to help with your strategy and other risk-management precautions.

Beginners Forex Education Forex Basics

Trading Frequency: Which Is Better – More or Less?

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

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

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

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

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

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

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

Beginners Forex Education Forex Basics

What Do I Need to Trade Forex?

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

An Education

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

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

An Investment

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

A Device with Internet Connection

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

A Broker

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


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

Beginners Forex Education Forex Basics

Why Do Trade Losses Occur?

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

Lack of Equity

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

Not fully Understanding Indicators, Market Entry, and Other Aspects

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

Blindly Copying Others

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

Not Sticking to a Tested & Proven Trading Plan

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


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

Not Using a Demo Account

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

Having a Bad Day

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

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

Forex Psychology

Winning…and Winning Badly

By now, you started trading actively, did some research regarding trading tactics, and watched numerous helpful and educative videos which helped you sharpen your senses and taught you how to profit. All of this led you, step by step, to success. The winning percentage just started rising month after month now. When you hit the numbers in a row, your adrenalin starts working and you get high on success. After such a winning row one reaches these heights and starts thinking of oneself as of pro which has a power of knowledge and cannot be stopped. This is where you get blind and slightly stupid in your arrogance and inevitably, fall happens – you hit the wall hard – it is just a matter of time.

Every decision and step you take right after this fall could easily determine your trading future from this point on. This will sound crazy, however, there is a right and wrong way of winning. You may take this preaching as rubbish especially if you are in winning swing at the moment of speaking. However, as I can easily foresee it right now, eventually at some point you will, for sure, come back to this article in the future. We will discuss this theme in two different aspects: on the macro level – kind of the zoomed-out point of view, and micro-level – where you need to understand when you are winning.

We propose to have look at these The Big three rules in terms of Forex trading:

Money Management

As we already spoke about it, money management is the most important thing in forex trading. At the end of the day, this is the thing that increases assets on your account or ruins you completely. Put together your plan: how much percentage to risk from your account, how many pips to risk, manage your trade, and pick wisely indicators that you will involve in trade.

Trade Psychology

The most important thing in trading psychology is patience. The long game is far superior to the short game. It is necessary to take initiative and develop the discipline to get to success. And last but not least the Technical Analysis.


One needs to understand that trading psychology is a very important part of trading. Once you learn everything you are out there getting amazing trade entries, great money management, you are on the run, controlling your emotions, winning trades, and achieving what you dreamed of…

You think the world is yours, now you are untouchable, however, as we already explained, the moments of failure are inevitable at a certain point. To be completely honest, the moments of prolonged failure. The way you deal with failure will determine a lot in the future. One of the things that are quite important is not to give up and leave everything. It is just one fall, get your grip, and start again. All you have to do to get back on track is keep trading your system, do not try to jump in – do not think that you know more or better than the system, and keep repeating this recipe until you get back on winning tracks. If you could do only these three things you would win every time, especially long term. It is not that easy, right?

Trouble is, we are all emotional beings and we cannot change this fact. In trading Forex, we just need to eliminate and subdue our feelings as best as we can and keep doing this all the time. We can be emotional persons, but it is not recommendable to be an emotional trader. Mistakes that we all do when we are winning like you are trading overall and you are unstoppable and your winnings are just landing one on top of the other. While you are in such a run, your emotions are at the highest level, especially if this is your first time, and you never been here before. You cannot stop it. It is just beyond you, especially if this is the first-time experience. The biggest problem with this is that majority of new traders do not understand or see that they are only temporarily winning.

Huge misleading thoughts are ‘this is how it is going to be from now on’, and ‘all I got to do is keep doing what I’m doing and I’m in profit every month till the end of the days’, right? Everyone who reaches these levels is risking to drop off real fast. Professional trader’s opinion is – do not consider this like failure. Consider it as coming back to the true aim you had when you started trading. Let’s say you made 9% per month and now you are making 1,5%. This now is not a bad result – actually it is a great average percentage. The previous average result was the product of too many entries or very high leverage you used. The one incredible mistake that anyone can make is ‘if I’m getting this high win percentage and doing so well, why am I risking only 2% of my assets, when I should be risking way more than that’. It is truly foolish to act like this. Returns that you got are not real and not sustainable on a long term basis and the solution is not to increase your risk.

What you need to do is understand that fall was inevitable, it was supposed to happen. Be completely honest with yourself and analyze, were you following the rules or you were going higher, overtrading and overleveraging, and so on. When you finish the analysis, dust yourself off and get back in the game. Just because you hit this crash doesn’t mean that you are not up to this. It just means that you need to come back taking all experiences into consideration and following the rules this time.


Here is how it looks on the micro-level: when you are actually in trade and winning, or you just closed winning trade, haven’t you felt regret of doing so? Just a little bit? Do not worry, every trader has been there. Everyone closed at least one winning trade with a speck of doubt ‘why have I did this just now’.
It may happen that you did not exit your winning trade when you thought you should. For example, you were in a winning trade that you saw it can bring 500 pips and suddenly, that price came back the other way, and tripped out to your Stop/Loss or your exit indicator, whatever the case it was, and you ended up closing this trade with only 275 pips. Of course, 500 pips are better than 275 pips, but a win is a win, and you shouldn’t be regretting over it.

The next thing that can be born out of this regret is the idea that you shouldn’t let it happen again, and thought that you should meddle in and stop the trade on 500 pips before it gets lower – this is something that should be avoided completely. The moment you do this, there is a possibility that price is going to come back a little bit, and then give you one really big 1500 pips move, and you are not going to take part in it. You will be watching with regret, what you have missed and professional traders will be getting this move. Why? Because they do not let their emotions to overpower them and get in a way of their trading systems. This is what you should do in the future as well.

There is another possible scenario. By now, you know how to calculate your risk and where to take profit, right? Sometimes, it can happen, that you may get really close to that ‘take profit’ point, and the price is going to come back and it will actually be closed as a loss. It is very true that you were so close. At this point, another form of regret floods you and you think if you just lowered a bit your first ‘take profit’ point you would have closed it with a win. The problem is that this causes you to start deviating from your system. As soon as you do this, slowly you are going to start leaving your pips behind. Again, this is the situation where you are trying to outsmart your system. The system that you made – if you did everything right – has been proven to work, and outsmarting it is not recommendable for profit.

According to many successful traders, regret is a wasted emotion. What these guys do is, keep up the plan, leave emotions out of the trade, and patiently win their trades. The whole point in trading is to get to profit not run from it. Our advice is to keep it smart and simple, follow the system, follow the rules, master your emotions, and stick to the plan. As you may guess by now, everything is up to you and how you control your emotions when they are at the highest level, i.e. when you are winning. We will do the best we can to support you on your way to success but this is something that you need to deal with yourself.

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 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.

Beginners Forex Education Forex Money Management

Three Key Reasons for NOT Taking A Trade

We all love trading and having time to analyze the charts can become a little tiresome if you have been at it for hours and there re no setups to suit your entry conditions, for both beginners and professionals, this can lead to mistakes being made or a desire for the excitement of a trade, but sometimes it is better to not take that trade, here are a few reasons why.

The market does not suit your trading strategy.

When you create a strategy, you also create a certain set of requirements from the markets, in order to open into a trade, the market must meet your preset entry conditions. The markets don’t always want to be friendly with you if your strategy involves trading the uptrend, but the markets are currently moving sideways, it clearly has not met one of your main criteria, so why would you enter the trade?

Sometimes it can take hours or even days for the markets to get into position and in line with your strategy, give it time, do not jump into trades that are no in line with your strategy, or you will quickly see how the mistake of entering the markets at the wrong time could cost you dearly.

You are bored.

The trading markets can be incredibly exciting, so much so that when you rent trading you are either thinking about it or don’t know what to do with yourself. This is not the time that you should be looking to trade, if you are feeling bored and tempted to enter a trade, make sure to stick to your strategy, do not trade for the sake of trading, it will only lead to losses.

You have just lost some trades.

The main downfall of many traders or gamblers or any other form of trading or gaming in life is chasing losses. When you see a story on the news or no website of someone losing everything or getting into debt from trading or gambling, it is often because they ave been chasing losses. This often occurs in the form of losing a trade, then making a larger trade to hopefully win back the lost value, if that loses, an even larger one is made. This is often known as a Martingale strategy or can also be incorporated into a grid strategy.

Do not do this, if you have made a number of losses in a row, then something has gone wrong somewhere, analyze your strategy, find out what has gone wrong and improve on it, do not trade just because you have lost a bit of money.

Remember, there is nothing wrong with not trading for a few days, if the markets do not suit your strategy then do not trade. If you really have that urge, then use a demo account. The forex markets will always be there and there will be appropriate trades, it is just about waiting for the right moment to take them.

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, 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.

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 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.

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 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.

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 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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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, 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.

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 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.

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 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.

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 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.

Forex Trade Types

Guide to FX Swing Trading Scaling Management

Regardless of what they trade, be it gold, corn, stocks, or forex, all winning traders share one key skill that sets them apart from all the other people testing their luck in their respective markets – the most successful individuals always take a portion of their profit off at some point in each winning trade. Termed scaling out, such a maneuver is a distinctive feature of all major players who have figured out their priorities, unlike the majority of participants in the market. As a strategy that each forex trader needs to adopt if they desire success and profit, scaling out can truly be perceived as the crossroads that separates two very different futures for each trader entering the market.

Naturally, if you are a beginner, you should first learn about several other topics which will help you understand forex trading better, notably ATR (which is one of the best indicators that can help traders with money management), risk management (which is a prerequisite for scaling out), and ratios (which will prevent you from falling for the same trap as everyone else). What is more, as a beginner, you should strive to look for real examples of people trading, where they explicitly describe each step of the way and test all methods and strategies yourself in a demo trade. Learning how to scale out is therefore a natural next step after learning how to calculate your risk and it is a level-up topic that requires a certain amount of effort on your behalf to adopt knowledge and information about forex beforehand. Due to the fact that scaling out is such a crucial step in developing one’s account and trader portfolio, we are going to discuss why and how you should incorporate this strategy in your trading. Note this guide is specific to technical swing trading strategies applied to the daily timeframe, but it can be applied to similar trading concepts.

The number one reason why anyone should consciously decide to scale out concerns the psychology of trading, which is distinctly different from betting or casino mindset. In fact, you can read quite a few stories about successful traders who had to learn the hard way what they should and should not do. One story even talks about a trader who experienced a lot of luck in the first trade to the extent that this led to some unrealistic expectations and, almost immediately, failure. Deciding not to learn how to scale out is what a blackjack player does when investing $100 to get $1000 only to lose it all at the end of the night. A similar phenomenon was noticeable in the crypto market not long ago, when a great number of traders were so captivated by the market’s tendency to grow that they did not take any profit off, believing that they can earn more profit this may. They failed to grasp the fact that they would still earn quite a big amount of money, pay off their mortgages, buy cars, and have a really great life even if they had reduced the initial amount they had invested. This story exemplifies the mindset of the majority where individuals always exhibit a hunger for more wealth without taking anything off the table.

These people do not understand that any system, regardless of how successful and functioning it may seem at a particular moment, can collapse in no time. Greediness is emotional and the forex trading market leaves no room for emotions and reckless reactions. The trader from the above-mentioned story believed that buying and holding forever is the best strategy, which is, however, a lesson that such traders have to pay a high price for sooner or later. Forex trading requires a calculated and precise approach that is not governed by emotions, and never getting satisfied by the level of your achievement is the exact opposite of the attitude this market can support. If a trader just keeps expecting more, they are inevitably waiting for the price to go down and one’s unwillingness to accept the state of the matter is no different from losing all your money at a poker table.

Withdrawing a certain amount of profit is the safest approach which entails that you have previously set your stop loss. What many traders fail to include here is the necessity to define their win limits as well. Every trader should know when and how to take a portion of their profit and knowing your limits can help you do this effectively. Therefore, you should consistently decide to take half of your profit at a particular point in your trade and run until your exit indicator or your trailing stop tells you otherwise. Any different approach would just make you a statistic or one of many who thought they could outsmart the system. Moreover, if you expect a price to jump from $0,02 to $25, you should know that this an unrealistic expectation and, as some traders have been waiting for this dream to come true for several decades, you may want to give yourself the freedom to learn faster. Funnily enough, even if such a scenario played out, you would probably have to lose so much down the road that no win could ever compensate for the extent of the financial disaster you put yourself through. While the rose-colored glasses cannot get you far, professional traders around the world can.

Since no expert trader enters or exits a trade without scaling out, we should really focus on what has proved to be successful in forex trading and start applying these first in a demo and then in real trades too. To make use of most tips and tools pertaining to scaling out, you are going to need to get acquainted with the ATR indicator, which has become an essential part of most expert’s algorithms. In addition to its multifaceted nature, this indicator helps traders achieve the same results as with the complex method when the ATR is used as the point of taking off half of the trade for each and every currency pair. Nevertheless, to get to this point, each trader needs to already be aware of several other key concepts and strategies.

If you are wondering how to enter a trade, you must know that you should first determine your risk or how much profit are you willing to lose before deciding to exit. This step also includes the question of how much money per pip you are actually putting at risk and ATR can be of great assistance here. Unfortunately, not all brokers automatically scale out at a certain point, so you should know how to use the numbers and information you came by without missing the price hitting your specific mark just because you are sleeping. If ATR is 80 pips, you may want half of your trade off the table at this point, but despite how successful a trade is, if you are away for any reason, any winning trade can go right back down. Since professional trading implies getting most of the winning trades, how can we bypass this annoying step? The key to resolving this issue is (for MT4 platform) in entering two half trades with one closing automatically owing to the take-profit point and the other still running. Therefore, after you enter the two trades, you will immediately insert your stop losses and put in your ATR value as your take profit, on one of them. This strategy will help you preserve half of your trade regardless of the circumstances, while the other one can run as long as necessary.

To see how this approach functions in real trading, you can look at the NZD/CHF dally chart below, which shows the ATR of 60 pips. Based on this value, we can immediately know that the stop-loss point is going to be at 90 pips (1.5xATR) whereas the take-profit point is going to be at 60. The next step would be to calculate the amount of risk, which is generally advised not to exceed 2% of traders’ entire trading accounts on each trade, and to see how much per pip we are in fact risking. The amount per pip, in this case, would be $11.60, which would equal $5.80 once split into two trades. At this point, you should insert all of the necessary information (please see the second image below) and ether your two trades. The only thing a trader should do now is to wait and avoid checking up the trades so as not to make any unnecessary move based on some emotion, e.g. impulsively exiting a trade too soon. By following these steps, you will secure yourself so that some minor losses do not impact you in the long run.

While the beginning of every trade is of vital importance, you should take several other actions the moment the price hits your take-profit level. Primarily, you should move your stop loss (90 in the example) to your break-even or, in other words, to the level you entered in the currency pair in the first place. Once the price has hit the take profit, you can rest assured that the trade in question is a winner and you cannot lose it any longer. The only question here is how much you can benefit from that particular trade. At this point, you should make use of some other tools, such as Heiken Ashi, exit indicators, and trailing stops, among others, to assist with your trade. These tools can be of great help with your second trade for as long as it runs, especially since knowing when to exit is one of the crucial elements of professional trading. No matter how well we use any tool, the time is the sole factor you should consider at this point and the only one which can grant you whether your trade will be a big win or a minor one.

In the stock market, for example, a 10—11% return is considered to be a really good result because it mirrors the stock market average. Should you be able to increase this percentage in time, you will become one of the few elite traders who are able to successfully manage hundreds of thousands to get such returns. If you are considering a specific benchmark to hit, this may as well be a great reference because these trading skills are not only ever-lasting but also in high demand. Warren Buffett for example, one of the most prominent figures on the investment scene in America, makes a 20% return per year and he surely has not achieved such success without continuously using an elaborate approach to trading and knowing how to allocate his funds effectively.

Scaling out, as we can see, is no longer optional once you decide to be good at forex trading or trading in general. You do, however, need to commit yourself to follow this system religiously, without feeling compelled to constantly micromanage your trades. Even if you encounter an unfavorable period or take a loss at some point in your trade, be patient and refrain from reacting impulsively because your stable and consistent approach to trading will even out any transient imbalance in the end. Accompanied by money management skills, scaling out is the one way you can avoid the blackjack scenario and be smart about your finances. The ability to take in all these pieces of information and apply them in a diligent and disciplined manner will only further support the development of a healthy trading mindset.

Learn how to estimate risk and make sure that all your trades are winning in a certain capacity. Rely on ATR in every step of the way and incorporate some additional tools to improve your trading skills whenever possible. If you have already taken the advice, done all necessary calculations, and enter the two trades, it is time to let go, relax, and allow time to run its course. Although this may seem like a great quantity of data, understand that after a while you will be able to make all assessments and enter a trade in as little as 15 minutes. However, whatever you do, never forget to scale out and persistently envision what your final goal in this entire endeavor is.

Forex Technical Analysis

A Fundamental Analysis Twist for the Technical Trader

Fundamental analysis mostly encapsulates social, economic, and political analyses of the forex market and in what ways they may affect currency pairs. It is known that in the trading strategy we have 3 types of analysis: technical, fundamental, and sentimental. How big attention we should give to this type of analysis? Could fundamental analysis be detrimental to our trading?

There is a big difference between the forex investor and the forex trader. Forex investors have time to just sit back and let somebody else do the work. They can make trades based on pure speculation or slow-moving events. On the other hand, traders grind, they do hard work, they get dirty. They get in, make money, and get out, based on what they have right in front of them. Does fundamental analysis apply to traders? How exactly forex twitter and big multi-billion dollar financial organizations and their experts affect our trading?

Fundamentals include politics, global market conditions, and economic indicators and reports. We will try to dig deeper into these. Politics can greatly affect the price of a currency pair every once in a while especially because of media. We just never know when. So trying to follow anything politically might be the waste of time because we are never going to be able to anticipate what some of the world leaders are going to say or do. If we can’t anticipate then there’s no way we can trade it. Global market conditions like: “What is the state of the European Union right now?” or “What is the state of the United States economy?”

With questions like this people can speculate for hours and how that might affect the economy which when it trickles all the way down to us and what we want to happen with the currency pair we trading, means absolutely nothing. Finally, when we do hear a piece of news that might be beneficial for us, it is really hard to process. For example, something big happens in China. How is that going to affect the economy and interest rates? Then, how will that affect inflation? Ultimately, how is that going to affect the price of yuan? Simply, it can be too many variables in place for anybody to really decipher how any of this information is going to directly affect the currency pair that we want to trade.

With fundamentals, it’s usually big, grandiose, complicated guessing game with all these movable parts that in the end doesn’t amount to anything. When it comes to technical analysis at least we have things in front of us that we do know and we actually can use. Now in our world, what we in real-time do have to contend with are economic indicators and reports. Things like non-farm payrolls, PMI numbers, or interest rates. When news reports come out saying if those figures have changed or if they haven’t, we know when they are coming. That might be our advantage. A lot of traders are used to watching different news outlets but we need to try to distinguish the real information from the people who give us useless fundamental analysis that cannot help us. These things only divert us from what is important.

Forex Twitter channels are also sources with questionable usage. Someone can be pretty unhelpful and make a lot of money in the forex world just by tweeting out news events that already happened. As traders, we are on top of the things, and we don’t need to be told some things because we have 2 eyes and we have a chart and that tells us all we ever need to know. So we might consider clicking the unfollow button on most of these twitter feeds. Sometimes we might hear about a news event that already happened and somebody on financial news saying things like: “Building permits in the US came in at 1.24 million and this is slightly below the forecast of 1.27 million”. Well, we could be grateful for that update but the thing is this is not really an update. Like every forex trader on planet, we also have our news calendars and we are usually pretty informed, we already know that all of that just happened. If we were trading the dollar, for example, we would probably be aware of all this. If not, most of this information would be totally irrelevant for someone who is a forex trader.

Like we said forex investors might do something with this kind of information because of their slow, laid-back pace of playing the game, but we as forex traders have been moved on five different ways since that news event came out. Financial news channels and forex twitter are full of these things. Another thing that these news outlets like to do is not only do they tell us what happened in the past, they tell us what’s coming up. Again, we have a calendar, we know that. It is our responsibility to know. Things like this don’t really apply to a real trader. If someone of us is a super forgetful, irresponsible trader then paying attention to fundamental analysis is the least of his problems. Sometimes on certain web sites, we might see people try to predict where the price is going to go based on the news that just came out or the news that might be coming up.

Still, there are major issues around this. It is still information that is hard to use. A lot of times what boils down to what they’re saying is: “Price might go up or down”. Well, thank you guys for that, that’s ultra helpful. And when they do some kind of predictions they almost always point to price levels, support and resistance line, or Fibonacci level. These predictions are usually wrong according to professional traders. Traders, who is responsible for making prices go up and down? We all know this. It’s the big banks, it always has been. When it comes to news events banks don’t have a reason to move, they just don’t react. Before the news event even comes out the big banks already know where they’re going to take price. It’s just the matter if the trader’s money switches from one way to another based on the news event that comes. if that news event is so one-sided and for example, the euro gets stronger. The banks still control when that happens, so they might lose a little amount of money during this process because the news could be just great in this situation.

In the meantime, they are going to find out where all those stop losses are and they are going to knock them out so they can collect as much money as they possibly can from spot forex traders before they take price where it’s going to go. It is not the case that great news just comes out for a particular currency and price immediately starts shooting that way. We usually see a lot of up and down jagged action first, a lot of fake news, sometimes prices are going the wrong way and we wonder why. That is the banks doing what they’re doing and they will always get theirs. The sooner we realize this the better off we could be. Simply, trying to follow fundamental analysis might be a glorious waste of time. This could actually be good news because technical analysis in the end always wins. If our technical analysis is amazing we might almost forget about fundamental analysis which can be liberated because it is a huge discombobulated confusing time-eater in most cases.

Of course, we still need to be aware of big news events but that shouldn’t be a problem because we have a news calendar. That might be the reminder that we need to focus on unless there’s a major political election coming up or some financial turmoil. The news event coming out usually does not apply to any of the currencies we trade, most of the time we can just slip through it. We could pretty much widdle all of the fundament analysis down into a small handful of news events that we’re already know are happening and when they’re happening, we could adjust our levels a little bit and move on. We have this wonderful luxury as spot forex traders that people who trade stocks, bonds, and CFD’s don’t have in a sense to where we can do over 99% of our trading directly from our charts and still potentially have great success with it. Most traders never realize this. After everything discussed here, we might try to re-think how and where we should invest our time.

Forex Education Forex Fundamental Analysis

Beating the Masters of Forex – The Big Banks

Some traders trade alone, out of hobby, fun, trying to make some money. Some traders trade professionally for funds, proprietary companies, or investors. This is what one of those professionals has to say about the rulers of the forex market. At the end of the line, dedicating your career to be profitable in the long term in this market eventually produces scientific methods that work. Also, to have the edge in this game, one needs to know it inside out. This leads us to know what the major players are doing and how they affect the market, how we can adapt and not be the 99% of the accounts doomed to be the victims of the big banks.

When we sum everything up, this is a trading strategy that you must know to at least have a chance against players with extreme capital stirring in the forex arena. Prop traders and other professionals know this, and it is not an indicator, practical tip or something you can use right away, unfortunately. And to be honest, no single tool or tip can help you reap the profits out of the 5 trillion flow on forex. It may sound to you we are going to talk about a conspiracy theory about the invisible hand manipulating the market so you always loose. Well, since professional traders do not trade unless math and other facts are on their side, then they are certainly not guided by conspiracies.

The truth is this fact is obscured by overwhelming false information so the big banks can keep reaping your accounts. It is not a secret the big banks are setting the rules on forex, not the economic forces. It is not a free, perfectly competitive market at its core. There is measurable proof to this fact and it is public. Probably the more famous trader spreading the word about this is ICT (Inner Circle Trader) by the name of Michael Huddleston.

The huge capital big banks use completely dominates forex, and it is used for price control. Traders are the ones who are against these giants and could be interpreted as our nemesis. On the other hand, it is they who make all these nice trends, volatility and create opportunities. Knowing what they are doing is giving you the edge, and consequently puts your trading out of the 99% who lose in the long run. Unfortunately, traders that even know this fact still do not know how to avoid their attacks. Our greatest threat to the account balance is the Interbank or the big banks by the name of HSBS, Citi Bank, JP Morgan, ICBC who control the main part of Interbank.

Like every bank, it will use the client capital in various investments to gain more capital. Some of these investments have a very low, controlled risks by client contract and law. Forex is also their playground where they create liquidity by moving the price. This movement is done with extreme capital flows, constantly replenished by the everlasting supply of losing trades. Your lost trades is their win, they know where traders money is, they see your trades and your Stop Loss, on every currency pair.

How to cope with this? Using one of the best measures in trading – avoidance. You need to be under the radar, do not be popular, stay away from the flock. The minority of traders and their money is not the target to the big banks, it is the lump of the“dumb money”. It is easy for them. See where (what currency pair) major dumb money is, are they trading short or long, and move the price the other way. If there is a concentration of Stop Loss orders at a specific price, let’s do the whipsaw. Repeat. Traders that are doing the opposite of the majority still have to apply good money management to capture that scarce profit, and most of them do not. You probably know what currency pair is the most traded, the EUR/USD. Well, this currency pair also happens to be where big banks like to play with traders’ money. If you do not know by now, the information about traders’ positions is not a secret to us, although it is not widely known. The Sentiment indication is what we also have access to. It also happens to be direct proof of big bank manipulation.

The direct correlation between traders’ positions and price movements is evident. Whenever a collective starts to open short trades, the banks will move the price up, and vice versa into infinity. Interestingly, there will be times when the banks will not demoralize you completely. They will give you that hope you need to stay in the game by allowing the masses to have their short profit time, evident in the right part of the picture. In the long run, if your trades belong to the big group, it will be game over. Casinos are also the masters of this method, known as the Blackjack theory. They will give you a little bit so you feel lucky, keeping you in the game until you lose everything. At first, it will be winning excitement that is keeping you in, then the hope of recovery, and finally they will wish better luck next time so you try again. The example above shows the big bank action on the EUR/USD, but it is also present in other currency pairs. Some cross currency pairs like the AUD/NZD do not experience this manipulation that often, simply because this is not a popular pair, not where the flock is.

There is another proof the market is manipulated, and it is very noticeable on the charts. It is the flash crashes. They happen once in a while but when they do, it is often not only catastrophic to your balance but brokers as well. A typical example of a flash crash is the EUR/CHF pair in 2015. Namely, the Swiss National Bank decided to introduce a “peg” on the EUR/CHF, precisely on the 1.2 ratio. In other words, the price will never drop below this level as proclaimed by the SNB. This led the majority of traders, precisely at the ratio of 70 to 1, to open long positions as the price continued to bounce off the 1.2 level. They would think it can only go up since they said it cannot go down.

On January 14th, 2015 the EUR/CHF drop was fast and brutal crashing 2200 pips in a very short time. Stop Loss orders were not executed because of the server overloads (guaranteed Stop Loss service is rare even nowadays) crushing the accounts and even going below zero, into negative. FXCM is one of the victims of this crash, a large broker with strong capital and reports. FXCM got bailed out by IG and the brand exists although it is a shadow of what it once was. Not to discuss the consequences on the people who got CHF credits from banks. The IG Sentiment report is a must if you want to have a peek into what the big banks look at when they are ready for the harvest. There are also other portals with similar sentiment indicators.

The US dollar is the dominant currency on the most traded pairs in the forex. Be especially careful around these currency pairs. The dollar is also one of the most influenced currencies by the news events. Unsurprisingly, the big banks enjoy this. Traders like to trade around big news events, and all the big banks see are a mass of single direction positions opened by them ready for the reaping. How many times have you seen the price go up when the news report was negative for the EUR on the EUR/USD? Or more likely see it also come back down as the logic assumes, only after your trade hit the Stop Loss. You may think your logical thinking was right, you have entered that trade just too soon. Try again. Eventually, you will understand there is no logic or economic laws. The banks, the Bloomberg and other portals can always give the excuse for this, they can choose what sounds reasonable enough and move on after the event is over. Before the event, it is also popular to give you useless tips from the pros that come down to: the price could move up and it can also move down.
To sum it up here is what you can do about all this.

-Avoid. Avoidance is one of the best measures in your strategy. Avoid the news.

-Do not be popular. Avoid the flock, use the sentiment reports. It is not a secret but traders still lose.

-Do not use the same tools the masses use. Using the same tools puts you in the same flock thinking where the price is going to go. You will be the big bank target. Popular tools are the ones you can easily find, probably the ones you have used first too, and the ones promoted on many videos, portals, and brokers pages. They are not only ineffective but also a favorite big bank “collectors” for the flock.

-Consider the USD pairs avoidance. See how it affects your balance. Seeking out currency pairs that are not exotics but are not popular is the goldilocks zone for you.

-Trading plan. It needs to have good money management in place even when you know what the big banks are doing. You still need to rely on the system to capture the profits.

-Experiment, test, build and look out for new ways to trade. This does not only include finding new tools or indicators, but it also means improving your trading plan and finding new markets.

There are many ways to trade, you may even build a system on unorthodox charting or timeframes, create an automated script which reads the sentiment, find that ultimate combination of indicators, and so on. There are infinite possibilities but one is certain, you have to put in the work. Trading is not easy and not for everyone.

This is a collection of what some of the professional prop traders agree on what is a base for those that want to succeed in the long run. You can trade your way and even be the one who is successful using the popular tool or trading the news, although the odds are against you. Every bullet above may be too vague for you to have something ready to be put to use. Focusing on each will require a separate article and, again, some traders invest a lot of time testing, reading, building, over and over until they find their complete system. What comes after is the easy part, you know your systems works, you are not getting in its way and just repeat. Traders focus on other investments once they have their profit-making machine on forex.

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 – 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.

Beginners Forex Education Forex Market

What We Can Learn From Quiet Markets

The markets can be a crazy thing, huge movements up and down, huge spikes in volatility, and subject to a whole host of outside news and events that can rapidly shift them both up and down. However, there are also times when the markets are at a standstill, this is the first time for a trade as nothing is really happening, the markets are sat still, nothing is coming into range of your strategy so you really don’t have anything to do. This is the scenario that a lot of traders come against at least a few times a year, so we need to be able to know what we can do when the markets are in this situation, and to understand that there are still some things that you can do to help you improve your overall trading.


Something that we often find that a lot of people lack, especially those that are new to the market. The need to always be doing something, whether it is analysis or actual trading, it can be a strong impulse. Having a low market gives you the perfect opportunity to practice being patient, and let’s face it, it isn’t giving you much choice. Being patient does not necessarily mean just sitting in front of the computer waiting, it can also involve doing something else entirely, away from the computer or on. Being selective in your trades is a good trait to have anyway, so this is a good way to help teach you to wait and take the trades that match your strategy.

Being able to wait for the right trade instead of acting on patience is such a vital skill to learn, so take this opportunity to learn it, it will greatly improve your future trading even in more busy market conditions.


It is normal to be required to adapt to the changing markets, they are constantly moving up and down and you will need to be able to adapt to that to adjust your strategies, however, another thing that you need to be able to adapt to is when a market decides to slow down or even flatline. This could be about adapting your own perception and staying put, which ties in with patience that we mentioned above. Another way to adapt is to have a backup plan when your pairs are deciding to not move, is there anything else that you can move onto? Maybe there is a commodity or a metal that you are interested in, often when the currency markets have stopped, there is still a bit of movement in the others.

Of course, looking at a new asset to trade would require changes to your strategy and also learning how they move, but having these other options available will make it a lot easier for you to adapt and change when things are a little slow.

Strategy Flexibility

Having a flexible strategy or even more than one strategy will help you to be flexible when the markets are not behaving nicely if you can have a strategy available for when it is trending and one for when it is a little more stagnant can help you to find trades no matter what is happening. If you wish to be trading all year round, then you will need to be able to flex your strategy to suit all possible market conditions, so allowing yourself to have those additional options would be a huge benefit to your overall trading plan.

Learning Style

We all have different learning styles, some learn from sitting and reading while others learn from actually doing. If you learn from actually trading then these quiet periods could be a nightmare for you as there is nothing to do. In a situation like this, it is important that you have a look at various other ways of learning, this will help you to learn new ways to study which would then give you the opportunity to learn even in these slow times. It can be hard, it can be a little boring, to begin with, but after training yourself on new ways to learn, it will be a huge benefit in the future.

So those are a few things you can do and learn during a slow market, while it can be a slow time for trading, there are certain things that you can try to learn and teach yourself to help you get through those slower periods.

Forex Education Forex Risk Management

Forex Risk Management Guide for Beginners

One of the most important elements of the trade is certainly risk management, even though it can be a neglected point. The traders need to learn as much as possible about the risk management to gain profit. This specific subject will guide you on how the risks could be avoided and implement the strategy to achieve projected goals and profit.

Lots of researches have shown that risk management might be the crucial aspect of any day trader. Sometimes, traders can see 80% of their trades are profitable, while 20% show as a net loss. This is an example that shows incorrect risk management. That is why the good planning and learning about the ways to get your trades protected are so important.

When we mention the strategy we always think of something that is based on the long term. The same goes for the Forex market, where even if the traders can be affected by the loss, it doesn’t mean that they cannot end up in making some profit. That’s why good strategy and planning are so important. Something that the professional traders always emphasize is, “Plan the trade and trade the plan”.

First of all, we should all be aware of the possible risks that can come along with the trades. The majority of the foreign exchange trades consist of foreign exchange swaps, currency swaps, options, futures, spot transactions. Since there is leverage, the risk with forex trades can be big and can cause a certain loss. Those losses could be even bigger than estimated.

Depending on how the leverage is created, the small payment can cause a serious amount of loss. Various issues can also affect the financial markets such as political situations, time differences, etc. Even though the Forex trade market seems to be the most active and frequent, there are always risks that can lead to serious losses. In further writing, we will show some of the most common risk points to understand how they could affect the trader and the market.

We can start with Interest rate risks. There is something that the macroeconomics study shows and that’s how the country’s exchange rates are affected by the interest rates. Proportionally, having an increase in the country’s interest rate is going to make the currency more stable, due to the inflow of investments in the country’s wealth. So, when we have a stronger currency, the higher return is expected. On the other hand, when the interest rate dips, the currency gets weaker since the investors start to pull back their investments. Also, Forex prices can be significantly changed by the difference between the currencies, due to the type of the interest rate and its unavoidable impact on the exchange rates.

Another risk element is known as Leverage risk. It is important to highlight that people join the Forex market because it provides them with higher leverage, which is different from other financial instruments. To even participate in the notable foreign currency trades, you will have to create an account for margin with your broker and it’s something that is strictly required by the leverage in the Forex trade market. When we have a case of the small price swing, it means that the investor needs to put the deposit further cash to cover the losses that may occur. When the trader begins to use the leverage extensively in the situation when the market is inconstant, it will eventually show as a big loss for the trader. The forex prices could be significantly changed with the interest difference between the currencies.

We also need to mention and elaborate on the transaction risks. The definition of the transaction risks is explained as an unbalanced exchange rate from the beginning of the contract until its completion. Something that happens most of the time in the Forex market is the fluctuation of the exchange rate before the contract gets finalized. On trading days we are all aware that the Forex works hours. Therefore, the same currency can be purchased and sold for different prices at different times. In that case, if we have a huge time gap between the beginning of a contract and its closure, the more risk in the transaction we need to take. If we have the change of the rate of exchange caused by the different timezone, the expense of the transaction can be pretty high.

When it comes to the risks we should talk about Counterparty risks. It presents the list of non-payment risks generated by the supplier. It is mainly related to the brokers or suppliers of benefits to investors. We need to mention the two types of contracts regarding this topic. Forex market differentiates spot and forward contracts. Spot contract handles the spot currencies and the risk is always determined by the brokers or market makers. If the situation in the market is not improving, the contract could be broken by the counterparty. The forward contract can be defined when two parties decide to purchase or sell an asset at a determined time in the future by the price that is agreed upon by the finalization of the contract. That price is usually called the future price.

The last on this list but not the least important and its Country risk. When you start to plan your investments, mostly in currencies, please check the strength and standard of the country that is using them. The most of the countries in the world that have just started to develop their economy or countries that still haven’t started to develop it, rely on the currencies of the economically strong countries such as US Dollar or Euro. That is why the central bank has to come up with a set of systematic measures to keep fixed exchange rates. In the case when the currency is undervalued, it negatively reflects on the Forex market. We also have to mention the term of currency devaluation. It starts with there is repeated balance of a deficit in payment, when the country has a higher import than the export rate. It is also important to mention the investments. Mostly, they are rather built on the idea than facts and researchers.

In that case, the investor will take back the assets if he estimates that the currency value will dip. It will seriously affect the currency which will get even lower. Also, it will be hard to get the assets pulled and exchanged. In the Forex market, when the currency crisis occurs, it means that the currency will continue to devalue, credit risk will be higher, and it will be very hard to sell the assets.

Here is what you can use right away as a base for Risk Management in your trading system. One of the most efficient indicators for reading and predicting the changes in this fluctuating market is the ATR. This acronym stands for Average True Range. Most of the professionals reckon that this tool is one of the most reliable to avoid risks and possible loss. It describes how many pips from the top to the bottom, a currency pairs fluctuate on average. The best possible number of pips that you can have as risk is 1.5 times of ATR value (pip value), according to some research for trend following strategies on the daily timeframe.

So what does it mean? It means that the stop loss has to be 1.5 times the ATR away from the current price. The ATR can be very helpful to find the Pip value. You can use the 2% of your current account as your possible risk. Then you divide your risk with the 1.5 ATR and it will show your 1 Pip value in $ if your account is in USD. For example, use your current account and multiply it with 2%, which equals 0.02. This result will present your total risk amount. When you want to calculate your stop loss you will have to pull up the ATR and multiply it with 1.5.

To avoid any stop loss, you will have to find the most suitable indicator that will pull you away from the bad trades. There are a few tips that some of the most proficient traders suggest. The first one would be avoiding the trade more than the one with the 2% risk. In some cases, you can just find the first trade entry and should easily go with the flow. Even better, if you get the long signal for EUR/AUD and the EUR/JPY you can try to split the risk ( 1% and 1% per pair).

Also, you can use the 1% on the one trade, and leave the other trade open for later, where you have half-risk. The first tip is the most common and the most reliable. To gain some profit and to path your way to be a successful trader, you should never fear the risk, but on the other hand, be cautious. Learn as much as possible to even get into risk. Learn how to calculate your risk and try to recognize your exit indicator. In the end, don’t get trapped by the over-leveraging.

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 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.

Forex Psychology

Trader Personality Test: Find your Pros and Cons

This concept that we will discuss here is not new. Personality Tests are used when hiring new employees. It is not all about the skills they may have, the employer may want his staff to have certain personality traits for the task in mind or company culture. Companies know that they may perform better for the role, sometimes even the skills and knowledge are secondary. Traders are independent, they do not have anyone superior, their performance is easily measured. The forex market will be their judge and a reflection of the effort, personality, and experience.

Still, it is rarely known prop companies test their traders’ personalities as there are so many videos, books, and mentors that are mostly focused on trading technicals, methods, management, and so on. If you have not heard already what are the two most important elements of trading, they are Risk Management and Psychology. Risk Management can be developed with testing and devotion but the Psychological part is a bit harder to master.

Everybody has unique personalities, habits, goals, and so on. Your Trading Plan and your Trading System will reflect this, and it should. Meyer Briggs Personality test is used by a group of prop companies so they can assess their new trader recruits and find out their strengths and weaknesses. If the company has the experience and has researched the personality-psychology relation in trading, they will know what traders’ mistakes are most likely to be. You will rarely find a video or a book about this if you are not searching, unfortunately, and it is such an important topic.

Prop company coaches even dare to say your Trading System is not important, it will increase your odds but it does not matter if you do not master your personality bad habits. Meyer Briggs test has 16 personality categories that cover enough psychological areas of a person so a trader can know on what weak spot he can focus on improving right away. How this is done depends on the weakness. What is important is to know that this test can be done for free, it is easy, and it is widely available. Once you complete it, we move on to explain how you can improve those bad aspects that bring your account down.


Know that this personality test does not have the right or wrong answers. In the end, you will have bad and good perks for trading as every trader has. There is no scoring, just the classification based on your answers. Let’s say you are stubborn. If you think this is all bad trait for trading you are wrong. It will mean you are not a quitter, you will likely keep trading despite the challenges. On the other hand, you could be doing things persistently wrong. What is even more interesting is that Forex will state this in your face as you trade. Are you persistent in chasing to recover that losing trade? Well, your account balance will suffer. Still doing this will bust the account. There is no way you can beat the market, if you want to become a professional trader, you will have to adapt.

Many traders that have been through the path of Forex trading have recognized they have changed for the better generally as a person. One of the great quotes that match the idea here is by Joseph Plazo saying that “ When it comes to trading in the market, winning is the matter of the mind, rather than the mind over matter…Playing a winning hand depends on knowing your own mind – and understanding the way psychology moves the market.” Finally, traders start to understand that mastering your mind for trading will take a lot longer than learning to make a good Risk Management plan. And it is perfected using special methods. Trading is 90% mental and 10% technical according to prop firm statements.

When you look at the market and have some basic knowledge to understand it, you will have an opinion. In a more scientific angle, this is subjectivity. This is your internal interpretation of the phenomena and how you deal with it. Your opinion could be aligned with the truth or not, in other words, you could be wrong. Objectivity is facts, our ability to get free from bias, prejudice. When two traders face and discuss what is going to happen next on the market, using the same data, they will form opinions. More often than not these will be the opposite. They will believe their opinions are facts even though in reality they are not. One of them will be wrong, the price will move in one way.

Money is tied to emotions. It will be our Subjectivity versus Objectivity. The separation of emotions from this is impossible according to the professional prop traders. It is very common to see a trader have great results on a demo account and collapse when trading with real money. They cannot trade the same way. If we can get to the point where we trade more on objectivity than on subjectivity, we are steps closer to consistent successful trading. This is one of the reasons trading systems are very helpful to see the objectivity.

The Personality Test has 4 classes that describe your Energy, Decision making, Attention, and Lifestyle. For each class, you have two opposite traits. In the end, there are 16 personality types possible. As you gain experience with trading, your personality results will reflect this. The traits describing your Energy can be Extrovert or Introvert, you make Decisions on Intuition or Sensation, Attention will be based on Feelings or Thinking, and your Lifestyle can be Judging or Perceiving.

Traders will have common opinions that the market is against them, that they are the victims. Of course, it is the trader who is in control. Forex cannot be controlled, except maybe by the big banks, but traders are responsible for their actions. The Personality Test will set you into an Introvert or Extrovert but you are a bland, more or less. Below are the peculiarities of each trader type.

Decision making is based on two traits:

Intuitive traders love patterns, correlations. They seek them out, they feel something is about to happen, they take the big picture and wrap their minds around. These patterns will be their facts. Hunches or feelings are the base of their research. Looking at the chart’s history is their main activity.

Sensing traders use all the sensory input to make a decision. This is the way they create facts, with everlasting desire to find more. Details that make the big picture is their way. Having all gathered, they make structures, linear processing, and an organized plan. Everything has to make sense, they rely on tools and precision.

Attention core is defined by:

Thinkers are more analytical. Analysis, logic, and principle. They want to detach subjectivity and focus on facts. Only objective criteria can make them make a decision. They can see imperfections in their system, engaging in self-criticism and everlasting need to improve it. Precision is required, the goals are defined clearly and the results cannot be in the gray zone. It is black and white, to enter a trade or not is clear to them. Math is their friend. Emotions are a sign to the system is not good enough for them and they will try to take emotions away with precise numbers, not fuzzy thinking.

Feelers like the abstract, intangible forces to guide them. They feel the market, focusing on what the emotions are trying to tell them. Facts are not a priority. Human values and needs create a way for them for judgment and decision making. Market psychology is their friend are more likely to act on it, Therefore, they are less objective, tend to force out bad trades led by strong emotions. If not in control, emotional traders are always in danger of default.

The energy of a trader will align on how they approach to problem-solving:

Introverts focus on their inner voice of ideas, concepts, theories, possibilities, abstractions. They need a reason for a consequence, the source, reasonable argument, proof. They will think reflectively. They will use the market data and action to measure, extract, and define facts. These facts are then aligned into a system used as a machine for decisions. The world is in their head.

Extroverts are outside of their heads. They find meaning in people and what is happening around them. Therefore, interaction is what motivates them, they will also move people into action, create events. They like to make decisions in a team, learn with others, take collective action. The expression is more important than to absorb.

Lifestyle will reflect on how they trade:

Judging traders do not have doubts when they want to trade, they act. Motivation is pumped internally, they will create rules. Unfinished business is not done by the judging trader, the task will be completed, fast. They will act once the basics are known. Plans are created and based on them the trades are executed.

Perceptive traders do not like plans, rules, and strict algorithms. It is not gray or white to them, it is fuzzy. Stop Loss placement is not exact, but close enough where they think it should be. Procrastination is common, easygoing, late at the meetings. They do not lack curiosity, they can adapt and be spontaneous. Before trading, they want to know everything about and tend to make bad trading decisions using too much information.

Now let’s see how all these traits mean for trading and traders. According to the research, all of them have bad and good habits in trading. Recognizing what type you are, you have a good starting point on what area to work on.

Starting with Extroverts’ strengths, they are energetic, passionate, they feel great, optimistic, and ready to trade. Group trading is a great way to trade, they thrive with teams. Chat is their favorite tool, talk about their ideas, and share with the team. Action is their middle name, when it is time to act they will have no fear. When the see the opportunity for trading, it will be done, fast. The weakness in trading is emotions. Extroverts get excited easily and get carried away. Passion for trading is great, but too much of it will cause overtrading, one of the most common bad habits. They may also underperform when alone or when too much information is given to them.

Introvert strengths are very good for trading plan construction. They are introspective meaning they will come up with ideas alone using their analysis. Information is how they base their decisions. That is why they want to know more. They will go deep and be thorough with every info they find. The weak points come with this desire to have more information and then overanalyze. Overanalyzing leads to hesitation. Introverts need just a bit more for that trade execution, until it is too late, missing the opportunity. They really care trade is a good one it blocks their execution. They like their ideas so much they do not want to share easily with others.

Decision-making strengths for the Intuitive type traders are based on patterns they easily see. They get the big picture, understand it, and act on it. Relationships for the movements are also noticeable for them. They zoom out and process all the “invisible” information and act on that. Sometimes they have reasons they cannot explain, but they just feel what is going on, on multiple levels. Their weakness shows up when they hang on to bias, hunch, and how they feel at that moment. If they are asked about a decision, they will have no factual or reasonable argument and probably disregard objectivity.

Sensing traders love details, systems, rules, easy to follow procedures. Organization and plans are precise. Research is top-notch and scientific. All this can be overdone and expose their weaknesses. These are overanalyzing, causing hesitation when trading. They are also stubborn. Once their system is complete it will probably work extremely well. But once the market conditions change at some time, it can stop generating profit. This is a nightmare for the sensing trader, the engineer, who is stubborn to stop trading with these conditions. Failure comes hard on them, they will not accept it and learn from mistakes.

Thinkers have a sea of ideas in their heads. Their strength comes from their mind, creating a reason, logic, clarity, goals, and finally, objectivity. After all, is set and done, they question if everything is based on facts and if it is objective. This is also a filter for emotions. The weakness comes from using the mind too much. Losing trades in a row will start the chain of thoughts about their system, create skepticism. Even when the trade is profitable, thinkers still think about that trade. Stress is something they experience more than other types.

Feelers’ main strength is understanding the market and the psychology behind it. They create a bond with the movements so they understand the relations although they find it hard to explain why. The big picture, the mood, and the energy of the market are easy to assess. Sometimes they can see the sentiment without indicators. The weakness comes from an emotional attachment to the trades. They will often disregard facts and arguments against their decisions. Trading on feelings alone will kick out of the game. Even when loosing extensively, their optimism will fuel their will to continue. This punishing weakness is boxed in with a rigid ruleset.

Judging a traders’ strengths can be very beneficial for trading. As masters of decision making, they will not hesitate. They will take action, complete, push to the goal. The plan will be followed to the letter, and the plan itself will be clear. There is only right and wrong, black and white, nothing in between. Their mindset does not allow doubts, any contrarian opinion will bounce off it. This manifests in the weakness of not taking advice. Additionally, low flexibility is another consequence of this mindset. Thus, traders of this type may have a steep learning curve.

Perceptive traders’ strengths come from their ability to be shaped into great traders. They are adaptive, change their mind, open for new ideas. Having a perceptive trader as an apprentice will be easy for the coach. Whatsmore, their curiosity will further improve their trading to an astonishing level of detail. Weaknesses out of all these positives manifest as being unsure of their decisions. Trades that they have entered could be closed before the Stop Loss rule. They change their minds, soak up information, and forex can easily play tricks on them. These decisions will be spontaneous.

Now once you have defined your weaknesses, you will need ways of eliminating them in trading. Discipline will not be enough. You may try to stay disciplined but your personality weakness will come out. Trying to change what you are is unnecessary. Admitting your weak points, faults, bad habits is a giant leap in trading. Naturally, you will tend to root them out. However, overtrading, risking, impatience, cannot be eliminated just by convincing yourself not do that mistake again. The mistakes will repeat. Because of this, prop traders even advise you to skip this step where you try to eliminate bad trading habits with discipline. Instead, create lifestyle barriers that separate you from the environment where the bad habits manifest.

This can be done in various ways. For example, if you are overtrading, you can appoint some sports activities that will pull you away from the trading platform. You will always feel the next opportunity is around a corner which you can take. This way, you will have an obligation, a barrier, pushing you away from the environment where your habits can manifest. These barriers may diminish at one point, but you will need to create new ways of avoiding exercising bad habits. This can usually be done in agreement with another person. Ultimately, your will to avoid things that bring your account down will decide if you are going to become a professional trader. After some time, the barriers will not be needed, your bad habits will be buried.

Key takeaways for your Personality Test results are:

  • Know that trading is 10% technical and 90% mental
  • Understand who you are and gain acceptance
  • Use your strong points
  • Do not try to fight your weakness, find ways to put it out of reach
  • Compensate your weak points with systems.
Beginners Forex Education Forex Basics

Questions in Forex Trading: The Good and the Bad

People often wonder how successful traders get such good results doing forex and what they discover is often not quite satisfactory. Browsing through available sources on this topic, a great number of individuals expect straightforward answers which would guarantee immediate success. However, this may not always be possible. Many amazing forex traders out there earned their success through trial and error, attempting and failing over and over again. Do not let yourself underestimate the power of learning from making mistakes in the search for a better approach to do this type of business. Theory and practice ought to go hand in hand, completing each other to provide you with the best possible set of skills you could use in practice.

Sometimes, you will not have the opportunity to find resources you may need, which only implies that you will need to come up with a solution yourself. It often happens that we are forced to become creative in our careers, which can eventually set you apart from the competition. What is more, if you are truly seeking to become an expert earning profit from forex trading, you cannot expect to always look for second opinions. Building your integrity and independence is simply essential if you are after professional and financial stability. Nonetheless, if you are new to this and you still feel shy to experiment, do not feel anxious – just keep exploring your options, take in as much information as you can, and most importantly stay focused.

If you feel that you have consumed a great portion of available material concerning forex and you still have a few unresolved questions lingering on your mind, then this is the place where we discuss what constitutes a good question and which ones belong the opposite group. However, let us first define what good and bad means in this respect, as these could be pretty vague categories in general. Since we are talking about business mindset and trading, a question considered to be good is naturally the one that could help you prosper in this market. Also, such questions are positive because they result from constructive thinking based on either the materials read or the real need to gain a different perspective on a specific issue.

Bad questions, on the other hand, are those which can hardly get you anywhere. In most cases, these typically consist of uninventive and unimaginative questions, which have probably already been discussed extensively in various media. Of course, the good-bad ratio is not black and white as we can all sometimes overlook some piece of information or simply happen to lack relevant experience, but the general advice is to always strive to immerse yourself in all types of learning as opposed to leaving an impression of a superficial, uninterested, or unprofessional individual. So, before you let yourself ponder any longer, make sure you set your ideas, impressions, and inquiries straight and align them with your ultimate objective – the goal of being a great trader and earning a profit as a result.

If you still, however, find it difficult to distinguish the good from the bad, consider the sample of commonly-asked questions and related explanations provided below. Note the questions asked are by amateur traders and are answered by a group of professional prop traders.

Bad Questions

Is hedging as a good strategy in forex?

In the world of investment, hedging is a term that denotes the practices money managers and investors apply to lessen and control potential risks. From the practical point of view, hedging could signify going long on a particular currency while also taking up the short position on the very same currency. Although this may sound like a contradictory approach, it actually grants some secure activity to forex investors doing very long trades during sluggish periods. However, despite its practical use, hedging naturally does not apply to all individuals involved with forex due to the fact that they are traders. Furthermore, these practices are not permitted in all places of the planet, and if you do not do your research properly, you may face significant problems in the United States, for example, where hedging is officially banned. What this further implies is that not only is this approach illegal in certain areas, but there are professional traders whose achievement never depended on hedging.

The rationale behind this example is that seeking answers should be backed up by very specific research. Besides, if you ever face a term which you have to do research on, start asking questions why that is so, rather than how to utilize it. Quite naturally, people across the world can have varying experiences as they rely on different methods at times; yet, why would you want to pursue an approach which thousands of forex traders do not really need? As portrayed by this sample question, putting effort into understanding some phenomenon, deriving genuine conclusions, and recognizing the fact that some questions may simply answer themselves can be crucial – both in some situations involving risk and as skills you may wish to develop and utilize in the future.

How do you approach the topics of supply and demand in forex trading?

While supply and demand are important terms in business in general, they hold little relevance in trading currencies, which is what forex is essentially about. The prices around which trading revolves are mostly determined by the direction of the majority and the reaction of the big banks. Therefore, trading has inherently very little to do with the notion of supply and demand in terms of meaning and importance they may have in other fields, which is truly a focal point for study, especially for all traders beginning their forex careers. Why this is deemed bad lies in the fact that there is a faulty belief constituting the question. To be able to grow in the world of forex is to delve into this topic, considering its true essence and all key factors regardless of some common business terms which occasionally have little to do with the notion of trading currencies.

Is TradingView as a charting platform useful for forex trading?

Traders can get very creative while exploring viable options for improving their trading careers, yet they sometimes rush to extend their selection of useful techniques and resources without having previously studied the available advice and stories on what has already rendered success in practice. In terms of charting platforms used in forex trading, MetaTrader 4 (MT4) and MetaTrader (MT5) are often praised for having the greatest number of indicators. Of course, searching for additional tools that could help you with trading is not bad itself, but why would you limit your options to a platform offering fewer indicators? As TradingView is frequently mentioned in the comments’ section in blogs and under videos discussing forex, a few other important ideas naturally arise.

While listening on what works best for growing your finances with forex is crucial, so is your ability to analytically assess whatever you browse through. Even when something is repeatedly mentioned or suggested in various ways, you need to take an objective standpoint to analyze whether something could be useful or not. In the case of TradingView, consider how many people try forex every year and, even if only a small percentage of them inquired about this particular platform, imagine how many comments there would be after a few years. Therefore, the quality of a charting platform is not determined by popularity, or design for that matter, but by its ability to give the highest number of indicators, which would naturally give you an immediate advantage.

How can I calculate the pip value on the ATR?

The question above concerns some of the most extensively discussed topics in the world of forex trading. You only need type pip value on the ATR in your browser to get an immediate response, in addition to numerous blogs, videos, and posts elaborating on this at length. While the search for the answer to this question does pinpoint to a degree of carelessness on the behalf of the inquirer, there may be some other reasons behind failing to understand something so widely discussed across various media channels. For example, a portion of traders may find the difference between yen and non-yen pairs quite challenging to figure out, but thankfully, there is always a way to get around this issue. As with trading with real money, demo trading can also give you some invaluable insights, especially when you fear that your lack of knowledge could hinder your growth.

After doing some very simple math, which you could first look up online, you can actually understand what an ATR value is indicating and use this knowledge to make a real profit. Consequently, traders have different ways to gather information at their disposal nowadays, and owing to practical tools, both those with and those without experience can now see whether the previously acquired information applies in reality. What we should never do, however, is expect to make a profit without at least putting some effort into research, which this question clearly signals.

How can I find a volume indicator?

Even though we may come across various questions which can vary in many ways, some questions are not really aimed at looking for answers the way we think. Some traders can get extremely anxious hoping to become successful in trading that they fail to acknowledge the importance of a learning process. Some other traders may, however, have ulterior motives, where they are not, in all honesty, asking for assistance to learn, but trying to win specific information which would save them time and effort. Although this is not illegal or forbidden, it does raise a few questions regarding integrity. Not only are there already numerous information pointing to obvious conclusions, asking someone to do your part of the job is not a way for anyone to start their own success story. This entire paragraph can boil down to this one key advice – learning is a process that undoubtedly takes time and energy, but it also pays off in time. The materials on forex trading which you may come across are not meant to prolong this period, but save you from having to learn the hard way. If you are truly intent on pursuing a forex trading career, be ready to patiently devote a section of your life without looking for shortcuts.

Good Questions

Can you recommend a broker?

Asking for a recommendation is always a good option because you can get some honest and clear response to your inquiry. Different video makers and blog/post writers sometimes comment on other people’s work, but what traders need to bear in mind when looking these up is that such recommendations can be affected by several factors. Depending on the degree of professionalism and knowledge, the recommendation you are receiving can be heavily reliant on personal opinions and potential deals between the involved parties, among others. Moreover, the recommendation may not involve actual money, which only proves how testing someone’s knowledge or skills did not take place before giving them a recommendation.

The traders’ task, as always, is to test whatever they see, comparing and contrasting the information they are presented with, so as to limit the damage as much as possible. As your knowledge and experience build-up, you will learn to spot the weak points and identify what is valuable in whatever source you turn to. That is why expansion to other markets outside the local one could be extremely beneficial – the more information and practical knowledge you possess, the faster you can profit from trading, especially if you start dealing with other assets, such as metals for example.

Would you recommend the use of divergence in trading?

If your prices are heading the other direction from the indicator, which is called divergence, you could gain some very useful information on the current trends. Divergence can be either positive or negative depending on the way a price is oscillating and, although it does signal some unusual activity, not all professional traders rely on this tool to determine how the prices will move. While thinking about trends and the interest foci is relevant, you can simply run a test trade with your demo trading account and see whether divergence could be of help to you in assessing a price’s momentum.
Would you consider automation or expert advisor (EA) based on a specific trading style?

With automation and EA available in the world of forex trading, the thought of having such a product custom made according to a successful system would definitely have its advantages – from simplifying trading to alleviating the difficulty of the challenges which traders face daily, to list a few. Nonetheless, automated trading can have its drawbacks unless properly designed; for example, news avoidance is said to be crucial because of its potential impact on the outcome of a specific trade. Although the existence of an automated product designed specifically for forex trading is not a matter of question or speculation, every trader at the beginning of their career should learn as much as possible before placing all their faith in a program without having learned how to be independent first.

If a received a signal to go short on GBP/CAD currency pair and another signal to long on the AUD/CAD one, should I opt for the first one?

If we compare the two currency pairs, we could see how the Canadian dollar is the one neutral currency among the three. The person who proposed this question probably assumed that the British pound is going to be weak because they received a signal to go short on the GBP/CAD. In addition, they could conclude that the Australian dollar is going to be strong since they received the long signal on the AUD/CAD. Based on these pieces of information offered by the system, they may be wondering if the best option would be to trade the strongest currency against the weakest one, going short on the GBP/CAD. While this may be inviting, the best advice here would be to do the two trades signaled by the system, without any alterations or deviations. What is more, going long on the AUD/CAD and going short on the GBP/CAD is in fact similar to going short on the GBP/CAD, which resembles a hedge to your advantage. Therefore, following the system’s indicators without overexposing to one currency is a secure way to enjoy trading currencies.

With such a great number of RSIs, should I test them all?

Despite the number of RSIs (the relative strength index), any professional trader would advise you to test all existing variations. Testing allows traders to learn how a tool or an approach works in real life, and many of the indicators discussed and used nowadays are in fact derivatives of the previous versions. Do not get uncomfortable testing an older RSI variation which has not been used for a while because any experience with a particular indicator could provide you with information you could use some time soon. Such versions may not serve the market of today, but with some adaptations, they can serve even present-day needs despite the fact that they were designed a few decades ago.

In the choice of good and bad questions, the focus was always placed upon a few important areas of concern. Browsing through materials discussing forex trading from the perspective of useful tools and strategies used in practice before is the one step every trader should do. This approach is supposed to prevent you from walking in the dark and needing to learn from your own failures. However, do not judge the age or the popularity of the materials, methods, or tools you come across, but run a demo trade and test how these work in reality. Furthermore, if you compare the good and the bad questions provided above, you will see that one of the main differences in the level of knowledge the inquirer possesses. If you are determined to make forex your career, then you cannot allow yourself to lack basic information.

Nevertheless, cramming theory is counterproductive, causing equal damage to the person who did not take time to assess various pieces of information they have gathered on this topic. Any development includes the necessary analysis stage, so by offering you the examples above, the text aimed to point out the differences between the questions which result from deep thinking about the acquired knowledge and the ones stemming from the lack of facts or original thoughts and insights. If you are a diligent and hard-working person, you will surely push against all limitations coming your way and, truth be told, this systematic approach is the only one that will help you succeed.

Sometimes you may feel that a particular question is blocking your progress, while it may not be the case in reality. Surely, the more self-reliant and independent you become, the faster you can prosper, and the best gift you can give yourself is honoring this process. Looking for information, searching for answers, reading, and watching everything and anything you can find on this topic, as well as applying analytical skills will allow you to get there faster than traders were able to a few years back. If you do want to become more involved in community discussions, as an avid reader and a conscious thinker, you are at a much better position of getting the questions right, thus gaining the opportunity to make a real difference while trading.

While blogs and video makers are eager to answer each of their follower’s questions, show respect by avoiding asking boldly for clues which should be your responsibility only. Such attempts at finding shortcuts reveal a mindset very different from the one prerequisite to forex trading, which naturally requires patience and focus. If you continually get proof that forex is not the best choice for earning money for you, there are plenty of other options you could choose, such as stock market trade. Whatever you do, hence, should involve clear thinking and asking the right questions. There’s no such thing as a stupid question, but consider what your choice of question is saying about you as a forex trader.

Beginners Forex Education Forex Money Management

Reasons Why Your Trade Sizes Matter

When it comes to risk management, there are a number of different aspects that make it up, one of those things is the size of our trade. This may seem obvious to some, but you would probably be surprised to see just how many people do not fully understand the importance of having the right trade size. Mistakes can be made by going too small, but those mistakes won’t cost you your account, the ones that will are those that place trades that are far too big for either their account or the strategy that they are using, this can have a detrimental and potentially dangerous effect on an account.

It should be noted that having a consistent trade size does not actually mean that it needs to be the same for every single trade, there are scenarios where you need to adjust your trade size, especially if that is part of your strategy. What is important is that you understand where your strategy is and what the size that is required for your strategy to be successful and consistent.

So let’s take a very basic look at how the trade sizes can affect your strategy and account. If your strategy has you risking 2% of your account for each trade, this percentage will be a combination of both the trade size and the stop loss location. If the stop loss location remains the same, but you increase the trade size, you will then be increasing the risk for that trade and ti will be more than 2%, as your strategy has a fixed stop loss, then increasing your trade size can be seen as a way to increase your profits, but if your account does not have the balance for it, this is not an appropriate way of increasing your profits.

Many people coming into trading wish to make a lot of money, quit their job, or to just become rich, they do this by placing trades that are far too large for their accounts. Every single time a trade is put on that is too high, the account is at risk, you are on track to lose a lot of money and multiple of these larger trades in a row can result in an entire account being blown, not something that any trader wants.

Similarly, simply not knowing what our trade size should be can cause two different scenarios that are detrimental to your overall trading and profitability. If you do not know that your trades are too high then you will be risking too much of your account which could then lead to a blown account or a lot of losses. If you are opening too small then there is a chance that it will demotivate you. You are not making as much money as you anticipated and were expecting, both are detrimental to your trading, which is why it is important to fully understand exactly what your trade sizes should be.

So how do we ensure that we have the right trade size for our strategy? Well it’s simple, when we set up our strategy, we should have set our risk management and this will include exactly how big a trade should be for any situation that may arise. You should be looking at your strategy and your risk ratio and this will help you to decide exactly what your trade sizes are.

If you feel that there is something wrong with the trade sizes that you are using, you first need to acknowledge that there is something wrong, you then need to be able to work out why it is going wrong. For many it could simply be an emotional thing, others being overconfident or greedy can result in you increasing your trade sizes, this is then putting your account at risk. If You feel like you have too much confidence, or just simply want more, you need to think back to your strategy and to stick with it, it is there for a reason and it is there to keep your account safe, do not overtrade just because you think you can or that you simply just want more, it will only lead to bad trades and losses.

It is important that you know your personal limits, as well as the limits of your strategy, do not try to push them, they are called limits for a reason, they are there for a reason, do not try to push past them., If you are feeling yourself getting the urges to push too much, then take a step back. Your strategies rules are there for a reason, keep to them, it is that simple, the more you try to push them, the more risk that you are putting on that strategy which could potentially push them past those limits which will only lead to disaster.

You need to keep your trade sizes small enough so that when you win or lose, they do not push your emotions too far either way. Your strategy has losses built into it, so accept them and move on, do not let them evoke strong emotions that could potentially jeopardize your overall trading and profitability.

So those are some of the reasons why it is so important to know your trade sizes and to be able to risk only what you need to risk, doing anything differently will only lead to disaster or disappointment.