Tag: Forex Information

Categories
Beginners Forex Education Forex Basics

Forex Isn’t As Difficult As You Think: Here’s Why…

With all the warning signs that you got all over the place about trading, the little notices that say things like “Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with IC Markets (EU) Ltd. […]

With all the warning signs that you got all over the place about trading, the little notices that say things like “Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with IC Markets (EU) Ltd. […]

With all the warning signs that you got all over the place about trading, the little notices that say things like “Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with IC Markets (EU) Ltd. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.” You would think that trading would be pretty hard wouldn’t you? Well, the truth of the matter is that trading forex is simply not that difficult, at least not as difficult as you may think it is.

That is quite a bold thing to say, considering so many people have lost money. In fact, a lot of people have lost everything that they own due to trading, but is that because it is hard? Or is it due to the fact that there may have been some flaws in their plans, or even in their own personality which has caused them to lose, or maybe it was simply the unfortunate event where they signed up with a scammy broker or apparent account manager. Whatever the reason was, there are things that you can do to prevent these losses and ultimately make forex trading a lot simpler and dare we say it, easier.

The concept behind trading is simple, we are taking one currency, converting it to another, and then converting it back once the price of the currencies has changed. If they change in the right direction then we profit, if they change in the wrong direction then we lose. That is the very basic concept of trading and why it is fundamentally very easy to do. All you need to get started is a broker, of which there are thousands, a little money, some brokers allow you to trade from as little as $10, and an internet connection. You can then use your phone or computer to load up an application and start trading, that is as easy as it is to start trading.

So if it is so easy, why do so many people fail and lose money? The simple fact is that they did something wrong, it was not the markets that did anything wrong, they work how they work. It is up to use to analyse and work out what it is that they will be doing, something that a lot of these losing traders did not do due to either a lack of knowledge or simply not being bothered and wanting some quick profits. Trading and forex are not rich quick schemes, even though it is described like this in various places. It is a methodical, long-term endeavor that takes patience and understanding.

Forex is all about creating a plan and then sticking to it, if you are able to do this then there is a good chance that you could end up being a successful and profitable trader. When we start trading we always need to create a trading plan, this plan then includes a number of different things like our strategy and our risk management plans. These things combined make it so that trading can become a lot simpler, it can be a lot more straightforward and more importantly, it can become a lot easier.

Your trading plan should involve creating your strategy. It is important to understand that you need to develop a good understanding of your strategy. Simply having one is not good enough, you need to understand how it works and also why it works. Doing this will enable you to adapt things should the market conditions change, and they will change, regularly. Being able to adapt will mean that you are able to maintain your profitability and also keep risks low in multiple different trading conditions, something that a lot of new traders fail and so end up losing out.

The other and arguably the most important thing that you need to have in place in order to make trading more successful and easier is our risk management plan. This will set out the different aspects of you trading that is to do with risk Your risk to reward ratio will detail how much you will risk on each trade and how much you are aiming to profit. With this being a positive ratio, 3:1 as an example, you only need to be right 33% of the time in order to be profitable, something that is much more achievable than some people who try and be right 80% of the time. This risk management plan will also detail things such as where you will be putting your stop losses. Trading without a stop-loss, putting extra risk on your account, is not something you want to be doing at all.

Another tip for making trading easier is to keep a trading journal. This journal is somewhere that you will be writing down pretty much everything that you do. It is a little tedious and a little boring, but it is vital and doing it gives you access to a whole lot of information that is beneficial to you. You are able to use what you have written down to analyse your own trading, to find out what you are doing right and what you are doing wrong. You can then use this to try and alter your trading or your trading rules to be a little more profitable. Consistency in doing this will result in much safer and more profitable trading.

The final tip to give you is simply the fact that you need to ensure that you are not taking on any scams. There are a lot of them out there, do not take people’s word for granted and if something looks like it is going to be too good to be true, it most certainly is, so beware. Trade yourself, learn yourself and you will thank yourself for it, as you will be able to trade for years to come and will be able to adapt should you need to, not something you would be able to do if you were relying on someone else.

Trading seems very difficult from the outside, especially with all the warnings about it, but when you dig a little deeper there are things and rules set in place that are there to protect you. These are there to make things easier for you and they are there to help you to be profitable. Do not rush in, plan your trades, plan your education and things will end up being a lot easier than you may think they are.

Categories
Beginners Forex Education Forex Basics

Top 10 Things I Wish I’d Known Earlier About Forex

Hindsight is a fantastic thing for those of us that have been trading for a long time. We made a lot of mistakes or didn’t do things quite the right way when we started out, things that we wish we had known or done differently. For those just starting now, you can take advantage of […]

Hindsight is a fantastic thing for those of us that have been trading for a long time. We made a lot of mistakes or didn’t do things quite the right way when we started out, things that we wish we had known or done differently. For those just starting now, you can take advantage of […]

Hindsight is a fantastic thing for those of us that have been trading for a long time. We made a lot of mistakes or didn’t do things quite the right way when we started out, things that we wish we had known or done differently. For those just starting now, you can take advantage of the fact that we have learned a lot of new things about our trading and the things that we can do, meaning that you can start off where we are now, rather than at the very start of a trading journey. So here are ten things that we wish we had known earlier in our trading career.

1. No single best time to trade: When I started out trading, I was told that there are certain times during the day that you need to trade at, and should pretty much avoid the rest, this is simply not the case Yes there are times where there is a lot more liquidity and movements in the markets, such as during the changeover of the different markets (London and New York for example). This does not, however, mean that this is the only time that you are able to trade, but this is what we thought, of course, we don’t mean that we weren’t able to, just that it would not be as beneficial for our strategy, now, however, we know that we can trade at pretty much anytime and it can be effective, bar some special circumstances or random news events.

2. The majority of traders lose money: If you are just coming into trading now then you probably already knew this, but a number of years ago, forex brokers did not have to have the disclaimer about the majority of traders losing money as they do now. In fact, they purposely hid it, which is why the requirement came into lace. Due to this, we believe that everyone could make a lot of money, but we now have the understanding that it is a hard thing to do, and this makes us more cautious and careful with the trades that we make.

3. Some currencies are linked: A number of the currency pairs and different assets are linked together, think about oil and CAD for instance, when the oil prices change, so does the CAD currency. Knowing which assets work with each other can give you a real advantage when it comes to knowing how the markets will move and how certain things like news events will affect other currencies, ones that say not necessarily be involved in the news.

4. You can profit with more losses than wins: Losses are a part of trading, in fact, it is something that all of us will experience and experience a lot of them. What we did not understand before is that you are actually able to be profitable by winning only a fraction of your overall trades. Our current strategy means that we only need to win 25% of our trades, something that is certainly achievable. Get your risk management and risk to reward ratio right and you can profit with just a small number of wins overall.

5. You can lose with more winners than losers: The other side to the coin mentioned above is the fact that you can actually lose money, even if you win 80% of your trades, if you do not use proper risk management techniques, then even if you have a number of winning trades, when you have a losing one, without the proper things in place, that one losing one could take away all of your profits and leave you out of pocket. This shows us how you need to get your risk management right, no matter the strategy that you are using.

6. Big news can be bad news: News events can be a little scary, yet we were not told this when we first started. Instead, we just traded whenever, with little regard to what news events were going on around us. This is where we went wrong, we wish we knew about the effects that news events can have on the markets, we have been trading through them and seeing ht markets jump massively up or down which has caused us both large wins, but also large losses, far more losses. So now we know not to trade during the news events, which has saved us a lot of money.

7. Don’t quit your job: Not something we actually did, at least not to begin with, but quitting your job was the goal of a lot of people, and we were told that it is certainly possible due to this, a large number of people took the leap a little too early. Unless you are really ready for it, with a lot of time and work behind you, then you will not be ready, no matter how well you are doing, you are not ready to quit your job unless you have been successful for at least a year in a row and are making more than you do with your job, only then should you do it. We weren’t told this before, and many learned it the hard way.

8. It can be good not to trade: A quick one at this, but you don’t actually need to trade. If the conditions aren’t right, then there is no need to actually put on any trades. It can be best to sit back and be patient. Better opportunities will come up and if the markets are not in line with your entry requirements, then putting on a trade would be considered a bad trade, something that we want to avoid doing as much as we possibly can.

9. You don’t need loads of indicators: Indicators can be fantastic, they can show you a whole host of information, but do you really need all of it? If you have too many indicators it can actually slow down your trading, each one that you add is another bit of information that you need to check before putting on a trade, the more you have, the more time that will take. Not to mention the fact that it could simply confuse you seeing so much information on the screen. Instead, choose just a few, this will enable you to get the info you need while still streamlining your trading and making it much quicker. Oh, and make sure they are at least relevant to your strategy and not just simply random indicators because they look cool.

10. Forex is long term: We came into trading like many others did, with the idea that we can make a lot of money and make it very quickly, we now know that this is north e case and instead Forex and trading are long term things where we can build for our future. Trying to make a lot quickly will only cause you to lose your deposited capital, so take your time and slowly build your balance rather than going for the big bucks.

Those are 10 of the things that we wish we had known when starting out our trading carers. You probably know most of them already as the information is much more accessible and people have been through the same experiences as us and shared them online. There will of course be learning opportunities and things that you will develop that you wished you knew before, but ultimately that is life and will happen with everything that we do.

Categories
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.

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.

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.

Categories
Beginners Forex Education Forex Basic Strategies

Forex Strategy: A Simple Definition

We can debate how to define a forex trading strategy but in the end, is it really important? We believe it is more important what elements are crucial and how to use them so you know you have a strategy. It is needless to say that without one you are blind and not make very […]

We can debate how to define a forex trading strategy but in the end, is it really important? We believe it is more important what elements are crucial and how to use them so you know you have a strategy. It is needless to say that without one you are blind and not make very […]

We can debate how to define a forex trading strategy but in the end, is it really important? We believe it is more important what elements are crucial and how to use them so you know you have a strategy. It is needless to say that without one you are blind and not make very far in forex trading. 

The Definition

We can find many definitions online but here is one that is simple but covers what is important: A strategy is a set of skills, tools, and information that consistently generate profitable trading decisions. We emphasize the word – consistently, so only when you have something that works over a long time you know that strategy has a meaning. It does not mean every trade or month has to be a winner, professionals usually take several positive months to conclude their trading strategy is consistent. The goal is to have profited from trading, however, we would not plan to gain percentages as goals right away simply because pursuing them might set beginner traders to think about winning only, whereas the true effect on the bottom line is about eliminating losers. Here is how to know you are on the right track to having a good strategy.

The Skill Element

Before all else, you need to be true about it. Follow your plans or everything you designed goes to waste. Your mindset has to be right to pursue any strategy or you are just playing games with yourself. Now, some traders do not rely on tools such as indicators, but they look at the charts at different timeframes and look at how the price is moving. Patterns, volume, and other aspects of the market are considered but they also consider what is going on with other markets, currencies, and any information that moves the upside/downside scale in their heads. This is the skill element of the strategy, and it takes a while to learn fundamental analysis and chart reading. Of course, there are other ways to trade where other skills are developed and could be used in a strategy. 

The Tools Element

One example is the use of indicators and rules for them. Technical traders do not want to rely much on their subjective analysis of the charts or events that drive the markets. They may have an opinion or predictions but they do not trade until their indicators confirm it. Even if they think otherwise, they listen to their tools. Their skill is to be able to create a setup of different indicators that jointly create consistently good decisions. This skill to combine the right tools also requires a lot of work. 

Technical traders are focused on indicators research and how they can make for a better overall performance with the others. They understand probabilities, statistics, and gauge what tools could mitigate losses. Also, when it is better to create a rule, like closing all trades on Fridays, they implement them into the strategy mix. Technical traders even use indicators for their money management if needed. It could be said that Price Action traders rely on fuzzy values while technical traders prefer precise points where they put Take Profit and Stop Loss orders, for example. 

The Consistency Element

Consistency is probably the hardest strategy element to achieve. You can have a strategy with inconsistent results but we regard that as an inconclusive trading solution. It is not a strategy that works in the long term. A car that does not move is not really a car, just a pile of materials. 

No strategy works every time on every market. And that is why traders spot the best market behavior for their strategies or develop different strategies for different market conditions. They look for ways to attain consistency with their strategies since they make losses in certain situations. That can only be avoided if they wait for a new period of right market conditions. Traders then implement rules to their strategies. The right market conditions have to be spotted. Technical traders have tools or indicators for that while plain chart readers just observe the candles. Forex trading is directional trading so traders of both kinds often look at the volatility and volume. They make rules based on these measurements and pick only volume/volatility levels where their strategies work best. That is why forex, precious metals, stocks, commodity traders have different strategies. 

It is not rare to see mixed strategies, technical indicators with fundamental analysis. These traders take into account more data but often they come up with conflicting signals and therefore need more time for a good setup. Does it mean it is better to mix different analyses to attain consistency? Not really, you can see pure PA or indicator traders that perform exceptionally well. 

Consistency can be achieved with a certain strategy, but as said in the beginning, a trader has to be consistent first. This side of trading is not in focus by beginners because working on the psychological part is not fun and you will not see it by reading strategy definitions. Therefore, we would also widen the consistency strategy element to the trader psychology too. This is also a skill, a rule, a tool, name it how you wish, but it is a requirement for any strategy to work. Traders that attain consistency with themselves and with the strategy are the elite in forex trading. They have one of the best “jobs” when we speak financially but also about their free time, stress, and resistance to side effects like different crises. 

Building a strategy does not stop when it becomes consistent. A trader explores any ways that the strategy becomes either more consistent or more profitable. It does not mean a trader has to change what is already working well, but exploring other markets where such a strategy with small changes could work. More opportunities open where more profits could be made. A strategy like this is evergreen and could be regarded as a holy grail in trading. 

To conclude, you have defined a strategy when you have educated yourself about how different strategies work and then design your own with specific rules, tools, or PA patterns. Have a plan for each trade this way and consider consistency building with loss elimination, money management, and having the right mindset. Only then you know you have a strategy that could be built upon as you advance. 

Categories
Forex Market

Forex Trading By the Numbers (This Information May Shock You)

For most current traders Forex markets are the privilege they were born into. As the majority of them are below forty–five years of age, they are too young to remember the Bretton Woods Agreement that was set to rebuild the post-World War II economy. This agreement established a system that ensured that each country adopted […]

For most current traders Forex markets are the privilege they were born into. As the majority of them are below forty–five years of age, they are too young to remember the Bretton Woods Agreement that was set to rebuild the post-World War II economy. This agreement established a system that ensured that each country adopted […]

For most current traders Forex markets are the privilege they were born into. As the majority of them are below forty–five years of age, they are too young to remember the Bretton Woods Agreement that was set to rebuild the post-World War II economy. This agreement established a system that ensured that each country adopted a monetary policy pegging their currency to the US dollar which was in turn tied to the price of gold. That became known as the Gold Standard.

Due to insufficient gold supply to cover for dollars in circulation during Nixon’s administration, the dollar has depreciated. The two currencies parted ways leading to the collapse of the said system in 1971. Finding a new model took a while and in 1973. countries were permitted to adopt any suitable exchange arrangement for their currency or let it float freely. Market forces began determining the value of one currency relative to other country’s currencies, thus giving birth to modern forex trading.

Initially, it was exclusively a playground for major players. The only ones who had access to forex trading were leading banks, financial institutions, and governments. The required minimum sum at the time was 40-60 million dollars. It was not until the nineties that a single person such as yourself could cross the threshold of trading with the first deposit not larger than $1,000.  Admittedly, even in 2020 market share of retail forex trading is only 5.5% while multinational corporations and hedge funds have the rest. Still, there seems to be enough for everyone. 

Technological progress played an important role in letting individual traders get into the game. The emergence of the Internet and the spurt of communication accelerated the information exchange. The appearance of forex trading platforms in 1996. facilitated trading currencies in real-time through the Internet and forex brokers. Software development gave us Meta Trader 4 (or MT4) in 2005 and MT5 in 2010 which are still used by 54% of the retail brokers a decade later in spite of numerous other software with user-friendly interfaces. Mobile phones play a big part in today’s trading. 35% of traders search for brokers via smartphones.

A Word or Two about the Market

The Forex market is the only financial market that works round the clock. Major world markets either overlap or as one closes in one part of the world the other one opens across the globe which makes it available 24 hours a day. 

There are four accepted time zones or sessions named after the cities where most forex trading takes place. Those are London, New York, Sydney, and Tokyo. The overlap of London and New York sessions marks the busiest part of the day. During those four hours, the bulk of the average daily $6.6 trillion of trade transpires. In comparison to the New York Stock Exchange, the daily trade volume is 53 times greater. This number is significantly higher than in 2016 when the previous market analysis was carried out by The Bank for International Settlements (BIS). 

The triennial period marks yet another growth of nearly 25%. The entire global forex market was valued at $1.934 quadrillion dollars in 2016. In case you were wondering, the figure is now $2.409 quadrillion. It is twelvefold the futures market and 27 times greater than the equities market.

Currencies and Currency Pairs

There are 170 currencies traded on the global forex market. In terms of how frequently they are exchanged, they could be either exotic or major.  The former is not in the top seven, but may still be noteworthy. Exotic currencies of emerging market economies (India, Mexico, Russia, Pakistan, Saudi Arabia, China, and Brazil) contribute to 24.5% of all market transactions.  

The latter ones are exchanged most frequently. They include the US dollar, the Euro, the Japanese Yen, the British Pound, Australian Dollar, the Canadian Dollar, and the Swiss Franc. In ascending order the last two account for the 5% of forex trading each, AUD for 6.8%, GBP for 12.8%, and JPY holds third place with 16.8%. The Euro is our silver medalist with 32.3% of all daily trades. Finally, lonely at the top is the USD. It is the only currency on either the base side of the quote side of major currency pairs involved in as much as 88.3% of forex deals as stated in the BIS survey of 2019.

According to the currencies involved in trading, there are three types of currency pairs. Majors are dollar-based transactions of major currencies and they make up 67.4% of the Forex market’s daily trade. Minors consist of two of the major currencies, the USD excluded (for instance GBP/EUR and AUD/JPY). Exotic pairs consist of one major currency and one exotic currency (e.g. a currency of a developing economy such as China or Brazil).

The Magnificent Seven

Major currency pairs are the 7 most prominent: EUR/USD, USD/JPY,  GBP/USD, AUD/USD, USD/CAD, USD/CNY, and USD/CHF. In everyday speech, they are often referred to by their nicknames.

The EUR/USD pair or popularly – Fiber, accounted for 24% of trades in 2019. which makes it the No. 1 traded pair on the foreign exchange.

The USD/JPY currency pair or Ninja holds second place despite the decrease from 17.8% of forex trades in 2016 to 13.2% in 2019. 

The firm third place is reserved for the GBP/USD pair nicknamed Cable, which has been stable for three years accounting for 9.6% of 2019 transactions. 

The fourth is the Aussie or the AUD/USD pair, which has been almost fixed since 2016 represented 5.4% of all transactions.

The USD/CAD, also known as the Loonie, is the fifth pair and it made up 4.4% of trades in 2019. 

The relation between the American Dollar and the Chinese Renminbi is the penultimate of the seven majors. This USD/CNY pair rose by 0.3% in three years’ time and it represented 4.1% of 2019 forex transactions. 

The USD/CHF pair nicknamed Swissy comes in last with its 3.6% of forex transactions of 2019 daily trades. 

Demographics

Most forex traders are men in their thirties and forties. Although the numbers fluctuate, divided into age groups – 43.5% of traders are aged 25-34, 41.5% stretches over another decade (35-44 years of age) and 15% are older than 45. Such a large percentage of young people involved in trading forex can be explained by being born as digital natives. They were surrounded by computers, the Internet, tablets, and smartphones from childhood and they are up-close and personal with innovative technology. 

Genderwise, women make a tenth of all traders (or 10.9 % to be exact). Still, they outperform men by 1.8% as they are not prone to risky behaviour, but rather long-term strategies. Speaking of performance, only 15% of all traders make a profit, so 80% quit in just a year or two. Only 1% of traders are able to generate income for more than four consecutive quarters.

A mere 7% have been trading for over a decade and 23% for 4-9 years. That makes new traders a sizable group. 31% are in their first year of trading and another 39% have traded for 1-3 years.  On a day-to-day basis 45% of traders spend up to 2 hours a day dealing with forex, 41% invest 2-6 hours of their time, and 14% devote more than 6 hours to trading. Monthly, 35% of traders make 4-8 trades. 41% of traders make 9-20 trades, an average of 16 trades per month for a profitable trader. Finally, 14% make over 30 trades each month.

As they are driven by their will to succeed over 50% have acquired books, purchased courses, and strategy testers. Their online time is also focused on education and self-betterment and it is split between reading materials and watching trading-related content on one hand and finding advice on social media and forums on the other.

Categories
Forex Basics

Information You’ll Wish You Had BEFORE You Started Trading Forex

When you start anything new, you are going into it pretty blind, picking things up as you go and of course making mistakes, probably a lot of them. When we have been doing something for a long time, we often look back and think about when we first started out and trading is no different. If you think back to your first days, weeks, month, or even year, you can probably think of some things that you probably wished that you had done differently, or things that you wish you had known, they probably would have saved you a lot of grief, but hindsight is like that, we all know better once something has already been done. We are going to be looking at some of the things that we wish we knew before we started trading all those years ago.

When you start anything new, you are going into it pretty blind, picking things up as you go and of course making mistakes, probably a lot of them. When we have been doing something for a long time, we often look back and think about when we first started out and trading is no different. If you think back to your first days, weeks, month, or even year, you can probably think of some things that you probably wished that you had done differently, or things that you wish you had known, they probably would have saved you a lot of grief, but hindsight is like that, we all know better once something has already been done. We are going to be looking at some of the things that we wish we knew before we started trading all those years ago.

When you start anything new, you are going into it pretty blind, picking things up as you go and of course making mistakes, probably a lot of them. When we have been doing something for a long time, we often look back and think about when we first started out and trading is no different. If you think back to your first days, weeks, month, or even year, you can probably think of some things that you probably wished that you had done differently, or things that you wish you had known, they probably would have saved you a lot of grief, but hindsight is like that, we all know better once something has already been done. We are going to be looking at some of the things that we wish we knew before we started trading all those years ago.

When many people first get into trading they go the easy route, they go after the advertisements about things like automated trading, hands-off trading, or signal copying. They seem like the perfect thing, simply deposit someone, sit back and let them trade for you, the problem with this is that it is the equivalent of simply giving someone your money and letting them do what they want with it. Not the smartest thing to do and also not something that you would do in any other situation. So why we thought it was a good idea back then we have no idea. One thing that we wish we had done differently would to simply not have used these services, it would have saved us thousands of dollars from the losses that were lost by trusting these traders with our money.

It would have been good back then if we understood that there wasn’t a perfect strategy out here, there isn’t a strategy that will allow you to win 100% of the time and so we should not be looking for it. Countless hours spent looking for it, countless hours and hundreds of dollars wasted trying out the so-called perfect strategies. If we knew back then that they wanted one, it would have saved us a lot of time and money. Instead, we should have been learning and developing our own strategies and also multiple different ones to allow us to trade in different trading environments and conditions.

It would have also been a good idea for us to learn a little before jumping into a live account, or at least using a demo account. Pretty much every broker now offers demo accounts, where you can trade on almost the same trading conditions without any risk to your own capital. Back in the day, they were not as regular and people didn’t seem to use them as much. Instead, we just jumped straight into a live trading account with our own money. All tests were done live, all changes were done live and the mistakes made cost us real money. If we were to start over, we would certainly be using a demo account for all of our practice, it can potentially save you a lot of money and also a lot of stress.

Avoid the news, something that is said a lot now. In fact, some brokers no longer let you put on trades during major news events and this is something that we wish we thought about back when we started. Trading the news can be incredibly profitable, the problem is that it can be incredibly risky too, in fact probably more risk than it is worth. The news can cause big movements in the markets, and the markets can even move in ways that are completely non-correlated to the news that was given, making it even riskier. We wish that we had known this before and decided to avoid trading during news events, it would have saved us a lot of money in the long run.

It would have been good to have had a better understanding of what different currency pairs are as well as the differences between them, we are talking about the difference in volatility, the difference in liquidity, and other aspects like that. Each pair reacts differently and moves differently, and this is something that we would have liked to have known a little earlier. We traded USDMXN the same as we did EURUSD, if any of you have traded both, you will know that they work very differently, but we used the same strategy on both which as you can imagine did not have the best effects and this caused us some pretty hefty losses before we worked out what was going wrong.

Learn the different order types, that is a big one, many traders simply use market execution orders by simply placing trades. Yet there are a lot of other styles of orders too, limit orders, stop orders and more, these different order types allow you to enter the markets in different conditions and at a price that it is not currently at the moment. This adds a whole new level to our trading allowing us to predict movements and to take trades on the support and resistance levels. We just wish we knew about them, or at least how to use them properly back when we started trading.

Forex and trading are not guaranteed, something that should be quite obvious, but back when we started you did not have all the warning signs on every site, that was not a requirement, all that we ask was the opportunity and the other traders stating how much they had made. Of course, now we know that those saying all the positives were simply trying to get some affiliates signed up after them, but back then, the dream was real and it seemed more realistic than it is now (of course it is still possible now too). It would have been nice for there to be more waning like there are now, and we would of course start again knowing that nothing is guaranteed and that we need to put in a lot of work to make it profitable.

Those are just some of the things that we wish we knew before we started trading all those years ago, there are of course some other things that we would have done differently, we could probably write for hours about it. Hindsight is an amazing thing, we need to live with our mistakes but also learn from them, we do not make the same mistakes that we made back then, it is all about learning from what we have done to make us a better trader in the future.

Categories
Forex Basics

What Skeptics Need to Know About Forex

There are a lot of people out there that simply do not trust trading or forex, they see it as some sort of money sink that will only result in losses. #If you go onto any sort of social media, you will always get a few people shouting about how bad trading is and that […]

There are a lot of people out there that simply do not trust trading or forex, they see it as some sort of money sink that will only result in losses. #If you go onto any sort of social media, you will always get a few people shouting about how bad trading is and that […]

There are a lot of people out there that simply do not trust trading or forex, they see it as some sort of money sink that will only result in losses. #If you go onto any sort of social media, you will always get a few people shouting about how bad trading is and that trading as a whole is a scam, maybe they lost some money, maybe they just don’t understand it, either way, it is important that we get all the information before we decide whether something is good or bad. So we are going to be looking at some of the things that the skeptics of forex trading need to know which may just change their minds about it.

Forex Is Real

One thing that you see some skeptics saying is that forex is simply not real, you are not trading with other people, you are trading against the brokers and they control the numbers, not the markets themselves. Well, the thing is that with some brokers this is partly true, for market maker brokers, you are actually trading against the broker and so it is in their interest for you to lose. With many other brokers like STP or ECN brokers, you are actually trading directly on the markets and it is in the interest of the brokers that you do well as they make their money through commissions. When trading with these brokers the markets are very much real, all money being traded are from real people or institutes. Forex is very much real and you can certainly make money out of it if you trade well.

Not Everything Is A Scam

There are a lot of scams out there and if you have been a victim of one, you will most likely lose a lot if not all of your trust in the forex industry. That is perfectly understandable, but not everything is a scam. There are a lot of legitimate brokers out there that are to help you trade, they do everything by the book and can be trusted. Many peoples view of forex is what they see people posting on social media, which is full of exaggerated results, exaggerated claims, and exaggerated promises, not the best place to get any real information, Instead if you go to one of the many dedicated trading sites or communities then you will see the truth, you will see the losers, but you will also see the honest winners, those making money and those showing that trading and forex are not actually scams.

You Can Earn Money

You can certainly make money, this goes along the lines of everything being a scam again, may skeptics who do not believe that you can make money also believe that it is a scam. Yet you can certainly make money, a lot of people do and a lot of people will continue to do so. We have made money ourselves, we know people making a regular income with trading, it is certainly possible, but until the skeptics actually make something they will not believe it, and even then, some will find it hard to actually believe.

Information Is Plentiful

A lot of people are skeptical about things because they simply do not know a lot about whatever it is that they are skeptical about. The good thing about forex and trading as a whole is that there are tonnes of information out there, so much so that you can go to any sort of trading-related site and find out quite a lot about it. There are also a  lot of trading communities around which can give you a great insight into how traders actually think as well as how they are doing with their trading. If someone is skeptical about trading because they do not know much about it it will be easy to help educate them on what trading is with all the information that is available on the web.

It Is NOT Gambling

Front the outside, when you do not know a lot about reading, it can look very much like gambling, we say this simply because, in the end, you are putting money on and then hoping that the markets go the right way, at least that is how it looks. In reality, there is a lot more to it than that, we do a lot of analysis in order to look at the different probabilities and then buy or sell based on those probabilities, so there should be a higher chance of our trades being successful than not. From the outside, they do not see that, they just see the trade and the result. There is an element of gambling, as the markets won’t always go the way they are meant to or we expect them to, but we certainly would not class trading or forex as gambling.

You Are Right

A strange one, but you should be telling skeptics that they are right, they are right to be cautious, they are right to have doubts, and they are right to be interested., You cannot be a skeptic if you do not have any interest in the subject. They are right to doubt simply because a lot of what you see makes things sound too good to be true, some bits are, but some bits are very real. It is always good to question things but you also need to be open to the answers, especially as some of them will go against what it is that you believe.

So those are just some of the things that the skeptics of trading and forex should know about, there is so much out there that can make some doubt, but also just as much out there that should make someone believe, it is all down to which bits of information they are exposed to first as to which opinion they initially build. We need to ensure that those that do not believe are shown the right info to help convert them, but you should not waste your time trying to convince someone who does not believe, instead you should be spending your time and energy on improving your own trading and aiming to be more successful as a trader.

Categories
Forex Basics

10 Books That Can Definitely Make You A Better Trader

What’s the best trading book? This answer will depend on where you are and where you want to go deeper, whether you are starting, whether you have experience, whether you are looking for a more long-term or short-term approach. If you are reading this article you will surely be looking for a book that can […]

What’s the best trading book? This answer will depend on where you are and where you want to go deeper, whether you are starting, whether you have experience, whether you are looking for a more long-term or short-term approach. If you are reading this article you will surely be looking for a book that can […]

What’s the best trading book? This answer will depend on where you are and where you want to go deeper, whether you are starting, whether you have experience, whether you are looking for a more long-term or short-term approach.

If you are reading this article you will surely be looking for a book that can help you as a trader. There are good books about trading, some focus on the technical part, and others do it more in experiences.

I have made a list of the trading books that have brought me the most and that I think they can bring to you the most. Something like the trader’s library. Surely some of these books you didn’t know, how is this possible? If you do a quick search, most of the books you’re going to find are loaded with aspirational messages and smoke. I tell you that, as you know, my approach is quantitative and this can be seen only by looking at the books I have chosen, but I recommend to you what has served me and helped me on my way.

The ranking is divided by levels so you can choose the one that best suits your level. Although it may seem that they all deal with the same topics, what makes the difference is the focus of each of them. There really are a lot of pearls and gold nuggets. Some of these books are only available in English but are usually fairly easy to read with terms similar to Spanish in some cases.

When you start, what you read can mark you for better or worse. That’s why you won’t see any titles in all these books that are kind of “how to get your first million in 30 days”. These books are the ones I think can really bring you value and a good basis to start with realism:

Quantitative Trading Initiation Guide – Martí Castany

This book has been published recently and as its name suggests it is a very complete and basic guide if you are starting in quantitative or algorithmic trading. I have recently recommended it when you ask me because it makes a good review of all the basic concepts and explains the day-to-day of a quantitative trader (necessary equipment, programs, etc.).

Martí Castany is the author and has been able to condense the information very well and make its reading very enjoyable. It’s not a long book and you can read it in no time. I especially like the realistic approach it gives to trading as a business.

The New Life of Trading – Alexander Elder

This is one of the best-known and recommended books, especially the previous version. This is a new one that has recently come out. There is a lot of interest in psychological factors and emotions within trading and relates it to technical analysis and risk management. It deals with issues as important as they are basic.

In this book, you won’t find backtest or operational statistics, as Alexander Elder is constantly relying on technical analysis for trading and manual trading. Recommended if you’re starting out.

Be Successful in Trading (Trade Your Way to Financial Freedom) – Van K Tharp

This book focuses on the aspects that the author considers to be important to create a good trading system. He constantly points out that input is only a small part of the strategy and explains how outputs and stop-loss affect their results.

The strengths it deals with are money management (position size) and the psychology to succeed in trading. There are two versions: “Trade your way to financial freedom” (in English) and “Being successful in trading” (in Spanish).

Now yes, we get into trouble. If you master the basics of trading and want more chicha, these books can help you a lot:

Quantitative Trading Strategies – Lars Kestner

This is one of the books I liked the most in my day. Although I might have qualified it as uninitiated, I think it can also contribute to people with experience. Lars Kestner talks about basics yes, but also about the types of trading strategies in detail and following order according to their behavior (trends, reversion to the average, and with price patterns).

In this book, you will also find system evaluations, their optimization, and risk management (a classic, as you will see in most). I read it in English and I did not find it in Spanish, but if you find this or any other translated, write it to me in the comments and I can add it.

Quantitative Trading Systems- Howard Bandy

Howard Bandy is one of the best authors on quantitative trading today. He writes in a very simple and enjoyable way. In this book, he explains what quantitative analysis is, how to treat data, interpret different ratios, create detailed strategies, analyze or test systems.

The book is quite complete and every concept is explained in detail. Of course, the strategies are done by the author on the Amibroker platform. Even so, the concepts and explanations do not change and are general.

Cybernetic Trading Strategies – Murray Ruggiero

Murray Ruggiero is for me a reference in the creation and development of trading systems. In this book, he touches on classic topics such as technical analysis and more advanced ones (neural networks, fuzzy logic, genetic algorithms) to demonstrate the power of trading systems based on computation. It is the common idea of the book, to make us see that with a computer we have many tools and power to do incredible things.

It is a book that is worth it for the range of topics it deals with and how it treats them, as they are accompanied by examples and practical cases that will make you understand everything better.

Building Reliable Trading Systems – Keith Fitschen

Keith Fitschen is another author I quite admire. He gives a different perspective and a twist to the creation of systems in a traditional way. In this book what he does is that he proposes a method to build and test systems in an alternative way to avoid our worst enemy: over-optimization. This method is called BRAC (“Build, Rebuild, and Compare”).

In addition, to do all this in a practical and visual way, he constantly compares two totally different trading systems that he is modifying throughout the chapters.

Technical Analysis Based on Statistics (Evidence-Based Technical Analysis) – David Aronson

The main objective of this book will be able to demonstrate the effectiveness of technical analysis with numbers. What really works and what doesn’t objectively. It has a first theoretical part and a second part where it makes the demonstrations (I warn you that it can become denser).

Although it was written in 2007, it develops very well how to statistically measure the reliability of a trading system. It deals with concepts like statistical analysis, data mining, and techniques for analyzing information, but it’s nothing basic. Its author is David Aronson.

Quantitative Trading – Ernest Chan

This is one of the first books that read about quantitative trading. It brings interesting ideas about statistical arbitration. It develops the concept of seasonality and generates a quite original mental framework.

The systems that Ernest Chan usually proposes are quite theoretical and are not easy to implement. Still, you can get a lot of ideas from everything you transmit. It also talks about risk, backtesting, cointegration, correlation, and many concepts that are important.

[Extra]: Books that can help you in your trading

Now we’re going with books that, although not trading, can help you improve it. How is this possible? Because they deal with topics that are perfectly transferable to the world of investment and trading.

Principles – Ray Dalio

Ray Dalio is one of the people who has inspired me the most. I found this book brutal, as the title indicates, it reflects principles not only at the working level but as a philosophy of life. Open-mindedness, transparency, and the ability to stand up are some of the messages it transmits and teaches. He also defends the union algorithms and people to work with and explains how he performs it.

In the book, Ray Dalio constantly shares experiences and situations that make his reading quite enjoyable, especially in the early part of life. If you didn’t know him, he’s the founder of Bridgewater, the world’s largest hedge fund.

Antifragile – Nassin Taleb

Nassin Taleb has become quite popular in recent years and you probably know him because he has other very good books like, “The Black Swan” which develops the idea that it is positive or preferable to stress something constantly to not do and when an unlikely event happens it will take everything ahead. The concept of robustness is important in trading.

It basically tells us that anything that is not exposed to that fragility will not thrive and will end up incurring greater risk. It gives many examples of the day-to-day that will make you reflect.

I know there are very good stock market books that can be more general or focus on other areas such as fundamentals, value, or finance that you may have missed, but I have selected only those that I find interesting in trading.

Categories
Forex Basics

The One Question EVERY Forex Trader Should Know How to Answer

We are always attracted to the lives of successful people and eager to find out what personal traits and course of action paved their way. There are dozens of books and countless Internet pages dedicated to listing and explaining things outstanding individuals do. Continuous reading, focusing on single tasks, having SMART goals to name a […]

We are always attracted to the lives of successful people and eager to find out what personal traits and course of action paved their way. There are dozens of books and countless Internet pages dedicated to listing and explaining things outstanding individuals do. Continuous reading, focusing on single tasks, having SMART goals to name a […]

We are always attracted to the lives of successful people and eager to find out what personal traits and course of action paved their way. There are dozens of books and countless Internet pages dedicated to listing and explaining things outstanding individuals do. Continuous reading, focusing on single tasks, having SMART goals to name a few. On the other hand, such people don’t procrastinate, don’t complain and they certainly don’t give up.  So, it is not only what they do, but what they don’t do that actually counts.

Applied to trading, it poses the question: “How to be in 5-10% of traders that make money consistently?” Grasping the forex market will only get you so far. Understanding your oversights and misjudgments will get you further. Being able to avoid all the tools and behaviors that do not serve you will actually do the trick.

If your trading account is not where you want it to be, it isn’t a matter of chance. If you are doing things as instructed and it has not brought you closer to the prize, those things have to change. Set aside some time to assess where your trades go wrong and define the behaviors and instruments that are holding you back from a brighter future.  

Stay Away from Forecasting

Many wonder where a certain currency is heading as they would like to trade accordingly. Predicting the direction a currency will take is unwise and therefore not something you want to dabble in. Once they asked the elder J.P. Morgan to deliver his opinion on stock prices. His prognosis was “I think they will fluctuate”. This is the only true answer and it pertains to the forex market as well.

Political changes (such as elections of major world countries) or economic ones (like breaking down of international trade agreements) will reflect on a currency. Sometimes the “how” is clear as day like with Britain leaving the EU. Ever since 2016, the very mention of Brexit made the Pound struggle. After the Brexit withdrawal agreement and ten months of transition, the new UK – EU partnership agreement was put into force on January 1st, 2021. Once again the British Pound dropped by a percent against the Euro and 0.75 % against the U.S. Dollar. Many analysts expected a post-Brexit surge that never happened, which illustrates the volatility of the market. Still, it remains to be seen what the Bank of England intends to do about it.

Unless you are Pythia, the famous high priestess of the Temple of Apollo at Delphi, you neither have to consult the oracle nor develop the gift of prophecy. Dwelling on things you have no control of is both time-consuming and unprofitable.

You Don’t Need to Be in the Pack

Herd mentality is a well-known psychological phenomenon where individuals embrace and mimic the actions of a larger group. They rely on proverbial two (or more) heads to be better than one and, despite their knowledge or experience, blindly go where the masses take them. Financial markets are no different. There it connotes a tendency to follow and copy what other traders are doing.

Countless traders racing towards an opportunity can trigger various emotional responses, but the following are most prominent:

Greed appears when the thoughts of easy money rush to your brain. The underlying belief is that others have done the research, so it isn’t imperative that you do too.

Self-doubt is sparked in situations when novices lack confidence especially when independent analysis does not coincide with the estimation of the majority. In such cases, they are more likely to believe the opinion of the many and go with the crowd.

Fear is the pervasive market-related emotion, the most common being the fear of loss. Once you lose some money, you start fearing greater losses and as a result trading less.

People also fear that the profit they’ve made may turn into a loss. If you enter a trade that is going your way and it is stagnating, you may suppose that it is coming to a halt and exit too soon. Falsely believing that the pair is overbought or oversold is dangerous for your future endeavors. In case you are right, you may start believing that you should always trust your instincts instead of reason. If you turn out to be wrong, it’s a whim that will cost you all those pips that will accumulate on someone else’s account when you leave.

Finally, there’s FOMO. Fear Of Missing Out is a syndrome usually prompted by the feeling that you might pass on a good opportunity. It happens when a trader sees a signal but does not follow up on it. He enters a trade later, after a period of being indecisive, and starts trotting after the profit. The odds turn against him and these trades invariably fail.

Stick to Your Guns

Remember Glock, a chunky, black piece that features in every other movie. It became the most sought-after gun among US police officers in the late ‘80s. Today, over 30 years later, over 65% of US law enforcement still carry it. The reason being, it is safe and dependable.

When you enter a trade you want to be covered. You do not want your pistol to shoot blanks like a superfast indicator. For one, it could be too old for modern trading. Shooting to kill a trade with it, is like aiming at a moving target, with the money moving further and further away from you. 

Despite it being among the four most used indicators, RSI is no better in our opinion. It does not present a clear picture of when a price is overbought or oversold. This is particularly true when a market exhibits a strong trend. RSI loses its value which renders it is inaccurate. It works best in oscillating markets since it is, like CCI, a momentum oscillator. 

These two indicators are just examples of things you have been taught to use as helpful but are at best mediocre. Even if something was there from the onset of your career, it doesn’t mean you have to keep using it if it brings sporadic results. If a tool cannot be utilized to your satisfaction, simply stop using it. 

In day-to-day practice, numerous instruments are not as good as advertised. Thankfully, there are hundreds of others to try from. Arm yourself with patience to find the combination of indicators that is just right for you.

A fine example of ammunition your smooth and slick semi-automatic weapon should fire is the Average True Range indicator. ATR tells you the average number of pips per 14 candles (default setting) for the given currency pair.  You can use the daily chart in the last thirty minutes before the candle is closed owing to greater accuracy, and then decide whether to trade. Provided you trade different currency pairs if the movement is slow for one pair you can risk more money whereas if it is fast for the other you will risk proportionately less. That is the true beauty of ATR – it keeps your money and risk management in check. Of course, this is just one way of many.

To revise, you grow as a trader not only knowing what to do but also realizing what to avoid. Your game will become way better if you steer clear of unreliable indicators. Refraining from forecasting will save you money. Staying away from herd mentality, FOMO, and generally keeping your emotions from over-interfering will aid your trading overall.

You will abundantly benefit from exchanging your bad habits for sound routines. Having a firm strategy in place and your risk and money management in check guarantee success.

How to Cultivate the Winning Answer

“If there’s somewhere you need to be, you have to plan how to get there.”

Maybe the saying wasn’t meant for traders, but it fits like a glove.  If we want to cultivate the winning outlook, we need to determine prerequisites for up-and-coming traders.  

Trading is not merely being acquainted with existing market conditions. Besides the knowledge and skills necessary to trade, there is a great deal of psychology involved. Trading psychology is no less a vital part of trading than having a good strategic approach.

One’s beliefs concerning intelligence and talent shape their mindset. When we perceive such qualities as inborn and unchangeable we speak of fixed mindset. This kind of perspective makes it hard for people to tackle problems and they are easily blocked by their mistakes. If you recognize yourself in any of these, you are on the wrong track.

What you believe to be true about yourself as a person and a trader has a bearing on achieving or failing to accomplish your goals. Have faith in yourself and stand firm in your belief that commitment and due diligence develop and strengthen your abilities over time. This is the basis of a growth mindset, a valuable tool for all true professionals. It is crucial for traders to develop one, as it will teach them how to focus on constant personal improvement, view obstacles as learning opportunities, try out different tactics, analyze the way they trade, and use their findings to refine their trading skills. 

As Cool As A Cucumber

Other than a mindset of growth, traders should have a mindset of poise. At the onset of your trading career and later on from time time, the market will throw you a curveball. It is only human to react to winning and losing, but the way you react will determine what kind of trader you are. You have to be aware that everyone loses occasionally. Loss is but a setback to be overcome with a new approach.

Instead of being apprehensive, a trader should exude the air of tranquility. That is not easy to accomplish as there is often a lot at stake. Emotions frequently interfere with making rational decisions, especially fear, impatience, greed, and anger. Impatience is particularly bad because it triggers rash behavior and envelopes the other three. It is in the trader’s best interest to stay impartial to the market. It will help increase gains and minimize losses.

Trading goes hand in hand with taking chances. As a trader, you acquire a high-risk tolerance, but it has nothing to with being hazardous. Pro traders take calculated risks, the ones that are more likely to turn into profit. They are simultaneously aware of the inevitability of losses. There’s no profit without a loss, they are just two sides of the same coin. Having that in mind, they never succumb to being exceedingly exultant about winning trades or overly despondent about losing them.

Two things that work wonders for keeping you composed are sleep and meditation. It is well-known that good sleep improves your concentration and maximizes your productivity. It is advisable for traders to start their day well-rested which benefits their attention and making a better judgment.

A trader’s internal memory is crammed with thoughts of past losses, future gains, and different kinds of trade-related anxiety. Introducing meditation, even as short as 5-minute ones, resets this computer of flesh and blood. The cache memory has to be cleared in order to stay focused on the present. Meditation dials down all the mind wandering, increases the concentration of gray matter in the brain, and is responsible for clearer information processing and better decision-making.

Loving What You Do…

The only thing you should be passionate about is the job itself. Trading works best when it generates a combination of euphoria and fascination. You start going deep into things because you find everything interesting and, before you know it, you breathe it, eat it, you even dream of candles and spikes at night. A drive to learn and be truly good at it will make it seem less like a profession and more like a hobby.

Finding mentors or role models is a big yes. Once given the chance, observe and absorb the way they operate until you become one with it. Deconstruct their actions until you master them, then implement them in your routine. As an alternative, follow other successful traders on social media, blogs, or youtube and read books on the subject. Always bear in mind the ratio of successful and unsuccessful traders, so not everyone will be the person you copy or look up to.

Be aware that the path is one of solitude and perseverance. There is no such thing as being over-prepared, so study the charts and do all the necessary background work. Be willing to try out new things, test new indicators and strategies. In that respect, trial and error are your new best friends.

Meticulous Planning and Execution

You will not learn only from others, but also from your own experience. Keeping a trading journal will help you with that. It is an indispensable tool for every aspiring trader who wants to evaluate their work objectively. Journal should contain daily entries starting before the trade and finishing after. It ought to incorporate all the minute details like date, the time frame that you trade,  the currency pair being traded, the direction of the trade, entry and exit points, two types of exit rules (one for taking profit and another for limiting your risk aka stop loss) and so on.  Apart from the factors mentioned above, you should make a note of all the indicators you are using, slowly building your algorithm.

You should also decide on the strategy you are using, whether it’s a trend following or a trend-reverse, news strategy, or a scalping one. Note down your go-to strategies and be equally prepared for profit and loss. The rudimental purpose in the core of your strategy is to keep you on course towards your long-term goals.

Jot down the result of the trade and include remarks about the forex market. Pay close attention to your emotions and write them down as well. All this data is invaluable for your growth because you can always turn to it to get feedback on your trading.  Retracing your steps can give a slew of information about one’s good or bad trading patterns. Having a neatly laid out plan will allow you to dissect each trade to see what, if anything, could have been done differently. In terms of losses, breaking down what went wrong may prevent future ones.

As you can see, a trader does not go headstrong into a challenge. Integrating journals into the daily trading routine is like having navigation for smoother sailing. It’s a reminder that you came prepared since there is no serious trading without a plan in place. Having a methodical approach to conquering the financial market is well worth the time and effort invested into making it.

The most important thing about a trading plan and this can’t be stressed enough, is adhering religiously to what you’ve outlined. You don’t enter a trade unless all those indicators with immutable signals coincide with one another. You exit neither before nor after you stop loss because you put it there for a reason. You similarly follow the book on your profit-making rule, because you are too smart to let your profit turn into a loss.  

All these things require commitment. If you’ve read this far you are ready. You have the drive necessary to strive to continually improve your game and the determination to enhance your prospects for success.

Categories
Forex Basics

Top 10 Fun Facts About Forex Trading

When it comes to forex and trading, there is loads of information out there, it also has a very rich history, so when we think about it, there are thousands of facts that could be spoken about trading. Today we are going to be looking at some of the fun facts about trading that you […]

When it comes to forex and trading, there is loads of information out there, it also has a very rich history, so when we think about it, there are thousands of facts that could be spoken about trading. Today we are going to be looking at some of the fun facts about trading that you […]

When it comes to forex and trading, there is loads of information out there, it also has a very rich history, so when we think about it, there are thousands of facts that could be spoken about trading. Today we are going to be looking at some of the fun facts about trading that you may not really know about. Of course, some are very common knowledge, others will be a little more on the subtle side with fewer people, and some may simply be surprising. So let’s take a look at some of the facts about trading.

It’s Been Around for Centuries

Forex and currency exchange has been around for centuries, of course, it never used to be about trading actual currencies. These days we are trading the GBP with the USD, back then we may have been trading some corn for a sheep. Even in biblical times, the Talmud actually records foreign currency exchanges back in biblical times. They record how moneychangers would set up various stalls where they would then change currencies for another while taking a commission for the change. These sorts of exchanges have also been recorded within ancient Egyptian papyri which date back as far as 260 BC.

The Cable

You may know that the GBP/USD currency is known as “the cable”, but do you know why it is called that? It is known as the cable due to the fact that before we had satellite and fiber optic internet, the information used to be passed between the London and New York exchanges with a giant steel cable that passed under the Atlantic ocean and was used to synchronize the rate between different currencies between the two stock exchanges. While it is no longer needed, it still has some use in modern times, but it is no longer used for the synchronization of data as this can be done quickly through more modern means such as fiber and satellite.

The Worst Currency Inflation

You have probably read about it or seen in the news or even social media sites, that the currency inflation rates in Zimbabwe went through the roof, which is out of sync with the rest of the world which often has very subtle movements in the inflation rates. The country experienced one of the worst inflation in record history where the inflation rate went up 6.56 sextillion percent, to put that into perspective, that is over 6,000,000,000,000,000,000,000%, a number that many probably didn’t even know existed. Due to this, Zimbabwe had to completely wipe out the currency and get rid of it, this happened in 2009 and up until 2014, it had to use foreign currencies as its main currency. During the high levels of inflation, the banks in Zimbabwe actually had to limit back withdrawals to Z$500,000 which equated to just $0.25 USD.

There Has Not Been A Collapse

Contrary to belief, there has not actually been a financial collapse that has affected the forex markets, it has caused a bit of movement but there has never been a collapse. Unlike the stock markets which have had a number of crises where the stock values have plummeted and people have lost thousands or even millions. When those same crises have occurred, the forex market managed to withstand it, this is mainly due to the fact that the markets are made up of traders and the prices rely on them, rather than companies and shareholders, this is why those collapses did not affect the forex markets as much and they can potentially withstand anything that happens.

Printing Money

An interesting fact about American banks, before the US Federal Reserve was established back in 1908, pretty much any bank was able to print their own money. The US Federal Reserve put a stop to this as it had the potential to cause mass inflation within the USD currency should the bank have decided to start printing.

Huge Amounts Are Traded

There is an absolutely huge amount of money traded within the forex markets each day, which is why it is the most liquid market in the world. There is an estimated $6.6 trillion being traded every single day. A number that will most likely never be topped apart from the forex markets themselves. No other market comes close and no other market probably ever will.

Challenged by Cryptocurrencies

The current market prices and trade volume of cryptocurrencies is nowhere near that of forex trading, but if there is going to be any sort of market that can actually challenge that of forex it will ultimately end up being the cryptocurrency markets. Currently, the transaction volume is in the tens of billions, far behind the forex markets, but there has been a substantial increase, and it is continuing to increase each year. It will take a long time, many, many years to get anywhere near the same level, but with the constant increase and exponential growth of the cryptocurrency world, there is certainly a chance that the forex markets will be challenged years down the line.

Forex Will Always Be Here

The markets will always be here in one form or another, even if traditional currencies are no longer available and no longer around, there will be some form of currency exchange. The World will never have a single currency, it just would not work due to the different ecosystems and the different natures of the various countries within it. So even if there are not traditional currencies, there will still be a need for the exchange of currencies whatever they are. Due to this, the foreign exchange market will always be there and so there will always be an opportunity to trade one way or another.

The US Market Is Not the Center

Many people, especially those that have seen some of the Hollywood or bigger films about trading and forex will often think that the USA is the center, it is where the most trading happens. When in reality, only around 19% of trades and trade volume takes place in the US, instead, the center of the trading world is actually London, it is predicted that 43% of all forex trading transactions take place in the United Kingdom, and London, making it the main hub for Forex trading.

Millions Required

Forex trading didn’t use to be as accessible as it is today, many years ago before the rise of retail trading brokers, in order to trade you would need to be an institute with a minimum of at least $40 million in order to trade, not something many individuals would be able to do. These days, you can trade for as low as $10 which makes it highly accessible for people all over the world and from pretty much any location that has an internet connection.

Those are some interesting facts about the forex markets, some you probably knew, others you may not have. The emirate is always changing, different things are always happening within them, but one thing is for sure, the markets will be around for a long time to come.

Categories
Forex Basics

Top 5 Things You’re Forgetting to Do While Trading Forex

Forex trading is a massive beast, there is so much involved in it, you will be forgiven if you were to forget something. In fact, it is probably expected that you at some point will start to miss things with your trading. No matter how experienced you are and how many years you have been […]

Forex trading is a massive beast, there is so much involved in it, you will be forgiven if you were to forget something. In fact, it is probably expected that you at some point will start to miss things with your trading. No matter how experienced you are and how many years you have been […]

Forex trading is a massive beast, there is so much involved in it, you will be forgiven if you were to forget something. In fact, it is probably expected that you at some point will start to miss things with your trading. No matter how experienced you are and how many years you have been trading, you will make mistakes and you will forget to do things that you otherwise know you should be doing. So let’s take a look at some of the things that people often forget to do even if they have been doing it or are meant to be doing it.

#1 – Placing Stop Losses

Stop losses are a vital part of any strategy. They are designed to be used to protect your account and they prevent you from losing any more of your money than you are intending with each trade. This very important aspect of a trade is unfortunately something that is quite often forgotten. While forgetting things now and then is not normally an issue, when it is something that will prevent you from losing money it can have a very big effect on your overall trading and your profits. A single missed stop loss could have the potential to completely blow your account, so it is vital that we remember to use them. It is easy to miss out yes, but you need to ensure that you place them as they are so important.

#2 – Creating a Trade Journal

A trading journal is a fantastic thing, it allows you to work out exactly what you are doing well and what you need to work on, and it will potentially help you to become a really profitable trader. Yet it remains something that a lot of traders seem to ignore or to forget to fill out. While this won’t have a negative effect on your trading, it will prevent you from improving over time, as you need to use the information that you have written down to work out what you need to change or what you are already doing well. You need to try and remember to write down things like the entry price, the exit price, how long you help the reader, the profit and loss, and pretty much everything that you do. This way you can use that information. A lot of people simply forget to do it, either through actually forgetting or from being too lazy to do it. It’s not the end of the world to forget, but if you want to be a successful trader, then you should certainly try and get it done.

#3 – Withdrawing Funds

This one may seem a little strange to say, but you will be surprised at how many people actually forget to withdraw any of their funds. One of the basic rules of trading forex is that you should be withdrawing your funds until you have at least withdrawn the same amount that you have deposited. This way while you can of course still lose money, you will not lose any of the money that you initially put in. Each month, withdraw your profits until you have withdrawn as much as you have put in. Many people forget to do this and some of them will then go on to lose whatever they have made if they had withdrawn, they would not be out of pocket as they would have taken out everything that they put in. So remember, withdraw a little bit each month. Even if it is not all the profits, a little bit each month will ensure that you do not lose everything that was put in.

#4 – Take Breaks

Trading can be addicting, really addicting, so much so that a lot of traders especially when first starting out actually forget to take breaks. Yes, you heard us right and we have been guilty of this ourselves. Breaks are incredibly important, simply because they allow us to refresh and to clear our minds, they are particularly good when our emotions are starting to come up or even take over. Yet so many people forget to take them. You need to, if you want to be a successful trader then you need to learn how to take breaks and you should be taking them regularly. If you can, take a break every hour or so. Don’t be like us and sit there for hours and hours on end, as this will only lead to burnout and you probably won’t be doing anything for most of that time anyway.

#5 – Adjusting Goals

Goals are fantastic. They are things that we are working towards, things that we wish to achieve at some point in our trading future. Some are short term and others are long term, but there is one thing that a lot of people forget to do, adjust them. When we achieve something, it kind of gets left behind, but it really shouldn’t. Instead, it should be adapted and pushed further forward, this way we still have something to aim towards and to trade towards. If we do not we will lose a lot of our motivation. So when you achieve something, be sure to adjust it so it will then become your next target, this way you will keep motivated and will always have something to work towards.

Those are some of the things that a lot of traders forget to do. Some may seem a little silly to you or some may not actually seem all that important, and that is fine. Not everything matters the same to each person, so you may not want to withdraw where someone else probably should. Are there things that you should be doing but forget? Probably, but once you can recognise that you should be doing something then you will be able to ensure that you are actively doing it in the future.

Categories
Forex Basics

What I Wish I Knew About Forex Trading A Year Ago

One thing that we can all be sure about, hindsight is a fantastic thing. It allows us to look back at what we have done in the past and to then consider what we maybe could have done differently. While we are not able to change the past, although it would be great if we […]

One thing that we can all be sure about, hindsight is a fantastic thing. It allows us to look back at what we have done in the past and to then consider what we maybe could have done differently. While we are not able to change the past, although it would be great if we […]

One thing that we can all be sure about, hindsight is a fantastic thing. It allows us to look back at what we have done in the past and to then consider what we maybe could have done differently. While we are not able to change the past, although it would be great if we could, we can still learn from it and that is what we will be doing today. Now that we have been in the trading game for quite a few years, we have learned a lot of new things, things that would have been very helpful for us back in the past. So let’s take a look at some of the things that we wish we had known a year ago that most likely would have helped us to be far better traders.

Do Not Trade Too Soon

One thing that we did quite a lot a year ago was to trade too soon. This is not in relation to not having the knowledge, we had already been trading for a bit of time before this so we had an idea of what we were doing. What we did keep doing though is putting on the trades too early, we had a trade lined up, did a little bit of analysis, but then did not wait for the additional confirmations that were needed. Instead, we simply placed the trades. Some went well, some did not, and those that went into a loss were easily avoided if we had just waited to place the trade and we would have seen that the markets went against us. So we simply wish that we had a little more patience when it came to policing out trades.

You Will Be Profitable

This is one quite personal to me. A year ago, I had a lot of doubts. I have a lot of thoughts that I may not be successful and that made me go days or even weeks without actually trading. In the position that I am in now, I am profitable month on month. I just wish that I had known that I was going to be successful. I would have had the motivation to trade every day and the motivation to put in more effort along the way. However, I am happy with the position that I am in now and will not dwell on the lost potential that would have been there.

No Single Strategy Will Always Work

About a year ago I only used a single strategy. It was my go-to strategy and it is what I used pretty much all the time, no matter what the conditions of the markets were. This is something that we know now is not the best way of going about things. In fact, it really held us back and prevented us from making quite a lot of profit. What we know now is that we need to have a number of different strategies in our arsenal if we want to really be successful. It will also allow us to trade better in different market conditions rather than trying to always adapt our single strategy, which can only stretch so far. So we just wish that a year ago we have learned a number of different strategies instead of sticking to just the one.

Use Stop Losses With Every Single Trade

We did use stop losses, just to make that clear, but we did not use them with every single trade. Due to this, we made a few losses that are a little larger than they probably should have been. This ultimately would have saved us a bit of money in the long run. We now know that we need to have the stop loss set on every single trade, every single one, no matter how sure we are around no matter how small or big the trade is. Always have one set, regardless of anything else, it will save you money and the one that you miss could be the one that would have saved your account.

Covid-19 Is Coming

If we take the tragedy out of the Covid-19 pandemic, then the pandemic gave us a lot of opportunities as well as a devastating effect on the world economy. A lot of people lost a lot of money when the markets decided to fall. However, while the stock market collapsed, the forex markets were a little more stable. It was, of course, a lot more volatile but it wasn’t blowing accounts every single day. What it did offer though was a lot of opportunities. As different countries went into lockdown at different times, the markets reacted accordingly. We stood back from the markets as a lot of trades did, but this meant that we missed out on some fantastic chances to make a lot of money.

Some traders took advantage of this. As the UK went into lockdown, they shorted the GBP currency. As the USA went into lockdown they shorted the USD currency, the same for Europe and other countries. As the countries went into lockdown, their economies shrunk which in turn made their currencies a lot weaker. The perfect opportunity to profit from them. There were, of course, still a lot of dangers in the as it was very unpredictable, but there was certainly a lot of money to be made and as it happened. We wished we were involved but didn’t want to take the risk. Now though with hindsight, we still wish we were more involved.

Those are some of the things that we wish we knew a year ago. Some of them would have helped to save us a little bit of our profits by reducing losses, others would have helped us to have made a lot more profit, and some would have just made us a more knowledgeable and consistent trader. Whatever you are doing now, think back to a year ago, were you doing the same things? You were most likely not, some of them yes, but some of them no. We are all developing as time goes on, so while hindsight is good. Looking back at how far you have come is good. Try not to dwell on the past or the mistakes that you have made, look to the future and the successes that you can make in the future.

Categories
Forex Basics

The Most Interesting Myths and Truths About Forex Trading

There are many myths about Forex that need to be left behind well in the past and here we will tell you exactly what these are because in reality there are many more myths than truths. In this article, we tell you everything! So let’s dive into the good, the bad, and the ugly.  The […]

There are many myths about Forex that need to be left behind well in the past and here we will tell you exactly what these are because in reality there are many more myths than truths. In this article, we tell you everything! So let’s dive into the good, the bad, and the ugly.  The […]

There are many myths about Forex that need to be left behind well in the past and here we will tell you exactly what these are because in reality there are many more myths than truths. In this article, we tell you everything! So let’s dive into the good, the bad, and the ugly. 

The myths about Forex that circulate in the network do damage to this type of investment. Currency speculation has always been, especially in recent years, the victim of false news and rumors. In order to succeed in speculating or investing with this trade, investors need to leave behind these myths that affect the image of Forex and its expectations.

Forex gives monthly returns or interest.

Another false myth. As in the equity market, the return generated by the person investing in this product depends on the movements of the currencies the investor buys. In other words, profitability only depends on the fluctuation of prices, something that also happens with other investments (raw materials or stock markets, for example).

Forex is a pyramid.

Forex is an electronically controlled market where all foreign exchange transactions are carried out worldwide. Its usefulness is incalculable for international trade since it is in this place where the currency needed to pay or collect money from import or export products is bought or sold.

Forex makes you rich in a few hours.

Another falsehood. While it is true that anyone can access this market and accumulate strong profits in a short period of time, to invest in Forex and accumulate profits it is recommended to form in markets. That is, it is advisable to take a course to invest in a stock. With this course, we will be able to strengthen the knowledge we have and, on the other hand, learn more about Forex techniques.

Giving up our job to invest in Forex.

Investing in Forex does not mean giving up our job. We can test trading as a part-time job, at least entry, but never leave other sources of income and always learning from investment or currency speculation and receiving continuous training.

The intermediaries only want to con you.

From a few illegal experiences, many people think that the brokers who allow us to speculate on Forex are scammers. We must be clear that there are corrupt companies, but they are a clear minority. Forex is the largest market in the world, which has existed for many years.

There are two fundamental points that show why intermediaries don’t want to rip you off:

-Current licensing and regulation make it impossible for intermediaries to commit fraudulent activities. If you have opened an account with an authorized broker, the current regulations will protect your capital.

-Brokers earn money with the buy or sell spread. That is, they do not need to steal the investor’s capital to make a profit.

On Forex, you bet.

Forex trading is speculative, but to a certain extent: it is not a casino. The strategies and tools in this market are like those in the stock market. Forex traders have different trades, but they don’t work randomly. If an operation is carried out as if in a casino, this is the responsibility of each investor only.

I can make profits whenever I want if the Forex market is open 24 hours a day.

Again, you will not be sitting in front of your computer throughout the day to be able to operate for 24-hours. I would need automated trading software to take advantage of the 24-hour trading market.

I need to accurately predict the outcome of the market to succeed in Forex.

Unfortunately, there is no scientific method for us to have the knowledge of what is going to happen in advance on the market with 100% certainty. There would be no foreign exchange market if the exact exchange rates could be known in advance. Trading will never be an activity of certainties, but of probabilities. New traders tend to think in terms of odds, and this is one of the first things they learn and risk-reward relationships.

Many times you tend to think that you need to use an extremely complex strategy in order to succeed in Forex trading. It’s a popular myth that many online marketers want to create. The main requirement for success in Forex is self-discipline and money management. There are many traders who make profits consistently with simpler and older strategies.

A large amount of initial capital is required for Forex earnings.

A large capital investment will not help you with Forex. You don’t need much money to diversify into currencies and you can’t move exchange rates with your orders (you would need billions of dollars to do that). You can actually trade in forex with very little capital because forex trades are almost always leveraged with the money of the broker.

It’s a risky market.

One could say that it is a market with a lot of risks. The ability to leverage, or buy up to 100 times as much money as you have for investment and high volatility, or the sheer speed with which prices change every minute, can mean big losses to the investor.

The advice for those who decide to enter this market is to know the market before entering it, look for a broker’s platform, if someone will advise you to look well at the experience and set and respect the limits of loss per operation, by day, by week and by month.

Is completely legal.

Although it is not regulated, anyone can legally access Forex through a simple mechanism, looking for a broker. The recommendation, in this case, is to invest in a recognized broker, with trajectory, and use the formal channels to deposit the money to the account in which you will trade.

There Is No need to fear the Forex market.

Once we have established that it is possible to predict the market, why are there so many traders who, understanding and agreeing with this point, have trouble exploiting the market profitably? It is here that psychology is most useful. The trader should not be scared or afraid of not being able to win the market, as the market is changing, nor should he fall into despair because the trade he is waiting for right now seems unworkable, etc. The list of psychological problems that can be identified is quite long, and almost everyone identifies with fear or fear.

“Don’t be afraid of financial markets, just respect.”

The experience and knowledge of how they work will gradually turn us into traders with better mental control and more prepared to face any eventuality in our operation with total normality.

You can earn a lot, YES, but can you lose a lot? YES.

For example, if you open a new account with $10,000 in a broker that allows you to buy currency for 30 times more than you have in your account. Now buy 200.000 euros at a price of US$1.20 per euro, which is investing in total is US$240,000.

In this situation two possible scenarios may occur:

  1. The price of the euro grows to US$1.30. In that scenario, it would earn US$10,000, because it obtained a profit of US$0.1 for each euro it bought.
  2. The price of the euro drops to US$1.15. This is the side of history that no investor likes, but that usually happens to starters. In this scenario, I’d lose $5,000. And if you do this several times in the day, trying to make up for what you lost, chances are your account will be zero at the end.

The scenario that is illustrated, is something that usually happens on a daily basis in the Forex market. Then we already know the importance of learning and knowing how to choose an appropriate strategy to limit losses once a trade has taken place.

Categories
Beginners Forex Education Forex Basics

The Most Pervasive Problems in Forex (#2 Might Surprise You)

From the outside, trading and forex look like a pretty green field, full of people getting rich, and everything going really well. When we delve deeper into it though and actually start trading ourselves, we find that there are a number of different problems, problems that a lot of traders experience on a daily basis, […]

From the outside, trading and forex look like a pretty green field, full of people getting rich, and everything going really well. When we delve deeper into it though and actually start trading ourselves, we find that there are a number of different problems, problems that a lot of traders experience on a daily basis, […]

From the outside, trading and forex look like a pretty green field, full of people getting rich, and everything going really well. When we delve deeper into it though and actually start trading ourselves, we find that there are a number of different problems, problems that a lot of traders experience on a daily basis, problems that pretty much every trader goes through. These problems are easy to get into and easy to fall into their pitfalls, but there are ways to avoid them or to at least reduce the effects that they have on your trading and your accounts. Today we are going to be looking at some of the most common problems that many traders go through.

1) A Lack of Training

Anyone that trades without knowledge and experience can easily blow an account, or even multiple accounts if they do not learn from their experiences. Trading without the required knowledge and without any idea of what it is that you are doing is a recipe for disaster, yet it is something that a lot of people do and will continue to do so. When we trade without proper learning we are pretty much just guessing at what the markets may do. In fact, it could even be compared to simple gambling.

If you are planning on trading, then you need to put in the time and effort that it takes to learn the basics. Learn about different strategies, learn about risk management, and learn about how the markets move and are affected by things like the news. If you do these basic things, you will have a much better understanding of what it is that you are doing which will help you to develop a  better trading ability and also to keep your accounts and capital safe from silly mistakes of simply not knowing what you are doing.

2) Using Emotions

We all have emotions. They are powerful things, they can make us happy, sad, or even do stupid things, and when we trade without our motions we are often doing just that, stupid things. Two of the most powerful yet damaging emotions that we can have when trading are greed and overconfidence. They often come from different events, greed when we lose and overconfidence when we profit. They both, however, have the same effect on us, as they cause us to throw out our trading strategies and our risk management and then they cause us to place trades that we know we shouldn’t. Either too large for our account or without doing the proper analysis, this can lead to larger losses or even a completely blown account.

If we get to a point where we can feel our emotions coming up or even getting the better of us, it is important that we do something about it. It can be as simple as walking away, taking a step back from your trading terminal, and going out, having something to eat, just doing something that has nothing to do with trading at all. This is the best way to clear your mind. You could even try talking to someone about it, often we can get more rational by talking to someone else rather than just thinking about it ourselves. Once you have cleared your mind you will come back refreshed, with a clear view of what is going on, allowing you to better follow your plans and to place much better trades again.

3) News Events

News events happen. There are calendars out there that will tell you what news events are coming up as well as the potential impact that they could have on the markets and which currencies it may affect. What they do not tell you though, is about the sneaky news events that are not on there. They come out of the blue, maybe something has just been developed or announced or there is a natural disaster somewhere in the world. These sorts of events cannot be predicted, they cannot be on any calendar and when they do happen, they often cause the markets to jump about in very unpredictable ways. They can be a real pain, as you could have just done a lot of analysis, put on the perfect trade, and then BANG, an unknown news event comes out and the markets fly in the wrong direction. We have all experienced it and most traders will in the future too, there is nothing we can do about it but to manage the trades that are affected.

4) Unpredictable Results

We mentioned the news events just above, but there is another side to them, even the news events on the economic calendars can play with us. If there is a positive result then the expected movement in the markets would be up. However, there are times when the markets just do not see to follow what the results would expect. Even things like the Non-Farms Payroll news events, which is historically one of the ones that can influence the markets the most can go a bit funny. There have been times where it is very positive, yet the markets moved down. For those following the news, a buy would have been placed but then the markets went down which would cause a loss as well as a lot of confusion, so the markets simply cannot be predicted even when all the indicators are there.

5) Dodgy Brokers

Unfortunately, when it comes to money, any form of money, there will be people out there that will do what they can to get as much money out of you as they can. From the outside they look like any other broker, offering some great features and trading conditions, but once you have deposited your money, it is very unlikely that you will be able to take any of it out. They will take it and even try and convince you to put more in, either way, your money will be gone. You can try and avoid this happening to you by checking reviews, going for the bigger named brokers, or by using brokers that you know people who already use them and have successfully withdrawn money from them. Choosing the right broker is important, so make sure you take your time to choose the right one for you.

Those are just some of the issues that many traders experience. In fact, many of them every single trader will experience at one point or another in their trading career. We can do what we can to try and reduce the effects that they are going to have on us and our accounts, but for many of them they are out of cour control and we will experience them at one point or another. There are of course a lot of other problems out there, but with every single problem, there will be solutions, or at least a way of reducing the impact that they are having on our trades and accounts.

Categories
Beginners Forex Education Forex Basics

Even More Frequently Asked Forex Trading Questions Answered!

Our previous question and answer article was so popular that we decided to add another round! What follows are some of the most popular questions (and answers, of course) as asked by novice Forex traders. Education is the key to success, so read on! Question #1: Why is Forex a Bad Idea? There are some […]

Our previous question and answer article was so popular that we decided to add another round! What follows are some of the most popular questions (and answers, of course) as asked by novice Forex traders. Education is the key to success, so read on! Question #1: Why is Forex a Bad Idea? There are some […]

Our previous question and answer article was so popular that we decided to add another round! What follows are some of the most popular questions (and answers, of course) as asked by novice Forex traders. Education is the key to success, so read on!

Question #1: Why is Forex a Bad Idea?

There are some statistics out there that suggest that 70% or more of first-time traders fail. Those that come across these statistics are often scared away from trading because it seems like it just isn’t worth it. In reality, many of these traders walk away over simple problems that could have been avoided, like opening a trading account with zero knowledge of the market, not using risk-management precautions, and so on. As long as you start well-prepared, you’ll be among the traders that succeed. 

Question #2: Is Forex a Good Career?

There are certainly several benefits to becoming a trader, including flexible work hours, the ability to work from home, and being your own boss, just to name a few. Of course, you would need to invest a good chunk of money to make enough profit to be able to trade full-time. Those that still need another source of income often trade part-time. 

Question #3: Is Forex Trading Difficult to Learn?

While there is a lot of information you’ll need to know before you get started trading, we wouldn’t consider it to be difficult. You will need to invest some time into learning, but the good news is that all of this can be found on the internet for free. You can also avoid strategies or indicators that seem overly complicated and stick with things you understand. 

Question #4: How Do I Start Trading Forex with $100?

If you have at least $100 to invest, you’ll find a lot of brokers that are willing to let you open an account. Some brokers even waive a deposit requirement altogether or ask for as little as $10. You’ll simply need to shop around to find an option that offers an account with a $100 (or less) deposit minimum. 

Question #5: Can a Beginner Make Money Trading Forex?

Yes, but your chances of success depend on a few factors, most importantly that you start prepared and choose a trustworthy broker. Beginners are more prone to avoidable mistakes because they simply haven’t had the chance to learn from them. One of the best things you can do to avoid this is to spend time reading articles that provide tips and tricks specifically for beginners. You can also read about common beginner mistakes to ensure that you don’t follow the same path.

Question #6: Can you Start Trading Forex with No Money? 

Sort of. You could start out with a demo account, which is like a practice account that allows you to trade without using real money. If you’re a beginner, you should start with a demo anyways while you work on saving up an initial investment. If you want to open a live account with no money, it is possible if you can find a broker offering a bonus to new traders. However, it may be difficult to find such a bonus that doesn’t require you to deposit anything at all, and these offers often come and go periodically.

Question #7: What is the Best Currency to Invest in?

This depends on the times, but currently, many traders would recommend the British pound. In particular, the GBP/USD and EUR/GBP. Of course, you’ll want to ensure that this is still a smart investment in case the recommendation goes out of date. 

 

Categories
Forex Basics

10 Incredibly Surprising Stats About Forex Trading

Both aspiring and expert forex traders can benefit from learning informative statistics about the forex market; however, you’ll often find a long list of boring facts and numbers when you look up the subject. We wanted our readers to have the chance to learn something new without feeling bored, so we scoured the internet to […]

Both aspiring and expert forex traders can benefit from learning informative statistics about the forex market; however, you’ll often find a long list of boring facts and numbers when you look up the subject. We wanted our readers to have the chance to learn something new without feeling bored, so we scoured the internet to […]

Both aspiring and expert forex traders can benefit from learning informative statistics about the forex market; however, you’ll often find a long list of boring facts and numbers when you look up the subject. We wanted our readers to have the chance to learn something new without feeling bored, so we scoured the internet to find the most surprising stats about the forex market out there. 

Statistic #1: Only 10% of forex traders succeed

Our first statistic is both depressing and surprising, but the good news is that it isn’t difficult to avoid becoming one of the failed traders we’re speaking of. The majority of this percentage is made up of aspiring traders that either opened a trading account without proper education or with unrealistic expectations. The misconception that forex trading is just a quick way to get rich draws in traders, then they give up quickly when they realize that they may have unrealistic expectations. 

Statistic #2: 51.6% of traders prefer Android smartphones over iPhones

People across the world have been arguing over whether Android or iPhone is better for more than a decade. We’ve heard a lot of arguments supporting the iPhone for all of its unique features; however, iPhone users might be surprised to hear that Android not only sells more phones than Apple, but the smartphone brand is also preferred by forex traders by approximately 14.3%. 

Statistic #3: A Whopping 90% of successful forex traders claim to use expert advisors

An expert advisor is a trading robot that executes trades on behalf of the trader. There are a lot of different types of EAs out there that enter and exit trades based on different principles. Although there are highly profitable trading robot options out there, many traders can be apprehensive about using them because they may fail and also because many EAs cost at least a few hundred dollars, meaning that you’ll be out of a decent chunk of money if you invest in an unprofitable robot. This is why it’s surprising to hear that so many successful traders actually depend on these services. 

Statistic #4: 27% of forex traders are aged between 18 to 32 years old

When you picture a forex trader, your mind might think of someone in their forties or fifties, or maybe even older. However, forex traders are getting started at much younger ages these days. Another 28% of forex traders are between 35 to 44 years old, meaning that younger traders make up more than half of the total forex traders in the world.  

Statistic #5: More than $5 trillion is traded in the forex market each day

It’s surprising enough to hear that an almost unheard of amount of money passes through the forex market every single day, but did you know that forex trading has more money flow through it than the stock market? It can be harder to find exact figures, but price points seem to fall more in the range of billions when you’re looking at the stock market, which gives forex a substantial lead. 

Statistic #6: 41% of all forex transactions occur in the United Kingdom

The most popular currency pair is the United States Dollar, so you might be shocked to learn that almost half of all forex transactions actually occur in the United Kingdom. If you’re wondering how many transactions take place in the United States, the answer is only about 19%. 

Statistic #7: Only 7% of traders have 10 or more years of experience

If you’re feeling like you’re at a disadvantage because you have little experience trading forex, you might be surprised to hear that traders with 1-3 years of experience make up 39% of forex traders, while another 31% have less than one year’s worth of experience. 

Statistic #8: 40% of forex traders choose to trade because they want to be their own boss

The number one reason why people decide to trade comes down to being their own boss, with almost half of all traders claiming this to be their top motivation, even more so than simply making money. Of course, forex does offer a lot of perks that you can’t find with a regular job.

Statistic #9: More than 45% of traders don’t spend money on learning resources

When you become a trader, you can find a lot of resources online for free, but some may believe that the resources you pay for would offer better educational opportunities. This isn’t necessarily the case, as nearly half of all forex traders opted not to pay a cent for any learning resources in the past year. 

Statistic #10: Approximately 89.1% of forex traders are men

You might have assumed that the number of male traders outweighs the number of female traders, but it’s surprising to hear just how much larger that percentage is. Of course, this is a great incentive for aspiring female traders to get out there and even out those stereotypes. 

Categories
Forex Basics

You Need to Know These True Pros and Cons of Trading Forex

If you’ve ever considered becoming a forex trader, you have undoubtedly wondered if it would be a lucrative investment. Forex trading has helped many traders to amass a great deal of wealth, while it has caused others to wipe out their investments altogether. There are good and bad aspects to trading and considering those factors […]

If you’ve ever considered becoming a forex trader, you have undoubtedly wondered if it would be a lucrative investment. Forex trading has helped many traders to amass a great deal of wealth, while it has caused others to wipe out their investments altogether. There are good and bad aspects to trading and considering those factors […]

If you’ve ever considered becoming a forex trader, you have undoubtedly wondered if it would be a lucrative investment. Forex trading has helped many traders to amass a great deal of wealth, while it has caused others to wipe out their investments altogether. There are good and bad aspects to trading and considering those factors is important before deciding if trading is something that you should try.

Below, we will start positive with the plus sides of opening a trading account, before moving on to the cons.  

Pros

Flexibility

 Forex traders never have to worry about a stressful boss standing over their shoulder. They get to be their own boss, set their own hours, and work from anywhere with an internet connection. There’s no need to commute to work or even to change out of your pajamas if you don’t want to. You could work from anywhere in the world because traveling is no issue. This is one of the main reasons that many people dream about ditching their desk job to become a forex trader.

You can get a free education

Learning everything you need to be a successful forex trader is right at your fingertips, online for free. The internet is filled with articles, videos, and other resources that can be accessed free of charge. It’s true that this will take some effort on your part, but anyone can accomplish this with a little hard work and determination. Remember that investing time into your forex education is one of the most important things you can do before you get started trading. 

Leverage

Forex traders use leverage to increase the size of their trades. This gives traders with a smaller amount of capital the opportunity to make bigger profits. This is another one of forex trading’s main draws. 

It doesn’t take much to get started

You don’t need much to become a forex trader. Simply sign up with a broker from any device with a working internet connection, make a deposit, and you’re ready! Of course, you’ll want to be well-educated before you start, but even acquiring an education is free. Anyone that puts their mind to it can do this – it doesn’t require having a lot of money already or other difficult steps. 

Cons

You need a starting investment

Just to be clear – you can get started with as little as $5, but this isn’t going to leave much room for trading. Those who can afford to deposit a few thousand (or more) dollars are going to make more significant profits. If you’re just looking to make a little extra cash here and there that shouldn’t be a problem, but those that want to support themselves purely by forex trading need to have a larger investment to start with. Sadly, most of us don’t have $20,000 or in disposable income just so sitting in our bank accounts. This means that it will take a while to work up to making larger profits. 

Trading is risky

Trading involves investing your hard-earned money with no promises that you’re going to see any profits. Or even worse, you could lose it all. In a way, it involves the emotions one would feel with gambling, that trading decisions are less based on chance. Traders consider a variety of factors, like technical or fundamental analysis, which makes their decisions more founded. Still, at the end of the day, nobody can 100% predict the way the market is going to go. 

Leverage

We know that we listed leverage under the pros, but it can also be a con. Many beginners make the mistake of trading with too high of a leverage, which can quickly end your career. Leverage is often referred to as a double-edged sword because it can go both ways. If you’re a beginner, you don’t need to use the highest leverage your broker has available just because you can. Start small and work your way up, or leverage could be your downfall. 

Scammers

Scammers can be avoided if one knows what to look for, but many beginners do fall victim to shady brokerages. Whenever you’re looking at companies, check for regulation, and do further research before you give out any personal information or open an account. Some brokers have impossible withdrawal conditions, have customer support teams that you can rarely get ahold of, and so on. New brokers pop up every single day and only some of those options are legitimate. Choosing a forex broker is not a quick decision, choosing the right one takes thought and comparison.

The Bottom Line

Anyone that is interested can become a forex trader with some know-how and a small investment, but one really needs to consider the pros and cons first. You might make a lot of money, or you could lose everything you invest. The good news is that some of the downsides can be avoided. If you secure a good forex education, research your brokerage before opening an account, use a leverage that suits your skill level, and take risk-management steps, then you’ll be more likely to succeed.

The ultimate downside to Forex trading is the risk involved. Even if you’ve been practicing on a demo account, switching to a live account can feel overwhelming and you might not realize the way that your emotions, slippage, or other live conditions could affect you. If you are willing to put in the work to learn, then we fully recommend opening a trading account, just be sure that you’re investing from your disposable income, not from the money you need to live on or support your family. It can also help to adjust your expectations if you’re starting with a small investment.

Categories
Forex Basics

The Top 7 Most Misunderstood Facts About Forex Trading

Despite the fact that there are currently more than 9.6 million forex traders in the world, the topic of forex trading still manages to bring up many myths and misconceptions. Knowing the truth about some of the most common misconceptions out there can really save you money in the long run if you’re a trader. […]

Despite the fact that there are currently more than 9.6 million forex traders in the world, the topic of forex trading still manages to bring up many myths and misconceptions. Knowing the truth about some of the most common misconceptions out there can really save you money in the long run if you’re a trader. […]

Despite the fact that there are currently more than 9.6 million forex traders in the world, the topic of forex trading still manages to bring up many myths and misconceptions. Knowing the truth about some of the most common misconceptions out there can really save you money in the long run if you’re a trader. On the other hand, those that have only considered trading may have chosen not to open a trading account over a simple rumor, while others may jump in with unrealistic expectations. If you want to learn the truth about forex trading, keep reading as we break down the 7 most common misunderstandings about forex trading. 

Misunderstanding #1: Forex is a quick way to get rich.

We can thank several movies, brokers, and sketchy “motivational” forex traders for the misunderstanding that forex trading can make you rich overnight. Oftentimes, people see flashy advertisements that show traders living a luxurious lifestyle and they decide they want that for themselves. In reality, these are just advertising gimmicks meant to capture your attention and draw you in so that the trader can sell you something or to convince you to open an account with a broker. On the bright side, you really can make a lot of money trading forex, but the amount depends on experience, the amount you invest, the market environment, and other factors. If you start trading with a few hundred dollars in your account and little knowledge of the market, it will take a while for you to reach the larger monetary goals you’ve set. 

Misunderstanding #2: Trading is a scam.

While some traders believe forex is a way to get rich quick, others think that the system is rigged and don’t believe you can really make money doing it. Shady unregulated brokers contribute a lot to this misunderstanding, but you also might hear from scorned traders that lost money due to their own error. Those traders then turn around and blame their broker, the market, or something else to help ease their bruised ego, when they probably just weren’t prepared to open their first trading account. As long as you choose a trustworthy broker that is regulated with positive client feedback, you shouldn’t have to worry about any issues. It’s also important to know that there are too many factors affecting the forex market and things move too quickly for there to be any way for your broker to rig the market. 

Misunderstanding #3: More complex strategies are better.

Many traders believe that the more complicated a trading strategy is, the better the results will be. It’s actually fine to stick with a simpler strategy, you just need to take certain matters into account, like price movement, a ranging or trending market, reversal points, and so on. If your trading system is making profits but it isn’t as much as you’d like, start by considering these factors before adding more variables and overcomplicating things. Know that even the best traders usually walk away with only a slightly higher win rate than their loss rate, so you shouldn’t throw an entire trading strategy out the window just because you feel you should be making profits more quickly.

Misunderstanding #4: More trades = more profits.

This is a common belief among forex traders because it makes sense that the more trades you enter, the more chances you would have to make money. The truth is that you can actually make the mistake of overtrading if you do this and you put yourself at more risk of losing money. If you open too many positions at once, you also may have trouble keeping up with everything and you could become overwhelmed, causing you to forget to exit positions and to make more careless decisions. Instead, you should only enter a trade if there is good supporting evidence to do so and be sure that you never open more trades than you can manage. Even if you’re left feeling unproductive, it’s better to avoid trading if there just aren’t any good opportunities in a day. 

Misunderstanding #5: It’s possible to have a 100%-win record.

If you ever hear a trader say that they’ve never lost money or made a mistake while trading, don’t believe them. With the forex market being so volatile, it just isn’t possible to make the right moves every single time, even if you’re an expert trader with a high win rate. It’s also impossible for signal providers or Expert Advisors to trade with 100% accuracy as well, so don’t fall for these false claims. When you do lose, you shouldn’t beat yourself up over it, as the solution is to keep calm and assess what went wrong. If there’s a problem with your strategy or you made a mistake, simply try to learn from it, make any needed changes, and move on.  

Misunderstanding #6: Trading with high leverage provides greater rewards.

There’s an old saying about forex trading that claims, “leverage is a double-edged sword”. This is absolutely true – the higher the leverage you use, the greater the potential for returns; however, it also increases your risk significantly. Many beginners rush out and decide to trade with the highest leverage available through their broker, which can be as high as 1:400, 1:500, or even 1:1000 in some cases. Beginners need to know that many professionals actually prefer the leverage ratio of 1:100 because it provides a good opportunity for investment without an insane financial risk. You’re still free to make your own decisions regarding leverage, just keep these facts in mind if you’re tempted to use a high degree of leverage.

Misunderstanding #7: It’s best to choose a broker that offers 100% bonuses.

Some brokers offer perks in the form of bonuses and promotions to traders that choose to sign up for an account with them. While it’s great to see deposit bonuses and other ways for traders to make extra money, it’s important that you don’t choose a broker solely because they offer this type of deal. There are usually strings attached when it comes to this, like minimum trade requirements before you can withdraw profits, the bonus being nullified if you make a withdrawal before fulfilling certain conditions, and so on. The broker might also offer bad trading conditions in general and use the bonus to draw in traders quickly and to keep you from looking into their terms further. This doesn’t mean that promotional opportunities can’t be a good thing, just that you need to do thorough research anytime this is offered. 

Categories
Forex Basics

Insider Tips & Tricks of the Forex Market

By making the decision to trade in the Fórex currency market, the future John Rockefeller stumbles upon several concepts and definitions that can put him in trouble, as well as new information that will take a lot of time and effort. To shorten the learning path and help beginners make the right choice, I have […]

By making the decision to trade in the Fórex currency market, the future John Rockefeller stumbles upon several concepts and definitions that can put him in trouble, as well as new information that will take a lot of time and effort. To shorten the learning path and help beginners make the right choice, I have […]

By making the decision to trade in the Fórex currency market, the future John Rockefeller stumbles upon several concepts and definitions that can put him in trouble, as well as new information that will take a lot of time and effort. To shorten the learning path and help beginners make the right choice, I have created this brief instruction on the main features and definitions. Success will largely depend on what the first step will be, the important thing is to do it in the right direction.

After selecting the trading account, the next required step is to choose the size of the «leverage», which can be from 1 to 500. Leverage will largely depend on the style of the trader’s trade. Therefore, I recommend you not to be in a hurry and think it over.

What is the Leverage?

Brokers offer their clients various types of «leverage» from 1 to 500. But before you select it, let’s clarify exactly what leverage is. I will try to convey everything to you with simple terminology. Leverage is funds that the company lends to the merchant to finance its operations in the Fórex market in automatic mode, without unnecessary paperwork and delays. The trader can choose the size of the «leverage», where the level of 1 (1:1) will mean the lack of borrowed funds in the account and the level of 500 (1:500), multiplication coefficient of the investor’s own capital.

Example. The merchant has an account with $1000 and using 1:1 leverage will be able to trade in the market only with its own funds. However, using a leverage of 1:500 you will be able to open a $500,000 transaction.

But, we must always be cautious because the more money you have, the greater the responsibility. Using maximum leverage means a slight fluctuation of quotes against your transaction that is able to turn your own funds to zero. Experienced traders typically choose leverage between 1:30 and 1:200. The standard leverage is 1:100 and is the most popular because it makes it easier to calculate the sum of own funds needed for benefits when opening positions. Therefore, if you do not have preferences, I recommend applying this coefficient.

You have already chosen the type of account and the size of the «leverage», but with what tools will you carry out foreign exchange buying and selling operations? When data transmission technologies did not yet exist, commercial operations were conducted by telephone and previously by telegraph. But now we have internet and commercial platforms of different types, including mobile devices and apps with access to a personal Area.

Which Terminal to Choose?

About tastes, there is nothing written and much depends on the preferences of each one. However, I would like to highlight certain peculiarities of the use of commercial platforms.

The trading platform in the Customer Area usually has a set of basic functions that allow you to open and close transactions, monitor the trading account, as well as necessary technical analysis tools to determine the future direction of currencies. It is ideal for beginners who just started the road to financial Olympus. However, you should not expect anything extraordinary from this platform. At the same time, your great advantage would be the ability to operate directly from the Personal Area without the need to install special applications.

Mobile platforms based on iOS and Android suit all those who lead an active life and do not have permanent access to a fixed computer. The terminals are equipped with everything necessary for trade and have a standard set of indicators and technical analysis tools. The big disadvantage of these terminals is the limited physical size of mobile devices, which does not allow you to make a complete analysis of the situation in the market. And this often leads to bad decisions.

Commercial Platforms: MT4 and MT5 or its Online Version?

If you’ve finally thought that the decision to conquer the world of trading and make a successful profit, the MT4 terminal is all you need. Some believe that it is the right instrument for analysis and trade. A huge amount of custom and integrated indicators for the analysis of quotes, the possibility to test your own commercial systems, a simple programming language in which you can sort or write the algorithm, make it stand out as a leading terminal in the Fórex market. A user-friendly interface in different languages that is able to satisfy even the most demanding trader. The MT4 terminal has passed the test of time, it is simple and accurate like a Swiss watch. MT4 is what real professionals choose.

The MT5 terminal received the best from its “big brother”, in this platform you can trade not only in the Fórex market but also open operations with other assets, including trading stocks and futures. The terminal has timeframes called “timeframes” with more advanced features and other advantages. However, the biggest disadvantage of the MT5 terminal is the limited functionality of the custom signs created for its “big brother”.

When you have already chosen the platform on which you will operate, it is time to know some concepts and terms of Fórex, at least to feel like a fish in the water and show off your knowledge to others; Merchants communicate in their own language and unknowingly will not feel comfortable in their “gatherings”.

Commercial Platforms and their Definition

The quotes of the currency pair in the Fórex market: the price of one currency is determined in relation to another currency and is written as a decimal fraction. The quotation, where the currency quoted in the pair is the numerator and the base currency is the denominator, is called “direct”, for example, the EUR/USD pair shows what is the amount of US dollars required to buy a euro.

Another way of representing the exchange rate is the reverse quotation, the exchange rate of the USD/RUB pair (the Russian rouble is determined against the US dollar). Another example of the reverse quote is also the exchange rate of the Japanese yen written as USD/JPY.

There are other types of cross-currency exchange, which do not include the US dollar. The most popular among them are the pairs of EUR/JPY and GBP/JPY, but I do not recommend newbies to start trading with cross exchange rates until they become familiar with the market for major currency pairs.

What is a lot? It is the size of an open position. In the Fórex market, the standard size of a commercial lot is the sum of 100,000 (one hundred thousand dollars, euros, pounds). When opening trades at this value and with the leverage of 100:1 the trader will need a loan of 1000 units of the quoted currency. The usual trading conditions allow you to open transactions of size from 0.01 lots, which with a leverage of 100:1 will be equal to 1000 units and will require loans of only 10 units of the quoted currency.

For example, if we open a position with a volume of 0.01 lots in the EUR/USD currency pair, this position is equal to 1000 euros and will require a deposit of just 10 euros. If we open a transaction with a volume of 0.1 lots in the same pair, this transaction is equal to 100 euros, which is obviously not much. I have given some examples for the trading account in Euros. For accounts in other currencies, it is necessary to convert these values.

What is Pip (Dot)?

In Fórex a PIP is the fifth decimal of a quote. In other words, for the currency pair EUR/USD, which is now quoted at 1.23456, the fifth decimal in the quotation (6) is the pip (percentage point).

What is a swap? It is an interest payment for the move of the open position for the next day. The trader can trade for the same day as much as he wants, but when he decides to move the open position for the next day, he is charged a swap created by the difference between the interest rates in the currency pair, which is due to the use of leveraged funds and a currency other than the nominal value of the account.

Attention: very important! What you have to learn from memory is that in most cases swaps are very harmful.

Swaps can be not only negative but also positive, that is, they can yield profits for traders. The bad news is that most swaps have negative values, another bad news is that the payment for the current move of the open position and for the weekend is charged on the night of Wednesday to Thursday being the triple charge.

Traders, especially beginners, often underestimate swaps by opening their positions. If the trade remains open for an extended period of time, swap hedging can lead to a significant loss of funds. The size of the swap is usually expressed in ticks, and its value can be known in the contract specification.

Thus, for example, on April 30, 2020, the size of the swap in the sale of the pair EUR/USD was -0.483, which means that in the open position with a volume of 1 lot the trader will lose $0.483 each day. However, when buying 1 lot of the same currency pair the size of the swap was already -4.7495 ticks, implying a daily loss of $4.7495. Thus, to keep the position open during the month, the trader’s losses would amount to $142,485, paid for the valued position of 100,000 euros. Swaps are charged at 00:00 according to terminal time. The swap is always charged in the currency that is the denominator (the base currency) in the quotation.

What is the Spread?

A spread is the difference between the purchase price and the selling price of the currency pair, that is, between supply and demand, The size of the spread depends on current market conditions and can vary from 0 to a few dozen points. The more people want to buy and sell the currency pair, the smaller the spread size. You can also find fixed spread quotes set before the currency pair specification.

What is Long and Short in trading? “Long” (long) is a buying position, “go long” means to buy. “Short” (short) is a currency or other asset selling position, “short” involves selling. The platforms came to Fórex from the stock market, where stock prices grow slowly and/or fall sharply. In the Spanish language too, the same terms, “long” and “short”, which mean purchase and sale, are often used.

What is Stop-Loss and Take-Profit?

Stop-loss is a pending order placed by the trader to stop losses automatically. They often call it simply “loss”. “Cutting losses” means closing lost positions. Take-profit is a pending order that the trader places to set the profits. The expression “take profit” means to set the profits.

Margin call (margin call) is one of the most feared concepts by traders. The Margin call is a letter or other signal that the trader receives from the runner when it is necessary to deposit his account. This means that the merchant has lost his funds and is proposed to close the open position or deposit additional funds in his account.

I really wish you didn’t have to resort to this legendary phenomenon. Of course, these are not all concepts and terms of the stock market. He’s still not familiar with the rest, but it’s enough to get him started.

Categories
Beginners Forex Education Forex Basics

The Top 6 Things We All HATE About Forex

Most people love forex trading. We would not be doing it if we didn’t. However, no matter how much you love something, there will be things that you do not love about it. When it comes to trading, although we may love it, there are certain things about it that we are not fans of. […]

Most people love forex trading. We would not be doing it if we didn’t. However, no matter how much you love something, there will be things that you do not love about it. When it comes to trading, although we may love it, there are certain things about it that we are not fans of. […]

Most people love forex trading. We would not be doing it if we didn’t. However, no matter how much you love something, there will be things that you do not love about it. When it comes to trading, although we may love it, there are certain things about it that we are not fans of. We have listed some of these things, along with tips for how to avoid them, whenever possible.

Missed Stop Losses

We all use stop losses on our trades. If you do not, then you should. The stop loss is there to protect your account. It is there to ensure that the trades do not go too far into the red when the markets go against you. Many traders seem to think that these stop losses are set in stone. The sad truth is that the markets can in fact move below these levels without it closing and so the stop loss will close at a larger loss. This normally occurs during times of low liquidity and high volatility. The markets will simply jump below the stool loss level and close out at a lower level. This can cause havoc on our overall profits and risk to reward ratio, but it is something that we are going to have to live with, even if we do hate it.

The Markets Move The Wrong Way

As a forex trader, we watch the news, we look out for economic announcements, and generally keep on top of world events. We know that these events can have an effect on the markets and generally the markets react in a  way that can be at least slightly predicted. Bad economic data should make something move down and good economic data should make the markets move up. There are however occasions where the markets just seem to do the complete opposite, for no apparent reason at all. Why this happens, many traders are not sure, the sentiment may just be too high. But when some really bad economic data comes out, something that would normally cause the markets to quite severely drop down, and the markets instead move upwards. This can cause frustrations, especially if trades were put on based on the economic data. This movement against expectations is certainly a cause of major frustration when it happens.

Unforeseen News Events

The economic calendars are fantastic. They give us an idea of what news events are coming up, and what currencies the news will affect the potential impact that they can have on the markets. This enables us to prepare and to stop trading if the conditions won’t be suitable for our strategies. The problems arise when a major piece of economic news comes out of the blue and there is no warning. These news events can cause the markets to jump or even trend, and when it is not predicted or there is no warning. This can catch you out, especially if you are not at your trading terminal and not able to make any adjustments. These news events can cause havoc can lead to losses, which is why we as traders hate them so much.

Long Withdrawals

This is only relevant to some brokers but isn’t it funny how deposits are instant, but it can take up to a week to get your money out. This can lead to a lot of frustrations, especially if you need that money for something. Many brokers are now moving towards same-day or at least next day withdrawals which is great, but there are a lot of them still stuck in the past with long delays to withdrawals. It is frustrating to wait, even if you do not need the money, the wait is something that we hate. Of course, you should not be trading with money that you actually need, so the withdrawal length should not affect your life. Still, it can be a source of frustration, as it is our of money after all.

Scams and Frauds

There are a lot of scams out there and unfortunately, they are giving the idea of trading and forex a bad name. With so many of them from brokers, fake money managers, fake social trading platforms, and more, it is certainly a minefield. Unfortunately, a lot of newer traders seem to fall for them, looking for quick and easy profits. They fall for a scam and then publicise the fact that they were scammed, giving people outside the trading world the idea that it is full of scams and that anyone that trades is potentially a scammer. Legitimate forex traders seem to hate those fake traders simply because of the reputation that they are getting and the reputation that is spreading to the legitimate traders too.

The Risks

If we want to make money there will be risks. Risks are a part of trading, but it is still something that we see a lot of traders say that they hate. We all have different risk tolerance levels. We can all handle different amounts of it, but it will be there with every trade. So while some traders may hate it, it is there, you can reduce the risks but there is no way of removing it completely apart from not trading at all. We all hate certain risks, but when it comes to trading, it is, unfortunately, a necessary evil that we will need to live with.

Those are some of the things that we go through as traders that we absolutely hate. Hopefully, you won’t experience some of them, but we are sure that you will experience at least one of them at some point in your career. If you do go through them, remember that much is out of your control. Do what you can to get past it and to rectify anything that may have happened. It is not the end of the world, even though we do hate it.

Categories
Forex Basics

If You Don’t Know THIS About Forex, You’re In Big Trouble!

The forex market is known for providing traders with favorable conditions, including 24 hours of market access and high levels of liquidity that provide a great number of trading opportunities. If you want to make the most of the opportunities that the forex market provides, you’ll need to approach the market with the right level […]

The forex market is known for providing traders with favorable conditions, including 24 hours of market access and high levels of liquidity that provide a great number of trading opportunities. If you want to make the most of the opportunities that the forex market provides, you’ll need to approach the market with the right level […]

The forex market is known for providing traders with favorable conditions, including 24 hours of market access and high levels of liquidity that provide a great number of trading opportunities. If you want to make the most of the opportunities that the forex market provides, you’ll need to approach the market with the right level of skill and confidence, while making smart financial decisions that limit your overall risk along the way. If you want to start out off on the right foot with a competitive edge in the market, it’s important to know these three key ideas.

The Forex Market is the Best Place to Practice Your Trading Skills

Practice is one of the most important factors that will take you from a novice trader to a professional level investor. Fortunately, the forex market is filled with practice opportunities that beginners can take advantage of thanks to the high liquidity and 24-hour market access we mentioned earlier. Sure, you can get in some practice on a demo account beforehand, but it’s different when you’re practicing on a live account because real money is on the line. This introduces emotions and a sense of danger that just isn’t present when you’re trading on a demo, even if you take your results seriously.

Another plus is the chance to test your strategy using micro-sized trades, as long as this option is available through your broker. This will allow you to test more entries in a shorter amount of time, especially if you were to use a shorter 5-minute chart. You’ll also risk less money trading with micro lots versus standard lots, meaning that there is still a financial risk present, but less pressure because you won’t lose much money if your strategy doesn’t work as well as you had hoped. 

With Forex, You Can Start Small and Work Your Way Up Over Time

Contrary to what some believe, you can actually open a trading account with a small investment through most brokers. Some companies will even allow you to open an account with just $1-10. You’ll also find many different account options available through different brokers, including micro/mini, standard, VIP, and other account options. Micro accounts are one of the best options for beginners because they support low entry-level deposit barriers and allow you to trade with smaller lot sizes, thus allowing you to test your system with a scaled-down level of risk. 

Many brokers offer tier-based accounts or will allow you to upgrade your account to a standard level or better once you’re ready. This means there’s no reason why you can’t start small with an entry-level mini or micro account, gain confidence, and test your strategy with minimized risk, and then move on to better account types when you’re ready. If you take advantage of this opportunity, you’ll lose less money along the way while increasing your confidence in your trading plan. You can also keep a trading journal in order to identify and make any changes to your plan that are needed before you start to risk more of your hard-earned money. 

You Can Decide How Much to Risk on Each Trade

It’s true that forex trading carries some level of risk, however, traders have a lot of control over the amount of money that they could actually lose. If you don’t want to risk a lot of money, you don’t have to. In fact, it’s better to test new strategies with a low level of risk at first until you have the chance to see that there aren’t any flaws in your system. 

There are a few different ways that you can control your risk level, like using a smaller amount of leverage, using a stop loss, trailing stop, and take profit for each trade, and managing your position sizes. If you’re wondering just how much to risk on each trade, it’s helpful to know that many professionals recommend risking no more than 1% of your total account balance per trade. In the end, you should remember to never invest more money than you can afford to lose. If you need to, you can also adjust the amount you risk based on other factors, for example, increasing your position size if you feel confident that the trade will be a winner or risking less when you aren’t completely sure about entering a trade. 

The forex market offers an endless amount of opportunities for investors that know how to manage their money and make smart financial decisions. If you keep these three key ideas in mind, you’ll be on the right path to making money in the competitive industry of forex trading. 

Categories
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.

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.

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 Thriftbooks.com 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, AbeBooks.com, 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.

Categories
Forex Basics

Top 8 Secrets That Successful Forex Traders Won’t Ever Tell You

If you want to get the same results as a professional forex trader, you have to behave like one. Unfortunately, there’s a lot of myth and speculation surrounding forex trading; therefore, it can be difficult to understand the truth about what does and doesn’t work, especially with false statements floating around. We want our readers […]

If you want to get the same results as a professional forex trader, you have to behave like one. Unfortunately, there’s a lot of myth and speculation surrounding forex trading; therefore, it can be difficult to understand the truth about what does and doesn’t work, especially with false statements floating around. We want our readers […]

If you want to get the same results as a professional forex trader, you have to behave like one. Unfortunately, there’s a lot of myth and speculation surrounding forex trading; therefore, it can be difficult to understand the truth about what does and doesn’t work, especially with false statements floating around. We want our readers to know the real truth about the market, so stay with us to find out 8 things that you’ll never hear a successful trader say. 

“I Taught Myself”

If you ask any trading professional about the key to success, they’ll tell you that a solid trading education is one of the most crucial steps to becoming a profitable trader. None of us are born with knowledge about forex trading, so we all have to start with the basics regardless of our IQ score.  

While there are many different resources for information online, like videos and articles, one of the best ways to learn is to ask other traders for help. Online courses, one-on-one training sessions, and trading forums are considered to be some of the most interactive tools out there. Keep in mind that every trader had to start from the same place, so don’t be afraid to seek help with topics you might be struggling with. 

Finally, you have to expect that mistakes are a natural part of the learning process. Remember that you’re only human and think of any bumps in the road as a learning experience. The good news is that everyone has the ability to become a profitable forex trader if they can remain disciplined and work on developing healthy trading habits, so a little hiccup every now and then doesn’t have to be a big deal.  

“I Don’t Lose”

A successful trader will never claim that they don’t lose money when trading because losses are an inevitable part of the process. Even trading legend George Soros lost $1 billion after Donald Trump’s surprise election win back in 2016 – and if it can happen to him, it can happen to anyone. 

What traders need to know is that trading success isn’t measured in short-term wins and it’s possible to have a higher loss ratio but to still walk away with positive profits. When thinking of trading success, you should look at the bigger picture with consistency over time. You will not win every single time and any trader that claims to is only lying to you to boost their ego.  

“My Predictions are 90% Accurate”

The forex market is highly volatile and full of surprises, which makes it impossible for any trader to accurately predict what is going to happen over 90% of the time. In fact, most successful traders claim to be accurate about 70% of the time or less, which is far more realistic. 

Keep in mind that trading is different than gambling, so it is possible to increase your chances of success by analyzing chart patterns and data, but you still won’t be able to hit a 100% success rate. In forex trading, you win some and you lose some, so don’t put unnecessary pressure on yourself to win every time. 

 “Risk-Management Doesn’t Matter”

While forex traders can’t be right 100% of the time, they can increase their chances of success by practicing effective risk-management rules. This involves only risking money you can afford to lose and taking other steps, such as setting a stop loss in case things don’t go in your favor. Even if you think you are making good decisions, risk-management helps to soften the blow if you lose money and it should never be downplayed as an important step to forex traders.

If a trader tells you that risk-management isn’t important, then they’re giving out some truly terrible advice. Even the big fish take precautions to limit the amount they could lose on their trades, regardless of how much money they have sitting around. You don’t want to make the avoidable mistake of risking too much and losing big-time. Sadly, this is a common trading problem that results in big losses for many unsuspecting beginners.

“The More You Trade, the Better”

While trading more often might sound more productive, it actually works against you. This is because there are times when it’s best to take a break from trading, for example, when political news is about to be released. Some traders do thrive in volatile environments, yet it is inherently more risky to trade during these times.

You also run the risk of overtrading if you become addicted to the general rush from trading. This works like any other addiction and can cause traders to make bad investments for the sake of entering a trade. It’s better to know when NOT to trade so that you don’t lose money in bad market environments. 

“My Strategy Never Fails in Any Type of Market Condition”

No trading strategy can be profitable 100% of the time – it just isn’t possible. Some strategies will work better than others in different kinds of conditions, but you have to remember that market conditions are constantly changing. A method that was working well in one condition may become obsolete once things change, and methods that didn’t work before may become a better option later on. Overall, you can develop a solid plan that works well in several different kinds of market conditions, but you’ll never find a 100% foolproof option because it simply doesn’t exist.

“Forex Trading is Always Exciting!”

You might have seen forex trading painted in a glamourous light in movies, where investors tend to jump up and down shouting in glee and frustration. Advertisements also seem to make things more exciting with flashy cars and hours, men surrounded by beautiful women, and other exaggerations. In reality, online trading can get a little boring. After all, most traders work in a quiet environment without any distractions, where they are kept busy analyzing charts and whatnot. This doesn’t exactly make for an exciting evening, but it’s important to remember that trading is still a job (that you can do in your pajamas). 

“There’s Nothing I Don’t Know About Forex”

Regardless of how many hours you’ve poured into your trading education, how many books you’ve read, or the number of YouTube videos you’ve watched, you can’t know everything there is to know about forex because there’s so much information out there. Technological advancements, changing economic factors, and other developing factors also introduce new things to learn constantly.

Professional traders might have more experience and knowledge, but they would need a computer for a brain to actually acquire all of the knowledge that’s out there about trading. Even once you become a more established trader, you should never stop pursuing knowledge about the industry by reading articles, researching different strategies, staying up to date on economic data, and keeping a close eye on new developments and technological advancements.

Categories
Forex Basics

Is Forex Trading Profitable? Here’s the Truth…

The study of human neurology shows how reward increases the activity of dopamine neurotransmitters, which explains our cravings when we smell the coffee brewing in the morning or satisfaction upon completing a task. The same reward system has a tremendous impact on how we approach business ventures, which is why we often need to conceptualize […]

The study of human neurology shows how reward increases the activity of dopamine neurotransmitters, which explains our cravings when we smell the coffee brewing in the morning or satisfaction upon completing a task. The same reward system has a tremendous impact on how we approach business ventures, which is why we often need to conceptualize […]

The study of human neurology shows how reward increases the activity of dopamine neurotransmitters, which explains our cravings when we smell the coffee brewing in the morning or satisfaction upon completing a task. The same reward system has a tremendous impact on how we approach business ventures, which is why we often need to conceptualize the results of our efforts in advance.

The interest in the profitability of trading currencies in line with this human behavior and, while we may not always process this consciously, we can in fact help our motivation to take on new tasks, provided that exercise control and minimize the risks. Today, we are going to assess what the word profitable means in terms of numbers and how we can increase our return from trading currencies.

We all know how high the percentage of losses for the majority of traders, especially in the beginning. The reason for these unfortunate outcomes often lies in the fact that many only learn the basics (i.e. reading the chart, some essential terminology, and tools to predict where the price will go). Beginners hear some compelling success stories which make them believe that they will easily turn their initial investment of 500 USD into millions just by following the tricks they read online. Along with these assumptions, traders immediately expect to be able to quit their day jobs in a matter of a few years, which is why they further encumber their bank accounts with new loans right at the start of their trading careers. 

Unfortunately, once traders set up their systems and start trading real money, they frequently realize that the intermittent and inconsistent wins can hardly make up for the losses they are taking. This typical scenario is further affected by poor money management skills, in which so many beginners fail to invest because they are preoccupied with the idea of amassing a fortune overnight. Even more appalling circumstances involve the traders who, despite seeing how their predictions and moves are not leading to any gains, stay in those trades hoping for a positive turn of events. This deadly combination of factors offers an explanation for the staggeringly high failure rate in this market.

Many people cannot afford to blow out their accounts, and despite each trader’s starting point, we all need to change the perspective to properly measure profitability. To ensure a better start, beginners are advised to bury the hopes of their initial deposits being able to make any changes in terms of their financial stability. The first 500 USD investment simply cannot suffice for the projection many traders make for their future, yet they should still deposit this sum and keep going. It is absolutely crucial for any trader to become comfortable trading real money after having traded with a demo account for a while. Real, professional trading will allow you to learn how to manage your emotions and understand how market conditions will simply not allow you to get 20 pips each day as promised on some blog online.

So, finally, we come to the question of how much money one needs to make through trading currencies to be able to earn a living. First of all, very few people have the luxury of being able to invest the initial 500 USD and, after calculating the yearly return, you can see how you can use the amount of money you made in a year. Even though we all know about the impressive 20% return per year Warren Buffet makes, we need to maintain a realistic perspective and learn how to plan objectively.

Some of the most affluent figures in this market willingly give exorbitant amounts of money to their advisors just to get a 13% yearly return, which is certainly worth the effort in their case. Therefore, with a 100 thousand USD account, one can get a yearly profit of 20 thousand USD before tax with the extraordinary 20% return only a handful of professionals can obtain. This unfortunately does not do much for the vision of living off forex, as it realistically provides just a few thousand USD over the poverty line in the U.S.

Luckily, there is another way for any trader who is ready to commit to learning and offering consistent results year after year. Some experts shared how they had significantly less money than the above-mentioned 100 thousand USD, but managed to get hired by prop firms, hedge funds, and financial institutions to trade on their behalf and with their money. The requirement for this type of business deals is to develop a functioning system and showcase your consistent results. Even if you have only a demo account or a small trading account records, you can still find an individual willing to take a look at your achievement, provided that your results reflect the minimum span of one year.

Be ready to take these companies’ tests and expect to go through a probationary period where you will have to show them how well you can do in real-time. These companies keep a percentage of the profits traders make and they often require traders to set aside some amount of money as a form of protection in advance as well as cover certain fees. Even if you do not have a degree a great trading record can help you, as long as you are honest and straightforward with your numbers and achievements. 

If you have a proven high-functioning system, you can trade your own money and earn additional profit through another company, which enables you to trade professionally with minimum investment. As you can see, the only condition that you truly need to satisfy is to be legitimately good at trading currencies. Some prominent traders explain how, due to the lack of information, they needed a lot of time to accumulate knowledge and skills to be able to display their results to any company. Circumstances are much different now although traders keep making the same mistakes.

Success does not happen overnight, so instead of being hasty about what your future holds, overcome the instant gratification hurdles and compulsions and start slow. Rather keep your risk small in the beginning and learn how to trade steadily in the meantime. The investment you make can be minimal, as you can trade forex professionally regardless of where you get your results. Whether you invested your own money or used a demo account, you need convincing results owing to which you will be able to be noticed by a company willing to take traders to work for them. 

As you can see, the topic of profitability is a loose category and it mainly depends on what your lifestyle and aspirations are. Many countries in the world other than the United States offer entirely different living conditions and, what is more, you may not want to depend on trading currencies alone. Nonetheless, if you are willing to take the time to learn everything there is to know about this market, set up your algorithm, test it thoroughly, open a demo account, and understand your reactions and emotions, you have a great advantage that can open doors to unexpected ventures and outcomes, regardless of your starting point.

As a final piece of advice, the best way to achieve your objectives and see the lucrative side of the forex market is to not give up, withstanding any challenges with a clear goal and a sense of gradual development.

Categories
Forex Basics

Is Forex Trading Expensive? Here’s the Low-Down…

Anyone who has ever considered trading currencies has pondered on the idea of whether it is a costly endeavor available to only a few well-to-do individuals on the planet. However, no matter what your starting point is, there are several questions to be answered to be able to approach this topic systematically, objectively, and pragmatically. […]

Anyone who has ever considered trading currencies has pondered on the idea of whether it is a costly endeavor available to only a few well-to-do individuals on the planet. However, no matter what your starting point is, there are several questions to be answered to be able to approach this topic systematically, objectively, and pragmatically. […]

Anyone who has ever considered trading currencies has pondered on the idea of whether it is a costly endeavor available to only a few well-to-do individuals on the planet. However, no matter what your starting point is, there are several questions to be answered to be able to approach this topic systematically, objectively, and pragmatically. Today, we are covering key areas of interest that will provide any interested individual with direct insight into prices, expenses, and overall monetary requirements to start trading in the spot forex market.

What Does Expensive Mean?

Before we continue with actual data on expenditures, we need to ask ourselves what we consider to be expensive. Forex enthusiasts are diverse in all possible aspects – background, professional experience, academic qualification, and income, among others. Due to these qualitative and quantitative differences, we all have a different start in terms of how financially prepared we are to cover the basic costs this market entails. As we will be discussing these later in the text, the main idea here is that some people may find 500 USD to be an exorbitant sum they had to save up gradually over time. While this group of people that needs to be careful with spending is considered to be the majority, some wealthy individuals may not have to give their expenses much thought. Therefore, whether you are like most beginners, someone who cannot afford to lose the initial investment right away, or you belong to a fortunate handful of those who need not worry as much about their finances, you will need to consider topics such as money management and trading psychology to be able to manage your traders effectively.

How Do You See Trading?

Many beginners have an ultimate goal of becoming a professional trader, often confusing the term professional for profitable. However, the only requirement traders may be lacking, in the beginning, is using real money, regardless of the amount invested. For some people, forex trading is aimed at providing for their existence, while others choose to trade currencies on the side. We have discussed before how the U.S. market’s size is big enough for the locals to enjoy great volume in a variety of markets, while forex is almost the only option for traders to build their finances in some other countries of the world. However, whether you choose to partake in different lucrative activities or direct all of your attention to trading currencies, you are a professional trader the moment you start investing your own finances. Naturally, for this to be a successful and sustainable source of income, beginners are always advised to slowly invest in education and demo test their trading knowledge.

What Part Do Your Expectations Play?

Traders often hear inviting stories about someone who was able to create an empire from scratches, starting with a 100 USD and building his finances to what you see as your dream-come-true scenario. The problem with this is that trading functions differently and there is no magic formula that will take all of your daily problems away and cover your loans and future investments in a matter of three years or so. It can be quite discouraging and stressful for any trader to enter this market thinking only about the ultimate goal, which often derails their attention from topics that are much more important. Whether your goal is to quit your job and trade alone to make a living or have a side activity to cover some of your expenses, always think about creating a solid foundation that will make this business endeavor possible and profitable down the road.

General Costs in Forex

The exact expenses depend on a number of factors such as brokers and trading styles, habits, and positions, among others. The usual minimum brokerage fee equals 500 USD although some may go down to a 100 USD limit. In terms of general expenses, most brokers offer an automatic calculator that should help you get an idea of your overall expenses and whether you see this market as worthy of your time and effort or not. Traders also need to consider commission fees charged for entering and exiting a trade. Commissions can vary substantially, so 1k lot on major currency pairs can amount to 4 cents USD, while the fee could be as high as 6 cents on more exotic pairs.

Another cost to take into consideration is spreads, i.e. the difference between the bid and the ask prices, which can, for example, be only 0.5 for major currency pairs or exceed 175.00 for more exotic currencies. You will also need to include rollover in your expenditure calculations, which is the interest differential between the two currencies comprising the pair you are holding during the time of the day when banks are closed. Aside from the previously mentioned fees, there are often other hidden costs to remember such as, for example, inactivity fees, monthly or quarterly minimums, margin costs, and the ones related to calling a broker on the phone.

Risk and Leverage

The two terms are extremely important for all traders, be they beginner-level or more advanced. In forex, we use leverage as a tool to increase returns on the initial investment. However, most traders typically struggle with overleveraging, which may lead to a loss of 25% (or more) of one’s account, which can be extremely difficult to compensate for. Traders are always advised to learn how to manage their leverage as high leverage is an inherent part of trading currencies. While starting with lower leverage is a wise decision, it is also vital that traders get used to adding leverage to the winning trades.

These steps reflect traders’ ability to exercise control over themselves and their trades, thus helping them minimize the risks in which this market is so profoundly abundant. Traders also need to ask themselves questions related to the capital they are willing to allocate to any one position, the amount of money they are ready to put at risk on a single trade, and how much exposure to risk they are comfortable with. Trading expenses, therefore, do not only stem from fixed fees traders are charged at some point, but the decisions they make along the way, which can have a severe impact on their financial stability.

Returns, Losses, and Gains

The final point to take into consideration is how you plan your finances to increase and how you expect to react to wins and losses. Our expectations often include some unrealistic return percentages that exceed the capabilities of the best traders out there. So, when we lose, we tend to increase the leverage hoping to overcome the discomfort, pushing ourselves further in the losing group. The same happens with wins because many traders view forex-related activities like gamblers, entering traders with no specific goal or criterion, which naturally affects one’s finances. Traders require a system that will explicitly tell them how and when they should enter and exit trades, which requires time and effort rather than money alone.

Last but not least, it is important to mention that most people give up trading in the first 90 days because they start investing too quickly. For you to be able to see whether this market is expensive or not, you alone need to see what your goal is and what you wish to achieve in trading. As you can see, the answer depends solely on you because, between the costs, profits, and other ventures, you will be the only person making the decisions. Forex can certainly bring money to everyone ready to learn, but you need to see whether you would be satisfied with the percentage return based on your initial investment and how you can create consistent and sustainable returns. With the right money management and proper attitude of going slow and learning steadily, any beginner can learn how to manage his/her finances and evade the challenges this market entails.

Categories
Forex Basics

Insider Secrets of Forex Trading for Newbies

Every new trader begins their journey with the same goal: to find the most productive way to trade the market without taking a financial hit along the way. Fortunately, trading doesn’t come down to luck or chance like gambling does. If you’re determined and willing to work hard, you can improve your chances of success […]

Every new trader begins their journey with the same goal: to find the most productive way to trade the market without taking a financial hit along the way. Fortunately, trading doesn’t come down to luck or chance like gambling does. If you’re determined and willing to work hard, you can improve your chances of success […]

Every new trader begins their journey with the same goal: to find the most productive way to trade the market without taking a financial hit along the way. Fortunately, trading doesn’t come down to luck or chance like gambling does. If you’re determined and willing to work hard, you can improve your chances of success drastically.

You shouldn’t make the mistake of focusing solely on those dollar signs or chasing the holy grail, but you should know that there are secrets that will set you up for success and ensure that you don’t make one of the countless mistakes we often see with beginners. If you learn these secrets, you can lower your risk so that you don’t lose money, while increasing your profits so that you wind up with more money in your pockets. 

Signal Providers

Starting off, many traders put their faith into signal providers, which tell them when to enter or exit the market through alerts. Signal providers often rely on technical analysis done by forex indicators to provide these alerts; however, different signal providers use different resources. If you’re thinking of going this route, you should know that no signal provider can offer results that are guaranteed to be 100% reliable, so don’t fall for these sorts of claims. Instead, you want to find a provider with a good track record of proven results. 

Other important qualities for signal providers include accuracy and consistency. With so many scammers out there and new ones popping up each day, a provider that has been on the forex market for a few years is safer than going with a newly released option. The longer the provider has been trading, the greater the chance is that they provide accurate signals. Since your hard-earned money is on the line, it’s better to be safe than sorry when it comes to choosing a signal provider. 

Insider Secrets

While some forex basics are shared often online, professional traders keep other important tips to themselves and don’t choose to share them with beginners. The following are some of the market’s deepest secrets, which most professionals won’t tell you:

  1. Don’t trade without a purpose: You need to be truly invested in trading for things to work in your favor. We don’t just enter trades for the sake of doing so: we make informed decisions that we feel confident about. Don’t trade if you aren’t feeling it or if there isn’t sufficient evidence to do so, and never risk money that you aren’t willing to lose. We assure you; your broker’s customer support team is not going to refund you if you message them asking for a refund after losing all your money from trading. 
  2. Don’t rush: Deciding to become a trader can be exciting, but one of the first mistakes many newbies make is opening a trading account before they’re truly ready. Instead, you should start slow by learning everything you need to know online and consider investing in online courses or training opportunities if you can afford to do so. Then, you need to practice on a demo account to see how much you’ve learned before opening a live account. Trust us, the opportunity to open a trading account isn’t going anywhere, so don’t risk your money by opening an account too early.
  3. Keep a trading journal: Please don’t skip this step! A trading journal is crucial if you want to be able to keep up with your success and it can be referenced anytime you have an issue. Your journal serves as a handy guide that shows you what does and doesn’t work about your trading plan and it can also point out things that you might overlook, such as emotions interfering with your trading results. Many traders are just too lazy to keep a detailed log of their trades, while others start with one and abandon it after a few weeks. Some traders never even start a journal because they don’t realize how helpful it can be, so don’t make this rookie mistake. 
  4. Beware anything that sounds too good to be true: The forex market is unpredictable, meaning that there isn’t a broker, indicator, robot, or anything else that can 100% guarantee to win every time. If a broker offers a promotion on a golden platter where there seems to be nothing in it for them, chances are, you’ll find some interesting terms and conditions hiding behind it. The point is that there are good brokers and services out there, but you can’t believe in magic answers. Always do research and beware of flashy ads or promises. Instead, look for real results, proof, and reviews from other traders. 
  5. Patience is key: Some beginners rush into trading with high strung hopes and dreams, and there’s nothing wrong with this, but you need to know that success takes time. It doesn’t come overnight. Trading might be more difficult than you think and it may take longer to reach your goals than you initially planned, but this isn’t a reason to give up. Think about what it takes to become a doctor or a lawyer, or to accomplish any other big goal in life. You can become a trader in a heartbeat, but you have to earn your way to the top, just like in any of life’s other big ventures. So, keep calm and know that you will meet your goals, as long as you don’t give up on your trading dreams.

The Bottom Line

There isn’t a magic answer to making it as a forex trader, so you shouldn’t waste your time believing in false promises that come from scammers. Instead, start with a good education, know what to watch out for, trade with a purpose, and don’t give up if things seem more difficult than you expected. If trading were an effortless way to get rich, there would be a lot more traders in the world. Fortunately, you now know some of the best insider secrets that can help you get off to the best start as a newbie forex trader. 

Categories
Forex Basics

The Most Difficult Parts of Forex Trading (and How You Can Easily Overcome Them)

Forex trading is hard. Anyone says otherwise either got incredibly lucky or had the work done for them. Here, we’re going to take a look at the most difficult problems associated with FX trading, and tell you exactly how to overcome them. The fact is that the majority of people who try to trade the […]

Forex trading is hard. Anyone says otherwise either got incredibly lucky or had the work done for them. Here, we’re going to take a look at the most difficult problems associated with FX trading, and tell you exactly how to overcome them. The fact is that the majority of people who try to trade the […]

Forex trading is hard. Anyone says otherwise either got incredibly lucky or had the work done for them. Here, we’re going to take a look at the most difficult problems associated with FX trading, and tell you exactly how to overcome them.

The fact is that the majority of people who try to trade the forex markets end up losing the money that they put in, the majority of traders fail. Then there are those that have had a successful month, this doesn’t mean that the next month is going to be profitable, in fact for the majority it won’t be. Trading is not easy, but it is incredibly rewarding.

We are going to be looking at what different parts of trading the majority of traders find the hardest and potential ways that you can help yourself get through those checkpoints. You may not find them all difficult, too many find other things difficult that others find easy, that is the thing with trading, each and every individual will have a different experience. So let’s take a look at some of the things that people find difficult when trading.

Choosing the Right Trading System

There are a lot of trading systems out there, hundreds, in fact, some are very similar to each other, however, others are incredibly different, being able to find the right one for you can be a daunting task. Many traders when starting out will decide to jump between a number of different strategies trying to find what works for you, there is nothing wrong with this. However, doing it too much and not giving each strategy enough time will mean that you will pretty much never find the strategy that works for you. There are a lot of reasons why a strategy may not work for you, it may require more money than you have, it may require higher leverages than your account has, you need to make sure that it matches what you have, which can be quite hard to find.

The other issue that people often come across is the fact that the most publicised strategies are either quite dangerous ones like the martingale strategy or strategies that have been marketed by so-called trading gurus as a marketing tool in order to try and get more people to sign up for their course. You will want to try and filter out these kinds of strategies, as they are often quite easy to get into and learn, but the results will leave a lot to desire. Do some research and take your time when deciding on your strategy.

Controlling Emotions

Emotions can be a real killer when it comes to trading and they have caused a lot of people to blow their accounts. There are two main emotions that are the most important to try and control, there is greed and there is overconfidence. They often come from completely different things, greed from wanting more, and overconfidence from thinking that they know the markets and each decision that they make is simply right, whichever emotion you are feeling, you will want to try and suppress them and to not allow them to take over your trading.

This is of course much easier said than done, both of those emotions are incredibly powerful and can really affect your trading. Those that fall for greed will start to put on additional trades and larger, riskier trades than you would normally put on. People who are overconfident will start to put on trades without putting in the proper amount of analysis that your strategy normally demands, you may also start to put on larger trades which can add to the risk that your account is under. 

It is not an easy thing to control those emotions either, the powerful ones, but it is important that you work out some things that you can do in order to help you get past them. Knowing what coping methods work for you is important, it may be as simple as getting out of the house for a few minutes, doing some online shopping, or talking to someone, whatever works for you, be sure that you are able to do it should you feel any of these emotions start to come up, just do not let them influence your trading, that will only lead to increased risks and the potential loss of your account.

Staying Motivated After Losses

Losses are not great, they make us feel a little crap and a little demotivated, they can even make us want to quit entirely, especially if they come after a lot of preparatory work. We need to have a way to keep ourselves motivated though. All traders, and we mean all traders will experience losses. In fact, some of the most successful traders of all time had losing months at the start. They still probably do, but the reason that they are successful is that they were able to motivate themselves afterward in order to keep going. Each loss should be a learning experience, learn from what you did wrong, motivate yourself to try again with your new-found knowledge and the results should be better. You need to remember that while losses can make us feel bad, they are just a stepping stone to better trading, so do not feel disheartened and try and push yourself to move on, do not let the loss start to make you doubt or even worse, do not let the emotions take over your trading, this will add risk and potentially further losses.

Being Consistent

One of the hardest things to do in trading and forex is to be consistent, if we could all do it then we would all be rich by now. Many many traders have had a profitable month, which is great, but that is no guarantee that their next one or the one after that will be profitable and that is where things start to fall apart. Your strategy may work really well, but then when the condition of the market begins to change, your strategy may not be quite as effective as it was before. Without adapting it to the new market conditions, you will end up with a loss and your results and profitability will not be as consistent.

In order to remain consistent, you need to be able to adapt your strategy or to have multiple strategies available to you that you can jump between. That is however a lot of work and many people who have just had a profitable week or month will simply want to stick with that as it works, but as we discussed above, this will only lead to added risks when the markets do decide to change. Consistency is great. It just so happens to be one of the hardest things to be when it comes to forex and trading.

So those are some of the more difficult things when it comes to forex and trading, trading forex as a whole is pretty difficult, but if you are able to get around some of the things mentioned above then you will be in a good position for the future. Do not be hard on yourself if you fail at times, that is part of the learning process. Instead, use those losses and mistakes as a learning experience, that is what will allow you to get past them and to become a better trader.

Categories
Forex Basics

Give Me 10 Minutes and I’ll Tell You Four Startling Forex Secrets

Forex trading has become more popular recently as more people ditch their desk jobs to become full-time professional traders from the comfort of their own homes. Whether you’re considering taking up trading or already trading in your spare time, your decision could be life-changing. However, there are some industry secrets you’ll need to know to […]

Forex trading has become more popular recently as more people ditch their desk jobs to become full-time professional traders from the comfort of their own homes. Whether you’re considering taking up trading or already trading in your spare time, your decision could be life-changing. However, there are some industry secrets you’ll need to know to […]

Forex trading has become more popular recently as more people ditch their desk jobs to become full-time professional traders from the comfort of their own homes. Whether you’re considering taking up trading or already trading in your spare time, your decision could be life-changing. However, there are some industry secrets you’ll need to know to have the best chance at success. 

All Brokers Aren’t Trustworthy

It is a proven fact that some forex brokers cannot be trusted. Hidden fees, high spreads, insane withdrawal charges, complicated withdrawal guidelines, and customer support agents that are almost impossible to reach are a few common examples of shady practices that hurt traders. Fortunately, there are ways to ensure that you are choosing a trustworthy broker so that you don’t fall victim to this problem. Here are a few tips for making sure that a broker is legitimate:

  • Check the broker’s website for a regulation status. Being licensed and regulated by a government body is the best sign that a broker is legitimate.
  • Research any potential options and look for comments from real people. Take these with a grain of salt, as some may be angry that they lost money from their own mistakes, but multiple comments about the same problem shouldn’t be ignored. 
  • Check out the website to see if it is transparent. All information about funding methods, fees, and more detailed information about the company should be posted on it. 
  • Reach out to customer support to see how quickly they respond and what type of attitude the agents have. Even if LiveChat is available, agents might not be standing by as advertised. You’ll also want to check for professionalism when speaking with an agent. 

Most Traders Fail

Another disappointing fact about forex trading is that most traders fail. Around 80% of traders wind up losing money in the end. We don’t list this fact to deter you from trading altogether, only to drive our readers to become more educated before starting a forex career. The main reason why these traders fail is that they are not prepared enough to start trading. You need a solid education and an in-depth understanding of more complicated trading topics. A good strategy, understanding of risk management, and being well-educated will help you to become one of the traders that go on to succeed. 

Don’t Trust Every Signal Provider

Many websites market signals, indicators, and automated trading systems that can supposedly predict market moves with certainty or that are guaranteed to turn a certain profit. While some of these products work, many don’t. These companies want you to pay for their products, and if they don’t work, you’ll wind up losing even more money using them. These companies will never give you your money back and will instead blame you. All signal providers aren’t bad, but you need to be looking at proven results over years rather than weeks. Also, look for providers that have a good track record, whether they are a company or an individual trader. Don’t rely on forex robots thinking that they are the answer if you’re a beginner, always make sure you understand how the product works so that you’ll know when to interfere or stop using it if it proves to be a mistake. Using too many indicators on your chart can also lead to issues where a trader is tricked into thinking their trading decisions are based on enough information to be guaranteed winners or where a trader has too much information to analyze at once, which results in delayed decisions or failure to execute trades altogether.

Know About Dealing Desk Brokers

Often times, the best spreads are associated with dealing desk brokers. These brokers trade against you and make money when you lose. In some cases, this can lead to dealing desk brokers to manipulate prices and your deals. Many traders prefer brokers with STP or ECN execution for these reasons.

The Bottom Line

We’ve covered a few important forex secrets that have the potential to affect your trading career. Here’s a quick summary of what we’ve learned:

  • Some brokers are trustworthy, while others aren’t. It’s important to do thorough research to ensure that a broker is trustworthy before opening an account with them.
  • Many traders prefer STP or ECN execution over trading with a dealing desk broker. 
  • While around 80% of traders lose money trading forex, the problem usually stems from a lack of proper education and understanding of the market.
  • Signals, indicators, and trading robots are not the magic answer to trading success. In many cases, these products will actually cause you to lose money. 
  • Using too many indicators on your charts can lead to analysis paralysis or cause you to become overconfident when making decisions. 
  • There are good signal providers out there, but it is impossible for these providers to “guarantee” you will achieve a certain profit. 
Categories
Forex Basics

How to Become A Successful Part-Time Trader

A lot of people get into trading with the hopes that they will someday trade for a living, there are a lot of fantastic opportunities to make money or to simply supplement your current income. It doesn’t really matter how much you want to be involved in trading forex, there are ways to earn. Many want to be full time, but many also want to do it part-time, to simply do it on the side in their spare time, doing it part-time means you do not need to invest quite as much time, energy, and work into what you would do when doing it full time but hen evolving that part-time trading into a full-time job.

A lot of people get into trading with the hopes that they will someday trade for a living, there are a lot of fantastic opportunities to make money or to simply supplement your current income. It doesn’t really matter how much you want to be involved in trading forex, there are ways to earn. Many want to be full time, but many also want to do it part-time, to simply do it on the side in their spare time, doing it part-time means you do not need to invest quite as much time, energy, and work into what you would do when doing it full time but hen evolving that part-time trading into a full-time job.

A lot of people get into trading with the hopes that they will someday trade for a living, there are a lot of fantastic opportunities to make money or to simply supplement your current income. It doesn’t really matter how much you want to be involved in trading forex, there are ways to earn. Many want to be full time, but many also want to do it part-time, to simply do it on the side in their spare time, doing it part-time means you do not need to invest quite as much time, energy, and work into what you would do when doing it full time but hen evolving that part-time trading into a full-time job.

Having said that, the majority of people who are trading in the markets today, it is more of a part time job or even a hobby rather than something that they are looking to do full time. One of the best things about forex trading is that you are able to trade when you want and you are also able to scale that trading accordingly, so you do not need to be full time in order to make a little extra on the side, it also allows you to work around your current job should you wish to. Trading forex part-time and trading when you want to allows you to put in enough time in order to make a consistent income to supplement your full-time job.

Trading forex for a living may not be the right route for you, it can be quite the gamble to quit your day job in order to go for this full time with a lot of pitfalls around to tip you up, trading full time is also not a short term plan, it is something a long way down the line as you cannot simply join and become instantly successful. Trading can be an incredibly exciting thing, with adrenaline running with every trade, people often decide to leave their jobs on the back of a good month, but do you really want to give up that guaranteed income from a job for something that is a little more temperamental?

So if you had the opportunity, would you go for a full-time trading position or a part-time one? If you were to ask a bunch of part time traders why they chose to do it part time rather than full time, you will get a whole range of different options.

There is a concept which is known as less is more, this concept is very relatable when it comes to forex trading. When we are trading full time, we want to get every single trading opportunity that presents itself, we are caught up in the emotions of trading and that is where things can start to go wrong when emotions get caught up in our trading. They cause us to make rushed decisions, or to put on trades that we otherwise never would have. Trading part-time gives us the option to step away, we know we won’t be getting every chance, we know we won’t be there 100% of the time and so we can pick and choose the trades that we take with much less if any pressure on us to perform, leading to better overall trading decisions.

One of the other things that part-time traders seem to really like is the fact that you are able to plan and trade around your other daily activities such as work, social interactions, and family life. It’s convenient for those that have a busy life especially at home where you simply won’t have the time to be a full-time trader. In the end, being able to become a successful part-time trader means that you don’t actually need to give anything up (apart from a bit of spare time) while becoming a full-time trader takes a lot of sacrifices, sacrifices that a lot of people do not want to make.

If you do decide to trade as a part-time trader, it is still a  good idea to try and work out a kind of routine, many people try and fit it in either before or after work, an hour or two on either side of work is perfect as you are still in the working mood and will have the energy to put in the time and effort required. Having a routine makes things easier for you in the long run as you begin to get used to the system. Find the right time for you though, it may be different for every trader

Along with this, you also need to have your trading plan setu, this plan will detail many different things about your trading. These include the strategy that you are going to be using, your risk management, your trading rules, and anything else that you can think of, it will dictate how it is that you trade. Talking of strategies, make sure that you have one appropriate to your available time, there is no point using a strategy that requires you to be in front of the computer all day if you are only trading part time.

So let’s imagine that you are now going to be trading as a part time trader, let’s take a look at some example routines that you could be setting yourself.

  • Do your major market analysis on the weekends, this way you are able to save time during the weekdays when you will actually be trading. The last thing that you want to happen when trading is to use up all of your time analysing the markets, only to find out that you no longer have any time to actually put on h trade.
  • Ensure that you wake up at the same time each day, try and fit this into the good times for the markets, unfortunately, this is not always possible for everyone, if you are in the UK and on London time, waking up at 8 am will mean that it is 3 am in New York, not the eBay time for trading, but if you are consistent that you will work out the patterns and trends that occur at that time and so you can find some good trades still.
  • Use your free time well, on the toilet? Check out some trading forums or news sites in order to get a little update, it may help you to further analyse or confirm the analysis that you did over the weekends. You don’t need to listen to everyone as it can be a little overwhelming but it is always good to get an idea of what other traders are thinking.

One of the other things that you need to understand is that trading as a part-timer is that it will take time for you to develop our systems and your routines, longer than it would if you were full time, simply due to the fact that you are not doing as much of it and not as often. As a part-timer, you will have a lot of time when you do not have any trades on and that is actually a good thing, this will help you to avoid over-trading, something that can be quite dangerous for a full-time trader.

You also need to set some goals, though you need to ensure that you set them realistically and relevant to what you are doing. As a part-time trader, you are not going to be making $100,000 overnight or each month, you will most likely be making less than your day job. As a part-time trader you should be looking to make a little extra, just ensure that you set them appropriately and that they are actually achievable.

So we will end this article with a few extra tips for you as a trader, you most likely will have heard them before, but it is important to put them down to ensure that you are aware of some of the things that you will need to do.

  • Get yourself a trading style that will match your available schedule, there is no point trading a sculpting method that requires you to be in front of the screen at all times, instead get one that allows you to put on trades and then necessarily b around for the result
  • Keep a trading journal, this is thrown about everywhere, but it is vital that you do it. It is very hard to improve as a trader if you do not have a trading journal to see how your trades are actually doing.
  • Try not to get too focused on the trading, you are doing this part time, most likely because you have other priorities in your life too, do not let the trading take over your life.
  • Pick the right time to trade both for you and the markets, there is no point in choosing a time in the middle of the night where you won’t always have the motivation to get up and trade or if there are literally no movements in the markets at the time you chose.
  • Select a currency based on what you want to really get to know, learn that pair and trade that pair, try not to branch out too much until you really understand the technicals and fundamentals of this first currency pair.
  • Don’t try to over trade in order to compensate for less time, this is the last thing that you want to do, instead take your time and make sure that each trade counts, it is better to be right on one trade than guessing many others.

So that is what it means to be a part-time trader and also a few things that you can do to make the experience a little better for yourself. Take the tips on board, look after yourself, and your other priorities, and then part-time trading could give you a real boost in life.

Categories
Forex Basics

Don’t Let These Common Myths Keep You from Trading

There’s a lot of speculation out there when it comes to forex trading, especially coming from people that have never tried it before. Many of the myths you hear make trading sound like a bad investment. On the contrary, trading may not be for everyone, but it can be a good investment under the right […]

There’s a lot of speculation out there when it comes to forex trading, especially coming from people that have never tried it before. Many of the myths you hear make trading sound like a bad investment. On the contrary, trading may not be for everyone, but it can be a good investment under the right […]

There’s a lot of speculation out there when it comes to forex trading, especially coming from people that have never tried it before. Many of the myths you hear make trading sound like a bad investment. On the contrary, trading may not be for everyone, but it can be a good investment under the right circumstances. If you’ve been considering opening a trading account but you’re feeling a little worried, allow us to debunk some of the most common rumors you might have heard below. 

Myth #1: It’s a Scam

You might have heard stories online or even from close friends or family members that claim forex trading is a scam. The truth is that some industry regulations do make it possible for scammers to prey on those that don’t know a lot about trading, however, this gives the trustworthy brokers a bad reputation. There are many good brokers out there that are regulated by government agencies, meaning that they are held to a higher standard. It’s important to do thorough research before selecting a broker by checking out their regulation status and reading customer reviews online. As long as you go with a trustworthy, well-known company, you won’t have to worry about being scammed. 

Myth #2: It’s too Expensive

You might assume that it takes a lot of money to get into currency trading, however, many different brokers will allow you to start with as little as $10. From there, you aren’t obligated to continue making deposits to your account. Do know that some brokers ask for steeper deposits around $300 or more, or a broker might ask for a larger deposit for a certain account type that they offer. Still, trading can be inexpensive and there’s no reason why you can’t start small. Just know that the amount of your profits depends on what you invest, so don’t expect to make a living off of a $100 deposit. 

Myth #3: It’s Time Consuming

Some trading strategies do take more time than others, for example, a scalper might enter several (or hundreds) of trades per day, which obviously requires a lot of time in front of the computer. On the bright side, those that don’t have the time to invest can simply stick with a strategy that is less time-consuming, like swing trading, which involves opening a medium or larger trade and allowing it to accumulate for days or even weeks. 

Myth #4: It’s too Risky

It’s true that trading can be risky, however, there are many things you can do to make it safer for yourself. Starting out with a solid education and understanding of how trading works is one example, while only risking a certain amount on each trade is another good way to limit your risk. The amount you risk comes down to personal preference and can be changed later on, so there’s no reason to feel like you’re being forced to put more money on the line than you’d like to. 

Myth #5: Trading is too Complicated

If you jump right in and open a trading account without spending any time researching trading in general, then you’re likely to feel confused or overwhelmed. Fortunately, the internet is filled with free resources that will teach you everything you need to know. Some beginners just don’t want to spend the time learning, so they write trading off as being overly complicated and give up. As long as you’re willing to put in the effort, there’s no reason why you can’t use the internet to prepare yourself for a trading career. 

Categories
Forex Basics

How Too Much Information Can Destroy Your Trades

It may seem a strange question, but people have asked this before: “Will too much information ruin your trades?” While it might be somewhat unlikely, the truth is that too much information can complicate your trades, and even end in losses. From my experience, there is a possibility of having an information overload. This is […]

It may seem a strange question, but people have asked this before: “Will too much information ruin your trades?” While it might be somewhat unlikely, the truth is that too much information can complicate your trades, and even end in losses. From my experience, there is a possibility of having an information overload. This is […]

It may seem a strange question, but people have asked this before: “Will too much information ruin your trades?” While it might be somewhat unlikely, the truth is that too much information can complicate your trades, and even end in losses. From my experience, there is a possibility of having an information overload. This is also known as “analysis paralysis.” In other words, you have too much information that prevents you from making a clear and precise decision.

Even though it may look a little strange, the fact is that too much information can overwhelm the trader, making him afraid to open a position. The idea of putting up a trade is too stressful, but when you have conflicting information, it can make things a little difficult. As the main rule, I tend to say that when there is too much conflicting information, it is better to stay out of the market. I like to be safe enough when I put money on the market, but I also recognise that my security in a trade does not necessarily mean it will work. There is one thing you should remember when you place a trade: it is important to pay attention to crucial information, not to all information.

Pay Attention to What Matters

One of the main problems for traders is that they can be influenced by any news, tweet, or rumor they might hear. Unfortunately, reporters and people on social media commenting on politics or economics generally have very little knowledge or are not experts on how markets move. The truth is that reporters are just that: reporters. Your job is to give the best possible information, not so much give their opinions. Economic ads are important and should be read and analyzed by traders. I simply question whether reading an analysis of the economic ads counts as reading the news, and I don’t think it does.

The trend is also something important to which you should pay attention, you must accept and learn that the fact of if a currency pair has a rising trend, it has it for a reason. It doesn’t matter how “right or wrong” news is, because price action is what makes you money. If you buy during an upward trend and the market continues to grow, you are making money. Fighting the collective wisdom of the markets will lead you to lose a significant amount of money. Too much trading information.

It is also important to read economic ads along with trend analysis, not as an individual story. Economic advertisements may vary in their importance and you should think about the general trend of economic advertisements for a particular currency. For example, if America’s economic announcements have been strong over the past few months then it makes sense that the US dollar is going to strengthen. A particular ad rarely makes a difference in the trend.

Everyone Has an Agenda

When you inquire about available information, you should keep in mind that everyone has an agenda. Your broker, for example, wants you to imagine that there is a huge amount of money waiting for you every moment of the day (which might be true). Because of this, the brokers publish news that they expect them to take to action. Why is this? Because they make money with a difference, and they make money when you lose in a trade. Don’t let broker news be the only information responsible for your trading decisions, as there is a lot of information.

The forums are also a place where I have seen much destruction done to the accounts of retail traders. Unfortunately, in the beginning, when you start trading one of the first things that notice is that there are a couple of forums that many people visit. A little common sense can vanish when it comes to the conversations you have in those forums, and they should not be seen as more than just entertainment and nothing else. If the old adage that 90% of traders lose money, in the long run, is true, then that means 90% of traders in the forum are losing money. If that is the case, why bother to listen to their opinions?

Conclusion

I cannot stress enough that you need to be very cautious about the information you take into account before making a trade. For example, I’m a technical trader. It’s because of this that I rarely pay attention to news or economic ads, and I just follow what prices do because, in the end, that’s what matters to me. Even if you are a trader who relies on fundamentals must be careful to read other people’s analyses and be sure to do your own research without relying on outside opinions. You should also look at economic data such as GDP, interest rate decisions, employment, and the like.

What you won’t find particularly useful will be the opinions of other people. It doesn’t mean they can’t be correct, but the reality is that when you put in a trade, you and only you may be responsible for it. The universe is full of people who are not able to accept responsibility for their own decisions, and in the commercial vortex that can ruin it. However, we must also think about the fact that optimizing the process not only simplifies the process, it also keeps it connected to what interests it.

Decide what is truly crucial in your trades and focus on it. Understand the fact that you will have occasional losses but in the end, you must earn more than you lose. Unfortunately, if you have too much information affect your trading decisions you could start to go in and out and make bad decisions based on concern. Even worse, it could move quickly between the sale and the purchase. Most of the time this type of event causes you to incur losses. Much more important is not to let other people dictate how to trade with your account, as they have nothing to lose with their trades.

Categories
Forex Basics

How to Break Bad Trading Habits

Most of us have daily habits that affect our everyday life. Waking up early in the morning is an example of a good habit while biting your fingernails is a bad habit that many people try to avoid. Many habits that affect our lifestyle are obviously good or bad, for example, as anything that leads […]

Most of us have daily habits that affect our everyday life. Waking up early in the morning is an example of a good habit while biting your fingernails is a bad habit that many people try to avoid. Many habits that affect our lifestyle are obviously good or bad, for example, as anything that leads […]

Most of us have daily habits that affect our everyday life. Waking up early in the morning is an example of a good habit while biting your fingernails is a bad habit that many people try to avoid. Many habits that affect our lifestyle are obviously good or bad, for example, as anything that leads to productivity is likely a good habit, while unhealthy habits are easy to recognize. When it comes to trading, the unfortunate reality is that good and bad habits aren’t as black and white. In some cases, traders even mistake bad habits for good ones. You might not even realize that you’re practicing bad trading habits at all! Here are some examples of bad trading habits:

  • Overtrading 
  • Revenge trading
  • Breaking your trading rules
  • Setting bad stop losses
  • Not keeping a trading journal
  • Practicing confirmation bias

The first step to breaking bad trading habits is actually being able to identify the problem. For example, traders that practice overtrading often get a high from trading and don’t stop when they should, which causes them to lose money. Others might practice revenge trading after taking a loss by thinking less about the moves they are making while risking more money to win back funds that were lost. Confirmation bias involves only considering data that supports your preconceived ideas, even though contradicting information is out there. If any of these sound familiar, then you can consider yourself guilty of practicing bad trading habits. 

 You’ll also want to take your self-imposed goals seriously, as breaking your own rules is still a bad habit. We need to set rules when trading, as it is all part of our trading plan. If you find yourself often deviating from the amount you said you’d risk, making trading moves that you said you wouldn’t make, or any of the above, you need to remember the plan you implemented or revise your strategy to work with your newfound trading personality. There are also other healthy habits you start, like keeping a trading journal. 

Once you’ve identified your bad habits, it’s time to break them. Try following these simple steps to train yourself not to make the same mistakes:

  1. Identify your bad habits
  2. Ask yourself why the habit is bad. How does it affect your profits?
  3. Replace the bad habit with a good one

This may seem overly simplified, but it works. For example, say that your bad habit is the fear of losing money. You set your stop loss for every trade according to your trading strategy, however, you often find yourself tightening your stop loss because you are so afraid of losing money, even if the trade is winning. Once you identify the problem and move on to step 2, you might realize that you’re actually cutting into your profits because many of these trades would have gone on to make you even more money, had you only left them alone. All you have to do to break this habit is to leave your trade alone in the first place and you’ll begin to make more profits. Other habits might be harder to break, but you will feel more of a reward once you begin to realize that your trades are making more money. 

Categories
Beginners Forex Education Forex Basics

Forex Misconceptions You Should Never Believe

Forex trading is shrouded in myths and misconceptions – some draw in traders, while others scare potential traders away for good. Unfortunately, it’s common for some traders to start out with unrealistic ideas of what trading really is, which causes them to give up once they realize that things aren’t the way they pictured. Keep […]

Forex trading is shrouded in myths and misconceptions – some draw in traders, while others scare potential traders away for good. Unfortunately, it’s common for some traders to start out with unrealistic ideas of what trading really is, which causes them to give up once they realize that things aren’t the way they pictured. Keep […]

Forex trading is shrouded in myths and misconceptions – some draw in traders, while others scare potential traders away for good. Unfortunately, it’s common for some traders to start out with unrealistic ideas of what trading really is, which causes them to give up once they realize that things aren’t the way they pictured. Keep reading so that you won’t be fooled by the following 3 misconceptions that surround forex trading.

Misconception #1: You Can Make an Easy Living from Trading 

You can in fact make a living from trading, but it isn’t nearly as easy as you might think. In fact, some people have actually quit their jobs because of this misconception, only to learn quickly that this idea is not entirely true. First, it would take a substantial investment in order to make enough money to support yourself from trading alone. The exact amount differs, but some studies suggest that it takes around $30,000 to wind up with $3K worth of profits each month. This might be equal to or more than your current salary, but many of us just don’t have that kind of cash available to invest.

You also have to consider that these studies expect the trader to really know what they’re doing, meaning that beginners aren’t likely to make as much money as an expert trader. In the end, it is possible to make a living from trading, but you’re going to need a sizable investment and experience to do so. It can take a few years (or more) to get there but do know that you can still earn profits from trading in the meantime. 

Misconception #2: The More Trades You Take, the Faster you Learn

Some newbies want to learn as fast as possible, so they assume that taking more trades will speed up the learning process. While more trading does lead to more experience, this mindset often leads to overtrading, which can cause you to lose money. Instead of trading too much, it’s better to try to improve the quality of the trades you do take. This can provide better immediate results and will improve your profits in the long run. Sticking to your trading plan, perfecting your strategy, and keeping track of results in a trading journal are the most helpful ways to improve your results as you gain experience.

Misconception #3: The Only Goal is Making Money

Everyone that trades wants to make a profit, otherwise, what’s the point? The truth is that making money is a common goal, but you’ll need to set realistic goals for yourself that extend beyond simply making money if you want to be a successful trader. The best goals focus on things that improve you as a trader and lead to better results in the long run, thus leaving you with more money in your pockets. Examples include sticking to your trading plan, tracking results in your trading journal, spending a certain amount of time each day researching, and so on.

You also want to stay away from goals that require you to make a specific amount of money in a certain amount of time, as the market is unpredictable and it is difficult to set realistic goals that go down to the dollar. If you focus on improving yourself and the trades you take, the end result will be more profits in your account.

Categories
Forex Education

Important Forex Lessons for Newbies

Oftentimes, new traders start out with their own preconceived idea of what trading is. Ideas can vary widely – some might assume that trading is easy and a quick way to earn a buck, while others might think of it in a more intimidating light. No matter what theory one has in the beginning, each […]

Oftentimes, new traders start out with their own preconceived idea of what trading is. Ideas can vary widely – some might assume that trading is easy and a quick way to earn a buck, while others might think of it in a more intimidating light. No matter what theory one has in the beginning, each […]

Oftentimes, new traders start out with their own preconceived idea of what trading is. Ideas can vary widely – some might assume that trading is easy and a quick way to earn a buck, while others might think of it in a more intimidating light. No matter what theory one has in the beginning, each beginner is likely to learn the lessons we’ve outlined below with time. Of course, you could always learn the hard way, risking real money as you go, or you could take a few minutes to take a look at our list below to avoid learning these lessons through trial and error.

Lesson #1: Stay True to your Plan

Before you start trading, you’ll need to create a trading plan that really considers the important aspects of the why’s and how’s of the way that you will trade. Many beginners read advice online that details the importance of actually making this plan, and they do start out with a trading plan. However, it’s common for beginners to deviate from their plan over time or simply forget they even made one. You might even decide that you don’t need a plan anymore once you start getting better results. Unfortunately, this can lead down the wrong path and you could actually lose money by forgetting about your tried and tested trading method. It’s a good idea to review your results once you implement your plan – if the statistics show that the plan is working, that’s reassurance that you should stick with it. 

Lesson #2: Manage your Risk

With gambling, you might be tempted to take bigger risks in lieu of larger rewards. Some beginners have this mindset when they start trading, but this is a quick way to drain your account. Trading decisions should be based on hard evidence that is outlined in your trading plan, but you also need to limit the risk you take on each trade because the market is never predictable. Be sure to read up on margin, leverage, and drawdowns if you haven’t, and ensure that you are also using stop losses and the correct position sizes as well. Many beginners don’t realize how important these factors are when it comes to limiting losses and wind up taking one or more large losses that leave them with a zeroed-out account balance. 

Lesson #3: Be Patient

There will be times when the best thing to do is nothing at all. If there isn’t evidence that supports making a trade based on the facts you’re looking for, you should sit back and be patient. Some beginners become addicted to the rush of trading or might even feel unproductive if they don’t do something, making them more likely to enter a trade that will go south. After all, it’s often said that the best traders do nothing 99% of the time. 

Lesson #4: Don’t Compare Results

Everyone trades at their own pace, so it isn’t fair to compare your results with others. Remember that the factors affecting your results are different, as that person likely invested a different amount of money, risks a different percentage on their trades, uses a different strategy, and so on. It’s also important to remember that you shouldn’t throw your trading plan out the window to randomly adopt a plan that seems to be making someone else more money. Otherwise, you might run into problems you didn’t expect and could wind up losing more money in the long run. 

The Bottom Line

Many of these lessons revolve around the importance of creating a solid trading plan and sticking with it over time, rather than abandoning one’s proven plan in favor of a sudden urge to try something else. You also need to avoid entering trades just to do so and only enter a trade if the evidence supports that it is a good move. Know when to do nothing if your trading plan doesn’t support entering a trade. Beginners also have a common problem that revolves around managing risk effectively, as some like to jump into things taking bigger risks when the reality is that a new forex trader should risk less money than someone that has been trading for a long time. If you keep these lessons in mind, they should help you to avoid losing money because of mistakes that could have easily been avoided.

Categories
Beginners Forex Education

Five Golden Trading Tips for Forex Beginners

3030Some of the best forex trading tips that can be found online are old, yet undeniably helpful. Whether you’ve recently started your journey as a forex trader or you’re only considering opening a trading account, you should take a look at our golden trading tips below to ensure that you aren’t missing out on any […]

3030Some of the best forex trading tips that can be found online are old, yet undeniably helpful. Whether you’ve recently started your journey as a forex trader or you’re only considering opening a trading account, you should take a look at our golden trading tips below to ensure that you aren’t missing out on any […]

3030Some of the best forex trading tips that can be found online are old, yet undeniably helpful. Whether you’ve recently started your journey as a forex trader or you’re only considering opening a trading account, you should take a look at our golden trading tips below to ensure that you aren’t missing out on any crucial trading advice.

Tip #1: Limit your Risk

Limiting your losses is one of the best ways to ensure that you don’t wind up blowing your entire account balance. While some of us might feel very uncomfortable risking a lot, others start out with the idea that risking more will lead to a larger payout. It’s true that you might win big, but a couple of losses can really depreciate your account balance. Experts recommend limiting your risk to 1-2% of your total account balance for each trade. However, other advice recommends determining how much you want to risk based on how much you’re willing to lose for each specific trade, rather than using a one size fits all plan. For example, you might be willing to risk more on a trade if there is more evidence that it is a good move, while you’d want to risk less on a trade you felt less sure about. 

Tip #2: Only Risk What you can Afford to Lose

First, you should never deposit money into your trading account that isn’t disposable. If money is meant to pay for bills or you need it to live on, then you should keep it in your pocket. When it comes to the amount that is actually in your trading account, you want to limit your position sizes and be careful with how much you risk. In this case, you actually need to think about how much you can afford to lose while keeping a steady reserve of cash available for trading. If you do wind up blowing your account, be sure you only replenish those funds with money you can afford to lose. 

Tip #3: Stick with your Strategy

Before you even begin trading, you need to spend time developing your trading strategy, which is basically a plan that outlines the reasons why you will or won’t take a trade, what time you’ll trade, how much you’ll risk, and everything else that is important about the way that you trade. Once you’ve made this plan, it’s important to stick with it for the best results. Many beginners spend time on their plan, in the beginning, only to deviate it or completely forget about it later on. Unfortunately, trading without a plan and trying out random strategies usually leads to a loss of money. 

Tip #4: Know when NOT to Trade

There will be times when the best thing to do is nothing at all. Before entering any trade, you should always make sure that evidence supports the move based on your trading plan. If there isn’t any evidence that you should enter the trade, don’t do it! Some traders feel that trading more will help them make more profits, while others can’t stand sitting back and doing nothing while their balance remains the same. The truth is that it is better to enter no trades and keep the same balance than it is to enter risky trades that will cause your balance to drop. 

Tip #5: Choose the Right Broker

You need to put a lot of effort into your broker selection, otherwise, you’ll wind up paying the price later on. Keep in mind that there are many legitimate companies to choose from, but scammers are among the offers online. You also need to compare the different fees, deposit and withdrawal methods, account types, leverage options, and other specifications offered by each broker so that you can find the best option for your needs. Don’t go with the first option you see and be sure to compare at least a few trustworthy options before making a choice.

Categories
Forex Market

Why are Forex Traders Losing Money in 2020?

What are the reasons why the vast majority of traders are losing money in 2020? It’s a pretty interesting question and the answers help you to better understand the market and give you a focus on what you should and should not be doing. Here, we’ve provided a summary of the most common mistakes seen within the industry this year.

What are the reasons why the vast majority of traders are losing money in 2020? It’s a pretty interesting question and the answers help you to better understand the market and give you a focus on what you should and should not be doing. Here, we’ve provided a summary of the most common mistakes seen within the industry this year.

What are the reasons why the vast majority of traders are losing money in 2020? It’s a pretty interesting question and the answers help you to better understand the market and give you a focus on what you should and should not be doing. Here, we’ve provided a summary of the most common mistakes seen within the industry this year.

Index

  1. Insufficient training to start trading
  2. Poor approach and lack of perspective
  3. Emotions interfere with your trading
  4. Do not limit losses
  5. Making predictions
  6. Trading scams
  7. Lack of persistence

Insufficient Training to Start Trading

More than 70% of the traders who start bankrupt their accounts in the first month. This fact says it all. It’s not that they lose money, it’s that they lose all their money. It is curious as for any other kind of professions as can be a doctor, teacher, dentist We dedicate years and to do trading you turn on your computer, watch some free videos on the Internet and you already think you can make a lot of money in one or two days. ¡ Ou, mama!

This does not mean that you have the need to spend years studying and training until you can start, only that your training takes time and doing things right beyond running and running and burning your account.

Poor Approach and Lack of Perspective

As you well know, there is too much information on the Internet about the study of graphics (chartism) and technical analysis. Lots of copied and pasted information that you start to devour and that many people apply over and over again. This has two consequences:

The vast majority of people lose money because they apply the same thing and this ends up making those patterns not fulfilled in the market. This way or approach to analysis is very subjective and makes you not know if what you’re learning or applying works. What we mean is there’s a lot of people teaching how to trade from twenty-page manuals without opening a real account or without results. There are few barriers to entry in terms of training and most are very theoretical.

All this, coupled with the idea that you can open a $100 trading account and take it in a couple of days at $1000, is a fateful cocktail. Recently someone asked me if I could earn 5 euros a day with 100 euros. We are talking about 5% daily. My answer was “How many days?”. You can earn 5% in one day, but you can’t expect to earn 5% or 1% every day. You know why? Because profitability in such a short term is not up to you. I like to say this because the other person’s reaction is usually to think “Okay, you don’t know, but you can”. After a while, that person usually remembers you. Sometimes the human being needs to be wrong to realize things.

All I can tell you about all this is that you need to see this business objectively and with a real perspective.

Emotions Interfere with Your Trading

It’s normal that you don’t feel the same when your account goes up as when your account goes down. We have emotions and that you feel them is normal. The problem comes when you do the opposite and your emotions interfere with your operations. For example, your adrenaline goes up and you start to raise your exposure and the size of your positions or, worse, you’re losing and you start doing surgeries without a beat. It works something like this, “Wow, I’ve run three operations and they’ve all been positive. From now on I’m going to double my tickets”. Or so, “The last two operations have been negative, abandonment”.

You need to create a methodology that makes you make cold decisions. This I have achieved with algorithmic trading, I focus on creating systems and evaluating them, measuring them. And once they’re running, I just supervise them. In this way you gain x1000 peace of mind and feel relaxed, knowing that you do everything that is in your hand.

Do Not Limit Losses

I’m not just talking stop loss that limits your loss when an operation is against you (of course they have to be applied). I’m talking about having the ability to eliminate strategies that are having a bad performance by others that can work better.

What most traders usually do is apply a single strategy. As you know, every strategy has a winning phase and a losing phase. What is it possible for you to do when you only have one strategy and start losing? Wait, little more. However, if you work with different strategies you can remove from your account those that behave worse and constantly incorporate those that do better. This will not just depend on a system and make your curve more stable.

Limiting losses is a key aspect of survival. Someday, whatever system you’re using will stop working. What are you going to do then?

Making Predictions

If you are a trader, you will often be asked something like “what do you think of the price of bitcoin?”. The reality is, no one knows unless you have inside information about it. And it’s not usually common unless a relative of yours is a colleague of Trump’s.

Making predictions in the press or social networks is very cheap. In the case of not fulfilling people usually delete the tweet or forget. But if everything goes as they said, they will say that they were right and that they are experts in it. You should not as a Forex trader depend on this.

You also don’t need to make predictions to make money. You need trading systems with a statistical advantage in your favor. Don’t worry about how to do it, nowadays there are tools that allow you to do it without programming and create your own arsenal. This is what I do myself and I recommend you to do: focus on creating strategies, check that they are robust, apply them and supervise. That’s it.

Trading Scams

Yes, unfortunately, there are many online scams related to trading. Unregulated brokers, groups of signals that make up your results, martingale robots that burst your account. You need to know that all this is there and not fall down to know what is best for you. You need to differentiate what is right for you from what is not.

You want profitability or you want to lose everything already? Many people fall into this kind of scam not because they are clumsy, but because they have the illusion of multiplying their money in a few hours and just in case they try. It happens in different sectors, in sports betting, online shops that do not deliver their products, etc. This has been and will be there. The question you have to ask when a broker calls you offering something is whether it is aligned with your interests. This type of broker wins when you lose. Need a partner for your business who would make money if you perform badly? It doesn’t make sense. Just avoid all of it and keep your head clean to focus on what you’re really interested in generating profitability.

Lack of Persistence

Many people are attracted to trade as a way to make quick money. They start, they start with a lot of risks and when a losing streak comes they leave it. They don’t know exactly what the subject is. They seek to make money by doing anything. And they finally end up losing all the money doing a lot of things. All without results.

Like any other business, you’ll need to take some time off and not run off at the first exchange. If you’re not really attracted to trading and just looking for results, you have a lot of ballots to go out the back door.

Change the Chip

It may seem complex, but it’s very easy to avoid all of the above. From not reading biased news or predictions, from being relaxed looking at your screen while watching how the EAs are running. I certainly do not know what will happen to the price of the EUR/USD pair, or EUR/GBP. I am dedicated to creating strategies that have worked based on profitable patterns. I test them and measure their robustness and work with a number high enough not to obsess over the performance of one. I eliminate the ones that don’t work well and incorporate the ones that are working correctly.

It all comes down to working with systems that make you take positions without thinking too much and react by impulses. The only thing we have as traders is the possibility to see how things have gone in the past. We do this through backtesting. Doing reliable backtests and managing your strategies in the present is how I’ve managed to get results, doing all this in a scalable and bearable way.

If you can automate to leave out of control the divergences of doing it manually, but you can start discretionally. The important thing is not to automate by automating, the important thing is to apply strategies that work. This is what is in your hand. At present, the real question is, how can I know what works? The answer is simple, focus on statistics.

Categories
Forex Psychology

Is It Important that You Actually Enjoy Forex Trading?

It’s a very simple question as to whether you enjoy trading or not, however even some of the simplest questions can be quite hard to answer if you look into things in a little more detail, with a little more depth, you can find out exactly how you feel about something, and for many, it […]

It’s a very simple question as to whether you enjoy trading or not, however even some of the simplest questions can be quite hard to answer if you look into things in a little more detail, with a little more depth, you can find out exactly how you feel about something, and for many, it […]

It’s a very simple question as to whether you enjoy trading or not, however even some of the simplest questions can be quite hard to answer if you look into things in a little more detail, with a little more depth, you can find out exactly how you feel about something, and for many, it may not actually be how it seems on the outside. There are a lot of aspects to Forex trading. Some people will enjoy some of them, like the wining, and others will find it absolutely tedious, such as all the numbers. It really comes down to your personality and your likes and dislikes as to whether you will enjoy your trading journey.

Trading is tough and trading takes a lot of deduction and discipline, if you believe that you are a free spirit, someone who cannot be held down, then trading can seem from the outside like it would be perfect for you, no boss, no set working time, however, in reality, the markets will ultimately control you and will be in charge of you. You will be forced to work certain hours, you will be punished when you do things wrong and you will unfortunately have all of that without the stability of a guaranteed monthly wage.

Trading can be incredibly exciting and incredibly rewarding, especially when you are on a roll of positive trades. Each and every win will give you a little bit of excitement and a little confirmation that you are doing something correctly. What about when things go wrong? When you make a loss, it is of course not an enjoyable situation to be in. What you need to think about is how you deal with that loss, how are you coping with losses? Do they stress you out, do they cause frustration? If they do, then you may not find trading to be very enjoyable in the long run.

There will be a lot of losses along your trading journey, if you are not able to deal with them without stress or to be able to move those loose out of your mind in order to move on then there is a good chance that you may begin to find trading stressful and not all that enjoyable once the losses begin to build up, and they most certainly will begin to build up. Being able to deal with those losses and being able to clear your mind will really help you remain positive. Just remember that those losses are coming, there will always be losses, so dealing with them is paramount. Just remember to consider your overall enjoyment when deciding to trade, if you get caught up on losses, then this may not be the hobby or career for you.

Numbers, lots of numbers, do you like numbers? If not then trading won’t be an enjoyable thing for you. The Majority of trading, the analysing, the planing, and the actual trading is all based around numbers, be it the value of a currency or the current Fibonacci levels. Numbers will be involved in everything that you do. For those that like maths and statistics, trading will be an amazing experience, it allows you to analyse all sorts of things and will keep you busy pretty much every day. However, if you are not a fan of numbers and performing mathematical sums, then trading could be a little boring and a little tedious as you begin to realise that it is pretty much all based around those pesky numbers.

How are you when being by yourself for an extended period of time? If you struggle to keep yourself company, then it can be a difficult journey. The majority of trading is not a highly social event, in fact, the majority of the time you will be sat by yourself in front of the computer, reading, trading, and keeping yourself entertained. Of course, there are times where you will take to others there are forums and other message boards available to talk to other like-minded people, but this is still all digital and many other traders do not actually come into physical contact with any other active traders.

Are you able to keep yourself occupied, do you feel lonely when alone, and do you cope well with isolation? These are pretty big questions that you need to ask yourself, there are those that are able to entertain themselves or in fact enjoy the aspect of isolation. If that is you then you could really start to enjoy trading, you are in total control, but that also means control of your moods and your interactions with others. If it starts to get too much, then you may need to look at trading in smaller chunks and using the time between to get outside and interact with others. However, if you like the isolation, like a lot of people do, then not needing to deal with other people and the issues that come with people management, then this could certainly be the career for you, it will be just you, your computer, and the markets.

Do you need direction? One thing that a lot of people hate about their job is receiving instructions on what they need to do, but it isn’t until you have left that job that you come to realise that you actually needed that direction and those instructions. Many people find it hard to prioritise and to plan their days, and without some there to help you through it can often feel a little lost. Being a trader, full time or part-time, requires a certain amount of self-direction and planning. You need to plan your day, you need to ensure that you are motivated to do it and you need to be able to evaluate your own performance on it. If you are not able to plan your days properly then you may find trading an extremely stressful experience. Those able to work well by themselves will find relief in the fact that they do not have someone above them managing them, of course, the markets will still be in charge.

How are you with self-motivation and self-discipline? If you notice that you are doing something wrong are you able to correct yourself? Being a trader means being able to motivate yourself to do the work and being able to tell yourself when you are doing something badly. In terms of your enjoyment of trading, motivation will go a lot way, if you are not motivated and not able to self motivate yourself then you will struggle to enjoy it. The most common reason for losing motivation is boredom, and that is something that you will potentially experience a lot during a solo trading career, so being able to give yourself that boost is paramount to any form of success.

The same can be said for discipline, if you are not able to discipline yourself to give yourself some honest feedback on your trading abilities and performance, then you will only continue to make mistakes These mistakes will lead to a loss in motivation and will diminish your overall enjoyment of trading. So if you are able to self reflect on your performance, you may well enjoy it, but if you are not, then it could be a difficult and demoralising journey for you.

So those are some of the things that you need to be able to think about. Trading can be very enjoyable for some, but others it can be a real mood and motivation killer. It will ultimately come down to your personality and the way that you are able to deal with boredom, stress, and all the other emotions that come along with trading.

Categories
Beginners Forex Education Forex Basics

Were You Aware of These Benefits to Trading Forex?

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

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

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

#1: Working on Your Own Clock

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

#2: No More Boss!

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

#3: Everyone Can Do It

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

#4: The Size of the Market

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

#5: Transaction Costs are Low

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

#6: Leverage

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

#7:  Innovative Technology

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

#8: Free Stuff!

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

Categories
Beginners Forex Education Forex Basics

Six Seriously Damaging Misconceptions About Forex Trading

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

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

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

Thinking You’ll Get Rich Quick

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

That You Can Start Immediately

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

That it’s Better to Risk More

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

The More Leverage the Better

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

That Trading is Fun

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

That you Need a Lot of Money to Get Started

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

Categories
Forex Psychology

Losses When Trading Are Not Personal

Let’s get this out of the way straight away, the markets do not care about you, when you take a loss, they are not doing anything against you, in fact, they do not even know that you exist. When you take the loss personally, it is only putting the rest of your balance, money and […]

Let’s get this out of the way straight away, the markets do not care about you, when you take a loss, they are not doing anything against you, in fact, they do not even know that you exist. When you take the loss personally, it is only putting the rest of your balance, money and […]

Let’s get this out of the way straight away, the markets do not care about you, when you take a loss, they are not doing anything against you, in fact, they do not even know that you exist. When you take the loss personally, it is only putting the rest of your balance, money and psychological well being at risk of collapsing.

It sounds a little extreme to call it a psychological collapse right? Well, the fact of the matter is that that is exactly what it is. When you take a loss and then take it personally, you are going to want to do whatever you can to get it back and to get even, but you are doing this against something that doesn’t even know you are there. If this was a football match, the opposition scored, it is perfectly normal and fine to want to get even, in fact, that would be the entire aim for the rest of the match until you do. However, for trading, this is not the case, if you make a loss, your main aim is not to simply win that money back. It is to continue with your current strategy and not to let that loss get the better of you.

You need to be able to separate the feeling of a loss and the fact that someone did it against you with the idea that it is simply part of your strategy. Losses should have been built into it and so they should not be taken personally, as soon as you look at it in a way that the markets purposely hurt you, things will only begin to go downhill.

Trading can be hard and you will make losses, a lot of them, there are no traders that do not make losses, what is important is that you do not see them as a failure, they are not personal failures and you should not treat them like they are. A single loss means very little in the long run, by following your trading plan you will be able to make back the money lost very quickly. These feelings of things being personal only really come from a loss when you win, the strategy is working and that is it, but when you lose, you must have done something wrong, which is a long way from the truth. You will feel frustrated, you will feel like it was your fault and that can lead to some very bad decisions on your next few trades, decisions that could potentially put the rest of you account in danger.

Some that knee jerk reaction is always the wrong one, but what should you be doing? Your reaction to a loss should simply be that you want to find out why it lost, there is often a logical explanation (although at times the market can be a little crazy). Review what happened, find what went wrong so you can try to avoid it in the future. As soon as you make rash decisions you will make further losses, then more and more until you are done, analyse and look at things calmly and you will be able to work out and avoid similar losses, of course, that is often easier said than done when you have just lost some of your money.

When you experience your first loss it can be hard when you experience your first consecutive loose sit can be even harder, but you need to be able to look at them as learning experiences. Someone who has the experience of losses will be able to look back at what they die after the losses, was their ration right and do they resolve anything, looking back and using past experiences can allow you to better overcome any future ones. Did you manage to recover? The fact that you are still trading tells us and you that you did, so you will be able to again. Use past experiences to help you get over current ones.

We have mentioned how regular losses will be, everything one should be helping you to improve the way that you are able to cope with them, making it easier for you to get past them. Again, losses will happen, it is important that you are able to deal with them without letting your emotions and feelings get the better of you.

If things are getting a little tense, take a step back, move away from the markets in order to clear your mind. Come back with a clear head and then do not just start trading again, instead look back to the loss and try and work out why it happened, with a clear mind you will be able to look at it without feeling that it was personal and so it will be easier for you to work out how you can deal with it in the future and how to avoid getting caught up emotionally in the losses.

Remember, the markets are not there to hurt you, they are not there to take your money, there will be wins and there will be losses, working out how to deal with the losses is a vital part of trading, just remember that the markets are not targeting you and your losses are not personal, they are just part of what trading really is.

Categories
Forex Assets

AUD and Gold Correlation Information for FX Traders

Over the past 10 years, exports of oil from Canada have been increased significantly. Canada is the fourth-largest producer and exporter of oil in the world, reaching around 3.6 million barrels per day in 2018. On the other hand, we have Australia, one of the world’s top producers of the yellow metal. More than 61% […]

Over the past 10 years, exports of oil from Canada have been increased significantly. Canada is the fourth-largest producer and exporter of oil in the world, reaching around 3.6 million barrels per day in 2018. On the other hand, we have Australia, one of the world’s top producers of the yellow metal. More than 61% […]

Over the past 10 years, exports of oil from Canada have been increased significantly. Canada is the fourth-largest producer and exporter of oil in the world, reaching around 3.6 million barrels per day in 2018. On the other hand, we have Australia, one of the world’s top producers of the yellow metal. More than 61% of Australia’s gold resources are located in Western Australia. A few days ago one of our bright trainees asked us a very interesting question during his research about precious metals. He was curious about currency correlations with other markets, to other actual commodities. So can we use one to better predict where the other might be headed?

Gold and oil are probably the two most important commodities that are always playing some of the main roles in the trading scene. The idea about this topic is to figure out if we can follow where oil is going to so we could somehow have a better clue of where the Canadian dollar is going. The same thing with shiny gold as it relates to the Aussie. There is the third one that deserves to be mentioned and that is the Nikkei index. If we follow that it often follows the same route as the USD/JPY. So are there any patterns or courses of action that we can anticipate? Sadly, looks like nothing here can help us at all.

Most professional traders keep saying that at the end of the day this is surely nothing more than a fun fact. We will try to give some explanations of why this is the case. The first reason is that they usually move in a tandem with each other so trying to get a speedy indicator where another one is going to go just doesn’t work. Second, in most cases, they don’t even correlate. Maybe they’ll correlate for a while and then they’ll stop and they’ll start up again. Here we simply never know when those changes are going to happen.

In the case of gold, the idea is that AUD and yellow metal should march in tandem. So gold actually does follow the AUD/USD down but when it rebounds, the AUD/USD doesn’t. If we dare to go long on the AUD/USD because there was a real branching there when gold went sharply, we would probably find ourselves in a problem. Even if before they moved in tandem we cannot acquire an advantage if two charts are just together in motion at the same time like that. Gold and all precious metals supposed to be the best hedge against a fragile economy if it crashes hard, so all the people holding metals out there should pay close attention to all earthquakes on the market.

The lesser-known correlation, Nikkei to USD/JPY used to move in tandem but is truly useless to traders in pursuit of real action. Over the past couple of years, since the Nikkei trades in the Asian conclave, the slowest in forex, some traders have been waiting for the closing result of the Nikkei market to better forecast directional bias for the USD/JPY in the NY and London sessions. We don’t recommend trading these lower time frames because it doesn’t work like we would want to and the Nikkei doesn’t have a powerful impact on the Eurostoxx 50 and the S&P 500 markets. These markets are much stronger from the financial angle and they would overrule anything that the Nikkei did earlier.

The only way to go forward is to put all our attention on things that matter. Worrying about how all these currencies correlate to the price of gold and oil might not be the highest tree in the forest we want to climb on. Simply, ‘Comdolls’ can not help us much. For our fellow traders who don’t know, the nickname ‘Comdolls’ refers to the AUD and USD because they are dollars and they tend to rely on commodities. So this way of trading isn’t probably the most exciting because we cannot just extract something from it and use it right away and start making pips.

It is crucially important for us to separate which are the things that can actually help us from the things that just whistle in the woods. We need to look at this thing as good news because it’s always better to know what kind of things we should eliminate from the equation. Forex market is a 4 to 5 trillion dollar a day market and surely it’s not set up for people to just come and take the money all the time. We will get out of it what we put into it. Our goal should be to absorb as much knowledge as we possibly can, to take notes, and be relentless.

Categories
Forex Psychology

Excuses That (Almost) All New Traders Make

If you look around the internet, you will find a lot of excuses out there about why someone may not be trading well or why they have been losing money. The problem with these excuses is that they often show that the user has a lack of understanding about how the markets work, either that […]

If you look around the internet, you will find a lot of excuses out there about why someone may not be trading well or why they have been losing money. The problem with these excuses is that they often show that the user has a lack of understanding about how the markets work, either that […]

If you look around the internet, you will find a lot of excuses out there about why someone may not be trading well or why they have been losing money. The problem with these excuses is that they often show that the user has a lack of understanding about how the markets work, either that or they are in denial and do not want to admit that it may have actually been something that they did that caused the trade to lose.

We are going to be looking at some of the more common excuses that you see posted about the internet on blogs and on various trading forums, we are sure that you would have seen some of them posted before and we are sure that you will also see them posted many times again.

My broker is a scammer!

This excuse could actually have a little merit to it, depending on the broker that is. There are some very shady and dodgy brokers out there, ones that have taken part in some pretty low business operations which have left people without any of their money, or tactics which encourage people to deposit money that they cannot afford to deposit, if this was the case then the excuse would be pretty valid. The problem comes when we look at the more reputable brokers, the ones with great track records that have done pretty much nothing wrong in their entire existence. People still claim that these brokers have scammed them and stolen their money, simply due to the trader losing their money.

This can also be seen with people who claim that all regulated brokers are good and unregulated ones are bad. The regulation covers the protection of their money, it does not always dictate the behavior of the broker, so people claiming that all unregulated brokers will scam you is not the case at all. The majority of traders who use the reputable ones have simply treated badly or gambled, the brokers often do nothing wrong (unless they are an actual bad broker). So be wary when you see people claiming to have been scammed by the broker, it is not always the case.

The markets are against me.

This is something that we see a lot, people take their time to analyse what they think is a good trade, they have put the time and effort in, they then place the trade and it goes the wrong way, or it starts to go well, then suddenly turns and zooms off in another direction. What happened? The markets must be against me, they obviously saw me put on this trade and then decided to go against me so I would lose my money. Reality check, the markets do not even care who you are, they do not notice the little money that you are putting into the markets. There are trillions traded each day on the markets, you $100 trade is nothing to it, not worth anyone’s time or effort to try and trade against it.

Newer traders often don’t realise how many things there are that can affect the markets. You can never prepare for them all, in fact, you cant prepare for even half of them, news events, natural disasters, banks changing consensus, loads of things affect them, just because it went against you, doesn’t mean it was anything personal.

Trading takes too long.

Trading does not take a long time, what takes a long time is the preparation of trading. This is unfortunately the part that you need to do at the start of your career and so it is the part that newer traders see the most. The thing that many do not understand is that once you have gotten through the initial planning and preparation stages, the actual process of putting on the trades does not take time at all. It is common to see it plastered all over the internet and forums that you will not have a life when you start trading or you won’t have time to do it after work, but you can, and many people do. Many people trade part-time after or before work, it is more than possible, people just do not want to put the effort in, or simply look at the start of the process and then assume that the entire trading career will be the same.

Trading is too complicated.

Trading looks complicated, in fact, it is complicated. We will probably give them this one. It takes a lot of effort and time to learn how to trade properly, not something that a lot of people want to actually do. The problem is that from the outside it looks incredibly simple, here isn’t actually that much to it, you guess that something will go up or down and put that trade on. Unfortunately, it is not that simple and once people have started trading they have realised this, do not want to put in all the time and effort to actually learn how to trade properly and simply chalk it up as too complicated and give up.

You can’t make enough to live on.

This is normally something that people say if they have gone into trading with their expectations of what they will be able to do is set way too high. The unfortunate truth is that a lot of people are now getting the idea that trading can make you rich overnight, this view is often formed when people view some of the frequent adverts that are promising less than realistic returns. When you go into it thinking you will have the world, you will be disappointed.

People also go in with the expectation that they will be able to make enough to quit their job within a couple of months, again, this is not something that is realistic. Yes, you may be able to make enough to quit your job, but that will take a long time to happen. It takes a lot of time to learn, not something that some people want to put in, so as soon as they do not make as much as they want, they blame forex and simply state that you cannot make as much as people say that you can.

So those are some of the things that you often see posted around social media or on trading communities. They are often from people who have entered trading without a proper understanding of what is involved or even what trading actually is. If you have that knowledge then you most likely won’t be making the excuses that we went through above.

Categories
Forex Psychology

How to Cope With Trading Boredom

Trading can be an incredibly exciting thing, especially when you are first starting out and everything is brand new to you. Even for experienced traders, it can be an incredibly exciting and thrilling thing to take part in, especially when there is a lot of volatility within the markets. The problem comes when the markets […]

Trading can be an incredibly exciting thing, especially when you are first starting out and everything is brand new to you. Even for experienced traders, it can be an incredibly exciting and thrilling thing to take part in, especially when there is a lot of volatility within the markets. The problem comes when the markets […]

Trading can be an incredibly exciting thing, especially when you are first starting out and everything is brand new to you. Even for experienced traders, it can be an incredibly exciting and thrilling thing to take part in, especially when there is a lot of volatility within the markets. The problem comes when the markets are a little bit slower, in these slower conditions something called trading boredom can set in.

Trading boredom can simply be described as the period when there is nothing going on, the markets aren’t really moving and even if they are, they are not moving in a way that is suitable for your trading strategy, and so you are sat there with nothing to actually trade, not much to analyse and nothing to do at all, this is where trading boredom begins to set in.

While boredom can bring our motivation levels down, it can also lead to other problems. It can make us far more likely to be distracted, those little toys that you have in the room, or the TV in the corner will be turned on a lot more often than it will. This creates a really bad habit when it comes to trading. You want to be getting rid of these distractions, so this trading boredom leads us towards a very slippery slope because if you get into the habit of getting distracted, it will be hard to break out of it.

So we briefly mentioned that boredom can actually reduce our motivation levels which in itself is not a good thing. Without motivation, we become more easily distracted and can make us just not want to do it. In fact, a lack of motivation is one of the things that can cause people to quit trading completely, which is of course not a great thing because trading is such a fantastic opportunity and a great hobby to have.

The problem with boredom is that for some it is unbearable and so they decide to try and force some trades, this is never a good idea, neve. All that this will lead to is bad trades and the inevitable losses that come along with them, if you are feeling bored, the last thing that you want to do is force trades, so do not do it, none, not even one, it will lead you down a slippery slope which for many there is no way to return from.

For some it is easy to get through these dull moments in trading, they do not need any added stimulus and can very patiently wait out the slow moments., For many though, it is not quite this easy and these dull moments can be a real killer. We need to find ways to help reduce the feeling of boredom and so we have come up with some ideas that you could try which could help to alleviate that feeling, some may work, some may not, but it is always worth trying as you do not want to be stuck with the feeling of boredom, it will only make you want to put down your trading tools and leave.

When the markets are slow, it is the perfect opportunity to learn a little more, learn something that you do not know much about. This could be a new strategy or just something smaller than can be used to adapt your own strategy. It is also a perfect time to start learning about additional timeframes. These can be used to help you confirm your analysis, as the more timeframes that you understand, the more accurate your analysis can be.

It can also be the perfect time to teach yourself a new skill, patience. Patience is key when trading, these dull moments will always be there, some lasting minutes, others for potentially days. Having an understanding that you have your strategy set, you understand the entry requirements and now are just waiting, do not see this as a time to be bored, think of it as waiting to pounce on the perfect trade. Building up your patience will benefit you in the long run and will potentially help you trade in more strenuous market conditions down the line.

If we are used to the high pace markets, then these slower moments can be even worse, you need to be able to slow yourself down, to calm yourself from all the excitement that you are used to. Take a few minutes before sitting down to trade to relax, take some deep breaths and slow your body and mind, this will allow you to better focus on the issue at hand and to be more in sync with the markets.

There are also a lot of trading forums and communities out there, do not be afraid to join a few. Some people often think that they are a waste of time or that they will not be able to learn anything from it or that they are simply full of people wanting info but not willing to give them. This is certainly not the case, there is a wealth of information out there, you will always find answers to questions and a lot of information that could be beneficial for you, not only this, but it will give you something to do while the markets are quiet, taking away some of that boredom.

So remember, there will be some dull moments, no matter what your strategy is or how long you have been trading, there is always the opportunity for the markets to be slow and for you to struggle to find trades, it is important that you know what to do with yourself in those situations. If you have a lot of patience then it won’t be an issue, but for those that find it hard, keep looking for something for you to do, different forums, new analysis, new strategies, anything that isn’t forcing trades. So have some things planned to do for those quiet moments, that way you won’t be tempted to make those bad boredom trades.

Categories
Beginners Forex Education Forex Basics

Some Uncomfortable (and Painful) Truths About FX Trading

When it comes to trading, there are a lot of ideas and rumors flying about which are coming from both those that have traded for a long time, those that are just starting out and those that do not trade at all. Some of what you hear is about what it is like to trade, […]

When it comes to trading, there are a lot of ideas and rumors flying about which are coming from both those that have traded for a long time, those that are just starting out and those that do not trade at all. Some of what you hear is about what it is like to trade, […]

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

It takes money to make money.

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

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

You will make a lot of bad and wrong trades.

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

There is not a perfect strategy.

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

You need to be there at the right time.

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

Trading may not be for you.

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

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

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

You will not be rich tomorrow.

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

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

Categories
Beginners Forex Education Forex Basics

What You Need to Know to Succeed as a Forex Trader

Forex traders spend a great deal of time educating themselves before they are truly ready to begin trading. However, its easy to miss out on some important tips because there are so many sources floating around on the internet. Below, we will provide some of the most important facts that you need to know to […]

Forex traders spend a great deal of time educating themselves before they are truly ready to begin trading. However, its easy to miss out on some important tips because there are so many sources floating around on the internet. Below, we will provide some of the most important facts that you need to know to […]

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

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

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

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

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

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

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

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

Categories
Beginners Forex Education Forex Basics

The Importance of Initiative

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

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

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

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

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

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

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

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

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

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

Categories
Beginners Forex Education Forex Basics

Staying in the Zone While Trading

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

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

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

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

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

Confidence

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

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

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

Control Stress Levels

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

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

Avoid Distractions

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

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

Preparation

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

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

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

Categories
Beginners Forex Education Forex Basics

The Honest Truth About Forex Trading

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

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

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

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

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

Trading is a slow process.

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

There is risk involved.

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

There is no hands-off trading.

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

You cannot predict the markets.

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

Regulated brokers are not always safe.

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

You cannot be successful with a $10 deposit.

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

You will have plenty of losses.

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

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

Categories
Beginners Forex Education Forex Basics

Are You Using these Excuses to Avoid Trading?

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

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

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

Not Enough Money

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

Not Enough Time

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

It’s Too Complicated

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

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

It’s Gambling

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

It’s a Scam!

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

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

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

Categories
Beginners Forex Education Forex Basics

What Forex Trading Offers (In Addition to Money)

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

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

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

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

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

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

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

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

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