Tag: Forex Techniques

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Beginners Forex Education Forex Basic Strategies

Apply These 5 Secret Techniques To Improve Your Forex Trading

There are so many ways to fail with forex trading but so many ways to improve on. Each trader is unique in how he is playing the long forex game, however, common techniques are applied in various forms that make a huge difference to the trader’s psychology and other trading aspects. Such techniques are not […]

There are so many ways to fail with forex trading but so many ways to improve on. Each trader is unique in how he is playing the long forex game, however, common techniques are applied in various forms that make a huge difference to the trader’s psychology and other trading aspects. Such techniques are not […]

There are so many ways to fail with forex trading but so many ways to improve on. Each trader is unique in how he is playing the long forex game, however, common techniques are applied in various forms that make a huge difference to the trader’s psychology and other trading aspects. Such techniques are not always on the scene, frankly, we think most of the good stuff is not in plain sight. This article will try to provide techniques everybody can apply but a few know about. 

#1 Use Personality Tests

You will certainly find trading techniques not applicable to you or your lifestyle. Every trader has inherited advantages and disadvantages related to forex trading. Now, it is very rare to connect your results from popular personality tests with forex trading. Did you know you can use these tests to see where you will be great and where you will fail in trading, regardless of the strategy you choose? This is a secret only experts talk about or prop firms when registering new members. It may be a good idea for you to research this topic, however, we will give you some examples. Personality tests are there to help you, so you should answer them honestly, they are just describing your personality after all. We will use 16 personality types created by Isabel Myers and Katharine Briggs. 

  • If you are an extrovert, you are likely happy to start trading right away, opportunities are never missed, you like to take action. All this eagerness, on the other side, is dangerous. Overtrading is a common mistake with these traders, they also get emotional quickly. They should work on rules that will prevent them from overtrading, such as going to the gym, reading sessions, or similar, just away from their trading platform.
  • Introverts are great strategists, planners, strategy engineers. On the downside, they miss opportunities because of too much information. Another drawback of such traders is their hesitation to talk about their trading that could produce a great idea. 
  • Your lifestyle is how you look at the world and this also defines how you look at fore trading. If you are perceptive, for example, you do not like plans, rigid constructs that tell you what to do exactly. Even though such traders are curious and open-minded, they may lack conviction or confidence. Accepting a decision system solves this, provided a trader follows it to the letter even though he dislikes it in the beginning. More on the personality test is found in our dedicated article.

#2 Achieve Consistency With Indicators

Indicators are a way to go for beginners especially. If your trading is already advanced and consistent you do not have to mess with indicators. Beginner traders need guidance, and indicators are tools just made for that. However, consistency could not be achieved just by plugging random indicators, you will need a system. Indicators are great decision-makers, but you need specialized ones. To be precise, each indicator has its role, what they measure, how they serve best. You will rarely find a good indicator that is universal if that is even possible. Use specialized ones and arrange them to have a system you can follow, do not rely on your instincts, at least not until you build experience. 

Your instincts and your psychology do not do well when you start losing. Each time you experience a loss from a gut feel trade, there will be self-doubt. Continue to do so and you might quit trading altogether. By using an indicator system, and following it, you create a foundation where you can relax. On a proven system you know you have a winning formula, drawdown will not shake you as much. Many adverse factors on your consistency will be eliminated this way, forget all the videos about trading that do not implement indicators. Find special Moving Averages for trends, volume indicators for gauging market conditions, and even use indicators for money management. To some, this might not be any secret technique, yet you will be amazed how many beginners do not know the true value of trading systems. 

#3 Custom Formulas

Did you know you can use a formula to make your index or a currency basket? Tradingview is a popular platform that allows you to do this. Indicators for MT4 that represent a currency basket, for example, are very rare, but in TradingView, you can make your own by typing one in the symbol box. Currency strength meters are not quite good replicas because you cannot see price action and you cannot factor in or out assets you want. This is still possible for free on the mentioned platform. You can use this formula for the Euro against the other 6 majors: 

(EURUSD+EURJPY/100+EURAUD+EURCAD+EURNZD+EURCHF+EURGBP)/7

You can also use inversion (1/X) which is needed for correct chart presentation, such as for the USD basket:

(USDJPY/100+USDCAD+1/EURUSD+1/GBPUSD+1/AUDUSD+1/NZDUSD+USDCHF)/7

On a basket chart, you can analyze, draw lines, put indicators like on any other. This is a secret technique currency basket traders adore, however even if you do not follow that strategy you can use it for a scoring system. If a single currency is trending up then you know to avoid selling it and mark it +1 point if you are looking to buy. This is just one secret from using custom formulas, we leave the rest for you to find out or create one of your own.

#4 Have a Schedule

Did you know trading is not only reading about strategies and ways to win trades? Professional traders have their routines and do not deviate from them. The reason for this trading technique is that it fosters their pros and encloses their drawbacks. It is what makes them have their trading “mojo”. We have mentioned indicators but professionals retain the edge with a routine, especially if they do not have a strict technical trading system. 

Take any trading book and you will see a lot of charts and setups, however, rarely about what really makes a professional trader. If you want to use a daily, weekly, or even monthly time frame, your trading schedule is much easier. Lower time frames require your presence but without a schedule, you can mess up your trading big time. If you find yourself looking at the charts for fun, to see what is going on in the middle of the night or similar, this is a sign you need to work on your schedule. FOMO is an unreasonable fear, there is always another opportunity with trading, chasing them is actually bad. 

Daily timeframe trading requires very little screen time. Basically, just 30 minutes to check if you want to trade and the news. Each period is one day so you only need to take a look once the candle closes. Set and forget for the next 24 hrs, easy. Lower time frames, on the other hand, require a plan in line with the sessions and the strategy. Execute this plan to the letter and then close the charts, do something else. You will be glad you did.

#5 Using Volume and Volatility

Did you know the trend following strategies are the most successful compared to everything else? Try to develop one with this special ingredient. So, if you are not totally new to trading then you have heard about volatility and volume. But have you noticed very few traders use these measurements? Too bad for them but now you know the secret of trend riding. To connect the two, trends rely on energy that pushes them further, and that energy is measured with volume/volatility indicators. This is a secret once again because rising volume or volatility alignment with the trend start makes such a big impact on trading. Whatsmore, such indicators are not common, which makes them even more special. Incorporate one as a rule for your trading, there are some to be found on the MetaQuotes portal for MT4 or ForexFactory. 

Categories
Beginners Forex Education Forex Basics

Overlooked Techniques That Can Help You Be a Better Trader

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

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

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

Eating Healthy

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

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

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

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

Waking Up Early

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

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

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

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

Meditation

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

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

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

Exercise

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

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

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

Reading

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

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

Beware of Too Much Multi-Tasking

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

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

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