Forex Forex Education

10 Quick Tips for Trading Forex With Success

When it comes to success in trading, there isn’t a simple solution, Forex is such a vast beast that you will never know everything and you will never be right 100% of the time, that does not mean however that there aren’t a number of different things that you can do that will help you to move the odds a little in your favour, little things that you can do to help yourself to become a little more successful. We are going to be looking at 10 things that you can do that will ultimately help you to become or remain a profitable and successful trader.

Set Your Goals:

Setting goals is vital if you want to be successful, when it comes to pretty much anything in life, those who have goals to strive towards often do a lot better than those that are doing something blind, the exact same thing applies to forex trading. Set your goals, but make them realistic and achievable, do not just say to be a millionaire, that is a long way off, instead look to create a series of smaller ones that you can achieve within the year, this will keep you motivated to keep going when each one is achieved.

Get A Good Broker:

The broker that you chose is going to be an important decision, there are a lot of them out there, in fact, there are thousands of them, so with so much to choose from it can be quite daunting. Look for the bigger names, they are often the most reliable, look for independent reviews, look for low costs, good support, and quick withdrawals, all of these things can make a broker worthwhile. It is of course your decision which broker you go for, just be sure that you are on the lookout for the scam brokers that pop up every now and then, just looking for your money.

Choose A Trading Platform:

The trading platform that you use is also important, if you are planning on using an EA, then there is no point in getting a cTrader account, as you won’t be able to use it. Each trading platform has different features so ensure that the one that you use has what you need. The most popular platform is currently MetaTrader 4, so that would be a good one to go for if you are not sure, simply because of its huge user base and the amount of help that is available out there.

Choose the Right Strategy:

There are a lot of strategies out there, too many to try and think about, but you will need to find the one or at least the style that best suits you. If you don’t have much time, the longer-term style may be better as it requires less time at the computer, if you have a lot of free time and not a lot of patience, then something like scalping may be best for you as it brings quick trades and allows you to be at the computer for longer Try a few different ones until you find the one that is right for you.

Use Stop Losses:

Stop losses are your protection, they are there to protect your account from large market movements and can be the difference between a small loss and a completely blown account. When you create your risk management plans you should be working out how far your stop losses should be, to only lose a potential percentage of your account with each trade, many go for one or two percent per trade which is fine, just ensure that your stop losses are in place with every single trade that you make.

Risk to Reward Ratio:

You need to have a risk to reward ratio in place, this will help you to work out things like your trade sizes, as well as take profit and stop-loss levels. The risk to reward ratio details how much you will risk with each trade and also how much you will make. If you have a good risk to ward ratio, it can mean that you technically only need to win 25% of your trades in order to be profitable, which makes being profitable so much easier, so ensure that you have this in place and that you stick to it.

Keep A Log:

A trading journal is invaluable when it comes to trading, it allows you to look at what trades you have made, what went well, and what went wrong, it also allows you to ensure that you are keeping to your trading plan and risk management plans. Being able to see what you have done wrong allows for invaluable learning opportunities, something that every single trade should be trying to do. Keep this log, it can take time and can be boring, but if you want to be successful, it is vital to have.

Speak to Others:

Trading can be lonely, but it can also be very hard if you try to do it all by yourself. Join a trading community if you can, not only will this enable you to speak to other like-minded people, giving you an outlet and making you feel more included, but it also offers a great opportunity to share your own ideas in order to get feedback, but also to find new ideas that other people are posting, they may be doing some analysis that you have not thought about, giving you additional insight and trading opportunities.

Demo Accounts:

Demo accounts allow you to trade without the risk of losing any of your money, in fact, it allows you to test out pretty much anything you want with no risk at all. If you are thinking of changing your strategy then trying the changes on a demo account will enable you to see whether it works and to get through any teething issues with it without losing any of your actual capital. Take every chance you get to use a demo account and protect your main account from being a test subject.

Take a Break:

The forex markets will be around for years to come, if you are feeling stressed, tired or emotional, then there is no harm in taking a step back, take a break, go out for a bit, clear your head and mind and then come back, the markets will still be there and you will be looking at them in a much clearer way. The last thing that you want is to allow your emotions to take over and to influence your trading.

Those are 10 tips that we have for being a successful trader, there are many other things that you can do too, but the 10 that we have listed are some of the most important things that you can do as a trader and will allow you to get a jump start on being a successful and profitable trader.

Beginners Forex Education Forex Basics

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

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

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

Can we beat the big banks?

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

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

Are there any indicators forex traders shouldn’t use?

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

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

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

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

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

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

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

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

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

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

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

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

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

Can we fix any old indicators?

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

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

Is the USD the best currency to trade?

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

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

Forex Basic Strategies

This Information Will Help You to Beat the Forex Market

Traders and investors often think about how important it is to read and read books, websites, and all kinds of material in order to improve trading. We spend a lot of time reading, but how much time do we spend on real learning?

I’ve already talked about How to win the market and the trap of the best and it is very important to practice and learn from the market. In trading the phrase “An expert is the one who has made all the possible mistakes in his field” is fulfilled and therefore we must devote ourselves to learning from them.

The problem of the human being is that he tends to minimize the bad things of the past and then we forget that we have done well and that we have not. To solve this problem Thomas N. Bulkowski decided to make himself a kind of complete statistic of each and every one of the formations from the chartist analysis you found. His conclusions and statistics are found in a book of more than 1000 pages called Encyclopedia of chart patterns.

Bulkowski was investing in the stock market while working as an engineer until at the age of 36 he had earned enough to retire. I think teaching a little of your book will be a good way to understand how statistics are made to achieve a trading system with positive mathematical hope.

Always study the bullish and bass breaking patterns separately. In this case, study the pennants that have a bullish breaking. Translating a little we have:

  • Break-even failure: Percentage of false breakages of chartist figures.
  • Average Rise: Average growth after the figure is completed.
  • Volume trend: Volume trend (either increasing, decreasing, or constant).
  • Percentage meeting price target: Percentage by which the target price of the figure is reached.

Surprising findings: Surprising discoveries. I must admit that this part is my favorite, the detail of counting down to the smallest appreciation says a lot about their way of operating and understanding the market. In this case, he tells us that the pennants that look big and tall are better than the small and short ones. He also comments that pennants with decreasing volume have a better performance. Bulkowski devotes a section to determine that it is considered a pennant and not before giving numerous examples.

For a trend to have the strength the volume must be growing with it, if there is a movement against the trend and the volume does not follow it, then it is a movement that is not supported by professional money and therefore is a FALSE trend. Now it turns out that the chartist analysis tells us that the pennants are pauses in a trend and one feature of it is that the volume is decreasing. If you look at both branches have seen this peculiarity of the market and therefore it is foolish to study each of them thoroughly, the information is duplicated with other words.

Dedicate yourselves to doing things like Bulkowski, studying patterns, studying indicators, studying yourself in front of the market, but stop reading gurus books, blogs with magic indicators and work!

Don’t be afraid to be wrong!

Beginners Forex Education Forex Basic Strategies

Top 8 Real-Life Lessons About Forex Trading

If you ever decide to go the traders’ way, know the only boss you will have to listen to is you. Also know listening to yourself is the harder part of trading. Sounds funny but true. When an established trader thinks about foolish beginnings he can only smile and realize how much he has changed since. Becoming a trader is a lot of work, but it is one that gives many life lessons with a tremendously good outlook for young people. There is one trait that each successful trader has – they are wise. Wisdom requires experience and work, just no way around that. The sooner you start working the better the odds you could retire early. What a trader learns on this path is all about actually becoming a better person and how he sees life around him. Here are the biggest lessons that await you if you decide to become a professional trader.

“Do, or do it not. There is no try”

This line is definitely familiar to the movie series fans but it holds true to trading especially. Hopefully, it also motivates you. The initiative has to be strong, simply because forex loves to cut quitters. This market will test your mettle psychologically above all else. All those who seek to get in for the easy money will be disappointed. Making forex a sort of casino is possible, most people take it like that. Gamblers are hard to stop, only a zero on their account can until they put some more money if they have it. it does not matter how high they went, unfortunately. Those that keep researching ways to beat the casino might be the ones that find their holy grail. There is a crucial turning point here, do you want to be a gambler or a trader. Is this you in the next few years?

“Discipline equals freedom”

This is the title of a book by Jocko Willicks. The book is not about forex trading yet it is an essential life lesson that applies to forex too. There is no trader with results without discipline. By giving an example of a book that actually addresses general life problems with practical guidelines, we want to point out that forex punishes those that lack discipline as life itself. Now forex is not dangerous per se, but it can be to your financial status if you do not have rules that stand in the way to complete disaster. What you want to become is one thing, but the way to that goal is what will define you. Forex does not have feelings, do not expect mercy, mistakes will be made. But that is a good thing, you discover your psychological weak points that would need discipline to patch. 

Understanding the Concept of Risk

You have done so many foolish things when you were young, so many songs have been written about that period of human life. Simply, people take irrational risks when young. Why is this so is explained by science but that is not important since you cannot avoid it. Forex is all about how you manage risks and if you stick to the rules you set. If you are on the way to become a forex trader, it is time to make stupid mistakes. Make the hell out of them, however, we strongly advise you to do them on a demo account. Just pretend that demo is the real one. Interestingly, some young traders lack the patience or mentality to accept what they are doing on a demo does not work and go to live trading anyway. This leads us to another lesson.


Again, one more interesting result of a science experiment, more precisely the Stanford marshmallow experiment showed that willpower has a dramatic effect on the quality of life. Now, patience does not mean you have to wait for something but to keep searching for ways to improve your trading, be it through researching other traders, strategies, indicators, or reading books. Have the willpower to persist despite the failures that could set you back emotionally, feel like it is a “waste of time”. But it is not, it is just another lesson. The results do not happen overnight. According to some experts, the results may come even after two years of everyday work. Patience is also needed in practical trading, however, this is just a smaller scale of this lesson. Now when you know it takes time to get to that holy grail the question is are you willing to do the right trading approach.

Knowing Yourself

On your journey of forex trading, you will discover your personality or better said, accept who you truly are. The sooner you accept your flaws but also your advantages the better. You now know where the potential reason for losses lies. Forex will demand you to cope with the bad habits, and this lesson will translate to real life. These habits exhibit life as well, and when you think about it this lesson improves how you manage your urges that lead to events you do not want to happen. Special skill traders have developed just by trading forex, yet this skill is evident in every elite professional. 

Decision Making

This skill is so in demand because it carries responsibility not everybody can take. When the time comes to decide and accept the consequences then it takes a special skill. Sometimes this skill is attributed to leaders. In sports, this is especially evident in the last lap, the last-second shot, the final point in a match that decides the winner. Are you the one who makes it despite the failure consequences? Actually, decision-making is a stealthy skill that just makes noise when it is apparent. Elite professionals are deciding all the time by scaling the upsides and downsides of the decision. In forex, these decisions define trading, but traders eliminate the stress by knowing their strategy or a system work in the long run. They are very cool when it is decision time because they know it is just a matter of probability. In the long run, they win. 

Staying Cool

Controlling emotions is a skill and closely tied with good decision-making. You may have the methods and tools that can tell you the odds or what is a good decision. But if emotions mess that up, what good it is? Handling emotions can be done in various ways, it does not mean you need to be emotionless to make the right decision. Many will tell emotional decisions are bad ones. However, it does not mean you need to take a “pill” to stay cool. How about just staying true to your rules? If you have a plan that works in the long run, let it choose for you, there is no reason to change your mind just because you feel like it. In time, you become cool in even the most stressful moments because you strongly believe in something that just works. Now, in life, it is not recommended to be emotionless of course, but every time you need to decide about something important, you will have that attuned, cool, analytical mindset that helps. 


The magnificent harmony of what you have learned by forex trading is the most precious part. At this point the results are inevitable. This is the point where you accomplish and turn to higher goals by reaching out to others and sharing what you know. Now you have the responsibility to make a better future for others. Forex trading made you a better person on many levels, not just financially free. The lessons and values learned is just another lesson your personal accomplishments do not mean much if it is not reflected in the life of others. 

Forex Market

Dirty Little Secrets About the Forex Industry

We just adore revealing things that are not talked about in the mainstream media. In our articles series, a trader could notice most of our trading methods are not ordinary. There is a reason for all that. Some could say it is a conspiracy but consider crisp and public proofs on the internet, reporting, news, forums, and other sources, some of which we present here. Dirty little secrets about forex are everywhere, in many forms, from fundamental manipulation to technical trading quirks that turn out to be manipulations too. Here is what we want to tell you.

Forex Gods

We will start from the forex rulers, the world’s largest banks are moving the currencies, not you or me, however big your pocket is. Never try this, and never get vengeful at them, forex has specifics because of the big bank interventions otherwise forex would look like the stock market as some professionals would say. Their dirty little secret is of course manipulating the forex market and the hunt for cluster groups of traders’ positions. It is not just about the Stop Loss positions or any pending orders, but about orders already triggered. Just a hint for those thinking about using a script to hide pending orders away from broker servers. As one familiar pro trader explained, the banks notice where orders are triggered, then they let a small movement that favors the traders, however, what follows is a sharp correction that cuts through most of the traders. Professionals that follow the big banks’ psychology call this accumulation (of traders) and manipulation phase, it looks like this:

Notice the far left side of the picture where the downtrend is reversing. This is the area where traders start open buying positions. The banks like these clusters and leave some movement up to keep them building on. What follows is a sharp move to the downside below the initial reversal level (middle of the picture). This is done to eliminate buyers’ Stop Loss. Only then the real trend starts which is much larger (right side of the picture) than the initial fake one. 

Now, another easier way to see this is by looking at the traders’ sentiment indicator. As mentioned in our previous articles, the IG group has a Client Sentiment Report daily on most forex pairs and other assets. Notice that the most liquid pars, also the most popular ones, are not moving according to the supply and demand logic. It is almost perfectly reversed. When buyers come in, the price falls, and vice versa. 

Hey, this does not happen on crypto! If you wonder why, cryptocurrencies’ core idea is Defi, decentralization, or no bank involvement. Even precious metals are not that manipulated despite the recent fine:

Credit: Reuters

Commodities have real supply and demand, not much room to manipulate there, however, money or currencies can be printed whenever. Printing can be digital with a press of a button too. Here is some more news about this recurring event (CBNC):

Ok, we have some raising eyebrows now, this dirty secret is repeating however there is not much “ordinary” people can do. Interestingly, according to pros, this behavior is what gives forex movements and sets it apart from the stock market, for example. Indexes by the way, also have sentiment anomalies, but be aware there is a very strong link between equities and the forex gods. 

The Brokers

Ok, these guys are not really forex gods but they still play a role to retail traders and they too, of course, have dirty little secrets. They are one part of the forex industry and are playing a similar game, even though forex unethical games come in many flavors, this one is the most popular. It is the Stop Loss hunting

Now, this is done on a smaller scale, it is not in plain sight and justice is rarely served. If you wonder why it is because they are the same team. Transparency is always the issue, you do not know what is done and if there is a conflict of interest caused by the well-known fact some brokers earn money from their clients’ losses. Stop-Loss hunting is hard to prove and the excuse is always the same, brokers are connected to different liquidity pools or banks so not every broker has the same price action. This explanation is overused. If we look up at the clients’ opinions, some brokers are labeled as stop hunters while some are not even though they are companies of the same size. Transparency is not strong with brokers so the only truth meters are the forums that reflect customer satisfaction. 

Review Misleads

Portals that reportedly host broker reviews is another dirty little secret that is present in the forex industry, however not uncommon in many other businesses. Just typing some broker name with the word “review” will overwhelm you with results. There are a few obvious ads first but then what looks like a sound review website. Sometimes the review has a great, 5-star rating, while the same broker is criticized on other portals. This is one easy clue that somebody paid for good reviews. More often than not, the same portals are owned by companies that hold broker brands, making you think they are separate entities. Of course, their brands are top-rated while the competitors are destroyed. There are also affiliate websites that just put a good word for anyone that wants it (pays), provided the affiliate website has a good number of visitors. 

We have put a lot of work writing independent broker reviews, however, if you are looking for client opinions forget about the first search results pages. Real, unbiased opinions come after, where the money noise is dimmed down. Only here there is no special interest by the brokers to mess with the truth. Alternatively to, the Forex Peace Army portal is a very good source for reviews and client opinion, but there are more out there under the served plate. 

Reading fake reviews does not end with brokers, you will also find reviews for Expert Advisors for MetaTrader platform or automated trading solutions companies. The same marketing scheme is applied, yet the source might be a company that developed the script, not only a broker. It is often mixed since you need a broker and probably a VPN service too. 


Similar to other industries, marketing borders with the ethics on one side and the law on the other. Brokerage is a heavily regulated industry yet it still has enough freedom to legally scam beginners. Even though certain regulatory measures are now more restrictive, such as leverage limit, amateurs looking for gamble trade are easy pickings for brokers. If you heard about the high percentage of losing trades in the forex industry then you get the picture of why. Of course, education is also tainted by this scheme so it is not easy to blame the client. Even those who do not want to gamble do not easily have access to good resources and learn to trade. Similar to the review search, good educational websites are rare and show only after all the junk in the first pages. 

Forex is a Scam?

Foul play is present in forex and people do not believe in the trader dream, the dream is vividly presented in marketing to lure uneducated clients. This is easy money for brokers and banks only. As it was not already plagued by the industry, forex is also a good playground for outright scammers. It is especially present today with untraceable cryptocurrencies. Scams are just another reason and alarm for beginners to dig deep when it comes to forex trading that, interestingly, elevates their research skills essential for successful forex trading. Forex has many ways to scam you, however, meticulous, patient, and curious will find their way to the trader’s dream eventually, just keep up the work. 

Forex Risk Management

Hedging and Coverage: What Forex Trader’s MUST Know

If you’ve heard the word hedging or hedging mentioned and you’re not sure exactly what this is about when trading, this article can help. As is normal in my posts, an example to bring it down to earth. Imagine you have bought a car or a house. When we buy an asset of this type we usually want to protect our investment from possible accidents or situations that may occur against us.

One of the simplest ways to protect these assets is to take out an insurance policy that allows us to reduce the possible losses we might have if some unexpected situation occurs that we sometimes cannot avoid. In trading, hedging works similarly. It is simply an investment to compensate or protect our funds, reducing the risk of price movements against us. In this way and simply put, investors or traders use hedging to reduce and control their risk exposure.

A very important aspect when using a hedging strategy is the fact that as you reduce the potential risk you also reduce potential earnings. This is because, as an insurance policy, coverage is not free. Hedging can also be achieved by opening a position in another financial asset that has a negative correlation to the vulnerable asset, that is, the initial investment we want to protect. In the case of Forex, we say that two currency pairs have a high negative correlation if the correlation is negative and above 80 generally, in this case, the pairs move in opposite directions.

For example, in the foreign exchange market, the pairs with a high negative correlation are usually the EUR/USD pair and the USD/CHF pair. Anyway, I leave you a complete article that I wrote about forex correlation and how you can consult it at any time (you don’t have to do the calculation manually). It’s an important concept.

Before you continue, it’s important to know that hedging is not allowed in the United States. This is because brokers operating in that country must comply with the “no-coverage” rule known as FIFO (First in, First out. First in, first out) of the NFA (National Futures Association).

This “no cover” rule only allows for an open position on the same symbol. If, for example, we open a purchase position on an instrument and then open a short on the same instrument with the same volume, the initial position is closed because one order cancels the other. Because of this limitation, typically brokers that are regulated by NFA have international subsidiaries for their customers outside the United States.

Advantages and Disadvantages of Hedging

Like any strategy, hedging has its advantages and disadvantages. Depending on your trading system it may or may not make sense to apply it (I don’t use it, I’ll tell you later). One of the main advantages we find in having to negotiate with hedges is that they limit your losses, but as I was saying, it also erases a portion of our profits. Although it is a fairly conservative trading strategy (a priori), it allows us to have a high hit rate, although the profit/risk ratio decreases.

Hedging increases liquidity in the market because it involves the opening of new clearing operations. However, this represents a disadvantage as a trader because you will pay more commissions. Although we can do it on almost any platform, some brokers do not allow you to do it, bear in mind before applying it. A clear disadvantage that we must always bear in mind is that not all risks can be covered.

Types of Hedging Strategies in Forex

The types of hedging strategies are varied and although they all seek to reduce risks and limit losses, each of these strategies can achieve its goal in different ways. Let’s look at the most common trading strategies used:

Total Coverage: As its name indicates, when we make a total coverage we keep open the same volume in long and short operations. Full-coverage allows you to block your exposure in the market, that is, raise or lower the asset in question will not affect your account. Be careful because a trade with a fixed profit and loss level could reach its stop or take profit and close (and you can keep the contrary trade open with a negative float and no coverage).

Partial Coverage: With a partial coverage strategy you have open long and short positions, but with different volumes. Here already if there is risk (the difference between the volume of one and another position of the same asset that you have opened.

Correlated Coverage: The correlated hedging strategy is one of the best known in trading. Although I mentioned this strategy at the beginning of the post, let’s go a little deeper. It consists of covering an open operation with another operation in a correlated currency pair. The correlation between both currency pairs or assets can be positive or negative.

In Forex, an alternative is to trade “strong” currencies against “weak” currencies and thus maintain less exposure with strong ups or downs. Suppose for example you decide to go short on the pair EUR/USD. Currency pairs such as AUD/USD and GBP/USD have a high positive correlation with EUR/USD, so their price is likely to fall as well.

If you open another short in AUD/USD or GBP/USD, you are more exposed in the market because of the EUR/USD short position you already have. In the case of currency pairs with a high negative correlation as the case of EUR/USD and USD/CHF, if we open a short in EUR/USD and go long in USD/CHF we would also be incurring a higher risk.

Here, we can perform a correlated coverage. What must be vital to us is always to maintain in mind the following: if the correlation is positive, to make the coverage you must trade in opposite directions (sale – purchase or purchase – sale) and if the correlation is negative you must trade in the same direction (purchase – purchase or sale – sale).

Direct Coverage: It consists of opening positions in the same currency pair. It may seem a bit confusing or pointless, I explain it better with an example (like not):

Suppose you are long in the pair EUR/USD, the position is green but still does not reach your take profit. You’re coming up with a high-impact story (for example, NFP or GDP) and you want to partially protect your earnings without closing the position. One way to protect yourself from movements due to the high volatility this news may generate is to open a short position in the same pair and when volatility decreases close the hedging position. Minimizing in this way the potential risks of the news.

Direct coverage is also often used to leverage corrective movements in a trend. Anticipating a possible price correction in an uptrend, we can cover a long position by opening a short position. If the correction does occur, we gain in the short position while maintaining the long position.

Coverage with Futures: Hedging operations with foreign exchange futures are one of the hedging more used by the big market operators. Suppose an investment fund, based in the United States, invested in a Japanese company and generated 1 million yen in unrealized profits. Since the investment fund needs dollars instead of yen, it can buy USD/JPY futures contracts on the stock exchange for the total amount of yen it expects to receive (total coverage) or for a percentage of the total to receive (partial coverage). In this way the fund secures a fixed rate for its yen, protecting itself from the risk associated with USD/JPY torque fluctuations.

Hedging: Yes or No?

From my experience, I consider that every trader should know and know how to apply the different strategies around hedging, especially in a market as volatile as the Forex market. What we want to achieve with coverage is to minimize risks of movements against us when making an investment and at no time seeks to maximize potential profits, so we can consider it a purely defensive strategy.

It allows us to manage our positions in a calmer way, reducing the stress of the psychological factor when trading. There are many hedging strategies depending on the financial instrument you are operating.

Robots Using Hedging

We find a lot of systems on the Internet that may seem very attractive but that constantly make coverage by delaying losses and adding more and more positions. You can imagine how this ends. Run away from these kinds of robots. And you’ll wonder, how do you detect them? Easy, don’t buy a forex robot that you don’t know how it’s created, how it works, and you’ve spent time testing. That’s for not telling you straight away not to buy a robot to trade.

My Opinion

As you know, I do algorithmic trading and none of my systems apply hedging. They could tell you that psychologically this technique makes you not close with losses and… I ask you, why not take the loss and delay it by taking more commissions?

Doesn’t make any statistical sense in that case. Applying currency trading systems individually does not. Hedging can make sense in correlation strategies as we have seen between assets or in our stock portfolio to protect us from currency risk. If for example we buy shares in dollars but our account is in euros. I certainly think today it is an excellent tool, not for trading systems.

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 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.

Forex Basics Forex Psychology

Weird Hobbies That’ll Make You Better at Forex

There are things that we do in our everyday lives that can actually make us better at trading. Some of them may be related, while others will have absolutely nothing to do with trading at all. Our hobbies can have the same effects, there are hobbies out there that people do that will give you the skills that you need to be a fantastic trader, in fact, they will improve aspects of your trading. We are going to be looking at some of the hobbies that people do that help to build our trading skills or develop certain aspects of us that would be beneficial to our forex trading.


This one may seem quite obvious and to be fair, it is. If you like reading then you will love Forex and trading, as there is a lot of reading to be done. Any people get bored when reading and learning, this is why there are so many video tutorials out there now, but if you actually enjoy it then you will be in a good position as there is so much information available for you to take in. There are also trading-related books out there that can be filled with relevant information and so reading those in your spare time can give you some fantastic insight into different techniques or give you ideas that you can implement into your trading. If you are not a fan of reading, there are alternatives out there, but you will find far more information in the written format than any other format when it comes to trading.

Jigsaw Puzzles

Trading can be compared to puzzles in a number of ways, the most obvious reason is the fact that when you are putting a puzzle together, you are taking lots of small things in order to make a larger overall picture. We do the exact same thing when we are trading, we are taking small bits of information from various analyses or indicators and putting it all together to give us an overall picture of what the markets may do and what we should trade. Doing puzzles helps you to take your time, to analyze each piece of information, and to have patience, afterall, some puzzles can take a long time to complete.

Playing Sports

Sport doesn’t seem like it would give you skills needed for trading, but it does. Well not exactly with your trading, but it is a fantastic way to get rid of some of the stress that can build up when trading. In fact, it gives you the perfect outlet to let off some of that steam. For anyone that sits in front of the computer for the majority of their day, it can damage your posture, can stress you out, and can ultimately make you a little bit fatter. Playing sports is a way of rectifying all three of those things. It helps you keep a good posture, it helps you to relieve stress and it can make you that little bit fitter. So even if this is not one of your current hobbies, try making it one once you start trading, especially if you are doing it full time.

Playing An Instrument

If You have learned to play an instrument in the past then you probably have a number of skills that are very desirable for a forex trader, these include things like consistent learning, patience, and being precise in your learning and implementation. It takes a lot of time and a lot of patience to learn an instrument, much in the same way that it takes time and patience to learn to trade properly. Music can also help to influence your mood or to calm you, something that is vital when it comes to trading. There are no shortcuts when it comes to trading, so being able to bring in the characteristics that were required to learn to play that instrument can be extremely beneficial to you as a forex trader.


While we don’t do much writing when it comes to trading forex apart from the little notes that we jot down in our trading journal, writing does give us a few skills that we can bring across. Firstly it teaches us to be a little more analytical, looking at what we have written in order to find and rectify any mistakes in the spelling or grammar. It also helps us to research, research is an important part of both writing and trading, so being able to do it when you are writing something means that it will be slightly easier for you to analyze different information sources when it comes to your trading.


There are a lot of things out there that you can collect, stamps, pokemon cards, marvel figurines, whatever it is, it will teach you one main skill. That skill is patience, you need to be patient when collecting, finding the right item for the right place, and not jumping in too quickly and ending up out of pocket. This same skill needs to be used when trading, you don’t want to jump into a trade too early and at the wrong place, if you do that too much then you will be making losses, so patience is vital if you are looking to become a successful trader.

Buying and Selling

Some people just love to sell things, and this helps you to understand the value of exchanging one item for money or money for items. This is exactly how trading forex works. We are exchanging one asset for another. Getting an understanding of how this works beforehand and what to look for when it comes to price fluctuations can help you out as a trader. If you do this, you are basically trading already, just in a more physical form rather than online as a retail trader.

The thing with hobbies is that it really doesn’t matter what it is, a hobby is something that you enjoy, this is a great way of destressing yourself. If you have a hobby, do not give it up just because trading is taking up a lot of your time, make time for it, not only will it help your mental health, but it will also help you to develop certain skills that can come in handy when trading, no matter the hobby that you are doing, it will have some form of benefit to your overall trading ability.

Forex Basics

How to Trade Forex the RIGHT Way

There is no actual right or wrong way to trade forex, there are however certain things that you can do that can make things a little easier or a little safer, these are the things that people would consider the right way to trade forex. Each individual trader will have their own ideas as to what it is that they need to do in order to trade things the right way. We are going to be looking at a few of the things that are widely considered as the right things to do when we trade. Some may be relevant to you and some may not be, but they are simply what many consider the right things to do.

The first thing comes down to your education, there is such a thing as too little information, but also too much information. There are three types of traders, those that learn the very basics and then jump in, those that try to learn everything before they touch their trading account, and those that learn as they go along. We would say that there is no right way to do it, but there are certainly wrong ways. Firstly, those that simply jump in with very little information, are setting themselves up to fail, you cannot trade with very little info, you won’t know how to manage your risks, or what certain events or patterns mean.

Then there are those that try to read too much, this can simply confuse you, there is a lot of contradictory information out there, info that makes it hard to work out what is right and what is wrong if there is a right and wrong. But if you try to learn everything, you will end up never trading, there is just too much information out there. You need to find a common ground, you need experience, such as a demo account, but you also need to read and learn a little about trading before going live. So try and find a balance of practical and theoretical learning.

You need to learn about risk management, this is how you will protect your account from losses and from the markets moving against you because they certainly will move against you at one point and on a regular basis. Your risk management plan should contain things like your risk to reward ratio, it should also contain details of where you stop loss and take profit levels are to be set. Your trade sizes should also be noted here, this will mean that you know exactly what size trades you will be making. All of these things combined work together to help protect your account, they enable you to trade in a much safer way. This sort of risk management is what can separate a successful trader from a trader that has just blown their account. So if you want to trade things the right way, you need to ensure that you have your risk management in place for the very start.

Learn one strategy at a time and learn one currency pair at a time. This goes along with the education that we mentioned but it is important that you concentrate on a single strategy to begin with. This will enable you to learn it completely and to properly understand it. If you start trying to learn multiple different strategies at once then it can cause you a lot of confusion. In fact, it can make you completely mess up the strategies when trying to implement them. We have seen this countless times in the past.

The same goes for learning different currency pairs, each one behaves differently, as if they have their own personalities, some of them you can interchange, but others you cannot use the same strategies on one as you can the other. You need to get to know the way they move and the way they react to different news events. Once you have grips of your first strategy and your first currency pair, you can then begin to try and branch out into additional ones.

Set your goals and expectations, many people come into trading with the idea that they will make ridiculous amounts of money very quickly, of course, is not the case and is not realistic. You need to set your goals at an appropriate level, think about things like your current capital and account balance, the strategy you are using, and other risk management things that you have in place. You should combine all of these to make more realistic goals. If you see them too high, then you will be risking too much with each trade, not something that anyone would recommend, so set your expectations at the right level and it will keep you grounded and will help to keep you consistent with your trading and risks.

Keep a trading journal, something you have probably been told before and also one of the things that a lot of people hate doing, simply because it takes a bit of time to do with each trade. You need to write down what you are trading, why you are trading it, and different things like the profit and loss, trade times, and more. Jot down as much information as you can to ensure that you have that information available. You can then use this journal to analyse your trades, to work out what you are doing well and what you need to improve on. It also helps you to work out whether you are sticking to your trading plan or putting on trades outside of it. You won’t know any of this if you don’t have a trading journal, so ensure that you have one, most successful traders have one, so there is no reason why you should not have one either.

The things that we have listed above are simply the basics, here are of course a lot of other things that you can be doing to trade in what you would perceive as the proper way, but this is all relative to the person that is trading. Ensure that you do at least some of them and you will be on the right track to becoming a profitable and successful trader.

Forex Assets

Little-Known Tips for Trading Commodities In Forex

Negotiating the realm of raw materials may be new to many of you, but in the end, doing so is very much like negotiating any other financial instrument. The first thing to decide is which broker you will use. There are CFD markets, futures markets, and a variety of options markets that can help you access commodity markets. To help you make this decision, just look at how much money you have available to negotiate.

Size Matters (When It Comes to Trading Raw Materials)

Size matters when it comes to raw materials. This is because of futures markets. Futures markets are defined contracts that give you the option to trade several raw materials. To place a transaction in the commodity market of your choice, you need to have the necessary amount of margin to open that position, just like in the Forex world. In this situation is where futures markets could be a little expensive for some people. While some raw materials are cheaper to trade than others, some raw materials require an initial margin of more than 5000 USD for a contract. Beyond that, standardized contracts mean there is only one tick value available. For example, if you sell crude oil, each tick is worth 12.50 USD. There are “mini contracts”, but they are usually not as liquid and are still very expensive for some traders.

This is where CFDs suppliers of raw materials come into play. These contracts allow you to negotiate less than one full contract, mainly because you are not actually operating in the futures market. You are negotiating a contract with your broker to pay or receive the difference between the opening price and the closing price. This is why your broker can offer the equivalent of 1 bale of wheat compared to the standard contract size, for example. In that sense, CFD brokers may be a good option to consider.

A final option may be to trade raw materials in the options markets, but lately, the options have been extraordinarily volatile and costly. Similarly, binary options have had a lot of bad press lately and, in general, can be extraordinarily dangerous because of the large amount of leverage they offer.

The Fundamental Factors Differ

Keep in mind that the fundamental factors in commodity markets can be quite different from the factors you are used to if you are a stock trader or foreign exchange trader. This is because these are real “things” and not necessarily about companies or economies. To take an example, several years ago there was a long series of floods along the Mississippi River and the surrounding area of the United States. This had a great effect on the price of wheat because of the floods they became a problem. The destruction of crops reduced the supply of wheat to the market, which naturally led to an increase in prices.

This is why so-called “soft” commodities in futures markets, which are usually products that grow on the ground, can be a little difficult for some traders to negotiate as weather patterns become very important. Usually, when a currency is traded, you don’t have to worry about the weather, unless there is some kind of anomaly like a tsunami in Japan. In general, climate rarely enters the equation for Forex traders. However, traders in agricultural raw materials trading in wheat, maize, soybeans, and many other products are totally dependent on weather reports.

Precious metals are also a completely different financial instrument, as they often react to interest rate expectations from the Federal Reserve. Similarly, the price of metals is directly affected by the strength of the dollar, as most of the larger precious metal markets are denominated in this currency. This is why it is very important that you have knowledge about how the US dollar has high volatility before trading in gold, silver, or other metals.

The Liquidity Varies

Another thing to consider when operating in commodity markets is the liquidity of the market where it is traded. The fact that your futures broker offers the wood markets does not mean that you should participate in them, as they are very illiquid and are usually used for hedging more than for anything else. This would not be the place for retail traders to participate. There is a contrast with the pair of EUR/USD and you can notice that there is a big difference between the opening and closing a position. Many retailers have been adversely affected by the lack of liquidity in a market they do not understand.

Stick With What’s Important

It’s really funny that I recommend this because I don’t think it’s the case in the currency markets, (although many traders will argue the opposite). This is because the commodity markets have variable liquidity and, if you are involved in a futures contract, that liquidity may hurt you, as the value of the tick may be extraordinarily large in some of these contracts. This is why typical retailers should trade assets such as crude oil, gold, silver, corn, wheat, soy, natural gas, etc. Participating in milk, wood or even palm oil may sound exotic and therefore intriguing, However, it’s an excellent way to lose money.

This does not mean that you cannot deal with these raw materials, but you only need to have the right account size, something that is within the reach of very few retailers. At the end of the day, it is better to stick to markets that are much more stable.

In Summary

Find a broker, one that hopefully is regulated by a strong market authority, or maybe use one that you already have and that offers CFDs markets. As a retail trader, it is much better to initially use the CFD markets, because you can trade penny-worth ticks, compared to those large positions that are required in some of the markets. Remember that technical analysis, to some extent, works the same in all markets. The more liquidity the market has, the more likely the analysis is to work. That is the beauty of some commodity markets like crude oil because they are highly technical in nature.

Fundamental analysis can also be important for the negotiation of raw materials, as mentioned above, and news can also be important. Agricultural markets obviously focus more on climate, while crude oil can focus more on the Middle East. Demand is also a determining factor in the prices of raw materials. Beyond that, I have discovered that commodity trading works in much the same way as foreign exchange trading and is an addition worth considering for your long-term trading plan.

Forex Basics

How NOT to Sabotage Your Own Forex Trades

You are in a trade, you have managed your settings prior to the entry, and everything seems to be running smoothly when all of a sudden the price starts plunging downward fast. The tension may be building up and you are now faced with two options to resolve this situation – you can either get involved and tweak the settings or stay put and refrain from making any changes. While the fear is usually quite real, there is only one correct answer to this challenge – do nothing.

Even though such manner of conduct may seem to be foolish on the outside, the implications of your actions at this crucial step will inevitably determine the future of your trading. Naturally, this may be easier said than done, maintaining the sense of discipline will turn out to be of vital importance for each trader’s forex career. In this article, you will be able to learn how not to sabotage your own trade and understand why most traders cannot surpass this hurdle.

You may be taking a course with a trading company or consulting with a professional trader with the hope of becoming better at forex, but in the end, no one can constantly be there to hold your hand. We all seek to accumulate as much information as possible and learn about the ways to acquire more pips; however, in order to be an excellent trader, you do need to be an independent one too. Any form of dependence is a prerequisite for failure, which is why the compulsion to make a move in some critical stages in a trade in an attempt to control it can also have disastrous consequences for your trading as a whole. 

The First Step

In order to better yourself and overcome the issue of not finding support within, you firstly need to create a solid, functioning system, which will take over some responsibility off your back and save you from needing to get involved. Unfortunately, many assume that the only effort they need to make is to create a system that will direct the entry and exit points in each trade they enter, yet they easily forget that the whole idea behind creating a system is so you need not worry about these steps yourself. Therefore, once they finally manage to put together an effective system, many traders fail to practice consistency.

If you have already invested time into assembling your own system and you put effort into proper testing, you should know by now that it functions well. Any divergence from what you built is then only counterproductive and will lead to inconsistency and thus disappointment due to failure. This is, in actuality, a key moment where one needs to separate emotions from logic because your decision-making must not, under any circumstances, depend on your feelings.

Impact of Emotions

Emotions can always fluctuate and they are colored by our own prejudiced, biased perspective, whilst a system is a structure that is aimed at navigating through this $4—5 trillion/day market. The system is there to both support you and help you steer clear of letting your emotions get the best of you and your trading. In addition, if you allow yourself to recollect and go back in time mentally, you will probably be able to remember the unfortunate part your emotions had in some important decision-making processes. You may think of all the anger that caused the people you know to utter words that they regretted later in life or the choices they made to stay in bad relationships for too long for example both have to do with one mutual culprit – emotions. Whenever traders allow emotions to rule their critical thinking, they are in fact making themselves vulnerable to misjudgment, subjecting their trades to the impact of the fleeting nature of their feelings.

The only way for any trader to truly feel in control of trading in this market is to make a clear distinction between their emotions and logical thinking. If we allow ourselves to enter and exit trades solely based on how we feel, we are then making vital money-related decisions grounded in our subjective idea of where the market is going to move. This sentiment-governed action is not based on any actual plan or structure, which is why a system is very much needed to bypass the dangers of our human nature. If you have developed and tested one, you have a tool that can certainly work and get you to where you wish to go, unlike this emotion-driven, reckless approach that will undeniably make all your fears come alive sooner or later. 

Doctors cannot carry out surgeries based on what they at first glance believe will happen with the patient or refuse to conduct a proper examination giving in to anger because that patient offended them upon meeting. You will always find these healthcare workers take a look at the blood results and use special medical instruments to assess the situation, leaving their personal opinions behind. Whichever job involving a great deal of responsibility you can think of requires this approach to decision-making, and certainly no doctor, army general, or president will ever allow himself/herself to put the future of people or countries in the hands of a passing sensation. 

Solution for Success

The proposition of action sounds quite simple – choose the one vehicle that will lead you to financial prosperity and leave the emotions out of the equation. Trading psychology is the very essence of trading that you will ever do and is responsible for the success acquired by professional traders too. While systems, algorithms, preferred tools, or charts may differ, the strong sense of what a “difficult” decision looks and feels like is something all experts share. No one can deny that a price spiraling downward brings up a negative feeling, but we can all agree that the only way traders can get to the exit with a smile on their faces is by ignoring that red alert button that is blinking from the inside.  

The battle is simply ever-present and we need to constantly remind ourselves what our purpose is, ensuring the conditions that help us offer our very best. Therefore, in order to go about this sensitive topic carefully and systematically, traders should think of the following steps: first, they should thoroughly develop their own system, which further implies that they should always know when you should enter or exit your trades; secondly, all traders should learn how to recognize the trade that can prove to be beneficial and execute it; last, traders must allow the market activities to envelop naturally without any interference, as it is a display of distrust in one’s own system and inevitably involves a higher degree of possibility to make things worse. 

The last step is of immense importance especially if you turn out to be right because your success in trading should be largely predicted by the efficacy of the system you worked hard to develop. Therefore, if your subjective impression of the current market situation leads to the predicted outcome and you end up being right, it will only give you green light to pursue trading by feel. Such an approach will surely prove to be detrimental to your future as a forex trader largely because forex trading requires mathematical precision that is free of any bias or preconception. The event where the close of your last trade aligns with your fear may even arouse more fear of your system being greatly flawed and that all the work you invested before was all in vain, and this is a vicious circle that can only draw you in deeper and deeper. 

If you are certain that you properly tested out your system, simplify all these steps in your mind and allow the events to unfold naturally. While a series of passing feelings of doubt and anxiety may come and go, the most important step is to refuse to listen and simply follow the process. The key here is to repeat the same steps each and every time, without giving in to the need to execute more control over the trade that is needed. Even if you feel tempted to step in and make adjustments, go back to this list and remind yourself of the ways in which you can help or endanger your trading.

Biggest Trading Mistakes 

Naturally, all traders are prone to making mistakes and these can creep up in a rather subtle fashion. Nonetheless, this does not give any trader the right to evade the educational segment of trading, especially due to the assumption that the job is done once the system is set up. There are a few typical mistakes that many traders make because, in terms of involvement, they often forget that in forex trading less is more. What is more, many traders forget that, apart from the technical aspect and the required precision, the trading is carried out by humans which are simply imperfect beings susceptible to emotional reactions. A number of traders thus only invest in learning about the market and the tools, failing to recognize the impact of their own psychology. 

Intraday trading is a perfect example of how traders easily sabotage their trades because they are pulled towards checking the progression of their trades, which leaves more room for doubt and makes them take action they would otherwise not consider. The best strategy in terms of trading applications and easy access to information is to completely ignore their existence and carry on as if they never existed. While this may seem like a silly idea, you are in fact allowing the market to perform the way it would naturally do on its own. By not looking at the apps and your trades, you are preventing yourself from meddling in and thus making huge mistakes. Professional traders around the world choose to trade just shortly before the close of the daily candle precisely because they understand their human weakness and the need to reduce the risk of doing something they could regret later. 

If they have already made some mistakes or lost more than they planned to, traders also tend to overcompensate by trying to do more than they should. In such cases, traders find themselves trying hard to find trades that would bring their account to where it was prior to losing. This way, traders actually chase losses while unfortunately, more often than not, the whole dissatisfaction with one’s account slowly but surely lures the individual into sinking deeply and fast. The lesson here is that losses are an inevitable part of trading in this market, and, the sooner you learn how to deal with them, the better you will be at keeping your account. Money management is not about compensating for your losses but preventing them. Therefore, the more you try to go back and return what is lost, the greater the chance for amplifying the loss is. 

An essential part of making mistakes such as the ones described above is panicking because traders are generally less likely to make an irrational decision willingly or consciously. Rather, traders are easily pushed into thinking that they better make a move because of the cold sweat going down their necks. This exact way many traders assume that taking money off the table once they start losing many pips is the best solution when, in fact, their accounts would most probably do much better without making this choice. Taking losses is an essential part of trading in the spot forex market and your task is to learn how to process the anxiety that stems from taking drawdown. Many a time, traders cut bait just because they start panicking and particularly as a result of looking at their traders more often than they should. 

On the other end of the spectrum, we have another situation where traders find themselves entering a particularly satisfying trade that is generating a great number of pips. Now, after a 2.5% gain, these traders can start feeling markedly satisfied with this outstanding achievement that they end up not making the crucial decisions that would keep their account safe. At this point, they are probably looking at their accounts, hoping not to fall below their new totals, so they completely disregard their proven system and money management process that they would naturally use under different conditions. What this often means is that these traders would take everything off, admiring the great sum appearing in their accounts, when in fact they would fail to recognize the possibility of the trade moving much further than that. Many experts have shared their past experiences where they missed out on long trades because they feared to keep going once they earned a great amount of money. 

Fearing risk can be a blessing in disguise as much as it can make your worst nightmare real. Therefore, just as we say that one swallow does not make a summer in terms of losses and your account being finished as a result, so we can move towards understanding that one big win cannot possibly imply that a trade is over. Instead of failing to earn a few additional hundreds of pips next time, learn to trust your system to tell you when to exit the trade. As you can exit too early while losing, you can do the same when winning, so the perfect solution for traders to stop doing anything prematurely is to simply allow the system to process information without micromanaging the trade or ignoring its signals. Traders must not, under any circumstances, deviate from their tested, proven systems and accept the imperfection of the human mind. 

Last but not least, among the greatest mistakes made in trading, forex traders increasingly fail because they simply do not understand the concept of playing the long game. Unlike other mistakes listed above, this one implies more of a process than a single mistake one can make in one second. What this essentially means is that earning an impressive percentage of the money you started out with should not make you feel entitled to winning. Many traders often earn great amounts of money quickly, increasing their total unbelievably fast, only to go back where they were in the beginning even more quickly. At this point, after feeling so proud of yourself and after putting so much effort into trading, you end up losing everything you earned, feeling completely shattered. This is such a sensitive spot for many traders because they are incredibly prone to acting impulsively at this stage and the least sensible and rational decisions are made precisely when one starts losing. 

The point after losing is the moment where even good traders need to keep their eyes open and control themselves so as not to let their emotions lead the way. While also common among experts, this issue can be tackled easily just by understanding the relevance of the data you get after a 12-month period. If you have completed the testing process and you are done with demo trading, you should feel pressured to experience wins constantly. Just like currency pairs, our trading accounts naturally oscillate up and down and this is an innate part of the forex market. Even if your account goes down more than you expected, you should aim to stay on the course, understanding the decline as a natural fluctuation. The main idea that you should constantly remind yourself of is that you are playing the long game which requires that you keep the same course as before, maintain a sense of direction despite the passing losses.

The top traders are precisely the traders who can maintain a clear picture of their goals regardless of the short-term losses. The best traders are those who know how not to quit or sabotage their trades by making rash decisions. These are the key points that will either place you among the losing majority or the winning minority. Even if you find yourself slipping in the unwanted direction, you can always consciously choose to correct yourself and return to the course you wish to follow. The winners are also those individuals who know how to recognize and accept that they have slipped because this is the mentality that will propel you, as well as every other trader, towards success. 

Actual Steps to Take

If you are a self-aware trader who understands his/her shortcomings, you are also probably the type of person who is ready to invest in psychological growth. As we have come to witness in this article and in real life too, sabotaging one’s trades often has to do more with discipline than any other aspect of trading, which is why reading useful material on this topic has proved to be extremely beneficial for a great number of traders. Discipline Equals Freedom by Jocko Williks, for example, is an essential read that has helped numerous traders get out of the slump of succumbing to their habits and impulses which often prove to be fairly unhealthy and unproductive. While many people assume that self-help books are light reads that are meant to make you forget your troubles, mindset books such as the one mentioned above are vital educational materials that will surely change your life for the better and thus your trading as well.

If you wish to be proactive and are at the beginning of your trading career, make sure that you leave enough time to set up and test out your system. The internet and various social media outlets provide numerous resources that will help you start devising your own system. Start applying the advice shared online and, most importantly, choose to give yourself the chance to demo test everything you learn before you actually invest your own money. The desire to make money is what we all share, but do not let it get the best of you if you are looking forward to achieving and maintaining sustainable, long-term success in the spot forex market. 

Another important piece of advice to consider is to make yourself aware of your own criteria because you will eventually need to make decisions based on your needs and standards. If you have a list of indicators that you need to use to get a green light to enter a trade, you should not by any means ignore your system and try to take a shorter path. Exercise discipline in every aspect of your trade and do not let yourself sabotage your success just because you are eager to earn more money. Wait for all of your indicators to tell you to proceed and, once you enter a trade, let it run its course naturally. Refrain from giving yourself the chance to check the trades you are in and possibly interfere, whilst nurturing a sense of trust in your system.

Lastly, do not allow yourself to be triggered by passing losses, understanding that your only point of reference should be the number you get upon the completion of a 12-month period. These steps may certainly turn out to be slightly more difficult to follow in real life, yet they are absolutely vital if you are a committed and self-aware trader who wishes to evade the common, repetitive mistakes that make many forex enthusiasts sabotage their trading. 

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 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.

Beginners Forex Education Forex Basics

The Best Advice Forex Trading Advice You’ll Ever Receive

We all like a little bit of advice, don’t we? The entire point of advice is that it allows us to get better, as other people can see the things that we are doing and point out what we need to improve. Of course, not all advice is actually helpful. Some of it will not impact our trading but it is still good to hear. Today we are going to be looking at some of the better advice that you could use to help improve your trading. You may already be doing a lot of these things, or you may not be. If you aren’t, try implementing this information into your trading plans to see if they make an improvement.

Use a Demo Account

First off, we must stress how important it is to test your strategies and any changes that you make. This is something that a lot of traders, especially newer ones, simply do not do. They just chuck the changes into their main trades and hope for the best. Those that do test may still do this on a live account. While the trades are smaller, you are still risking your own money on something that you have no idea whether it works or not. So instead, what you need to do is to trade and test any changes that you make, no matter how big or small, on a demo account. This way you are not risking any of your own money on the changes, and if the change makes things a lot worse, you have not lost anything. As soon as you can see that the change is working consistently, only then should you try and implement that change on your live account where your actual money is.

Have a Risk Management Plan

One of the main elements of any trading plan or strategy is the risk management that comes with it. You can set this up before placing a single trade and you should, it will then be used for every trade that you place. The thing is though, that a risk management plan that works at one point, won’t always, and so you will need to be making constant changes and constantly reviewing the plan. Different market conditions may require you to change the locations of your stop losses and take profit levels. It may even cause you to change your risk to reward ratio. That is fine if you need to, just be sure that you are constantly monitoring the levels they are at and what risk management techniques you are using. You never know when they need to change, just remember our first point, test them on a demo account. Never accept your risk management plan as final.

Do Not Blindly Follow Others

A lot of traders will come into forex and simply follow what others are doing or what they say. While it is perfectly fine to get ideas from others or to trade the same as someone else, (some people make a lot of money by doing that) what is not right is to simply follow their trades blind. This means that you do not know why the trade is being put on or what to do if things go wrong. Each trader that you are following will have a reason as to why they have placed the take that they have, you need to know this too. As soon as you trade without knowing, you are risking your money on a blind gamble, and what will you do if things go the wrong way? That trader may not be there to tell you what to do, you will need to work it out, so if you follow blindly, you won’t be able to. Always work out why someone is placing a trade and what the requirements of that trade are before you place it. If you do not know any of these things, then do not place the trade.

Never Trade With Bill Money

The golden rule of anything to do with trading or investing, do not take any more than you can afford to lose. The best way of doing this is to consider any money that you deposit into your broker’s account as lost money, it is lost to you until you withdraw it back to your account. You also need to consider whether you need that money. We have seen countless traders trade with money they cannot afford to lose, money that they needed for food or for rent. They lost it and so cannot afford their rent that month, or even worse, traders that borrow, get into debt for trading and then lose it, leaving them with the debt to pay. If the money you are using will negatively affect your life if you lost it, then you should not be using it to trade at all.


This leads on from the previous point, you need to research everything, and we mean everything. If you are looking for a broker, research them. Find the one that has the right features that you need, and that has a good reputation of honoring what they are meant to be doing. If you are looking at signals, research them. Look at how they have done previously, the people behind it, everything. Creating a new strategy? You know the drill, you need to research everything that you can about it, the risk management that comes with it, the best trading conditions for it, your own requirements such as time required. Anything you do in trading, you need to research, this is how you get to know what it is that you are doing and why and it is the best way to ensure that the way you are going to do is correct. Do not do anything blind in forex or trading, that will only lead to losses and potential blown accounts.

That is some of the advice that you will hear quite a lot over the internet. It is all fantastic advice that can really help you to become a profitable and successful trader to at least save you some potential headaches down the road, not to mention some of your capital. Whether you already do them or not, take them into consideration next time you plan on trading and think about what you could potentially be doing differently which could help to improve your overall trading.

Forex Basics

Tips for Increasing Your Forex Productivity

Forex trading can take a long time. In fact, in order to place a single trade, it could take you up to a few hours of analysis before you actually place it. That doesn’t sound like the most efficient thing in the world and you would be right, it isn’t. Traders are always looking for things that they can do that will help them to speed up their trading abilities. To improve their productivity and to basically make trading forex quicker and simpler. That is why we are going to be looking at some of the things that you can do that will help speed up your productivity when it comes to forex trading.

Have A Predefined Plan

Having a plan already set out can make things incredibly simple and a lot quicker when it comes to actually placing your trades. This predefined plan basically means that you have your entry requirements already set up, a set of rules that dictate what trades you are going to be putting on and how you are going to put them on. These rules should be set in stone and go inline with your strategy. Having them there clear and simple means that you do not need to think as hard when you are there to place a trade which can increase your productivity as you are no longer needing to work out whether it is a good trade or not, you know whether it is or is not based on whether it matches your rules. If it does, then place the tread, if it does not then do not place it, as it would be a bad trade. Having these rules are paramount for being efficient, as well as profitable.

Remove Any Distractions

Distractions can be a real nightmare for your productivity, not just with forex trading but with pretty much anything that you are doing. Distractions can come from a lot of different sources from the TV, a radio, your phone, internet browsers, or even other people. If there is something around that can distract you, try and get rid of it. This may mean that your trading room is a little bare, and that is fine, as long as it enables you to concentrate on what you are doing. As soon as you start to procrastinate, looking at or doing other things, your productivity will plummet. Avoid this as best as you can. Of course some distractions you cannot avoid, the postman at your door for example, but as long as you control the ones that you are able to, you should be able to keep your productivity high.

Avoid Bad Trades

Productivity is not all about placing trades. You could place 100 trades a day, but this does not mean that you are being productive. All it means is that you are placing a lot of trades. Instead, you should try and focus on placing good trades, trades that are in line with your trading strategy, and trades that will give you the best chances of being profitable. If you simply place random or lots of trades, then there is a good chance that some of them will be losers. As soon as you lose a trade, your overall productivity will decrease. So instead you will want to focus on the good trades, each one will have a better chance of profits, which is your overall goal and the overall measurement of your productivity.

Reward Yourself

There is no better motivator to work hard than a reward, so reward yourself. It will help you to want to keep going and to work harder. If we constantly work and don’t receive anything back, why are we doing it? It will demotivate us, make us not want to bother doing too much which will be detrimental to our overall trading productivity, it will drop if we are not motivated to work. So reward yourself regularly. It doesn’t need to be very large rewards. A little bit of your profits or a nice meal out should be enough. Reward yourself, motivate yourself often and you will see your overall productivity levels rise.

Take Breaks

This may seem to be counter-productive. Taking a break means that you will be away from your computer and away from making trades, but this is not necessarily a bad thing. In fact, it is a good thing and can very easily improve your overall productivity. Taking breaks allows you to refresh both your mind and your body. If we do the same thing over and over for a long period of time we will become bored. We will become tired and we will start to make mistakes. That is why taking breaks is so important, it allows us to remain fresh when we are trading. This freshness means that we are able to concentrate more and will be able to better ensure that we are placing good trades, not to mention the speed at which we can place them will also improve.

Get Plenty of Rest

There is nothing better to refresh us than a good night’s sleep. Your brain needs time to switch off and to recover, not to mention the fact that we have all experienced what it is like to not sleep properly. You are sluggish, make mistakes, and are far more irritable than when we have had a good night’s sleep. This is why it is so important to try and sleep. Along with this, it may be beneficial to choose a trading strategy that does not require you to be up in the middle of the night, one that allows you to take advantage of your bed and to sleep the entire way through the night. If not, then at least try to get a minimum of 6 hours sleep a night, at a minimum to ensure that you are up and alert the next day ready to trade.

Set Alarms

Let’s be honest, we have all had those trading sessions where we are sat at the computer for hours and absolutely nothing happens, there have been no trade opportunities available to us. We can avoid this by simply setting up alarms and alerts. These alerts can let us know when the market conditions are favourable for us and this will enable us to get away from the screen and to avoid wasting time simply sitting there. We can take a break, we can do some laundry, cooking anything rather than simply sitting there doing nothing, and becoming frustrated. These alerts mean that we are only actively trading when the markets are in the right condition, which will also keep our mind free and fresh for when we actually need to place our trades. These Arts can also work forever, meaning that we can set them and they will alert us every time in the future when the conditions are right.

Those are just a few of the things that you can do that will help to ensure that your trading productivity remains high. They will enable you to place far better trades at a much quicker pace, will help you to become profitable, and will enable you to be a better trader overall.

Beginners Forex Education Forex Basics

The Ultimate Checklist for First-Time Forex Traders

Congratulations on your decision to become a forex trader! This self-made career path can really open the door to a lot of financial opportunities in your life and might even help you through retirement or hard times later on. You might have had some doubts when you started considering trading as an alternative way to make extra money, especially if you’ve heard the rumors that most traders fail, but we’re here with good news.

There are guaranteed ways to start off on the path to success, so long as you complete all the necessary steps BEFORE you actually open your very first trading account. If you follow along with our ultimate checklist, we can guarantee that you’ll start off on the right path with an advantage over other beginner traders. 

Start with Beginner Education

If you want to trade, you need to start by educating yourself, or else you won’t know what’s going on. Here’s a list of some of the first things you’ll need to know:

  • Terminology 
  • Factors that affect prices in the forex market and how the market works
  • Information about the different currency pairs and instruments
  • Forex trading sessions and hours
  • Leverage and margin
  • How to manage risk as a beginner
  • Tips for beginners
  • Trading psychology
  • Navigating a trading platform

Of course, there’s a lot more to know, but these are some of the first topics you’ll want to tackle as a beginner so that you can understand more complicated topics later on. If you don’t understand common trading terms like leverage, pip, or spread, then you will be lost once you move on. 

Fortunately, all of this information can be found on the internet for free. You can simply perform a quick Google search for “beginner trading topics” to get started, or head over to YouTube and type the same thing into the search bar if you’d prefer to watch educational videos. Once you think you have beginner education covered, we’d suggest taking some online quizzes to make sure you fully understood all of the content, then you’ll know you’re ready to move on.  

Move On to More Advanced Material

Once you understand beginner related content, you’ll be more prepared to learn about more complicated subjects without becoming frustrated. Here are a few examples of the kind of content you should be looking for:

  • Trading strategies
  • Candlestick patterns
  • Using indicators, signals, EAs
  • Fibonacci tools
  • Reading charts
  • Technical and fundamental analysis

Once again, there’s a lot to learn here, and you’ll want to pay extra attention to content that teaches you how to develop and manage a trading strategy. Reading articles or books that have been written by expert traders is a great way to learn, as you might be able to find trading tips that inspire you. Also, be sure to research multiple types of trading styles and strategies so that you’ll be more knowledgeable when it’s time to develop your trading plan. 

Choose a Forex Broker

At this point, you need to find a broker. This isn’t a decision that should be made with haste, as your choice will affect your entire trading experience. You should know that there are hundreds of options out there, but each broker wasn’t created equally. Here are some things to research and consider when it comes to choosing the broker that is best for you:

  • Deposit minimums and associated account types
  • Fees and charges (spread, commissions, withdrawal fees, inactivity charges, etc.)
  • Available assets (currency pairs, commodities, stocks, cryptocurrency, etc.)
  • Available trading platforms
  • Customer service (hours and contact methods)
  • Extra perks like bonuses and promotions
  • Access to educational resources 
  • Regulation status

It’s a good idea to compare some of your favorite options and always lean towards regulated brokers to keep yourself safe in the event that your broker was to go out of business. One of the best ways to get an idea of whether a broker is trustworthy is to read user reviews online, but make sure these are coming from other websites besides your broker and take some of the bad reviews with a grain of salt, as some traders may blame the broker when they lost money at their own fault. If you can’t find any reviews online, you’re probably looking at a less established broker or possibly a scammer. 

Develop a Trading Plan

One of the biggest beginner mistakes is opening a trading account with no plan. If you don’t know when, why, or what you want to trade, then you’ll be making random moves that don’t make much sense. Fortunately, you should know a lot about different types of trading plans and strategies from step 2, but you might need to do a little more research as you work to develop your plan. This is what your plan will need to cover:

  • How often you will be trading (part-time, full-time, etc.)
  • Rules for entering and exiting trades
  • Factors you’ll look at when deciding to make a trade
  • Goals you want to meet
  • The types of instruments you want to trade
  • How much money you’re willing to invest and risk on each trade
  • Steps you’ll take to limit losses

It’s crucial to ensure that your time schedule will fit with your trading plan. Some plans require a lot more time in front of the computer screen, while others will allow you to remain less active. Remember that you’re setting yourself up for failure if you try to set a plan that requires you to trade during times when you may not be able to or if your plan is too complex for your skill level. Often times, the simplest plans produce the best results. 

Practice on a Demo Account

At this point, you’re almost ready to open your first trading account! You’ve learned beginner and intermediate content, chosen a forex broker and developed a comprehensive trading plan. You’re probably feeling eager to get started, but you don’t want to skip out on using a demo account. This is the most hands-on tool you’ll have used so far and will help you to gauge your preparedness for trading on a real account. 

You’ll want to start by opening a free demo account through your chosen broker’s website (Almost every forex broker offers this option). This will allow you to practice trading under the broker’s current conditions, become more familiar with navigating their trading platform and tools, and most importantly, to test out your trading plan with no financial risk. 

As you practice on your demo account, you should keep a record of each trade just as if you were using a live account. Check for any issues that might need to be addressed so that you can tweak your strategy to perfection before you put any money on the line. Once you have a consistently profitable strategy that works, you can move on with confidence. 

Open Your Trading Account

Congratulations! Once you reach this point, you’ve done everything you need to ensure that you’re starting off on the right path. Your broker will likely ask you for proof of identity and proof of address documents, so you’ll want to be sure to have these handy. Most people simply use a copy of their driver’s license and a utility bill for this step. 

Of course, you should never stop pursuing a trading education along the way, and be sure to keep a detailed trading journal to keep a good record of your profits/losses. Now, get out there and open your first trading account!

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, 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.

Beginners Forex Education Forex Basics

Forex Pros Do These Things (And You Should Too!)

We forex traders like to look up to those that have come before us and been successful. We do this for a number of reasons. These individuals have been successful, so they clearly know what they are doing. This means that they are great people to learn from. They also have the experience to know what is a good thing to do and what is a not so good thing to do. They are the people that we wish to copy, to learn from, and to be just like. So we are going to be looking at some of the things that professional traders do in order to be successful, and why you should be doing the same things.

Sticking to the Plan

One of the things that any professional or even successful trader will tell you is that you need to stick to the plan. There is no point in having a trading plan in place if you are not going to be following it. Even breaking the plan in a tiny way is basically meaning that you are placing bad trades. They will tell you that you need to stick to it and you need to stay disciplined. That is one of the most important steps to becoming a successful trader.

Don’t Be Afraid to Take Risks

Contrary to the above, a lot of traders will tell you that if you want to be successful then you will need to take risks. This does not, however, mean that you should be placing more trades or placing larger trades. Those are bad risks and will put your account in danger each time you do it. Instead, the sort of risks that they are referring to are things like taking trades on an asset that you do not usually trade. So if you are an avid EURUSD trader but a great trade opportunity comes up on the GBPUSD pair, then there is no harm in trading that pair, as long as the entry requirements and all other aspects of your trading plan are still being met. Do not limit yourself to that one pair.

Remove Your Limits

We mentioned this briefly in the above point, but you need to be able to remove or at least expand your limits. Sticking to a single currency pair or asset will greatly limit your opportunities to trade and to be profitable. It is, of course, not a good idea to expand too much. Going from one pair to 100 will put your account in danger as you cannot monitor or fully understand all 100 currencies. Instead, expand slowly, moving from one to two, then two to three, and so forth. You are still expanding your limits, giving yourself more opportunities, but you are doing it in a controlled manner which is exactly what you need to be doing.

Get Into the Right Mindset

Being in the right mindset is vital. In fact, it can make or break a trader. If you believe that you can trade, if you are able to control your emotions, if you know when to take breaks then you can keep your mind in the right place and remain free from the distractions that are around you. If you have the right attitude towards your trading then things like sticking to your trading plan and staying disciplined will be a lot more straightforward and easier to maintain. Those that are not in it with the right attitude will soon find themselves making bad trades or making losses, so it is important that you get the right mindset and then try to remain there.

Know When to Take Breaks

A good trader will not spend all day everyday in front of the monitor. If they did, they would simply burn out and start to make losses. A good trader will know when they need to take breaks. This can be a break when your emotions are starting to build up, or you are simply getting a little tired. There is no wrong time to take a break. Getting out and clearing your mind is paramount to being a successful trader. If you don’t take breaks you will burnout and make losses. So learn when to take them, and even set designated times for breaks if you need to.

Risk Control

Risk control is the foundation of any forex trading strategy. If you do not have a risk management plan in place then you’re setting yourself up for failure. You need to create a risk management plan that has a number of different elements to it. These will include your risk to reward ratio, your stop loss size, take profit sizes, trade sizes and more. These are the foundation of your trading plan, you need to have them in place before you make a trade. Any professional trader will simply laugh at you if you are trading without a plan in place.

Not Always Trading

You do not always need to trade. You do not need to trade every minute or even every day. In fact, some professional traders will go a whole week without putting on a trade. This is often due to the fact that the markets are not in the right condition for the strategy that they wish to trade. They will only trade when the conditions are right and this is something that you should be doing. Do not trade just for the sake of trading. Trade when the setup is actually there. If you trade outside of your strategy it is considered a bad trade, so having patience is key to sticking to this rule. Have patience and wait for the right trade to come and certainly don’t try to force it.

Not Focusing on Wins and Losses

Advertised all over the internet are those strategies that are promising you a 99% win rate. These are just not realistic and are playing on the strings of those that are there to simply make money, yet do not fully understand how forex or the markets actually work. Professional traders do not care about how many they win or how many they lose. They are simply interested in the returns. With a proper risk to reward ratio in place, you can be profitable with a 25% win rate. This is what the professionals focus on, being profitable no matter whether they win or lose. Due to this, they do not focus on whether their last time won or lost, and neither should you. Trust your strategy, trust your risk management and you will have a far less stressful time.

Professional forex traders are people that we look up to, yet they do not do anything different to what we should be doing. If we want to be successful traders then we need to mimic some of the things that the professionals are doing. It is easy to do, as they aren’t doing anything magical. There really isn’t an excuse that we can use that will make it acceptable to avoid following them. Stick to some of the actions that we have mentioned above and you will be on your own path to becoming a professional trader at some point in your career.

Beginners Forex Education Forex Basics

The Truth About Why You’re Failing at Forex

There are a lot of traders out there. A lot of them are experienced and a lot of them are completely new. The one thing that the majority of them have with forex is that they are simply losing. Yes, they are losing money. You have probably seen the warning signs from pretty much any forex related site, stating that the majority of people that trade forex or any sort of CFD will lose money. So why do we still trade? It is because of the potential, but in order to achieve that potential, we are going to need to work out why it is that so many traders are failing when it comes to forex trading.

Some reasons are based on the individual, some through inexperienced and some through simply making mistakes, common mistakes that a lot of people make. We are going to be looking at some of the main reasons why people fail at forex trading.

Lack of Risk Management

Something that should have been cemented into your mind when you read any sort of trading course or help site is that you need to have a risk management plan in place. Yet it is something that a lot of traders still fail to do, and when you fail to do this, you are failing to trade properly. The risk management plan outlines a number of different things including trade sizes, stop loss distances, your risk to reward ratio, and more. It is paramount that this is in place, its sole purpose is to protect your account and to help you prevent yourself from making large losses. So we really don’t understand why people trade without one, either through lack of understanding or simply being too lazy to follow one. Get a risk management plan and stick to it, you simply cannot be successful without one and will fail if you don’t use it.

Not Using Stop Losses

Part of the risk management plan that we mentioned above is your stop losses. These are basically automatic stops that you can place on your trades. When the price of the markets move up or down and hit these levels then your account will automatically close. They are there to help protect you from bigger losses than you planned for, yet so many people refuse to use them. Again, this may be through simply not understanding their use, but for many. It is simply the fact that they do not want to and for this reason, they often lose their accounts. You need to have them set, every single trade needs to have one, no matter what your strategy is. If you are the sort of person that doesn’t set them and instead wants to manually watch your trades then we would suggest you rethink, these are hard stops, they protect you, use them. Otherwise, a single trade could be enough to blow an account, and it has happened many times in the past.

Trade Sizes Too Large

The size of the trade that you place relies on a number of things. It is decided based on your strategy as well as your current account size. If you place trades that are too large, then you are placing your account under an increased amount of risk, not something that you want to be doing. If you have an account size of $1,000 and place a trade size of 0.01 lots then you have a lot of room for movement. However, if you use your leverage to place a 1 lot trade, then it won’t take much movement in the markets to simply blow your account. You need to place your trade sizes responsibly, yes the larger the trade size the larger the potential profits, but the losses are also potentially larger. Stick to appropriate trade sizes and do not try to push them too far.

Overleveraging Your Account

Leverage is a wonderful thing. The brokers are basically lending you money to place trades larger than your account would otherwise be able to place. It is something that you should take advantage of, but unfortunately, a lot of people do not understand the darker side of leverage, the side that can cause you to simply blow your account. When you leverage your account, you will be placing larger trade sizes, and these give more profit potential but also more loss potential. We see $100 accounts with a leverage of 2000:1 placing 1 lot trade sizes. The markets only need to move a few points before the account will blow. You need to use your leverage appropriately, even with a leverage of 2000:1, you do not need to use it all with every single trade. Remember to follow your strategy and do not place trades too large just because you have the leverage to do it.

Quitting Too Early

People don’t like to lose, and that is understandable, but people also should not quit at the first hurdle. Many people from many walks of life have tried things, but do you think that any of the successful ones have quit after their first lesson or two? When you leave after your loss, you are basically accepting that you have lost that money and have walked away. It should be that you were never serious about trading and never serious about wanting to make the money that you are upset that you lost. You cannot quit too early, losses are a part of trading, just because you experienced one does not mean you are a failure or that you should give up. You need to keep going, even the best forex traders fail, but they are the best because they did not quit, and neither should you.

Being Distracted

Let’s be honest, it is easy to be distracted, and far easier in these modern days than it was before with all the different devices that we have to entertain us. Yet when we trade, we need to try and get rid of everything that we do not consider essential. Get rid of the TV in your trading room, get rid of your phone, get rid of anything that can distract you. We have made losses through distractions in the past, we are sure that the majority of traders have, but it is something that we can very easily deal with. Distractions will take your mind off your trading, placing wrong stop losses or take profits, trades too large, and so forth. You need to be focused when you trade, if not, mistakes will happen and you could ultimately fail if you experience too many of those mistakes.

Those are some of the reasons why people fail. If you make a loss to begin with, do not panic, that is pretty much expected of all new traders. In fact, if you are profitable in your first few months, either you are amazing or simply lucky. However each time you make a loss, take a look at the trade, try and work out why you lose, some you will be able to make adjustments, others may have just been unlucky, but use it as a learning experience. Doing this with each trade will enable you to be better, and the better you are, the less likely you are to fail.

Forex Basics

Why It’s Easier to Succeed with Forex Than You Might Think

Those that decide to pursue forex trading fall into two categories: those that go on to make a profit and continue trading, and those that lose money and quit. While everyone hopes to become one of the traders that finds themselves on the path to success, many people simply don’t realize the simple factors that can make you or break you when it comes to trading in the forex market. First, you need to start by understanding the basics of forex trading. 

An Introduction to Forex Trading

The term forex refers to the foreign exchange market, which is an online global exchange market where people buy and sell different currencies. This includes regular people and professional traders, along with bigger entities like banks, hedge funds, brokers, specific companies, and other high-stakes investors. The value of the currency that people are buying and selling changes based on several different factors, including but not limited to:

  • Interest rates and inflation rates
  • The country’s current debt
  • Unemployment data
  • The housing market
  • Politics
  • Supply & demand
  • Economic factors 

As you can see, the value of each country’s currency is primarily affected by factors that are associated with money, government, and economic data. In order to make informed trading decisions, traders keep up with news events and look at economic calendars for updates that tell them a currency’s value may change. Other methods that are used to decide what currencies to trade include technical and fundamental analysis. 

What Is a Currency Pair?

A currency pair includes two different currencies that are paired against one another. For example, EUR/USD. This means that the (base currency) Euro is being traded against the (counter currency) United States Dollar. This is the most used pair in the world, but there are also several other major, minor, and exotic pairs that can be traded. 

  • Major currency pairs include EUR/USD, USD/JPY, GBP/USD, USD/CHF, AUD/USD, USD/CAD, GBP/EUR, EUR/CHF, EUR/JPY, and the NZD/USD. 
  • Minor currency pairs don’t include the United States Dollar. The most common examples are the British Pound (GBP), the Euro (EUR), and the Yen (JPY). 
  • Exotic currency pairs are made up of one major currency, traded against a currency from a developing country. The Turkish Lira (TRY) is one example of an exotic currency

Traders choose which currency pairs to buy or sell based on the change in price with the goal of making a profit. It’s generally considered the safest to trade major currency pairs, while exotic currency pairs can be more volatile and riskier to traders, so be sure to choose wisely. 

Must-Follow Tips for Success

Now that we’ve covered the basics of forex trading, it’s time to dish out some of the most helpful tips that can help you reach long-term success. Simply being aware of this information can help to ensure that you get started on the right foot without falling victim to common trading mistakes. 

  • Choose the Right Broker: There are a lot of choices out there, but you’ll need to do some research to make sure you’re working with a reputable broker. It’s also important to compare account types, fees, funding methods, and other important aspects before you open a trading account. Know that choosing a broker with fewer fees means that more of your profits will wind up in your pocket. 
  • Develop a good trading strategy: There are a lot of different strategies out there that appeal to all kinds of different traders. You’ll need to choose one that fits with your schedule and determine the reasons why you will enter trades, how much money you’re willing to risk, etc.
  • Don’t open an account until you’re ready: You shouldn’t rush to open a trading account until you understand the market and you’ve developed a solid trading plan. Some brokers will even charge you for inactivity if you deposit funds but choose to hold off on trading until you feel ready. Instead, open a demo account for practice. 
  • Try to limit distractions in the place where you plan to trade. Background noise, music, television, conversation, and other noises can cause you to lose your focus. Also, try turning off your phone or at least put it on silent if social media keeps pulling you away from your work.
  • Never risk more than you can afford to lose: Don’t get caught up using extremely high leverage options or risking large amounts on your trades in an effort to make a large profit quickly. It’s better to be safe than sorry when it comes to forex, especially if you’re a beginner. 
  • Don’t enter a trade if there isn’t a good reason to do so: Even if you haven’t entered any trades for the entire day, don’t enter one for the sake of doing it just because you’re bored or feeling unproductive. It’s better to choose not to trade at all with no money lost than it is to enter a trade and lose money you could have spared with patience. 
  • Never stop learning: Even once you have a good understanding of the forex market and strategies, there’s always more to know. Be sure to spend time reading about psychology-related trading material, checking out tips and tricks from other traders, watching educational videos, or anything else that helps to expand on your knowledge as a forex trader.  
  • Keep a trading journal: Trust us, you’re going to refer back to your trading journal more than once, so don’t take the lazy way out on this one. Be sure to log specific details about the trades you take and check on your progress from time to time. 
  • Don’t give up: If you start to lose money, don’t panic and start risking more to make up for it. The best way to handle this is to take a step back and look at your trading journal to see if you can figure out what’s going wrong. If you think your strategy is to blame, try making changes and testing on a demo account before you go back to your live account. Staying calm and figuring out the problem is what separates successful traders from the large percentage of those that give up.
Beginners Forex Education Forex Basics

How Can I Ensure Long-Term Success in Trading?

As a Forex trader, you will need to pay attention to important points in charts, adjust specific settings, manage your risk, and maximize your returns as a result. The intention here is to show how you can practice long-term sustainable and profitable trading regardless of your market of choice. We truly want you to have the best opportunity no matter how and when you started to trade for the first time, which is why we are delighted to close this topic with special tips that you can apply today. You will probably want to prepare your notebook and take notes so as not to forget any suggestions or ideas you may have.

What is the worst attitude for long-term success?

I need that money now, many people say. Unfortunately, with this degree of dependency on the result of your trading (i.e. the need to succeed now), you are limiting your vision quite a bit. With this point of view, you do not give yourself the chance to learn steadily and the learning curve is unrealistically steep. Since there is a need to debunk this myth of instant wealth, what you can do instead is set the grounds for trading in the way you will be thankful for in the future.

What is the right mindset for sustainable growth? 

You should find a way to always preserve a portion of your return and reinvest it so that this system starts running on its own. We call this buy and hold strategy that helps traders take steps that will always put the money back into their accounts. This is the one way you can feel secure about your finances down the line.

What if I don’t feel like allocating part of my earnings?

Changing perceptions and creating a new routine is a tough thing to do. Most people are afraid of changes, but the control you may think you have over your life and your finances now is false. If you just trade, you do not have a plan B. Even if you have a regular job and do trading on the side, don’t you feel like you can do more? We want you to do more and to succeed in an easy way, but this will require you to change your views about how money should be managed.

How do I reduce anxiety about making changes in how I perceive trading?

First of all, start playing offense and defense at the same time by not spending all the money you earn. What you never want to do is work hard for a few months and spend it in a matter of a few days or weeks. Reinvesting your money will help you relieve yourself and alleviate that sense of anxiety. If your worries come from the place of wanting to secure your finances in the long term, this is the way to go. The thing is, with this approach, you will never need to worry about individual trades because, even if something falls through, you will always have security. Whenever you enter the market, it is absolutely never too late if you have a buy and hold mentality.

What if I need the money now?

Well, first ask yourself the question of what is the sum that would make you happy. When you will take this money off your account is yours to decide, but you do need to have a clear idea of how much you need to make. If you generally just want to be rich, you are much better off applying the buy and hold strategy.

What are the essential trading rules?

Perfect your system first and then do everything to stop yourself from sabotaging it. This may sound easy, but it is actually one of the greatest hurdles in trading.

How do I start buying and holding?

You first need to have a plan that you will write down. Whatever situation you find yourself in, do not make any changes to it regardless of what is going on in the market. This means that you will not tweak the settings or change the take-profit point as you please even if it gets tough. The best part about this approach is that you will always have more opportunities to earn money trading and any losses will be opportunities for you to improve your system.

What is the best strategy for buying and holding?

In one of the previous articles, we talked about scaling out if you use a swing trading strategy. This is your best money management solution and a secure way to amass a fortune over time. As long as you don’t react impulsively, get suddenly triggered by some external factor, or make decisions based on your emotions, the money you take off the table and reinvest using the scaling out strategies will provide you with the things you need.

How do I differ from the rest?

You will be different if you design a thorough plan first. Then you will choose if you will be in the buyer’s or seller’s market and whether you will go long or short. Shorting may be more difficult in the stock market than with trading ETFs, gold, or commodities for example. You will strive to pick things that can have a limited downside and can hardly go down to zero, such as gold and oil or healthcare and energy stocks and ETFs. Forex traders should test their algorithms to perfection (backtesting, forward testing, and real money application as well) because this will help you outperform most investors and financial advisors. Opt for the monthly or the weekly chart for a more aggressive approach, rather than the daily one. While these are easy to apply, understand that just by scaling out and buying and holding, you are already way ahead of the majority

What are the two biggest pieces of advice you can give me?

Firstly, never let yourself be susceptible to the fear of missing out (FOMO) because there is an abundance of opportunities in every market, be it stocks or gold. You can push yourself sporadically in the investment scene, but must never let your emotions guide you while trading. Secondly, always and with whatever amount of money you have, start trading and investing as soon as possible. Make your plan and you will have that bright future of which you keep dreaming.

What is the best order of actions I could use to succeed as a trader?

Since this is the last article on the best position you have, we would like to share a form of a checklist you can return to any time you like.

Thank you for sharing this journey with us. Ensuring the best trading position is a really broad topic, but we strived to be as clear and to the point as possible. Consider reading additional articles on the topics that may be of interest to you because the more you know, the sooner you can apply and test. Finally, please also remember that the sooner you start buying and holding long-term, the better. And, once the shorter-term machine starts running, the world is yours

Good luck!


Beginners Forex Education Forex Basics

Six Key Mistakes New Traders Make (and How to Avoid Them)

Within the last few decades, trading in the financial markets has seen a sharp increase in popularity, which has led to a boom in the number of newbie traders signing up for trading accounts all over the world. While trading can be a great way to make money from home or even as a full-time job, many of these beginners start out with no real idea of what they should be doing.

After losing a little bit of money (or blowing their account balance), they feel discouraged and give up. In reality, most of these failed trading attempts can be contributed to common trading mistakes that could have easily been avoided if the novice traders were aware of them. If you don’t want to suffer the same fate, we have good news, as you’ll simply need to read this article so you’ll be aware of these mistakes.  

Mistake #1: Trading Without a Strategy

Ask yourself these questions:

  • “What instruments do I plan to trade?” For example, you might answer something like “Major currency pairs, minors, and some CFD options.” 
  • “What evidence will I look for to tell me to enter a trade?” Some traders might answer that they are looking at fundamental data, while others are looking at technical data or a combination of the two. 
  • “How much am I willing to risk on each trade?” This answer varies based on personal preference; however, a smart choice would be around 1% of your total account balance. 

Your answers might look a lot different than our suggestions, but the point is that you should have some type of answer to these types of questions. If you do, then you’ve been doing your homework and likely have an idea of a trading plan and strategy. If you couldn’t come up with an answer, then you’ll need to develop a plan so that you can start well-prepared. One of the beautiful things about the forex market is that while nothing is guaranteed, traders do have the chance to significantly improve their chances of making money by educating themselves and sticking to their trading plan. One of the biggest mistakes beginners make is opening a trading account with no real plan, which is essentially the same as just gambling. A bit of preparation will go a long way if you simply invest time into your plan and follow it. 

All you’ll need to do is develop a solid trading plan and choose a strategy that will work for you. This will take some research and work, but it is one of the most crucial steps to trading success from the very beginning. 

Mistake #2: Not Testing Your Plan

Once your trading plan and strategy is in place, you may be feeling very eager to jump in and get started trading. Unfortunately, there may be some problems that you didn’t oversee. This can be very costly if you’re trading on a live account and it could even drain your account balance altogether. Many traders reach this point, feel discouraged, and decide to give up before their trading career ever even got a chance to take off. Keep in mind that your plan may sound great on paper, but you still need to test it in a real setting to make sure that it lives up to expectations. 

The good news is that you can avoid this problem by signing up for a free demo account through your broker. You may already know about demo accounts, but if you don’t, you simply need to know that these simulation accounts allow you to practice trading in a live environment while using virtual funds. Since there is no financial risk, you can test your plan to your heart’s content until you’re confident that your strategy is profitable beforehand. 

Mistake #3: Lacking Discipline

If you’ve ever read about trading psychology, you probably have some idea of the ways that emotions can affect our trading decisions. Sadly, some traders skip over this category completely when they’re learning about trading, which leaves them unprepared in the event that their emotions do start to cause problems. Every trader needs to know that feelings of greed, resentment, overconfidence, anxiety, and other emotions can cause you to make avoidable mistakes like risking too much money, deviating from your trading plan, overtrading, and more. If you don’t know this, then it can catch you off guard.

You’ll likely feel some type of emotion at some point, but the best way to avoid this problem is to stay disciplined and remember to always stick to your trading plan. Reading about trading psychology so that you can identify and remedy any related problems is another important step. If you’re ever feeling overly emotional and you can’t calm down, the best thing to do is to take a short break from trading until you feel more level-headed in order to avoid making emotion-driven mistakes. 

Mistake #4: Having Unrealistic Expectations

Whenever someone opens their first trading account, they have some kind of picture in their mind about how things will go. Many beginners start with unrealistic expectations about how much money they’ll make. Oftentimes, this is because those traders have heard about the success of others, possibly even people they know, and they assume that they can reach the same level of profitability from the beginning. In reality, you may be working with a much smaller deposit and you won’t have the experience those investors possess at the beginning, which can lead to disappointment. 

From the beginning, you’ll need to set more realistic goals that focus on positive notes like improving yourself as trading, losing less money each month, sticking to your trading plan, and so on. It isn’t a good idea to set exact monetary goals, as it can be difficult to predict how much money you’ll make due to the market’s unpredictability, especially from the beginning. 

Mistake #5: Not Understanding the Market

All traders need to understand the market and what causes prices to change in order to make smart trading decisions. There’s a lot to learn on the subject, as microeconomics and certain events like elections or pandemics can really shake up the market. Many beginners are in a rush to get started and may briefly glance over this topic before moving on, only to realize that they don’t really know what’s going on once they get started. 

Before you open a trading account, you should spend an ample amount of time researching these topics so that you’ll be more aware of the factors that affect the market. If you’ve already opened an account and you’re confused, consider taking some time off to brush up on your knowledge of these subjects. Some of this knowledge will also be gained through experience as you make trades and live through certain events. 

Mistake #6: Overusing Leverage

Leverage can be both good and bad for traders, as it can help you to make large profits, or it can help you to wipe your account clean when used incorrectly. Many beginners don’t entirely understand leverage and might think that it is best to use the maximum leverage cap offered by their broker to make the most profits. You might make a lot of money doing this, but you’ll likely be risking a lot more money than you’re willing to lose in doing so. 

Start by ensuring that you understand what leverage is and how it works, then you can incorporate leverage limits into your trading plan. Don’t assume that you should use the highest leverage available, especially if it is more than 1:100. As you gain practice over time, you can adjust your plan and trade with higher leverage with a better chance of using it correctly.

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 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.

Forex Market

What is the Best Trading Position? Part II – Trade Protection

Last time we started talking about risk management, giving you the exact number of what your risk in trading should be. In case you are eager to learn how to secure the best trading position, go back and read the first article of this series and do the test at the end. If you have already done that, prepare your pen and paper once again because we are covering key concepts that you will need to get the best possible results trading in the forex market.

Why is Stop Loss Important?

Owing to the stop loss, i.e. a specified number of pips away from the point of entry, you will always know that your trades are protected. If there is an unfavorable move and you are not there to oversee your trades or if you are simply tired of being on the watch all the time, stop loss is surely your best friend. Your stop loss will also help you determine the value of each pip and control your risk. Therefore, make sure to set up your stop loss before you enter any new trade because it is one of the most important tools you will learn to use in trading.

How Can I Set up My Stop Loss?

Here is one way to do it. In order to make proper use of stop losses, you will need to meet two conditions: use the ATR (Average True Range) indicator and use the daily chart. Pull up the indicator in the chart for the pair you wish to trade and do not change the default value (14). You will find the ATR on the left side of the indicator window under the white line in the middle. If you see a value of 0.0071, you will know that the ATR for that specific currency pair equals 71 pips. To set up your stop loss, you need to multiply this number by 1.5. Just make sure you remember that any other time frame will not give you correct numbers, so this form of protection would not work in that case.

How do I Calculate My Pip Value?

Use this simple equation to calculate the value of a pip: RISK ÷ STOP LOSS = Pip Value. Now is the time to remember the previous lesson and calculate your risk for a 50,000 USD account and a value of 0.0071 on the left side of your chart. In case you forgot, we will do it together now:

RISK = TOTAL ACCOUNT x 2% = 50,000 USD x 2% (0,02) = 1,000

ATR = 71

STOP LOSS = ATR x 1.5 = 71 x 1.5 = 106.5 ≈ 106


This is how you determine your risk, set up your stop losses, and protect your trades. Whatever you do, make sure not to deviate from this plan, especially if you are a beginner trader. While this may seem like a lot of trouble to go through, understand that you will know that you have succeeded the moment you see your losses no longer affect your account. Try to use the ATR and set up stop losses for each trade in your demo account for at least six months before you decide to start trading real money.

Part 2 Task

As always, we will give you a task to do on your own and provide you with the results in the next article of this series:

Calculate the pip value for your 50,263 USD account based on the information you can find in the chart for the EUR/USD currency pair.

The correct answers for the last task are provided below. Please, besides the answer key, read the explanations under each answer as well.

  • a, b & c

All three answers are correct because we need risk management regardless of our individual stage of development as traders. 

  • a & c

Do not get misled by a few wins here and there because successful professional trading entails consecutive and sustainable winning.

  • a & b

The first task and primary responsibility of every trader is to learn why a certain trade did not go as planned. The worst mistake one can do is just to keep trading regardless of poor results. This is the approach that leads to losses and blown accounts.

  • a, b & c

All of the options are correct since forex trading is not only about securing wins but making sure that losses are controlled. We can do that after learning what went wrong in the past and how we can fix those issues.

  • b & c

Risk is never about one number alone. Risk entails a series of tasks and strategies that we are still learning about in these articles. Securing the best position will mainly depend on how you manage your risk too, so stay tuned until next time when we will be sharing another set of invaluable tips and tools.

Watch for Part III to be posted tomorrow!

Beginners Forex Education Forex Basics

Top 10 Errors Made By Forex Newbies

In this article, we present 10 errors of the beginner trader that are repeated more frequently. These mistakes are actually made by any trader, from beginners to veterans. It doesn’t matter how long you have on the market; from time to time you will experience lapses of indiscipline, either because of extreme market conditions or because of emotional factors. It is vital to recognize and understand these situations in order to be successful in trading.

1. Cutting Profits, Letting Losses Grow

Usually, the most repetitive error when investing in currencies is to hold lost positions too long and close winning positions early (usually out of fear). Even with a larger record of winning positions, the losers, though less, will represent a larger amount of money.

The best thing we can do to limit losses is to follow a business plan that considers the risks and always use a stop-loss. Normally no one will be right all the time. It is best to accept that having some losses is part of the day-to-day, the more time it will take to refocus and get winning operations.

2. Operating without a Plan

Opening a position without having a concrete action plan is reckless, and the market will surely take our money. If the price moves against us and you don’t have a plan, you won’t know for sure when to cut the losses. If the price moves in our favor, neither will know when to collect the winnings. Making these decisions in the heat of open positions is a good invitation to disaster. Trading with a plan is perhaps the most important step a Forex trader can take, as it tries to largely eliminate the emotional part when it comes to making trading decisions.

3. Operating without a Stop-Loss

Operating without a stop-loss is also a recipe for disaster. That’s how a small, manageable loss can end up blowing up an entire account. Using a stop-loss is a vital part of a well-crafted plan that has specific and realistic expectations, based on prior analysis and research. Stop-loss indicates when a given strategy is invalidated.

4. Move a Stop-Loss

Moving the stop-loss to avoid being taken out of position is almost the same as investing without a stop-loss at all. It indicates a lack of vital discipline, which will unequivocally result in losses in most cases.

The exception to the rule that allows you to move a stop-loss, is when it is done in the winning direction, to consolidate profits that are being recorded in the position. Never move the stop-loss in the losing direction.

5. About-Invest

There are two forms of over-investment.

– Investing too often in the market: Investing too often suggests that something is always happening in the market and that you always know what is happening. If you have open positions constantly, It is also usually exposed to financial market risks. It is much better to focus on looking for good and strong opportunities, where the risk is minimal, and where a well-developed plan and strategy can be implemented.

– Holding many open positions simultaneously: Having too many open positions at once is an indication that you probably don’t have a good business plan and many of them are opening up instinctively without control. Many open positions also affect the margin available, making it more difficult to maneuver in difficult market situations.

6. Over-Leverage

Over-leverage refers to holding very large positions with respect to the margin available. Even a small market movement can be catastrophic in a very large position for the margin available. This common error is made more tempting by the generous levels of leverage offered by online brokers. If a broker offers leverage of 1:100, 1:200 or even 1:500, this does not mean that they should be used. Do not base your positions on the maximum leverage available. Positions must be based on factors specific to the operation, such as proximity to specific technical levels or confidence in any specific signal to open a position.

7. Not Adapting to Changing Market Conditions

Market conditions are always changing, which means that the strategies to be used must be flexible. The current market situation should always be analysed using technical analysis to determine whether it is fluctuating or trending. Likewise, the use of technical indicators must be flexible. No indicator works well all the time. Different indicators and strategies should be used depending on market conditions. Some indicators work well in fluctuating markets, while others work better in markets with more pronounced trends.

8. Do Not Be Aware of Important News and Events

Even for traders who rely exclusively on Technical Analysis for their operations, it is essential to be aware of the main news and events of the market. If at some point certain indicators are indicating the existence of a very good opportunity to open a transaction, but in half an hour a piece of important news that can move the market in a significant way. It would be unwise and very dangerous to open that operation. These types of situations can occur if you are not aware of events and news. Always keep the economic calendar at hand and identify those events of major importance that can affect your open positions.

9. Investing in the Defensive

No trader wins all the time. Some of the best traders even lose more times than they earn. But when they lose, they lose little. After a series of losses, it is better to wait a while for the market situation to stabilize and refocus on new opportunities. One should avoid falling into the mistake of investing in the defensive and try to recover or avenge the losses.

10. Having Unrealistic Expectations

No one is going to retire with the result of a single operation. The key is to make profits as experience is gained. You have to be flexible and manage to adapt to market conditions. It is a bad idea to have in the beginning goals about how much money you will earn. With expectations about specific quantities, and being in a position where those expectations have not been met, it is very common to fall into the temptation of opening larger operations to achieve the goal. Finally, the result is usually a greater loss.

Beginners Forex Education Forex Basics

What Does a FX Trader Really Need to Focus On to Trade Successfully?

What factors do you assume to be the most impactful in the world of forex trading? Should traders focus on the technical tools more intensely than on their traits? Does one’s personality have a determining role in the development of a trading account? How do we measure our growth and what attitude is necessary to facilitate progress in the forex market? Along with these questions, today we will be discussing all areas traders need to focus on to be able to trade successfully.

The Right Approach

The right approach to trading does not necessarily imply a fixed set of actions that each trader must take but a direction in which one needs to move so as to grow and reap the rewards from trading in any market. Whether you are a beginner or a more advanced trader, you probably already know how maintaining a proper attitude is a necessary continent of successful trading. If you truly want to be good in this field, you must learn how to maintain a degree of curiosity in each developmental stage and in every possible sense.

At the very beginning, curiosity is required in looking for credible sources where you can learn about the key terminology and tools to use later on. Education, however, also entails the aspiration towards understanding different currencies, their respective countries, and central banks along with related events that may affect the market at some point. You will need to polish up your research skills and practice discernment to know exactly which item of knowledge is best suited for your vision. In order to create a purposeful course of movement, naturally, you will need to minimize any reliance on luck and set short-term and long-term objectives through thorough planning.

Ask yourself some vital questions and look for answers in selected sources and in your own attempt to apply theory in practice. Strive to understand what your reasons for entering this market are and how your expectation might affect your trading. Set realistic goals and use analytical and critical thinking so as not to stain facts with your personal projections (e.g. I will get a 20% return in the first go). Finally, prepare yourself to continually show commitment and dedication without expecting to see immediate results. Learning about forex and growing as a trader is a process, which requires both patience and persistence.

Key concepts: curiosity, commitment, dedication, dedication, persistence

Example questions: How do I build an algorithm? Why is this currency pair considered to be risky?

Functional System

The basis of every trader’s experience with forex is the system that is comprised of various tools, strategies, and techniques specifically selected to produce the best possible result and protect one’s trading account. To be able to set up an algorithm that will function to your advantage, you will not only need to set a good foundation in terms of knowledge but also invest a considerable amount of time in testing. Opening a demo account and applying the theoretical knowledge acquired up to this point will allow you to assess how prepared you are from both the technical and psychological perspective. You will keep looking for areas where your approach lags and track your progress through journaling. Reflecting on one’s wins, losses, and important numerical data allows traders to measure trading in terms of quality and quantity in every respect and have an active role in its further development. Having an efficient algorithm also obliges traders to consider the risk-reward ratio and consciously understand when and why they wish to enter or exit trades.

Remain open to making changes in your system by using different strategies for example and allow to be molded by your experience. If you happen to come up with two viable options, always turn to your records and compare how the two systems compare to one another, picking your top-performing algorithm as a consequence. Lastly, at this stage, you should aim to nurture independence and sense what it feels like to be dependent only on your system and your logical thinking. Your system will only need to reflect your personality and goals regardless of how similar it may seem to what you have read about before, which is why you need to play an active part in every step of its creation.  

Key concepts: demo account, testing, journal, improvement

Example questions: What leverage is acceptable to me? Where do I put my stop-losses?

Personal Growth

Forex trading is known to be able to test each individual’s boundaries, awakening people’s greatest fears, and bringing to light their deepest desires and urges. To facilitate your learning and development as a trader, you will have to invest in personal growth. Investing wisely necessitates that every forex market participant understands their triggers and compulsive behaviors or those situations and conditions that provoke emotional responses and reactions we may not be able to keep under control. Experts always advise traders to take a personality test where they can learn about their personality type and how it can potentially impact their trading.

People generally try to erase traces of whatever they deem negative, but if you learn how to trust your system and you make a habit of communicating with parts of your personality that seem to need more attention, you will soon be on top of your weaknesses. Personal development also includes the skills of balancing trading and other life responsibilities, whether you are learning how to allocate time to obtaining education or how to let go of the stress you face on a daily basis. Working with your personality additionally entails deliberate action to improve whatever you discover you may be lacking, be it diligence, discipline, or any other skill or ability. The best part about the effort that you will be investing in this area, no matter how scary it may seem, is the fact that your overall living conditions will change for the better and you will see benefits in different areas of life.

Last but not least, personal growth also involves thinking about future progress, which is why you are advised to think about how you can use the skills and knowledge you have acquired so far down the line. Will you expand to other markets we trade or possibly decide to present your trading achievements to a prop firm and sign a contract for bigger yearly returns? Wherever your path takes you, remember that your personality traits will always have a varying impact on your trading but that the effort to improve your personality will impact your entire life positively.

Key concepts: personality test, triggers, emotions, control, discipline, balance, benefit

Example questions: How does my personality affect trading negatively? How can I improve myself?

We can now say that your position sizing is equally important as your reactions to failure. Your skills in managing high risk may be exceptional, but if you fear to invest more when you can, your account will not grow as much as it can. The examples of these correlations and contrasts are many, but at the same time, traders must focus on the process rather than on their desired profit. Goals are amazing because they make us create plans, but if we are unwilling to adapt and adjust to changing circumstances, our objectives will only be farther and farther away. Generated layer by layer, excellence is a product of hard work and continual faith in oneself. Trading is a multi-faceted skill and, as such, it encompasses several key areas where your focus is mandatory. Like a singer who needs to overcome stage fright, practice singing techniques, and considers different styles of singing, a trader also needs to adopt and test specific knowledge and skills while ensuring the right mindset to secure success.

Forex Education

What to Do About Slippage Before It’s Too Late

Slippage is an inherent part of the forex market and it stands for the difference between the initial price of an order and the final one at which the trade in question was closed. Therefore, it essentially represents the discrepancy between a trader’s expectation and the real outcome. Slippage occurs with market orders, where a trader requires the best market price in the least amount of time, and stop orders, which essentially turn into market orders once the stop price is triggered. However, traders who opt for a limit order directly exclude the slippage factor because the price will not go beyond the limit.

Slippage will happen whenever there is a certain delay between the time of entry and the moment a broker receives the order, in between which price changes often occur. What is more, aside from the delay, some other traders could have already stepped in and sent the order before you did. This also includes the need to act fast as the price may disappear before the order has had the chance to arrive or you may simply need to queue before others who acted more quickly. Slippage has a tendency of appearing in more quick-paced, volatile markets and can, as a result, have either a positive or a negative effect on traders. This volatility naturally entails greater price movements and, consequently, more risk, which altogether can lead to slippage. Today we are going to analyze this phenomenon and assess how we can minimize the damage, avoid situations where we can take losses, and evade currency pairs where such negative occurrences may take place.

Last, Bid, and Ask

The three terms – the last, the bid, and the ask – are extremely important for understanding how an order is processed and where slippage might occur. The last, as the name suggests, is precisely the last completed trade, which naturally changes with the execution of new prices. Both the bid and the ask are live market orders that have not yet been executed. While the bid is the highest price offered by the buyer, the ask is the lowest price that a seller is currently selling. Only when they get filled, that is when two people agree on the price, will they become the last. As the bid is the highest buyer, who expresses willingness to pay a certain amount of money, he is actually making a buy order that is a limit order where the limit is set at a certain value (e.g. 1.0568). If any other trader managed to offer a higher price (e.g. 1.0569), the new price would then become the new bid price in the Level 1 screen, thus becoming the new highest bidder.

The ask price or the offering price states at which amount the seller is willing to sell (e.g. 1.0570), and as such it is still not an order that went through. As with the bid, another trader can step in and offer another ask price (e.g. 1.0569), hence becoming the new ask and placing the previously lowest ask price second in line. Each time a bidder (i.e. a bid) and a seller (i.e. an ask) willingly meet at a particular price, both orders disappear as they are executed. The executed prices are now the last, so the new bid and ask are the two prices that were the second in line. If either bid or ask happened to be larger than the other, a part of that bigger order would need to stay. For example, if a trader wanted to buy four lots but managed to fill only two of them, the remaining two lots would still be offered at that price. 

In terms of the size of the bid and the ask, Lever 1 quote screen provides all the necessary information. So, for example, we could see that the size of the bid priced at 1.0568 is 8 million, whereas the size of the ask priced at 1.0570 is 300 thousand. The example of the asking price further tells us that there are three lots or 300 thousand offered at the given price and, based on the prices’ discrepancy, we can conclude that the buyer is more aggressive. These figures with regard to the size always keep moving up and down, and these increases and decreases typically happen slowly in a quiet market as opposed to a more volatile market where the changes naturally occur more quickly. Aside from the details regarding the size and the price, the quote screen also provides traders with information on the related currency pair.

After the Level 1 quotes, traders may be interested in what is happening in the subsequent lines. The Level 2 quotes screen also tells us the sizes and the prices after the bid and ask, although these are more or less stagnant nowadays and you can typically opt to hide them from your screen. Modern technology also allows traders to show that they are bidding but display a smaller size than what it truly is, which means that it is now possible to make changes so as not to reveal the full extent of someone’s actions. Therefore, the line below the first one actually gives information on other buyers, their price, and size, and it is precisely these types of information that can provide traders with insight on where slippage occurs. 

Causes of Slippage

Slippage, as stated before, happens when you enter a queue after a market order is made. The order will be filled only when you get to the front of the line at the best price available. However, if the size of the ask is 300 thousand and its price is 1.0570, any buy order exceeding this size will need to be divided between Level 1 and Level 2. If a trader is making a 5 thousand buy order, he/she would be able to buy 3 lots at the Level 1 price, whereas the 2 remaining lots would need to be sold at the price offered in the very next line, i.e. 1.0571 (see the table below). The size is extremely important on several levels: the more buyers and sellers, the better because this entails a lot of action or a lot of liquidity at these prices. In addition, whenever there is a lack of depth (i.e. fewer buyers and sellers), slippage occurs. In such cases, the orders are filled at the stated price, yet there is usually some type of lag involved when sending out a market order.

Due to these delays and lags, it is important to choose the right software that will be continuously praised for price and speed execution. Aside from the buy market, traders may also place an order to sell at the market. A particular trader may want to sell 400 thousand, and it could become a problem if there were other orders lined up before. A number of selling orders typically pile up around major news events, so an influx of orders follows whenever important news announcements (e.g. the impact of FOMC on the USD or RBNZ on the NZD) come out. Among the selling orders listed above yours, the first one (equaling 12 million for example) would be divided into the 8 million bid at the price of 1.0568 (see the first line in the table below) and 4 million bid at the price of 1.0567 (view the second line). The other queued sell orders would be filled accordingly one by one until your order’s turn comes.

However, since your order was the last in line, you would not be able to get the price you set your eyes on but the last one in the row (i.e. 1.0565). With major news announcements, the price discrepancy could be even greater due to several different reasons. As we saw from the previous example, there could be other sell orders queued up before you placed one yourself, leading to slippage of 10—20 pips. Nonetheless, it is not uncommon for bids to be pulled quickly in the face of the news events due to traders realizing the volatility of the market under such circumstances. Even the most experienced traders avoid trading news announcements because of the involved risk and some even claim to have witnessed 200-pip slippage in the past. 


Gapping is one of the causes of slippage in the forex market and, although it is an unavoidable phenomenon, experts provide reassuring thoughts for anyone concerned. Gapping originally comes from the stock market where it occurs regularly, while forex traders can typically see such occurrences on weekends due to the nature of the market. The forex market runs continuously until weekends, so any gapping that takes place in forex normally occurs on Monday (or Sunday depending on where you live) candle, typically following a specific news event that took place the previous weekend. At times, traders can see how big banks’ involvement affects gapping and the forex community on Twitter is often quite vocal about these occurrences. Most traders experience fear because they believe that a certain gap would run past their stop loss and keep running, thereby causing a major loss. While the gaps do happen often, such massive losses are highly unlikely to ever happen and, even when they do, they almost always follow a certain trend and they are tightly connected to the activity of the big banks.

The big banks will always notice the greatest concentration of traders in the chart and, as many of them keep going after reversals, the big banks will ensure that the price stays on the same course over a longer period of time. Gaps here serve only as a faster vehicle for the big banks to get in between and impact the majority of traders, experts suggest. If you find yourself among this majority, having slipped and taken a loss, the odds of it being vastly destructive and insurmountable are rather low. Even if take a look at the span of one year, the probability of you finding more than 2 places with a gap exceeding 30 pips is increasingly low. What is more, in order for any trader to be affected by gaps as huge as 70 pips, one would need to be already in a trade, going in a certain direction with a stop loss at a specific place. Therefore, not only is this quite improbable an event but it is also demonstrative of the extent to which someone’s emotions (i.e. irrational fear) can affect trading.

How to Avoid Slippage

Experts in the forex market suggest that it is best to altogether avoid trading live orders or trading major news events, wait for the announcements to come out, and wait for the initial surge to settle. The impact becomes weaker after a few minutes and, even though the volatility is still present, slippage is less likely to happen. The massive slippage of 200 pips mentioned above happens exceptionally rarely and immediately after the first blow, which is why it is wise to avoid live orders letting the market calm down. In terms of choosing which currency pairs to trade, various experts offer different viewpoints. Some say that it is wise to choose the most liquid pairs such as EUR/USD, USD/JPY, and GBP/USD. Other currency pairs such as the ones involving the NZD, the CAD, and the AUD are less liquid and should thus be avoided, according to this group of traders.

Some other prop traders insist that currency pairs such as EUR/USD are so heavily monitored by the big banks due to the number of trades done that it is also one of the charts where gapping is more likely to occur as well. Aside from choosing the right pair to trade, it is vitally important to use stop limit orders that can prevent most slippage, especially at trade entries. Even if the market becomes extremely volatile, the stop limit will prevent you from taking losses in a situation when the price starts and keeps moving sharply. So, for example, you are looking at a pair trading at 1.0655, willing to enter if the price started to break higher. You could put a buy stop, which is a form of a trigger, as you want to buy once it starts to break higher. A stop can either be a market order asking for the best possible price or a stop-limit where the stop is triggering a limit order.

Therefore, if you want to get in at 1.0655, you would probably be looking for a trigger if it breaks above 1.0680. You can then put a stop at 1.0681 at which point you may want your order to go to the market and get filled. You can also then decide on your buy limit, which reveals how far you are willing to go (e.g. 1.0698 allowing for a window of 70 pips). Such a move also prevents you from paying an exorbitant amount at order execution on any pair you are trading regardless of liquidity. If your trade moves beyond your buy stop (e.g. moving directly to 1.0750), your order will not get filled, which is still a positive outcome despite not winning. Put simply, it is always better not to enter a trade which is that far from your desirable price. 

The challenge in these types of situations is putting overwhelming feelings and sensations aside and striving to maintain a rational viewpoint. To achieve a more sensible perspective, traders only need to look at numbers and break down the fear analytically. For many of them, trading has only recently become part of their everyday lives, especially trading the daily chart, so they may naturally still be in the process of weighing out how much control and caution they need to exert in order to prevent losses from happening. This question frequently extends to weekends regarding which, however, prop traders keep a positive attitude, reassuring new traders not to worry about slippage.

This further means that trading on Friday should be carried out naturally and in the same manner as on any other day of the week. In addition, aside from the fact that forex experts calming thoughts on gaps and slippage, claiming that they can hardly cause any worries, they also believe can have certain benefits as well as we discussed above. Moreover, as gaps are triggered by news events, it is always wise to trade the daily chart where many events that occur on weekends simply hold little importance. Furthermore, trend traders will not even have the opportunity to experience any damaging effects of gapping as gaps typically along with trends. If you do, however, happen to be on the negative side of a trade, feeling the effects of slippage, simply close the running trade and take the loss. Find comfort in understanding that the likelihood of this happening again or any time soon is extremely low. Nevertheless, should you find yourself in a position where you take frequent losses in a span of one year, consider changing your trading system where the root of the problem probably lies.

As trading is never about technical aspects alone, besides understanding the importance of figuring out the depth of the market and putting stop limits, it is also valuable to explore other factors that directly contribute to success. Therefore, it is also crucial to try and grasp when and how the market is manipulated by the big banks and why so many traders lose so often. Also, in order not to rush in any trade, feeling greedy about money and winning, learning about risk management and money management alongside trading psychology can be exceptionally fruitful for your overall trading. This approach will help you stop yourself from reacting impulsively especially when the market starts acting unpredictably after an event. As a result, you will never really need to worry about slippage and, although it sounds too simple to be true, many professional traders agree with this approach. Additionally, even if you take a big loss, you have probably had greater fails in trading currencies than this one. Simply keep going as before and work your way up, understanding how and where you left room for a loss to happen.

Beginners Forex Education Forex Basics

Reasons Why Forex Traders Quit Trading (And How You Can Avoid the Same Fate!)

If you’ve ever looked at statistics about forex trading, you’ve likely noticed that the results seem bleak. If you haven’t, check out a couple of the current statistics we’ve listed below:

  • 80% of all day traders quit within the first 2 years.
  • 90% of traders lose money.

These statistics might shatter the delusion that forex trading is the answer, but this doesn’t mean you shouldn’t trade! You might be wondering what the point is if only 10% of traders never lose money. Well, most traders do lose at some point – maybe only a few dollars, or more, but this is expected. What matters is that you have more winning trades than losing ones. Still, you might be wondering why so many traders quit if forex trading is so great. Below, we will try to explain some of the main reasons why traders give up so that you can avoid falling victim to these common problems.

Reason #1: They Start with Unrealistic Expectations

Some people start trading for the wrong reasons. These traders hear about another person’s success and decide that they want a piece of the pie. Others think of trading as an avenue to get rich quick. Trading is profitable, but it takes a lot of hard work and determination. Plus, it takes time. How much time depends on the size of your initial investment, your strategy, and a whole host of other factors but the lesson here is still the same. You should only start trading if you’re willing to put the time into learning with an understanding that it could take a while to see a lot of profits, especially with a small investment.

Reason #2: They Use too Much Leverage

Leverage is attractive because it allows traders to increase their buying power. Unfortunately, overleveraging your trades can backfire. Many beginners turn to leverage without being fully aware of the risks. This often includes those that don’t have a large starting investment. Once these traders wipe out their accounts, they are usually scarred from the loss and never fund their accounts again, thus ending their trading career. The best thing to do is stick with a lower leverage option until you are more familiar with trading and well-aware of the risks. Even then, many professionals recommend using a leverage of 1:100 or lower.

Reason #3: They Risk too Much

Risk-management is essential for success if you decide to trade forex. No matter how skilled one is at trading, failing to use risk-management precautions is one of the biggest mistakes you can make. Setting a stop loss and reasonable lot sizes are some good examples of ways that you can limit your losses. Many professionals recommend only risking 1% of your account balance on any single trade. If you risk too much or you don’t have loss limiting precautions in place, then you’ll likely blow your account as many others have done.

Reason #4: They Let Emotion Guide Them

Emotion plays a bigger role in trading decisions than many realize. Anxiety can cause analysis paralysis, which results in the lack of ability to make any decision altogether or making delayed decisions when one needed to act quickly. Emotions like greed or excitement can cause the opposite, where one fails to stop trading when they should, and they risk too much. Traders that don’t recognize these emotions and their effects often fall victim to their downfalls. If you want to avoid these, research trading psychology to be more aware of the problem and work on self-discipline.

Reason #5: They Don’t Have a Trading Plan

It’s impossible to predict what the market is going to do, but a trading plan can help one to make more informed moves. Your trading plan or strategy needs to consider the best times to enter and exit trades, risk management, and other factors. An example of one common strategy called scalping revolves around making many trades quickly and profiting from small price changes. Day traders open several trades throughout the day and close them out before the end of the trading day. Swing traders do the opposite by allowing their trades to stay open for days or even weeks. Traders that don’t have a game-plan rarely fare well in live conditions. This is another way that traders wipe out their account balance early on and give up.

Reason #6: They Give Up Too Soon

Some traders get off to an unlucky start. Maybe they failed to get a proper education before opening a trading account, they didn’t have a good plan to follow, they used too high of a leverage, or some other reason. This doesn’t mean that person is a bad trader, only that they need to figure out where the problem is stemming from. Keeping a trading journal is one way to log this, but many traders don’t get that far because they become discouraged and convince themselves that they just aren’t any good at trading. If this happens to you, take a step back and look at the bigger picture. It may be discouraging to lose your initial investment but think of it as a lesson rather than a sign to give up trading for good.

In Summary

Statistics about the number of forex traders that quit might seem unpromising, but there are several reasons why traders quit that can be avoided. Here’s a quick summary of the most common reasons why forex traders quit:

-They don’t have realistic expectations and aren’t satisfied with making a small profit, so they quit trading entirely as it seems like too much work.

-They use too high of a leverage, which can quickly backfire and blow one’s account, especially if that person doesn’t have much experience. After losing their initial investment, they feel defeated and walk away.

-They risk too much on their trades, which is another quick way to blow through a trading account’s balance.

-They fail to see the ways that emotions might be interfering with their decisions. Some may be too anxious to make quick decisions and fold under pressure.

-Others may become too excited and risk too much.

-They don’t have a good trading plan to follow. This results in trading decisions that aren’t properly planned and lead to financial misfortune.

-They get off to a bad start and give up before they have a chance to improve.

If you follow our tips, then your trading career should get off to a smooth start. It’s discouraging to see disclaimers about the percentage of traders that actually make money or how many quit, but potential traders need to realize how many of those people weren’t prepared. If you give it a half-hearted go, then of course you are likely to fail. Those that put the effort into securing an education, choosing a good broker, and devising a good trading plan should go on to have a productive trading career.

Forex Basics

Follow Top Trader Advice When Getting Started in Forex

Starting the forex journey has a reason, so you first need to know what you want out of trading once you are familiar with the basics. It is not always about the money, some people like the thrill of trading, however, if you want to have some income out of forex forget about getting emotional. The great thing about forex trading is that it is very flexible for you. You can shape trading how you like it, trade only 10 minutes a day, explore an incredible array of methods possible, and use your knowledge how you see fit.

Now we have mentioned a broad spectrum, when you have so many possibilities people start wondering if they have made the right choice. Eventually, your trading will become a result of what you like but also evolve as you develop the skill and discipline. The right path to consistent results is very hard, that is why most fail. But it is not hard to learn to trade, it is hard to fight with the emotions and urges trading will put on you many times. Therefore, we have made a few steps that will put you on the right track, getting started is a crucial moment that will direct you for some time. Sometimes it may take a while to understand that a particular trading method is not for you, but this is ok, successful traders fail and keep trying. 

Treat Trading Like Your Business

If you want to treat forex trading like your little business project, you are on the right track to becoming a professional trader. If you are in for the thrill, make fast money, consult our other articles about this to have at least a bit better luck (probabilities), you are going to need it. Now, making things serious will result in serious outcomes. Forex, after all, will just reflect what you have been doing and how on several aspects: your mindset or psychological aspect, how you manage your capital when trading or risk management, and finally your trading methods. You have to master these three pillars of forex trading. All of these aspects need to align with your personality and lifestyle. 

Now that we have outlined the most important things you need to focus on, let’s first get acquainted with forex and trading. Your first stop can be The internet is full of guides about forex, however, this portal has easygoing content beginners like. You can also consider our article about free resources you can gradually explore as your skill and knowledge grow. Some things need to be understood before trading, consider babypips as your encyclopedia about forex, however, we do not recommend applying right off trading methods in the later lectures about advanced trading. This part has to be molded as you want and at the end of the day, where you have the best results. Actually, the biggest part of making yourself a pro is finding where you perform the best, all aspects combined. 

Trade Demo First!

After you have a picture of what forex is, you might try demo trading. Demo trading can be done in several ways, and again the internet is providing you the best tools for this. Just two decades before, traders had a lot harder way to test their trades. You can try to handle the portal and try out some trading. Use their charting to explore practically what you have learned from babypips lessons, spend some time getting familiar with the charts. The replay button on the top is very handy if you want to test out your trading ideas. 

After you get familiar with charts, time to get to some demo trading. Metatrader platform is great for this and is supported by the majority of the brokers. Find one regulated broker you like, consult our resources to find one, and get familiar with the client, there are many guides online. Demo accounts are where you will spend most of your time, forward testing or trading in real-time, and backtesting your strategies. Only by doing this part, you can know if you have something worth working on further. Of course, there is a proper way of doing this too as we have explored in the previous articles. Know you are most likely into an emotional rollercoaster, what you have made may not work for a long time. If you find yourself in a position you become wondering again, you may need more guidance. 

Take Advantage of All Resources

At this point, you may try to find other resources where you can have a glimpse of how professional traders trade. By professional, we mean proprietary firms and fund traders that have real experience trading large portfolios and manage other investors’ money. To find these people is not easy, however, social media is a good source where to seek them. Learning from the greats is completely normal, even required if you want to get to the top of the forex game. Find like-minded people and their channels on youtube, tweeter or forums. It is important to align your trading ways with similar traders or their strategies.

The result from this is that it could point what is missing from your current strategy which is not performing well. But also, inspired to try new things too. Experienced traders have discovered what works and what is junk already, most of the methods and tools are not very good, so do not be surprised if everything you have made so far is way below what is considered good and consistent. 

Once you make your strategy sound and rigid, traders at this point often fail on the psychological aspects. Messing up with the rules that could work is a common mistake. It is just a matter of if you can keep consistent with your strategy to get consistent results. Of course, the strategy that works is backed up by rigorous proving grounds you had to endure but everything can fail if you do not follow it to the letter. There are so many reasons to get off track on the psychological aspect many professional traders agree this is the most important pillar. Right after it comes how you manage your risk in trading. Therefore, all things considered, you might want also to include some books while you are exploring other strategies and traders. 

Forex Reading Materials

Forex books come in many flavors, however, when you are getting started it is recommended to read those that concern with trading psychology. Some of the most interesting books in this category do not even talk about forex trading, but everyday discipline. Once you have understood some strategies on a more advanced level, and also explored other tools not mentioned on babypips or other media, it is time to make sure you are not making any emotional decisions in forex.

Some of the books we recommend to get started are from Ray Dalio, one of the best economists who can transfer an incredible amount of useful information that is easy to digest. Advanced forex psychology books, but good ones may come from less known traders, such as “No Nonsense Forex Trading Psychology” by Patrick Victor. Books such as these not only point where your drawbacks and mistakes are, but also motivate traders to keep pushing to the top. As mentioned before, not quitting is the only way to succeed.

With this article, you have some starting points but also you know what to do as you progress. Exploring forex trading is a very engaging journey, for those that like the idea they can discover their own strategy or system of indicators that make money over many years will certainly dive into this world and be persistent in their quest. If you need more resources consider our free resources article.

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 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. 

Forex Psychology

BEWARE: These Excuses Could Be Holding You Back from Dominating in Forex

If you search “forex trading” on any search engine, you’re going to find a lot of frequently asked questions from users that doubt trading is profitable. For example:

  • “Is forex a scam?”
  • “Can you really make money trading forex?”
  • “Is the forex market illegal?”
  • “Is it really worth becoming a trader?”

As you can see, a lot of people online seem to feel apprehensive about opening a trading account thanks to online myths and speculation or stories about traders that have lost money. Sure, it is possible to lose money and there are scammers out there, but you shouldn’t let these common excuses keep you from trading:

Excuse #1: I Don’t Have Money to Invest

Many people want to start trading forex, but they imagine that the luxury is reserved for those that have a great deal of money to invest. In reality, you can get started trading on a demo account for free. It’s also possible to open a trading account with only a few dollars through a wide variety of brokerages, so you shouldn’t let a lack of money keep you away. Of course, you should expect to be limited to a micro, cent, mini, or standard account if you only have a small investment, but these accounts are actually beneficial for beginners. These accounts might not offer as many perks as elusive VIP accounts but they will allow you to trade, hone your skills, and make profits, nonetheless. Just remember not to invest more money than you can afford to lose – if it’s meant to pay bills or live on, don’t deposit it into your trading account. 

Excuse #2: I Don’t Have the Time

It’s true that some traders sit in front of their computer screen constantly entering and monitoring positions, but you don’t have to do this. In fact, there are many different strategies that benefit part-time traders that have other things going on in their lives. Swing trading is one example where you enter trades and let them go for days or even weeks in some cases. The flexibility of being able to trade from any device with an internet connection even makes it possible to monitor your account while you’re on your lunch break or from your child’s soccer game. It might seem like another annoying thing to keep up with, but it’s worth it when you think of how much money you could make if you carve out a little bit of time each week for trading. 

Excuse #3: It’s too Risky

Forex trading is an investment, meaning that there is risk involved, not unlike other investment opportunities. You really do have to give money to make money, but you shouldn’t think of trading as gambling. Before you ever start, you should have a good concept of what moves the market and how trading works. Then, you’ll develop a trading plan that tells you what to look for when it comes to entering and exiting positions, along with plans for managing your risks, and so on. All of this is designed to keep you safe if things go against you, although they don’t eliminate the risk of losing money entirely. Still, with a solid trading plan and background knowledge of what you’re doing, your risk will be significantly reduced. 

Excuse #4: It’s too Complicated

This excuse seems to come from people that just don’t want to invest the time into learning to trade. Sure, there are a lot of things you’ll need to know about, like terminology, how to work a trading platform, factors that affect prices, trading psychology, and so on. However, it’s wrong to say that these topics are complicated to learn. All of this information can be accessed online for free and you can even try learning through different resources if you have trouble understanding a certain topic. For example, some might learn better by reading articles, while others might prefer to watch videos. Some authors can also do a much better job of explaining concepts than others, so there’s no reason to give up.

Excuse #5: It’s a Scam

This myth likely comes from the idea that most brokers are scammers just waiting to steal your hard-earned money. As we mentioned earlier, there are some scammers out there, but there are a lot more reputable brokers than there are scammers. If you want to ensure that you’re opening an account with a trustworthy company, try following these steps:

  • Check to see if the company is regulated. (Double-check that the listed regulation company exists and check for a license number, as some scammers will post pretend regulation details. Also, if you’re located in the US, you might have to go with a company that isn’t regulated.)
  • Look at the broker’s website. Does it tell you in detail about the accounts they offer, available funding methods, applicable fees for funding, spreads, and commissions, etc.? Or are you left with more questions than answers? A detailed website is a sign of a good broker, while a lack of information suggests otherwise.
  • Read through the broker’s terms & conditions to ensure that there aren’t any crazy policies or hidden fees, like inactivity charges.
  • Look for customer reviews online. More popular brokerages will have a lot of feedback, while scammers may not have any at all or everything will be negative. Remember that some traders that have lost money at their own fault might leave bad reviews regardless.
Forex Basic Strategies

Master the Art Of Forex Backtesting With These Key Tips

Let’s talk about the results of our trading strategies. And if we talk about results we’re going to have to talk about backtesting when we trade forex. Here we go!

Backtesting is simply the bedrock of statistics or the behavior of our trading strategies in the past. It’s kind of like going back and watching what would have happened. In it we can observe the yield curve and statistics associated with our operation as can be the number of winning trades, losers, how much you win when you win, and how much you lose when you lose, in short, is a scan of our trading strategy.

What Good is Backtesting?

Backtesting is not a guarantee of anything, but it is a sign that What you’re doing is either good or no good. You avoid wasting time with strategies that are clearly losers. I’m very surprised that there are people putting their money into something that they don’t even want to know with numbers whether it works or not. That what you do makes sense doesn’t make it profitable. You can only tell if it is if you have the results to contrast it.

How Does a Backtester Work?

A backtester is nothing other than a tool to check how good or bad a strategy is. There are many platforms to backtest our trading systems, the most popular is the Metatrader (I don’t say the best, I mean the most popular).

A backtester at the end what it does is that through the historical data of the asset in question where you want to trade and the entry and exit rules of the strategy it computes the results in each operation, the time of entry and exit. It’s kind of like taking a pen and paper and doing it manually, but much more precisely.

In fact, I do not recommend you to do a backtest by hand since you can cheat yourself or just make mistakes in the computation, something that is more complex to happen with a computer program.

Why is Backtesting So Important?

One thing is clear, past results do not guarantee future results. But if on top of the past results of the trading methodology we are applying it is a disaster. or worse, we don’t know if it’s a disaster or not and we carry it out because I’ve been told it works or I explain it to a person who knows a lot, you can hit it, but fine.

Trading without looking at a backtest is like driving without knowing if the brakes and accelerator work well in the car you’re going to ride. Operate manually or automatically do at least one test of what you’re doing or you’ll be rolling the dice.

How to Perform Forex Backtesting?

Carrying out a backtest on Forex is very simple. Yes, if we have our automated strategy. Otherwise, you’ll have no choice but to by hand as I said before, roll up and learn some programming or hire someone to automate it. It is not usually very expensive, you can get worse to apply it without knowing how it goes and lose money.

If you have an already automated strategy you have almost everything done. You simply need the data of the broker where you are going to execute it and execute it. Normally, it takes minutes or even seconds to get all the results.

Winning Strategies When Backtesting

There are many criteria you can obtain to evaluate if your trading strategy is really profitable. These criteria are statistics of our system to evaluate it and to know if it is valid or not. We go with the most common statistics or ratios:

Net Balance: The net profit of a trading system is the profit less the losses. The more net profit, the better for our trading system.

Return/Drawdown: It is the result of dividing the profitability obtained by its drawdown (it is the biggest consecutive loss streak suffered by the system).

Making the quotient of both turns us into a proportion that is quite interesting because if for example, the result of the division is 3, we can interpret this for a risk level of 1 we have a return of 3 (in this case in percentage).

System quality number (SQN): The SQN measures the relationship between mathematical hope and the standard deviation of a multiple distribution of R generated by a trading system. To be able to continue talking about SQN we must therefore define that it is a multiple of R: it is the relationship between the profit obtained and the risk assumed per operation. Thus, if in a transaction we obtain a profit of 500 € and we have risked 250 € (the loss we would have obtained for example if we had skipped the stop loss), our multiple of R would be 500/250 = 2.

The idea is fine, but we need some reference to be able to assess these figures and decide if a system is good or not. For this purpose the following scale is proposed:

  • 1.6 – 1.9 Lower than normal, but can be operated
  • 2.0 – 2.4 On average
  • 2.5 – 2.9 Good
  • 3.0 – 5.0 Excellent
  • 5.1 – 6.9 Superb
  • > 7.0 Perfection

Win/Loss Ratio: It is simply based on dividing the number of winning trades among the losing trades. It doesn’t take into account how much you win when you win and how much you lose when you lose, so it leaves out a lot of important information.

Sharpe Ratio: This ratio is one of the best known in the financial world. To build it we will need the profitability obtained by the system and its risk. Being the risk with the standard deviation. Assesses the excess profit of a given investment above its risk. The higher the Sharpe ratio, the better the return on the risk taken on the investment.

Profit Factor: It’s another fairly used indicator. Their calculation is very simple: it is a matter of dividing the total earned in positive transactions by the total lost in loss transactions. If the system we are using is profitable it must obviously have a profit factor greater than 1, since the profit will be greater than the loss. The idea is to have a profit factor greater than 2, being 3 something very difficult to find. Similarly, a system with a profit factor of 1.6 can already be enough to say that we have a good strategy.

Profit: The latter criterion is based on taking into account the benefit only the gross benefit obtained by the system.

Balance Line Stability: It is a round number between 0 and 100. The higher the stability of the balance line, the better. A level equal to 100 means that the balance is a straight line (only possible if there are 0 or 1 trades) Anyway, any value above 90 is good.

R Squared: The coefficient of determination or R2 is used in the context of statistical models whose main objective is the prediction of future results based on other related information.

The R2 value is a number between 0 and 1 and describes how well a regression line fits a data set. When the value of R2 is close to 1, this indicates that the regression line fits the data very well, while a value of R2 close to 0 indicates that the regression line we see does not resemble in any way the data. The higher the value of R2, the better the capital curve of the trading system. A very high R2 value should result in a profitable trading system with little drawdown.

Stagnation: Stagnation is a long period of time with little or no growth in the capital curve of a trading system. We will try to keep the stagnation as low as possible. Basically, at a glance, you will be able to observe in the graph of results how your curve behaves.

The Best Software for Backtesting

The best software for backtesting can be Python, Tradestation, or Matlab. However, they are not usually simple if you are starting out and not part of a programming level and that is why they use platforms that are usually much simpler such as Metatrader. MetaTrader is not usually too accurate of course, but it is more than anything and it is not wrong if you take the data from your broker where you are going to apply it with real money.

Advantages of Backtesting

The advantages are obvious and we have already mentioned them throughout this article. But to sum up:

-Information about our trading strategy.

-Possibility to optimize the variables of your strategy.

-Configure broker conditions such as swaps and spreads to see how they affect.

-Avoid deploying losing systems.

-Psychological advantages of having information about the behavior of our systems such as trust and the elimination of doubts.

Disadvantages of Forex Backtesting

The main disadvantage when doing backtesting and specifically on Forex is that it is difficult to do it with a precision that comes close to reality. Having a realistic backtest is fundamental and with few tools, we can do so. Another disadvantage is that, like everything, you need the knowledge to carry it out. And so far all aspects related to backtesting of trading strategies. As you have seen, it is very worthwhile and should become a must for you from now on if it is not yet.

Forex Basics

Using Non-Conventional Methods to Fast-Track Your Forex Education

Starting with forex trading has a few stages before the real live account trading. Forex is a specific kind of business where you need to acquaint yourself with the terminology, the tools, how to use indicators, and price action elements. It puts you as the main subject and your actions isolated from everything else, so trading is more likely to be a lonely, one on one business with forex.

Of course, trading can also be teamwork of like-minded individuals or companies but you can only be a part of them if you have experience with trading. After the first stage, you can move on to learn about the strategies, money management, and psychology, how it all fits into a trading system. At this point, beginner traders can try to demo trade and try out the endless possibilities of trading effectively. If you are asking the title question because you do not want to read or follow other professionals, you are out of luck, you will have to acquire basic knowledge the old way. Practice comes next, your demo account will be your playground after the first stage and it will stay like that for the whole trading career if you choose to step into the world of forex. Perfecting the trading system requires trying out new things, with a demo account you can try out anything without any real money losses. 

Aside from following experts and their various strategies, you have many options on how you want to take this market. You can trade using automated scripts, apply for a managed account, copy trade others, invest in the long term, stake, and so on. However, you will need to acquire knowledge. Experimenting with indicators and strategies on a demo account is definitely beneficial to your learning curve. Sometimes, having a coach might come as an idea if you struggle to advance. Some prop firms give support to their traders, but the help is mainly aimed to stabilize their mindset on a losing streak.

Traders have two options if reading is excluded. There are free but rare coaching channels and those that charge for their service. Those that charge are not necessarily of better quality than those that offer free education. Often the coach traders will stick to one or two ways of trading, their strategies may not be what you want to follow for various reasons, and that is ok. Still, try new things, what you previously disregarded might surprise you with good results. Coaches that do not charge a fee often use video streaming services, podcasts, and YouTube. Sometimes you will see ads, on the other side, some uploaders want to keep ad-free content and still be free. One such channel is created by Partick Victor, also an author of a book, by the name of “No Nonsense Forex”. His channel is mostly based on pure technical trading strategies, if you tend to learn more about price action style trading then you will have to search elsewhere.

Finding a free education may not be that hard, but finding advanced knowledge is. When you have an opportunity to take a glance at something different than what you are used to, take it. This knowledge will give you so many new ideas even though it is not directly related to your starting strategy. Inner Circle Trader is another channel where you can learn about scalping if this is your initial idea about how you will take forex trading. Both traders are experienced and have their blogs and other social media pages. If you want to take trading heavily on fundamental analysis, follow people who are independent, who are not tied or biased to some institution, asset, or groups. Additionally, identify that their opinions are backed up with sound data. Our advice is to slowly get away from the popular analysis on the news if you already follow them, use it mostly to learn the terminology. To sum it up, there are two options, listen to the podcasts and videos or hire a coach, which leads us to the next topic.

There is a difference if you are seeking more than just reading, and if you do not want to read to learn forex trading. If you fall into the second category, your chances of succeeding are slim, maybe if you only take a lucky trade or two, cash out and stop. Of course, few will walk away if they feel lucky. If you fall into the second category, this is great, you are an explorer and want to learn more. Hiring a coach has its cons. The coach might do this for additional income, but he also has to be experienced and consistently successful in trading. If your coach is not a real trader or used to be, know he failed and now he is doing what he can in this business. This kind of coach is just a hand holder, he will not give you anything special that is not already explored many times over. If you are new to trading all this might be new, but ultimately there are better and much less expensive options.

Now, if you just need someone to hold your hand during the learning process, this is a problem if you want to establish the right trader’s mindset. Asking for special treatment is a bad sign, trading forex is not really teamwork where you can share the load with others, it is all on you. Asking to depend on others might leave you empty-handed when you are alone at some point. Mentorship will get you used to relying on other opinions on advanced topics and depending on the basics. When it is decision time, you will be alone after the sessions are over. Independent critical thinking is now tested, you will likely fail and you might feel like you do not know anything, especially when things get downhill. There is no excuse to plead for help and make yourself special if you are on the same path as everybody else trying to get into forex trading.

The internet, videos, and books are all giving you a lot to learn, but to some people, this is not enough, and need a guide that is just basically reading this content out loud. When some problem, a situation, or question needs answering, these people will just ring a bell for help. It is about being independent, if you are not ready to be your own boss, do not try trading. Do yourself a favor and do not try anything if it will reduce self-reliance. Any question you cannot google you can ask for free on specialized forums. Find a forum or a portal where you think it is appropriate and ask other members. Pay attention that you first exhaust all other sources, it is very likely somebody already asked the same question and there is an answer to it. 

In addition to all this, most of the successful traders shaped their strategies and systems according to their ideas and thinking. None of them are the same, even if the same strategies are applied. The trading plan and systems are specific to them and only they can effectively use them. Some technical traders have developed strict rules based on indicators and tools, leaving the ability to be used by others. Such systems are sometimes publically shared, all with the rules when to enter and exit a trade, however, even then you might not be successful with it. This is one more reason to follow your own path to forex trading, use all material you can find and if you need more, try the free options mentioned above. Likely, you will never need a mentor at all.

Forex Basics

Help! How Do I Start Trading Forex?

Are you looking for information on how to start trading currencies? Surely, you must have read numerous tips, but today we are giving you the most important 11 instructions to take into consideration on your path to becoming a professional trader.

1: Be honest and realistic

Naturally, we all want to earn a higher income, yet to make it happen continually, one does need to set his/her priorities straight. Prioritizing means that each trader must dedicate himself/herself to ongoing development through education, testing, and self-analysis. Additionally, be realistic about your expectations and see if it is plausible for your ideas and plans to come to fruition. Most commonly, traders expect to start trading and immediately get impressive returns when, in fact, everyone is limited to a specific percentage even with impressive skills.  

2: Work on your research skills

Forex is not really a marketplace where you can go and find information nor is there a book where you can look up the answers to your burning questions. You should start by discovering credible information sources on the internet, be they social media outlets or YouTube channels. See what type of learner you are because you may do better by enrolling in a course on forex trading.

3: Maintain individuality in all ways possible

Whether you are good at looking for definitions of forex-specific terms or you like to discuss matters you feel excited about with others, you must exercise independence from the very beginning. Try not to seek support from your friends, family, or other members within the forex community. Strive to grow your ability to assess your steps on your own and do not ask for understanding or approval externally. This will allow you to grow an invaluable mindset that will be of extreme importance once you start creating your system. 

4: Learn to let go

After you have read about the basics and are looking to apply the theory you have absorbed so far, the time has come for you to discard what is not serving you in terms of information, strategies, and tools to trade. Only keep what you have measured through thorough testing, having previously obtained tangible proofs that something produces good results. Also, learn to let go of any people who may have been assisting you on your path to becoming an independent trader because these individuals are only doing you a disservice after a certain point. 

5: Start a demo account

Most experts will tell you the same thing – do not proceed to real trading before you have seen how trading functions in a safe environment. Whatever you feel you may know or believe you have figured out should be assessed through your demo account. Get the impression of what it looks like to trade for real and use this opportunity with your eyes open, as a professional trader is often much scarier because real money is involved. 

6: Carry out testing properly

Testing is your best friend in that it will show you the areas that need improvement. Get yourself acquainted with backtesting and forward testing that will help you generate the ultimate version of the algorithm you will use to trade real money. Also, any scientific or quantitative assessment requires proper recording skills, so prepare yourself for detailed journaling of every entry and exit point, among other key items of data. Discipline in this respect is the only way for you not to set yourself up for some major disappointment with your algorithm.

7: Give yourself time

We are all anxious to see the fruits of our labor, but this must not by any means influence our growth. If you feel that you are under a lot of pressure, find exercises or techniques that could help you calm down. And, most importantly, do not assume that there is a way out from doing things step-by-step, as becoming good at forex is a gradual process. Any attempt to speed up the learning or testing part will most probably lead to a scenario that we unnecessarily see too often in the trading world. In the beginning, for example, you might need to readjust your schedule and see how you can absorb all the information without any disturbances. Later, when you feel satisfied with your results, you may even choose to forsake your day job. Nevertheless, whichever stage you are on, make sure that you are not needlessly adding pressure to your everyday life. 

8: Get to know yourself

As you are slowly gathering all information you may need and seeing how theory works in practice, give yourself the space to understand how you may be blocking your growth. Are you aware of your major triggers? Are you a perfectionist, never feeling truly happy with your results? Are you a massive controller, feeling compelled to tweak the settings here and there in the middle of the trade? Or, are you potentially scared of success, so you fail to recognize the moments where you can maximize your profit? Do a personality test and discover which traits or characteristics may turn out to be fortunate or detrimental to your trading to know where to divert your attention.

9: Exercise control in every step

Whatever your own set of blockages is, make sure that you get to it before your emotions get to you. Trading is all about knowledge, testing, and a sober mind, so your emotions must be kept under control. Likewise, any laziness in terms of being dedicated to taking notes on your trades or really being present when trading needs to be dealt with before you move on to trading with real money. Being in control also entails properly protecting your assets, so make sure that your trades will never go on and on without you even noticing that your stop losses are off for example.

10: Really devote yourself to growing your money management skills

Trading without money management is basically the same as betting because you are not protecting your trades (thus your finances) properly. You surely do not want to spend all your hard-earned money just like an all-in casino goer, wasting it all in one go. See how you can manage your trades more effectively and make the habit of using the tools and methods that will help you with that. Each trader is individually responsible for fostering and developing a profound understanding of how to handle and invest finances. Understand that without adopting a sustainable mindset, your winnings may eventually go to waste.

11: Expand your options

If your current financial status cannot help you to get the return that would make a difference in your life or let you switch to trading alone, you can be even more motivated to succeed. Do not get discouraged if your initial investment will not provide you with an amazing return, as you only need great demo trading results to be noticed by a prop company for example. If you manage to achieve a good return percentage and present your accomplishments to a certain institution or a hedge fund, you may easily get an offer to trade on their behalf.

As you can see, many of the requirements to start trading involve the development of soft skills, which go hand-in-hand with any technical knowledge. However, we cannot broaden our minds or improve our life standard without curiosity, which will remain to be one of your best allies from the very beginning to some more advanced trading stages. Besides, understand that trading starts the moment you create an account even though no real money is involved. Professional trading is just another term for trading real money for a living, and since we know how success varies individually, do your part the best you can and everything else will fall into place.

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 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.

Forex Basics

Top 20 Quick Tips for New Forex Traders

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

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

Tapping Into Mind Power for Ultimate Forex Success

Becoming a successful forex trader can be attributed to many different things, from higher education to dedication, money and time invested, available resources, and so on, but one thing remains the same – success starts with you.

From the very beginning, you have the choice to enter the market with a positive mindset and reachable goals, or you could speed into trading with little experience and negative thoughts. Even with everything else that trading entails, your attitude can make or break your trading career, so it’s important to ask yourself whether you’re on the path to success, or if you’ll soon be packing your bags along with the countless others that have failed. 

The buying and selling of foreign currency online is often considered to be a recreational activity that is driven by the trader’s performance. In many ways, traders can be compared to athletes because of the determination that trading involves. Athletes also spend a lot of time training, often with coaches or trainers, because it increases their chances of success, even though it doesn’t guarantee victory. Forex traders can improve their chances of success in the same ways by spending time researching, chatting with forex trainers and coaches, attending webinars or seminars, practicing on demo accounts, and so on. 

The following suggestions can help you master your trading thoughts and channel success in the forex trading actions that you choose to make:

Believe in Yourself and Become a Beacon of Positivity

If you want to become an expert trader, you need to believe that it’s actually a reachable goal without doubting yourself. If you say negative things about yourself out loud, you’re putting that negative energy into the universe, while positive thoughts do the opposite. Your perception of yourself is important when it comes to managing complicated emotions that can spring up when you’re trading – after all, trading often brings out feelings of regret and self-doubt, along with happier emotions like excitement. If you have a positive outlook on trading, you will have more control over your emotions and you’ll be less likely to beat yourself up over mistakes. The great news is that everyone has the chance to become a successful trader if they will just take advantage of available resources and work hard.

Here’s a tip: try writing down 5 or 6 positive statements about yourself each morning to get yourself thinking in a positive direction. 

Act Like a Professional Trader

If you want to acquire the same results as a professional forex trader, you have to learn to think and act like one. This means you can’t only focus on making money. Instead, you need to set short-term and long-term goals that focus on improving yourself as a trader. If you think this way and take steps to become a smarter, more savvy trader, profits will follow. You’ll also want to make sure that your goals are realistic, so don’t tell yourself that you’re going to make a million dollars by a certain date, as this is highly unlikely. Professionals don’t sit around feeling regretful over losses, they look back at past results and figure out what went wrong to try to keep it from happening again. 

Whenever you are about to make a trading decision, simply stop and ask yourself “what would an expert trader do in this situation?” If you keep this mindset, set realistic goals, and keep track of your results in a trading journal, you’ll be behaving like a serious forex investor

Don’t Consider Failure to be an Option

Once you make the decision to become a trader, it’s important to promise yourself that you won’t give up in spite of possible losing streaks or bad days. Losses are inevitable, but creating and sticking to a solid trading plan will help you to bring in as much profit as possible while limiting the losses you do take, so be sure to invest an ample amount of time into this plan. Even a blown trading account isn’t a suitable reason to give up because you can always invest more money and start from scratch. You live and you learn, so don’t let yourself give up over something that can be corrected. 

To get the best perception of your trading results, you should keep a detailed log of every trade you take in your trading journal. Be sure to log information about emotions you were feeling, the reasons why you decided to enter and exit trades at the time you did, how much money you made or lost on each trade, and so on. Later on, you can look back and find patterns or notice details that you just wouldn’t catch without having written it down. Your trading journal will help you achieve success because it can point out things that you should or shouldn’t change about your plan while helping to shed light on some of the hidden issues you may be overlooking.

Keep in mind that you have to become conscious of problems in order to take the proper steps to change. Everyone has the keys needed to become a successful forex trader, but what makes or breaks us is whether we believe in ourselves, make informed decisions that mimic those of an expert, and become aware of our mistakes so that they can be fixed. If you learn to think and act the right way, you’ll find yourself on the true path to trading success.

Forex Basics

How to Successfully Trade Forex While Working a Full-Time Job

When you consider becoming a forex trader, do you find yourself thinking of a list of reasons why you just can’t realistically do it?

We could probably debunk a lot of those, but today, we will talk about time. As far as excuses NOT to trade go, the lack of time is one of the top reasons why many people never even try. Many of us are already juggling full-time jobs while struggling to keep up with our personal lives, run errands, clean our houses, raise children, and the list goes on. How could you possibly add trading into the mix when there’s so much going on already? 

Believe it or not, it’s possible to take up trading in your free time, even if you do work full-time. This might mean taking on more responsibility, but isn’t it worth it if you’re getting paid? Allow us to provide some tips that can help you with time-management so that you don’t have to miss out on all that trading has to offer: 

Study Charts in Your Free Time

A lot of people assume that traders sit around looking at charts all day long, therefore, they don’t think they have the time to study charts as they should. In reality, it’s possible to do analysis around your job’s schedule. This means nighttime analysis if you work during the day and vise versa. Research and planning can also be done in one’s spare time, including weekends and non-market hours. 

Don’t forget to do the following when you run your analysis:

  • Keep your specific strategy in mind when studying the charts. Stop for the day if you don’t see a set-up that supports your strategy.
  • Try not to perform analysis if you’re stressed out or emotional. If you often feel this way after work, try to do as much as you can on the weekends when you aren’t as burned out or get some of it done before you head to work for the day. 
  • Set a time limit for analysis and stick to it.

Avoid Trading if Necessary

We mentioned earlier that you shouldn’t analyze charts when you’re stressed out or emotional, but you’ll also want to take it a step farther and avoid trading altogether during these times. If you don’t have a clear head, you’re more likely to make mistakes, such as overlooking data, entering trades without proper evidence that you should, putting yourself down if you lose money, and so on. If you simply avoid emotional trading altogether, you’ll be less likely to make mistakes that are influenced by those strong emotions. Likewise, you aren’t doing yourself any favors by forcing trades when there isn’t any evidence to do so. Both of these issues will likely cause you to lose money when you could have kept your account balance the same by knowing to do nothing. 


You want to be sure that you can focus solely on trading when you decide to do it, so try to plan it around your schedule the best way you can and avoid distracting situations. If you can, try trading in your car while on break at work or take your laptop into another room if you have household distractions to deal with. Silence your phone and avoid background noises as well if possible. It might be difficult to find the time for distraction-free trading at first, but there are usually ways to make this possible if you’re creative enough, even if you have to tweak your daily schedule. It also helps to make yourself available during specific times, like when a certain currency pair you’d like to trade is most active. Most movements for currency pairs occur during two different timeframes:

  • From 8 a.m. to 11:00 a.m. EST
  • From 1:00 a.m. to 8:00 a.m. EST

This provides separate opportunities to trade when the market is more active, so you’ll want to take advantage of these two options. You could trade before going to work by waking up earlier, for example. 

Use the Right Strategies 

Those that are juggling trading with working a full-time job can take advantage of certain strategies that involve holding trades for shorter periods of time, like scalping or day trading. Scalping provides an advantage because traders often open and close trades quickly in order to profit from small price movements, meaning that you could accomplish some trading activity during a short break. Day trading is another potential solution where traders only open trades for a few hours at a time and close them out by the end of that trading day. You could open a few positions, check on them during your break, and close them if necessary. You’ll basically be making money in the background while you work your regular job if you can get the hang of multitasking. 

Remember that Consistency is Key

If you can develop a solid trading plan and follow it consistently, you’ll be more likely to bring home consistent profits. This means you need to set a schedule and stick to it, so it isn’t a good idea to switch strategies. Instead, traders should follow the same rules and guidelines, even if they do take a loss, and stick with their trading plan through thick and thin. This can also help you get into a good trading routine that will keep you going if you ever quit your job to become a full-time trader.

Do You Want to Become a Full-time Trader?

If you’re dreaming of quitting your desk job, know that you aren’t alone. However, there are a few things to consider first, so don’t march out without thinking things through. Here’s what you need to know:

  • Full-time trading won’t be as time-consuming once you’ve developed your strategy and gained enough practice, as many trading decisions will come to you without much thought. You’ll have a much easier time analyzing charts and information as well, which cuts back on time.
  • Think before you quit your job and remember that profits aren’t guaranteed in trading, while you know you’ll be bringing home a paycheck from your regular job. You need to be making consistent profits before you make the decision to let everything ride on trading profits. 
  • If you quit your job at the wrong time, you’re more likely to make emotional trading mistakes because of the financial burden that will be on your shoulders. This is why it’s a good idea to ensure that you’re earning enough to support yourself and to have some backup cash in the bank to ease some of that post-job stress.
  • Consider copy trading or using a trading robot if you’re still feeling pressed for time. Both can trade for you automatically, but you’ll want to be sure to choose a reliable option and keep a close eye on the results. 
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. 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.

Forex Basics

Is Forex Trading Honestly Really Worth Your Time and Effort?

It is a well-known fact that forex trading brings together a truly vast range of diverse personalities all over the world, and being such an incredibly big and booming market, it easily arouses interest in individuals regardless of their background and past academic and professional achievements. Naturally, we all desire to gather as many pieces of information right from the start, so we browse the internet in search of evidence that would confirm our compatibility with the market demands and benefits.

Not only do we want to see the fruits of our labor as fast as possible but we also realistically demand to have a clear vision of what responsibilities and tasks we can or cannot expect to take on or carry out ourselves. This thirst for concrete and relevant facts can now be quenched because the entire mental turmoil boils down to the question of whether forex trading is really worth it. For these reasons, let’s objectively analyze the key aspects that determine our motivation, satisfaction, and persistence in this market. 


Forex is, fortunately, or unfortunately, an entire field that is defined by specific terminology and rules that all need to be studied and understood. On a positive note, having a subject so well defined and studied as extensively offers more and more sources of information than ever before, including articles, podcasts, social media posts, videos, and trading courses. The ease of access and the myriad of places and vehicles to get educated, however, do not always support the learning process because the information offered does not always reflect original thought and what we can expect in real trading situations.

What is more, while cramming a whole set of new vocabulary and concepts they have never heard before, traders with experience in some other markets (e.g. stocks) may increasingly face difficulty due to seemingly identical tools and techniques. And, while there is so much to learn, potential or beginner traders also need to bear in mind that this is just the theoretical side of what needs to be done and that all theory ought to be properly exercised and tested to reach excellence just like in any other learning program. Nevertheless, after completing this stage, traders can rest assured that they will likely never need to go back to studying the basics, provided that they invested them conscientiously and whole-heartedly.

The Costs 

People are, understandably, drawn to trading currencies because they are keen on improving their finances. Nonetheless, forex newbies often discover later on how they already need to have a specific sum of money prepared in advance to be able to enter the market. Even though investing occurs in one of the later stages in a beginner’s trading development, we do not want to have any relevant items of information escape our focus, so we must learn about brokerage, commission, spread, and all other more obscure fees. An important part of this topic includes the topics of risk and leverage that, if not properly handled, may affect your trades and ultimately your account. If traders do not learn how to properly manage their trades and restrain their shadier personality traits (e.g. greediness, fear, impatience, laziness, etc.), their accounts may suffer consistent or intermittent blows that may never be compensated for by any wins no matter how big they are.

Time Committment

Time is an invaluable asset and the reason why many experts opted to put effort into learning how to trade currencies in the first place. Now, even though traders at the beginning of their careers may have already heard professionals talking about how their routines changed after learning about forex, they should still not forget that it is the decisions we make each step that have a say in how our life is going to look like in the future. First of all, in order to become knowledgeable about forex, you will need at least six months to study theory and start a demo account where you can apply what you learned.

Under the condition that you spent the learning period actively and without being superficial, you can become a professional trader (i.e. someone trading real money) even after a year, after which you will be able to tweak and improve your system if and when needed. It is also important to include psychological growth in this section because trading tends to bring out our worst fears and limitations in people, and overcoming emotional hurdles often takes more than 12 months. Finally, you may also need to consider a bigger time frame if you wish to make some significant lifestyle changes, as many traders become dependent on trading all day, missing out on the opportunity to experience a different type of routine.

Prospective Returns

You will double your investment in the blink of an eye, they say on various blogs, but they fail to mention that the market conditions and simple math will not let you go beyond a specific percentage simply because the big banks would lose their profit in that case. Some of the most prominent figures in this market make 20% per year, and while this can turn out to be quite a large sum, you need to calculate your own return based on your initial investment. Therefore, if you deposit 500 USD and manage to get a 13% return, you will get a realistic image of your yearly earnings from trading currencies. Also, if you happen to struggle with your algorithm and start taking severe losses, understand that the world forex does not offer any trick by which you can magically let you start over with a clean slate. Despite these difficult aspects of trading currencies, you can always present your records to a company that would pay you to trade on their behalf and increase your returns in that manner.


We all have a different starting point in terms of age, available capital to invest, social obligations, and work/school schedule, among others. Any trader wishing to become successful at forex needs to set aside a designated period in a day or a week that he/she would dedicate to learning and testing. Some traders may choose to do currency trading on the side, keeping their day jobs or prioritizing other trading activities, while others may want to focus on forex only. Therefore, both before and after one feels ready to start investing real money, it is absolutely crucial that each step be free of the stress and the turmoil of the outside world. A proper routine also entails methods to calm oneself down and direct one’s attention to trading alone.

Another vital piece of advice for all traders, be they beginner- or professional level, concerns developing the habit of meticulously recording each trade. Not only does proper data management help traders track their growth, improve their trading systems, and perfect their strategies but it also leaves room for traders to enter into a trading agreement with a desirable company, fund, or institution as discussed above. 

Potential or beginner traders have much to ponder on before changing their lives in a way that would impact their finances, time, and schedule. Some people may be quite reluctant to apply anything new in their life and others cannot bear the idea of having to sit down to study or take records each time they enter or exit trades. The key ingredient in all this decision-making is the individual vision of the future and balanced expectations of oneself and forex. Forex can offer much, but at the same time, it is you and you alone who need to make things happen. It is important to be honest with oneself from the very start as well as be prepared for a steep learning curve before being able to reap the benefits of this market. 

Forex Basics

The Correct Way to View and Approach Forex Risk

If you’re looking for an extra way to make money in your spare time, chances are that you’ve probably stumbled upon the subject of forex trading during your search. Many people overlook this option because they don’t understand what forex trading is, but the term simply refers to the buying and selling of foreign currency online. With all forms of investment comes some level of risk, and Forex is no different. How we deal with this risk is what makes the difference between failure and success. 

Traders open an account through a broker and attempt to make a profit off of the differences in pricing for the currencies they are buying or selling. Prices are controlled by the forex market, which is affected by many different factors. For example, large financial institutions including big banks have a significant impact on the market, along with economic factors, news releases, political events, and other important information that shapes trader’s opinions. 

If you want to become a forex trader, it’s fairly simple to open a trading account online. All you need to do is find a brokerage firm or commercial bank that offers online forex trading through a trading platform, like MetaTrader 4 or 5. There are also many other suitable platforms out there and some brokers offer their very own trading platforms. 

Is Forex Regulated?

Different regulatory bodies are responsible for regulation standards in certain countries. For example, the United States is monitored by the Commodity Futures Trading Commission (CTFC) and the National Futures Association (NFA). US regulations are known for being strict, which is one reason why some international brokers avoid working with US clients. Brokers located in other countries deal with separate regulators, some of which have more lenient rules. In some cases, brokers choose not to become regulated at all, but this does pose a potential risk to clients that sign up with these companies. For example, in the event that an unregulated broker was to go bankrupt, their clients would be at risk of losing the money they had invested in their trading account.

How to Get Involved

In order to open a trading account, you simply need to be 18 years old with access to an internet connection on a device like a phone, computer, or tablet. You’ll need to find an online trading platform as well or sign up through a bank’s platform. Pepperstone, XTB, EagleFX, FP Markets, and IC Markets are some of the most popular options, but you can find hundreds more to choose from as well.  

What Are the Benefits? What About the Risks?

Forex trading can provide a good source of income for those that put in the effort. This means you’ll need to spend a lot of time doing research, developing a trading plan, and honing your skills in order to be successful. Trading also provides other benefits like flexible hours, the ability to be your own boss, and the option to start with a low investment. A few high-profile investors have managed to become billionaires thanks to trading alone. Aspiring traders should know that the potential to make a lot of money as a trader is real and that it isn’t as difficult as one might think. The best traders learn to master self-discipline and are extremely active in planning and managing their trading plans.

When it comes to weighing the risks, one of the biggest downsides is that profits aren’t guaranteed. There’s always a chance that you could lose everything you invest, from a hundred dollars to thousands. On the bright side, traders can take more control of this by only risking what they are willing to lose and incorporating strict risk-management rules into their trading plan. Having knowledge and experience on subjects like microeconomics and geopolitics can also help to increase your chances of success, while you’re more likely to fail if you don’t understand the factors that affect prices. In the same ways that a disciplined trader is likely to be successful, a laid-back approach can lead to financial losses, therefore, the risk depends largely on the trader’s knowledge and attitude. 

The Bottom Line

Forex trading can be a great way to earn some extra income and can even take the place of a full-time job for those that are determined and hard-working. Like with most investment opportunities, there are risks involved with trading forex, with results depending heavily on one’s understanding of how the market works and what affects prices. Although forex does involve risk, traders can take more control by only risking money they are willing to use while using risk-management precautions, like using a stop loss on every trade. It’s surprisingly easy to get started as a forex trader, as you’ll simply need to find a regulated broker and open a trading account through that entity. 

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 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. 

Forex Basics

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

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

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

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

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

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

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

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

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

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

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

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

Beginners Forex Education Forex Basics

How to Trade Your Way from $10,000 to $1 Million

Forex opens and an incredible array of possibilities of how you can get your target million. Therefore, there is no single answer. More importantly, the answer you may get might not be adequate to your character, and the way you approach forex trading. Beginner traders asking this question fall into the first and probably the most dangerous trap called “getting rich quick”. This desire in young traders is overwhelming, aligning with the temperament that only spells failure in forex trading, unfortunately. Getting rich quickly in forex is plausible, forex is a game of probabilities, and is also a mechanism where higher risk brings higher reward and vice versa. However, not all risks are justified, some things are just worth trying while others border with stupidity. 

If getting rich quick is what you want to make out of forex, there are some ways of doing it that are better than having any plan at all. So, the key is having a plan. A plan that will increase your odds however abysmal they might be when you are after that $1million during a very short time. At this point, forex trading is more like buying lottery tickets worth $10.000 – scoring the jackpot probability is still way under 0.1% in most major lotteries. There has to be a better way right? Well, increasing the odds is an everlasting quest of a forex trader, do it meticulously, and finding ways to get “lucky” will be opening up in front of you. Instead of presenting how percentages and compounding works, let’s get into a few basic examples to get things into perspective, just note the following ways are not recommended. 

Assuming you are hyped and do not want to spend time learning how to trade like professionals, try to search for a good forex robot. This process might take a few weeks but it is still better than going all-in without any clue where. Try to find good reviews about the robot with a high win rate on a single, specialized asset they run best on since you will need consecutive wins over a short time. Forex robots or Expert Advisors for MetaTrader platforms are numerous, some are free. A higher price for a robot does not mean they are better, just try to find one with good ratings, results, and reviews (be aware of fake reviews). Pay attention to the leverage, how much is put into every trade, and set everything to your $1 million goal time frame. All you have to do is let it run, watch, and hope. By the way, some brokers might be hesitant to pay you out and will probably try to find anything to discredit your incredible gains, but this is another topic. 

Our second do-not-do-it example of how to get rich quick is trading high-risk forex events. Such events are global and deep, like elections or recent pandemic. The extreme moves they cause in a short period are your perfect playground to get that gain you need. Identify a trend that has started on a specific asset, for example, the S&P 500 index or the USD currency pairs where big moves are expected. Now, you need to set your position sizes and leverage to endure the drawdown you might experience as your tolerance for losses is extremely low with the way you are trading, even on an already established strong bear rally. By getting in a strong trend your odds of survival for the first candle (periods) are better than 50% and you also have a chance to win big as the trend continues for days, just know to set a trailing stop optimally. You might still need a few of these monster wins to get to that $1 million but at least you have better odds with a plan. Waiting for these opportunities might take some time, however, it still counts as getting rich quickly. 

The final example is popular and directed to another type of new-age currencies. You got it right – cryptocurrencies. There are several ways to fill your pockets in this market, but similarly to trading forex during extreme global events, you will need extreme mover assets. Splitting your $10.000 across several altcoins with a good perspective to get popular will get your portfolio skyrocketing. All you have to do is research what are good picks. This method applies diversification, meaning the likelihood of losing everything is low, especially if you pick more than 10 coins. Of course, your $1 million goal needs to wait for things to get going, yet if only one multiplies in the value we are talking about extreme gains, possibly above your targets. An example altcoin that changed investor’s lives is the Verge with a 1,581,942% peak gain, going from $0.000019 per coin to $0.300588 per coin from December 2016 to December 2017. Similar to what happened to Einsteinium and Reddcoin. So the odds are much better here than with lottery tickets, especially if you do some fundamental analysis about altcoins. Suddenly picking 100 altcoins and investing $10.000 in them does not sound like a bad idea, just know you will never know when it will happen (if it happens at all), so it may not be as quickly as you expect. 

Now, the recommended way to get rich is by devoting to the process of learning and experiencing forex trading. This path requires effort and not for getting rich quick-minded people. Professional traders sacrificed some time, a few years to get at the top of the game. They do not have extreme triple-digit returns over a year, but they are consistent. They switch high-risk returns for consistency that lasts for a lifetime. The two biggest pillars of trading are Psychology and Risk or Money Management. The analysis comes third after these most important aspects often overlooked by impatient traders. As with the above not recommended methods, start with a plan. Seek out beginner forex trading portals (such as to get the basic understanding of forex and then explore some more advanced topics such as strategies, indicators, trading systems, theories, and some forex psychology books. Improve your knowledge following financial websites and social media channels. Follow smart investors and traders on Twitter and try to find their channels on youtube or some other platform. Some of these figures are going to be appealing to you and your learning curve will get easier quickly, open your mind, and get motivated.

For some, a few years of demo trading and trying things out might be too long but reaching $1 million from $10k is what professional traders actually do consistently. Many spend decades just to try to live with $10k let alone become millionaires. What is great about forex trading is it does not force you to quit your daily, conventional jobs. It is as flexible as it is deep. You may become a purely technical trader, long term investor, crypto holder, but all successful traders have things in common, they all have a plan or system, structured risk management, and have mastered psychological trading aspects. Having a good plan is great, sticking to it is the psychology challenge most cannot overcome. However, with the internet, all the information available to you, all you have to do is dig up a bit and put that $10k to use, $1 million might be just a couple of years ahead.

Forex Basics

What No One Else is Telling You About a Real Trader’s Daily Routine

What’s the secret to trading success that you won’t read about in books or won’t even hear mentioned too often?

It’s kind of funny but there are some things traders almost never talk about – even among themselves – but when you start to quiz them about these topics, they actually love talking about. They just somehow don’t seem to bring them up on their own. Well, one of these topics is a trader’s daily routine. You’ll never hear a trader start talking about their daily routine and the number of people talking about this versus just about any indicator or trading tool is vanishingly close to zero. And yet, if you ask an experienced trader about their trading routine, you may as well settle down for the long haul because they can talk about this sort of thing for hours and go into great detail.

In fact, we recommend you do talk to more experienced traders about this because the amount of things you’ll be able to learn is equivalent to a small goldmine of knowledge and hints and tips. And the beauty of it is that this is the sort of stuff you’re never going to learn about in books and that nobody really talks about on the forex internet. Instead, most traders sort of work this out by themselves, usually over many years of trial and error. And both the trials and the errors can amount to a painful learning curve that will not only leave you stressed out and dissatisfied, it could also cost you potential gains.

But ultimately, having a well-worked out and systematic daily routine to your trading could mean the difference between being an amateur who’s just playing around with trading for a few extra bucks and a proper, professional forex trader who has made this activity into a veritable career. In other words, into someone who has committed to forex trading on a fulltime basis and is determined to see it through until they retire or – as is the case with most people who have made a genuine commitment to trading – well beyond their retirement and probably until the day they die. In many ways, at one point being a forex trader ceases to be something you do and becomes something you are.

Well, one of the steps along the way to that transition is working out a reliable and consistent but manageable daily routine. You can think about it like this: If you wanted to be a professional in any other business or walk of life, you would have a schedule of working hours and tasks that would shape every day you’re working. 

It’s different when you’re just starting out, of course. That’s when trading has an excitement to it and the adrenaline will keep you going through a lot of bumps on the road for many years. But when you’ve been doing this for many years – over a decade, say – the excitement gets worn down somewhere along the way. Thankfully, it takes a few other things with it. The stupid beginner mistakes are also gone, as are the sleepless nights or the nights spent staring at the charts. Also gone is the undercurrent of anxiety you feel about making mistakes or making the wrong decision. Instead, all of this is replaced by a steady, often repetitive, daily grind. In other words, a routine that makes trading feel more like a business.

Well, part of working out your daily trading routine is making the mental shift from thinking of trading as an activity you do on the side, to thinking of yourself and your trading as a business. And that’s not a bad thing. Making forex trading into a legitimate business – filing business taxes, managing business bank accounts, keeping track of business expenses – makes it seem like a different activity to when you’re just a lone wolf out there on your own, trying to learn how to make trading work for you.

As with any legitimate business, there are going to have to be those few things you have to do regularly and, if you want to be successful, you’re going to have to do them well. Most successful businesses will have set hours – not based on when they want to work but dictated by external factors, such as when it’s optimal to work. Say you have a small restaurant, you’re going to want to catch the lunchtime rush and the evening dinner crowd. It’ll hurt your business if you miss these peak times of the day while your competitors are taking your clientele and you’re still paying rent on the space. And you need to know when those peak times are every day so that you can plan in advance and have everything set up. It’s no good to you if your lunchtime customers are coming in but you’re still cleaning tables and getting the kitchen set up.

Most people don’t treat forex trading like a business – at best they treat it as a side-gig or, at worst, as a hobby. And most people don’t manage to make forex trading successful. But if you do want to make it work for you, you have to make that switch. Therefore, setting out a comprehensive daily routine is a huge part of becoming a truly professional forex trader. The absolute worst thing you can do is go in with no plan, no structure, and no routine. With no routine, you will inevitably end up sitting in front of your system all day long, which will have a few very negative knock-on effects. First, you will not be using that time constructively and most of it will be wasted in endless loops of, “should I trade now? …Or now? …Or now?” And not only this but you will almost certainly end up falling into the trap of over-trading – i.e. trading too often, out of boredom, or because you feel the pressure to make all the time you’re investing count for something.

In a manner of speaking, traders who focus all their energies on equities have it easy. Stock markets are only open for seven and a half hours per day, which is actually very useful. First of all, it gives you a set structure right there – your trading is limited to this window and someone else has decided for you when this window will open and when it will close. Secondly, it only gives you so many hours in which to be an idiot. This is especially useful when you’re starting out because making mistakes will be a big part of what you do. But with forex trading, on the other hand, you have almost all the time in the world to be an idiot and make mistakes because the markets are open for neigh on 24 hours per day. You can sit yourself down in front of your system at just about any time of your choosing and make a mistake. Also, you can get sucked into checking on the markets at all kinds of times of the day. Hey, we’ve all done it. It’s three in the morning but why don’t I just check the markets one more time, just in case. We’ve all been there. But thankfully, because you’re now reading this and with a bit of luck some of it’s getting through, maybe you can recognize this behavior when it crops up and avoid doing it for years on end.

Going from part-time trading to full-time is a tricky business. Your instinct is to think that now things are going to be easier because you have fewer commitments preventing you from trading. But actually, the opposite will turn out to be true – unless you have a strict routine.

Ultimately, this is a question of self-discipline. Those traders who work this out somewhere along the line – whether it is sooner or later will depend on their own personal make-up – will have a much better shot of turning their trading into a successful business. Those who never figure it out will eventually fail and be left by the wayside.

Part of the problem is the essential rhythm inherent to trading. The markets have their own ups and downs, periods of activity, and lulls where nothing is happening. There will be days – sometimes several in a row – where you simply end up doing no trading. The danger here is that you will start to get itchy fingers and will probably end up pulling the trigger on a trade or on several trades that you should have stayed out of. All because you end up feeling like that time you put in just waiting is wasted and you get eager to make up for it. Part-timers don’t suffer from this in the same way because the time they have for trading is more limited by other factors (like their day job) but it is a bit pitfall for full-time traders.

The smarter traders out there will use some of the time they spend in front of their system to run tests of tools or indicators that might end up becoming useful tweaks to their system in the future. That goes some way to alleviating that sense of wasted time.

Designing Your Routine

How you design your daily trading routine will depend on a lot on you. It isn’t entirely up to you because you won’t be able to completely avoid those times when the markets are lively or those news events that come in from time to time to give the price of a pair of currencies a kick in one direction or the other. But you will need to tailor your routine to fit with other parts of your life. Lots of traders out there have families and children and those are a good example of commitments that are external to your trading but that are ultimately more important. You will need to find a balance that works for you and enables you to still live your life the way you want and keep in mind the needs of your family.

But what do you do with those conflicts that are going to crop up from time to time? Say there’s a big news event coming up and it clashes with something else important in your life – say your daughter’s recital for example. This is where that self-discipline comes in because you are going to have to be strict with yourself. If you are a professional forex trader, you will essentially be trading for the rest of your life. That means you will likely see hundreds of similar news events and have plenty of opportunities for those juicy trades. You can get a hold of your fear of missing out and go to your daughter’s recital.

At the end of the day, if you don’t take control of your trading, your trading will take control of you. Everyone out there who has been trading for any meaningful length of time will have had this feeling like the market has begun dictating things in their life. Though you have to factor in big market events into your routine, you also have to make sure that the whims of the market and your desire to always be trading don’t start to impact your quality of life. We all got into trading because we want our lives to be better – if it starts going the other way, you need to be aware of that and you need to rein it in.

One of the ways you can begin to do that is to plan each trading week out in advance. Sit yourself down on Sunday night and go through your calendar of market events for the coming week. If you see gaps where there are likely to be quiet periods in the markets during the week, prepare some testing and research you can do during these times. In order to do this properly, you will need to be on top of the news cycle for the currencies you are trading. You can’t possibly account for the unexpected news events that will come out of the blue – that’s why they’re unexpected. But you do need to have a calendar of the regular news cycle that can become part of how you plan your trading schedule. 

Set up a calendar of regular news events such as central bank announcements, national GDP reports, and other economic forecasts made by governments and the major financial institutions. You can treat this calendar as a constant work-in-progress project. You can constantly be updating it and also you can use it to cross-reference past events so that you build up a good sense of how they affected the markets.

Plan ahead so you can be trading and taking advantage of these times when there is energy in the market as long as they fit into the schedule you set yourself.

Every individual trader will have timeslots when they prefer to be trading – some prefer to trade the European market opens, like the London open, while others prefer to trade the Asian or American opens. How that fits into your schedule will depend on your other life commitments and also the time zone you’re in and trading different peak times in market activity will affect your lifestyle so you need to be sure you are making a conscious decision about when you trade.


When you’re planning your week, you also need to plan times when you are away from your system. This is perhaps the hardest part of all. You will know after a while that there are times during the day when there is usually no real benefit to sitting in front of your system and entering trades. These are those times when the markets lose energy and become choppy and you will learn after a time when they usually happen. They can be quite annoying these periods because they usually come in the middle of the working day you set for yourself but they feel like wasted time.

This is where you can put your daily routine to work and schedule yourself tasks that take you away from trading during those quiet times. Doing this has multiple benefits. First, you cut down the chance that you will start entering trades or messing with your stops just out of sheer boredom. Second, it gives you a chance to go and do something other than trading, which will help you come back to your system with a clearer head at a time when actually entering trades is going to be more useful in any case. Thirdly, you won’t have a sense of wasted time and will give yourself a chance to make sure the anxiety this can cause doesn’t build up and make your trade out of panic.

So when you’re sitting down to plan your week, schedule some other activities during those lulls in the market to help you get through each trading day. Lots of traders will use this time to get away from the computer completely. Some use these times to run a second business, while others head down to the gym or go for a long walk. The determined traders will make use of these times to run backtesting on a technical indicator or review past trades. But all of these activities are ultimately beneficial because they stop you from spending those periods just waiting for things to pick up again and, at the end of the day, you won’t feel like that time is wasted.

The Take-Away

Planning your daily routine is one of the hardest things to figure out. In the old days, people were just left to their own devices and had to try to do it by trial and error. You’re lucky that you have read this article because even though it won’t change your life overnight, it will give you an awareness of how important your routine is to your trading. That’s gives you a chance to skip forward a few steps if you are willing and able to put some of this advice into action.

The way to design a workable routine is to treat your trading activities as a legitimate business, with office hours, daily tasks, weekly schedules, and proper planning. Doing this will help you to cut down on those usually terrible trades made out of boredom, out of panic, or for other emotional reasons.

Not only will your trading improve, but your life outside of trading will also improve. You will have to be strict with yourself but every time you are, you will be exercising your self-discipline muscle. In the end, this will make you more effective and ultimately more successful.

Forex Psychology

The Supreme Discipline of the Forex Trader

Although the currency market is the largest market in the world, there are still many traders who have no idea how it works. So, the reality is that there’s a fair amount of prejudice against currency trading. Some traders even fear the market. If you’re one of those traders, be sure to read this article carefully.

In it, we will present to you the most important basic concepts of the currency market or Forex trading and show you the possibilities it offers. But even for readers with a lot of experience in this market, this article will be an interesting read, in which they will still be able to learn a little more.

Anyone who has made the decision to prove himself in the supreme discipline of traders must become intensely familiar with the currency market. If you know how the market works and what tools are available, you can optimally plan your operations and succeed.

Which players are represented in the market, how should risk and money be managed, what are the possibilities of analysis, and what are the most proven strategies? In this article, we want to work step by step on the most important points so that you can finally start successfully in the currency market (Forex).

What is Forex?

In the Forex market (currencies), currencies (currencies) are traded on the OTC market (over the counter). In other words, there is no central market but only OTC operations. The foreign exchange market is made up of banks, large companies, central banks, funds, intermediaries, and private investors. The Forex market gives the trader a chance to actively trade in the currencies of different countries, with private traders who can only actively trade in the foreign exchange market since the mid-1990s.

Previously, it was available only to institutions. The special feature of this currency market is that it is open on Sunday afternoons and remains active until Friday evening. During this time, it is open 24 hours a day, with a daily trading volume of around $6,000 billion, much more than any other market. Of course, it has its advantages. For example, you can trade when you have time currency pairs that are actively trading.

For example, suppose you live in Germany and have a window of opportunity from 08:00 to 10:00 when European stock exchanges open. In this case, for example, the currency pairs GBP/USD and EUR/USD could be very interesting. In general, the Forex market is very flexible and is able to create a timeline based on individual criteria.

What Moves the Market?

Economic data, in particular, has a significant impact on the Forex market, especially if a particular message deviates significantly from analysts’ and investors’ expectations. In some cases, however, a central bank could take a completely unexpected step at a certain point, leading to a dramatic price change in the currency market. Therefore, a position that is opened immediately before the central bank meeting is not advisable.

As with any trade, you should always remember to limit your losses through a limit on the Forex market, and consider what can happen when you post a specific message that moves the price directly to your loss limit. The amount lost due to a certain position is the question that must be asked again and again.

Entering the Currency Market

Currency pair trading can be done in different ways. Private investors, by choosing a suitable intermediary, gain access to various products with which they can directly or indirectly implement their trading ideas in the Forex market. In the case of cash trading, the two partners trade foreign currencies among themselves. For example, if Bank A with Bank B exchanges EUR 10 million/USD at an exchange rate of 1.30, Bank A will have to transfer USD 13 million. The A will receive 10 million euros from Bank B. The classic currency transaction is also available in a slightly modified form in private Forex trades under the name Spot Business.

Some brokers also offer trading with Forwards. Both methods are usually transactions based on a margin deposit; that is, with leverage. However, compared to cash trading in the interbank market, the foreign currency is not delivered but is “transferred” until the position is closed with an opposite order.

Costs Incurred 

Since the foreign exchange market is an interbank market and therefore does not incur additional fees to the stock exchange services, its trading is relatively cheap. Therefore, depending on the broker model, the trader only has to pay the differential or a combination of fork and commission. The tighter the hairpin, the better for the trader.

Since the currency market is very liquid, the odds of tight ranges are usually quite good. At the same time, dispersion is an important criterion when selecting the broker (in combination with commissions). However, traders need to know if the hairpin is fixed or flexible. In turbulent times, it can be a significant disadvantage when it suddenly reaches an expansion.

In addition, there may also be large differences between individual intermediaries in terms of corporate policy. Therefore, make sure that your broker guarantees the execution of the order and the setting of your loss limit. You should also make sure to include redundant systems to protect your hardware and software so that your commands always run, even if the server fails you during an operation. It should be noted that even in the less regulated currency market there are regulators who supervise many intermediaries, for example, the NFA (National Futures Association) in the U.S. The U.S. and the FCA (Financial Conduct Authority) in England.

On their websites, investors receive full information about private currency trading. Operators should be careful if the agent is in a peripheral country.

Trading Practice – Fundamental Analysis

The fundamental analysis analyses the causes that influence supply and demand in a given currency and thus determine the exchange rate. In assessing supply and demand, they consider, inter alia, the economic situation, and developments in the two currency areas included in each currency pair.

The development of factors such as interest rates, inflation, politics, and society, as well as economic growth plays an important role. Using models, it is possible to assess in a long-term context how a change in certain influencing factors affecting a given currency would affect and whether the current exchange rate seems justified. The exchange rate, which results from the models, is however only a theoretical guide.

In fact, prices may deviate from this, as particularly difficult future expectations to measure are included in price formation. Basically, however, it applies to the analysis: if the current price is below the value of the model, there is talk of an undervaluation, in the opposite case of an overvaluation.

Interest Rate Parity

The simplest model is interest rate parity. It requires traders to invest where they can achieve the highest return. Investment opportunities should have a similar level of liquidity and comparable risk. Capital flows between the two countries are based on the interest rate spread between the two currency areas, according to the interest rate parity model. If the interest rate is higher abroad, traders transfer their money there at the current exchange rate.

Later, the money is transferred back to the source at the current exchange rate. Depending on how the exchange rate develops during the investment period, it will have a positive or negative impact on profitability. If there were no exchange rate movements, the return would simply correspond to the foreign interest rate. Then, later, each investor would keep their money in the currency offering the highest interest rates.

Balance of Payments

In contrast to interest parity theory, the balance of payments attempts to explain exchange rates with a holistic approach. The focus is not on the return efforts of investors, but on the flow of goods and capital flows between the respective economies of a currency pair. The balance of payments is a systematic record of economic transactions between private and public households, as well as businesses and banks at home and abroad. It consists mainly of the current account and the capital account. The current account records all transactions in the goods market.

The current account balance is often defined as the “external contribution”. In other words, it’s about the difference between exports and imports of goods and services. If a country has a positive external contribution, domestic capital increases as a result of net capital inflows. If, on the other hand, imports exceed exports, money flows out of the country and domestic assets diminish. The capital account records accounts receivable and household liabilities vis-à-vis other countries. Here, a distinction is made between capital imports and exports.

The difference is also called the net export of capital. If the performance and financial balance are not the same, an imbalance between the supply and demand of a currency is created. The resulting movement of the exchange rate returns the relation to the equilibrium point. Fixed exchange rate systems may also have long-term imbalances in the balance of payments.

Purchasing Power Parity Theory

The third model, the absolute theory of purchasing power parity (also known as purchasing power parity, PPP), compares the purchasing power of 2 currencies. The key message of the theory is that one currency that has been changed to another in the corresponding country will have the same purchasing power and therefore the same real value.

The external price level after conversion of the exchange rate should correspond to the domestic price level. If the exchange rate deviates significantly from this equilibrium, there should be a tendency to return to equilibrium according to this model, since in principle there is a possibility of a gain.

If, for example, a computer in the U.S. (In Euros) costs less than in the Eurozone, it would be worth buying it in the U.S. and reselling it in Europe. It’s worth it. The difference between the purchase price (converted to euros) and the sale price continues to provide a profit.

However, to purchase a computer in the United States, you will need dollars. The supply of the euro and the demand for the dollar will subsequently lead to an appreciation of the dollar, with the result that purchasing power in both monetary areas is adjusted. A popular example of this model is the so-called Big Mac index. This is a simple-built index of people’s buying power published regularly by The Economist.

The basis for calculating purchasing power is a comprehensive description of the prices of a standardized and readily available product: the Big Mac at a McDonald’s restaurant. For example, if a Big Mac in the U.S. costs $ 5.28 on average, while the price in Germany is $ 3.95, the theoretical exchange rate is $ 5.28 / € 3.95 = 1.34. If the current exchange rate deviates significantly from the theoretically determined value, it would be adjusted to this long-term value according to purchasing power parity. In reality, the purchasing power parity theory considers not only a good but a complete shopping cart. Moreover, not all price differences generate an opportunity for profit, as taxes, transport costs and customs duties must be considered.

Many goods cannot be marketed worldwide, especially services or haircuts which are not transferable. Therefore, the shopping cart should only contain marketable products worldwide.

Technical Analysis

A general topic of controversy is whether the technical analysis in the currency market makes sense. On the one hand, there are so many price adjustments that many patterns can arise. On the other hand, the market is so inefficient that these patterns (theoretically) cannot function sustainably. However, most of the tools provided by Technical Analysis (TA) are well used in foreign exchange trading.

Classic graphics formations, such as trend channels or resistance and support lines, can be used, as well as the most advanced techniques of trend recognition, indicators, and oscillators, as well as candle formations. Due to the trend behaviour of the currencies, a relatively unknown type of graph is offered for the correct exchange rate analysis: the so-called “Graph of points and figures” (P&F – Point and Figure). This is a variant of alternative representation to the bars and candles graphics that are widely used.

In the foreground of the P&F table is no longer the movement of price in temporal terms, but the development of movement. Times when only small price changes (i.e., lateral movements) occur are filtered out of the table. A variant of similar representation, but more visually understandable, are the so-called Renko graphics. Both types of charts work with trend lines, indicators, and formations. When using it, you should always keep in mind that the time axis, unlike the “normal” graphics, is variable. Therefore, it may happen that the chart does not change over a longer period of time, if price fluctuations were too low or if a significant movement has not developed.

Various Time Levels

The methodology of integrating several time windows into the analysis and the resulting trading decisions are mentioned in the trader jargon as multiple time frame analysis. Due to the speed of the Forex market, this technique is particularly suitable. The concept derives mainly from 2 approaches. First, many operators check the situation in the main time window (for example, small time window: minutes chart, main time window: time chart) before entering a new position.

Only when the hourly chart does not have the resistance or support at the same level as the minutes chart and the exchange rate does not move in an opposite trend, will it enter the market. Second, many traders use this approach to enter into a long-term trend.

The smaller window often allows for a better entry time. However, once the entry is made, the operation will be managed in the longer-term chart. However, the danger of over-operation will be threatened. Instead of focusing on the long-term vision, many operators observe the position in the subordinated time frame, even after starting, and take unnecessary risks. If you consider support and resistance, you should start at the highest available time window and advance to the smallest primary unit in time.

Intermarket Analysis

The dollar, of course, is the most important currency in the world’s financial system. Consequently, the dollar index is excellent for analytical purposes. Just look at the index to read the strength or weakness of the dollar against the main currencies: if the index rises, the dollar shows strength against the other currencies. If the dollar index falls, this indicates a weakness against the other major currencies. To measure even how a known currency is developed one compares its value with a basket of 6 coins. Specifically, this is the weighted geometric average of the US currency in euros, Japanese yen, British pounds, Canadian dollars, Swedish krona, and Swiss francs.

Market observers, who are interested in the interactions of different asset classes, know that the United States dollar plays an important role in cross-market analysis. From the historical development of the price, it can be clearly deduced that the global currency has a long-term negative correlation with the commodity market.

You can see how commodities entered a massive bearish trend, as the dollar index had a brilliant rally in mid-2014. For this reason, the United States dollar or the associated concept of the United States dollar index plays an important role in cross-market analysis, which examines the interactions between markets.

Appropriate Strategies – Long-Term

Now that we have learned a lot about currency market theory, we also want to deal with its practical application. To this end, we present two strategies that are interchangeable, on the one hand, in the long term and, on the other hand, in the short term. The carry trade is well known in exchange operations. Behind it is a simple system: funds are generated in a low-interest currency and invested in a high-yield currency. The difference between interest rates and the change in price is most important.

If the exchange rate does not change during the investment period, the return on the carry trade equals the interest rate spread. Also, a rise in the price of high-interest rates versus low-interest rates will lead to a further increase in revenue. In this case, the return on the interest rate advantage is further increased by the favourable development of the exchange rate. On the contrary, a devaluation of the currency in which it is invested leads to a reduction in yield.

If the percentage devaluation is above the interest rate spread, the trader loses money. If there are significant fluctuations in exchange rates to the detriment of the investment currency, the strategy could incur correspondingly high losses.

Carry trade is a popular strategy for hedge funds, as they are suitable for large sums of investment. Fund managers seek to identify macroeconomic developments at an early stage and make cost-effective use of appropriate strategies. In the same context, there is often debate about leveraged carry trades. Only part of the negotiated sum is deposited as collateral, taking advantage of existing capital. A Deutsche Bundesbank study in 2005 based on carry trade in euros against the dollar shows an average yield of 15 %, a multiple of the interest rate spread. A maximum of 71% profit would be possible.

However, annualized yields can vary widely and be markedly negative from month to month. Although carry trade is a long-term currency strategy it represents an interesting trading approach in the past and today. However, due to the high potential for detractions, the risk should not be underestimated. Rapid market movements can wipe out accumulated earnings in months or even years.

Appropriate Strategies – Short-Term

For short-term traders who want to generate profits in the volatile phases of the market, there is the breakup strategy of Maite Krausse. Breakage trading is a strategy used by many professional traders that offer satisfactory results in both swing and intraday trading. The best results are achieved in the volatile market phases or in strong trends, with uncertainty between market participants and continuous sidesteps minimizing the likelihood of successful entries. First, the range is displayed from 24:00 to 08:00 Central European Time (CET) on the 15-minute chart.

At this time, the maxima and minima are determined. Highs up to 8:00 a.m are considered the upper limit or resistance range, and lower prices represent a support level. If the price is now above the minimum marked or below the minimum, a purchase order is placed between 2 and 5 pips above the maximum, a sales order of 2 to 5 pips below the minimum.

This range is only valid during the respective day, after which it must be redefined and is therefore ideal for intraday traders. Orders are still valid until around 21:00. Thereafter, all pending orders are removed and redefined the next day. Once a purchase/sale order is activated, the transaction is carried out throughout the day, with a risk/probability ratio (CRV) of around 2:1 on mostly quiet days and a CRV of 4:1 on economically important days, given that the interest rate is a country’s decision.

For example, the loss limit (SL) can be set between 20 to 30 points. Profit-taking (TP) ranges from 40 to 100 pips, depending on market fluctuations. Therefore, a smaller TP will be chosen in the quiet phases of the market, and a higher estimated TP in days of interest rate decisions and global political events. Trading management is simple and must be set with an automatic limit of approximately 15 to 25 pips. In addition, in the 1-hour chart, you should pay attention to the areas of resistance or support in the area of the alleged inputs.

Therefore, a purchase order above the resistance, and a sale order below the support will be established. The most likely to benefit from this strategy lies mainly in the evolution of macro-influenced prices. Then, it is very useful to have a look at the daily economic calendar, as the greatest fluctuations are accompanied by surprises and new knowledge about the economic situation of a country and, therefore, the respective currency.

Particularly interesting are central bank decisions or protocols that provide directional indications. In those days, sometimes the profit can be generous around 100 or more pips. Inputs can be further improved by including breakdowns of price patterns such as upward and downward triangles, double floor/roof, and head and shoulders formations.

If the price has formed as a pattern, you should be careful and tune your inputs, because the buds of these patterns are often traded and are volatile. Another way to identify good break opportunities is through certain candle patterns that have formed on the daily chart. For example, the inner bar candle (also known as Harami bassist/bassist), can predict an imminent break, both in trend and in reverse, which is often used.

There is an inner bar formation when the next daily sail is of a different colour (day 2) and has its maximum and minimum price within the previous day’s sail (day 1). The entry is set on day 3 above/below the maximum/minimum sail of the second day.


The Forex market offers interesting trading opportunities that allow private traders to benefit from exchange rate changes. Whether it’s in the area of classic day-to-day operations, as well as to protect against price fluctuations or as a mix of separate strategies in the custody account. The advantages lie in the high liquidity and flexibility of the market and its 24-hour operation.

Moreover, foreign exchange markets always offer clear short-term trends. With trading margin and leverage, Forex is especially interesting for low capitalization traders. Operators also have the opportunity to choose between a more flexible interbank market, on the one hand, and standardised products, on the other. An investor will be able to choose from numerous trading instruments and strategies and combine them if necessary.

Beginners Forex Education Forex Basics

Healthy Trading Habits to Try Today

Forex trading is a great way to put extra money in your pocket or to earn an unconventional income without having to worry about working a 9 to 5 job. However, the results that one gets depends on a variety of factors, including time spent researching, effort, trading strategies and plans, and so on. Revenge trading, overtrading, and other bad habits can wreak havoc on your trading profits and cause some traders to walk away forever after losing their investment. If you’re currently practicing bad habits, or if you haven’t started trading yet, consider trying these healthy trading habits if you want to see your profits improve significantly.

Habit #1: Reviewing Closed Trades

It’s important to take a look at your results after every closed trade, even winning ones. This helps to distinguish what you’re doing right and wrong, or where your trading plan is or isn’t working. Some traders might pay more attention to these details in the beginning but get lazy with reviewing their trades later on. Don’t fall into the bad habit of letting things go out of sheer laziness, or else you might start to miss things that could be changed to improve your results. Our best advice for this healthy habit is to keep a trading journal, which is used to log important details about each trade for review. This is the easiest and most organized way to keep up with your trading activity and to track improvement over a period of time. 

Habit #2: Only Enter Trades for a Reason

Some traders fall into the bad habit of overtrading because they are looking for the emotional rush of entering a trade, even if evidence doesn’t support it. Others might make the mistake of feeling lazy if they don’t trade on a certain day and enter a trade so that they feel as though they are doing something productive. The best traders actually recognize when it isn’t a good time to enter the market and know when to do nothing. If you want to practice this healthy habit, you need to start by outlining the reasons why you will enter trades in the first place. You might base this on economic data, fundamental analysis, technical analysis, or other pieces of factual information. If you don’t see the signs you’re looking for, simply don’t enter the trade. Remember that it’s better to do nothing than it is to enter a losing trade for the sake of doing something.    

Habit #3: Don’t Let Your Emotions Get the Best of You 

Trading when you’re emotional is a very bad habit that can cause you to make clouded decisions that will likely lead you to lose money. It’s true that many professional traders can control their emotions and don’t get bent out of shape over losses, however, it takes time to become disciplined enough to keep those emotions at bay. If you feel yourself getting anxious, fearful, or overly excited, you should take a deep breath and step away from the computer for a moment until you feel more level-headed.

If you find that a certain emotion is affecting you often, consider doing research online for tips that can help you deal with that exact problem. This is another habit that revolves around the need to recognize when it’s best not to trade. Like with our 2nd healthy habit, you can also double-check that the trade you want to make meets the criteria you’re looking for if you’re feeling out of your element.

Forex Basics

Did You Know that Good Traders Often Do Nothing?

The title sounds a little counterproductive, if you are not doing anything, how are you meant to be successful? One of the biggest and most important traits for a  trader is often their patience, the ability to simply sit and way, and to have the self-discipline to not jump at every single opportunity that comes up.

The majority of traders fail, and they often fail within their first year, quite a few within their first month. One of the things that can cause them to fail is overtrading, simply putting on too many trades. When you start out you will have your trading plan and your strategy, this will have some rules to follow. If these rules are allowing you to put on 100 trades a day as a day trader, then you are probably trading too much and your rules are not strict enough, your strategy only allows for one or two trades a day but you are putting on six or seven trades then you are not sticking to your rules, you are placing trades outside of it and this simply means that you are overtrading your strategy.

A good trader won’t let this happen. A good trader will always stick to their rules and a good trader will only trade when it is exactly right. You don’t need to take every single trade, even if it does one up with your strategy. It is often said that you should not let your emotions influence your trading, but when you are in a situation where your strategy is good enough, you can allow them to slightly influence you, not on the trades that your strategy allows, but whether or not you take those trades. Sometimes you simply have a hunch that something is not right or you just do not want to take it, use this and do not take it, you will kick yourself if you don’t, yet your strategy stated that it will be a good trade and one that you should take, so it is not the end of the world if you don’t, but you will begin to grow your own sense as to whether you should take it or not, just do not be afraid to say no and miss a trade every now and then.

Learning how to wait is vital, any good trader will understand how to do this. It helps you to keep some self-control and discipline within your trading. Not every single opportunity needs to be amazing. In fact, the majority of them are not. You only want to take the ones that both your strategy and your gut are telling you are right to take. If just one of those things exist, then it may be better not to take it. Of course, being able to train your gut feeling to lean more towards the better trades will take time, quite a lot of time, only through practice and experience will you be able to be sure that you are thinking along the right lines, this does not, however, mean that you should be trying to take lots of trades in order to train yourself.

Many newer traders like to rely on others which in the world of trading is never a good thing to do. You will be taking trades solely based on what it is that they are trading, with no actual knowledge of what it is that you are trading or why you are putting the trades on. This is not a sensible way of doing things, you will be putting on a lot of trades that you probably shouldn’t be, even if they are good trades, you have no idea why so you should probably not be putting them on.

Good traders simply do not need to put on a lot of trades in order to be profitable, they select their trades carefully and only select the ones that have the highest profitability and potential for a good win. So do not feel the need to place lots of trades to make a profit, pick them carefully and you can have quite a successful career as a trader.

Forex Basics

Reasons to Avoid Revenge Trading

Revenge a dish best served cold. That is the old movie quote, but it doesn’t quite have the same meaning when we look at revenge in relation to forex trading. We all have losses, it is a major part of trading and something that you will experience throughout your trading career, no matter how good you are, you will have losses and most likely lots of them. What we don’t want to do when we do have a loss is to try and revenge trade, to try and win that money back, throwing all risk management out the window, and simply hoping that the next trade wins.

Revenge trading is a situation where your emotions are getting the better of you, they are taking over your thought process and you are trading based on your feelings rather than the markets and your analysis. It takes you away from your rules, it takes you away from your system, and shows a lack of discipline within your trading. We all get these feelings though, the important thing is that you do not act on them, remind yourself why you are here and avoid putting on those revenge trades.

When you decide to trade based on your emotions, you are pretty much just gambling, there is no real reason to why you are selecting certain trades, simply the fact that you want to make back any of the money that you previously lost. The usual form of revenge trading is when you make a trade take a loss, you then place another trade, usually in the same direction but this time with a larger balance size. We have set out some examples of typical revenge trades below.

Jack has placed a trader with $100 based on his analysis, it goes the wrong way and he is currently losing about $95 out of his $100 bet (it has a stop loss placed at $100 loss). Looking at the markets, he still believes that his initial analysis was correct, due to this, he decided to extend the stop loss down to $250, a few hours later that stop loss gets hit and he has now lost $250 instead of the original $100. This form of revenge trading simply creates more losses, he did not want to lose that initial $100, even though it was calculated into his strategy, and so instead he has over doubled the loss incurred.

Sarah has placed a $100 trade, it goes completely the wrong way and she is stopped out losing the entire $100. She is annoyed and so wants to try and win that money back, so she decides to place an additional trade, this one is for $200, double the original amount. Once again it goes the wrong way, this fuels her frustration and so a third trade goes on, this time for $400, another double of the amount. This can continue until going bust. Even if the second trade went the right way, it is often closed once the original amount is recovered, it is still a form of revenge trading and very risky, even if it gets the result that you wanted.

So we know that revenge trading is bad, we know it is something that we need to avoid and we know that it is a feeling that most traders feel at one point or another. So let’s take a look at some of the things that you can do to try and avoid it or to reduce those feelings if it does raise its ugly head.

Take a break: Go outside, do something that has nothing to do with trading. Sometimes all you need to do is to clear your head, get away from it and think about something else. When you come back after the break with a clearer mind, you most likely won’t have that regret and that desire to place larger or trades that are outside of your strategy.

Document and journal your trading: If you are keeping a trading journal or at least documenting each trade, you can use your information to work out why that original trade lost, this will give you a much better insight and can help reduce the desire to revenge trade, as you know what went wrong, you can use that in the future to improve your trading, it will also help you to realise that placing another target trade will be a bad idea as the reason for the loss in the first place is still present.

Trust your trading system: You have your trading system and you have it for a reason, you would not be using it if it did not have a proven track record or at least the potential to be profitable. If You trust in our plan then you will stick to it, if you do not trust in it then you should not be using it, either way, you should be sticking to your plan and understanding why understanding that any trade that is placed outside the rules f the system is bad trade and a trade that should not be made.

Practice proper risk management: This is where revenge trading really hits, your risk management. It completely throws out the window and as soon as you get rid of your risk management, your account is far more open to losses and potential total loss. It can be hard to stick to it, especially if you do not have a lot of self-discipline or patience to begin with. It is a habit that you will need to get into and one that you will learn the more you do it, but if you have a risk management plan in place, then stick to it, this is the best way of avoiding revenge trading overall.

So that is revenge trading, you can probably see why it can be so devastating to your account, many traders have completely blown their accounts from doing it, but stick to the plan, stick to your risk management and take a break when things are getting a bit too much and you should be able to avoid such trades and to remain on your path to success.

Forex Psychology

Emotions and Success in Long Term Trading

Trading is emotional for most of its participants. Your own emotions added to the emotional side of the market will largely determine whether you will end up a trading day as a radiant winner or whether you will leave the market as a downcast loser. Not in vain, there is the following saying among experienced traders, “buy fear, sell greed”. This article is designed to explain initially why a discussion about emotions is essential to success in long-term trading and to show you later how to conquer the poisonous cocktail of fear and greed as well as how to use it to your own advantage.

Both academic and non-academic work on stock market price action has multiplied in recent decades. Many of these trials quickly show an overview of the basic problem we are going to address. However, they fail to provide you with the tools you need to succeed every day on the market. Therefore, I will only show you here an incomplete outline of the results of this research. This incursion into theory will clearly reveal the weaknesses of some of them and, at the same time, will answer the question of why the psychological-emotional part of market analysis is so important. Moreover, this market approach can be of great help to you.

Weaknesses in the Efficient Market Scenario

First, mention should be made of the fact that the two poles of investigation of the market efficiency hypothesis and behavioural finance have been more or less at odds for decades. Despite the fact that the efficient market hypothesis was created by Eugene F. Fama in the 1970s, it has since contributed significantly to describing markets and prices through simple models, making them more transparent. In short, this assumption assumes that markets will be efficient when markets reflect all available information. However, trading costs, as well as any existing information asymmetries between different groups of market participants, are not taken into account. Particularly questionable is the postulation of the hypothesis in its strict form, which indicates that the success of the investment of professional participants is more a random process. However, many traders who have been successful for decades have shown that the opposite is true.

Only behavioral finance can provide a plausible explanation for extreme volatility.

For a long time, markets were dominated by the efficient market scenario. However, as illustrated in Figure 2, the 1980s were characterized by an extreme increase in stock volatility, which was obviously impossible to explain by means of Fame theory. We had reached a point where it no longer made sense to look at markets without including human emotions. Therefore, the theoretical design of behavioral finance is equivalent to a revolution and rupture of a taboo, making the ivory towers of academic dogma tremble. Suddenly, the psychological variables of human behavior were especially those that had to be taken into account in such a way that the behavioral finance center was the main cause of the formation of bubbles in prices and the appearance of periods of high volatility. Since the limited rationality of market participants means that adaptation strategies, called “heuristics”, have had to be used in decision-making, information acquisition – to name just one example – may increase the cost incurred by market participants. Each operator is familiar with it, as it is part of their daily operation: When things get lively in the markets, they tend to look at prices more often.

When Emotions Become a Problem

You want to maintain some control over the market in which you operate. But in turn, it wastes time, creates unnecessary stress, and, if you are not careful, can even lead you to an impulsive operation. But if you have put the stop loss, and stick to your risk management, you don’t have to worry as you don’t control the market anyway. The real benefit of heuristics, the decision-making for saving resources, weakens, and in the worst case, deviates from the right path. You may act compulsively just because the market has again moved a few points against you. Despite your determination to comply with your negotiation strategy, you find yourself acting too quickly and drawing biased conclusions caused mainly by your emotional perception. For example, you have been able to decide that you want to make a profit on the operation you have open and give you “a little more leeway”. Novice traders often follow this process of increasing the stop-loss distance.

However, this behavior can completely undo even a sophisticated risk management strategy and significantly reduce your trading capital. Therefore behavioral finance comes with a statement that is diametrically opposed to the efficient market hypothesis: Because of the many incentives, the behavior of market participants, and the allocation of capital, financial markets are not efficient. Both suffer from information costs and psychological constraints. Each trader, whether private or institutional, knows from their own experience that decisions about individual trades are often made based on rules. The basic problem is that these decisions can be ‘colored’ emotionally.

Emotions also obscure the fundamental value.

Until recently the debate in the academic literature has been dominated by so-called “limits of arbitration” of mental construction. This implies that the fundamental price of an asset is of vital importance. Therefore, irrational price deviations are only allowed for a limited period of time due to arbitrage (risk-free profit) by rational investors. However, so-called “noise traders” do not look at the core values of a stock. They buy and sell in such large quantities that rational investors have difficulty closing the gap between fundamental rational value and actual market price. What matters here is the sheer power of the market. If you are aware of it you will be able to protect yourself according to the motto: The market is always right.

Rational Versus Irrational Behaviour

So far this article has focused on describing why dealing with the world of emotions is of vital importance in trading. Attempts have also been made to illustrate how emotions can put their results at serious risk. Now, however, we will move from the grey world of theory to the real world of everyday practice. How to transform past knowledge into operational success?

To this end, decision-making between rational and irrational behaviour must be optimized. As a trader, you should primarily learn how to quickly decide which ìtone’ is displayed by market participants; that is, whether in certain phases emotional behavior is more rational, or more irrational. That is the decision making in the outside world that can be explained very well with specific examples of trading.

Decision-making in the “Inner World”

A little more difficult, but essential to success in trading is the way to a correct interpretation of your own emotions. Especially in discretionary trading, emotions can never be ruled out. Anyone who says otherwise is denying human nature. So you have to learn to have companions of your emotions that you listen to carefully and keep in check the impulsive need to operate as your imagination will be conducting a riot. The first and most important rule is: In any situation, stay calm and don’t panic. True, that sounds easier than it looks in reality. Emotions have a powerful impact and will suggest you change your behavior. Now, how will you achieve the specific level of inner peace that is needed to operate successfully?

Don’t take pressure on yourself: Are you nervous about your friends and colleagues telling you stories of your countless successes? So it is adding an additional pressure to itself that it does not have to bear. If you fail in your trading, you can rest assured that you will be greatly affected and criticized. Instead, trade only for yourself. Look at it as a game you can’t win if you’re completely relaxed or with your knees completely straight. The optimal state of mind must be between fear and greed, which is also called “respect for the market”.

Pay attention to your diet: dairy products contain catalase, table salt is a chloride, and wheat products contain gluten. Taking these substances will change your digestion from aerobic to anaerobic, while activating a number of hormones in your body. Do you have the feeling of not obeying yourself? Maybe it’s because your hands are tied by your diet. It’s not a good omen for success in trading that, among other things, has a lot to do with reconciling yourself with your emotions. Try to lead a Spartan life for three months. Your health and trading account will thank you. Institutional traders are supported by entire risk departments. As a private trader, you operate on your own and what you need to succeed is to keep your head clear.

Analyze yourself: the traumas of the past tend to turn against you in troubled times and markets are the perfect breeding ground for it. Make an agreement with them, otherwise, they will show up again and sabotage your trade. This process will take years to complete. The stock market is an expensive location to investigate who you are. Therefore, use the time during which you do not operate to work yourself. It will be cheaper for you. Meditation and yoga can really do wonders.

Stay calm and don’t let others run your life: Not everyone needs to know what you do to live or earn extra income. In human relationships, many things happen subtly causing emotions that are a nuisance. Someone says something stupid and you’re thinking, “Wait and see, I’ll prove it to you”. In this business, you have to have thick skin. In most cases, getting angry involves making the mistakes of others. Don’t get carried away and don’t do impulsive operations.

Enjoy something enjoyable: Consumption financed by the benefits of trading will reinforce your positive feelings. These in turn will manifest in the neural circuits of the brain. Then you will begin to think like a winner.

Decision-Making in the Outside World

Now that we have seen how you can get a better view through the “inner world” of your emotions, let us open ourselves to the outer world. For traders, it is worth looking at the picture from the outside, for example, to analyze the “greed and fear index” reported by CNN Money which can also be used in intersectoral analysis. This indicator is based on seven sub-indicators with equal weighting among which is the VIX (CBOE volatility index), which is a typical measure of fear and momentum of the S&P 500.

This index is shown with values below the 25-point line which indicates a growing fear among securities operators. On the contrary, securities above 75 points are a sign of increased greed in stock markets. Its peak in 2007 was a good indicator that warned traders in time against the crash and also generated a good investment signal in 2009. However, it reached another peak in Q1/2012 generating a false long-term selling signal.

It is not the Holy Grail but it is useful when combined with filters.

After the above, we deduce that this isolated indicator has limited validity. But however, combined with filters such as market profiles or economic data, quite reasonable results are achieved. For example, the use of market profiles allows you to see well that novice operators operate in areas where prices are very low in volume. It is because their operations are often determined by fear. Only after the professionals have cashed out, the novels will overcome their fear and get in the car. Often, by then, it will be too late.

The situation makes one thing clear: A market sentiment that is characterized either by extreme fear or extreme greed deserves the trader’s attention. Often when everyone is afraid it is worth entering. However, keep in mind that a good investment sign combined with various counter-trend techniques is the best insurance against bad surprises. In the long run, markets will only move along the macroeconomic pathways. Therefore, a change of trend in the markets is always preceded by a very important development of the economy.

Unfortunately, what happens very often at the really relevant trading points are abrupt moves. Several hundred points in a day are not uncommon. But, obviously, you must also bear in mind that trends are long-lasting. This is where, statistically speaking, value will be rewarded in most cases, as long as volume is still important.

Concrete Advice

Most neophyte traders don’t see market action as what it really is, that is, a brutal business. What can you really do now to use the phases of greed and fear for your own benefit? A good preparation: Treat each operation with utmost care because a good preparation is the best way to deal with emotions. In professional trading, any real trade has been preceded by many hours of research. In particular, unconventional news sources such as the or are good early indicators. The moment the stock market lets you see where you’re going, it’s usually too late. So make sure you devote at least eight to ten hours a week to studying the national and international press.

Working a scenario: Are you an intuitive operator? So much better, in that case, what you need is to regularly feed your intuition. Every second, the human brain is bombarded with 600-900 million bits of information. Most are processed unconsciously and largely determine their behavior through the decision-making process. All this is illustrated in Figure 5. Trading in the stock market is like a game of chess. It is necessary to create a scenario based on the information provided. Those who prepare their scenarios will see their operations in a much more relaxed way and will be free from fear and greed. If the scenario that we have prepared is not given, so much the better. In that case, we will use the loss stop and rethink the situation.

Never beat too much: As a trader, sometimes there will be too much risk in the market. Your initial greed will make you experience a feeling of discomfort that will worsen second by second before it finally turns into sheer terror. ¡ That fear is justified! You just over-leveraged your account and now you can inflict a lot of damage on it at any time. Among other things, the line between gambling and trading is determined by leverage.

Put loss stops: Do you often operate in the market without using loss stops? We must have the courage to do this because in the fast markets legitimate fears will be triggered.

Do not operate too much: Operate when you are mentally well prepared. If you operate the same way you play in a video game, your subconscious will be absolutely thrilled but the stock market will soon teach you a very tough lesson.


How you deal with your emotions will be the key to your success or failure in the stock market. Have the time to work yourself. Profitable trading is not a closed book, but the result of hard work applying a good strategy, with reasonable assumptions and, above all, control in itself. Only when these three factors interact properly will you be consistent with what happens and thus be able to succeed, such that you will catapult your trading to a new dimension. Keep it up and remember: never be too serious, never too informal – in the middle is just what works best.

Forex Money Management

The Top 5 Reasons Why Forex Traders Lose Money

It’s no secret that becoming a successful forex trader can be an uphill battle. After all, we are speaking about a field where reported numbers suggest that 70-90% of those who try fail. While the statistics can seem bleak, the truth is that anyone can profit as a forex trader, but most of those who give up do so because they are making one of these mistakes: 

Mistake #1: Not Being Prepared

One of the main benefits to opening a trading account is that it’s pretty easy, as long as you have a device with an internet connection, at least $10, and you’re 18 or older, you could open a trading account right now. However, this is also a downfall for many traders that decide to open an account before they’re truly ready. If you can’t read key indicators, don’t have a good understanding of how the market works, when to trade, how to trade, and other important concepts, then you’re going to be confused once you jump into everything. There’s a lot to learn, so be sure to educate yourself beforehand. Many traders give up because they start too soon and don’t want to put the effort into learning, but it’s important to remember that it takes time to learn to trade just like with any other job. 

Mistake #2: Not Having a Solid Plan or Strategy

Let’s assume that you’re educated enough to begin trading, so you open your trading account. What now? You have to have a plan in place that tells you what assets you’ll trade when you’ll decide to enter trades, how much you plan to invest and risk on each trade, and so on. You should also have an idea of a strategy you want to use, like scalping, day trading, swing trading, and so on. If you simply open trades without a plan, then you’re bound to lose. Fortunately, the internet is filled with free resources that can help you craft a plan and choose a strategy. Know that you might have to tweak your ideas a bit as you grow more accustomed to trading, but it’s still important to have a roadmap to follow. 

Mistake #3: Risking too Much

Some traders are in a hurry to make money and might risk as much as 10%, 20%, or more on each trade. Doing so can put you on the fast track to wiping out your trading account. Instead, you want to risk around 1-2% on each trade or calculate how much money you’re willing to risk on each individual trade. Losses are inevitable, so it’s better to stick with smaller position sizes and to risk less so that there will be less fallout if you lose. Many beginners start out risking too much and quit once their account shows a $0 balance.

Mistake #4: Being Emotional

There’s a whole host of factors that go into the way that your emotions can affect your trades. If you’ve never researched this before, all you have to do is Google “trading psychology” and you’ll find a ton of information. Understanding the ways that emotions can affect trades negatively is the first step to ensuring that this problem doesn’t affect you. If an emotion like fear or anxiety starts causing you to make bad decisions, you’ll be much more likely to realize this if you’re educated about it beforehand. Then, you can find ways to deal with these emotions rather than allowing them to continue to cause you to lose money.

Mistake #5: Trading When They Shouldn’t 

Those that are workaholics might not feel right if they go a day without trading, after all, it would seem as though you’re losing money by doing so. However, there are times when the market just isn’t right for trading, or when it should be avoided, like when big news is scheduled to be released. There’s a saying that trading less is more because of this – so it’s important to know when to avoid trading. In the end, it’s better to avoid trading on a bad day and to keep your balance the same, than to trade and lose money.