Tag: Forex Tips

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Forex Basics

How to Break Bad Trading Habits

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

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

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

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

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

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

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

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

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

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Forex Basics

A Reality Check for Modern Forex Traders

Forex trading can seem glamorous, as it is often promoted with images of a luxurious lifestyle that’s fit for the rich and famous. That isn’t to say that you can’t get there someday, but trading is also surrounded by a lot of myths and misconceptions Today, we will explore some of these uncomfortable truths so […]

Forex trading can seem glamorous, as it is often promoted with images of a luxurious lifestyle that’s fit for the rich and famous. That isn’t to say that you can’t get there someday, but trading is also surrounded by a lot of myths and misconceptions Today, we will explore some of these uncomfortable truths so […]

Forex trading can seem glamorous, as it is often promoted with images of a luxurious lifestyle that’s fit for the rich and famous. That isn’t to say that you can’t get there someday, but trading is also surrounded by a lot of myths and misconceptions Today, we will explore some of these uncomfortable truths so that traders can start trading with realistic expectations.

Reality Check #1: You Have to Invest Money to Make Money

One of the advantages of trading is that you can start out with a small deposit – some brokers will allow you to deposit as little as $10 (or less!). This can be exciting for beginners because it makes it possible for everyone to start trading without requiring you to be rich in advance. However, traders need to realize that the amount they invest does matter. For example, if you want to make a living trading, one study suggests you’d need to deposit at least $30,000 to make around $3K a month. Most of us don’t have that amount laying around, meaning that we would need to trade for some time to make enough money to bring in a large enough profit to support ourselves.

On the bright side, you can make money off your initial investment, even if you do start as small as possible. We’ve heard stories where great traders have made themselves rich off a few hundred dollars, so don’t let this fact discourage you. Simply remember that it is important to start with realistic monetary goals without expecting to become rich instantly. 

Reality Check #2: Trade During the Action

We often promote the fact that you can find a trading strategy that supports your lifestyle, whether that’s part-time trading, trading during the morning, in the afternoons, or whenever you have free time. However, the best time to trade is actually when the market is experiencing the most action, which is typical during the New York and London sessions. If you can, you should try to trade during these times because there is more opportunity, even if it means rearranging your schedule. This isn’t absolutely required, but it can help to improve your results. 

Reality Check #3: There is No Magic Answer

As a forex trader, you will come across claims that something is the magic answer to becoming rich at some point. These claims could be referring to an indicator, trading strategy, forex robot, or something else. Don’t fall for this – especially when the product that is being advertised costs money. You have to remember that the market is unpredictable and nobody knows what will really happen, no matter how smart they claim to be or how convincing they are when explaining that their system is “foolproof”. This doesn’t mean that these systems can’t be profitable, but you should always be skeptical and never put all your faith into something that claims to make you rich. Instead, focus on perfecting your plan while taking proper risk-management precautions as this is the real key to success. 

Reality #4: You Can’t Always Win 

Losing trades are an unavoidable part of forex trading. The truth is that if you begin with the idea that you’ll never lose a single trade, you’re living in a fairy tale. The good news is that this doesn’t mean you’re out of luck because it’s possible to be profitable with low win rates, as long as you make enough money on the trades that you do win. You also might wind up with a high win percentage and only take a losing trade every now and then. For most people, this is perfectly acceptable, but some traders do struggle with these losses and blame themselves way too much when things don’t go according to plan. This is why it’s important to understand that this will happen from time to time so that it doesn’t take you by surprise. 

Reality #5: Trading Isn’t for Everyone

It’s pretty easy to set up a trading account, deposit a few dollars, and get started trading. Unfortunately, trading is not for everyone. That doesn’t mean that everyone couldn’t make money doing it, but some people just don’t want to put in the time, effort, and patience that it takes to stick with trading. Those that easily give up are more likely to walk away if their expectations aren’t met or after one or two bad trades. If you want to be among those that do make it as successful traders in the long-run, you have to be willing to work hard and understand that trading isn’t a scam, but that it isn’t always easy.  

 

Categories
Forex Psychology

Trading Boredom and How to Deal with it

We’ve all experienced boredom from time to time, and in today’s day and age, the human race has spent a lot of resources developing all kinds of inventions to help us curb those feelings of being bored. Forex traders are especially prone to boredom when the market isn’t jumping because we thrive off of volatility […]

We’ve all experienced boredom from time to time, and in today’s day and age, the human race has spent a lot of resources developing all kinds of inventions to help us curb those feelings of being bored. Forex traders are especially prone to boredom when the market isn’t jumping because we thrive off of volatility […]

We’ve all experienced boredom from time to time, and in today’s day and age, the human race has spent a lot of resources developing all kinds of inventions to help us curb those feelings of being bored. Forex traders are especially prone to boredom when the market isn’t jumping because we thrive off of volatility and want to be kept on our toes. Unfortunately, some of us tend to abandon things once they become boring. We change the channel, we put down a book and never pick it up again, we lose interest and move on. Trading is no exception – many traders walk away because trading just doesn’t keep their attention. 

So, maybe you’ve tried to spice things up while you’re trading so that you won’t lose interest. You might play the radio in the background, turn on the tv, or introduce some sort of auditory/visual stimuli. You open Facebook on another tab and start scrolling away, you check your Instagram, you find something else to do. What you might not realize is that these distractions can actually have a negative impact on your trading results. If you aren’t focused, you might miss out on market information, overlook chart patterns you should have spotted, and make other mistakes. So how do you deal with the boredom without distracting yourself in the meantime?

The key here is for your mind to be focused on trading without having to multitask. One thing you can try is to trade during your most productive time of the day. In the morning, right after drinking a hot cup of coffee and eating breakfast can be a great time to really tune and focus before everyday stresses can affect you. On the contrary, you might not perform as well in the morning if you’re more of a night owl. Being well-rested is a good start to having a clear head. 

What you don’t want to do is deal with trading boredom by introducing negative habits. Some examples of this would be overtrading, forcing trades, or risking more money to feel some excitement. This might cure your boredom in the moment, but it can lead to losses that could have easily been avoided if you would have been patient. You have to think about how entering a trade just to do so could cause you to lose money and how it is completely unproductive to do so. You might feel unproductive by doing nothing, but it is better to do nothing if it means you’ll avoid losing money. It’s just like sitting at home on a rainy day – if you have to go out, you’re going to spend money. If you can sit back and be patient, you can save those funds for something else. 

At the end of the day, you’re going to have to embrace the fact that boredom will occur from time to time when you’re trading. Rather than trying to curb that boredom with distractions that can cause you to lose focus, you need to learn the art of trading discipline and patience. Try to trade during your most productive time of day and think of any activities you could do before trading to improve your focus, like jogging, mediation, yoga, drinking coffee, etc. If you’re ever feeling eager to enter a trade just because, consider the trade’s risk-to-reward ratio and ask yourself if evidence really supports entering that trade, or if you’re only looking to add some excitement.

Categories
Forex Basics

When NOT to Trade Forex

In the fast-paced world of forex trading, many of us are kept on our toes just waiting for the next trading opportunity. However, patience is considered to be one of the key factors necessary for successful results. There are hundreds of articles online that are dedicated to telling you when you should enter a trade, […]

In the fast-paced world of forex trading, many of us are kept on our toes just waiting for the next trading opportunity. However, patience is considered to be one of the key factors necessary for successful results. There are hundreds of articles online that are dedicated to telling you when you should enter a trade, […]

In the fast-paced world of forex trading, many of us are kept on our toes just waiting for the next trading opportunity. However, patience is considered to be one of the key factors necessary for successful results. There are hundreds of articles online that are dedicated to telling you when you should enter a trade, but it’s equally as important to know when you shouldn’t. Take a look at our list below to ensure that you aren’t making the mistake of overtrading and losing money.

#1: During A Losing Streak

While we never want to lose money, losing streaks can affect us all from time to time. The most successful forex traders talk about brushing off losses and moving on, but the truth is that this is easier said than done. If you’ve lost a lot of money and you can’t afford to deposit much more, a losing streak can leave you feeling really down in the dumps. This can also bruise your ego and it can give loss-fearing traders a run for their money. If you continue trading while feeling this way, your results can suffer.

The first thing you need to do is to take a step back from trading and review what’s been going wrong. Hopefully, you’ll have a detailed trading journal handy to help with this step. Look for things like poor risk management, bad trading decisions, or other mistakes that could be adding to your losing streak. After pinpointing those mistakes, you can develop a better plan to avoid them and start again with a renewed sense of confidence. 

#2: When You’re Feeling Uncertain

If you trade news events, your economic calendar might be telling you to enter a trade that you just aren’t certain about. The truth is that you don’t have to enter these trades if there isn’t enough evidence to do so. In some cases, it is better to sit out when you’re expecting the market to experience volatile conditions, so ask yourself how the event may play out and consider how much money you could lose if things don’t go your way. If you aren’t comfortable with those answers, try sitting out and taking notes about what would have happened if you had entered the trade. Checking to see if you would have been right or wrong can help influence your future decisions when you can’t decide whether to enter a trade or sit out. 

#3: When the Odds Aren’t in Your Favor

You need to think of the risk-to-reward ratio for every trade setup you consider. Is the risk worth it? Some traders choose to enter trades even though the potential risk is high or there’s a low probability that they will make money. In reality, there isn’t much of a reason to risk money on a setup that is unlikely to win any money, so this is a good time to sit out. If you’re not sure whether or not to enter a trade, try looking for fundamental or technical signs that it has a high probability to win. If you can’t find the evidence, it’s probably better to do nothing. 

Categories
Forex Basics

Use these Tips to Reduce your Number of Lost Trades

The forex market can be unpredictable at best. It’s important for traders to track their results with each of the trades they take to keep up with how well their trading strategy is performing. On the downside, traders rarely track the stats of the trades that they don’t take – unfortunately, many of the trades that we miss out on might have actually turned out to be winners.

The forex market can be unpredictable at best. It’s important for traders to track their results with each of the trades they take to keep up with how well their trading strategy is performing. On the downside, traders rarely track the stats of the trades that they don’t take – unfortunately, many of the trades that we miss out on might have actually turned out to be winners.

The forex market can be unpredictable at best. It’s important for traders to track their results with each of the trades they take to keep up with how well their trading strategy is performing. On the downside, traders rarely track the stats of the trades that they don’t take – unfortunately, many of the trades that we miss out on might have actually turned out to be winners.

The truth is that trades avoid these potentially rewarding trading moves for a variety of reasons, for example, maybe they’ve chosen to sit back and do nothing after a couple of losses in a row. At first, this might seem like the safer option, but that trader is actually losing out on even more money because they chose to do nothing. If you’re struggling with this problem, take a look at our helpful tips below for advice to overcome it.

Tip: Journal Missed Trades!

You’ve probably read about the importance of keeping a trading journal before and if you haven’t, you should know that is definitely something you want to do if you’re looking for productive results. Even if you already keep a trading journal, you probably aren’t logging the trades you haven’t been taking. You might have avoided a trade here and there and wanted to kick yourself later because it would have been a winner, but you might not realize just how much money you’re missing out on. 

Whenever you want to take a trade that has evidence it could win but you don’t for some reason, like anxiety or recent losses, journal everything as if you had actually taken it. After some time, you can look back at your results to see if the majority of those trades would have been winners or losers. If you see that you would have made several good decisions, you will feel motivated to follow your instincts the next time an opportunity presents itself. Also, remember to keep these journal logs separate from your actual trading logs so that you don’t get confused when comparing results. 

Tip: Consider Smaller Position Sizes

One of the main reasons that you’re avoiding trades likely has to do with your amount of confidence that the trades will be winners. Rather than missing out altogether, you could try lowering your position sizes so that less money is on the line. This can help to take some of the pressure off so that you’re more likely to enter trading moves that could be winners. In this case, it would be better to walk away with some winnings rather than nothing and you could gradually work your way towards taking larger position sizes once you start seeing positive results.

Tip: Set Alerts

Another possible contender on the list of reasons why you’re missing out on trades could be the fact that you simply don’t have the time to sit around monitoring your charts and waiting on good opportunities. Rather than letting those winning trades go, you could consider setting price alerts or using entry orders to ensure that you aren’t missing out simply because you don’t have the time to monitor everything. 

Tip: Don’t Forget About the Big Picture!

Losses are an inevitable part of trading and are usually logged in a trading journal and reviewed. However, missed trades are rarely written down and are easily shrugged off by traders because they don’t realize how much money they are actually missing out on once all their missed trades are added up. If you’re looking to maximize your profit potential, you have to start thinking of all those trades you aren’t taking for whatever reason so that steps can be taken to overcome the problem. If you try following all of our tips, you’ll likely make a lot more money. Who could argue with that? 

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Beginners Forex Education Forex Basics

Trading-Related Resolutions that Will Improve your Results

While we usually introduce resolutions around New Years, why wait? You can start practicing these healthy trading resolutions right now (for free) if you’re looking to put more money in your pocket. Resolution #1: Review your Past Performance Whether you’ve only been trading for a short time or you have more experience under your belt, […]

While we usually introduce resolutions around New Years, why wait? You can start practicing these healthy trading resolutions right now (for free) if you’re looking to put more money in your pocket. Resolution #1: Review your Past Performance Whether you’ve only been trading for a short time or you have more experience under your belt, […]

While we usually introduce resolutions around New Years, why wait? You can start practicing these healthy trading resolutions right now (for free) if you’re looking to put more money in your pocket.

Resolution #1: Review your Past Performance

Whether you’ve only been trading for a short time or you have more experience under your belt, it’s a good idea to look back at your past performance over the last year or so, or however long you’ve been trading if it hasn’t been that long. Are you making more or less money than you were in the beginning? You can try asking yourself these questions with your results in front of you:

  • Did I follow my trading plan or drift from its guidelines?
  • What are my trading strengths and weaknesses?
  • Have I met the goals I had set? 
  • What goals do I want to achieve in the next 6 months or longer?

After answering these questions, you should have a place to start with your plan for improvement. Try addressing your weaknesses to start. When reviewing your past goals, you’ll want to think about whether they were realistic or not. To be clear, an unrealistic goal would be to make a million dollars from a small deposit, while a realistic goal could be to improve your results over a period of time. If your previous goals were unrealistic, try to model more reachable goals for the next period of time without setting harsh financial objectives. If your goals were realistic, ask yourself why you weren’t able to meet them and work on a plan to try again. Perhaps you need to devote more time to trading, revise your trading plan, spend more time researching, etc. 

Resolution #2: Embrace Positive Thinking

That little voice in your head can be negative from time to time, and some traders can be especially hard on themselves after making mistakes that cause them to lose money while trading. We hear a lot about the ways that negative emotions like anger and greed can negatively impact our trading results, but did you know that there’s a whole movement dedicated to the ways that positive thinking can improve them? If you beat yourself up over mistakes, this negative mindset is going to spill over into your results, and you might even wind up feeling more depressed and less motivated. Instead, try to be kinder to yourself by thinking positively and learning from past mistakes. Remember that even trading robots make mistakes and we’re all only human.

Resolution #3: Learn!

Once you figured out everything you felt was important about trading and devised a strategy, you might have slacked off on the extra research or even avoided it altogether. Sure, you might know the ropes and feel confident about your trading knowledge, but why not learn something new? You just might find some helpful tips, come across a new strategy that you like better, learn more about trading psychology, and so on. Putting in the time to expand on your trading knowledge will only benefit you in the long run. If you’re unsure where to start, try the following:

  • Look for a trading-related book about strategies, tips, psychology, etc. 
  • Find a blogger that has a different trading style from you.
  • Research trading tips.
  • Check out trading forums.
  • Google search beginner, intermediate, or advanced trading articles (depending on your skill level).

The more you know, the better. Never stop learning new things when it comes to trading, otherwise, you’ll be left in the dust as new advancements are made and you might miss out on some really helpful trading-related information.

Categories
Forex Basics

Three Key Factors that Day Traders Should Consider

30Day trading is a popular trading strategy that involves placing multiple short trades per day, with each trade being closed out before the end of the trading day. It is known as a profitable, yet demanding trading strategy that can give good results when practiced effectively. Of course, each trading strategy comes with its own […]

30Day trading is a popular trading strategy that involves placing multiple short trades per day, with each trade being closed out before the end of the trading day. It is known as a profitable, yet demanding trading strategy that can give good results when practiced effectively. Of course, each trading strategy comes with its own […]

30Day trading is a popular trading strategy that involves placing multiple short trades per day, with each trade being closed out before the end of the trading day. It is known as a profitable, yet demanding trading strategy that can give good results when practiced effectively. Of course, each trading strategy comes with its own strengths and weaknesses, along with things that should be considered. If you feel that day trading is the right strategy for you, be sure to consider the following:

Factor #1: Money

Just how much cash do you have available to deposit into a trading account? As a day trader, you’ll need to open at least a couple of trades each day, so you’ll probably want to deposit enough money to keep you afloat for a while to avoid quickly reaching a $0 account balance. This is especially true if your broker charges fees for making a deposit. You’ll also want to set some realistic expectations related to how much money you’re planning to make. If you start out with a $25 deposit, you won’t be making thousands of dollars right off the bat. Meanwhile, a larger deposit of around $30,000 might leave you with returns around $3,000 per month. Of course, everything is subjective when you’re trading, so it isn’t wise to set specific monetary goals. Still, you’ll want to figure out how much you can afford to deposit and be sure to have a realistic idea of how much money you might make. 

Factor #2: The Cost of Trading

Each broker charges a different amount for spreads, commission charges, transaction costs, and so on. Some brokers offer competitive pricing, including low spreads and possibly even fee-free withdrawals. However, others will charge you an arm and a leg to trade and might even throw in some nasty surprises like inactivity fees, account maintenance charges, etc. In order to wind up with more money in your pocket, you have to be able to make enough of a profit trading that your winnings aren’t gobbled up by these fees before you ever even receive your withdrawal. Fortunately, you only need to invest a little time into finding a good broker with attractive costs to avoid this problem. Be sure to read the terms & conditions for each option you’re considering to look for information about these hidden fees and avoid brokers that aren’t upfront about their charges, as this is a sign that a company is trying to scam you. 

Factor #3: Stress

Did you know that short-term traders like day traders and scalpers are actually exposed to more stress, which can lead to psychology-related trading issues? This is mainly because you have to work quickly while taking in a lot of information. The timed pressure can make it easier to make mistakes along the way and you might find that your head feels like its spinning after a really tough trading session. If you already struggle with anxiety on a daily basis, you’ll probably have a difficult time adjusting to the pressure that comes with this type of trading strategy. One thing you can do to help take some stress off is to make sure you aren’t crowding your charts with unnecessary indicators, take a break if trading becomes too much to handle, etc. However, day trading might not be right for you if you can’t keep up with fast-paced trading. In that case, you could consider swing trading or another strategy that isn’t as stressful.

Categories
Beginners Forex Education

Five Golden Trading Tips for Forex Beginners

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

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

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

Tip #1: Limit your Risk

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

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

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

Tip #3: Stick with your Strategy

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

Tip #4: Know when NOT to Trade

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

Tip #5: Choose the Right Broker

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

Categories
Forex Basics

Trading Problems that Will Cut into Your Profits

As a forex trader, there’s a lot to know when it comes to making money… and avoiding the loss of money. Psychological problems, technical errors, and other issues have the potential to really affect how much cash actually winds up in your pocket at the end of the trading day. If you’re looking to maximize […]

As a forex trader, there’s a lot to know when it comes to making money… and avoiding the loss of money. Psychological problems, technical errors, and other issues have the potential to really affect how much cash actually winds up in your pocket at the end of the trading day. If you’re looking to maximize […]

As a forex trader, there’s a lot to know when it comes to making money… and avoiding the loss of money. Psychological problems, technical errors, and other issues have the potential to really affect how much cash actually winds up in your pocket at the end of the trading day. If you’re looking to maximize your profits, you should take a look at the 3 trading problems we’ve listed below to ensure that you are not making any of these mistakes. 

Problem #1: Using the Wrong Position Sizes

Using the correct position size is crucial for walking away with the best profit possible – if you use an improper position size, you could either lose out on a lot more or end up with a lot less than you could have. Finding the right size to use has to do with risk management. You need to understand how much you could lose, but your understanding should extend beyond your initial risk. You’ll need to be able to tell when you should make large trades and when it’s best to limit your exposure on each trade.

The best time to increase your risk is when the market is trading in your direction, you have a high probability to win, and there is a possibility for large rewards. You’ll want to use smaller position sizes when things are moving less in your favor so as to limit the loss you’ll take if you do lose.

Problem #2: Letting Fear Rule You 

It’s good to be careful when trading, but you can’t let the fear of losing money get the best of you. This causes some traders to pull out of trades too early when they could have stayed in the trade and made more money. Others have issues entering trades at all, even if the evidence supports their idea that entering the trade will be profitable. If you let yourself pull out of trades early or you find yourself avoiding good moves, your fear is going to eat into your profits a great deal. Fortunately, there are many tips online that can help you deal with this specific trading problem.

Problem #3: Not Adapting to the Market

In order to make the most profit possible, traders have to learn to be adaptable. This means that traders need to be able to adjust to changing market conditions, as the market is constantly changing. You’ll also need to adapt your expectations to fit those current conditions. For example, you can’t expect that you’ll catch a big swing move when volatility is low or when the market is trading in a tight range. Always ensure that your trades are planned with the current market conditions in mind.

Categories
Forex Basics

Useful Tips for Part-Time Forex Traders

One of the biggest benefits of becoming a forex trader is flexible hours, which make it possible to trade part-time while working a full-time job, attending school, or dealing with other responsibilities. This can really help bring in some extra income if needed, however, there are unique obstacles that come with being a part-time trader. […]

One of the biggest benefits of becoming a forex trader is flexible hours, which make it possible to trade part-time while working a full-time job, attending school, or dealing with other responsibilities. This can really help bring in some extra income if needed, however, there are unique obstacles that come with being a part-time trader. […]

One of the biggest benefits of becoming a forex trader is flexible hours, which make it possible to trade part-time while working a full-time job, attending school, or dealing with other responsibilities. This can really help bring in some extra income if needed, however, there are unique obstacles that come with being a part-time trader. You also might find that trading strategies and advice online would be time-consuming with your schedule. Fortunately, you can follow our useful tips to make the most of part-time trading. 

Tip #1: Find a Strategy that Fits With your Schedule

If you spend some time considering different strategies, you’ll notice that some just don’t fit in with part-time trading because they require too much time in front of a laptop. Scalping would be one example where you would need to be at your laptop multiple times a day, which could certainly conflict with your work or class schedule. Fortunately, there’s no need to break your neck trying to make time-consuming strategies work because there are many different options that can work better for a part-time trader, like swing trading. This might not be good news if you wanted to be a scalper, but you’ll still be able to find something else that works.

Tip #2: Use your Trading Journal!

You’ll find advice that suggests keeping a trading journal quite a lot if you spend time online looking for trading tips. This is because logging your experiences in a trading journal is a great way to track your progress and it can easily be used to back-track if you need to. If something goes wrong, you can look at your journal to see if you’ve been doing anything differently or to find out if your strategy simply isn’t working. Trust us – don’t go the lazy route with this one and journal each trade, even though your time is limited. 

Tip #3: Get your Priorities Straight

Chances are that you have other things going on in your life if you’ve decided to trade part-time. Rather it’s a job, school, caring for children, or something else, you’ll have to figure out how to balance your time so that you can get to everything important. You don’t want to miss work because you’re trading, for example, because then you’ll lose out on money that you probably need to survive. If you find yourself struggling to complete all of your daily tasks, try considering where you can make cuts that will have the least impact. If you have to, you could adopt a less time-consuming strategy like swing trading or consider using a forex robot to trade for you when you just don’t have the time. 

Tip #4: Use Your Time Wisely 

The best part-time traders maximize the time that they have set aside for trading. If the market is slow for the day, don’t sit around daydreaming or dedicate your trading time to something else. Instead, you could review your charts, spend time researching, journaling, or doing any task that is related to trading. Since your time is limited, you should really put in an effort to stay updated on what’s happening with the market, news releases, important events, and other factors that could affect the market. 

 

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Beginners Forex Education Forex Basics

Why Consistency is Important for Forex Traders

Many successful forex traders will tell you that consistency is key when it comes to a profitable trading strategy. If you want to bring in consistent profits, you can start by setting rules for yourself to follow. These rules are meant to help with discipline and to keep you on the right track as you […]

Many successful forex traders will tell you that consistency is key when it comes to a profitable trading strategy. If you want to bring in consistent profits, you can start by setting rules for yourself to follow. These rules are meant to help with discipline and to keep you on the right track as you […]

Many successful forex traders will tell you that consistency is key when it comes to a profitable trading strategy. If you want to bring in consistent profits, you can start by setting rules for yourself to follow. These rules are meant to help with discipline and to keep you on the right track as you work on building your profitable strategy. Here are a few examples of some self-imposed rules you could set:

  • Not risking more than 2% of your total account balance on a single trade
  • Only entering a position when data supports your idea that it is a good move
  • Entering positions based on specific data
  • Keeping a trading journal and logging every single trade in detail 

Without rules like these, you’ll spend a lot of time thinking about what to do, when you could automatically know what to do thanks to a well-thought-out plan. Consistency can help you to hone your plan, as you’ll be able to tell what works and what doesn’t after using the same plan and strategy over time. Eventually, you’ll have automatic responses to certain situations that help you act quickly so that you don’t miss out on any opportunities in the market. 

In the beginning, it will probably take some work to come up with a trading plan that works for you. You might find that a certain strategy takes too much time, that you want to risk more or less than you initially thought, and so on. It’s ok to tweak your rules and plans at this point – the idea is to come up with a consistent plan after trial and error. Once your plan is in place, you will be able to make better decisions and should start to see a sharp increase in profits. Know that what works for one trader might not work for another, as there is no one-size-fits-all plan when it comes to forex trading. 

The market can be unpredictable at times, which is why it’s best to have rules and a plan in place to help guide yourself. When things come to you more automatically, you’ll be able to enter positions more quickly without extra thought. Once you’ve set a consistent plan that works for you, you can expect to see improvement with your trades that wouldn’t be possible without set rules. 

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Beginners Forex Education Forex Basics

The Importance of Having a Solid Trading Routine

It is no secret that good habits are very important to most aspects of our lives. People with good dental hygiene habits have fewer cavities and fewer dental problems. People with stable exercise or healthy eating habits tend to suffer less disease. The same can be extrapolated to Forex trading: traders with the best trading […]

It is no secret that good habits are very important to most aspects of our lives. People with good dental hygiene habits have fewer cavities and fewer dental problems. People with stable exercise or healthy eating habits tend to suffer less disease. The same can be extrapolated to Forex trading: traders with the best trading […]

It is no secret that good habits are very important to most aspects of our lives. People with good dental hygiene habits have fewer cavities and fewer dental problems. People with stable exercise or healthy eating habits tend to suffer less disease. The same can be extrapolated to Forex trading: traders with the best trading habits tend to have longer and more profitable trading careers.

Good Forex trading habits are not born simply but develop over the years, often with the expense of losses along the way. Managing good business habits involves a very important decision to work toward the goal and put in the time and energy to build the right habits. Think of the professionals you know or have met in the past: – doctors, lawyers, athletes, accountants, and pilots, among others. They have all spent many hours developing the skills and habits necessary to master their trade. The same is true for currency traders.

The Importance of Daily Forex Habits

Make no mistake, without healthy daily (or regular) trading habits, it will not be profitable in the long run. Good business habits are different from your business plan. Business habits are the engine that will give you the strength to implement your business plan. Solid business habits include sleeping well, eating well, meticulously keeping your business successes and failures in writing, and always keeping the plan in mind even when a voice inside is telling you to quit smoking.

A solid trading routine will likely include identifying key levels of support and endurance at the beginning of each week and regular monitoring of markets to track the daily trends of your favorite peers. A routine will include checking markets at the same time each day to ensure accuracy and observe how trends develop or block. Most traders check markets at least when they open and close. They establish trades that meet the criteria of their strategy, or they move away if the opportunity does not present itself.

In the routine described above, note that the trader does not spend hours on his computer analyzing possible entry and exit points. He/She makes a strategy and monitors it at constant moments throughout the day without obsessing over possible opportunities that have been lost or could be created with a little bit of force.

If you are working to achieve a beneficial currency trading routine, be sure to build one that suits your specific lifestyle and not get stuck ‘thinking too much’.

Is he an “End of the Day” merchant? Should he be?

Some professional traders believe that end-of-day trades will help you to have a trading routine in the foreign exchange market that will be very successful without spending too much time. This sounds great, theoretically, because the reality is that becoming a full-time merchant has to be more flexible than having an ordinary job, right?

End-of-day traders basically only use strategies that can be implemented at the end of the day, so they’re not tied to their computers all day. This may sound like an excellent opportunity to make money with a few minutes a day, but be careful: this kind of trading routine can be very risky and can cause you to miss out on good opportunities, or to quit if markets suddenly change. End-of-day trading can be implemented with the right stop losses and entry settings, but it’s one of the most difficult to master Forex trading routines, and it’s not necessarily beneficial to all, but could be suitable for you depending on the lifestyle you lead.

The Advantages of Routines

If you’ve been living a routine free life so far, the concept of building a Forex routine can be horrible for you. However, there are advantages to building daily routines that should be examined even beyond the trading world.

According to health experts at Northwestern Medicine, building a daily routine will help reduce stress, improve bad eating habits, improve the quality of your sleep, and improve your physical condition. Routines will also eliminate the inefficient use of time and allow you to use your time more optimally.

Routines can be tricky to be carried out at first, but if they approach slowly and concentrate on the specific results you are trying to achieve, it is quite possible that in reality, you look forward to your daily rituals.

Points to Consider

For anyone looking for Forex trading as a way to escape the routine of everyday life, building a Forex trades routine may seem an antithesis to what they are trying to accomplish. But, it is important to be clear that without a routine, your trading will be less focused and, as a result, less successful. Before developing your trading routine, consider the following questions:

-When is the best time to focus on my trading without interruption?

-Do I have a healthy lifestyle that gives me the energy and momentum to trade successfully?

-Can I give you the time needed for my trading strategies with some small modifications in my current routine?

If you consider the answers to these questions and think you are willing to modify your existing program to spend some time in a correct Forex trading routine, you will realize that your current trading strategies will be sharper and your approach will be sharper, And hopefully, you’ll find more long-term gains.

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Beginners Forex Education Forex Basics

Activities That Can Help You Be a Better Trader

Trading can be a long process, it can be draining and it can also be unforgiving. Sitting at a computer for hours on end is never a great way to spend your day, but more often than not it seems like a necessity. When the markets are slow, or you have just lost a couple […]

Trading can be a long process, it can be draining and it can also be unforgiving. Sitting at a computer for hours on end is never a great way to spend your day, but more often than not it seems like a necessity. When the markets are slow, or you have just lost a couple […]

Trading can be a long process, it can be draining and it can also be unforgiving. Sitting at a computer for hours on end is never a great way to spend your day, but more often than not it seems like a necessity. When the markets are slow, or you have just lost a couple of trades, it is important to be able to take a step back. Do something to refresh yourself, and then come back. That is why we are now looking at a number of different activities that have nothing to do with trading, but they can still help your trading performance.

Playing Sports

This may be obvious to a lot of you, but you would be surprised how many traders either give up their physical activities in order to trade full time. Without going into the really scientific side of why sports is beneficial for you, the main aspect is the energy that it provides, you may be feeling tired straight after, but the long term effect of exercise includes boosts in energy, better concentration levels which then allows for more patience and discipline. Taking part in sport is also a great way to teach your body different aspects of discipline and preparation, important aspects of trading. Some sports like Boxing are also great for getting id of any underlying frustrations that you may have about the markets and your trading.

Yoga

A little like sports but slightly less physical (no less challenging though). Yoga can be used to help relax and focus your mind. When you have come off a few bad trades, it is hard to get out of that cycle, so being able to refocus your mind and relax is important. Being able to take what you learn in Yoga into the markets can also be fantastic, being able to channel your focus into the markets and your strategy can really help boost your productivity and profitability.

Reading

You probably thought this would be number one, it would be if we were looking at trading related books, but we aren’t, that would still be an activity to do with trading. A good book can take your mind away from your trading, to completely remove it from your mind so you can relax without the stresses.

Having said that, you can often find elements of trading in a lot of books, not necessarily related to trading, these could give you ideas of new trading strategies or ways you can adapt your own, often when your imagination is working (reading books) you can come up with ideas that you never would have before.

Talk to Other Traders

This one may seem obvious, and to be fair it is, but it is something that a lot of people do not do, many traders, especially the newer ones get absorbed into their trading, they forget about the other thousand traders around them that are going through the same thing. Talk to them, if you are having trouble with something, someone somewhere will have a solution for it, talking can help you find it, it is also a great feeling to help others, so giving your own wisdom to others can help the overall trading community.

Travel/Get Out of the House

Heading to a sunny shore or a snowy mountain may seem like a bit of an extreme, but giving your mind that extended break from trading can help refresh your mind. It can also give you a completely new and fresh perspective when you get back, often coming up with ideas you had never thought of before due to being stuck in a routine. If you cant get away for long, just get out to the local park, do something completely different, even a few hours can refresh your mind.

So there are a few different ways that you can help to refresh your mind or gain knowledge away from the trading platform, it is always important to add a bit of variety to your life, trading all day every day is not a healthy habit to get into, how you add that variety though, is up to you.

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Beginners Forex Education Forex Basics

Helpful Habits For Forex Newbies

Many new traders come into it not really knowing much about it, they have often seen or heard something about it, something that is a great way to make a bit of extra money on the side, or even as a carer. Coming into it with this expectation or lack of knowledge can put you […]

Many new traders come into it not really knowing much about it, they have often seen or heard something about it, something that is a great way to make a bit of extra money on the side, or even as a carer. Coming into it with this expectation or lack of knowledge can put you […]

Many new traders come into it not really knowing much about it, they have often seen or heard something about it, something that is a great way to make a bit of extra money on the side, or even as a carer. Coming into it with this expectation or lack of knowledge can put you on the back foot right from the start. Another issue that comes with this is a lack of understanding of the process and also a number of bad habits, nothing against the person, but certain habits come in with new traders. Due to this, we have come up with a list of habits that you should try and get into as a new trader. They will help in your trading and also with your chances of becoming a profitable and successful trader.

Using a Trading Journal

We appreciate that you may not actually know what this means, as someone coming into trading it may have been mentioned but it is becoming more and more apparent that people are not using them and this is a big negative against their trading. A trading journal is simply somewhere that you jot down everything that you do, and we mean everything that you do, the trades you make, the reasons behind them, the results, and more It then gives you the opportunity to look back at toys trading to see that you have been doing well and what you need to work on. It is an invaluable tool, so the sooner you get into the habit of filling one out and then keeping it up to date, the better your trading will develop.

Using Stop Losses

Part of your trading plan should have been a risk management plan. This would include using stop losses which are a way to automatically close trades when they go a certain distance into the negative. Using them is a habit that you need to start getting into, the amount of money that they could potentially save you is incredibly high and they can even save an account entirely. Losses are a part of trading, you will have a lot of them, especially as a new trader, so being able to limit those losses and to control the amount that is being risked each trade is vital. You cannot control the markets, but you can control how much you will potentially lose with each trade. It is ok to widen or tighten those stop losses as things go and as the markets change, but the one thing you must do is have them in the first place.

Set Trading Times

The markets work 24 hours a day, but that does not mean that you need to work those hours. Give yourself some set times when you want to be trading, having these set times will help you to keep concentration and will also ensure that you are not wasting your time. Don’t try and trade all your free time, treat it like a job, work certain hours and it will be easier to keep those times in the future, and to keep your discipline.

Preparing for Trades

Having your trading plan and strategy all set up before you start trading can make things much easier now and also in the future. If you start trading without a plan then what are you actually trading? You won’t know which means that the majority of your trades are going to be bad trades, whether you know that or not, there will be far more losses than wins. Having your plan will also set out certain trading rules for you, these rules are what you will follow with each trade, doing so keeps you in line with your strategy and as long as your strategy was created properly, it will help you to become profitable and successful in the long run. Having things planned beforehand also helps you to prepare and cope with the results on a psychological level which can keep you happy and will help to lower and reduce stress levels which is a major psychological issue when it comes to trading.

Specialise

Forex and trading as a whole is a huge beast, there is so much to it that if you try to do a bit of everything then you will be overwhelmed and won’t be able to do anything to a decent level. You need to be able to specialise, to pick a certain trading style and certain instruments that you wish to trade. This will then allow you to pinpoint your strategy, to get it working well for those particular instruments and timeframes. If you are a scalper, then there is no point trying to place some swing trades, stick to scalping, specialise in it and you will have a much better chance of being successful. 

So those are some of the things that you can be doing as a new trader, not everything will work for you, in fact, many of them may not, but the more habits that you try to get into the easier and quicker your trading will become. Even if you do not get into three specific habits if you notice a bad habit that you are doing (and there will be some) try and get out of it before it really sinks in and you are stuck with it for a long time.

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Beginners Forex Education Forex Basics

The Golden Rules of Forex Trading

If we look around the internet we will see a lot of different tips and hints being thrown around, some are pretty good, while others seem like they are simply plucked out from thin air. There are however a few things that are true across the board, no matter your experience level and no matter […]

If we look around the internet we will see a lot of different tips and hints being thrown around, some are pretty good, while others seem like they are simply plucked out from thin air. There are however a few things that are true across the board, no matter your experience level and no matter […]

If we look around the internet we will see a lot of different tips and hints being thrown around, some are pretty good, while others seem like they are simply plucked out from thin air. There are however a few things that are true across the board, no matter your experience level and no matter how long you’ve been trading. There are a few little rules that you should always take into consideration. We are going to be taking a look at a few of them and why they are so important if you want to become a successful trader.

Understand When to Limit Your Losses

One of the major areas of trading is risk management, this is simply the way that you protect your account. Without it, your account is liable to be blown with pretty much every single trade that you make, so it is vital that you have a risk management plan in place. As well as this plan is the need to understand why you should be cutting your losses. This is not something gotta anyone likes but it is a very important part of trading. When you have a trade going the wrong way, what do you do? Do you hold on to it in the hope that the markets reverse or do you deceit to cut the loss and then rebuild the account from the loss position? 

There isn’t an exact right or wrong answer here because everyone is different, we all have different abilities to handle risk and stress so ultimately it is going to come down to you. A lot of your profitability will come down to your ability to get out of, losing trades before they go too far. There are a few ways of doing this, either watching the trade manually, setting stop losses, or one of our favourites, setting up trailing stop losses. These are good because they act the same as a fixed stop loss, except for the fact that they move with the market, as your trades go up, the stop loss will follow them, when things reverse the wrong way it will hit the stop loss and you will close the trade. Just ensure that you have things in place along with your risk management plan in order to get out of trades before it is too late.

Understand and Accept Your Limits

When we first start out we just want to get started, we want to start placing some trades in order to get the ball rolling, but this is not exactly the smartest thing to do right from the very beginning. Simply thinking that a trade is a good one is not enough, instead, you will need to look at each trade with a clear mind with a set amount that you are going to be risking on this trade. Doing it this way will enable you to know exactly how much you have to use and so you can limit your position to be within your own boundaries.

It is important that you then stick to these limits, there is no point in making him just to break then the next minute. You will need to be strict with yourself and to have a lot of self-discipline in order to do this, but in the end, it will certainly pay off. If you have set yourself a weekly loss limit or a monthly loss limit, if you hit that amount, then no matter what else is going on, you will need to stop trading and then use the remaining time to analyse what it is that has gone wrong and to work out ways to avoid it happening again in the future.

Develop Your Trading Style and Stick With It

Unless someone is simply copying someone else trade for trade, no two traders are exactly the same, they may take very similar trades, but this does not mean that they are using the exact same strategy, we all create our own variations of them that suit our own personalities better. You need to build up your own knowledge base and to work out exactly what it is that you enjoy about reading and what you are good at. Once you have done this you need to select a strategy and a style of trading that suits you and that you have a good understanding of. Once you have done this, you will then need to continue to learn more, but the important thing is that you stick to that same strategy.

The importance of sticking with it is that you gain a much better understanding of the ins and outs, chopping and changing is never a good thing when it comes to trading as results can only be considered over a long period of time, and not simply after one or two trades. So be sure that once you have your strategy, you stick to it and work on it.

Patience

Patience is something that a lot of people unfortunately lack, yet it is such an important trait to possess when it comes to trading, without it, you will become stressed, frustrated, and will most likely start putting on trades that you probably shouldn’t. Patience allows you to wait for the right moment to put on your trades, if the markets are not yet in the correct state or they do not line up with your entry requirements, then you need to exercise patience and hold off making any trades, if you do then it will be considered a bad trade which could lead you to lose out and having some potential losses.

Make a Plan and Follow It

This is probably one of the more important rules to remember, once you have created a plan, it is paramount that you stick to it. This is relevant for a number of different reasons, the first being that you are not able to work out whether a strategy has been successful for a longer period of time. You cannot judge a strategy unless you have been using it properly for at least one month. The other main reason why you need to stick with it is that your strategy and trading plan will also have your risk management plans built into them, as soon as you start doing things differently it is putting this out of whack. This can then result in larger losses or smaller profits, making your overall strategy far less profitable in the long run. The moral of the story is to simply stick to your trading plan and strategy once they have been created.

So those are just some of the rules that you need to be considering when you start or continue to trade. There are of course many more and most likely some that you have made up for yourself, once you have your rules, keep to them and it will make your trading journey a lot simpler and hopefully a lot more profitable.

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Beginners Forex Education Forex Basics

Common Problems (and Solutions) For New Traders

The forex markets are complicated, there is a lot of information that is constantly changing, being able to keep up is a challenge, especially if you come into it wanting to learn and do everything, which let’s face it, is practically impossible. As a new trader, you would have come across losses, probably a lot […]

The forex markets are complicated, there is a lot of information that is constantly changing, being able to keep up is a challenge, especially if you come into it wanting to learn and do everything, which let’s face it, is practically impossible. As a new trader, you would have come across losses, probably a lot […]

The forex markets are complicated, there is a lot of information that is constantly changing, being able to keep up is a challenge, especially if you come into it wanting to learn and do everything, which let’s face it, is practically impossible.

As a new trader, you would have come across losses, probably a lot of them and a lot of them in a row, the reasons behind these losses can be difficult to work out due to a number of different reasons which are not necessarily your fault but they may be things that you are able to counter in the future with a bit of learning and experience.

So what exactly could these issues be and how can you help to get around them?

Not having a set trading plan: Normally when people start out, they want to try a bit of everything, it is great to experiment and it is great to find the style that suits you, but a lot of new traders take this to an extreme level and can try a different strategy every single day or even every single trade. N order to truly test out a strategy and to see whether it is right for you, you need to give it at least a month of trading, this will let you see both the ups and downs of the strategy and also help you to work out whether you have the right mentality for that type of trading system.

Emotions: Emotions are a part of trading, there is no doubt about that. What is different about newer traders and experienced traders is how raw those emotions are. If this is your first or second loss, it is going to hit you both psychologically and motivationally very hard, much harder than those that have traded for a while. These hits can cause a lot of different emotions, one of the most damaging is the desire to win that lost money back, this then takes us into the realms of gambling and can eventually lead to a lot of financial issues, not something you want to be doing.

Lack of training and education: Starting out you are going to have gaps in your knowledge, heck, people who have traded for years have gaps in their knowledge, however, when starting out, there is a very steep learning curve, going from 0 to 100 in an instant. There is so much to learn, but you should be ensuring that you have some knowledge on the thing you are planning to trade, whether that is a currency pair, a certain strategy, and even knowledge on how your trading platform works, we have seen plenty of questions with people trading and not actually knowing how to set stop losses or even how to close a trade.

Not using a demo account: You have probably been told that you should be using a demo account to try out new strategies rather than risking your own money, well this also counts for new trades, you should be spending an extended amount of time, in the beginning, using a demo account, this means that there are no risks to your equity when practicing and learning the basics. Don’t take it for granted, use a demo account.

Using an EA straight away: An Expert Advisor is a piece of software or code that will make trades for you, this has made forex trading extremely accessible with many being marketed as a way for someone with zero knowledge to trade, however using these robots without any knowledge can be dangerous, you do not know how it works and there is not one single holy grail of EAs, they will all have their issues and so knowing how it works will allow you to alter it when things are going wrong, having no knowledge means you are putting all faith in the software which can often lead to disaster.

Not knowing the markets: This is something that you can never actually master, but having a basic understanding of how they work, both in regards to trends and reversals, but also things like how economic news can affect trades, not watching out for news events has caused a lot of accounts to blow and a new trader may not know that they should be looking out for them, or what they actually mean. So this is yet another learning area for newbies.

So those are some of the reasons why new traders may be caught out, have a think, did you come across any of these issues, and do you still fall for them, some of these are still relevant to experienced traders too, which shows us how large the forex trading world is and how much there actually is to do and learn.

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Forex Psychology

Dealing With the Stress of Forex Trading

Stress is a powerful emotion and it is not one that will shy away from forex traders or any other traders, in fact, it can take a hold of us no matter what it is that we are doing, even something as simple as making a sandwich. You sometimes see those people who never experience […]

Stress is a powerful emotion and it is not one that will shy away from forex traders or any other traders, in fact, it can take a hold of us no matter what it is that we are doing, even something as simple as making a sandwich. You sometimes see those people who never experience […]

Stress is a powerful emotion and it is not one that will shy away from forex traders or any other traders, in fact, it can take a hold of us no matter what it is that we are doing, even something as simple as making a sandwich. You sometimes see those people who never experience it, and generally, we hate it, but what we see is not always the truth, just because we do not see them reacting to stress in the way that we expect, it does not mean that they are not experiencing it.

People can develop ways to deal with stress, so while it may not seem like they are experiencing any, they actually are, they just are able to deal with it. It is important that you are able to deal with your stress levels, if they manage to get too high it can potentially cause you to make rash and irrational decisions which could then be detrimental to your overall trading strategy and profitability. Everyone deals with stress in different ways so it is important that you work out the way that you will be able to deal with it. 

We are going to be looking at a number of different ways that people can help deal with their stress, some may work for you, some may not, but they are certainly effective for some.

The first thing that you need to be able to do is to acknowledge and accept that you are experiencing some stress, the earlier that you are able to do this the better. Admit to yourself that you are feeling stressed, anxious, or that things are just simply too much for you. Once you are able to accept that you are experiencing stress, you will then be able to begin to work on getting over it or controlling it. Think about the last time you felt stress, what did you experience? Some people have a faster heart rate, some people get headaches and some people begin to sweat. You need to understand your signs and how they manifest themselves if you are going to be able to recognise stress and then acknowledge it.

You then need to accept that you are experiencing these emotions, just because people have seen the signs, does not mean that they want to accept that they are going through it. Some people like to suggest that they do not experience stress, they never have before but that is simply not true, some people like to believe that they do not, they like to allow others to believe what they do not, but they most certainly do. Accept that you are going through it and you will be able to offer a better deal with it instead of keeping things inside and letting them grow.

If you feel that you are going through some stress or can feel in building, then it is important that you stop trading when going through these emotions can lead to some very rash decisions that could potentially put your account in danger. Stress can make you throw whatever risk management that you have out of the window and to put on larger, more risky trades, not something that anyone should be doing.

Take a step back, there is no harm in stepping away from the computer or your trading station when you are feeling these emotions. In fact, it would be recommended. Take a break, be it 5 minutes, 10 minutes, an hour, or until the next day. Go outside, go for a walk, all of these things will help you to clear your mind and to get a fresher look at the markets. Taking your mind away from the thing that is causing you the stress is the best way of reducing it, of course, then simply coming back can simply bring on the stress again, so there need to be ways for you to be able to control them and to know exactly what it is that is causing the stress.

The next and one of the most important things that you need to be able to do is to identify what it is that is causing you to stress, the sources of your stress. The sooner that you are able to work out what it is that is causing you the stress, the sooner that you will be able to avoid it or to eliminate it completely.

The problem is that it can be quite hard to actually work out what it is that is causing you the stress, due to this it is important that you take a journal. You were probably told to create a trading journal, what you need to do is add a little section to it where you can indicate your current feelings, every time that you are feeling a little stressed, write it down, you will then be able to use this to see any patterns. Maybe you are feeling it each time you have a loss, each time the markets go against you, or if a certain someone comes over to visit and distracts you from your trading.

If you are able to notice and pinpoint a trend or a reason as to why you are getting stressed, you can then look at ways to reduce or avoid it. Some things like losses cannot be avoided, but you are able to train yourself to have a better understanding of your overall strategy, losses should be a part of that and how to deal with them. If it’s a person interrupting your trading, then, ask them to not come during your trading times. There are little things that you will be able to do, and it is important that you understand what they are.

You won’t be able to remove every source of stress, that would be impossible, and some levels of stress can actually be good for you and can help you to concentrate more, but the most important thing is that you get an understanding of what the sources of your stress are, this way you can manage yourself to not allow those stresses to take over your trading. Try to avoid trading stress and you will be able to be a calmer and ultimately more successful trader.

Categories
Forex Psychology

Positive Thinking = Positive Trading: The Power of Positivity

Staying positive can be difficult, especially when things are no longer going your way, and when trading in the markets, there are countless things going on that can cause you to have a slightly more negative attitude. With currency trading, the markets like to go on trends and when these trends go against you it […]

Staying positive can be difficult, especially when things are no longer going your way, and when trading in the markets, there are countless things going on that can cause you to have a slightly more negative attitude. With currency trading, the markets like to go on trends and when these trends go against you it […]

Staying positive can be difficult, especially when things are no longer going your way, and when trading in the markets, there are countless things going on that can cause you to have a slightly more negative attitude. With currency trading, the markets like to go on trends and when these trends go against you it could lead to potentially weeks of things not going your way.

Positive thinking and personal development are incredibly important things, not just when trading but in anything in life, your job, your family life, it all requires personal development and certain levels of positive thinking in order to be successful, trading the markets is no different in this regard.

So we want to be in a positive mindset when we go into trading, but how do we get into this mindset? Well, there are a  few things that we can do, and they are important to get right. Going into trading with a positive mind will give us extra motivation and confidence within the markets and our own strategies and trading plans.

Start your day on a positive note:

This may seem obvious, but being able to start your day on a positive note will give you a good starting position, you will begin the day motivated, confident, and ready to trade and learn. Prompt yourself and remind yourself as soon as you get up that the day will be a good one. You may look strange talking to yourself, but this sort of self-motivation can work wonders on our daily outlook and productivity.

Use constant self-assurance:

Throughout the day, things will happen that will put a dent into our positivity, especially when trading and a trade does not go our way. You need to be able to keep self-motivating yourself by telling yourself that things will turn around and that your next trades are going to go well. It is good to remember that losses are a part of trading, your strategy and trading plan has taken them into account so they should give you any negative thoughts, instead, chalk them off as part of the ride and try to keep that positivity up.

Positive environments:

One thing you could change is the environment that you trade in, what brings you more happiness, a plane grey room with a desk and a window, or a colourful room with plants, colours, pictures, and other things? I am assuming the second, this is the sort of environment that you want to trade in, a room that makes you happy and makes you feel positive. Trading in a depressing room will not only prevent certain levels of inspiration, but it will potentially make you feel bored or other negative thoughts. Of course, don’t just stuff the room full of all your favourite things, this could cause unwanted distractions, just make sure it is a nice room to be in,

Spread positivity to others:

When you are feeling positive, it is important to pass those feelings onto others, not only to help them but to also help yourself. Talking to others can bring up their positivity levels, doing so will help to cement the positive vibes into your own mind. Once others are positive, there is a good chance that they will be able to lift you back up should your positivity begin to fall. It can become a positivity circle and can be beneficial for everyone involved.

The currency markets can be depressing and stressful places, but they can offer a lot of fantastic things too. In order to get the most out of them, you will need to go in with a positive mind and a positive attitude, doing so will make it far easier to both learn and develop our own trading techniques as well as motivating you to actually trade.

Categories
Forex Psychology

Should You Trust Your Instincts While Trading?

Your instincts are powerful things, they can take hold of us when we are doing pretty much anything in life, out in the wild, our fight or flight reactions, playing sports and it most certainly rears its head when we are trading, in fact, everything that we do when trading has an aspect of our […]

Your instincts are powerful things, they can take hold of us when we are doing pretty much anything in life, out in the wild, our fight or flight reactions, playing sports and it most certainly rears its head when we are trading, in fact, everything that we do when trading has an aspect of our […]

Your instincts are powerful things, they can take hold of us when we are doing pretty much anything in life, out in the wild, our fight or flight reactions, playing sports and it most certainly rears its head when we are trading, in fact, everything that we do when trading has an aspect of our instincts in them, or at least in the back of our minds. We have often been taught when trading that we need to go with facts and not our instincts, but is this really the case? We are going to look into your instincts and how they can actually help with your trading.

We are going to go against that trend and state that you should indeed listen to your trading instincts, there are a few catches, we, of course, are not referring to simply ignoring all the research and then just trade whatever it is that you think is right.

We are sure that there have been times when you are trading where you have done all the analysis, it all looks right and good for a trade, but there is something at the bottom of your stomach or the back of your head that is telling you not to take that trade, but why? Everything seems to be pointing to it being a good trade, so why shouldn’t we take that trade?

More often than not, you would have read something or heard something somewhere which you did not register at the time, so are not entirely sure what it was, but you did, and now your mind and body are telling you not to take this trade due to that. Seems silly not to take the trade still, but how many times in life have you just had a bad feeling about something and so did not do something, only to then later find out that it went wrong and should you have done it, you would have been in trouble.

So in this regard, it is good to listen to your instincts when you feel that you should not enter a trade, after all, there is no harm in not taking a trade based on it, the worst that can happen is that you miss out on a profitable trade, but you can always get the next one that comes along, so in reality there is very little harm in it.

There are also times when we can look to our instinct when putting on trades too, sometimes you simply feel that something will go up and down, but this does not mean that you should then put on the trade. Instead, it should be an indication that you should then do the analysis and check on that trade, if everything you analyse and look at confirms your feelings then you should by all means put on the trade after all the analysis confirms it.

What you should not do is put on a trade simply because you think it will work without doing the subsequent work to confirm it. This is basically gambling, the same as betting on a sports team because you think they will win. Listen to your instinct but do not act on it solely by itself.

People will always tell you that your instinct has no place in trading, this is simply not true, listen to it, use it as a tool, just make sure that you are not using it to choose your trades without doing the rest of the work that is required.

Categories
Beginners Forex Education Forex Basics

How Long Does It Take To Learn To Trade Forex?

It’s an interesting question, how long does it take to learn to trade? The fact of the matter is that there is not a set amount of time. You could technically learn to trade within the time it takes you to sign up with a broker, download the trading platform, log in, and push the […]

It’s an interesting question, how long does it take to learn to trade? The fact of the matter is that there is not a set amount of time. You could technically learn to trade within the time it takes you to sign up with a broker, download the trading platform, log in, and push the […]

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

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

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

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

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

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

How much money do you have available to invest?

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

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

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

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

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

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

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

Categories
Beginners Forex Education Forex Basics

Tips for Improving Your Forex Trading Skills

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

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

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

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

Trading Other Pairs

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

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

Use Different Timeframes

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

Look Into Other Strategies

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

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

Talk to Other Traders

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

Watch the News, Read Economic Articles

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

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

Seminars and Online Courses

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

Demo Account

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

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

Categories
Beginners Forex Education Forex Basics

Non-Trading Activities That Can Help Your Trading

Many people think that in order to improve on your trading you need to be sitting in front of your computer, reading and analyzing. While this is true to an extent, it can also be the source of stagnation and failure to actually improve any further, this can be for a number of different reasons including burning out, not having a clear mind, and being influenced by things you have previously read.

Many people think that in order to improve on your trading you need to be sitting in front of your computer, reading and analyzing. While this is true to an extent, it can also be the source of stagnation and failure to actually improve any further, this can be for a number of different reasons including burning out, not having a clear mind, and being influenced by things you have previously read.

Many people think that in order to improve on your trading you need to be sitting in front of your computer, reading and analyzing. While this is true to an extent, it can also be the source of stagnation and failure to actually improve any further, this can be for a number of different reasons including burning out, not having a clear mind, and being influenced by things you have previously read.

So we are now looking at a number of different things that you can do which are not related to trading but could potentially help you improve your trading for a number of different reasons.

Sports

Taking part in sports can have a number of benefits, and not just for your own body and health reasons, which we would point out are great reasons to be taking part in sport anyway. The sport also helps encourage certain attributes that help with trading, these are things like discipline, competitiveness, preparation, and patience, anyone that has taken part in sport and team games knows that these things form a big part of them.

Reading

Now you probably assume that we mean reading some trading books, however that would then be related to trading which is not what we are looking at. Reading a good novel, or even a magazine is a great way to clear your mind, it will allow you to come back to your trading with a completely clear and fresh mind. It has also been known that some of your best ideas for anything in life can be created when reading, even when they have nothing to do with the book you are reading, your brain is still subconsciously analyzing and looking at what you have done previously in the day. The imagination peak caused by reading can cause these thoughts and new ideas to come to the surface.

Yoga

You have probably been told about Yoga at least 100 times in your life, but does it really help? It just looks like a bunch of people making funny poses, doesn’t it? Well, you will get out of Yoga what you want to, many use it as a way to balance their body and mind, others to simply clear their mind of thoughts. It can be a way to refresh your mind before heading back to the markets, and also as something to do while the markets are acting a little slow. It also helps you to learn patience which is vital for trading in the markets of today.

Taking a Holiday

A little more on the extreme side, but sometimes it is good to get away, to have an extended break from trading. This will completely clear your mind of it, give you some fantastic experiences and when you come back you will be completely fresh. The good thing about doing this with a holiday is that you will be far away from the computer and the markets, so your mind shouldn’t keep coming back to it even when trying to relax. Just remember not to take your laptop with you.

Talking to Others

This seems simple, and that is because it is, talking to others is a great distraction, and this is where we will break our rule, but actually talking to others about trading, including other traders is a good way to grow new ideas or to develop your own further. Trading can be a lonely experience which can cause frustration and stress to build up, so venting and talking to others is a good release for these emotions and feelings.

So those are a few different things you could do, while none of them will help you to become an expert, each one has its own merits which can help to improve both your health, but also your mind when it comes to trading.

Categories
Beginners Forex Education Forex Basics

Methods of Change: Becoming a Better Trader

It is not uncommon to talk to traders to only realise that they have been set in their eyes, they have developed a number of different habits that they are not too keen to change, or they actually do not know how to change them. Some habits can be very beneficial, especially if they are […]

It is not uncommon to talk to traders to only realise that they have been set in their eyes, they have developed a number of different habits that they are not too keen to change, or they actually do not know how to change them. Some habits can be very beneficial, especially if they are […]

It is not uncommon to talk to traders to only realise that they have been set in their eyes, they have developed a number of different habits that they are not too keen to change, or they actually do not know how to change them. Some habits can be very beneficial, especially if they are set around their trading plans and following rules, however, some can be detrimental to your trading strategy, there are also times when you just need to be able to change things up, especially when the markets are starting to change themselves.

You are often able to work out what your trading habits are, even if you are not conscious of them by simply looking at a tour trading journal. If you do not have a trading journal yet then we would suggest getting one set up, this is where you will detail the in and outs of your trading, everything that you do will be recorded, this enables you to check what you are doing and the outcomes of each action and trade. This will allow you to find your habits and is also an opportunity to see where it may benefit you to change things up a little bit.

It’s very easy to simply state that you need to make a change, anyone can do that, the issue comes from the fact that making those changes, in reality, can be hard, in fact, some people find it so hard that they do not bother, but you are looking to make a change for a reason, so it is important that you are able to battle through the difficulties in order to make that change. We are able to look into different stages of changing, these are often looked at towards addicts of certain substances, so while traders may not be addicts, the same model and techniques can be used to help synthesis change in their trading habits. So let’s take a look at different methods that can help you to change.

There is something called contemplation, this is basically where you do not know that there is a problem or simply deny that there is something that you need to change. This is often seen in addicts when they simply refuse that there is anything wrong, they have no issues with what they are doing so they do not want to change, or they simply do not realise what their addiction is doing to their life. The same thing can work for traders, there are traders out there that go against one of the golden rules of not trading what you cannot afford to lose, they are using up their savings or even borrowing money to do it, but they do not see this as an issue or they simply refuse to see it as one as they know that they are going to earn it all back.

This can also be seen with those traders who do not follow their plans or do not record what it is that they are doing, you have sustained a number of losses, but you do not know the reason why and cannot see where you went wrong. If you continue to trade like this those losses will only multiply. Often those that are in this stage will need some help from someone in order to make any changes. Someone who is in denial or does not see that there is an issue will not make changes on their one, so it is important that you always have someone there with you or someone that you talk to regularly who may be able to sport the problem signs and then step in as an intervention to help you initiate some changes.

The next stage of change is contemplation, as the name suggests this is all about knowing what you need to do in order to make or facilitate a change, but you have set up some barriers in your mind or there may, in fact, be some physical barriers preventing you from making the actual change. So what sort of barriers may there be? The main one that most people come across is within their own mind, they have a good understanding of what it is that they need to do, they know that this change needs to happen if they are going to be a successful trader but they just can’t do it. The time comes to make the change but your mind is set in two different ways, you could do it, or you could not, something is making you reconsider before you make the change, thinking of the god and bad parts of the change, moving away from what you are comfortable with is going to push you out of your comfort zone which can put a lot of people off.

There are also some physical barriers at this stage of change, things like the possibility of not having enough money in order to make the change that is needed, or if you want to trade during a certain trading session, you may not be able to wake up in time for it, especially if it is in the middle of the night. While these things are more than achievable, it can sometimes take a lot of time to make the cage due to these constraints, during that time of not changing, you will only be pushing yourself further into your hole. It is important that during this stage, you create a plan for the change, write down exactly what is needed and what stage you are currently at towards achieving it, this will give you a better idea of what you need to do next and can also help to motivate you to make that change.

The action stage is next, this is where you actually make the change, you have created your plan for it and so now is the time to do it. Depending on the problem that you needed to change, this can be a relatively small thing to do such as adding stop losses to your trades if that is something that you never used to do, it could also be a little bit bigger, such as taking out entire trading assets from your portfolio. Once you have made a change, it is so important that you stick with it, when things are not going to plan, take a step back away from the markets. This change will be for the better, but sometimes it can take time for that change to have a real effect, so stick with it. Wanting to change is not enough, you need to be able to put into action, there is no harm in tweaking things if they are not working exactly as planned.

The final stage is maintenance, this is all about after the change has been implemented or at least after part of it has. Part of this stage is about turning those new changes into new habits, once you have started to implement the changes, you should find yourself beginning to naturally make those changes without thinking about it, if not then you need to have that plan in mind for you to keep an eye on before making each trade. Some traders may need some outside support to stick with it, and that is perfectly normal, joining groups or talking to a  mentor can help you to maintain and stick with the changes that you have made. Of course, not every change will go perfectly, so you are always able to tweak things if they are no going exactly as planned, some changes can take a long time which others can be very quick to implement, what is important is that you stick with them and do not revert back to the problem behaviour.

There is another stage of change, this is often where things have gotten far too out of hand and you need an intervention, this can either be from yourself or from others, it is far easier for other people to see if you have an issue or not, this is due to behaviour that may seem normal for you will look incredibly strange or dangerous to someone else. If you are risking hundreds per trade, that is normal for you as you have been doing it for a while, but for others, it could look like madness. If someone tells you that you may have an issue, you can either accept it or deny it, it is always best to accept and listen, even if you do not actually believe, as listening may actually help you reveal the issue to yourself. In terms of intervention from yourself, this will normally involve going cold turkey, taking a complete break away from trading to look at how it has affected and changed your life. Taking that break can clear your mind and really allow you to put things into perspective and will allow you to see exactly what it is that you need to change.

Change can be hard, there is no denying that and anyone that says that it is easy has never really had a problem that they need to change for. It can be hard, and it can take time, do not feel disheartened if things are not changing or improving within the first few days of making a change, just understand that it can take a while. Being able to pinpoint the problem and work out a way to change it is the first step and is often the hardest step, the next stages are the ones where you need to remain mindful of why you made the change and then to stick with it. Keep a written note of it and this will help you from falling back into the bad habit and then keeping it at bay.

Categories
Beginners Forex Education Forex Basics

Tips for Limiting Distractions While Trading at Home

Working from home is one of the perks to becoming a forex trader, along with the chance to be your own boss, setting your own flexible hours, and so on. However, some home-based traders might struggle to adjust to working from home instead of being in an actual workplace environment. After all, there are a […]

Working from home is one of the perks to becoming a forex trader, along with the chance to be your own boss, setting your own flexible hours, and so on. However, some home-based traders might struggle to adjust to working from home instead of being in an actual workplace environment. After all, there are a […]

Working from home is one of the perks to becoming a forex trader, along with the chance to be your own boss, setting your own flexible hours, and so on. However, some home-based traders might struggle to adjust to working from home instead of being in an actual workplace environment. After all, there are a lot of distractions in our home, like the sounds of television or the radio in the background, kids playing, a significant other trying to talk to us – any of these distractions can be frustrating for a trader that just needs to concentrate. If you’re struggling to focus while trading from home, try following these pro tips to help yourself cut back on distractions: 

Tip #1: Set a Predefined Time to Trade Each Day

The first thing you should do is decide when is the best time of day to trade in your household. You’ll want to avoid chaotic times and trade when you’re feeling focused. For some, the best time might be after having a morning cup of coffee, for others, it may be better to get a late-morning or early-afternoon start. Although trading offers flexible hours, having a predefined time to trade also helps with the ever-important discipline that traders need to master. Another plus is that trading during the time of day when you feel most productive has been proven to provide better results.

Tip #2: Get Away from Background Noise

If you live alone, this shouldn’t be much of a problem, but you should still think about background noises that might be distracting you, like a leaky faucet. If you live with someone else (especially children), it’s a good idea to dedicate your own space to trading so that you can have some peace and quiet. If you already have an office or can change a room in your house into one, that would be the best option, but your bedroom or back porch could work just as well. Try asking your loved ones not to disturb you whenever you’re in the place where you work, simply let them know what time you’ll be finished and ask them to wait until then if possible. After all, trading forex is still like a job and requires focus. 

Tip #3: Only Visit Certain Websites While You’re Working

It’s easy to get distracted online. Maybe a Facebook notification pops up at the bottom of your screen and you decide to check it really quickly…only to find yourself mindlessly scrolling your news feed for hours instead. Or an interesting news article could come up and grab your attention. We’ve all been there. Whatever it is that usually takes your mind off your work, you need to restrict yourself from it during trading hours. Stick with trading-related websites and consider putting your phone on silent and turning off notifications when you need to concentrate. Remember that one distraction can really take away from your focus and cause you to lose money. 

Categories
Beginners Forex Education Forex Basics

Is There a Shortcut to Trading Success?

Many people have wondered if there is some sort of shortcut to becoming a successful trader. The short answer is no. In fact, many times trading shortcuts can backfire and hurt us rather than help. But as a forex trader, it is important to understand why shortcuts do not work.  First, getting a good trading […]

Many people have wondered if there is some sort of shortcut to becoming a successful trader. The short answer is no. In fact, many times trading shortcuts can backfire and hurt us rather than help. But as a forex trader, it is important to understand why shortcuts do not work.  First, getting a good trading […]

Many people have wondered if there is some sort of shortcut to becoming a successful trader. The short answer is no. In fact, many times trading shortcuts can backfire and hurt us rather than help. But as a forex trader, it is important to understand why shortcuts do not work. 

First, getting a good trading education is key to making good trading decisions. While there is a never-ending stream of information online, you must make yourself put in the time to learn. Even if you plan on using an automated robot, it is important to understand the market and how it works. You need to know how trading psychology affects our trades and you should understand risk-management precautions. It will take you weeks, months, and possibly even years to take in all this information, and you should never stop pursuing knowledge about trading even once you consider yourself to be an expert. Remember, if trading were easy, everyone would be doing it. Most people don’t want to put in the extra time to learn the things they need to make good trading decisions, which causes them to lose everything. 

Many beginners make the mistake of thinking that forex trading is a fast way to get rich. On the contrary, it is very much like a job, requiring time, dedication, and experience to profit. If you’re looking to make a few thousand dollars a month, it even requires a large investment of somewhere around $30,000 and full-time day trading hours. The mind-frame that trading is easy is what leads many beginners down the path to failure. Scammers take advantage of this idea with flashy promises and guarantees that they will help you become rich. It is important to remember that nothing is guaranteed when trading, and no company can promise to help you profit.

Forex isn’t a scam, but there are scammers out there. Always research any company you plan on dealing with and be wary of things that sound too good to be true. Forex brokers are looking to make money themselves – and while they may dangle real incentives like bonuses or promotions in front of you to get you to open an account with them, they still must make a profit.  These brokers should give you a realistic idea of your earning potential and encourage you to seek education if you’re just a beginner. Many trustworthy brokers offer free educational resources on their websites and offer demo accounts for practice. 

Another scam that often takes advantage of those seeking a get rich quick scheme is false trading signals. To clarify, a trading signal is a notification of when you should open or close a trade. Trading signals can be helpful, but you still need to check behind them yourself to be sure that they are based on strong information. Another similar scam involves trading robots, otherwise labeled as Expert Advisors (EA). These robots automatically trade for you, but many of them don’t work successfully. Remember, robots cannot make judgments the way we do. They can only think the way they are programmed to think without seeing the bigger picture or taking other factors into account.

Trading signals and EAs can be helpful tools, but you shouldn’t use them unless you understand the market and have ensured that the company or individual providing them is legitimate. Once again, promises or guarantees of profits are signs of scammers. Beginners often make the mistake of thinking that using these tools can help them become successful overnight. Many even leave forex robots running for long periods of time, only to find their account has been wiped out quickly afterward. There is no magic answer when it comes to trading robots or trading signals – these are all just interpretations of the market. 

There are a few other mistakes that beginners make under the assumption that they will profit quickly. Overleveraging your trades is one of the most common mistakes that will disrupt your trading career. Using high leverage should be reserved for experienced traders, so don’t think that using the highest leverage will ensure a great deal of profit. In fact, it will do the opposite. Others might use too many indicators, which results in information overload. Some may fail to keep a trading journal because they are being sloppy.

If there were a shortcut to becoming rich, we would all do it. Unfortunately, forex trading may look like the answer, but becoming a successful trader takes a lot of time and dedication that many people aren’t looking to invest. It can also cause traders to lose out on a significant amount of funds if it isn’t done correctly. Scammers are always looking to take advantage of people that want a quick solution, so you should always be on guard when dealing with brokerages, trading signals, or EA providers.

The good news is that becoming a successful trader is possible and it can be quite profitable with a lot of hard work. Many traders have even managed to quit their day jobs and take up full-time day trading. Of course, it takes time to work up to this. You can get started on the road to success today by educating yourself, and always remember to keep an eye out for scams and opportunities that seem too good to be true. There are no guarantees or promises of profits in the world of forex trading.

Categories
Beginners Forex Education Forex Basics

Six Quick Tips to Improve your Trading

Looking for some straightforward tips that could help you improve your trading results immediately? Here, we’ve provided 6 helpful tips that every trader should definitely know about.  Tip #1: Learn to Take a Break (Sometimes) There are certain times when we need to take a short break from trading. Experiencing strong emotions would be a […]

Looking for some straightforward tips that could help you improve your trading results immediately? Here, we’ve provided 6 helpful tips that every trader should definitely know about.  Tip #1: Learn to Take a Break (Sometimes) There are certain times when we need to take a short break from trading. Experiencing strong emotions would be a […]

Looking for some straightforward tips that could help you improve your trading results immediately? Here, we’ve provided 6 helpful tips that every trader should definitely know about. 

Tip #1: Learn to Take a Break (Sometimes)

There are certain times when we need to take a short break from trading. Experiencing strong emotions would be a good example of one of those times. Anxiety, fear, excitement, and greed can really interfere with our thoughts and cause some unwise trading mistakes. Anxiety can cause us not to place a trade because we’re overthinking, excitement can make us take more risks, fear can cause us to doubt ourselves, and so on. Experiencing a “lucky” streak is another less obvious example of a time when one needs to take a break. This is because those that have been winning tend to trade too much and risk more than they should. Having a bad streak can cause one to become anxious and could make you pull out of trades too soon. Whatever the emotion, step away when you need to and try yoga, listening to music, or whatever helps you keep calm until you’re feeling more level-headed. 

Tip #2: Understand that it’s Okay to Lose

Traders make choices based on probabilities, not facts. It isn’t possible to win all the time and even the best traders have misjudged the market at times. This doesn’t mean you should go risking all your money without fearing the consequences, but you shouldn’t beat yourself up when it happens. Try to learn from the bad trades and let go of the blame. If things go against you, consider whether the problem is something that you should have done differently, or if it was unavoidable. If you made an error that could have been avoided, use the mistake as a learning experience.   

Tip #3: Keep a Trading Journal

Traders use trading journals to log their trades in detail, including entry and exit times, reasons why they entered and exited the trade, how much they made or lost on the trade, and so on. The idea is that you can then look at the bigger picture of how your strategy is working and what you should or shouldn’t change. Trading journals can point out flaws that might not be obvious to us in general. For example, maybe you have a problem with getting overly anxious and exiting your trades before they reach their stop loss. This could be a big problem and you may not realize how often you’re doing it. A trading journal will bring these types of issues to light so that you can figure out what to work on.   

Tip #4: Never Stop Pursuing a Trading Education

Traders need a solid understanding of the market before they even begin trading, from basics like terminology to the mechanics of how things work, to more complex information about strategies and different types of analysis. Unfortunately, some traders get too eager and start trading without a proper understanding of all of these concepts. Even once you’ve done a lot of research, there will always be more to learn. You should never stop reading articles and brushing up on your trading knowledge and if you feel that you haven’t done enough research, then you should get online and get to work.  

Tip #5: Lower your Risk

Many professionals recommend risking around 1% on any single trade. Even though this may not result in a lot of profits, it helps stop losing trades from being a big problem. If you go risking 15% on one trade, 20% on another, and so on, then chances are that you’ll wipe out your account quickly. Even if you aren’t risking a lot, you should consider lowering the amount of money you’re risking on each trade if you’ve been experiencing a lot of losses lately. 

Tip #6: Use a (Proper) Stop Loss

Hopefully, you’re already using a stop loss. If not, you should know that using a stop-loss is one of the best ways that a trader can manage their risk. If your trade hits a certain loss target, then the stop loss will close it out and prevent it from losing too much money. When you set your stop loss, you also need to make sure that you place it properly or you’re still in danger of losing a lot of money. Try reading articles online about where to place your stop loss if you think yours should be adjusted. 

 

Categories
Forex Basics

Setting Realistic Trading Goals

Everyone that decides to try out forex trading enters the market with goals in mind. Often times, our goals revolve around turning a profit, like making a set amount in a given timeframe or earning enough income through trading to sustain our lifestyle. Others might want to become one of the very best traders out there and to have their name associated with the likes of George Soros, Paul Tudor Jones, and other trading legends. While being ambitious and setting goals shows that one has the self-determination and positive outlook, many traders set unrealistic goals that lead to disappointment. Some traders enter the market with starry eyes, only to give up on trading for good if things don’t meet their expectations. This is why it is important to set reachable short-term goals for oneself when trading forex. Below, we will provide some real examples of what you should expect.

Everyone that decides to try out forex trading enters the market with goals in mind. Often times, our goals revolve around turning a profit, like making a set amount in a given timeframe or earning enough income through trading to sustain our lifestyle. Others might want to become one of the very best traders out there and to have their name associated with the likes of George Soros, Paul Tudor Jones, and other trading legends. While being ambitious and setting goals shows that one has the self-determination and positive outlook, many traders set unrealistic goals that lead to disappointment. Some traders enter the market with starry eyes, only to give up on trading for good if things don’t meet their expectations. This is why it is important to set reachable short-term goals for oneself when trading forex. Below, we will provide some real examples of what you should expect.

Everyone that decides to try out forex trading enters the market with goals in mind. Often times, our goals revolve around turning a profit, like making a set amount in a given timeframe or earning enough income through trading to sustain our lifestyle. Others might want to become one of the very best traders out there and to have their name associated with the likes of George Soros, Paul Tudor Jones, and other trading legends. While being ambitious and setting goals shows that one has the self-determination and positive outlook, many traders set unrealistic goals that lead to disappointment. Some traders enter the market with starry eyes, only to give up on trading for good if things don’t meet their expectations. This is why it is important to set reachable short-term goals for oneself when trading forex. Below, we will provide some real examples of what you should expect.

Have Realistic Expectations for Profits

No matter how inspired you are or what you’ve heard, you can’t expect to become rich overnight or make a lot of profits from a small deposit in forex trading. The best goal starting out is to turn a profit rather than losing money. If you do this, then you’ll be off to a better start than many others. Once you are more comfortable trading, a realistic goal would be to see returns of 5% or less. Eventually, you will improve, and you’ll have more money to invest if you invest your profits, so you’ll see larger gains and you can set higher goals. At first, simply remember to focus on not losing money and know that some profit is better than nothing.

Don’t Think Trading is Easy!

A few minutes of research cannot possibly prepare anyone to become a forex trader. There’s a lot you need to know, so don’t make the mistake of opening a trading account too soon. Predicting market behavior isn’t easy, it takes a lot of knowledge to make good trading decisions. If trading were a quick way to get rich, everyone would be doing it. If you’ve already started and you’ve lost money, don’t give up. Just take a break from trading until you’re better prepared. Don’t think you’re going to become the best trader overnight just because someone you read an article that makes it sound easy.

Don’t Quit Your Job (Yet)

Forex trading inspires many people to quit their jobs. There are a lot of benefits to becoming a trader, including flexibility, not having a boss, being able to work from home or anywhere with an internet connection, and so on. Unfortunately, some people quit their job believing that forex trading will allow them to make enough to sustain their lifestyle. If you’re only starting out with a couple of hundred dollars or even a few thousand, you aren’t likely to make enough money to pay all your bills and take care of a family if you have one. Try out trading part-time for a while so that you can see firsthand how much money you’re going to make. Then you can decide if that amount meets your requirements. Don’t feel discouraged if you can’t afford to quit your job yet because this could be a longer-term goal.

Focus on Being the Best You Can Be

It isn’t about making the most money at first. The primary objective is to learn from your mistakes and to be the best trader you can possibly be. You don’t have to get the same results as someone you know so don’t beat yourself up over the little things! If you don’t understand something, research it. Keep a trading journal to log your mistakes. You won’t become the best trader out there with a little bit of practice, this is a long-term goal that takes a lot of time and hard work. If you aren’t willing to put in the effort, don’t become a trader. If you’re ready to make the commitment, then you should focus on short-term goals rather than only seeing the big picture.

The Bottom Line

Many traders walk away from trading for good because they come into the forex world with unrealistic expectations. This isn’t an easy way to get rich, it takes a lot of hard work and time. Starting with short-term goals and realistic expectations will make it easier to celebrate small victories. Remember that making something is the first goal, even if you don’t make much, you still worked for that profit and you should be proud of yourself. Don’t feel discouraged if you’re feeling more ambitious – eventually, you could make enough money to quit your job, become a well-known trader, or meet any other long-term goal you have set. Simply know that it might take more time to achieve those goals and that you’re off to the right start.

Categories
Forex Psychology

Three Ways to Boost Your Trading Confidence

Trading is a difficult thing to do, well it’s difficult to do well and to do it well consistently. There are a lot of things that can happen that can really put a dent on your confidence levels, losses are a part of trading, yet every single loss is going to hit your confidence levels […]

Trading is a difficult thing to do, well it’s difficult to do well and to do it well consistently. There are a lot of things that can happen that can really put a dent on your confidence levels, losses are a part of trading, yet every single loss is going to hit your confidence levels […]

Trading is a difficult thing to do, well it’s difficult to do well and to do it well consistently. There are a lot of things that can happen that can really put a dent on your confidence levels, losses are a part of trading, yet every single loss is going to hit your confidence levels and can make you question whether or not you are doing things right or whether or not it is the right career or hobby for you.

With so many things to hit your confidence levels, it is important that you work out ways to increase it again or to keep it high. If you are making profits, no matter how many losses you have you should be feeling confident as this is something that a lot of traders fail to do. So let’s look at a few of the different things that you could be doing that could potentially help you to increase and keep your confidence levels high.

#1 – Practice

One of the more obvious things, the more you do something, the better you will get at it and the more confident you will be at doing it. The reason people get good at things is simply through practice, you will never be able to plan for every scenario, so having p[racticed through them will give you that little bit of confidence and understanding of how you can deal with the situation at hand without having to worry too much.

#2 – Look at the Bright Side

When things go wrong, there are two things that you can do, you can take it personally or you can look at the brighter side and use that loss as a new learning opportunity. There is always a positive to every negative, it is important that you take a little look for it, this will give you a better perspective of what has gone wrong and will enable you to continue to trade without taking that loss personally or thinking that you may not quite be good enough because you are, everyone experiences these losses, everyone even the millionaires, so do not take it to heart and carry on with your confidence high and a new learning opportunity in hand.

#3 – Focus on Your Trading

Try to focus on what it is that you are doing, do not worry about the things that others are doing or what the results of others are, concentrate on you and only you. If you are not comparing yourself to others you will only have your own past experiences and results to go by, as time goes on you will notice an improvement in your results which will help build your confidence through seeing the progress that you are making. As soon as you compare yourself to others, you will find people doing a lot better and this will hit your confidence levels, so stick to comparing yourself to you and not others.

So those are some of the things that you can do to try and help keep your confidence levels high, it is vital to keep it high and to build up, this will keep you motivated and happy when trading, it will also help to keep away some of those more pesky emotions such as stress.

Categories
Beginners Forex Education Forex Basics

Are You Forcing Your Forex Trades?

While trading, you’ve most likely come across a stage in time when there is not a lot of thing happening, in fact, nothing is happening, the markets have flatlined or your strategy just simply is not picking up any trades. When these times are happening, there are a few things that you can do, you […]

While trading, you’ve most likely come across a stage in time when there is not a lot of thing happening, in fact, nothing is happening, the markets have flatlined or your strategy just simply is not picking up any trades. When these times are happening, there are a few things that you can do, you […]

While trading, you’ve most likely come across a stage in time when there is not a lot of thing happening, in fact, nothing is happening, the markets have flatlined or your strategy just simply is not picking up any trades.

When these times are happening, there are a few things that you can do, you can use this as an opportunity to take a step away from trading, use it to take a break and refresh, you could use this time to learn something new about trading, such as a new strategy, or you could try and make some trades in order to make up a few extra pips and profits.

Hopefully, you didn’t choose the last option, if you did, then you are most likely guilty of trying to force trades when you should not be making any.

So what exactly is forcing trades? When you created your trading plan, you would have also created certain trading rules that you would stick by. When you make a trade that goes against any number of these rules, then this would be considered as forcing a trade. Traders are most often forcing trades when the markets are relatively slow, or that a trader has gotten a little bit greedy and is looking to make some additional profits.

It is important that you remember that you set up these rules for a reason, so why would you now start to break them?

Think back to the last time that you broke one of your trading rules, what was the reason behind it? The temptation to break the rules when things are quiet can be very strong, in fact, it is one of the most common ways that traders manage to hurt their accounts. Things are slow in the markets, it’s a bit boring, I will just place a small trade, it goes wrong, now you want to make that back so you place a larger trade, this can continue until an account goes bust. When the markets are not a match for your strategy, you simply do not trade.

Why did you create a trading plan if you aren’t going to follow it? Trading and Forex is all about consistency, you cannot be consistent if you are forcing trades and breaking rules. The markets come with exciting trends and boring horizontal movements, you need to be able to fill the quiet times with something that won’t potentially hurt your account.

If you are constantly experiencing times where the markets do not suit your strategy, that is fine. What you could do instead of forcing trades is to have a look at a new strategy that suits the kind of market conditions that your other one does not. This will then give you the opportunity to trade in these quieter times too. Create two separate plans that can be used during different conditions, this is simply adapting, and as you have a full plan for the new system, you will not be forcing any trades.

When starting out it can be hard to stick to your plan all the time, especially when you see others making money. Stick to it, it is all about consistency and when you are able to build up your levels of patience and self-discipline, it will greatly benefit you in the future and will ultimately make you a much more successful trader.

Do not try to anticipate the markets, do not try to lead them and do not try to force them, these are some of the golden rules of trading, you are not in control, the markets are. Trading is a long haul exercise, you do not need to make money the first day or week, you want to make it over the next 20 years, so do not damage your progress by trying to place trades when they should not be placed.

Categories
Beginners Forex Education Forex Basics

14 Ways You May Be Hurting Your Trading

There are some things that we all do, either consciously or without us even knowing that will have a negative effect on our trades and overall trading strategies, so what are these things and are you guilty of any one them? Getting out of trades too early: I am sure we have all done this, […]

There are some things that we all do, either consciously or without us even knowing that will have a negative effect on our trades and overall trading strategies, so what are these things and are you guilty of any one them? Getting out of trades too early: I am sure we have all done this, […]

There are some things that we all do, either consciously or without us even knowing that will have a negative effect on our trades and overall trading strategies, so what are these things and are you guilty of any one them?

Getting out of trades too early: I am sure we have all done this, you are watching the trade move in the right direction, it is moving up and up but then it falters a little bit, our strategy dictates that we should wait, but in the back of your mind you think it could reverse here and so you get out, the trade then continues up and would have hit your take profit level. Getting out early just cost you a little bit of extra profit.

Fear of taking a loss: We all hate to lose, some more than others, especially if you haven’t already calculated losses into your strategy, or maybe you are a very risk-averse person. When we see a trade going in the wrong direction it is only natural that there is a little bit of anxiety that goes along with it. The difficult part though is to leave the trade, a lot of newer traders get this anxiety and will then c,.lose the trade, normally just before there is a turn in the market, you have now made a loss whereas if you followed the strategy, it would have ended up in profit. Your strategy made that trade for a reason, let it work its magic.

Adding to losing positions: This is often referred to as a grid system or Martingale, a trade is going the wrong way but you either do not want to accept the loss or you have a certainty (whether justified or not) that the markets will turn. You add an extra trade going in the same direction as your first, this is common, it can also be classed as loss chasing and is why a lot of gamblers get into so much debt. If the markets do not change, then you are far deeper into the red than you would have been without the additional trades.

Wishing things change: Sometimes, taking no action is the worst thing you can do, especially if you have not placed proper risk management, if you see things going in the opposite directions, don’t just sit there hoping and wishing that it will change, make a decision, can your balance sustain the loss or are you going to risk things, indecision can lead to further and greater losses.

Being too compulsive: The markets can be exciting, we know, but there are times when there are no trades to take. Just because you want to trade does not mean that you should, do not trade just for the sake of trading. These sorts of trades won’t be part of your strategy, you may not have even done any analysis, you just want to trade because you feel like it or want a bit of fun. Don’t do this, it will only lead you down a more gambling route and could lead to a lot of losses.

The joy of winning: Winning is a great feeling, both the fact that you were right and the monetary value that you gain. However for some, this feeling can be a bit overwhelming, in fact, it can be an addiction, if you feel this way, take a step back, allowing this to take over will result in you making additional trades that you should not be doing, these sorts of trades are not analysed, they are impulsive and will only end up in losses, gamblers often have this feeling when they win and it is why they keep gambling, so step back and have a break if you are getting a little too pumped up.

Self-doubt: The strange thing about self-doubt is that it often comes when we are doing the best that we have. A few wins in a row and you may begin to wonder why you are doing so well, it must just be luck, it won’t continue, these sorts of thoughts are more common than you may think. The problem with these thoughts is that they will take away all of your motivation to continue, it will make you want to stop as you are ahead and you won’t be able to continue. If you are following a strategy, just remember that you made that strategy, you are doing well and you certainly do deserve it.

Not following your strategy: You have created a strategy, it is your strategy for a reason, so why would you think about deviating from it? Your strategy has its risk management built-in, so as soon as you deviate from the rules you have created, the riskier our trading becomes which could ultimately lead to losses that you have no justification for. Sometime sit can be boring trading with the same strategy all the time, but when it is, that is the time you should take a break, move away from the markets for a bit until you are ready to follow the strategy again.

Overthinking: Some trades are time-sensitive, they need to get taken at a certain time, but is it the right trade? Am I risking the right amount? Am I sure it is the right trade? These are all things that we ask ourselves and answering them takes up time, by the time you have answered them all, the trade opportunity has passed. So while it is good to question and analyse, sometimes you can overthink things and miss out on potentially profitable trading opportunities.

Excessive trading: Greed, it’s a common trait amongst some traders, especially the newer ones, you have a few wins under your belt and now you want more. So how do you do that? But putting on more trades, or putting larger trades, larger and more than your risk management can handle. Your strategy is built around a certain number of trades or a certain trade size, changing this up and creating larger or more trades can put your account at risk, stick to what is working and do not get greedy.

Afraid to trade: This is particularly prevalent for people who are risk-averse, people who do not like risks may find it hard to make that initial trade, especially if there is a doubt in their mind that they do not know what they are doing or if their trading strategy is not fully complete, so while those last ones would be valid reasons not to make the trade, having the doubts even with a fully fleshed-out strategy can prevent some people from making the trades. Your strategy should cover all possible scenarios, so trust in it.

You are irritable or tired: The vast majority of traders do not trade full time, they trade in their spare time after work or on their day off, unfortunately coming home from a hard day’s work can leave us tired and irritable, this is not the right time to start trading. If you are in a bad mood, making decisions is often not your strong points, it could make you rash and not follow your strategy properly, causing you to make trades that you would not have originally made. If you are feeling irritable or tired, take a rest, the markets will still be there once you have recovered.

Trading more than you have: This is a cardinal sin of trading, you will see warning all over the place, do not trade more than you can afford to lose and it is key. This will lead to other things like greed, emotional trading, lack of discipline, and more in the hope to either make more or get back anything that has been lost. The last thing you want to do is get yourself into some financial issues. If you think you would miss the money if you lose, then it is not money you should be trading with.

So those are some of the major ways that we can limit and damage our trading, some are far easier to avoid than others, but through hard work and discipline, looking after your self and your account can become a lot easier to do. These things normally centre on the fact that you are quite new to trading or the human nature of wanting more, once you have traded for a longer period of time a lot of them would not really affect you anymore, but when you are starting out, be sure to try and recognise any of the signs and stamp it out before it manages to take hold.

Categories
Forex Basic Strategies

Plan the Trade And Trade the Plan

This is something that you have probably heard a lot of times before, it is one of the most used phrases in Forex trading and it is also one of the most relevant. When you break it down, it is simply reminding you that each trade needs to be planned, analysis needs to take place […]

This is something that you have probably heard a lot of times before, it is one of the most used phrases in Forex trading and it is also one of the most relevant. When you break it down, it is simply reminding you that each trade needs to be planned, analysis needs to take place […]

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

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

Use a trading journal:

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

Discipline:

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

Find the justified and unjustified wins and losses:

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

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

Consistency:

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

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

Categories
Beginners Forex Education Forex Basics

Tips for Taking Your Trading Game to the Next Level

There are times when we just feel like we have gone as far as we can for the level that we are at, so now it is time to take out trading to the next level in order to start achieving more. Of course, the first thing that you are going to need to do […]

There are times when we just feel like we have gone as far as we can for the level that we are at, so now it is time to take out trading to the next level in order to start achieving more. Of course, the first thing that you are going to need to do […]

There are times when we just feel like we have gone as far as we can for the level that we are at, so now it is time to take out trading to the next level in order to start achieving more. Of course, the first thing that you are going to need to do is to work out exactly what level you are currently at. Think about it, are you a new trader? Are you playing with millions or simple hundreds of dollars? You need to know what level you are on in order to work out what it is that you are going to be doing next.

The best way to do this would be to analyze our current trading performance. This can be done by using your trading journal which we really hope you have been keeping. Take a look at your past trades and results, review the performance that you have had over the past few months. Are they consistent? These results will tell you a lot about the level that you are at as well as your style of trading.

This journal and analysis of it will enable you to look at what your most profitable assets are, the times of these trades, the sizes, the risks involved, and more. It will also tell you how well you do in actually sticking with your strategy, something that is paramount if you wish to move up another level. You need to be able to gather and understand your strengths and weaknesses before you try and move up to the next level, as not having an understanding of them could put you in a potentially dangerous situation for your account.

We have now come up with a number of different ideas that you could use to try and raise your trading game, you may well already be doing some of these things which is fantastic and this will put you in a good position for moving up, some you may not want to d, but at least trying some will help put you in a great position for stepping up our trading game.

Use a trading journal: We aren’t going to say too much on this as you are probably tired of hearing it, but ensure that you have a trading journal setup and that you are using it. It will tell you all sorts of things about your trading and will give you fantastic insights into your strengths and weaknesses. This is something that you will require if you want to improve. So set one up and ensure that you are constantly and actively filling it in. Getting this knowledge is the main step to improvement and you will find it hard to properly scale up your trading operations if you do not have a good understanding of your own strategies and your own trading habits. It is also a great way to help you stamp out any bad trading habits that you may have.

Improve your ratios: When many people think of scaling up their operations they often just think about placing bigger trad sizes. While this is a valid strategy and certainly can help youtube make more money, this does increase the risk that you are putting on your account. So instead, let’s look at improving some of the ratios that we have. The first is your win/loss ratio and the second is the risk to reward ratio. The problem comes from the fact that while they are separate, they can also have a direct effect on each other.

It may seem like a good idea to improve your reward to risk ratio, by narrowing down the stop loss to make it a little tighter, this would mean that you won’t need to win as many trades to be profitable, but it will potentially make your win and loss ratio look horrible, so it may not be worth making a change. You will need to work out a balance between the ratios so that any changes that you make do not damage the other too much. It is the same if you wanted to increase your win rate, you should not sacrifice the risk to reward ratio as this will decrease your overall profits. It is a difficult thing to do, but if you are able to improve these ratios, either one without affecting the other or even both of them, then it will help you jump to the next level of trading.

Keep doing the good things you do: This may seem obvious but there are a lot of people out there that aren’t doing this, as soon as they make changes they seem to forget about all the things that they were doing right before. Do not forget them, they are the reason why you are here so you should continue to do them for as long as you possibly can. Even if you are changing up other aspects of your trading, try and remember the good parts and keep them going along with what you are changing, this way you will only be bringing the good parts and changing the potential bad parts.

Expand your skillset: One of the best things that you can do as a trader is to continue learning, you can never know everything and so there will always be something new for you to learn. By doing this you are better equipping yourself for when the markets decide to change and your current strategy just doesn’t cut it anymore. This can be in the form of different strategies or simply learning to trade a new currency pair. Whatever it is, you should always be on the lookout for new skills and new knowledge to learn. It is simply adding a new weapon to your arsenal, allowing you to trade in situations that you may not have been able to do so before, thus increasing the potential of your success and profitability.

Trading and forex is a huge thing, you will never learn it all and you will never actually master it, there will always be things to trip you up, no matter what level of trading you are currently at, you will always be able to take it higher, whether through your trading or your learning. So neve target complacent, keep an eye on the level that you are at and always work on getting to the next level where possible.

Categories
Forex Psychology

Self-Calming Techniques for Forex Traders

Forex trading is known to cause a rollercoaster of emotions – from excitement and self-fulfillment, to anxiety and bitter disappointment, along with every other emotion in between. Sometimes, the best thing to do is to step away and take a break from trading until you can get your emotions under control. However, many traders don’t want to miss out on opportunities, so taking a break from trading might be difficult. One of the best ways to get yourself more level-headed is to figure out a self-calming technique that works for you. Some of these can be practiced while trading, others might require you to step away for a short time. Either way, these techniques can help clear your mind so that you can get back to trading. Here are some popular calming techniques:

Forex trading is known to cause a rollercoaster of emotions – from excitement and self-fulfillment, to anxiety and bitter disappointment, along with every other emotion in between. Sometimes, the best thing to do is to step away and take a break from trading until you can get your emotions under control. However, many traders don’t want to miss out on opportunities, so taking a break from trading might be difficult. One of the best ways to get yourself more level-headed is to figure out a self-calming technique that works for you. Some of these can be practiced while trading, others might require you to step away for a short time. Either way, these techniques can help clear your mind so that you can get back to trading. Here are some popular calming techniques:

Forex trading is known to cause a rollercoaster of emotions – from excitement and self-fulfillment, to anxiety and bitter disappointment, along with every other emotion in between. Sometimes, the best thing to do is to step away and take a break from trading until you can get your emotions under control. However, many traders don’t want to miss out on opportunities, so taking a break from trading might be difficult. One of the best ways to get yourself more level-headed is to figure out a self-calming technique that works for you. Some of these can be practiced while trading, others might require you to step away for a short time. Either way, these techniques can help clear your mind so that you can get back to trading. Here are some popular calming techniques:

Practice Conscious Breathing

Perhaps one of the quickest ways to calm yourself after a big loss is deep breathing. This is a simple, yet effective solution that helps you get your head back in the game without missing anything. You just need to take a few slow deep breaths to expel tension from your body. Most people recommend taking about 10 deep breaths. Then, you can get back to trading almost immediately.

Listening to Music

Music can really help to influence our emotions, so calming or happy, upbeat songs can help out when you’re feeling down. This is also something you can do while trading, so you don’t have to worry about missing a good opportunity. Just try not to turn up the music too loud, otherwise, it could become distracting. You’ll also need to pick the right kind of tune and be sure to avoid depressing songs.

Try Positive Self-Talk

When you’re trading, is your inner voice calm and relaxed? Would you want someone else to talk to you in the same way you talk to yourself? If the answer is no, then you need to be kinder to yourself. Tell yourself that everything is going to be ok and that everyone loses sometimes. Don’t beat yourself up when you make a mistake – everyone does.

Try Meditation or Yoga

Many people swear by calming exercise techniques like yoga and meditation. These practices aren’t only good for dealing with the stress of trading and might actually help with other stressful aspects affecting your life. Of course, this one does require you to step away from your device for a while. In some cases, it might be better to unplug completely for a while after all. Then, you can come back for a fresh start with a clear mindset and more focus.

Use Grounding Techniques

Grounding is an easy task that involves focusing on the physical world instead of your own inner thoughts. This is another quick solution that can help calm anxiety or fear that might be caused by forex trading. Here are a couple of examples of grounding techniques but know that there are more examples online or you can even come up with your own:

  1. Name 5 things you can see, 4 things you can hear, 3 things you can immediately touch, 2 things you can smell, and one thing you can taste at that moment.
  2. Count to 10, or say the alphabet.
  3. Clench and release your fists.
  4. Place a cool washcloth on your forehead.

As you can see, these are all simple but effective ways to calm yourself down and they can be done right from your trading station.

Categories
Beginners Forex Education Forex Trade Types

Swing Trading: Pros and Cons

Swing trading is a type of trading style that involves opening a position and leaving it open for days or weeks so that profits can accumulate. This style is essentially the opposite of day trading, where traders open multiple positions per day and close them before the end of the trading day. Swing trading is […]

Swing trading is a type of trading style that involves opening a position and leaving it open for days or weeks so that profits can accumulate. This style is essentially the opposite of day trading, where traders open multiple positions per day and close them before the end of the trading day. Swing trading is […]

Swing trading is a type of trading style that involves opening a position and leaving it open for days or weeks so that profits can accumulate. This style is essentially the opposite of day trading, where traders open multiple positions per day and close them before the end of the trading day. Swing trading is seen as one of the most popular trading styles and has unique benefits and a few disadvantages that traders should consider. We’ll start with the positives:

PROS

Swing trading does not require your constant attention and allows traders to have a lot more free time than day trading. Once you’ve opened your position, you won’t have to constantly monitor the market. It’s even possible to work a full-time job if you choose this strategy and you aren’t as likely to suffer from burnout as you are with a more time-consuming trading style.

The holding period for trades is longer, meaning that less time is spent searching for trades to enter.

Returns for this type of trading style are usually around 5% – 10%, as long as you are using a good strategy and are fairly knowledgeable about trading.

CONS

Swing trading is risky and can lead to large losses if the market goes against you. If your trade is made in the opposite direction and the market opens with gaps up or gaps down, it can lead you to lose a lot, and even stop losses don’t protect against this problem.

Most brokers charge fees for holding positions overnight and this can really get expensive if you have multiple positions open for days or weeks. Triple swaps are another problem, as they are often charged on Wednesdays to account for the upcoming weekend.

You need to invest a lot of time into learning about the market, especially surrounding technical analysis. You’ll need to be able to read charts, use technical indicators, and so on. Of course, you need a good knowledge of the market in general, but this is still worth pointing out.

The Bottom Line

The pros and cons of swing trading seem to even out, although there’s a lot to consider before you take up this trading style. You need to spend a lot of time learning about the market for starters, and you’ll need a good understanding of technical analysis and need to know how to read charts and use indicators. The bright side is that this style can provide good returns and it doesn’t require you to be glued to your computer screen all hours of the day, so burnout from boredom is less likely. On the downside, losses will occur and can be large if the market goes against you. You’ll also need to pay attention to how much your broker charges for holding positions overnight and when/if triple swaps are charged.

Categories
Forex Psychology

The Dangers of Envious Trading

Have you ever seen a video, social media post, or anything else posted by someone who claims to be a successful forex trader? Often times, these posts show that those traders are living a luxurious lifestyle. You’re likely to see big beautiful homes, fast sports cars, photos from multiple vacations, expensive clothes, and other luxuries that these people are able to purchase. It’s easy to look at this and think that you want that for yourself; after all, there’s nothing wrong with being ambitious.

Have you ever seen a video, social media post, or anything else posted by someone who claims to be a successful forex trader? Often times, these posts show that those traders are living a luxurious lifestyle. You’re likely to see big beautiful homes, fast sports cars, photos from multiple vacations, expensive clothes, and other luxuries that these people are able to purchase. It’s easy to look at this and think that you want that for yourself; after all, there’s nothing wrong with being ambitious.

Have you ever seen a video, social media post, or anything else posted by someone who claims to be a successful forex trader? Often times, these posts show that those traders are living a luxurious lifestyle. You’re likely to see big beautiful homes, fast sports cars, photos from multiple vacations, expensive clothes, and other luxuries that these people are able to purchase. It’s easy to look at this and think that you want that for yourself; after all, there’s nothing wrong with being ambitious.

So, maybe you’ve already started trading, or you’re considering it. Perhaps you even know someone or have a family member that trades. Forex trading can be a profitable income source, but you aren’t going to become rich overnight from doing it. You may already be disappointed with your results, or maybe you’re setting yourself up for failure by entering with unrealistic expectations. Here are a few things to think about when it comes to being envious over the success of other traders:

Many of the people you see promoting how rich trading has made them, probably have income coming in from other sources. They might own a business or even work as a CEO at a company.

A lot of these people have been trading for quite some time. It may have taken them years or even decades to become millionaires. If you have a big deposit, you might get there quicker, but don’t buy into get rich quick promises. It takes time to make it to the top.

It takes a large deposit to make a lot of profits. It’s true that we all start from the beginning. However, some of us start with $5, while others might have $25,000 to invest.

Some of these people might get paid for attracting new traders. Or maybe they have a book to promote. This makes them more likely to exaggerate their results.
This doesn’t mean that you can’t get there someday, only that you need to have realistic expectations before you begin. Giving into envious feelings can be dangerous. It might lead you to make trading decisions that aren’t well-thought-out, to invest money that should have been used on necessities out of eagerness to turn a profit, or you might even fall for a scheme that claims it will get you rich quick.

Some traders might hear someone they know talking about their strategy and try to hastily copy it, only to lose money because they don’t know exactly what to do. Being envious of a more successful trader also might lead you to downplay your results. If you’re making a profit, then you’re off to a great start. Don’t put yourself down because you only made $5 – celebrate those small wins that will one day become much larger gains. Besides, making a small profit is better than losing money.

If you allow your emotions to affect the way you trade, you’re destined to make mistakes. Remember that it is ok to want to model another trader’s success; you just need to understand that it is going to take time and invested money to get there. Instead of feeling the urge to trade more to reach their level, spend more time learning about different strategies and concepts related to trading, and consider keeping a trading journal to monitor your progress. It’s true that trading can make you rich – eventually. If you begin with realistic expectations and keep negative emotions like envy at bay, then you’ll have the best chance of success.

Categories
Forex Forex Psychology

The Problem with Overconfidence in Trading

Confidence is usually thought of as a good emotion – if we are confident in ourselves, we feel reassured that we can do anything. This is a great outlook on life, but when it comes to trading, confidence can be a negative emotion. Let us explain why. Once traders become confident, they tend to become […]

Confidence is usually thought of as a good emotion – if we are confident in ourselves, we feel reassured that we can do anything. This is a great outlook on life, but when it comes to trading, confidence can be a negative emotion. Let us explain why. Once traders become confident, they tend to become […]

Confidence is usually thought of as a good emotion – if we are confident in ourselves, we feel reassured that we can do anything. This is a great outlook on life, but when it comes to trading, confidence can be a negative emotion. Let us explain why.

Once traders become confident, they tend to become less receptive to criticism and less likely to spend time educating themselves. Some traders might feel that they are on a lucky streak, not unlike gambling. And just like with gambling, this often leads traders to take more risks and to lose huge amounts of money. There’s nothing worse than feeling on top of the world – and then losing it all due to your own stupid choices.

Overconfidence in trading results in something that has been labeled ‘King Kong Syndrome’. A trader suffering from this would experience a series of winning trades, which would result in them choosing to trade more. As they win more and more, those traders pay less attention to the market and convince themselves that they are riding on luck. The winning streak then comes to an end with a difficult reality check where those traders lose everything. The traders that are most likely to fall victim to this demise are beginners that don’t have a lot of trading knowledge. Using too high of a leverage or a huge lot size can contribute to the losses that these traders will experience. Many beginners have emptied their trading accounts because of this and give up on trading for good.

King Kong Syndrome is tied in with trading psychology, which involves the way that our emotions change our trading decisions. Fear and greed are major contributors to how we trade, but excitement and obvious confidence in oneself seems to be the major emotions connected to King Kong Syndrome. Remember that anyone can make this mistake, it isn’t only something that affects beginners. In fact, research shows that men – especially single men, are more likely to fall victim to overconfidence than women are. Beginners may be more prone to this phenomenon, but it can affect any trader out there.

So, how does one avoid making these mistakes and falling victim to King Kong Syndrome? First, you need to understand that confidence in your trades is important, but you shouldn’t feel overly confident. Conducting research and paying attention to fundamental and technical analysis is important, and they can help us feel confident about the trades we’re about to make. But we shouldn’t be too confident – no matter how much research you’ve done, you aren’t guaranteed to get the results you’re expecting. Always set a stop loss and watch how much you’re risking, no matter how much information you’ve gathered about the market.

Simply being aware of this problem is another way to avoid it. Having a good trading strategy also plays an important role. Without a good strategy, you’re basically just gambling with the outcome of your trades. Your plan needs to account for different market conditions and long-term outcomes. Don’t fall victim to overtrading, as most traders amass profits from making smaller, safer trades.

Never make the mistake of thinking that you’re too good to learn something new. No matter how long you’ve been trading, you can always get better and there is more information to learn. Those that give up on trading aren’t always beginners. Many of those traders once considered themselves to be experts or unstoppable, but a few big gambles and the King Kong Syndrome can change that.

Since King Kong Syndrome is tied to one’s emotions, you need to think about the emotions that you’re feeling when trading. If you feel overly anxious, excited, greedy, or anything else, take a break. It’s best to trade with a level head so that you can see the big picture without making hasty decisions. And this goes for overconfidence too – if you’re on a winning streak and you see yourself getting a big head, it may be time to clear your head and take a break. Remember that confidence is important, but too much confidence can cause one to risk too much and make bad decisions.

Being a successful trader involves doing a lot of research and having a well-thought-out trading plan with minimized risks. Good traders can control their emotions and never let them cause bad trading decisions, or they know when to walk away when their emotions are changing the way that they think. Don’t make the mistake of assuming that you’re the best trader out there and never rely on luck. Being a profitable trader comes down to strategy – luck is only an illusion and every winning streak will come to an end if those decisions aren’t made based on facts and data. Be sure to do your research and don’t allow yourself to wipe out your trading account because of King Kong Syndrome.

Categories
Beginners Forex Education Forex Basics

Top 6 Forex Questions Answered

Forex trading can be a profitable way to spend one’s free time, while some make their living by working as a full-time day trader. Although trading forex has become more popular over the years, it is still surrounded by some confusion and myths. Some wonder if you can really make money doing it, if trading […]

Forex trading can be a profitable way to spend one’s free time, while some make their living by working as a full-time day trader. Although trading forex has become more popular over the years, it is still surrounded by some confusion and myths. Some wonder if you can really make money doing it, if trading […]

Forex trading can be a profitable way to spend one’s free time, while some make their living by working as a full-time day trader. Although trading forex has become more popular over the years, it is still surrounded by some confusion and myths. Some wonder if you can really make money doing it, if trading is really worth it, or if the whole thing is a scam. Below, we will answer some of the most common questions that beginners ask when considering becoming a forex trader.

What Does it Mean to Trade Forex?

This one is basic but important. Forex trading involves making transactions that involve different currencies on the foreign exchange market. The currency pair EUR/USD is a recognizable example. Investors would try to determine whether the value of the euro would appreciate or depreciate in value versus the US dollar in order to try to make a profit. A person that trades forex is known as a trader. In order to trade, you need to open an account through a broker, who provides you with access to the market.

How Much Do I Need to Get Started?

Perhaps you’ve avoided trading because of the assumption that you’d need thousands of dollars to get started. Fortunately, this isn’t true. Some brokers do require larger deposits, but there are companies out there that will allow you to open an account with as little as $1-$5, or around $100. Do keep in mind that your expectations need to match the amount of your investment. You won’t make as much as a trader that has invested $20,000 if you only put $20 into your account. It’s actually better to start out small in the beginning as you perfect your strategy and improve your skills. Then you can worry about growing your investment and bringing in noteworthy profits.

Is it Really Worth it? Can I Actually Make Money?

You can absolutely make money as a forex trader. However, you need to know that trading isn’t going to make you rich in a short time span. It takes a lot of hard work and effort to become a successful trader and to bring home enough profits to support yourself, quit your job, or meet other financial goals. If you’re looking for an easy or quick way to get rich, then trading probably isn’t for you. On the other hand, if you’re willing to work for it, trading will prove to be worth it if you put in the effort.

What Do I Need to Start Trading Forex?

The good news is that you don’t need much to get started. First, you’ll need an education so that you understand basic terms and concepts related to trading, along with more advanced information like setting a stop loss or trading psychology. You can learn everything you need online for free, so there’s no excuse not to do it. Once you’re ready, the next step is to open a trading account through a broker. You’ll need to do some research to make sure you choose a trustworthy company with attractive costs. Of course, you’ll also need to make a deposit into your trading account. As we mentioned earlier, some brokers accept deposits as low as $1. You should try to make a larger investment if you can, but you can still get started with a low amount. Along with obvious necessities like a computer, phone, or tablet and internet connection, this is all you need to become a trader.

Are There Benefits to Trading Forex?

Forex trading is popular because it offers key benefits over working a real job. The best part is getting to be your own boss. You get the perks of job flexibility and you can work from anywhere with an internet connection on your PC, laptop, smartphone, or tablet. Unfortunately, there is one main disadvantage to forex trading – you aren’t guaranteed to make money. A real job offers you stability and a guaranteed paycheck for the hours you’ve worked, while forex trading may or may not be profitable on any given day. This is why many traders start out doing it part-time before quitting their jobs or making larger investments. It’s a good idea to test the waters and get an idea of your profit goals first.

How Risky is Forex Trading?

The forex market is risky. It is affected by news releases and other factors and can experience volatility at certain times of the day. However, you can make trades based on certain data, so trading offers more of a probability for winning than gambling. Nobody knows what the market is going to do, but having a good trading plan, learning to use indicators, read charts, devise a strategy, and so on will improve your odds for winning. If you’re losing money, you can always change your system and fix the issue, so trading isn’t a complete gamble. Avoiding trading during more volatile times is another helpful way to avoid taking as much risk.

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Beginners Forex Education Forex Basics

Trading Frequency: Which Is Better – More or Less?

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

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

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

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

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

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

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

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

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

Categories
Beginners Forex Education Forex Money Management

Seven Trading Secrets that Most Successful Traders Won’t Share

1. Keep an Open Mind In the world of forex trading, nothing is ever guaranteed. Successful traders don’t think in terms of absolutes or in “if/then” statements. Instead, you should think of words like “likely” or “probably”. Always remember that there is no accurate way to predict what is going to happen and that no […]

1. Keep an Open Mind In the world of forex trading, nothing is ever guaranteed. Successful traders don’t think in terms of absolutes or in “if/then” statements. Instead, you should think of words like “likely” or “probably”. Always remember that there is no accurate way to predict what is going to happen and that no […]

1. Keep an Open Mind

In the world of forex trading, nothing is ever guaranteed. Successful traders don’t think in terms of absolutes or in “if/then” statements. Instead, you should think of words like “likely” or “probably”. Always remember that there is no accurate way to predict what is going to happen and that no matter how sure you are about the ways things will go, you should never feel too certain. Those that fall into confidence often make mistakes when it comes to overtrading or make hasty decisions because they believe they know exactly what will happen. Imagine losing a great deal of money because of this issue.

2. Stop Focusing on Making Money!

Traders that start out with dollar signs in their eyes are only setting themselves up for failure. Of course, you might be wondering “what’s the point?” if it isn’t making money. Your goals as a forex trader shouldn’t be to make a certain amount of money, but rather to make more than what you’ve lost. If that equates to a $5 profit in a one-month period, you’re doing better than many others that have tried. Creating a solid trading plan and perfecting your strategy is another notable goal that directly affects your success and profits later down the road. Instead, try to mold yourself into the best trader you can be, and you will reap the benefits in the end.

3. It’s Better to Risk Less

It might seem like taking a bigger risk is the better option, as it can result in a larger reward. However, the opposite is true. If you only risk around 1% or slightly more on each trade, then it will be much harder to drain your trading account if the market moves against you. It will take longer for your profits to build up, but you won’t lose everything in one sweep either. Trust us, we’ve heard horror stories of traders losing hundreds of thousands of dollars on one trade.

4. Boring is Normal

You might have a concept in your head about what trading is like from watching movies and tv shows that depict traders on Wall Street running around, jumping, yelling, and so on. In reality, those that choose to trade from home use devices like laptops and phones, often trading in solitude and watching the market for something to happen. Overall, it can be quite boring, as you’ll spend a lot of time watching your computer screen. A quick tip if you can’t handle sitting on your hands for hours – consider investing in an automated forex robot so that you won’t have to.

5. Know that your Win Rate isn’t Important

A trader’s win rate is one of the most talked-about figures when it comes to trading. This seems to make sense, as you want to win more than you lose, therefore, a higher win rate should seemingly indicate success. This isn’t true, however. What really matters is making more money than you lose. If you have a higher win rate with profits then that’s great, but you could still wind up coming out on top with a higher loss rate as well. Instead, simply compare your profits vs losses.

6. Decide How Much Money you Want to Lose on a Trade, Not the Percentage

Traders typically base their risk tolerance on a percentage of their account balance. For example, you might risk 2% of your account balance on any single trade. This is recommended by experts, but you might not want to base every single move on the same percentage. Instead, it is recommended to decide how much you are actually willing to lose on each trade down to the dollar amount. That amount might actually be higher or lower than a predetermined percentage.

7. Remain Neutral

Obviously, nobody wants to lose their hard-earned money when trading. Unfortunately, this is an inevitable part of trading that is bound to happen from time to time. If you find yourself hoping and crossing your fingers that your trade will be a winner, you might be setting yourself up for disappointment. The best traders have learned how to be neutral and don’t allow losses to break their spirits because it is a simple part of trading.

Categories
Forex Economic Indicators

Tips for Trading During the Coronavirus Pandemic

Anytime a global crisis happens, investors tend to panic and start selling. Although it might seem like a bad idea to invest when things are so crazy, the market actually sees growth after the dips that are caused by the actions of fear-stricken investors. Pandemics and global disasters can actually present trading opportunities, as long […]

Anytime a global crisis happens, investors tend to panic and start selling. Although it might seem like a bad idea to invest when things are so crazy, the market actually sees growth after the dips that are caused by the actions of fear-stricken investors. Pandemics and global disasters can actually present trading opportunities, as long […]

Anytime a global crisis happens, investors tend to panic and start selling. Although it might seem like a bad idea to invest when things are so crazy, the market actually sees growth after the dips that are caused by the actions of fear-stricken investors. Pandemics and global disasters can actually present trading opportunities, as long as one reacts properly. Below, we will provide a few tips that can help traders make it through this pandemic on top.

Tip #1: Don’t Panic!

Pandemics are generally known for causing hysteria. The COVID-19 pandemic itself has been known to cause shortages of food and other essential items due to hording. Many people might have seen the ways that this type of panic has carried over to the stock market. For example, you might see a drop in your investments and quickly sell out your assets out of fear. Remember that selling everything and being terrified of the stock market is caused by your emotions, and that making financial decisions out of fear will cause you to make mistakes. Instead, try to focus on long-term goals and watch for bearish opportunities as the market recovers.

Tip #2: Take Advantage of the Market

During times like these, the value of stocks will go down. This makes it a good time to invest in stock for good companies while the price is down before the price goes back up. You won’t see many opportunities like these, and prices will eventually go back to normal. Just be careful, as shares in bad companies might stay down, so you’ll need to be mindful of the companies you’re investing in. Think about the fact that others are thinking from fear and anxiety and anticipate the way the market will move.

Tip #3: Consider Diversifying your Portfolio

You should be mindful of what you invest in during times of global pandemic, but it might be a worthwhile idea to invest in different resources. If you typically invest in currency pairs, consider adding commodities to the list. Having your money in different places can help to cushion the blow if one of those investments goes bad, so it’s better to have different options.

Tip #4: Be Mindful of Risks

Traders should always take precautions to limit their losses, especially during times of pandemic and hysteria. Of course, you will need to be even more careful right now. Make sure you’re using a stop loss and consider setting take profit levels or other measures to ensure that you don’t blow your account. Take another look at your trading strategy as well and look for any needed changes. You don’t need to change everything out of fear, just simply look at the way the pandemic has affected your profits thus far and see if there is anything that needs to be changed. If you don’t already keep a trading journal, consider keeping a special one until the pandemic passes so that you can keep a close eye on the ways that it is affecting your outcomes.

Tip #5: Look Towards the Future

There are a lot of reasons why COVID-19 has inspired panic, not only in traders but in all of us because of how dangerous it is and how it can affect our lives. If you haven’t found yourself doing much trading because you have too much on your mind, or if you’re feeling too anxious to trade, remember that this will pass. All of the previous pandemics have ended at some point. Try to profit from it by anticipating what the market will do but understand that it is ok to take a break from trading if your head isn’t in the game. Things will eventually go back to normal.

Final Thoughts

The COVID-19 has caused many investors to sell and take profits out of fear and anxiety. Good investors need to understand how times of crisis affect the market and make smart trading moves while practicing risk-management techniques to limit their losses. To make effective trading decisions during any times of market uncertainty, one needs to be able to handle their emotions, otherwise, they are bound to make bad trading decisions. Don’t panic and remember that this pandemic will pass, and the market will go back to normal before we know it.

Categories
Beginners Forex Education Forex Basics

Accept It, There Is No Holy Grail In Trading

The Forex markets are its own beast, many traders will say that at times, it just does what it wants with no real reason behind it. It is also something that can be influenced by the big banks (to a degree) so why are we still looking for what we would call the Holy Grail? […]

The Forex markets are its own beast, many traders will say that at times, it just does what it wants with no real reason behind it. It is also something that can be influenced by the big banks (to a degree) so why are we still looking for what we would call the Holy Grail? […]

The Forex markets are its own beast, many traders will say that at times, it just does what it wants with no real reason behind it. It is also something that can be influenced by the big banks (to a degree) so why are we still looking for what we would call the Holy Grail? If something cannot be tamed, if its conditions cannot always be mastered, then would such a thing actually exist?

The short answer to those questions is no. It does not exist and it never will exist. A huge part of trading is losing and any profitable trader will tell you that they still make plenty of losses, their strategy just allows for it and they make profits overall. So why can’t there be a holy grail of forex?

The market is uncertain and unpredictable. The markets are fluid, they are prediction and there are thousands of factors that come into play that can cause it to shift up or down. A human mind is an incredible tool, but even that will struggle to take into account and calculate the thousands of variables that come into play when looking at the markets. Unless you are told by a major bank what will happen (which is illegal), you won’t be able to predict certain events such as economic news events and certainly not natural or man-made disasters. So, the mind cant do it, why cant a computer? People have tried to create robots in order to trade, but again, the computing power and the number of information sources needed would involve a lot of computing power, not to mention that even the robot won’t be able to predict the aforementioned news events and disasters that often rock the markets.

And then there are market influencers. The markets are full of thousands if not millions of people trading, and due to this, they have control over the movements in the markets. So this doesn’t necessarily mean that humans are deciding where the markets will go to, but we are certainly influencing it in ways which according to data would seem unnatural. There have been times where the data has been incredible negative, all signs points to a fall in price, however, the markets continue to rise, against all the available data. This is simply because the traders in the markets are still buying, of course it should eventually come down, but due to its nature, this is unpredictable and no one can say exactly when it would.

A strategy cannot be profitable in all scenarios.The reason there are so many strategies out there is that no one strategy can be successful in all situations if there was one, then it would be the only strategy being used, and unfortunately, that would completely kill the markets and they would be at a standstill as everyone is using the exact same strategy. Patterns often repeat themselves over time, the markets can be seen as cyclical which is only broken by huge events. Most strategies that we know work for certain patterns in the markets, as soon as it shifts to another the strategy no longer functions to its fullest and so adaptations or completely new strategies will be needed for the new pattern that is forming.

So while there is no holy grail to trading, no way to be 100% profitable and no way to always win, it doesn’t mean that you cant be a profitable trader overall, the losses are part of trading, adapting strategies and having multiple at hand is the key, but also knowing when not to trade. Control your risk, protect your account and whatever the markets are doing, you will be able to profit in them.

Categories
Forex Psychology

Tips for Coping with Trader’s Frustration

When trading, frustrations come with the territory, it is an inevitable part of trading and something that every single trader will experience at some time during their trading career. The problem with frustration is that it can lead to further feelings of not being good enough or wanting to not bother anymore, it can also […]

When trading, frustrations come with the territory, it is an inevitable part of trading and something that every single trader will experience at some time during their trading career. The problem with frustration is that it can lead to further feelings of not being good enough or wanting to not bother anymore, it can also […]

When trading, frustrations come with the territory, it is an inevitable part of trading and something that every single trader will experience at some time during their trading career. The problem with frustration is that it can lead to further feelings of not being good enough or wanting to not bother anymore, it can also lead to you making mistakes and cutting corners, which is a cardinal sin when it comes to trading.

If you have been trading for a while, then I am sure that you are able to think back to a time when you started to feel frustrated when you did, did you stick with it or did you do something to try and reduce the amount of frustration that you are feeling? The good news is that there are a number of different things that you can do to help reduce the levels of frustration that you are feeling, some easy and some that take a little more effort. What is important is that you do something to reduce the feeling before you start to take shortcuts or make mistakes.

So let’s look at some of the things that you can do to help reduce your frustration levels.

It is not your fault: A lot of frustration often comes from a loss or a few losses in a row, when this happens it is perfectly reasonable for someone to begin to think that maybe it is them that is causing the losses, maybe you just aren’t good enough at this trading thing. What you need to remember so that it is not your fault and everyone experiences these losses. Losses are a part of trading, if you didn’t have any, then you would be one of the greatest traders who has ever traded, so when you experience a few, even if they are in a row, do not kick yourself. Remember back to when you created your trading plan and strategy, you calculated these losses to give you an overall profitable strategy, so when they come, it can be annoying, but it is not your fault.

Losses will happen, do not blame yourself, and just take a look at the trades to work out why it lost, there may be a logical explanation or a clear reason that shows you that it was not you, it was something that happened in the markets. If you are following your trading plan and sticking to the rules that you set, then there is nothing that you have done to merit any blame, so accept the loss and move on to the next trade.

Your strategy still works: When you make a couple of losses in a row, it can make you think that maybe your strategy is the thing that is not working. In reality, this is not the case. In fact, your strategy may still be working perfectly well. The markets are constantly changing, the conditions are changing minute by minute, your strategy will not pick out trades perfectly, no single strategy ever will. So a few losses here and there is part of the process, your strategy was designed to be able to cope with this. Stick with it.

If you are convinced that there is definitely something wrong with your strategy, do not start over, take a closer look at each aspect of your strategy, the majority of it will still be absolutely fine, no reason to start over completely. Just alter any parts that you feel need adapting to the new trading conditions, but your strategy ultimately still works, so do not throw it out for something completely new and untested.

Work out what went wrong: If you have had a few losses, do not start to feel frustrated, it is difficult as it is a natural feeling to have, but instead, try working out why things went wrong. Hopefully, you are keeping a trading journal where you are putting in all the trades that you are making as well as the reasons behind making them. Looking at this, you may be able to see whether you did something wrong or if you missed a part of it. It can also show you if there are any patterns in your trading which could have caused the losses.

If you manage to find something, then this is the perfect time to make some changes, just adjust the little bit that you feel caused the issue, then test it out on a demo account, see whether it has made any differences, if it works, change it on the live account, if not, then revert back and continue with your strategy. If however, you find no patterns and nothing really wrong, then it could just be the part of your strategy where you will have losses, it will always happen, try not to overthink it too much, and carry on with what you are doing.

Take a break and get outside: So you have become frustrated, either from a few losses or the lack of trading opportunities, instead of letting that frustration grow, try and get away from it completely. Get outside and get some fresh air, this is a fantastic way to clear your mind, being able to reduce your frustration levels with a good walk, or by doing something completely different like shopping with help take the negative thoughts out of your mind. Coming back to trading with a fresh and clear mind will allow you to look at the markets in a new way, your past losses will mean nothing and you will be able to fully concentrate on your next upcoming trades.

Do some exercise: Exercise is one of the number one ways to get rid of both frustrations and also negative thoughts. Taking part in the exercise will release endorphins into your body which will very quickly help you rescue the frustrations that you are currently feeling. It does not need to be anything extremely tough, even a simple jog or a long walk is enough to help your body. Not only does it help clear your head, but exercise helps with your overall well being, both your mind and body. Having a healthier mind and body allows you to tolerate a lot more including those trading frustrations in the future and will help you to trade with a clearer mind.

So those are a few of the things that you can do to help with your frustration, it is important to remember that when something goes wrong, when you have a few losses, it does not mean that it was your fault. In fact, you may well have done absolutely nothing wrong. Being able to control those frustrations and to spot when you are starting to become a little frustrated is a very powerful tool, as soon as you see it coming, change something, do something else to help reduce or avoid it completely. Only you can tell when you are feeling frustrated, so it is up to you to be able to take that step back and do something about it. You will thank yourself later once you have managed to reduce those levels and you will be a far better trader if you learn to control it.

Categories
Beginners Forex Education Forex Basic Strategies

What to Consider Prior to Changing Strategies

At some point throughout your trading career, in fact, in quite a few points, you will be required to change up your trading strategy. While it may have been working really well at one point the markets will not remain consistent forever and they will change, you will then be required to change with them, if you do not, then you are putting yourself into some additional risk and could be putting your account in danger, as your strategy may not be as effective in these new conditions as it was in the ones that it was created for.

At some point throughout your trading career, in fact, in quite a few points, you will be required to change up your trading strategy. While it may have been working really well at one point the markets will not remain consistent forever and they will change, you will then be required to change with them, if you do not, then you are putting yourself into some additional risk and could be putting your account in danger, as your strategy may not be as effective in these new conditions as it was in the ones that it was created for.

At some point throughout your trading career, in fact, in quite a few points, you will be required to change up your trading strategy. While it may have been working really well at one point the markets will not remain consistent forever and they will change, you will then be required to change with them, if you do not, then you are putting yourself into some additional risk and could be putting your account in danger, as your strategy may not be as effective in these new conditions as it was in the ones that it was created for.

There are a number of different things that you can do to help you prepare to change your strategy, these can either be used to help you to alter your current one or some of them can be used to help you adapt yourself in order to use a completely different strategy that varies a lot from what you are used to, so let’s take a look at what some of these things are that could potentially help you change your trading strategy.

The first thing that you need to be able to do is to understand why you need to make a change, there could be a number of different reasons for this. Maybe you are currently risking too much of your account per trade and so you need to scale back your lot sizes. Maybe the markets have shifted, your strategy worked well before but there are now different trading conditions that it may not function at 100% in, so you need to make some changes to match the markets. Maybe you need to change things up because your risk management isn’t quite working or your risk to reward ratio is not quite right, whatever the reason is, you need to have a good understanding as to why you need to make that change, once you know the reason, it will be easier to focus your changes on what will resolve the current issue, rather than changing things that may not actually need changing.

It is important that you only make a single change at a time, while there may be multiple different things that need changing for your strategy to be ready, it is important that you only do it one thing at a time. The reason for this is that when you make changes, they can either work or not work, you do not want to be changing 5 things at a time if one of them is not working how will you know which one it is? When we are changing just one thing at a time, we can see straight away whether that one change is effective or not. If it is not, then we can adjust again, if it is then we can move onto the next thing to change. Of course, changing some things can then also affect something else that you had previously changed, but at least when doing it one thing at a time, you are able to better track what the effects of each change are and whether individual changes have worked well.

You also need to have a good understanding that once these changes have been made, you cannot just leave them, things will be constantly changing so you need to be prepared to continue to make changes as the conditions of the markets continue to move on. A strategy is never complete, this is something that a lot of traders see to forget, no matter how much you have worked on it, it is not complete, there will always be things that need changing and adapting, this is due to the fact that the markets will never stop changing themselves, you must stick with them no matter what they decide to do. So while your strategy has been changed and is now working, you will need to make further changes in the future. I mentioned that a lot of times just then, hopefully, that helped it to sink in, once again, the markets will always change, so you will always need to adapt your strategy.

So you are looking to make some changes, where are you going to do this? Are you going to make the changes directly onto your life account or are you going to implement the changes onto a demo account? Hopefully, you went with the latter option. You should not be making any changes on a live account, you do not know what effect these changes are going to have on your strategy or the profitability of the strategy. This is why we always test all changes on a demo account, if it works, fantastic, we can then move them over to the main account, but what if they do not work, and we are using a demo account, it makes no difference to our live account, we can just revert back and try again with zero risks. If you were to attempt this on a live account and it goes wrong, then you have put your account in danger and could potentially lose a lot of money if things go wrong and you cannot rectify it.

What if you need to go with a completely new strategy? One that you have never used before. You have been using your current strategy for quite a while now, so making the huge leap onto a completely different strategy can be a little daunting. Some of the reasons why you may need to do this could simply be that your current strategy does not suit your style of trading, or it does not work in the current trading environment. When you make such a huge change, it can be hard to forget some of the things that you had been using in the past. You need to understand that you are starting fresh, ignore all the little things that you may have done with your previous strategy, you need to follow the new rules that you have set out and only those rules, when you try to take in some of the little extra things that you did with your previous strategy, there is a good chance that they can contradict the things that you are doing with the new one, so stick to the new rules, not the old ones.

Going along with the above when you make small changes to your strategy, it can actually be quite hard to get old habits out of your mind, you are so used to doing the same thing over and over, as soon as one little bit changes, it can be hard to adapt to that. This is far more prevalent in those that have changed just one thing if you have been using your strategy a certain way for a long time, you can naturally want to do things the old way, you need to set reminders about the changes that you have made. When you change your entire strategy, it is easier to remember the changes than it is when you only change a very small part of it. So set yourself reminders or put something up on the wall to remind you of the change that you made and what you need to do to stick with it.

So those are some of the things that you should be keeping in mind when you decide to change up your strategy or even go with a completely new strategy, it is important to know that you will need to keep on adapting and so getting these things into your head beforehand can make thing booths easier and safer when you eventually implement any changes.

Categories
Forex Money Management

Tips To Help You Trade Consistently & Profitably

Consistency, one of the main roads that you see thrown about as something that you want to be, you need to be consistent if you want to be profitable, if you aren’t consistent with your trading you will only lose. Those are all phrases that you have most likely seen before, most likely multiple times. […]

Consistency, one of the main roads that you see thrown about as something that you want to be, you need to be consistent if you want to be profitable, if you aren’t consistent with your trading you will only lose. Those are all phrases that you have most likely seen before, most likely multiple times. […]

Consistency, one of the main roads that you see thrown about as something that you want to be, you need to be consistent if you want to be profitable, if you aren’t consistent with your trading you will only lose. Those are all phrases that you have most likely seen before, most likely multiple times. So what does consistently actually mean? It is defined as “acting or done in the same way over time, especially so as to be fair or accurate”, so this would mean that we need to trade the same way over a long period of time before we can be sure that our strategy works properly and that our strategy is actually profitable. This needs to be an extended period of time, not just a couple weeks that a lot of people think.

We are going to be looking at some of the different things that you can do which may help you to become more consistent. Some may work for you, some may not, some may seem completely irrelevant but that may be true for you, but not for others. As long as you can use some of these tips to help you stay consistent with your trading, it will be a big benefit to your overall profitability and can ultimately help lead you to trading success.

Know Your Limits

You need to have a good understanding of what your own limits are, this is more in regards to the money that you have available to trade. You often see horror stories of people borrowing money in order to trade, this is never a good idea and is something that you should never do. You need to be able to trade within your own means. In order to work out how much you can trade, think about losing the money that you are wanting to trade with, if it would have a negative effect on your life, such as not being able to do things you would normally do then this is too much, you need to reduce it down to an amount that if you lost, you could still continue to live the way you currently are.

You also need to be able to limit your total loss, at the start of each month, think about the maximum amount that you would be willing to lose that month, this should be less than your total account balance. If you were to hit that amount during the month, you should stop for the month and then use any remaining time to analyze and evaluate the trades that you have made in order to hopefully work out exactly where things went wrong and what you can change for the next month in order to hopefully be more successful. Once the next month comes you can begin again with a new loss limit, when you do become profitable, ensure that you are putting a bit aside each month in order to act as a reserve, helping to keep your account safe in the future should you reach our loss limits again.

Limit Your Losses

This goes hand in hand with the point we made above, successful trading often comes down to being able to limit your losses, this does not mean that you won’t take losses, those are inevitable. What it means is that when you do have a loss, it takes a smaller hit on your account capital rather than a big one. This is required if you want to be profitable in the long run, it’s simple really, limit your losses so that your profits can grow. If you are only losing a small amount with each trade then it will take multiple losses in order to overturn one of the wins, so you can technically have more losses than wins and still be profitable. This is how a lot of strategies work and how a lot of traders become profitable, even with an under 50% win rate, you can be a profitable trader.

You can use things like trailing losses in order to help reduce potential losses and to help you close trades at a minimum of break even, there are a number of other ways to protect yourself against reversals too and these are things that you should certainly be taking advantage of.

Trade with a Suitable Strategy

Understanding your strategy, the advantages of it, and the weaknesses of it is vital, but it is also just as vital that you trade a strategy that suits your own style of trading. If you are a relatively impatient person and like to take smaller and quicker trades (known as scalping) then there is no point in trying to use a swing trade strategy, it just won’t gel with your personality and you will begin to make some mistakes.

There are a lot of other aspects that you need to think about, things like the amount of risk that you are comfortable with, if you do not like risk, then risking a larger amount with each trade will cause you to stress, and a lot of it, s you need to be able to have a strategy that matches your risk preferences too. What would be beneficial would be to develop a number of different strategies that each suit your own trading style, this way you will be able to trade with whatever conditions there are with a strategy that you are comfortable with. It is sometimes good to get out of your comfort zone, but you do not want to do it with every single trade you make.

Be Patient

A virtue that a lot of people seem to lack, patience can be an incredibly powerful tool when it comes to trading, not just for making profits but also for avoiding losses. If things are quite in line with your strategy then you need to be able to wait. If the markets are very quiet and there is nothing to do, you need patience in order to not push yourself to make trades when you know you should not be making them. Sometimes it can go hours, days, or even weeks without a proper setup, are you prepared to wait that long? If you want to be consistent then you may well need to.

Stick with Your Plan

A nice simple one here, if you have a plan stick with it. If you do not, then what was the point in actually creating the plan? You made it for a reason so stick with it, as soon as you deviate from it, you will begin to start making bad trades and this will only lead to losses in the long run. So once you have made a plan, stick to it.

Those are a few of the things that you can do to help yourself become more consistent, some you probably already do so it is important that you stick with them. As long as you do these things, stick to your own plans and strategies, you will be in a good position for being more consistent in the future.

Categories
Beginners Forex Education Forex Basic Strategies

When To Let Go Of Your Trading Strategy

You may have spent the last few days, weeks or months developing your very own trading strategy which is great, having your own strategy that is suited and adapted to your own personality and trading habits is great, however, this does not actually mean that it is the right strategy for you to be using, […]

You may have spent the last few days, weeks or months developing your very own trading strategy which is great, having your own strategy that is suited and adapted to your own personality and trading habits is great, however, this does not actually mean that it is the right strategy for you to be using, […]

You may have spent the last few days, weeks or months developing your very own trading strategy which is great, having your own strategy that is suited and adapted to your own personality and trading habits is great, however, this does not actually mean that it is the right strategy for you to be using, this can be for a number of reasons that we will look at later in this article.

You may well be seeing others boasting about their profits or the amount of pips that they are making each month which could then make you want to switch over to that one and to abandon all the work that you have put into your current strategy. This is of course not the best idea or thing to do, firstly we do not know if those results are actually real and secondly, those strategies are created for those people not for you. So simply wanting to emulate someone else’s success is not a good reason to throw your own strategy to the side, instead you should be sticking to your own.

Before we look at the reasons why you possibly should change your strategy, create your own and what you put into it, because if you missed out one or more of these things then you may just need to alter your own rather than look for an entirely new one. Did you take your time to play it? Including risk management, your risk to reward ratio, and just overall risk of the strategy. Are you using the correct indicators for the strategy, there is no point having 100 indicators if you only use 3 or 4, but make sure that those 3 or 4 indicators are the right ones which give you the right information. How long have you tested the strategy? If it has only been a week or two, then you need to use it for longer, a few months at least to ensure that you are clear as to whether it is working or not. Finally, are you following the rules, and do they suit the current market conditions? Not all strategies work all the time, yours may work when there are different conditions to the ones in the markets right now, so you may not need to abandon it completely.

Since you have done all of that, if things still aren’t working then it may be time to try something new, so we have come up with some reasons why it may be the right time to jump out of your current strategy into a nice new shiny one, this does not mean that the new one will work, it may give the same results, but it is worth trying something that more suits you as a trader.

You struggle to follow your own rules.

When you created your strategy, you would have created some rules that you are meant to be following. The problem is that some people struggle to do this for a number of reasons. Maybe there are just too many of them, maybe they are a little unrealistic, whatever the reason as to why you are not following them, it could be an indication of this strategy not being suitable for you. You breed to be able to be consistent with the rules, this is the only way to work out whether a strategy is successful or not, so if you are struggling to stick to them, no matter what they are, this strategy is probably not the right one for you. Of course, as mentioned before, it is always better to slightly tweak these rules to see if that makes things easier rather than just ditching the entire strategy, although that is of course still an option that is available to you.

Does your strategy require too much effort?

Let’s be honest, you probably don’t have 12 hours a day that you can set aside for trading, if you are working a job at the same time then you probably only have a couple of hours each day to trade. So if your strategy currently takes you hours to find a trade or it requires you to be online at ridiculous hours then do you feel that you will be able to keep it up? If your system is keeping you up or is requiring you to be online at hours and times that are not suitable for you then it may not be the right strategy. You may need to find one that fits in better with your current schedule rather than allowing one to dictate it for you.

Are you spending more than you make?

This is more for those that are buying their strategies or using Expert Advisors. We should point out that some are fantastic and can make you money, while a lot of others will not. However, if you are paying for a signal or an EA, then you need to be able to add the costs of this into your profit and loss numbers. If this results in you spending more on the signal or the Ea than you are making,g then we are sure that you can see the issue here. A good signal or EA will be able to cover its own monthly cost with its results, if it cannot, then there’s clearly something wrong and you should probably consider moving on to a different one.

The market conditions aren’t right.

There may not actually be an issue with your strategy at all, it may just not be the right time to be using that exact strategy. There is no one strategy that works all of the time, they are all suited to certain market conditions. Some like trends while others like a more up and down market If Your strategy works on a trend but the markets are going sideways then of course it will not be effective. This does not however mean that it won’t be effective once the markets begin to trend. So you should still be keeping that strategy at hand once the market conditions change. So try and have multiple strategies that you can switch between based on the current markets and what works best for them.

It’s not profitable.

The big bad obvious one, if your strategy is not profitable, then you should not be using it. We are not talking about not being profitable week to week, we are talking about being profitable over a long period of time. If you have been using it for months and it is still not profitable then it may be time to look for another one to try.

So those are some of the reasons why it may be the right time to try and get a new strategy. It is entirely up to you what you do, or how long you give a strategy before deciding to get a new one, but try and give it enough time to have enough results to see an accurate portrayal of how it will perform. You should also not be shy about simply tweaking things with your current strategy rather than looking for a new one completely.

It can take you time, effort, and possibly a little bit of luck before you find a strategy that works for you, just don’t be afraid to ditch some of the work that you have put in in order to find a more suitable strategy for you. Take your time with it, demo it to ensure that it works and this will hopefully allow you to be more successful over a longer period of time.

Categories
Beginners Forex Education Forex Basics

Why Do Trade Losses Occur?

Trading is full of ups and downs. In fact, that is pretty much all that it is, the markets will continue to move up and down based on the strengths of the currencies or assets that are being traded. The sad thing is, around 90% of all traders will lose, which means that only around […]

Trading is full of ups and downs. In fact, that is pretty much all that it is, the markets will continue to move up and down based on the strengths of the currencies or assets that are being traded. The sad thing is, around 90% of all traders will lose, which means that only around […]

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

Lack of Equity

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

Not fully Understanding Indicators, Market Entry, and Other Aspects

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

Blindly Copying Others

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

Not Sticking to a Tested & Proven Trading Plan

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

Greed

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

Not Using a Demo Account

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

Having a Bad Day

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

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

Categories
Forex Indicators

Guide to Selecting Custom Forex Trading Indicators

How should you use custom forex trading indicators and should you buy them? One of the greatest gifts modern technology has bestowed upon us as technical traders is the ability it has given us to shape, hone, and personalize our trading experience. The seemingly unstoppable march of technology has given us the ability to craft […]

How should you use custom forex trading indicators and should you buy them? One of the greatest gifts modern technology has bestowed upon us as technical traders is the ability it has given us to shape, hone, and personalize our trading experience. The seemingly unstoppable march of technology has given us the ability to craft […]

How should you use custom forex trading indicators and should you buy them?

One of the greatest gifts modern technology has bestowed upon us as technical traders is the ability it has given us to shape, hone, and personalize our trading experience. The seemingly unstoppable march of technology has given us the ability to craft for ourselves bespoke strategies, charts, and indicators in order to optimize our market experience to fit our needs.

Why Custom Indicators?

If you are a technical forex trader, why should you use indicators when trading? There are really two answers to this and neither of them will come as any big surprise to any of you. The first one is simple, to give you an edge in terms of the timing of your trades and the precision with which you take advantage of that timing. The second reason is that forex trading, even technical trading, is as much an individual process – trying not to say art, here – as it is a scientifically or mathematically founded methodology. Even if you are a very technically driven trader, you will want to adapt your trading strategy to your own personal needs, goals, and ways of doing things. Inevitably, one of the outcomes of this is that you will need to build up, over time, a personalized system that relies on, among other things, a set of trading indicators that you have finely tailored to your requirements.

Who Builds Indicators?

Who designs and makes those custom indicators that you can find out there and download for your own use – whether you pay for them or not – and should we care? The short answer is, of course, we should care a bit. Here’s why: While some custom indicators are made by traders and enthusiasts with some knowledge of how trading and the markets work, there are a great many indicators out there – maybe even most of them – that are made by programmers. Now, being good at coding is important to make a good custom indicator but that does not necessarily mean it will result in one that is actually useful. More to the point, it does not mean that it will result in one that is useful for you.

Evaluating Indicators

Ok, bad news first: There is no shortcut. Of course, if you’ve been forex trading for almost any amount of time at all, you will have been able to figure that answer out for yourself because there are no shortcuts to anything. If you’re not ready to put in the grind, you won’t get very far. That is particularly true if you’re a technical trader.

So, how do you chose the right custom indicators for your strategy? There’s no mystery here, the answer is you have to test them. Testing is important for two reasons. First, you will have to probably go through a large number of custom indicators to see what fits with your approach to trading. Even good indicators, those that work as advertised or as close to the way they are advertised as possible, may not be the ones that mesh with the system you are building. The second and even more important reason is that you need to test the dice out of indicators to make sure they work.

Once you download a custom indicator, take it to the testing range. Backtest it to make sure it worked in the past. This is the first hurdle and if it clears that, its time to upload it to your demo account and forward test it to see how it performs in the market. Moreover, forward testing is the best way to ensure that a given indicator will add value to your strategy.

The testing process you put custom indicators through needs to be rigorous. It has to be robust in two senses: First, it should comprehensively test each indicator you select and, second, it should test a broad range of indicators to provide you with a clear picture of what works and what works in your system.
Your friends here are time and work. The more indicators you put through a testing regimen, the better honed your system will be. Expect to test tens, if not hundreds, or even thousands of indicators throughout your career as a trader. The key is to avoid resting on your laurels but to always be learning and adapting.

Paying for Indicators

Should you go out and buy custom indicators to integrate into your platform? There is now a very broad market for custom indicators out there – some are free and some are paid-for. When you first encounter this it might seem a little daunting. You will ask yourself, are the paid indicators better in some way? As many experienced technical traders will tell you, ultimately there is no guarantee of a difference. Those who have already put the time and effort into exploring and testing the custom indicators that are floating around out there will have discovered the following: the main thing separating paid indicators from those you can download for free is that the person who made them decided to try to charge for them. The vast majority of custom indicators that somebody else made are likely to either a) not work properly at all, or b) not suit your particular system or strategy. This applies equally to those that are free and those that cost actual money.

So, should you just ignore the indicators that will cost you a few bucks? There’s an element of personal preference in the answer here. Because technical trading is an unending cycle of learning and re-learning, there is a good chance you will not regret paying for an indicator even if it turns out that it isn’t very useful. Even just by taking it through a robust testing process, you will learn something – both about the indicator itself and about your approach to trading. There is also the caveat that an indicator you pay for could turn out to be really useful to you and end up helping you to make many times over the 10, 30, or 50 dollars you paid for it.

It is also possible that you will pay for, download, and test an indicator and then decide not to use it. But that down the line at some point, as your trading strategy evolves and as you learn new approaches, you will want to go back to an indicator you previously decided to set aside. Maybe you will realize that you can tweak it to make it a useful addition to the way you trade or maybe the way you trade will change over time to the point that you need a new mix of indicators that will now include one you bought two years ago, say, and never used.

The Bottom Line

Whatever approach and strategy to forex trading you are designing for yourself, you will certainly benefit from the myriad of custom indicators available out there. You don’t have to feel like you have to pay for indicators – there is no guarantee that paid-for indicators will work any better than free ones. The key thing to remember is that any indicator you are thinking of using will have to go through a comprehensive testing phase – whether you chose to pay for it or source it for free.

Categories
Beginners Forex Education Forex Basics

Tips for Trading During the Holidays

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

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

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

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

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

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

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

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

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

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

Categories
Beginners Forex Education Forex Basics

Staying in the Zone While Trading

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

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

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

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

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

Confidence

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

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

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

Control Stress Levels

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

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

Avoid Distractions

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

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

Preparation

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

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

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

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Beginners Forex Education Forex Basics

Overcoming the Challenges of Trading at Home

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

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

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

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

Access to Your Money

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

Create an Office Space

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

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

Get Rid of Distractions

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

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

Take Breaks to Socialize

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

Set a Schedule

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

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

Do Not Work or Trade Too Much

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

Go Outside

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

If You are Sick, You are Sick

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

Maintain Discipline

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

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