Tag: NEW

Currency Trading Basics – Learn These Facts Before You Trade and Avoid Becoming a Loser!

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The facts enclosed should be obvious but most traders ignore them and lose and if you make the same mistake you will lose too – so lets take a look at them and give you some ideas on how to get on the road to currency trading success.

Lets first look at the way most traders seek currency success and its by buying a hundred buck robot or expert advisor. These traders seriously think they are going to make huge gains for life, with no effort and all for the cost of a night at the bar and of course they all lose. These systems are so cheap because they don’t make money.

Let’s state a fact 95% of traders lose money and if you could get rich with no effort a lot more people would win at Forex and they Don’t. You need to learn the basics, as you do in any profession but the fact is:

Forex trading is simple and simple systems work best, as they are more robust and less likely to break than a system cluttered with indicators – so don’t try and be too clever or work to hard, as these traits will not increase your chances of success! Anyone can learn a simple system with the potential to win but you have to make it win, this now brings us to our last fact which is the reason 95% of traders ALWAYS lose money.

The reason traders lose money is simply due to mindset and you must have the correct one to win – so what is the correct mindset?

The correct mindset involves taking losses unemotionally and keeping them small. Most traders hate taking a loss and when their losing they refuse to take it and get wiped out. It sounds easy taking losses but it’s not when the market is taking your money and making you look an idiot but it’s what you must do and if you keep your losses under control, the markets will always reward you with some great trends you can run.

Forex trading is simple to learn yet few traders succeed and its not that they can’t learn a successful system- they can in fact – anyone can however a good system is not enough to make you money on its own.

The reason for this is you need to apply it with the correct mindset to make big gains but the good news is – choosing the right mindset is a choice, if you swallow your ego and keep your losses under control, your on the road to currency trading success.

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Day Trading Articles – How To Find The Best Authors

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With the rise of day trading online, there are a lot of day trading articles on the net. If you want good information you want day trading articles that have been written by people who actually trade and thats what were going to look at here.

The vast majority of articles written on day trading are not written by traders at all. There normally written by people who are simply trying to make money by appealing to traders to visit their site where they have ad words or products from vendors for sale.

These products appeal to people who are looking for an easy way to make money in forex and they lose.

The fact is day trading simply doesn’t work.

As an experienced trader, I find it amusing that people actually believe what some authors say in terms of day trading, here are just some examples:

“Predict market tops and bottoms with 90% accuracy”

“Scalp profits everyday”

“Earn $10,000 a month with this system”

Of course these day trading systems don’t work as the track record that comes with them will have the disclaimer below (or a similar one), read it carefully:

“CFTC RULE 4.41 – Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown”.

What this means is a vendor can make up any track record they like in hindsight, knowing the closing prices – but trading is actually a little more difficult, you have to trade without knowing the closing prices!

You will never see a day trading system with a track record of real gains, audited with account statements over the longer term. If you do – let me know because I have been trading for 25 years and never seen one.

Day trading forex day trading stocks, day trading commodities, day trading CFD’s – it doesn’t matter – day trading does not work in any of them due to the following:

All volatility in short term time frames is random and prices can and do go anywhere, meaning that if you try and use support and resistance levels they wont help you with your trading signal or help you get profitable market timing.

You therefore can’t get the odds in your favour and will lose over time.

This is fairly obvious when you consider that the price in any financial market is made by a vast diverse group of traders.

You simply cannot predict what this vast mass of people will do in a period of a few hours – the time period is simply to short.

If you want to make money trading then you need to trade longer time frames, where you can calculate and get the odds in your favour. This means swing trading or trend following.

So the next time you read a day trading article you should be aware that the person writing it has probably got no experience on the subject they are actually writing about. There are lots of day trading articles and the vast majority of the authors have simply never traded.

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Forex Trading – Why Most Trader’s Can Never Accept Huge Gains

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Most forex traders simply never make big returns because they cannot accept them. This may sound paradoxical as you would think most traders would want this and yes they do – but a psychological problem stops them from making the returns they deserve.

Traders have more problems accepting profits than taking losses.

Taking a loss is easy you place your stop and your taken out or not with a profit you don’t have such clear cut levels to work with – in fact you have no levels at all as the trade could produce a minor profit of a few hundred dollars or a huge profit of $5,000, $10, $20,000 or more but:

When do you take profits?

This is the problem for most traders.

The dilemma is most traders have problems staying with a long term trend, as open equity swings eat into their open profit.

Here is a typical example of what happens.

When a trader gets a profit he gets excited, the bigger the profit becomes the more excited he gets and the more tempted he is to take it. All the time as the trend is moving volatility causes retracements and losses in open profit.

As the profit gets bigger and the swings against him more violent the more nervous he gets and in the end he moves his stop up or snatches the profit and banks it.

He then watches as the trend continues the way he thought and make a huge profit while he only has a minor profit despite getting the trend right.

So how do you cope psychologically with the above?

Here are some guidelines that will help you milk and maximize your profits from major trends.

1.Have Courage

You’re after a big profit, so you know that if you believe the trade has further to go you need to accept short term price swings against you. Short term dips in equity, are a by product of making huge gains.

2.Risk = Reward

Do NOT Move your stop to quickly leave it in its original position and trail it up slowly, a big trend will sometimes show huge volatility as it develops and this means not getting clipped out early. Traders try so hard to avoid risk they actually create it by getting clipped out by putting their stop to close.

3.Trail Slowly

If you want to make money from the big trends you are going to have to trail your stop slowly and this means that at the end of the trend, you are going to give a big chunk back at the turn – this is unavoidable with long term trend following so get used top it. Comfort yourself with the knowledge that if you caught just 50% of every major trend you would be very rich.

The KEY

Is to have rock solid confidence in your forex trading strategy and accept that you will give back profit and lose open equity but acceptance of the above will make you a lot of money.

A lot of traders think that they actually don’t deserve big gains and they should take what they can get but if you have the courage and conviction to hold a big trend you deserve every cent of it – because most traders are simply incapable of doing it.

Accepting big profits is not easy psychologically – but get the right mindset and a solid system and you could be catching the big trends that yield thousands or tens of thousands in profits, so get ready to accept them when they come your way!

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+ PROFESSIONAL FOREX TRADING COURSE

For free 2 x trading Pdf’s with 90 of pages of essential info and a great currency trend following course visit our website at: http://www.learncurrencytradingonline.com/index.html

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