Forex mistakes and sins.

[youngfx]

3 Mistakes to Avoid when Plotting Fibonacci Tools on Forex Charts

Successful Forex trading using technical analysis hinges a lot on correct application of technical indicators, and the Fibonacci tools are not an exception. It is pretty easy to apply a tool like the Fibonacci tool retrospectively when the price action is all done and nicely fits, but the real challenge is how to apply the Fibonacci tools when trying to determine where a retracement action is going to end for a renewed trend move to resume. In this piece, we will try to identify common mistakes that traders make when using the Fibonacci tools and how to avoid them.

1. Plotting Fibonacci retracements on a short time frame.

This is perhaps the greatest mistake made by traders when using Fibonacci tools such as the Fibo retracement tool. Why is this so? In Forex, the market activity in a short time frame such as the 15- minutes or 1-hour time frame is too short to effectively determine the trend of a currency. What the trader may see as a strong downtrend on a 1-hour chart or a 4-hour chart may actually be a retracement on a daily chart. Trying to plot a Fibonacci retracement tool on the shorter time frame will only end in disaster. The trend pattern of currencies on a longer time frame such as the daily chart is usually a better determinant of the trend. The best thing to do here is to use the longer time frame to determine the trend, apply the tool and then switch to the shorter time frame to make your entry determination.

2.Over-reliance on the Fibonacci tools

In Forex, it is a bad practice to use only one indicator to carry out your technical analysis. Confirmation of the entry is best done using two or three indicators that supplement each other, and the Fibonacci tools are not an exception.
To give an example, let us assume a currency pair is undergoing a downward retracement following a particularly strong uptrend. Where do you possibly think the retracement will halt, especially given the fact that there are five possible retracement levels (23.8%, 38.2%, 50%, 61.8%, 100%)? This is where you have to turn to other indicators such as the Stochastics, MACD or RSI for help. For example, if I get a Stochastics cross at an oversold level (i.e. Stochs crossing upwards at

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Always confirm entries with more than one indicator.

3. Misapplication of the Fibonacci Tool

Many times, traders simply misapply it. What does misapplication mean? Fibo tools are best plotted from the swing high to the swing low. If the trader does not use the highest or lowest points on the chart for tracing the tool, an inaccuracy has set in and this is a clear example of misapplication. Another example is tracing the tool from a candle shadow to a candle body or vice versa. A trader must be consistent. For the best results, always trace from the tip of the upper shadow (the wick) of the candle making the high, to the tip of the lower shadow of the candle making the swing low.

These are the common mistakes made by traders when using the Fibonacci tools. Avoid these mistakes to get the best results possible from your Fibonacci tools.

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Mistakes to avoid in Fibonacci Retracement
Fibonacci retracement is a term employed in technical analysis. it’s the potential retracement of a financial asset’s original move in price. It refers to the areas of support which means the value stops going lower or the resistance which means the value stops going higher. Forex traders can eventually use Fibonacci retracements. Some can use it often and a few can use it for a few time. it’s not necessary how usually you utilize the strategy what matters is how to properly use it.
If you utilize technical analysis technique improperly it’ll undoubtedly result to bad entry points and losses on currency positions. in this article we are going to make a case for the things that you simply should avoid in Fibonacci retracement.

1. you must not mix Fibonacci reference points
It is recommended to stay the reference points coherent. If you’re obtaining the bottom price of a trend through the close of a session or the body of the candle, the high price will be found inside the body of a candle on prime of a trend. If you combine the reference points can result to misanalysis and errors. Fibonacci retracements ar applied on a wick to wick basis.

2. Avoid looking forward to fibonacci alone.

An information won't be really true if you are doing not ensure it. it's also applies with Fibonacci. you would like additional support or technical tools to substantiate that there's a trade chance. If you probably did not use different tools or if you probably did not make sure your findings the merchandiser can have a solely somewhat hope of a positive result. you'll use MACD and random oscillators as tools to substantiate the findings you bought from fibonacci.

3. long-run trends shouldn't be neglected.

In trading, you mostly ought to look into the larger image that may be a rule that a beginner ought to learn since they unremarkably live the many moves and pullbacks solely within the short term. during this regard, the merchandiser ought to look into the long-run trend since you'll be able to apply fibonacci replacements in a very correct direction of momentum through the long run trend.

For example, if you utilize fibonacci retracement in a very graph it'll show that the currency try goes upward, if it happens then that's the time you'll be able to go long therein currency try. mistreatment fibonacci in a very longer timeframe is best than mistreatment it in a very shorter timeframe. Also, it's less reliable if you utilize it in a very shorter timeframe. you furthermore mght ought to confine mind that in statistics you would like to urge additional knowledge so as to urge a stronger analysis. mistreatment longer timeframe can assist you get a additional reliable data’s.

---------- Post added at 02:08 PM ---------- Previous post was at 02:06 PM ----------

Mistakes to avoid in Fibonacci Retracement
Fibonacci retracement is a term employed in technical analysis. it�s the potential retracement of a financial asset�s original move in price. It refers to the areas of support which means the value stops going lower or the resistance which means the value stops going higher. Forex traders can eventually use Fibonacci retracements. Some can use it often and a few can use it for a few time. it�s not necessary how usually you utilize the strategy what matters is how to properly use it.
If you utilize technical analysis technique improperly it�ll undoubtedly result to bad entry points and losses on currency positions. in this article we are going to make a case for the things that you simply should avoid in Fibonacci retracement.

1. you must not mix Fibonacci reference points
It is recommended to stay the reference points coherent. If you�re obtaining the bottom price of a trend through the close of a session or the body of the candle, the high price will be found inside the body of a candle on prime of a trend. If you combine the reference points can result to misanalysis and errors. Fibonacci retracements ar applied on a wick to wick basis.

2. Avoid looking forward to fibonacci alone.

An information won't be really true if you are doing not ensure it. it's also applies with Fibonacci. you would like additional support or technical tools to substantiate that there's a trade chance. If you probably did not use different tools or if you probably did not make sure your findings the merchandiser can have a solely somewhat hope of a positive result. you'll use MACD and random oscillators as tools to substantiate the findings you bought from fibonacci.

3. long-run trends shouldn't be neglected.

In trading, you mostly ought to look into the larger image that may be a rule that a beginner ought to learn since they unremarkably live the many moves and pullbacks solely within the short term. during this regard, the merchandiser ought to look into the long-run trend since you'll be able to apply fibonacci replacements in a very correct direction of momentum through the long run trend.

For example, if you utilize fibonacci retracement in a very graph it'll show that the currency try goes upward, if it happens then that's the time you'll be able to go long therein currency try. mistreatment fibonacci in a very longer timeframe is best than mistreatment it in a very shorter timeframe. Also, it's less reliable if you utilize it in a very shorter timeframe. you furthermore mght ought to confine mind that in statistics you would like to urge additional knowledge so as to urge a stronger analysis. mistreatment longer timeframe can assist you get a additional reliable data�s.

[smmunni]

Forex mistakes and sins include,
1.trading without limits,
2. getting greedy
3. unexpected decision without thinking the consequences.
4. too much money invest for nothing. Must understand first and then go for more invest.

[bablu7832]

I think the most common mistake in Forex is to trade with impatience and indiscipline.We mostly loose because of greed and fear.Lack of knowledge and experience is also major reason.If we want to earn consistent profit in Forex then we must trade using good strategy.

[jancaree3]

These kinds of typical currency dealing errors can be prevented. All you need to comprehend is that little variations occur all enough time and it is better to prediction about upcoming by examining activities and understanding which industry occasion can indicate an incident of raise in near upcoming

[youngfx]

Why You Don’t Need To Be Smart To Be a Trader

Many people think that you need to have a Master’s degree in Finance or be some Albert Einstein math-wiz to be a successful Forex trader. Well, I am living proof that you don’t need some fancy college degree or a doctorate in mathematics to be a skilled trader in the Forex markets. I started trading when I was in high school and shortly after getting out I started to become successful as a trader. I never finished college, and I don’t claim to be the “sharpest tool in the shed”. However, what I understand, and what other consistently successful Forex traders understand, is that trading success is not only about knowing you need to control yourself and your actions in the market, but actually doing it.

I know that sounds simple, but being a successful Forex trader really does boil down to these two main points:

1) Understanding that you must consciously control your interactions with the market so that you always do what is logically and objectively the best thing for your trading account at any given time.

2) Actually doing number one; it’s not enough to just understand….you have to actually DO. Remember, as Yoda said in Star Wars, “No! Try not. Do, or do not. There is no try.”

A good analogy for this concept is the fact that some doctors smoke cigarettes, I personally had a a doctor who I knew was a smoker when I was kid. Now, it’s pretty safe to say that all doctors UNDERSTAND they should not smoke or do anything to damage their body. So…it isn’t that they aren’t smart enough…it’s that they just don’t have the proper habits and (or) they aren’t disciplined enough to carry them out.

The same thing can be said for many Forex traders; it isn’t that they aren’t smart enough to understand how to trade properly….it’s that they just don’t DO WHAT THEY KNOW NEEDS TO BE DONE.

• Long-term success vs. short-term satisfaction

Successful Forex traders understand that their trading success is measured over a large series of trades, not just a few. This is not a difficult concept to understand; you don’t need a genius IQ or a degree in finance to understand this. So, once again, we are seeing exactly why you don’t need to be super smart to be a successful Forex trader. What you DO need is some common sense and the ability to act on what you know is true.

So, a key element to becoming a consistently profitable Forex trader is aiming for long-term success, rather than short-term satisfaction. Giving into short-term satisfaction is the main reason why most Forex traders lose money. It isn’t enough to just know that you shouldn’t give into short-term satisfaction in regards to your trading; you have to actually not do it. Amateur traders end up over-trading and risking too much because they cannot overcome the temporary satisfaction that these actions bring to them. You have to be able to ignore these temptations with the knowledge that exercising patience and discipline is the only way to become successful over a longer period of time. What good is winning a few trades really quickly if you give all your winnings back the next week or the next day? Traders who give in to short-term satisfaction are constantly experiencing very volatile changes in the equity curve of their trading accounts, this usually ultimately ends in disaster with a blown out account.

So, while it is important to understand the importance of patience in Forex trading, you ALSO need to execute this understanding by ignoring all the short-term temptations that will come at you every time you open your trading platform. In fact, you could say that the way you manage your interactions with the Forex market is far more important than your intelligence or your ability to understand complicated mathematical trading algorithms or any other similar unnecessary trading “tool”.

• What types of people typically make good traders?

While there is no concrete rule as to who can be a successful Forex trader and who can’t, certainly people who are naturally more disciplined and realistic have an easier time achieving success in the markets than people who lack discipline in most areas of their lives and (or) who tend to ignore reality.

Discipline and overall fortitude are indeed FAR more important than intelligence when it comes to successful Forex trading. Many highly successful people in other fields fail miserably when it comes to trading the markets. Doctors, lawyers, college professors, you name it, there is no shortage of people from these highly-skilled fields and others that have lost thousands of dollars in the markets. It’s not because they weren’t smart enough to understand the concepts…this clearly is not the case; the reason highly intelligent and highly skilled people have no real advantage over anyone else is because becoming a professional Forex trader depends mostly on your ability to execute…not to comprehend.

It is execution of discipline that makes a successful trader, this means reinforcing positive trading habits instead of negative ones and making a conscious effort to make sure all your actions in the market are logical and not-emotion based. For these reasons we often see ex-military personal succeeding in the markets; because they know what it’s like to make discipline a part of their everyday lives. This is not to say that successful and intelligent people in other fields cannot be successful traders, in fact this is obviously not the case it all, I am just trying to emphasize the fact that intelligence and previous accomplishments do not really matter at all when it comes to trading. What matters the most is your ability to stay dedicated to and master your Forex trading strategy, your ability to stay disciplined in the face of constant temptation, and your ability to stay realistic.

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• Keep It Simple Stupid

Yet another result of amateur traders erroneously believing that trading needs to be complicated or that they need to be super smart to succeed at it, is the fact that so many of them employ Forex indicators and (or) Forex trading robots to try and analyze and trade the market.

I won’t lie to you guys, early on in my trading career I tried all the typical indicators, I was stuck in the analysis-paralysis rut and I thought there was some “magic” combination of indicators that if I could just figure out, would give me a virtual key to riches. After enough trial and error I realized that was just not true. I began to notice the beauty in the simplicity of the price action occurring underneath all the messy indicators I had on my charts back in those early days. Once I peeled off all these indicators and swore them off forever, I began trading on simple price action strategies, these are the same ones I use today and that I teach to aspiring traders, granted I have definitely tweaked and refined them, but the simplicity remains, because it works.

You see, there is no “magic” indicator and there is no knowledge that I have that you guys cannot or do not already have. The difference between traders who are successful like me, and traders who are not, can only be explained through the difference in our behavior in the market. I trade a lot less than you might think, and so do the other successful traders who I know. It’s all about trading Forex like a sniper instead of a machine gunner.

[youngfx]

Understanding forex trading and Improving your Trading Skills

Forex also referred to as exchange market or currency market. It’s a business of buying and selling of currencies against one another, which are known as currency pairs. As an example, USD/CHF pair refers to the rate of exchange between the U.S dollar and the Swiss Franc. Inside the currency market you’d be ready to buy or sell currency pairs, thus if you’re thinking that the U.S dollar can rise against the Swiss Franc you’d elect to buy the USD and sell the USD if you’re thinking that the Swiss Franc would rise. Same would apply for all currency pairs like EUR/USD, USD/CAD, EUR/JPY etc. The currency within the front is that the lead currency thus if the USD/CAD is pricing at 1.1082 suggests that one USD is of value 1.1089 Canadian greenbacks. If the value for USD/CAD was showing as 0.8983 would mean one USD is of value $0.8920 in Canadian equivalent.

Daily forex trading is thought as being difficult even to individuals with years of trading expertise. However, understanding the fundamentals and knowing precisely why currency pairs move up and down against one another can alleviate this worry and create it abundant easier to become profitable trading the forex market. However, knowing currencies movements within the short term and future don’t mean you may be ready to properly predict the result anytime, though market knowledge is a wonderful approach of deciding what this scenario is at any given time. It’s nearly as good the simplest way as you may notice of predicting future market behavior. Nevertheless, it’s not a secured predictor and consequently even the foremost old Traders typically lose on trades thus it’s vital to come back up with a trading plan that you follow carefully. Creating investments primarily based on emotion or such is typically not a decent plan and deviating from your investment budget isn’t a decent plan

The less expertise you’ve got in something you are doing causes you to a lot of mistakes initially. Once trading the Forex market, mistakes will find yourself costing you real cash. It’s so important to your success that you simply have a good trading strategy. For example: solely create a trade supported with information obtained through market knowledge and grasp precisely what quantity you wish to gain or lose on every trade thus you recognize when to sell your investment regardless if it’s a winning or losing trade. Forex trading could be a proportion game where you may NOT forever be making profitable trades however as long as you stick with your strategy and significantly your budget, you’ll be able to achieve success within the forex market.

One way of gaining valuable trading skill and knowledge while not trading any real cash that may quickly result in expensive mistakes and risking your finances, is to start out by employing a demo account which will primarily provide you with fake money that you simply can use to execute forex trades in a real trading condition. These simulators precisely replicate the real-life forex market and would not only enable you to learn the way to trade with success within the forex market while not risking any real cash however also enable you to be get the way to use the trading software on your PC thus you’ll be able to quickly and simply create real trades with real cash once you’re assured in your ability and prepared to trade with real capital

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Forex Signal Providers, Good or Bad

The factor to check out for with a forex signal provider is that they are not fully dependent upon their expert advisors or Robots and have some form of human intervention or human primarily based checks on ground. Robots are illustrious to fail eventually and though there are various promotions out there designed to make us believe otherwise, ultimately market conditions get the higher of them eventually and that they incur big losses.

With human monitoring or a minimum of twenty four hour regular investigation to confirm up and returning times of volatility, it’ll ensure a safer signal performance. A symbol provider will provide 2 totally different ways; they’ll either send data for the trader to put the trades themselves through SMS or Email or they’ll work on an additional automatic basis by sending electronic signals straight into traders MT4 accounts. Each has benefits and drawbacks that we are going to investigate currently.

Getting signals via email or SMS service is nice if you’re able to access your trading platform at an instant and obtain a good market price. The provider may additionally send prices of entry and exit levels at the start of the day in order that you’ll set and leave trades. The apparent disadvantage here is the reality that you may not have access to your broker at the time of a trade or in the other hand of set and leave trades the market price might change at an instant and you are unable to react to the market conditions. A good advantage of a signal alerts service is that the proven fact that you can choose and opt for the trades that you suppose are less risky.

Getting signals straight into your MT4 account has the unique advantage that the total system will be fully automatic and provides you a very hands free investment expertise. However, the disadvantage is that the proven fact that may not have any intervention with the signals that are sent (note: this may even be a plus for emotional traders) therefore if a trade seems like it’s a nasty plan it’s going to well get placed anyway.

There is lot to be considered for signal providers if you get one that maintains a profitable history. You must ensure you get a trading history from a provider before you sign on to their service and make certain that it will be checked by a third party verifier like Myfxbook or MT4i, these firms provide you with a clear view of the traders history and trading strategy that they use.

[youngfx]

Avoiding the Fear of Losing Trades in Forex

If you’re hoping to be a quality trader, then you’re going to lose money at some point, and just in case you’re still within the path of attempting to avoid all losing trades and looking for a “Holy-grail” trading system with a high winning rate, you have to remove all that thought without delay. As hard as it might sound, losing is a component of winning as a trader; the two go hand in hand. If you don’t discover how to lose properly you may never create consistent income as a trader.

All professional traders lose their money, and that they understand it’s simply a part of the “game”. Sadly, for several traders, each trade they enter is in the middle of an incredible concern of losing money and typically intense emotional attachment.

Major factors why traders become scared as to losing their money may associate with the following:

1. They don’t perceive that mathematically, over a series of trades, a trader will lose a majority of their trades and still be profitable.

2. They’re just too terrified of losing money normally.

3. They are trading positions that are too massive (risking over what ought to be), inflicting concern upon themselves, sleepless nights and large emotional swings.

Fear of losing capital may be a sensible feeling to possess in several areas of life, if we tend to not have it there would be even additional problem in the world and within the forex markets. Humans are always protective of their wealth and property, and justifiably so because they labored for it.

In trading however, this normal behavior to be defensive and emotional with cash has to be reworked and defined into a unique mental state.

Instead of being terrified of losing your money once trading, embrace the management you’ve got on every trade; a trader has complete management over each trade via stop losses and lot sizing. These risk management tools are your approach of being up to speed with your funds, and rather than being “fearful” regarding losing cash, you ought to feel confident and assured. As a result, you’ll predetermine what amount you’re comfortable with probably losing BEFORE you enter a trade by utilizing these money management tools.

However, simply employing these tools to manage your risk per trade isn’t quite enough to all take away the concern of losing.

If you’re trading your hard-earned money in the markets however, and you don’t grasp what your trading edge is and you don’t have 100% confidence in your ability to understand and trade the markets, you most likely shouldn’t be trading. One amongst the largest reasons traders become afraid to lose their trading capital is as a result of they aren’t assured in their own ability to trade. It appears silly though, however it’s terribly true. Several traders merely don’t have an effective trading strategy, they don’t have a trading set up. They merely aren’t ready to risk real cash within the markets yet, thus they feel concern after they trade.

If you don’t grasp what your per-trade risk tolerance is, then you would like to work that out initially. It’s simply the dollar amount that you’re 100% confident with probably losing on any trade; because you can lose on any trade, remember that. You have to require into consideration your overall financial state of affairs in order to verify what amount of money you ought to realistically and honestly risk in the market on any one trade. Be honest with yourself here. You need to think about yourself as a risk manager and as somebody who is managing capital, instead of simply a smart guy looking to play lucky; your trading attitude can directly influence your trading results.

Even profitable traders generally lose more than they win, for instance, imagine a trading account of 15 trades which over a given period has made a ROI of 80% with a 43% win rate. To be clear, which means you’re losing 57% of all trades and simply winning 43% of them. It may be senseless to associate “losing” the bulk of your trades with making huge profits; however maximizing the profitable trades to the fullest would allow the few winning trades to recover the managed (small) losses from the numerous losing trades.

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How to Trade Forex at the Right Time

Most traders create the error of trading on all market conditions. The reality is that typically it’s wiser to merely not trade. Typically the markets are too inconsistent to trade with any accuracy or effectiveness. It’s these times traders tend to relinquish back all their recent profits (and sometimes more).

I am aiming to allow you to guys in on somewhat ‘secret’ today; the quickest route to creating cash in the forex markets is by capital preservation. You see, most traders don’t preserve their trading capital long enough to create any substantial gains within the market. Instead, they trade it all away in a very flood of emotional trades that reduce their accounts all the way down to nearly nothing. Then, they own very little to trade with once the market conditions change and the trading becomes easier and a lot more profitable.

As a professional trader, a part of your job is to determine market conditions; you want to not solely learn the way to identify high-probability price action setups, but to determine the market context that they evolve in. Meaning, a part of trader is learning to work out the underlying bias of a market, not simply trading any market setup you see. Your goal is to attend for the ‘perfect storm’ of a high-probability trading pattern forming at a merging purpose within the market, and to create certain that the setup ‘makes sense’ in line with the conditions of the market once the setup forms.

Seriously, AVOID trading every week; don’t consider the markets for a week. There are fifty two weeks in a very year; you don’t have to trade each one of them. It’s fairly safe to mention a minimum of two or three of these weeks (probably more) can contain terribly stormy price action that may shred your trading account up if you attempt to trade it. One of your jobs as an advanced trader is to spot once the market is stepping into a consolidation section that’s too stormy to trade. I’ll admit, this can be easier aforesaid than done, however once you pay more time analyzing a market’s price action, it’ll become easier for you.

One issue you’ll do is to easily take your time off once a winning trade. We tend to feel like trading a lot more after a winning trade or a series of winners. Most of the time, these trades are based on emotion and an over-estimation of our own ability to predict the market. In short, once you hit some winners, trading looks plenty easier than it is and we become blind to the very fact that we’ve the potential to lose capital on any trade we take. This causes several traders to relinquish back all their gains.

Taking time off trading on the markets isn’t a foolish idea, particularly after closing a winning trade or once the market is chopping sideways and lacking direction. Several traders give back all the money made when the markets were trending as they go into periods of chop. This behavior cannot be fully avoided no matter how good you are as a trader. However, there are some clear price action based clues that we can use to assist us determine a stormy market so we will then keep out of it.

Many traders trade during times of chop as they feel that urge to be within the forex markets all the time. They assume they’ll miss out on opportunities if they don’t trade all the time. Don’t worry regarding missing out on trade opportunities, the market isn’t going anyplace and it’s wiser to be slow and organized than quick and impulsive once it involves trading your valued capital in the forex markets.

[youngfx]

How Often Do Professional Forex Traders Actually Trade?

This article is going to challenge some of your beliefs about trading, especially the beliefs you hold about how often you should trade and the consequences that your trading frequency can have on your forex trading account. Hopefully after reading it you will gain some powerful insight that will help you stop over-trading or prevent you from turning into an over-trader like the guy in this picture on the right.

One of the biggest obstacles standing in the way of amateur traders becoming professionals is their lack of recognition and(or) acceptance of the fact that trading less frequently almost always produces more consistent and more profitable long-term market performance than over-trading and interacting with the market too often (ie: Day trader market junkies).

Professional traders view each interaction with the market through a realistic lens that does not filter out the risk involved with every potential setup, whereas amateur traders tend to think less about the risk involved and more about how much money they can make if XYZ happens. This is an important point to take into consideration before you enter your next trade.

• The extremely slippery slope of over-trading

If you have had any experience trading real money in the markets you very likely have experienced first-hand just how slippery the “slope” becomes once you start over-trading. Most traders do not even recognize they are guilty of over-trading until they have lost so much money that they are forced to take a break from the market, it is then that they typically realize what they have done; entered numerous trades with no sound logic or rational behind them.

Professional traders are always aware of the dangers of trading too frequently, they know that it is a very short stretch from entering one too many trades to full-scale addiction to the forex market and to chart watching. In essence, amateur traders that get caught up in a fit of over-trading in the forex market are simply gambling; continually entering the market randomly while hoping for a windfall profit. The professional trader is not a gambler; he or she is a risk manager who simply seeks to flawlessly execute their edge in the market only when it is present.

This typically means that most professional traders are not day trading or scalping, instead they are focused on multi-day positions and look to take a good slice of the action that takes place in the market each week or month. This typically means taking multi-day positions in trending markets, because it is easier to take larger chunks of price action out of a trending market by holding multi-day positions than it is to constantly jump in and out trying to scalp the market each day.

Trading less frequently like this also makes you more immune to the slippery slope of over-trading. Even if you are following an effective day-trading or scalping edge, when you trade with the high frequency demanded by day-trading and scalping strategies, you drastically increase the odds that you will give in to the ever-present temptation to jump into the market when your edge is not truly present.

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• You can’t get hurt from the sidelines

The value of simply NOT BEING IN THE MARKET cannot be overstated. Many amateur traders don’t even consider that being flat the market can actually be a very lucrative position, not to mention it is the SAFEST position you can take in the market.

To understand why not being in the market is actually a lucrative position you have to look at it from a different perspective. Let’s say point A is being flat the market, and point B is where you trading account stands relative to point A after a losing trade, you obviously had more money at point A than at point B, thus point A (being flat the market) is actually a lucrative (profitable) position compared to point B since you have more money in your trading account at point A than you would have had if you had lost that money in the market and went to point B.

The fact that most amateur traders simply do not even consider the fact that being flat the market is valuable is directly related to the fact that they simply do not believe the market is as risky as it actually is, or they simply ignore this reality. Professional traders are fully aware of the risk involved in the market, therefore they inherently understand the value in being flat the market, and thus they trade less frequently than amateurs.

• How does trade frequency relate to long-term trading performance and a trader’s mindset?

Once you identify exactly what your trading edge is, and the market conditions that are best to trade it in, you can begin to trade with patience and precision because you now know EXACTLY what you are looking for in the market. In essence, you have to master one forex trading strategy at a time, so that you can almost instantly look at any price chart and tell if your edge is present or not. Once you obtain this level of trading mastery and skill, over-trading or entering a position when your edge is not present will seem silly to you and just down- right stupid (because it is!). To put it more succinctly, you are more aware of whether or not you are over-trading when you are completely aware of what your forex trading strategy is.

Due to the fact that professional traders have mastered their forex trading strategy, they trade less frequently than amateur traders because the pros are looking for a very specific event to occur in the market, rather than throwing darts in the dark like so many amateurs do. So, it almost goes without saying that once you totally mastered your trading edge, entering trades when your pre-defined edge is not present will have a negative effective on your long-term profitability. So, trading with precision and patience inherently means trading less often, but it also means greater profits in the long-run, which is the whole point of trading.

Traders who follow their trading strategy to the T actually enjoy the patience and the down time in between trades, it becomes routine and comfortable over time. They do not feel a “need” to trade when there is no setup that fits their criteria. Operating from this confident yet carefree state of mind while interacting with the market is the way you reinforce positive forex trading habits, like patience and discipline, because when you wait patiently for your edge to appear and then execute it with effective risk management, you will see positive results after doing this for a series of trades, these results will reinforce the positive trading habits that produced them.

Amateur traders tend to reinforce negative trading habits like over-trading and over-leveraging by getting lucky a few times while committing one or both of these trading errors, it really only takes one big lucky winner while over-trading or over-leveraging to condition your brain to constantly over-trade and(or) risk too much.

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So, how often DOES a professional trader trade?

There is obviously no set answer for the number of trades that professional traders make each month, as every trader is different. However, if you are currently losing money in the markets you can safely assume that professional traders are trading less frequently than you are. If you are currently stuck in a rut of over-trading, one thing you can do if you are not already, is switch to strictly trading off the daily charts. Higher time frames lead to less trades but more precision and accuracy of the trades that you do take, you can also employ “set and forget forex trading” on the daily charts that requires only minor tweaking and minimal involvement beyond identifying your edge and setting the trade up.

In conclusion, if you take nothing else away from this article, just remember that professional traders are on average trading less frequently than you are simply because they fully accept and understand the risk involved with any one trade, so this tells you that you need to reduce the frequency that you trade or that you interact with the market. Let’s say that price action trading is going to be your trading strategy, once you master this trading strategy and you know exactly what you are looking for, there is no reason to sit at your computer all day staring at your charts. Set up a routine each day that you follow; you check for your edge, and if it isn’t there you come back the next day, or the next 4 hours or whatever your routine is. But, you don’t ever need to sit there and burn your eyes out watching the charts if you know what you are looking for. If you don’t know what you are looking for and you want to learn a very simple yet effective trading strategy that can give you a solid edge in the market, you should check out my price action trading course and online member’s trading community.

[youngfx]

Master One Forex Trading Strategy at a Time


Master One Forex Trading Strategy at a Time

Do you want to become a MASTER of your Forex trading strategy? If so, you will need to have laser-beam like focus, you cannot waver and change strategies every week like many amateur traders do. Bruce Lee was arguably the best martial artist of all time, and guess what? He was not born the best martial artist of all time. He earned that title through dedication and focus…he learned to become a MASTER of his craft…if you want to succeed in Forex you will need to do adopt the Bruce Lee mentality…

Forget everything you have learned up to this point in your trading career, because if you truly want to master a new Forex trading strategy you really need to wipe the slate clean of all the confusing indicator and software based trading systems you have likely used thus far. One of the biggest problems that plague traders who are trying to adopt a new approach to the Forex market is that they seem to bring a lot of preconceived notions and failed trading concepts with them. If you really want to excel at Forex trading and adopt a fresh new trading strategy, you need to focus on one strategy or way of thinking and stop allowing previously failed trading methods to influence your current perspective on the market.

• Train your Brain

Learning to master one trading setup at a time will help you properly train your brain to become more disciplined and objective, two characteristics that you absolutely must possess if you wish to excel at forex trading. The process of truly mastering and “owning” one forex trading setup at a time might take months or even years to accomplish, but your chances of making money are increased dramatically by doing so. After you completely master one trading setup you will know almost instantly whether or not your setup is present, there will still be some discretion involved, but owning and mastering a setup means that you have fine-tuned your sense of discretion when it comes to deciding which trades to take and which ones to pass on. Many traders search long and hard for some “holy-grail” trading system that allows them to avoid having to develop their discretionary trading skills, unfortunately for them, professional trading inherently involves a fine-tuned sense of being able to discern between A, B, and C ****e trade setups.

The discipline and objectivity that you will require as a result of learning to master one forex trading strategy at a time should spill over into other areas of your trading such as managing your risk and remaining calm and collected. When your thoughts are scattered on multiple trading strategies and (or) you have little confidence in the strategy you are currently using, you are obviously not going to make very wise trading decisions. Learning to master and “own” one forex trading strategy at a time will solve both of these problems because your focus will not be scattered amongst multiple strategies and you will naturally gain confidence in each setup as you master them one by one. Essentially, our goal in mastering one setup at a time is to reduce variables in our trading, many traders do the exact opposite when starting out by actually increasing variables through analyzing greater and greater amounts of technical and fundamental market data. Yet, the reason most traders lose money is not because they aren’t analyzing enough data, it’s because they over-trade, over-leverage, and analyze TOO MUCH data.

• Learn to Think like your Mentor

Obviously, if you are looking for a new trading strategy or mentor, what you were doing before was not working for you. Thus, it is paramount to your success as a trader that you adopt the same trading philosophies that your new mentor or trading strategy teaches, wash your mind of what you have learned thus far and completely immerse yourself in this new approach to the markets. In regards to what we teach here at learn to trade the market, this means learning to master one price action setup at a time, as this is how I initially found success in the forex market and so it is also what I recommend all my students do. As I have stated previously, after you master one price action setup you can move on to master another, until eventually your forex trading arsenal is fully loaded.

• Specialization is the Universal Key to Making Money

What do most people that make a lot of money in this world have in common? What do Tiger Woods and Bill Gates have common? Or how about George Soros and Venus Williams? At first you might say “nothing” besides the fact that they all make a lot of money. But what is the fundamental reason, behind all else, that these people and others like them make so much money while the rest of the world struggles to get themselves out of bed in the morning? One word; specialization.

People that make a lot of money focus in on one thing that they are passionate about, and they do it over and over and over until they achieve the result they are looking for. Simply put, you cannot really make a lot of money at anything in life if you master nothing. All of the people in the above example have literally “mastered” one thing, sure they had ups and downs along the way, but they did not let that bother them, instead they transmuted this negative energy into motivation and pressed on because they believed in what they were doing. Had they got involved and distracted with numerous other side-projects or interests they simply would not have achieved what they did. In forex trading we need to focus on one price action setup at a time and become a “specialist” in it, get to the point where you find yourself being someone that other traders look to for advice on the setup that you “own”. Become an authority on each price action setup before you move on to the next, there is no sense in doing anything half-ass in this world, and trading price action setups is no different.

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How to Master the Setup

Mastering one price action setup at a time is accomplished through literally making it the only setup you think about or look for when interacting with the market. You essentially live, breath, and sleep this one setup until you feel confident you know every angle and condition it can or should be traded in. Keep a trading journal to record under which market conditions the setup excelled in and which conditions it performed weaker in. Find all the information out on the setup you choose and learn everything you can about it. Once you do this you can begin implementing this knowledge on a demo account, only after you master this one setup on a demo account should you attempt to master it on a live trading account. If you find you are becoming consistently profitable with this one setup on a live trading account and you truly feel like you “own” it, then and only then should you think about adding a new setup to your trading toolbox.

• One Setup does not mean One Variable

In closing, a very important distinction to make here is that one price action setup does not only mean entering a trade when you see a well defined pin bar or other price action setup. By learning to master one “setup”, we mean you learn to master trading that particular setup in a particular market context. For example, you might learn to master the pin bar strategy in a trending market and only enter or exit at confluent levels within the trend, this is an example of how a “setup” can mean the actual price action setup itself and the market conditions that it is traded in. So, in order to fully master one price action setup you must learn to master this setup in one particular market condition, perhaps you want to master the fakey strategy in range-bound markets, or the inside bar in down-trending markets; the totality of the actual price pattern itself combined with the particular market condition you trade it in is what you must master in order to consider yourself a “master” of one Forex trading strategy.

[youngfx]

16) Don’t expect to win every trade

I’m going to let you guys in on a little secret that all pro traders know; you don’t have to be right to make money trading. In fact, you can actually be wrong on THE MAJORITY OF YOUR TRADES and STILL make money. Yes, that’s right. If you want to see how, click the article I just linked to.

The point is this, you can’t freak out every time you lose a trade, EVEN IF you think it was a “perfect” trade setup. I get a lot of emails from traders sending me charts of setups they took that they said are “perfect” and that they just “don’t understand why the trade lost because it was so perfect”. Well, the cold hard truth is that it really doesn’t matter why the trade didn’t work! Also, why do you care so much? Have you risked too much on that one losing trade? Do you expect to win every trade? If you do expect to win every trade you are in for a lot of struggle and strife as a trader. The sooner you accept losing as part of being a trader and devise a realistic plan to deal with it, the sooner you can get on to making money in the markets.
17) Enjoy Losing – Each loss brings you closer to a large win

Similar to the point above, you have to actually learn to enjoy losing. I know that sounds strange, you’re probably thinking “How can anyone enjoy losing?” Well, if you are really passionate about being a trader, and you’ve already accepted that losing is part of being a trader, then at the very worst you should not make a big deal out of a losing trade. You have to learn to embrace your losers and think of them as just one trade closer to a winner. I always tell my students to “stop trying to avoid losses”, as losing is a big part of winning a trader, and the more you try to avoid losing trades, the more of them you are probably going to have. Think of losing trades as a coworker you really don’t like but that you have to work with everyday. If you take a bad attitude with this coworker and try to avoid them, it’s probably going to hurt your chances of a promotion and thus make you less money in the long run.
18) Be consistent

You just had 4 losing trades, what do you do, remain calm and collected, following your trading plan as usual? Or, do you freak out and jump back into the market to try and make back the money you just lost? If you lose your confidence and stop trading your proven trading strategy, you are probably going to miss out on the next trade that would have been a big winner. Trading is the ultimate test of being able to brush off and ignore obstacles that are in your way now for a longer-term reward. If you crumble at the first sign of adversity or hardship, you are probably going to become very emotional after a losing trade or two and start making stupid trading decisions.
19) Read, study, and improve…Always

Great investors, traders and business people, read, study and educate themselves on an ongoing basis. You need to invest in yourself because it’s the most important investment you will ever make, and it will lead to direct growth in your knowledge and skill as a trader or personal fund manager.

I am always amazed at how many traders think they don’t need to educate themselves about the markets or on a proven trading strategy. Many of them tend to think they can just dive in head-first to real money trading, with no formal trading or education, and that somehow they are on the right track. Well, that’s not the case, trading takes time, effort, and education, like anything else. The trick is to make sure you learn an effective trading strategy like price action and that you learn how to trade from a genuine and honest source.
20) Daily Trading Affirmations

A secret formula of many successful people has been to verbally reinforce the most important goals in their life. For a trader, having a wall poster or post it notes with important goals and phrases will help. We did a great lesson on this some time ago and it’s worth a read for any of you looking to take your trading to the next level…this stuff really does work and anybody can practice it…you can check out my trading affirmations lesson here.

It’s important to read through these affirmations everyday before you trade, I would even incorporate this into your trading plan. Doing so, will get your daily trading routine started off on a positive note.

Finally, I just want to say that I hope all of you have learned something from today’s lesson, and that if you really read through all 20 of the points above, and fully absorb them, you will gain some solid insight and knowledge that will help you improve your trading.