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Forex-trading-signals

Boxing and TradingSome complex things are easier to understand through analogies and metaphors. What do boxing and trading have in common? Nothing at first glance, but if you look closely… 1. You can't avoid the bumps. Even the best boxers with incredible technique and reaction are not able to get away from all the blows. At the same time, missing a shot does not mean losing, it's just part of the game. It is the same in trading – it is impossible to avoid losses, they are part of the game. Do not think that you are the best and will be able to avoid stop losses. A professional trader takes stop losses for granted and does not worry about it - he just continues to trade as if nothing had happened. They are waiting for the next opportunity to strike in order to win at a distance. 2. Miss a lot of punches instead of a single one that will knock you out. The best boxers missed punches, but they had enough technique not to miss the hardest punches. A true professional should be able to defend himself both in boxing and in trading. Follow risk management and learn to identify your worst case scenario. Use an adequate position size, protect it with a stop loss, and always make sure that never, under any circumstances, one trade leads you to a margin call. 3. You don't have to win by knockout - winning on points is also a victory! The audience loves a knockout because it looks beautiful and spectacular. But most of the wins boxers get on points. The best boxers are always focused and will not allow themselves to throw dangerous punches in the hope of winning with one punch. They know that thanks to accurate and effective strikes, they can win without the risk of running into a counterattack. In trading, you don't need to earn huge profits from a single trade. Regular small winning trades will add up over time. A professional trader always remains in control, and he knows that this advantage guarantees success in trading in the long term. 4. Control your emotions. The fight doesn't start in the ring, the fight starts before the ring. Every boxer feels this psychological pressure, but it does not lead the best astray, and even vice versa. The best are able to influence and influence their rivals. In trading, our enemy is you, or rather our emotions. We must be able to control them, not let them influence us. 5. Preparation for each battle is unique. Each new fight is special, because each new opponent uses his own style, has his own characteristics. You need to be able to analyze both your own actions and the actions of a new opponent. In trading, it boils down to the fact that after each closed position, you need to analyze it and understand where there were mistakes and where there were not. This is an important job that will make you a professional. 6. You have to react to what is happening now. Making a plan for the fight before the fight is a good strategy, but you need to be flexible enough to be able to change the plan at the right time if the situation requires it. The best boxers were able to do this, unlike those who stuck to the plan even realizing that the plan has not worked for a long time. Traders are most often very static and trade in reaction mode. Despite the fact that you must have a trading plan and follow it clearly, during some unexpected events you must be able to adapt to the changed market conditions. Amateurs often get "stuck in time" during bad periods – as a result, they get a knockout blow that went before them for a long time. 7. You have to go all the way from the beginning. Tyson, Ali or Holyfield hardly made the decision that they would fight for the world title. They started boxing very early and could hardly imagine their future boxing career. They fought in dozens and hundreds of small fights in dilapidated halls and worked slowly until they were able to take a step on the big stage. Traders should follow the same path. You can't decide to become a profitable trader right now. Most likely, you will go through several accounts, you will lose money for a month or a year, or even more; you will have to work 7 days a week for 12 hours a day without knowing whether all the effort spent will pay off and whether you will achieve your goal. 8. Become a master of the basics. The best boxers are those boxers who perfectly master simple techniques: they move perfectly in the ring, hit effectively, defend perfectly, possess a dangerous hook and incredible endurance. The best boxers do not need to own a unique and outstanding technique or develop their own tricks and tricks – they train their skills on what really matters. Only then will the trader have a chance of success when he masterfully masters the basic principles and techniques. Being able to perform multi-time frame analysis, understand how to read the price and its "mood", understand the basic principles of statistics, have a constant principle of setting the position size and risk management, as well as unquestioning adherence to their trading rules - all this is the basis of any successful trader. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
10
Trading DiaryYou will encounter an enormous amount of information in trading. The emotions you will experience while doing so will also be unlike anything else. Therefore, you will need a diary. And not just one, but two: A diary for traders and a diary for emotions. Trading diary This's simple. If you don't monitor the effectiveness of your trades and if you don't keep statistics, you're playing the lottery. Records of your trades help you control not only the trading process, but also your emotions. They show a complete picture of your struggle with the market. A picture that you can then learn from it. Keeping a trading diary is not difficult at all. It is most convenient to do it in a excel spreadsheet or google docs. In fact, all you need from a trading diary is: the open and close time of the trade; asset name; trade volume or lot size; notes (which indicator, which system is used); and the result Such a table will give you a lot of opportunities to analyze your trades. And most importantly, it will save you from impulse entries. Nothing in the table will be forgotten. What else could be added to it? For example, an extended description of the reasons for entry or reasons for failure. A screenshot taken before you open a trade is very helpful. Some people even record a mini-video, but this is, in my opinion, unnecessary. All this data is evidence. And you show them to yourself later, if the trade was successful or not. If it was successful, note that it was an excellent entry according to your plan. If not, take apart your mistakes and write them down. Emotional diary This diary is treated extremely negligently. You should not keep such diaries because you "have to" do it because someone said something. You have to feel an urgent need to do so, to record your emotions. How and when to do it? You know the easiest way is sincerity. Be honest with yourself. You can't be successful in trading if you constantly lye to yourself. Your job is simply to understand how you feel before, during and after trades. Writing down a lot of words is not an option, it takes time. It makes sense to create a dictionary of code words. Some even use hieroglyphs or emojis for this purpose, as each emojis is a meaningful picture. By doing this, you begin to understand yourself much better. Every day we experience a fairly fixed set of emotions. Always fear, greed, boredom, joy (much less often than other emotions). In trading in general, emotions are complex, where a thought is followed by an emotion and vice versa. By exposing your emotional portrait, you will immediately see your weaknesses. Let's say the fear that the trade won't work out. And what is this fear, its reasons? For example: Lack of practice (uncertainty); you are not confident enough in your trading system (doubts); you have violated money management and are afraid of losing money (fear); you're working on your last dime and you're scared (fear); you're sick of all the technicalities (impatience); the trade is lost (indignation). What to write in the diary? Everything that relates to trading: before, during and after. Trading is a set of skills and certain abilities, no matter what specific techniques or tools are chosen. And the final result depends on the systematization of your skills. It depends on how well you follow your own plan, how you execute it and how you monitor it. The diary should include: your motivations, why you came into this business; what the market is to you, how you assess and analyze it; how you analyze mistakes and missed opportunities; how you keep track of your trades. Everything must be prescribed. You can have a simple list; you can have a complex program, whatever you like. Formalize your approach to trading. This is the only way to turn an amateur into a professional trader. Take screenshots. Lots of them with descriptions. In Tradingview, they are made with one button. You don't even have to install a separate program. Study your trading diary The diary is a jewel. It's your trading life. On weekends, when there are no trades, it's a good time to open it and dive into studying your past trading week. As you go through it, try to answer the following questions: How much, given the risks, was the correct lot size? Was the entry really as successful as you thought it would be? What tools could be used to improve it? Did you think things through patiently or did you open a trade because you couldn't wait? Did you follow the trading plan when opening the trade? What happened to the support and resistance levels during the trade? Was there any big news? By constantly asking yourself these and similar questions, you will learn to control your emotions and be able to treat the market as a regular, structured work, where no surprises can happen to you, because you have thought everything through in advance and know how to act in case of profits and losses. What to do with statistic? Nothing complicated. You actually need the diary for two things: to find something that works; and what is known to be useless. It is the diary that allows you to find answers to many questions in relation to currencies, best trading days of the week, special instruments and much more. If you track your trades in a diary, you're on the road to professional trading. This way you rely on structural logic rather than your memory, which regularly fails us, also due to the continuous influence of emotional factors. Use it, regularly, do it for yourself. Be sincere with yourself. Talk to yourself, criticize, praise, if there is a reason to do so. Do not keep all your emotions inside, they will come back to you later through wrong trading decisions. Dear diary...
Education
by DeGRAM
4
Paper TradingThere are traders who live only from trading, there are quite a few of them. But do you think they have some secret formula for the market? Wouldn't it be great? A simple and clear way to make money from the market, no worries. You open a chart, take a trade, and just go away. In reality, it's not like that. Like many traders, I found it infinitely difficult, because trading is: Work and a continuous buttle with yourself. You have to detach yourself from your passions and become a creature that absorbs all possible and available information about markets. One must cope with a multitude of incompatible and mind-breaking emotions. You need to stop treating trading as a game and consider it as a job. The chart itself should be regarded as a real business. It's a difficult road, not an easy one. Most people lose money on this route. They get picked up by the people who follow them, they lose too, and it happens time after time, in a continuous line. Along the road of trading, you will encounter a lot of obstacles: A desire to solve your problems by investing a capital and making a large sum of money quickly. You will be very afraid and hurt to lose money and you will lose it, inevitably, there's no way around it. You will constantly lose faith in yourself and your predictions; the market has broken a lot of traders. Trading abounds in traps. How to avoid many of them? Well, you can do it the old-fashioned way by trading on paper. Paper and market prices Trading on paper. What does it mean? It means you and just a piece of paper. Yes, it's the old way. Of course, you can use spreadsheets and there are different prediction tools on trading platforms now, like forecast on Tradingview, for instance. Get a notepad, a pen, sit down in front of the chart and watch how the price moves. When your strategy indicates an opportunity for a good entry, write down all the details of the potential trade, such as: Account balance; The current price of the asset; Open and close time; The size of the trade; and of course, whether it is a buy or sell trade. All you have to do next is keep looking at the chart, or you can leave it alone. When it's time to analyze the past, just write down the current price and the new size of your balance, and if the forecast was right or wrong. That's what trading on paper is all about: you write down the data on a trade instead of risking your money. So why rush in and lose it. I understand if you don't like paper. I'm a fan of smartphones and laptops myself. So, keep records in Excel or in the trader's diary. Pros of trading on paper The pros are obvious no money is lost, you can open a chart at any time and assess the results of your efforts. Similarly, you can analyze successful predictions and learn to repeat them on the chart. Yes, of course, many brokers give demo accounts, but do not forget that they often give you the demo only for the purpose of "hooking" you on their platform. Some brokers even open a demo after depositing with real money. Paper trading doesn't require you to do anything at all. You just need to record your entries from time to time, it can't be easier, can it? And when you start getting good at it, you can try the demo or go straight to the real one, to work on a small capital. The disadvantages of trading on paper The disadvantages are obvious, this is not real trading and one can get too carried away with paper testing. Sometimes everything turns out great on paper and you diligently build up capital every single day. And then you know what happens? You'll have a very interesting thought in your head, like: "Isn't it time for me to invest more money and earn real money?" If you get greedy, you're in trouble. What a way out of this is not to think that paper successes will immediately translate into real successes. You shouldn't get greedy. Theory is theory, and practice is practice. With paper trading you certainly can't lose money. When it comes to working with real capital, it also helps to eliminate the emotional factor—the continuous stress we experience, and which we struggle so hard to tear from our hearts. Trade on paper Paper trading is the most elementary way to test strategies and educate traders' discipline. This method is old, one might say, grandpa’s way. For decades, Wall Street traders have been writing their notes on paper, before the computer age. Work on paper as close to reality as possible. If you can't afford to work with more than $100 on your account in reality, work with the same amount while trading on paper. Do not draw millions for yourself. The simulation should be as close to reality as possible. In the end, the main thing that distinguishes real trading from demo or paper trading is only emotions of the trader. After all the charts and prices remain exactly the same.
Education
by DeGRAM
7
Multiframe analysisMultiframe analysis is when we analyze the same currency pair or other asset on several timeframes at once. You know that any price can be seen on a chart: Daily hourly 15 Minutes 5 Minute 1 minute We have plenty of opportunities to study the behavior of the same price. And it is the multiframe analysis that will allow us to do it correctly and efficiently. There are quite a few trading systems where the daily or even weekly charts are taken as the basis. Does it mean that sets on higher timeframes are not applicable on small ones? Not at all. That is exactly what we need. Let's say you saw that EUR/USD is in a downtrend on the 4 hourly chart by drawing a trend line. However, your main trading chart is a 5-minute chart and you see perfectly well that the price on it goes up/down, and the trend line from the 4-hour timeframe is hovering far above. And what to do with it, on what timeframe to look at? Traders often get confused with this. They see a sell signal on the 4-hour chart and a buy signal on the 15-minute chart. What should we do in such situations? Let's figure out what timeframes should be used and how to perfume it. Best timeframe The question of which timeframe is better to trade is asked very often. And this question is always wrongly answered when a beginner trader chooses a timeframe that does not suit him psychologically at all. Inexperienced traders want a lot of money at once in the shortest possible time. That is why they, naturally, choose the 1-minute or 5-minute chart. However, as time goes by, it turns out that these timeframes cause frustration and emotional distress to the majority of traders. The frenzied pace of price on these timeframes provokes incredible greed, turns off the brain and most lose money. Some people are comfortable trading on the 1 hourly chart. You wait much longer, and there are much less signals to take. But there is much more time to analyze the market and there is no rush. And, of course, a frequent guest in terminals are several timeframes on one screen. The whole point of the Dow theory is that we analyze the price from the higher to the lower timeframe and thus get a complete picture of the market. The timeframe is just a detailing of the price movement. Price chart is always the same. You can simply watch the price in the one minute or monthly chart. When it comes to the main timeframe, it could be too fast or too slow. This is normal, and it should be. You will try them all anyway, so the question of a constant timeframe is purely rhetorical. Let's compare several timeframes, what their pros and cons are. Long-term timeframes. These are the daily and weekly charts that give you a bird's-eye view of the markets. It’s for the real turtles. Medium-term timeframes. These are mostly hourly charts. Much more opportunities compared to the daily and weekly charts, there are can be several trades per day. Short-term timeframes. The timeframes, respectively, are 15 or 1-5 minutes. When choosing a timeframe, you should also take into account the number of trades and your deposit. Remember that the lower the timeframe, the messier trades it provokes. Such emotional traps are one of the key reasons why people lose money in forex. Psychological timeframe The main thing you need to understand is that the trading timeframe is tailored to you and your personality. Different people = different trading timeframes. With experience you will have no problem finding a good TF for you. Before looking for signals and on lower timeframe, you should analyze: 4 hourly or even daily 1 hour chart And for each, we need to draw support/resistance lines, channels, and what grandpa Dow requires of us. This is how you can identify reversals on, let’s say, a 15- minute chart. Because on higher timeframes the price encounters strong support or resistance. As you already remember, the larger the timeframe, the more reliable the resistance and support levels. When you see the big picture, the chances of successful trading decisions increase significantly. But with newbies it's the opposite. They set up a 1 or 5-minute chart and other TFs do not interest them at all. The practice of multiframe analysis We have already understood the essence of the analysis on different frames, it was also discussed in the theory of Dow. This is how we see the global price movement: long-term trends are formed on higher frames, and support and resistance are much more reliable on long-term TFs. It all starts with choosing a trading timeframe, after which we go up the ladder to get the full picture. And the full picture is an understanding of what's going on with the market. The market has only two states: a trend and consolidation. Higher timeframe analysis allows us to figure out what entry and under what conditions to make a trade. Tunnel vision or a global view; the choice is obvious. The best bundles of 3 timeframes It's best to use three TFs: The first one will show us the main trend, the big picture of the market; the second is a medium-term signal. The third is the detailing of the second signal, here we will look for the exact entrance zone. The most popular combinations of timeframes, depending on their level of detail, are as follows: 1, 5, 30 minutes; 5, 30, 240 minutes; 15, 60, 240 minutes; 1 hour, 4 hours, daytime; 4 hours, daily, weekly. There must be a sufficient time interval between timeframes. Otherwise, instead of detail, you get a simple clarification that is not particularly useful. To summarize Multiframe analysis is a framework that complements the Dow theory and, in fact, is based on it. First you must choose a global timeframe, then learn how to detail it. Conversely, enlarge the smaller timeframes to get an overall picture of what is going on. Never enter into trades without checking the situation on higher timeframes. Otherwise, you risk getting stuck on one timeframe and will surely miss an important market movement.
Education
by DeGRAM
7
Advantages and disadvantages of trading robotsHello everyone Today I want to discuss Trading Robots with you. In trading, any trading method takes place, especially trading using a robot that is devoid of emotions and performs everything that is assigned to it with the accuracy of a tick. Robots have many pros and cons, let's figure everything out in order. Advantages Speed. Any program is able to monitor more tools than a person. In addition, the program easily performs dozens of calculations and can analyze the market and make a deal in a matter of seconds, which the human brain is simply unable to do. A trader cannot learn hundreds of strategies and rules and use them simultaneously in the market, trading manually. On the other hand, the program is able to safely use complex systems. Accuracy. If the code is written correctly, if the strategy is well chosen, the robot will follow the rules accurately. An ordinary trader can choose the wrong tool, mix up the numbers, put a comma in the wrong place, the robot is absolutely accurate in its actions. Fatigue and scalability. Any trader needs rest, no one is able to sit at the monitor and constantly trade correctly. Unlike a human, a robot just doesn't get tired. He is able to work all day, seven days a week and does not ask for time off. If you use a robot, you can be free all day and go about your business while the robot does all the work for you without fatigue. Functionality. If a person finds a new strategy, he will need time to study it. And even after spending time studying, there is no guarantee that a person will understand everything that he studied the first time. But the robot will be taught easily, it is enough to write a line of code, and it will do everything, without errors, from the first time and you can add as much as you want and almost anything. The robot is not subject to emotions. Perhaps the biggest problem of a trader is emotions. Every trader, especially a beginner, experienced strong emotions when he lost or when he earned. It will not be possible to correct your psychology and get rid of emotions in a second, but fortunately, the robot does not have such problems. The core of the robot is built on clear rules, the robot simply does not know how to deviate from them, and the robot does not know emotions. The robot doesn't care how many losing trades there were before or will be after, all it knows are the rules, and it adheres to them. It is not easy to create a robot, but everyone can do it if they put enough effort and spend time. Disadvantages The complexity of making a robot (writing a program). Everyone can create a profitable trading strategy, but not everyone knows how to program and create robots. If you can program, you may have to learn a new programming language. There is an opportunity to buy a ready-made robot or order a robot to be written to you. In the first case, you will not know what is hidden in the black box, you will not be able to configure it. In the second case, there is no guarantee that the programmer will understand your idea and do everything right. The trading robot can only use technical analysis. A trader can read the news and understand the meaning that is hidden between the lines. The trader knows how to understand, but the robot does not. The robot understands only dry figures and therefore it uses technical analysis perfectly, but is not able to go beyond these limits. In addition, there will be situations when you clearly see one scenario, and the robot simply does not see it. At the same time, it is impossible to stop trading the robot if it is profitable at a distance. The only thing that can be done is to analyze this situation and, if necessary, make changes to the algorithm, while carrying out the entire testing process anew. A trading robot cannot make decisions in non-standard situations. It only fulfills the logic inherent in it, and in case of problems it will not be able to change anything. Of course, the program can include the robot's reaction to some situations, but it is impossible to foresee everything. For example, if the Internet connection is lost, the robot will not be able to continue trading or at least close an open position. A trader trading manually, in this case, would call the broker and close the position, or restore the Internet. The computer may freeze, the program may close with an error, the broker may not accept the application or accept it, but with a long delay. The trading robot will not be able to react to all events and this may lead to unplanned losses. The lack of emotions, one of the advantages of a trading robot, is also a minus. The robot can drain your entire capital in one day without any embarrassment. This must be taken into account when creating a robot. For example, allow the robot to trade only a part of your capital, or make it so that when a certain threshold is reached, the robot notifies you and (or) stops trading. Conclusion Concluding the consideration of the pros and cons of using trading robots, I want to say that the negative sides can be largely offset by a professional approach to creating a robot whose algorithm will take into account actions in non-standard situations. But at the same time, of course, there is no escape from the complexity factor in the process of creating robots, this is the main deterrent, which can only be overcome by spending considerable time on mastering programming. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
11
Time ManagementHow long and when I should trade? These are the main questions beginner traders have. In other words, what kind of time management should you have? Unlike stock market that is strictly tied to a schedule, the currency market works round the clock. That's why many newbie traders start to have a 24-hour life when they stare at the charts all day. They don't have a slightest clue when it's better to work and when to rest. Most traders, especially beginners, trade in their free time. This is understandable, because it's extremely difficult to combine work and trading. However, some people are lucky enough to look at charts right in their workplace. Professional traders who work from home don't sit at charts all the time. They work in a certain trading session, make forecasts, open positions and go away from the charts. Trading sessions Although forex market is open 24 hours a day, traders who live in different time zones need to rest and sleep, just like all normal people. That's why price movements in the markets depend on the trading sessions. By the time an amateur trader living in the U.S. finishes his job, the Asian markets have almost closed; the European markets will also close soon, and the American market has a few hours left. As a result, the trader's main resource; time is limited. So, what to do with it? Nothing complicated. Adapt our habits and trading methods to make the best use of the time available to us. If you have limited time to trade, you have to make the best of it. On the one hand, if you have the whole day to trade, it gives you a lot of opportunities, but on the other hand, it increases the risk of "overtrading". After all, no one has ever gotten healthier from hours and hours of continuous looking at charts. Time management rules Now let's figure out how to manage our time, which is just as important as risk and money management. In forex trading we have 24 hours a day and that's good. However, most of us have a job to do, which means we have only a few hours left for trading, which is not good. So, the first thing to do is to decide exactly when you trade. When to trade Trade only when you have dedicated time to do so. Trading is impossible without concentration, without the ability to fully immerse yourself in the world of charts. You can't help the kids to do their homework and wash the dishes, while opening trades at the same time. It will instantly turn into an ordinary game of chance. Ask yourself a simple question, say "when do I have free time"? Think of trading as a job that is done in a clearly allocated period of time. Let’s just say, if you trade from 9 to 11 p.m. That’s great. This is your trading time. Now make sure no one disturbs you during this time. Finish all your work before this trading period. Free it entirely for trading only. Consistency is the key to success. If you trade when you have a free then you're just gambling. And it will end up, as it always ends, with the loss of capital. Therefore, you need to understand at once that you cannot trade on the opening of all markets at any given time. You should focus on one specific market, which at this time shows exact pattern that you need. For example, higher volatility for trend strategies or lower volatility for consolidation strategies. Free up your time to trade Let's say you trade from 9 to 11 p.m. This period is your only chance to make money. If you miss it, you're left with ultra-risky trading. That's why all your business ends before 9 p.m. Turn off your social media. From 9 to 11, it's just you and the charts. Turn off everything that will bother you. If you miss even this small amount of time, spending it on chores or browsing on the Internet, you’re not going to be a professional trader. Trading is a business; it is potentially your new full-time job. Treat it responsibly. If not then after a couple of months you'll give it up after losing a certain amount of money. Preparing for trading Time is set, all chores are done so that nothing gets in the way. You need to get ready for the trading. If you’re hungry, eat something. Prepare your body and mind. You have to activate your brain. A beer that you drink in the evening will have exactly the opposite effect. You only have two hours. Be prepared. Just 5–10 minutes of exercise, and that's enough to spot market patterns with a keen, tenacious eye. Specialization Pick 1or 2 your favorite assets, say EUR/USD and GBP/JPY. Another option is to go through 10-20 assets at once in search of the ones that will show the behavior you need during those 2 trading hours. If you run through a bunch of assets, your attention is immediately scattered, you get tired quickly. Even one asset is difficult to analyze, and you want to complicate your trading tenfold. Start small, with 1-2 currency pairs or indices. Who earns the most in any profession? The one who specializes in something one, who is an expert in his field. No overtrading For profits and losses, you need to set clear limits. This is extremely important. Beginners very often overestimate their strength and, forget about money management, try to "win back" after a series of failures. Time does not matter to them at all. They often overtrade and don’t notice how: • Fatigue has accumulated • the market has changed • concentration is broken • they lost more than they earned Stop Trading Most novice traders find it extremely difficult to stop. They will not follow the rules described here. And they will realize their mistake only after some time. They will understand that: • You can't trade when you're tired, it's a self-destructive practice; • You can't trade when you're not ready for it; • You can't open random trades when you only have five minutes. When your allotted time to trade is over, just stop. Take a steady, deep breath. Step away from the chart for at least 5 minutes. Try to put everything out of your mind and think about what you will do tomorrow. That's it for today. You have done all you can, no matter how it went. Write down your conclusions about the past trading hours in your trading diary. Time limit Such rules allow to set up trading for people who are extremely limited in time due to office work. Another option is known to forex traders is to work with large timeframes (usually daily). It is possible to come to work in the morning, to open positions and check them a couple of times, in the afternoon or in the evening after work. So, don’t rush. The markets will not go anywhere. Calm down, put everything in its place and you will see how positively it will affect the results.
Education
by DeGRAM
8
Traders’ common psychological mistakesA beginner trader inevitably faces a number of mistakes that will cost him/her a lot of money. Many deposits will be lost as well as nerve cells through the trading journey. We usually pay for our trading mistakes with money and mental health. Don't you think the price is too high for that? If you try to avoid common trading mistakes, you’re going to have a good chance to save your money and your mental health. Not adapting to market conditions One of the most common mistakes is the psychological attempt to "force" the market to adapt to the trading strategy or system. How does this happen? A novice trader finds a trading strategy which seems to him profitable and effective. That moment trader immediately will be imprisoned by his own illusions, and he’ll lose any idea about the market in general. As we all know trading is a fight, a war. To be a consistently profitable trader you have to adapt to market conditions, not otherwise. Let's say the RSI didn't work out in a particular trade? If your indicator leads to losing trades before opening another trade just stop for the moment and instead look at the big picture and understand this: • Do you need it at all? • In what market conditions does your indicator work? • When is the best time to use it? • What systems and strategies does it work best with, but with which it is not? You need to be flexible and adapt continuously. The market in trend and consolidation are two different markets, and approaches to them should also be different as well. Adaptation and creating a flexible trading system is the right path to trading success. A constant search for the best strategy We get caught in the endless loop of searching for that magic system that will bring us a lot of money. And we lose so much time and energy trying to find next the best strategy. Do you know why strategies work for some people and not for others? The answer is experience. That's all. Without a trading experience, in the first days of using any strategy, you only have theory of probability, which is against you. Searching for the best strategy is always useless because you can't suddenly get the experience that was invested during the building of the strategy. Only with a set of experience can you get consistent results. That is how by using only two moving averages, some people can make a fortune in the markets, but a beginner trader doesn't have the slightest chance. In any business, only professionals earn good money. And in trading most people for some reason decided that they do not need to work and study. Find one strategy which suits your personality and backtest it. Make it your own. Don't avoid your mistakes It hurts like hell to continually lose money, doesn't it? But that's what happens in trading, all the time. Especially in the first months, when there are so many losses that after six months there are only a few left. The pain from losses is so great that people ignore mistakes and do not even want to look into them. And that is a fatal mistake. You've paid a money for a negative experience. So, to take the time to sort out the reasons why the trade didn't work out. Do it, or else this mistake will happen again and again! Until you lose it all. You should not be ashamed or think you are a stupid trader or something like that. You have to calmly admit the mistake and learn from the losing trades. Write and break it down in a diary, make some conclusions, and remember them. Stop making Excel spreadsheets with projected profits You're sitting there thinking like: "So, how much money am I going to earn if I let's say will make 100$ a day? It will be $500 in the week. If increase the lot size, a month will be so much, and after 1 year I am going to be a millionaire”. It's only on paper, but we somehow manage to spend that money that doesn’t exist. When traders create those types of spreadsheets, they do not take into account the psychological factor at all. Factors such as: • fear • greed • the stress of losing money. There is none of this in the spreadsheets. There's just a bare, primitive exponential curve, based on the assumption that the market will steadily give you profits. The market is not a bank with guaranteed interest on a deposit. Reality will be so different from your spreadsheet that you will throw it in the trash very quickly. Spreadsheets with imaginary income bring only harm. Conclusion Trading can be a source of stable income, but "stable" just means positive deposit growth over a period of time. It is really possible to close each month with profits. But it may be, for example, from 0.01% of the capital at the beginning of the month to 100% or possibly more. And the first one will be more realistic than the second one. The art of the professional trader is to manage this percentage and increasing a positive mathematical expectation of each trade. Do not set yourself goals in specific amounts; it will break you when you face your first failures, because there will be beautiful hypothetical figures in the spreadsheet, while the actual deposit will decrease, and this cognitive dissonance will destroy a beginner trader, because millions on the paper will never coincide with reality.
Education
by DeGRAM
10
All about the GBPUSDGBPUSD is one of the most popular and widely traded trading instruments on the Forex market. Due to its high liquidity and high volatility, it provides opportunities for daily or intraday trading. In this article we will look at GBPUSD and give valuable tips for successful trades. Currency Overview The British pound is the main currency pair representing the currencies of the two largest economies in the world. The quoted currency is the US dollar, and the base currency is the British pound. Interesting fact: Many currency traders refer to the GBPUSD pair as a "cable". Currencies are seriously affected by economic reports such as GDP, employment reports, inflation, etc. Nevertheless, the activity of the central bank is one of the most important factors of currency volatility and price direction. This applies both to decisions made by the Bank of England and to the units of the Federal Reserve System responsible for interest rate decisions. From a historical point of view, the GBP/USD pair has been trading since the early 1970s, when both the United Kingdom and the United States switched to floating exchange rates. The best time to trade The average daily volatility of the cable is large enough to take advantage of short-term price trends. In addition, the currency pair is very stable and suitable for technical and fundamental traders. The best time to trade GBP/USD is when the sessions in London and New York overlap. At this time, the maximum trading volume is observed. The spread during this period will be the narrowest, which means the least slippage in trading. The window for trading between the London and New York sessions is between 8:00 and 12:00 Eastern time. The second best time for trading is the opening time of the London session, that is, the interval from 3:00 to 4:00 Eastern time. Most European markets are trading at this time, so this pair has a large trading volume. Five economic data affecting the exchange rate: First of all, these are reports on the GDP of the United Kingdom and the United States. Usually, the initial estimates of GDP have the greatest impact on the price of currency pairs, because they are published earlier, giving traders a preliminary assessment of the economic state of the country. The second type of reporting is related to monetary policy. In particular, reports and decisions on interest rates published by the Bank of England and the US Federal Reserve System. Trade balance indicators. As a rule, the trade balance shows how much capital enters the country and how much is withdrawn from it. As a rule, an increase in the trade surplus is considered a sign of a healthy economy, while a trade deficit is considered not such a favorable event. GBP/USD traders should pay close attention to the unemployment rate in the US and Britain. Essentially, the unemployment rate measures the percentage of the total workforce that is unemployed but currently looking for work. Obviously, the higher the unemployment rate, the greater the harm to the entire economy. Inflation indicators. This includes the consumer price index and the producer price index. The consumer price index measures the inflation of a basket of goods and is considered an inflation index at the consumer level. The PPA measures inflation at the producer or wholesale price level. Both inflation indicators provide important information about potential long-term price trends. However, the producer price index is considered a leading indicator and therefore may be more useful for predicting the next price trend. Correlation GBPUSD can often move simultaneously with other major currencies, especially the Eurodollar pair, and can often depend on other major currencies in the opposite direction. The correlation can exist in different time frames, including four hours, eight hours, or the whole day. Moreover, these correlations are dynamic and can change over time. Trading Strategy The strategy is called the Big Ben strategy. In fact, this is a strategy for breaking the opening range of a currency pair. The logic of the strategy lies in the change in the volume of volatility, which tries to restore the initial price movement after the Japanese session. In particular, the trading volume of GBP/USD decreases significantly after the end of the New York session, and then during the Asian session. Therefore, most large institutional traders will not trade before the start of the European session. This usually leads to market fluctuations within the range of the GBP/USD currency pair during the night period. Therefore, when the currency pair begins to increase trading volume at the beginning of the European session, it is possible to trade on breaking the opening range. Given that interbank sellers create a range on both sides of the market during the opening period, a potential exit from the range usually leads to a trend phase at the beginning of the trading session. Rules for a long entry using a Big Ben set with five-minute candles: Plot the range of high and low prices between the Frankfurt Open Championship and the London Open Championship. This is defined as the opening range. The price action during this period should be limited to a range of Enter the breakout and close above the range extension level by 38%. The stop loss should be set in the middle of the opening range. The take profit will be equal to twice the length of the opening range measured from the breakout point. Rules for short entry using a Big Ben set with five-minute candles. Plot the high and low price range between the opening in Frankfurt and the opening in London. This is defined as the opening range. The price action during this period should appear to be limited by a range Enter the breakout and close below the range extension level by 38%. The stop loss should be set in the middle of the opening range. The take profit will be equal to twice the length of the opening range measured from the breakout point. resume Now you know what news you need to follow in order to trade GBPUSD profitably. In addition, you know the best time to trade and even the trading strategy. GBPUSD is a very volatile pair, with proper trading it can bring you a quick profit. But do not forget about the risks. Stick to the strategy! Good luck! Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
4
5 PHASES OF TRADE ANALYSISHello everyone! Trading is hard mental and emotional work. The market is a dangerous place that will show all your disadvantages. Without strategy and control, it's not even worth trying to beat the market. Today I want to talk about the five phases that a good trader must go through when trading on the market. PHASE 1 The first step for a good deal is to choose the right instrument. To do this, you must be able to understand stocks, currencies, indices. You must understand the specifics of each tool, be able to understand the data of reports and news, and use the information correctly. The big mistake of beginners is trading all instruments indiscriminately and without preparation. You should understand that, although there are similarities between the markets, they still have differences. YOU should understand that the bankruptcy of a small company will not affect the market, but Google's problems can. An increase in the interest rate in a third world country does not have much impact on the world, unlike the actions of the US central bank. Study the specifics of the market and follow the news, then make a choice what you will trade. PHASE 2 After you have selected a suitable instrument for trading, you must open a position. To do this, you must have a strategy prepared in advance, in which the entry conditions will be prescribed. This topic is a separate article because the issue of opening a deal is very important. You will be able to know where to open a position and where not to do it only when you try existing entry strategies, analyze the results and do something of your own. After finding a suitable entry strategy and waiting for the right conditions, open a deal. PHASE 3 After opening a deal, all you have to do is follow the market and the news. But don't overdo it. Beginners often sit in front of the screen monitor for a long time and monitor every price movement, which eventually leads to fatigue, and this leads to mistakes. Of course, if you are engaged in scalping, for example, you will follow the movement, your trading style also decides how much you will be behind the monitor screen, but do not overdo it. Open a position, watch how the price reaches important levels, but do not overdo it. PHASE 4 Then you have to close the position. The strategy of closing a deal is also important and there are many styles of closing deals. You have to choose your strategy and close the position according to it with profit or loss. The main thing is not to deviate from the rule and not to forget about the stop loss. PHASE 5 Beginners, as a rule, after closing a deal, go further for a new position and this is a big mistake. The resulting profit is maddening, and newcomers think they have understood the market. Losses spoil the mood and you don't want to remember them, so beginners quickly run on. Not performing an analysis of the completed transaction is the biggest loss. You lose the most at this stage, because by analyzing the transaction, you will avoid losses in the future and get even more profit, without doing the analysis you will continue to trade poorly. Therefore, at the end of the day or week, allocate time to analyze all transactions, draw conclusions and make no more mistakes. conclusion As you can see, it is not enough just to open a position and close it, you need to prepare, and then analyze everything. These steps will help you reach a new level as a trader, if you haven't started trading like this yet. Good luck!
Education
by DeGRAM
3
EUR/USD most popular currency in the world!A little history… The euro is a new currency that was born in 1999. It was created on the basis of the "European monetary unit", which replaced (abolished) the entire national currency of the countries of the European Union. Therefore, the peculiarity of the euro is that it is sensitive not only to the macroeconomics of the entire EU, but also to the individual economies of France and Germany. It is the most popular currency pair in the world, representing the two largest economies in the world. The euro was created to facilitate international trade between European trading partners. The pair has experienced significant fluctuations since its founding in 1999, caused by many global events, such as the technology boom that led to the real estate price bubble and the European debt crisis. The European Central Bank (ECB) plays the role of the issuer and regulator of the pan-European currency. The main support for its creation in 1998 is the banking system, which is based in Frankfurt am Main, and its fund was created on the basis of the participation of all representatives of EU countries. In addition to its issuing, supervisory and monitoring activities, the ECB charter is responsible for maintaining the financial stability of the eurozone. General technical specifications More than a third of the total volume of transactions in the foreign exchange market fall on a pair of euros to the dollar. This is due to the economic scale of the countries. The base currency is the euro, the dollar is the quoted currency. In other words, the euro-dollar exchange rate shows how many dollars you will have to pay for one euro. If there is positive news in the US and you predict a rise in the dollar, then you should sell. If you predict the growth of European currencies against the dollar, then you should buy quotes. What factors do the euro dollar exchange rate depend on? The main factors contributing to the change in the euro-dollar price revolve around the monetary policy of the United States. There are several levers that can help the Fed regulate and change cash flows in various ways: Open Market Interventions; Increase or decrease of the discount rate; Managing the level of reserve requirements. The Federal Reserve Board may immediately change the terms of the reserve and the discount rate. By changing one of the three factors, the Fed affects the amount of funds and ultimately changes the real ratio of the dollar to other currencies (including the euro). Thus, the Fed's decision is a long-term priority factor for the euro currency pair. The main factor affecting the euro/dollar exchange rate is the interest rate of the Federal Reserve System. This indicator represents the daily payment of interest on loans by credit institutions (banks). When it is necessary to tighten or weaken the national currency, US financial regulators will change interest rates. Traditionally, these measures have had a significant impact on both the foreign exchange and the stock market. Euro to Dollar exchange rate The European Central Bank regulates the monetary policy of the EU countries. The main decision on the European exchange rate is made by the Governing Council, consisting of representatives of national banks of the EU countries. The main objective of the ECB's work is financial stability and full response to the consequences of the global financial crisis of 2008. Serious economic problems of all EU countries can have a negative impact on the euro exchange rate. This is evident from the dynamics of euro prices during the economic crises in Greece and Spain. Macroeconomic emissions are also a very important factor influencing the strengthening or weakening of the euro. The most important news is from Germany. This is due to the fact that Germany is the largest economy in the European Union. The most important information is the state of GDP, the theoretical and real inflation index, the growth or decline rates of industrial production, as well as unemployment figures. It is important to take into account the deficit and the effectiveness of current measures to combat the economic downturn of the economy. Techniques for making a profit There is a strong inverse correlation between the values of EUR/USD and USD/CHF, which shows an approximate relationship between the euro and the franc. This is due to the fact that Switzerland's economic situation largely depends on the economic and political development of the EU. In most cases, after the euro falls against the dollar, the euro/franc currency pair immediately falls. Given the correlation between the British pound and the euro, the pound/dollar pair has a significant correlation. Euro Dollar chart To make money in euro dollars, traders need some skills. Fast trading in 15 minutes or even 5 minutes can allow you to make a significant profit. The frequent volatility of this quote allows you to implement the most daring and risky trading strategies. A moving average or a combined indicator (for example, MACD) will be able to give a fairly accurate entry point. Exit from the position can traditionally be based on a breakout of the price channel. When using the chart for 1 day or more, the deviation and reversal of the position can also be based on the intersection of the moving average. Conclusion EUR/USD has a relatively small history, but in this short time the pair has become popular with many. High volatility creates many opportunities for earnings, but do not forget about the risks. The pair is dangerous for untrained traders. Good luck!
Education
by DeGRAM
2
The reason for the stagnation in tradingMany times people trying to reach a new level face an invisible obstacle in their business. At that moment, life turned into a routine. It seems to us that there are no changes in life and there is no way forward. This is quite unpleasant. In those periods when it seems to us that our development has stopped, we become unhappy, because, after all, progress is the key to happiness. There are three reasons why we feel like we're marking time, and sometimes it's a combination of these three reasons: 1. Your physical condition Poor physical condition can increase negative emotions. Sports activities cause positive emotions. When you are physically active, you change your mental state and destroy your negative model. Thus, maintaining a good physical condition will cause positive emotions, which is one of the key ways to get out of stagnation. Develop a positive state of mind and get rid of all the negative by changing your physical condition. 2. Time limit One of the reasons we think we are stuck in one place is excessive attention to the past or the future. But constant thoughts about the future or the past will not change anything. As you know, the past cannot be changed, and the future is unknown, so there is no point in worrying about them. We have the right to change only the present, that's what we need to focus on. Stop flying in the clouds of the future, stop suffering because of the past, get busy with the present. 3. Sitting on the plateau Why do some people make breakthroughs that take them to the next level, while others can't? What is the difference between a master and an amateur, a creator and a speaker? The first dig deep to find an answer that will help them overcome stagnation, they do not stop fighting and searching and eventually achieve goals, reaching a new level. 5 signs that bring you closer to a breakthrough 1. Routine. You're tired of everything. You are tired of your financial problems, tired of your boring job, tired of carrying an extra 20 kilograms. Everything annoys you and you want to change something. 2. Unsatisfied. Whatever you do, it doesn't work for you anymore. Maybe it is unprofitable or uninteresting. Or maybe you are tired of the lack of energy, which, in your opinion, is necessary to achieve the desired result. Perhaps your current method has been successful in the past, but it is not suitable for your current conditions. 3. Border. This is the moment when change is needed. If you are on the verge of bankruptcy or, for example, if you have serious health problems. This is the point of no return, you are on the edge of the abyss and all you have left is to take a step, make an effort to become better and reach a new level. 4. Insight. You are illuminated by an idea or a deep understanding of something that opens up a new world for you. You begin to see the world in a new way, you have found a goal that can help you get out, your eyes are burning. 5. Open the door. The door opened... You enter it. At this stage, you will feel a surge of strength, realize that everything is not in vain, and you will want to move forward with great enthusiasm. Do not give up, do not stop, study. Good luck! Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
12
Methods to improve your tradingAny professional trader should monitor his daily routine. Traders make a schedule, follow it and remove from life what is unproductive. Beginners don't spend enough time making plans. A typical trading day for beginners can consist of constant monitoring of price movement, even during lunch. Today we will talk about how to make your trading day calm and productive. 1. Sleep Sleep is still an important part of any person. Do not neglect sleep, because sooner or later the body will require rest, without which it is simply impossible to trade calmly and in a disciplined manner. Needless to say, your attempts to trade, analyze the market and stick to your trading plan with a lack of sleep simply will not succeed. Perhaps the first and most important way to ensure a proper trading regime is to provide yourself with a good, full night's sleep for at least 7 hours a day. • Do not drink coffee or other caffeinated beverages during the day. Try drinking herbal tea instead; • Do not go to bed late thinking that you can sleep off the next day. Research proves that our body functions as productively as possible when we go to bed at sunset and wake up at dawn. This means that you need to go to bed early and wake up early; • Create a proper sleeping environment. As a rule, this means that your bedroom should be cool (i.e. not too hot), dark and quiet. 2. Healthy breakfast It has long been known that breakfast is the most important meal of the day. After sleep, the body needs a boost of energy. Find time for a healthy breakfast every morning: take the necessary amount of protein, whole grains and some fruits. As soon as you wake up, drink a huge glass of water. Most people don't do that. Drinking water saturates your body and also helps to control appetite between meals, and since your body mainly consists of water, it is necessary, first of all, to drink water rather than any other drink. 3. Physical exercises Regular exercise is the main key to your motivation, attention and focus on everything in your life, including trading. Physical exercise gives us a good feeling physically and mentally, and this is very important for the development of proper trading habits and productivity. Regular physical training will keep you focused at the highest level, it will also help you sleep soundly at night, which, as noted above, is an extremely important factor for the proper functioning of cognitive activity, which is obviously crucial for success in trading. 4. Hobbies and entertainment You definitely don't want to turn into a trading hermit. You don't want to turn into a guy who sits in his underwear in front of the charts in the hope that his positions are moving in his favor, and allowing every victory or defeat to affect his happiness. Trading is a way to potentially improve your life, but it doesn't have to be your life. To succeed in trading, you need to have outside interests so that you are distracted from excessive market analysis and so that you feel happy and confident. If you still don't have any hobby, then find some. Even if your hobby is just spending time with your family, that's fine, just don't be the "guy" who sits in front of charts all day long, because, I assure you, it's not good for you and your trading. 5. Plan your day Make sure that you plan the key levels of the chart during or at the beginning of the week. Take some notes about the trend, your trading advantage, potential trading signals that you see. The easiest way to do the analysis is when the market is closed, so you will avoid the pressure caused by the price movement. Make a plan for the week and every day and follow it without paying attention to the noise. The famous French microbiologist Louis Pasteur once said: "Chance favors a pre-prepared thought." 6. Practice your trading strategy This may seem obvious, but if you haven't mastered your trading strategy yet, or if you don't have a trading strategy at all, you won't be able to develop a trading regime. Many traders start in the wrong direction because they don't really have a clear trading method yet, but, instead, they have a vinaigrette of different methods and trading "tips" that they read here and there, mixed everything into one pile, "thinking" that they got, thus, your trading strategy. You need a trading strategy that you can learn and master and that makes sense and is simple. 7. Discipline and consistency Discipline, routine and patience are things that people usually consider "boring" or uninteresting, but they should not be perceived in this way at all, especially with regard to trade. You have to understand and accept these things as the ones with which you make money in the market. After you review them in the light that "discipline and everyday life are beneficial and useful," they will take on a different meaning for you. Remember - trading should not be some random event without a structure or a firm approach and without an underlying regime, and if that is the case, you will end up wasting all your money by giving it to the market. You need to develop your own trading program that would fit your schedule and your personality, and then stick to your trading regime, maintaining cold discipline so that you can see how it works in your favor over a long period of trading and that it brings you income.
Editors' picks
Education
by DeGRAM
70
Advantages of trading on the daily chartHello everyone! Today I want to discuss with you the advantages of trading on the daily chart. Not all traders understand why daily timeframes are so attractive, but professionals trade on them. Let's figure it out! But first, let's recall the words of Ed Seikota: Constantly looking at the charts is like playing roulette. You'll end up spending the whole day playing. I check my charts only once a day after the market closes. You are learning patience Patience is a key quality that is necessary for success in trading. If you trade on daily charts, you will have to learn patience, because you will have to wait for the right signal for several days, or even weeks. But don't be afraid, it will only increase your chances of success and allow you to use only the most reliable and profitable entry points. Free all day In trading, you will have to sacrifice not only your time, but also put some of your money at risk. When you trade on daily charts, you have a whole free day to go about your business and earn money. This will allow you not to rely only on trading and diversify your income. You automatically filter the market noise A variety of events can occur during the day that will affect the price movement. The daily chart allows you to filter intraday volatility spikes and focus only on the closing price of the trading session, without being distracted by anything else. The technical signals and patterns that appear on these higher timeframes are much more reliable than the patterns you encounter on lower timeframes. In many cases, the price movement on lower timeframes is simply market noise. Reliability The closing price level, which is the result of a whole day of struggle between buyers and sellers, is a reliable signal about the current state of the market. When making your trading decisions, you should always pay attention to signals from higher timeframes. Many novice traders who come to the financial markets tend to short-term trading on intraday timeframes. These traders believe that by trading on lower timeframes, they have more trading opportunities, and thus they can get more profit in the long run. Although theoretically this type of thinking may sound logical, in fact it is just a myth. You should realize the fact that support and resistance levels, chart patterns, price action patterns, indicator signals are much more reliable on higher timeframes. You avoid over-trading Over—trading is one of the main problems faced by traders. When you use a daily timeframe, you focus on the global picture of the market, and you do not need to constantly open new deals. You can choose only the best setups. Some traders are addicted to trading and have a psychological need to constantly enter and exit the market. It's like an adrenaline rush, which they constantly need. Obviously, this can be counterproductive and even lead to the drain of the entire deposit. There is another type of traders who tend to constantly monitor their positions and analyze charts. These traders are very active, and it can be very difficult for them to make a deal. They are also usually emotionally traders, inclined to act on intuition. The best advice I can give to any trader who has difficulty controlling his emotions in the market is to analyze the market only once a day. You find the strongest trends In trading, you should always try to follow the path of least resistance. This means that if the market is moving in a certain direction, the price is likely to continue its movement in this direction until there are factors indicating a reversal. The trends on the daily chart are very strong and you will rarely fall into the trap if you use the daily chart. You will only need 15-30 minutes to analyze the market You don't have to spend whole trading sessions in front of the monitor and analyze the market in robot mode, which usually leads to its reanalysis. You can safely look at the chart and determine whether there is a signal to enter the market or not, and then place an order to open a deal. Possible risks are reduced Every trader should have a detailed risk management plan. As part of this risk management plan, you should take into account factors such as the average risk per trade, the risk-to-profit ratio, how you will handle drawdowns, as well as the maximum amount of leverage that you will use. Some novice traders believe that they cannot trade on daily charts because they would have to place a stop loss at a relatively large distance in points compared to a smaller timeframe. They think they will take too much risk regarding the size of their small account. However, this assumption is completely wrong. Even if the average daily range of a trading instrument is much higher than the hourly or four—hour range, the only thing a trader needs to do in this case is to reduce the size of the position in order to adapt to a potentially larger stop loss. And thus you will actually reduce your leverage, which in turn will reduce your overall exposure to risk. You have a lot of time left to enjoy life Isn't that why we started trading? It is foolish to deny the fact that almost everyone comes to the stock exchange for money and financial independence. And chaining yourself to the monitor screen for 8 hours can take away from you what you have been striving for. In order to be an effective trader, you do not need to spend a whole working day analyzing charts. In fact, rarer and more selective trading can lead to better results. And as an added bonus, you can also keep your day job so that you always have an additional source of income. Conclusion Day trading provides many advantages, frees up your day and helps you avoid trading on false signals. You will become disciplined, your capital will not jump sharply up and down, you will become a professional! Good luck! Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
9
Unstoppable TradersBeing a profitable distance trader is not easy. This requires discipline, a lot of patience and passion. In addition, you need to have certain habits that most people simply don't have. All traders are different in some ways, everyone has their own trading strategy, but there is something that unites all successful traders. Let's talk about these general features. 1. One deal is not the end When the deal is already closed, you can start experiencing different feelings and emotions from happiness to grief and depression. Newcomers drown in this wave of emotions and eventually lose control and money. Professionals act differently. Each transaction is a common thing for them, while they do not experience a storm of emotions that can lead a beginner astray. If you internalize the following ideas, it will be easier for you to deal with emotions: • Success in trading is not one day, it is several months of trading and several hundred transactions. To understand how good you are, you have to trade following your strategy for a long enough time. Sometimes a year is not enough to understand that a trader is ready, and even more so one day is not enough. Therefore, prepare for a long journey and do not overreact to one losing trade. • Risk management is very important. Before opening a deal, calculate how much you are willing to lose and not go crazy because of this loss. Losses should not lead you astray. You have to stay calm and follow the rules. Also, don't let profitable positions drive you crazy. In any situation, you should be calm and prudent. 2. They are confident, but not too irrational Being confident in yourself is very important. A trader's confidence in himself and in his trading strategy comes with time. To do this, you need to learn how to clearly follow the rules of trading, be disciplined and eventually profit will come to you. Confidence should manifest itself most of all in those moments when you have received a series of losing trades. This is inevitable and only the best are able to pass such tests with dignity. Professionals do not change the rules in the same situations, do not change the method of trading and coolly move on. A confident trader does not give in to emotions, he knows exactly what he is looking for in the market and is ready to wait, ready to endure. You should feel invulnerable, the market no longer has power over you. 3. Wait professionally Professionals differ not only in the ability to trade, but also in the ability to wait. In the market, 80% of the time you will have to wait for your signal. The best traders are ready to wait for their highly profitable chance for several days, or even weeks. And even if they lose some money after a long wait, they are ready to wait again. Newcomers suffer because they want to be in the market all the time. This is a big mistake. Most of the time, the market is unpredictable, especially for a beginner. Leave the sick desire to constantly be in the market, constantly open new positions. Learn to wait like the best traders. In order to trade with a preponderance in your favor, you must patiently wait for obvious trading setups, and if they do not appear for several days, then you should not enter the market just like that. This time is worth spending on some other job or hobby. Unstoppable traders don't worry about not trading for days or even weeks, waiting for the next good setup to enter the market. 4. Good sleep is the key to success Sleep is important not only for the trader, sleep is important for everyone. Without healthy sleep, you will not be able to be calm and calculating for a long time. In addition, if you trade properly, namely: • do not risk too much capital, • do not open unnecessary positions, • follow your trading plan, • with respect to all of the above, observe discipline, then you will not have any problems sleeping during real trading, since you will have nothing to worry about. Well, if you sit in front of the monitor every day, anxiously watching the price movement, at a time when you should be sleeping, sooner or later this will lead to a complete loss of money. Follow the strategy, don't chase the market, rest and come back full of energy. 5. Continuous training All traders with experience know that it is difficult to trade because the market is volatile, and it is even more difficult to work on yourself, on your own discipline. There is a good feature of trading – it helps you understand yourself. It's unpleasant, but it's definitely useful. This work is difficult, but the result is beautiful. Thus, to become an unstoppable trader, you must know yourself and improve yourself in addition to your trading strategy. You will learn how to trade in the market and improve as long as you continue to trade. But you have to start doing it right now in order to start building your foundation for the right approach to your trading. If you decide to go into battle, accept all of the above and your path will be much easier. Good luck!
Education
by DeGRAM
9
Reasons for the futility of short-term market fluctuationsAll markets move up and down. Most market fluctuations are not important and trading on them is very dangerous and risky. Very often, beginners lose money trying to trade intraday on corrections or simply losing sight of the direction of the main trend. Sometimes the market knocks us out on a stop loss, after which it goes in the direction we need. All these errors appear because the trader pays too much attention to the daily price fluctuations in the market. Today we will look at some facts about price movement and market dynamics that will help you understand why a "smaller" price movement is actually "more" important for trading, as well as some ways to avoid succumbing to the temptation to enter the market on any fluctuations. Fact 1: Attempts to stop a moving train If you look at the daily charts of USD/JPY, AUD/USD or EUR/USD pairs, you will notice long multi-month trends. Such trends move with a strong impulse, which is similar to an accelerated train, and they are not able to stop easily and quickly. A strong trend usually continues until something important happens. That is why intraday fluctuations do not matter, they are just noise and it is very difficult to trade on such noise. Look at the daily currency charts. Daily trends are like moving trains that move in the direction they need almost without stopping, and it takes a lot of force and a lot of time to stop such a movement. Everyone has heard the old expression: "the trend is your friend." It's true. The trend is your friend as long as you move with it, but as soon as you decide to go against it, it will destroy you, walk over you and not notice. Don't make the typical beginner's mistake, don't try to predict the reversal of a strong trend, don't trade against the trend! It is trading according to the trend that gives a high probability of earning. Trend trading is the most profitable business, the best time to trade. You have to make sure that you are trading according to the trend if you don't want to get hit by a train. Fact 2: Losses No one wants to lose money. This is a fact. Any sane person would agree with that. But as soon as a person is behind the monitor screen, as soon as he starts trading, he immediately forgets about everything and tries to trade on all timeframes, in all known ways, losing all the rules of trading along the way and losing money. Some people trade as if they want to lose their money! Losing money is a very unpleasant event. We all don't like it. Everyone comes to the market to earn money and this desire sometimes blinds us, and we forget about the most important thing – we don't want to lose money. That is why the most important and first goal of any trader should be to preserve their capital. And the easiest way not to lose money in the market is not to try to trade every price movement. You will not be able to trade these fluctuations, because most of them are just noise that defies logic. By understanding a few key things, you can really reduce this temptation or get rid of it: • The best trading setups are obvious. You don't have to be a genius to notice them. If you are sitting in the hope of opening a position, it means that there is not a single worthwhile opportunity on the market for which you could risk! Go away! Save your money! If you value your money, you will not enter the market thoughtlessly. Otherwise, go and gamble, throwing money away and losing it all if you like it. • By saving your capital (without opening extra positions), when there is no reason to trade, you thereby earn money in the market already by the fact that you will have more money to trade with good trading signals. You should understand that not every price movement in the market makes sense, in fact most of them are meaningless. Learn an effective trading method, like Price Action strategies, master them, and then you will know what to look for in the market. And only after that you should have the discipline and patience to act only when your trading strategy shows you. But if you sit for several hours looking at charts and trying to figure out every tiny price fluctuation, you will surely lose your money, and we all know that losing money sucks. Fact 3: A long-term trend causes a short-term price movement If there is a long and strong trend in the market, then most likely the counter-trend short-term fluctuations will not last long. This means that the main trend in the end will still direct short-term fluctuations in the right direction. This is a very important concept that helps us look for entry points in the direction of the main trend, thereby increasing our chances of winning. Beginners try to take profit from any movement, experienced players act in the direction of the trend and that is why they win at a distance. Corrections go out faster and they do it unexpectedly, which makes trading on them very dangerous. Thus, the facts stating that a steady trend behaves like a "freight train", the loss of money sucks in, and a long-term trend causes a short-term price movement are the main reasons why short-term market fluctuations are practically useless. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
7
Errors in automated tradingHello everyone Surely you have heard about automated trading. You may even have used it. Today I want to talk about the mistakes that people make using automated trading. Let's go! 1. Back testing or forward testing Who really understands the creation of an adviser will be able to make the adviser bring 100% profit per month during back-testing, while trading with almost no risk. But do not rely only on the results of back-testing. Checking the adviser on the history is of course important and useful, but what is really important is how the adviser shows itself in real trading. After all, you will not be able to earn on what has already been, you need to be able to earn in the future. Therefore, it is very important to test any system on forward tests. Forward testing is real–time testing in real market conditions. This means that all decisions are made based on the history of quotes, but only the result that is generated in real time is considered a true representation of performance. 2. Data accuracy 70%-80% of the data on the Forex market, including those provided by brokers, is complete nonsense. Your system is as good as your data is, and if you can't rely on your data, then your system won't be able to do it either. Valuable data is quite expensive, and that's why so few people have it. You need to be able to clean the data for the correct operation of the system. A good system developer, even with a wonderful strategy, will fully understand its weaknesses and take appropriate actions to eliminate them. 3. Consider all expenses There are a lot of costs associated with trading, brokers are very well aware of this, and you should also know this. At a minimum, you should consider: 1) Spread – it is different on different instruments; 2) Commission expenses; 3) Slippage on various assets on which you are going to trade; 4) Broker delays in opening orders; 5) Infrastructure costs. 4. Risk and Capital management The key to all trading systems lies in the rules of risk and capital management. In order to completely change the characteristics of the strategy, it is enough to change these rules a little. The strategy developer must take into account all the details of his system. This is necessary not only to avoid everything that can blow up a trading account, but also for the purpose of emotional balance, in order to calmly leave your system or a working strategy and not interfere with it. There is one more thing we try to do – it is a daily analysis of open/closed positions based on the current market situation. This ensures that any gains or losses will be analyzed instantly. This avoids new such open positions and some emotional problems. This approach will quite easily confuse systems with unclear rules and those that have a rather attractive yield curve. 5. Investors are an emotional person For those who plan to develop successfully, this point is key, and it must be taken into account by everyone who will invest their funds in trading systems. You should remember that although you may feel good with 30% drawdowns and wild fluctuations in your equity, your investors will not share such feelings. If you want to move to the next level of development, you must cultivate a personality in which you can invest. As a rule, in the world of investments, this means applying a small leverage, allowing low drawdowns and earning consistent profits. A common, time-tested method of evaluating investments is the Sharpe coefficient. For a good investment, it should be at least 3, the maximum leverage should be 10:1, and the drawdown should be no more than 10% of both equity and balance. 6. Consider the limitations And the final key rule is that you need to know the limitations of your system. This includes both the trading conditions under which it will and will not work (no system is perfect) and its scaling. That is, if I pour $100 million into my account and my profit target is 2 points, then, most likely, slippage will swallow my entire profit target, and I will never see a profit from my investment. Even the infrastructure you use needs to be taken into account. For example, the MT4 platform, which is used by most brokers, works so slowly that at the time of the NFP exit, the difference between your planned and actual market entry price will be 10 points. If your system is price sensitive, then it will kill it. Yes, it happens. For the most part, our rules are based on common sense, but the vast majority of systems that we have encountered have never taken into account such errors. As a rule, even if the creators claim that the system takes them into account, this is not the case, since when answering these questions they are still far from understanding the essence. Paying attention to these things at the very beginning will allow you to save a lot of time, effort and develop an exceptional personality in you. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
10
IS IT TIME TO CHANGE THE STRATEGY?In order for your strategy to start making a profit, it takes time, patience and discipline, no matter if you bought it or developed it yourself. To see the weaknesses and strengths of the strategy, you need to test it, and this means strict adherence to the rules for a long time. At some point, there may come a situation when it is worth abandoning the strategy in order to develop further. But when should it be done? That's what I want to talk about today. How to understand that the strategy is outdated and it's time to get rid of it? I present to you four signs that it's time to get rid of the strategy: 1. Inability to follow the rules Any strategy implies rules to be followed. Take a look at the list below: • It is too specific; • It is extremely uncertain; • It's too complicated; • Contains a large number of items/rules. If your strategy contains these items, it's probably time to get rid of it. The strategy should not be too complicated, otherwise you will not be able to use it. At the same time, it should be understandable. If you don't understand your strategy and can't change it, make it easier, then it's time to throw it away. 2. You spend a lot of effort and end up getting nothing Do you sit in front of a monitor screen all day all week? Do you compare a large number of indicators to confirm the signal? Does your strategy require you to turn to the sun and recite the alphabet in reverse order at exactly 5:30 in the morning? If it is inconvenient for you to use your system consistently for long periods of time, or if you believe that it brings plus or minus the same number of points of profit in comparison with not using it at all, then it's probably time to look at other options. 3. You lose more than you gain This applies to those who prefer to buy ready-made strategies from other people. Although not all strategies available on the market are "divorce", the chances that you have chosen one of them are very high. If your signal provider generates more various signals for entering and exiting the market every month than real profits, then it's time to admit your mistake. The same applies if you use your own system, but pay a lot of money for subscribing to some data - you should also think about replacing your strategy with another one. 4. It just doesn't make a profit There is not much to say here. If you have shown due diligence and tested your strategy, tried to revise it, adjust it and launch it in various market conditions. If it still won't bring you profit, then obviously it's time to move on in search of a new strategy. Thank you for your time – I hope this will help you and your trading.
Education
by DeGRAM
4