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Trading Plan

The Bid-Ask Spread (What Is It?)The spread is the difference between the bid price and the ask price. The bid price is the rate at which you can sell a currency pair. The ask price is the rate at which you can buy a currency pair. Whenever you try to trade any currency pair, you will notice that there are two prices shown, left price is BID and right price is ASK. The spread is brokerages commission on that trade, that is why all trades start off in negative until that spread is negated before turning profitable. For Your Information: The lower price is called the “Bid” and it is the price at your broker (through which you’re trading) is willing to pay for buying the base currency. The higher price is called the ‘Ask’ price and it is the price at which the broker is willing to sell you the base currency against the counter currency.
Education
by Anbat
What Is The 80/20 Rule? (Forex trading)What is the 80/20 rule? this applies to play, work, trading, business and all parts of your life. 20% (of your trading) equals 80% (of your results). An 80/20 mindset enables you to take control! - More Time - More Focus - More Money - More Freedom - Less Stress " Time Is A Gift" "Time Is Money" Questions To Ask Yourself? 1) Can you trade less and make more money trading? 2) Can you trade only high quality trades with the right pair, at right price, during right session & at right time? 3) Can you focus on only trading only one or few Forex pairs and know everything about them? news, price action etc...? 4) Can you trade with a simple and repeatable trading system and edge to profit in long run? Is trading strategy flexible? 5) Can you always use discipline when trading? using risk management: stop, entry and targets to protect your account?
Education
by Anbat
Risk Management (Your #1 Priority)Risk Management in Price Action Trading Risk management in price action trading is much like risk management in any other style of trading; the same basic rules apply: 1. Know your maximum risk tolerance, i.e. the loss you are willing to take on each trade, before you place the trade. A common rule is that traders will not put more than 2% of their funds in the market at a time. 2. Understand correlation between assets, and to what extent you would like to be diversified. 3. Know when you will exit before you enter. 4. Know your reward/risk ratio. 5. Identify what you expect to happen and why, and what price point negates that expectation. This is price point at which you should put stop. Of course, with risk management, techniques are important, but, ultimately, it is up to the trader to ensure they are psychologically prepared for all that is involved. Even if a trader is using a fully automated system, he/she must still have confidence in the system, and must know when any losing streak experienced is just a temporary losing streak versus a more fundamental problem suggesting the system is no longer valid.
Education
by Anbat
Trend lines (How To Draw & Use)There are a few basic rules to bear in mind when drawing trend lines: 1. Tentative trend line - A diagonal line market bounces off of twice. This trend line is indicative of a potential trend, but is not confirmed & actionable yet. This is a tentative trend line; two points touch the line. It suggests the possibility of a trend in the making, though conventional analysis will not regarding the trend as established until there are three points on the line. 2. Confirmed trend line - The market has bounced off this trend line three times. Conventional analysis regards this as a sign that the trend line is real, and that the market will react around it. It is easiest to trade from a trend when its highs or lows trend closely to a recognizable diagonal line, since this line may be used to predict future highs or lows. Opinions vary on whether trend lines should be drawn from the highs and lows of candles or from body of the candle, open & close prices; successful traders can be found employing either approach. In an up trend, trend lines touched three times, this validates the trend line. Those who wish to trade with the trend may have looked for opportunities to buy based on validated trend. Price pulled back to the trend line that was previously confirmed. Traders can do a trend trade & may be a buying opportunity. Support and Resistance The price action trader pays particular attention to pivotal price levels, often “drawing” these lines horizontally as Support and Resistance levels. The theory behind employing these lines is that the market has a sort of memory: price behaves with respect to certain levels that have previously been significant turning points in the historical narrative of the price’s action, and other market participants are likely
Education
by Anbat
The Hard Truth About Trading 😅 Well, that is just a joke. Or not a joke? In every good joke, there's a sliver of truth... So many people blew their trading accounts in a blink of an idea chasing the profits, so many people went bankrupt practicing leverage trading... Do not be that guy in a picture. Be a true trader! Never forget about risk management and don't be greedy. Never let your emotions control you. Stay calm and humble while you trade. Have a great weekend! ❤️Please, support these drawings with like! It really helps!
Education
by UnitedSignals
3
The Hard Truth About Trading 😅 Well, that is just a joke. Or not a joke? In every good joke, there's a sliver of truth... So many people blew their trading accounts in a blink of an idea chasing the profits, so many people went bankrupt practicing leverage trading... Do not be that guy in a picture. Be a true trader! Never forget about risk management and don't be greedy. Never let your emotions control you. Stay calm and humble while you trade. Have a great weekend! ❤️Please, support these drawings with like! It really helps!
Education
by UnitedSignals
10
How To Trade With The Big Banks (Price Cycle Trade Setup)Elements To The Trade Set Up: Price Cycle Of Institutions. 1) Expansion= Order block/Zone Is when price moves quickly from a level of equilibrium in other words when price breaks out of consolidation. This will leave an order block or zone behind. 2) Retracement= PA Fills In Any Imbalance Is when price pulls back inside the recently created price range or close to breakout of expansion area. Look for imbalance to be filled on retracement. 3) Reversal= Seek To Pick UP Liquidity Is when price moves in the opposite direction from the current market direction was moving in. (from up trend to a downtrend). 4) Consolidation= Equilibrium In PA Is a period of ranging or sideways price action, before expansion in price action area.
Education
by Anbat
3
Trading Style? High Win Rate? High Risk Reward? Can't Have BothWin Rate, Risk/Reward, and Finding the Profitable Balance You generally need to make a choice in your trading Forex: either have a high win rate % and low risk reward (hedge traders or scalp traders) or low win rate % and high risk reward. (day traders and swing traders). Either can be successful, but it is a personal choice and different style of trading. Sometimes you can change depending on: pair, price, time & session that you are trading. End of Tokyo to end of London is high volume and liquidity daily time, so day trading might work and swing trading mid week. Hedging is mostly a high end money way of trading related to taking positions on both sides of a pair and scalping is going for many trades in same session, but make little pips per trade, but having high leverage per trade. These are great anytime of session, but do pretty good during low liquidity and volume times. Win-rate is how many trades you win, usually given as a percentage. Such as 50%, 5 out of 10, or 50 out of 100. Means 50% of trades placed result in a profit. Win rate is what many people focus on. They want to be right, often! Yet reward:risk (R:R) is just as important. R:R is how much a trader wins on winning trades versus how much they lose on a losing trade. Most day traders focus on the win rate or win/loss ratio. The allure is to eventually reach that stage where nearly all their trades are winners. While this appears to make sense, having a high win rate doesn't mean you'll be a successful trader or even a profitable one.​ Your win rate is how many trades you win out of all your trades. For example, if you make five trades a day and win three, your daily win rate is three of five or 60%. If there are 20 trading days in the month, and you win 60 out of 100 trades, your monthly win rate is 60%.
Education
by Anbat
4
What Is Leverage?Leverage is the use of borrowed money (called capital) to invest in a currency, stock, or security. The concept of leverage is very common in Forex trading. By borrowing money from a broker, investors can trade larger positions in a currency. As a result, leverage magnifies the returns from favorable movements in a currency's exchange rate. However, leverage is a double-edged sword, meaning it can also magnify losses. It's important that Forex traders learn how to manage leverage and employ risk management strategies to mitigate Forex losses. KEY TAKEAWAYS: Leverage, which is the use of borrowed money to invest, is very common in Forex trading. By borrowing money from a broker, investors can trade larger positions in a currency. However, leverage is a double-edged sword, meaning it can also magnify losses. Many brokers require a percentage of a trade to be held in cash as collateral, and that requirement can be higher for certain currencies. Leverage simply allows traders to control larger positions with a smaller amount of actual trading funds. In the case of 50:1 leverage (or 2% margin required), for example, $1 in a trading account can control a position worth $50. As a result, leveraged trading can be a "double-edged sword" in that both potential profits as well as potential losses are magnified according to the degree of leverage used. Example: USD/CAD at 50:1 or 2% leverage ( in this example, if you place a 100,000 USD/CAD trade with 50:1 leverage, your margin requirement will be $2000. Trade Size: 100,000 Margin: $2,000 Trade Size: 10,000 Margin $200 and Trade Size 1,000 Trade Size $20. *Required Margin. Required margin is the minimum account balance needed to hold a position.
Education
by Anbat
Leverage 50:1 (maximum Reward Risk)Should you use 50:1 leverage or maximum Reward Risk on any one trade? Is that using proper risk management? Per chart example: 1) You could either lose on chart one trade 10% of your account or 2) You could win on chart one trade 25% of your account Using Leverage is a double edged sword, which can be used or abused in the context of risk management, lot size, margin and leverage. Bad risk management is number #1 reason why traders blow accounts. Use 2% of account on one single trade, adjust lot size accordingly, stop losses and targets- this is a marathon not a sprint.
Education
by Anbat
Leverage Trading (Example)What is leverage in Forex? Leverage is a facility that enables you to get a much larger exposure to the market you’re trading than the amount you deposited to open the trade. Leveraged products, such as Forex trading, magnify your potential profit - but also increase your potential loss. Leverage works by using a deposit, known as margin, to provide you with increased exposure to an underlying asset. Essentially, you’re putting down a fraction of the full value of your trade – and your provider is loaning you the rest. Leverage and risk management Leveraged trading can be risky as losses may exceed your initial outlay, but there are risk-management tools that you can use to reduce your potential loss. Using stop-losses is a popular way to reduce the risk of leverage. Attaching a stop-loss to your position can restrict your losses if a price moves against you. However, markets move quickly and certain conditions may result in your stop not being triggered at the price you’ve set.
Education
by Anbat
MrRenev portfolio exposedHere is my current short term portfolio. This might give the reader an idea of how a moderately diversified short term portfolio might look. I use various tools (including turbos, options...) so it's hard to say how much I have in, but I know how much of original risk I got. Which is today €500. I added my little XRP bag from earlier this year to my crypto holdings to get to exactly 500. It makes more sense to build a PF looking at risk rather than the size that doesn't mean anything by itself. Of course I have some winners and I have trailed my stop so this is why I precise "original" risk, that's the risk when I opened the position. The whole thing is maybe €40,000 with €25,000-€30,000 in Forex which would make it around 70% but it is less volatile, in "risk" terms it's actually 30%. Entry stops are tight (for example 0.50% with FX, 2% with S&P, 1% with commodities depends). I am sure I have 25 to 30K in FX, it's the rest that is hard to evaluate. Here is the detail: 30% - Forex: 2 longs on the Yen, 2 shorts on AUD, and short USDZAR. 25% - Commodities: Gold, Platinum, Natural Gas. All long. 23% - Indices: All in the S&P500 long, pyramided in since April. 12% - Crypto: Mostly Bitcoin. And a bit of XRP (it's less than 6 month old). 10% - Stocks: Pfizer & Moderna. I also have a few stocks & cryptos that I hold long term and have not listed here. And cash in the bank. And physical goods in my house. I even have stamps and a few old coins. I don't check on it every day, or week, or month, or year, but I really don't care about the long term stuff, I am focussed on the long term. Looks like I have found a perfect trick to not worry. I am not "ultra" diversified, but some billionaires have hinted that diversification may be for idiots. If you saw Ray Dalio present his "holy grail" you know that (roughly) you get a huge improvement in risk adjusted returns going from 1 to 5 (good) positions, a little more improvement going from 5 to 10, and it basically flatlines past 10 positions no matter how much you add. This is universally true, I'm sure it can be proven by a mathematician and the limit of growth will be Euler's number 2.718 (like maybe the stdev can only be improved 2.718X?), no matter how many uncorrelated positions are added. The reasons for having dozens of positions is either you're such a whale you have to, or you're trying to attract clients and plenty of positions makes you look pro and justifies the cost and also makes it look too complicated to do for a novice. My positions shown here are all short term, with: FX and Commodities and Stocks (65%) all under 2 months S&P500 and Crypto (35%) all under 6 months I have been long US indices since September or October of 2020 but it was tech100 and I closed it all since then. 33% of my holdings are correlated to the US stock market but I am in the green on the S&P and have guaranteed stops, I have pyramided into my winner over time, so there is actually no major risks there. I am not a professional risk manager and I don't give advice but I don't think I have crazy risks. No single instrument (a currency, an indice) ever has a leverage over 5 (when adding all pairs or all correlated indices). The max leverage I have been using on a position ever as far as I can recall is 2 (0.25% stop loss with a leverage of 2 = risk of 0.50% on the single position). Anyone who understands elementary school level maths should be able to understand the problem with too much volatility: A 3% drawdown takes a 3.09% profit to get back to breakeven. This is 3% more (3.09% is 3% more than 3%). A 10% drawdown takes an 11.11% profit to get back to breakeven. This is 11.11% more. A 30% drawdown takes a 42.9% profit to get back to breakeven. This is 42.9% more. A 70% drawdown takes a 233.33% profit to get back to breakeven. Good luck. Simply since this is short term there will be much more volatility, so careful with leverage! (Indeed, if a long term portfolio had say 15% deviation happen every 100 years, the short term one could have this every 100 months or even 100 weeks). And then there are the black swan events... They don't happen but when they do it stings. And in one's career they WILL happen. Bill Hwang got destroyed by having 5 leverage on all his money, concentrated in a few stocks. The "Swiss Franc Tsunami" was a 15% drop. You'd have to be a complete mongrel to get wiped out, that would require over 6 leverage on a single currency. Legend james Cordier had next to 100 leverage divided between only half a dozen commodities, he was riding at least a 10X on NatGas alone. Even if you had 10 leverage on stocks but distributed in 10 a 20% gap down wouldn't wipe you out it's very unlikely they ALL gap down. Don't go 10X in stocks even if diversified, that was just for the example, in the EU it's not even possible anyway max is 5. I even posted ideas for some of those positions With Bitcoin I think I post everything. Not sure. Almost 1 year ago, "buy area visited", hah I actually bought the very bottom. As I said this is nearly 1 year old but I moved to the S&P500 back in April to catch a new swing. 2 different trades within a long term bull bias. Buying pullbacks with tight stops you get stopped often but you also buy the very bottom often. I probably mentioned my transition to the S&P500 somewhere but without details and I don't write every single time I add or take profit or reduce my position. Might add a bit to crypto if it keeps going. Hopefully I get to short GME soon, should reduce my overall stock risk, maybe. It can always shoot up while the rest crashes down, I don't think this is likely it's a 1/100 thing, it does happen, and you want to make sure you'll survive it, but it doesn't happen that often so it's worth taking the risk. Typicall I might have something like this: 10 positions 2 wins I'm trailing (> 5R) 3 little wins trying (2.5-4.5R) 5 positions around my entry (between -1R and 2.5R) I rarely see red in my accounts, losers go quite fast. So mostly I look at positions in the green. It has the benefit of feeling good. Losers hold losers, that simple. Individual positions are very volatile, I might see a currency pair have a drastic move against me and crush my soul, but then I log in my accounts and I see my overall profits have not moved much, while the 1 pair was crashing 3 other ones sligthly went up. So it makes it more of a slow and steady growth rather than some hysterical bipolar game.
Education
by MrRenev
3
Technical Analysis: Technical Indicators (Do You Need Them?)Charts always have a story to tell. However, from time to time those charts may be speaking a language you do not understand and you may need some help from an interpreter. Technical indicators are interpreters of Forex market. *Some traders trade Naked Charts, too each their own!!! Technical indicators are based on mathematical equations that produce a value that is then plotted on your chart. For example, a moving average calculates the average price of a currency pair in the past and plots a point on your chart. Technical indicators are divided into the following three categories: Trending Indicators:Trending indicators, as their name suggests, identify and follow the trend of a currency pair. Moving Average(s)- Moving averages are the most basic trending indicator. Bollinger Bands- Shows what direction a currency pair is going but also how volatile the price movement of the currency pair is. Oscillating Indicators:Oscillating indicators, as their name suggests, are indicators that move back and forth as currency pairs rise and fall. CCI- show you how bullish or bearish traders are toward a currency pair and how dramatic those sentiments are MACD- show you when trading momentum changes from being bullish to bearish and from being bearish to bullish. Slow Stochastic- show you when investor sentiment changes from being bullish to bearish and from being bearish to bullish. RSI-is a momentum indicator used in technical analysis that measures the magnitude of recent price changes. Volume Indicators: Since currencies are traded on the inter-bank market and not on a central exchange, volume data for currency transactions is not available. Without volume data, you cannot construct volume indicators. Therefore, we do not use volume indicators in Forex trading.
Education
by Anbat
1
Position Size Calculator (Use It On All Trades)Example CADJPY daily setup is a swing trade using the position size calculator, on chart. This should be down on all trades down, for risk management and to trade Forex for a lifetime and be part of the winners in trading. Yes, this example is on daily, but practice on 4 hour, 1 hour or lower charts using position size calculator. There are several free ones online, fine one you like and book mark it for easy access when needed. Good Luck.
Education
by Anbat
Supply Zones & Demand Zones (Where Swings Happen)Supply zone are areas of resistance on charts which price action reverses at a swing point and goes bearish and Demand zones are areas of support on charts which price action reverses at a swing point and goes bullish. Once Big Banks have consumed all of the SELL ORDERS- from a demand area price action will go up. No sell orders left, sharp move up. This is so that Big banks can move market quickly consuming buy orders along the way to their targets. Once Big Banks have consumed all of the BUY ORDERS- from a supply area price action will go down. No buy orders left, sharp move down. This is so that Big banks can move market quickly consuming sell orders along the way to their targets. Price action is #1 (ALWAYS)- Big banks will range for as long as they need to do accumulate positions for what direction they take Forex pair in future, that is why use the COT REPORT (to get a heads up on this information and to keep you trading with them not against them (which is a failing/gambling trading) There are major supply and demand zones on higher time frames on 4 hour or higher charts (used for swinging or daily time frame trading) and minor supply and demand zones on 1 hour or less time frames (used for scalping or day trading) Using supply and demand zones should be part of your normal practice and trading, they will give you possible entries and targets. You can tell weak and strong supply and demand zones, by how easily price action goes thru it and/or stops (makes a base at) or reverses at... They tell you a lot in Forex trading.
Education
by Anbat
How To Trade High Impact Expected USD News (Patience)When USD news comes out before a 4 hour candle closes, I use discipline, patience and wait. A Lot of high impact expected news hits at 5:30 am (PST/USA) when New York session opens. This is London session and New York session overlapping 4 hours which I think is best 4 hours of day to trade. My Rules Area: (USD high impact expected news) 1) Use either a 5 minute or 15 minute time frame to trade on. 2) I use forexfactory.com for my news and results. 3) Use a highly traded USD currency (like Eurusd, UsdCad, UsdChf,Gbpusd or Usdjpy) to trade with. 4) If high impact news hits at 5:30 am---- then EURUSD example on chart (8/12/21 PPI mm) --- comes in---> refresh page and get results. Results were USD positive: actual 1.0% and forecast was 0.6% so was higher then forecast and/or expected, so USD shows strength, if you are trading the following pairs EURUSD , USD,AUD, GBPUSD, should go down, USDCAD,USDCHF & USDJPY should go up- related to USD high impact news results. 5) If high impact expected USD news hits prior (5:30 am PST/USD) to a 4 hr candle--I WAIT for top of hr of 6:00 am -10:00 am candle for any new trades. Why? let both spreads calm down to a normal range and all of the scalper traders clear out, to set up any possible further trades. This gives you 30 minutes to set up whole trade: Entry, Stop Loss and Targets for this. Remember EURUSD only has an ATR of 53-60 for last 5 weeks, so stops/targets are close. Chart set up is: 5 stop loss vs 14 pip target. Note high impact USD expected news was positive, so set up a bearish or sell trade with EURUSD. *Trade was entered on reversal of 5 minute DOJI candlestick right start of new 4 hour/6:00 am (not shown related to short time frame for TV/public to look at). I use both 5 minute time frame and 15 minute time frames to trade high impacted expected news on. Note: Price Action & Risk Management ALWAYS!!!
Education
by Anbat
The Art of Swing TradingHey, family, we are wishing you all a pleasant weekend and coming at you with another educational post. The topic of our article for today is the following: The Art of Swing Trading. As you all may know, Swing Trading refers to the practice of trying to profit from market swings of a minimum of one day and as long as several weeks. But what is it that makes this type of market trading so unique? Let’s follow through and find out! To start with, Swing Trading is safer than other types of trading such as day trading and scalping. This is due to the fact that with Swing Trading, you are less likely to overtrade, there is less stress and there is a reduced chance of making mistakes. Secondly, with Swing Trading, you are likely to spend much less time on the charts in front of monitors. You don’t have to open many positions within a day as opposed to intraday trading and scalping, which gives you plenty of free time in your hands. You can simply open your positions and then forget about those positions for days or weeks to come. You can go for a walk with your partner, grab a cup of coffee with your best friend, spend a quality time with your family, and do it all without being anxious about your trades. As the golden rule states: “Set (Your TP and SL) and forget”. Last but not least, financial news do not have a huge impact on your positions, as your SL is relatively higher than the Stops of day traders and scalpers. Therefore, you do not need to worry about some random spikes taking you out of the trades. However, as the famous proverb cites, every advantage has its disadvantage. When it comes to Swing Trading, he or she needs to have patience, patience and some more patience. Swing trades are meant to be held open for a few days of even few weeks (Well, at least till the price hits your Target Profit). And while the trade is running open, you should know how to remain calm, control your emotions, and not to stress out. Once again, set and forget. Do not monitor your positions every 10-15 minutes. Further to that, this type of trading generally requires a huge trading capital, or otherwise, the profits are gonna be minuscule. When it comes to the timeframes that need to be used, the Weekly and the Monthly are the best for identifying the direction of the trend, the Daily is the best for drawing the key zones and identifying the needed patterns, and lastly, H4 should be utilised for entering and exiting the market. As for the recommendations part, the utilised risk fully depends on the trading capital. The 1-1.5% risk would be the standard normal. As for the risk-to-reward ratio, 1:3 would be an appropriate one to go with. But remember not to be greedy in the markets. Take your profits and enjoy the fruits of your labor.
BITSTAMP:BTCUSDEducation
by Investroy
29
How to import watchlist in TradingView?It will be cumbersome to add each and every share symbol again and again into watchlist especially if 100s of symbols are to be added in watchlist. One simple way to do this is import the entire watchlist. I have taken example of importing Nifty100 stocks into watchlist to explain this process. • Visit NSE site at www1.nseindia.com • Home> Products> Indices>About Indices>Broad Market Indices> Nifty 100 Index • Download List of Nifty100 stocks • This will be a csv file • Copy the Symbol Column • Open a new excel sheet • Paste the symbol column (use paste values) • In next column use the formula =Concatenate(“NSE”,”:”,Symbol cell reference ) • Copy this formula for all 100 cells • Select and copy all 100 cells and in next column use paste values • Now copy all these 100 cells and in a new cell right click and select paste special • Select the transpose box at the bottom and click OK • The cells in vertical range are now in horizontal range • Copy all these cells in horizontal range • Open Notepad and paste these copied cells. Save file and close. • Now, In TradingView open a new watchlist • On top right side you will see “…” symbol; click on it • Select import list option and open the notepad that you have saved. • Done! Your watchlist will import all the symbols. • Shares whose symbol don’t match exactly with TradingViews symbol wont display any data. So delete these symbols and enter the name manually for these few shares. In Nifty100 there are only 3 such shares.
NSE:NIFTYEducation
by ashishrpurandare
4
Trading Psychology Is Worth 95% To Overall Failure or SuccessThe Cold Hard Truth "You Are You're Own Worst Enemy" You will probably develop technical skills required in placing trades and learning money management. But you constantly end up sabotaging yourself. What Is Trading Psychology? Knowing when to quit and when to push Using a stop losses Hitting targets Controlling greed, fear and hope *Discipline, Discipline, Discipline! If you want to be 10% successful FX traders then do the following: Have a trading plan and view, have money management rules, have emotional control, each trade is unique and has nothing to do with last trade, you do not revenge trade, you only trade during certain times not 24/7 & review trade results. Do opposite of above if you are part of the FOMO traders whom do not treat Forex trading as a probability based business but as gambling. Note: If a Forex trade is not doing what and when you want it too, then FIRE it ( get out of it), you are the BOSS. Have a detailed trading plan. More specifically have a detailed set of money management rules within a trading plan to take control over EMOTIONS.
Education
by Anbat
8 WAYS TO IMPROVE YOUR TRADING | Tips From Experienced Trader 🤓 In my years in trading, I’ve been approached by the new and semi-experienced traders for help and advice, and that's how it's supposed to be. Those that «have become» help those aspiring ones. Then I thought that tens of thousands of people are joining tradingview every day, and most of them are beginners and inexperienced traders, So I decided to share some knowledge here with you today. Condensed wisdom of years in trading. 🦉 You see, trading is unique in that it is accessible to people of all walks of life. Your previous education, social status, and other barriers, that might prevent you from entering some industries are completely absent in trading. The only tool you need is your brain, as trading is essentially an exercise in pattern recognition and our cognition is based on pattern recognition and the endless chain of association.🧠 So the CORE is your ability to learn and recognize patterns, and everything else gets added like pearls on the string. Master these KEY points below, and the Gods of trading might smile at you! ✏️🗒️ MAKE A TRADING PLAN - Develop a strategy! This bit seems obvious, yet so many traders arrive to this idea only after losing their first account. Don’t be like that, and you will lose your first account much slower. Research all the main strategies that are out there, and dive deep into the one you found appealing(for any reason). This step might take a year or even more, yet, trust me, this will be time well spent. I would advise simple multi-timeframe top-down technical analysis. I might be biased, as that’s the strategy I use myself, but learning it will give you the basics that you will NEED ANYWAY, whichever strategy you will end up using later. Also, I would choose it because it is intuitive and simple to use. You will be able to identify key levels on the chart after a week of staring at the charts and then work your way up, polishing entries, adding indicators if you like. 🔁 Review your plan after every trading session! After you started trading, even on a demo, DO YOUR HOMEWORK, or else all the trading that you do is in vain, and you will NEVER LEARN. Start your day by reviewing the previous day’s trades, as you will have a fresh perspective that isn’t clouded by emotions of the moment. This WORKS WONDERS! Have a diary with trades, write down your thought process of how you arrived at the particular trade. Then write down your assessment of the next day nearby. Several months' worth of a journal like that is a GOLD MINE, where you can mine data, looking at what works, what does not, etc… ⚠️ DON’T RISK MORE THAN YOU CAN AFFORD TO LOSE - Protect your positions! USE STOP LOSS and place it the moment you entered the trade. Don’t let your mind play tricks on you. As your inner voice will tell you «Why SL? I will close that trade manually, If I see that I was wrong» Nah, you won’t. You are kidding yourself. So DO use SL, don’t give your money to the market makers! 💯 Don’t risk more than 5% of the account! Now that we know we need to use SL, I strongly advise you to never risk more than 5% of your account in one trade. In fact, I do not risk more than 1% per each trade myself. Use a lot calculator to help you determine how much you are risking in dollar value per trade. It is a bit boring, but will save you a ton of money! And who said trading needs to be fun, huh? You are a grownup and it's your job! 😌 BE DISCRETE AND DISCIPLINED -Once you have the system, don’t overthink it! After you mastered your system, backtested it on multiple pairs and begin trading on demo, stop worrying about whether the strategy is good or bad. You chose it, it showed results on the backtest, now get out and test it on the market. Time will show if your choice was correct. 📜 Follow the rules and reflect on the results later! Once the system is chosen, make the rules that are as simple and clear as possible so that you could approach each trade with a ready-made algorithm. This will take a lot of stress off your mind. 💢 CONTROL YOUR EMOTIONS - Too much anger or excitement alike hurt your trading! Having a strict algorithm helps massively, and when trading you need to learn to abstract yourself from the monetary values on the screen. These are just numbers, and you are playing a game of probability, so there will be winning and losing streaks. Learn to treat both with indifference. 🌁 Play it cool! Trading is a battle of wills. Whoever has the hardest balls wins. So be cool! ⌛️ BE PATIENT - Keep your eyes on the big picture! When even considering trading as a potential career, please accept the simple fact that there will be losses, a lot of them, all the time. You will NOT be making money for quite some time. Accept it as part of the game and it will be much easier for you physiologically. If you come with the make easy money fast mindset, you will lose! 🏅 Winning takes time! I’ll stress it again, learning trading will take a lot of time, and there are some hard times ahead of you, so prepare for this beforehand, and no, you are NOT unique or special, so you will have to go through the same trial and error ordeal as others. There are no shortcuts. ✔️ ACCEPT YOUR LOSSES AND MOVE ON - Remember that you are in this for the long haul! When feeling down because each trade this week was a losing one, imagine yourself free from the location, from your job, from all the constraints that usual people have, and remind yourself, that that’s exactly what you are working towards, because the moment you can make stable returns, you can multiply your income by a factor of x10 overnight. It might be a factor of an x100, it just depends on how big your balls are. So whenever you want to quit, think of what life could have been like if you persisted! 🚫 A loss is a part of the learning process! You will lose multiple accounts. There is no way around it! This is your way of learning, and no one has created a different one so far. You might be as good as a God on demo, but the moment you enter the real world emotions kick in and you will have to learn a lot again. So when entering trading, be prepared to pay the market a fair price for educating you. And remember that the reward is much greater still! 📰 READ THE NEWS - Current events can affect the markets! This one is certainly not for beginners! If you start doing that from the start, it will be too much info for you and you will get lost in the constant swirl of hot air that surrounds the markets. But once your strategy is good enough and you are beginning to be profitable, you might want to start paying attention to the key events and dates that might have an effect on your trading. I never actively trade fundamentals myself, but who said that you shouldn't? 🤏 Keep in mind big political events that can cause big moves! This! If the FOMC meeting is tomorrow, you better close all your positions today, because whatever analysis you made might get invalidated by what the FED minutes bring to the market. We are playing probabilities that we can predict based on past experience, but whoever is trying to predict the FED and the market's reaction to it is fooling themselves, so once such a whale enters the room our ability to predict rationally vanished, thus we need not trade that day at all. And the FOMC is just an obvious example. Important statistical data such as CPI, jobs, etc might affect the pair you are trying to trade, and you better know about it. As a famous trader’s saying goes «Not being in the Market Is a position too» 🆕 UPDATE YOUR TECHNOLOGY - Slow internet connection or an old computer might make you miss your trade! There is a side note yet do not neglect your workstation. Don't let it be dirty or messy, and make sure your equipment, i.e. a computer or a smartphone work properly. Missing a trade because of a bug is SUCH a pain! You don’t want that, right? 📈And not trading update charts is even worse as some level breakouts can happen in seconds. That one is less relevant today thanks to tradingview charts being awesome, yet always make sure that the data on the chart is given to you without a delay. Trading a setup that ain’t there anymore is not good… 🦉📚 These are the «words of wisdom» that came to my head today, and I really hope I helped some of you get back on track, or begin your path as a trader with a slightly better understanding of what is ahead of you. ❗️ JUST REMEMBER: IT IS POSSIBLE! But it will take time, money, and effort, so brace yourselves, and may the odds be always in your favor! 💖Adios, Amigos! Give me a like and comment, if you agree with what I said!💖
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by UnitedSignals
21
Comparing Traders: the FOMO effectFOMO Trading vs Disciplined Trading: THE CYCLE (chart) The process of placing a trade can be very different depending on the situation in hand and the factors that are driving a trader’s decisions. (On Chart example) Here is the journey of a FOMO trader vs a disciplined trader – as you will see, there are some fundamental differences that can lead to very different outcomes. DAILYFX ANALYSTS SHARE THEIR FOMO EXPERIENCES Traders of all levels of experience have dealt with FOMO, including our DailyFX analysts: “Trade according to your strategy, not your feelings” – Peter Hanks, Junior Analyst “Strategize. Execute. Stick to the plan and don’t be greedy. All types of traders make money; pigs get slaughtered” – Christopher Vecchio, Senior Strategist “Trade decisions are not binary, long vs. short. Sometimes doing nothing is the best trade you can make” - IIya Spivak, Senior Currency Strategist “If you don’t deal with and temper FOMO in trading – it will deal with you” – James Stanley, Technical Strategist If you do not have a trading plan, trading strategy, trading edge in Forex trading- you are leaving trading to happenstance instead of controlling your probables and treating Forex trading like a business. This is not a sprint race but a marathon race. Forex trading outcome is up to you alone.
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