Fundamental Technical Analysis And Tools Of Trading The Markets

Fundamental analysis is the evaluation of non-visual information to evaluate trading activity and make trading decisions. Whereas technical analysts utilize charts and mathematical indicators to quantify price activity, fundamental analysts utilize market news and market forecasts to qualify price activity. There are numerous market events that move financial markets every week. Some affect every market instrument while others affect specific instruments. If the outcome of a market event has been fully discounted by the market, traders will not notice any discernible impact on their charts. If the outcome of a market event has not been fully discounted by the market, the result is either price appreciation or price depreciation and traders will see this activity on their charts.

Every week, there are fundamentally-important market events that are scheduled in every country at specific times. Similarly, there are fundamentally-important market events that may not be scheduled for specific times. Some countries (Germany, for instance) often do not schedule market events for specific times. The outcome of market events is sometimes leaked in advance in certain countries (Germany, for instance) for different reasons. Market events include the release of economic data, speeches and testimony by government officials, interest rate decisions, and others.

Technical Analysis

Technical analysis differs from fundamental analysis in that technical analysis is applied only to the price action of the market, ignoring fundamental factors. As fundamental data can often provide only a long-term or "delayed" forecast of market price movements, technical analysis has become the primary tool with which to successfully trade shorter-term price movements, and to set stop loss and profit targets. Technical analysis consists primarily of a variety of technical studies, each of which can be interpreted to generate buy and sell decisions or to predict market direction.

Support and Resistance Levels

One use of technical analysis, apart from technical studies, is in deriving "support" and "resistance" levels. The concept here is that the market will tend to trade above its support levels and trade below its resistance levels. If a support or resistance level is broken, the market is then expected to follow through in that direction. These levels are determined by analyzing the chart and assessing where the market has encountered unbroken support or resistance in the past.

Popular Technical Analysis Tools

Moving Averages (MA): Indicators used to smooth price fluctuations and identify trends. The most basic type of moving average, the simple moving average, is the average of the past x bars ending with the current bar;

Moving Average Convergence Divergence (MACD): Indicator that utilizes moving averages to identify possible trends and an oscillator to determine when a trend is overbought or oversold;

Bollinger Bands: Bands that are placed x moving average standard deviations above and below a simple MA line;

Fibonacci Retracement Levels: Indicator used to identify potential levels of support and resistance;

Directional Movement Index (DMI): A positive line (+DI) measuring buying and a negative line (-DI) measuring selling pressure;

Relative Strength Index (RSI): Momentum oscillator that is plotted on a vertical scale from 0 to 100;

Stochastics: Momentum oscillator that measure momentum by comparing the recent close to the absolute price range (high of the range minus the low of the range) over a period of x bars;

Trendlines: Straight line on a chart that connects consecutive tops or consecutive bottoms of prices and is utilized to identify levels of support and resistance. Stay updated and have a nice day.

10 General Trading Guidelines To Note

Be it Forex or cryptocurrencies, trading is now a common term in the midst of  many young internet savvy people now, trading is now the order of the day. Below are some ideas to trade successfully online. 

1. Plan your trade and trade your plan: You must have a trading plan to succeed. A trading plan should consist of a position, why you enter, stop loss point, profit taking level, plus a sound money management strategy. A good plan will remove all the emotions from your trades.

2. The trend is your friend: Do not buck the trend. When the market is bullish, go long. On the reverse, if the market is bearish, you short. Never go against the trend.

3. Focus on capital preservation: This is the most important step that you must take when you deal with your trading capital. You main goal is to preserve the capital. Do not trade more than 10% of your deposit in a single trade. For example, if your total deposit is $10,000, every trade should limit to $1000. If you don't do this, you'll be out of the market very soon.

4. Know when to cut loss: If a trade goes against you, sell it and let go. Do not hold on to a bad trade hoping that the price will go up. Most likely, you end up losing more money. Before you enter a trade, decide your stop loss price, a price where you must sell when the trade turns sour. It depends on your risk profile as of how much you should set for the stop loss.

5. Take profit when the trade is good: Before entering a trade decide how much profit you are willing to take. When a trade turns out to be good, take the profit. You can take profit all at one go, or take profit in stages. When you've recovered your trading cost, you have nothing to lose. Sit tight and watch the profit run.

6. Be emotionless: Two biggest emotions in trading: greed and fear. Do not let greed and fear influence your trade. Trading is a mechanical process and it's not for the emotional ones. As Dr. Alexander Elder said in his book "Trading For A Living", if you sit next to a successful trader and observe him or her, you might not be able to tell whether he or she is making or losing money. That's how emotionally stable a successful trader is.

7. Do not trade based on tips from other people: Trade only when you have done your own research. Be an informed trader.

8. Keep a trading journal: When you buy a market instrument, write down the reasons why you buy, and your feelings at that time. You do the same when you sell. Analyze and write down the mistakes you've made, as well as things that you've done right. By referring to your trading journal, you learn from your past mistakes. Improve on your mistakes, keep learning and keep improving.

9. When in doubt, stay out: When you have doubt and not sure where the market is going, stay on the sideline. Sometimes, doing nothing is the best thing to do.

10. Do not over trade: Ideally you should have 3-5 positions at a time. No more than that. If you have too many positions, you tend to be out of control and make emotional decisions when there is a change in market. Do not trade for the sake of trading. Happy New Year in advance.

Things You Can Do When The Market Is Bullish

A bull market or a bull run refers to a stock market that is characterized by a sustained rise in share prices with most counters trending upwards.

Bull runs normally occur when investors believe the positive trend will continue for the long term.

Bull runs present an opportunity for investors to take advantage of rising prices by buying early in the trend and then selling when stocks have reached their peak.

At times, a company may simply be doing well and investors want a piece of the pie and they buy stocks and hang on tight to watch the money come in.

The supply of shares, then, is low no one wants to give up their piece of the pie.

The competition to acquire those much-coveted shares becomes fierce, which drives the prices up even higher. In such circumstances, the best strategy is to recognize the trend early and make smart buys.

This means that timing is of utmost importance.

However, knowing exactly when stocks are at the bottom or the peak is impossible but investors need to closely follow market reports, results releases and trading updates in order to get it right in terms of timing. The trick is in buying low and selling high.

As you start to add shares to your portfolio, first analyze your situation to make sure that you have diversification. Some shares are more aggressive choices than others.

This choice reflects your risk tolerance as well. Figure out whether you want to invest in a small-cap stock with phenomenal growth prospects (and commensurate risk) or a large-cap stock that’s a tried-and-true market leader.

 Look at industries that are poised to rebound as the economy picks up and individuals and organizations begin to spend again.

One of the most basic strategies in investing is the process of buying a particular security and holding onto it, potentially to sell it at a later date.

This strategy necessarily involves confidence on the part of the investor: why hold onto a security unless you expect its price to rise?

For this reason, the optimism that comes along with bull markets helps to fuel the buy and hold approach.

Evaluate your personal goals. No matter how good the market and the foreseeable prospects for growth are, stock investing is a personal matter that should serve your unique needs.

For example, how old are you, and how many years away is your retirement? All things being equal, a 35-year-old should have predominately growth stocks, while a 65-year-old requires a more proven, stable performance with large-cap market leaders.

For any investor, safety is as important as growth. Prudent risk management therefore requires that one addresses the possibility that a “Bull” market could turn “Bearish” at any time. One’s portfolio needs to be prepared should unfriendly market conditions occur.

For more detailed information you need to physically visit a stockbroker or any capital market participant for interaction about your Investment choice or decisions.

Have a wonderful day.

The Three Trend Line Strategy Forex Trading Tool

There is no one single super smart Forex trading tool which gives you profit, profit and more profit.

The only possible solution is to use a combination of different tools to identify the favorable market forces to get a maximum number of high probability trades over a period of time. 

Trend lines are the most popular and reliable Forex trading tool which many successful traders give their testimonial for.

The Three Trend line Strategy

Trend Lines are an important tool for trend identification and confirmation in technical analysis.
It is a straight line that connects two or more price points and then extends into the future to guide you.

There will be lines drawn across significant lows in an uptrend, and significant highs in a downtrend. To roughly classify trend lines, we can divide them into three as short term trendlines, medium term trendlines and long term trendlines.

1. Short Term Trendlines

Draw these lines across the most recent two lows for an uptrend or across most recent two highs for a downtrend. Best observations are found on a smaller time frame such as a 15 minute or 30 minute chart.

2. Medium Term Trendlines

These are best observed on a higher time frame like a 60 minute chart. It either connects the nearest significant low to current price action to the previous significant low in an uptrend or the nearest significant high to current price action to the previous significant high in a downtrend.

3. Long Term Trendlines

It uses higher time frames such as the 4 hour chart or the daily chart to draw long term trendlines using the same method of Medium Term Trendlines. The long term trend line is considered as an effective Forex trading tool. The daily chart is used mostly by traders of big institutions who do not usually engage in small moves on an intra day level.

By drawing a trend line on a daily chart you can graphically analyze where price is and where it is likely to bounce. But employ trendlines as a Forex trading tool with caution and discretion. Covering your charts with every trend line possible will result in confusion and blurry analysis.

It is not a good idea to rely completely on a short time trend line.
They merely give you a defined picture of current price action.
These are broken often during the course of a day.
Their main use is to give you a clear, instantly recognizable graphical representation of current price behavior. If you notice price coming back to test a trend line on the higher time frames, look at other factors. Draw in horizontal lines to mark key support and resistance using previous highs and lows.
Draw Fibonacci retracement and extension levels.
Calculate the daily pivot points and put them on your chart. Have the 200 EMA (Exponential Moving Average) shown on your charts.
Enjoy your day.

Crypto Currency Mining Simply Explained

Mining is a record-keeping service done through the use of computer processing power. Bitcoin is a crypto-currency and worldwide payment system that can be exchanged for other currencies, products, and services. 

 

It was created as a reward for mining. Miners keep the blockchain consistent, complete, and unalterable by repeatedly verifying and collecting newly broadcast transactions into a new group of transactions called a block.

 

It is, therefore, important to state here that Bitcoin is the first decentralized digital currency, as the system works without a central bank or single administrator.
 

 

Transactions between users are done directly, without any intermediary. These transactions are verified by network nodes through the use of cryptography and recorded in a public distributed ledger called a blockchain.

 

However, buying Bitcoin atimes may takes a difficult process or have trust issues. And it may even be more difficult when you try to buy with your credit/debit card.

 

But things seem to be changing as some companies have succeeded in making the process easier and instant than usual. You can buy Bitcoin and Ethereum with your credit/debit card with ease using Luno. 

 

Read More Here

Why Is Forex Trading Popular ?

Forex trading is not familiar to any every day person however it has of late become a very popular tool for a good number of people to make some extra money.

It has emerged as being an incredibly popular vehicle in which people place their funds.

We will explore below as to why this has become the case.

First of all, once one has good knowledge of the trending forex and has studied and explored the markets in line with the current economic indicators, they are likely to be in a good position to place trades that are likely to fetch high earnings.

For those motivated to be successful in the forex market, trading in foreign currency can provide a path to wealth. Again, this contributes to the popularity of such trading.

Forex trading has also become popular because it provides a viable alternative to other forms of investing and trading. 

Although the trading market has lately been unstable leaving many not sure where to put their funds, the fact that many people have reaped huge profits from it still makes it a popular choice for investing funds.

The ease accessibility to trading is another reason for the huge popularity of forex trading. 

With the possibility of opening personal accounts online regardless of whether it's in office or at home or even on the move has let to a surge in the number of people interested in opening accounts with online brokers compared to previous systems where one had to contact a broker over the phone to open accounts and also with instructions of which trades to place and when. 

New technological developments have made things much more accessible. 

Specifically, there are platforms which have emerged that allow a trader to use software to execute trades. 

These trades can be executed automatically or manually based on preset indicators. 

This has made it so much easier for traders to get online and trade as and when required.

In addition, along with the above, some trading platforms do offer some indicators, signals and pointers regarding the current  markets and therefore these help traders to make informed decisions when it comes to what trades to open.

These features have proved popular with traders and some have been able to place very profitable trades.

It's always a good time to start forex trading so if you are thinking of starting, get yourself immersed in the resources available and get trading and hopefully you'll discover why it is a popular tool.

http://cathyfx.weebly.com/home/why-forex-trading-now.

What Is Forex Trading

Forex Trading in a lay man's terms is the is the speculation on the price of one currency against another. 

For example, if one thinks the pound is going to rise against the U.S. dollar, you can buy the GDP USD currency pair low and then hope to sell it at a higher price to make a profit. 

However be prepared that when you buy the pound against the dollar and the U.S. dollar strengthens, you will end up making a loss on that trade and this explains the whole idea about speculative trading.

One of the key elements behind forex’s popularity is the fact that forex markets are open 24-hours a day from Sunday evening through to Friday night. 


Trading follows the clock, opening on Monday morning in Wellington, New Zealand, moving on to Asian trade then to Tokyo and Singapore, before moving to London and closing on Friday evening in New York.

The fact that prices are available to trade 24 hours a day helps traders to place their trades at their preferred time of the day or night. 

Trading in between different market openings is controlled in a way that  when a price jumps from one level to the next without trading in between, it is less and this is referred to as gapping.

Many traders are who have had a few months or years trading are able to watch and follow the markets of interest and are therefore able to place trades based on what they hope to make them the highest earnings.

It's always a good idea to keep in mind that trading is not only about making profit, at times losses are likely to be made and it's advisable to be ready for these moments.

Forex Trading can be enjoyable once you have the tricks and tips of trading profitably.
​All the best!

http://cathyfx.weebly.com/home/why-trade-forex

The Importance of Forex Trading Explained

Foreign Exchange [Forex] involves exchanging of different foreign currencies for a profit.

 The reason for buying the currency of another country may be the need to buy some commodity of the said country as well, besides making money through the difference in exchange rates.

In the latter case, people buy currency of a foreign country when the rate in the market is low, and sell it off when the rates go up. 

Currency trading is usually done between the central banks, the government, speculators and MNCs. 

Nations cannot trade with each other without the presence of a foreign market. 

 A huge amount of money is daily traded in the Forex market, though the amount invested by an individual trader may be very low.

 No one individually can have any influence on the Forex fluctuations, not even the government. 

So it can easily be concluded that the level of the currency reflects the strength or the weakness of the economy of a country. 

So this makes the Forex market a good place for competition.

The government and the central bank do try to stabilize the currency of their country by speculating, by buying and selling currencies at appropriate times.

 So they can influence the market if they conduct a trade in huge volumes, though. 

To buy its own currency, however, the government or the central bank must have huge reserves of foreign currency with them. 

So it is virtually impossible to inflate the currency value artificially. 

Banks trade a lot in foreign currencies and this forms a chunk of the volume in the Forex market. 

They buy currencies not only as individual bodies, but also on behalf of their clients. 

They trade in lots of futures. 

Till a few years back, the brokers could influence the volumes of trading in the Forex market. 

But due to the electronic services available now, the services of brokers is not required. 

It’s easy to operate electronically. 

Trading with international countries is possible only with the existence of Forex markets. 

When there is no Forex market, there is no common currency between two countries, so one cannot evaluate the value of one currency with respect to the other.

The buyer pays the seller in the former’s currency. 

With the money so received, the seller buys goods in the buyer’s country and sells those goods in his [seller] country.

Only then he is able to know how much he has earned through the export.

In the presence of a Forex market, though, it is very easy for a seller to know of his earnings at the very instant that he conducts an export trade. 

 In the same manner, the buyer too will have a thorough knowledge of the cost he will have to incur to buy goods from an international country.

So during a time of economic meltdown, be on the lookout!

Have a good one.

Don’t Fall In Love With Your Forex Trades

 

ARE YOU IN LOVE WITH YOUR FOREX TRADES?
 
Do you find it difficult to exit a losing trade, convinced that it will turn around soon in your favor?

Traders are told that to be successful, they have to cut their losses and let their profits run.
So why is it that we tend to do the opposite?

If you go through your account over periods of loss, most of these will have come from trades you exited far too late.





 If you fit this bracket, then success will not depend on finding the right methodology, but rather on your ability to ruthlessly cut your losses.

The other side of the coin is not being able to take your profits.

Most traders think the most important signal is the entry signal.

But knowing when to take profit is just as vital. Imagine you are in a winning trade.

You wait and wait and greed overcomes you.

You feel almost paralyzed.

All the times you exited too early and you kicked yourself flash before your eyes.

This time it won’t happen again you say to yourself!

So whether you exited too late because you let your losses build up or whether you exited too late because you were pushing for more and more and allowed your profit to slip away, the result is loss.

The more we have invested in something, the harder we find it to let go.

 We hang on hoping that it will work out eventually so that out original investment is not lost.

Or we hang on caught in our expectations of landing a big one.

 If you refuse to define a loss or liquidate a losing trade and you refuse to define what profit looks like, then how can you exit your trade?

So do you know what a loss looks like? What does profit look like?

Pre-define what profit and loss are in every potential trade.

 Determine what the market has to look like or do, so that you know when your trade is clearly not going your way or has given you all it has to give.

You have to learn how to let the market tell you how much is enough, instead of assessing the potential from your personal value system of how much is enough.

Confront the possibility of being wrong and consequently not avoid the inevitability of taking a loss or cash in when the time is ripe.

 So confronting and accepting the inevitability of a loss and knowing when to take profits are trading skills.

Which can be learned and should be because they form the foundation of all you need to know as a trader.

Why is it so difficult to let go of a trade?

From a logical point of view, one can presume that when a trader finds that he or she is letting his losses run repeatedly, and his or her profits dwindle away, it is because – perhaps also on a subconscious level – that the trader believes that it is in some way beneficial.

But we are making one big assumption. And that is that the trader has a choice.

Instead of ‘cutting losses small’ and taking profit when all the signals are screaming out loud, such as hitting support, the trader is choosing to make the wrong choice.

But does he or she have a choice?

The trader is not exiting too late because he or she chooses to, otherwise the problem would have been solved the first time the trader heard about it. It is rather the trader cannot help him or herself.

 But why? The answer lies in our upbringing, and in particular, what we were taught and what we learnt about success.

We were taught to win, not lose.

 We were taught not to give up, to be decisive and determined against all odds.

With this mindset we approach the market with the desire to conquer it with our powerful intelligence.

We are determined to persist until the market gives us what we want.

In addition, the more we have invested in something, the harder we find it to let go.

Think of that relationship we knew was doomed…but we hung on.

Our gut says out, everything says out, but we refuse to give up. If we were to, we say to ourselves, it will all have been for nothing.

But all we get is more pain……
This explains why so many traders lose all their money before they quit. ‘Cutting losses and profits short?’ That is only for the meek and mild!

This also explains why most traders spend hours studying charts and searching for new indicators, trying to find the secret to success that no one else has.

That is why we spend so much money on books, courses or seminars.

But when we have found a methodology that suits our time needs and personality, it still doesn’t necessarily convert us into that consistently profitable trader.

For even though using a methodology with a proven ‘edge’ such as price action is extremely important, giving the disciplined trader clear guidelines for entry and exit points, for the trader who cannot cut his trades, the largest determiner of trading success lies elsewhere.

Trading skills can be divided into anticipating market moves and executing them.

Your charts, your methodology and your gut feeling give you the information you need to read potential moves in the making.

Traders tend to concentrate most of their energy on these skills and it is the subject most covered in seminars and books.

This is to the detriment and neglecting of the actual trading part, i.e. executing your trade.

Think of it like this. Independent retail traders trade their own accounts for their own profit.

And their preoccupation is to anticipate market moves.

But there are brokers too, and a good broker is sharp and alert and will execute the orders he has been given with speed, decision and efficiency.

Imagine a novice uncertain broker who is unsure what to do.

Would you entrust your money with the experienced or novice broker?

So to be successful you have to be able to both anticipate market moves and execute them without hesitation. There are various scenarios.

 The trader could anticipate well but have poor execution. Or poor anticipation and poor execution. Or poor anticipation and good execution.

Or good anticipation and good execution. It is obvious which one is the most preferable – the latter. But which one are you?

Most traders are good at anticipating but poor in their execution. And they lose money because of it. So we need to develop the attitude of a good broker when it comes to the actual execution of our trades.

A broker is judged by his execution skills, he and his client are only concerned with his ability to execute efficiently.

Our goal should thus be to focus on executing trades with ruthless efficiency.

Think about the money you have lost. It was probably due to poor execution rather than poor anticipation.

Do you trade out of frustration and anger? Do you move your stop?

 Do you not act on an opportunity and watch helplessly when you see you were right?

Do you fail to lock in profit? Do you let a winning trade turn into a losing one?

Do you hang on to your trade and find it impossible to admit you were wrong?

If you do then it is your poor execution rather than poor anticipation that is to blame.

To succeed, eliminate these mistakes by concentrating on executing your trades flawlessly.

Assess your trading on your execution.

 Focus on perfecting the buy, sell and exit signals of your chosen price action trading method.

If you Enjoyed This Lesson and want to  learn more about Trading Forex with “Price Action” strategies please check out my comprehensive forex course, in it I teach advanced price action setup trading strategies along with a beginners guide to forex and price action.

Author: Nial Fuller

Nial Fuller is a professional trader & coach who is considered ‘The Authority’ on Price Action Forex Trading.

He is one of the most widely followed forex trading coaches in the world attracting over 200,000 readers each month.

If you want to learn more about harnessing the  simplicity of Price Action visit Nial’s Forex Trading Course Page.

3 Vital Considerations In Choosing Trading Systems That Works

There are numerous people who are eying on the foreign exchange market these days to capitalize and gain profits in the process.

With this advent comes the surge of various trading systems that promise people to become better and achieve so much more as they use these kinds of products.

As a trader, you simply cannot choose the first one that catches your attention.

You have to find out in depth information about the tool to be sure that you will be investing your money on the kinds of tools where you will benefit more. 

You may be a conventional trader who refuses such ideas like Forex robots and the likes.

You want to rely on the services of professionals to help you plan your trading schemes.

There is really nothing wrong with that. There are indeed people whom you can turn to for such requirements.

But you cannot expect them to perform well all the time.

They may base their opinions on the findings of their market study or they may also be using a trading system that you can also get hold of.

It may be quite tricky to find out what system is the best that you can use to help you with your trading schemes.

There are many products available and many more keep on coming out through time.

 You must really spend time doing your research about these products before you proceed with your purchase.

And once you have acquired and are already using what you think is the best tool that can help you with your venture, you must not stop searching for more to find out if other products can perform better than what you already own.

This way, you will be able to stay at the top of your game and will be able to execute the right decisions to make sure that you will make good decisions on your trading quest.

Here are some considerations that you should think over if you are in the process of deciding what kind of trading system will be able to help you as you last in the business.

1. You must be able to understand how the system works.

If you are going to spend money in order to acquire these tools, you must make sure that you will find it easy to use them.

 If you will spend more time in understanding the instructions and vague terms, you will be wasting your precious time because you could have spent such honing your trading skills.

2. You must look into the provider of the product.

You must look into their background and how they deal with clients before you transact any business with them.

You can get such information when you do your research and look for product guides and reviews.

Make sure that you read all information available, including those that are about the sellers of the tools.

3. You have to look into the factors that make the products work.

These were created to be able to perform technical analysis of the market trends.

These conduct automated analysis using algorithms to arrive at useful Forex data.

 In order to get substantial results, you have to know when is the right to use these trading systems and when it will be better to rely on your instincts instead.

Take care.

What The Forex Trading Hype Is All About

Forex trading is all about making big money. Some investors have found it quite easy to make a large amount of money as the forex market changes daily.

Forex trading takes place through a broker or a financial institution often where you are able to purchase other types of stocks, bonds and investments.

Forex, is the foreign exchange market. Online and offline you will find references to the forex market as FX as well.

When you are thinking about getting involved in the forex markets you should know you are sending money to be invested with other countries.

 This is done to prop up the investments of people involved in certain types of hedge funds, and in the markets overseas.

The forex market could have your money invested in one market one day, and the next day your money is invested in another country. The daily changes are determined by your broker or financial institution.

When reading your statements and learning more about your account, you will find that every type of currency has three letters that will represent that currency.

For example, the United States dollars is USD, the Japanese yen is JPY, and the British pound sterling will read as GBP. You will also find that for every transaction on your account listing you will see information that looks like this: JPYzzz/GBPzzz.

This means that you took your Japanese yen money and invested it into something in the British pound market.

 You will find many transactions from one currency to another if you have money that is scattered through out the forex markets.

Forex markets trading by investment management firms are the companies you can trust with your money.

You want to find a company that has been dealing with forex trading since the early seventies, and not someone just new on the block so you get the most for your hard earned money.

It is important that you beware of companies that are popping up online, and often times from foreign countries that are stating they can get you involved in the forex markets and trading.

 Read the fine print, and know whom you are dealing with for the best possible protection.

If you are interested in trading on the forex market, you will find limits for investing are different from company to company. Often times you will learn that you need a minimum of $50 or $100 while other companies will need $200 or $10,000.

 The company you are dealing with will set limits in how much you need to open an account with their company.

 The scams that are online will tell you, that you only need a $1 or $5 to open an account, but you need to learn more about that company and where they are doing business before investing any money, this is for your own protection while dealing in forex trading and markets online.

4 Steps To Develop A Profitable Forex Trading Mindset

It’s an unavoidable reality that your forex trading success or failure will  largely depend on your mindset.

In other words, if your Forex trading psychology is not right, you aren’t going to make any money!

 
Unfortunately, most traders ignore this important fact or are unaware of how critical having the proper mindset is to Forex trading success.

 If you do not have the correct trading mindset, it doesn’t matter how good your trading strategy is, because no strategy will ever make money if it’s used by a trader with the wrong psychology.

You NEED to have a business trading plan, a trading journal, and you need to plan out most of your actions in the market before you enter.

The more you plan before you enter the higher-probability you will have of making money long-term.

 You are ALWAYS going to interpret the market more accurately whilst you’re not in a trade…so pre-planning everything increases your odds of making money since you will be working more on logic than emotion.

In today’s lesson I am going to help you develop a profitable trading mindset.

Note: I would love to hear how you plan on using the points discussed here to improve your Forex trading mindset. Please leave me your comments and feedback below after reading today’s lesson! 

A lot of people seem to be unaware of the fact that they are trading with a mindset that is inhibiting them from making money in the markets.

Instead, they think that if they just find the right indicator or system they will magically start printing money from their computer.

 Trading success is the end result of developing the proper trading habits, and habits are the end result of having the proper trading psychology.

Today’s lesson is going to give you the insight you need to develop a profitable trading mindset, so read this lesson carefully and don’t dismiss any of it, because I promise you that the reason you are struggling in the markets now is because your mindset is working against you instead of for you.

Step 1: Have realistic expectations

The first thing you need to do to develop the proper Forex trading mindset is have realistic expectations about trading.

What I mean is this; don’t think you’re going to quit your job and start making a million dollars a year after 2 months of trading live with your $5,000 account.

That’s not how it works, and the sooner you ground your expectations in reality, the sooner you will begin to make money consistently.

You need to accept that you cannot over-trade and over-leverage your way to trading success, if you do those two things you might make some quick money temporarily, but you will soon lose it all and more.

Accept the reality of how much money you have in your trading account and how much of that you are willing to lose per trade.

 Here are some other points to consider:

• Only trade with disposable ‘risk’ capital – Disposable capital is money you don’t need for any life expenses, including retirement or other long-term things.

 If you don’t have any disposable or risk capital,  then keep demo trading until you do, or stop trading all together, but whatever you do, do not trade with money you are going to become emotional about losing.

 Always assume you could lose whatever money you have in your account or in a trade…if you’re truly OK with that, then your good to go, just make sure you don’t lie to yourself…REALLY BE OK WITH IT.

  Trading with ‘scared’ money (money you can’t afford to lose) will lead to severe emotional pressure and cause ongoing losses.

• Make sure you can still sleep at night !– This is related to the above point about disposable capital.

But the difference is that you need to ask yourself before EVERY trade you take if you are 100% neutral or OK with potentially losing the money you are about to risk.

If you can’t sleep at night because you’re thinking about your trade, you’ve risked too much. No one can tell you how much to risk per trade, it depends on what you’re personally comfortable with.

 If you trade 4 times a month you can obviously risk a little more per trade than someone who trades 30 times a month…it’s relative to your trade frequency, your skills as a trader, and your personal risk tolerance.

• Understand each trade is independent of the previous one – This point is important because I know that many traders are way too influenced by their previous trade.

The fact of the matter is that your last trade has absolutely ZERO to do with your next trade. You need to avoid becoming euphoric or over-confident after a winning trade or revengeful after a losing trade.

 The fact of the matter is that every time you trade it should just be seen as another execution of your trading edge; if you just had 3 consecutive winners you need to avoid risking more than usual on your next trade just because you are feeling very confident, and you need to avoid jumping back into the market right away after a losing trade just to try and “make back” what you lost.

When you do these things you are operating 100% on emotion rather than logic and objectivity.

• Don’t get attached to your trades – If you follow the 3 points we just discussed you should have little chance of becoming too attached to your trades.

Don’t take any trade personally, just because you lose on a few trades in a row doesn’t mean you suck at trading, likewise if you win on 3 trades in a row it doesn’t mean you are a trading “God” who is immune to losing.

If you don’t risk too much per trade and you aren’t trading with money you need for other things in your life, you probably won’t get too attached to your trades.

Step 2: Understand the power of patience

I think one of the biggest realizations that allowed me to turn the corner in my own trading was that I didn’t have to trade a lot to make a decent monthly return.

Think about it, most people consider a 6% annual return very good for a savings account, and if you average 12% a year on your retirement fund you are pretty happy.

So why is it that most traders expect to make 100% a month or some other unrealistic return?

What’s wrong with making 5 or 10% a month? That’s still exceptional over the course of one year.

Whilst I can’t imply you will make a certain percentage per month, if you just understand that slower and more consistent gains are the way to long-term success in the markets, you will be far better off at the end of each trading year.

Here are some other points to consider about patience:

• Learn to trade on the daily charts first – By learning to trade on the daily chart time frames first, you will naturally take a bigger-picture approach to the markets and you’ll avoid most of the temptation to over-trade that the lower time frames induce.

 Beginning traders especially need to slow down and learn to trade off the daily charts first. Daily charts provide the most relevant and practical view of the market. YOU DO NOT HAVE TO TRADE EVERYDAY to make a solid return each month.

• Quality over quantity – I consider myself a “sniper” of the market; I wait and I wait and I wait, sometimes for days or even 1 week without trading, then when I see a price action setup that triggers my “this one is a no-brainer” alarm…I pull the trigger with ZERO emotion.

I am always fully prepared to lose the money I have risked on any one trade because I do not trade unless I am 100% confident that my price action trading edge is present.

• User your ‘bullets’ wisely – To really hammer-home the power of patience in developing the proper trading mindset, you need to understand that being patient will work to instill positive trading habits within you.

Patience reinforces positive trading habits, whereas emotional trading reinforces negative ones.

Once you begin to trade patiently you will see how using your “bullets” wisely works…you only need a few good trades a month to make a respectable return in the markets, after you achieve this via patience, you will learn to enjoy NOT being in the markets…because it’s then that you are “hunting your prey”.

This in contrast to the frazzled and frustrated trader who is staying up all night staring at the charts like a trading zombie who just will not accept that they need to trade less often.

Step 3: Be organized in your approach to the markets

• Have a trading plan – I know it can be boring, I know you might think you don’t “need” to make one, but if you don’t make a trading plan and actually use it and tweak it as you learn, you will start trading on an unorganized and probably emotional path.

 A trading plan doesn’t have to be a very dry and boring document; you can get creative with it.

You’re trading plan could be that you write your own weekly commentary before each week begins, plan out what you will do and look for in the upcoming week…just make sure you have a “plan of attack” before you enter any trade.

• Keep a professional trading journal – You need a track record, you need to record your trades, you need to do this in a forex trading journal.

This is a critical component to forging the proper Forex trading mindset because it gives you a tangible document that you can look at and instantly get raw feedback on your trading performance.

 Once you start keeping a journal of your trades it will become a habit, and you will not want to see emotional results staring back at you in your trade journal.

 Eventually, you will look at your trading journal as something of a work of art that proves your ability to trade with discipline as well as your ability to follow your trading plan.

This is something any serious investor will want to see if you plan on trading other people’s money.

• Think BEFORE you ‘shoot’, not after – All of the planning and preemption that I just discussed is analogous to thinking before you shoot.

A gun is a very powerful weapon, we all know that we need to think before we shoot one, even if we are just hunting or shooting at a gun range.

Likewise, the markets can be very powerful “weapons” in regards to making or losing you money.

So, you want to do as much thinking before you enter a trade as you can, because after you enter you are going to naturally be more emotional and you don’t want to put yourself in a position of constantly entering regrettable trades.

 If you plan your actions before you enter, you should not regret your trades, even when you have losing trades.

 I never regret any trade I take because I don’t trade unless my edge is present and I’m always comfortable with the amount of money I have risked on any one trade.

Step 4: Have no doubt about what your trading edge is

Finally, don’t start trading with real money if you aren’t really sure how to trade your edge.

 You are obviously not going to develop the proper trading mindset if you jump into trading a live account without being 100% confident in what you’re looking for.

Whatever your edge is, make sure you’ve found success trading it on a demo account for at least 3 months or more before you go live.

 Don’t just “dive in head first” without being totally comfortable in your approach…this is what most traders do and most of them lose money too.

• Have 100% confidence in your edge – I have 100% confidence in my price action trading strategies…that’s not to say that I am foolish enough to believe EVERY trade will win, but I am totally confident that every time I trade my edge is truly present.

I don’t compromise my trading edge by taking setups that look they are “almost” good enough…I simply don’t trade in that case.

I only take price action setups that I feel in my gut are high-probability valid representations of my edge.

Therefore, I am never fearful or worried about any trade I enter, even if it ends up losing.

• Don’t gamble – There are skilled traders, and then there are people who gamble in the markets.

If you take a calm and calculated approach to your trading and wait patiently for your trading edge to appear, like a sniper, then you are a skilled trader.

 If you just “run and gun” and veer off course from your trading plan, you are a gambler. So, are you a Forex trader or a gambler?

• Price action trading helps develop the proper trading mindset – My trading edge is price action, and I fully believe that the simplicity of price action trading helped me develop and maintain the proper Forex trading mindset.

We don’t need tons of messy indicators on our charts and we don’t need Forex trading robots or other expensive software.

All we need is the raw price action of the market and our magnificent human minds to interpret it; it’s up to us to harness this power.

The price action of the market gives us a map to follow, and a pretty obvious one at that, if we can ignore the emotional temptations that arise in our minds we will have no problem profiting off of this price action map.

 I trust today’s lesson has provided you with some insight into how you can develop the proper mindset and ignore the emotions and break the habits that destroy your trading success.

If you want to learn more please check out my price action Forex trading course.

Author: Nial FullerNial Fuller is a professional trader & coach who is considered ‘The Authority’ on Price Action Forex Trading.

He is one of the most widely followed forex trading coaches in the world attracting over 200,000 readers each month.

 If you want to learn more about harnessing the  simplicity of Price Action visit Nial’s Forex Trading Course Page Here.

Reaping The Benefits Of Trading Systems

If you are in the business of currency trading and is planning to stay in the business for a long time, it is important to equip yourself with the necessary tools that you will need in order to conquer and succeed in the business.

 Investing in a forex trading system can be profitable and does not require huge capital.

Competition is stiff when it comes to forex trading and in order to keep up with the competition, you need to set your sights on investing on a system that can help you succeed and earn an income in the process.


Common sense dictates that most of the time, the person earning an income will most likely have access to the best and most updated technology. 

A forex trading system can help keep you at par with the leading investors. As it is a volatile market, utilizing a system can give you access to lots of relevant data that can be captured or analyzed. It is unlikely for a human to efficiently and effectively accomplish this feat on their own. 

There is a proliferation of forex trading software in the market today. If your target is to stay in the market for a long time, then you need a software product that will help you succeed and take what is rightfully yours.

It would be worthwhile comparing them first before deciding on the right one.

Behind every successful forex trader is a dependable forex trading systems.

It is therefore imperative to find such a system. However, before finding the right trading system, you need to have an understanding of what a good one is.

Here are some of the considerations that you need to look for when looking for a forex trading software.

Extensive track record.

 One of the most important things that you should look for in a forex trading software is extensive track record.

 Do not spend your time and money on systems that only show two or three months of hypothetical testing results.

Almost any system that can be found on the market today can show up to two or three months of excellent trading.

Realistic Capital Requirements.

Aside from the track record, the amount of capital needed to invest and perform realistic trading should be put into careful consideration as well.

When venturing into this kind of business, your capacity to fund your project is the very first thing you should determine. It would be a futile attempt to trade using a system that requires $100,000 in capital when you are willing to fund only $10,000.

Realistic Risk Limits.

Do not be fooled by systems that look impressive in their advertisements and on the surface but in reality, but deep within are not worth risking the money.

For instance, systems may boast of generating high income stream but if you try to investigate, there is a need to risk an unusually high percentage of equity in order to produce such result.

These are just some of the considerations that you should bear in mind when choosing a forex trading system. Since there are many of them in the market today, finding the right one for you may be a daunting task.

However, by closely evaluating and comparing their features, you are giving yourself the opportunity to succeed in the competitive world of forex trading.