Learn to be a Trader
Forex Advantages - Lesson 1Learn the advantages of trading in the forex exchange market that has a daily turnover of over 3 trillion dollars! See why Forex currency trading is one of the fastest growing markets and why trading is rapidly becoming a favorite amongst investors of the stock market.
Basic Forex Terms - Lesson 2This lesson will get you familiar with the basics of Forex Currency Trading in order to ease your way into trading. Familiarize yourself with many important trading terms and start trading today in the forex exchange market today.
Types of Orders - Lesson 3Learn to use the right order types at the right time in order to maximize profit and minimize risk.
Wining Strategies - Lesson 4In this lesson you will discover some of the winning strategies our professional traders use. Learn them and find the winning strategy that works for you.
Glossary of Concepts - Lesson 5Keep this video near at all times and refer to it when in doubt. With an A to Z glossary, you'll be sure to understand all Forex exchange concepts while trading.
Trading strategies and emotions
How a good trading strategy makes it easier to handle emotions
Strategy is a part of life, it is necessary whatever you do, it bridges the gap between you and your goal. A good strategy always makes you efficient to accomplish your goal. Trading in the forex market also requires trading strategy. Once you have a strategy in place you can cope up with any kind of situation or environment.
Trading strategy goes hand in hand with emotions. A good strategy helps you to control your emotion however a bad strategy aggravates your emotions and forces you to take an adverse position.
How a good trading strategy makes it easier to handle emotion
Handling emotion is one of the challenging tasks in the forex market particularly during adverse market condition.
A good trading strategy puts you in a frame where you have a solution to any kind of market situations, it doesn’t matters if your trade goes against or in favor, you must handle it with full calmness.
Your good trading strategy should consist of everything depending upon the types of your trading style like scalper, swing trader, day trader or position trader. As per your trading style & position size you should be aware of average & maximum movement of pips of currency pairs, you must know your stop loss levels and dynamic stop losses if you believe in it, your target profit from the trade etc. Being a good trader you must follow a proper risk management system by always having a cushion against extreme circumstances. Better your risk management easier it is to control your emotions.
Emotions normally goes out of control during an extreme adverse situation when you fear of incurring a huge amount of loss. A good practiced strategy can make you overcome the situation with minimum loss. In these kinds of situation traders normally look at their losses and forget about the market fundamental & retracing of currency pairs as per previous history. During the adrenaline rush they close the position and book huge losses, however if traders have a proper strategy by having historical maximum movements of pips in a particular kind of situation, they could easily avoid the losses.
Alternate strategy always reduces emotions by avoiding fear of losses. Your trading position goes bad but you use your alternate strategy and take a position on the opposite correlation currency pair and minimize your losses.
Trading psychology says a good strategy makes you to enjoy your trading even during difficult times
Dealing with losses
How to deal with the fear of loss?
Fear is a sense that alerts about a coming danger, it makes you ready, either to fight or fly away. Fear is the biggest enemy of mankind. In a war if you overcome fear then you won half the battle. You can overcome fear by taking it in a positive way rather than being negative. Once it is taken in a positive sense then it provides an opportunity to do even better during the fearful situation because it brings out your true intelligence and skills. But in case you take it in a negative sense then the adrenaline rush can create anxiety, overburden, panic, sweating etc., makes you rush to the things & take the wrong decision.
Trading psychology proves that no other market puts you in a fearful situation as the forex market does. Forex market is a highly exhaustive & stressful market to trade, but with the option of high rewards also.
Traders face various kinds of fearful situation in the forex market-
If you are a day trader, scalper or swing trader then everyday you will have ample opportunity to take a position in the market. You take the position on the basis of your trading strategy and indicators signal. You come into a situation where trading strategy provides an opportunity to take a position however you saw some other signal that doesn’t show a clear cut sign and it creates fear in your mind, your fear prevents you to take the position but later you find that you could have made $1000 if you would have taken the position. Being a trader you always have to face these kinds of situations and at that time you need to believe in your strategy and overcome the fear of loss and think about the profitable opportunity that you are going to miss if you don’t take the position.
Trading psychology says that in the forex market it is very important that you use advanced trading tool to take maximum profitability from a trend. There are situations where the fear of losing money cuts short the profitability & doesn’t allow to take maximum benefit of a trend. Being a trader you should not allow your fear to overcome your trading strategy. The opposite is also true when you are losing money, fear of seizing account forces you to book huge losses though you realize afterwards that the market retraced back and you could have saved the losses you booked.
Fear is the enemy of the forex market, it will eat you if you don’t eat it, overcome fear, believe in your strategy and make super profit.
Understanding the importance of emotional intelligence while trading
An award winning author and psychologist Daniel Goldman describes emotional intelligence as far more important than IQ. A person with high IQ but low emotional intelligence flounders in a top job however a person with average IQ but high emotional intelligence succeeds more.
Emotional intelligence is very important to get succees in the forex market. The forex market gets up and down with a stroke of news event, economic data or any kind of catastrophic event etc.. In order to sustain these uneven situations, traders need to develop a high level of emotional intelligence.
If you are a retail trader and holding micro or mini account then your emotional intelligence level should be very high, otherwise the market carnage environment can force you to take a wrong turn & blow up your account.
How to develop emotional intelligence to trade in the forex market?
Practice makes the man perfect and practice can make you overcome difficult situations, fear, greed etc.. A sports person succeeds because he practices a lot in the virtual environment to overcome any kinds of situation that can occur at the top level. The same is true with the forex trading, more you practice in a demo virtual environment the more the chances of getting succees in a real account. Being a trader you should test various kinds of strategies and scenarios with low risk, medium risk and high risk situations & put yourself in extreme stressful situation and try to overcome that.
The volatility is highest in the forex market before and after high impact news and events. These are the situations where scalpers make a lot of money. It is always advisable to trade in these kinds of situations to develop a high level of emotional intelligence. These situations are like your advanced trading tools or trading psychology that test your emotions, greed, fear, anxiety, stress and IQ when pip movements are up and down @ high speed.
Traders can have high emotional intelligence if they maintain a proper trading plan and discipline. It makes your work easier because you know what strategy you are going to use and what you will do when market goes against you. In crux you have ploy for your benefit.
Trading psychology and emotional intelligence are like your advance trading tools that can fetch you high reward if you control your emotions properly while trading in the forex market.
Advanced trading psychology
Advanced trading psychology
Psychology is a very important part of human life. It distinguishes one person from another, it is more about how you take care of your mental process, how you think, how you behave or how you act in a particular situation. Trading psychology is no exception to the forex market as we all know forex market is a highly volatile, stressed and energy drained market where you need to be continously vigilant to protect your money or to make a profit.
Trading psychology plays a very important role for a successful career in forex trading. Following are the major points of Trading psychology-
How do you control your Emotion:
Emotional intelligence is a significant part of human psychology. It is more about how you react when the market moves against you? How you control yourself & continue trading when the market keeps changing? How & when to close trade without affecting your emotions.
How to overcome fear:
The forex market is a heartbreaking and a profit making market at the same time. Forex is the biggest financial market and extreme volatility creates fear in the mind of traders during volatility or uneven movement of prices. There are times when any news flash, political unrest or economic data can move 200-300 pips within a minute. If you are a retail trader then your hand will be on your face while dealing with these types of situation, but being a professional trader you should overcome these kinds of fear by maintain a calm during the price movement and think strategically, see all your open positions before taking any decision. Practicing on a demo account with different strategies can make you overcome these fears.
How others think:
Forex market is the market where sentiments & psychology play a very crucial role for a profit making trader. It is like an advance trading tool where the market moves just on the basis of sentiments. Once you can understand the sentimental behavior of market maker or breaker, you can make an unimaginable amount of money. There are times when sentimental behavior changes the direction of the market. For example if a high impact forex data is supposed to release after a few hours then even before the release of the data market moves 100s of pips just on the basis of thinking pattern or sentiment of top hedge funds, FII, banks etc.. Being a trader if you can understand their thinking pattern you can bet on more successful trades.
Understanding & aligning your own psychology with the market maker or breaker’s psychology can make you a millionaire.
Trading myths – Forex tips and tricks
Trading myths – Forex tips and tricks, Trading myths
Trading & getting success in the forex market is not everybody’s cup of tea. It is very easy to enter into the market, it is as easy to get enrolled in a professional courses like Chartered Accountancy or Cost Accountancy but it is very tough to survive in this market. If anyone thinks that he or she can make easy bucks in the forex market then it is not right, it can be very easy once you know the functionality, technicalities, heart breaking volatility & extreme circumstances of the Forex market. People have a lot of myths about the forex market-
Every trade is a winning trade: There is a misconception about the forex market that every trade that you enter should be a winning trade however this is not at all true even if you have an experience of 50 years in the forex maket, every trade can’t be a winning trade. There has to be some losing trades due to the nature and volatility of the forex market. The forex market works on economic, political & the environmental conditions of different countries & the world. Being a good and a disciplined trader means your winning to losing ratio should be higher.
Practice is fine but not compulsory: There are various kinds of trading markets like stock, bonds, commodities etc.. However no other market requires to practice before entering the trade as much the forex market requires. A Forex trader, no matter how much expert or knowledgeable he is, can’t sustain profitability in the forex market unless & until he practices in a demo account before entering into the Forex market. If you try to trade without practice there are chances that you can lost all your money. It is always advisable to trade in virtual market with live quotes for at least 3 months before exposing your real money in the live account.
Discipline is not compulsory: As the forex market is available 24 x 7, 5 days a week doesn’t mean that you just open an account and trade all the time. You need to be disciplined while trading in the forex market. You should have your own trading plan, strategies should be built and tested, proper risk management techniques should be followed & the losing trades should be continuously reviewed so that you can avoid the same mistakes in your future trades.
Trading in the forex market rewards you with an unprecedented amount of profit if you have an appetite for it, but not everyone can achieve it, only those who overcome forex market myths and emotions can achieve it.
Trading as a way of living
Trading as a way of living – Trade from home, Forex psychology
What do you do for your living? Are you a doctor, scientist, engineer, or an accountant. Do you love your work or just work for your living? How do you feel when you have to get up in the morning and think about the work you have to do? How do you spend time in office or after office hours? The answer to these questions explain whether you love your work or not, if you are not excited or passionate about your work then it means you are just spending your time and feeding yourself.
Have you tried forex trading? If yes, then why do you tried. Just to earn some extra income to feed yourself or do you like the forex market, its heart breaking volatility, leverage, liquidity, earning money in quick time etc..
If you think you are getting bored with a day job of 9 to 5 and it doesn’t gives you satisfaction, however spending only a few hours on forex market excites you, even though you can’t spend more time then don’t lose heart as you can consider the forex market as a full time profession and can earn more than you would have earned while doing your 9-5 job?
You can consider it as a full time profession. You will be master of your own, your destiny will be in your hand, you will be calling all the shots and you can become a CEO of your own. The forex market can be adopted by any individual and passion for it can be developed over a period of time.
It is the only market where you don’t have time boundations, you don’t need to go anywhere, you can sit at your home and call your shots.Forex gives you an opportunity to trade at any time in the midnight, morning, afternoon whenever you want, if you are on vacation then also you can track your positions and market movement by spending only a few hours.
Once you are accustomed to this kind of lifestyle and develop a passion for it then there will be no better jobs in this world.
Initially you have to spend time in understanding the market and practice constantly to have more winning trades than losing. You should know forex psychology that is to understand and think about the market with the point of view of a market maker or breaker, you should know what others would do when a particular kind of event happens. Once you understand forex psychology, you become master of it.
The psychology behind trading Forex
The psychology behind trading Forex – Learn how to trade Forex, Trading psychology
The difference between a successful forex trader and an unsuccessful one is not the disparity in their profits at the end of the day; it is the consistency in applying their trading principles.
How often have we come across traders who have encountered losses after having entered into trades which were extremely profitable or traders who shy away from initiating or delay in placing trades even though the market indicators are suggesting so? How often have traders been very successful while trading demo accounts and performed quite the contrary while trading real- time accounts? How many times have we heard stories of traders who have wiped their trading accounts clean because they failed to cut losses?
All these questions lead to a single debate; the characteristics and the role of trading psychology in developing into a successful trader.
Trading psychology refers to a trader’s behavior or perception when actively trading the forex markets; A trader can either follow a set trading plan, irrespective of market conditions and external factors, which could ultimately lead to a high ratio of profitable trades and cutting losses short OR indecisive actions leading to trades not being initiated and profitable trades resulting in losses.
The attributes to successful trading in the forex marketplace is the ability in displaying the right psychology, keeping emotions in check as far as possible and following a pre- determined trading plan, irrespective of the outcome in the short- term.
Traders ought be open to new ideas and innovative thinking, even if they have developed successful trading systems, should connect with other traders and exchange views which could be mutually beneficial.
Trading behavior is not limited to beginners, as even experienced traders often deviate from their set trading beliefs, resulting in their downfall at some point in time. The primary reason could be traders find it difficult to change their behavior due to extreme confidence in their abilities or the lack of it, impatient in exiting a trade, while others could be governed by emotions such as greed and fear.
The ones who make it are the very few who keep their emotions in check, follow the trading curve, day in and day out and are not affected by the factors above.
Trading forex markets is never easy and forex traders, both fresh and experienced will vouch for it. Trading is a skill and only those traders who are well prepared with a plan and go that extra mile in implementing them will be successful.
10 most common mistakes every Forex traders do
10 most common mistakes every Forex traders do – Forex tips for beginners, Learn Forex trading online
Forex trading is all about making money but not everyone can make money in the forex market. There are a few misconceptions about forex trading that it is a quick buck making market, yes it is a quick buck making market but only once you learn it properly and avoid making common mistakes to ruin your hard earned money.
What are the most common mistakes every forex trader do?
Lack of thorough knowledge: If you want to succeed in any field you have to have exhaustive knowledge of that particular filed and forex is not an exception. A future trader should gather full knowledge of the forex market like what makes or breaks the market, how market works, how timing influences the market etc.
Believe too much on Indicators: Depending too much on indicators can be a drawback for your forex trading, it is correct that indicators provide you signals but at the same you have to understand market sentiment and fundamental aspect of trading too.
Lack of knowledge of risk tolerance: Risk tolerance is one of the most important part of trading. If you don’t know your capacity of risk tolerance when the market goes against you then there are chances that you can burn your hard earned money in the forex market.
Risk/Reward ratio: If you position your trade with proper risk and reward then you will be involved in more of winning trades than losing. You should know how much stop loss you should put as per your position sizing & make your stop loss dynamic as per changes in market sentiment.
Lack of knowing yourself: If you don’t know what kind of trading style you like then it is very difficult for you to trade. There are traders who like to prepare their own chart and do their own analysis and on the other side there are traders who follow the brokers tips and indicators.
Doesn’t Practice on Demo A/C: Demo accounts are provided by brokers to practice and make yourself ready for live trading. To become a good trader you have to practice in the demo account for at least 3 months but sometime after a few good trades people think they are ready for live trading without knowing forex market’s high volatility that creates a carnage of pips movement.
Another few common mistakes are Lack of proper money management, No trading plan & Control of emotions during volatile trading period or when the market goes against you.
Conclusion: You can become a successful trader only when you overcome all these mistakes.