Click Here To Watch The Video
If you decide to open an account with FxPrimus, please use this link Open Account.
This will put me as your referrer. Thank you for your support.
Cheers,
Mike PS
Friday, April 22, 2011
Wednesday, February 9, 2011
9 Challenges that We Traders Face
1) “I feel that my broker is a market maker and is trading against me”
We’ve all been there before. You set a trade up, place your targets and stops, and get ready to rock and roll. Unfortunately, the trade doesn’t go your way. It starts to inch closer to your stop loss. As it flirts dangerously close to your stop, you heave a sigh of relief when it appears to be reversing.However, to your horror, it suddenly hits your stop, takes you out of the trade, makes a killer reversal and continues to move in the direction of your profit target! Sounds familiar doesn’t it?
This friends, is a reality in the Forex brokerage business. Many brokers operate a DEALING DESK which simply means they also trade to speculate for profits. Unfortunately, this sometimes means taking trades against you, the retail trader.
2) “Slippage is a common occurrence. I hardly get the price I want”
Do be careful when you are attracted to brokers that offer “1 pip spread or zero spread.” Either one of 2 things may occur:- You have to pay a high commission on each trade
- There will be many requotes
Please do your own due diligence and read the fine print on the broker’s terms and conditions.
3) “I worry about the safety of my funds”
This is definitely high on the agenda of most if not all, retail traders. Unlike the billion dollar institutions which have endless cash at their disposal, many of us are trading with hard earned money. It would be refreshing to come across a solid broker which offers segregated client accounts.Anyone remembers the Refco debacle? They were at one point the largest broker in the world before filing for Chapter 11 bankkruptcy in October 2005. Many people who opened accounts with them over the years are still finding it a challenge to get their money back.
4) “It’s too hard to fund my account”
While I agree that many structures need to be in place to check the customer and his/her background, there must be a limit. As a Forex trader and coach, I have had my fair share of grumbles from fellow students who complain that funding their account is just too difficult.To keep things clean and simple, your broker-of-choice must follow these 3 steps:
- Have strict Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols
- Verify client background with copy of passport & proof of residence
- Provide a variety of funding methods for the trader, e.g. bank transfer, local deposits or credit card
Speed is also of the essence. Some brokers take more than a week or two to approve accounts; which makes one confused on whether its a case of strict regulation or pure inefficiency.
5) “The customer support has a bad level of service”
This point really riles up most traders. At the very least, your broker-of-choice MUST provide round-the-clock customer support through a live chat function. If for whatever reason, the live chat function is down, then back-up support like phone and email must be readily available.The second step would be to provide prompt and professional help to the traders.
Look, it’s YOUR company (I’m talking to the tele-support people in the brokers now). If you don’t know the answers to our questions, who would? Quick and competent responses coupled with prompt follow up on the clients needs seem to be lacking in some of the brokers I know today.
6) “I can only trade Forex and basic commodities”
It has been a joy for me to see some of students blossom and mature into astute investors. Some of them have lament the fact that most brokers only offer currencies and basic commodities like gold and silver for trading on their platform. Come to think of it, it sure would be nice if brokers offer a one-stop shop for traders and investors to trade Forex, Bullion, CFDs, stocks etc. Some do by the way; but they are few and far between.Even if it’s not for trading, it sure would be nice to see the price of oil, gold, the dollar index etc on ONE platform to get a global perspective on world finance.
I’ve had one student come up to me and say “Man! If only my broker could let me trade Citigroup when it was below $1 last year! I could have made a killing!”
My response was, “Are you going to sit there and whine or find a broker which allows you to do so?”
He got the picture! Not that it makes a difference to this article, but the share price of Citigroup is just under $5 now
Bro, if you are reading this article, I am all ready for a dinner treat at El Bulli or The Fat Duck!
7) “I can only get low leverage”
This is going to be a bigger problem if you select brokers that are based in the US. Many brokers there are now “constrained” by regulatory bodies like the NFA and CFTC to offer LOWER leverage to the retail traders. This is huge. If it happens, my bet is that there would be a MASSIVE EXODUS of traders getting out of brokers which are based in the US.Is high leverage good? My answer, is Yes. But you’ve GOT TO understand how to use it wisely. If you go with a broker that offers a leverage of 10:1 as opposed to 100:1 or 200:1, then get ready to put down more margin for each trade.
Do yourself a favour today. Go read up on Leverage and how to employ it wisely for your benefit.
My favourite explanation for the term leverage is “doing more with less.”
Is leverage a double-edged sword? Yes. So how would you reduce it to a single-edge one?
Lean a little closer. Press your ear to the computer screen.
(Shouting) “ALWAYS PUT A STOP LOSS!!!!!!”
8) “My broker doesn’t allow hedging”
Not that I advocate the method of hedging, but it would be good if your broker gives you the flexibility of doing so. Again, brokers in the US do not allow you to do so (don’t look at me. Check with the NFA). Some also have the FIFO rule, which means that you can only exit trades in the same sequence you entered. What??!!Now, with all that restrictions, time to pack your bags!
9) “I must have different accounts if I want to trade Micro, Mini and Standard accounts”
Oh puh-leeeeeeease. Dear brokers, why the hassle? The main job of a trader is to control risk. Why can’t we have just ONE account which allows us the flexibility to execute 1 lot, 0.1 lot or 0.001 lot? Isn’t that the exact same thing as having a standard account, a mini account and a micro account?Wake up people!
So there you have it. The 9 challenges that most if not all, retail traders face. The bigger question is how would we overcome them? Simple. Choose a broker that counters ALL the problems listed above.
As I operate the largest Forex Academy in Asia, I do get my fair share of brokers knocking on my doors, asking me to refer students to them.
I am careful with such practices; as it is my job to source the best brokers out there who HELP traders succeed rather than make their trading journey a seemingly painful one.
The One Broker I’ve Found That Is Really On Our Side
Over the last couple of months, I’ve had the pleasure to be acquainted with a Forex broker called FXPrimus. Initially, I had the impression that they were just “one of them.” However, on closer inspection on their business model, I am pleasantly surprised to find out that they SOLVE ALL 9 of the challenges that I have just listed above. Pretty cool!Some of their BEST features include:
1) Straight Through Processing (STP) – they DO NOT trade against their clients
2) Segregated client accounts at Tier 1 banks; which are independently Administered by Turnstone Corporate (Mauritius) Limited – An Industry First
3) Annual audits performed by world-renowned firm, Ernst & Young
4) MT4 platform, the most preferred trading platform worldwide
5) Trade over 70 currency pairs AND instruments like bullion, oil and gas
6) Syariah compliant accounts
7) No requotes during normal market volatility
8) High leverage (up to 500:1)
9) Minimum funding as low as USD250
Article Source From : www.mariosingh.com
Cheers,
Mike PS
My Broker FX Primus
7 Rules For Choosing a Forex Broker
1. Regulation
The regulated Forex brokers are accountable to the authorities. They have specific regulations to follow. With these brokers, most of the information is available online and you can easily find out their past performance. To find out if a Forex broker is regulated, you first need to find out which country the broker is registered in. Always choose a Forex broker that is conducting business in a country where their activities are monitored by a regulatory agency.
For example, US Forex brokers should be a member of the National Futures Association (NFA) and registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC). In Switzerland, the regulatory body is the Swiss Federal Department of Finance.
If a broker is not regulated at all, it might be wise to choose another broker.
2. Spread
In another words, low transaction cost. Unlike futures or stocks, currencies are not traded through a central exchange. Hence, different brokers may quote you different spreads. Spread is a MAJOR consideration in every good trader’s mind because choosing a broker with unusually high spreads is a sure-fire way to kill off your account.
Additionally, do check if the spread is fixed or variable. A fixed spread means exactly that – it will always be the same no matter what time of the day it is.
Some brokers use a variable spread, which means that the spread varies depending on the market conditions. Typically, this would mean a small spread when the market is quiet and a wider spread when activity heats up. When you play with a wider spread, take note that the market must move more in your favour before you start to see a profit.
Over the long term, fixed spreads can be safer for a trader.
3. Trading Platform & Software
The best way to get a feel of the broker’s trading software is to try out the demo account which is readily available. Choose one that you would be most comfortable with when trading. The software should have basic features like trailing stops and direct trading from the chart or price quotes.
Some features may only be available at a cost, so be sure you understand what you are getting and how your broker is charging for the added services. The speed of execution is also very important. Be wary of brokers who do not “honour” the price feeds displayed. This happens most often through “re-quotes” and delays in getting the price that you clicked. For the record, the most popular trading software which Forex traders all around the world use is called the MT4 (Meta Trader 4) platform.
4. Support
The Forex Market is a dynamic market. Over 3 trillion US Dollars is traded every single day, 24 hours a day. Your broker should ideally offer 24-hour support. Check out the avenues of support provided – is it through a direct telephone line or just a simple email address? Most reputable brokers now have a “Live Chat” function, where traders can engage a customer service officer readily, anytime of the day.
You should also check if you can close positions over the phone – absolutely essential in the event your most trusted PC or internet connection crashes at a critical moment (think Murphy’s Law).
5. Minimum Trading Size Requirement
Many brokers offer different types of accounts. The two most types are the “standard account” and the “mini account.” A standard account means that the trader uses lots of 100,000 units. A mini account means that the trader uses lots of 10,000 units. Hence, 1 “mini” lot is 10% of a “standard” lot.
The main difference between the two accounts is the “payout”. For a “standard” account, 1 pip is usually worth USD10. In a “mini” account, 1 pip is worth USD1. A “pip” is a unit of measurement for each uptick (or downtick) in the currency charts. A “mini” account is appropriate for a beginner because, while the profit potential is lower, the amount of risk involved per trade is also lower. Do check that your broker offers “mini” accounts, especially if you are new to Forex Trading.
6. Margin and Leverage Policy
Ensure that you understand the broker’s margin terms before setting up an account. What are the margin requirements? How is their margin calculated? Does it ever vary according to the currency pair being traded? Or even the day and time of the week you trade? Some brokers may offer different margins for “standard” and “mini” accounts. In terms of leverage, most brokers offer anywhere from 50:1 all the way up to 400:1. Leverage is truly a double-edged sword. As a general rule of thumb, don’t use too much leverage. It’s one of the biggest reasons why novice traders blow up their accounts.
7. Withdrawal Fees
Ultimately, the benchmark of any Forex trader worth his salt is to be consistently profitable in the Forex Market. Check that there are not too many “financial leaks” deterring you from this goal. Do a comparison on the withdrawal/wiring fees of some brokers. Over the long term, you would be wiring back a portion of your profits on a consistent basis. For some traders, it could mean once every several months. Do your homework early so that the fees incurred do not cause too much of a dent in your trading profits.
Article Source from www.mariosingh.com
Cheers,
Mike PS
My Broker FX Primus
The regulated Forex brokers are accountable to the authorities. They have specific regulations to follow. With these brokers, most of the information is available online and you can easily find out their past performance. To find out if a Forex broker is regulated, you first need to find out which country the broker is registered in. Always choose a Forex broker that is conducting business in a country where their activities are monitored by a regulatory agency.
For example, US Forex brokers should be a member of the National Futures Association (NFA) and registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC). In Switzerland, the regulatory body is the Swiss Federal Department of Finance.
If a broker is not regulated at all, it might be wise to choose another broker.
2. Spread
In another words, low transaction cost. Unlike futures or stocks, currencies are not traded through a central exchange. Hence, different brokers may quote you different spreads. Spread is a MAJOR consideration in every good trader’s mind because choosing a broker with unusually high spreads is a sure-fire way to kill off your account.
Additionally, do check if the spread is fixed or variable. A fixed spread means exactly that – it will always be the same no matter what time of the day it is.
Some brokers use a variable spread, which means that the spread varies depending on the market conditions. Typically, this would mean a small spread when the market is quiet and a wider spread when activity heats up. When you play with a wider spread, take note that the market must move more in your favour before you start to see a profit.
Over the long term, fixed spreads can be safer for a trader.
3. Trading Platform & Software
The best way to get a feel of the broker’s trading software is to try out the demo account which is readily available. Choose one that you would be most comfortable with when trading. The software should have basic features like trailing stops and direct trading from the chart or price quotes.
Some features may only be available at a cost, so be sure you understand what you are getting and how your broker is charging for the added services. The speed of execution is also very important. Be wary of brokers who do not “honour” the price feeds displayed. This happens most often through “re-quotes” and delays in getting the price that you clicked. For the record, the most popular trading software which Forex traders all around the world use is called the MT4 (Meta Trader 4) platform.
4. Support
The Forex Market is a dynamic market. Over 3 trillion US Dollars is traded every single day, 24 hours a day. Your broker should ideally offer 24-hour support. Check out the avenues of support provided – is it through a direct telephone line or just a simple email address? Most reputable brokers now have a “Live Chat” function, where traders can engage a customer service officer readily, anytime of the day.
You should also check if you can close positions over the phone – absolutely essential in the event your most trusted PC or internet connection crashes at a critical moment (think Murphy’s Law).
5. Minimum Trading Size Requirement
Many brokers offer different types of accounts. The two most types are the “standard account” and the “mini account.” A standard account means that the trader uses lots of 100,000 units. A mini account means that the trader uses lots of 10,000 units. Hence, 1 “mini” lot is 10% of a “standard” lot.
The main difference between the two accounts is the “payout”. For a “standard” account, 1 pip is usually worth USD10. In a “mini” account, 1 pip is worth USD1. A “pip” is a unit of measurement for each uptick (or downtick) in the currency charts. A “mini” account is appropriate for a beginner because, while the profit potential is lower, the amount of risk involved per trade is also lower. Do check that your broker offers “mini” accounts, especially if you are new to Forex Trading.
6. Margin and Leverage Policy
Ensure that you understand the broker’s margin terms before setting up an account. What are the margin requirements? How is their margin calculated? Does it ever vary according to the currency pair being traded? Or even the day and time of the week you trade? Some brokers may offer different margins for “standard” and “mini” accounts. In terms of leverage, most brokers offer anywhere from 50:1 all the way up to 400:1. Leverage is truly a double-edged sword. As a general rule of thumb, don’t use too much leverage. It’s one of the biggest reasons why novice traders blow up their accounts.
7. Withdrawal Fees
Ultimately, the benchmark of any Forex trader worth his salt is to be consistently profitable in the Forex Market. Check that there are not too many “financial leaks” deterring you from this goal. Do a comparison on the withdrawal/wiring fees of some brokers. Over the long term, you would be wiring back a portion of your profits on a consistent basis. For some traders, it could mean once every several months. Do your homework early so that the fees incurred do not cause too much of a dent in your trading profits.
Article Source from www.mariosingh.com
Cheers,
Mike PS
My Broker FX Primus
Sunday, January 2, 2011
Happy New Year 2011
Wishing all my dear friends and traders a very Happy New Year. Let this year be the year where we become financially free. God Bless You.
Cheers,
Mike PS
Cheers,
Mike PS
Monday, December 20, 2010
MA Crossover Indicator with Alert
Hi Huys,
I have an indicator which I have modified to signal me the MA crossover. The signal can be by sound alert or an email.
You can configure any type of MA, price and method.
Here is the M15 EURUSD chart with this indicator applied.
Click the image to have a better view.
Here is the sample setting screen shot.
You can get the indicator here.
Cheers,
Mike PS
I have an indicator which I have modified to signal me the MA crossover. The signal can be by sound alert or an email.
You can configure any type of MA, price and method.
Here is the M15 EURUSD chart with this indicator applied.
Here is the sample setting screen shot.
Cheers,
Mike PS
Winning Forex Traders Vs. Losing Forex Traders
Two traders can use the same exact forex trading strategy yet one of them makes money consistently and the other loses consistently. To what can we attribute these seemingly perplexingly different outcomes? There really can be only one variable that is different if the trading strategies and everything else is exactly the same. The difference in the outcomes can be explained by the fact that a winning forex trader thinks fundamentally differently from a losing forex trader. That is to say, that the difference between winning and losing forex traders is entirely in their heads. This article will discuss how a winning trader thinks about various aspects of forex trading vs. how a losing trader thinks about them. Hopefully, you will gain some insight into what you are doing wrong and how to fix it as a result of reading this article. Enjoy!
• Realistic expectations –
Winning traders have realistic expectations about how much money they can logically make in the markets with the amount of money they have to start with and they don’t think they will get rich quick. This mentality actually helps them make more money faster because they don’t make the emotional trading mistakes that losing traders make as a result of trying to control the market by over-trading and over-leveraging their accounts.
Losing traders typically have unrealistic expectations about how much money they can make given the amount of money they are trading with. Many traders come into the forex markets thinking they can deposit $250 into their accounts and turn it into $10,000 in a few months. Having this mentality is going to naturally make you risk too much and (or) over trade, which will eventually cause you to lose money even if you get lucky for a while and hit a few big winners. Having realistic expectations about how much money you can make each month given the amount of money you have to trade with, while practicing effective forex trading money management, is a crucial component to successful forex trading.
• Managing risk –
Winning traders know how to effectively manage risk, they are comfortable with losing the money they have on the line and this allows them to trade emotionally detached. Losing traders typically begin with good intentions regarding risk management, but it all goes out the window once they hit a few losers OR winners. Winning traders know how to continue managing their risk no matter how many losers or winners they have in a row. They know that every moment in the market is unique, and essentially anything can happen at any time, this causes them to be consciously aware of the error of over-leveraging their account just because they think they stumbled onto a “sure-thing” trade. Winning forex traders never trade with money they can’t afford to lose, while losing traders often trade with money that they shouldn’t be risking in the markets, this causes them to worry about their trades and to be in a constant state of overly-emotional trading.
Losing traders by definition do not know how to manage risk effectively, they might say they are comfortable losing the money they have on the line for any given trade, but secretly they are mentally fixated on their trades and cannot stop thinking about them, sometimes even staying up all night staring at the computer screen. Losing traders react to each winning or losing trade they have by trying to control the market through the amount of money they risk or by trading too much; if they win on a trade they will typically risk more on the next trade out of euphoria or they will start over-trading because their confidence is up, when they hit a losing trade they will again jump back in the market and over-leverage or over-trade their accounts in a vain attempt to “make back” the money they just lost. So, in essence, losing traders do not have the same emotion-control mechanisms that winning traders have, or rather that they have developed, these emotion-control mechanisms are basically conscious patterns of thought that are formed out of discipline, they keep winning traders in check after each trade they win or lose, thus eliminating the emotional mentality that losing traders possess.
• Taking profits –
Winning traders take profits with a pre-defined strategy, losing traders don’t take profits, or they take small profits compared to their losers. Winning traders understand risk to reward and how it is the key to making money in the markets. A trader’s main job is to manage risk, not to take profits, profits come naturally if you understand risk to reward and how to properly maintain your poise and manage your risk on each trade. This includes not “meddling” in your trades when it is unnecessary, and taking a set-and-forget forex trading mindset. Winning traders know that you must believe in your trade, they know that you are the most objective and level-headed when you are NOT in the market, so if you plan your trades while you are flat the market there is no sense in messing with them once they are live because you won’t be thinking as clearly as you were in the planning stages.
Losing traders take small profits relative to their risk, they do this because they don’t plan their profit taking strategy prior to entry, and they also usually risk too much so they are more likely to take a premature profit or close a trade out at break-even because they are over-analyzing it from being worried about losing the amount of money they have on the line. When you take a profit that is less than what you have risked on a trade, you essentially make it very difficult to succeed because you are putting yourself in a position to be required to win on a high percentage of your trades in order to make money. Winning traders know that they only have to win about 35-50% of their trades to make money consistently because they understand risk to reward ratios and they know that taking anything less than 1 to 2 times your risk on a trade is simply counter-productive to a long-term profitable forex trading strategy.
• Trading strategies –
Winning traders know simple strategies like price action trading work best because what really separates the winners from the losers is how well they manage their emotions and remain disciplined, not having a super-complicated or fancy looking trading strategy. Therefore, winning traders know there is no sense in over-complicating one’s trading strategy when you can learn to trade with a simple and effective method like price action. Winning forex traders master the setup(s) they trade, one at a time, as a result of this they know when to trade and when not to trade. Losing traders jump the gun because they don’t master their setup(s); they switch from one strategy to the next on a never-ending futile search for the “perfect” trading strategy that will allow them to win on nearly every trade.
Winning forex traders know they must develop and implement a patient mindset with the trading strategy they use, as a result they don’t rush any trade, they let the market show them its cards, instead of trying to “out think” or control the market. Losing traders typically manifest trading setups that aren’t really there, they over-analyze the market and try to digest as many market variables as they can in a vain attempt to predict what will happen next, once they convince themselves they are right about market direction they will risk too much simply because they think they have covered all angles and they can’t possibly be wrong. Winning traders know that the market is an untamable beast and that the only variable they can consciously control is how they react to what the market offers them. Price action trading gives winning traders a high-probability entry method so that when the market shows them its hand they can take a trade setup with confidence and clarity because they have been patiently waiting instead of actively over-analyzing.
Article Source from :http://www.learntotradethemarket.com
• Realistic expectations –
Winning traders have realistic expectations about how much money they can logically make in the markets with the amount of money they have to start with and they don’t think they will get rich quick. This mentality actually helps them make more money faster because they don’t make the emotional trading mistakes that losing traders make as a result of trying to control the market by over-trading and over-leveraging their accounts.
Losing traders typically have unrealistic expectations about how much money they can make given the amount of money they are trading with. Many traders come into the forex markets thinking they can deposit $250 into their accounts and turn it into $10,000 in a few months. Having this mentality is going to naturally make you risk too much and (or) over trade, which will eventually cause you to lose money even if you get lucky for a while and hit a few big winners. Having realistic expectations about how much money you can make each month given the amount of money you have to trade with, while practicing effective forex trading money management, is a crucial component to successful forex trading.
• Managing risk –
Winning traders know how to effectively manage risk, they are comfortable with losing the money they have on the line and this allows them to trade emotionally detached. Losing traders typically begin with good intentions regarding risk management, but it all goes out the window once they hit a few losers OR winners. Winning traders know how to continue managing their risk no matter how many losers or winners they have in a row. They know that every moment in the market is unique, and essentially anything can happen at any time, this causes them to be consciously aware of the error of over-leveraging their account just because they think they stumbled onto a “sure-thing” trade. Winning forex traders never trade with money they can’t afford to lose, while losing traders often trade with money that they shouldn’t be risking in the markets, this causes them to worry about their trades and to be in a constant state of overly-emotional trading.
Losing traders by definition do not know how to manage risk effectively, they might say they are comfortable losing the money they have on the line for any given trade, but secretly they are mentally fixated on their trades and cannot stop thinking about them, sometimes even staying up all night staring at the computer screen. Losing traders react to each winning or losing trade they have by trying to control the market through the amount of money they risk or by trading too much; if they win on a trade they will typically risk more on the next trade out of euphoria or they will start over-trading because their confidence is up, when they hit a losing trade they will again jump back in the market and over-leverage or over-trade their accounts in a vain attempt to “make back” the money they just lost. So, in essence, losing traders do not have the same emotion-control mechanisms that winning traders have, or rather that they have developed, these emotion-control mechanisms are basically conscious patterns of thought that are formed out of discipline, they keep winning traders in check after each trade they win or lose, thus eliminating the emotional mentality that losing traders possess.
• Taking profits –
Winning traders take profits with a pre-defined strategy, losing traders don’t take profits, or they take small profits compared to their losers. Winning traders understand risk to reward and how it is the key to making money in the markets. A trader’s main job is to manage risk, not to take profits, profits come naturally if you understand risk to reward and how to properly maintain your poise and manage your risk on each trade. This includes not “meddling” in your trades when it is unnecessary, and taking a set-and-forget forex trading mindset. Winning traders know that you must believe in your trade, they know that you are the most objective and level-headed when you are NOT in the market, so if you plan your trades while you are flat the market there is no sense in messing with them once they are live because you won’t be thinking as clearly as you were in the planning stages.
Losing traders take small profits relative to their risk, they do this because they don’t plan their profit taking strategy prior to entry, and they also usually risk too much so they are more likely to take a premature profit or close a trade out at break-even because they are over-analyzing it from being worried about losing the amount of money they have on the line. When you take a profit that is less than what you have risked on a trade, you essentially make it very difficult to succeed because you are putting yourself in a position to be required to win on a high percentage of your trades in order to make money. Winning traders know that they only have to win about 35-50% of their trades to make money consistently because they understand risk to reward ratios and they know that taking anything less than 1 to 2 times your risk on a trade is simply counter-productive to a long-term profitable forex trading strategy.
• Trading strategies –
Winning traders know simple strategies like price action trading work best because what really separates the winners from the losers is how well they manage their emotions and remain disciplined, not having a super-complicated or fancy looking trading strategy. Therefore, winning traders know there is no sense in over-complicating one’s trading strategy when you can learn to trade with a simple and effective method like price action. Winning forex traders master the setup(s) they trade, one at a time, as a result of this they know when to trade and when not to trade. Losing traders jump the gun because they don’t master their setup(s); they switch from one strategy to the next on a never-ending futile search for the “perfect” trading strategy that will allow them to win on nearly every trade.
Winning forex traders know they must develop and implement a patient mindset with the trading strategy they use, as a result they don’t rush any trade, they let the market show them its cards, instead of trying to “out think” or control the market. Losing traders typically manifest trading setups that aren’t really there, they over-analyze the market and try to digest as many market variables as they can in a vain attempt to predict what will happen next, once they convince themselves they are right about market direction they will risk too much simply because they think they have covered all angles and they can’t possibly be wrong. Winning traders know that the market is an untamable beast and that the only variable they can consciously control is how they react to what the market offers them. Price action trading gives winning traders a high-probability entry method so that when the market shows them its hand they can take a trade setup with confidence and clarity because they have been patiently waiting instead of actively over-analyzing.
Article Source from :http://www.learntotradethemarket.com
Monday, November 15, 2010
Believe In Your Trade – Overcoming Fear
A‘Many traders become afraid to pull the trigger on a trade even when everything else in their brain is telling them the setup is sound and logical’
• Trust your gut…
You are sitting at your computer desk on a Tuesday afternoon, the New York trading session has just closed out, you see a very well-defined pin bar setup that is showing rejection of a confluent level and is also in the direction of the dominant daily trend, all signs point to this being a very high quality setup that you should take. The problem is that as you sit there staring at this setup all you can think about is how you got burned on a very similar looking pin bar 2 weeks ago, you admit that you risked a little bit too much on that last one, and you really don’t want to lose that much money again, so you decide not to enter this setup. The next morning you check the market before going to a job that you strongly dislike, you see that the pin bar has come off over 150 pips in the direction you would have entered, time for work…
Does this sound familiar? Maybe not exact, but I’ll bet a similar scenario has happened to you in the past if you have been trading for any length of time. This is a prime example of not trusting your gut when you see a high probability setup, the fact that you risked too much money on a similar setup and lost on it is influencing you to be afraid to trade whenever you see a similar setup, you naturally feel that big losing trade again, even though the odds are in your favor you give into how you “feel” from a previous trade. It is very easy to associate a current trade setup to a past setup, especially if we experienced a big loss on the past setup which elicited some very strong emotion.
The reason traders give into this fear and end up hesitating and missing good trade setups is because they are not thinking correctly about the market. Instead of simply viewing each price action setup or trade setup as another execution of their trading edge, they are viewing each setup as a “make or break” scenario, they forget that the market is a near never-ending stream of opportunities, in essence they lose their patience. If your trading edge is a pin bar setup with the trend, you must take every high-quality pin bar setup with the trend, if you start becoming fearful because you lost on one or two of them, eventually you are going to miss very lucrative setups, this is going to have a very negative impact on your trading psychology and cause a landslide of emotional trading mistakes.
• Believe in your ability…
At this point you might be asking yourself, “How exactly do I trust my gut”? Well, you have to believe in your forex trading ability, if you don’t believe in what you are doing you are aren’t going to get very far in anything in life, and this holds equally true for forex trading. This self-belief in your trading ability comes from learning an effective method like price action trading, and practicing it until you have mastered it. You have to practice your trading strategy in real-time market conditions; you cannot think that just because you can spot trade setups in hind-sight that you have a commanding knowledge of the trading strategy you are using. After you learn to recognize the opportunities and patterns that your trading strategy presents in real-time market conditions, and you successfully trade them, you will begin to develop the confidence you need to solidify belief in your trading method.
It is very important to practice your trading strategy on a demo account before trading with real money. Often what happens with beginning traders is that they start trading a solid trading strategy with real money, they risk too much, they lose on a few good setups, and as a result they become afraid of these setups in the future. When there is real money on the line it can really hammer home an emotional impact when you lose on a high-quality trade setup. The only way to master this fear is to have traded enough similar setups to the point where you actually believe that it works, and that the few you lost on were just a simple cost of trading the market; that cost is that every good strategy has losing periods. If you let this fear get to you however, it will result in you switching trading strategies, or looking for something “better”, when in reality the strategy you were using is just fine.
• Don’t hesitate…
Indecisiveness and hesitation lead to failure in just about any endeavor, just as they do in forex trading. Think about a military sniper who has his or her target in their scope, all their years of training have come down to this one scenario, are they going to start getting emotional and over-think the situation or are they going to pull the trigger and operate without hesitation? Most likely the latter, but only because they have been trained, they have had years of specialized training and they already knew what they were going to do before they did it. This is EXACTLY how you need to operate to be a successful forex trader; you need to obtain training in a specialized trading strategy that works, and then you need to pre-define all aspects of your trading before you enter the market. Militaries try to pre-define everything as much as they can before going into battle, because if they don’t they will end up operating on emotion, and you don’t want to be fighting an enemy who is operating on logic while you are operating emotion.
Trading the forex market is no different, think about it; do you think that a professional trader is going to hesitate when he or she sees a good trade setup? No, because they have been trained, and they have practiced so many times that they know what they are going to do before they do it, they don’t over-analyze anything. Keep in mind before you begin trading with real money that you are going up against other traders who understand the importance of operating on logic instead of emotion. These traders have thus eliminated fear from their trading, they know they can’t afford to hesitate, and they are counting on YOU to hesitate and be fearful or greedy. If you are looking for training in a solid trading strategy that you can practice until you build a solid foundation of self-belief that will eliminate fear from your trading, check out my price action trading strategies, I cannot promise you will become a calm and calculating trader, but I can provide you with simple and effective price action strategies which can be the foundation of a profitable forex trading career.
Article Source from :http://www.learntotradethemarket.com
Cheers,
Mike PS
One of the most important lessons for you to learn early in your trading career, is that successful trading requires you to not only be able to correctly interpret a forex chart, but once you have indentified a specific trading opportunity, you must completely “believe in your trade”. This article will explore in more depth the concepts of overcoming fear and believing in your trade.
The most natural emotional attached to “believing in your trade’ is ‘overcoming fear’, and unless you can learn to overcome this fear associated with your trades, you will never make it in the world of trading. Many traders become afraid to pull the trigger on a trade even when everything else in their brain is telling them the setup is sound and logical. Many of my previous articles have covered the various greed-based trading mistakes that traders give into, like over-trading and over-leveraging one’s account. However, this article is all about greed’s ugly twin; fear, and how to overcome it, so sit back and relax as we discuss some techniques you can use to stop hesitating as you trade and why fear can be your biggest enemy in the forex market.
• Trust your gut…
You are sitting at your computer desk on a Tuesday afternoon, the New York trading session has just closed out, you see a very well-defined pin bar setup that is showing rejection of a confluent level and is also in the direction of the dominant daily trend, all signs point to this being a very high quality setup that you should take. The problem is that as you sit there staring at this setup all you can think about is how you got burned on a very similar looking pin bar 2 weeks ago, you admit that you risked a little bit too much on that last one, and you really don’t want to lose that much money again, so you decide not to enter this setup. The next morning you check the market before going to a job that you strongly dislike, you see that the pin bar has come off over 150 pips in the direction you would have entered, time for work…
Does this sound familiar? Maybe not exact, but I’ll bet a similar scenario has happened to you in the past if you have been trading for any length of time. This is a prime example of not trusting your gut when you see a high probability setup, the fact that you risked too much money on a similar setup and lost on it is influencing you to be afraid to trade whenever you see a similar setup, you naturally feel that big losing trade again, even though the odds are in your favor you give into how you “feel” from a previous trade. It is very easy to associate a current trade setup to a past setup, especially if we experienced a big loss on the past setup which elicited some very strong emotion.
The reason traders give into this fear and end up hesitating and missing good trade setups is because they are not thinking correctly about the market. Instead of simply viewing each price action setup or trade setup as another execution of their trading edge, they are viewing each setup as a “make or break” scenario, they forget that the market is a near never-ending stream of opportunities, in essence they lose their patience. If your trading edge is a pin bar setup with the trend, you must take every high-quality pin bar setup with the trend, if you start becoming fearful because you lost on one or two of them, eventually you are going to miss very lucrative setups, this is going to have a very negative impact on your trading psychology and cause a landslide of emotional trading mistakes.
• Believe in your ability…
At this point you might be asking yourself, “How exactly do I trust my gut”? Well, you have to believe in your forex trading ability, if you don’t believe in what you are doing you are aren’t going to get very far in anything in life, and this holds equally true for forex trading. This self-belief in your trading ability comes from learning an effective method like price action trading, and practicing it until you have mastered it. You have to practice your trading strategy in real-time market conditions; you cannot think that just because you can spot trade setups in hind-sight that you have a commanding knowledge of the trading strategy you are using. After you learn to recognize the opportunities and patterns that your trading strategy presents in real-time market conditions, and you successfully trade them, you will begin to develop the confidence you need to solidify belief in your trading method.
It is very important to practice your trading strategy on a demo account before trading with real money. Often what happens with beginning traders is that they start trading a solid trading strategy with real money, they risk too much, they lose on a few good setups, and as a result they become afraid of these setups in the future. When there is real money on the line it can really hammer home an emotional impact when you lose on a high-quality trade setup. The only way to master this fear is to have traded enough similar setups to the point where you actually believe that it works, and that the few you lost on were just a simple cost of trading the market; that cost is that every good strategy has losing periods. If you let this fear get to you however, it will result in you switching trading strategies, or looking for something “better”, when in reality the strategy you were using is just fine.
• Don’t hesitate…
Indecisiveness and hesitation lead to failure in just about any endeavor, just as they do in forex trading. Think about a military sniper who has his or her target in their scope, all their years of training have come down to this one scenario, are they going to start getting emotional and over-think the situation or are they going to pull the trigger and operate without hesitation? Most likely the latter, but only because they have been trained, they have had years of specialized training and they already knew what they were going to do before they did it. This is EXACTLY how you need to operate to be a successful forex trader; you need to obtain training in a specialized trading strategy that works, and then you need to pre-define all aspects of your trading before you enter the market. Militaries try to pre-define everything as much as they can before going into battle, because if they don’t they will end up operating on emotion, and you don’t want to be fighting an enemy who is operating on logic while you are operating emotion.
Trading the forex market is no different, think about it; do you think that a professional trader is going to hesitate when he or she sees a good trade setup? No, because they have been trained, and they have practiced so many times that they know what they are going to do before they do it, they don’t over-analyze anything. Keep in mind before you begin trading with real money that you are going up against other traders who understand the importance of operating on logic instead of emotion. These traders have thus eliminated fear from their trading, they know they can’t afford to hesitate, and they are counting on YOU to hesitate and be fearful or greedy. If you are looking for training in a solid trading strategy that you can practice until you build a solid foundation of self-belief that will eliminate fear from your trading, check out my price action trading strategies, I cannot promise you will become a calm and calculating trader, but I can provide you with simple and effective price action strategies which can be the foundation of a profitable forex trading career.
Article Source from :http://www.learntotradethemarket.com
Cheers,
Mike PS
Friday, October 22, 2010
Automatic Fibonacci
Hi Guys,
How are you guys doing ? Wish you guys have lots of pips. I was busy practicing my trades. Now its improving everyday. What made me improve ? guess what, its Rules, Rules, Rules. I started to follow the rules and I started to follow my rules and i started to see positive results.
I know that lots of new traders have difficult to draw a good Fibonacci. Here is a cool indicator which can help you on this. This auto Fibonacci draws on the H1 time frame based on the previous day high and low. The values may differ from the manually drawn Fibonacci but the levels are all at the same place. Try it out. I am using it and it has help me on targeting my take profit.
How are you guys doing ? Wish you guys have lots of pips. I was busy practicing my trades. Now its improving everyday. What made me improve ? guess what, its Rules, Rules, Rules. I started to follow the rules and I started to follow my rules and i started to see positive results.
I know that lots of new traders have difficult to draw a good Fibonacci. Here is a cool indicator which can help you on this. This auto Fibonacci draws on the H1 time frame based on the previous day high and low. The values may differ from the manually drawn Fibonacci but the levels are all at the same place. Try it out. I am using it and it has help me on targeting my take profit.
Click the image for a better view
You can download the indicator here
Cheers,
Mike PS
Friday, September 24, 2010
How To Improve Your Forex Trading Success in 7 Simple Steps
I just read an article about this and like you to read it too. This articles talks about the following
•Treat your trading like a business…not a casino or hobby.
•Use position sizing to manage your risk and reward effectively.
•Over-trading; a real problem for most traders and how to stop it.
•Learn a handful of simplistic price action based strategies and master them.
•Have a trading plan.
•Use printed affirmations to keep your mindset on track, put them on your office wall or computer monitor.
•Trade what you see and believe in, don’t doubt yourself or become a “hindsight trader”; meaning do not enter a trade due to regret or for no logical reason.
You can read the entire article here.
Cheers,
Mike PS
•Treat your trading like a business…not a casino or hobby.
•Use position sizing to manage your risk and reward effectively.
•Over-trading; a real problem for most traders and how to stop it.
•Learn a handful of simplistic price action based strategies and master them.
•Have a trading plan.
•Use printed affirmations to keep your mindset on track, put them on your office wall or computer monitor.
•Trade what you see and believe in, don’t doubt yourself or become a “hindsight trader”; meaning do not enter a trade due to regret or for no logical reason.
You can read the entire article here.
Cheers,
Mike PS
Thursday, September 23, 2010
38 STEPS TO BECOMING A TRADER BY ANONYMOUS TRADER
38 STEPS TO BECOMING A TRADER BY ANONYMOUS TRADER
[As published in Commodity Futures Trading Club News and in Traders
Organization’s “Real Success Day Trading Course”]
1. We accumulate information—buying books, going to seminars, and researching.
2. We begin to trade with our “new” knowledge.
3. We consistently “donate” and then realize that we may need more knowledge or information.
4. We accumulate more information.
5. We switch the commodities we are currently following.
6. We go back into the market and trade with our “updated” knowledge.
7. We get “beat up” again and begin to lose some of our confidence. Fear starts setting in.
8. We start to listen to “outside news” and to other traders.
9. We go back into the market and continue to “donate.”
10. We switch commodities again.
11. We search for more information.
12. We go back into the market and start to see a little progress.
13. We get “overconfident,” and the market humbles us.
14. We start to understand that trading successfully is going to take more time and more knowledge than we anticipated. Most people will give up at this point, as they realize work is involved.
15. We get serious and start concentrating on learning a “real” methodology.
16. We trade our methodology with some success but realize that something is missing.
17. We begin to understand the need for having rules to apply our methodology.
18. We take a sabbatical from trading to develop and research our trading rules.
19. We start trading again, this time with rules, and find some success, but overall, we still hesitate when we execute.
20. We add, subtract, and modify rules as we see a need to be more proficient with our rules.
21. We feel we are very close to crossing that threshold of successful trading.
22. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology.
23. We continue to trade and become more proficient with our methodology and our rules.
24. As we trade, we still have a tendency to violate our rules, and our results are still erratic.
25. We know we are close.
26. We go back and research our rules.
27. We build the confidence in our rules and go back into the market and trade.
28. Our trading results are getting better, but we are still hesitating in executing our rules.
29. We now see the importance of following our rules as we see the results of our trades when we don’t follow the rules.
30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear), and we begin to work on knowing ourselves better.
31. We continue to trade, and the market teaches us more and more about ourselves.
32. We master our methodology and our trading rules.
33. We begin to consistently make money.
34. We get a little overconfident, and the market humbles us.
35. We continue to learn our lessons.
36. We stop thinking and allow our rules to trade for us (trading becomes boring but successful), and our trading account continues to grow as we increase our contract size.
37. We are making more money than we ever dreamed possible.
38. We go on with our lives and accomplish many of the goals we had always dreamed of.
Cheers,
Mike PS
[As published in Commodity Futures Trading Club News and in Traders
Organization’s “Real Success Day Trading Course”]
1. We accumulate information—buying books, going to seminars, and researching.
2. We begin to trade with our “new” knowledge.
3. We consistently “donate” and then realize that we may need more knowledge or information.
4. We accumulate more information.
5. We switch the commodities we are currently following.
6. We go back into the market and trade with our “updated” knowledge.
7. We get “beat up” again and begin to lose some of our confidence. Fear starts setting in.
8. We start to listen to “outside news” and to other traders.
9. We go back into the market and continue to “donate.”
10. We switch commodities again.
11. We search for more information.
12. We go back into the market and start to see a little progress.
13. We get “overconfident,” and the market humbles us.
14. We start to understand that trading successfully is going to take more time and more knowledge than we anticipated. Most people will give up at this point, as they realize work is involved.
15. We get serious and start concentrating on learning a “real” methodology.
16. We trade our methodology with some success but realize that something is missing.
17. We begin to understand the need for having rules to apply our methodology.
18. We take a sabbatical from trading to develop and research our trading rules.
19. We start trading again, this time with rules, and find some success, but overall, we still hesitate when we execute.
20. We add, subtract, and modify rules as we see a need to be more proficient with our rules.
21. We feel we are very close to crossing that threshold of successful trading.
22. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology.
23. We continue to trade and become more proficient with our methodology and our rules.
24. As we trade, we still have a tendency to violate our rules, and our results are still erratic.
25. We know we are close.
26. We go back and research our rules.
27. We build the confidence in our rules and go back into the market and trade.
28. Our trading results are getting better, but we are still hesitating in executing our rules.
29. We now see the importance of following our rules as we see the results of our trades when we don’t follow the rules.
30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear), and we begin to work on knowing ourselves better.
31. We continue to trade, and the market teaches us more and more about ourselves.
32. We master our methodology and our trading rules.
33. We begin to consistently make money.
34. We get a little overconfident, and the market humbles us.
35. We continue to learn our lessons.
36. We stop thinking and allow our rules to trade for us (trading becomes boring but successful), and our trading account continues to grow as we increase our contract size.
37. We are making more money than we ever dreamed possible.
38. We go on with our lives and accomplish many of the goals we had always dreamed of.
Cheers,
Mike PS
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