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Found 50 results

  1. EURUSD: Backs Off Lower Prices, Eyes More Strength EURUSD: The pair looks to extend its recovery triggered the past week in the new week. On the upside, resistance comes in at 1.1750 level with a cut through here opening the door for more upside towards the 1.1800 level. Further up, resistance lies at the 1.1850 level where a break will expose the 1.1900 level. Conversely, support lies at the 1.1700 level where a violation will aim at the 1.1650 level. A break of here will aim at the 1.1600 level. Below here will open the door for more weakness towards the 1.1550. All in all, EURUSD faces further upside pressure.
  2. Fibonacci and Trade Scaling

    Fibonacci and Trade Scaling When I first started trading I was losing in most of my positions – as everyone does. I started trading with no real strategy and whatever activity I was conducting should be described more as gambling than as trading. This is because there was no real ‘rhyme or reason’ to my approach and since I was randomly selecting assets to buy or sell, I had no better chance than guessing a coin flip on any given occasion. Of course, many lessons followed and a good deal of those had to do with the technical analysis techniques I have written about in the Forex column of this website. But not everything comes down to mathematical probabilities, and there is a good deal of ‘common sense’ that is employed by every successful trader. One example of this can be seen in the fact that it is essentially impossible to consistently nail down the perfect trade entry. It is possible to get lucky now and then – even a stopped clock is right twice a day. But expecting to do this with any consistency is totally unrealistic and should not even be viewed as an approachable goal. Does this mean that traders should feel hopeless when making the decision to pull the trigger on a trade? Not at all. Separating Your Trade Entries The first mistake that many traders make is to place an entire position stake in a single location. For example, you are bullish on the Euro and you decide to buy the EUR/USD at 1.35. At best, these novice traders will at least follow the conventional wisdom and never enter into a position that puts more than 2% of your total account at risk. But this is not nearly enough trade planning as it still suggests that the trader had entered into the position at the exact right time and place. Since this is almost never the case, more work needs to be done in the planning stages – before any orders are executed. Specifically, this means separating your positions into multiple parts. “The easiest way to scale into positions if doing to divide your trade size in twos or threes,” said Tony Davis, head trader at Atlanta Gold and Coin. “and then to find two or three places on your chart where price activity is likely to work in your favor (i.e. clearly defined support or resistance levels).” Risks I first realized that this was a preferable approach during a GBP/JPY trade, which as you might know is one of the more volatile forex pairs. At this stage, I was mostly looking for trades that risked about 125-150 pips but I quickly learned that this was an unrealistic expectation for this low-liquidity pair, which is capable of significant intraday moves. In this case, I quickly found my position in negative territory, down -150 pips, and I had to make a decision because I was starting to exceed my previous risk threshold. Some traders argue that you should never deviate from your original game plan, but I could never totally agree with that. Instead, I chose to double my position, and improve on my average price. In this case, the trade did rebound in my favor and I was able to close out at a profit. Some experienced traders would argue that the above approach was a bad idea – and in some ways they are correct. I did break my original trading rules and expose myself to double the losses in a market that was already working against me. But I think the most valuable lesson for me in this case was that establishing your entire position in the same location (the same price level), is one of the biggest mistakes that a trader can make. Does that mean I should have doubled my position in the above scenario? No. It means that I should have divided my position in half (or in thirds, fourths, etc), and then scaled into the position once the market started working against me. Of course, this means that your regular trading activities are going to become much more complicated. You cannot simply find a support or resistance level and then place your entire order in that area. Instead, you will need to find two or three (or more) separate entries and actively expect that the market is going to start working against you. Could the market immediately turn in your favor? Of course, and in this case you would not be trading at a full position size (which also means reduced profits). But what is most important here is to adequately manage risk and protect yourself from unnecessary losses. This benefit outweighs even the more substantial profits that would have been realized if you had staked your entire position and the market immediately started to work in your favor. The reason for this comes from the fact that the favorable scenario is far less likely, and will happen much less often when compared to situations where your initial trade entry was ‘less than perfect.’ Possible Strategies (Chart Source: Orbex) The next question you should be asking yourself here is: How can I find multiple entry points for a single trade? There are many ways of doing this. Even the simplest technical analysis strategies will generally outline more than one support or resistance level on any given chart, and these can be used to define price areas that that agree with your original strategy. For example, in the chart above, we can see relatively clear historical resistance levels in the Euro at 1.37 and just above 1.38. Many charts will have more than two support or resistance lines drawn. So hypothetically, there would be nothing wrong with establishing half a short position once prices reach 1.37 and then wait to add on the second half if prices continue higher into the 1.38s. This would give you an average position size of roughly 1.3760, rather than your original 1.37. When you have live positions, this added trade cushioning can make a significant difference if things start to work out unfavorably. But what is even more important here is the fact that prices would have had to break all of your original prices and the next one in order to stop you out. Moves like this are relatively unlikely, and these types of market tendencies are outlined in these courses to learn finance online. This is one way that traders can turn the probabilities in their own favor, and this is a strategy approach that should be applied in almost all cases. Fibonacci Fibonacci studies offer another possibility. But what is most important to remember with Fibonacci is that the numbers should be viewed as approximations. Many traders claim to base positions on the ‘cosmic nature’ of the Fibonacci sequence (the Golden Ratio). The financial markets are just another organism in the universe, why wouldn't they follow the rules of physics that every other entity must follow (tree branches, shell shapes, hurricanes, etc.). Not all of us subscribe to these types of ideas and not all us us feel the need to define a retracement by its relationship to the 38.2% or 61.8% Fib level. Instead, I am interested in what is happening to the price at any given moment. Is something likely to happen in this asset? Right now? If not, move on to the next chart. If so, start looking at how a trade could be positioned. It is just as acceptable to view these retracements in thirds, so instead of the 38.2% retracement, you are viewing the market as having had a one-third retracement of its original move. Let’s say your criteria are met. In order to use Fibonacci, you need to identify a predetermined price move. This is easier said than done because there are a lot of prices moves on a price chart. Everything that happens on a price chart is a price move. Fibonacci Example Not enough space here to get into how to define a retracement move. I have explained Fibonacci in depth here in other articles (for example, here and here). The graphic below shows how you should be looking at when using Fibonacci to scale into a position. (Chart Source: Orbex) In the chart above, we can see clearly defined Fib resistance at 1.3770 (38.2% retracement), at 1.3820 ( the 50% retracement), and at 1.3860 (the 61.8% retracement). Traders looking to enter into bearish positions could place one short entry at each of these levels (a third in each position), with a stop above the two-thirds retracement of the original decline. This would allow you to scale into your position and protect against major upside risk while using the Fibonacci retracement.
  3. In this trading lesson I’m going to give you 15 useful tips that will help you become a better forex trader. Hopefully as you read this article you will realise some of the mistakes you are making in the forex market and pick up some advise and guidance that will help you avoid making them in future. As we develop as traders it’s natural to make mistakes from time to time, in order to improve our record and increase profitability we must assess our decisions against a sensible set of rules to ensure we do not act in an emotionally motivation way. The list I have included below for you is just a subset of some of the rules I apply to my trading to ensure I am able to execute my forex trading strategy as effectively and professionally as possible. I hope you are able to apply some of the things you learn from this lesson to your trading and improve your trading results for the year ahead. 1) Start Maintaining A Trading Journal If you’ve taken the time to read my forex trading course you will know I’m a big advocate of keeping a trading journal. You should use your trading journal to record every trade you execute in the market. It should include entry rationale as well as analysis of the outcome of the trade. This will significantly help you refine your strategy and improve your trading results because it gives you a platform to assess the decisions you make and focus on removing bad habits. Many of you may already keep a trading journal, in which case you’re doing the right thing. The hardest thing about maintaining a trading journal is writing down a losing trade – it gets even harder when we have to record lots of consecutive losing trades. This should not tempt you to stop updating your trading journal, many traders simply stop keeping one when they have lots of losing trades because it pains them too much to write down that they lost. If you record your losing trades and the reasons why you lost it can serve two purposes; 1) you will be able to highlight the fact that you didn’t do anything wrong, the market just wasn’t on your side on this occasion or 2) you made a mistake and you can now focus on never making that mistake again. The bottom line is you should always record your trades, good or bad, and nothing should stop you from updating your trading journal, not even many losing trades in a row. The only way to improve your trading is to have a good track record of the decisions you have made. 2) Stop Wasting Time Looking at Lower Timeframes It’s widely accepted amongst the professional forex trading community that lower timeframes are a waste of time when performing price action trading analysis. By lower timeframes I mean anything below the 1-hour timeframe. The price movements that occur on these timeframes are far too erratic, they are affected by news announcements to a far greater extent than the 4-hour or daily timeframes and they require you to check your charts much more frequently. Additionally, trading lower timeframes will significantly impact your mental state; it will mess with your emotions and tempt you into making emotionally motivated trading decisions. It’s important to make technically sound trading decisions and only act off the back of good price action setups. I firmly believe this can only be achieved by focusing on the daily, 4-hour and 1-hour timeframes and would strongly recommend you switch to this trading style too. 3) Write a Decent Trading Plan Your trading plan is your bible; you should treat it as your guide to assist you when you need help in the markets. It should contain rules for every eventuality and you should assess every trading decision you make against it. If you do not have a decent trading plan then you cannot determine whether or not you’re doing your job properly as a forex trader. There is no-one else to assess your performance in the retail-trading world, you have to do that yourself. If you have a good trading plan you can determine whether your trading decisions meet your rules or not. This is essential when you lose a trade, if you are able to assess the rationale for taking that trade against your strategy and determine it met your rules it will massively help you when it comes to dealing with the emotional trauma experienced after losing money in the markets. 4) Start Using Clean Charts We don’t use any indicators on our forex charts at all when trading price action. The only indicators we use are for trend identification and we use different EMAs to help us with this. It’s important to keep our charts as clean as possible so we can see what is truly happening in the market. Remember, we are price action traders and so we trade PRICE, nothing else. Indicators are lagging by their very nature and can only attempt to tell you what price has been doing in the past, not what price is doing right now. When trading price action strategies we care most about what is happening in the market in real-time, so indicators are of absolutely no use to us whatsoever. 5) Make Sure Your Charts Are In Sync With New York Close The last major forex market in the world to close is New York at 22.00 GMT. You want your daily candlesticks to close at the same time as New York so the price action you observe on your charts is in sync with this. If you charts are not in sync with the New York close you may miss some essential price action trading setups occurring on the daily timeframe. You should also make sure your 4-hour candlesticks are in sync with London open, so you want your candlesticks to close at 8.00 GMT, 12.00GMT etc. This will help you follow our forex market commentary and understand the setups we discuss here at Forex Trading University. 6) Learn How To Trade Price Action Setups You should not be trading anything other than raw price action trading strategies. Price action trading is the method that offers the highest probability setups and greatest chance of success in the markets. It is the analysis of price in real-time by a trained human eye, which no computer, indicator or mechanical system can beat. This is the methodology I teach in my forex trading course and I would encourage you to learn how to execute this method of trading if you haven’t already. 7) Stop Making Emotional Trading Decisions Price action forex trading is entirely technical. We do not trade based on things we read in the news, emotions or any ‘gut feelings’ we may have. You MUST stop acting based on the emotions you feel and make your trading decisions based on sound sensible technical analysis that meets your trading plan and strategy. If you have been making too many emotional motivated trading decisions then I suggest you switch to trading higher timeframes and learn how to keep your emotions under control. 8) Use The Right Moving Averages For Trend Identification Whilst we do not use indicators to decide when to enter / exit trades, we do use exponential moving averages for trend identification. We use different EMAs on different timeframes to show us the direction of the daily trend. You should make sure you have the right EMAs plotted on the right timeframe so you can always keep the dominant daily trend in mind. You should only be looking to enter trades inline with the daily trend once price has moved back to the daily mean. You can learn about the indicators we use for trend identification in my forex trading course. 9) Start Trading With The Dominant Daily Trend Many newbie traders simply disregard the importance of trading in the same direction as the daily trend. The daily timeframe tells us which direction the big orders are placed in the market. The only orders capable of moving the market on the daily timeframe in the forex market are those that amount to millions if not billions of dollars. There is absolutely no point in trying to fight the flows and trade counter trend in the forex market because these orders are so large they will push the market in their chosen direction over 90% of the time. You can significantly improve your trading results just by making sure all of your trades are placed in the same direction of the daily trend. 10) Always Use a Decent Risk / Reward Ratio Start practicing proper money management techniques. You need to start managing your risk in the forex market properly if you are going to be a successful forex trader. If you have been trading with no stop-loss or with a very low risk / reward ratio then you need to seriously reassess your trading strategy. As traders the number 1 priority should always be effective risk management, if you do not manage risk properly you simple can never expect to turn a profit. I always trade with at least 1:2 risk / reward and this is something I teach in my forex trading course. 11) Stop Blaming Someone Else For Your Mistakes When you suffer a loss in the forex market it is YOUR fault, nobody else’s. You must stop trying to blame other people when your trading decisions don’t go your way. Whether you are blaming your forex coach or your broker you are taking the wrong approach. Everybody has their own method that works for them in the forex market, and you must develop your own method too. Make sure you record your decisions in your trading journal and refine your technique over time to become consistently profitable in the market. Unless you are using a broker that practices illegal behavior such as ‘stop-hunting’ or a broker that has ridiculous spreads it is not their fault either. If you are dissatisfied with the service you’re receiving from your broker please check out chapter 6 of my forex trading course where I teach you how to choose the right broker. 12) Stop Paying Attention To News Announcements There is absolutely no way we can expect to know how the market will react to news announcements as retail traders. Our orders are totally insignificant when compared to market liquidity and order flow and the decisions we make have no influence on market movements whatsoever. It is much easier for a large investment bank to place an order for hundreds of millions of dollars that will move the forex market in their chosen direction and trick lots of retail traders out of their positions. Instead, you should wait for the chart to tell you what it’s doing by reading raw price action setups and sticking to your trading plan. 13) Limit Your Daily Chart Time Limiting the time you spend each day analyse the forex market will force you to make decisions based on price action rather than emotion or stupidity. It will also ensure you only analyse the charts when you absolutely should do, by this I mean you will only be checking higher timeframes for a few minutes at the end of each candle. I personally only check my charts for 10 minutes or so after every 4-hour candle closes and for about 30 minutes after the daily close at 22.00 GMT. This will also help you with our next tip… 14) Stop Interfering With Your Trades You should never interfere with trades, you shouldn’t move take-profit levels or stop-losses and you should avoid exiting your trades early (before your predefined levels are hit) without very good reason. I’m sure there are many occasions where you have exited one of your trades because you were losing money only to see the market reverse and end up moving the way you predicted. If only you had the ‘will-power’ to stay in the market, eh? Well, if you set your take-profit and stop-loss levels before you enter the market and leave them until they are hit, you will be sure not to deviate from your trading plan and I can assure you this will reap great benefits for your trading results. 15) Remember There Is Life Outside Of The Forex Market! Last but not least, please remember there is life outside the forex market! If you spend hours and hours in the markets it can affect your trading mindset and negatively impact your trading decisions. Remember to spend time with family and friends, maintain hobbies and generally keep your life going away from the markets. You should only be trading higher timeframes anyway in which case there will be plenty of hours in the day to do other useful things whilst also managing a successful forex trading business. Conclusion If you already have a trading plan then you are on the right track to success, if you are making any of the mistakes I’ve outlined in this lesson you should go and update your trading plan so you do not make the same mistakes in the future. If you don’t have a plan yet you should create one right away before taking anymore trades in the market – I strongly encourage you to use this lesson as the basis for your strategy. I hope this lesson has helped you identify some of your flaws and set you on the right path to becoming a better trader. These are just some of the tips I have picked up over the last few years in the markets and by coupling these with your own trading experiences you will be best equipped to become a professional forex trader.
  4. Trading the Head and Shoulders Reversal

    Trading the Head and Shoulders Reversal Any successful technical analysis strategy requires us to buy before prices head higher (in long positions) or to sell before prices drop lower (for short positions). This reality has inspired common market maxims like “always buy low, always sell high.” But those of us with trading experience know that it is nearly impossible to forecast true trend tops and bottoms with any regularity. In most cases, we will need to see evidence that the underlying trend is changing before we can establish contrarian positions. There are a variety of ways to do this: Doji patterns, oversold indicator readings, trendline breaks, and Engulfing candlesticks offer some options. In my own trading, some of the best market reversals have been seen with Head and Shoulders patterns (which can also give bullish signals when reversed). One of the reasons I prefer to look for these patterns is that the structures are much more complex than some of the other reversal signals mentioned above. These patterns unfold over broader time horizons and require a much more specific series of events in order to validate themselves. I also believe that these patterns match the spirit of what technical chart patterns are truly meant to do: Visually represent changes in market sentiment. Normally, I try to stick to the facts in these articles and avoid personal opinions but here I thought additional disclosure was appropriate because this is one of my preferred ways to trade. Head and Shoulders Patterns Defined Head and Shoulders patterns signal bearish reversals in an uptrend (shown in the first charted example). Reverse Head and Shoulders patterns signal bullish reversals in a downtrend (shown in the second charted example). In these charts, we can see that prices form a peak in the direction of the previous trend (creating the left shoulder). This is followed by a retracement and then a larger push in the same trend direction (creating the head). Finally, we have one more retracement and a smaller push in the direction of the trend (creating the right shoulder). The pattern should resemble the “head” and “shoulders” on the human body, with each component beginning at roughly similar price levels. This region is then referred to as the “neckline.” Interpreting the Pattern In the standard (bearish) pattern, price behavior is telling is that markets are making an attempt to extend an uptrend, with two higher highs (the left shoulder and head). Warning signals are sent, however, when the third peak fails to create a higher high (creating the weaker right shoulder). At this stage, anyone in a long position should consider exiting the market as there is now building evidence of a reversal. The reverse Head and Shoulders pattern is bullish, signaling the opposite scenario as the right shoulder marks a higher low. Trading Triggers But the pattern can do more than send warning signals for those already in established positions. These patterns can signal new entry points as well. Let’s look again at the standard pattern. Here, we can see that the troughs between the shoulders and the head can be connected using a trendline. It should be remembered that this trendline does not need to be perfectly horizontal, but this line (the neckline) should be viewed as an area of important support. Once prices fall below this neckline support, the pattern is activated and it is time to enter short positions. In the third charted example, we can see a real-time chart Head and Shoulders pattern, where prices form the low peak/high peak/low peak series and break below the neckline. Short positions should be initiated once neckline support is invalidated. The Reverse pattern is used for long positions, and a real-time chart example can be seen in the fourth graphic. In this case, the neckline forms above the pattern, and acts as an important resistance level. Once this resistance level is broken, long positions can be taken as this implies a new uptrend is place. Establishing Price Targets, Setting Stop Losses To construct the complete trade, profit targets and stop losses must be established. In the third and fourth charted examples, the profit targets are drawn out. This is done by measuring the price distance between the extreme point on the head, and then moving back down to the neckline. So, for example, if this is 100 pips, your profit target will be 100 pips after entry (taken after the neckline break). More aggressive traders can elect to close half the position once this target is reached and then move the stop losses to break-even for the remainder. More conservative traders should close the entire position once the objective is hit. Profit targets are relatively clear in these trades. Stop losses are not as clear-cut and will actually depend, to some extent on the size of the profit target. For those with a low risk tolerance, stop losses can be placed 10-15 pips above the neckline (for short trades) or 10-15 pips below the neckline (for long trades). For those with a higher risk tolerance (or smaller position sizes), stops can be set above the right shoulder (for short trades) or below it (for long trades). Most important for stop losses, however, is to maintain a favorable risk-to-reward ratio. So, for example, if the profit target is 100 pips, your stop loss should be no more than 50 pips (2:1 risk-to-reward ratio). This also goes far to determine whether or not you should take an aggressive or conservative approach in these trades. Complex Head and Shoulders Last, it should be remembered that with any technical analysis pattern, there will always be some separation between actual practice and the pre-determined ideal. In some cases, the neckline will be flat, others not. Similarly, the number of shoulder can also vary. For example, when multiple left and/or right shoulders appear, the structure would be classified as a Complex Head and Shoulders pattern. In the fifth and sixth charted examples, we can see a sample structure of what this might look like. Two left and right shoulders are accompanied by the head formation before prices push through the neckline. The underlying reasoning behind these patterns is that the initial trend makes a series of highs and low that support the trend. But when this is followed by highs or lows that suggest a turning point, and an eventual violation of the neckline, a Head and Shoulders pattern is in place. This activity can be used to establish contrarian trades. Conclusion: Head and Shoulders Patterns Offer Reliable Reversal Patterns for Contrarian Traders For traders not readily familiar with the Head and Shoulders pattern, the structures should be considered as an added tool in regular trading. These formations make up some of the most reliable reversal patterns that can be found in technical analysis, and they become easy to identify once you begin looking. Added confirmation of pattern validity can gained using indicator readings, violation of Fib support or resistance levels, or price proximity to Moving Averages as a measure of underlying momentum.
  5. Article By Thebinaryoptionsbroker.com Binary Options Vs. Forex Trade For any trading investment, investors must compare binary options vs Forex trading factors appropriately. In the past few years, binary options are becoming most common. The main reason being the options offers high profit returns and are easily traded. The binary option involves the betting over a currency pair that it will expire in-the-money. If positive, it returns a fixed amount, not withstanding how far the option goes. At times the option only pays off only if the option goes in-the-money, regardless of price at expiry. For example if a binary had a strike price of 1.3, the long position would return $100 per contract regarding the higher price than strike price at expiry. The options are standardized and traded on exchanges. On the other hand, in Forex trading, there are many shared features. They also provide the opportunity, but not the need to buy (call) or sell (put) a certain underlying asset at a particular price (strike price) by or on a particular date (expiry date).Forex trading does not involve currency pairing, but rather the future trading on the currency pair. It is the exchange-traded agreement to buy or sell at some point for a price that relies on initial factors. When trading options, one has to predict if the price of an asset will go up or down from its current value over a given period of time. For instance, the current price of USD IS 1.31 and one thinks its might increase in the next hour. The individual can place the bet and wait for the one hour. Any correct predictions result to up to 80% profit on one's investment. While, Forex trading one speculates that the value of a particular currency will increase or decrease in comparison to another, with a target of making profit. For instance, when the current price of a currency is 1.4 and one thinks the price will shoot in the near future. One buys 1 lot of the currency pair and wait for the price to increase until the desired point before closing the trade at profit. In options, margin is not used when trading. People can still make great percentage profits on their investments, so traders find binary options very attractive. The advantage is that an investor can never get a margin call. While in Forex trading, people use margin to trade. Each broker determines the maximum margin and sometime it can be up to 1:500. Margin allows investors to increase their investment capitals so that they can make an increased trade and make more profit for the winning trades. In binary options, before making a trade, the investors will know the exact payout and loss return percentages to be made for the particular option at expiry. Brokers can offer payouts up to 80% or even more depending on the option traded. Other brokers never offer loss backs, this means that if an investor's option trade is a losing one, the investor will definitely loose the invested amount and not more. In Forex trading, the investors never know the maximum profit to be made on a particular trade. The investor can always regulate an order and be guaranteed some percentage profit if a stop regulation is initiated. Any losses and profits in Forex trading can be managed with the regulations to limit or stop orders. Actually, the maximum loss in this trading is an investor loosing all the money in the trading account. In binary options, there are no spreads, swap or commissions when trading. While in Forex trading, an investor has to consider the spreads and swap, and any commissions. Each broker in binary options determines the maximum and minimum trading size for their clients. Sometimes the maximum amount can be up to $5000 and the minimum up to $5 per trade. While in Forex trading, brokers allow their clients to trade smaller lots such as 1000 units of the base currency in the trade. They also determine the maximum trading amount. Binary options are available in five types which an investor can choose to trade. They include; 60 seconds option, high/low, touch/No touch option, option builder and boundary option. In Forex trading, there are a variety of order types. The most essential ones are the market orders of buying/selling. Other advanced orders include stop, OCO, trailing stop, limit, hedge orders among others. Therefore, investors must be able to lay out the factors of binary options vs Forex trading in order to choose an effective investment.
  6. Through the Cracks

    Good Morning All; Of all the articles I have written, my favorite articles are ones that bring out some of the subtleties of chart patterns that many new traders may miss. But the purpose of this letter, "Eyes", is not to 'teach' technical analysis; that is what our seminars are for. That is why perhaps the most helpful articles, for those that listen, are the ones that talk about how to go about learning the business of trading. Through the Cracks That is correct, the business of trading. It is a business like any other. True, it does not generally involve employees or large facilities for most traders. But it does involve education, planning and preparation. Traders need to be educated in the method of making money in the markets, as well as all of the surrounding concepts that are needed. They need to plan the business in the big picture by opening accounts, allocating money, figuring out living expenses for a period of time, allocating the proper time and money to the new venture, allocating money to initial and ongoing education, as well as many other important issues. Traders also need to prepare for each and every trade by forming trading plans and proper follow up procedures, and the proper research for their trade. Let's take a harder look at the first concept; getting an education in the markets, as well as all of the surrounding concepts that are needed. Deciding what approach is right for you; fundamental or technical, long term or short term or both, using news or not, understanding how to use platforms, how to enter orders, what types of orders should be used, understanding what actually moves prices, and the 'math' of making money. It should seem obvious that everyone would have a handle on all these topics before risking capital in their new business. But experience tells me nothing could be further from the truth. Learning the actual concepts of technical trading is what our Trading the Pristine Method seminar is all about. But that course is about understanding price movement; how prices go through stages, transitions, and how to play those movements to make money. Plus a whole lot more. But many of the other concepts are things traders need to understand but often don't. Many are touched on in seminars, but some are not. It is expected that traders will learn from our free webinars, or from their broker, and maybe some are even in the 'common sense' category. Many important items seem to 'fall through the cracks'. Sitting in the Pristine Method Trading Room, I am often mildly shocked at some of the things that 'experienced' traders ask. To that end, we have created a new course, "Online Trading Essentials". It covers many important topics. If you are looking at a career in the markets, or if you have recently begun pursuing that opportunity, this class is a must. I also feel 'anyone' would enjoy the class. It is free to current clients who have attended a seminar. If you are currently talking to your counselor about becoming a client, see if you can get into the class for free. Closing Comments Paul Lange Vice President of Services Pristine Capital Holdings, Inc. Day Trader School
  7. It was almost twenty-five years ago that I began my education on the markets and technical based trading. After a period of time using the indicator based method still used today, I came to the realization that method was too subjective. I also saw times (too many) that price could move in the opposite direction signaled by an indicator or a group of them. Pattern recognition was the only concept that made sense; however, the most powerful price concept I discovered was NFT. Before I get to the concept of NFT, I first have to touch on some basics of Candlesticks. Candlestick analysis essentially is the recognition of reversal patterns. There are one, two or three bar candlestick reversals have different names like Dark-Cloud Cover, Morning Star, Evening Star, Shooting Star, Star, Hammer, Inverted Hammer, Doji and there are many more. All indicate a turn and the probability of a price movement in the direction of the reversal. Some with a stall in momentum first or at the same time of the reversal pattern. It all depends on the time frame being viewed, so candle patterns change or can even conflict. The explanation of these candle reversals related to multiple time frames (MTF) analysis is virtually non-existent in the education industry. Why? Because an understanding of MTF makes all of these names unnecessary. If you understand that if prices move in one direction and suddenly turned in the other, it's a reversal. What difference does it make if it happened in one, two or three candles? A two or three candle reversal is a one candle reversal in a higher time frame and vice versa. It comes down to understanding MFT and retracements between reference points. You're getting an insight into Pristine education. As I studied and traded these individual candle or multiple candle reversals that had No follow Through (NFT), it became clear that NFT was a very powerful message. Price patterns are a reflection of what traders and investors believe and have acted on with real money. Money, put into action has emotion connected to it, and when beliefs and emotions in the moment change abruptly - it's a message to pay close attention to. Let's look at a normal or typical type of a reversal and an NTF. Both are tradable when combined with other supporting technicals; however, the NFT concept expands your opportunities and increases your odds of profitable trading setups. The above chart of Citibank © shows typical reversal signals within an uptrend. It doesn't matter what the name of the signal is according to the candlestick textbook. Even the novice to candle technical analysis can see the turn. Can you begin to see how the names are irrelevant now? If there was a Doji candle between those reversal candles, would it change your opinion of the turn? In the above chart of QCOM, there's a big bearish candle (doesn't matter what its name is, it's big) signaling lower prices. Rather than following through lower, QCOM had NFT and negated the bearish signal. Clearly, buyers were in control and were going to continue running over sellers. Can you imagine being a seller inside that big bearish candle? How are feeling the next day? What are going to do? As a trader or investors recognizing the NFT, can you take advantage of this? he concept of NFT is universal to all tradable instruments, since anything traded is affected by human beliefs and emotions. In the above chart of the Aussie dollar versus the U.S. dollar is another big bearish candle that had NFT. The move above that bearish candle hasn't happened to confirm the signal yet, but the NFT to it suggests that short-sellers are caught and a counter-trend move that will likely test price resistance and the declining 20-MA is coming once prices move above that bearish red candle. No Follow Through is a concept that I developed years ago after getting caught in trades based on candles that were negated. The NFT concept along with my Bar-by-Bar concept will put you the right side of most trades. While there is no guarantee of a sure thing in the markets, NFT when combined with other Pristine concepts is the closest thing to it you're going find to it. Greg Capra President & CEO Pristine Capital Holdings, Inc
  8. The Learning Process

    Good Morning All; Sometimes identifying the process we go through in learning can help the learning process itself. For example, any difficult task, such as trading, is generally learned in four phases. This assumes of course that one even gets to the later phases. When students read the following, it often helps them understand they may be making great progress, even if it does not appear that way. The Learning Process The first phase is what we call the "unconsciously incompetent" level. This means that we do not know the material, and worse than that, we are unaware of the vast amount of material we need to know. Most traders are in this phase when they begin trading. Perhaps you know someone like this. They feel they have all the tools they need to make proper decisions and are completely oblivious to what the market has in store for them. The next learning level is a vast improvement as it is what we call the "consciously incompetent" level. At this level, the trader still does not know material, but at least they are now aware that there is a vast amount of information they need to learn and they need to begin that process. In other words, at least at this level, they are aware of their ignorance, and that is a big step forward. Many traders who seek out seminars or who begin to look for training are at this level because they have tried on their own, and not succeeded. The next level of learning is the one that takes longest time. It is to get to the point of being "consciously competent". This is all that traders should be striving for, realistically. This is the ability to be able to know and memorize all the techniques that have been studied, and to be able to reproduce them, with the trader consciously making an effort to follow the same plan every day. The next level would be the final level and considered one of mastery. It is rarely found in trading. It is the level of "unconscious competence", where all the rules and strategies fall into place without effort by the student to enforce them day after day. Closing Comments If you are learning to trade, you will pay your tuition one way or another. You can pay a fair amount toward education, or you can pay a lot more to the market. Often when you pay it directly to the market, it is more of a 'fee' because you do not get an education in return. People often put off an education thinking they will try it on their own, or they should wait for a better market. Unfortunately new traders often get the attitude of waiting to pay for an education with the profits they get from the market without an education; so it never happens. The market is ALWAYS good. There has never been a better time to get involved in the market. Paul Lange Vice President of Services Pristine Capital Holdings, Inc
  9. Gaps occur every day to varying degrees on stocks and indices. To the stock trader, these gaps can offer enough trading opportunities to be done trading by mid-morning and many are. That being said, these gapers, depending how they have gapped, can provide additional trade setups later in the day as well as in the coming days. In this Chart of the Week, we'll review two gaps and a strategy how to have played them, use in the future and why they should continue the move. As I mentioned, gaps occur in varying degrees. Those gaps also can be in the direction of the prior day's movement or against them. With the prior days of movement the gap can be a continuation (pro) type of gap or it can be an exhaustion (novice) type of gap. The difference is based on whether the gap occurred after some type of correction within a trend, e.g., a gap up after a pullback or a consolidation base within an uptrend. The exhaustion gap occurs after prices have been trending in one direction for a period of time and then prices gap in that direction. All price movement reflects traders' and investors' beliefs and emotions; however, gaps can provide a shock element to price movement when the gap is against the recent price direction. Those educated and experienced trading gaps aren't shocked by continuation and exhaustion gaps, since they are expected based on the existing trend, location of support, resistance and pattern of candles. When prices gap in the opposite direction of the current pattern that partially or completely reverse the direction of the prior bar or two, it's a shock. The larger the immediate candle before the gap and the size of gap against it, the greater the shock and potential opportunity to profit. Let's look at two. American Express (AXP) had started to move lower with a large gap down, slightly recovered, stalled and then broke lower and closed with a huge red candle that closed near the low of the day. That day also occurred with an increase in volume. The pattern was pointing toward AXP moving lower, but that didn't happen. Rather, AXP gapped up the next day more than 50% into the prior red candle's range! Gaps like this shock traders since the prior pattern did not suggest such a large move in the opposite direct. We can correctly assume that traders are short were expecting AXP to move lower based on the pattern. What do you think they are going to do if AXP doesn't immediately collapse lower? This is what sets up a "Gap and Go" type of morning for stock traders to take advantage of. If AXP can move higher above the high (red line), it should continue moving up. But let's look at the intra-day chart that day and how it setup. On the gap up AXP cleared its resistance area, but the gap higher also leaves a partial void of support that has the potential to be filled. For that reason, entering long immediately could result in a move lower and without a clear area to place a stop-loss. What to do? Let AXP form a price pattern signaling that buyers are stepping up and taking control again in the form a reversal pattern. These patterns can happen in many ways, but the trained trader will follow Bar by Bar and see whatever the pattern is as it unfolds. The odds are AXP will move up based on the daily shock setup. AOL Inc. (AOL) is another example of a gap and shock. AOL was moving up toward resistance, but had closed strong the near the day's high and with an expanding range. The next day AOL gapped under that large green daily bar. What are all the traders that bought AOL that day now holding or anyone that bought in the prior two weeks? Right, losses! What would you do if you were long? Cut and run? Hope it comes back to get even? Buy more? The last two choices typically don't work out very well. No one likes losing, but it happens. Professional traders and investors have a plan that includes a stop-loss and stick to it. A gap lower under a large daily green candle strongly signals that prices will go lower, but gaps create voids and the intra-day entry must be formed. Here I have included the15-minute chart to see why prices stalled moving higher; the resistance (supply) to the left. The 2-minute detail provides the pattern signaling the setup on the current day in alignment with the big picture. These are some of the basics of what to look for when trading a gap. Look for daily shocks, prior areas of support or resistance where traders will take positions and a current pattern that forms in alignment with the big picture analysis. The odds will be in your side. All the best, Greg Capra President & CEO Pristine Trading
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  11. Alright guys, so I made a poor call on AAPL and I'll clear that up later. I'm still long AAPL, by the way. Today, I want to talk to you about a great trading system that I utilized to bring me gains in futures trading. It is called the floor trader strategy and you can read more about it right here: http://www.trading-naked.com/FloorTraderMethod.htm There are 3 things to remember with this method: 1. The first is to watch out for retracements; a minor rally in a downtrend and a minor decline in an uptrend. I have always loved retracements as they are so easy to identify and trade on. 2. Exponential Moving Average (EMA) is vital and it involves the 9 and 18 EMA lines. 3. Identify entry level or trigger.
  12. Offshore Forex Trading is beneficial in many ways but also comes with risks not seen in domestic trading. Since lawswillvaryfrom region to region, there is less security in deposit funding and a greater risk that the company could go bankrupt and fail to repay your trading funds.
  13. Mini Accounts are generally recommended for new traders with limited risk capital to invest. These accounts allow traders to use medium trading sizes so that strategies can be tested before larger amounts of money are invested.
  14. How To Break Your Addiction To Trading

    If you find that more often than not you are either in a trade, thinking about being a trade, or even “itching” to be in a trade, you are probably addicted to trading the markets. If you find it difficult to remove yourself from your computer after placing a trade or you are staying up until 3 in the morning watching every tick for or against your trade with frazzled nerves, you are probably addicted to trading. How do you stop your addiction to trading? If you are man enough to admit that you are addicted to trading then read on for some tips on how to break free from this addiction, if you want to continue on in denial of your addiction, then it’s better to click off this page now. Stop trading small time frames When I say “small time frames”, I am talking about any chart time frame below the 1 hour time frame. I personally believe these time frames are too full of random price movement that carries with it very little significance. As a result, I feel that traders who focus primarily on these small time frames end up getting “seduced” into over-trading because they naturally spend more time analyzing and watching the markets as a result of having more (mostly meaningless) price movement to analyze. We humans tend to be good at finding “patterns” in things, or meaning in things that perhaps don’t carry any inherent meaning. Traders are really good at doing this when trading the lower time frames. Also, any trading signal on a 5 minute chart is going to inherently carry with it a lot less weight than that same signal on the 4hr or daily time frame. So, if you want to break your addiction to the charts…stop watching the small time frames all the time, the reality is that it’s only causing you to over-analyze, over-think, and over-trade. Be accountable People who are addicted to drugs or alcohol lack accountability to themselves, they don’t care about their bodies enough to stay disciplined enough to stay away from substances that harm them. Similarly, traders who gamble their money away and who are addicted to the markets, lack accountability; they are unorganized and undisciplined and so they need something to be accountable to. The best way to inject some accountability into your trading is to develop a Forex trading plan based around an effective trading strategy, as well as a Forex trading journal. Then, you have to force yourself to actually use them; if you can manage to do this you will then have something to be accountable to. When you self-manufacture these tools of accountability in your trading, it helps you stay disciplined and helps to forge positive trading habits in your trading. Traders who gamble and who are addicted to the markets actually reinforce negative trading habits and thus it can be nearly impossible for them to turn their trading around. Understand that NOT trading IS a valuable position Another very important thing to understand that will help you break your addiction to trading is that NOT trading is often the best position to take. Think of it like this, if you are addicted to the markets and are over-trading, you are going to have many more losing trades than you would have if you were disciplined enough to simply not trade when you knew you shouldn’t have. Just to get back to breakeven you have to then hit enough winning trades to make up for all your losers. Whereas, if you simply had traded like a sniper and not a machine gunner, you could have avoided many losing trades and thus had a much more consistent and profitable equity curve. Don’t put pressure on yourself to make money The reason why many traders get addicted to the market is because they put too much pressure on themselves to make money from their trading. This is a very dangerous thing to do. Traders who find success in the markets feel little to no pressure, they don’t put too much significance on any one trade. If you see trading as your “only option” at having a happy life, you are obviously going to become emotional the first time you lose a trade, then that’s going to kick off an avalanche of emotional trading mistakes and trading addiction that will only result in you losing increasing amounts of money. In short, remover your “need” to make money in the markets, and the money you so badly desire will actually come faster. Making sure you don’t “relapse” As any addict knows, relapse is always lurking around the corner, waiting for you like an unavoidable temptation in the night. When you’re a trading addict, the situation is exactly same, and perhaps even more difficult than being addicted to drugs or alcohol, since you are still going to see your temptation (the markets) everyday. You have to consciously be on-guard against falling back into your old ways of being a trading addict. The easiest way to do this is to stay disciplined and organized by thinking about your trading like a business and making a trading plan and trading journal and using them with passion. You also need to keep in mind that you COULD lose money on ANY one trade, so keep that fact in your mind at all times while trading, and ask yourself before every trade if THIS is a trade that a I REALLY want to risk money on, and is THIS amount of money an amount I am TRULY OK with losing? In short, there is no concrete way to avoid slipping back into your old bad habit of trading addiction. But, you can pre-empt all your actions in the market by doing the things I just described, this will greatly increase your chances of avoiding a relapse. Also, you should realize that trading is a life-long event, so don’t get too hung up on any one trade; your trading success is measured over months and years, not over days or weeks. Find other hobbies, don’t get obsessed with the markets, and realize the markets will always be there, so missing out on a good trade setup is not a big thing. By and large, traders who take a slow and controlled approach to trading the markets make a lot more money over their lifetimes than traders who take a fast and emotional approach. Nial Fuller is a respected Forex trader and trading coach. He teaches forex traders to simplify their trading by learning to read the “raw” price action of the market and by trading with simple yet highly logical and effective strategies. If you want to find out more about him and his price action trading methods, check out his Forex Trading website here:
  15. Given that forex trading has a drastic effect on currency markets, there are instances where corporate profits see extra gains or losses based on the exchange rates that are present at the time of final transaction.
  16. Forex is serious business, and is no place for fools. True, those who just want to gamble away with their money would serve themselves better at casinos than forex brokers. And no, currency trading is not a game, a pastime, or a sport for those with a lot of leisure time to spare. But forex is by far the most lucrative and profitable financial business for the patient, reasonable, and diligent individual who is willing to invest the time and energy necessary for success. And yes, it is possible to achieve spectacular returns in this market, if you're ready to pay for it: you're going to devote a significant amount of time to learn the rules and better your skills; you'll have to tame your pride when you achieve unbelievable returns on your investments, and suppress your fears when relatively harmless but inevitable losses threaten your determination for success. But in the end, the markets are driven by facts, and if you follow them for profit, the logical consequence of your actions will be profits, nothing more, and nothing less. Forex tips - Get it learn by couple of days The tip that I want to share is that the traders should enter in the world of Forex and trade with real money when they have proper knowledge of the strategies of the trading. I've learned some forex tips and doing some forex analysis after going through the technical analysis tool of dynamics level that I would like to share to beginners: * Stop-Loss guaranteed: to be sure that it's not "around", nor "near", but rather exactly on the rate as you defined. * Full control over your funds: can you control your funds from anywhere, at any desired time? Is it really 24 x 7 x 365? * On-line currency rates: are the rates shown the most updated rates? Is it powered by reliable providers? * Commissions and hidden costs: is the trading at your Forex dealer’s site clearly visible and well informed? Are you paying commission on withdrawals? Are you paying commissions on the trading forex? * On-line Chat or phone contact: are their dealing forex room experts available for your phone calls? Do they offer free numbers and chat services? But the most important point is that the knowledge that you'll gain by trading forex, and having a good understanding of fundamental analysis and economical events, will grant you the literacy that will be useful to you throughout your life. Even if you are perfectly content with a non-trading career, and are happy with your full-time job with little understanding of where the economy is going, you'll eventually find out that to protect your nest egg, you do need to know more about economics and trading, and that by ignoring the risks related to currencies, you're not isolating yourself from them. So to achieve the great profits are possible in the forex market, great returns are achievable if you work hard and place logic and reason above emotion and sensation. If you think that you're capable of this, don't hesitate to begin your career today. If you already trade other markets, your experience in forex will widen your horizon, and enhance your skills and vision. If you're new to trading, this is the field where you'll get priceless education and invaluable experience by learning what moves the markets, and what drives economic developments.
  17. Trading in the forex market tends to be a little confusing when you're first starting, which is why it's vital to your success as a trader to understand technical indicators and use them within the framework of your forex trading strategy. Forex indicators assist traders in predicting the direction in which the currency market will travel. Following the indicators will give any forex trader the information they need to work their forex trading strategy. You see technical analysis is just the study of the short term price action in the market. Now, this short term price action is determined by the buyers and sellers in the market. Markets are just buyers and sellers trying to buy or sell. Their emotions rule the markets. When these buyers and sellers all start behaving in the same manner, you can well imagine market can become highly predictable. When things become predictable, they lose their value. This is the exact reason why when majority of the traders use the same indicators they become useless. The different types of Forex trading indicators depend upon the need of an individual. For just a technical support, a trader needs to set up the whole scenario of deriving the very least of information from the indicators. This can be a set up of two or more kinds of indicators which are combined in order to obtain very helpful results. In a layman language, indicators are something which alarms you to trade. It sets up informative surrounding and makes work much easier. It is supported by trend, cycle, volume and momentum in trading. The indicator uses trend to show the ongoing setup of the market. It makes the trader aware of the uprising or downfall in the market which can be used as a piece of information. The Bollinger Bands They give very good signals and can be used as support\resistance indicators, telling us - before the move occurs - that a reversal is prone to happen. When price touches the lower band it is oversold, and when price touches the upper band it is overbought. The trading method for the Bollinger Bands is basically to look for price-action support and resistance levels, and confirm them with bounces on the Bollinger Bands themselves. This results in very high win rate and consistent profits. The Simple Moving Average, or the SMA, is an interesting indicator that most traders do not use in the right way. Most traders use it as a trend-following indicator to enter trades after a trend has been established, however we use it in an entirely different way. For example: The last five closing prices for MSFT are: 28.93+28.48+28.44+28.91+28.48 = 143.24 To calculate the simple moving average formula you divide the total of the closing prices and divide it by the number of periods. 5-day SMA = 143.24/5 = 28.65 The most accurate and predictive way to use the SMA is in the bounce method: we wait for trend to establish, but instead of randomly entering, we wait for price to retrace to the moving average and bounce off it. Relative Strength Index The RSI is the abbreviation of the Relative Strength Index, which is introduced by Mr. Welles Wilder in 1978. The RSI method is one of the Oscillator analysis, which indicates the gapping in the forex market using figures, 0 to 100. RSI = 100 - ( 100 / ( 1 + RS ) ) RS = Average of inclining prices for X days / average of declining prices for X days Now you have to choose which one is best for your trading
  18. Secrets of Successful Forex Traders - by Nial Fuller Below Expert Forex Trader Nial Fuller Talks About Secrets Of Successful Forex Traders. The “secrets” of most successful Forex traders are perhaps not so secret. What I mean is that you probably already know most of the things you need to do to be a profitable trader, but you don’t do them because you think you will find a “short-cut” or you think you just “feel” the market better than most people so you will be able to cut the corners you know you should probably be taking. Most struggling traders think in a similar manner to what I just discussed above; they think they are always just one trade away from hitting a big winner and then they will start to be disciplined and create a trading plan and trading journal. Unfortunately, it’s usually too late for traders who think like this, meaning because they think like this they are reinforcing trading habits that are inhibiting them from making money in the markets. Don’t be like the masses of losing traders, be different, be realistic, do what you know you should do to excel in the markets, stop cutting corners and start trading in an organized and responsible manner. Here are a few things that ALL consistently profitable Forex traders do, and that you probably are not doing: Trading frequency Most traders seem to have a natural tendency to want to trade a lot. Rather, traders who are undisciplined, have no trading plan and who don’t view their success as being defined over a long series of trades want to trade a lot. Most very successful traders do not trade as much as you probably are. In fact, there are studies that PROVE that investors and traders that trade less frequently than day-traders or scalpers make more money over the long-run. If you think about it, isn’t the “long-run” really what matters anyways? Why does it matter if you make 50% one month only to give it back the next month? Isn’t it better to just make 50% a year and keep that 50%? Of course, everyone would answer yes, but most traders’ actions do not reflect this. If you boiled down the reasons behind most traders’ actions, you would see that they are primarily concerned with the ‘here and now’ and not so much on their end-of-year trading results. Of course, when the end of the year comes and they look back over their trading performance, they realize that they traded way too much and that had they just traded less frequently, they probably would have made a lot more money…or in most cases made some money. What is the point? Well, the point is that one of the biggest ‘secrets’ of successful traders is that they don’t trade very much. If you take a look at your own trading performance you’ve probably entered 5 or more trades in the past week, in my opinion, that’s too many. I focus on the daily chart time frame, and I only enter very obvious price action setups that I consider the ‘low-hanging fruit’; I don’t like to put my hard-earned money at risk in the markets unless my trading edge is present. This is how a professional trader thinks, whereas an amateur / losing trader just manifests trading signal after trading signal, mutating their trading edge to meet their desire to trade, or altogether ignoring the fact that their trading edge is not present. Discipline Another ‘secret’ of successful Forex traders is that they are disciplined. If you are not consistently successful in the markets yet, it’s a fair bet that it’s because you are not disciplined enough to consistently manage your risk or to consistently stick to your trading plan, i.e. not over-trading. Almost every trader who struggles to make money in the markets does so because they risk more than they should per trade…rather more than they know they should, and also because they trade too often. Both of these problems are a result of not being disciplined enough to stick to what you know you should do and what you need to do. Successful traders are successful because they are disciplined enough to wait for the most obvious trade setups and also because they are disciplined enough to never risk more than they are totally comfortable with losing per trade. Simplicity Finally, perhaps one of the biggest ‘secrets’ of successful Forex traders is that they do not use complicated trading methods. Whilst every trader is different and trades in a slightly different way, by and large, pro traders are using simple price action-derived methods. You are going to be hard-pressed to find a pro trader with 10 different indicators on their charts. Most successful traders have long since realized that the only thing overly-complicated indicator and software-based methods do, is cover-up the high-probability price action setups that occur on the price chart beneath them. Most beginning and struggling traders seem to have the idea that they by putting more ‘crap’ on their charts they are somehow going to gain some inside information or understanding of price movement. All they’re really doing is masking the price action of the chart and making it more difficult and complicated to interpret and trade from. Most traders who make it out of the woods of beginning trading and searching for the “Holy-Grail” trading system, eventually end up gravitating towards natural and raw price action trading because they ultimately realize that a market’s raw price movement is the best and most accurate tool for analyzing it and making trading decisions. Unfortunately, Forex trading is a very easy industry for people to develop trading systems and ‘magic-bullet’ indicators that sound and look great, and are very easy to market and sell. As a struggling or beginning trader, the best thing you can do is to be skeptical; if something sounds too good to be true…it probably is. There are no short-cuts to success in Forex, and the ‘secrets’ that I’ve discussed in this article really are just common sense things that you probably already know you should be doing but most likely aren’t. So, make the change today and start doing what you know needs to be done to succeed as a currency trader. You Can Visit Nial Fuller's Price Action Trading Community Here - Forex Trading
  19. The Angolan Novo Kwanza is the official currency of Angola, given value by the nation’s central bank. Traders investing in the AON currency hold an optimistic view of the country’s macro economic fundamentals and the value and allocation of the countries natural resources. Price levels are heavily influenced by inflation rates, and the low liquidity levels of this currency make it unavailable in many regions.
  20. How to Reach Your Full Potential as a Forex Trader To begin today’s article, I want you to yourself a question: “Am I currently doing everything possible to be the best Forex trader I can be?” I’m willing to bet that you are one of many traders who know what they need to do to trade successfully, but simply aren’t doing it. So, why is it that so many struggling Forex traders have the knowledge to trade successfully but they still do not make money consistently? How can you take your knowledge and put it into action in the markets and finally overcome your inability to remain disciplined? I will give you some insight into these questions in today’s article and hopefully you will then have an easier time reaching your full potential in the markets. Anyone can learn to trade successfully if they really want it bad enough The 1983 trading experiment by Richard Dennis and David Eckhart, known as ‘The Turtle Traders’, famously proved that trading could indeed be taught successfully to people with little or no trading experience. Thus, you have the potential inside of you to trade successfully; it doesn’t take some special genetic gift of birth to trade the markets profitably. However, it is true that some people have an easier time with discipline and self-control than others, and these are two of the most important traits of consistently successful traders. But, that doesn’t mean you can’t develop these traits in yourself, it will just take you a little more work if you aren’t naturally inclined to be disciplined. Successful Forex trading is all about developing and maintaining the correct trading habits. The potential for you to make money consistently is inside of you, but you need to “unlock” it by staying consciously aware of your emotions as you trade. Turning your trading knowledge into action We’ve already discussed the problem that many traders face of not being able to act on their knowledge of what they need to do to trade correctly. Trading seems to be a lot like staying in shape; most people know what they need to do to stay in good physical shape, but they lack the motivation to become and remain disciplined enough to develop the proper habits that make them consistently healthy. Similarly, most struggling traders know what they need to do to start making consistently money in the markets, but they simply lack the necessary discipline to make it happen. So, what are some things that you can do today to help jump-start your motivation to get and remained disciplined in your trading so that you can reach your full potential as a trader? 1) Start accepting that trading is risky and that you can lose money on any given trade. If you truly understand and accept that there is no such thing as a “sure trade” in the market, then you have no reason not to manage your risk effectively on every single trade you take, that is unless you really enjoy losing an emotionally painful amount of money on any one trade. 2) Learn an effective trading strategy that is not overly-complicated. Let’s face it, there’s a ton of trading systems and strategies floating around the internet that are anything but user-friendly. So, if you want to reach your true potential as a trader you need to employ a simple trading strategy that you actually understand end enjoy using, not some messy conglomeration of indicators that resembles a piece of modern abstract art. 3) You need to actually create a practical trading plan around the strategy you have mastered. If you do not create a trading plan that details all your trading strategies, money management, and entry and exit rules, there is no way you will ever pull together the discipline necessary to succeed in the markets long-term. Just like a business needs a business plan, you need a trading plan for your trading, and you need to treat it exactly like a business, because that’s what it is. You would not gamble away your money for a business, so don’t gamble away your money in the markets, instead plan everything out and preempt all your actions in the market. 4) Once you have mastered an effective yet simple Forex trading strategy and have a trading plan in place, you need to create a Forex trading journal to track all your trades. This is essential to you reaching your full potential as a trader because you need to develop a track record that shows you your progress in the markets or lack thereof. This will also work as a self-accountability tool, because if you can manage to pretend that you are “reporting” to your trading journal as if it is your “boss”, you will create some accountability in your trading, and this is important for most traders since without a real boss breathing down their neck they have little reason to stay on track and motivated. In summary, if you can manage to do the things discussed in the four points above, you have a very good chance at succeeding long-term in the Forex market and in reaching your full potential as a Forex trader. However, keep in mind that these things are not going to help you if you only start them but don’t persist with them. You have to follow-through and give yourself some time to see your efforts pay off, forget about getting rich over-night, seriously successful traders have long-since figured out that the “get-rich-quick” mindset is simply not conducive to making consistent money in the markets. About the author: Nial Fuller is CEO and Founder of the webs Foremost Trading Education Community - Learn To Trade The Market, A Global Leader in Forex Trading Education & Training. The Learn To Trade The Market Forex Price Action Trading Community has become a vital education resource for aspiring forex traders.
  21. Liquidity Definition

    A liquid market is one where traders are prepared to buy and sell a financial asset in the market. It can also be used to describe a situation where there is plenty of tradable cash made available by the various market players to trade the markets. It can also be used to describe a state where there are many traders available to buy and sell instruments. As such, it makes trade executions faster as there are always ready buyers and sellers. Cost of transactions is also lower in a liquid market. This explains why the EUR/USD pair which is the most traded pair in the forex market has spreads which are as low as 0.8 pips with some brokers, but less traded currency pairs like the EUR/SEK have spreads of up to 50 pips.
  22. ECN Defnition

    The key element in trade executions done by ECN is that it brings market participants together without a dealing desk or market maker functioning as an intermediary. This allows traders to get the most transparent pricing possible. It requires the existence of plenty of liquidity; as a result, traders can only have access to ECN trading if they have account balances that start from $50,000 and above. In addition, spreads are not fixed as dealers jostle to offer competitive pricing, and the direct nature of trading operations in an ECN system also means that orders are executed speedily and without re-quotes.
  23. The Truth About Forex Trading

    Many traders come to trading with dollar signs in their eyes and dreams of a yacht docking at the Bahamas. Whilst this dream is not unattainable the percentage of traders that are ever going to make that type of money is extremely small. What can be realistically achieved? What you will be able to gain out of the market is largely based on the amount of money your trading account has. Someone with $1,000 is going to struggle make decent living and ride out what are inevitable losses that will come, compared to someone with $100,000 who is going to have a far better chance. It is simple maths that the more money in the trading account the less percentage that the trader has to make, to make a decent living. Are you kidding yourself? Are you expecting to open an account with $10,000 and quit your job? If so I think you need to realistically asses your situation. Example: Let’s say that you need to make $50,000 per year to make a living. Account balance A= $10,000 to make $50,000 profit = 500% per annum Account balance B= $200,000 to make $50,000profit = 25% per annum As you can see from the above example trader A needs to make 500% yearly to make a living, whilst trader B only needs 25%. This is obviously not including compound interest from within that year however trading on the assumption that you need to make any more that 5% a month is very risky. Some people will say "only 5% a month". Well 5% a month is 60% per year, and if you add compound interest with the growth of your account it is 80% per year! If you can make 80% per year growth you are doing very well! How does having unrealistic expectation hurt my account? Getting rid of unrealistic goals will help you with the mental application of your trading plan. Traders that are trying to reach trading percentages that are large will in most cases do two things; 1. Over trade 2. Risk too much money per trade Overtrading is a very common mistake made by many traders who are unrealistic in what they can achieve. They operate on the assumption that trading more will make them more. This is in fact is the complete opposite. Trading more will lead them to taking setups that are not worth taking and they will begin to lose. Risking too much will in most cases lead to an account being blown. Occasionally a trader will get lucky and pull off a large winner. Over time however the same trader can’t keep it up and when the losses come their account is crippled. What is needed to become consistently profitable? To become profitable a trader needs to realistically asses their situation. Every trader is different. How they trade and what method they will use will vary greatly from trader to trader. Learning a method such as Price Action trading and perfecting that method will greatly increase the chance a trader will have of making consistent returns in the market. If a trader can learn to trade Price Action and start using strict money management principles they will set themselves apart from the pack and give themselves a good chance of becoming consistently profitable. I hope you enjoy this article. It is designed to show you what is possible but at the same time bring you into the correct mindset that is needed in such a competitive market such as Forex. Safe trading, Johnathon Fox
  24. Trailing Stop Loss Definition

    In the early days of online trading, traders were forced to manually adjust their stop loss levels in order to protect any profits made in the market, while following the market to maximize profits. With the advent of the trailing stop tool, a trader can wait for the market to become profitable, then activate the trailing stop tool, setting it to a pre-determined trailing distance. This protects the profits in the trade by staying still when the market moves against the trader, and continuing to trail the market when it moves in the trader’s favour. If the market moves against the trader to get to the trailing stop, the trailing stop now functions as a stop loss to close the trade but this time, in profit.
  25. Support Definition

    Support is probably one of the most used terms that a trader MUST encounter every trading day. In reality, support levels are not just one fixed price level, but rather a zone. The more times a support level is tested without being broken, the stronger the support. If a support is tested repeatedly several times, at some point the price will either reverse totally or break through the support level if the downward trigger is strong).
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