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Found 6 results

  1. 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.
  2. Trade Forex and Keep Your Job

    The wonderful thing about Forex trading over trading so many other markets is that traders can make good money and only trade at the end of the day or the end of the New York session. This allows traders to keep their job and trade successfully at the same time. Many people have jobs they love or to be honest, cannot just leave at the drop of the hat. That doesn’t mean these people can’t trade and make good money also. In fact I advise traders when learning to trade to only trade the daily charts, and to only trade the end of session in New York. I am personally a massive fan of trading the close of New York setups. The reason so many traders like trading the daily charts are; - Daily candles do not have the noise that the intraday charts have. By trading the daily time frame we can more accurately predict the flow and trend of the market. Markets tend to be very choppy on the intraday time frames. By trading the daily charts we don’t have to deal with this volatility or market noise. - Lifestyle. Many traders come to Forex to enhance their lives, not to have Forex running it. This is a huge factor for traders trading the daily charts. Trading the daily charts takes anywhere from 5-20 minutes depending on whether there is a set up to trade or not. If there is a trade, the trader can place the trade and then come back and manage at the next close of the candle in 24 hours time. - People can keep their jobs and still trade. Obviously if traders are trading the daily timeframes they can place trades and then hop of to work or come in from work and check the market depending on which country and time zone they live. - Simplicity. Trading the markets on the daily charts offers a much simpler way to trade than sitting and watching computer screens all day long! Learn to Trade the Daily Charts I advise all new traders to Price Action to first start learning to trade on the Daily time frame. Once they have perfected their trading method on the daily time frame they can then begin to explore possible trading opportunities on the intraday charts. I recommend progressing in this manner because the daily charts are lot easier and less complicated to navigate. The intraday time frames tend to be more choppy and volatile. Traders have to learn to deal with noise and fast market movement when they move down the time frames. Many traders find that after trading the daily time frame and becoming consistently profitable they have no need to trade any of the lower time frames. They realise they can have the best of both worlds of having a busy and happy life and still being able to trade successfully. Perfect Your Method When learning to trade Forex there is no need to rush. The majority of traders do not make money in their trading careers and you don’t want to be one of these! When learning to trade the daily charts take your time and perfect your method. Before going live you want to be completely confident in your trading method. You can build this confidence by trading on a demo account. There is no set time frame a trader should be profitable on a demo account before going live, however I would definitely recommend being profitable for at least three months before putting any skin in the game and risking money. Moving Down to Intraday Charts As I said earlier a lot of traders find that after trading daily charts and becoming profitable they see no need to trade any other time frame. If you do want to trade the smaller charts such as the 1hr and 4hr charts you don’t just want to jump into the deep end. After moving from the demo account on the daily charts and becoming profitable on a live account you need to repeat the process. Your next step would be to move down to the 4hr charts and begin practising on the demo account. Once profitable on the demo account for a period of minimum three months you could consider also beginning to trade the 4hr charts live along with your daily setups. To trade the 1hr charts or anything smaller you should repeat the process. There is no need to lose money when learning to trade. If the majority of people trading do not make money you should start doing the exact opposite of what they do. The majority of traders will not learn on a demo and perfect their method. They will go straight to a live account and lose money. If you want to have things that most people don’t have, you must start behaving differently then how most people behave! Do not follow the crowd as nearly all the people in the crowd are losing money. Be smarter than the rest and start doing the exact opposite of what most traders are doing! Safe trading this week, Johnathon Fox Forex School Online
  3. Why Use Price Action Analysis to Trade Forex? Below Nial Fuller Talks About Why Traders Should Use Price Action Analysis to Trade Forex. Trading Forex successfully is both art and skill. You need to learn to read the natural ebb and flow of the market if you want to truly understand the price dynamics that occur within it. Trading based off rigid rule-based systems, or black-box systems is a thing of the past that is quickly losing popularity amongst savvy Forex traders. You have probably already experienced the mess and frustration that comes with using numerous indicators on your charts or with trying to trade solely off software trading programs. The core problem with such approaches to trading is that they are not natural. If I may, I would like to make an analogy with food here; when you eat unhealthy food that is not natural, your body suffers, and everyone knows this. Similarly, in Forex trading, when you try to use unnatural trading strategies that are not based off the ‘pure’ price data of a market, you end up polluting your mind and as a result your trading results will be poor. You see, to trade successfully you need a clean and calm mind, just like you need a clean body if you want to live healthily. You get a clean body from eating natural foods, and you get a clean and calm trading mindset from trading natural price action based trading strategies. Price action trading allows you to ‘resonate’ with the market by being as in-sync with it as possible, just like eating natural foods will work to keep you healthy because they are what your body needs and they ‘resonate’ better with your body’s cells than do unnatural or highly-processed foods. Why price action trading is effective in the Forex market I have used about every trading strategy available, because when I first started out in the markets I was stuck in the cycle of analysis-paralysis that so many traders get stuck in, jumping from one strategy or system to the next and trying to analyze as many economic news reports as I could get my hands on. Eventually, I realized that the most efficient and effective way to trade is to simply learn to analyze a ‘naked’ price-only chart. My unique way of trading with price action strategies is the result of many hours of time spent analyzing price movement on price charts. Forex trading is a process of trying different methods and tweaking them and eventually ending up with your own unique trading method. Price action analysis is the art and skill of identifying specific price action patterns in the market you are trading. Forex is an excellent market to use price action analysis in because it is open 24 hours a day 5 and half days a week and this means there are more opportunities for you to take advantage of. All you need to know is how to identify and trade specific price action strategies and you can learn this most effectively from a professional price action trader and by studying the charts. Price action analysis works very well in the Forex market because it is such a dynamic and liquid market. The beauty of price action trading is that it is a naturally flexible method of trading that gives you a perspective on the market that allows you to make sense out of what is happening at any given time. I have been profitable by concentrating on just 2-3 good price action setups that have proved consistently effective for me. If you learn how to read what the chart is telling you and focus on just 1 to 3 setups that you like, eventually you will master these setups / patterns, allowing you to have a better chance of making make money from your trading. Where people go wrong is with using indicators and other overly complicated methods and then constantly jumping from one trading system or strategy to the next. You have to find a truly consistent edge in the market and just concentrate on that until you truly master it, remain in one frame of mind, focus and master those setups first, and then you can add more tools to your arsenal later on. Forex trading is difficult enough without having an overly complicated trading system that tells you to look at numerous indicators when you could just be looking at a simple Forex price chart. Perhaps the best reason to trade Forex using price action is that any indicator you use on your chart to analyze market movement is derived from price and is just showing you in a less vivid format the same thing price is showing you. Some people like indicators because they give you rigid buy and sell signals without you having to think for yourself. The truth is, rigid trading systems and strategies will never stand up over time because the market is not rigid, and you have to trade a strategy that allows you to resonate with the market, not fight it. Just because your charts come with a hundred different indicators doesn’t mean they are going to help your trading or make you money in the markets. Trading success depends mostly on your mindset and your ability to remain disciplined in a realm of constant temptation to over-trade and over-leverage. We are trading currency markets, and the ‘core’ of what we are doing is trying to profit off of price movements. So, why so many traders do not want to make their trading decisions off of pure price action is beyond me. I promise you that if you simplify your trading method and concentrate on using price action strategies you will wonder how you ever traded any other way
  4. What is Price Action Trading?

    Price Action is everything that price is doing on any trading instrument, being represented on a chart for a Trader to see. In very basic terms Price Action illustrates in a way that a Trader can see exactly on a chart, what a certain pair did for a particular time frame. For example the individual candle sticks or bars will show how high the pair went, how low the pair went and also the open and closing prices. Most charting platforms can produce candle sticks and bars for time frames varying from 1 minute to 1 month. Another way to think about it is, Price Action is everything humans are doing and how they are trading, shown in a chart form. This basic explanation of Price Action is not subjective. What I see on my chart is exactly what another Trader will see on their chart, providing they are using the same charting equipment. The next question is the important question. How can we use Price Action to profit? Humans are very habitual. Traders tend to do the same things and react the same way over and over again when presented with similar circumstances. Although if the same two Traders have the same charts they will see the same Price Action that does not mean the same two Traders will come to the same conclusion. In this way Price Action can be interpreted by the individual depending on how they understand different Price Action formations. If you have watched the charts previously you may have noticed that the same patterns, most of the time, repeat themselves. This is once again because humans are habitual and react the same way given very similar circumstances. So if we can notice these patterns and human trading habits in the markets, we can start to find a trading strategy and implement it, to make money off the other Traders, while they carry out their normal trading patterns. These patterns will continue repeating themselves as long as human’s trade. Like I said, humans are very habitual and most of the time they repeat themselves, over again given similar circumstances. What is needed to trade Price Action? Clean charts- Price Action is best seen and traded from clean charts. To trade Price Action we don’t need fancy indicators or anything at all except for a clean chart. Many Traders fall into the trap of thinking the more indicators they have on the charts the better chance they have of predicting where price will go. This is just plain wrong. Indicators just confuse what doesn’t need to be a confusing process. Solid method- Trading Price Action in the Forex market is the best way to consistently predict movement. For a Trader to do this however they need a strong method and skills to trade with. Learning through a course such as an Advanced Price Action Course will give Traders the skills and understanding they need to trade effectively. Continual education and practise- Trading the Forex markets with Price Action is a skill that takes continual practise. The Forex markets are continually doing new and different things and all Traders from the beginner to the advanced can continue to learn by trading and watching Price Action through their charts. An edge on the market- A trading edge is something that gives a Trader a statistical advantage of being profitable over a sample size of trades. The edge for a Price Action Trader is their Price Action signals and trade management. Forex School Online teaches its members how to trade low risk with high reward setups, using solid Price Action formations that form in the markets time and time again. Without an edge a Trader may as well just flip a coin because even a coin toss should average out to 50/50. Trading can be very rewarding and profitable endeavour if the Trader knows how to trade using solid Price Action techniques. Trading with Price Action allows the Trader more flexibility and a lot less stress than the Trader who trades with so many indicators they get confused. In forex trading less is more. Less confusion and less overcomplicating things leads to more success and ultimately more profit.
  5. 5 common discipline mistakes traders make: Trading with money they can’t afford to lose Most active traders know that they should not be using money they might possibly need for other life purposes to fund their trading account. However, I know many of them commit this cardinal trading sin because they think they can get rich quick or they don’t really think they will lose any money. You really need to have the discipline to consciously remind yourself that if you are using money to trade that you really shouldn’t lose than you are essentially gambling and are setting yourself up for a whole host of emotionally fueled trading mistakes. Not having a defined trading plan or method If I were to ask you “what is your trading plan”, what would you say? If you cannot decisively answer this question than you have a serious lack of discipline which is going to drain your trading account very quickly. Developing a defined trading plan is not only a benefit to your emotional sanity but it also gets you in the habit of doing things objectively and helps develop your self-discipline. Success in trading is all about self-control and managing your emotions. You need to write out your trading plan when you are away from the markets and then follow this plan as you interact with markets in order to keep your brain in check. Having a trading plan and not following it Having a valid and defined trading plan is essential to trading success but if you are not following the plan you spent so long developing than you might as well throw it out the window. It is extremely easy to think you see something happening in the market that warrants you doing something not consistent with your trading plan. These are the exact behaviors that end up killing traders’ accounts. After the fact you realize that had you just stuck to your objective trading plan you would have been much better off. The emotional anguish and frustration that results from this is often quite intense. Often this cycle is the catalyst for a snow-ball effect of emotional mistakes that can literally lead to you blowing out your trading account very quickly. It requires more discipline to stick to your trading plan than to actually develop one. Read that last sentence again. Letting winners turn into losers Allowing a previously positive trade to turn negative is probably one of the most common mistakes that are a direct result of a lack of discipline in the market. Predicting near-term market direction is not the most difficult skill to become good at. What is difficult though, is taking profits off the table and proper stop-loss placement. Many times traders have un-realistic profit targets that are too far away from their entries. When these targets get missed and the market starts turning back towards the entry point many traders at this point are not thinking logically if they don’t stick to their plan. Often traders will not have moved their stop loss to break even after being up a substantial amount of money. Then when the market gets back to their entry and turns negative they start to hope. Once the hoping starts you might as well start burning your trading account money, because you are about to lose it. Many traders even move their stop losses further away from their entries because they think the market will turn back around in their favor. Sometimes it indeed will, but the point is, if you develop the habit of hoping and moving your stops away from your entry point eventually you are going to get burned really bad and it’s going to essentially nullify all of your previous trading success. Overtrading Over trading is a direct result of a discipline deficiency. Generally, over trading is a symptom of numerous other trading mistakes that were a result of a lack of discipline. Not having a trading plan or not following the one you do have leads to overtrading, as does letting winners turn into losers. People usually over-trade as they try to make back money they unexpectedly lost on a previous trade. Even if you are following your trading plan to a T you are going to endure losing trades or even strings of losing trades. In the face of such adversity you must realize that you cannot make irrational trades that deviate from your plan just to try and make back what you just lost. It won’t work, it never works. Your trading plan needs to be played out over a large series of trades for you to see its profitability. If you deviate from this plan by over trading than you are nullifying your edge in the market and might as well go hit the slots in Vegas. Nial Fuller is an expert on price action forex trading strategies, you can visit his website at Learn To Trade The Market
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