Forex trading is one of the most exciting professions to strive for success in; however it can become very solitary and lonely as it is generally done alone. Traders can benefit greatly from joining an online trading community to discuss their thoughts and ideas on the market. Forex forums can be a great place to meet other forex traders and exchange tips and insights on each other’s methods. Joining a forex forum can also help you learn new methods that might fit your personality better as
well as allow you to learn from other people’s mistakes, which will ultimately save you time and money.
Networking with other forex traders is a great way to meet people that share a similar passion and desire for financial freedom. The best way to learn any new skill or trade is from other people that have been in your shoes and already made all the beginning mistakes. Often times experienced mentors that are full-time traders are active members of a forex forum and will be very willing to share advice and help out novice traders. Learning from a mentor who is actually a professional trader their self is probably the best way to learn how to trade forex.
Forex forums are very easy to find on the internet and there are a wide variety available. The best ones will be clear and concise and be centered around a logical theme; price action, psychology, money management, fundamental analysis, technical analysis, etc. Posting up your own trades in real time will help you adhere to your trading plan better because you will want to make sure you only take the best trades worth posting for everyone to see, it gives you a sense of accountability. It is invaluable to get other traders’ critiques of your trading method as well as your entry, exits, and stop loss levels. Often times by getting a second opinion you will notice something that you over looked before.
It is comforting to know that you are not alone as a forex trader. There are many struggles and difficult lessons to learn along the way, so to collaborate with other traders going through a similar situation can bring you much relief and hope. Forex forums give you a place to ask questions and pose suggestions for other traders. The exchange of ideas is what has fueled human civilization and ingenuity in every field; it is no different in the world of forex trading.
Becoming an active member in a quality forex forum should not be over-looked as an important tool in your trading tool box. The ability to learn and grow from other traders is an invaluable asset to your forex education. Learning to trade the market does not need to be a solitary and lonely experience. There are many aspiring traders out there that are more than willing to share ideas and help those who are less experienced. Join a popular forex forum and you will become a more profitable trader in the end.
Sunday, April 18, 2010
5 Stages of a Trade
5 Stages of a Trade
In order to comprehend the specifics of trading each separate trade may be divided into 5 stages. In other words, you should instinctively divide each trade into 5 different phases requiring different attitude. Three of them are intellectual in nature and two of them are intuitive. Let us take a closer look at these stages:
Stage 1 – Searching for opportunities
This phase may be enjoyable for the first
hour, then it becomes boring, but anyway attention is needed. Stage 1 is deliberate studying the trading charts in accordance with the trading strategy you have chosen. This process is intellectual in nature. However, be sure you are not under control of your emotions which may bring taking of false decisions. You should define your process of seeking opportunities and stick to it. Do not get upset about every wasted opportunity.
Stage 2 – opening position
This phase is an intuitive one. Since you have received an appropriate trading signal, you should immediately place the corresponding order. When the situation is identified and the signal is received and interpreted, no matter how you received such a signal, you should immediately open a position. Hesitation here may only lead to failure. Those traders who lose do that because they do not trust the system they have chosen.
Stage 3 – position management
So, we are in. For most traders this stage is the most difficult one because their money is at stake and it is high time to start panic. The main difference in mindset of losing and winning traders is that when the price goes into undesired direction the first group is expecting the price to reverse and the second group when making losses is afraid of losing more. The same difference comes when speaking about taking profit. Professional traders do not fear market to take the profit, they suppose that their profit will extend. Here you should overcome your emotions. Ignore fear, hesitation, greed and hope. Such emotions always end up with a failure.
Time is required to develop confidence in trading rules. Your trading rules are your weapons. Here your personal attitude to the facts may become an obstacle. This stage is treated as the most important one as here emotions rise to their peak and some traders get confused.
Stage 4 – closing position
This phase is definitely intuitive. While closing position, the trader should be relaxed eliminating thinking of trade, profit, losses, commission etc. The only thing you need to do is just exit, close the position. Click to close as soon as you get an appropriate signal.
Stage 5 – analysis
You should keep a diary of you trades as it will provide you with an opportunity to compare your trades and find reasonable explanation for excessive profit or deep losses. Your opinion towards trading should be based on experience with numerous trades as analysis of transactions may reveal certain trading regularities. Thus, analyzing your trading experience you may discover the fact that a certain trading strategy proves to be profitable once out of 4 times, but when its works, the profit covers all the previous losses. Clear analysis is aimed at eliminating further mistakes in trading.
In order to comprehend the specifics of trading each separate trade may be divided into 5 stages. In other words, you should instinctively divide each trade into 5 different phases requiring different attitude. Three of them are intellectual in nature and two of them are intuitive. Let us take a closer look at these stages:
Stage 1 – Searching for opportunities
This phase may be enjoyable for the first
hour, then it becomes boring, but anyway attention is needed. Stage 1 is deliberate studying the trading charts in accordance with the trading strategy you have chosen. This process is intellectual in nature. However, be sure you are not under control of your emotions which may bring taking of false decisions. You should define your process of seeking opportunities and stick to it. Do not get upset about every wasted opportunity.
Stage 2 – opening position
This phase is an intuitive one. Since you have received an appropriate trading signal, you should immediately place the corresponding order. When the situation is identified and the signal is received and interpreted, no matter how you received such a signal, you should immediately open a position. Hesitation here may only lead to failure. Those traders who lose do that because they do not trust the system they have chosen.
Stage 3 – position management
So, we are in. For most traders this stage is the most difficult one because their money is at stake and it is high time to start panic. The main difference in mindset of losing and winning traders is that when the price goes into undesired direction the first group is expecting the price to reverse and the second group when making losses is afraid of losing more. The same difference comes when speaking about taking profit. Professional traders do not fear market to take the profit, they suppose that their profit will extend. Here you should overcome your emotions. Ignore fear, hesitation, greed and hope. Such emotions always end up with a failure.
Time is required to develop confidence in trading rules. Your trading rules are your weapons. Here your personal attitude to the facts may become an obstacle. This stage is treated as the most important one as here emotions rise to their peak and some traders get confused.
Stage 4 – closing position
This phase is definitely intuitive. While closing position, the trader should be relaxed eliminating thinking of trade, profit, losses, commission etc. The only thing you need to do is just exit, close the position. Click to close as soon as you get an appropriate signal.
Stage 5 – analysis
You should keep a diary of you trades as it will provide you with an opportunity to compare your trades and find reasonable explanation for excessive profit or deep losses. Your opinion towards trading should be based on experience with numerous trades as analysis of transactions may reveal certain trading regularities. Thus, analyzing your trading experience you may discover the fact that a certain trading strategy proves to be profitable once out of 4 times, but when its works, the profit covers all the previous losses. Clear analysis is aimed at eliminating further mistakes in trading.
WHAT IS THE FOREX ?
If you’ve watched any infomercials lately, you may have heard of an exciting “new” market called the forex, but the truth is, it is not a “new” market at all. The “Off Exchange Foreign Currency Market”, or forex, was initially established in 1973 as a way of tracking exchange rates between world currencies.
Although it began in 1973, it was not made available to “retail investors” until 1997 when the introduction of the
internet made it more accessible to individual traders. Before 1997, participation in this market was limited to large corporations or institutions because of trading account minimums ($500,000 to $1,000,000 USD) and the high cost of data feeds from the centralized banks.
But because of the increasing demand for a system that would give the individual trader access to this potentially lucrative market, forex brokers (aka Futures Commission Merchants, FCMs) were created to act as an intermediary between liquidity providers and “retail investors”, people just like you and me, who wanted to be able to trade on their own with smaller amounts of money.
The forex is the world’s largest financial market with more than $2 TRILLION dollars traded daily. To put that in perspective, more money is exchanged in the forex in just one day than exchanged on the New York Stock Exchange (NYSE) in ninety days! For you, that means almost unlimited opportunity.
Why the forex? According to Investopedia, a Forbes Digital Company, “…currencies benefit from some of the same things that may hurt stock indexes, bonds or commodities and can be a great way to diversify a portfolio.” So when other markets seem very uncertain (sound familiar?), diversification into the forex might be just what your portfolio needs.
Now, for some basics…
The forex is a market that is based on fluctuations in the exchange rates between pairs of currencies. For example, a rate of 1.2147 for the USD/CHF pair represents the rate of exchange between the US Dollar (USD) and the Swiss Franc (CHF). It means that 1 US Dollar is worth 1.2147 Swiss Francs. This rate is constantly changing and that creates the market. The exciting thing about the forex is that it is possible to make money as the rate goes up and as the rate goes down.
A trade is the simultaneous buying and selling of currencies. Now that may seem a little strange to you if you are familiar with other financial markets, so we won’t go into detail here, but suffice it to say that you would enter a “buy” trade if you anticipate the rate going up and you would enter a “sell” trade if you anticipate the rate going down.
Is the rate going up or down??
The truth is, nobody really knows! Some analysts will predict the rate going up while others will predict the rate going down and many sophisticated tools have been designed to assist traders in answering that very important question. The fact remains however, that it is mostly a guessing game. The key is to guess correctly more often than not so you can realize an overall increase in your account. But how?
How can you participate in the forex?
1. Trading courses: There are several companies that will teach you their methods of “guessing” the direction of the market. If this is how you choose to participate, you will likely spend several thousand dollars, and hundreds of hours, trying to learn these methods, but the sad reality is that more than 90% of people who try to “learn” to trade will FAIL. They will either give up because it is much too complicated or they will lose all of the money in their trading account. Many people who think that they will be one of the successful minority are disappointed when they find out they are not.
2. Signal Services: These services are designed so that you won’t have to do any of the trading analysis. This can be a great way to participate IF a) you are near your computer when you get the signal, and b) you don’t mind staying up all night waiting for a signal (since that is when a majority of the movements take place in the market, at least for those of us in the United States) and finally, IF the company/person providing the signal is consistent and reliable.
3. Managed Accounts: Some companies will manage your money for you and this can be a good option for some people, but be prepared to pay some fees in conjunction with this type of service:
a. Management fees: 2-3% of your account balance. As your account gets larger, so do the management fees. You pay the management fee regardless of whether the balance increases or decreases.
b. Performance fees: 15-25% of the growth in your account. If the management of the account results in a loss, however, the management company does not pay you a “non-performance” fee!
4. Expert Advisors: An Expert Advisor (EA) is a computer program that runs on a specific trading platform. The EA will place buy or sell trades based on specific parameters built into the program by the creator of the EA. There are some good reasons to use an EA as a tool for participating in the forex:
a. An EA will run 24 hours a day while the market is open, so you don’t have to watch the market or stay awake when you want to be sleeping.
b. An EA simultaneously evaluates the price data and places consistent trades based on whether or not specific parameters are met.
c. Because it is a computer program, it is not subject to the “psychology” of trading that can be the ruin of many novice, as well as experienced, traders.
While EAs can be a great tool for participating in the forex, there are also some challenges that come along with using an Expert Advisor:
a. With hundreds of EAs available for purchase, how do you choose one that will be consistent and reliable for the long term?
b. If you don’t know how to download and install a trading platform, you’ll need to learn and then modify it to run an expert advisor properly.
c. Many EAs come with installation instructions that consist of little more than a one to two page PDF file and little, to no, support.
d. Because it is a computer program, it will only run when, 1) your computer is connected to the internet, and 2) you have the trading platform running on your computer. This requires that you leave your computer running 24 hours a day while the market is open. If your power goes out or your internet connection goes down or your computer does an automatic update, it will shut down your trading platform which results in missed trades and lost profits.
At Profits to Passion, we realize that time is one thing you cannot replace, so we have designed a service that will enable you to participate in the market without the headaches and the steep learning curve. Our goal is to make your experience in this exciting market simple, consistent and profitable.
Find out more about what Profits to Passion can do for you by clicking HERE…
Author's Bio
Carole Noxon, a physicist who decided to become a stay-at-home mom, began looking for opportunities to allow her to keep her mind sharp while also working from home. What she discovered, was the Off-Exchange Foreign Currency Market, better known as the forex.
Excited by the possibilities of this new market which was just opening up to consumer traders after being exclusively in the domain of major banks, she sought out the education from one of just a few places offering this in the early days. In the following decade, she dedicated herself to becoming an expert in the field.
Although it began in 1973, it was not made available to “retail investors” until 1997 when the introduction of the
internet made it more accessible to individual traders. Before 1997, participation in this market was limited to large corporations or institutions because of trading account minimums ($500,000 to $1,000,000 USD) and the high cost of data feeds from the centralized banks.
But because of the increasing demand for a system that would give the individual trader access to this potentially lucrative market, forex brokers (aka Futures Commission Merchants, FCMs) were created to act as an intermediary between liquidity providers and “retail investors”, people just like you and me, who wanted to be able to trade on their own with smaller amounts of money.
The forex is the world’s largest financial market with more than $2 TRILLION dollars traded daily. To put that in perspective, more money is exchanged in the forex in just one day than exchanged on the New York Stock Exchange (NYSE) in ninety days! For you, that means almost unlimited opportunity.
Why the forex? According to Investopedia, a Forbes Digital Company, “…currencies benefit from some of the same things that may hurt stock indexes, bonds or commodities and can be a great way to diversify a portfolio.” So when other markets seem very uncertain (sound familiar?), diversification into the forex might be just what your portfolio needs.
Now, for some basics…
The forex is a market that is based on fluctuations in the exchange rates between pairs of currencies. For example, a rate of 1.2147 for the USD/CHF pair represents the rate of exchange between the US Dollar (USD) and the Swiss Franc (CHF). It means that 1 US Dollar is worth 1.2147 Swiss Francs. This rate is constantly changing and that creates the market. The exciting thing about the forex is that it is possible to make money as the rate goes up and as the rate goes down.
A trade is the simultaneous buying and selling of currencies. Now that may seem a little strange to you if you are familiar with other financial markets, so we won’t go into detail here, but suffice it to say that you would enter a “buy” trade if you anticipate the rate going up and you would enter a “sell” trade if you anticipate the rate going down.
Is the rate going up or down??
The truth is, nobody really knows! Some analysts will predict the rate going up while others will predict the rate going down and many sophisticated tools have been designed to assist traders in answering that very important question. The fact remains however, that it is mostly a guessing game. The key is to guess correctly more often than not so you can realize an overall increase in your account. But how?
How can you participate in the forex?
1. Trading courses: There are several companies that will teach you their methods of “guessing” the direction of the market. If this is how you choose to participate, you will likely spend several thousand dollars, and hundreds of hours, trying to learn these methods, but the sad reality is that more than 90% of people who try to “learn” to trade will FAIL. They will either give up because it is much too complicated or they will lose all of the money in their trading account. Many people who think that they will be one of the successful minority are disappointed when they find out they are not.
2. Signal Services: These services are designed so that you won’t have to do any of the trading analysis. This can be a great way to participate IF a) you are near your computer when you get the signal, and b) you don’t mind staying up all night waiting for a signal (since that is when a majority of the movements take place in the market, at least for those of us in the United States) and finally, IF the company/person providing the signal is consistent and reliable.
3. Managed Accounts: Some companies will manage your money for you and this can be a good option for some people, but be prepared to pay some fees in conjunction with this type of service:
a. Management fees: 2-3% of your account balance. As your account gets larger, so do the management fees. You pay the management fee regardless of whether the balance increases or decreases.
b. Performance fees: 15-25% of the growth in your account. If the management of the account results in a loss, however, the management company does not pay you a “non-performance” fee!
4. Expert Advisors: An Expert Advisor (EA) is a computer program that runs on a specific trading platform. The EA will place buy or sell trades based on specific parameters built into the program by the creator of the EA. There are some good reasons to use an EA as a tool for participating in the forex:
a. An EA will run 24 hours a day while the market is open, so you don’t have to watch the market or stay awake when you want to be sleeping.
b. An EA simultaneously evaluates the price data and places consistent trades based on whether or not specific parameters are met.
c. Because it is a computer program, it is not subject to the “psychology” of trading that can be the ruin of many novice, as well as experienced, traders.
While EAs can be a great tool for participating in the forex, there are also some challenges that come along with using an Expert Advisor:
a. With hundreds of EAs available for purchase, how do you choose one that will be consistent and reliable for the long term?
b. If you don’t know how to download and install a trading platform, you’ll need to learn and then modify it to run an expert advisor properly.
c. Many EAs come with installation instructions that consist of little more than a one to two page PDF file and little, to no, support.
d. Because it is a computer program, it will only run when, 1) your computer is connected to the internet, and 2) you have the trading platform running on your computer. This requires that you leave your computer running 24 hours a day while the market is open. If your power goes out or your internet connection goes down or your computer does an automatic update, it will shut down your trading platform which results in missed trades and lost profits.
At Profits to Passion, we realize that time is one thing you cannot replace, so we have designed a service that will enable you to participate in the market without the headaches and the steep learning curve. Our goal is to make your experience in this exciting market simple, consistent and profitable.
Find out more about what Profits to Passion can do for you by clicking HERE…
Author's Bio
Carole Noxon, a physicist who decided to become a stay-at-home mom, began looking for opportunities to allow her to keep her mind sharp while also working from home. What she discovered, was the Off-Exchange Foreign Currency Market, better known as the forex.
Excited by the possibilities of this new market which was just opening up to consumer traders after being exclusively in the domain of major banks, she sought out the education from one of just a few places offering this in the early days. In the following decade, she dedicated herself to becoming an expert in the field.
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