Why Investors Fail [ Must Read ]

According to research more than 92% of traders close their accounts within 9 months and never come back trading again. This essentially means one thing – trading is not a get rich quick scheme. Yet, this should not be misinterpreted to mean that it is not a profession for newbies. Even the best traders lose money in their first months in the investment industry, and they made it big because they strived to overcome the challenges and went on to learn from their mistakes. Why then do so many investors fail? Here are a number of reasons:

1.    They trade for a quick buck. While traders can easily make money in the forex market, it can easily disappear. Many traders earn quick money but very few make it big because they do not fully understand how the market works. On the other hand, there are many others who end up broke because they failed to realize that forex trading is all about an properly timed trading strategy.

2.    They don’t have a plan. In any financial market, a trading plan (or strategy) is essential. Before an investor decides to trade real money, they must set specific amounts on capital they want to invest, and how much they are prepared to lose. Unfortunately, so many new traders do not realize the importance of this or they simply couldn’t be bothered.

3.    They don’t use stop losses. Not all trades will go well, and in this case, a trader must know when they can call it quits. By setting up stop losses, traders can prevent additional risk to their account and can limit their losses to a few hundred dollars.

4.    They do not test for entry and exit points. Trading works a lot like firing a missile – you have to test it so you can minimize the casualty. Random buying and selling just wont work.

5.    They get emotional. Most traders who profit in an uptrend will tend to keep their bets on that same position hoping to get a few more dollars. Unfortunately, at a time when information can be transmitted so fast, prices can change in just a few minutes and will cause a $1,000 portfolio to drop in value without notice.

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Market Makers

The participants of Forex currency market are divided into two groups by their activity and influence on currency rates: market makers and market users.

Market makers are large banks and financial organizations which determine the current level of a currency rate, owing to a significant share of their operations in a total volume of the world market. Market makers exercise a constant control of different trading instruments, and they also conduct trades with them. Market makers are market members providing liquidity of particular instruments, making buy or sell orders. These are big international banks and financial institutions, which run daily currency operations of buying or selling trading instruments for more than billions of US dollars. Every market has its own market makers. Similarly, every Forex broker has its personal market makers, the quoting rates of which are exploited by it and offered to its clients further on. Among the greatest market makers such as Deutsche Bank, Mizuho Bank, Barclays Bank, PBS, Citi Bank, Chase Manhattan Bank, Union Bank of Switzerland can be named. In order to define whether the organization is a market maker it is important to consider not only the size of a bank, but also its share in market operations and its capability to influence the market by setting a price policy.

As mentioned before, for a particular market there can be own market maker. Worth pointing out that for the USD/CHF trading instrument the main market makers are Credit Suisse Bank and Union Bank of Switzerland. For trading instruments comprising the Asian currencies the major market maker is the Standard Chartered Bank. As to the rouble instruments, here the top market makers are the International Moscow Bank and the Onexim Bank. The Central Bank of Russia can also play this role being one of the most active participants in setting up the quote rates of currencies vs. the rouble, making different currency interventions, if the rouble rate exceeds the regulated currency rate limits.

Market makers determine the current currency exchange rate by conducting trades with each other as well as with smaller banks, which are also market participants. That is the market makers who introduce quote rates to small banks, organizations and individuals. Thus, another notion emerges characterizing these participants - market users.

Market users are financial organizations, broker companies, small banks and individuals, who use the quoting rate set by market makers for their operations. Market users are not aggressive market players, though a total volume of their operations in the market can be significant, but the share of each one is minor. The role of small market users consists in either acceptance or not of the rates provided by market makers. Consequently, market makers make price and market users take it.

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Trading Psychology - Control your emotions

Trading is less a work, than a psychology, on which your success or failure on Forex market depends on. If you decided to switch to systematical trading, it does not unload emotional pressure at taking a trading decision entirely.

Frequently, Forex traders incline to the opinion that only complete absence of emotions can help while trading. Though, fear, suspense, greed, hope, belief, regret and happiness accompany the trading process inevitably. Suppressing emotions at the moment of feelings overwhelming you means disregarding the sixth sense, intuition, and finally, insight.

It is known that emotions are also transmitting a flow of information to us. We are guided by this information, act under impressions from it. But this is given to us in order to control our emotions and to change one sentiment for another.

There are a number of ways to control emotions:

Firstly, it is possible to change your emotions by switching to another object of your concentration. As a rule, this method is very effective. The thing which draws our careful attention becomes real for us. You can consider suffering losses, or vice versa render an opportunity of gaining profit.

Secondly, having changed your convictions and believes you can alter your emotions. Every belief that we attain during our life time is a sort of a filter for us, influencing all the information perceived. All views accumulated during our life affect the interpretations which we are admitting into our consciousness.

And finally, the third way to change our emotions is by modifying physiology. A change of breathing, mimics, body position, the tone and tempo of our voice, all this has a direct influence on the emotive part of not only a Forex trader, but of any person.

Attention concentration

A concentration of attention is one of the most significant constituents of our emotional condition. Because the thing you are focused on in the process of Forex trading becomes not only an object of happening reality, but also a perception of factual reality. All actions influence your interpretation of events and consequently, affect your emotions. All this manipulates your behaviour, and decisions get emotional connotation. In this case it is needed to define priorities: what are you waiting for? Are you entertaining a possibility of losses? Or are you expecting gains only?

Those who see only losses are likely to hesitate for too long entering the market or can even skip a trade. But once having decided to enter the market, they are gaining profit quickly.

Trading is an attempt to balance the opposites. A trader should focus on profit and loss and try to balance them. A trader should concentrate on probability of his methods, and on information provided by the market, as it is the only accurate and reliable one.

Physiology

It is proved that our body manages our emotions, and emotions affect the thoughts. The easiest and the most correct way to change emotional condition is to change your physiology - tempo and depth of your breath, voice or even your pose.

Pay attention to your position, the way you sit, breathe, whether the muscles of your face, shoulders and of all body are tense. If you feel discomfort, you should only sit cosily.

Absolutely simple physiological manipulation can serve an effective instrument to control your feelings.

Control your emotions, and this will definitely make a more successful trader out of you!

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Forex Cross Currency Pairs

On Forex there are cross currency pairs, which do not include the US dollar, unlike major currency pairs.
The analysis of the US dollar movement is of crucial importance in trading major currency pairs. The analysis of the second currency quoted in a pair (EUR - the euro, JPY - the Japanese yen, CHF - the Swiss franc, GBP - the British pound) is not that essential. Trading major currency pairs is quite a profitable strategy. Still, dealing with such pairs is worth trying, once you have gained some experience on Forex.
Cross currency pairs. The value of a currency in such pair is denominated in other currency units - not in USD. The rates of these pairs are called cross rates.
The most-traded pairs are those with euro, for instance, EUR/CHF, EUR/GBP, EUR/JPY. These pairs are distinctive due to their high liquidity. A currency pair can sometimes be more liquid than USD/CHF because of institutional players, willing to work with the Swiss franc.
The yen is an integral part of another cluster of cross currency pairs: CAD/JPY - the Canadian dollar and yen, NZD/JPY - the New Zealand dollar and yen, as well as GBP/JPY - the British pound and yen. This cross currency cluster is quite popular with investors and traders, as they can engage in carry trade with its pairs. Carry Trade is selling a certain currency at a relatively low interest rate (for example, the yen) and then buying a currency at a higher one. This scheme enables a trader to gain profit from the difference between two rates.

The highest interest rates are those of the following developed countries: Canada, New Zealand and Great Britain. The currencies of these countries are thus the most widely used in carry trade against the Japanese yen.
A trader dealing with major currency pairs can face a situation, when the US dollar is just as strong as the second currency quoted in pair. The situation is tricky as USD is rather unpredictable.
 If both the USA and Eurozone show persistent economic growth, it is unclear what decision to make - either to open or close a trade. Trading in EUR/JPY is optimal when the yen is under pressure of geopolitical factor, for example.
The most popular cross currency pairs are as follows:

EUR/CHF - Eurozone is Switzerland`s major trade partner. The Swiss franc has rather low interest rate, which makes this currency preferred for carry trade operations. The pair has been showing a positive trend since 2006.

EUR/JPY - A much-used cross currency pair owing to its interrelation with USD/JPY and EUR/USD. Traders often speculate on its movement, relying upon interest rates and differences between the growth rates of Japan and Eurozone.

NZD/JPY - This pair is in great demand among cross currency pairs at carry trade dealing, as it has the widest difference between the interest rates. The pair is good for long positions, particularly if general fundamental and technical indicators are favourable for its growth.

EUR/GBP - Eurozone is the second important trade partner for Great Britain. So, if a trader takes into account fundamental factors related to England and the British pound, he is sure to work with this particular pair since GBP/USD is most affected by USD movement in the market.

CAD/JPY - One can use the ability to foresee the upcoming oil prices trend trading with this cross currency pair. Canada is the second on the list of largest oil reserves in the world. This country is a net oil exporter, so that it gains profit from rising oil prices, whereas the major oil importer, Japan, suffers losses. Thus, opening long positions with this pair is the most profitable ahead of oil price spike.
Working with cross currency pairs, a trader can open carry trade deals. Difference between two countries is a good advantage in trade. Each cross currency pair has its characteristics, interest rates differences; it is dependent on certain political and economic events determining its trend.

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Money Management Techniques

When trading on Forex, it is necessary to know how to properly place your capital; how to calculate the amount of funds needed to make a trade in order to obtain sufficient earnings; and if it comes to loss, how not to loose your entire deposit.

To achieve these goals, there are special equity management methods (money management techniques):

No equity management methods. Most traders, when opening a position, do not calculate the amount of funds that are being used, estimate potential earnings or potential loss. This is considered to be a technique too, but if the capital is not very large to begin with, several unsuccessful trades will make it completely disappear.

Multiple contracts. Opening several positions on the foreign exchange market on different instruments, for instance, EURUSD and EURGBP, a trader can earn profit if the price moves in the right direction. Earnings can be considerable, losses too though.

Fixed amount. Depending on the amount of funds available, a trader decides how much can be put at risk when opening one or another position. The trader then makes deals not exceeding this amount.

Fixed equity interest rate. This technique is similar to the previous one but there is one small difference: the trader determines the equity interest rate, but not the equity amount.

Establishing correlation between profits and losses. It is necessary to track statistics on all operations (the amount of losses, profits and the correspondence between them). When you see the correlation between them, you can apply what you have learned to your trading.

Equity curve trading. Most people are acquainted with moving averages, which can act like signals for entering the market or leaving it. According to this method, moving averages (long- and short-term) are used to forecast trade results. If the short-term moving average of the equity curve is above the long one, a position can be opened and it will be profitable. If, however, the short-term moving average is below the long one, it is better to wait for a while.

Choosing a particular money management technique of trading on Forex can help you rationally use your money on the market and earn profit. Money management techniques are used for opening positions.

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Main Secret of Short-term Trading

The secret is the less you trade, the less you earn.

 Sad but true. Think of any investment that you have ever made. Were you able to finish a job in one day? And if you were so lucky, how many times did you do it again? Undoubtedly, very few. That’s because the universal rule of speculation is the same as for growth.

We need time to increase profits.

Successful Forex traders know that a one-minute market can move forward a little, in 5 minutes it will move a bit further, and in 60 minutes still more, and who knows how far it will go in one day or in one week. Losing traders feel like trading only within short periods of time, which automatically narrows their potential profit.

By definition they intentionally limit their profits and go along with unlimited losses. No wonder that so many come up with poor results in short-term trading. They have locked themselves into a hopeless situation, thinking that it is possible to make money during the day just by catching market ups and downs. And this theory seems to be rational, because when you trade within one day and don’t ever leave positions open for a night, you simply don’t rely on news events and major changes, and therefore narrow your risks. And this is incorrect for two reasons.

First of all, your risk is under your control. The only control you have in that business is the control over stop loss points – the point where positions close. Yes, there is a probability that next morning the market will open with a gap exceeding your stop (slip over your stop) even though it is a very rare case, but even then you can limit your losses, having stop loss points and willing to close loss-making trades. Losers stick to losses but not winners.  

As soon as you set positions with stop-loss points, you can lose a fixed amount of money. Without any reference to the time your position opens, since your stop-loss point limits your risk. Your risk is the same whether you buy at the all time high point of market or at the all time low point.

Refusing to set positions overnight limits the amount of time that brings investment growth. Sometimes, although the market may open against us, we are still in the right direction, as the market is to open in favor of us in most cases.

And what is more important, when you finish trading at the end of the day, or worse at some made-up moment, let’s say, 5 – or 10-minute intervals, you radically narrow your profit potential. Remember, a big difference between winners and losers was mentioned, and that losers stuck to their losses? Well another distinction is that winners hold their winning positions, while losers go off the market way too soon. As for losers, they don’t wait for winning positions: they are so happy to make any profit that they leave the market too soon (mostly during the day).

You’ll never make big money, until you learn how to stick to winning positions. And the longer you stick to them, the bigger your potential profit can be. When farmers sow fields, they don’t dig the plants up every few minutes to see how they are growing. They let those plants grow and sprout. Traders can learn from this natural process. Trader success is not any different from successful farming. To cultivate successful trading, traders need time as well.

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Risk Management Methods

When trading, a Forex investor can multiply capital, and the risks to loose not only potential earnings, but the invested money as well. The deviation from an average expected yield determines the investor’s risk in the financial market.

This kind of deviation can bring high profit as well as great loss.

Financial risk management does not guarantee a successful trading, but assembles important parts of it. Every currency operation is a risk. That is why usage of general management methods decreases potential losses.

1. Stop order setting;
2. Capital share investment;
3. Trend trading;
4. Emotion control.

Risk management methods are used after positions are opened. The main risk management method is an order setting that restrains losses.

Stop loss (literally means to stop losses) – is a point where trader goes off the market to avoid a disastrous situation. You have to set a stop loss when opening positions for preventing losses.
There are several types of stop signals:   

Initial stop signal – determines the deposit amount or interest rate that the trader is ready to lose. When the price moves toward this position and reaches it, the trader’s fixed level position closes, not exceeding the loss preset by the trader.

Trailing stop signal – is when price moves towards a position and stop signal is set right after it, according to trader preferences. In case the direction changes, the price reaches that signal and the trader goes off the market, potentially having earned profit (depending on when the price started moving).

Profit raising – is when a net profit has been earned and position is closed.
Stop signals at times – is when the market is not able to provide the necessary yield rate in the course of time and the position closes.

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Difference between Winners and Losers

A trader going deeply into Forex should realize that currency trades imply a certain risk: you can open profitable positions one by one, but any wrong step may bring you a total loss in the blink of an eye.
Your success does not entirely depend on your trading experience and professionalism. Every novice and professional should understand that the risk is always there, so it is better to keep an eye out. In order to trade on Forex and gain profit, you have to follow a constructive approach, be attentive and analyze every factor which may affect trends.
Below we are going to deal with 9 factors underpinning a successful trading strategy:
1. Traders who decided to work in a short-term period are initially in a risk group, which brings them closer to failure. The main reason for failure of short-term traders is a lack of training and a strict trading plan to follow, not the time limits they set. Lack of experience and knowledge does not allow even a tiny mistake, which can result in a loss of deposit. At the same time, such traders often do not have a lot of money on their accounts. More successful traders work in medium- and long-term periods. Statistically, medium- and long-term trading is more successful. The same can be referred to the funds invested, a capability to stay on the market depends much on the starting capital.
2. Losing traders often spend a lot of time on analysis of where the market will be tomorrow, while more successful ones decide how to behave in the current situation and apply their strategy in accordance with their conclusions. If a trader can foresee the reaction of crowd, he/she will definitely achieve success. The probability of deriving profit would be much higher if a trader can respond to irrational buying and selling of the crowd by a rational action plan. Therefore, it is much more difficult to be a successful analyst than such trader. An analyst has to perform more complicated work, as they have to predict the market movement and recommend how to earn a maximum profit while a successful trader just follows the market.
3. Successful traders pay attention to losing trades and to correlation of profit and loss, while losers only concentrate on their successful trades. It is much more important to track your risks than your profit or loss. Professional traders always estimate how much they can earn and how much they can lose.
4. As a rule, those traders who cannot control their emotions are never successful. Professional and experienced traders analyze the market putting their emotions aside. In case a trader opens and closes positions based on emotions only, this approach cannot be considerate or logical. However, complete ignorance to one's emotions is wrong too. Sometimes excessive stress may lead to mental disease and loss of all trading skills. The best way is to track each emotion and consider if the reasons for one or another decision still remain.
5. All unexperienced traders are concerned about their rightness, while professionals admit their emotions being able to master temper. Successful traders only acknowledge those factors that may help or prevent from obtaining profit. It is very important to stay aware of processes on the market; however, it is necessary to separate private life from trading. Considerable exertion may result in mental disorders and physical exhaustion. Professional traders promptly react to market processes, as it is the only way to earn money for them.
6. After losing money while trading a loser starts buying new books or trading systems and following their concepts. In the meantime, a professional analyses the incident and edits his methods with a regard to the analysis results. More successful trader does not switch to another trading system at once; he/she rather does it after realizing that the old one does not work properly. Successful traders always stick to their developed system using only a few trading strategies usually.
7. Traders without a considerable trading experience often try to repeat trading techniques of famous traders. At the same time, professionals consider all possible strategies, including ones of famous traders, but use them only in case they suit their trading style. Trader's individuality, a knowledge about the market and own trading system are much more relevant than the achievements of famous market players.
8. Often inexperienced traders do not notice numerous factors that could help them to derive profit. Profit of each trader determines the amount of funds in circulation, that is clearly realized by all experienced traders. The amount of money flowing into Forex must exceed the one flowing out, and this is what every trader has to take into account.
9. As a rule, all beginning traders losing any opportunity to get profit really take it too hard, while more successful traders take it easy. Trading is a pleasure for them; however, they take it absolutely seriously. Psychiatrists argue that an excessive seriousness makes person more vulnerable to diseases.
Both successful and losing traders take Forex trading as some sort of a game.
If we compare trading with a game, for example, bowling, newbies realized that strikes thrown by experienced professionals without any visible effort are results of much time spent outside the "big game". As in sports, trading implies numerous internal and external factors. You should be extremely serious about each of your trades. The difference between a professional and a beginner is that the former follows an accurate trading strategy and the latter takes trading as a game.

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Buy Gold, Eur/Usd and GBP/Usd

Xau: buy at 1679 tp 1686, 1693.50
stop: 1672.50
Eur/usd: buy at 1.2826, tp 1.2865, 1.2900
stop: 1.2785
GBP/USD: buy AT 1.6026, TP 1.6070,1.6108
STOP: 1.5988

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Buy Silver

Buy Silver @ 30.85
S.l - 30.00
T.p -  31.20 ,31.50

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Tips For beginners

Tip 1. Develop a trading strategy or adopt an existing one and make sure it works on historical FOREX data. Then make sure it works on a demo account, and finally make sure it works on your life account with mini-lots. Then you can trade using regular FOREX lot sizes. Trading without a proven strategy cannot be profitable over a long period of time.

Tip 2. When you trade, always consider the current trend. Depending on the timeframe you trade in, it can be daily, monthly or global trend. It can also be flat, especially during the summer months. If the market is in a trend, open positions in the direction of the trend only. If it is flat, you can trade in both directions within the channel.

Tip 3. Before opening your position, take into consideration the larger timeframe. Check all the important levels, previous extremums and the direction the market is moving towards on the global scale. Very often volatility is extremely high at important levels, where certainty is low. If you trade intraday, check the daily timeframe to make sure you do not trade against the monthly trend.

Tip 4. Use a smaller timeframe to find the best entry and exit points. If you trade on H1 charts, use M15 charts to find the best entry and exit points. If you trade on daily charts, use H1 charts to find best entry and exit points.

Tip 5. Learn how to manage your risks. Your deposit is your workhorse, and if you lose it, you are out of business. This is the reason why you should not risk more than 5% of your deposit per trade under any circumstances. In my FOREX tips, I recommend to risk even less. 2-3% is the safest way to go.

Tip 6. Learn to control your emotions. Watch for fear and greed and follow your trading system no matter what. When you start opening and closing positions based on what you feel and not based on what your system tells you, you start to lose your money. The more money you lose, the more chaotic your trading becomes and the more money you lose as a result. The same happens if you win too many trades in a single row. You start feeling yourself like a “God”, lose your mind, and start ignoring your system, which usually leads to big losses. Always stay calm no matter whether you win or lose. It’s ok to lose a single trade or a number of trades in a row. After losing trades you usually get winning trades, which compensate your losses, and the opposite is also true.

Tip 7. Your trading strategy must complement your lifestyle and personality. If you can trade only a few hours a day, choose a strategy that is based on delayed orders, and use larger timeframes such as daily and monthly timeframes. If you cannot wait for big market movements, use a smaller timeframe, such as M5 or M15. Perhaps, a scalping strategy will best suit you. If you need hours or days to make a decision, use larger timeframes and trade long-term.

Tip 8. If you are in doubt, or when the markets are uncertain, refrain from trading. Staying away and not trading is also a position, often called “neutral position”. By not trading you avoid losses, and prepare to take a big win when uncertainty is over and a new trend emerges.

Tip 9. Limit your losses by using protective stop-loss orders or hedging. If you open a position in a wrong direction, stop-loss or hedging order will kick in saving your deposit. You will lose this single trade, and your deposit will shrink a bit which is fine. But if you don’t use preventive stop-losses, your stop-loss in your entire deposit. Are you sure you want to risk your workhorse for the sake of a single transaction?

Tip 10. Before accepting a trade signal, check if Profit/Loss ratio of the trade is at least 2:1. When you forecast a price movement, you forecast profit and loss targets. Divide projected profit in pips by projected loss in pips, and you will get this ratio. Do not enter the market if you come up with a number less than 2. History has proven the fact that traders cannot forecast price movements with greater probability than 60%. This is the reason why choosing P/L ration of at least 2:1 is the only way to stay profitable over the long term.

Tip 11. Never add positions to a losing trade. If you think that market is about to turn around and desperately want to add positions to your losing trade at a “better price”, it means you are trading on emotions. Market will not turn around and you will lose more money than you have originally planned. Some people even remove stop-loss orders if market starts to move against an open position to “prevent” losses, and increase this position at a “better price” at the same time. Guess what happens to these people in a little while? In my FOREX tips I recommend you to add positions to a trade ONLY if it is a winning trade, and ONLY if you know that the market still has some momentum and will probably reach your target.

Tip 12. Cut your losses and allow your profits to grow. Close losing positions without a hesitation and let winning positions to accumulate more profit. Do not be afraid that the market will turn around and you will lose those 20 pips you’ve made for a couple of hours. Set stop-loss order to zero, and allow the profit to grow. Once you get a good profit, you can protect it by moving your stop-loss order higher to let’s say +80 pips to allow more profits to be generated.

Tip 13. Know active market hours for the currency pairs you are trading. The greatest movements happen with GBPUSD and EURUSD when London and New York sessions overlap (between 8:00am and 11:00am EST). The same happens with AUDJPY pair when Sydney and Tokyo sessions overlap (between 7:00pm and 12:00am EST). It’s easier and safer to initiate a trade when market takes of, and quickly moves towards your target, than to sit for hours near terminal waiting for the price to move some 20 pips.

Tip 14. Trading day of week matters. You do not want to be on the market when the trading volume is extremely low, or when the majority of traders close their positions. This is the reason why you should avoid Mondays and Fridays. Mondays tend to be flatty and shaky, and Fridays way too volatile because on Fridays many traders close their weekly positions.

Tip 15. Avoid highly leveraged FOREX accounts unless you know what you are doing. The more your account is leveraged, the greater your risk is, and the more careful you should be as a result. For a novice trader any account with leverage more than 100:1 can be disastrous. Leverage stands for multiplication. 100:1 means that for every dollar you have on your account, you can trade $100 dollars. But if you open a position and market moves against you, you loose your money 100x times faster than without a leverage.

Tip 16. Evaluate your trading skills by the end of a month or year. Do not judge about your trading success or failure on a single trade. You need to prove yourself over a long period of time. Do not think about the end result every time you close your positions. Make a number of trades, then analyze the end result. A winning strategy may give you 10 loosing trades in a row with -15 pips loss, and one successful trade with +300 pips profit per month, and over the period of a year this strategy can yield +2000 pips net profit. But if you judge it within the bad days, you may give up too early.

Tip 17. No one is born a successful trader. People become successful traders by learning how to stay successful over a long period of time. You may need a couple of burned deposits until you get it right. This is the reason why your first live account should be a FOREX mini account not greater than $1,000 USD. Once your prove you can stay profitable for a long period of time, you can deposit more and start using regular lot sizes.

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Buy Oil

Crude Oil: buy at 86.65, tp 87.30,88.00
stop:86.00

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Sell Aud/Jpy

Sell Aud/Jpy @83.40
T.p 83.00 ,82.77
S.l - 84.50

Trade on ur risk

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Sell Gbp/Jpy

Sell Gbp/Jpy @ 129.23
T.p - 128.65
S.l 130.15

trade on ur risk

http://onlyforextips.blogspot.in

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Sell Usd/Cad

Sell Usd/Cad @1.0004
T.p - 0.9972
S.l - 1.0100

Trade on ur risk

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Forex Trading Tips - 20 things you need to know to be a successful trader

Forex has caused large losses to many inexperienced and undisciplined traders over the years. You need not be one of the losers. Here are twenty forex trading tips that you can use to avoid disasters and maximize your potential in the currency exchange market.

1. Know yourself. Define your risk tolerance carefully. Understand your needs.

To profit in trading, you must make recognize the markets. To recognize the markets, you must first know and recognize yourself. The first step of gaining self-awareness is ensuring that your risk tolerance and capital allocation to forex and trading are not excessive or lacking. This means that you must carefully study and analyze your own financial goals in engaging forex trading.

2. Plan your goals. Stick to your plan.

Once you know what you want from trading, you must systematically define a timeframe and a working plan for your trading career. What constitutes failure, what would be defined as success? What is the timeframe for the trial and error process that will inevitably be an important part of your learning? How much time can you devote to trading? Do you aim at financial independence, or merely aim to generate extra income? These and similar questions must be answered before you can gain the clear vision necessary for a persistent and patient approach to trading. Also, having clear goals will make it easier to abandon the endeavor entirely in case that the risks/return analysis precludes a profitable outcome.

3. Choose your broker carefully.

While this point is often neglected by beginners, it is impossible to overemphasize the importance of the choice of broker. That a fake or unreliable broker invalidates all the gains acquired through hard work and study is obvious. But it is equally important that your expertise level, and trading goals match the details of the offer made by the broker. What kind of client profile does the forex broker aim at reaching? Does the trading software suit your expectations? How efficient is customer service? All these must be carefully scrutinized before even beginning to consider the intricacies of trading itself.Please refer to our forex broker reviews to find a reliable broker that suites your trading style.

4. Pick your account type, and leverage ratio in accordance with your needs and expectations.

In continuation of the above item, it is necessary that we choose the account package that is most suited to our expectations and knowledge level. The various types of accounts offered by brokers can be confusing at first, but the general rule is that lower leverage is better. If you have a good understanding of leverage and trading in general, you can be satisfied with a standard account. If you’re a complete beginner, it is a must that you undergo a period of study and practice by the use of a mini account. In general, the lower your risk, the higher your chances, so make your choices in the most conservative way possible, especially at the beginning of your career.

5. Begin with small sums, increase the size of your account through organic gains, not by greater deposits.

One of the best tips for trading forex is to begin with small sums, and low leverage, while adding up to your account as it generates profits. There is no justification to the idea that a larger account will allow greater profits. If you can increase the size of your account through your trading choices, perfect. If not, there’s no point in keeping pumping money to an account that is burning cash like an furnace burns paper.

6. Focus on a single currency pair, expand as you better your skills.

The world of currency trading is deep and complicated, due to the chaotic nature of the markets, and the diverse characters and purposes of market participants. It is hard to master all the different kinds of financial activity that goes on in this world, so it is a great idea to restrict our trading activity to a currency pair which we understand, and with which we are familiar. Beginning with the trading of the currency of your nation can be a great idea. If that’s not your choice, sticking to the most liquid, and widely traded pairs can also be an excellent practice for both the beginner and the advanced traders.

7. Do what you understand.

Simple as it is, failure to abide by this principle has been the doom of countless traders. In general, if you’re unsure that you know what you’re doing, and that you can defend your opinion with strength and vigor against critics that you value and trust, do not trade. Do not trade on the basis of hearsay or rumors. And do not act unless you’re confident that you understand both the positive consequences, and the adverse results that may result from opening a position.

8. Do not add to a losing position.

While this is just common sense, ignorance of the principle, or carelessness in its employment has caused disasters to many traders in the course of history. Nobody knows where a currency pair will be heading during the next few hours, days, or even weeks. There are lots of educated guesses, but no knowledge of where the price will be a short while later. Thus, the only certain value about trading is now. Nothing much can be said about the future. Consequently, there can be no point in adding to a losing position, unless you love gambling. A position in the red can be allowed to survive on its own in accordance with the initial plan, but adding to it can never be an advisable practice.

9. Restrain your emotions.

Greed, excitement, euphoria, panic or fear should have no place in traders’ calculations. Yet traders are human beings, so it is obvious that we have to find a way of living with these emotions, while at the same time controlling them and minimizing their effect on our lives. That is why traders are always advised to begin with small amounts. By reducing our risk, we can be calm enough to realize our long term goals, reducing the impact of emotions on our trading choices. A logical approach, and less emotional intensity are the best forex trading tips necessary to a successful career.

10. Take notes. Study your success and failure.

An analytical approach to trading does not begin at the fundamental and technical analysis of price trends, or the formulation of trading strategies. It begins at the first step taken into the career, with the first dollar placed in an open position, and the first mistakes in calculation and trading methods. The successful trader will keep a diary, a journal of his trading activity where he carefully scrutinizes his mistakes and successes to find out what works and what does not. This is one of the most importance forex trading tips that you will get from a good mentor.

11. Automate your trading as much as possible.

We already noted the importance of emotional control in ensuring a successful and profitable career. In order to minimize the role of emotions, one of the best of courses of action would be the automatization of trading choices and trader behavior. This is not about using forex robots, or buying expensive technical strategies. All that you need to do is to make sure that your responses to similar situations and trading scenarios are themselves similar in nature. In other words, don’t improvise. Let your reactions to market events follow a studied and tested pattern.

12. Do not rely on forex robots, wonder methods, and other snake oil products.

Surprisingly, these unproven and untested products are extremely popular these days, generating great profits for their sellers, but little in the way of gains for their excited and hopeful buyers. The logical defense against such magical items is in fact easy. If the genius creators of these tools are so smart, let them become millionaires with the benefit of their inventions. If they have no interest in doing as much, you should have no interest in their creations either.

13. Keep it simple. Both your trade plans and analysis should be easily understood and explained.

Forex trading is not rocket science. There is no expectation that you be a mathematical genius, or an economics professor to acquire wealth in currency trading. Instead, clarity of vision, and well-defined, carefully observed goals and practices offer the surest path to a respectable career in forex. To achieve this, you must resist the temptation to overexplain, overanalyze, and most importantly, to rationalize your failures. A failure is a failure regardless of the conditions that led to it.

14. Don’t go against the markets, unless you have enough patience and financial resilience to stick to a long term plan.

In general, a beginner is never advised to trade against trends, or to pick tops and bottoms by betting against the main forces of market momentum. Join the trends so that your mind can relax. Fight the trends, and constant stress and fear will wreck your career.

15. Understand that forex is about probabilities.

Forex is all about risk analysis and probability. There is no single method or style that will generate profits all the time. The key to success is positioning ourselves in such a way that the losses are harmless, while the profits are multiplied. Such a positioning is only possible by managing our risk allocations in accordance with an understanding of probability and risk management.

16. Be humble and patient. Do not fight the markets.

Recognize your failures, and try to accommodate them if they can’t be eliminated completely. Above all, resist the illusion that you somehow possess the alchemist’s stone of trading. Such an attitude will surely be ruinous on your career eventually.

17. Share your experiences. Follow your own judgment.

While it is a great idea to discuss your opinion on the markets with others, you should be the one making the decisions. Consider the opinions of others, but make your own choices. It is your money after all.

18. Study money management.

Once we make profits, it is time to protect them. Money management is about the minimization of losses, and maximization of profits. To ensure that you don’t gamble away your hard-earned profits, to “cut your losses short, and let profits ride”, you should keep the bible of money management as the centerpiece of your trading library at all times.

19. Study the markets, fundamentals, and technical factors leading the price action.

That we have placed this so low in the list should not surprise the experienced trader. Faulty analysis is rarely the cause of a wiped-out account. A career that fails to begin is never killed by the consequences of erronerous application or understanding of fundamental or technical studies. Other issues that are related to money management, and emotional control are far more important than analysis for the beginner, but as those issues are overcome, and steady gains are realized, the edge gained by successful analysis of the markets will be invaluable. Analysis is important, but only after a proper attitude to trading and risk taking is attained.

20. Don’t give up.

Finally, provided that you risk only what you can afford to lose, persistence, and a determination to succeed are great advantages. It is highly unlikely that you will become a trading genius overnight, so it is only sensible to await the ripening of your skills, and the development of your talents before giving up. As long as the learning process is painless, as long as the amounts that you risk do not derail your plans about the future and your life in general, the pains of the learning process will be harmless.

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