If you have been with me for a while, you have heard me preachPRACTICE, DRILL, REHEARSE! Guys you are entering into the toughest, trickiest market in the world, and you can not jump in and expect to make a killing. Every superstar, every winning athlete, when you don't see them, are PRACTICING, DRILLING AND REHEARSING the perfection of their art. If you want to do this for a living. You have got to PRACTICE, DRILL AND REHEARSE on a demo account !!.
You are going to get bruised, so what, every great athlete or performer does, and yes you are going to get your feelings hurt from time to time. Falling down does not create greatness, getting up does, no matter how many times it takes.
There are two ways to learn this market. The hard way like most of us, or find a good mentor that is willing to tell you the truth about what is going on here. If you are really struggling with your trading, STOP NOW !!!!! and get a demo account until you perfect some things. If you are still losing on your demo regularly, then you are not ready for a live account.
YOU CAN DO THIS, but you must discipline yourself enough to develop winning strategies. There are no perfect strategies, you are just looking for some that will put you on the right side of the trade most of the time.
Will you take a hit? Sure. So what, there are still plenty of opportunities for profit. If you are going to shine like a star in Forex, you must PRACTICE, DRILL AND REHEARSE on your demo account. I know you don't want to do it because you'd rather be making money. The thing that gives champions an advantage over the rest, is what they are willing to invest in their art. Super champions, musicians, actors, and all achievers have one thing in common and that is their willingness to go the distance to become great.
When ever you begin to trade live again; start off small, building both your account balance and your confidence. Over trading no matter who you are can kill you fast, the market is to unpredictable to gamble your families hard earned cash. Forex is like any other profession, it is a get rich slow game. Ok (^_^), you can do it here much faster than other places, but you must start off slow and light, and always keep learning. Yes FOREX TRADING IS EASY, it is the game that can be hard. It is a winner take all sport
There is nothing more important in forex than your mindset. It is the invisible magic that makes forex success possible. Most of us as Traders have been killed by the market, some of us over and over again.....lol. That was me (^_^).
The hardest thing to overcome when you have gone broke in forex is that broke mentality. That fear ghost from your past that holds you captive every time you are about to enter a trade. When the ghost has arrested you, his friends come to taunt you with horrible memories of what happened the last time. When price bounces and retraces, then a ghost jumps out of the closet and scares you to death. If you are still in the trade after all of that, then the doubt monster pays you a visit. Constantly talking to you, so you often end up abandoning a good trade. It is all a mind game designed to throw you. Price bounces and retracements happen to give the doubt monster time to play on your psyche.
The truth is price is going to go up and price is going to go down. If price has made a new low or high. Look to protect your profits, with proper confirmation. IT IS NOT THE TIME TO ENTER !!!!That is the time the market is most likely to make a hard bounce or retracement. Now you may enter as long as your candles confirm your move, but please wait for the candle to close before making your decision to jump in.
The market will lead traders like sheep to the slaughter, that is why if price is is running one way strong, (unless you have just come off of a bounce or retracement) you may want to wait. If you chose to jump in, you may only want to do so briefly. The most likely time for a strong turn in the market is when traders are all piled up on one side of the seesaw and the elephant comes and jumps on the other side and throws all of the traders off. In other words you are most likely to get trapped at new highs or new lows.
WHAT CAN YOU DO?????
Education - Education is the second most important factor to being successful in the forex market.
Your broker, I am sorry to say will give you enough information to get you killed. They only give you incomplete information which is the noose at the end of a short rope, then they let you lose and you hang yourself, and they collect big on your families hard earned money. You dust off, study harder, and go running off again, sure that you have learned your lessons from the past. Then it happens again, and you find yourself in this cycle of small success and big failure. It takes it's toll. It challenges everything you are, especially if you thought you were smart before entering this arena.
FOREX IS A PSYCHOLOGICAL MINEFIELD!!!!!!!!!! It is designed to mentally paralyze you until they have drained all of your resources from you.
Trading is not logical, in fact it goes against logic and wisdom. It is a trapping game run by professional trappers. The market never makes common sense to your mind or emotions, which keeps you thrown off. Wait until you can clearly see an opportunity where you truly have the odds in your favor and it happens less often than not. This is physiological warfare, a total minefield(mind game) in which you have to have nerves of steel and the ability to outwit those who make their living trying to cheat you.
THE REAL TRUTH IS THAT TRADING IS EASY, but of course they can't tell you that because then you would make too much money and they would never fatten themselves off of your blood, sweat and tears. They start you off with the most complicated stuff to deceive you into thinking that this is something close to physics or rocket science. That is the first mind trap, now you have convinced yourself that this is really hard because of the intense study and focus that you are giving to it. Even after all of that study (often times of the wrong material), you are still getting killed, so now you are convinced that it is rocket science.
You do need to educate yourself, but what you need is education in the things that are really going to make you a success at Forex.
The truth is Forex is simple. Now what is going to be hard is freeingyour mind from those mental ghost that haunt you. What you may want to do to begin this process is to write down your fears and why you feel that way; then you are going to have to begin giving yourself a new message like "I am not that same scared trader who didn't know what she/he was doing, I am now a competent successful trader who understands what is going on in the market". You will have to do that fairly often in the beginning, but you stand and fight those ghost when they come to pester you and eventually they will go pester another trader.
THE BIGGEST THING TO BEING A SUCCESS AT FOREX IS BELIEF!!! THEN YOU HAVE TO ADD THE EDUCATION. NOT THE JUNK YOUR BROKER GIVES TO YOU, BUT THE GOOD STUFF FROM TRADERS WHO ARE MAKING IT HAPPEN.
I have no super forex secrets; I trade what I see, that is it. I only use candlesticks, trendlines, support and resistance. I do think that much of my past study aids in my trading. Learn the basics first, then add any other oscillator/indicator that you want. They go hand and hand, but you must understand how to use them properly. If you master the basics first, (candlesticks, trend, and support and resistance) then the other will make much more sense.
While you are fighting these ghost, it is wise to use your practice account until you perfect your strategy. Please go to your local library and pick up Steve Nison's book on Japanese Candlestick trading. I think it is a basic essential for successful trading. Once you have mastered your candlesticks and your candlestick patterns, then learn the other stuff. Also your practice account will help you learn and understand market rhythm. Every hour, every day, every week, every month...etc., price is going to go up and down, the trick is getting on the right side of the trade. Trading with the major trend with proper confirmation will give you the very best chance at success.
TRADING IS NOT HARD, but first YOU MUST BELIEVE that YOU CAN! Then with proper education, you must wait for the best time to enter a trade, that part will come with practice. The third biggest secret to successful trading is waiting. You can be a consistently profitable trader if you learn the art of waiting. Wait for proper trade set up. Be careful of new highs and new lows Thank you my Friends (^_^)
The biggest challenge to being a successful trader is waiting for proper confirmation signals before entering a trade. Many traders play the guessing game with the market even when they understand that they should buy low and sell high. In a bull market when they think price has gone up far enough, they sell and when they feel it has gone low enough, they buy to get a jump on the market, for what they are hoping is a big pay check. This kind of thinking is often Market Suicide, and will get you killed.
Price in a trend is like a locomotive freight train, it will run you over and never even feel you. You have got to wait until the breaks are applied and the train does a u-turn before trying to sell tops or buy bottoms. YOU CAN NOT GET A JUMP ON THE MARKET unless you are psychic. The market has successfully tricked traders for hundreds of years and is very efficient at it.
YOU CAN NEVER OUT GUESS THE MARKET !!!!! You can only follow where it leads, hoping it doesn't turn on you like a mad dog.
Sometimes you will wait for a proper set-up and still get stopped out, but waiting for a proper set-up is going to give you the greatest chance for success and put the odds the most in your favor.
There is no perfect strategy, but you are looking for one that will put you on the right side of the trade most of the time. Remember everyday your market is different, so develop a strategy for every kind of trading market. (The bullish, the bearish, consolidation and choppy). As a trader you will take an occasional hit, but it is the end of the month profit that you are looking to, not the end of the day profit. It is ok to lose a battle every now and thenas long as you win the war.
The most simple trading strategy is to follow the current trend until your candlesticks tell you differently. A good trader spends much more time waiting than trading.LEARN THE PSYCHOLOGY OF YOUR CANDLES AND YOUR CANDLESTICK PATTERNS !!!!!!!!
If you go back and check your chart on different time frames, you will find a wonderful treasure in plain sight. It is a low risk, easy to trade short term setup. The setups that I am referring to are your bullish and bearish steps. They are easy to spot as they resemble the steps you climb and descend on a daily basis.
The bullish steps:Your bullish steps are steps in which each candle is higher up than the preceding candle. When you notice the beginning of steps building, you want to look for your entry opportunity. In a set of bullish steps, price will drop below the high and often below the close (and sometimes close to the open) of the previous candle before continuing upward. First note the high and the close of the previous candle. When you note that price has fallen below the high, allow it to fall until you get a valid reversal confirmation in your candlesticks, going in the direction of your bullish steps. If you are trading a time frame that will allow you to do it, go to a smaller time frame and look for a valid reversal signal in harmony with that trend for an entry, so that you can have a tighter stop loss.
The bearish steps:
Your bearish steps are steps in which each candle is lower than the preceding candle. In your bearish steps price will climb above the previous day's low and often time the close or even close to the open before resuming it's bearish pursuit. Allow price to trade above the low, then switch to a smaller time frame and begin to look for your entry point on your candlestick reversal in the direction of the bearish steps. Your stop loss should be placed the number of pips that you are comfortable with above the candlestick reversal pattern.
Please note that this is a short term strategy as your steps will eventually disappear, but they are a relatively profitable trade set up while they are in force.
WARNING: DO NOT TAKE THE TRADE IN THE DIRECTION OF THE STAIRS UNTIL YOU GET A VALID REVERSAL PATTERN!!!!!!
This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.
This great strategy is provided by Peterfibonacci: Here is my strategy. On a GBP/USD and EUR/USD M30 time frame:
Indicators:
8 EMA applied to Open 5 EMA applied to Close Fibonnaci pivots to show the resistance and the supports. Signal Line period of 45 2MA Crossover signal Indicator (to alert when a cross over has happened)
RSI 14 Stochastics (10,3,3) MACD (5,15,9)
Long Entry: Enter immediately when the MACD, Stochastics, RSI show a long position and the 5MA has crossed over the 8MA from below.
Place the stop loss a few points below the recent low with a take profit of 70 pips and a trailing stop of 30 pips.
Short Entry: Enter immediately when the MACD, Stochastics, RSI show a short position and the 5MA has crossed over the 8MA from above.
Place the stop loss a few points above recent high with a take profit of 50 pips and a trailing stop of 30 pips.
This strategy seems to work best in a horizontal market. Sometimes one has to work with the resistance and support points to determine the proper Take Profit level, because it's not always 50 pips.
This strategy also works well with the H1 time frame. I personally like the H1 because the candlestick patterns are move evident and sometimes one can see entry and exit points before the alert(which is the EMA cross)!
Above and below a chart has been provided for your study, so that you can obtain a better grasp of this strategy. If you left click your mouse on the chart, you will have the options at the very top of that menu that says 'view image'. If you click 'view image', it will provide you with a larger, better view of the chart.
The No Man's Land Strategy is actually a very simple strategy.
It is based on Multiple Time Frames, Moving Averages (5 - 22 - 42) , and Pivot Points (for Support and Resistance), and I only run it on GBP.
The signal is generated from H4 Candle. I take the previous High + 10 pips ( you may use any number you like) + spread as a Buy Stop Order, while for the Sell Stop Order is previous Low - 10 pips.
Suppose I have a target 20 pips from my Buy Stop or Sell Stop Order. I then look to see whether there are some Support/Resistance or MA or Trendline Support/Resistance ahead to act as a barrier to the move I want to make. If there is, then I use the next S/R or MA or trendline S/R as a new point of calculation for my Buy Stop or Sell Stop Order. I repeat this step on the H4, H1, M30, M15 and M5.
Here is an example : Prev High of H4 : 1.6300 Prev Low of H4 : 1.6250 Spread : 3 pips
I check my H4 Chart, to see if there is any resistance from 1.6313 to 1.6333, if not, then I go to my H1. I continue repeating the above step. Suppose I find Resistance on 1.6320. I then recalculate making 1.6320 the new basis for calculating my Buy Stop Order. So my new calculation is : 1.6320 + 10 + 3 = 1.6333 ---> TP 20 pips = 1.6353. Then I recheck to see if there is any resistance that might prevent me from reaching my new target.
I do this until I get to M5.
This is why I called this strategy : No Man's Land. Pivot's, S/R, MA, Trendline's S/R are things that I consider landowners.
For example: There is Pivot Resistance at 1.6250 and Trendline's R on 1.6265. This 15 pips distance I consider as "Pivot's Land and Trendline's Land." I don't want to fight either Land's owner, so I avoid them. I prefer to trade on "No Man's Land" where, there is no land owner who will be angry if I steal a few pips from the market. I do the exact opposite for my Sell Stop Order. For the trendline I use the DeMark Indicator found at the Forex Factory.
The idea behind this strategy is to make a high percentage of winning trades. It works very nicely at the London open, around 6-7 GMT, depending on H4 cycle from the broker's chart we use to analyze. ( I like to use the ALPARI-UK, as I trade the London open).
I usually look to gain 20 pips; but if I am constantly profitable with this strategy, I think I can be one of the few winner in the forex market. The BIG BOSS who drives the market, that come from the big financial institutions and old-fashioned people who use just candlestick pattern and support-resistance as their trading guide; I am trying not to fight them, but to align myself with them.
Many traders fear placing stop losses because they are afraid that they will get stopped out. This is the wrong mindset. A stop loss is a friend that helps you preserve your capital when you are on the wrong side of the trade.
A stop loss is simply what it says, it is a system that you put in place to stop the loss of your capital, just in case the trade goes against you strongly. Don't place stop losses with the idea that you are going to get stopped out, but place it with the idea that you are protected if a trade does something differently than you expect. It will give you the opportunity, if it is hit to step back and position yourself for a more profitable trade set-up and entry. What happens when you ride a losing trade to long. It depresses your emotions. It keeps you locked in a losing mentality. It takes up margin that you can be using on a better more profitable trade. A stop loss gives you the freedom to move on, and be free from all of the negative things that comes from seeing that losing trade over and over.
Even if you have the capital to ride out a losing trade for months, then whenever you see a more profitable trade set-up in that same currency pair, you are not free to take advantage of that new opportunity because you are stuck in a losing trade waiting for it to turn back in your favor......one day 8^( .
Let's go back and look at that trade from day one. What if you had taken that hit the first day with a 60pip loss. That is quite a hit. You could have simply made 10 pips a day for the next 7 trading days, and you'd be a head 10pips. What that would have done is free up your capital as well as your mindset. There is an extra confidence that comes when you go to your platform with no losing trades staring you in the face. It is a feeling of power.
Instead you decided to hold that trade 7 trading days. Now you are in the hole 150 pips, plus you paid 7 days of rollover fees, but things have begin to turn in your favor like you knew they would. That is 7 days that you have locked yourself out of more profitable trades in that currency pair, and who knows when you are going to break even on that pair.
When you have losing trades on your platform, then you are fearful of taking other good trades that you see, because of your margin level, the new trade may go against you and wipe you out, or any number of negative messages that we hear in our heads when we are in losing trades.
Dearest traders stop losses are your Friends. Here is a video that can help you decide how you may want to place your stop losses.
I am certainly not encouraging you to take unnecessary losses, if you are in a situation where you are in harmony with your trend and you have a little retracement that has gone against you temporarily, by all means allow that trade to close profitable.
Just don't allow losses to run on and on and on and on, because it's like spiderwebs in the mind and pretty soon, they cloud your vision and your judgment until you are paralyzed and can not do anything until that position comes back into profit. It is better to be out of a good trade wishing that you were in, than to be held hostage in a bad trade that you wish you were out of. Lastly letting trades go to far against you is just breeding grounds for stress and anxiety.
Remember strong dips and rally punish traders who don't have proper stop losses in place.
Trade well, Live Well, Laugh a lot and have Loads of Fun (^_^)
This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.
