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Asian Trading SessionHello everyone! Each trading session has its own characteristics. According to these features, you as a trader should act. And today I want to discuss with you the specifics of the Asian trading session. Working hours The Asian trading session is open from 19:00 to 4:00 New York time. Trading in Asia begins with Tokyo, the main trading center is opened, the Tokyo Stock Exchange, followed by all the major financial institutions of Japan. The centers of activity of the Asian session are Tokyo, the largest financial center in Asia. Then, in an hour, Hong Kong and Singapore open, which contributes to the increase in trading. The trading peak is reached at the opening of the European session, which overlaps with the Asian one at 2:00 New York time. The Asian and Pacific sessions coincide in terms of working hours and therefore they are often considered as one. The trading period at this session coincides with the opening hours of the largest Asian exchanges, such as the Hong Kong Stock Exchange, the Israeli TASE, the National Stock Exchange and BSE in India, the Shanghai and Shenzhen Stock Exchanges in China, the Abu Dhabi Stock Exchange and DFM in the UAE, the Saudi Stock Exchange, Singapore SGX, Korean KRX, as well as the Japanese TSE, which in many ways is the market conductor in the Asian session. Also, during this period of time, trading is underway on the Australian ASX, the New Zealand Stock Exchange in Wellington, as well as the Port Moresby Stock Exchange. Currency pairs It should be understood that during the Asian session, the Asian currency is characterized by increased volatility. Currency pairs with the Japanese yen: AUD/JPY, CAD/JPY, CHF/JPY, EUR/JPY, GBP/JPY, HKD/JPY, NZD/JPY, SGD/JPY, TRY/JPY, USD/JPY. Currency pairs with the Australian dollar: AUD/CAD, AUD/CHF, AUD/USD, EUR/AUD, GBP/AUD. Pairs with Hong Kong Dollar: EUR/HKD, GBP/HKD, SGD/HKD, USD/HKD. There is also an increase in volatility in the currency pairs CHN/USD, CHN/RUB, EUR/SGD, GBP/SGD, USD/SGD. It is these pairs that traders pay the main attention to during the Asian session. Session Features The Asian session is considered to be the calmest session, where sharp fluctuations are practically excluded, so it will be easier for beginners to trade at this time. Due to the fact that the market is closed on the weekend, on Monday, driven by the news of what happened over the weekend, the price can create strong movements and even form gaps. Asian traders form a trend that is most often supported by European and American traders. The main players during the Asian session are the Japanese Central Bank, as well as large companies. The economies of Japan and China are export-oriented, which causes their companies to be more active in foreign exchange transactions. Due to the active activity of the state in the market, which are caused by the currency interventions of the Japanese Central Bank, significant deviations of the Yen can be observed, and since 16% of all transactions in the market take place with the participation of the Yen, this also affects other currencies. Conclusion It should be understood that most of the time the market is influenced by the state, which by its actions (interventions) pushes the market and creates a trend. That is why news monitoring, tracking the economic indicators of the Asian region, greatly help to predict the future movement of the market. The Asian session is the quietest trading period, the most suitable for training beginners. Strong jumps are quite rare, while trends are often replaced by strong sideways movements. Volatility during the Asian session is considered to be the lowest, which makes it the least convenient for scalping strategies and the greatest for technical analysis. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
15
Trading BooksI can say unequivocally that without reading the trading book in this market you can't go far. People who do not develop will eventually end up with nothing. The well-known argument what is better, books or practice, makes no sense they are parts of a single coin. The question of "what to read" is also abstract. There is plenty of meaningful reading. Except that I would advise not to bury yourself especially in books about the stock market, if you work in the Forex market, for example. The candles are different there (daily gaps between sessions), and it's a different world. Don't skip books about trading psychology. They are often fascinating and your brain will rest after looking at the charts all day. Practice on the charts. Read again. Work through them again. In parallel, work with a live chart. That's how you slowly become a trader. Always keep in mind the main thing whatever is described in the book, it is only a particular view of one author and there are thousands of such views. What you need is a personal, individual approach to the market. If trying to copy or adopt someone else's style of trading you will not get far. You can only trade by being yourself. And to become a self-sufficient trader, you must break through the mind of someone who's been in the market for decades. Take from them what suits you psychologically and create your own. Only yours that you will then not be able to pass on to anyone. What books to read This is a very popular question. There are a lot of books to read. Books on technical analysis; Books on psychology of trading; Books and articles about price action. Your task, averagely, is to get at least a general idea about trading at first. Therefore, read about the basics of technical analysis: Reuters. Technical Analysis for Beginners. The basics of candlestick analysis: Steve Neeson. Japanese Candlesticks. Chart Analysis of Financial Markets Gregory Morris. Method for analyzing stocks and futures Psychology: Mark Douglas. Trading in the Zone. Edwin Lefebvre. Memories of a Stock Speculator Sometimes a whole book is worth reading for the sake of a single phrase that can sort out the mess in your head. How to Read a Trading Book Most books, as you know are easier to find in electronic form. Personally, I read mostly in electronic form on my MacBook and iPad. Why is it convenient to read on the laptop exactly the trading books? Well, you can immediately open the chart, practice what you read, plus write down the appropriate thoughts in your electronic diary, take screenshots. An alternative method is print the books you want on a laser printer. Some people get it at work and others buy a simple laser printer at home. You can buy the least expensive model and print thousands of pages. It is not difficult to staple them and your eyes will be less tired (although I am more than satisfied with the apple screen). Likewise, a good e-reader like the Amazon Kindle or Pocketbook. No one owns the market. Hence the logical consequence there is no grail, no secret mathematical formula or method of guaranteed prediction. Not in any book or course. Not a single indicator. Not one candlestick pattern or price action pattern. No teacher on the planet that "knows the market." No guaranteed signals that make you feel good. There aren't any. There is only mathematical probability and all the traders in the world are learning to "tilt" it slightly in their direction, reducing losses and increasing profits. The market is a zero-sum game. Money constantly moves from one hand to another without ever sticking around. Many hedge funds last 3-4 years and disappear. Now you made a million, tomorrow you gave 2, the day after you made 4, lost 5, went bankrupt, came back again, etc. Books allow us to learn a lot of these stories. Thousands, tens of thousands of author's views are what trading books are all about. Not a guarantee, not some special way to suddenly become a unique forecaster by reading it.
Education
by DeGRAM
7
Stability In Forex TradingWhy so few traders manage to bring their trading to the level of stable earnings, when trading becomes a source of income, and not a source of constant disappointment? Because before you start to get the "easy" money that everyone comes to this industry, you will have to go a long way to make a lot of mistakes, each of which will cost you money. To fall down many times and get up more times, to lose money at the same time without losing the motivation to move forward, to learn yourself and change your attitude to trading. In addition to all of this, the difficulty is that no trader knows how much time it will take him. And the truth is that 95% don't have the strength and patience to do it. I can point out 3 main criteria for stable trading: The right attitude to losing trades. Confidence in your strategy. Availability of trading rules and most importantly the desire to follow them. 1. Accepting losses. To survive in this field, a trader has to learn to properly deal with losses, without that he will not be able to make a profit in the long run. Just like in sports, first you learn how to fall properly, then everything else. The thirst for quick money, which is present in almost everyone at the initial stage, generates fixation on profits. With this attitude the trader becomes highly vulnerable and morally unprepared to accept and tolerate losses. Nobody likes making mistakes and losing money. And large losses cause a lot of stress, which can lead to emotional burnout, depression and even deprive the strength to continue trading. Trader's dependence on the expectations of the result of each deal will invariably make him experience emotions. And emotions will push him to make erroneous actions. These constant emotional swings take away the trader's strength and leave him with no opportunity to improve his trading. He's busy just trying to keep his mental balance somehow. How do most traders try to solve this problem? They try to avoid losses and fight their emotions. But that's impossible, you, see? This is a vicious circle. What you can and should do is to shift your attention from the result of each trade to the result of a time period (for example, a month). It is very important to understand and accept that: in any sequence of trades, there is a random distribution of profitable and losing trades. This will help reduce the emotional component of trading. When you do not expect any result from a trade, the result of the trade ceases to matter and causes emotions that push you to take the wrong actions. The trader's job is to make his trading as psychologically comfortable as possible. 2. Strategy A strategy is a method. Most traders, having suffered another failure, begin to change their trading strategy or look for another one. They sincerely believe that the problem is in it. That it is the strategy which does not let them to earn profit. But there are no profitable or unprofitable strategies. Traders make them so. In fact, a strategy is not supposed to provide a trader with profit. It has only one function. It should provide trader's understanding of WHAT, WHERE and WHEN to trade. And the sooner the trader stops shifting responsibility from himself and his actions to his strategy, the faster he will learn. It will take time for you to feel confident in your strategy. Time to adjust the method to yourself, to your understanding of the market. You can take any strategy you like as a basis and taking into account your weaknesses and strengths determine how and what you will trade. 3. Compliance with rules The third and perhaps the most important criterion for stable trading is the presence and observance of rules. This is what will bring the trader profit in the end. Trading rules have only two functions: To provide a trading strategy with a positive mathematical expectation. Provide correct models of trader's behavior in different trading situations. So that it is possible to control emotions and not to leave the psychological comfort zone. When successful traders are asked what is most important to achieve success none of them focuses on their strategy, they do not talk about the magic money management or special knowledge. But all of them say that it's important to follow their rules in a disciplined manner. All traders who make money fanatically follow their rules. Because they know that strict adherence to trading rules is what makes them profitable. The market pays us money for our disciplined actions. We pay it for experience and it pays us for discipline. Most traders are mainly busy analyzing their trades and forget about their own behavior and trading mindset. The desire to follow the rules arises only when you realize that they reduce your losses, which automatically increases your profitability. Unfortunately, there is no ready algorithm for creating rules. They are individual, and that is the difficulty of learning to trade. The only guideline in their creation is that they must LIMIT your losses. Everything else is up to you. Learn to listen to yourself by methodically and persistently striving to improve your trading. If you give yourself time to learn first, setting aside the desire for instant results, you will definitely come to have your own trading system sooner or later. An individual system which will bring you money.
Education
by DeGRAM
21
Winning Trader is Patient TraderHello friends, like every forex trader on Earth, I sometimes ask myself what are my strengths and weaknesses? How have I changed, and what qualities have I developed in myself? Today we're going to talk about how you can develop it. How susceptible are you to impatience? Impatience in ordinary life. But what does it mean to be able to "delay making a decision"? For me, it means handling things calmly and being disciplined. I don't have to do rash things right away and can bide my time for action. This is equally true for trading as it is for real life. Wait until you get a good discount for something you've wanted to buy for a long period of time. After all, there are many things that seem to be needed, but their purchase may well have to wait until the seasonal sale. This behavior, also called "delayed gratification," protects me from making hasty and emotional decisions. I would not be satisfied if I bought something recklessly, only to get the thing right away but pay a high price for it. My focus is on the risk/reward ratio. So, the risk of making a bad decision is relatively low. I think it's not easy to just wait it out these days. The sensitivity to consumption and the wide variety of offerings makes it difficult to refrain from buying something right away without waiting out the right situation. Due to the ability to pay in installments, people are able to buy expensive items right away. Many people spend money on rash decisions and get into debt just because they can't wait. Several years ago, I read Daniel Goleman's book “Emotional Intelligence”. Among others, he described long-term experiments with children who became particularly successful and incorruptible if they learned at an early age about delayed decision-making. The essence of the experiment was this: a child was offered a candy and told that he could eat it now, and if he didn't eat the candy right away, but waited twenty minutes, he would get two candies. So, those children who agreed to wait, then in adulthood were much more successful than fans of "fast" candy. What does this mean for the trade? I think delayed gratification has several positive effects on trading. You have to wait out the right situation and you have to refrain from recklessly entering the market. You must wait for the perfect set-up that will execute according to all the rules. You should not take profits too early, and should calmly wait and close a position only when your rules allow you to do so. You must be firmly aware of when you should not trade and when your individual trading strategy will not be profitable. You must control your risks to stay in the game. You must know that you can only succeed in trading in the long run and that you cannot get rich quickly. Nowadays, I have begun to notice that I am primarily looking for reasons NOT to enter the market. It is only when there is no reason to trade that I open a position. The market no longer pressures me, and I try not to be influenced by my emotions. I have to wait for the right setup and the right conditions. The emphasis is on first-class odds, not second-class and beyond. All you have to do is wait it out. Another point that is never talked about. It's pushing through situations. Here's an example: you have an open position and it has reached a stop loss. You want to win back, and at the next signal you enter the market with bigger lot position. Again, you take a loss. You follow your emotions and open in the same direction with an even bigger lots, without even waiting for your strategy signal. You probably already know the end of the story. This is a push-pull situation, when you're trying to have some kind of impact on something you can't influence. Exercise Instead of describing any self-evident conclusions from the above, I offer you a simple exercise, which allows you to understand whether you have developed the skill of waiting or not. Take an hourglass, for 3-5 minutes (no less), turn it upside down, and just watch the grains of sand pile down into the empty half of it. Your task is to wait until the last grain of sand falls down. Do not try to control your thoughts. So, after you've completed the task, remember what thoughts and emotions you had while you were watching the sand? If you were starting to get mad at how slowly the sand is falling away, you were trying to figure out how much time is left, you were cursing to yourself about this "stupid task" that doesn't let you see pictures of cats, you were remembering how many important things you have to do today, or even failed to wait until the sand falls to the other half of the hour congratulations. You have a problem with patience. But if you calmly waited for the last grain of sand, you had no desire to speed up the process in any way, you just watched the sand until the very end without emotion or irritation. You don't have a problem with patience, at least not obviously.
Education
by DeGRAM
14
Divergence in TradingThe essence of divergence is very simple: The divergence of price and indicator movements. When price updates higher highs and the oscillator updates lower highs, it is divergence in its classic form. It could be stochastic, RSI, MACD, CCI and hundreds of other oscillators. Some traders believe divergence is the only oscillatory signal worth looking at. From stochastics creator George Lane to Alexander Elder, hundreds of professional traders have described divergence in their books. What is the essence of the divergence? When the price reaches its maximum value, the oscillator should reach it too. The same is true for the minimum values. This is how it works in a normal situation. If the oscillator and price decide to mark different values - we're talking about divergence. It can be used in two main cases: conventional divergence; hidden divergence. Let us now analyze them. The classic divergence The simplest and clearest signal, which hints at a future trend reversal. If price makes a lower low and the oscillator makes a higher low, we have a traditional bullish divergence. In other words, if the oscillator is up and the price is down, that is a hint of a reversal of the price in the direction of the oscillator. The opposite situation is also true. The trend is going upward and the price is updating the maximums and if the oscillator is not then it’s a divergence. The optimal use of divergence is on the maximum and minimum values of the price. This is the easiest way to find the reversal zone. The oscillator directly indicates that the momentum is changing and although the price keeps updating levels, it will not last. We have considered the conventional divergence, now let's look at its evil cousin, the hidden divergence. It is not so secret that it is just a divergence hidden within the trend. Hidden divergence A divergence does not always indicate a trend reversal. Sometimes it is, on the contrary, a clear indication that the trend will continue. Remember, you should be friends with the trend, so any signal that the trend will continue is a good signal. Hidden divergence is quite simple. The price updates the upper low and the oscillator updates the lower low. It is easy to see. When the price has updated the maximum, check if the oscillator has done the same. If it doesn't and goes in the opposite direction, it's a divergence. And there is the hidden bearish divergence. The price updates lower highs on a downward move and the oscillator, on the other hand, it is trending upwards and updating the higher highs. If the general trend is downward, it is an indication that this trend will continue and quite possibly double its efforts. How Use Divergences Properly? Divergences are a great tool. However, it often raises the question of when exactly to open the trade so that it does not happen that the trade is opened too early or too late. For this purpose, we need a confirmation: some method allowing us to filter the false entries in the divergence. We will consider several such methods. Oscillator crossing The first thing we usually look at is a trivial crossing of oscillator lines, say, stochastics. This is an additional indication that the trend may soon change. Therefore, when the price approaches the upper or lower zone, the crossing can give a good signal. Patience and confirmation of signals are the main qualities of a trader. Divergence is a great tool, but you need to confirm it with additional tools to achieve really good results. Oscillator exits the overbought/oversold zone Well, we took our time and waited for additional confirmations of the divergence. Strong enough to indicate a reversal of the trend. Which ones? Remember the basics of technical analysis. A trend line would show that the trend is steadily descending and it is too early to enter the reversal. This technique is very valuable for finding a reversal or breakdown of a trend line. If the price bounces from the trend line, draw it for the oscillator as well. 8 rules of divergence To use divergence successfully, it is advisable to adhere to the following rules. 1. The minima and the maxima The following conditions are necessary for divergence price updates higher highs or lower lows; a double top; double bottom. When the price updates these highs and lows, there is a trend and this is the feeding ground for divergence. If there is no trend and all you see is a consolidation, the divergence can be missed. 2. Draw lines between the tops The price is in only two states: trend or consolidation. Connect its tops with lines in order to figure out what is going on. If one peak is lower or higher than the other, it is trending and the market is sweet and available for trades. If there are no clear new highs and lows, it means that there is a consolidation, and divergences do not play a significant role in it. 3. Connecting the tops Let's be more specific. The price reached the new maximums? Connect the tops. If it made lower lows, connect them. And don't get confused. A very common mistake the price makes new highs and the trader connects the previous lows for some reason. 4. Just watch out for overbought and oversold. We have connected the tops with trend lines. Now we study the oscillator readings. Remember we are only comparing highs and lows. It doesn't matter what the MACD or stochastic is showing in the middle of the chart. What difference does it make? It makes no difference. We are only interested in their boundary values. 5. Connect the highs and lows of both the price and the oscillator If we have connected the highs/minimums of the price, we have to do the same for the oscillator. And not somewhere, but for the current values. 6. Watch the angle of slope of the lines. Divergence when the angle of lines for the price and the oscillator is different. The more this difference, the better. The line can be upward, downward or flat. 7. Don't miss the moment If you notice the divergence too late and the price reverses, it means the train has already left. The divergence has worked out, it will not be relevant forever. The one who missed it is too late. Wait for the next price divergence with the oscillator and a new divergence will not keep you waiting. 8. Longer timeframes Divergence works better on higher timeframes. Simply because there are fewer false signals. That's why it's recommended to use them on 1-hour charts or more. Yes, some people like 5- and 15-minute charts, but in these timeframes, divergences often lead to false ones. These are the rules for dealing with divergence. It's a cool tool. If you specialize on it, it is one of the most powerful methods of technical analysis. Certainly, you will need practice and a bottle of good wine to understand all its peculiarities.
Education
by DeGRAM
10
Trading on a demo accountHello everyone! Today I want to discuss a topic that worries everyone: to trade or not to trade on a demo account. The demo account itself is a useful tool, but it also has a couple of disadvantages. Let's deal with everything in order. Advantages of a demo account Perhaps the most important plus is that you do not need to deposit your money into the account. The demo account is created for training, and you can use it for free! There are no risks and you will not lose your money. The ability to test your strategies. Thanks to a demo account, you can try to trade your strategy in real time on a real market and understand whether it works or not and whether you are able to follow the rules. The experience is priceless, and you can get it thanks to a demo account. You can open demo accounts as much as you want and trade all day long, filling your hand on the real market. Thanks to the demo account, you can try all the free indicators and understand which ones are suitable for you and which ones do not work at all. Disadvantages of a demo account Perhaps the most important disadvantage is that you will definitely behave differently than on a real account. Psychology is not to do anywhere and when trading for real money, you will immediately notice it. There is no tension on demo accounts, because you will not lose your money, but as soon as the question concerns your real money, you lose your head. In addition, transactions are executed instantly on a demo account, this is not always possible on a real account, because there is slippage. Because of this, strategies that were profitable on a demo account may be unprofitable on a real one. On demo accounts, traders choose the maximum deposit and trade the maximum lots . With an infinite deposit, it's hard to lose all the money. In real trading, the account is usually always smaller and therefore you need to trade a smaller lot, which is not so easy. Spread. A narrow spread on a demo account is a feature of brokers trying to attract as many clients as possible. In real trading, this parameter will be wider. The number of transactions. On demo accounts, traders tend to execute a much larger number of orders than they actually need. This habit is transferred to real money. But it is much more important to approach the evaluation of each transaction carefully and chase not the number of orders, but their quality. Conclusion A demo account is certainly a very useful tool for a trader. But you need to approach the matter wisely and understand the difference between a demo and a real account. Practice trading on a demo account the same way as if you were managing real money and then the benefits will be much greater. Good luck! Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
10
Environment Dictates PerformanceHello, fellow Forex traders! Successful trading on the currency market is not only about having a trading strategy that suits you, emotional composure and risk control. Your work environment, where and how you trade, also plays an important role. So, what should be a trader's workplace? A computer You don't need super powerful hardware for the trading terminal. But when all of your programs, including the terminal, work quickly, nothing hangs and the computer does not "freeze", if you suddenly decide to take your mind off the charts and watch videos with cats on youtube, it's quite pleasant and comfortable. And it does not disturb your emotional state. And you still need nerves. If you trade on a desktop PC, I advise you to keep a laptop nearby. Since the electricity can theoretically cut out at any time, and the laptop runs on battery power - at least to close the position you will have enough charge. Monitor It is better if it will be large. 19-24 inches. It's just more comfortable. A lot of monitors, as in the movies about cool traders, you do not need, believe me. At least it will not make you trade better directly. But you will be able to watch a movie, play a game and trade Forex at the same time. Internet The faster, the better. Also, you need to think about what you will do if it suddenly turns off. "Backup plan" can be either pre-internet from another provider (just pay every month for 2 networks), or a 3g modem, or a modern smartphone, such as iPhone, with a modem function (more than once helped me out). Chair The spine is directly related to brain function, headaches and overall human health. So do not skimp on normal computer chair. You will get a hundredfold return of the money spent and you'll save your health. Printer Printer/scanner/copier. You probably saw these hybrid devices at offices of different companies. Buy one of these and you can print out charts, use pens to draw on them, scan them back into your computer, make yourself important data posters, etc. Printed out charts with examples of difficult situations, tables with lot sizes for positions, examples of shapes, new rules to implement in the TS are very helpful in your work. Try it. But most importantly, try not to mix work and personal life. If possible, it is better to allocate a separate room for trade, or even rent an office (for those who do not have problems with money). This way you will not be distracted by anything, and you will not disturb anyone.
Education
by DeGRAM
10
ARE YOU A GAMBLER OR ARE YOU A TRADER?Hello everyone Today we will touch on a serious topic, at the end of which you will be able to determine who you are in the market. Let's go! Two types of people There are a large number of people in the forex market and they are all different. But, even considering the diversity, there are still common features by which people can be divided. Some come with a desire to earn quickly, while spending not much time and effort. Others come to the market as a job. The first are simple players, mostly they lose money and eventually leave with nothing. The second are professionals. They know how to trade, they follow the rules and their discipline is at the highest level. How to determine which group you belong to? There are a couple of factors that distinguish an ordinary player from a real trader: 1. Risk management. The player, as a rule, does not follow the rules of risk management. The player's risk is equal to his capital. That is why players lose all their capital. Real traders rarely risk more than 1% of the capital. Such traders follow the rules of risk management in EACH position. Therefore, they never lose all their capital. 2. Trading plan. Players have not tested strategies and rarely study them to the end. They superficially learn new trading methods and run to the market to use them and therefore lose everything. Professionals know everything about their strategy, when to open, when to close, why and how much. A professional will have an answer to all questions and will have a plan. 3. Emotions and money. Do you trade for emotions? Do you like roller coasters at the market? If the answer is yes, then you are a player. Players come to the market to experience the full range of emotions and the market gives them this, but takes money in return. Professionals do not experience emotions, they are here to earn a living. Chasing emotions is not for them. 4. What do you want or what do you see? The player trades what he wants from the market. A player may see something on the street or some news and now he wants to open long positions without paying attention to the context of the market. A professional is not set up to trade long or short, he is set up to trade what the market is trying to show. If the market shows signs of growth, a professional will open long and vice versa. There are no desires here, there is only a plan, strategy and discipline. Conclusion Everyone should answer these questions to understand who they are in the market. Having defined yourself, you will be able to improve yourself, admitting mistakes is already half the case. This article also indicates the further path that will help you from an ordinary player to become a professional trader. Good luck! Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
14
Dietary Supplements For TradersLong sitting at the computer, constant stress, bad ecology in the cities, unbalanced nutrition all this is detrimental to the health of forex trader, as well as any intellectual worker. Today is not going to be a typical post. We're going to talk about supplements that help improve mental and physical vitality under emotional pressure from the market. I will share with you those remedies that I myself use. What are dietary supplements? Nutritional supplements are supplements, usually based on natural ingredients. They are not medicines, but act similarly to vitamins. There are universal nutritional supplements, and there are specialized ones for bones, brain, heart, etc. Consider dietary supplements not as something magical, but as a kind of bonus, "+1 to HP", if we put it in computer game terms. There are opponents of supplements, there are supporters. Personally, I have tried various supplements for many years, and below is a list of what I think are the best. Of course, it all depends on the individual, for example, I have problems with the stomach and cervical spine, so, let's say, joint supplements for the average person needs less than I do. Try to try everything on your body, diseases (if any) and preferences. My experience is just my experience, not the fact that what works for you is what works for me. Omega Fatty Acids Omega-3, omega-6, omega-7, and omega-9. These are all varieties of fatty acids found in foods such as fish, nuts, some fruits and vegetables. Omega's are healthy bones, immune system, breasts, cardiovascular system, intestines and pancreas as well as improve memory and brain function. I recommend unconditionally to all. I myself have been drinking for many years. Omega-7 is generally rare, and here it is in a complex, perfectly balanced, also containing astaxanthin - the most powerful antioxidant in the world. Cordyceps I use it when I need a lot of energy. When flights, busy days. This is a parasitic fungus that sucks the life juices out of insects that it encounters: grasshoppers, ants, etc. In China, cordyceps has been used medicinally for 5000 years. In addition to energy, it stimulates brain activity by improving blood circulation, strengthens the walls of blood vessels, as well as the immune system. Unfortunately, there are a lot of fakes, be careful. One rule of thumb - cordyceps can't be cheap, as very little of it is extracted. Ginseng Ginseng has long been known for its healing powers. Unlike cordyceps, it gives a deeper energy, not so pronounced, the effect is noticeable a little later. In addition to physical energy helps with mental fatigue. In dietary supplements is usually used artificially grown ginseng, as it is cheaper. Wild ginseng is considered more powerful, I can't recommend any particular supplement, so please try it. If you feel the effect, it means that it is suitable for you. Now I take this one. Ginkgo Biloba Ginkgo Biloba is the plant whose leaf extract is closest to those "NZT pills" from the famous movie " Limitless ". It nourishes the brain, improves memory, attention, mental performance, and slows the aging process of the brain. Result is not instant; miracles is not going to happen. Garlic. Garlic kills a lot of pathogens inside the body, a couple of times a year I take a course. What is interesting, everyone knows about the properties of garlic as an anti-cold and immune boosting agent, but it also helps to reduce cholesterol and improve male potency. Garlic is a dietary supplement in a concentrated form and in large quantities. This will not make your breath stink. Hyaluronic Acid Hyaluronic acid is a constituent of many tissues in our body. Hyaluronic acid is commonly advertised as an anti-wrinkle cosmetic, for younger looking skin, etc. But it is also excellent for joints, muscles and ligaments. Scientists are predicting that in the future, this acid will form the basis of cancer fighting agents. In this way, it is an excellent remedy for the mobility of the joints and has an aesthetic effect on the skin. Blueberries Although modern monitors don't strain our eyes as much, there's still nothing good for vision in the glowing screens of laptops, cell phones and tablets that we all often look at. And it doesn't hurt to take preventive care. Blueberries are very good for vision. And in combination with the substance Lutein, the effect is enhanced. I try to remember to take a course of blueberry extract with lutein once a year to prevent good vision. Calm You also need to drink a soothing magnesium-based mixture. It promotes better sleep and relieves stress, of which there is so much in a trader's job. I drink it at night. How to use supplements? The most important rule is not to overdo it. Make sure that you do not overdose on any components/vitamins. For example, if you drink something with vitamin E, you should not take a supplement at the same time, where vitamin E is also present, albeit as an auxiliary component. Also, watch your own well-being. What works for one person won't necessarily work for another. Conclusion Various supplements help, but they are not a panacea. If you have, God forbid, any diseases, be sure to see a doctor. Also, supplements work many times better when you combine them with physical activity. Yes, that's right: you have to get off the couch and go to the gym. Choose what you like: yoga, aerobics, tennis. It's your business, but physical activity has to be, without it there is no way.
Editors' picks
Education
by DeGRAM
44
Winrate and risk reward ratioHi everyone. In the pursuit of success in forex, traders tend to focus on finding a strategy that gives the highest accuracy of entry. The pursuit of perfectionism in trading blinds their eyes and does not let them see the "forest for the trees". So, what are you missing out on? What important detail is missing from your trading plan? The profit/risk ratio is your advantage. In this article, we will look at how you should calculate your risk-to-profit ratio for your working trading system. A Forex trading system should include a well-defined equity management system that is easy to follow. Money management is one of the most important aspects of any trading strategy (TS) today, but most traders neglect the whole concept of money management in their trading. Most forex traders want to focus on the entry points provided to them by their trading systems. Their dream is to find a TS that gives a buy entry signal at the lowest point on the chart and a sell signal at the very top! The entry point is undoubtedly important. But do not forget that at the moment of entry, we can create an advantage not only in the exact entry into the trade, but also in creating a favorable statistical expectation. Specifically, by putting a good profit to risk ratio into the trade. Trading is a game of probability. We know that in N% of trades we will lose and that in X% of trades we will win. But we need to remember that we can easily improve our stats by simply ignoring trades where the profit potential does not exceed the potential loss by at least a factor of two. It is the presence of money management in your trading strategy that reduces your losses and makes you hold on as a winner. I say "makes you" because you have built into your trading system a certain percentage of profitable trades, the knowledge of which will screen out your emotions in the process of trading. Applying this simple money management system will give you a general idea of how to propel your trading exponentially forward and in a positive way. In this article, I will explain how, by developing your trading system, you will determine the size of a position before you open it. Please remember that these are the basics to help you think properly. The exact calculations, specifically for your strategy, you will need to do on your own. "We've all heard the famous trading axiom: cut your losses, and let the profits run. This is the aspect of money management in your trading system that produces big winners. Money management puts aside the subjective feelings that are present in people. " Richard Dennis “I'll say it again: I never made my money by trading; I made my big money by waiting and letting my profits grow." Jesse Livermore The first aspect we have to understand about our trading system is that our system gives us a positive expectation. We can only do that by testing, but sometimes testing can give a negative result if you forget to set a profit to risk ratio for each trade of at least 1:1.5 in the rules of the strategy. All beginners say that a forex trading system without 90% of profitable trades sucks, and they will surely develop their own holy grail to the envy of others. They are wrong, of course. In Pursuit of Perfection For all the trading systems really working in the Forex market, it is important to note that: - Professional traders are looking for performance, while novice traders are looking for perfection. - Beginner traders are looking for quick profits. Most novice traders get hung up on the number (percentage) of successful trades rather than total profits. They all buy into a system that is advertised as 90% winning. The question is, "What good is a system that provides 90% winning trades with an average win of 12 pips if you have to tolerate 60 pips of risk to achieve a win?" Do you see where I'm going with this? It's like your best friend after taking 3 karate classes is ready to fight 6 muzzleloaders in an alleyway. He's obviously going to lose) Probability of bankruptcy of a trading account as a function of the percentage of profitable trades and the profit to risk ratio. The table above shows the dependence of the probability of "losing" the deposit on the percentage of profitable trades in your trading system and the profit/risk ratio in each trade. Thus, we can see that even if your strategy works 60% of the time but the profit/risk ratio is kept at least at 1.5:1, you can already be sure that you will not lose all your money. But if the ratio of profit to risk is 1:1 with the same 60% of profitable trades, the probability of losing the deposit in a series of losing trades is 12%. A profit/risk ratio of 1.5:1 or more is the right way to think about trading. The minimum characteristics of a profitable strategy is 40% of winning trades with a profit/loss ratio of 2:1 (see the table above). According to this table, if you make 100 trades (each one following the same rules) and you have a 40% winning trade with a 2:1 profit/loss ratio, your risk of ruin would be about 14%. This is the minimum point from which the system can be considered working. What is the most important piece of information regarding risk of loss? Let me help you out. Having a high winning percentage is not an indication that you'll come out a clear winner. If you have 55% winning trades with a 1:1 risk to profit ratio, then your risk of going broke will be in the neighborhood of 27%. So, if you're trading in a similar way, in addition to that it's better to have fewer positions with higher profits! Overall, 42% winning trades with a 1.6:1 profit to risk ratio would also be a good option. That means you would take 1.60 pips out of the market for every 1 pip you risk. For example, by risking 40 pips, you get 64 pips. If the market turns against you (when volatility occurs), you adjust your stop up or down. If your stop-losses and take-profits vary from trade to trade, try skipping trades where the profit/risk ratio is less than 1.5:1. And you'll see how your overall trading statistics will improve. Conclusion I hope this article will help you in forming and optimizing your own trading strategy. Don't get hung up on perfection, but search for and work through profitable trading patterns and profit will come to you.
Education
by DeGRAM
8
How To Lose ProperlyOne of the few aspects of forex trading where you can experience some certainty is that you will have losses. Losses are a part of trading, and one of the key differences between successful traders and the rest is not how much they lose, but how they handle those losses. Being able to lose is key to being a winner in the long run. How are you currently coping with your losses in trading? How do they affect you? What effect do they have on your performance and trading results? Let's break down three steps that can help you better manage your Forex trading losses. Step 1: Reduce losses The first step in effectively dealing with losses is " Reducing losses". It is a key aspect because if you get this step right, you will have to use step 2 and 3 less in the future. The first step can be seen as a kind of "disease prevention". There are three aspects that will help you reduce your trading losses and have an impact on how you deal with them. 1. Reduce your losses When I talk about reducing your losses, I do not mean trying to reduce your losses per se, as it is not realistic, I mean focusing on your trading strategy, maintaining trading discipline and reducing loss-making trades that, for example, arise from trading that is not part of your strategy and that you can therefore avoid. Losses that occur as a result of orderly trading are nothing more than losing trades that are part of the trade. Losses incurred from opening trades that go against your trading strategy, when "something seemed there" to you, can be seen as bad trading or something else that could have been avoided. In short, don't be fooled. Follow your forex strategy. 2. Reduce the value of your losses. Obviously, it all comes down to risk management again. It's important to recognize that large losses have a significant impact on our emotional state, and can often have an impact on our trading behavior, usually not in the best way, such as trying to "get back at the market. Never increase the lot size after a losing trade. 3. Reduce the mental and emotional impact these losses have on you Your reaction to losses is a factor in how you got those losses (whether you followed your strategy strictly or not), their magnitude, as well as your perception and belief about those losses. If you don't like to suffer losses, and feel that you shouldn't have losing trades or dealing with a trade where losing trades are possible, then your reaction will be very different from those people whose thinking is more realistic and who realize that losses are an inevitable part of trading, that results are probabilistic and that not every trade is a winning trade. Are you fully aware of the fact that losses are a part of trading? Are you fully aware of the fact that every trade is not lossless and has a probabilistic outcome? Step 2: Reacting to losing trades Knowing how to lose is the key to becoming a winner. This step comes down to how you actually handle yourself the moment you realize that you may have to accept a loss. Dealing with loss is extremely difficult, it has to do with factors such as our ego, our desire to win and our human nature of aversion to loss, and that is why the "loss reduction" phase is so important. However, even that one step in terms of accepting losses can still be difficult, even more so if we have had losses or losses before. Because of this, it would be helpful to have some strategies that could help you stay calm, focused and disciplined while in the heat. Many people are stopped or taken out of the trade by feelings of anxiety or anger. Their behavior begins to be driven by the emotions they are feeling in that moment, causing them to lose control and discipline. The whole point is to be able to manage your emotional state in real time and keep your mental faculties open to trading, as well as to be able to own yourself and keep a tight discipline. The only quick and easy way to learn how to manage your emotional state is to learn how to manage your breathing. When you are stressed, your breathing usually changes. It becomes ten times more frequent and intermittent, so you need to breathe deeper and longer. This will help you overcome the stress response and keep yourself calm, composed and, most importantly, disciplined. It also helps me to connect the palms of my hands using my fingers. This is a simple ancient Indian technique for calming the nerves. Also, taking the cognitive aspect, keep your sanity in these situations. What thoughts usually visit you the moment you execute a losing trade? "The market always goes against me." "It shouldn't have happened," etc. ... These are unhelpful thoughts because they only increase your stress level. A better question to ask yourself is the following: "What would a successful trader say to himself in a situation like this?" This may help you to direct your thinking in the right direction, and as a result affect your feelings and lead to more positive behavior. Another way to manage your mindset is to actually create some affirmations, phrases that you can repeat to yourself when you are in a situation that will probably bring you a loss, and channel your thoughts, feelings and emotions and override any unconscious and habitual reactions that you might have developed in yourself. Remember that what you focus your attention on will determine your emotional state and discipline. It can be very helpful to focus on phrases that help you concentrate on your trading process and do the right things (which is probably not easy) at the right times and for the right reasons; for example: "I'm a winner because I follow my trading plan." Step 3: Recovering from losses It's helpful to have some strategies that can help you stay calm, focused and disciplined while in the heat. At the end of your trade, take stock of your losses today. What can you do to do this? 1.Evaluate your state of mind How do you feel? On a scale of 10, evaluate your overall trading condition, with 10 being the other end of the scale, and 1 being the other end. Where are you now? 2. Evaluate and analyze the cause of your losses. What type of loss occurred - a losing trade or a bad trade? Can you learn a lesson from the trade? Is there anything you can do about it in the future? Evaluate and analyze the cause of the loss. What lesson can you learn from it? 3. Control your reactions. There are a number of ways in which you can manage your reactions to losses. On a cognitive level, you want to be fully accountable for your thoughts, your perceptions, and the meaning you give to your losses. Your losses have the meaning you give them. Loss does not mean, for example, that you are a loser. You can take a different perspective by looking at things more broadly, what lesson can I learn from this? How will I feel about it at the end of the day, at the end of the week, at the end of the month, after 6 months, after a year, after 5 years? On a behavioral level, you could use a breathing or relaxation technique, go for a walk, or do some physical exercise to help you deal with feelings of loss. Sometimes it's just a matter of time. One trading session or day can often be enough to help you get rid of some emotions, regain some perspective, and be ready to start trading again. 4. Get it together. Come back and be ready to start trading forex again emotionally and strategically. Remember your trading plan, focus on your breathing, and then act. Bottom line. If you want to learn to lose like a winner, and develop skills that will help you improve your chances of becoming a successful Forex trader in the long run, remember: - Reduce your losses: develop the ability to avoid strong reactions to losing trades, by reducing avoidable losses and bad trades; by managing position size and trade outcomes; and by developing a mindset that has a more positive view of losses. - Properly respond to your losses by directing your thoughts and focusing your attention on controlling your breathing to create a state that will enable you to conduct yourself in the proper manner necessary for orderly trading. - Learn to recover from your losses by assessing your condition, analyzing, controlling your reactions, and focusing on trading again.
Education
by DeGRAM
5
Margin callWhen there are not enough available funds in your account to meet margin requirements, the broker issues you a warning, which is called a Margin Call. Your broker automatically sends a margin call when your free margin reaches $0 and your margin level reaches 100%. From now on, it will be impossible to open new positions. Thanks to leverage, traders get leverage that allows them to open positions that are several times larger than the size of their trading account. This helps to earn much more, but losses are also growing. It is at such moments, when you hold too large a position and the market goes against you, that you can get a margin call. This will trigger the automatic closing of all stop-out positions if the market continues to move against you. An example of a margin call. You open a forex trading deposit of $4000 and use a leverage of 1:100. As we know, the lot size on forex is equal to 100,000 units of the base currency ($ 100,000). When using the leverage of 1:100, you must deposit $ 1000 of your money as collateral for each open transaction in the amount of one lot. After analyzing the EUR/USD currency pair, you decide that the price will rise. You open a long position for two standard lots at EUR/USD. This means that you are using $2,000 of your funds as collateral. At the same time, the free margin will also be $ 2000. The cost of one item when trading one lot of software will be equal to $ 10. This means that if the price drops by 200 points, the free margin will reach $ 0, the equity level will be equal to the margin used, and you get a margin call. How can margin calls be avoided? To avoid margin calls, you need to follow the rules of risk management. Before opening positions, you need to know where your stop loss will be and how much it will equal as a percentage of capital. The distance from your entry point to your stop loss should determine the size of your position and, accordingly, your risk level. Do not do the opposite: the size of your position should not determine the size of the stop loss. You may have heard that it is not worth risking more than 5% of the capital in one transaction. Trading according to this rule is, of course, better than trading without rules, but an experienced trader will still say that it is too dangerous to risk 5%. Using the 5% rule, you can lose 20% of your capital in just 4 trades, which is too much. The more money you lose, the more difficult it will be for you to return to the previous level of your trading capital. Serious drawdowns are also psychologically difficult for most novice traders. You may even start trading out of a desire to recoup and start opening even bigger positions to try to recoup your losses. But this will no longer be a trade, but a gambling game. Never risk more than 2% of your trading account in any transaction. If you are just starting to trade forex, 1% risk will be even more appropriate. After you become confident in yourself and your trading strategy, you can slightly increase the size of your position. In any case, 5% is too much for most trading strategies. Even the best traders can make 4 or 5 losing trades in a row. If you want to trade using large lots, you must have the appropriate amount of capital. This is the only safe way to trade for large amounts. The number of positions you open at the same time determines your risk at any given time. If you risk only 2% of your trading account in one trade, do not think that you can open 10 positions at once — this is a sure way to get a margin call. Even if you only open two positions, but you are trading correlated currencies, you are still risking 2% in one trade. An example of this could be a risk of 1% on a long EURUSD position and a simultaneous risk of 1% on a long GBPUSD position. If there is a sharp jump in the market due to the US dollar, you will receive a loss on two positions and lose 2%. Therefore, try not to open multiple positions on correlating currency pairs, or at least be aware of the possible risks. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
21
How To Create Your Own Trading StrategySooner or later every trader comes to the understanding that he needs his own trading system. It is possible to use others’ forex strategies, but they should also be adjusted and suit to you: to your own trading style. In this lesson we will talk about the necessary components of a trading strategy (TS), why a trader needs it, and what questions should be asked when developing a system. What is a trading strategy? A trading strategy is a set of rules allowing to systematize trading, to give a trader a clear notion of when it is better to enter the trade, when it is better to exit it and when it is better to abstain from trading. Also, the system specifies the time and time frame for trading, currency pairs to use and the lot to trade. TS helps to switch off emotions and protect against their negative impact on trading. Why create your own TS? There are many ready-made trading systems on the market, both simple and quite complex and understandable only to professionals. Beginners, as a rule, start trading using ready-made TS, and not the most complex one. However, with time almost each of them understands that trading is really effective only with a strategy, developed personally, based on one's own experience and preferences. Not always the TS is developed from scratch. Often (especially if it is the trader's first experience in creation of a strategy) a ready-made system is taken and some changes are made to it: some indicators are added, parameters of already installed instruments are changed, etc. Regardless of whether the trader creates a strategy from scratch or modifies a ready-made one, it must be suitable for his/her character: scalping is unlikely to suit a thoughtful and rational person, while long-term trading is not suitable for other people due to their nature. Essential components of a trading strategy Each strategy must include certain points, which together will ensure the stability of trading: • Logical reasoning. This is the basic idea on which the trading strategy is built. It is the foundation on which all other components are based; • Currency pairs; • Timeframe and time of trade. • Rules of entry • Rules of exit. How stop-loss and take-profit are set; • Trading lot volume and risk limitation. • If all of these parameters are taken into consideration, you can start testing the strategy on a history or demo account. Timeframe The timeframe choice depends on the time the trader is ready to devote to trading. While on the daily charts, the formation of a candle takes a whole day, and therefore only a few minutes a day will be required to assess the situation and make a decision, on M1, everything changes every minute, and the trader will need to be constantly present in the trading terminal. The smaller is the timeframe, the more signals will be received and the bigger is the potential profit. However, not everyone has the opportunity to devote all the day to trading, and for working people the daily chart will be the best option. It is also believed that technical analysis works better on the daily charts than on the hourly and especially on the minute charts, so D1 will be the best choice for beginners. Most traders use D1-M15 charts, the five-minute and 1-minute charts are too unpredictable and only highly specialized professionals are able to make stable profits on them. Currency pairs In most cases it is optimal to choose EURUSD or another currency pair as a trading asset. In the trading terminal MetaTrader 4, you can select to display only the desired assets by right-clicking on the "Market Watch" field and selecting "Symbol Set"-"Forex". If the idea is focused on a particular asset (for example, gold or the S&P 500 Index), the choice is even more obvious. Choice of tools for analysis Once the trading idea is clear, and timeframe and currency pairs for trading are selected, it is necessary to determine the tools for analysis and determination of entry/exit points. The main rule here is not to go overboard. As a rule, simple systems prove to be the most efficient in real trading. In the same TS, which are overloaded with indicators, various constructions and other signals, these tools often contradict each other, only confusing the trader and provoking him to make mistakes. If the strategy is an indicator one, as a rule, it must contain from 2 to 5 instruments. The minimum required is one trend indicator which determines the trade opening direction and one overbought/oversold indicator (oscillator) which helps to avoid false entries. If the strategy is focused on candlestick analysis, then the trader needs to be well-versed in Price Action patterns. If it is planned to use graphical analysis - a good knowledge of shapes (triangles, flags and pennants, double tops, etc.) is required. It is also necessary to decide whether news and important economic events will be taken into account (if the TS itself is built on the analysis). If the system is based on fundamental analysis, you need to decide what kind of news to trade. News can be tracked with the economic calendar and special indicators. Rules of entry and exit First of all, you need to decide on what type of orders you will enter the market: pending or market orders. Pending orders, on the one hand, help to avoid false entries, but, on the other hand, take away a part of the profit due to the fact that the price passes a certain distance before the moment when the order is activated. It is also necessary to decide in advance on what principle take profit and stop loss will be set. In some TC exposition of take profit is not necessary (for example, when using the trailing stop), but stop loss must always be exposed. Stop Loss is primarily a risk limiter, and protects the trader's capital from force majeure, such as from Internet or power outage. Once all of the rules are defined, they must be necessarily recorded on paper or in a separate file - that is, a checklist is needed. Then you can begin testing the TC. Testing on the history and on a demo account First of all, the strategy should be tested on the history. It will give statistics and primary understanding of its profitability. However historical data loses its relevance over time, so the strategy behavior on the real market will give more useful information. Before entering the real account, the TS should be tested on a demo account. The time of testing depends on the time frame: when trading on H1-H4 or, moreover, D1, it will take at least several months to determine the profitability, while the scalping strategy effectiveness can be determined in a week. Conclusion Every trader should have a trading system. Sometimes beginners think they can trade based solely on their intuition, especially if this delusion is confirmed by a couple of successful trades. Moreover, there are cases when experienced traders have opened deals based on intuition or against the rules of the system and earned huge money. However, the key factor in this exception is experience. A professional trader is able to understand when intuition can be activated and when it is necessary to work strictly according to the system. As a rule, intuition is used very seldom, and rather not to enter the market by a signal than to open a trade against the rules and get a loss. In any case, only professionals with years or even dozens of years of experience can afford such actions without serious risk for capital. There is only one correct way for beginners who are determined to learn how to earn on Forex - the way of systematic trading. Besides, there is one point that is very often missed in their trading, even by experienced traders. This is the Logical Rationale for the trading strategy.
Education
by DeGRAM
6
When to switch from a demo to a live account?An important part of trading is trading on demo account, at least in the initial stages. But, after all, what's the point of earning fake dollars? After practicing on the demo, you need to switch to the live account with real money. You are going to find out when and how to do it correctly after reading this article. To begin with we would like to point out that technically demo and real accounts are virtually the same. Except that order execution on the demo is a little bit better. But if you are not opening trades every minute with a couple of points, the speed of order execution will not play any significant role. That's why the decisive factor in the difference between trading on a demo and a real account is psychology: the fear and greed that people write so much about. When working with real money all of this is felt many times stronger and if you earn on a demo account, but lose on a real one, then trust me it’s all about you not the stop hunters. Two groups of traders As for the transition from demo to live account, we can distinguish 2 groups of people: 1) those who switch to real account too late; 2) those who switch to real account too early. First group. I know some people who have been trading on a demo account for a year or two and haven't even tried to trade on the real account. And they have a stable profit, a well-established system, risk management and emotion control. When asked "Why aren't you trading on the real account?" they vaguely answer something like "I need to check everything, allocate the amount of money from the budget, calculate the risks etc.". I do not know what it is called from a psychological point of view, but a similar fear of action, fear of making a mistake, indecision, is present in many people. A large number of people dream of opening their own business someday, read books, forums, come up with ideas, but do not start their own business. Not even trying. It's the same with the demo account: many people get stuck on it and prefer to think that they will move on to a real account "someday". In my opinion, you just have to decide and do it. There is no other way. Second group. There is also the opposite of the "dreamers" traders who, after closing a couple of successful trades, immediately get into the real account. The market will not run away from you! And all possible mistakes are better to make on the demo account, because on the real one you will have to pay for them from your own pocket. That is why you should first take part in education, choose a system or develop your own strategy, gain experience by using the demo account and only then switch to the live account. 3 signs that it's time for you to move to the real world 1. There are more profitable trades than losing ones. You have to learn how to extract profit from the market, and to do it steadily. It is not so important how many dollars you have earned, it is much more important what percentage of all your trades are profitable. Of course, this all depends on your particular strategy, the ratio of average profit/loss, etc., but in general 6-7 trades out of 10 you have to be successful. 2. You know how to management your capital Position size management is one of the main factors of success. There is no Forex strategy, which gives 100% of profitable trades. There will be periods when you will definitely incur losses, there is no other way. So, we need to select the size of trading lots so that in case of losing trades, not to lose too much, and in case of successful positions to earn an attention-worthy profit. That is the purpose of any method of risk management. As for specific numbers, I would not advise anyone to risk more than 3% of the deposit in one trade. 3. You Control Your Emotions No matter what they say, but emotions play a very important role in trading and you must learn to control them. Of course, when trading on a live account emotion is much more emotional than when trading on demo accounts (because there is real money at risk), but you can still build up some experience. You must be comfortable with losses, because you know that losses are a part of trading, and the most important thing is to have more profitable trades. But you must also take profits calmly: do not fall into euphoria, to keep a sober judgment in market analysis. Excessive optimism often leads to bad decisions. How to be calm in the presence of losses and profits? Very easy: trading must become a routine for you, an ordinary job, for the execution of which you will get a salary. How much time should I trade on the demo? Turning to the question of time, you need to understand that the purpose of trading on a demo account is to gain experience. You need to identify all the standard and non-standard points in your strategy, and for that you need to make a substantial number of trades. So, for different tactics, the time needed to gain experience will be different. Agree, when trading on hourly charts you will get a lot more signals in a week than on daily charts. But if we call any specific numbers, it is as follows: - Trade on hourly charts for 2-3 weeks minimum - Trade on 4-hour and daily charts roughly for 3 months. Alternative to Demo Accounts A good alternative to Demo accounts are cent accounts. With a deposit of just some 20-30 dollars, which you do not regret to lose, you will get the opportunity to trade with real money using precise money management. Of course, you will not earn much from these pennies, but it will be a good training in the "combat" conditions.
Education
by DeGRAM
9
3 paradoxes in tradingIn life, as in trading, there are many paradoxes. Some things are obvious, some are not. With experience comes awareness, and we begin to see what we have not seen before. Understanding the fundamental principles will help you move on correctly. Paradox #1: The more you need money, the longer you won't have it Everyone who came to trading needs money. Often a new trader is a person who has recently lost his job and now hopes to earn them by trading. Here they will be disappointed. After all, trading is a very risky activity, and if you still do not have knowledge and experience, the risks increase to the skies. When you are in desperate need of money, your thoughts and actions are driven by emotions, not logic. And your trade is doomed. As the saying goes, "if you can't afford to lose, then you can't afford to win." The more you strive to make a profit from trading, the more it will elude you. If you came to the market because you really need money, your brain is already set up for emotional mistakes. This is a bad attitude, leading only to big losses. Paradox #2: The more mistakes you make, the more likely you are to succeed Mistakes are good! If you don't forget to learn from them. If you lost everything and still didn't give up, you got closer to victory. This is a very important point, most of them give up here, and the best continue to work. No matter what anyone tells you, the most important thing in trading is practice. Nothing in this life teaches better than the good old practice. Real trading will immediately show all the flaws of the above trading system, flaws in your brain. This is the best teacher, but don't forget to listen to him! Make one mistake, write it down and don't repeat it again. Work it out and continue trading further. I promise that you will learn much more from this experience than from any trading seminar from the "guru" of trading. Make enough mistakes (and learn from them) and you will start making money. It's very simple. Paradox #3: The more you are convinced that you are right, the less likely it is that you have the right knowledge "One of the problems in our world is that smart people are full of doubts, and stupid people are full of self–confidence" - Charles Bukowski. Some people may say that trade is neither a science nor an economy. Unlike the physical sciences, financial markets simply have too many unknowns to have a high degree of confidence in the accuracy of forecasting future prices. To send a rocket to Mars, it is enough for us to understand the laws of physics accurately, but we cannot predict tomorrow's market prices with approximately the same degree of accuracy. Why? This is because we can rely on the laws of physics that remain unchanged, but we cannot rely on the same thoughts, moods and actions of people who essentially drive the markets. The best retail traders understand that regardless of the thoroughness of their analysis, there is still much that they do not know and cannot know about the market. Thus, when they are "lucky", they use trading methods that increase their profits, and when they are "unlucky", they use trading methods that limit their losses. In trading, as in life, confidence is nothing but an illusion. Good luck! Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
16
How To Make a Trading PlanThis time we are going to touch upon one of the basic things that every aspiring trader should have: a trading plan. Many people, after reading silly articles on the internet, confuse a trading plan with the rules of your trading strategy. Well, they are two different things. If you want to know what is a trading plan for forex trading, what it should contain and how to make it, you will learn after reading this material. How to make a trading plan for forex trading? 4 obligatory documents for a trader every trader should have 4 documents, thoroughly drawn up and spelled out both electronically and in hard copy, namely: - Trading Strategy Rules - Checklist for entering a trade - Rules of Money Management - Trading Plan 1) Rules of the strategy - clear rules for entry and exit transactions, also describing: trading hours, timeframe, currency pairs, elements of analysis, and other nuances, directly related to opening and closing transactions. 2) Checklist for entering the market - the list of conditions for transaction opening. You put a tick against each of these conditions, if at least one of them is not satisfied - you do not enter the market. 3) Rules of money management used - clearly spelled out instructions for calculating the size of the position. Be it % of the deposit, N lots for X balance units, or other methods of calculation of the order size. 4) Trading plan - a road map that answers ALL the possible "what if" questions in your trading. Most often a trading plan is advised to include both strategy rules and money management and a bunch of other unnecessary stuff. I'm against having everything in "one pile". Because with a big amount of information you simply will not pay enough attention to it, and it will turn out that you do have a trading plan, but it is of no use. What should a trading plan consist of? Below is a list of parameters a trader should include in his trading plan. They are categorized and examples are given. Don't forget that these are just examples - you will need to make specific points on your own, based on your trading strategy, money management, overall risk level, and views on the foreign exchange market. 1) Force Majeure You must clearly spell out (as well as take the necessary preparatory steps) what you will do if: power outage, "fly" windows, shut down the Internet, an invasion of aliens starts.... Precautions against such circumstances usually include: a laptop with a charged battery (in addition to the main computer), a smartphone/tablet with installed mobile MT4, VPS-server, 3G-modem or smartphone with modem mode, a list of nearby cafes with free WI-FI, phones of friends who live nearby. 2) Restrictions on profits and losses It should also be spelled out what you will do in case of large profits, sufficient profits and a series of losing trades. Everything here is highly individual and depends on your trading style and risk. A few examples to give you an idea of what we are talking about: - "After I reach a profit of 20 pips, I do not trade on that day anymore." (Note that 20 pips is a profit limit per day, not a goal. This is important - setting a profit target is very dangerous.) - "After 5 losing trades in a row, I take a break for a week." - "If I have a 20% drawdown, I stop trading for the rest of the month." - "If I earn 10% - I do not trade this week anymore". - "If I get three stop losses on one pair, I don't trade it that day anymore." - Etc. 3) Emotional states - when you can't trade - "If I'm sick, I don't sit at the computer that day." - If I'm depressed, upset, depressed, or just want to sleep, I shouldn't get into the terminal. - "If I am too excited, angry at someone/something, unable to concentrate, excited about something, enthusiastic, scared, nervous, etc. - I won't open a trading platform." 4) Complex trading tactics If you use several trading strategies, then describe the conditions, when which of them to use. For example: - "If the market has been trending for the last week, I apply strategy X, if the market has been flat - strategy Y" - "The Expert Advisor enters the market, then I disable the Expert Advisor and manage the position by the rules of strategy Z." 5) Sources of information used Examples: - "I watch the list of upcoming news in the economic calendar, I do not trade half an hour before and half an hour after important news. If there are Non Farm Payrolls on that day, I do not trade at all." - "I mark possible sets on the chart, but I check the analytics before I enter into trades. If there are contradictions, I recheck the opportunity to enter. 6) My trading objectives are long-term and short-term. It's important to keep a memo in front of you - why are you doing this in the first place. This will help you both come back from heaven (why do you need 100500 trades a day, if your goal is a stable 10% a month), and keep in mind the long-term plans in times of drawdown. Examples: - "My goal is 5% per month. So, I understand that chasing the number of trades and looking for entries where there are none is stupid." - "Trading is interesting to me as a hobby. I'm earning enough as it is. That's why I do not risk more than 0.5% in a deal." - "I like the market as a source of adrenaline. I like risk and I like to win. I understand that this approach is dangerous and I never deposit more than the amount I don't feel sorry to lose." - "I borrowed 10,000,000 rubles from bandits. I understand that if I don't pay them back 12,000,000 in a month, they will kill me. Good luck to me." 7) Something of your choice This may be a favorite quote, a personal rule of "do not look at the terminal more than twice a day" or "keep your pet cat in the other room while analyzing charts". Or some specific nuances related to your trading methodology. Your trading plan Be sure to create a trading plan. Print it out and put it on the table next to your computer. Or attach it to the wall. It is important to have this document before your eyes. And, of course, you have to follow it.
Education
by DeGRAM
14
TURN ON YOUR BRAINWith age, mental clarity deteriorates, we get tired faster and cannot focus on completing tasks for a long time. At the same time, age is not the only reason for the decline in performance. Lifestyle also plays an important role in this. Poor nutrition, lack of sleep and lack of exercise, constant stress, smoking and environmental pollution factors – all this leads to damage to fragile brain cells. Our brain is very strong and, if we help it, it will work at full power again. Today I want to share with you five ways to improve the work of your brain. Let's go! Healthy fats To improve cognitive functions of the brain, as well as the prevention of mental and affective disorders, it is advised to use flax seeds, salmon and walnuts in food, because they contain a large amount of omega-3 fatty acids. These acids improve and support the ability of your brain to adapt to different situations, improve memory and increase learning ability. Many studies have shown that the use of omega-3 fatty acids increases a person's IQ. In addition, it has been proven that the lack of omega-3 fatty acids leads to the development of mental disorders. Green tea Green tea is recommended to protect the brain from the effects of free radicals. It is full of nutrients and trace elements, rich in antioxidants. In addition, green tea promotes fat burning and increases the metabolic rate in the body. Green tea helps to improve short-term memory and improve cognitive functions of the brain. Physical activity It has long been known and repeatedly proven the positive effect of physical activity on the brain. Some people think that physical activity means a lot of intense and hard sports, but this is not the case. Scientists have proven that it is enough to take a 40-minute walk at least once a week. Such activity improves neural connections, reduces the influence of age on brain function and enhances cognitive skills. In addition to walking, warm-up exercises have a positive effect on the work of the brain. Scientists have proven that the inclusion of warm-up exercises in daily activities improves brain function, helps to cope with tasks faster and better. Foods that stimulate brain activity Proper nutrition and proper diet are very important for brain function. Scientists have proven that children who ate before going to school absorbed the material better and were easier to learn. In addition, people who followed a proper healthy diet had a lower risk of developing brain disorders in old age. To improve brain function, it is recommended to take the following products: • Dark chocolate. It has been proven that it enhances the attention and concentration ability of the brain. • Broccoli. It is rich in vitamin K, which is known to enhance cognitive and thinking abilities. • Blueberries. It contains anthocyanins and antioxidants that support interneuronal connections in the brain and contribute to the prevention of memory loss. • Nuts. They contain a large amount of magnesium, a trace element that is responsible for improving both short-term and long-term memory. • Pumpkin seeds. They are a source of zinc for your body, which is extremely necessary for improving memory and thinking skills. • Greens, asparagus, olives, and whole grains are also rich in vitamin E, which probably helps prevent cognitive decline, especially in the elderly. The superfoods mentioned above contribute to the activation of the intellectual resources of the brain, improve memory and increase efficiency. Music Surely you have turned on music more than once during workouts to better tune in to physical activity. In addition, people listen to calm music to relax. And what about training? It has been proven that classical music increases concentration and improves the level of self-discipline. In addition, it was proved that students who listened to Mozart's works against the background demonstrated the best results in processing spatial and linguistic information. Scientists have proven that music reduces stress levels, which has a positive effect on brain function and reduces the occurrence of chronic diseases, mental disorders and slows down brain aging. Result Our brain, like the rest of the body, needs care. Proper nutrition, physical activity and music contribute to improving brain function. All these tips will inevitably lead you to a new level of brain activity. Watch your body! Good luck! Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
17
Fear In TradingThe profession of a trader can add a whole wagonload of extra emotions and experiences to your life. Fear, along with other important emotions, hope and greed, drive the forex market. Because of the fear of losing money that affects everyone involved in forex trading, fear can be called the number one emotion in trading. Generally speaking, the emotion of fear arose as a result of a perceived threat and has evolved into a natural defense mechanism in most animals. In our heads, the limbic system is responsible for fear, which is one of the most primitive parts of the brain. Fear is one of the components of the instinct of self-preservation in developed animals and manifests itself in the form of "fight or flight”. It is the same with humans. Response of forex traders to the fear manifestation When trading, there are several types of emotional responses associated with fear: - Fear of failure - Fear of missing potential profit - Fear of losing everything; doom. The aforementioned fear-related emotions are reflected in the daily movement of the markets and often lead to trading losses if not properly controlled. Nevertheless, fear can be extremely helpful in case of market contingencies. As W.D. Gunn, one of the famous traders of the past, remarked, "Fear will save you if you act quickly when you realize you have made a mistake." Many professional traders admit to using fear as a sort of sixth sense to get out of a position in time. This refers to situations where neither take-profit nor stop-loss has been triggered yet, but the trader feels that "Something is wrong." Another quote by Gunn reflects the above well: "Fear of the market is the beginning of the road to wisdom. How fear drives your trading Having a good trading system and all the necessary technical and analytical tools is not enough to succeed in forex trading. You also need the right mental attitude. Which can only be achieved by learning to control your emotional reactions in all possible trading situations. Most people have no way of knowing how they will react or what emotions they will display when they start trading. And they have no idea how much their emotional reactions will affect their profitability. Another emotional reaction that can negatively affect a forex trader includes fear, preventing them from doing anything, namely opening/closing positions. This can be especially detrimental if the trader, holding a losing position, finds himself paralyzed, unable to close a losing order while the market continues to move against him. This type of reaction can also prevent the trader from opening a position when he hesitates to "pull the trigger" and thus goes against his own trading plan and system rules. Another type of fear, which occurs during forex trading, usually occurs after the trader has closed a losing trade. Due to the loss of confidence in their system caused by a previous losing position, the forex trader may be too scared to re-enter the market, even fully aware of the possibility of recovering the money lost on a previous trade. How to use fear in forex trading Basically, when it comes to fear, keep in mind that fear refers almost exclusively to future events. It can take the form of prolonging an unacceptable situation (holding on to losing orders), which can make the current situation even worse. A good way to deal constructively with fear is to replace it with hope which can be very damaging to the trader. For example, instead of thinking, "I hope the market comes back," you can replace this thought with a much more helpful "I'm afraid I'll lose more money. Caution in trading can't hurt. This thought replacement technique can help well if you find it morally difficult to accept (and close) losing trades. In general, if you can be disciplined and trade using a good strategy, with application and unquestioning adherence to a money management system, fear and other emotions can be easily curbed. As long as you "plan your trade and trade plan," fear can usually be kept to a minimum in your forex trading.
Education
by DeGRAM
11
Boxing and TradingSome complex things are easier to understand through analogies and metaphors. What do boxing and trading have in common? Nothing at first glance, but if you look closely… 1. You can't avoid the bumps. Even the best boxers with incredible technique and reaction are not able to get away from all the blows. At the same time, missing a shot does not mean losing, it's just part of the game. It is the same in trading – it is impossible to avoid losses, they are part of the game. Do not think that you are the best and will be able to avoid stop losses. A professional trader takes stop losses for granted and does not worry about it - he just continues to trade as if nothing had happened. They are waiting for the next opportunity to strike in order to win at a distance. 2. Miss a lot of punches instead of a single one that will knock you out. The best boxers missed punches, but they had enough technique not to miss the hardest punches. A true professional should be able to defend himself both in boxing and in trading. Follow risk management and learn to identify your worst case scenario. Use an adequate position size, protect it with a stop loss, and always make sure that never, under any circumstances, one trade leads you to a margin call. 3. You don't have to win by knockout - winning on points is also a victory! The audience loves a knockout because it looks beautiful and spectacular. But most of the wins boxers get on points. The best boxers are always focused and will not allow themselves to throw dangerous punches in the hope of winning with one punch. They know that thanks to accurate and effective strikes, they can win without the risk of running into a counterattack. In trading, you don't need to earn huge profits from a single trade. Regular small winning trades will add up over time. A professional trader always remains in control, and he knows that this advantage guarantees success in trading in the long term. 4. Control your emotions. The fight doesn't start in the ring, the fight starts before the ring. Every boxer feels this psychological pressure, but it does not lead the best astray, and even vice versa. The best are able to influence and influence their rivals. In trading, our enemy is you, or rather our emotions. We must be able to control them, not let them influence us. 5. Preparation for each battle is unique. Each new fight is special, because each new opponent uses his own style, has his own characteristics. You need to be able to analyze both your own actions and the actions of a new opponent. In trading, it boils down to the fact that after each closed position, you need to analyze it and understand where there were mistakes and where there were not. This is an important job that will make you a professional. 6. You have to react to what is happening now. Making a plan for the fight before the fight is a good strategy, but you need to be flexible enough to be able to change the plan at the right time if the situation requires it. The best boxers were able to do this, unlike those who stuck to the plan even realizing that the plan has not worked for a long time. Traders are most often very static and trade in reaction mode. Despite the fact that you must have a trading plan and follow it clearly, during some unexpected events you must be able to adapt to the changed market conditions. Amateurs often get "stuck in time" during bad periods – as a result, they get a knockout blow that went before them for a long time. 7. You have to go all the way from the beginning. Tyson, Ali or Holyfield hardly made the decision that they would fight for the world title. They started boxing very early and could hardly imagine their future boxing career. They fought in dozens and hundreds of small fights in dilapidated halls and worked slowly until they were able to take a step on the big stage. Traders should follow the same path. You can't decide to become a profitable trader right now. Most likely, you will go through several accounts, you will lose money for a month or a year, or even more; you will have to work 7 days a week for 12 hours a day without knowing whether all the effort spent will pay off and whether you will achieve your goal. 8. Become a master of the basics. The best boxers are those boxers who perfectly master simple techniques: they move perfectly in the ring, hit effectively, defend perfectly, possess a dangerous hook and incredible endurance. The best boxers do not need to own a unique and outstanding technique or develop their own tricks and tricks – they train their skills on what really matters. Only then will the trader have a chance of success when he masterfully masters the basic principles and techniques. Being able to perform multi-time frame analysis, understand how to read the price and its "mood", understand the basic principles of statistics, have a constant principle of setting the position size and risk management, as well as unquestioning adherence to their trading rules - all this is the basis of any successful trader. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
10
Trading DiaryYou will encounter an enormous amount of information in trading. The emotions you will experience while doing so will also be unlike anything else. Therefore, you will need a diary. And not just one, but two: A diary for traders and a diary for emotions. Trading diary This's simple. If you don't monitor the effectiveness of your trades and if you don't keep statistics, you're playing the lottery. Records of your trades help you control not only the trading process, but also your emotions. They show a complete picture of your struggle with the market. A picture that you can then learn from it. Keeping a trading diary is not difficult at all. It is most convenient to do it in a excel spreadsheet or google docs. In fact, all you need from a trading diary is: the open and close time of the trade; asset name; trade volume or lot size; notes (which indicator, which system is used); and the result Such a table will give you a lot of opportunities to analyze your trades. And most importantly, it will save you from impulse entries. Nothing in the table will be forgotten. What else could be added to it? For example, an extended description of the reasons for entry or reasons for failure. A screenshot taken before you open a trade is very helpful. Some people even record a mini-video, but this is, in my opinion, unnecessary. All this data is evidence. And you show them to yourself later, if the trade was successful or not. If it was successful, note that it was an excellent entry according to your plan. If not, take apart your mistakes and write them down. Emotional diary This diary is treated extremely negligently. You should not keep such diaries because you "have to" do it because someone said something. You have to feel an urgent need to do so, to record your emotions. How and when to do it? You know the easiest way is sincerity. Be honest with yourself. You can't be successful in trading if you constantly lye to yourself. Your job is simply to understand how you feel before, during and after trades. Writing down a lot of words is not an option, it takes time. It makes sense to create a dictionary of code words. Some even use hieroglyphs or emojis for this purpose, as each emojis is a meaningful picture. By doing this, you begin to understand yourself much better. Every day we experience a fairly fixed set of emotions. Always fear, greed, boredom, joy (much less often than other emotions). In trading in general, emotions are complex, where a thought is followed by an emotion and vice versa. By exposing your emotional portrait, you will immediately see your weaknesses. Let's say the fear that the trade won't work out. And what is this fear, its reasons? For example: Lack of practice (uncertainty); you are not confident enough in your trading system (doubts); you have violated money management and are afraid of losing money (fear); you're working on your last dime and you're scared (fear); you're sick of all the technicalities (impatience); the trade is lost (indignation). What to write in the diary? Everything that relates to trading: before, during and after. Trading is a set of skills and certain abilities, no matter what specific techniques or tools are chosen. And the final result depends on the systematization of your skills. It depends on how well you follow your own plan, how you execute it and how you monitor it. The diary should include: your motivations, why you came into this business; what the market is to you, how you assess and analyze it; how you analyze mistakes and missed opportunities; how you keep track of your trades. Everything must be prescribed. You can have a simple list; you can have a complex program, whatever you like. Formalize your approach to trading. This is the only way to turn an amateur into a professional trader. Take screenshots. Lots of them with descriptions. In Tradingview, they are made with one button. You don't even have to install a separate program. Study your trading diary The diary is a jewel. It's your trading life. On weekends, when there are no trades, it's a good time to open it and dive into studying your past trading week. As you go through it, try to answer the following questions: How much, given the risks, was the correct lot size? Was the entry really as successful as you thought it would be? What tools could be used to improve it? Did you think things through patiently or did you open a trade because you couldn't wait? Did you follow the trading plan when opening the trade? What happened to the support and resistance levels during the trade? Was there any big news? By constantly asking yourself these and similar questions, you will learn to control your emotions and be able to treat the market as a regular, structured work, where no surprises can happen to you, because you have thought everything through in advance and know how to act in case of profits and losses. What to do with statistic? Nothing complicated. You actually need the diary for two things: to find something that works; and what is known to be useless. It is the diary that allows you to find answers to many questions in relation to currencies, best trading days of the week, special instruments and much more. If you track your trades in a diary, you're on the road to professional trading. This way you rely on structural logic rather than your memory, which regularly fails us, also due to the continuous influence of emotional factors. Use it, regularly, do it for yourself. Be sincere with yourself. Talk to yourself, criticize, praise, if there is a reason to do so. Do not keep all your emotions inside, they will come back to you later through wrong trading decisions. Dear diary...
Education
by DeGRAM
4
Paper TradingThere are traders who live only from trading, there are quite a few of them. But do you think they have some secret formula for the market? Wouldn't it be great? A simple and clear way to make money from the market, no worries. You open a chart, take a trade, and just go away. In reality, it's not like that. Like many traders, I found it infinitely difficult, because trading is: Work and a continuous buttle with yourself. You have to detach yourself from your passions and become a creature that absorbs all possible and available information about markets. One must cope with a multitude of incompatible and mind-breaking emotions. You need to stop treating trading as a game and consider it as a job. The chart itself should be regarded as a real business. It's a difficult road, not an easy one. Most people lose money on this route. They get picked up by the people who follow them, they lose too, and it happens time after time, in a continuous line. Along the road of trading, you will encounter a lot of obstacles: A desire to solve your problems by investing a capital and making a large sum of money quickly. You will be very afraid and hurt to lose money and you will lose it, inevitably, there's no way around it. You will constantly lose faith in yourself and your predictions; the market has broken a lot of traders. Trading abounds in traps. How to avoid many of them? Well, you can do it the old-fashioned way by trading on paper. Paper and market prices Trading on paper. What does it mean? It means you and just a piece of paper. Yes, it's the old way. Of course, you can use spreadsheets and there are different prediction tools on trading platforms now, like forecast on Tradingview, for instance. Get a notepad, a pen, sit down in front of the chart and watch how the price moves. When your strategy indicates an opportunity for a good entry, write down all the details of the potential trade, such as: Account balance; The current price of the asset; Open and close time; The size of the trade; and of course, whether it is a buy or sell trade. All you have to do next is keep looking at the chart, or you can leave it alone. When it's time to analyze the past, just write down the current price and the new size of your balance, and if the forecast was right or wrong. That's what trading on paper is all about: you write down the data on a trade instead of risking your money. So why rush in and lose it. I understand if you don't like paper. I'm a fan of smartphones and laptops myself. So, keep records in Excel or in the trader's diary. Pros of trading on paper The pros are obvious no money is lost, you can open a chart at any time and assess the results of your efforts. Similarly, you can analyze successful predictions and learn to repeat them on the chart. Yes, of course, many brokers give demo accounts, but do not forget that they often give you the demo only for the purpose of "hooking" you on their platform. Some brokers even open a demo after depositing with real money. Paper trading doesn't require you to do anything at all. You just need to record your entries from time to time, it can't be easier, can it? And when you start getting good at it, you can try the demo or go straight to the real one, to work on a small capital. The disadvantages of trading on paper The disadvantages are obvious, this is not real trading and one can get too carried away with paper testing. Sometimes everything turns out great on paper and you diligently build up capital every single day. And then you know what happens? You'll have a very interesting thought in your head, like: "Isn't it time for me to invest more money and earn real money?" If you get greedy, you're in trouble. What a way out of this is not to think that paper successes will immediately translate into real successes. You shouldn't get greedy. Theory is theory, and practice is practice. With paper trading you certainly can't lose money. When it comes to working with real capital, it also helps to eliminate the emotional factor—the continuous stress we experience, and which we struggle so hard to tear from our hearts. Trade on paper Paper trading is the most elementary way to test strategies and educate traders' discipline. This method is old, one might say, grandpa’s way. For decades, Wall Street traders have been writing their notes on paper, before the computer age. Work on paper as close to reality as possible. If you can't afford to work with more than $100 on your account in reality, work with the same amount while trading on paper. Do not draw millions for yourself. The simulation should be as close to reality as possible. In the end, the main thing that distinguishes real trading from demo or paper trading is only emotions of the trader. After all the charts and prices remain exactly the same.
Education
by DeGRAM
7
Multiframe analysisMultiframe analysis is when we analyze the same currency pair or other asset on several timeframes at once. You know that any price can be seen on a chart: Daily hourly 15 Minutes 5 Minute 1 minute We have plenty of opportunities to study the behavior of the same price. And it is the multiframe analysis that will allow us to do it correctly and efficiently. There are quite a few trading systems where the daily or even weekly charts are taken as the basis. Does it mean that sets on higher timeframes are not applicable on small ones? Not at all. That is exactly what we need. Let's say you saw that EUR/USD is in a downtrend on the 4 hourly chart by drawing a trend line. However, your main trading chart is a 5-minute chart and you see perfectly well that the price on it goes up/down, and the trend line from the 4-hour timeframe is hovering far above. And what to do with it, on what timeframe to look at? Traders often get confused with this. They see a sell signal on the 4-hour chart and a buy signal on the 15-minute chart. What should we do in such situations? Let's figure out what timeframes should be used and how to perfume it. Best timeframe The question of which timeframe is better to trade is asked very often. And this question is always wrongly answered when a beginner trader chooses a timeframe that does not suit him psychologically at all. Inexperienced traders want a lot of money at once in the shortest possible time. That is why they, naturally, choose the 1-minute or 5-minute chart. However, as time goes by, it turns out that these timeframes cause frustration and emotional distress to the majority of traders. The frenzied pace of price on these timeframes provokes incredible greed, turns off the brain and most lose money. Some people are comfortable trading on the 1 hourly chart. You wait much longer, and there are much less signals to take. But there is much more time to analyze the market and there is no rush. And, of course, a frequent guest in terminals are several timeframes on one screen. The whole point of the Dow theory is that we analyze the price from the higher to the lower timeframe and thus get a complete picture of the market. The timeframe is just a detailing of the price movement. Price chart is always the same. You can simply watch the price in the one minute or monthly chart. When it comes to the main timeframe, it could be too fast or too slow. This is normal, and it should be. You will try them all anyway, so the question of a constant timeframe is purely rhetorical. Let's compare several timeframes, what their pros and cons are. Long-term timeframes. These are the daily and weekly charts that give you a bird's-eye view of the markets. It’s for the real turtles. Medium-term timeframes. These are mostly hourly charts. Much more opportunities compared to the daily and weekly charts, there are can be several trades per day. Short-term timeframes. The timeframes, respectively, are 15 or 1-5 minutes. When choosing a timeframe, you should also take into account the number of trades and your deposit. Remember that the lower the timeframe, the messier trades it provokes. Such emotional traps are one of the key reasons why people lose money in forex. Psychological timeframe The main thing you need to understand is that the trading timeframe is tailored to you and your personality. Different people = different trading timeframes. With experience you will have no problem finding a good TF for you. Before looking for signals and on lower timeframe, you should analyze: 4 hourly or even daily 1 hour chart And for each, we need to draw support/resistance lines, channels, and what grandpa Dow requires of us. This is how you can identify reversals on, let’s say, a 15- minute chart. Because on higher timeframes the price encounters strong support or resistance. As you already remember, the larger the timeframe, the more reliable the resistance and support levels. When you see the big picture, the chances of successful trading decisions increase significantly. But with newbies it's the opposite. They set up a 1 or 5-minute chart and other TFs do not interest them at all. The practice of multiframe analysis We have already understood the essence of the analysis on different frames, it was also discussed in the theory of Dow. This is how we see the global price movement: long-term trends are formed on higher frames, and support and resistance are much more reliable on long-term TFs. It all starts with choosing a trading timeframe, after which we go up the ladder to get the full picture. And the full picture is an understanding of what's going on with the market. The market has only two states: a trend and consolidation. Higher timeframe analysis allows us to figure out what entry and under what conditions to make a trade. Tunnel vision or a global view; the choice is obvious. The best bundles of 3 timeframes It's best to use three TFs: The first one will show us the main trend, the big picture of the market; the second is a medium-term signal. The third is the detailing of the second signal, here we will look for the exact entrance zone. The most popular combinations of timeframes, depending on their level of detail, are as follows: 1, 5, 30 minutes; 5, 30, 240 minutes; 15, 60, 240 minutes; 1 hour, 4 hours, daytime; 4 hours, daily, weekly. There must be a sufficient time interval between timeframes. Otherwise, instead of detail, you get a simple clarification that is not particularly useful. To summarize Multiframe analysis is a framework that complements the Dow theory and, in fact, is based on it. First you must choose a global timeframe, then learn how to detail it. Conversely, enlarge the smaller timeframes to get an overall picture of what is going on. Never enter into trades without checking the situation on higher timeframes. Otherwise, you risk getting stuck on one timeframe and will surely miss an important market movement.
Education
by DeGRAM
7
Advantages and disadvantages of trading robotsHello everyone Today I want to discuss Trading Robots with you. In trading, any trading method takes place, especially trading using a robot that is devoid of emotions and performs everything that is assigned to it with the accuracy of a tick. Robots have many pros and cons, let's figure everything out in order. Advantages Speed. Any program is able to monitor more tools than a person. In addition, the program easily performs dozens of calculations and can analyze the market and make a deal in a matter of seconds, which the human brain is simply unable to do. A trader cannot learn hundreds of strategies and rules and use them simultaneously in the market, trading manually. On the other hand, the program is able to safely use complex systems. Accuracy. If the code is written correctly, if the strategy is well chosen, the robot will follow the rules accurately. An ordinary trader can choose the wrong tool, mix up the numbers, put a comma in the wrong place, the robot is absolutely accurate in its actions. Fatigue and scalability. Any trader needs rest, no one is able to sit at the monitor and constantly trade correctly. Unlike a human, a robot just doesn't get tired. He is able to work all day, seven days a week and does not ask for time off. If you use a robot, you can be free all day and go about your business while the robot does all the work for you without fatigue. Functionality. If a person finds a new strategy, he will need time to study it. And even after spending time studying, there is no guarantee that a person will understand everything that he studied the first time. But the robot will be taught easily, it is enough to write a line of code, and it will do everything, without errors, from the first time and you can add as much as you want and almost anything. The robot is not subject to emotions. Perhaps the biggest problem of a trader is emotions. Every trader, especially a beginner, experienced strong emotions when he lost or when he earned. It will not be possible to correct your psychology and get rid of emotions in a second, but fortunately, the robot does not have such problems. The core of the robot is built on clear rules, the robot simply does not know how to deviate from them, and the robot does not know emotions. The robot doesn't care how many losing trades there were before or will be after, all it knows are the rules, and it adheres to them. It is not easy to create a robot, but everyone can do it if they put enough effort and spend time. Disadvantages The complexity of making a robot (writing a program). Everyone can create a profitable trading strategy, but not everyone knows how to program and create robots. If you can program, you may have to learn a new programming language. There is an opportunity to buy a ready-made robot or order a robot to be written to you. In the first case, you will not know what is hidden in the black box, you will not be able to configure it. In the second case, there is no guarantee that the programmer will understand your idea and do everything right. The trading robot can only use technical analysis. A trader can read the news and understand the meaning that is hidden between the lines. The trader knows how to understand, but the robot does not. The robot understands only dry figures and therefore it uses technical analysis perfectly, but is not able to go beyond these limits. In addition, there will be situations when you clearly see one scenario, and the robot simply does not see it. At the same time, it is impossible to stop trading the robot if it is profitable at a distance. The only thing that can be done is to analyze this situation and, if necessary, make changes to the algorithm, while carrying out the entire testing process anew. A trading robot cannot make decisions in non-standard situations. It only fulfills the logic inherent in it, and in case of problems it will not be able to change anything. Of course, the program can include the robot's reaction to some situations, but it is impossible to foresee everything. For example, if the Internet connection is lost, the robot will not be able to continue trading or at least close an open position. A trader trading manually, in this case, would call the broker and close the position, or restore the Internet. The computer may freeze, the program may close with an error, the broker may not accept the application or accept it, but with a long delay. The trading robot will not be able to react to all events and this may lead to unplanned losses. The lack of emotions, one of the advantages of a trading robot, is also a minus. The robot can drain your entire capital in one day without any embarrassment. This must be taken into account when creating a robot. For example, allow the robot to trade only a part of your capital, or make it so that when a certain threshold is reached, the robot notifies you and (or) stops trading. Conclusion Concluding the consideration of the pros and cons of using trading robots, I want to say that the negative sides can be largely offset by a professional approach to creating a robot whose algorithm will take into account actions in non-standard situations. But at the same time, of course, there is no escape from the complexity factor in the process of creating robots, this is the main deterrent, which can only be overcome by spending considerable time on mastering programming. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
11