Get started

Trading Psychology

Comparing Traders: the FOMO effectFOMO Trading vs Disciplined Trading: THE CYCLE (chart) The process of placing a trade can be very different depending on the situation in hand and the factors that are driving a trader’s decisions. (On Chart example) Here is the journey of a FOMO trader vs a disciplined trader – as you will see, there are some fundamental differences that can lead to very different outcomes. DAILYFX ANALYSTS SHARE THEIR FOMO EXPERIENCES Traders of all levels of experience have dealt with FOMO, including our DailyFX analysts: “Trade according to your strategy, not your feelings” – Peter Hanks, Junior Analyst “Strategize. Execute. Stick to the plan and don’t be greedy. All types of traders make money; pigs get slaughtered” – Christopher Vecchio, Senior Strategist “Trade decisions are not binary, long vs. short. Sometimes doing nothing is the best trade you can make” - IIya Spivak, Senior Currency Strategist “If you don’t deal with and temper FOMO in trading – it will deal with you” – James Stanley, Technical Strategist If you do not have a trading plan, trading strategy, trading edge in Forex trading- you are leaving trading to happenstance instead of controlling your probables and treating Forex trading like a business. This is not a sprint race but a marathon race. Forex trading outcome is up to you alone.
Education
by Anbat
104
FOMO (No Place In Forex Trading)What Is FOMO in trading? FOMO in trading is the Fear of Missing Out on a big opportunity in the markets and is a common issue many traders will experience during their careers. FOMO can affect everyone, from new traders with retail accounts through to professional Forex traders. In modern age of social media, which gives us unprecedented access to the lives of others, FOMO is a common phenomenon. It stems from feeling other traders are more successful, and it can cause overly high expectations, a lack of long-term perspective, overconfidence/ little confidence and an unwillingness to wait. Emotions are often a key driving force behind FOMO. If left unchecked, they can lead traders to neglect trading plans and exceed comfortable levels of risk. Common emotions in trading that can feed into FOMO include: Greed,Fear,Excitement,Jealousy,Impatience and/or Anxiety. What factors can trigger FOMO trading? Volatile markets, Big winning streaks, Repetitive losses, News and rumors and/or Social media, especially Twitter. Tips To Overcome FOMO include: There will always be another trade. Everyone is in the same position, Stick to a trading plan, taking the emotion out of trading is key, Traders should only ever use capital they can afford to lose, Knowing the markets is essential, FOMO is not easily forgotten, but it can be controlled, Keeping a trading journal helps with planning. Overcoming FOMO doesn’t happen overnight; it’s an ongoing process.
Education
by Anbat
How to Assess Your Trading Performance|Consistency & Perspective Hey traders, 👨🏻‍💻I am trading forex for more than 8 years. During the last 5 years, I am actively posting my analysis & trades on TradingView. Growing my audience, it was very peculiar for me to contemplate the reaction of my followers to my trading performance. (by the way, we must say thanks to tradingview where the posting system does not allow to delete the posted trades so that each and every author is easily backtestable). 👩‍👩‍👧‍👧👨‍👨‍👧‍👧Those who follow me at least a half a year know that occasionally I have winning streaks when 9 out of 10 of my forecasts play out nicely. Sometimes, however, I face the drawdowns and catch a sequence of losing trades. And sometimes the performance is mixed with the probabilities being on my side slightly. 🥇While the reaction to winning streaks is quite predictable: I am praised by the members and get nice tips. The reaction to losing streaks is worth discussing in detail. It turned out that quite a huge portion of a trading community has a completely wrong understanding of a trading nature. 🤬The single loss is considered by them to be a failure, a mistake. Facing the sequence of losses, they quickly become negatively biased to the person that they have just recently praised. With the continuation of a drawdown, they blame the analyst and launch a barrage of criticism towards him. 🔍Then they are in a search again. They are looking for a trader that will be constantly right. Catching the new one during a winning streak, the cycle repeats. At some moment such people become disappointed in trading and drop this business... ❗️Losses, losing streaks and negative days/weeks/months are inevitable. If you want to become a full-time trader, you must be prepared for the fact that trading won't give you a stable income. Your equity curve will be in constant fluctuation. Your goal in this game is simply to lose less than you make. You must become disciplined enough to keep following the rules of your trading strategy no matter what. You must learn to be consistent in your actions. You should learn to perceive losing trades not as a failure but simply as the moment when the market takes its share. Feeding you, giving you the opportunity to make money out of thin air, the market definitely has a right to claim its dividends from you. ⭐️Change your mindset, learn to lose and the magic thing will happen. ❤️Please, support this idea with a like and comment!❤️
OANDA:XAUUSDEducation
by VasilyTrader
28
The 5 Steps To Becoming A TraderThe 5 Steps to becoming a trader Step One: Unconscious Incompetence. This is the first step you take when starting to look into trading. You know that its a good way of making money because you've heard so many things about it and heard of so many millionaires. Unfortunately, just like when you first desire to drive a car you think it will be easy - after all, how hard can it be? Price either moves up or down - what's the big secret to that then. Step Two - Conscious Incompetence This is where you realize that there is more work involved in trading and that you might actually have to work a few things out. You consciously realize that you are an incompetent trader - you don't have the skills or the insight to turn a regular profit. Step 3 - The Eureka Moment Towards the end of stage two you begin to realize that it's not the system that is making the difference. You realize that its actually possible to make money with a simple moving average and nothing else IF you can get your head and money management right You start to read books on the psychology of trading and identify with the characters portrayed in those books and finally comes the eureka moment. Step 4 - Conscious Competence You are making trades whenever your system tells you to. You take losses just as easily as you take wins You now let your winners run to their conclusion fully accepting the risk and knowing that your system makes more money than it looses and when you're on a loser you close it swiftly with little pain to account. Step Five - Unconscious Competence Now we’re cooking - just like driving a car, every day you get in your seat and trade - you do everything now on an unconscious level. You are running on autopilot. You start to pick the really big trades and getting 200 pips in a day doesn't make you any more excited that getting 1 pips.
Education
by Anbat
Compounding "Most Powerful Force"★ Compounding interest is a powerful investment tool. By reinvesting your trading earnings, you can significantly boost your returns over the long term. Compounding refers to interest which is calculated not only on the initial principal but also the accumulated interest of prior periods. Compound interest differs from simple interest in that simple interest is calculated solely as a percentage of the initial principal deposit. As a result, compounding accelerates returns as you are earning not only interest on your principal, but interest on your interest. Anyone can benefit from compounding interest. The longer your money compounds, the faster it grows. For example, if you had a $5,000 Forex trading account earn 2% per day for one year (260 business day) and just let account grow, you will make over $800,000.00 US within the 1st year. You can accelerate your earning power even more by contributing principal payments to your accounts periodically. Even small deposits will realize significant benefits with compounding over the course of time. This is just by trading Forex, if you contribute additional monies, then account will grow quicker. "Compound interest is the eighth wonder of the world. He who understands it, earns it... he who doesn't... pays it."- Albert Einstein Note: There are free daily compounding calculators online- for you too put your own account size in, % in, days for see how much compound interest would substantially and quickly increase your Forex trading account- just let your account account, with having a plan, risk management and patience.
Education
by Anbat
My Journey of TradingThese thoughts come in my mind recently. And I think I want to share with anyone who interested in. I already trade for about 2 years now, and I found that this world of trading is a very unique world. In order to survive, I think I need to be happy. But when I walk in this journey, I found many things that change my mind. I think to be happy in this stuff, I must have a goal. And I must try to stick to that goal. For now, I set my goal to make money and to be happy. Believe it or not, sometimes during my journey, I fall to several things that distract me from my goal (without I realize it). Now what I found comfortable enough to hold on to, are stuffs that I write in the last box. I have sometimes "envying" friends that succeed in scalping. And trying to become scalper, damages my life. I can't concentrate to my main job, I have no willingness to spend time properly with my family. I found no happiness at all. Well, trading is like looking for a spouse. Find anything that suits you best. What's best for other people, may not be the best for you.
OANDA:XAUUSDEducation
by arifkus
2
Set and Forget TradingThe Psychological Advantages of Set and Forget Trading Regimes Set and forget trading is a phrase that I coined in about a year back while taking classes with my students. It’s a trading approach that works if you follow it, to put it simply. For this reason, I write about it often, and my students no doubt understand the main benefits of the set and forget trading approach. However, in today’s lesson, I want to focus on the psychological aspects and benefits of the set and forget approach and why it will help your trading performance, based on my personal experiences. I get many of my students who email me regularly with success stories after they have adopted the set and forget approach. Hopefully, more of you will start trialing this concept because there is nothing that makes me happier than hearing my students’ success stories. Set and forget trading works partially because of the way it helps you to systemize the entry, stop and target of your trades. By allowing the edge to play out uninterrupted, without you fiddling with it for arbitrary reasons, your long-term trading performance will improve simply as a ‘side-effect’. However, there are also some very important mental benefits of set and forget trading which I don’t often discuss. In this lesson, I want to focus on the psychological benefits of set and forget trading to help more of you make the mental transition to this style of trading. By committing to the trade completely before you even place it, it means you’re identifying the trade, placing the orders and walking away with very little monitoring. It also means being at peace and avoiding the emotional ups and downs that come with watching your trades as they are live. It means walking away and letting the market ‘do the work’ whilst you go do something more productive or fun. It means removing yourself from the temptations of chart-watching and getting influenced by chart whipsaws from news releases, short-term volatility and so on. In short, it means setting and forgetting! Mental advantages… By understanding the mental advantages of set and forget trading, perhaps you will gain a deeper understanding of its power and begin trading this way sooner. Significantly Reduce Stress & Emotional Ups & Downs Trading can be as stressful or as stress-free as you want it to be, it all depends on what you do. If you sit there staring at the charts all night when you should be asleep, you are doing to drive-up your body’s stress response and your cortisol (stress hormone) levels will sky-rocket both from the lack of sleep and from over-thinking about your trades . Now, as if the stress wasn’t bad enough, it’s going to get worse. You’re also going to hurt your trading performance by doing what I described above, this will work to further increase your stress levels. Eventually, you will be tired, angry, frustrated, on the verge of tears and left with an empty trading account. By employing my set and forget trading approach , you can eliminate all this stress, worry and losing! Show me a set and forget trader and I will show you a stress-free trader who is on the path to trading success. There have been studies done on investors / traders and their trading performance in relation to their trading frequency, and they always show that less-involved traders do better over the long-run. Similarly, even though trading is a male-dominated arena, when women do step into it they tend to do much better on average than men. Why? Simple; they do not over-trade as much and they do not risk too much like many men do. The reason has to do with men having higher testosterone levels (a hormone that makes men take more risks and feel over-confident, things that can hurt you in trading). I have an article in which I discuss this female vs. male trading phenomena more in-depth, you can write to me to send you the article if you would like to get it: What is The Weakest Link in Your Trading? Suffice it to say, us men are not always right, and we can and should learn from women sometimes and trading seems to be one area where we can benefit from their seemingly innate ability to set and forget their trades. Help Cure Your Obsessive Chart-Watching Have you ever heard of positive reinforcement? It’s when you get a reward from doing the right thing, this will then reinforce whatever the ‘right thing’ was that you did so that hopefully you keep doing it. It works on kids and it can work on adults too, especially in trading. When you watch charts all the time, you are probably going to lose money, so the chart-watching is a negative behavior. The tricky part here is that the act of chart-watching can feel very good while you’re doing it (dopamine – the chemical in your brain that gives you the rush you get from the ‘hope’ of making money), so you are essentially getting a mental reward from committing a negative behavior and you are reinforcing a negative behavior by continuing to do this. Therefore, traders get stuck in an addictive cycle of watching charts, making the same mistakes over and over and losing money. But, YOU CAN STOP THIS and YOU CAN REVERSE IT! By utilizing set and forget trading you can literally begin to reinforce positive behavior rather than negative. This will work like a positive feedback loop in which the improved performance you see from behaving properly in the markets works to make you want to continue that positive behavior. It’s no different than someone who sticks to a regime of exercise over a period of months; soon enough the endorphins and improved strength and energy-levels begin to reinforce the behavior of working out consistently. Yes, in the beginning it may seem like a ‘boring’ chore you don’t want to do and it may even hurt a little, but rest assured, that pain is good for you. Setting and forgetting your trades is truly the key to eliminating almost every negative trading behavior that traders have. You need to implement this sooner than later. A man smarter than me once said; “Suffer the pain of discipline or suffer the pain of regret”. That means, pay your dues, be disciplined now and it will pay off later, or you can continue to act lazy and undisciplined and you will suffer the pain of regret later. Sleep at Night – Know What You Stand to Lose or Make Sleep is critical to all physical and mental process in the human body. There are thousands of studies on this. I can tell you for a 100% iron-clad fact that IF you are losing sleep from watching charts and worrying about losing too much or not winning enough, you are hurting your trading performance and you are starting down the road to reinforcing negative trading habits as we discussed in point 2. When you are using set and forget trading, your stop loss and profit targets are pre-defined, so you know what you stand to lose and what you stand to win on any given trade. I can tell you from experience, this makes it a lot easier to get and stay asleep at night so don’t under-estimate this benefit! This brings up another point: When you know what you stand to lose or win on a trade it goes a long way towards eliminating greedy behavior. Greed is a huge reason traders fail. It causes them to hold trades too long whether the trade is moving in their favor or against them. How many times have you been in a big winning trade and you didn’t take the profit because you had no profit target or because you moved your profit target from its initial setting? This is greed. Being greedy inevitably causes traders to end up with no money. Bulls make money, bears make money, Pigs? Pigs get slaughtered! That is one of the oldest Wall Street sayings and it rings louder than perhaps any other, still to this day. When you set a profit target and stick to it, you aren’t being greedy, so over-time you should end up making money. When you set a stop loss and stick to it, you can pre-define your risk to a dollar amount you’re mentally OK with (potentially) losing. When you adjust your risk properly and you know what you can lose, you should have no problem setting your trade and walking away. Disclaimer : There is never a 100% certain outcome for any trade and losses can sometimes exceed stop losses due to slippage. Exercise the Mental Muscles of Routine & Discipline When you make the commitment to start set and forget trading, you are kicking off a process that is self-reinforcing and will continue to strengthen the longer you use it. The power of routine and discipline, of repeating an effective system or process and staying accountable to THAT, will help you accelerate your development of the proper trading habits . Once you have the proper trading habits in place you will see improved trading performance which gives rise to a huge surge of trading confidence in both yourself and what you’re doing. This reinforces the routine you started with and it all stems from committing to the set and forget trading approach. Here is what this looks like in the diagram below. Notice that set and forget is in the center, because it really all starts with that idea – once you commit you will quickly figure out the proper trading routine from the help of my articles and trading courses , then it really starts to almost ‘take care of itself’ as long as you stay disciplined and stick to the set and forget plan. The set and forget ‘wheel’ of trading success: Confidence Through Achieving Better Trading Results Confidence in business, trading or even in your personal life is something that truly is so important that it has no dollar value; it is invaluable. Confidence breeds more confidence and it works to reinforce those positive trading habits we discussed earlier. By trading properly not only are you reinforcing positive trading habits but you’re breeding confidence in yourself and your ability to stick to a plan, this confidence helps you stick to what was working. It’s all a positive feedback loop as I said before. Confidence is spawned by the momentum of winning trades or at the very least, having better trading experiences and having more control over the capital in your account; the strategic planning that set and forget allows, that results in improved results. It’s not going to happen all at once, but over time, when you master this style of trading , you will start to feel more in control because you’re controlling the things you can and not trying to control the things you can’t (the market’s movement is uncontrollable). Being more confident will spawn more motivation to continue mastering the act of finding the trade and placing the trade. It’s just like the earlier example I gave of exercise; when you get over the initial ‘pain’ of it or the initial ‘I don’t want to do this feeling’ and you start seeing positive results, it’s going to inject you with a whole boat-load of motivation and confidence that will work to fuel your on-going progress and quest for being the best. This will give you the willpower and discipline you need to make it as a trader. Conclusion I focus on the set and forget approach and 95% of the time I will resign to the fact I’m about to lose XYZ or make XYZ on a trade; this works to eliminate the potential of making emotional mistakes. The expectancy of my trading method combined with the set and forget money management approach has helped me, as well as many of my students improve their trading. It’s not an exact science, and of course there will be times trades are adjusted and there are times that no amount of mechanical money management can override the natural human emotion of trading, but we are not after perfection, we are after training and exercising the mind to be able to let go of the need to control the outcomes and control the market, after all the market is going to do what it’s going to do with or without us watching it or trading it. All we can do is control ourselves and our own behaviors in the market and that is what set and forget trading is all about. Happy trading, CryptoKings! Do well to follow for more lessons and trading analysis....
Education
by Skuchies_CryptoKing
6
Why the Quality of your trades matters more than the QuantityMost traders simply want to trade. They fear missing out on the next big move and they forget that the market is still going to be there tomorrow and the next day and 10, 20, 50 years into the future. Everything in the market repeats and that means there will be another opportunity right around the corner, so stop worrying. Today is not the last day you will have to trade and yet many people trade and think like it is! Over-trading is the number one reason that most traders don’t succeed; it’s a ‘cancer’ to your trading account and to your dreams. What would be considering "over-trading?" If you find you are almost always in a trade, you’re over-trading. If you find that you are preoccupied with the markets and your trades, you’re over-trading or you’re about to over-trade. If you are in more than one trade at a time you’re probably over-trading unless you have carefully divided up your overall 1R risk amongst all the trades. There are many other examples of over-trading, but the basic fact of the matter is that you know if you’re trading too much because you won’t be able to sleep at night and you will be hemorrhaging money. I personally only trade 1 to 6 times per month approximately, which all my students clearly know about that, and I very carefully select my trades and filter out the signals I don’t like. A. Here’s what over-trading does to your trading results and account… 1. Too many trades dilute your edges The more trades you take, the more diluted your trading edge becomes. A trading edge increases your chances of success, but the simple fact is, there are only going to be so many high-probability trade signals each week, month, year etc. no matter what your edge is. So, once you start breaking away from your trading edge and start taking lower-quality trades that don’t meet your criteria, you start lowering your chances of success. You are basically diluting your trading edge down to where eventually it will be no better than random or worse. basically diluting your trading edge down to where eventually it will be no better than random or worse. Market Noise vs Quality Trades – There is market noise, and then there are actual high-probability price events, you must know the difference. I wrote an article that touches on this titled how to trade sideways markets and I suggest you check it out to learn more and see some chart examples. The point here is that when you don’t know the difference between market noise and actual price action signals worth risking money on, you will naturally end up taking trades that are just noise and not actual signals, further diluting any edge you may have. The verdict is clear: Before you start risking your hard-earned money in the markets, make damn sure you know EXACTLY what your trading edge looks like and how to trade it so that you don’t ACCIDENTALLY end up over trading. 2. The spread and commission eats your profit How do you think casinos make sooooo much money? Frequency. The high-frequency of games played means that their edge is going to play out to their advantage over and over again. The house always wins. In trading, the broker is the house, and they always win because not only are there a lot of people trading but probably 90% of them are trading WAY TOO MUCH. Hence, your only REAL “edge” as a retail trader or investor is to simply TRADE LESS! Consider this : Every 100 trades you give back at least 100 to 150 pips equivalent in spread or commissions, so the more you trade the more you cost yourself simply due to the “churn” of your account.You want to avoid trading like you’re the casino player and premeditate, filter, and carefully select your trades. In a nutshell, to maintain your edge you want to avoid giving the market or broker the spread constantly. Doing too much of anything is a bad idea If you take a look at most endeavors, trading included, often times doing them too much or thinking too much / worrying too much about XYZ endeavor has a direct and negative relationship to how well you do at that thing. For example : Drinking too much coke, eating too much Mcdonald’s, even working out too much or drinking too much water – all of these things can be bad for you. Being too worried about your significant other will end up pushing them away as it becomes unattractive and “needy”. One thing is true – too much of anything can hurt or even kill you and too many trades WILL kill your trading account for sure! Your brain is wired to get addicted… Drugs, sugar, video games, gambling, blue light from your smartphone, trading, what do all of these things have in common? They can all become insanely, dangerously addictive. Our brains are wired and designed to become addicted to things, this is an evolutionary trait that served us well thousands of years ago as hunter-gatherers, but in modern-day society with all of its unhealthy vices and temptations, it tends to work against us and in certain cases, even kills us. Our brains work on a reward system; when something feels good we get a little “shot” of “feel-good chemicals” such as dopamine and others. Hence, we become addicted to whatever gave us that dopamine rush, whether it was bad or good for us. For example, drugs are obviously bad for you but they can make you feel really good and we can become addicted to that good feeling even though we know the dire consequences it brings. Certain drugs like heroin are extremely addictive and can kill you very quickly, so they are especially dangerous. On the contrary, exercise also releases “feel-good” chemicals and you can become addicted to that feeling and you will be more likely to continue working out, obviously that is not a bad thing. Knowing this basic information about how your brain works, it should be obvious that you need to be very careful and train yourself to get addicted to positive thoughts and processes so that you don’t become addicted to the negative ones. When it comes to trading, we have a laptop in front of us with flashing colors and prices moving up or down that we can use to enter trades at the push of a button. Once we do that and hit a few winners, the brain says “hey that feels pretty damn good, do it again”, and so the trading addiction begins, if we aren’t careful. If you do not create a trading plan where you plan out your trading edge and how you will behave in the market, you will naturally end up over-trading as you will get addicted to the feeling of “chasing” that winner. If you do not objectively plan our your trades in the beginning of your career, you will end up losing a lot of money due to trading addiction before you finally learn the lesson enough times that you either quit or have no money or desire left to trade with. B . A CURE FOR OVER-TRADING I’ve been trading the markets for about 2 years, teaching traders for over half that time, and without a doubt I have learned every lesson there is to learn in the markets many times over. So, the plan I am going to lay out for you below is born out of my experience and it is my opinion that if you follow it, you will be “cured” of the over-trading “cancer” that is probably destroying your trading account right now. 1. Set a max 10 to 12 trades a month, ideally less. You must have some rigid rules built into your trading plan. Think of it like this: some of your trading strategy is rigid and then within that rigid structure there is some flexibility such as how much you risk, how you enter, where you place your stop loss, etc. But, when it comes to trade frequency, it really is necessary to say, “I am not going to take more than 10 trades a month” or 5 trades or whatever. Ideally, I would not trade more than 5 – 7 times a month. If you’re trading more than 10 times a month you’re probably over-trading. 2. Wait for setups matching your plan and apply a filter When we talk about “applying a filter”, I am talking about a set of criteria that you use to check if a trade is worth taking or not. I like to use a T.L.S. filter wherein I am checking for a trade that has multiple pieces of confluence in its favor, at least 2 of 3: Trend, Level, Signal, etc. Your goal is to trade like a sniper and wait patiently like a crocodile hunting its prey. You are not going to go after “every” target or the prey that looks strong and difficult to “kill”. Instead, you want to improve your odds of success by saving your “ammo” (trading capital) for the weaker / easier to get prey / trades. You only have so much money to risk just like a sniper only has so many bullets and a crocodile only has so much energy. Use it wisely or you’ll run out / blow out your account. 3. Set and forget approach One of the big reasons traders trade too much is because they don’t give their trades enough time to play out and then they jump into another trade right away. Remember, good trades take time to play out and if you want to catch big market moves you have to be patient, this means you also have to not trade a lot. This is one reason why you need to set and forget your trades. Doing so not only improves your chances of making big gains but prevents you from trading too much and “chasing” trades. 4. Limit yourself to markets clearly moving in one direction with technical evidence Traders often make the mistake of trading in choppy market conditions, this causes them to get in a trade and it immediately starts going against them, then they want to enter another one. The dopamine chase is underway at that point. Jumping from trade to trade is very dangerous. If you stick to markets that are clearly trending and moving in one direction aggressively, you are much less likely to over-trade. CONCLUSION One of the hard truths of trading is that there simply are not a large amount of highprobability price events in the market each week, month or year. So, it goes to reason that the more you trade the less impactful your trading edge becomes. Despite these facts, most traders continuously trade far too frequently each week, and they end up losing money. My strategy is built on a low frequency trading approach so that I am basically trading as infrequently as possible whilst not passing up the most obvious trade setups. Obviously, there is some learning and skill required to know what constitutes the “best” and “obvious trade setups”, you aren’t going to just wake up one morning and magically know what to look for. With the help of my professional trading classes and the set and forget approach that I teach, you will begin to learn what a “high-quality” price action event looks like and you’ll learn to filter out the lower-quality ones from them. My end of day trading approach is inherently low-frequency FOR A REASON; it results in a selffulfilling type of function that works to systematically prevent over-trading which naturally increases your chances of long-term trading success. Which is what we all want, right? Happy trading, CryptoKings! Do well to follow for more lessons and trading analysis.... Love you all.
Education
by Skuchies_CryptoKing
86
YOUR PROFIT FORMULA | Three Essential Ingredients 🤔💭💫 Hey traders, We must admit that it is phenomenally difficult to become a consistently profitable trader. This journey requires years of practicing and training, constant losses, and nervous breakdowns. If you are a struggling trader, if you are still looking for your way to succeed in this game, here is the formula that will help you to chase consistent profits. 💰Consistent profits = 📝Trading Strategy + 🤬Emotions + 📈Market Sentiment Let's discuss each element separately. 📝Trading Strategy: To be in profit in a long run requires an understanding of what do you actually trade. You must have strict and objective entry conditions. You must rely on the objective & verifiable rules for the execution of market analysis. You must have a plan to follow. A plan that is backtested and proved its efficiency. 🤬Emotions: Even the best trading plan, the most accurate trading strategy can be easily beaten by emotions. Emotional decisions such as revenge trading and early position close can easily blow the account of any size in a blink of an eye. The most disappointing thing to note right here is the fact that you can be taught how to execute technical analysis but you can not be taught to control your emotions. Your main enemy here is yourself and being in a constant battle with your greed and fear it is very easy to go broke. Only by being humble, disciplined and patient, you can successfully apply a trading strategy. 📈Market Sentiment: Mastering your emotions and having studied a trading strategy, it looks like it is finally the time to make money. However, occasionally the market tends to be irrational. Being chaotic and unpredictable, sometimes the market neglects every technical and fundamental rule. Crisis, euphoria: the reasons can be different. The fact is that such things happen. And it is your duty to learn to deal with unfavorable market conditions. 💰To become a consistently profitable trader, you must become the master of these three elements. Only then the doors to freedom and independence will be opened to you. ❤️Please, support this idea with a like and comment!❤️
COINBASE:BTCUSDEducation
by VasilyTrader
25
Trading PsychologyIn order to make it on green in the trading area, you need a lot of skills or a mind "all over the place". You will need to analyze a lot of data like profit, earnings, market share, and competition in order to see how the stock will go. Numbers are an important part of the game. However, an even bigger part of the game is the "emotional" part, or how you handle difficult and good times. We can call this part: what is your "mindset" when it comes to trading? Emotions can be negative - FUD or positive - greed What is FUD? FUD is short for fear, uncertainty, and doubt. Who likes bad news? I guess nobody, but still, we have bad news everywhere. It's normal to be scared when you see a bad report/a "bad news". However, what is "normal" on paper might feel very strong for some and that can lead to irrational moves like liquidating all just to feel safe having cash. This overreaction can be: 1. Good - in the sense you avoided more losses. 2. Bad - true you might avoid some losses, but markets tend to recover. That means you sit on cash so you lose the gains made by the same recovering stocks that you liquidated in red. I'm talking at points 1 and 2 about "uncertainty". Nobody knows how the stock market will go. Sure we have a lot of tools but in the end, all they do is to give us estimates: might go up or might go up. So what do you do? It's obvious why people "doubt" what they should do. The information is not clear and furthermore the information changes rapidly. It's not: - OK the market is going up, so I will buy the market and make money. No. Nope. It's more like: now it's going down, now up, but overall down, but now up, what a spike up, but happened too fast in order to take advantage of it ... what shall I do (considering that I already lost some money - that only adds more pressure to the situation)? To put it short: If training would be easy, everyone would be rich! So what can you do to prevent this? First, you should know that all these emotions are normal reactions of the mind. Furthermore: you probably already lived these emotions in your life so this is not something special (only) for the trading area. For example, fear is a natural reaction to a perceived threat. A trader might feel fear not only because he might lose the profit made, but also cause he can lose his invested capital! If you have a lot of info the uncertainty will vanish. Ok, not vanish, but knowing what you are dealing with will lead to a better judgment of the situation so therefore better decisions. All you have to do is DYOR (do your own research) meaning: have information. Why should you doubt when you have a plan? In some tight situations, you can doubt your plan, but the plan is what might save you from doing dumb stupid moves. For example, a good plan in the stock market will include lines like: it is important to know that the markets are going to go up and down. No, of course you won't like it when the market will go down, but at least you will know that this is normal and you will probably also know what to do in such situations. By planning ahead (what can/will happen?) a trader can be prepared for different events that might occur in the market. These plans will make the trader "skip" the emotional part and focus more on what he should do in the situation he is facing. Note: I must tell you this is easy only on paper and much harder when being in that situation. However, with patience, perseverance, and taking into consideration your past moves, trading events will become much easier. What is greed? Greed is an uncontrolled longing for an increase in the acquisition or use of material gain or social value. To put it simply: people don't know when to stop. Who remembers the hot stocks from '80? A reason for not knowing those stocks: most of them and I mean more than 95% are not on the market anymore! Sooner or later any company will have its downfall. Now it doesn't have to be bankruptcy or lose all your money type of situation, but it can cause you to lose from 50 up to 90% of the money invested with that firm. The problem is that greed comes in a masked form and that is why only a few see it. Greed is based on the feeling to do better or to have more. So are you trading based on greed OR you are just doing your plans to do better? It's every trader's job to answer this question as there is no general predefined answer. Discipline beats luck! Repetition can become boring so adding $$$ each day to make "that million $" is out of the question for most people. Because let's face it: Everyone wants to be rich fast. BUT: Investing is not a get-rich-quick scheme! Can you see the conflict between the ideas? That is why you need a plan that should contain a line called: Resolving my emotional conflicts. To improve your trading psychology you should answer questions like this: What risk am I willing to take? What should I invest in? Should I be a day trader? Or a long-term investor? Or between them? Or all at once? When do I enter a trade? When do I exit? After EPS, the launch of a product, after naming a new CEO? Should I place an order, stop loss, or take profit? Do I use leverage? Answering these questions might be time-consuming (can take even weeks), but it's very important to know them. To put it short: it's important to know what you are doing and why. Knowledge can overcome emotions especially fear. For example, you will probably sell your stock if you would know that a company will fall the next day. But how would you know that if don't research? Reading the news, looking at charts, analyzing competitions, talking to other traders, learning and testing new strategies are actions that need to be done every day. At least 5 days out of 7. Results The purpose of handling your emotions or taking advantage of what they are communicating is to have results. No one will pay for how much effort you do! People pay for results. But emotions change depending on your strategy or what you want. It's not the same emotion when you invest $100 or $10.000. Although they might seem similar (the emotion caused by investing money) they are not. There are 2 different emotions for each case that require 2 different strategies. You got to be flexible and know that handling your mindset is a daily set of tasks. The more you go in-depth about what you are going to do, the more you increase your chances to become successful each day. Lose aversion An example of how emotions lead a crucial role in the trading strategy is related to lose aversion. This happens because most of the trades haven't lost money anywhere! Sure if you lose a $10 bill on the street you lost your money! But: 1. How often do you lose money on the street? 1 time in 5 or even 10 years? 2. It's only $10. You will survive without them. The rest is only depreciation (not losing money). After 5 years a car will lose its value. But in these 5 years you used the car, you went to work or on holiday. So for the money "lost" in the depreciation process, you got something in return. When you invest in a company, what do you get when you lose 20% of the invested value after only 20 minutes? And what people don't realize: ANY trade will start on red, due to the commission/spread paid to the broker. So before you make money, first you lose money! That is mindboggling and in most cases, due to "loss aversion" or the lack of experience in losing money, most beginners (but even experienced traders) will start doing unexplainable moves (most of them dictated by the emotions they feel). Conclusions: Mastering your emotions is a skill that will lead you to success in trading. However, it takes a lot of dedication, patience, and work to get to a level where you can handle your emotions and still make the right moves. But it is worth it! Your bank statement will be proof that your work was worth it!
BYBIT:BTCUSD.PEducation
by AngelAlgo
1
How To Use Position Size & Risk Calculator (On All Trades)Use Position Size and Risk Calculator to easily calculate recommended lot size, using live market quotes, account equity, risk percentage and stop loss. What are Lots: Standard 1.0 Lots: 100,000 Units Mini 0.10 Lots: 10,000 Units Micro 0.01 Lots: 1,000 Units Nano 0.001 Lots: 100 Units In Forex a Lot defines the trade size, or number of currency units to be bought or sold in a trade. One Standard Lot is 100,000 units of base currency. Most brokers allow trading with fractional lot sizes down to .01 or even less. Fractional lot sizes are sometimes referred to as mini lots, micro lots and nano lots. How To Use Position Size & Risk Calculator: (Select and/or impute your particular details of any pending trade)* THEY ARE FREE ON LINE!!! Currency pair: Traders can select from Major Forex crosses, Minor pairs. Stop loss (pips): Traders should input the maximum number of pips they are willing to risk, or lose, in a trade, to protect the account equity in case the market goes against their position. Account balance: Pretty straight forward, traders just need to input their account equity. Risk: The crucial field of this Position Size and Risk Calculator! In this field traders can select from a risk percentage or any amount of their account base currency ($2, $20, $40, etc). As a guideline, professional traders do not risk more than 2% of their account equity per trade. This technique will allow for traders to last longer with their trading careers, and eventually, also to recoup from previously losing trades. Now Hit the "CALCULATE" button The results: The Position Size and Risk Calculator uses a market price live feed with the current inter bank rate (in a 5-digit format) and it will display the selected currency pair price Calculator displays the amount of units that that a lot represent; how many trade units and finally the portion of the account equity at risk, or the value of the position, in this case $100 USD.
Education
by Anbat
5
Significant Candles (Find Them)This is where and when big banks and institutions, during large significant candles. They give you a lot of valuable information- that will help you in your trading. Per chart: yellow lines are high psychological price actions where large candles either range, with large bodies or price reacts when it hits them. I personally do not day trade outside of the times of Tokyo end to London end (12 hours), which is highest daily liquidity and volume times of Forex- other times scalp for 12.5 to 25 pips related to low liquidity and volume. Also, Monday and Fridays have lower liquidity and volume then Tuesday thru Thursday, so might do more scalping or short trades. Significant Candles happen: During The Right Pair During The Right Session At The Right Price At The Right Time + Large Ranging candles, With Large bodies and Price reacts to candle once it reaches it.
Education
by Anbat
4
Is Trading Forex Gambling? DependsIs Forex Trading Gambling? Depends Notice a common theme? “Risk” and “losing”. If there are two things a Forex trader knows, it’s that there’s always risk and you will lose money at some point. It’s simply the cost of doing business as a Forex trader. What is the truth? The truth is that even the large banks and hedge funds gamble every time they sit down at their trading computer. But (and it’s a BIG but) there’s an inherent difference between how they gamble and how 99.9% of retail Forex traders gamble. It’s a little thing called “probabilities”. Learn to Think in Probabilities It all comes down to putting on trades where the probable win is higher than the probable loss. In other words, stacking the odds in your favor. Use price action and confluence. The more “Confluence Factors” you have in your favor on any one trade, the higher the probability is that the trade will make you money. Different types of probabilities: Price action pin bar on the daily chart. Price is rejecting a key level.The trend is up.The moving averages are providing dynamic support. No immediate resistance to the upside (there are several more probables, you might use for your edge, plan or in your strategy). Let’s go back to the casino example for a second. We can learn something from casinos. The goal for any Forex trader should be to trade their account like a casino owner runs his/her business. Casino owners know they’re going to lose money on some customers, it’s the cost of doing business. But they also know that by the end of the year, they’ll turn a profit because the odds are stacked in their favor. So start trading account like casino owner runs his/her business by using price action and confluence, and begin stacking the odds in your favor.
Education
by Anbat
Top 10 Things 2 Look 4 On ChartFocus on larger price movement. Lesser but reliable signals. Bigger stop losses & profit targets. Market noise greatly reduced. Smaller position sizes. Use 1 hour, 4 hour and daily for yes, scalping, day trading instead of lower time frames under 1 hour which have more signals but less reliability. Please refer to (attached AudUsd 1 hour chart example chart) for Top 10 Things 2 Look 4 On Chart: 1) Price action by main daily pivot point (red line) 2) Risk Reward set up is at least 1:1.5 or larger on trade (ex: 20 pip stop vs 30 pip reward, per this trade) 3) Tokyo session is in a 20 pip sideways or ranging price action 4) Large big banks and or institutions for two hours (blue candles) quickly bought market (manipulation phase), thus clearing out all the retailer sell traders. 5) Large big banks and or institutions suddenly with double or triple money sold market, during London & NY sessions (too end of London/9 am PST/USA) 6A) Two psychological numbers noted on chart, 0.74000 and 0.73500 (50 pip range)-why? triple 000'sand/or 500's act as magnets for both stops/targets. 7) Noted 50 pip range area for price action for the day 8) Breakout one hour candle (Red candle), with momentum which should have been used to enter a new sell trade, with correct risk management. 9) Daily Trend (of 30 pips) 10) Target or take profit exit for trade at 0.73500 (which happen at London close, Friday and last day of month to trade)- after low liquidity/volume
Education
by Anbat
3
Trade like a casino! 🎰🎲💵Yep you heard me right you need trade like a casino 🎰 Key bit here is trade like the casino operates their business model. Don't trade like the clients that frequent the casinos. Why should you trade like a casino? Profitable traders understand how casinos are successful. Casinos are profitable and make money because they have an edge which they let play out. They know probability is in their favour. How many times have we all been at a roulette table thinking we have a 50% chance of winning betting on red or black. We all seem to forget about that green zero on the table and here in lies the casinos edge. With having an edge they let play out it's impossible for them not to make money. The casino is comfortable with every outcome on the bets placed knowing the edge will play out. Losses are seen as a cost of business, risk is controlled and emotions to are in check. This is why the house always wins! 🎰🤑 If you as a trader apply the same logic's to your trading strategies the end results will be the same as the casino. If you choose to trade like one of the clients in the casino with no fixed rules you essentially are gambling with you trading. Subjectivity and emotions will come in to play. Random winning and losing runs will occur which will impact trading psychology. This way of trading will only end in one way and that's by giving everything to the house or in this case your broker! Development of a strategies with proven mathematical edges ensures you will become the house 🏦💰 Once an edge is established trust your strategy and let that edge play out. ----------------------------------------- Please hit the 👍 LIKE button if you like my ideas🙏 Also follow my profile, then you will receive a notification whenever I post a trading idea - so you don't miss them. 🙌 No one likes missing out, do they? Also, see my 'related ideas' below to see more just like this. Thank you. Darren
Education
by pow_removetheguesswork
History of Forex | From Ancient to the Modern Day We have come a long way from the previously practiced barter system to the modern-day system of trading currency. Following is a brief summary of the evolution of currency and how it gave rise to Forex Trading. Here are the main stages that are illustrated on the chart: 1️⃣The Ancient system of Trading - Trading with Gold As early as 6th century BC, the first gold coins were produced, and they acted as a currency because they had critical characteristics like portability, durability, divisibility, uniformity, limited supply and acceptability. 2️⃣Bank Notes Originated - Deposited Gold in banks in exchange for banknotes 3️⃣Role of Geography - Various banks of different regions printed different currencies Gold Standard - Currency pegged to gold In the 1800s countries adopted the gold standard. The gold standard guaranteed that the government would redeem any amount of paper money for its value in gold. This worked fine until World War I where European countries had to suspend the gold standard to print more money to pay for the war. 4️⃣Bretton Woods System - Currency pegged to USD The first major transformation of the foreign exchange market, the Bretton Woods System, occurred toward the end of World War II. The Bretton Woods Accord was established to create a stable environment by which global economies could restore themselves. It attempted this by creating an adjustable pegged foreign exchange market. An adjustable pegged exchange rate is an exchange rate policy whereby a currency is fixed to another currency. In this case, foreign countries would 'fix' their exchange rate to the US Dollar. 5️⃣Birth of Floating Currency - Currency that is not pegged to any assets or other currencies is known as a 'floating currency'. And what will be next? Very hard to say but blockchain technologies will make the system change again. ❤️Please, support this educational post with a like and lovely comment❤️
OANDA:XAUUSDEducation
by UnitedSignals
27
Closer look into Rising/Falling Wedge, Reversal Price Action Closer look into Rising/Falling Wedge, Reversal Price Action structures/patterns Hi traders: Today I will go more in detail on rising/falling wedge correction in price action structures/patterns. You might have already heard about these types of correctional structures, and many traders who utilize them. Certainly there are many ways of traders identifying them and taking advantage of these kinds of price action, so it's ideal for you to understand them in your analysis. We first need to understand that a rising/falling wedge is a REVERSAL price action. Meaning when the correction completes, there's a higher probability of the price to reverse. You might have already seen multiple price action videos from me that go over all sorts of continuation and reversal price action (I will share links below), and I always talk about when combining multiples of different price action structures/patterns will give you a better edge at entering positions that work out in your favor. Same idea here, so let's take a look at how rising/falling wedges are, how to identify them, and how to effectively use them in your analysis. Rising/falling wedge, just as the name suggests, is an ascending/descending type of correction where the price is getting squeezed into a “wedge”. As the price gets narrower and narrower, there's a higher probability of the price to “reverse” from the wedge. Now about entries, certainly many traders have their own method of entering, so I will share my point of view and the way how I like to enter them. Any questions, comments or feedback welcome to let me know :) Thank you Risk Management: 3 different entries on how to enter the impulsive phrase of price action Multi-time frame analysis Identify a correction for the next impulse move in price action analysis Continuation and Reversal Correction Continuation Bull/Bear Flag Parallel Channel (Horizontal, Ascending, Descending) Reversal Ascending/Descending Channel Reversal Double Top/Bottom Reversal Head & Shoulder Pattern Reversal “M” and “W” style pattern Reversal Impulse Price Action Continuation/Reversal Expanding Structure/Pattern
TVC:DXYEducation
by jojofang0901
47