Many traders lose simply out of ignorance. They base their trades on hunches, news, or tips from friends, and do not define specific risk and profit objectives before placing trades.
Others have the merit of educating themselves but fall victims of their emotions. They hold on to losing positions hoping they will turn into winners and sell winners by fear of losing a small gain. They overtrade to fulfill a need for action or by fear of missing out.
The consistent winners follow a winning approach:
A strategy to enter and exit trades
You need to a strategy to put the odds in your favor for each trade you take. Your strategy should be as objective as possible and include the following elements:
Entry: conditions required before you can enter a trade - may include technical analysis, fundamental analysis, or both.
Initial stop loss: price at which you want to close the entire position if it does not go in your favor.
The risk per share is the difference between the entry price and the initial stop.
Initial price objective: price at which you want to take some or all profits if the trade goes in your favor.
Trade management: set of rules that dictates your actions while a trade is opened. It may include trailing stops, closing position, etc...
For every action you take, the reason should be clearly described in your strategy.
Example: Buy pullback - stock in on uptrend on daily chart
Entry
Setup: Price above rising 30 day moving average with 3 or more consecutive days with lower highs
Buy signal: $0.05 above the previous day's high
Initial stop
Below lowest of previous and current day's low
Initial objective
At the previous pivot high - sell helped
Trade management
Move stop below previous day's low daily
A more complete strategy would include market and industries conditions, technical indicators, conditions from different timeframes, etc..
Money management rules to keep losses small
The goal of money management is to ensure your survival by avoiding risks that could take you out of business. Your money management rules should include the following:
Maximum amount at risk for each trade. The different between your entry price and your initial stop loss is your risk per share. Your maximum amount at risk for each trade determines the share size.
Maximum amount at risk for all your opened positions.
Maximum daily and weekly amount lost before you stop trading - avoid trying to trade your way out of a hole after a loosing streaks.
Example:
Maximum amount at risk for each trade: $200
Maximum total amount at risk for all my opened positions: $800
I stop trading until the following day if my realized loss for that day is over $600
I stop trading until the following week if my realized loss for that week is over $1000
During your learning phase, your goal should be to survive, not to make money. Start with low limits and raise them as you become a consistent winner otherwise you will simply go broke faster.
Good record keeping
Although the process of gaining experience cannot be rushed, it can be made much more efficient by keeping good records of your actions. Good records will allow you to:
Review your actions at the end of each day to make sure you strategy followed you, not your emotions.
Learn from your losses - they cost you money, make sure you get the education in return.
You should therefore keep a journal of your observations.
A trading plan to keep emotions out of your decisions
During trading hours, emotions will turn smart people into idiots. Therefore you have to avoid having to make decisions during those hours. This requires a detailed trading plan that includes your strategy and your money management rules.
For every action you take during trading hours, the reason should not be greed or fear. The reason should be because it is in the plan. With a good plan, your task becomes one of patience and discipline.
You have to follow the plan without exception. Any valid reason for to exception - for example, correcting to oversight - should become part of the plan.
Overtrading
Sometimes the best thing to do is to do nothing. Not trading on those bad days is key to becoming a consistent winner - in some situations it is very tempting to overtrade:
If you trade to fulfill a need for action, to relieve boredom If you can 't find but the proper setup can' t wait If you fear you are missing out on a great trade or on a great market If you want to make up for losses (revenge) If you trade to feel like you are working instead of sitting around. Trading involves a lot of work other than the actual buying and selling. You should not trade under the following conditions
You are not following my trading plan you have reached your daily or weekly maximum loss you are sick or very tired you are very emotionally (upset pressured to make money, destroyed self-esteem) you are using new tools you are not completely familiar with you need time to work on your trading plan A winning attitude
Losing traders look for a "sure thing", hang on hope, and avoid accepting small losses. Their trading is based on emotions. You must treat trading as a probability game in which you do not need to know what is going to happen next in order to make money. All you need to know is that the odds are in your favor before you put a trade.
If you believe in your edge, which is you believe that the odds in your favor for each trade you enter, then you should have no expectation other will happen than something.
Your will have a direct influence on your trading results attitude:
Take responsibility for all your actions - don't of blame the market or world events.
Trade to trade well and for the love of trading, often not to trade and not for the money. The money will come as a result of trading well.
Do not be influenced by the opinions of others. Reach your own decisions and follow them.
Be rigid with your rules and flexible in your expectations. Most traders are flexible with their rules and rigid in their expectations.
Never think that taking money from the market is easy and never assume that you know enough.
Have no particular expectation when you place a trade because you know that anything can happen.
Don't of try to guess the future - trading is a game of probabilities.
Use your head and stay calm - don't get excited or depressed.
Handle trading as a serious intellectual pursuit.
Do not count how much money you have made or lost while you are in a trade - focus on trading well.
A disciplined and organized approach to trading
4 Errors in the trading strategy
Four Principles of Successful Trading
Why do successful traders keep making money year after year, while newbies lose everything within the first few months? What is it that most beginners get wrong? How do successful traders know what's right?
My colleagues and I are often asked how to succeed in trading. In fact, we have been asked this question so many times, that I have finally decided to write a trading report; a report that will give you straightforward and easy-to-follow advice on how to become a better trader.
Unlike most trading advice articles, this report is written in a clear, plain-English manner. I am going to describe the very essence of the problem in a concise and coherent way. You will read about major mistakes that prevent traders from making money and learn the basic principles that took successful traders years and thousands of dollars to discover. All the facts in this report are based on years of observation and can be easily verified.
Have you ever felt like you have finally learned how to predict market moves after a winning trade? And then felt desperate only a few days later - after a devastating loss?
Now imagine the feelings of a trader who spends years studying price movements, buying expensive indicators, following expert advice, and attending seminars. However, this trader keeps losing money until all their savings are gone. He then raises more funds, loses everything again - all the time wondering why, contrary to all the guru promises, he can't turn trading into a profitable business. Nevertheless trading is just as understandable, predictable and profitable as any other business.
Just imagine that after years invested in trading you still won't be able to understand how markets work. How frustrating would that be?
Or even worse: what if, driven by emotions, you lose control and, as a result, all your savings? Do you have an emergency plan to protect yourself?
How quickly do you think you could recover from heavy losses, if at all?
Not only beginners but also 'experienced' traders tend to ignore or forget about taking steps to protect their capital against these types of catastrophes - until disaster strikes. By then it's too late and the damage is done.
But That Could Never Happen to Me!
After working with over 2000 individual traders and institutional customers in Europe and the USA, we found that 9 out of 10 traders will experience some type of losses that will end up costing them between several thousand to several million dollars.
This doesn't include money spent on manuals, trainings, seminars or months of painstakingly analyzing the market.
Losses incurred in poor trading practices differ in each particular case. However, whatever those losses may be they are always too high for the trader involved. As a rule, people lose all their disposable money. Even worse: sometimes they go even further and get dragged into debt.
Take a look at these statistics:
90% - 95% OF ALL TRADERS LOSE MONEY (Source: Ryan Jones, the author of The Trading Game, Playing by the Numbers to Make Millions)
70 percent of day traders lose money (Source: 1999 study conducted by the North American Securities Administrators Association (NASAA))
95 percent will fail in the first two years (Source: Harvey Houtkin, February issue of Securities Regulation and Law Report)
What Do These Statistics Mean for You?
The facts above clearly demonstrate that most people underestimate the risks of trading. In most cases, they are simply misled by advertising from brokers and consultants. As a rule, brokers don't care about your long-term success because their goal is to quickly earn back the money invested in attracting a new customer. That's why they want you to start trading as soon as possible. To achieve this goal, brokers provide beginning traders with minimum information that is just sufficient to make trades (and thus to generate commission that brokers live on) and let them fly blind in the market. Such unscrupulous practices have even drawn attention of various governmental agencies supervising and monitoring securities trading. Unfortunately little success has been achieved in curbing these practices.
The sad truth is that most trading consultants sell trading methods that don't work. Of course, these methods are presented not only as working but also as highly profitable. As a rule, a potential customer is shown the few occasions when an indicator (or some other analysis method) happened to predict a good trading opportunity. What happens to be left out of the picture are all the occasions when the method led to disastrous trades.
Furthermore, trading gurus avoid selling their strategies as a set of formally defined objective criteria to enter the market. The main argument is that indicators must be applied differently in different situations. Gurus claim that no algorithm-based system can substitute human intellect. Of course, this kind of reasoning is extremely convenient. Whenever the advertised trading method brings disastrous results they blame the trader not the system. Since everything depends on the trader's subjective determinations, it's impossible to prove that it's the method that doesn't work. You are the only person to be blamed for those losses.
What's most exasperating about this situation is that most of these disasters andunnecessary costs could have been completely avoided or greatly mitigated easily and inexpensively with a little analysis and proactive verification.
Why Are Beginning Traders Particularly Vulnerable
Today's markets are becoming increasingly efficient. To survive in this highly competitive environment, unconventional tools and methods are called for. However, contrary to common sense, beginning traders don't even try to use the latest market analysis tools. Instead, they use methods that worked quite well 30 years ago but are totally useless nowadays.
Institutional players, on the other hand, are equipped with state-of-the-art methods and technologies. Trading futures is a zero sum game. In this game, newbies invariably fall prey to the more advanced players.
$45,000 Spent Just to Discover That a System Doesn't Work
One of my customers purchased a set of indicators from a well-known and respected trading expert. The method consisted in waiting till all the indicators showed a favorable point to enter the market. Of course, such trading opportunities don't come up every day.
You'd think that common sense should have told this customer to paper-trade his method first - to see how well it would work in the real market. Unfortunately, emotions and the expert's convincing arguments proved stronger. He took several trades that emptied his $45,000 trading account.
I tried to persuade the trader to have those indicators coded into a comprehensive and objective system and test it against historical data. My reasoning was simple: what didn't work in the past probably won't work in the future.
Out of pure curiosity I coded those indicators into a system and tested the system on different trading instruments and resolutions. The tests proved that the system didn't work.
If the above trader had spent $900 on a back-testing program and $200 on coding his system, he could have saved $45,000!
How Slow Reaction Once Cost Me $2,000 in 5 Seconds
At some point, I was combining software development with trading FOREX. This active trading gave me a good feel of the tasks and problems that traders face and allowed me to develop software to improve my own results.
I was once trading a system based on the Federal Reserve System interest rate announcement. My strategy correctly indicated the entry direction. Unfortunately, back then I wasn't using automated trading and had to manually adjust the stop loss as soon as the market started moving in the favorable direction. The broker I was using didn't support trailing stops, so manual adjustment was the only way to trade with my method.
As soon as the profit reached the required value I started adjusting the stop loss. Unfortunately it took me too long and a potentially lucrative trade was closed with a loss. The market gets highly volatile following news releases, therefore 5 seconds for manual correction was way too long. If I had managed to adjust the stop within 2 seconds, I would have made $2000.
Automated order execution allows reducing the reaction time. It will take your computer 1 second or less to react and modify an order.
Thus, a one-time investment in automating my strategy worth just 1/10 (or $200) of just one losing trade could have completely changed the outcome. And who knows how many similarly unsuccessful trades will occur in future?
Six Consecutive Losing Trades Made a Trader Give Up on a Working Trading Method and Miss a Rare $35,000 Trade
The manager of a 50 million dollar investment fund told me about a loss that wouldn't have happened if they had adopted the well-known practice to diversify traded instruments. Richard, one of the fund's analysts, was trading on exotic markets using an automated trading system. The system had been tested before and had proven reliable and profitable. Tested against historical data, it had never shown more than 4 successive losers, which was normal for this particular system.
However, in real-world trading the system generated 6 consecutive loosing trades and Richard decided to drop it. He found it psychologically difficult to use the method that seemed to have stopped working - even though he knew that the market was being sluggish and the system's behavior was totally natural under the circumstances. As soon as he stopped using the system, the market entered a growth stage and this trend-following system started working again. As a result an excellent opportunity to earn $35,000 on a single contract was lost! This costly mistake could have been easily avoided, if they had been trading a portfolio based on uncorrelated markets. It would have ensured a steady profit growth irrespective of the conditions on a single market. Other profits would have nullified 6 losing trades on this particular instrument.
When I asked Richard why he didn't use diversification, he said that the reason was quite simple: the company wasn't paying enough attention to the issue and he didn't have the software to make an efficient portfolio.
The unwillingness to factor in quite a predictable situation as well as the desire to save $2,000 on software resulted in losses 20 times exceeding expenses on the necessary research.
Four Things You Must Do at a Minimum to Protect Yourself from Common Mistakes:
While it's impossible to plan for every problem or emergency, a little proactive analysis and a few simple rules will help you avoid or greatly reduce losses.
Unfortunately, I have found that most beginning and even many experienced traders are NOT conducting any type of analysis, which leaves them completely vulnerable to the types of disasters you just read about. This is primarily for four reasons:
#1. They don't understand the importance of verifying trading systems
#2 They use outdated market analysis techniques instead of adopting the latest and most efficient approaches
#3. Even if they do have a good trading method, they can't use it efficiently
#4. They rely on profits from a single strategy/instrument and don't try to diversify their portfolio
While there are over 20 critical tasks that need to be performed to succeed in trading, I'm going to share with you the 6 that are most important for protecting your capital and creating the most favorable conditions for a profitable and consistent strategy.
Step#1: Don't Trust Any Trading Ideas
I never stop wondering what makes people blindly trust the so-called gurus. I have lots of facts proving that most gurus are nothing more than frauds. However, my main point is that you shouldn't trust anybody, not even yourself. You are the only person responsible for your trading failures and successes. If you fail, the only person you should blame is yourself. If you have a trading idea you must test it. All assumptions and untested ideas cost too much. You simply can't afford it!
Therefore, before you start trading with real money, test your idea under conditions as close to real life as possible. The more accurate the simulation is, the more reliable your tests will be. Be critical and objective when making conclusions. Trust statistics, not your feelings or beliefs.
Step #2: Learn From Those Who Really Know How to Make Money While Trading
Study the practices of those traders who take money out of the markets year after year. Unfortunately, finding such people is a major challenge. Most gurus you'll meet will tell you that they are extremely successful and that they teach trading just for the fun of it or out of pure generosity. I'm afraid that in 99% of these cases all their success stories will be lies.
I only trust statistics coming from unbiased sources. For my analysis I rely on ten-year reports on the best Commodity Trading Advisors (CTAs). Obviously, anybody could be making money for 1-3 years due to sheer luck. Data spanning 1-3 years isn't statistically reliable and can't be trusted. This is why in the ten-year reports, I single out those traders who have been making steady profits for more than 3 years.
Most successful CTAs rely exclusively on mechanical methods and automate their trading to be faster than everybody else. Also, they always diversify their trading.
If you analyze the trends in the algorithm-based trading industry, you will see that most of the solutions out there have been created for institutional traders and cost thousands of dollars. The high demand for algorithm-based trading on the part of institutional traders is only natural. They understand that the best trading opportunities can't last long. Mere seconds separate winners from losers.
Today's markets respond well to arbitrage strategies and high frequency trading. These methods, however, call for reliable mechanical trading systems and high-quality software to deploy them.
I must point out once again that the primitive systems that most newbies get a hold of ceased to work long ago. In the 1970s, even basic trend-following strategies worked fine because the markets weren't as volatile and fast-paced as they are today. Nowadays, markets require brand-new methods that you won't find in old trading manuals.
Step #3: Run Multiple Tests of Your System under Various Conditions
I am not going to deny the benefits of paper-trading, but I prefer backtesting. Backtesting is the fastest, the most reliable, and most objective way to test a trading method in different situations without letting emotions interfere with your judgment. When testing your trading idea in real-time on a simulated account, it's impossible to ensure that your tests are error-free and extensive enough to be statistically reliable. I've met few people who would be prepared to paper-trade a strategy for at least 3 months before switching to real-world trading. As a result, their conclusions about the strategy's workability and performance are highly subjective and rash.
Backtesting allows trying a method against different historical data and across different financial instruments. It also ensures that the results are unbiased and consistent. Of course, there are a number of backtesting rules but those must be discussed separately.
Invest just a couple of hundred of dollars to have your strategy coded or spend a few hours of your time to do it yourself and you'll find out if the tested idea is worth anything. I can assure you that you'll reject 99% of the systems that you thought were a sure thing!
Step #4: Don't Miss the Benefits of Optimization for Fear of Curve Fitting
Most people regard optimization with apprehension because in most cases it is applied incorrectly and therefore leads to devastating results. Most people optimize their trading systems to find the best parameters. However, optimization must be approached in a completely different fashion.
How do you create a new trading method? You visually scan data for patterns and check how well those patterns work in various situations. Such eyeball tests are nothing less than implicit optimization.
For example, you will use a moving average with the length of 20 and won't use a moving average with the length of 25. Why? Because you can see that the 25 moving average can't predict market moves as precisely. In other words, you have visually optimized your strategy. The danger of such optimization though is that the chosen value of 20 can be completely random and have no rational foundation.
Optimization is vital for solving two tasks. First of all, eyeballing data for the best parameters is too tedious and time-consuming. Moreover, you might simply never manage to find those best parameters. Let the computer do the job and do it much faster than you would. For example, with the help of the genetic optimization I can test hundreds of indicators with different parameters and find out what works and what doesn't. Visual analysis of the same set of indicators would take centuries.
Second, optimization ensures that the discovered optimal parameters aren't random or over-sensitive to changes. Just create a 3D optimization graph with one click and you'll see how robust your strategy is. If even minor changes affect the strategy's performance and there are no logical explanations for each value, you're simply using an over-optimized system that might look nice when tested, but will result in disastrous losses in real-world trading.
Step #5: Trade Several Instruments to Ensure Consistent Profits
According to experts, it is vital to trade several uncorrelated instruments. Diversification allows compensating for unfavorable trading periods for a particular instrument while steadily increasing the overall size of your trading account. Obviously, even the most consistent strategy will run into periods of losses. This is the normal dynamics of trading. At the same time, traders find this phenomenon extremely difficult to deal with. They feel like the system is no longer working because the market has changed. These assumptions can be contrary to reality but more often than not they override logic and common sense and lead to poor decisions.
To eliminate or at least minimize this effect, several strategies must be traded in uncorrelated markets. This way you will ensure a steadier capital growth and abate losses during unfavorable periods. Profits from trading one of the instruments will compensate for the money lost on another. The result will be a modest but steady growth which is the most important thing in trading. Today, creating an efficient portfolio isn't such a difficult task. Portfolio-level backtesting is now available for a reasonable price. Just a few years ago only large companies with enormous budgets could afford portfolio backtesting.
Step #6: Automate Your Trading Method to Avoid Errors and Routine
It is a well-known fact that a good signal is not enough to enter the market. The latest trading methods call for the best possible entry price. This is especially true for high frequency trading. Human reaction isn't quick enough to respond to price changes within milliseconds. At the same time, the price can change several points which will result in a smaller profit or even in a loss.
Latest trading software products make automated trading perfectly feasible. All you need to do is code your strategy and enable auto-trading. Of course, the trader still must monitor the automated strategy execution and interfere should the situation call for such actions - just as the pilot of an auto-piloted plane may be forced to do.
There is another important reason to automate your trading. There's no point in staring at your computer screen 8 hours a day not to miss a good trading opportunity. And what if you're monitoring a portfolio consisting of dozens or hundreds of instruments?
Instead of wasting your time like that, you could use it to do research and improve your trading methods. Let the computer do all the routine work. This approach will make trading exciting and far less tedious which is particularly important if you want to dedicate most of your time to trading.
Maintain a trading journal - a very important feature that should have all Forex trader
Do you know what is a forex trading journal? Do you know the importance of maintaining a forex trading journal? A trading journal is a record or a book which keeps track of all of your successful or unsuccessful trades. It is very important for you to keep track of all your trades, whether you win the trade or lose the trade as you can use this information for future trades as a reference. Lets say entered a trade with some reason in specific trading hours, but you lost the trade. The technique might have worked for you earlier but not in this trading hours. With this trade, you come to know that the technique won't work in the specific trading hours. If you don't note it down or keep track of it, in future you may do the same mistake again and you will lose the trade again. A trading journal can be used to refer all the mistakes you did in the past so that you won't do them again. All successful forex traders maintain a forex trading journal.
Trading Currency Pair: Note down the currency pair you are trading or you have traded for example EURUSD, GBPUSD etc.
Long or Short: In forex terms Long means buying a currency pair and short means selling a currency pair. Record whether you bought the currency pair or sold the currency pair.
Trade Won or Lost: Record whether you won the trade or lost the trade. If you won the trade note down the reason why you won the trade like any technique you used, any economic news you used to enter the trade etc. Also note down the exit strategy you used for coming out of the trade. If you lost the trade then also you have to note down the reasons for losing the trade.
Trading time: Record the day and time you entered the trade. Also record the time zones you entered like asian time zone, london timings, NY timings etc. This is very important as some trades may work only in specific timings and this information, you can use in future.
Entry Price, Exit Price and No. of Pips: Record the entry price and exit price and also the number of pips you lost or won.
No. of lots you traded: Record the number lots you traded.
Any techniques used: Record any techniques or methods you used for your trading.
Screenshots: Screenshots are very important when you are maintaining a trading journal. As all of us know a picture speaks a thousand words. Even if you note down all the above points and if you don't have a picture, in future, you may not be able to understand your own trade you took. So saving a picture of the trades you are doing is very important.
The above are some of the things that you have to note down if you want to become a successful trader. You may also note down any additional remarks, if you want.
How to maintain a trading journal: Generally forex traders use an excel work sheet or a microsoft word to keep notes of the above things (to maintain trading journal). But when the number of trades are increasing the size of the files also increases.
Moreover when you are saving the screenshots of the trades the file sizes increases more and more. So it causes problems in opening or saving these files. So after a certain point you may have to start a new excel or word file. These problems cause you trouble when you want to sort your trades. For example you want to take a look at all your lost trades or all your winning trades. It is very difficult to sort the trades if you save them in excel or word files.
That is why, forexbees.com is offering you a successful way of maintaining your own trading journal. Once you login to forexbees.com, under navigation block on the left side you will see the link "Create Content". Click on the link and you will see the "Trading Journal" link. If you click on that you will see the trading journal form with the following options you can use when you are creating your own trading journal post. This is completely private and no elase, other than you, can watch your trading journal.
Title: You can enter any title that fits your trade like "EURUSD break out trade - hourly chart - lost" or "GBPUSD MACD convergence divergence trade - daily chart - won" etc. It's better if your title can tell you what type of trade you are doing on the first glance so that it will be easy for you in future to find out the trade you want.
Trade Date: You can select the date on which you did the trade. If you are currently doing the trade you can leave the date as it is.
Vocabularies: Vocabularies are the different categories that you can use to categorize your trades. The following are the different categories available that you can select when creating your trading journal post.
Currency Pair: This category shows the different currency pairs like "EURUSD", "GBPUSD" etc. You need to select the curreny pair you are trading when you are creating you own trading journal post.
Short or Long Trade: If you bought the currency pair you can select the "Long Trade" option or if you sold the currency pair you can select the "Short Trade" option. In forex terminology Long Trade means buying a currency pair. Short Trade means selling a currency pair.
Trade Won or Lost: If you won the trade you can select the option "Trade Won" option or you can select the "Trade Lost" option.
Teaser or Summary: Teaser or summary is a small description of your trading journal entry. You can generally copy and paste the first few lines of the body of the trading journal.
Body: You can enter any details about your trade.
Image Picker: This can be used to upload images or screenshots. This shows four tabs. Upload, Current, Browse, Groups. Under "Upload" tab page you can upload images or screenshots of your trades. This contains the image file field using which you have to select the image or screenshot of your forex trade to upload. After that it asks for the thumnail size of the screenshot. I generally use a thumbnail size of 400 px as I like to align the image or screenshot in the middle of the content. "Scale Image" you don't need to use it. "Title" of the image. You can enter any title for the image as this will appear on the top of the image in your trading journal post. "Description" of the image. You can enter any description for the image and this will appear at the bottom of the image.
Once you upload any images you can see them under the "Current Images" tab and also under the "Browse Images" tab. "Current Images" tab shows the images currently updated and only for this post. "Browse Images" tab shows all the images that you have uplodated for all the posts that you have uploaded the pictures. Select any picture. If you have entered the title and description select the "Description" check box. Othewise you won'tsee the title and description that you have entered for that picture. If you want to insert the screenshot left aligned in the body select left option. If you want to insert the screenshot right alighned in the content select right option. If you want to insert the screenshot in the center of the content select the option "none". Click on the body field somewhere. Click on insert button and the image will be inserted in the body field.
File Attachments: If you want to attach the screenshots that you have taken you can use the file attachments and the screenshots will be attached as files to the content and you can download them any time you want.
Once you create a trading journal entry you click on the "Trading Journal" link on the left hand side to see your trading journal entries.
On the trading journal page you can also see the options to sort your trades based on trade dates, currency pairs, trades short or long and trades lost or won.
Calender: Under the calender block you will see a calender which you can use to see the trades on different dates. Click on any date under calender block and you will see the trading journal entries if you entered anything for this date.
Currency Pair: Under the currency pairs block you will see all the currency pairs. If you click on any currency pair you will see any trading journal entries you entered for that pair.
Trades Won or Lost: Under this block you will see two options - Trades won and Trades Lost. If you click on any of the options you will see all the trades you that you won or lost.
Short or Long Trades: Under this block you will see two options - Short Trades and Long Trades. If you click on any of the otpions you will see all the trades you bought or sold.
So this offers a lot of options to you to maintain a very good trading journal to become a successful forex trader. You don't need to maintain your trading journal in excel or word files which take a lot of time to open or save them. You can also upload your trade screenshots or attach them as file attachments.
Online Forex day-trading the Tao of rapid creation of prosperity and maintaining
Foreign currency trading is the most profitable and powerful way to make money today in the world.
It is a 2.5 trillion dollars daily global market and business.
For this reason the knowledge and the secrets of how to do it successfully have been kept away from the public for thousands of years.
They create vast fortunes easily trading foreign currencies.
Thereafter, using this great wealth, they create factories to manufacture consumer goods and products and hire you, Joe Bloke to work in those factories, banks and jobs at minimum wages.
So, it is no wonder why they don't want you to know about the REAL TRUTH and "SECRET" on how to generate great wealth through foreign currency trading.
If you know how to trade foreign currency and generate $100,000 monthly for life, will you be idiotic, naïve and crazy to go to work at these DEAD END jobs to earn minimum wages and be paid nickels and dimes?
So, there has been a persistent organized campaign by the powers that be, the Money Elite to KEEP AWAY AND HIDE these "SECRETS" of creating vast wealth from foreign currency trading.
That is why they are always floating false propaganda and negative campaign in the mass media that currency trading is risky and you should not do it because you'll lose all your money.
If you go to your bank manager or money management advisor or investment management company and tell them that you wish to make money at home from online currency trading, they will scream at you and try to discourage you and frighten you with the false information and half truth that it is risky and that you'll lose your money.
This is because it is THE SECRET with which they make money and get rich!
Citibank alone makes $20 billion dollars trading currencies yearly.
Most banks, including your bank trade currencies and it is among the major ways to create income.
It is just that they don't advertise this secret.
George Soros, the King of forex trading makes billions of dollars yearly trading currencies!
It is reported that a few years ago, he nearly caused the government of Thailand to go bankrupt because he made so much money trading their currency!
Yes, foreign currency exchange trading or forex trading can be risky.
It is true, you can lose your shirt and go bankrupt.
But this is half of the truth.
The other half of the truth is that if you buy and study a good forex currency trading e-book guide or program and understand how it works, avoid the pitfalls and get to know the secrets of risk management and trade with discipline, you can get fabulously rich so fast it will make your head spin round and put the devil to shame.
This is why there is an organized campaign to discredit online currency trading.
If you get rich so fast, then you'll not need to depend on the "Money and Power" Elites and their jobs and welfare system where they allow you nickels and dimes to keep you subjugated.
If you get rich too fast, they will no longer be able to manipulate you into voting and keeping them in power to continue milking your life by making you labor and work yourself to death making them rich.
There are so many reasons why most beginners in foreign currency trading fail to earn money and instead lose all their savings.
When they first hear about how easy and fast it is making money from day trading currency, they search the internet and find a forex trading broker.
Then they open a currency trading account and put in a few thousands of dollars in the online currency trading account and immediately begin to try to earn money from online currency trading.
And they get entangled in all the foreign currency trading sophisticated strategies and systems of technical and fundamental analysis such as reading "Forex charts", "Moving Averages", "Elliot wave", "Stochastics", "Bollinger bands", "Directional movement index", "Trend and Oscillator indicators", "Fibonacci retracements and others.
They spend all day and night listening to business news on radio, reading forex newsletters, forex articles in magazines and watching business news on TV
These beginners don't take their time to buy a valid online currency trading e-book guide to study and understand the forex market and the currency trading "SECRETS" before they begin trading.
They don't open the free demo trial forex trading account to practice for free to develop viable profitable currency trading skills first before they open a paid forex trading account to begin trading and making real money.
They make the fatal and dumb mistake of trying to fly in the world of foreign currency trading market before they learn how to crawl.
So, they get confused, make grievous foreign currencies trading errors and lose their money.
When they lose their money, they will not accept responsibility because that is the difficult part.
The easy thing to do is to blame their mistakes on online currency trading and to declare and gripe that it is risky and a scam designed to con the unsuspecting public.
This gives them the justification to begin filing false complaints and instigating legal action with the lame excuse that they were naïve and didn't know the risk involved and so have been ripped off.
The truth is that there are at least one million people around the world who have foreign currency trading skills and do it well to make millions of dollars monthly!
Yes, sometimes they will lose.
But most of the time they are fabulously profitable.
I once read about a taxi cab driver from New York who started trading foreign currencies about 10 yrs ago.
While driving his taxi cab, occasionally during his lunch break, he will log into his forex trading account and enter a few currency trades.
By the end of his driving day shift, he would check his online currency trading account and was always surprised to find that for a few minutes of trading currencies, he had made more money that day in minutes than he made driving the cab for a whole month.
This encouraged him to stop driving the taxi cab and to begin trading currencies full time.
In 10 years, he made $4 billion dollars ($4,000,000,000) trading foreign currencies online and was listed in Forbes Magazine's 400 richest Americans!
He is just one out of the many average people all over the world who took the time to study online currency trading, understood it and trade it correctly and are making millions of dollars without any hard work.
You too can do the same.
It is simple.
If you can click your mouse once to buy the currency and in a few minutes click your mouse a second time to sell them, you can make money.
It is a no brainer. Even a caveman can do it!
So, foreign currency trading is not difficult to understand or to do like stock or bond or commodity trading.
If you know where to get a good and valid forex trading guide or e-book and be patient to spend 1 hr daily to study it to understand the foreign currency trading market, how to click your mouse to buy and sell the currency; and if you will be patient to do the free demo trial for a few months before you open a paid forex trading account to begin trading, you can get obscenely and insanely rich so fast, it will make your eyes want to pop out, seeing all the piles of cash you generate just by clicking your mouse twice for a few minutes daily!
One powerful secret that will help you as a beginner is to avoid hiring money managers at the beginning to trade currencies for you.
The reason is that 90% of these money managers who advertise with highly impressive websites and brochures and also in TV infomercials and radios and seminars are fraudulent.
When you hire them to trade for you, they will over trade your account (churning) so as to generate a lot of trading fees for themselves because whether they make money for you or not, you must pay them their fees.
The more they trade your account, the more fees they generate for themselves!
By over trading your forex currency account, they expose it to massive risk which will eventually lead you to lose a lot of money.
This is because there are certain days and times which are profitable to trade and there are some days and times which are not.
Therefore by over trading (churning) your currency trading account, they get rich at your expense.
Plus, some of them will even use some profits they generated from trading your account to trade for themselves and make themselves rich without you knowing what is going on.
As if that is not bad enough, some will entice you to trade on margin. This means that they will loan you money to trade.
But the trick is that they are loaning you digital money which is created from the air and has no value.
All they do is go to your account and enter any amount of money they wish to loan you. (They don't actually put real money into your currency trading account!)
This is not real money because it is just digital artificial numbers.
But if you use this fake funny digital money to trade and lose, then you'll owe them real money!
You'll be required to pay them with real money!
And if you fail to pay them, they can freeze your bank accounts, assets and homes to collect the debt.
This is how most of these brokers get rich at the expense of naïve beginners in online foreign currency trading.
So, if you're a beginner, avoid hiring money managers to trade for you at the beginning. Stay away from managed trading.
Instead learn to trade and after you have made at least $500,000, contact us to give you the list of the best and honest money managers in the world (as well as the best forecasting services) who can trade for you and make you richer.
There is another fraud which some money managers perpetrate.
After you open a paid online currency trading account and put in thousands of dollars in there for them to trade for you, they use your money to trade for themselves.
Then they use a computer software to generate a fake forex trading account statement for your forex trading account which will show that you've lost money.
There is no way most people will find out, because you can't access their trading activities.
And sometimes even when you find a honest and reputable money manager to trade for you, when your account becomes profitable and you request to withdraw some of the money, they will begin to give you a run around, excuses and try to discourage you from withdrawing the money.
If you persist, you'll find out that suddenly your account will begin to lose money because they have softwares to manipulate it and generate dubious account statements to make it seem as if you've been losing money!
Above all, most beginners in forex currency trading fail to earn money because they spend too much time in doing complicated forex mathematics, reading charts, listening to business news on radio, TV and reading too many forex newsletters and magazine articles, which are conflicting, confusing, time consuming and counter productive.
They spend so much time over stuffing themselves with forex trading news and information that they become constipated with information and overwhelmed and so have little or no time to actually click their mouse to buy and sell the currencies and make money.
Most beginners also are unable to find and use a good currency trading system and software.
Some of them are even conned into buying outrageously expensive trading softwares and system for $4000 from some companies who advertise on TV infomercials late at nights.
They don't know that they can get the same forex trading system and softwares for free online at the websites of some forex trading companies!
These $4000 softwares are not for beginners and when we checked them out, we found they are complicated and not easy to use.
Infact after you manage to master how to use it, they will not help you to make more money!
So, it is not wise squandering your hard earned $4000 to buy them.
If these over priced worthless forex trading softwares work as they are advertised in seminars and infomercial, the companies will not be selling them.
Instead they will keep them secret and use them to make billions of dollars.
If you wake up tomorrow and discover you have a goldmine underneath your house, will you go out and advertise in TV infomercials and radios and seminars to sell your house for $4000???
The truth is that most of these infomercial advertising forex companies don't really trade currencies. They are just sales people. Shysters. Tricksters.
They make their money by peddling worthless forex trading softwares to the naïve beginners for $4000.
When you check one of these companies out (one of them has the audacity to call their worthless software "Forex Made Easy"), you'll discover that the CEO of this company actually admitted that not only that he does NOT use his $4000 software to trade but he knows nothing about trading currencies!
He only lends his name to his company to use to market their worthless foreign currency trading software.
The company's pitchman who conducts the seminar is a sales man and he also doesn't trade currencies because he had committed fraud in the past and was barred from trading commodities.
While the CEO of the company runs infomercial and seminars peddling worthless forex trading software for $4000, he doesn't use it and doesn't trade currencies.
Instead he hired a money manager who trades the currencies for him!
So, if you're a beginner who desires to get rich fast from currency trading, you must know these insiders' "SECRETS" of currency trading market and the pitfalls and how to avoid all the fraudulent companies peddling worthless forex trading e-books, books, softwares, systems and complicated trading strategies.
There are millions of them.
Beware because they are smooth operators who are very skilled in salesmanship and who can easily dazzle you with their big refined nonsensical English and so con you.
There are billions of dollars to be made in foreign currency trading and you can get abundantly rich trading these currencies online from home or office starting small.
But you must locate and buy a valid foreign currency trading e-book guide.
You must study it and understand it.
You must try the free demo account trading and do well in it before you can open a paid forex trading account to actually begin making real money.
You must begin by trading only one or two currencies at the beginning.
With time as you acquire more skills, you may trade more currencies.
You must learn how to trade with discipline and learn the BEST DAYS AND HRS to trade to be profitable and the other times when YOU MUST NOT TRADE to avoid losing money.
You must know how to "go long" or "short" on a currency, how to enter "Market Order", "Limit Order", "Stop Order", "OCO order" and "Entry Order".
If you learn how to do Online currency trading hedging, it will help you to maximize your profits.
You must be disciplined and avoid emotional currency trading.
When you make a reasonable amount of money for the day, stop trading because you can't be profitable at all times of the day and if you don't stop and take your profit, you may end up losing all the money you made.
Above all don't open a paid currency day trading account and trade until you have done the free trial demo account trading for a few months and mastered it.
At the beginning, keep your trading strategies simple.
Avoid complications and advanced trading strategies of technical and fundamental analysis because these are the reasons why 90% of beginners lose money.
Use a simple trading strategy to get rich at the beginning.
Afterwards you may then take advanced forex trading courses and do technical, fundamental analysis and use forecasting services to make even more profits and get richer, making millions of dollars effortlessly.
If you're serious in learning all the insiders' "SECRETS" about how to make millions of dollars trading foreign currencies online, without selling your soul to the devil and without losing your shirt, you must get our powerful currency trading e-book which reveals a very simple and yet profitable and powerful trading strategy which is guaranteed to make you $100,000 monthly for life from home or office.
You can learn to get rich from the jealously guarded foreign currency trading "SECRETS" of the "Money and Power" Elites, the multi-national and multi-billion dollars corporations, largest banks and governments of the world, the "Movers & Shakers" of International Banking & Finance, Business moguls & Tycoons, CEOs of major Corporations, secret societies and the privileged blue bloodlines of the Wealthiest Families of Europe and the Americas.
With the millions of dollars which you make from foreign currency trading, you'll be free like a bird to buy a mansion, with the most lavish and expensive furnishings, jewelry, antiques, electronics, a 50ft yacht, dream luxury cars, pick your choice: Lexus X470, $44,000 Jaguar 2007 S type, Silver Porsche Carrera, $180,000 Ferrari Testarossa, Mercedes 2007 Model S Class, 2007 Rolls Royce Silver Seraph, Bentley Mulsanne S, $220,000 Bentley Arnage Silver Tempest or a flaming red Lamborghini Jalpa!
You can make all your dreams in life to come true, without any hard work!
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Paper trading and the transition to trading with real money
Paper trading is widely discussed regarding its merits, and whether it is of value to a trader as they try to make the transition to real money trader. One viewpoint is that since paper trading is not real, the profits are meaningless, and are no indication of real money profitability. An opposite viewpoint would state that paper trading is an important step in the trader's learning progression, and regardless of whether it is real, if the trader cannot 'properly' paper trade, then they will not be able to real money trade.
I began trading in early 1995, with the intentions of becoming an options trader; my first trading education was through an oex options teaching service. Besides options training, the service included 'tape' reading, trade management AND sp500 index futures trading - also included in the service was the prevalent attitude that paper trading was for 'sissies'.
So I was a new trader, trying to learn and understand completely new concepts and ideas - what was called a trading method AND I was 'practicing' with real money - because paper trading was for 'sissies'. What did I accomplish, besides a big draw down in my account? I quickly introduced to trading psychology and the related implications - something else I also knew nothing about. Losing money and a trading psychology 'wreck', both from the losses and thoughts like I was too 'stupid' to ever learn how to trade, became a combination which took me out of futures trading, and then unfortunately carried over into my options trading which I had previously been doing well with. I just couldn't take it any more - I had to somehow start all over, or just quit for good.
Paper Trading Viewpoints
Consider: simulator fill prices are not real and won't be attainable with real money. Even if this is correct, is it really an issue unless the trader intends to be a scalper, trading for very small profits, and thus each tick is critical? Granted, but shouldn't a beginning trader be very selective, focusing on learning their method and the 'best' setups that method provides? This would be my viewpoint, and in this capacity paper trading fill prices are not an issue.
Consider: the trades are being done with no risk. No, there isn't any financial risk in paper trading, but I actually haven't met nearly as many profitable paper traders as one might expect. Why would this be the case if being able to trade without risk was such an easy thing to do? As well, what about self-esteem risk, and an attitude like - how can I be so bad that I can't even paper trade? The risk feelings like these are probably greater than that of financial risk, and if they are going to surface, you would want to encounter them before trading real money. As well, even if the issue was only one of financial risk - wouldn't you want to begin with the confidence of knowing that you were paper trading profitable? It would be hard to imagine a losing paper trading being able to profitably trade real money.
Consider: there is no emotion involved with paper trading. I was in our chat room watching a paper trader post their trades in order for me to give them feedback, and I noticed that one of their specific plan setups wasn't done. When I asked why, the trader told me that they were ahead for the day and didn't want to risk those profits. But the profits aren't real - how can you not take a 'base' method setup when paper trading - isn't that the point? Would you be in agreement, that if paper trading profits could be viewed in this fashion, that it has the ability to become very real and thus emotional to the trader? I would suggest that this is related to paper trading really not being 'so easy', and as mentioned above, self-esteem risk can be very emotional.
Besides examples like this, emotions can be added to the paper trading process. Throw away your simulator, and then go into a chat room and post all of your trades - no 'youknowwhating' around where you wait to see if the trade was profitable before you post it, like a number of traders that I have seen. What's the point, and when you consider the underlying implications of 'needing' to do this - the issue certainly isn't about whether paper trading is of value or not, but certainly best to find out before trading real money. You must post immediately and without lag, giving your direction and entry price, along with subsequent posts of any partial profits, and of course your exit, which ultimately is the determinant of whether the trade was profitable. There is no need to make any comments, or answer any questions regarding your trades - simply post the particulars as fast and real time as possible AND see if you feel any emotions doing this in front of the rest of the room while you go through a series of losses. Do you want to add even more emotions? Go through the same posting process, but do so where the rest of the room actually knows the method that you are trading, and what the trades 'should' be. You will quickly find out just how emotional paper trading can be - actually a very valuable exercise for the paper trader to do.
Paper Trading And Making It Further Beneficial
I have two predominant problems with paper trading, but this is with the trader's approach, and not with paper trading by definition: (1) the trader does 'things' paper trading that they would-could not do with real money (2) the trader views paper trading profitability, instead of paper trading proficiency, as the guideline of whether they are ready to begin trading real money.
I have seen too many paper traders, continuously and knowingly, over trade 'non-plan' trades, with trading size that is greater than they could afford the margin for in a real account - let alone accept the risk of loss, while also holding trades for risk amounts that they would not accept with real money. Viewing paper trading as a 'step' in the learning progression and transition to real money trading, it is critical that the paper trader only trades exactly what, and how they would trade with real money. Don't allow yourself to turn paper trading into a game, supposedly because there is no risk - the risk of making bad habits that you can't correct is tremendous, and will circumvent any attempt to trade real money. This is the time to learn YOUR basic trading setups, and make necessary adjustments to them and your entry-exit timing, in order to then make money trading them - this is NOT the time to turn your simulator into a pinball machine flipping at any ball that comes near you.
There is a problem with focusing on trading profitability -vs- trading proficiency. To begin with, profitability places the focus on money instead of on plan. And what is profitability - if you take 10 trades and make $75 are you profitable? Technically, if you are net ahead you are profitable, but what if those same 10 trades had a potential of $1,500, and you only made $75 - are you really profitable? This is what I am referring to when I think of trading proficiency. Instead of focusing on the common metrics, such as win:loss or win size:loss size ratios, I am most concerned with the win size:potential win size ratio, and want to maximize this percentage to the extent that is possible.
For instance, when a trader asks about adding trading size, taking the attitude that if they can make $100 trading 3 contracts, then they can make $1,000 by trading 30 contracts, the first thing I ask them is what is their proficiency ratio - why increase contract size and the corresponding trading risk, if you 'should' be able to make more money from smaller size? This is especially important for the paper trader, where they should not regard simple profitability as an indication of readiness to trade real money, but consider proficiency - for instance, begin trading real money when you are 60-70 percent proficient with your paper trades.
So What Is Your Viewpoint Regarding Paper Trading?
I never thought that I would ever make a dime trading, let alone be able to trade for a living or become involved with trying to teach others to trade - was this simply a function of starting over and paper trading? Granted that is too simplistic, however, I do know that it would have certainly changed the beginnings that I had, while very much shortening my learning curve, and reducing a lot of pain.
Clearly, I am on the 'side' that believes that paper trading is not only beneficial, but that paper trading is also necessary - however the value received will be dependant upon the trader's approach and attitude. Needless to say, paper trading as described is something that I have always strongly recommended.