Forex_Fortunes_Guide, Deyan Dimitrov [easy to read books for adults list TXT] 📗
- Author: Deyan Dimitrov
Book online «Forex_Fortunes_Guide, Deyan Dimitrov [easy to read books for adults list TXT] 📗». Author Deyan Dimitrov
When you come across Forex trading websites, almost all would promise you converting your money into millions in just a short span of time. Some online advertisements would even beguile you to finally quit your job and to just focus on Forex trade.
But is it really worth it?
Can you really make it big overnight?
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Why Set Realistic Expectations
The answer is both a yes and a no. Forex trading is definitely worth your effort especially when you already possess the right mindset and you use effective trading strategies. But the promise of earning thousands or even millions overnight is just impossible and even dangerous.
When you finally set to venture in currency trade, setting realistic expectations is the initial step. Success in this kind of business all starts with knowing what to actually expect. Since there are different market forces that can directly and indirectly impact currency trade, you can never be 100% sure.
Always keep in mind that any investment involves certain level of risks. It is basically the same thing when it comes to Forex trade. Without a doubt, you can earn a huge sum. But on the other side, you can also incur losses. Once you come out thinking that you can have all the economic gains by just buying and selling currencies, you are doomed to fail.
Remember that just like in kind of investment venture, you need to be realistic to make your goals achievable and feasible. Your attitude and mindset towards Forex trading certainly affect your trading decisions.
Calculating Risks in Forex
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Instilling impossible expectations towards Forex profitability can negatively affect your trading choices. For one, traders who have high and impractical expectations might end up gambling their money without even thinking of the risks.
The tendency is that some would easily want to get high profits in an instant. There are even traders who would trade currencies everyday thinking that by doing so, they can earn more. With Forex trade being a highly volatile business venture, you can never afford to trade without even calculating the risks and without any Forex knowledge. Doing so will not only lead to disappointment but to high losses as well.
If you really want to make it in this kind of business, you need to have patience. You have to set realistic expectations so that you can carefully plan your trading strategies.
Study the currency market, gather the price data along with the significant indicators and create your trading plan. These are the things that you should keep in mind if you really want to be successful in Forex.
The expectation of earning huge amount in an instant might seem appealing at first. But in the long run, you need to understand the fact that success takes quite some time. With Forex, patience is definitely a virtue. You need to know when to use your bullets to your advantage. In that way, you can avoid incurring losses and you get to earn high profits.
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Chapter 5:
Understand The Power Of Patience
Synopsis
A lot of people make huge losses in Forex markets just because they make simple mistakes like overtrading or not being patient enough to allow their trade setups to play out and instead they enter and exit the Forex market compulsively. The problem may lie not so much with your trading strategy but with your inability to exercise patience by waiting for the best low risk opportunity with the highest probability of success. The tips discussed below will help any trader step up their trades from mediocre trading to consistent and profitable trades.
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Educate Yourself on the Forex Market
It is important that new traders educate themselves on all matters pertaining to the Forex Market resisting the impulse to rush into trades before understanding the ins and outs of the trade. Learning through mistakes on the Forex market could leave you counting your losses, but lucky for you this can be avoided by taking the time to study the market. After clearly establishing your trading edge, you can now exercise patience by waiting for the right moment to execute your trade; patience is worthless unless the trader knows what they are waiting for.
Create a Trading Plan and Stick to It
The best traders in the market always plan ahead and are prepared at all times having compiled an elaborate trading plan after which they always act according to their plans.
Creating a plan does not necessarily mean that they trade all the time; novice traders usually accumulate losses because they think that they should be on the market trading all the time. Preparation is an important aspect to any successful trade but at times it’s better to sit tight and wait for the trade to play out; just because the Forex market is open 24/7 does not mean that you should be trading all the time.
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Wait for Your Trade Setup to Play Out
Good traders never anticipate how their trades will play out, those who do lose a lot of money in this manner. Exercise patience when your trade plays out and bear in mind that a good trader can be compared to a lion, an amazing predator due to his great stalking skills, and a patient one at that, always waiting for the perfect opportunity to go for the kill and what’s more when he goes for it he rarely misses.
Jesse Livermore once said that big money is made by sitting and waiting, and never by thinking, he adds that it’s important to wait for all the factors to tilt in your favor prior to making the trade.
Trust Your Instincts
Accurate gut feelings are indisputable with one of the greatest Forex traders, George Soros revealing that he depended heavily on his instincts when he traded.
Soros said that he relied on his animal instincts and that when he suffered from back pain he used the onset of the pain as a sign that something was wrong with his portfolio. This will prompt him to check whether something was amiss when he might have done the contrary, if he had ignored his instincts he might have incurred huge losses.
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Know When to Call it Quits
If during a trade you realize that things are not going well for you it will save you a great deal of money to retrench rather than adding on to your losses by waiting for your fortunes to change. To stay in the trading game, you have to be strong enough to bear the profits and the losses and take George Soros as an example. It didn’t matter to him whether he lost or won, if the trade didn’t go well, he was still confident that he had the capacity to win other trades such that he could confidently walk out without any hard feelings.
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Chapter 6:
Be Organized in Your Approach to the Markets
Synopsis
The phrase “playing the market” may make it seem like you would enjoy greater success by trusting your gut instincts, going with the flow, and being a slave to trends. However, the truth is actually the opposite. You have better chances of earning from Forex trading if you adapt a more disciplined and organized method when trading.
Avoid letting your emotions and all the hype get the better of you with the following tips.
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Planning is still the key to success
If you remember your Management 101 lessons, then you should know that Planning is the first step to success. Forex trading is no exception. You need to come up with plans for your short-term and long-term goals. These plans also have to be detailed. If possible, include step-by-step guidelines for how you want your strategy to work out.
Focus on a few high-potential currency pairs.
Don’t spread your resources thin. It’s hard to put your plan and strategies to good use when you have a lot on your plate. Rather, it’s better to take your time choosing a small number of currency pairs that you can fully focus on and nurture until the very end.
The more time you spend studying how your pair works in the market, the more chances you have of predicting its future trends. Consequently, you’ll have a lesser need to rely on instincts alone when making a decision. Instinct is not a bad thing at all, but instincts powered by knowledge are even more trustworthy.
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Use a timetable.
A timetable can be a more powerful tool than an ordinary calendar if you know how to make good use of it. To start with, take note of all the important events that are relevant to your trading plan and strategies. These include but are not limited to the following:
Public holidays in both countries where your currency pairs originate
Global and economic summits affecting your currency pairs
Economic releases
Scheduled key announcements from major market players
All the events above are sure to affect your currency pair in terms of demand, supply, and liquidity – just to name a few. Every time you add an event to your timetable, remember to review your plan and strategies and adjust them accordingly if it proves necessary.
Expand your network.
When it comes to any kind of trading, it’s who you know, what you know, and when you know that matter. Being able to predict market trends is a great skill, but it’s not one you can always rely on. However, what you can be sure to depend on at all times is your network. It’s fairly easy to determine which individuals will make
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good sources for insider’s information. The challenges lie in making those individuals a willing part of your network.
Check technical analyses.
Technical opinions must always be taken into account even if you strongly feel the opposite of what these experts have to say. At the end of the day, you need to remind yourself that technical analyses are based on verifiable facts and figures. They have to mean something.
Last but not the least, remember that your ultimate goal is to minimize your loss first and increase your profit next. Don’t gamble everything on a whim.
Be man enough to admit when you’re on the losing side and just start again. At least you still have something to start with unlike other traders, who have lost everything because of their inability to keep their emotions in check.
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Chapter 7:
Why Emotional Management is Critical to Trading Success
Synopsis
Trading in the foreign exchange market is not all about strategies. Oftentimes, it can involve a lot of emotions especially when the experience is not at all pleasant. After all, even when the system of trading is reliable, human factor still remains as the major player. The trader can be very effective in maximizing the potentials of the trading system.
It is also possible that the trader might lack certain qualities that prevent him in making the right approaches. It becomes even more disadvantageous when the trader lacks patience in dealing with losing trades. Thus, it is essential to control strong emotional urges ensure that the process of trading is managed properly.
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Proper Emotion Management can Lead to Better Calls
There are instances wherein a trader dismisses the signs that his ways are inefficient, thinking that it is the system that is at fault. When this happens, the trader will continue with the trade, hoping that the system will eventually turn out for the better. On the part of the trader, this kind of reaction can be translated to as being optimistic. However, unless the trader is already an expert in the Forex market and he has the right resources that will validate his moves, this reaction is actually an act of stubbornness more than anything else.
The trader is given two paths- to recognize what is happening or to maintain blind optimism. When the trader recognizes that the pattern is not going to favor his end anytime soon, the best decision would be to cut losses short. Acknowledging the technicalities
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