Forex-Crazy

Focus on The Process and Steady (profits) As She Goes!

2011-07-29T07:38:00.000-07:00

Whilst chatting online last week to another student who had recently completed a personal mentorship programme with Sunil Mangwani, I asked how their trading was going?

The answer came back, rather melancholy, that ‘I’ve only made XY% profit this year’. To which my reply was great, that’s a neat profit! The ensuing online chat was then along the lines that constant steady profits no matter how big or small when compounded grows ones trading account nicely over time.

When starting out in the world of Forex if you can consistently make profits, whatever their size, then you are moving in the right direction. So if you are learning how to trade Forex, then set your overall expected profit targets at a realistic level and over time these will be exceeded and you can set a higher bench mark for yourself. The more pressure you put on yourself to make money, the less well you are likely to trade. Far better to focus completely on the process of trading than on the expected outcomes, as they will take care of themselves if you can get the process right and down to a fine art.

Top Trading Tip: Focus on the process of trading such as implementing your chosen strategy to perfection, along with good trade planning, risk and money management and the profits should take care of themselves.

Less is More and More is Less – Don’t Over Trade!

2011-07-15T03:18:00.000-07:00

When I first started trading I felt I had to be in a trade or I was going to miss out on a move and as result I found myself over exposed to the markets even though I was managing my risk on each trade properly.

I soon began to realise that over trading can kill your account quite rapidly.

I now plan all my trades down to the last detail and only take those which appear to have a higher probability of succeeding. Sure I still have losing trades but the profits from my winning trades by far offset those losses, which are inevitable.

So following on from my previous Blog about trying to have the Patience of a Saint and the Discipline of a Soldier when trading the markets, if we apply those ideas to our trading and stick rigorously to our Trading Plan, Trade Plan, Strategy and Risk & Money Management we should be able to stop ourselves from Over Trading. After all we need to preserve our trading Capital to take best advantage of those moments in the market when we have total clarity of the likely direction and are thus in for the kill at the right moment.

These events tend to take place when we get what I and Sunil call confluences taking place, where everything seems to come together at one point in time across several timeframes, but more on that topic in a future blog article.

So even if you only take one good really good well planned trade a week it will most likely pay well and you will minimise your losing trades and on balance will see your account grow faster.

Top Trading Tip: Try not to take impulsive, unplanned trades and don’t Over Trade and kill your account, pick and plan your trades carefully, as Less really can mean More.

Don’t Force It – Patience Pays

2011-06-24T05:23:00.000-07:00

A common problem encountered by novice retail traders is their overwhelming desire to trade, no matter what the market is doing. They switch on their laptop or PC check their charts and expect to get into a trade and make some money during the time they have allotted. Many end up ‘Forcing’ a trade and this approach can lead to losses.

We have found that waiting for a quality set up and entry signal pays greater dividends over time. Yes, you will be in fewer trades, but that doesn’t mean less profits, in fact the opposite is nearer the truth of ‘Less can mean More’.

To be successful with this approach, as Sunil Mangwani so often says and constantly reminds me, you need the ‘Patience of a Saint & the Discipline of a Soldier’ to be a consistently profitable Forex trader. Waiting for a quality set up may mean you miss what seems like a potentially good trade but it also means you don’t get sucked into a losing trade. If a slightly dodgy set up occurs and goes in the desired direction, don’t chase price, wait for a decent pull back and then join the party but when you take that trade make sure it is a quality set up based upon one of your chosen, tested and proven strategies.

Endless entries into poor trades will eventually cause one’s trading account to be quickly depleted.
So try and think of yourself as a soldier waiting in ambush or a wild animal waiting for its prey to come by and then at the right moment pounce and execute the trade. For both these examples failing to pick the right moment could mean the difference between life and death so try trading as if your life depended upon it and bring some real focus, patience and discipline to your trading and let me know if it makes a difference.

Top Trading Tip: It is better to be Patient and wait for a quality trade set up to occur before taking a trade than being impatient and trying to force a trade. Try and be patient and disciplined in your trading as this should reap dividends over time. Remember ‘Patience of a Saint and the Discipline of a Soldier’ and lie in wait for your foe! Less can really mean More.

FOREX-CRAZY.COM

Who or What Is Pulling Your Strings?

2011-06-10T06:05:00.000-07:00

When you are trading do your emotions drive your actions? Do you chase price, only to have the market turn as soon as you pull the trigger? Do you bail out of a trade as soon as it looks like it could go against you? If so you are probably at the mercy of the 2 key emotions that can stop you becoming a successful consistently profitable trader, and they are FEAR & GREED. Fear can lead HESITANCY which can make you fail to take a potentially good trade and Greed can lead you to take on too much Risk and make poor unplanned entries and eventually probably blowing up your account. Lastly the result of poor trades due to all the above can lead to UNCERTAINTY, with you wondering what the heck is going on in the markets

The best traders have learnt to control their emotions when trading. How have they achieved this? By knowing their chosen strategies inside out, backed up by a robust Trading Plan and historic data which proves their strategy works, if implemented with constancy and accuracy over a period of time. If ever uncertain about the markets or a particular trade then check your plan and if necessary stay out!

All traders have losses but the best traders minimise their losses by precise implementation of their strategies and using strict Risk and Money Management. Having such a robust Trading Plan and following it to the letter, provided the right market signals are given, leads to unemotional trading, but you do need to understand and work on one’s own Psychological Trading profile.

My own Psychological Trading profile is that I have an impulsive nature when trading and thus I have worked on developing my trade planning, patience & discipline, but more on the latter two topics in a future blog.

If you need help with any of the any of the above here are a few pointers:

Great Book on Trading Psychology:
Personal Mentorship & Workshops
Trading Beliefs

Top Trading Tip: Try and plan down to the last detail every trade you take as this can take the emotion out of the equation. Try and focus on the process and not on potential gains or losses. Also give some thought to and try and identify and analyse what your own Psychological Trading Profile is, as once recognised, you will be half way to addressing it and improving your trading. And If you are ever in doubt then stay out!

Stop, Stop, Stop!

2011-06-02T08:13:00.000-07:00

It is often said that ‘the best Stop is a great entry’, meaning that as soon as you enter the market price moves in the direction of the trade and never goes near your Stop. This takes time and practice to achieve but is a laudable target to aim for.

I also remember being at an International Traders Conference a few years back and trading live with some top traders and as the novice traders inevitably asked the question ‘Where would you put your Stop?’ you could see the expert’s eyes glaze over!

So to answer that novice’s question and put it to bed, here goes ……

Firstly, I recommend always use a Stop Loss to manage your Risk.

Secondly, it depends upon what strategy you are using and what that requires, which you will, of course, have back tested a thousand times over before trading live.

Thirdly, your Stop Loss should be placed just beyond a particular technical level, plus an allowance for the spread, beyond which your trade plan is wrong and you definitely want out.

Fourthly the size of the required Stop will dictate (along with your account size) your position size. So if you have a tight Stop your position size can be larger, but if you have a large Stop you will probably have to reduce your position size, so that your risk on any one trade remains fairly constant.

A technical level is above or below a key support or resistance level, beyond a pivot level or a key fib level and so on, but a point beyond which you know your trade was in the wrong direction. If you can’t manage you risk because the Stop is too big then stand aside and wait for a better setup. If you need help with these concepts then maybe you could benefit from attending our next Forex Mastery 2 Day Workshop in London.

Top Trading Tip: Always use a Stop Loss and place it beyond a technical level (also allowing for spread) and manage your risk by altering your position size to match your Stop size, so that your Risk remains fairly constant for every trade. If you can’t do that because your Stop is too big, then stand aside and wait for a better set up to occur.

Go Go Go & Get Organised

2011-05-24T05:00:00.000-07:00

I have found setting up and sticking to a daily routine with regards to trading can pay dividends. Establishing a routine means getting organised with regards to your trading. So what sort of things can you do to get organised and establish a trading routine?

If you get up early for a particular pre-market and market opening then when you wake switch on your laptop and internet and log on, whilst everything loads, go and do whatever your morning routine is. It may help to be washed/shaved/showered and dressed, breakfasted and watered before you start. This will help the brain and how you feel.
Make sure you have your Trading Plan and Check Lists available & use them.
Manage any open trades by moving stops and taking profits/cutting losses etc.
Check the likely news flow for the day to make sure you don’t get caught out.
If there are certain strategies you employ on certain timeframes, then set up templates if you use MT4, and then scan the currency pairs for any potential trade setups. This quick scan routine can get you focussed in quickly on the currency pairs that matter.
Once your quick scan is complete then conduct your Top Down/Bottom up analysis and apply any filters you use to establish if any of the potential trades are worth taking.
Then plan out any chosen trades that pass the filters and analysis test, making sure you know the market context in which the trade will be taken, if the entry criteria are met. Remember the 5Ps (trade context; risk:reward; entry; stop; profit targets etc) before entering the market.
If the identified trades are some way off entry then set up alerts if you use MT4.
Next comes trade execution, make sure you follow your plan.
Take a screen shot of the trade and file for reference.
Annotate your records and note any specifics.
During your chosen trading session plan some breaks when the market goes quiet and there is no news expected and keep hydrated and have a snack if needed.
On quiet days go do something else or hit that list of back testing to be done, or go over your performance thus far or research an aspect of trading that you’d like to know more about – just Google or Bing it!
At the end of the day or even weekly keep a journal record of your thoughts and feelings with regard to your trading.

Top Trading Tip: Establish a daily trading routine and get organised, treat your trading like any other business. Keep records and review your performance and aim to improve on identified weak areas. If you need help the maybe we can do that

The 5Ps!

2011-05-06T04:40:00.000-07:00

Over time I have learnt that the best trades often occur as a consequence of the effort and attention to detail that I put into the planning stage, prior to pulling the trigger.

A great acronym for this, which can be applied to life in general, is the 5Ps or PPPPP:

Prior Preparation Prevents Poor Performance!

So before you make that impulsive trade and just jumping into the market stop and think about the 5Ps, it may just prevent you from blowing up or seriously damaging your account. If you need help in developing into a consistently profitable trader then we can help you.

Top Trading Tip: Before taking any trade, ask yourself have you planned it out, are you following your (back tested) strategy to the letter and do you understand the risk you are taking and the potential reward you may gain? Remember the 5Ps!

Safe trading!

Martin W

Forex-Crazy and FxTribe

How Much Time Do You Have?

2011-04-28T07:11:00.000-07:00

Time is an important factor when learning how to trade Forex or any other financial market. So how much time do you have to dedicate to:

The ‘Learning to Trade’ process (each day/week/month)?
Analysing your chosen financial market(s) when seeking potential trades?
Managing your open trades?

What other distractions and responsibilities do you have in your life? You may have to do a bit of rebalancing to fit everything in and even give something up or let go of negative people.

The more focussed you are and given sufficient time, the more successful you should be as a trader.

Conversely, if you have too much time, it is easy to waste it staring at your charts all day long, like watching paint dry!

It’s all about getting the balance right and worth some thought. We’ll take a look at getting organised as a trader in a future article and what things we can use to help us be more time efficient.

Top Trading Tip: Dedicate sufficient time to the ‘Learning to Trade’ process each week if you want to progress up the Learning Curve, however, if you find yourself just flicking through the charts and time frames, looking at the same things over and over again in a day because nothing is happening in the markets, then STOP and go find something else to do, be it seeking out new trading knowledge or a job that needs doing or go see some friends or spend some time with family.

Will You Survive?

2011-04-18T07:48:00.000-07:00

Have you got what it takes to SURVIVE in the markets whilst learning to trade Forex?

Will you survive to trade another day?

Whilst learning to trade Forex or any other financial market there are certain things that you must do and that need to be in place, if you are to stand a chance of surviving to trade another day. What are they?

Don’t trade live until you have learnt your strategy inside out in a Demo account and preferably to have back tested it hundreds if not thousands of times to prove that it is, and you can be, profitable.
When you do start trading in the Live markets make sure you start off in a Micro-account and trade cents per pip.
Make sure you employ strict Risk and Money Management.
Make sure that you do not take unplanned impulsive trades!
Make sure that your account is sufficiently capitalised so that you only risk 1-2% Max of your account balance on any one trade and no more than 5 trades open at any one time, but preferably less.

Most people when they start to trade live will lose money and you have to persist until it all clicks and comes together and then you will start to make gains and recover the account. Even when profitable there will be periods when nothing seems to go right, your account needs to be able to absorb these periods as well. As well as the above, the key things which will get you through this learning process are:

Practice, Practice, Practice!
Determination (stick ability) and Drive (motivation) to see you through this period of initial loss making until you get to that tipping point of profitability.
Experience counts – if you stick with it and learn from your mistakes you will get there, provided you have sufficient funds to carry on trading live.
Vision – if you have a clear vision of what you are trying to achieve and why then this will keep you focussed through the ups and downs.
Having a Forex Mentor should shorten this painful initial loss making period.

Top Trading Tip: Make sure you have everything in place as above and the expectancy to lose money in the first instance rather that make millions overnight and have a clear vision of why you are trying to learn to trade Forex and you may stand a good chance of succeeding as the odds against you will have been lessened significantly. So make sure you will survive and if you need help then we can do that.

Do You Have a Trading Plan?

2011-03-29T15:03:00.000-07:00

At a recent Forex Mastery workshop I was involved in, the topic of Trading Plans was raised and I delved into one of my folders and retrieved my rather scruffy Trading Plan. It is hand written on one side of a plain postcard. It was written a couple of years ago and suffices to this day. It covers:

WHY I trade (My Vision of where I want to be in Life).
WHAT I trade (e.g. Forex/Commodities/Indices - Spot/Futures).
WHEN I trade the Forex markets. (e.g. The London Session)
HOW I trade the Forex markets - the strategies I employ and my style of analysis.
RISK & Money Management details that I employ.
REWARD to me for doing well – Salary as a % of monthly profits.
PSYCHOLOGY – my psychological trading profile and what I must do to improve on that.

That’s it in a nutshell!

I look at it every trading day and it helps keeps me focussed.

Note: A personal Trading Plan is different from individual Trade Plans, the latter being the plan of a specific trade.

If you need help with your development as a trader then you might consider a personal mentorship plan.

Top Trading Tip: Spend some quality time researching and deciding what you require in your own Trading Plan, it’s a personal thing and should be meaningful to you and help you become a more focussed and better trader.

The Best Times To Trade Forex

2011-03-18T09:13:00.000-07:00

Although the Forex market is described as a 24 hour market when open Sunday (5pm EST) through to Friday (4pm EST), there are times in that when there is greater movement or volatility than other times, when the market tends to stagnate.

As a trader, particularly for Day and Intra-day and scalping, the periods of largest movement or range will offer the greatest potential for achieving profits and should be the time when a trader should be trading. For a swing trader on the higher time frames this is less important.

The 3 main geographical areas which are open for trading at differing times are:

Australasia and Asia
Europe
America

It is when these areas overlap in their trading times that we tend to get the greatest movement in the Forex markets.

When translated into GMT we have the following overlaps:

Asia/Europe: 7AM – 9AM GMT (2AM-4AM EST)

Europe/America: 1PM – 5PM GMT (8AM-12PM EST)

So these are the times when we may wish to trade and focus our efforts.

Additionally, different currency pairs have different average daily ranges across the differing trading areas and time zones, so it is beneficial to know which pairs are statistically likely to have a greater range during the periods we are available to trade.

If you would like to know more about the Best Times To Trade Forex and which currency pairs to pick and really get into the detail and thus improve your knowledge and edge then download our free report and watch Sunil Mangwani's video on this subject by putting your name and email in the pop up window on the FxTribe Home page, if you don’t see it then just try it in a couple of days and it should appear. Thanks.

Top Trading Tip: If you want to find a greater number of profitable trades, focus your trading on the hours in the day (and the relevant currency pairs) when the markets tend to make their biggest moves, i.e. when the major market overlaps occur, as these are the Best Times To Trade Forex.

What Type of Trader Are You?

2011-03-15T15:57:00.000-07:00

What Type of Trader Are You?

What Type of Trader Do You Want To Be?

These are key questions that every aspiring trader needs to answer. If you are new to Forex or any other form of financial trading, then you will certainly have to do some homework before you may even be ready to answer these questions, but let’s see if we can help.

Most people when they are learning normally have a day job which restricts the times of the day when they are available to trade the markets. If this is the case then there are probably 2 options for you to consider:

· Swing or Position Trader - trading mainly on higher timeframes such as the 4hr and Daily charts but also the 1hr and aiming to hold positions over several days to even weeks in order to make several hundred pips or more. This style of trading may provide you with a greater range of currency pairs to trade as the spread will be less of an issue.

Scalping is trading on the shorter term time frames such as the 1min and 5 min charts and aiming to make 3-10 pips per trade. So you get in, get out, and get done in the short time window that you may have available, or may open and close multiple trades in a day. You may focus on one or 2 currency pairs which have a decent daily range and a typically low spread such as the EURUSD.

If you have more time during the day then you could be one or both of the above plus you have the third option of:

· Day or Intra-Day Trader - trading where you would be trading on the 15min, 30 min and 1hr charts and aiming to make anything from 20 to 100 pips. In this case spreads may be of some concern but less so than Scalping.

The point is you need a trading style (one of the above) that suits your lifestyle and then you need a strategy or strategies that suit that style of trading and then currency pairs which are also best suited to that style.

So if you are an aspiring Swing or Position Trader then higher time frame Harmonic Trading strategies fit nicely with this trading style and you have more choice over which pairs to trade.

If you are a Scalper then again Harmonic Trading strategies can be adapted to achieve this trading style but your choice of suitable currency pairs will be limited.

Lastly for Day and Intra-Day trading again Harmonic Trading strategies can be used to match this trading style and you will have a reasonable range of currency pairs to trade.

How can Harmonic Trading strategies be used for all 3 trading styles? You may ask. Well, harmonic patterns are naturally occurring and repeating patterns in any liquid financial market on any timeframe. You just have to have the training to know how to identify them, how to trade them to maximum advantage and how to adapt your Harmonic Trading strategies to match the chosen trading style.

Top Trading Tip: Think long and hard about what style or type of trader you want to be. It may be that you can adopt all 3 trading styles depending upon your available time, on any particular day, provided you have the right trading strategies (the tool box) and the right mind set and necessary focus.

LUCKY Results in Trading

2011-03-02T08:41:00.000-08:00

One thing I have learnt the hard way is that there is hardly any chance of having LUCKY results when trading Forex. For many people, as soon as they enter a trade then the market reverses in the opposite direction. To be ‘LUCKY’ and get great results one may consider the following methodology:

Firstly you have to Learn as much as you can about Forex trading

Then you need to Understand the methods and strategies you intend to use and how and why the markets move and then you have to be able to implement your chosen strategies and methods as if they were second nature.

Next you must Check your results and adjust and tweak everything to what suits you and to get the desired outcome.

Once you have done all the above, then you might begin to Know what you and the markets are doing.

This repetitive cycle of Learning, Understanding and implementing, Checking and Knowing will begin to pay dividends and Yield tangible and positive results.

So remember: Learn/Understand & implement/Check/Know/Yields

The best way of doing all this with the aim of becoming a consistently profitable Forex Trader is to:

Start off by trading in a Demo Account and get familiar with all the tools etc.
Learn how to, and then Back Test all your strategies over and over again, tweaking your system, especially risk and money management, as you go.
When you have tangible results in your chosen currency pairs and timeframes then and only then should you start trading live, and then only in a Micro-Account.
Once you have a consistently profitable track record of trading live in a Micro-Account then you can consider upgrading your account to a Mini-Account and if you do well in that then you might consider scaling up to a Standard Account.
I would consider a reasonable track record time for any type of account to be anything from 6 months to a year and would encourage a year because the market changes in nature throughout a trading year and thus your results may reflect that.

· So to achieve consistently profitable Forex Trading results you need to make your own ‘luck’ by doing the above and then you should get LUCKY.

Top Trading Tip: Make your own luck and learn how to Back Test your chosen trading strategies and methodologies, analyse the results, tweak then retest and so on, this will pay dividends when you start to trade Live.

Quiet Times for Reflection and Development

2011-02-21T09:14:00.000-08:00

As we develop as traders there are often many things that we think of that we would like to find out more about or need to develop or test. It is a good idea just to note those things down as they occur to you, then when there is a natural lull in the markets then this can be the ideal moment to look back at those notes and maybe get on with one or two of the things you would like to take further and develop or understand better.

Today is a classic day for that if you are based in the UK or outside the USA. Being ‘President’s Day‘ in the US means that the markets are extremely quiet, so it is an ideal day to either take off or to get on with other things, even, dare I say it, to Back Test some of your chosen strategies!

These quiet times can also be a great time to reflect on what has occurred and how things are going in your trading and maybe to tighten up your trading plan and look back at your trading record and particularly your failed trades, as these are the ones we can learn most from. To do that though, we must have kept a record of previous trades and their outcome.

However, if you trade in MetaTrader 4 (MT4), then you can easily generate a report from you Trade History, just select the ‘Account History’ tab at the bottom of your screen when your Terminal is showing and then right click on the historic list of trades and then select ‘Save as Detailed Report’. This will generate a full report over the chosen time period and if you scroll down to the bottom of the report you will see your Equity Curve and associated trading statistics or Stats as we call them. The key stat to look at is your Profit Factor, this must be greater than 1 if you are going to be able to build your account equity balance and preferably better than 1.5 or even 2.

Top Trading Tip: When you take a trade in MT4 then take a screenshot of your setup and save it for future reference or sharing at the time of the trade. Just select 'File/Save As Picture/Active Chart (as is) and give it an easily understandable title such as 'GBPUSD 1hr Regular Bearish Divergence - 11 Jan 2011' and save it in a logical folder such as ‘Past Trades’. You can then go back and refer to them and compare them to how things worked out and learn from your mistakes. They are also a great way to get feedback from your peers or Trading Mentor allowing you to show when and why you took a certain trade.

The Answer Is In The Price Or What Is Price Action?

2011-02-13T13:31:00.000-08:00

The other day in the Live Room a new student asked the question ‘What is Price Action?’

My answer was along the following lines:

To ascertain whether price is trending, reversing or moving sideways we need to look at current and previous price action on whichever is our chosen time frame. We need to look at the fractal highs and fractal lows (i.e. the zig zags) taking place as the market moves in waves when moving up, down or sideways.

If price is making successive Higher Highs and Higher Lows then we can say that the market is trending up, similarly if we can see that there are Lower Highs and Lower Lows then the market is trending down and if they are of equal Highs and equal Lows, or thereabouts, then the market is probably consolidating and moving sideways. If you are at a point where it is difficult to decide either way then the market may be at a turning point. To make it clearer to you can draw a trend line joining the highs and another connecting the lows. This also may show whether price is in a channel, an expanding (megaphone like) pattern or a reducing (wedge or triangle like) pattern. More on patterns at a future date.

So when planning our trades and before pulling the trigger we need to be as sure as we can be of the likely market direction in our chosen time frame and by looking at what price is and has been doing is a useful method of deciding this. Of course this doesn’t mean you shouldn’t look at time frames above and below your chosen one to ascertain the context of your planned trade, remember the Top Down/Bottom Up approach mentioned in my previous Blog entry.

Top Trading Tip: When planning your trades ask yourself ‘Where is price now, what is price really doing and do I want to get involved?’ and do the same on all time frames.

Happy and Safe trading

Top Down & Bottom Up

2011-02-08T07:48:00.000-08:00

Last week I went over the importance of Support & Resistance (Demand & Supply Order Flow). This week I want to build on that and introduce Top Down / Bottom Up.

To become a proficient Forex Trader it is essential to be able to plan and takes trades within the context of higher time frames. One of my biggest breakthroughs whilst learning how to trade Forex was undertaking regular and rigorous Top Down and Bottom Up analysis, so that I fully understood the context of the market I was about to trade in.

Once a week I will scan through each currency pair that I trade and look at the Monthly, Weekly and Daily charts and analyse and note what I see, particularly key Fib Levels/Trend Lines or Support & Resistance levels, then every day I will look at the Daily, 4hr, 1hr and 15 min when planning my trades and will also work from the smallest time frame upwards marking up what I can see.

This means I have a good feel for where a currency pair’s price might go to and where it could turn plus I will highlight any of the set ups that I trade. It also means I have a feel for the trend on what ever time frame and where any counter trend moves might retrace to.

So I can then trade my chosen strategies on whatever time frame they occur, whether they are trend or counter trend trades, and manage them within the context of that and higher time frames.

Having planned my trade I will even quickly scan through at least the next higher time frame and the next lower time frame to my chosen trade time frame before pulling the trigger, to ensure I haven’t missed anything.

Top Tip: Use Top Down / Bottom Up chart analysis and understand the context within which to plan your trades and also your expectations of likely price movement. Before taking any trade look up at least one if not two time frames and down one.

So What is Support and What is Resistance?

2011-01-30T15:17:00.000-08:00

Horizontal Support & Resistance occur because of Order Flow. People (and institutions on their or a company’s behalf) place orders into the market where they think price will turn or they want to take profits, get out of a losing trade or at a price where they wish to exchange one currency for another.

Horizontal Support occurs when there are more Buy orders than Sell orders so the Bulls win the day; horizontal Resistance occurs when there are more Sell orders than Buy orders and the Bears win the day. Support and Resistance on a chart is nothing more than a visual representation in price and time of Buy (Demand) and Sell (Supply) Order Flow which is real people setting and executing Buy and Sell orders. This creates horizontal Support and Resistance, nothing more and nothing less.

When price moves up and down in waves in the market the swing highs and swing lows create wicks on candles (fractals) where one can draw trend lines, be they Support trend lines or Resistance trend lines. Trend lines should be drawn connecting these fractal wicks and should not cut through the body of a candle on a chart. The next thing to understand is that order flow created the wicks on the candles, which created the fractals and thus diagonal trend lines if drawn correctly are also a representation of Supply and Demand Order flow and thus Support and Resistance.

Top Tip: When looking at your charts think about Supply and Demand and Order Flow and where orders are likely to be placed and consider the use of trend lines alongside horizontal Support & Resistance, it might help with your trade planning and when and when not to pull the trigger.

Copyright Forex-Crazy.com 2011. All Rights Reserved.

Look Left & Stay Safe!

2011-01-30T15:11:00.000-08:00

One of the most basic things a trader needs to learn inside out is how to determine and then use Support & Resistance to plan and execute their trades.

When we want to cross a road safely we look to our left and right and the order we do that depends on what side of the road traffic drives on. When trying to plan and execute trades we need to know where key levels of support and resistance are to make sure we don’t get run over by the market. We are trading the Right Hand Edge of the charts and are not 100% sure what price will do next, so before we look right we must always:

LOOK LEFT

on our charts and identify past significant horizontal support and resistance and trend lines in the timeframes which could impact upon our intended trade. Once that is done and marked up on our charts then and only then should we look right, and have a more informed view of likely price action and hopefully stay safe when taking our intended trades.

Top Forex Trading Tip: Often past horizontal support and resistance will create small zones where price may react in the future, also where the bodies of candles actually close can be key levels.

How to Make Your New Year’s Resolution a Reality!

2011-01-05T05:31:00.000-08:00

So Christmas is over and the New Year has started and you’ve made your New Year’s Resolution:

‘I’m going to learn how to trade Forex!’

Then what? If, like many others, you are psyched up and raring to go but don’t know where and how to make that resolution become a reality, then stick with me and read on:

Firstly you might want to tweak your resolution and add ‘and be consistently profitable’ on to the end of your New Year’s Resolution, because you no doubt are doing this to make money.

Around 95% of people fail in their attempt to become consistently profitable Forex traders for a myriad of reasons, please don’t let that be you. Also, you will probably need to temper your expectations regarding time scales to achieve your goal as it may take anything from a year to as many as 3 years or so to really make the grade. One way to fast track your progress is to get yourself a Forex mentor, someone who is a successful Forex trader and also an honest straight talking teacher and mentor, they do exist! This will cost but it will be money well spent, plus you will get to see what they are trading too.

The key elements to learning how to become a consistently profitable Forex trader are:

Open a Demo Account.
Get some lessons, attend a workshop or seminar or enrol in an online course.
Get a Forex Mentor/Tutor:

Understand the Basics

What moves the currency markets?

Basic Fundamentals and news flow

Support & Resistance
Price Action
Basic Technical Analysis

Learn Top Down/Bottom Up

Ask Why, What, When and How and Google everything.
Prepare for your lessons and ask intelligent questions.
Get some good Forex trading strategies.
Practice, practice, practice and learn how to Back Test your Forex trading strategies.
Learn to trade in the context of the differing timeframes.
Decide what type of Forex Trader you want to be and what times of the day do you want to trade to suit your lifestyle.
Learn about and implement the 3Ms (Money Management, Method and Mind).
Learn about the 5 Ps (Prior Planning Prevents Poor Performance).
Be Honest with yourself and be Accountable for your Forex trading actions to someone else – get an Accountability Partner.
Keep a Trading Journal and note your trades and observations as you progress.
Develop (the) Patience (of a Saint) to wait for your chosen strategies to setup and don’t force trades.
Demonstrate (the) Discipline (of a Soldier) in executing your chosen strategies to the letter.
Always, always use a STOP LOSS but you need to know where to place it.
Learn to love your losses – every Forex trader has losing trades.
Learn that No Trade is sometimes the best trade.
Be selective in which trades you take – often less is more!
Learn to minimise your losses and maximise your gains – this is NOT easy and requires mental fortitude.
Don’t open a live trading account until you are consistently profitable in a Demo account over a period of at least 6 months if not a year.
When you do open a Live Forex trading account start off with a Micro-Account, because when you blow it up (as most do) you should be able to reseed it with minimal pain and also make sure it is sufficiently capitalized.
Learning how to trade Forex is more of a marathon than a sprint so pace yourself.
There is no substitute for experience in this game especially as the Forex market conditions can change quickly, so learn as much as you can from your Forex Mentor.
Experience can also be gained from others – so don’t trade alone, try and find a group of like minded people to trade alongside with this can help you be more disciplined and you will learn from them too, we offer a Live Trading & Education Room and Skype thread where you can do just that 24/7.
WARNING:

When you start don’t set you sights too high – be realistic.
There is NO one Golden Button/Indicator/Robot or one perfect method to make millions in Forex. You have to build up a tool kit.
99% of all indicators are lagging – Price action is key!
Trading Forex live is often different to that described in text books and is an art rather than a science and requires judgement on a case by case basis.
Forex Trading can be addictive so be aware of that and remember that there are other things in life besides Forex.
Don’t stare at your screen all day – learn how to set Alerts and then go and do other stuff whilst waiting for trades to setup.
No one can really afford to lose money, so any money used to trade Forex should be Risk Capital in addition to your savings etc.

If, after reading the above, you are still interested in learning how to trade Forex then we might be able to help you realise that New Year’s Resolution at Forex-Crazy & FxTribe.

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Forex-Crazy & FxTribe wishes everyone a prosperous and Happy New Year!

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To Spreadbet or Not To Spreadbet Forex? - That is the Question!

2010-04-23T13:48:00.000-07:00

Hi Traders,

Often I am asked whether it is better to trade Forex using a Spread Betting Account or a traditional Forex Broker Account and my answer is always - that depends upon several factors and they are:

If you are not yet a consistently profitable Forex trader then stick to a Forex Broker micro-account/mini-account. This allows you to trade smaller lot sizes and stay trading for longer and costs less to re-seed your account should you have to, whilst you are learning to trade Forex profitably.

If you are a consistently profitable and you are making sufficient money in the Tax year to have to declare your profits to the UK Tax Man (HMRC) - i.e. are you liable for Capital Gains Tax, then you may like to consider trading in a Spread Betting Account, the profits of which are currently tax free. Everyone has a Capital Gains Tax Allowance of £10,100. So currently you would need to be making more than £10,100 and then the additional figure would be taxable at 18%, for 2009/10 tax year. (These figure may change after Weds 24 March 10 - Budget Day)

The next issue to consider is whether you have sufficient funds to place in a Spread Betting Account. Most people open a Spread Betting Account with insufficient funds and then proceed to lose it all. To stay in the game you must be able to withstand a run of losing trades and also apply Fractional Money Management to your trades, so that you are not risking more than 1% of your account on any one trade.

Spread Betting Accounts often have restrictions on the smallest position size you can take, so you need to make sure you are able to operate your fractional money management and not risk more than your allotted account percentage on any one trade by having sufficient money in your account.

However, if you are sufficiently capitalised, consistently profitable, making more than the current UK Capital Gains Threshold and also a UK taxpayer then it may be advantageous to trade Forex using a Spread Betting Account.

One useful aspect of Spread Betting is that you can then trade Forex Quarterly contracts (like a Futures Contract), this is useful for longer term position trading and cuts out the daily swap or spread at daily rollover. You can also set up your accounts to automatically rollover these types of contract at each quarter end, if you so wish.

The next question I am then asked is who would you recommend for a Spread Betting Account? I have two Spread Betting providers that I favour they are:

IG Index - minimum spread bet size is £0.50 a point
Capital Spreads - minimum spread bet size is £1 a point

Both have user friendly platforms and good customer support.

IG Index also offers their Trade Sense beginners course and introductory period with minimum spread size of £0.10 for weeks 1 - 2, then £0.20 for weeks 3 -4 and then £0.50 for weeks 5 - 6, once you opened an account with them.

Capital Spreads also offers free seminars to help the novice Spread Better, through to Trading Strategies and Advanced Trading.

You will still need to plan and keep tabs of your trades in your chosen charting platform such as MT4 which tend to have better analysis tools than Spread Betting Account providers, but it is fairly simple to have both applications open at the same time to set up your trades.

A Top Forex Trading Tip is to make sure you have the selected Spread Betting Account Dealing Desk Telephone Number written down somewhere accessible and also programmed into your phone so that you can mange your trades should you have a laptop or PC crash on you.

I hope that helps to answer those questions.

Great trading

Martin

www.forex-crazy.com

How To Become A Consistently Profitable Forex Trader - My View

2010-03-11T12:05:00.000-08:00

Hi Traders,

One of the best ways to become a consistently profitable Forex trader is to do the following:

Take responsibility for your own mistakes and actions.
Be accountable to someone for your trading results.
Learn about Support and Resistance in all its guises.
Learn how to conduct Top Down analysis of a currency pair.
Get yourself a Forex Strategy.
Back test each and every Forex strategy or system 1000s of times before trading them in a live account.
Trade in a Demo Account before trading Forex in a Live account.
Keep a record of your trades (excel spreadsheet) and keep a Trading Journal noting your progress, your reflections on your trading and how you feel.
Take PC or laptop screenshots of your trade setups and their progress to completion.
Learn to fully plan your trades in their entirety and then trade that plan. Prior Preparation Prevents Poor Performance.
Adopt good money and risk management.
Find yourself a successful Forex Tutor or Mentor - this will be money well spent and will fast track your learning journey. Attend their Forex classes/seminars/workshops and soak up all their knowledge.
If you have a run of losing trades - then stop trading, take a break and re-asses and note your findings in your Journal. Put the problem right once you have identified it.
If you are struggling to find a trade then the market is probably consolidating, so go do something else!
Be patient and let the trade set ups come to you, don't force it.
Forex can be addictive so try not too let it impact upon other aspects of your life and don't sit there staring at your screen all day watching every pip movement.
When you do start trading in a Live account do yourself a BIG favour and start off trading in a Micro account. If you blow it up you should be able to reseed it, you probably won't be able to do that in a Normal trading account.
Once you are consistently profitable in a Live Micro Account then start to scale things up slowly. When you are ready (proven track record in Micro Account) move upto a Mini-Account and so on. Trading a Normal account with Large Lot sizes is significantly different 'emotionally' to trading a Demo or Micro account.
Make sure your account is sufficiently funded. You should not be risking more than 1% of your account on any one trade and at a max total of 3 - 5% for a Micro account, if you really must. The point is when you make a mistake, if your account is sufficiently funded and your are controlling your risk, your account will survive to allow you to trade another day.
Use fractional money management to determine your position size based upon the number of desired positions, your account size and the Reward : Risk Ratio for that trade.
Do yourself a favour and employ a Stop Loss at all times (at least until you become a seasoned Forex Master and your strategy allows you not to do so, which you will have, of course, back tested!)
Network and link up with other Forex Traders and exchange ideas online - Skype is great for this. Trading with other like minded people is also a great way to learn as you swap knowledge, ideas and trade setups.
Enjoy the fruits of your labours.

That is just a quick overview of many of the essentials, if you want to know more then grab my free e-book which goes into greater depth. I wish you every success on your Forex quest.

Martin
www.forex-crazy.com

Forex Trading Workshops London UK - 14th - 15th Feb and 16th Feb 2010

2010-01-24T05:41:00.000-08:00

Forex Seminars and Workshops in London UK

We try and keep you informed about forthcoming recommended Forex Trading Seminars & Workshops in London UK:

Learn How To Trade Forex Here:

Forex Workshops in London UK - 14th to 15th Feb 10 & 16th Feb 10

BIG NEWS: Renowned Top Forex Trader Sunil Mangwani is coming to the UK in February 2010 to run 2 Forex Trading Seminars/Workshops in London including Live Forex Trading - he is brilliant! If you really want to get on the right path to learn how to trade Forex or improve your trading then these are Must Attend events. Sunil doesn't get to the UK very often so make the most of this opportunity.

14th - 15th Feb 10 - Basic Forex Seminar & Live Forex Trading Workshop (2 Days)

16th Feb 10 - Advanced Forex Seminar/Live Forex Trading Workshop (1 Day) - Learn a complete Hidden Divergence Forex Trading Strategy.

To secure a provisional place click HERE and leave your details today, by doing so you will qualify for a months Free access to Sunil's Live Forex Trading Room on completion of payment.

The cost of the 2 day Basic Forex Seminar / Live Forex Trading Workshop is just £399 - an absolute bargain!! There is an early bird discount reducing the cost to just £349 if you register early, CLICK HERE for details on how to obtain your discount now!

The cost of the 1 day Advanced Forex Seminar/Live Forex Trading Workshop is £799. There is an early bird discount reducing the cost to just £749 if you register early (by 31 Jan 10), CLICK HERE for details on how to obtain your discount now!

IMPORTANT: These Forex Trading Seminars/Workshops will be limited in numbers and will sell out fast so if you want to secure your place send an e-mail to support@forex-crazy.com with the heading 'Forex Seminars' and include you name in the text and we will send you the link to register.

Sunil Mangwani is an expert on Forex Trading and is the course instructor.

To see the 2 Day Basic Certificate Forex Seminar content and details just CLICK HERE

To see the 1 Day Advanced Certificate Forex Seminar content and details just CLICK HERE

TRACK RECORD – Trading 1 mini lot on the EUR/USD on the 1 hr timeframe from 1st January 2007 to 31st December 2008, the Advanced Certificate technique alone has banked 30478 pips and increased the trading capital from $10000 to $40318.

Our (Forex-Crazy) experience of these Forex Trading Seminars & Live Forex Trading Workshops is that you will also learn a lot more than the above and be able to bring real discipline to your Forex trading, by learning:

how to identify low risk high probability trades
how to plan the trade and then trade the plan
when to enter a trade and with what position size and number of positions.
when and how to scale out by taking profits at predefined levels for multiple positions
when to let your winning trades run or when to close them out.

So don't delay, secure your provisional place today by clicking HERE and leaving your details or send an e-mail to support@forex-crazy.com with the heading 'Forex Seminar' and include your name in the text.

For more details on Sunil Mangwani: click here

So come and join us and learn how to trade Forex like a pro!

Forex Currency Correlations

2009-10-20T08:49:00.001-07:00

Most Forex Traders with a modicum of experience will have come across and may know the ins and outs of Currency Correlations. They will know that some currency pairs are negatively correlated whilst others are positively correlated, and others are uncorrelated with each other. On top of that some currency pairs are correlated with commodities such as Gold and indices such as the S&P 500. In doing so the Forex Trader will be able to make certain judgements and minimise their risk when taking particular currency pair trades, but that is probably as far as their knowledge goes.

Currency correlation (positive and negative) also offers some Low Risk, High Probability trading opportunities provided you know what you are doing.

If you would like to know more about Forex Currency Correlation Trading Secrets and get a free Forex Trading Strategy, then go here and download a Free PDF on the topic, plus you will also receive more free content on the subject over the next few weeks ( starting 15 Oct 09): Don't say I never told you!

If the above link doesn't work then just go to www.Forex-Crazy.com and select the Currency Correlation Secret Menu page. You do need to act on this one as it's a time restricted opportunity for the Free Stuff.

Hope that helps in some small way.

Martin S

www.Forex-Crazy.com

The free site for Forex newbies to stop them losing money and their shirt! We try to help them learn how to become consistent and profitable traders.