Go Go Go & Get Organised

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!

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

Will You Survive?

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.

LUCKY Results in Trading

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

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.