Risk management allows us to have control over a few things in the market. Nobody knows where the currency exchange rate is going to go next for any particular pair. This is because a forex chart gives us a fraction of what is going on in the world's currency markets.Many amateur traders fool themselves that when they look at their favorite currency pair chart they get the entire picture. With a little commonsense thinking we can understand that we are only seeing a small fraction...
Trade SetupPair: EUR/USDWhen: 04/06/09 19:05:00 Pacific (-8h)Number Of Lots: 2Pip Value: $10 per pipDirection: LONGReason for Direction: The first trading day of the week opened with a long sentiment. Strong prior uptrend on 1 hour chart.Potential: Don't expect m...
Taking notes about the decisions made to enter a trade and the results of any particular trade is an important element of being a profitable trader. Starting a trade diary is one of the best free investments a trader can make in order to improve his or her performance. Looking back at the decisions you've made for entering trading positions can improve your understanding of yourself as well as the forex market. The greatest thing about keeping records is that by looking in retrospect at your...
It would be easy to say that you are a poor trader because you are undercapitalized. Amazingly, not many people often mention what that really means, or give a rational solution to fix the problem of being undercapitalized. Sometimes these shallow attempts at giving advice just don’t work. For example, being undercapitalized doesn’t always mean that you need to pour more money into your trading account.Being undercapitalized means that there is something wrong with...
According to his book “Sell & Sell Short”, the notorious writer, educator and stock market trader Alexander Elder writes: “When I put on my first trade ever, the worst possible thing happened. I made money. That lucky break created the delusion that trading was easy. I began jumping into other trades – with a predictable outcome.”Dr. Alexander Elder’s focus is on trading stocks. He is not very fond of trading the forex market because he believes that forex is base...
No matter what you've heard about forex, trading this market is not easy. While it is also not impossible, it is difficult and requires knowledge. One of the keys to consistent profits trading the forex market demands the ability to execute your strategy and the ability to deal with losses, all of which culminates in thorough knowledge of risk management, also dis...
It would be difficult for me to start this blog on a negative note, by saying that trading is not for everyone. But the unfortunate reality is that it is true. Not everyone will succeed at trading the forex market. It is not difficult to understand that many people fail at trading forex, or that they find it difficult to do. Most people who do fail trading leave the market quick, often saying that trading is simply another word for gambling, or luck.The material on this website assumes...
Why forex is not like gambling? Many people say forex is gambling. And I say forex is like gambling. Except if forex were a person, it wouldn't have a cigar in its mouth. Certainly forex could be gambling if we used it as a gambler's game like roulette or any of the other coin-operated toys that 99.9% of the time would take your hard-earned money away from you. Such games are designed to make a marginal profit for the owners of the casino. Forex, on the other hand...
Trading forex is not a common or usual activity. And so, our approach must also be unusual. The solution is to change our psychology, or, how we think about trading forex. This will not only have to do with our emotions but also it will have to do with understanding what is actually happening in the currency market. We know exactly what situations we encounter on the road when we drive, and we know exactly what we have to do to get paid, when we are at work. We feel comfortable about these th...
It is likely that if you are a courageous person, you have lost your entire forex trading account before you started to show an interest in learning information about trading forex from books and tutorials on the Internet. But why did you fail the first time? This is an article about forex, but if instead of trading forex you were driving a car, would you, in the same way be so irresponsible? Would you allow an accident to happen? Reckless driving puts one or more human lives at risk....
