Forex A Contemporary Gold Mine
The quest for working at home jobs is on the rise and one of the best options that can be considered is Forex trading. Some large companies have found out the lucrative side to Forex trading and have hired people to do it right for 1000% return on investment. If you think that this is only for big corporations, think again.
Free Trial Accounts
Unless you have been living under a rock, chances are you have seen pop-ups about websites offering free software demos to download which can teach you the principles, strategies, and information about Forex trading. The free software can be yours in exchange for sign-ups with them which you may also use to enroll yourself with them if this type of investment idea works for you.
The free trial gives you a chance to open a Demo account, where virtual money is used to put your newly-acquired money management skills with real market conditions. Since this is only a free trial, you won’t receive any earnings should you do well, but it will attract and encourage you of getting the real McCoy.
Forex vs Stocks
While the stock market is strictly business hours trading, the beauty of Forex trading is its availability 24/7. The main reason why this type of trading is 24/7 is because of the time zones of the different countries all over the world. Another allure to the trading is your total control over your money or account. Licensed brokers are doing the trading for you is done away, which saves you commission fees. You also don’t need to be bothered with your invested money staying in a brokerage firm for a long time which can charge you fees if you withdraw it at an earlier period.
The trading that is done with Forex is not affected by swings in the market that stock markets are exposed to all the time. The only time that a market swing can happen in the account is through buying and selling the same currencies. The hundreds, if not thousand types of currencies available to trade online gives you bigger chances of getting the most profit from your investment.
While there are many benefits, there are also risks. The key is to do your research well, understand the concepts of investing, and think of this as a business opportunity that lets you work comfortably right in your home.
How would you like to start turning your losses into wins? Sound impossible to you? Well, in a way, you’re right – it pretty much is. A loss is a loss is a loss. But if you can take the lesson from your loss, and use it to make darn sure that you never make that mistake again, then ultimately that loss can become a win. You’re human. You make mistakes. No matter how well you think you have mastered the mental challenge of becoming a successful trader, you will still slip up. No matter how many times you have read Mark Douglas’s masterpiece, The Disciplined Trader, you will still make mistakes. Yes, it is inevitable. You will make a mistake. You will allow outside circumstances to influence your decisions, or to distract you. You may cancel a stop loss order, or make a trade that far exceeds your usual trading size or something of a similar nature, and the absolute worst that can happen, will. You will find yourself facing a loss of substantial size, and you will be punching yourself in the face because you know it is all your fault. The key is in what you decide to do next. First off, acknowledge that you are human. You are, aren’t you? You’re not some kind of trading robot. And human beings make mistakes. Face it, they do. They are not perfect. But you need to also realize that mistakes are opportunities for learning what to do, and what not to do. As stupid as it may sound, and as comforting as it may be (NOT!), there is a silver lining in that grey cloud. You can use it to your advantage if you choose to. Secondly, define the mistake. Was it just one mistake, or did you make a series of mistakes? Did you rush a trade before your plan indicated an entry? Did you ignore a stop loss or an exit signal? Did you throw your entire trading plan to the wind and go completely on instinct? Did you get too aggressive, in an attempt to make up losses, and increase your trading position size beyond your regular parameters? Next, examine the circumstances that led to the mistake. Identify the actions and especially the emotions involved. Were you fighting with a loved one? Were you distracted by an event, either good or bad? Once you suffered your initial loss, did you then compound the problem by engaging in revenge trading? When you are emotionally involved in something else, you cannot be dedicated totally to your trading. It’s hard to be unemotional when you are clearly emotional. In these circumstances, it is far better to refrain from trading until the situation is resolved. Likewise, when you are distracted either physically (cannot be present at your trading desk) or emotionally, it is best to stop trading until you can give your trading your full attention and effort. Finally, make sure you don’t do this. Don’t try to make up a big loss in just one trade. Trying to make up a big loss all at once is bad money management and a sure-fire recipe for disaster. You must understand that a 10% loss will require a gain of 11% in order to get back to even. A loss of 25% requires a gain of 33% in order to get flat. You have made a mistake, you have suffered a loss far larger than your regular system losses, and you are upset about it. The most critically important thing for you to do now is to return to your regular trading strategy. You need to bring your emotions back under control and get your discipline going again. Acknowledge that there is no quick or easy way to get back to where you were, and that to try to do that is to pile on more mistakes. Resolve to learn from this error. Resolve that you will not allow this particular situation to EVER happen again. You may make more mistakes in the future. After all, you are human. But if you can manage to truly learn, to derive meaningful knowledge from your mistakes, then that is the way to turn a loss into a win.
In order to be an effective day trader you must learn to master your Forex market psychology. Not having a grip on your psychological trading downfalls can cost you a lot of money and undue stress. Understanding Forex market psychology often means understanding the mass psychology of the Forex market. For the purpose of this article we will stick with the topic of individual market psychology, or how personal psychological hangups can cost you money in the Forex market (or any market for that matter). Understanding Forex Market Psychology One way that traders (especially new traders) are hindered psychologically is by fear of trading. This happens often, and can be hard to overcome for some traders. Most often this is due to a lack of confidence in one’s trading system, but fear of trading can also affect seasoned professionals from time to time. Cure: Find a trading system that you have confidence in, and then learn to have the discipline to stick to your trading plan 100% of the time. Keep track of your trades: - To prove to yourself that your trading system works in the long term - To teach yourself your own personal bad trading habits - To visualize where you have made and where you need to make improvements Another way Forex market psychology gets to traders is through revenge trading. Revenge trading basically happens when you lose a trade, and you enter another trade almost immediately in an effort to gain your losses back. This trade is brought on by emotion, has little analysis to back it, and is rarely profitable. Again, this is considered a rookie mistake. Taking a revenge trade shows a complete lack of discipline, however, even experience traders have the urge to do this from time to time. Revenge trading is a good way to blow your trading account. Cure: When you lose a trade, take a minute or two to collect yourself. Go watch tv, a movie, check your social media sites, go for a walk, etc…. Do anything you can think of to get your mind off of the market for a bit. If you are a particularly emotional trader, you may opt to stop trading for the day after a loss. Many professional day traders stop trading for the day after a loss or two. In order to be a successful day trader, you have to learn to let your winning trades ride. This is another area where a trader’s psychology can fail him in the Forex market. It is sometimes hard to let winning trades ride, because of the fear of turning a win into a loss. A rookie trader will take any profit saying, “I’ll never go broke taking a profit.” The fact is that if you are too quick to take your profits, you could end up losing money in the long run. Experienced traders know the value of letting winning trades continue to surge. Sometimes the difference between daily and monthly profits or losses comes down to a breakout trade or two. This is often more of a challenge for rookie traders to understand, partly due to the fact that few rookies keep a trading journal. Cure: Again, part of the issue with letting winning trades ride is confidence. Find a trading system that you are confident in. Make sure your trading system has distinct entry and exit point strategies (like the Top Dog Trading system) to help alleviate most of the guesswork. I hope this article gives you a better understanding of Forex market psychology and some of the ways it can affect your trading. Understanding how to correct your own personal psychological mistakes is all part of the process of becoming a consistently profitable trader.
There are a lot of good study resources being created on Forex these days that are really great, and some Forex study tutorials are awesome. But one thing I want to know is, Dear Trader, are you also learning Forex trading on your own? Do you have a forex teacher? So far I am continuing my own education. I'm good and I'm bad again, but I'm happy. Your willpower is your first tool for good trading. And with that comes the need for perseverance, regular trading and applying new strategies. Try to know well what you know and make it a reality. Set and trade each strategy as you like. Keep a record of both your profit and loss trades then review both trades over time, why the trade lost and why the trade made a profit. Find out the right reason and learn from it. If there are any other issues that make you think too much, then ask questions in the forum. There are many expert traders who will give you the right solution to your problem. Hope you do well. Thanks.