Forex_Fortunes_Guide - Deyan Dimitrov (most inspirational books of all time .txt) 📗

of how the market works will prevent the trader from experiencing any more marginal losses.

 

 

It is quite observed from novice traders that they are too hopeful when they enter the Forex market. Although optimism can be a good thing, failure to identify negative signs while they are happening will undeniably slow down the trader’s progress in this volatile industry.

 

 

 

 

 

 

 

 

 

 

 

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Patience Yields Better Results

 

 

 

On the other side of the spectrum, it is also important to keep emotions in check when good things are happening during the trade. However, a normal reaction from a trader who is new to the system and has immediately acquired profit would be to withdraw them at the first sign. After all, liquidating the profits will translate to guaranteed earnings.

 

 

A good lesson that amateur traders can get from experts in the system would be to let their profits run. It is true that seeing the first sign of profits will make a novice trader excited to cash out on his earnings, but if he really wants to succeed in the system, he should learn how to play along with it.

 

 

With familiarity, guidance and patience, the trader can still expand his profits while letting it run its course. The trader can study past trends so it will be easier for him to recognize the signs that the market is about to reverse. Once this occurs, he can liquidate his profits which he allowed to mature to its best potential.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Chapter 8:

 

Over Complicating Forex Trading Can Easily Induce Emotional Trading

 

Synopsis

 

These Forex trading tips are for those currently experiencing losing streaks, it is not unnatural for a trader to lose money once in awhile, but when you realize that you are making fewer profits and losing more, you may have some deep underlying issues you need to fix before you can get back on track. After reading this book, traders will learn how make the trading process as simple as possible, providing them with the insight on how to make more profits in the markets.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Mastering Your Mind

 

 

The primary reason as to why a lot of Forex traders are losing money is that they are unable to consciously master their emotions and it does not take long before they are deeply caught up in emotional trading mostly because the latter is easier and is more exciting than controlled trading. In essence, Forex markets offer traders a pair of options, the first one being to recklessly gamble your hard earned money away in the adrenaline packed rollercoaster trades or the ability to master your emotions through discipline, slowly making consistent money over a period of time.

 

A disciplined trader has the proper trading attitude which allows them to grow their investment without necessarily having to resort to risky games such as emotional trading.

 

Implementing the Tools for Proper Money Management

 

 

 

It is important that you first understand how to manage your money on the Forex trade and then later on you can proceed to implement the latter in you trading mannerisms. A lot of traders become very emotional when trading because they either trade too frequently or risk too much of their money.

 

 

Risking huge sums of money in any given trade subconsciously makes the trader to inherently place more meaning or value on every trade; since they have plenty to lose which naturally causes them to worry more thereby becoming more emotional about the Forex trade.

 

 

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This kind of emotional trading works to fuel itself because emotional trading results in more emotional trading. If it so happens that a trader loses a significant sum of money, they put themselves in a vulnerable position of carrying on with the cycle because they tend to feel a great deal of anger and frustration over the lost money. This only fuels their desire to risk more money so as to try to make up for the money they had lost earlier.

 

 

Traders often mismanage their Forex trading accounts by trading a little too frequently and as a result they tend to lose way too much in a relatively short period of time. Over trading could be an emotional outlet for the trader and for them it is a form of gambling, to prevent yourself from overtrading it is important that you have a comprehensive trade risk management plan which should specifics on the means through which you can preempt overtrading.

 

 

 

 

Mastering Your Trading Strategies

 

 

 

It is important that any successful trader masters their Forex trading strategies, considering the fact that a lot of traders are unsure of what it is they are searching for in the market, so as to avoid inducing emotional trading.

 

 

 

 

 

 

 

 

 

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Chapter 9:

 

How Price Action Trading Will Cure Emotional Trading Problems

 

Synopsis

 

 

 

Kingdoms have fallen and battles have been lost the moment men let their emotions get the better of them. Since the world’s greatest warriors and kings have fallen prey to their own emotions, how can mere traders avoid the same death trap?

 

 

The answer is simple: it’s all about having the right mindset. Consequently, price action trading is a good foundation to use for developing the right mindset. This system consists of several fundamental principles.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Focus On Managing Your Emotions Instead Of Ignoring Them

 

 

Emotions are not your enemy. This is extremely important to understand. Ignoring them will not help you at all. If anything, they will simply make you more prone to bad trading decisions. What’s more critical is being the master of your emotions with the right mindset rather than the other way around.

 

 

Avoid Overanalyzing Forex Trading

 

Some traders are so opposed to the involvement of emotions in their trading strategies that they go to the extremes and over analyze their next steps. Again, doing this will only backfire on you. When you overanalyze and even over-complicate your trading strategies and market trends, you will simply end up confusing yourself.

 

 

Remember that every complicated equation can be broken down to various simpler equations. In fact, it’s one of the golden rules when writing algebraic equations: the simpler, the better! It’s the same with Forex trading. If a system proves too complicated for you, then forget about it! If it works for another trader, good for them! But don’t let that sway you into knocking your head against the wall. There are many other systems you can try – and some of them will surely prove much more suitable to your personality and preferences.

 

 

Stay Objective

 

 

 

 

 

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If you succeed in emotional management, then you will be able to use your emotions to help you stay objective. With emotional management, you’ll know which emotions to believe in more. If you are presented with a very high-risk investment that you do not understand but your friend recommends, what should you do? Greed will tempt you to bet on it, but your instinct for danger will warn you against doing something foolhardy.

 

 

With successful emotional management, you will be able to take the more objective middle ground instead and that’s to carefully research your options before making any decision.

 

 

Constant Training And Practice Leads To Permanent Habits And Mindsets

 

Consistency and constancy are essential in making price action trading a permanent part of your mindset. It’s not enough to know how price action trading works. It’s not even enough to be aware that emotions can have a positive and negative impact on your life. You should also make a conscious effort to apply your knowledge to your trading decisions. It’s all right to forget these principles once in a while, but don’t let that hinder you from trying again.

 

 

Having the right mindset will not make your strategies fail-proof, but it can significantly reduce your risks of incurring heavy trading losses. With the right mindset, you become more aware of the pros and cons of your decision and that’s more than what you can say about other traders.

 

 

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Wrapping Up

 

The Winning Traits of a Forex Trader

 

 

 

 

 

In the world of Forex trading, the most successful traits a trader may have has nothing to do about who gets to play the good or bad guy. Rather, it’s all about the traits that increase your tendencies to make wise – or unwise – moves.

 

 

Cut Your Losses Early

 

 

 

Traders hear this very sage advice all this time, but most ignore it – to their everlasting regret. Hope is a powerful motivator. And it’s always good to be optimistic. However, you have to be careful about choosing what to be hopeful for. Cutting your losses early does not mean you’re quitting. It simply means it’s time to move on and try another currency pair. It really is that simple.

 

 

Don’t Fix What’s Not Broken

 

 

 

It is a cliché, but that doesn’t stop it from being true. In fact, ignoring clichéd advice is quintessential example of how people insist on leaving the path to success in order to take a wrong turn. Why put a stop to an account that’s doing well? Although there’s a chance for trading pairs that are doing so good to plummet and suffer a huge drop in their rates, these things rarely happen without any noticeable

 

 

 

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signs. In most cases, you will have enough clues to warn you and fall back to Trait #1: cutting your losses early.

 

 

Know The Right Time To Trade

 

 

 

Some people just like being the exceptions to the rule for the sake of it. However, that kind of attitude is dangerous for a Forex trader to adopt. More often than not, it will lead to heavy trading losses, enough to break the bank for good.

 

 

Timing is everything in Forex trading. You may like to think it as a subjective factor, but studies show that timing is actually objective. Numerous experts have proven with their case studies that the best time to trade in the Forex market is between 1900h – 1100h in UK time, which in Eastern Time will be around 1400h to 0600h.

 

 

Know The Best Times To Use Trading Breakouts Versus Range Trading

 

 

Rather than letting mere instinct to be your guide, there’s a surer way of determining which of these two essential trading strategies is best to use.

 

 

Range trading is best to use during active hours as your strategies are given sufficient time to work.

 

 

 

 

 

 

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Trading breakouts are best to use during volatile hours as they can take advantage of the extreme changes that currency pairs will undergo.

 

 

 

 

Make Use Of An Effective Leverage

 

 

 

 

 

How much leverage you allow yourself to use will always have a considerable impact on your trading strategies and its eventual outcomes. There are many different formulas you can use to compute how much leverage you can afford to use, but at the end of the day the factors listed below will prove most important.

 

 

Keep it conservative.

 

Always apply a stop-loss point to your strategy.

 

Risk tolerance levels do not have to be proportionate with leverage.

 

There are always exceptions to the rule, and those are simply an inevitable part of the game. Even if things do not go your way, the above traits will serve to minimize your losses and increase your winnings.

 

 

 

 

 

 

 

 

 

 

 

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