Tag: Forex Evaluation

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Beginners Forex Education Forex Basics

Ask Yourself These 5 Questions Before Trading Forex

If you are thinking about making the jump and investing in a trading account, there are a lot of choices and a lot of decisions that you need to make. Your family, your friends, and people randomly over the internet will want to give you advice. They will want to point you in the direction […]

If you are thinking about making the jump and investing in a trading account, there are a lot of choices and a lot of decisions that you need to make. Your family, your friends, and people randomly over the internet will want to give you advice. They will want to point you in the direction […]

If you are thinking about making the jump and investing in a trading account, there are a lot of choices and a lot of decisions that you need to make. Your family, your friends, and people randomly over the internet will want to give you advice. They will want to point you in the direction of what they like and what they think is right. This can be helpful but it can also be detrimental. With so many different voices and opinions being thrown at you, it can make it hard to keep sight of what it is and the reasons as to why you want to trade in the first place. 

With this in mind, we have come up with some questions that you should be asking yourself. They will help you to really understand why it is that you are looking to trade and why you should or should not be doing it. You may not be able to answer them all or you may not be sure of the answer and that is fine. Use this as an opportunity to work them out, as this will then enable you to know whether trading forex is the right thing for you.

What is your end goal with trading?

When people look at trading, they often see the big numbers and the fortunes that could be made. If this is your end goal then you could be in for a little bit of a surprise. Things aren’t that simple and people very rarely see those larger numbers in their accounts. It is important that you have a more realistic end goal, something like being able to quit your job. This is achievable. A lot of people do it and it is certainly something worthy to aim for. Ensure that your goal is manageable and that you do not forget it, keep your eye on it to help you remain focused. People Will say that it is wrong or bad, but it is your goal, and if you believe in it, you should be able to achieve it. Just ensure that you actually have one as you are not simply trading blind, there will be times where it will be hard to motivate yourself.

How does the idea of trading make you feel?

Before thinking about this, have you actually traded before Either real or demo accounts? If you have then think about it when you were actually trading, if not, just think about how you would feel about trading with your own money. Many people like the idea of trading or the idea that they will be able to make money, but when it actually comes to trading or to actually risk some of your own money. If you feel nervous about putting your money on the line or taking a risk with it then trading may not quite be the right thing for you, or you will need to ensure that whichever strategy or trading style that you are going for suits your risk tolerance. You need to be able to accept a certain level of risk if you want to trade. Also, consider your thoughts and feelings towards learning, many people do not like to sit down and read a lot of information. If you can manage this then it’s a big plus. If you cannot then it could be a long journey ahead of you.

Do you have enough time to trade?

Trading takes time, a lot of time, if you were to think about your average week, excluding the weekends, how much time do you actually have free? You need to consider your other hobbies, your family, your social life, and of course work. 99% of people start trading as a side hobby, something to do after work or on their day off. It’s great that you are doing it alongside your work, but this will end up taking away pretty much all of your free time. There will also be some limits to what you can do, some strategies and trading styles require you to be in front of the computer for extended periods of time while others only a few minutes. So before you decide how you want to trade you will need to work out which style would better suit you.

Do you have enough capital to trade?

Trading takes money. While it has become increasingly accessible, with accounts being able to be opened from as little as $10, it does not mean that you will be able to be successful with that amount, let alone make enough to achieve the goals and targets you would have set for yourself. If you want to be successful and to use proper risk management techniques then you will need to ensure that you have enough money to support it. Your capital needs to be in line with your goals, so if you want to earn $10 a month, then a $100 account may be enough, but if you want to earn $1,000 per month then you will need at least a $10,000 account in order to do it safely. Trading can be an expensive game, and remember that any money that you put in is being put at risk, you are able to lose it all regardless of how good your money management is.

Do I have the determination and dedication for it?

Trading takes a lot of dedication and commitment to be successful. It is true that anyone can trade, anyone can enter into a trade, but it takes time and a lot of effort to fully understand why you are putting on trades and also which trades you should be taking. If you are someone that gets bored easily and likes to move onto the next thing, then trading may not be right for you. You need to go into trading with the idea and understanding that this is a long term thing, we are talking years or even a lifetime. You won’t be successful straight away, in fact, the majority of people who trade quit within the first year either due to losses or simply getting bored of it. Know that you will be here for the long haul, and if you are the sort of person with the personality that can deal with that, then it is a good start.

The start of your trading journey comes far before the first trade has been made. It comes far before you have even signed up with a broker and it has even begun before you have read your first educational article. You need to think about whether the prospect of being a trader is right for you right at the very start. If you are not sure or don’t think it is for you, there is nothing wrong with that, but you do not want to then still get involved, spend hours of your life learning and trying just to confirm that it is not right for you. Simply look for something that is instead. If you feel that it is right, then start learning, you are now embarking on a long and hard journey, but one that can reward you with pretty much everything you need to stick with it and continue to learn.

Categories
Beginners Forex Education Forex Basics

Signs that you Need to Ditch your Current Trading Strategy

Think back to the beginning of your trading career: did you adopt a trading strategy that was promoted by others, or did you create your own system that was intended to be perfect? You’ve likely come across claims of “holy grail” trading strategies before and it can be easy to get caught up believing that […]

Think back to the beginning of your trading career: did you adopt a trading strategy that was promoted by others, or did you create your own system that was intended to be perfect? You’ve likely come across claims of “holy grail” trading strategies before and it can be easy to get caught up believing that […]

Think back to the beginning of your trading career: did you adopt a trading strategy that was promoted by others, or did you create your own system that was intended to be perfect? You’ve likely come across claims of “holy grail” trading strategies before and it can be easy to get caught up believing that these systems are a one-size-fits-all answer to all your trading woes. Unfortunately, the strategies you read about online might not always work for you, or a strategy you’ve created yourself may prove to be less than profitable. If you’ve been questioning your strategy lately, see if it fits in with the following sings so that you’ll know whether to keep it up or ditch it completely.

Sign #1: You Have Trouble Following your Trading Rules

One of the most important things you need to do once you have a trading strategy is to keep using it consistently and to follow all the rules you have set. If the rules are too vague or specific to follow, this is a good sign that they need to be adjusted if possible or that the trading plan might not be well thought out enough or just too specific overall. On another note, a plan with rules that are overly difficult can also cause frustration or lead to mistakes if you’re having issues determining what to do. 

Sign #2: If you’re Feeling Burnt-Out

How much effort does your strategy take? It’s true that you’re going to have to put some time into trading if you want to make money, but you shouldn’t have to be online 24/7 to do it. If your plan is leaving you feeling burnt-out because it requires more effort than its worth, you probably need to ditch it for a less time-consuming option. After all, flexible hours are one of the main benefits of forex trading and there are many options out there that don’t require you to wake up at daybreak. 

Sign #3: The Cost is too Much 

It’s okay to spend money on indicators, strategies, and EAs and some of these systems can be profitable. However, it’s important to ensure that these systems are actually paying for themselves and bringing in some profits on top of the cost. You also need to be skeptical when the creators of these systems claim that they are foolproof or guaranteed to make a certain profit for you. Some of these options can be expensive, so be sure to look to see if you’re actually winding up with more or less money in your pocket at the end of the day.

Sign #4: It isn’t Profitable

This sign might seem obvious, but some traders might have trouble letting go of a strategy that they imagined to be perfect. If you’ve already tried changing the parameters, testing, and trading under different conditions, and you still aren’t making profits, it’s better to just let the strategy go and move on. Keep in mind that some systems work great for certain traders but don’t work well for others because of the attention they require, difficulty levels, your trading personality, and other factors. In the end, if you just aren’t making money, you need to look for a strategy that better fits with your own personal trading style.

Categories
Beginners Forex Education Forex Basics

Not Earning Enough from Forex? Consider This…

Not every trader will be profitable to begin with, in fact not all traders will be profitable at all, the majority will lose, this is the warning that you see wherever you are looking when it comes to trading forex. Trading is accessible now, it is incredibly easy for almost everyone to open up an […]

Not every trader will be profitable to begin with, in fact not all traders will be profitable at all, the majority will lose, this is the warning that you see wherever you are looking when it comes to trading forex. Trading is accessible now, it is incredibly easy for almost everyone to open up an […]

Not every trader will be profitable to begin with, in fact not all traders will be profitable at all, the majority will lose, this is the warning that you see wherever you are looking when it comes to trading forex. Trading is accessible now, it is incredibly easy for almost everyone to open up an account, to deposit money, and then to trade, but it is a lot harder for them to do it profitably.

There are hundreds of questions that you could ask yourself in regards to your trading, to help work out why you are not being profitable. We always consider things like whether we are good traders if our strategy works and why we are having some losing streaks, but we need to be able to ask ourselves the right questions. When we answer rhythm honestly, it should give us an indication of where we are with our trading and potentially what we need to do to improve it and to then become profitable.

One thing that you have to keep in mind is that these questions and answers will not suddenly make you an expert, or prevent you from making any losses, losses are as much a part of trading as the wins are, so bear that in mind, these questions are tools to help you improve, not solutions.

Are you making basic mistakes?

There are a lot of mistakes that people make and there are some which are far more common and basic than others Some of these basic mistakes include things like trading without a stop loss or take profits, risking too much with each trade, having the wrong profit to loss ratio set up, letting emotions like greed and overconfidence get the better of them and more. These mistakes are very easy to commit without even realising that you are doing them, so it is even more important that you take notice of what you are doing. If you find that you are doing these things, then take a step back and think about why you are, there is no room for them and so you will need to stamp them out. Do not let yourself become too overconfident, 95% of traders quit or go bust in the first month, do not think that you are invincible, if you commit these mistakes, you will be one of the 95%.

Do you have a proper system and strategy?

You would be surprised how many people actually trade without a properly formed trading strategy or even a strategy at all. Those people will lose, and they will lose quickly. Consider whether you trade specific pairs or do you trade the first thing that looks interesting to you? What makes you pick your indicators, is it the colors, the names, and do you use that for your trading signals? Do you use specific timeframes or do you just select any of them and trade?

If you have a proper trading plan in place then there should be a very clear answer to those questions, your plan should be detailing everything about what you need to do to trade, the time frames to use, the pairs to trade, and the conditions needed to trade them. If you do not have one of those things in place then you do not have a fully formed trading plan which can make trading profitably quite difficult. If your plan is not complete then before doing any more live trades, get it complete. If it is already done, great, you can move on to the next question, that is as long as you have tested it properly on an emo account and it is working correctly.

Do you check your trading journal?

A better question may actually be, do you have a trading journal? A trading journal is where you jot down everything that you do when you trade. It will tell you which trades you took and the reasons why, it will tell you your exit points, the reason for exits, the risk on each trade, the different indications used, and more. Pretty much everything about every single trade. You can use this journal to help you to better understand your trading habits. It can help you to find the good points and the bad points within your trading. It is also a fantastic way to help you to see the progress that you are making, if you are using one, then look at it now, check to see what your habits are, are there any similarities with the losses which are different to those trades that you win? If not, then continue to look at it, see if your trading is evolving, if it remains consistent even with the losses, then it may show you that there is something that needs tweaking in order to become profitable.

Do you manage your risk?

The risk that you are taking should match your trading strategy and what is required by it, it should also be in line with your own risk tolerance levels. You need to work out whether your risk to reward ratio is right for you and your strategy and whether or not you are coming out of trades too early or late. It is very easy to get this wrong, so if you have it is not a problem. It may take some time to get exactly right though. This is where you need to take a demo account, it is far too risky to change things up on a live account, you need the demo account so that there is no danger of you losing any money as you fiddle with your settings, stick to the demo account until your risk management has shown to have improved over a months period and hopefully over a number of different trading conditions.

Is trading right for you?

You may need to ask yourself the big question, whether or not reading is right for you. For a lot of people, this is a difficult question as you may want to trade, you may want to be good at it and profitable, but for some, it just won’t happen. It takes a certain kind of person to be profitable and consistent over a long period of time. If you are finding yourself constantly bored or distracted, or are constantly stressed by the markets, then there is a chance that this is not the right hobby or career for you. You need to consider this, it is hard to do, but it is the most important question that you can ask yourself.

Those are some questions that you need to be asking yourself, you are not answering them to show whether or not you are doing anything wrong, it is more to look at what you can change to be more successful. It can sometimes be hard to tell yourself that you are doing something wrong, but as soon as you are able to, you will be able to trade to a much higher standard as soon as they are remedied.