Forex lessons

Trading - a mind game
First, you should change your mind from thinking a normal person to think speculator.Almost all traders I have met, except for a few successful, actually made millions and billions by trading in the market, just wasting their time trying to learn the easiest type to read data and graphs, improving the inputs and outputs are practicing, etc. Trading - a game of mind and without a proper structure of consciousness, it is - a losing game even before its start. Preparation trader consciousness - the first step for any successful trader but almost all new traders neglect them, which explains why more than 95% of traders ultimately fail.


Acquisition of knowledge of the market does not hinder anyone with average intelligence, after several years of diligent training. But neither the intelligence nor the knowledge does not determine the outcome of market actions trader. Determining factor is the decision making process, which is so difficult for most traders, but this is where the main reason for the success or failure of any trader. Some easy to make decisions and stick to them, but for most it is very difficult. Unfortunately, any decision-making process in the trade - a painful process, but people tend to avoid pain and seek pleasure, even if only temporary. In addition, necessary and sufficient market knowledge, coupled with a robust trading system (this is - the second most important element of success in trading. The benefits of any system based on the quality of information obtained).


After spending time in training and research to implement their knowledge and develop a system, a trader comes to decision-making problem. How many traders can honestly say that without the worry will leave the ranch, when working a deal proposed by their own system (assuming that trading - game of chance), leaving a profit to rise for weeks and months, as recommended by the system, and how many can make taking lossesroutine process, when the situation demands. It's all easy to say but so hard to do when it comes to real money in the market. I still can not sleep when I have an open position, because even if the income had grown to several hundred dollars, and the system tells you to continue, there is no guarantee that profits will not turn into a loss in a day or two, if that happens, something unexpected. Painful process for the senses. It hurts not to know what will happen in the future and fear of loss. Only discipline helps the trader to overcome the pain right decisions at the right time, which depends on the outcome of the transaction. So I call trading conundrum. When I conduct interviews with prospective young traders, I am always looking for a disciplined and determined person - these I put in the first place, but, oddly enough, in most cases come to imagine themselves as geniuses, with good mental ability, but without any discipline.


I always try to average the mid-stance, when convinced of the emergence of a new trend. So, starting position in USD / JPY from 135, I added the 132 and 129. The same goes for AUD / USD and EUR / USD. But look at how the kickbacks take away a lot of money - not an easy job, always causes a lot of pain. Most traders, even among experienced, can not stand the pain and go out too early. But there is no other way to make big money and we have to endure the pain, "sit and collect" until the mid-term trend remains intact. That's why I always believe that the psychological aspect of trading is far more important than anything else was, for a successful trade. Mind game, like poker.


Words of wisdom
Any market, whether real or forex, is a way of transferring money from the crowd to a few very lucky. In the speculations with the real property of mass to make money, a lot of money, but the money can be seen only on paper as profit evaporates before they are able to convert paper profits into hard cash. In most cases, speculation on forex weight a few years barely surviving due to lack of market knowledge and deadly arm. Both of these types of speculators bring to the market offering such a hard-earned money in exchange for a dream.


Each trader must find his own method / system that suits only him. So, if Tom, medium trader, using his method of making money for three decades, his system may not be suitable for Dick and Harry, day traders, and vice versa.


Successful trading is - is the ability to get as much as possible when you are right and lose as little as possible when wrong. This is the essence of this business. Therefore, any theory or system that satisfies this rule - is good.


System - this weapon a soldier in this market. You should get it as soon as possible.Otherwise, it will be like fighting with bare hands with well-armed robbers. It is best to build the system yourself, because you'll never feel comfortable in someone else's shoes, although borrowing good ideas from others - a good thing.


You can not make money if you do not follow most of the time the crowd or trend.However, one must be careful when approaching the overbought-oversold, and know how to roll a pivot point for movement with the opposite trend. Following the crowd does not require exceptional ability and courage, but the turning point where you have to take the necessary action, require not only intelligence, but also great courage. Luck loves the brave.


Money Management - this is where most traders are almost always does not act as expected, because of what a winner in the end are a few. Money management and discipline - that's what makes a trader, not the basic methods of entry and exit.


Forex trading: it is - a game of feelings with the mentality of the crowd, where even the best players with the best forecasts of running out of good positions magic price movement.


Trade with the trend: the accumulation and distribution
The forex market, like any other, works very simply. For some time he accumulates in a certain region and, as soon as the accumulation is completed, it moves a certain distance, making the distribution, then the phase of accumulation, then moving again at some distance, and again and again. Daytrading can not lead to better results when fighting the accumulation and distribution, neutralizing each other zigzag steps. At the same time when the market is beginning to emerge from the area of ​​accumulation, Daytrading - a reliable way to break a profit. Generally, trading in the day, in my experience - not the best form of profit, contrary to some authors, who are trying to prove it, without making real money in this game.


The safest and best way to make some money, it's wait until the "accumulation" and take the entire length of the "distribution" in the form of short-term, for 2-10 days, transaction, depending on the circumstances.


Technical analysis and charts
Learn the 8-hour or 4 hour chart bars or candles, look for patterns, and especially the 20-period high on the charts for several months every day, and you will discover what I mean by the accumulation and distribution for the short-term transactions on Forex-market. These processes are inherent in the market, so that you can always decide what tactics to use in a given stage. The rest - the case of money management and discipline, and, of course, experience.


On the technical side of trading, the first thing to do is to determine the trend in the time scale and find an appropriate trading strategy for the trend. Some hold the position for many months, while others - less than an hour or day, and their views on the trend is clearly different. For a trader who holds positions for months, the daily fluctuations may be just meaningless noise, while for the daytrader same day swing can be a monstrous tsunami. Availability of equipment and a precise definition of trend identification and reversal in-time trader, and make the right strategies for this trend - the first elementary step in the difficult school of trading.


I try to keep the technical analysis of any currency pair as simple as possible, to see how you can use the situation to their advantage. For me the strategy is to identify "the range of deals." Always place a stop order when you open any new position. Medium-term reversals can be confirmed only on monthly, weekly and daily charts. Reading the schedule can not predict the top or bottom of the movement, but can confirm a trend change as soon as it happens, to take the right strategy for this new trend.


Each new cycle is different, and this - the beauty market. It is extremely important to see the whole picture from a distance instead of minutes and hours of study under a microscope.


I use a very primitive graphics methods. Look at the 8-hour schedules EUR / GBP with 20 and 40 MA, take a look at round numbers and advances (from the consolidation, then you will understand that there is a more primitive method than this, but no less effective). Buy on dips to the support is added to the breakout of consolidation, considering the two inputs, as one transaction, with one level of stop-loss and keep it until the market goes in the right direction.


As a rule of thumb, the 20-period average 8-hour, daily, weekly and monthly chart helps identify the trend and support and resistance levels. Not sure if it will work in Daytrading.


Look at the weekly EUR / USD and USD / JPY with a 10-month RSI and AUD / USD with 10 RSI, seeing "patterns" rather than levels. So you will learn rudimentary things work, and it is better to do it, coupled with even simpler means. RSI is useful "only for weekly and monthly time scale." You can ignore the RSI for short-term scale, as long ago told us, the inventor of the RSI, Wilder.


If you trade within the day, a 30-minute and 15-minute candlestick chart in combination with the MACD and MA may be more useful than the hourly or even daily charts.Especially do not miss the long tails of candles, as a confirmation of changes in short-term trend. If you - an experienced trader, even a single candle is enough to pull the foot up or down a long shadow. When you trade the dollar / yen, we look at the Swiss / yen, the pound / yen and euro / yen together to confirm the top or bottom. When you trade a pair of Euro / Dollar or Dollar / Swiss franc are looking at the pound / Swiss and euro / pound together to confirm the same.


We use crosses and gold
EUR / GBP and GBP / JPY are the property of leading indicators of movements USD / JPY and EUR / USD. EUR / CHF is similar to EUR / GBP in the forecast values.


In short, EUR / GBP and GBP / CHF are leading indicators for the EUR / USD and USD / CHF, and GBP / JPY, EUR / JPY and CHF / JPY - leading indicators for the USD / JPY. EUR / JPY is very important for the direction of EUR / USD, while GBP / JPY plays the same role for the GBP / USD. For example, yesterday's weakness EUR / USD is largely began with sales of EUR / JPY, have sent EUR / USD and USD / JPY down. As a rule of thumb, if EUR / USD does not move, and EUR / GBP began to move, it is - a good indicator that someone later would lead EUR / USD in the same direction, and when moving EUR / USD, but EUR / GBP did not move before or together, then it is very likely that the movement of EUR / USD will be short-lived and soon replaced by the opposite. The same applies to the USD / JPY for EUR / JPY and GBP / JPY.


EUR / USD, EUR / GBP, EUR / JPY and GBP / CHF, to some extent correlated with each other. This just shows how money is moved between these pairs. In fact, GBP / CHF and EUR / GBP in many cases, move to a candle or two before EUR / USD.Watching charts GBP / CHF and EUR / GBP, you can learn in many cases before the movement include EUR / USD. The same goes for charts and GBP / JPY and EUR / JPY, advanced motion USD / JPY. A careful study of the movements of these pairs also show you some more interesting things.


I used the code USD and EUR / GBP (or GBP / CHF) as a pointer to the direction of the late '70s, with reasonable accuracy the medium-term trends. I have never lost money on the medium-term transactions, relying on these indexes. But they do not work when Pound deliberately devalued.


AUD / JPY - one of the key pairs that affect the AUD after the Dollar, Euro and Pound.Normally, a falling AUD / JPY is good for the bulls Yen.


Gold - a mirror of the Dollar for hedging purposes, and their correlation is excellent.Sometimes when I'm tired to recheck too much information, changing with each passing hour, I only watch for the gold. Gold Charts - one of the main chart, which you should always observe when trading forex. Schedule EUR / GBP, with a timetable for EUR / JPY, is also an excellent mirror for directing EUR / USD most of the time. Charts Gold, EUR / GBP and EUR / JPY tell the story of the market despite the fact that Gold and EUR / GBP is most often lead the rest of the world of Forex.


The use of stops
Always put a stop corresponding to your risk profile when you open any new position.Medium-term reversals can be confirmed only on monthly, weekly and daily charts.Reading the schedule can not predict the top or bottom of the movement, but can confirm a trend change as soon as it happens, to take the right strategy for this new trend.


When setting stops to consider the basic mood of the market in a given time scale, the market liquidity situation at the time and position size. The stop may be based on a technical level or at a certain sum of money or a percentage of total assets. Each trader must develop his own unique style of using stops. But unfortunately, all that can be learned only by giving money for education market.


Yes, as a position trader, I never use tight stops. The same applies to trailing stops.They are all I have are very far from market to market their noise did not touch. The initial stop, I always placed at a distance of 1% of all my assets.


You can avoid problems in most cases, leaving the market trailing stops, that is, without establishing a profit target. Then every winning trade will work until the market itself does not tell you to go, hitting your trailing stop. When you enter the market at a signal and then move the trailing stop the accumulation of profits, thereby removed the most difficult part of the decision process.


Tips for USD / JPY
One of the most ridiculous rules of thumb to trade USD / JPY - she rarely goes to 700-800 pips in a row without a correction for 200 pips or more in the middle of the course, and almost always rolled back to 350 points from the beginning of his movement in the 700-800 pips . All of this - because of liquidity problems in the market the Yen.


Real battle between bulls and bears for the medium-term trend in the market is always going on about Jena on line 20-day MA.


Position traders hold positions of yen to several hundred pips. For intraday trades require a much more nimble approach. As a position trader Yen, please, never buy below the falling 20 day MA, and will never sell above the rising 20 day MA, regardless of how the situation looks pretty. Start buying only when the daily 20 MA will begin to rise on any level - is not only safe, but also a proven way to make money, even though it looks so easy.


Reaction to news
News and data are always read in the direction of the prevailing market sentiment. The data may well show the state of the market. If the data are bad, and the price rises or does not respond, it must be a bull market when the best choice would be a strategy of buying at the bottom. Conversely, if the data is good, but not price increases or even decreases, this downward trend, when the best strategy is to sell on the rebound. An important point will be when the good or bad news will not affect the price as before.Changes in market sentiment was generally accompanied by a reaction to the news.


Various centers
The first hour after opening in Tokyo set the tone for the liquidity of the day, at which time most of the major players trying to solve their problem, not to then not have problems during the day. Opening of Sydney is often used by some players as the hour of the ambush, as the time window before the opening of Tokyo. There is a rule of thumb - if the yen jumped at the opening of Tokyo, it is possible that this movement will continue throughout the day, and maybe a few more days.


One hour after the opening of Tokyo, Lond