I am always being contacted by people asking if I can help them improve their forex trading results.
A question I ask is, “What made you start trading forex ?” .
The majority answer that they were told that is was a way to quick riches ,nothing is further from the truth and that what told them was an email that they found in their spam folder showing a statement with fantastic profits and the a $97 offer which is going to expire in the next few hours selling a indicator or robot (EA) .
Lets take a look at this email.
In all likelyhood that email was from an internet affiliate marketeer selling someone elses product from a website not an actual forex trader. The $97 is the give away here and in all probability when you try to leave the webpage you then get a popup stopping you from leaving , taking you to a webpage that offers the same product at a reduced price.
So you give in and pay out the $97 and try this “convert $500 into $100,000 in 6 months” system.
Guess what ?
It didnt work and you just blew out your account.
So you then find another “system” advertised to you using a spam email .
So you try that one and that fails too !
You see what is going on here is that most of these indicator driven systems are just the same thing , they look different because a coder has changed the way the pretty colors appear on the screen. They are ALL just the same con to get you to part with your $97.
So getting back to the original topic , we now have a trader whose mind is totally convinced that indicators are some sort of magical thing thing to get them the profits they want and that somewhere out there is a combination of these indicators that will work and be their holy grail of trading.
The honest truth is that there is NO indicator or combination of them that is going to give you trades that are 100% of the time accurate .
The answer to making a consistent long term profit in Forex is to actually learn how to trade. Use a proven trading plan and stick to it .
Lets expand on that a little with 4 examples :
1. Learn your trading platform inside and out.
Yes I know this sounds obvious but you would be amazed at how many people dont know how to setup a trailing stop or plot a fibo with their particular trade software.
2. Learn what moves a particular market and why
The forex market , particularly the euro right now is like an ongoing soap opera. You need to learn to identify what is moving a particular currency pair and why.
3. Have a basic understanding of technical anaylysis
Pick on 1 or 2 things to specialise on . Dont try to become an expert on all the methods out there you will just end up double guessing yourself.
4.Learn what Risk Vs Reward is
Something else a lot of traders fail to figure out or properly grasp. It great to make a few winning trades taking 10 pips or so but if your stop is always bigger than where you take profit, long term you are going to lose.
Lets now look at some deadly sins of trading
1. Not setting a stop or increasing your stop size
Remember what we said about having a trading plan ? Your stop is the first thing you figure out before opening a trade because it is this that gives you your risk reward calculation. Also you should only ever move your stop towards your entry once set thus reducing risk , NEVER away.
If you are doing this then you dont have a trade plan
2. Jumping into a trade because your not in a trade
You consistently jump into trades because you are bored and think that if your not in a trade then you will not make a profit. So you scan the charts for a trade setup hunting around till you see something that vaguely matches your “plan”.
Dont do this . let the market come to you .not you goto the market. Trades will always be there . Use patience and wait for the good ones to come along.
Im most cases less trades = more profits as you will be not taking the bad ones.
3. Letting profits turn into losses.
Always try to trade with more than one lot so you have the flexibility to close 1/2 of your trade and get your stop to break even as soon as you have whatever profit that your Risk Vs Reward allows. dont set crazy 100 pip stop losses because you think that the market is going to come your way . You dont actually know this.
4. Dont revenge trade
If you get blown out of a trade dont go leaping into another one like a bull at a gate because you want those pips back. Take a step back check if you closely followed your plan , if you did great, you got stopped out no big deal . Wait for the next trade that matches your plan.
If you start revenge trading you will not win and the market will nail you !
If you want to actually learn how to trade properly and become a sucessful trader then join us as a member here using the membership signup button above.