Forex Education: Why Retail Traders Fail
by Harold Hsu
There are many reasons why Forex traders often wipe out their accounts. In fact, there are so many factors that cause Forex traders to lose money, that only 10% of all traders are consistently profitable.
Almost all of these loss-causing factors, however, can be generally narrowed down to 4 basic reasons:
1. Not understanding what the Forex market is about
Many retail traders make the mistake of treating the currency markets the same way they treat other financial markets. I knew of a well-performing stock trader that lost more than $50,000 because he traded Forex the same way he traded stocks.
Even though the trading charts used in the stock and currency markets are similar (or even identical), the underlying natures of both markets are vastly different. To be able to trade profitably in the Forex market, you’ll have to first understand its characteristics and nature: don’t think that Forex trading is the same as other forms of trading!
2. Not understanding your position in the Forex market
There are many players in the Forex market, and each type of trader has different strengths and weaknesses. Many losing traders don’t realize that the trading strategies of one type of trader won’t work for the other types. For example, the trading strategies used by institutional traders will fail miserably for retail traders. This is because the strategies used by institutional traders are based on their strengths and weaknesses, which are very different from that of retail traders.
3. Not understanding the effects of greed, fear, impatience and pride on traders
This point is self-explanatory. Instead of using this knowledge as a tool to trade well, losing traders often fall into the habit of suffering from these emotional effects instead.
4. Listening to bad trading advice
It’s easy to find Forex trading information and advice on the internet today.
Unfortunately, most of this advice is provided by people who aren’t profitable traders themselves. While their advice is generally well-intentioned, the fact is that much of it is pure hogwash and cannot be practically implemented into any sustainable trading strategy. Be careful about where you learn about Forex trading from.
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Showing posts with label Forex Education. Show all posts
Showing posts with label Forex Education. Show all posts
Online FOREX Trading Tips For Big Profits
Thursday, March 19, 2009 Forex Day Trading, Forex Education, forex experience, Online FOREX Trading
Online FOREX Trading Tips For Big Profits
by Yusoff Allian
Fortunes can be made (and lost) on the FOREX market, but patience and a little bit of common sense can help you succeed where almost everyone else fails. The simple FOREX trading tips outlined below will help get you on the path to big profits in the FOREX market while at the same time reducing your losses. And you *will* suffer losses - it's a fact of life in the FOREX market. What separates the successful FOREX investor from the burnout is the successful FOREX investor understands this and plans for it, while those that don't quickly lose their shirt.
FOREX Tip #1 - Start with at least $1000 ready to trade. Although you can open micro accounts for as little as $200 you really won't be able to weather any turbulence in the market with so little investment capital. Start your online FOREX trading career with a minimum of $1000 in a micro account, and once you've made $10,000 roll it into a mini account and see your profits really pick up.
FOREX Tip #2 - Use leverage wisely. The ability to control large sums of currency with small amounts of cash is one of the major advantages of FOREX trading, but if not used correctly you can quickly blow through all of your investment capital. Make smaller trades to start with, and keep enough cash in your account so that you can withstand the occasional margin call.
FOREXT Tip #3 - Use a winning FOREX trading system. Seems like a common sense thing to say, but jumping in and spending thousands of dollars on the first trading system you find online can leave you penniless and none the wiser. You're far better off creating your own system (it's really not that difficult) and applying it to your trades. You'll learn how to recognize trends, when to get in and exit, and you'll be able to understand why a trade works one day and why it didn't the next. Using this knowledge you can modify your FOREX trading system accordingly - if you had simply purchased a system online you'd be stuck with what they gave you.
FOREXT Tip #4 - Manage your risk. You make money on the FOREX market based on two events - when you buy and when you sell. Discipline is key when determining when to get out of a trade, so set up stop losses at reasonable positions in line with your trading system and *always* follow your system. There may be times you're tempted to get out early, but don't deviate from your system. If you set your stops wisely you'll manage your losses over the long run and end up turning a decent profit.
FOREXT Tip #5 - Practice, practice, practice! If you're just getting started in the FOREX trading world you may be seeing dollar signs dancing around your eyes, and yes it is possible to make some really nice profits by trading currencies. However, as with any kind of investing, if you jump in without really knowing what you're doing you'll quickly lose your money. Most online FOREX brokers offer demo accounts that let you trade with fake money using real data - take advantage of this and fine-tune your FOREX trading skills. Get comfortable with your trading system and work on your discipline, and only move up to real money trading when you're consistently making winning trades in your demo account.
by Yusoff Allian
Fortunes can be made (and lost) on the FOREX market, but patience and a little bit of common sense can help you succeed where almost everyone else fails. The simple FOREX trading tips outlined below will help get you on the path to big profits in the FOREX market while at the same time reducing your losses. And you *will* suffer losses - it's a fact of life in the FOREX market. What separates the successful FOREX investor from the burnout is the successful FOREX investor understands this and plans for it, while those that don't quickly lose their shirt.
FOREX Tip #1 - Start with at least $1000 ready to trade. Although you can open micro accounts for as little as $200 you really won't be able to weather any turbulence in the market with so little investment capital. Start your online FOREX trading career with a minimum of $1000 in a micro account, and once you've made $10,000 roll it into a mini account and see your profits really pick up.
FOREX Tip #2 - Use leverage wisely. The ability to control large sums of currency with small amounts of cash is one of the major advantages of FOREX trading, but if not used correctly you can quickly blow through all of your investment capital. Make smaller trades to start with, and keep enough cash in your account so that you can withstand the occasional margin call.
FOREXT Tip #3 - Use a winning FOREX trading system. Seems like a common sense thing to say, but jumping in and spending thousands of dollars on the first trading system you find online can leave you penniless and none the wiser. You're far better off creating your own system (it's really not that difficult) and applying it to your trades. You'll learn how to recognize trends, when to get in and exit, and you'll be able to understand why a trade works one day and why it didn't the next. Using this knowledge you can modify your FOREX trading system accordingly - if you had simply purchased a system online you'd be stuck with what they gave you.
FOREXT Tip #4 - Manage your risk. You make money on the FOREX market based on two events - when you buy and when you sell. Discipline is key when determining when to get out of a trade, so set up stop losses at reasonable positions in line with your trading system and *always* follow your system. There may be times you're tempted to get out early, but don't deviate from your system. If you set your stops wisely you'll manage your losses over the long run and end up turning a decent profit.
FOREXT Tip #5 - Practice, practice, practice! If you're just getting started in the FOREX trading world you may be seeing dollar signs dancing around your eyes, and yes it is possible to make some really nice profits by trading currencies. However, as with any kind of investing, if you jump in without really knowing what you're doing you'll quickly lose your money. Most online FOREX brokers offer demo accounts that let you trade with fake money using real data - take advantage of this and fine-tune your FOREX trading skills. Get comfortable with your trading system and work on your discipline, and only move up to real money trading when you're consistently making winning trades in your demo account.
Forex Education - 3 Vital Tips to make Money Fast In 2008
Forex Education, make Money Fast
Forex Education - 3 Vital Tips to make Money Fast In 2008
by kelly Price
As we turn into the New Year it's a good time to make changes and take action - if you are trader who is not doing well or a potential trader then these 2 tips will help you make money fast not just in 2008 but at anytime and they should be a cornerstone of your forex education.
The first point I want to make needs serious thought 95% of traders lose money not because they can't learn forex trading (anyone can) but because they believe certain myths and commonly accepted wisdoms that are wrong.
The tips below are not conventional but don't let that worry you the bulk of traders don't make money so being in the minority is good so here are your 3 tips
1. Be Patient Trade Less
Many traders think the more they trade the more they will win but this is simply not true in forex trading in fact the opposite is true - the more you trade the greater the chances are you will lose.
You don't get paid for the effort or amount of trades you make - you get paid for being RIGHT that's it. I know traders who trade every day and make nothing and others who trade a few times a year and make over 100% annualized gains!
The majority of novice traders believe the day trade and make money myth and that's all it is a myth. Day traders don't make money period.
If you don't believe me, try and find a real track record on a day trading system and you will be looking for ever. You have to catch the big high odds moves and they can ONLY be spotted by looking at longer term data and data within a day is meaningless.
If you like the buzz of trading you will lose - if you are patient and wait for high odds trades you will win.
2. Diversification
You will have heard it countless times diversify; don't put all your eggs in one basket etc. On a small account of $1,000 or less you don't have enough to diversify and make big gains at the same time.
All diversification does is dilute gains - wait for the big moves and load them up with as much as you can afford.
3. Take Bigger Risks
You will hear many give you the advice of only risking a maximum of 2% on a trade - well on 1,000.00 that's $20 you won't make much doing that!
Wait for the good trades and load them and risk up to 20% on a small account.
You can only diversify and risk less per trade if you have enough cash and that's $10,000 + if you don't you need to risk more - period!
4. Have Courage
Learn to accept big gains!
Hang on you may say all traders can do that because that's why their trading currencies.
They are - but they don't understand accepting a big gain is harder than taking a loss.
Why?
Because as soon as a trader sees a profit he wants to take it and the bigger it becomes the harder the temptation is to resist. As open equity swings keep eating his open profit it becomes too much and he snatches a mediocre or minor gain.
What happens next? The trade goes on to make 10,000 20,000 or more and he's not in.
If you want to make money you need to have courage and accept that open equity will eat into your profits and have confidence to hold for a bigger longer term gain.
If you want to make more money from your forex trading and you are starting off with a small account make the above part of your forex education and you will see your profits increase dramatically.
by kelly Price
As we turn into the New Year it's a good time to make changes and take action - if you are trader who is not doing well or a potential trader then these 2 tips will help you make money fast not just in 2008 but at anytime and they should be a cornerstone of your forex education.
The first point I want to make needs serious thought 95% of traders lose money not because they can't learn forex trading (anyone can) but because they believe certain myths and commonly accepted wisdoms that are wrong.
The tips below are not conventional but don't let that worry you the bulk of traders don't make money so being in the minority is good so here are your 3 tips
1. Be Patient Trade Less
Many traders think the more they trade the more they will win but this is simply not true in forex trading in fact the opposite is true - the more you trade the greater the chances are you will lose.
You don't get paid for the effort or amount of trades you make - you get paid for being RIGHT that's it. I know traders who trade every day and make nothing and others who trade a few times a year and make over 100% annualized gains!
The majority of novice traders believe the day trade and make money myth and that's all it is a myth. Day traders don't make money period.
If you don't believe me, try and find a real track record on a day trading system and you will be looking for ever. You have to catch the big high odds moves and they can ONLY be spotted by looking at longer term data and data within a day is meaningless.
If you like the buzz of trading you will lose - if you are patient and wait for high odds trades you will win.
2. Diversification
You will have heard it countless times diversify; don't put all your eggs in one basket etc. On a small account of $1,000 or less you don't have enough to diversify and make big gains at the same time.
All diversification does is dilute gains - wait for the big moves and load them up with as much as you can afford.
3. Take Bigger Risks
You will hear many give you the advice of only risking a maximum of 2% on a trade - well on 1,000.00 that's $20 you won't make much doing that!
Wait for the good trades and load them and risk up to 20% on a small account.
You can only diversify and risk less per trade if you have enough cash and that's $10,000 + if you don't you need to risk more - period!
4. Have Courage
Learn to accept big gains!
Hang on you may say all traders can do that because that's why their trading currencies.
They are - but they don't understand accepting a big gain is harder than taking a loss.
Why?
Because as soon as a trader sees a profit he wants to take it and the bigger it becomes the harder the temptation is to resist. As open equity swings keep eating his open profit it becomes too much and he snatches a mediocre or minor gain.
What happens next? The trade goes on to make 10,000 20,000 or more and he's not in.
If you want to make money you need to have courage and accept that open equity will eat into your profits and have confidence to hold for a bigger longer term gain.
If you want to make more money from your forex trading and you are starting off with a small account make the above part of your forex education and you will see your profits increase dramatically.
Forex Education - No Trading Experience, 2 Weeks Training to Millions In Profit
Monday, March 2, 2009 Forex Education, Trading Experience
Forex Education - No Trading Experience, 2 Weeks Training to Millions In Profit
by kelly Price
This story is about a famous experiment in 1983, when trading legend Richard Dennis wanted to prove anyone could learn to trade so he taught a group of people who had never traded before then set them off to trade - the result? They made $100 million in 4 years. There is a lot you can learn from this story and use in your own forex education.
The turtle experiment proved ANYONE can become a successful trader, with the right Forex education and everything about trading can be specifically learned by anyone with the desire to succeed.
This is Of course true - but still 95% of traders lose their money and the turtle experiment can give you an insight into why and how you can enjoy currency trading success.
The Experiment
The people Dennis selected represented a variety of different people of all ages, both sexes and from all walks of life including:
An actor, security guard, a couple of professional card players, an auditor, a boy fresh from school and a female exchange clerk - so a diverse group of people!
They then went on to make annualized 70% returns and make $100 million and many went on to become trading legends.
Dennis taught a Trend Following simple trading methodology - but also the confidence and the discipline to follow it through periods of drawdown, to long term currency trading success.
What You Can learn
The reason most forex traders fail is simply they cannot adopt the right mindset to succeed. Having a sound method is only part of the equation for success - you must have the confidence and the discipline to follow your system through draw down periods to win longer term.
If you can't follow your method with discipline, you really have no method at all.
Dennis proved that a simple system that traders could understand, applied with discipline, could lead anyone to success and he was proved right.
This logic of course still applies today.
The way to make money in forex trading is based upon the following:
A Simple Logical Method + Understanding of It = Confidence = Discipline = Forex Success.
Most traders however use methods that are not logical with good examples being day trading or scientific methods, or they follow someone else.
Of course if you use a method that's not logical you stand no chance but if you try and follow someone else without believing or testing their logic you will fail as well.
You are going to get losses (don't let anyone tell you won't) and its here the correct mindset is so important your discipline is based on confidence and you need this to stick with your method.
Discipline is vital to success and this is based upon inner knowledge and understanding.
The turtle experiment is part of trading history, the story should act as inspiration to anyone who wants to learn currency trading and enjoy currency trading success. It imspired me to start my trading career 25 years ago and has inspired countless traders over the years, as it shows that anyone has the oportunity to achieve success if they learn the right knoweledge.
If you understand the above then you to could become a successful trader and make the income you desire from trading global forex markets.
by kelly Price
This story is about a famous experiment in 1983, when trading legend Richard Dennis wanted to prove anyone could learn to trade so he taught a group of people who had never traded before then set them off to trade - the result? They made $100 million in 4 years. There is a lot you can learn from this story and use in your own forex education.
The turtle experiment proved ANYONE can become a successful trader, with the right Forex education and everything about trading can be specifically learned by anyone with the desire to succeed.
This is Of course true - but still 95% of traders lose their money and the turtle experiment can give you an insight into why and how you can enjoy currency trading success.
The Experiment
The people Dennis selected represented a variety of different people of all ages, both sexes and from all walks of life including:
An actor, security guard, a couple of professional card players, an auditor, a boy fresh from school and a female exchange clerk - so a diverse group of people!
They then went on to make annualized 70% returns and make $100 million and many went on to become trading legends.
Dennis taught a Trend Following simple trading methodology - but also the confidence and the discipline to follow it through periods of drawdown, to long term currency trading success.
What You Can learn
The reason most forex traders fail is simply they cannot adopt the right mindset to succeed. Having a sound method is only part of the equation for success - you must have the confidence and the discipline to follow your system through draw down periods to win longer term.
If you can't follow your method with discipline, you really have no method at all.
Dennis proved that a simple system that traders could understand, applied with discipline, could lead anyone to success and he was proved right.
This logic of course still applies today.
The way to make money in forex trading is based upon the following:
A Simple Logical Method + Understanding of It = Confidence = Discipline = Forex Success.
Most traders however use methods that are not logical with good examples being day trading or scientific methods, or they follow someone else.
Of course if you use a method that's not logical you stand no chance but if you try and follow someone else without believing or testing their logic you will fail as well.
You are going to get losses (don't let anyone tell you won't) and its here the correct mindset is so important your discipline is based on confidence and you need this to stick with your method.
Discipline is vital to success and this is based upon inner knowledge and understanding.
The turtle experiment is part of trading history, the story should act as inspiration to anyone who wants to learn currency trading and enjoy currency trading success. It imspired me to start my trading career 25 years ago and has inspired countless traders over the years, as it shows that anyone has the oportunity to achieve success if they learn the right knoweledge.
If you understand the above then you to could become a successful trader and make the income you desire from trading global forex markets.
Forex Education - Sceintific Theories and Predicting Forex Prices
Forex Education, Predicting Forex Prices, Sceintific Theories
Forex Education - Sceintific Theories and Predicting Forex Prices
by kelly price
Many forex traders think that prices move to a scientific theory and that they have to predict to win at forex trading but this is one of the biggest trading myths and will ensure you lose. Read on and find out why and learn a better way to guarantee currency trading success.
The myth that forex prices move to a scientific theory has been spread by vendors who sell predictive trading systems that they say will make a trader rich and they appeal to greedy or naïve traders.
Of course they don't work - why?
If prices could be predicted with scientific accuracy we would all know the price in advance and there would be no market!
Markets move because they are uncertain.
Of course if somebody really had found a scientific theory, they would be to busy making money to sell it to you.
Predicting forex prices is simply another word for hoping or guessing and if you base your forex trading strategy on that you don't have one!
Famous Scientific Theories that Don't Work
There are lots of scientific theories and many are based around the Fibonacci number sequence (which was actually devised to solve a problem to do with the copulation of rabbits in the 12th century) this is not to insult Fibonacci who was a brilliant thinker - but even he would be surprised at how his theory has been hijacked by the far out investment community.
Also in the hall of fame is Elliot and his Wave Theory (lets ignore the fact he died a pauper) and look at his trading system.
There is nothing scientific about the theory.
It's all subjective! If a theory is scientific it should be by definition objective.
Finally we have Gann and natural law - well if he knew how the markets moved why did he lose all his money and have to sell courses to make a living?
None of the theories are scientific.
They appeal to the lazy, naïve and the far out crowd, who love them.
The problem is they don't know the scientific theory of market movement and no one does - because there isn't one.
Let's get in the real word and focus on making money with a forex trading system based upon sensible logic
The Good News!
The good news is that human nature is constant and you can spot repetitive price patterns that can be traded for profit. You won't win every trade - but if you trade the right set ups and execute your trading signal at the right time, you can win longer term.
Forex trading is simply a game of odds but that doesn't mean you can't win - you can and the rewards can be huge.
Trade The Reality and The Odds
The best way to trade forex markets is to use forex charts and look and act upon the reality of price change. A trader who uses technical analysis doesn't care how or why the markets move, he is just wants to make profits when they do.
If you are looking for a level to hold or break wait for confirmation that it has first and go with the trend. Don't anticipate - wait until you see the reality and then execute your trading signal.
So if you want to learn forex trading the right way and get good forex education, understand that trading is a game of odds not certainties - but if you learn to trade them you can make a lot of money.
by kelly price
Many forex traders think that prices move to a scientific theory and that they have to predict to win at forex trading but this is one of the biggest trading myths and will ensure you lose. Read on and find out why and learn a better way to guarantee currency trading success.
The myth that forex prices move to a scientific theory has been spread by vendors who sell predictive trading systems that they say will make a trader rich and they appeal to greedy or naïve traders.
Of course they don't work - why?
If prices could be predicted with scientific accuracy we would all know the price in advance and there would be no market!
Markets move because they are uncertain.
Of course if somebody really had found a scientific theory, they would be to busy making money to sell it to you.
Predicting forex prices is simply another word for hoping or guessing and if you base your forex trading strategy on that you don't have one!
Famous Scientific Theories that Don't Work
There are lots of scientific theories and many are based around the Fibonacci number sequence (which was actually devised to solve a problem to do with the copulation of rabbits in the 12th century) this is not to insult Fibonacci who was a brilliant thinker - but even he would be surprised at how his theory has been hijacked by the far out investment community.
Also in the hall of fame is Elliot and his Wave Theory (lets ignore the fact he died a pauper) and look at his trading system.
There is nothing scientific about the theory.
It's all subjective! If a theory is scientific it should be by definition objective.
Finally we have Gann and natural law - well if he knew how the markets moved why did he lose all his money and have to sell courses to make a living?
None of the theories are scientific.
They appeal to the lazy, naïve and the far out crowd, who love them.
The problem is they don't know the scientific theory of market movement and no one does - because there isn't one.
Let's get in the real word and focus on making money with a forex trading system based upon sensible logic
The Good News!
The good news is that human nature is constant and you can spot repetitive price patterns that can be traded for profit. You won't win every trade - but if you trade the right set ups and execute your trading signal at the right time, you can win longer term.
Forex trading is simply a game of odds but that doesn't mean you can't win - you can and the rewards can be huge.
Trade The Reality and The Odds
The best way to trade forex markets is to use forex charts and look and act upon the reality of price change. A trader who uses technical analysis doesn't care how or why the markets move, he is just wants to make profits when they do.
If you are looking for a level to hold or break wait for confirmation that it has first and go with the trend. Don't anticipate - wait until you see the reality and then execute your trading signal.
So if you want to learn forex trading the right way and get good forex education, understand that trading is a game of odds not certainties - but if you learn to trade them you can make a lot of money.
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