The following situation happens quite often to many traders. Look it over and see if it has been happening to you:
You have been faithfully following your trading plan and the rules you've set for trading. By following them you are now in a trade that doesn't look so good. At the same time, by following your trading plan, you see that you've missed a beautiful move in a different market, one that could have made you a lot of money.
You are in a bad trade and you've missed out on a great trade. You become disgruntled. You think to yourself that your trading plan must not be so great. You think there must be a better methodology that you should use that will prevent this from happening. You think to yourself, "Yes! That's it, I'll change the way I do things." So you create a new rule or modify an old one so that such a rule would have let you capture the trade you missed and avoid the one you took. Have you been making this mistake?
Here's another way it can happen: You are in a trade, and your rules cause you to be stopped out with little or no profit. Shortly after you exit the trade according to plan, prices take off and move to where, had you stayed in, you would have made substantial profits. The move leaves you sitting there thinking you are stupid. You reason that there must be something wrong with the way you do things.
Your rules, your plan, or both must not be right. So you change what you are doing, or make a new rule so that the next time this happens, you won't be left behind.
You have just abandoned all of the hard work you've previously done that enabled you to successfully trade futures. You've abandoned your education and learning. You've abandoned the wisdom that will enable you to be consistently successful as a trader. You've just started trading history, and you are supposed to be trading on the future movement of prices. You are trading what happened, not what will happen. By not being willing to be left behind, you are setting yourself up for being left out.
If you've been having thoughts, or have been acting as we've just described, you have a terrible problem with greed. Why? Because greed can never get enough. You can't satisfy greed. Greed wants more, and yet more.
Not every trade is your trade. Not every trade has to work out for you. You have to be satisfied with getting a reasonable share of trades that fit your description of a good trade. Some of those trades will turn out to be great trades, others are good trades, and a certain percentage of your trades will be bad. There's no way around it.
Not every good trade will turn into a great trade. When you enter a trade according to your rules and trading plan, you have no idea whether or not it will turn out to be a good trade, much less a great trade. The reality of trading is that, try as you might, you cannot know the future.
Whenever we miss a big move and then try to find some pattern, indicator, rationale, or modification to make to what we are doing so that the next time we will not miss the "big" move, it is a part of the hunt for something magic - a continuation of our quest for the holy grail of trading.
What a terrible mistake to allow yourself to make. Winning as a trader consists of making some small profits and some larger profits on a regular basis. Obviously, there will be some losses. We regularly want to keep losses small, but there are times when a loss will get away from us and turn out to be bigger than desired.
If adversity causes you to become disgruntled, then you really need to examine your thinking and your approach to trading. Your trading plan must allow for disappointment and loss.
You've got to believe in what you are doing and be able to trade from the knowledge that when you follow your rules and your plan, you will make money from your trading.When you become disgruntled and begin to change your plan, your rules, or both, you are setting yourself up for almost certain failure and the worst thing that can happen to a trader - you will lose the courage of your convictions. Without it you cannot trade with any level of confidence.
This is why we encourage you to write out the reasons and rationale for every trade you make, even if you have to do it after you have completed the trade. You must develop a keen recognition of the trades that are your trades. Write out your trading plan every day and for every trade you intend to make. If you did not have time to plan every trade, be sure to review those you did make without pre-planning. Then you can go back over your trading and be able to see why and when you are successful.
Reminder: Here are some steps to take before the market opens.
View major formations on the charts of those futures you intend to trade. View potential congestion areas, get the big picture from the longer term charts.
Write down all potential entries as you see them on the chart.
You need to go through this exercise every day that you trade. This takes discipline. However, doing so will help you develop the kinds of habits that will mold you into a great trader.
If you are too busy to be disciplined, then you are too busy to trade. If you don't discipline yourself, you will soon disappear from the trading scene.
ABOUT JOE ROSS:
Joe Ross has been trading for more than 47 years, and is a well known Master Trader. He has survived all the up and downs of the markets because of his adaptable trading style, using a low-risk approach that produces consistent profits.
Joe is the creator of the Ross hook, and has set new standards for low-risk trading with his concept of "The Law of Charts?." Joe was a private trader for most of his life. In the mid 80's he shift his focus and decided to share his knowledge. After his recovery, he founded Trading Educators in 1988 to teach aspiring traders how to make profits using his trading approach. He has written 12 major books on trading. All of them have become classics and have been translated into many different languages.
Joe holds a Bachelor of Science degree in Business Administration from the University of California at Los Angeles. He did his Masters work in Computer Sciences at the George Washington University extension in Norfolk, VA. Joe still tutors, teaches, writes, and trades regularly. Joe is still an active and integral part of Trading Educators.
Welcome to the World of Currency Trading
Indeed large multinational and individual banks and other major financial institutions have dominated FX trading (also known as Forex trading), but there is a paradigm change in the nature and type of investing. According to one estimate, in the new millennium, there are over 6 million online investment accounts, up from 1.5 million in 1997. As a result, start-up firms now compete directly with financial institutions to serve investors in the new technologically driven economy, and the clear winner is the customer. The competition between the brick and mortar institutions and the Internet-based companies has dramatically lowered the costs of investing, and empowered the individual investor to take control of their own investment strategy in Forex trading.
Is The U.S. Dollar About To Reverse Course?
For the first time in several years the U.S. dollar has managed to gain value against the world's other major currencies. During the first three months of 2005, the U.S. dollar is up approximately five percent against both the yen and the euro. The gains for the dollar should be considered significant when considering the United States still faces a growing trade imbalance. So far this year, currency traders have shifted their focus from the United States' large trade and current account shortfalls toward the higher rates of returns being offered on U.S. debt. The recent strength shown in the dollar has somewhat shifted sentiment within the financial markets about the future direction of the currency. A Bloomberg survey released earlier this week shows that the major currency traders expect to see dollar weakness resume later in the year, but the sentiment among dollar bears is much weaker than it was at the start of the year.
Risk and Stock Trading Fees: The Two Barriers To Overcome If You Want A Successful Trading Career.
You know the old joke:
Example of a Profitable Transaction in FOREX
To make a profit, in the FOREX, a trader can enter the market as a *buy position* (known as going "long") or a *sell position*(known as going "short").
A Look at Online Forex Brokers
An online forex broker is a firm that facilitates retail trading using Internet technologies. Global Forex Trading (GFT), one of the popular online forex brokers. It provides retail traders with a free demo trading account, allows users to open a live account, gives live help, provides software called DealBook FX 2, and allows viewing of account documents. (DealBook FX 2 can be downloaded for the demo trading account).
Day Trading Training ... You need more than just going to a free stock market workshop to learn
Day trading is all about making buy and sell decisions. When you make a trade either your going to lose money or your going to make money, and some other times you will break even. When you win some body else will lose and so forth, but that's NOT what's important.
Business and the Forex
The business world is a complex web of supply and demand. Money and goods, physical or otherwise, pass through the global market every single day. To meet this exchange between one country and another, foreign exchange, or forex, was born. The term forex is used to refer to transactions involving the conversion of money of one country into that of another or to the international transfer of money and credit instruments.
A Short Introduction To FOREX
FOREX is the world's largest and most liquid trading market. Many consider FOREX as the best home business you can ever venture in. Even though regular people have had the opportunity to take part in trading foreign currencies for profit (in the same way banks and large corporations do) since 1998, it is just now becoming the cool, hip, new "thing" to talk about at parties, business events, and other social gatherings.
Money Management, Part 2
Reality of Online Forex Trading
Foreign exchange trading is the trading of currencies. Most currencies can be traded. Huge amounts of currencies are traded 24 hours a day, 5 days a week. On average $1.9 trillion is traded a day. The most traded are United States Dollar, Japanese Yen, Euro, Canadian Dollar, British Pound Sterling, Australian Dollar and Swiss Franc.
Crisis of Confidence in the EU
The European Union (EU) constitution was dealt a double blow, first by a French "no" vote on 29-May and then by a follow on "no" from the Netherlands on 01-Jun. To add insult to injury, one low level Italian diplomat quickly called for a referendum in Italy to decide if a return to the lira was warranted. Additionally, Prime Minister Tony Blair, who took over leadership of the EU on 01-Jul, indefinitely postponed the British referendum on the EU constitution.
Forex2u Forex Strategy On Successful Forex Trading
The essence of the FX2u Forex strategy is that it does not have any Forex trading system but could forecast the market trend accurately.
Trading Profitably on the Foreign Exchange Market
You may be asking yourself "how does one begin to trade profitably as a currency trader?".
Online Forex Trading
Foreign exchange currency trading is also known as Forex trading, or FX, and has no single physical marketplace like the New York Stock Exchange does on Wall Street in New York or the Tokyo Stock Exchange does in Japan. The New York Stock Exchange and the Tokyo Stock Exchange online traders are limited to making purchases during the actual trading hours governed by New York Stock Exchange hours or the Japanese Stock Exchange's Tokyo hours. In contrast online Forex trading gives traders access to the online Forex trading community through an electronic series of different online trading platforms. Online Forex trading and online accessibility are nicely compatible because the world's foreign currency exchange market is a 24-hour market, and the internet makes online forex trading a 24 hour possibility open to anyone with a computer, a telephone line and money. Anyone, any corporation or any bank can log onto an online account at any time, and trade foreign currency through online forex trading.
Hedging Foreign Exchange Risks
The exchange rate of the Macedonian Denar against the major hard currencies of the world has remained stable in the last few years. Because of the IMF restrictions, the local Narodna (Central) Bank does not print money and there are no physical Denars in the economy and in the local banks.
Discovering Turnaround Candidates
There are many types of investment methodology out there. All of them has their own merits. I for one, personally like to invest in turnaround stocks. What is turnaround stocks? They are normally companies that are experiencing problems (hopefully short-term), and a lot of people are not willing to wait for those companies to recover.
Advantages of Trading FOREX Over Stocks and Commodities
There are many advantages to Trading FOREX as your main income generator. Let's start by something that may be worrying you already.
Option Arbitrage in the Forex Market
What is arbitrage? Arbitrage is the simultaneous buying and selling of identical financial instruments taking advantage of price discrepancies between different brokers, exchanges, clearing firms, etc. and thus locking in a profit. On paper, arbitrage is a risk-less trading strategy. In the real world however, risks abound.
Ways to Acquire Discipline in Trading
One way to acquire discipline in trading...
FOREX Trading Philosophy
Keen on starting FOREX trading? Why would you not be? Many beginning FOREX traders are captivated by the allure of easy money. FOREX websites offer 'risk-free' trading, 'high returns' and 'low investment' ? these claims have a grain of truth in them, but the reality of FOREX is a bit more complex. As with anything in life, what you put in will determine what you get out.
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