Survival From Trading

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Survival From Trading

Is this the correct way to trade forex? Boost your forex survival trading tips from trading forex. Read this forex blog from forex friend loan about survival from trading

Survival From Trading


Boost Your Forex Survival Trading Tips From Trading Forex


Is this the correct way to trade forex? Boost your forex survival trading tips from trading forex. Read this forex blog from forex friend loan about survival from trading. Many forex traders want to make as many profits as possible from the forex market, therefore they always want to be in the market so that they will not miss any trading opportunity.

The fact that 90% of the forex traders lose money in forex trading is because they lack trading discipline, money management, patience, emotions, never stick to one trading strategy and most of all, they are too eager to trade. They are never learning how to trade forex first place. Forex trading is about high probability trade setups, and to win in forex by trading many times a day is not easy at all. You are lowering the probability of winning a forex trade.

You can be those short-term traders and scalpers who make a few profits here and there but receive a lot of stress in return OR be a trader who takes in only one or 2 trades per week and able to satisfy your monthly needs.

Let me give you an example.
Trader A
Needs to trade every day to make 10 pips per day(out of 20 trading days) in order to achieve 200 pips per month.
Trader B
Only needs to trade for 2 weeks which can make him 100 pips per week. Which will you choose? 80% chose the letter A after I asked them this question.

A lot of people start forex trading with the first method because they want quick profits out of the market or lack of confidence that the trend will sustain. Every each and individual has their own preferences, I can't say which is wrong and which is right.

But if you are trading forex for already quite some time, you should have realized that often a perfect trade setup is the one that you are looking for. You know that you can make an excellent living from forex trading if you are able to find just 1 of the ideal trade setups per week.

I personally use some forex technical indicators to detect forex entry and when is forex market about reversal the high probability trade setups and will make sure that those indicators are all in the same direction before I decide to trade. I do not like to trade for small profits because firstly, I have a high risk to reward ratio (profit target of at least 60 pips if my stop loss is somewhere around 30 pips) to meet. Secondly, I only go along with the weekly chart and daily chart the real trend, and it's the real trend that brings me the big fish.

HAVING TO TROUBLE SURVIVAL WINNING TRADES

I understand that some forex trader will disagree by saying that a forex trend does not occur every day. That's the point I want to prove, there is no real trend every day, that's why I only trade once or twice per week, or even per 2 weeks, but already it's enough for my income.

The main point I want to get across is that you only need a few of the high probability setups to make some excellent returns. If you are not sure what kinds of methods are able to do that and forex trading strategy that you need to trade successfully.


What's the biggest obstacle to your forex trading success is the three pounds of grey matter between your ears? Emotions are - by far - the worst profit killer. 

FEAR tricks you into selling your winners too early. 

BLIND hope dupes you into riding your losers all the way down. 

GREED? It lures you into positions you never should have been in at all. 

If you don�t take charge of your emotions� they will rule you. 

Eliminate The Problem One By One


What�s one of the most dramatic changes you can make to your trading game? Knowing just exactly how to deal with a succession of losing trades and periods of drawdown. This is how you can survive in forex.

Think about it.  What�s most likely to destroy your trading confidence, or worse � take you out of trading altogether?

What would it mean to you if you could transform what is experienced by many as stressful and emotionally jarring trading experience into a carefree and relaxing hobby� so that you can just celebrate losing trades as part of the process?


Boost Your Forex Survival Trading Tips From Trading Forex


1. TRADING WITH MENTOR
DO NOT even attempt to trade until you have a trading plan with a method that has a systematic approach.

If you do not understand the probability of your risk of ruin based on your amount of risk exposure per trade do not trade until you do.

Take all the time you need to get educated in forex trading before you ever place your first trade. If you have not put in some serious time learning good trading books, studying charts, backtesting, and using all the resources available with mentor 24/7 on a week. You should not trade any real money until you do.

The forex market isn�t going anywhere and there is no rush to get into it until you are completely ready.

Set specific goals with a timeline so you know where you are in your trading journey. Be realistic but stretch yourself. It is not about making money at first it is about work and effort to get you to that money. Once you get the right process, discipline, and risk management in place only time will separate you from profitable trading success.

2. REMOVING EMOTION FROM TRADING
It�s an inconvenient truth, but no forex trading strategy is ever profitable the whole time. Nor is any trader. Losing money is never easy, especially if the trade set-up smelt good, felt good and, of course, fulfilled all of the rules for entry. Losing trades knock our trader confidence and our account balance.

3. 55% PSYCHOLOGY, 30% MONEY MANAGEMENT AND 15% TRADING STRATEGY
The moment you accept this truism, the greater your receptiveness (consciously and subconsciously) to actively improving your mindset and trader psychology � especially when it comes to implementing the following advice.  This is the cornerstone of your most clear advantage when it comes to handling losing trades effectively.

Thanks to our risk management techniques, and from targeting trades with high reward potential, we can be safe in the knowledge that if the trade moves against us then we have only lost a pre-defined amount (your risk per trade) but if it goes in your favor then you stand to make a lot more.

4. KEEP A TRADING JOURNAL AND REVIEW IT OFTEN
Trading forex needs a set of skill. The only way you can ever improve your trading skills is by keeping track of what works and what doesn�t and trying to gauge why. After each trade, take the time to write down the details of the trade and what went right and/or wrong with that trade. You can only improve what you measure, so measure everything and put it in your trading journal.

5. TRADING IS AN INVESTMENT
Investments go up and down. Training to a forex trader as an investment in yourself (which according to people like Benjamin Franklin is the �best kind of investment�) and your application of it as a long-term process that helps to grow your capital over a healthy period over time.

6. CELEBRATE LOSING THE BATTLE IN ORDER TO WIN
Not every trade you place is going to be a winner. In fact, some of the best looking trades out there, with the highest profit potential. Providing you have faith in your trading strategy and it is profitable, the trick is to view losses as a short-term strategic battle which is lost in pursuit of winning the overall war. As Mark Douglas says in his book �Trading in the Zone�, they are a necessary �business� expense prior to a win or even a string of winning trades.

7. The RISK REWARD RATIO
Always having a decent reward will dramatically help to rationalize (take the emotions out of) your trading decisions � especially at times of drawdown. After all, what is the worst possible thing that could happen if you take the trade? You lose $100. But what is the worst possible thing that could happen if you do not take the trade? You could potentially lose out on a profit of $300!  Using this strategy, looking at your trades this way can make a huge difference in whether the fangs of emotional trading have sunk into your wallet.

8. SEE THE BIG PICTURE
Did you choose to trade for a quick buck or rather to obtain long-term capital growth? Those who see the bigger picture fall into the camp of the latter.

Do not fall into the trap of shifting trading styles or strategies as a knee-jerk reaction after a couple of losing trades. Thanks to variance and the flow of winners and losing trades any strategy or system manifests, you will typically be missing out on a flow of trades with a winning outcome.

Give your style of trading/strategy a chance. If you trade end of the day, it may be 6 months � year in terms of time � or a sample of 30 trades. This will enable you to get a more representative picture of how a strategy can work for you.

9.  REVIEW YOUR STRATEGY
If you are in a prolonged period of drawdown, instead of simply trading in anticipation of a string of winning trades, this could be a strong time to take the initiative to review your strategy. This can permit you the much-needed perspective to see what you could do differently.  Use this as the opportunity to see if the new tweaks or changes yield a more positive outcome. Sometimes all it takes is one extra ingredient, rule or filter in a strategy�s rules for entry to turn a loss-making strategy into a profitable one.

But, for this, it�s time to get your hands dirty! Identify a modification, back-test it on the trades you would otherwise have taken.  See how it would affect things for you.

Will it affect things for better or for worse? It is this very routine � and critically important � work that many traders simply do not bother with.  Doing this work separates the serious and successful traders from all the others.

10. LOW LEVERAGE
As a trader, it is crucial that you understand both the benefits AND the pitfalls of trading with leverage. Using a ratio of 100:1 as an example, means that it is possible to enter into a trade for up to $100 for every $1 in your account. With as little as $1,000 of margin available in your account, you can trade up to $100,000 at 100:1 leverage.

This gives you the potential to earn profits on the equivalent of a $100,000 trade! But leverage can also work against you. If your trade moves in the opposite direction, leverage will AMPLIFY your potential losses.

As a new forex trader, you should consider limiting your leverage to a maximum of 20:1. Or to be really safe, 10:1. Trading with too high a leverage ratio is one of the most common errors made by new forex traders. Until you become more experienced, we strongly recommend that you trade with a lower ratio.

11. USE BOTH TECHNICAL AND FUNDAMENTAL ANALYSES
You may have heard that all traders use technical analysis and believe that fundamental analysis is a waste of time. Don�t believe it. Although technical analysis is crucial to finding the right entry and exit points, fundamental analysis improves your ability to make the right forex pairs choices, given market and economic conditions.

Using a combination of fundamental and technical analyses, your chances of identifying bull and bear markets and finding phases of transition and consolidation improve dramatically. Your best trading opportunities are at the beginning of these phases of change, so be sure that you understand the six phases of the market and know which sectors offer you the best trading opportunities.

12. COUNT ON THE MOVING  AVERAGES TO MAKE YOUR MOVES
You may think that using data from averages to find the right time to enter or exit a position is counterintuitive, but moving averages can be powerful trading indicators. Moving averages actually smooth out the data for you visually and help you identify any trends.

Be sure to find out how to use moving averages and what they mean. After you understand them and what goes into them, you can manipulate moving averages to your advantage and coincide with your trading style.

13. DEVELOP AND MANAGE YOUR TRADING SYSTEM
To be able to trade outside the pack, you need to develop your own trading system, using your own favorite tools. Although you can use tools provided in off-the-shelf software packages, you want to develop and adopt a trading system that fits uniquely with your personality and trading objectives.

You�ll need to constantly monitor your trading strategy successes and failures and look for ways to make improvements.

14. KNOW YOUR COSTS
Not only do you have to worry about commissions or transaction fees, but you also must watch for any slippage in your trades. Even though you may be using stop or limit orders, you rarely end up executing trades at the exact entry or exit prices you plan. Some slippage is bound to occur, so be sure that you carefully monitor your commission costs, transaction fees, and slippage costs.

In addition, don�t forget to consider the tax man. If you�re trading stocks that you hold for less than a year, any profits you make are taxed as current income instead of at lower capital-gains tax rates.

15. HAVE AN EXIT STRATEGY
Knowing when to take your profits and get out and when to accept your losses and close a position before it becomes even more damaging can be among the hardest lessons any trader must learn. All too often you�re enticed by the win and want to ride it to the absolute top.

Wise traders plan their exit points at the top and bottom of each position long before they ever enter that position. Getting caught up in the emotions of a winning trade is easy, but don�t forget you�re operating a business.

16. WATCH FOR SIGNALS, DON�T ANTICIPATE THEM
You start watching the charts and waiting for the right signal to buy. Often, you�ll see charts move close to your planned signal but not actually reach it.

Wait for the signal you�ve designated in your plan. Don�t anticipate any moves, even if the forex pairs price is getting close to that point on your charts. You may miss the perfect entry point, but you�ll be less likely to make that fatal mistake of entering a position before the signal is triggered only to see your forex market reverse course and thus be forced to take a loss.

17. BUY ON STRENGTH, SELL ON WEAKNESS
When you see a forex pair showing strength and heading into an uptrend, it�s time to buy. When you see a forex pair falling and showing signs of entering a weakening period, it�s time to sell. If a weak forex pair takes a turn for the better, you can always reenter the position.

18. 1% or 2% RISK OF THE TRADE CAPITAL
Only risk 1% of your capital per trade. While this is standard, you must avoid the temptation to trade big to make up your losses. This usually compounds the problem because the market is not cooperative with your style during a downtrend.

The Bottom Line
Survival from forex trading your first few years as a forex trader with a systematic approach that builds adequate capital outlines a solid trading plan and executes the first elements of a risk-based forex market strategy.

Survival From Trading






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