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5 Things You Must Know Before You Start Trading Forex

1. Forget About the Money – Start Small

Probably, someone sensible said to me at the beginning to take it very steady, very small. Prove that you can trade first before you start to put in decent money. I didn’t take it seriously. But this is the kind of thing that you really need to take seriously if you want to do this as a long-term thing and you are not looking to just buy one stock and sell it.

If you are into trading, If you want to make money at this for the long term even though the rest of your life – start small.

Start small

One of the reasons is reducing the pressure of money. If you are starting with a big account, relative to your net worth. You are going to feel the pressure when the trade is going your way. You want to take the profits quickly and vice versa, you are gonna feel the pressure when it goes against you.

You need to be refining your craft and your skill rather than looking at it from a profit perspective, so starting small it’s just the biggest possible thing. And, If you want to know when should you start ramping it up, the right time is when you’ve made the good progression.

So, when you’ve got the consistency, the losses are coming as well but you’re capping them off early or letting those runners win and you’re picking the right trades to be in. You’re not overtrading right now, but you will know when it is the time to ramp it up and start to make some money.

Starting small, and looking at it from a different perspective such as I am actually improving a skill here, not looking to make money.

 

2. Focus on the Risk

This one is very similar, but not the same. Forgetting about the size of the account, just focusing on per trade or per group of trades. This is the biggest thing. If we’re looking from a pure perspective, operations perspective risk – Risk management, it’s massive. You can have the best system in the world but If your risk management is not good, you’re gonna blow up.

Focusing on risk and understanding what is the worst-case scenario is the best way. You can do that by maybe accepting that risk. This is your max loss per trade, You are taking X trader per week, X trades per month, X trades per year. Worst case scenario is that you will lose all of them. Will you be comfortable with that? If the answer is yes, let’s begin the year.

Similar to starting small, but really focusing on the risk and also purely from a perspective of where is the genuine risk of the trade. A lot of people are going to look at the charts and ask themselves where is the hidden risk in it. Are you holding a stock overnight and you shouldn’t be holding it? Are you in something that it could be some news out? Or just understanding the risk, because that is what keeps you in the game.

Focus on the risk

If you have the capital to play the game and of course the time – you can do this. You just need to keep going until you improved. You need capital and time. A lot of people run out of capital. Not many people keep going and say well I will keep smaller my capital and I can keep going indefinitely until I get this.

This is the biggest part of the game, trade risk, week risk, multiple trade risk, hidden trade risk. Everything is about risk, we are all risk managers and the most important thing is to not lose our capital and the next thing to do is to grow our capital, grow our trading account.

 

3. Filter out the Noise

There is so much information. So much bombarding with information on TVs, magazines, newspapers, newsletters, emails, gurus, youtube videos, etc. Just get rid of it.

If you want to kind of subscribe to something that gives you informational trade ideas I don’t think that is a problem. But just stick it to one, just keep it one thing that you follow. If you don’t do any, even better.

But when you have so much noise, almost you do get a disservice because you get pros and cons with different trades coming at you. And sometimes you can’t see the signals that are in front of you just because you’ve got all this noise to filter through.

“THE SIGNAL IS THE TRUTH. THE NOISE IS WHAT DISTRACTS US FROM THE TRUTH.” – NATE SILVER

Much more clarity and you can go in with more focus and make your own decision and then just stick to it. Rightly or wrongly, that’s the point in trading. You’re backing up the decision with money.

 

4. Stick to One Method or Strategy(Market or Group of Markets)

Trying to be master of all trades you can become a master of none.

But that can mean as well, sticking to one market or a group of markets-not too many. You need to decide for example, that you are going be a great day trader scalp of Dax or Dow, that’s it.

One Strategy

Sticking to that, run it for a while, see how you do and analyze your performance.  Or maybe you can trade tech stocks on a swing trade basis after earnings. Maybe even going to trade London Stock Exchange insurance stocks pair trading, whatever it may be, It doesn’t matter. The point is sticking to one method and just sticking out for a long period of time.

This is definitely a big one there, a massive mistake that I see people make in trading.

So, If you want to be FX trader, focus on the trades that you feel you want to focus on, stick to that and timeframe wise.

 

5. Be in the Game for the Long Term

Expect to be in the game for the long term. Getting rich quick doesn’t exist. And If it does it’s luck. Very few people come into the game and instantly can pick it up straight away.

Yes, there is always going to be that one, or two that are always out of lines, the normal distribution curve.

Be in the game for long termBut expect to be in there for the long term. And If you think about that in the back of your mind, that will help you put all of these tips into perspective.

If you are expecting to be In this trading game for the long term, it makes sense to start small, you need to focus on the risk because again you want to be here and there is no point for you to overdo the risk. You want to have your own method, your own strategy. You don’t want to be relying on other people, so yes you are going to filter the noise and have one newsletter or something else that you look at and learn from.

If you take this 5 things seriously, the learning curve will potentially go from many years to a very short period of time.

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Strategies

Automated Trading Software

How to Find a Trading Job

The complexity and amount of data in financial markets means
that we are inevitably turning to computers to do a better job. Automated
trading, isn’t new. It has been around for several decades.
What is new is the rapid evolution of these algorithms as well as their
widespread use. Recent studies estimate that over 80% of all trading in the forex
market is software driven.

What they do

First it helps to understand what automated trading is and
what it isn’t. Many of us already use some form of algorithms in trading. These
are the chart studies otherwise known as indicators that most of us use on
popular platforms like TradingView.

These types of charting tools use software to process
underlying price information, sometimes aggregating it with other data like
volumes, to create a useful signal for the trader. That signal might be an
overbought flag which suggests a selling opportunity or an oversold flag that
could represent a buying opportunity.

Some of the most frequently used chart studies include the
moving average lines, stochastic oscillators, relative strength index (RSI), Fibonacci,
Ichimoku and MACD. There are also many variants of these.

These are the most basic types of trading algorithm. Not
surprisingly, computerized trading gets a lot more advanced than this.

A basic trading robot reads the outputs of indicators and
other data feeds and generates automatic buy or sell orders that are entered
into the market via a connection to the broker. This takes the evolution of the
indicator one step further.

A trading robot does not need a human to operate at all. It
can run as an automaton, just obeying the trading rules it’s programmed with.

More advanced trading bots take this a stage further. These
may use advanced pattern matching techniques and more specific rules that
can adapt better to changing markets. Some even aggregate information from different
sources like news feeds, indicator sets, and from multiple markets to improve
their accuracy.

forex trading software

Advantages and disadvantages of automation

Those who intend to use trading software should consider the
pros and cons of each approach. They also should understand that any kind
of trading involves the risk of financial loss.

Pros

  • Trading software is non-emotional
  • It will obey trading rules and money management accurately
  • It can be backtested on historical price charts
  • It is hands-off just requiring monitoring
  • It won’t get distracted or deviate from the strategy

There are drawbacks to software as well.

Cons

  • Trading software can be expensive to develop and maintain
  • It needs dedicated computer hardware
  • It can be unpredictable
  • The code can contain bugs

Solutions

So what are the solutions if you want to go ahead and use
trading software? There are a number of off-the shelf packages that are advertised
on websites like Metaquotes.

Their marketplace lists hundreds of trading expert advisors
and indicators. These tools can be created by anyone and sold or rented for a certain
fee.

The source code is locked so you will not know how the
system works besides the general description that the seller gives you on their
listing page. Because this is an open
market, with anyone being able to sell, the quality of these systems does vary somewhat.
The better-rated tools can be expensive.

For those who are already skilled in software development,
there is always the possibility to create your own system. Most trading
platforms have their own scripting language that allows you to programmatically
interact with price data and automate account functions like placing orders.

For non-programmers, there are platforms like Tradoso. This platform has a graphical tool
that lets you create an automated strategy, bypassing the coding stage altogether.
You can use indicators as building blocks and pull various inputs and feeds
together. It lets you backtest your system so that it can be refined and
improved upon.

Risks

All trading carries risk. Automated trading is no different. An automated agent is only as good as the rules it’s programmed with. That’s why it is important to know the rules
that your system is following, and the range of possible outcomes.

Trading with a black box piece of software will carry high risk because you can never be certain what rules that system is following. Creating your own system is the only way around this.

In this way, tools like Tradoso and others that automate the whole development process are likely to become more prevalent in the future.

While coding will always be important, the sophistication of algorithms out there makes it increasingly hard for the part-time-coder
to compete on the same level.

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Strategies

Forex Scams – How to Avoid Them

Forex trading

Scammers try to imitate the approach of legitimate investment firms and sales representatives. Thus, the fact that someone can contact you in a specific way – by phone, mail, email or even referral should not in themselves be seen as an indication that the investment is or is not shady. Many reputable companies use exactly the same methods to identify individuals who may be interested in their investment products and services in an effective and economical manner. Keeping in mind that “investigating before you invest” is good advice regardless of how to contact you, Forex Scams are here to help you in this regard… there are many ways that scammers use to scam but we will tell you how they do that, so you can be aware of 

Telephone boiler room telephones remains a favorite way for scammers and their sales squads to quickly communicate with large numbers of potential investors. Even if a scammer has to make 100 or 200 phone calls to find a mooch (one of the terms scammers use for their victims), they believe that the opportunity to save thousands of dollars from someone’s savings is still a good pay for the time and cost involved. 

Mail Some fraudulent investment deal sellers buy mailing lists in good faith – names and addresses of people who, for example, subscribe to a particular investment-related publication, who have responded to previous direct mail offers or who have other features scammers look for. In the hope of avoiding notification by postal authorities, mail order scammers cannot make a direct or immediate launch for their money. Rather, they often seek to entice you to write or phone for more information. Then comes a call from the seller or the person closing the deal. Some may call even if they did not reply to the email. 

The Rising Popularity of Binary Options in Nigeria

Forex Scams on The Internet 

Internet access has increased dramatically in recent years, and consumers have become more comfortable doing business. (Shopping, banking, or investing) online, but crooks are aware of the potential of cyberspace. The same scams that are conducted by mail or phone can be found on the internet and new technology creates new ways to commit crimes against consumers. 

Advertisement Advertisements in newspapers or magazines may offer profitable opportunities. (Or at least with implications) that are more interesting than general investments Once you have taken the victim, the scammers will try to “hang up”. Although investors know that the regulatory agencies regularly check advertisements in major publications, there are some who use famous publications. Said in the hope that it could be hit and run before the other detectives appeared. Advertisements in the narrowly spreading print media, they think regulators may be less likely to see. 

Referrals 

One of the oldest plans involves paying fast, big profits to initial investors. (Indeed, from their own investments or those of other people) knowing that they tend to recommend investments to their friends and these friends will tell their friends soon. Scammers do not want to find victims. New ones anymore They will meet him. 

The “Reputable” Business 

Some scammers go to the first floor. Take profit from scams. Previously, they rented a luxurious office, hired an interior decorator and professional receptionist, sounding and opening things that were similar. (But not the truth) of a reputable investment company, You may have to call to make an appointment and when you don’t have to wait. (Which is intended to make you more enthusiastic). The success of this type of scam depends on how long he can prevent his victims from knowing that they have been cheated. Investors are confident that their big profits will be reinvested to receive even greater profits. Such swindlers may join local civic groups, participate in charities, and generally play stable citizenship. There are some best forex brokers in the market, which forex scams will let you know about that, stay tuned with us to check it before investing your hard money into them. 

forex quotes

Techniques for Using Forex Trading Scammers 

Their techniques vary according to how they communicate. However, what they have in common is their ability to persuade. The skills that make them successful are the same skills that help salespeople succeed. But con artists have an advantage in their decisions: they don’t have to fulfill their promises. In the absence of this responsibility, they do not hesitate to make any promises that will persuade you to divide your money. Here are some techniques to figure out the forex scam in the market, please see below: 

Expectation of Large Profits 

The money flying through the air, the profits that con artists speak of, are big enough to make you interested and eager to invest. But not too big to make you believe it Or he might mention the profit numbers he thinks you will consider credible, and then in further temptations suggest that the actual profit is even greater. Of course, the latter numbers are something that he hopes you will focus on. In general, if an investment proposal sounds too good to be true, it is possible. 

Low risk Some people are clear that it suggests that there is no risk – investment is a sure-fire source. Clearly, the last thing a scam wants you to think of is the possibility of wasting money. (If you ask how you can be sure that your money is safe, you can trust that the answer is trustworthy. He also believes that you believe what you want to believe) to make him confident. Con artists may admit that there may be a risk – then reassure you that you will definitely get the least profit. Con men may become impatient or aggressive if they have questions about the risk – perhaps suggesting they have. Better things to do waste time with people who lack courage and farsightedness in making money! With this, he hopes that you will not bring this story back. 

Urgency 

There are generally interesting reasons why it’s necessary for you to invest now. It may be because the investment opportunity can be “offered only to a limited number of people” or because the delay in investment can mean missing a big profit (after all, when the information they have told you becomes generally known, the price will Higher, right? Urgent is important for con artists. He wants your money as quickly as possible, with the least effort on his part, and he doesn’t want you to have time to think about it, talk to someone who may suggest you to wonder or check out his or her proposal. With regulatory agencies. In addition, he may not plan to stay in the city for very long. 

Confidence 

The scam is confident in the money you make, so you are confident enough to release your savings. Their message is that they are doing your favorite things by offering investment opportunities. Con artists may intimidate (Happily or something else) to end the conversation by suggesting that if you don’t really care, there are many others that will When you protest that you are interested, he will keep your savings in his pocket. Even if you can’t see a man the way he speaks But most people are determined, clear, and determined people who will control the conversation. The more you talk, the less likely you are to ask questions.

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Strategies

Know all about PIPs in Forex Trading

A Lot Size Which Is Too Big or Too Small

What is a PIP?

PIP is one of the basic terminologies in forex trading. You can’t start your trading journey without knowing about pips.

In this guide, we are going to tell you what a PIP is in Forex and how they are calculated.

All about Pips

A pip or “percentage in point” is the smallest possible movement of the price of a currency pair. 

Suppose, the EUR/USD pair has changed from 1.2334 to 1.2335, this means that the pair’s quotes have changed by one pip. 

As a rule, in the forex market, the name “point” is more common, although point and pip have the same meaning. But on the stock market, these concepts are different; their pip is one cent, and a point is one dollar.

Usually, 1 forex pip is equal to 0.0001 parts of one unit of the base currency but since each currency has its own value, then the price of a pip is not a fixed value but a variable, depending on the chosen currency pair.

Suppose, if we take the same currency pair EUR/USD, then we will see that the first currency in this pair is the Euro. This means that the Euro is the base currency, which we buy for US Dollars so that 1 pip will be measured in dollars.

Currency quotes change by a certain number of points, therefore, the forex trader’s profit changes first in pips, and then it is converted into a monetary equivalent. 

Giving up in FT

What determines the cost of pip?

As you know, each currency pair has its own monetary value of pips. It depends on:

  • a currency pair that is being traded;
  • lot (volume) by which it is open;
  • the exchange rate that applies to the currency transaction.

How to calculate your profits using pips? 

Suppose you decide to make a purchase of one lot for a pair of EUR/USD. One lot (the standard unit of forex trading) is equal to 100,000 units of the base currency. In this case, the volume of your transaction will be 100,000 euros. 

Since the cost of a point = 0.0001 parts of the lot, then 1 pip will be equal to: “100 thousand euros multiplied by 0.0001”, that is, $10. If the currency quotation changes by 1 pip in the direction you traded, you will earn $10, if, by 100 pips, your profit will make $1,000. 

Tools for calculating pips

To avoid calculating the value of potential profit or loss in your mind (or on a piece of paper) every time you open a transaction, we recommend that newcomers use the pip calculator.

Almost every broker has a pip calculator now. So, it shouldn’t be a problem. 

The concept of pipsing

The concept of “pipsing” in Forex Trading is a trading strategy that enables a market participant to make a profit on short positions, usually from 1 to 5 points. 

Many professionals use pipsing several times daily, which makes it possible to get good profits with the least risk.

Conclusion

It is very important to gather information on basic Forex trading terms like “pips”, because a small change in pips can make you win or lose. You must need to educate yourself with all the basics of Forex Trading before you start your Trading. A regular Forex trader needs to spend at least 1 hour daily to read all the technical aspects of Forex Trading, and to practically apply them in the real trading step by step. The more good knowledge you have, the more cautiously you can trade. We wish you best of luck in your Trading!


Sources and references of the Content: Some of the facts and hints have been taken from Wikipedia Percentage in point and FXCC’s article What is a Pip in Forex

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