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Top 5 Reasons Why You Will Never Make Money with Forex

Mentor in FT

1. You Need a Mentor

The main reason why you’ll never make money in Forex is that you will try and accomplish successful trading solo, even though you need a mentor. That is the biggest reason why you won’t make any money. Imagine teaching yourself how to become a pilot through trial and error without any formal training or mentor. You will end up crashing your first plane on the first day.

You need someone who made lots of money with Forex, not just someone who claims on Youtube, Instagram or Facebook to know how to trade.

 

The first thing that you need to do is to find someone in the Forex industry. It can be someone who you look up to, you need to like their lifestyle, the values that they live by and the characteristics that they have. You want to find someone that you can call a role model and then make them into your mentor.

People in Forex, they go into the industry, find a broker and then they fund their account and just start trading. That is the number one mistake people make when it comes to Forex trading.

You need to learn how to look at people who’ve already accomplished something. The best way to ask for directions is to ask someone who’s already been where you want to go.

2. Depending Too Much on Forex Signals

There are some of the best, most powerful Forex signals that people send out. Signals are made from deep analysis of the market, views what is happening on a daily basis and people actually pay about thirty-nine dollars to subscribe that VIP signals.

Anyways, when people find a mentor but won’t attend a class or a course, that is a big mistake. You have to attend some sort of formal educational training when it comes to Forex training before you actually spend real money.

What you need to do is actually use the Forex signals as a guideline on when to trade not necessarily to depend 100% on the Forex trading signals. Because a lot of people receive Forex signals from a mentor, a company or a website, but they don’t actually know why that website or that mentor is trading that currency or trading at that particular time. They don’t really understand what is the reason behind that trading. They just want to use that opportunity to get the signals to sell or buy.

Depend Too Much on Forex Signals

And then they get surprised why some people in the signals group make money and they are losing money. The reason is simple, you don’t know why you are trading that currency peg. Even though you are subscribed to someone who actually knows what they are doing, you might be going in at the wrong time or you might be going in with the wrong block size.

3. A Lot Size Which Is Too Big or Too Small

Remember, every time you start a trade on the Forex market, you get to chose how much leverage as the amount of additional equity that a broker can lend you in order to place the trade.

So, you can choose a lot size of 1,10,5,20, and those are a lot sizes that beginner traders tend to use, and which are totally wrong. The average lot size that a beginner trader should use is around 0.02,  0.03 or 0.05.

A Lot Size Which Is Too Big or Too SmallIf you are using a lot size somewhere in between 1 to 10 as a beginner, you are going to lose your money. Most beginners don’t start off with a $10,000 account, or $5,000, they start off with $100 to $500 accounts. So if you’re going to use a big lot size, you can expose your account with too much leverage, therefore if you lose the trade, you will lose if not all of your money, a half or 25%. So make sure you are using an adequate not size when you are trading Forex.

4. Lack of Consistency

Remember, Forex trading is like a sport, you’ve all heard about Tiger Woods, he was well known for training over six hours a day on the golf course. In order to become a successful master Forex trader, you need to actually practice every single day. If you are going to trade and make a good trade today and you are going to skip tomorrow and then maybe trade on the fifth day, you will actually end up losing money without not knowing why.

Lack of Consistency

Why? Because you have to consistently stick to a strategy, and a strategy is a system or a formula that you devise in order for you to accomplish your trading goals. So if you want to reach a target of a $10,000 within a six months period and you start with the 500$ account, you need to actually make an average of the maybe four to ten percents every single day.

Trading in profits in order to reach their target. So if you are not going to trade and you want to become successful overnight then that obviously is going to make you a greedy trader and greedy traders always lose money.

5. Giving Up

If you are going to practice trading Forex, you need to understand that you must never give up. The reason why people lose money in Forex and end up calling Forex market a scam is because they are not consistently trading every single day. And when they lose money, let’s say for instance you fund your account with a thousand dollars and you blow your account.

If you want to be a professional Forex trader, you need to consistently fund your account. You can get your money from the other jobs, you can make money from your salary, you can go wash cars and windows, whatever can make you side money.

Giving up in FT

But the fact is chances are very high that you are going to blow your account or make significant losses on your trading account, maybe even so much that you actually lose all of your money and then you will need to go back and start from the scratch and fund your account.

You need to have a resistant strong personality if you want to trade Forex, otherwise, you will never make money with Forex.

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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. 

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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. 

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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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Strategies

2 Trading Strategies for Trading with Support and Resistance

2 Trading Strategies for Trading with Support and Resistance

There are two strategies for trading with support and resistance, first of all, wait for confirmation or secondly, we can second guess the level is going to work.

1.Waiting for Confirmation

As you can see in the picture, let’s say we’re waiting for confirmation.

Wait for confirmation

We’ve got a chart here. The market’s been falling. Maybe we think the market’s going to turn around and the level we’re watching is old low down marked on the picture. So if we’re looking for confirmation, it’s not enough that the market just heads back to that level. We want to see, again, support coming into a place where we have a market that’s sliding.

Maybe, we wait for it.  If we’re looking at candlesticks and this doesn’t really matter whether we’re looking at a daily chart, an hourly chart, 10-minute chart. We wait for at least one period where the market turns around. So maybe we have a positive candlestick.
We have a sign of buying come in. That’s our first bit of confirmation. And of course, the reverse applies if we’re selling into resistance. We’re looking for a day when the market does at least go down.

This is the price of gold example. We’re looking at a daily chart. So every day, every candle represents a day’s worth of trading. From September 2017, we saw the price of gold in recovery. We did see sell-offs, but the market turned around and moved higher.

Wait for confirmation2

So as you can see in the picture. This is up to the 25th of October. And we might think the same thing is happening again. We’ve had a run-up. We’ve had a sell-off. The markets bounced back. We’re coming back to the old support. What’s going to happen?

We might want to be a buyer, but we’re going to wait for confirmation. So we can see the support is at 1260. So what we’re waiting for is at the very least one day where the market goes up. We want to see it turn around if it goes sailing through the support. There’s no trade confirmation waiting for is one positive day.

So we have our day where the market has pushed lower. But as you can see o the picture, it’s turned around on the day and it’s closed pretty much near the highs of the day. So for some people, that will be enough to confirm this point is valid. So it would be a buyer around about what, 12.73, 12.74, obvious place the stop-loss down below 12.60. And we’re in the trade.

Wait for confirmation3

As you can see in the picture, there is our turnaround. It took a week of sitting on that support. But so far, at least, the market has moved about 13 dollars higher. So that is a good example of waiting to come on confirmation ahead of previous support would have set us up with a good trade.

Wait for confirmation4

Now we’re looking at a very different time frame. We’re looking now a confirmation of a sale near resistance. As you can see on the picture, we’re looking at dollar-yen. It’s a 10-minute candlestick. Every candle represents 10 minutes worth of trading. This is the early hours of the 7th of November. The market rallies up from 113.70 rallies up 60, 70 points up to 1144.33. We see the market drop out of the trend line.

Wait for confirmation5

This has made us think if this is an opportunity to sell if we go back to hair and fail? Is this our opportunity to sell short? But again, we are looking for confirmations and maybe we want to see at least one 10 minute candlestick where the market runs out of steam. If it blasts through the level, there’s no short.

Wait for confirmation6 The resistance level is if we walk forward 10 minutes, 9:20 in the morning, UK time, traded as high as 114.33. We’ve seen this candlestick here trade up to 114.29, so within four points of the high and it’s turned around.

Our trade here could be if we’re going to be a seller at 114.18, with a stop somewhere above, let’s say 114.14, 114.15, something like that. But we’re taking that as our confirmation of resistance. Short term resistance, It was only formed about seven hours earlier, but that’s our signal.

Over the course of the next nine hours as you can see on the picture, it does actually end up being the turning point. There was no way of knowing when we put the trade on that the market was going to drop about 50 points. But it was a low-risk logical place to go short because we had a definite reference point. If the trade doesn’t work out, we get out for a small and manageable loss.

Waiting for confirmation7

Arguably, that’s the more disciplined way of doing it. Wait for the market to confirm this is a valid level. But if we want to be more aggressive, we can anticipate that a level is going to hold. So again, let’s take a quick look at how it should work in the theoretical world.

2. Guess the Level Is Going to Work

When it comes to anticipating support or resistance holding. It’s a much more aggressive trade. We’re hoping that we get in it may be a better price or rather than waiting for the market to turn round. We’re buying or selling when the levels approach. So, for example, going back to this chart here, we just are a buyer as you can see on the picture with our stop loss below. So we are in effect, we’re second-guessing the market is going to turn around. But accepting that risk, of course, it could just sail straight through. So we’re giving up the extra confirmation, but we’re hoping to get in as near as possible to that big level.

guess the levels going to work1

Now, clearly, there are going to be more examples of anticipating because it’s going to work. I think a lot less off often than are looking for confirmation.

So here’s our more aggressive strategy. This is euro dollar 0 spread four-hour candlestick as you can see on the picture. Every candle represents four hours worth of trading. This is the middle of October. So the market Eurodollar is traded as high as 118.80 and is sold off pretty hard, sold off down to 117.30. So we’ve seen one hundred and fifty point decline. The market is bouncing back, but we think that that level is going to hold. We think that the old resistance It’s going to be a barrier.

guess the levels going to work2

The level is 118.80. Let’s say our stop-loss is 118.95. You can see during this four hour period, the market traded as high as  118.57-118.60. So we may decide to be a seller at one 118.40 where this market has traded, so we were waiting for it to just push a little bit higher than we’re going to sell because we’re gonna assume that all resistance is gonna hold. It is a more aggressive strategy because we’re second-guessing the resistance.

Let’s see what happened over the next four hours. As you can see in the picture, the market has pushed higher. Let’s say we got filled at 118.40 but is carried on higher still. So at the moment, the trade is underwater. We’re down 15, 20 points, but we’re still guessing that that old resistance is going to hold. It was a big level and we did see it tested on the way on the way down. But that’s what we’re assuming here.

guess the levels going to work3

We then go over the next four hours, fairly indecisive candle. If we were waiting for confirmation, this could well be the confirmation for some. But we’re taking a more aggressive stance here. We’re already in the trade.

Let’s see what happened next. As it turned out, the market did turn down. If we if we’d have waited for a more negative candle for confirmation, we wouldn’t have been getting in until the point that you can see on the picture. So anticipating it higher risk, but arguably gives us a better feel. But the risk is the market would have just gone sailing through that. old level.

guess the levels going to work4

Let’s look at another example. As you can see in the picture, now we’ve got a much more short-term example. It’s a 10-minute chart of the German 30. Like many stock markets, it has had a very strong year being dragged higher by U.S. stock markets. What we’re looking at here, each catalyst represents 10 minutes worth of trading is the 7th of November. We’ve seen the market hold at 13340, and you can see it has quite a few goes that are marked on the picture.

guess the levels going to work5

So we see the market pushing down. Again, our aggressive strategy will be to be a buyer. Now, assuming this level is going to hold. What happens next?

And the DAX, the German 30 index, just sailed through the level like a knife through butter. So if we had been waiting for a confirmation there, we’d never have done the trades. But we run the risk of the market turning around shortly. But this shows why it’s even more important if you’re taking an aggressive approach and anticipating levels hold that you have stop losses in place because here’s a clear example where the market didn’t care about previous support and went sailing through.

guess the levels going to work6

You can see one of the drawbacks there of trying to anticipate is that you end up just jumping out in something that is a runaway train. The upside is you’ll get better entries. The downside is, as we saw with that DAX example, bang, it just goes sailing through the level. I think it maybe if you’re new to trading and then maybe the logical the safer way to do it, first of all, is to wait for the confirmation. It builds up the discipline, it builds up the patience. And I think these are both incredibly important factors when it comes to trading.

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