Dealing with Forex Trading Blues

Can’t seem to pick a winner? Tired of the ever changing market? The trading blues are quick to cut in and ruin your trading system.

Depending on your trading style, you may be more or less likely to experience these trading blues. If you are a day trader or scalper, then you’ll probably agree that your profession is indeed a nerve wrecking one and requires a certain kind of mindset that’s different from everyday life.

Regardless of the style you’re using, here are five ways you can improve your trading environment, allowing you to minimize, if not eliminate your trading blues.

1.  Have a Trading Buddy or Join in Trading Seminars

Having someone who understands all the roller coaster emotions associated with trading can help decrease the tension. There are a number of Forex trading Canada forums around the Internet where you can find like-minded traders. Ideally, you’ll want to choose someone who trades with the same style as yours. 

Alternatively, you may want to participate in Forex trading seminars in your local area. Listen to what others have to say about the markets, find out which one will work for you and apply what you’ve learned into a trading plan. Trading seminars give various insights within the Forex markets and can help you get a fresh start in your trading venture.

2.  Pursue Skill-building Activities

One of the reasons for your trading blues could be the fact that you’ve gone far beyond the fundamentals. Taking a look back to the basics of Forex trading and practicing skills such as analyzing candlesticks and drawing trendlines can help you feel comfortable again with your own trading style. This is a good idea if you have a lingering insecurity in your ability to trade especially after a series of losses.

3.  Have a Complete Trading System

This plan should take into account the worst of times. Be prepared for anything, including the steps for trading in bear markets and what to do in worst case scenarios. Your plan should also include when to redeposit your account after some losses. You may be tempted to do that right after a huge loss so you can get back at the markets, but resist the urge. Revenge trading is a foolish and miserable way to earn money. The urge for revenge doesn’t make sense because the market doesn’t care a thing about you. Remember that the market is not your enemy, it’s a system. Your enemy is the one within you.

Developing a Trading Plan for Forex Beginners

Trading in the Forex market involves a steep learning curve and one of the things you need to learn is how to create a trading plan. This is an essential part of currency trading yet it’s surprising that many traders fail to create one before leaping into the markets. This is the reason why over 90% lose money in the end.

A Forex trading plan is a systematic approach to currency trading which takes into account all aspects of trading. This is usually conducted through simultaneous application of different systems including the Forex trading system, emotion management and money management.

Why You Need a Trading Plan

Considering how volatile and risky the Forex market is, any trader should have a complete trading plan in place. The worst time to make a decision is in the middle of the trade and if you are new to trading currencies, it’s crucial to understand that emotions can sabotage your trades. A trading plan makes it possible for you to decide on your trades rationally without the emotions you get while in the middle of a trade.

Developing a Trading Plan

Now, developing a trading plan adds another aspect to the logistics. As mentioned, a complete trading plan includes a Forex trading system, emotion management and money management. Each of these aspects will have its own checklists and rules pertaining to the object of their operation.

Moreover, your trading style can determine what kind of trading plan is best for you. To find your trading style, you’ll need to figure out some things about yourself and how you prefer to trade. There are basically three types of traders, namely short term, medium term or long term. 

Short Term is basically a high-frequency day trading. The positions of a short term trader are usually held anywhere from a few seconds to an hour.  In short term trading, traders make profits by opening and closing positions after gaining just a small amounts of pips, sometimes even just 1 or 2 pips.

Medium Term, also known as swing trading or directional trading involves examining the present technical trends and using it to the trader’s advantage. Swing traders put importance on how the market will move more than which currencies are going to rise. Like short term trading, medium term trades can also be held within a few minutes but can also last for a few hours, sometimes a day.

Long Term trading on the other hand holds positions for weeks and months. Traders profit on long term movements in a trade and are on the lookout for major price trends before taking a big leap.

There are other vital factors you need to consider including your position size, entry point and exit point among many others. Adjust these to your needs and above all, stick to your trading plan.  Focus on this when you trade currencies and you’ll soon maximize your success.

Forex Trading – A Complete and Proven Trading Plan is the Key

The number one appeal of currency trading in Canada and all over the world is that it offers instant wealth creation. However, an offer is nothing more than an offer and the opportunity will positively pay off only for those who navigate in the Forex market equipped with the right Forex trading strategies. Of course, these strategies should be complete and unique if possible.

Regardless of the trading style you intend to use, whether day trading, directional trading or position trading, a well thought-of strategy will reduce your risk. But this will happen only if you have the discipline to stick with them. It is said that about 95% of traders fail because of the lack of discipline. Realize that traders who are undisciplined can render the savviest trading plan useless but a disciplined, flexible trader can see opportunities to take profits from even the direst of market movements.

How Do Successful Forex Traders Trade?

Successful Forex brokers share some traits in common, regardless of their trading style. For one, they take into account all factors when developing a trading plan. They define their entry and exit strategy as well as determine the risk-reward scenario on any potential trade before entering it. 

Their trading plans also include an activity or some compulsory thing that they have to do after exiting a trade, whether it’s a winner or loser. This time is one of the most, if not the most emotionally sensitive period for traders. This is when the feelings of anger, fear, greed, revenge or other emotions set in and can cause a trader to jump back into the market and make irrational trading decisions. Successful Forex brokers refuse to allow emotions to dictate their moves and based everything on their plan.

With that being said, it’s important that you have enough confidence in your trading plan that you can stick to it firmly. Many experienced traders will extensively back test and then paper trade their strategies before implanting them on a live account. By doing this, they gain a proven sense of whether their plan has some major flaws that need to be dealt with before using it in a live environment.  

The Bottom Line

Overall, remember that successful trading doesn’t come initially. While there’s no guarantee that you will make money from Forex trading, having a thorough trading plan is crucial if you want to become successful and survive the trading game in the long run.

Forex Trading Tips for Beginners

So you’re interested in Forex trading? Perhaps you’re drawn to the potentials of Forex trading as a lucrative venture. And while that can be true, it’s also important that you’re fully aware of the risks involved.

There is no magic bullet or foolproof, surefire way to succeeding in the Forex market. There are lots of Forex trading robots, books, videos, courses and software out in the market today and while these can help traders to some extent, these do not guarantee success. The only way to profit from this volatile market is through knowledge and experience that develops over time. Finding strategies that work for you and adapting as you make mistakes are qualities that separate the winners from losers.

Before leaping into currency trading, here are some tips for you which when followed, will increase your chances of success.

1. Don’t allow your emotions to dictate your trades. Emotions play a great part in Forex trading and these demands for a certain behavior that is different from everyday life. Your level of discipline can either make or break your trades and without it, even the savviest trading system will become useless. Having a trading plan that includes an emotion management strategy is the best antidote to letting your emotions get involved.

2. Make sure that you use a take profit order and stop loss order in your account. Think of this as a personal insurance while you trade, regardless of your trading style. Without these limit orders, any unexpected major shift in the prices can lose you a lot of money or even wipe out your entire account.

3. Do not rely on Forex robots. While these can sometimes help, these are no guarantee to long term profits. Forex robots should be used as a research tool and not the basis for conducting your trades. Use your knowledge and experience as well as that of other experienced Forex traders. While this seems a harder work, your effort will surely pay off.

4. Pay close attention to the financial news. This is crucial as the money markets go up and down based on ideas which are usually triggered by the media.

5. Before you actually trade Forex online, make sure that you choose a legitimate Forex broker. It is highly advisable that you choose a broker that is regulated with a regional regulator.  When a Forex broker is regulated, it means that all their trading operations are performed in adherence to the policy, standards and guidelines set by the local regulatory body. This removes the unnecessary headaches and heartbreaks in your part when online trading in Canada.