Archive for June, 2015

Intermediate goals in trading

Thursday, June 25th, 2015


Of course, you have read many times that the necessary condition to success in trading is setting goals. But is it all so simple? At first glance – yes, everything is planned. And then it goes according to plan or not. But the main question now is – what are your goals. Our goals can motivate us. Lead us to success. But they can also lead to deep depression if our goals are unattainable. After all, the problem may be in how we act, but what goals we have set ourselves.

Setting goals

Our goals have to lead us to success in life in general and also in trading. Our goals should motivate us and delight that we are on the right way. But unfortunately it does not happen always.

What goals really lead us to success? Large? Small? Long-term or short-term? But if the result will not be seen for at least 5 years? Will we have enough motivation to continue?

Three types of goals

It is not so easy to set a goal that will really move you forward. It is really not so easy as for axample to say: “Every month I make $ 50 000.”  Our psyche here again plays an important role. And more important thing how we use our psyche.

For example, how will you feel yourself if you set a goal to make $ 50 000 every month, but at heart, you doubt that you are actually able to do it. And what happen, if you will not be able to go on that income in a few months? What will be with your motivation and self-esteem?

Goals aimed at the result

We set ourselves goals like as to earn such a sum per certain time. Simply because we believe it is necessary. We want to be successful, productive and feel confident. We believe that these goals lead us to something much larger. For example in 5 years have a million dollars in the account. This may really seem motivating, but a lot of circumstances that would have to lead us to achieve this goal are not under our control.

Examples of such purposes may be like these:
-Every Day, I make $ 500.
-Every Day I make 20 successful trades.

But what if our trading system is based on the presence of a strong trend, and the market is for several days in the flat. What if the market does not just give opportunities to earn $ 500 every day? How would you feel if the plan is not executed? Whether it will add motivation? And if a few days in a row there will not be possibility to act on your plan? Increasing disappointment by the fact that every day you do not only approach the goal, but instead move away from it.

Goals aimed at the result can lead to excessive transactions. In an effort to reach a certain profit every day, trader often begins to break rules and enters the market with a completely inappropriate motivation.

Intermediate goals

Fortunately, there is something that can bring us much more satisfaction from trading – the intermediate goals. These goals are completely under our control, because their achievement depends only on us. These goals can be our guiding map that will ultimately lead us to the desired million. Zdest But there is one important nuance – the goals aimed at the result can demotivate, and if we feel that we cannot reach them. This can easily happen, because the factors that determine the achievement of goals are beyond our control and we can not influence on them. In addition, if we are aiming beforehand to a certain result, than we live and work with the feeling that we have not achieved our goal, that we are still far from it. Million on the account is yet and it can cause a feeling of uncertainty, guilt, self-doubt, depression and frustration.

Intermediate goals are different from the final goals that are not directed at the result, but to perform certain actions.

Examples of such goals are:

– This week, I’ll find on the internet a recording of the webinar dedicated to forex. I will listen it and write down check points to my diary.

– Every time before work, I look through the economic calendar for this day. I will not open positions half an hour before the event with a high severity level and for half an hour after it.

All the month I will trade only if there are all the conditions of my trading system.

– This week I will strictly adhere to my trading system. Especially for closing positions. The deal will be closed only when a there is condition “A”, despite of the misgivings, mood and so on.

– During this year, I find a professional trader and reach agreement with him about regular consultations.

These goals are not complicated and are easily accessible. And most importantly – these goals lead to success. They bring you closer to your final goals.

So why should we not put final goals aimed at a specific result?
Targeting only on result hides a serious threat. This creates a subconscious pressure, nervousness, anxiety and frustration.
Such goals are really dangerous.

Lifestyle and trading – two views, of value ​​and growth

Wednesday, June 17th, 2015

Already in the 17th century, when the first public company appears in Holland, investors were wondering whether to buy or not to buy. And most importantly, why.
Over time, there are many approaches to trading. Two main are a method of cost (value) and growth.

It is hard to discern investors that are guided by different views, since they both follow developments in the economy, various economic data and different financial indicators (profitability, dividends, etc.). How they are different, so that’s how they perceive this information. Price approach says: “This company (currency) has good results in recent years and is sold at a good price, so I buy it. ”

The principle of price approach is to determine of the “true” value of the assets and compare that price with the market price. In addition, you can analyze the performance as price/volume of sales, the dividend yield in recent years, etc. The price trader compares the various assets and defines them as “overrated” or “undervalued” and accordingly adjusts his investment portfolio.
Growth trader looks to the future, tracks the trends in the economy in order to benefit from them. He iss not interested in financial instruments that probably already passed the period of its greatest growth. Under the same terms like price trader, he is looking for the opposite values. For a few dollars, he tries to buy an asset, which in the future will be successful in the market. New products and services of companies that are managed by competent management, with an emphasis on research and investments will probably be the most profitable. Although the dot-com bubble in 2000, is not the best example. Total euphoria caused by the IT boom in Millennium has established in the minds of many investors fantastic expectations about the future profits of “growth” companies.
After an impressive growth of their shares was a sharp fall.

So, which style to choose? The only right answer is not to try to go two ways at the same time. The basis for a successful investment portfolio is its maintenance and management, in accordance with a certain style – on certain rules, of value or growth. Throwing from one approach to another, will lead to the inevitable crash.

Therefore, it is advisable to stick to a certain style of life. Of course this applies to trading too – the creation of a particular style of trading and following it is a prerequisite for success.

Why you do not follow your trading system

Thursday, June 11th, 2015


Why you do not follow your trading system?

We often hear how important to adhere the trading system to turn profit.
To create trading system is only half the battle, but to act strictly adhering to the chosen system – a task more difficult.

Today we try to understand why most traders do not follow the plan they had chosen.
One of the most common reasons why traders are not able to stick their trading system are unexpected events. Yes, there are times when market moves exactly as described in the tutorial, and you can use the situation to 100% and get maximum profit. But more often market does not move exactly as you expected.
When something unexpected happens, this drives some traders to panic and move them out of balance. They lose their composure and begin to act impulsively. And usually they make something that does not correspond to the plan.

To avoid such impulsive behavior, it is necessary to take into account all potentially possible scenarios, even before you enter the market. You must have a plan how to act in any situation (off the Internet, unexpected news of that may significantly change the market movement). So nothing unexpected can happen, and you will know how to react in this situation. There will be no panic.

Another case when trader can step back from the chosen plan – a series of successful deals. In such situation a trader can relax too much, begin to consider himself a king of the market and simply lose the ability to distinguish the signals. After a series of successful deals, you can begin to feel yourself too self-confident and open positions that do not correspond to your initial trading system. Also negative effect can have a series of losing deals.
Under the impact of losses the mental mechanisms begin affect on the trader to protect him from the psychic pain. And here can appear situation when a trader begins misunderstood signals.
And as a consequence, not only to join in the obviously unprofitable deal, but do not notice the clearly profitable one.
To deal with all these situations and associated emotions, you should to keep a psychological diary. Its meaning is that you get used to pay attention to your mental state and use it in the analysis of your trading. Of course it’s better to do this every day after your trading. The basic idea is that it will remind you that your plan is based on clear rules. And you will always see the which risks brings your deviation from the plan.

Another problem is the lack of confidence in the trading system. The significance of this problem is that trader starts to think that following a system is not mandatory. And sometimes he thinks that it’s not always going to work if he follow the plan. This causes the trader start to select positions under the influence of emotions and use only a part of the system. Trader begins to discard signals which he does not “feel”. And now, following a plan becomes completely
In the long term this means a loss of all sense of the trading system. And without a system you get, at best minimal profit. At worst, it brings you huge lost.

One of the way to avoid this is to keep trading diary and analysis of statistics. It is hard to argue with statistics that monitors all accurately. And when it will be clear that the trading system actually works and brings positive results, there will be the motivation to continue follow the trading system.
For the same reason it is useful to test your system on the history of deals. Through such analysis, we can quite quickly verify our trading strategy over a long period. This adds our system more credibility.

The next problem is discrepancy between the trading plan and the type of personality.
Sometimes it may happen that you will feel the need to enter the market, simply because the trading system requires it. Or you can commit less deals, because your lifestyle does not allow you more. This can lead you to inconsistency and confusion in the work, because you will stick to the rules only occasionally.
This will ruin the results as a whole. And you again wonder whether your system is suitable for you. In other words, whether your system is suitable to your plan?
Maybe you use a moving average, and you ought to trade with the trend. Or you focus on intraday trading, but your calling is long-term trading. You need to understand the feature and adjust your plan to it. As soon you introduce your trading system according to your nature, you will do the next step on the path to successful trading.

In conclusion we should say that for following a plan for a long time, you need much more than just discipline. You must to be sure that the plan is right for you, fits your character, takes into account all possible scenarios and confirmed by statistics.

10 Rules of Success

Monday, June 1st, 2015


10 Rules of Success

Forex let you make good money. You can travel around the world, work from any part of the world, but it requires knowledge, patience, initial capital. And most importantly, you must love this business.

Rule number 1: Accept the truth

Trading is often a coincidence. Imagine that we flip a coin 100 times. It is likely that one side drop out more than the other.
In trading we have roughly the same situation. There is enough statistical probability that your trading method will win more times than lost, and profits will be guaranteed higher than losses.

2: Plan your trading and then proceed according to plan

Your main target on the way to successful trading is strict adherence to your business plan. There are hundreds of trading systems, but without a clear plan, they do not cost anything.
3: Who does not spend too much – cannot lose too much

One of the biggest mistakes that beginner can make is to invest in a single deal too much money or get started with high risky instruments. Most people starting trading act lightly and often risk excessively. Of course the more money you use the great opportunities you have. And it depends on experience whether it will be profits or losses.

4: Do not think about money

Everybody needs money, and none likes to lose them. I do not think that you will like to see the money disappears from your account much faster than coming.
The main difficulty is to understand that the loss – it’s just a part of the process. Losses will be. In order to win, you must lose something.
If you cannot change your attitude towards money, then at least try not to think about it too much. Instead of money, focus on the numbers and general result.

Rule 5: Avoid emotions

Is it possible that subconsciously you want to lose money? Pre-programmed to self-destruction can occur at any time, especially among traders involved in intraday trading. If the price is constantly flashed before your eyes, you can lose control. You can start to feel that the price is playing with you, teasing you. So you must be very careful to avoid emotional trading.

Rule 6: Be your own boss

You are the only person who is responsible for your trading. For your success or failure you will be responsible only to yourself. No market no trading system not the government. Only you. Monitor your behavior during trading. Very carefuly track of your feelings. This will give you very useful information about your activities.

Rule 7: Think positively

Try to think and talk positively, otherwise you give your subconscious command to act in the opposite way. If you think negative, then the results will be relevant. Therefore be more positive.

Rule 8: Less often means better

The best time to trade is usually within the first two hours after market opening. Some traders also like to work in the last half an hour before closing.
Many short-term traders have the rule “three deals and finish.” If your trading limited to three deals per day, the stress level is reduced to a minimum.

Rule 9: Enjoy your life

Do you know, what do you trade for? Think about what motivates you. Successful traders live a balanced life. There is no point in spending a whole day on the trading.
Go out, meet with friends, meet new people. Forget about trading for a moment.

Rule 10: Keep a trading diary

Write down your thoughts. If you hesitate or fear with a deal write it down. When you finish trading write why.
Look at the depth of your soul. Maybe you will be surprised what you see there.





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