Monday, June 11, 2018

Why do Traders Leave the Forex Currency Market?

Sooner or later, before each trader, the question arises: is it worth it? It is about the comparability of time and effort spent on material goods. Of course, a beginner has this question to himself more often. You have to be a fairly stubborn person to continue trading Forex, despite a series of financial losses and disappointments.


THE PROCESS OF BECOMING A TRADER GOES THROUGH SEVERAL STAGES:



  • The initial stage, when a beginner tries to embrace the immensity. This stage is characterized by a large number of merged demos and real deposits.

  • The stage of growth, when a trader begins to plan his trade, simplifies and improves his trading strategy.

  • Stage of professional maturity. At this stage, the trader is distinguished by patience in achieving the set goal and sufficient discipline in observing his own trading system. A distinctive feature of this stage is the development of trader's intuition, of course, it is associated with the accumulated experience of the behavior of currency pairs.


Traders Leave the Forex Currency Market



HOW FAST DOES A NEWBIE LEAVE FOREX?


Most often the beginner does not reach the second and third stages and throws trade. And this is understandable because the initial formation requires a new trader substantial moral, physical, mental and financial costs. Sometimes a person returns to Forex, realizing that he did not go all the way to becoming a trader. Significant interruptions in trade help the trader to accept the market not as a game, but as a tool for making money.

Sometimes traders leave forex in the second and third stages. The reason for this can be a good job or a stable, high-paying job. Sometimes a trader is bored with being in constant emotional tension, and he becomes an investor or finds a quieter work related to forex trading, for example, a consultant or analyst at some broker.

Passage of all stages of becoming a trader does not give the 100th guarantee that you will become a successful trader. Unfortunately, the most emotionally persistent and well-adapted individuals survive. Statistics show that only 5% of traders consistently make money in the market, but this is no reason to despair. This is an incentive to enter this top five. I wish everyone good luck!

12 Tips for Forex Novice from a Beginner

There are a lot of councils for trading in the foreign exchange market, but they are all of a general nature, so the newcomers break them. But in everything you need to know the measure. During the trading year, I had some opinion regarding trading, and I want to share my little experience by giving some advice for a beginner.




  • Everyone is advised to run a trading strategy and start trading on a demo account. I think in the demo it's worth learning how to only press buttons, and everything else you need to learn on real. Of course, this should be cent accounts. Yes, trading on Forex requires investments. But let it be 10-20 dollars, which will not bring you significant financial inconveniences in case of loss. Again, many brokers provide free reals for trading with the ability to withdraw profits. Such accounts can be up to $ 500. For a beginner this is a smart opportunity, you can even not trade your own blood.

  • Based on my own experience, I can say that beginners can often make a mistake with the entry point, the size of the take / stop. Of course, in time everyone will learn to more clearly define these moments. But for starters, I advise you to close the deal with a profit of 20-30 points with your hands.


[caption id="attachment_848" align="aligncenter" width="300"]Forex Novice Forex Novice[/caption]

  • If your deal was in a drawdown for a long time, and you finally went to zero or profit, close it immediately, do not wait for profit. Most likely, there will be no profit and there will be no mistake since the mistake with the entrance was originally made.

  • Before the release of important news and speeches, I advise you to close the profit deal or at least to transfer it to a breakeven.

  • Study the main points of technical analysis - patterns and levels. Trace their work on history. Most likely you will find many patterns. For trading choose the most technical currency pairs, cross-rates are best not to trade.

  • Do not look for the Grail, better create your own. The simpler, the better!

  • Read the analyst, but do not trust her 100%. Listen to the inner voice and make a deal only if you are 100% sure of it.

  • A separate topic is stop orders. It is best for a beginner to trade within a day, as long stops are needed to trade in long lines, and their newcomers can not pull.

  • Beginners very often inflate the lot, opening several deals in one direction and inflating the volume. I advise you to close them quickly when you reach the total profit for all transactions, since the reverse is fraught with the discharge of the deposit. Of course, it is better not to practice such trade in principle.

  • I advise you not to wait for profits in the first year of trade, most likely it will not. Do not despair! Far not everyone earns on Forex, especially in the first years of training.

  • Do not place high hopes on the fast and big income from trading Forex.

  • Do not become conceited and do not become dependent on the market. You can not change anything.

5 fundamental rules to operate based on technical analysis

1. Have a system and an iron discipline. If you abandon it and go to the trailer of market psychology, it is very likely that you will fail. For a day, we can change our minds often and what seems like a good purchase can become a disaster in a matter of hours If you have no references to operate and you rely on hope, you are lost.


2. If you have set a stop level, stick to it. It is better to be faithful to a work dynamic and to assume a small loss than to lose capital or discipline. If you do not get profits, analyze why. The fundamental virtue is always to be fresh and ready to take an advantageous position. Avoid supporting positions against yourself or having a position without technical references.


3. Try to avoid euphoria or discouragement. This is not an easy task, as often objective prices explode and quotations rise sharply. Other times pessimism dominates the atmosphere; it is in this type of situation that you will be able to do your best work. The psychological climate is normally a trap, and it is important to know how to avoid it.

4. Set objective prices It is better to undo an advantageous position at a reasonable price than to abandon it to one's fate. Unless the position is taken in a primary market floor it is best to be disciplined with the price targets.

5. Tend to buy on media and sell in resistors. Often, these levels are clear and many people can see them. A bullish trend usually returns to the support zone, this zone often gives the buy signal although it seems that the market is deteriorating. And a drop after a new maximum is a buy signal, a rebound after a new minimum is an exit signal.

Sunday, June 10, 2018

How not to get to Forex Scammers?

Passive income is income that does not depend on daily activities. Surely, there is no such person who would not like to periodically receive any interest on deposits, rents or dividends.


Today we will touch on the topic of passive income, but will not offer 10 of the most common ways to generate passive income. What will we talk dividends? Are they intrigued?



HAVE NOT YOU PREPARED BAGS FOR MONEY YET? THEN WE GO TO YOU!


Phone call. It's an unfamiliar number. A pleasant female voice.


- Hello. Are you interested in passive income?


And further, in the same pleasant voice, the girl makes me a tempting offer - the opportunity to receive a passive income of 30% per month . And the temptation of the proposal is that I do not really need to do anything. It's just necessary to bring money to ABV Capital, and then they will be engaged by the company's employees - professional analysts and traders with a three-hundred-year experience of work in various financial markets. I will only have to get a monthly profit.


"So it's wonderful!" - you will say. And I agree with this, but I remind readers of my favorite saying: "The devil is in the details." It is details to me (and now, I hope, to you) are very interesting.




[caption id="attachment_830" align="aligncenter" width="315"]Forex Scammers Forex Scammers[/caption]

I'm picking up the company's name in Google and I see that the company is an investment bank that is part of the ABC group of companies. But we are not bastard, so to speak, shit. My question is " Which organization regulates the activities of your company? "Puzzles the girl. After searching for an answer that took her some time, she invites the senior manager to answer the phone for all my questions.


The senior manager answers with a confident voice that they are regulated by the Russian Federation. Curious…


In exactly the same confident voice, I tell the senior manager that I did not give any consent to the advertising calls, and therefore, on what grounds do I get a call? I get an inarticulate answer that they have publicly available information that I am a trader and all of that kind.


After a few more questions, the enthusiasm of the senior manager faded somewhat. Realizing that for their company, I am a client without prospects, the conversation was over.


And now, dear experts, the question is - who called?



WOLVES IN SHEEP'S CLOTHING


Honestly, this is not the first call of this type. I get them periodically. Surely, many of the traders with them, too, came across. Experienced traders understand who and why they are calling from the very first word.




And for those who do not know yet, you know - these are real fraudsters trying to take your money under the guise of investment or trading.



The scheme of their work is simple: you are offered to deposit money into a trading account in their company, after which you can try to trade on it yourself or entrust the management of your money to "super-traders and analysts", who are afraid of the whole Wall Street. Then events develop as follows:




  • If you try to trade on your own, then sooner or later you merge the account and remain in the position of "the fool himself".

  • If your account is under "reliable" management, then again, sooner or later, you are called from the company and report that "there were force majeure circumstances on the market. Our analysts and traders see this situation for the first time. Unfortunately, there is a loss on your account that exceeds the amount of your funds. " In general, you still need the company.

  • As an alternative, you may be asked to deposit a "small amount" on the account, as the situation is about to grow and the loss will be covered with a profit of 1000%.


And if before the names of such companies did not say anything even to the knowledgeable person, now these scammers skillfully disguise themselves as real big enough and well-known companies.



INSIDE FROM THE "SENIOR MANAGER"


Once on a friendly get-together, I ran into one of the "senior managers" of a similar company. In personal communication for a "glass of tea," he turned out to be a good guy, although what he does is disgusting me.


So, he said, one manager calls about 5 thousand people a month , while at the same time a person 10-15 people agree to such a tempting offer.


The newly-made future millionaire is being prepared for about a month. On his account draw beautiful figures of profit, after which they offer to make more money. Well, why not? Look, you are doing just fine. If you add to your account even at least 10 thousand dollars, you will receive a minimum of 3 thousand dollars a month.


Not life, but a fairy tale, is not it? And at the mention of the sum, they will necessarily say "at least", stressing that 10 thousand dollars for their company is just some kind of pocket trifle in the background of their oh-th profit.


In such companies, there is the concept of "close the client" . That is, your account is purposely merged. Well, why not drain it? Nobody really did not sell anything, and draw at least a report with a profit, although with a loss - it's a simple matter. After such a "plum" the client is offered to replenish the account. If the client still has something in his head, and he refuses or, moreover, begins to make any claims to the company, then such a person is simply ignored. Everything, the client is closed.



WHERE DID THEY GET MY PHONE NUMBER?


Quite a logical question. And now remember, starting your acquaintance with forex trading, how many times and on what trading platforms you left your phone number. Do you remember? Here I am not. And the data is still there.


You can google your name and phone number and check for such websites.


That is, in principle, anyone can buy a base of numbers of such thousands for 200 in just a few hundred dollars.



HOW CORRECTLY TO TALK TO THE "SENIOR MANAGER"?


If you get a call with this or similar offer, first of all. You have to take every word with a great deal of skepticism, if you did not put down the phone at the very beginning of the conversation.


If you understand that you are simply "bred" for money, you can simply, as the youth say, poprikalyvatsya and enjoy, portraying a naive simpleton. If there is no time or desire for this, then forget about all tolerance. Very often such people play on your reliability and courtesy. Ask you not to call again. And yes, in expressions you can not be shy - it will only do good. Otherwise, if you try to bring them out in a polite tone to clean water, as in the case I quoted above, they will talk with you as if they owe you something.


Responding to another such call, remember this article. I hope that it will save many novice traders and investors from ill-considered steps and large financial losses.

Wednesday, June 6, 2018

3 Opinions about Forex Locks

Almost all traders in Forex have heard about locking positions. However, having a clear idea about this technique is several times smaller. And there is nothing surprising in this, since locating positions or exposing locks is such an ambiguous technique that the opinions of even experienced traders regarding it are very different.


In this article, there will be no ready-made rules for installing and unlocking locks. We will summarize the three most common opinions about forex locks, and draw conclusions to our readers.



OPINION IS THE FIRST. LOCKING IS A PSYCHOLOGICAL DEVICE THAT CAN SAVE YOU FROM A LOSS


Locks when trading on Forex are used when opening positions without stop-loss. Instead of fixing the loss, the trader opens a position of equal (perhaps more or less) volume in the opposite direction.


Why is this done?




  • First, some removal of psychological stress, the trader gets the time necessary to make a decision.

  • Secondly, the loss is no longer growing.

  • Thirdly, with a successful combination of circumstances and strict calculation, it is possible to obtain income from the use of the castle.


[caption id="attachment_687" align="alignleft" width="228"]Forex Locks Forex Locks[/caption]

Now about this in more detail. Most often, locks are used by traders who trade using the Martingale method. It looks, approximately, as follows. A series of orders was successively opened. The pullback, which makes it possible to close the transactions at least to zero, was not. The price continues to go against the trader, and he puts the lock on the entire volume of orders. And again the question - why do this? As a rule, this is the only way to save a deposit from a full discharge. In addition, we get additional time, which can be used for deeper analysis of the market, depositing funds for the deposit, etc.


The installation of the lock helps psychologically. This allows the trader to "cool down", to come to himself and gather his thoughts. It is possible that the next day the trader will "see" the market quite differently than at the moment when "everything went wrong". Do not underestimate the importance of this moment. In poker, there is such a slang term - "tilt". They are characterized by the psychological state of the player who, in a fit of desperation, begins to make thoughtless and stupid bets.


Forex traders often fall into the same "tilt", without noticing it. Locking positions will give the trader a delay in deciding whether to close the loss-making position or adding money to the deposit if Margin Call is in the back. This is the main reason for installing locks.




Is it worth it to lock positions and how to do it correctly? It all depends on the situation and the practical experience of the trader. Be sure to understand that 100% working strategy for opening locks on Forex simply does not exist.



The main problem with opening a lock is that the trader, as well as the sapper, has only one attempt. If it is not successful - the deposit will be merged.


If you are going to apply locking positions, then you need to train on demos or cent accounts. For example, build a pyramid of orders against the trend and try to bring it to zero. Over time, you will begin to understand how this works, and gain the necessary experience.



THE SECOND OPINION. IT IS BETTER NOT TO INSTALL ANY LOCKS


To say that locking positions is some kind of uniform technique or trading strategy is meaningless. After all, we're not talking about a technique or strategy using, for example, stop-loss. Someone uses them, but some do not. Similarly, with locks. Someone uses loki, some do not. And those who do this, do it differently, with different goals and, naturally, with different success.


That's why talking about locking positions is necessary in relation to a specific situation. For example, take a wire martingale. Opened a large pyramid of orders against the trend, the price moves confidently against the positions, there is no correction, the drawdown increases with supersonic speed. You can set the lock. That is, to open a position in the opposite direction and volume, not less than the total volume of transactions opened before this, taking a break and going to rest and recover. But is it worth doing this?


To place a lock simply because you do not know how to proceed further - so it is worth to act only if the next step is the closing of all transactions and fixing the loss.




The main and most important rule of locking - the installation of the lock must be a weighted and clearly calculated trade decision.



Like any other trading solution, it must be based on market analysis and forecasting the further situation. If all of you have calculated and predicted correctly, there will be benefit from such a decision. If your calculations were wrong or, moreover, you installed the lock only in order to stop the growth of the loss - such a decision will make the situation only worse.


If you can not soberly assess the situation, clearly analyze the state of the market and make an accurate forecast - it is better not to put any forex locks. Very often it turns out that doing nothing is not the worst decision.



THIRD OPINION. THE BEST LOCK IS A LOCK FOR A LUCRATIVE DEAL


Many forex traders who have many years of trading experience in the foreign exchange market, use loks very rarely. These are consequences of negative experience of their use and deposit sinks.


In order to open the lock, one analysis of the market and a clear forecast for the currency pair is not enough. It is necessary that your forex broker has suitable conditions for this. For example, some companies do not have the ability to partially close a counter position, which greatly complicates the opening of the lock, especially if an even lock is used.


A mistake often occurs when a trader opens a locking order larger than the original positions in order to reduce the loss when the price moves against the initial orders. Such a castle is extremely dangerous. If the direction of the price changes, the situation will immediately deteriorate, and the loss will grow faster.


Also, many traders admit a psychological mistake. As soon as some lock deal shows profit, and there is a possibility that the price will not go any further, most traders do not stand nerves, and they quickly close the lucrative position of the lock.


As market analysis shows, recoilless (or with minor corrections) price movement in one direction more than 500 points are found only 1-2 times a year. To install a lock at this level, the drawdown on the account should be no more than 45%, otherwise there will not be enough free funds to open a counter order. Statistically, the probability of rollback at this level is several times higher. That's why it's better to "sit out" such moments than to install a lock.


Of course, you can install a lock without waiting for a recoilless trend of 500 points. But in this case, you will constantly be in limbo and deal with locks. In most cases, when you are morally ready to install a lock, the price will be on the verge of reversal.




The expediency of using lock positions on Forex is missing, as such. Whatever the situation with the currency pair, the alternative to the lock will always be a stop-loss or the usual "overstatement" of losses with averaging at important levels.



In addition, do not forget about swaps. If the swaps are negative, then such a lock will only increase the loss, and in fact on some currency pairs the swap size is very, very significant. Yes, one of the swaps can be positive, but even in this case the size of the negative swap will be larger, and the loss will still increase.


The only acceptable option for a reasonable trader is the use of the lock - this is his installation is not a loss-making, but a lucrative deal. When the open position gives a good profit, but the correction is close, you can put a lock instead of closing the transaction, thereby fixing the profit. At the moment when the price resumes movement in your direction, the counter order is closed, the profit on the open transaction earlier continues to grow. With such a lock, it is much easier to work psychologically than with a loss-making one.

Real Forex Reviews. How to distinguish truth from marketing?

Choosing a forex broker is not easy. Most novice traders carry money in the DC, which they just liked - either the office is nearby, or the beautiful girl-manager smiled and took it as her own - the reasons, as a rule, subjective, can be very much.


More advanced beginners climb on forex forums and read reviews about brokers. After spending some time, the trader, inspired by positive feedback and taking note negative, bears money to the broker chosen "wisely". Subsequently it turns out that everything is a bit different than it was written in the reviews - money is not being taken out, with the execution of the problem, and instead of the beautiful trader-manager girl, the former paratrooper, the grinning security guard Uncle Vasya, now meets.


Today, let's talk about real and not very reviews about forex brokers and try to learn how to distinguish truthful from custom-made.



"ALL ARE LYING" OR ARE THERE ANY REAL REVIEWS ON FOREX


Why did it happen? After all, 10 people on the forum wrote that everything is fine, the money broker displays quickly, unlike (!) From another company, the conditions are excellent, trade - I do not want. Who are all these people? Why are they all good, but our trader is not?




[caption id="attachment_684" align="alignleft" width="328"]forex reviews forex reviews[/caption]

The Internet network depersonalizes. Behind the avatar with a cute girl, a pot-bellied peasant with a beard can hide, and the owner of an account with a cat on the avatar, can have 10 more students on the same resource, and quite talk with himself.


Starting to delve into the subject of the difference between fake reviews from truthful ones, we were a bit shocked by the numbers. According to the director of Kraftwork company, specializing in the creation and promotion of sites, 70% of all reviews in any industry are written to order.


The account manager of one marketing agency claims that there are paid reviews on any site where there is an opportunity to leave a comment. According to him, ordinary people, as a rule, rarely write reviews.



WHY DO WE NEED FALSE REVIEWS?


It turns out that this phenomenon even has a special term. Specialists call it "unethical SMM" (Social Media Marketing) or "partisan marketing" (Hidden Marketing).


All these customized posts and comments can be conditionally divided into two types:




  • White - designed to attract the reader to the services of a particular company;

  • Black - are designed to form a negative image of a competing company.



Statistics show that in order to have a certain opinion already formed in the subconscious, 85% of readers have only ten comments or responses. All other materials will be perceived subjectively, since the opinion, even if still unconscious, has already taken shape.



HOW TO DISTINGUISH REAL REVIEWS ABOUT FOREX BROKERS FROM CUSTOM BROKERS?


Unfortunately, no one will give you a specific recipe how to distinguish a real tip about forex from a custom one, but it does not exist. However, there are people who, in the nature of their activities, face daily a huge number of comments and posts on the forum. What prevents us from taking advantage of their experience?


The editor-in-chief of fortrader.org Julia Apel, relying on her many years of experience, calls the review 100% customized if:




  • "Advertising services. Something like "Wow, they have such a super bonus and chic service, thank you for having introduced." Who ever writes this? That's right, PR man.

  • from the back of another review: "the company is scam, scammers, do not take anything out." When a person has a problem with a broker, he is not ashamed to write accounts, passwords, names, publish correspondence. He needs money to return, and not to spoil the reputation.

  • discussion from 3-5-7 of the same users who themselves talk to themselves. Questions ask and from time to time the adverts launch "look, how cool". It's funny even. Oh yes, they can still this company have 2-3-5 companies in the branches to sit. It is useful to see where the user still writes on the forum - in options it can be done. If he comes to the forum only at the broker to unsubscribe, it is not difficult to guess why he is here.

  • and of course a set of feedback from users who have 1-5 messages. Sometimes there are such coincidences, when the company asked to write a review for some service (so it was with FBS with a welcome bonus), but rarely. "


 

Very competent approach to the definition of false reviews from the Forex administrator forexsystemsru.com forum with the nickname NSerega:




  • "Often they write allegedly negative reviews, but for some trifle. Then the courageous representative of the company appears and "with one stroke of the pen" solves a non-existent problem. As a result, the satisfied "client" begins to write that he is so unintelligent, and the company is just super and everyone recommends working with it.

  • There were several frames that the same screenshot was posted with an alleged confirmation of the withdrawal of money from the company, and each claimed that this is his screenshot. What they gave out, he was inserted, even without bothering to compare.

  • There is also this type of feedback from the advertisers, they seem to have been on the forum for a long time and they have a lot of messages, but they fill these messages in the topics "about everything and nothing", only to "pump out" their profile and look solid as the old-timer of the forum in the reviews.

  • The idea of the veracity of the recall can be fully formed from the history of the messages of the user who left this review.

  • The most truthful reviews are those in which there are bills, passwords, names, publish correspondence. "


WE DISTINGUISH CUSTOMIZED "TRUTH" FROM THE PRESENT: UNIVERSAL METHODS


We will try to generalize the above recommendations, and also add a couple of our own. Using them, you are almost 100% likely to understand - where the truth, and a lie. So, what you need to pay attention to:



User Profile


So, the first thing we look at is the profile of the user who left the review. Unfortunately, this feature is not available on all resources. Nevertheless, there are always things that should alert you. As already mentioned - this is the number of posts, topics in which the user is communicating, as well as his reputation on this resource.



Date of comment writing


As you already understood, writing customized reviews is not some kind of spontaneous Makhnovshchina, but quite a serious industry. In short, the system looks like this: the company orders the writing of reviews, after which the manager (let's call this person so) the company begins to distribute them on the selected resource.


Very often it happens that the whole "pack" of reviews is poured immediately, in the end, within 15-30 minutes there is a splash, there are dozens of comments and comments. After a temporary calm, this splash repeats itself - in a short period of time, dozens of new "real" reviews are again "pouring in".




It is clear that in reality, this does not happen - it is unlikely that all satisfied or dissatisfied customers decided to express their opinion almost simultaneously.



Style of writing a post


In our subjective opinion, literacy of Internet users, unfortunately, is deteriorating. Nevertheless, in this case it will play into our hands.


For example, the company orders a review about itself from a professional copywriter for a decent amount. The copywriter is honestly working out his fee. As a result, a post or commentary appears on the forex forum or forex website, corresponding to the volume at school, and written at 5+ in terms of literacy.


It is precisely such volumes and such commendable literacy that should arouse suspicion among you. Web users often use slang and abbreviations. Do not pay attention to the correct spelling of words and rarely bother with the proper arrangement of punctuation marks.


For example, a user with a nickname ProfitMaster in his post will write: "I decided to open a trading deposit. After much thought, he chose the company ABC-Market. The managers of the company listened attentively to me, answered all questions, helped me to open a deposit. Yesterday I brought my first profit quickly and without delay. I recommend to all". A user with a nickname Vanya-Terminator writes: "Yesterday I was in the ABC-Market. Like the norms but I do not even like spreading their spreads and with the conclusion of some kind of mute. " For some reason, Vanya believes more than the Lord of profit.



Elements of "black" PR


Let's return to the conditional post from ProfitMaster, described above. There is a "white" advertising, for a kilometer giving away zakazuha. However, in the text there may be elements of "black" PR. For this, in the same post, instead of "After long meditations", "After long torment with the withdrawal of money from the broker of the EYuA-trading ..." and then in the text.


These are the mentions made, as it were, between the cases, with the head issue a custom spelling.



Lack of specifics and useful information


In topics about forex brokers, users write to share their experiences, whether positive or negative. If the specifics ends with the expressions "An excellent broker, I recommend!" Or "Do not fool yourself into this scam! Profit is not deductible! ", Then this is clearly someone's" white "or" black "order. As mentioned above Julia Apel and NSerega, a sign of truthful post - account numbers, screenshots of correspondence with broker representatives, etc.



No shortcomings of the broker


Even in the best company, whatever it is, there are at least small, but disadvantages. And there will always be people who at least have something, but do not like it. Therefore, we understand that there are always drawbacks. How can this be useful to us?


The logic is simple. The company orders the writing of a review about its services. Naturally, the review is ordered in such a way as to gladly and enthusiastically talk about the services of the company without mentioning any shortcomings or "pitfalls". This is done in order to improve the company's rating.


And now think, if you are already reading the tenth consecutive exceptionally positive feedback about the company on one forum - is this a cause for concern? After all, real reviews of traders will necessarily contain descriptions of what they liked and did not like.


We hope that our recommendations will allow you to distinguish on forex forums real feedback about forex brokers from "black" and "white" orders and help make the right choice. Such are the cases, dear reader.

Tuesday, June 5, 2018

8 Forex Market Mistakes you should avoid

What is the Forex currency market? Even a novice trader knows the answer to this question. And who trades in the foreign exchange market? That's right, people. Each person has his weaknesses and shortcomings. And when a lot of people get together in the framework of a project, they become a crowd that has its own stereotypes of behavior.


Today we will talk about the stereotypes of the market crowd and what should be done so as not to mingle with it.


A LONG-VIRGIN FABLE ABOUT A SERIOUS TRADER IVAN IVANYCH


Ivan Ivanych is a serious trader. He every day opens a trading terminal, trying to earn on Forex trading in currency pairs. Ivan Ivanych is not some green newcomer. He read many books on trading, registered at many forex forums. He even independently created a trading strategy.



Let's look at Ivan Ivanych and see how his trading day is going.


First of all, he starts a terminal where a lot of currency pairs' charts are open. Ivan Ivanych quickly looks through them in search of clear trade signals.


The search goes idle - there are no signals to enter the market. But the trader does not give up - the deal must be opened in any case! After all, how can you earn on Forex without trading? Said - done, the search for trading signals "starts" repeatedly, but already "more carefully."


Finally, a trade signal (in fact, existing only in the imagination of Ivan Ivanych) is found, the deal is open. As we have already said, our trader is not a beginner, so he writes down his actions in the trade diary: "I opened a deal to buy a pair of euro / dollar after the trading signal - a sharp drop in the price down and its stop at the moving for a subsequent turn."


This is the seriousness of Ivan Ivanych does not end. He opened a deal to make a profit, so to make a profit, God forbid, did not go anywhere, you need to set a take-profit. In order not to puzzle, the take-profit is set at 30 points from the current price.


And what about the stop-loss? Ivan Ivanovich - the trader is not only serious, but still reasonable and cunning. Why put a stop? I constantly monitor the transaction and, if that, I will close it with my hands.


The deal is open, the price is in place and, apparently, is not going anywhere. Why waste time? As a serious trader, Ivan Ivanych knows perfectly well that trading Forex creates a psychological burden on the trader. Why not relax while the market "sleeps"? Ivan Ivanych opens the World of Tanks, driving a couple of skating rinks on his beloved bachata to relieve this inhuman strain on the psyche.




[caption id="attachment_665" align="aligncenter" width="604"]Forex Market Mistakes Forex Market Mistakes[/caption]

In an hour our trader remembers an open deal. Looks at the chart - instead of growth, the price fell by 50 points, the deal gives the deposit a floating loss of $ 50.


A connoisseur of forex literature Ivan Ivanovich is perplexed. What is going on? When was it that it was?


Express analysis of the euro / dollar pair chart leads our trader to the conclusion that there is nowhere else to drop the price, because this time on its way there is already a long-term moving average. Ivan Ivanych opens another deal to buy in the same volume, averaging against the momentum.


Minutes 40 passes in close supervision over all evolution of quotations of a currency pair. The price has slightly receded from long-term moving, instead of a floating loss even a small floating profit was formed.


Ivan Ivanych condescendingly smiles: now you can not deceive, the calculation turned out to be correct. If the price does not fall any more, then to clear the conscience, you can set the stop-loss. But what about without insurance, the trader is serious! Ivan Ivanych with unstrained hand puts a stop-loss in the area of the weekly minimum.


Exactly after five minutes the price breaks the moving, falls further, and our trader's transaction closes on the stop-loss. Ivan Ivanovich in shock - as it is, this can not be, in fact a moving, because a long-term ...


Such here came a fable about a serious trader Ivan Ivanych? Did you recognize yourself? But, as you know, in every decent fable there must be a moral. Here we will dwell on it in more detail.



THE MORAL OF THIS FABLE IS AS FOLLOWS ...


I think many learned in Ivan Ivanych himself. Why then is there a sin to conceal, the author of this article was himself the same. For most of the truly experienced traders - this is already a passed stage. But what conclusions can we draw from this?


Such "Ivan Ivanychs" on Forex are whole crowds. And, accordingly, these crowds can identify stereotypes of their behavior, knowledge of which will allow you to make a profit where others lose money.


And since the conversation was about money, then jokes aside. It's time to consider the most basic stereotypes of crowd behavior that directly affect the market. So, let's begin.



Mistake No. 1: MORE DEALS OPEN AGAINST THE CURRENT TREND


In simple terms, these are the deals open against the trend, in order to catch the price reversal at its very beginning.


There are many methods for determining the direction of the trend and its reversal, but the facts are a stubborn thing. They show that a prolonged price movement in one direction leads to an increase in the number of people willing to open a deal against its movement. They do not believe that the price can continue, for example, growth, because "it has already grown very much, where much more."


If you express this in figures, then in the direction of the current trend, only 40% of deals are opened, but against the trend - as much as 60%. As we have already said, this stereotype is based on the desire to "catch" the reversal at the very beginning - on the overcoming of some level or line of the figure of technical analysis.



Mistake No. 2: PROFITABLE TRANSACTIONS "LIVE" ARE HALF AS MUCH AS UNPROFITABLE


The reason for this stereotype is ordinary human fear. We are just afraid. We are afraid to miss the profit, so we are happy to close profitable trades. And we are afraid to take a loss on deposit, so we pull with the closure of such transactions, in the hope that the price will unfold.


It is curious that such behavior of traders leads to the fact that unprofitable transactions in the market are always more than profitable. And that is why the ratio of profitable traders to Forex to unprofitable traders is about 30-35% and very rarely exceeds 40%.



Mistake No. 3: THE TAKE-PROFIT ORDER IS SET MUCH MORE OFTEN THAN THE STOP-LOSS ORDER


The absence of stop-loss trading is a "disease" not only for most beginners but also for many experienced traders. Here again, "guilty" of psychology. We are afraid that the price will catch the stop-loss and go again in the right direction. The choice is simple and erroneous - do not set a stop-loss, and close transactions manually, like Ivan Ivanych. In fact, only 40% of open trades have a stop.



Mistake No. 4:  CLASSIC WAYS OF INSTALLING STOPS


Having carefully read the previous paragraph, you should have a natural question - wait, after all, there are the same classical ways of setting a stop-loss order, for example, above the previous high and below the previous low. The logic is simple - if the price broke through the high / low level, then it will continue its movement further. Is not this what the training materials on trading teach us ?


Looks, of course, logical. Previously, it was so. The price is close to the level of the previous extremum, panic was growing on the market, which moved the price further. It was this mechanism that formed the habit of the crowd setting stops behind these levels.


Now the foreign exchange market is already far from the one that was before - the marketplace is ruled by market makers. And such classic levels, on which the crowd installs stop-loss, attract them, like a sweet tooth cake, to open their trades.


The market has changed, but the habit of exposing stops for local extremes has remained. In fact, at such levels, there are twice as many Stop Loss orders as on all others.



Mistake No. 5: TAKE-PROFIT EXPOSES MOST TRADERS


Profit is loved by everyone, so the take-profit warrant is exhibited much more often. In fact, it looks like this:


40% of transactions have a stop-loss, of which 30% also have an established take-profit;
In 80% of the transactions there is a take-profit, of which 30% also have a stop-loss;
10% of transactions have no orders at all.
And why do we need this information, you ask? And then, that the next stereotype follows from it.



Mistake No. 6: THE TAKE-PROFIT SETTING IS NOT TIED TO ANY LEVELS


The technique for setting the take-profit order is much larger than the stop-loss setting techniques. Therefore, such a cluster of take-profits, as it happens with stops, is not observed.



Mistake No. 7: MOST TRANSACTIONS ARE OPENED IN THE ABSENCE OF TRADING SIGNALS


If you track the congestion of transactions at individual levels, it becomes immediately obvious that the longer the price is at a certain level, the more open positions on it.


What does it say? And this means that the deals were opened without any obvious trading signals. That is, the crowd of "Ivan Ivanychi" just opens a deal, because they so wanted. And the reason to "see" the trading signal, you can always find.



Mistake No. 8: AVERAGE. THERE ARE THREE PENDING ORDERS PER OPEN POSITION


According to the results of the conducted research, the number of pending orders, on average, is three times more than the number of open transactions.


This is quite logical, because one transaction can have two pending orders: stop-loss and take-profit. However, the set stop and take is a ratio of no more than 1 to 2, and we have a ratio of 1 to 3. The rest of the pending orders are orders Limit and Stop .


Also, if we take into account the previous stereotypes and the fact that not all the deals have a stop loss and take profit, we will get the following ratio of pending orders in the market:




  • Stop-loss - 14%;

  • Orders of Stop type - 20%;

  • Take-profit - 28%;

  • Orders of the Limit type are 40%.


Considering that we are preparing to "go against the crowd", for us it does not really matter, because, from the point of view of a market maker, it is one and the same.

I CAME TO THE FOREX FOR MONEY ...


Above Ivan Ivanych laughed, the stereotypes were dismantled, but what is the practical meaning of this? As one of the users of our forum says: "I came to the Forex for money, but not smart to be." How to convert this knowledge into material profit?


Figuratively speaking, the crowd at Forex is food for market sharks. The money "Ivan the Ivanovs" is their profit. And moving away from the stereotypes that have developed in the market, you can not be afraid that the sharks of the stock exchange will eat you, but you can tear off from their food and a piece to yourself.



How not to mix with the crowd? Following the recommendations below, this will not be very difficult:



  • Open your deals solely in the direction of the current trend.

  • Avoid placing stop-loss orders at round levels and in areas of local extremes.

  • Do not perceive the setting of a take profit order as an axiom. As a rule, if our forecast turned out to be correct, then in the right direction the price will continue for a long time.

  • To set a take profit order, choose levels where "classic" traders display their stops. Most will "knock out" the stop-loss, and you will get your profit.

  • Open a deal only if there is a clear trading signal. Do not succumb to excitement and bouts of gambling.

  • Pay more attention not to profits, but to losses. Control your losses, always exposing the stop-loss, and the profit from you will not go anywhere.

  • More often use in trade warrants of type BuyLimit and SellLimit, thus, necessarily establish in them stop-loss.


Of course, you already know some of these recommendations. However, now you understand their meaning, and going against the crowd, you will be able to profit where the majority leaves at a loss.

A Successful Trader and His Workplace

So, you are a forex trader. You have: repeatedly tested reliable trading strategy, ability to control risks and keep your emotions in the fist. Is this sufficient for profitable trading in the foreign exchange market? Someone will say - quite. But we will allow ourselves to object - no, this is not enough. A very important role is played by where and how you trade, and what your working environment is. As you may have guessed, today we will talk about the workplace of the trader and how it should ideally be.



WHAT SHOULD BE THE COMPUTER FOR TRADING?


[caption id="attachment_660" align="aligncenter" width="478"]successful trader workplace successful trader workplace[/caption]

We do not need to launch satellites into space, so a super-powerful computer does not need a trader. However, in extreme cases it is also not worth hitting - the ancient "calculator" is hardly suitable for a successful trader. It is enough that the trading terminals used by you work quickly and do not hang up, and the resources of the machine allow you to work without a slowdown in the browser, watch videos or use other programs.


It is very important to have at hand some kind of duplicating electronic device. It can be a simple laptop or even a smartphone, good, now almost every forex broker has a mobile trading platform. This is in case the computer (unexpectedly, as always) refuses to turn on, the Winchester will fly, the cooler will die, etc.



ON WHICH MONITOR IS BETTER TO TRADE


In the feature films of Wall Street, the trader's workplace is equipped with monitors from all sides, including the monitor behind the eyes at the back of the head. It's all superfluous. You can hang monitors from head to foot, but you will not trade better.


One monitor for comfortable trading is enough. And it's better if he will be with a diagonal of 19 to 24 inches. This will allow you to comfortably trade, and watch a movie or video about ridiculous seals while you rest.



DO NOT FORGET ABOUT THE INTERNET


For the modern Internet, the proverb "the faster - the better" is applicable. We believe that this does not need explanations. However, even after carrying out the optical fiber and getting the speed of 100500 Mbps, do not relax. You need to have a backup plan, in case the Internet (as always on time) disappears.


It can duplicate the line from another provider, 3g-modem or smartphone in modem mode.



I'M AT SEA, AND MY ASS IS SOMEWHERE ON THE CHAIR ...


Do not underestimate the importance of what you are sitting on. In the human body, everything is interconnected. The spine is directly related to the work of the brain, headaches and your general condition. What will be your efficiency if you sit at the computer for a half-hour on the kitchen stool?


Do not regret money and buy yourself a good computer chair. Do not skimp on health, but earn money.



DOES THE TRADER NEED A PRINTER?


Strictly speaking, if the previous items were mandatory, then this item is optional. The presence at your work of a printer, or even better than an MFP, which combines a printer, a copier and a scanner, will make the trade more convenient.


You can print the necessary graphics, draw on them with a pencil or marker, make tables and posters for yourself with important information, etc. Very well, if it does not lie on the table, but hang on the wall before your eyes.



AND, PERHAPS, THE MOST IMPORTANT


Finally, we left the most, according to our experts, for trader, the main requirement for the workplace of the trader. It is the need to share personal life and workspace. Agree that there can be no question of any effective trade if, next to you, "As I remember, Varya dies, Ivan Izrailevich in the next room, crushed by a piano ..."


If there is a possibility, then it is better to allocate a separate room for trade, where nobody will disturb you. Suppose the option and removal of the office. Let the word "office" do not scare you - it can be an ordinary small company, where no one will interfere with you (do not forget to warn your wife, but how could something not work :)).


How do you see your ideal workplace trader? Share in the comments.

Monday, June 4, 2018

3 Rules for Profitable Trading by Scalper Advisers

Forex scalping, despite the fact that it is one of the most difficult technically and psychologically types of trading, has long been deservedly popular. Naturally, scalping and the creators of advisers did not ignore.


At the moment, the trader has an indescribable array of paid and free robotic scalpers, built on different principles and trading strategies. Some advisors trade only at certain hours, some - trade constantly. Some advisors work better, some worse. But, as a rule, the scalping advisor shows the profit for a certain period of time, after which there is a period of calm and a series of transactions with a loss.


Often, the implementation of one or another scalping strategy in the adviser reaches the point of absurdity, which leads to the closing of the trading account on which the adviser is installed by the broker.


What are the rules that must be followed in the trade of scalp advisers on Forex?



RULE NUMBER 1. SCALPING - ONLY AT THE RIGHT TIME


In the first place, you need to understand that increased volatility is the first enemy of the scalp adviser, he likes when the market is quiet. Therefore, if the price draws long candles, which, as a rule, is observed during coincidence of sessions, it is necessary to forbid the adviser to trade, wait for the phase of calm and only then start again scalping.


Profitable TradingIn no small measure, this refers to the events of the exchange calendar. Even novice traders know that before the publication of important economic news volatility can increase many times, so trading during this period, the adviser-scalper can easily bring a loss to your deposit.


For robots that trade only at certain hours (as a rule, these are night scalpers), the GMT Offset parameter is relevant, reflecting the difference between your broker's time and the GMT time. Periodically, this parameter should be checked, especially during the transition to winter or summer time.




On Fridays, when the trading week comes to an end, and in the last 2-3 days of the month, large market participants often close positions. This time is also not suitable for a scalper robot, which is easy to see when testing any scalping adviser.



RULE NUMBER 2. WHEN "LESS" MEANS "BETTER"


The second, but not least, moment is the choice of a forex broker, or rather, the choice of a suitable spread for the currency pair on which the scalp adviser trades, the amount of the commission (if any) and the speed of execution of orders.


Before installing a scalper, check all of these conditions. Naturally, the smaller they are, the more comfortable the forex advisor will feel. Ideally, you can spend a little time to choose a broker and type of account, which will be the minimum spread and the time of execution of orders.



RULE NUMBER 3. DO NOT BE LAZY TO TEST COUNSELOR


In addition to the terms of trade, of course, you need to pay attention to the adviser himself. Using the results of testing, it is necessary to understand what logic is the basis of the robot, what size take profit and stop-loss it sets, how many deals it opens and how long it keeps them open.


Do not be lazy and test the advisor in the tester, not forgetting the size of the spread. For example, if the scalping adviser puts out stop-loss sizes of 200-300 points (for 4-digit quotations), then the word scalper is unlikely to apply to it. The stop-loss for the scalping robot should not exceed 50-60 points (depending on the traded currency pair), otherwise, it will already be a robot-money-loser, not a robot-scalper.




If the lifetime of an open scalpel adviser transaction is not more than 1-2 minutes, be prepared for the fact that a forex broker can block your trading account.



If the test shows that the average hold time of an open transaction is on the order of a few minutes, then such tests have nothing to do with the real state of affairs, and such a robot will at best trade zero, at worst - simply merge the deposit.


Pay attention to the amount of average profit per transaction. It must be at least 2 points. A number of transactions - the more, the better. If the number of transactions is small enough - this is the reason to suspect that there is a normal fit for the story.


However, it should be remembered that the results of testing are not true in the first instance and the real results of future trade may not coincide with them.


Having spent a bit of your time and following these simple rules while testing scalping advisors and trading on a real deposit, you will find that the proper selection of a forex broker and a scalper will allow you to receive a stable profit in the Forex market.

6 Typical Mistakes of Novice Forex Traders

In recent years, there are more and more willing to try their hand at investing in various financial markets, including the FOREX currency market. But, nevertheless, despite the emergence of new teaching methods, and the professional level of teachers themselves, I can not help but notice that the most common mistakes beginners in traders move from year to year. In this article, I want to analyze in detail what is stopping the newly emerged investor traders from finally becoming successful. Well, give some advice based on life experience.




MISTAKE 1: LACK OF KNOWLEDGE


So, let's start from the very beginning. The first and most important mistake: the lack of the necessary knowledge base - a person commences trading after surface training or without it at all. It is almost impossible to get the skills of trading in books. As a well-known psychologist, trader and author of many bestsellers for beginners, Dr. Alexander Elder, studies for a pilot or surgeon for several years, then makes trial flights or operations under the guidance of an experienced mentor and only then, very cautiously proceed to work independently. Nobody believes that you can control an airplane or do operations by reading detailed instructions. Why then, to work on the stock market, the overwhelming majority of beginners treat differently?


It is best to first thoroughly study all the nuances of working on forex directly with a practitioner, then follow the trial period in a demonstration or a small real account under the guidance of an experienced mentor, and only then should carefully work with observing all recommendations on a real account. It is also important to understand that to a demo account, if you chose it, you must treat it as if it were already real.



MISTAKE 2: SELF-CONFIDENCE


The second mistake of a novice trader: excessive haste and self-confidence. According to statistics, dealing prices in the first two months earn 80%, but in the third or fourth month, virtually all lose their initial capital. Why does this happen?


Here is an example of driving instruction. After receiving the rights, at first the former pupil, and now the full-fledged driver tries to drive very carefully, observing all the rules of the road, but in two or three months you will not recognize him. Signs to him are already uninteresting, it seems to him that he has mastered the methods of driving a vehicle and knows them "like his own five fingers", here he is in for trouble. According to statistics, most accidents occur during the first 4-5 months, with the peak occurring at the end of this period. The same applies to work on the stock exchange. The rules of safe trade must be followed in a year and two, they do not change.



ERROR 3: DAY TRADE


The third mistake: an attempt to start trading with day trading, that is, from work inside the day on short-term schedules, mistakenly thinking that it is possible to earn so much. In fact, this is certainly a myth.


Daydreaming is successfully handled only by professionals with many years of experience and is able to make decisions instantly, not so much on the basis of the market analysis, but on the basis of their own intuition and rich life experience. If these components are absent, success is almost impossible to achieve.


For beginners, I recommend starting work on the basis of technical and fundamental analysis end of the day, that is, with medium-term positional trading on daily charts.



MISTAKE 4: WORK AGAINST THE TREND


The fourth and most common mistake is the work against the trend. 50% of beginners lose the initial deposit for this reason.


There is a good rule: it's never too expensive to buy, and too cheap to sell.


Do not consider yourself the cleverest, you must merge with the crowd. No wonder there is an English saying "trend is your friend." Trend your friend - while he is there is a need to go with the flow.



MISTAKE 5: THE PASSION OF THE GURU OF THE MARKETS


The fifth mistake is excessive confidence in various kinds of indicators, mechanical trading systems, analysts, including the guru of financial markets.




[caption id="attachment_654" align="aligncenter" width="600"]Mistakes of Novice Forex Traders Mistakes of Novice Forex Traders[/caption]

Remember, you and only you make the decision. This is your money, and if you lose them on the basis of the recommendations of the aforementioned assistants, none of them will take responsibility for your losses. Besides making transactions on the basis of your own analysis, you are gaining an invaluable experience, which is surely useful to you in the future.



MISTAKE 6: TRADING WITHOUT A PLAN


And finally, the last, sixth mistake of a novice trader is the lack of a clear trading plan and own strategy. You at any time, no matter how the market behaves, should know what to do at the moment. For this, especially beginners, it is necessary to keep a diary of the trader, where should be described:




  • Date and time of compilation;

  • The name of the instrument on which the trading plan is drawn up;

  • The reason for choosing a tool;

  • The entry point to the market (buy, sell) with a comment, on which basis it was chosen;

  • The point of loss limitation is StopLoss ;

  • The point of exit from the market with the maximum profit is Take Profit;

  • Commentary after fixing profit or loss.


It is very important to choose a position for entering the market to keep the profit / loss ratio at least 2 to 1, and in general, the more than the better. Then the mathematical expectation of profit ratio will be positive.

Observance of all the above rules and avoiding mistakes will allow novice traders not only not to lose their first deposits, but also to start earning immediately on any financial markets, including Forex.

Forex for Beginners: To Ban or Warn?

In this issue, I would like to depart from the work-life advice on how to become richer, more efficient and more successful, to turn again to the issue of trading. Today I want to share with you reflections on the topic of opening accounts by brokers for newcomers to Forex. I was inspired by the idea of this article that the Russian forex regulator thinks about allowing only professional traders to enter the market, that is, those speculators who have already confirmed their qualifications, having passed prof. examinations. Let's discuss whether a new trader really needs such a strong "care".


To begin with, I propose to think over two fundamental questions: "Who is a beginner in Forex?" And "Why is the first deposit lost?".



WHO IS A BEGINNER IN FOREX?


A beginner forex trader is a person who became interested in trading in the foreign exchange market after seeing an advertisement about earning opportunities without leaving home or on the Internet, while only beginning to delve into the essence of what is happening "beyond the terminal".




[caption id="attachment_650" align="aligncenter" width="278"]Forex for Beginners Forex for Beginners[/caption]

Most likely, this is a person who read something about trading, about "bulls and bears", about the trading shoulder and has an idea of how the deals are opened. I think that he has several times successfully opened deals on a demo account and he has a very exemplary strategy that has formed in his head or he somewhere read it.


And finally, a novice trader knows how to make money, if you buy a dollar for rubles cheaper, and then sell it more expensively, but does not know about the statements, requotes and floating spreads ( Do not you know what it is? Look at the end of the article ). Those. in general, a person who decided to try his hand at Forex understands what he will do, difficulties are opened only when he comes across nuances that are not visible at first sight.



WHY DO TRADERS LOSE THEIR DEPOSITS?


Why do traders basically lose their first deposit? Sometimes, but not often, just because of ignorance of the above-mentioned nuances - the strategy assumes a low spread, and on news it expanded, when the trader did not notice, the requotes in the busy time did not allow the deal to be closed in time, the market opened with gepom and so on. Typically, these situations are extremely puzzling for beginners and their deposit, and therefore (as a positive) stimulate a deeper knowledge or (as a negative) to write a complaint somewhere.


Much more often, the first deposit is merged because of an unstable reaction to what is happening or, more simply, on a human factor or psychology. The loss of real money is very different from the minus on the demo: closing the deal at a loss is more difficult, as well as enduring to a profit of 40 points, when there are already 25. About the system of management of funds and discipline is rarely remembered at such moments. Euphoria from its own importance or confusion at losses undermine traders and managers with many years of experience, what can we say about beginners.




As Sergey Kozlovsky from Grand Capital remarked: "The level of financial education and the success of a trader are not always interdependent things. There are often cases of a complete loss of capital by investors with FFMS qualification certificates, and at the same time, success stories of self-taught traders make it possible to assert that financial literacy is an elongated concept. "



We should also mention the question of leverage. Quite often, even traders with experience do not fully understand the principles of margin trading and the risks of a large leverage, let alone the beginning speculators who, on the one hand, frighten the word "credit", and on the other - it pleases the opportunity to trade $ 100 as well as 100 000 $. Big profits are always big risks, but it is not easy to realize it. Therefore, often beginners on Forex lose their deposit also because of the wrong chosen shoulder.


"It would be simpler to say that newcomers should not offer services that they will not understand, but it's still the company's task - to convey the essence of the products offered and make them understandable," - Igor Volkov, president of MFX Broker.



WHAT YOU NEED TO KNOW A TRADER TO START TRADING ON FOREX


Let's sum up what the forex trader should know in order to more or less be prepared and consciously start trading:




  • What is forex and how it functions. What are the risks of trading on Forex.

  • How does a forex broker or dealer work: getting quotes, making deals, commissions, spreads and so on.

  • About how the terminal works and deals are made.

  • What is leverage, what risks it brings.

  • What is a money management system (Money Management), how to use it and why.

  • About trading strategies and market movements.

  • On the psychology of commerce.



Even a general understanding of these issues will reduce the risks of losing the first deposit, as well as the number of complaints and appeals of novice traders to regulators and forex communities with questions about fraud companies.


"To enable traders to earn money in financial markets, one should not impose restrictions, but increase financial literacy. This is not just important, it is a fundamental moment when trading forex. The trader should understand what bid and ask, collateral requirements and leverage, " - confirms my opinion, public relations specialist FxPro Evgeniya Konovalova.



DO I NEED A BROKER TO LIMIT THE WORK OF A BEGINNER TO FOREX?


Turning to the brokers with the question of whether the company should take responsibility for determining the level of knowledge of the trader and, based on this, to limit its capabilities, I received many different answers. For the most part, companies agree that to clarify the client at the time of opening an account, as far as he is aware of the opportunities and risks of trading in the foreign exchange market, one must, however, somehow check the veracity of this answer, be responsible for his subsequent actions or limit his opportunities within the framework provided services does not make sense.


"Given the fact that both the client and the company are interested in the fact that the trader still began to trade through the company (and the company is interested in this even more), the objectivity of such a check will always cause doubts. However, even if it is done by a specially appointed body, it will be difficult to guarantee the quality of the knowledge test, " - Nikolai Solabuto, managing director of Finam Management MC.


This is quite a reasonable opinion: of course, a self-respecting company whose earnings are based on a commission on the volume of the client's trading, informing the client about all possible situations, supports not only their reputation but also their income. A trader who quickly loses a deposit is unlikely to continue to trade and will no longer make a profit, so reducing the percentage of quickly merging customers is in the interest of a bona fide broker. But to force the novice to trade only on demo or cent accounts or to check his knowledge and rigidly determine the set of tools available to him does not look like a clever solution. The amount of funds that a trader can and wants to risk is different for everyone, and he depends on the well-being of a person. Knowledge, however, everyone prefers to receive in different ways: someone wants to see a demo, and someone immediately is interested in going into real trading,


"It is difficult to objectively determine the criteria for assessing the level of financial education of traders because different trading strategies require a different level of knowledge," said Victor Kupriyanov, representative of the dealing department of JustForex.


ONCE AGAIN ABOUT A LEVERAGE FOR BEGINNERS ON FOREX
The only thing that would be worth limiting (and many companies also agreed on this opinion) is the trade shoulder provided to the newcomer . If, by opening an account, the trader indicates that his knowledge level is low or absent, then it would be nice for a company to think a little about the customer about its risks, giving a maximum lever of not more than 1: 100, explaining the reasons, and notifying him about the possibility to increase his leverage with time . If the client claims that the level of his knowledge is sufficient for active scalp with a large shoulder, then, probably, it is not necessary to limit it in the possibilities, because the risks he consciously incurs.


"Based on the client's experience, a decision is made about the level of guarantee security that is established for him. The more experienced the client, the larger the size of the "shoulder" for him is permissible. This, in fact, is in the interests of the broker, since a client who does not adequately assess risks and commits transactions without proper understanding of the situation is likely to lose money. As a result, he will cease to be the source of the commission for the company, and even create a bad reputation for it and exchange transactions ", - Nikolai Solabuto, managing director of Finam Management MC.


Those. notify all risks, talk about all possible situations and at the same time give the right to choose the client himself how he wants to work and what risks he is willing to take, this is a very democratic approach that suits all three sides - the company, the client and the regulator.


Anton Sharonov from NPBFX responded very well to this question: "As for beginners and risks, I like the approach of Swiss Forex banks, the essence of which is to directly register all the risks in the contracts, as well as to outline the borders of responsibility of the parties to the contract as forex- company, and client. In mature civil societies, a capable client himself is able to make a decision whether this type of activity suits him or not. " So why do not we use this useful experience?



SUMMARIZE AND MAKE RECOMMENDATIONS


Summing up, I must say that the article turned out to be more for representatives of companies than for traders. Probably, it happened because the market is changing in connection with the appearance of regulation and at the same time the opinion of dealers is taken into account, and the opinion of traders is not very.


We are put in the position of an unreasonable consumer, who stands in the chain of decisions the very latest. At the same time, the quality of industry services is assessed, alas, only by the abundance of complaints, not taking into account the positive experience of trading, which is quite a lot, but which is not openly spoken about. Therefore, without taking responsibility for speaking out for everyone, but still having considerable experience and having long been watching the development of Forex in Russia, I would say that it's completely pointless to limit the trade to beginning traders. With this approach, an industry that can bring income to everyone will simply perish. As Oleg Okhrimets from the Exness Group said correctly: "Forex-retail was originally created to simplify access to financial markets for individuals, regardless of their skills. Any artificial restrictions will only lead to the flow of customers to other jurisdictions. "


But to make a list of recommendations for the broker about what should be reported to the client who opens the account, how to notify him of the risks and give the opportunity to choose for himself suitable tools at this level, it is quite possible. It is unlikely, of course, this will significantly reduce the share of lost first deposits, but raise financial literacy, awareness of clients and reduce the flow of claims.



ADVICE FOR BEGINNERS FOREX TRADERS!


For traders, I would recommend choosing partners such companies that care about the education and capabilities of their customers, do not hide anything and notify the risks as openly as possible. Pay attention to what your managers tell you, what they promise in advertising. Those who openly talk about trading as risky investments and possible losses associated with the trading process are more likely not to deceive your trust. And vice versa…


"When completing the registration form, we always ask the client about his knowledge, work experience, and warn about trading risks. If his experience is not sufficient, then we strongly recommend that you get acquainted with the market on a demo account. In addition, for beginners, we have a section on Forex for beginners and Help Center on our site. For experienced clients, by default, we provide a leverage of 1: 100, and not a maximum of 1: 500, " is the modern experience of one of the most popular companies, whose name I do not want to name so that the article does not seem to be an advertisement. I just want to show that this is the right way, open, honest and worthy, which brokers are already on, creating the right basis for the work of the modern currency market in Russia. Such companies, fortunately, quite a lot.

Saturday, June 2, 2018

Trading Strategy and System on Forex

In the global open spaces of the Internet now, unlike literally 5 years ago, a lot of information about trading in the Forex market has accumulated. Including many we see and trading strategies and tactics. Very often, the rules for opening a trading position are called differently: both the tactics and the strategy and system for Forex. However, there is a difference between these concepts. Let us discuss this question.



FOREX TRADING SYSTEM


So, the Forex trading system includes answers to global trading issues, such as the choice of a tool for trading, a time slot, a trading session. The trading system defines a set of analytical tools: indicators, analytical constructions, news data, etc. Also, the general principles of the trading strategy are concentrated in it: we trade on the trend, in the channel, on the flat, the strategy of capital management, the protection of open positions, etc.




[caption id="attachment_646" align="aligncenter" width="628"]Trading Strategy Trading Strategy[/caption]

FOREX TRADING STRATEGY


The trading strategy for Forex is primarily a set of rules and criteria for entering a trade in the market and exit from it. It is within the trading strategy that we look for signals from indicators, analyze candlestick combinations, analyze the newline, etc. Also, the trading strategy includes support for the transaction: the installation of StopLoss and TakeProfit, the transfer of stops to lossless, the use of a trailing stop, etc. Escort of the transaction is directly related to another component of the trading tactics - with risk management or capital management. Risk management is designed to limit the losses of the trader by all means. This includes the transfer of positions to break-even, the use of trailing stop, locks, hedging positions, etc., because, By these actions, we reduce the risk of losing the deposit.


As you can see, the Forex trading strategy is only an element of the system, which certainly deserves much attention, but in itself is not yet sufficient for successful trading. While doing trading, you need to see the whole picture, and therefore you must have a trading system.

Friday, June 1, 2018

The Main Postulates of Technical Analysis on Forex

The technical analysis on Forex as a whole can be defined as a method of forecasting the price dynamics, based on the observation of the charts for the previous periods of time.



LET US SINGLE OUT THREE BASIC AXIOMS OF TECHNICAL ANALYSIS


The price takes into account all factors


Any factor, such as economic, political or psychological, has already been taken into account and is reflected in the price chart. In other words, changes in demand and supply are reflected in the price movement. If the demand for currency exceeds supply, then it begins to grow, and vice versa - if the supply exceeds demand, it falls.


Technical Analysis on Forex

Price moves directionally


The main task of technical analysis is to determine the direction of price movement for use in trade.



Hence we can distinguish the following:


a) The current trend always has a desire for development.
b) The current trend moves until it begins its reverse movement.
c) Trade only in the direction of the current trend.



History repeats itself


It is based on the assumption of the constant psychology of the crowd. If some time ago the situation developed in a certain way, then there is no reason to believe that under the same initial conditions, market participants will act differently.

Wednesday, May 30, 2018

How much money is required to start trading in the Forex market?

One of the most frequently asked questions from beginners: how much money is needed to start trading in the Forex market ? There is no one-sided answer, of course. All individually. Here's what you can think about:




  • Why do you want to start trading in the forex market, it will be your primary or secondary earnings?

  • How much can you afford to invest?

  • What is your personal attitude to risk, and how risky are you planning to play in the market?


Objectives


[caption id="attachment_598" align="alignleft" width="300"]forex money forex money[/caption]

First of all, it is necessary to determine the motivation and goals. Why do you want to start trading in the Forex market, and what are you aiming for in the long run. Clearly formulated goals will help you build a path from the place where you are now, to the place where you want to be. Without this, it is difficult to estimate how much money you need to start trading Forex.


How much would you like to earn on Forex? Imagine this number! Per month. In year. Presented? Good. And now forget it!


Usually, ambition is good. They push us forward both in the market and in life. The main thing is that ambitions do not turn into expectations from the realm of fantasy. Such expectations create pressure on the trader, distorting his perception of the market, leading to a pursuit of profit and loss of the deposit. For the sake of preservation of peace of mind, beginning traders are urged to measure their successes in the market at the initial stages in the form of acquired material, in the form of a decreasing number of obvious mistakes, in the form of a growing stock of patience and tranquility, but not earned or lost money.



Risk


If Forex is only interested in you as an online casino, you will not need big money for such forex trading. You can gradually replenish the account for a couple of thousand and will be to you.


But, if you have far-reaching plans for Forex and you are ready for everything, then, in principle, the message is the following: the larger the balance, the greater the potential yield while keeping risks at the same level. What is this level? 1%!


Take yourself for a rule, especially if you are a beginner, put a picture on the desktop, hang a poster over the workplace, hack on the nose - it does not matter, the main thing is not to break! In each transaction, risk no more than 1% of your deposit!


Suppose you have opened the most simple account with a 1: 100 lever and threw a minimum deposit of $ 100. Then 1% is equal to $ 1. With a lever, 1% is $ 100. Can you open a deal with a volume of $ 100, observing the 1% rule? No, because the minimum volume is 0.01 lots, and this is $ 1000.




Simply put, the minimum deposit for a seriously minded beginner is $ 1000 minimum.



Most novice traders find this amount too big to risk it. But this fear does not prevent them from putting $ 100 on the account and, at the risk of up to 90% of the deposit in one transaction, try to get rich in this way. Of course, they all lose. Again and again.


The truth is that if you follow the 1% rule, trade systematically, learn from your mistakes, your risks are reduced to an absolute minimum. About the loss of the whole deposit and no thoughts.



Investment Capital


Having dealt with the lower limit, we translate to the upper limit - it also exists.


Not all money is suitable for trading. Money that you can not afford to lose is not suitable for speculative trading. Why? Not because you will certainly lose them, but because you will think about it. As the pursuit of earnings, and an attempt to avoid losses lead to a distortion of the picture of the market.


Any book on trader psychology unequivocally asserts that proper trade is a process that is dispassionate. Cold calculation, regular repetitions and summing up not after each transaction, but at the end, say, a month - that's the way to success.




The lack of education, erroneous goals and insufficient capitalization are the main reasons for the failures of traders.



A financial leverage can help a trader break into the market with insignificant funds, but expecting to get a lot out of small quickly is stupid.



See also:


Technical Analysis of Forex

Summing up, let's summarize the factors that are most important in determining how much money is needed to start trading on Forex.




  • Determine why and why you want to trade in the currency market.

  • Weigh the actual attitude to money and risks.

  • Assess how much you are willing to invest, do not risk the money that you can not afford to lose.

Friday, May 18, 2018

Guide to Alligator Indicator

The indicator of the Alligator, authored by the well-known trader Bill Williams, became popular after the publication of two books "Trading Chaos" and "New Dimensions in the Exchange Trade," there you will find the most complete description (in connection with the author's vocabulary is not the best).


It is generally accepted that the majority of the time (70-80%) markets are in the state of a trading range or rang, prices at that time fluctuate within certain limits, and only in 20-30% of the time there are really trend movements that are most favorable for profit, because the price change at this time has a clearly expressed directional character.


Alligator indicator is just a very interesting approach to assess the direction of the market and filter the periods of absence of the trend (the side range). Its main goal is to give you the signal of an emerging trend.



Formula of Alligator


The alligator is a simple combination of 3 ordinary moving averages of different lengths and with different forward shifts.


All moving averages in the indicator Alligator use not the closing price, but the median price.


Median Price = (High + Low) / 2
Where:
High - the maximum of this bar (candles) ;
Low - the minimum of this bar (candles) ;


Moving Average 1, called in Bill Williams's The Jawbone Jaw is the Balance Line for the time period that was used to plot the chart. The line is a 13-period moving average, shifted on the chart by 8 bars ahead; It is usually depicted in blue.


Alligators Jaw = Smma (Median Price, 13, 8)
Where Smma - smoothed moving average (Smoothed Moving Average, SMMA)


moving average 2 Bill Williams called "teeth Alligator" - a line balance for a significant time period in order below. The line is an 8-period moving average, shifted on the chart by 5 bars into the future. Usually red.


Alligators teeth = Smma (Median Price, 8, 5)


Moving Average 3 is called in Bill Williams's "Lips of the Alligator" - this is the Balance Line for a significant time period, which is lower by another order than the Line is a 5-period moving average shifted on the chart by 3 bars ahead. Green Line.


Alligators Lips = Smma (Median Price, 5, 3)


The formula of the smoothed moving average used to calculate the indicator of the alligator.


The first value of the smoothed moving average is calculated, as well as the simple moving average, only the closing prices, but the median prices (the formula of which is indicated above ) are summed up.


The second and subsequent moving averages are calculated using the following formula:


Smma i = (Sum 1 - Smma i-1 + Median Price i) / N


Where:
Smma i is the smoothed moving average of the current bar (except the first);
Sum 1 - the sum of Median Price prices for N periods, measured from the previous bar;
Smma i-1 - smoothed moving average of the previous bar;
Median Pricei is the median price of the current bar;
N is the period.



Example of Alligator:


Example of Alligator:

Description of the indicator Alligator:


As it became clear, the Alligator indicator is a usual combination of three smoothed moving averages with different periods (13, 8 and 5) and different biases (8, 5 and 3 respectively), built not at the closing price but at the median price. Each of these moving averages by the author (Bilu Williams) has its own "crocodile" name.


The longest moving average - the "Alligator Jaw" (with period 13 and offset 8) shows the price level, which should be established in the market, if it is not influenced by new factors. It is like a long-term analogue of a fair market price. That is why the author called it the "Balance Line". It is believed that if the price is higher than the "Alligator Jaw" - then the market positively assesses the new factors and will continue to move up. Conversely, if the price is below the Alligator's Jaw, the market negatively assesses the new factors and will continue to move down.


Moving averages with a smaller period are estimated exactly the same, but refer to a shorter period.


Bill Williams himself described these lines in a very peculiar way, so sometimes he needs comments to understand his theory. Moving averages he called the Balance Lines and said that if all the moving averages are intertwined, then the Alligator sleeps, and the longer he sleeps, the hungrier it becomes. This has its own logic, and it is consistent with some concepts of technical analysis. In this case, a long "interlacing" of moving averages means nothing more than a long-term consolidation or a narrow trading range.


Williams points out that when the Alligatorwakes up after a long sleep, he is very hungry and begins to hunt for the price until he is satisfied. This is something other than a breakout of the trading range, which is usually the stronger, the longer and there was the previous consolidation and the lower it was in height.


Williams points out that after the Alligator is full, he begins to lose interest in food, the moving averages begin to converge. This is nothing more than a new consolidation after a rapid trend. At this time and according to his theory, according to the general concept of technical analysis, the trader must close his positions and wait for the new trend to begin.



How to use Alligator indicator?


One of the biggest pluses of the Alligator indicator is that it avoids the ambiguous interpretation of most signals.




  • The Alligator indicator can be used to determine how strong the subsequent movement in the market will be. This, as a rule, can be determined by the time that the lines of moving averages are in the intertwined state. The more this time, the more, as a rule, the subsequent trend movement. However, the use of moving averages like Alligator is not the best method. An alternative to this is to monitor any measure of volatility, for example standard deviation (standard deviation), or indicators based on these indicators, for example Bollinger Bands.

  • Signals preparing to enter the market. If during the trading period the amplitude of the moving average fluctuations starts to increase and the space between the lines grows slightly, it means that, most likely, a new trend begins, the direction of which will show the first appeared fractal. After the appearance of the first fractal, you can start preparing for trading.

  • For signals entering the market, the Alligator indicator is usually not used in its pure form. Usually, the signal for buying is the movement of the alligator lines up and the market penetration of the fractal pointing upwards. Purchase is carried out either at the fractal level, or slightly higher. In this case, the fractal must be higher than all three moving averages. The sell signal is the reverse one, i.e. the movement of the alligator lines down and the penetration by the market of a fractal, directed down, while the fractal should be below the sliding ones. Sometimes to confirm the signal, another fractal is waiting, which should be higher (for a purchase transaction) or lower (for a sale transaction) of the previous fractal, respectively.

  • To add to an existing position. Adding a volume to an existing position occurs if the situation of the previous rule remains, and the next fractal appears next to the previous one.

  • To determine the trend. If the moving average with a period of 13 ( Alligator Jaws ) is the most distant from the price bars, the 8-period moving average ( Alligator's teeth ) is between the 13- and 5-period moving averages, and the last 5-period moving average ( Alligator Lips ) is the closest to the price schedule, then the market starts a trend. The further these lines are from each other, the stronger the trend. The trend ends if the moving averages begin to intersect with prices and among themselves.

  • To set the stop. As the level of stop orders when trading on a trend, use the 13-period moving average 1 - "Jaws of the Alligator". However, depending on what risk the trader is going to bear, he can use any of these lines as the Stop loss level . Setting a stop on the longest line (13-period, blue) increases the risk of losses, since by the time this line reaches the price, the trader may already be at a loss. Setting a stop on the fastest line (5-period, green) leads to the fact that the trader will close the position at the slightest signs of the end of the trend, which means that he can miss the greater part of the trend and not get profit.

  • Sometimes the derivatives of the Alligator indicator are used, for example, the oscillator Gator, Awesome Oscillator, Accelerator.


Disadvantages of the indicator Alligator:


Like all indicators built on the moving average system, the alligator lags in its signal about the beginning of the trend formation and gives at this point a lot of false signals