Courage Under Stressful Conditions When the Outcome is Uncertain

All the foreign exchange trading knowledge in the world is not going to help, unless you have the nerve to buy and sell currencies and put your money at risk. As with the lottery “You gotta be in it to win it”. Trust me when I say that the simple task of hitting the buy or sell key is extremely difficult to do when your own real money is put at risk.
You will feel anxiety, even fear. Here lies the moment of truth. Do you have the courage to be afraid and act anyway? When a fireman runs into a burning building I assume he is afraid but he does it anyway and achieves the desired result. Unless you can overcome or accept your fear and do it anyway, you will not be a successful trader.
However, once you learn to control your fear, it gets easier and easier and in time there is no fear. The opposite reaction can become an issue – you’re overconfident and not focused enough on the risk you're taking.
Start by analyzing yourself. Are you the type of person that can control their emotions and flawlessly execute trades, oftentimes under extremely stressful conditions? Are you the type of person who’s overconfident and prone to take more risk than they should? Before your first real trade you need to look inside yourself and get the answers. We can correct any deficiencies before they result in paralysis (not pulling the trigger) or a huge loss (overconfidence). A huge loss can prematurely end your trading career, or prolong your success until you can raise additional capital.
Both the inability to initiate a trade, or close a losing trade can create serious psychological issues for a trader going forward. By calling attention to these potential stumbling blocks beforehand, you can properly prepare prior to your first real trade and develop good trading habits from day one.
The difficulty doesn’t end with “pulling the trigger”. In fact what comes next is equally or perhaps more difficult. Once you are in the trade the next hurdle is staying in the trade. When trading foreign exchange you exit the trade as soon as possible after entry when it is not working. Most people who have been successful in non-trading ventures find this concept difficult to implement.
For example, real estate tycoons make their fortune riding out the bad times and selling during the boom periods. The problem with trying to adapt a 'hold on until it comes back' strategy in foreign exchange is that most of the time the currencies are in long-term persistent, directional trends and your equity will be wiped out before the currency comes back.
The other side of the coin is staying in a trade that is working. The most common pitfall is closing out a winning position without a valid reason. Once again, fear is the culprit. Your subconscious demons will be scaring you non-stop with questions like “what if news comes out and you wind up with a loss”. The reality is if news comes out in a currency that is going up, the news has a higher probability of being positive than negative (more on why that is so in a later article).
So your fear is just a baseless annoyance. Don’t try and fight the fear. Accept it. Have a laugh about it and then move on to the task at hand, which is determining an exit strategy based on actual price movement. As Garth says in Waynesworld “Live in the now man”. Worrying about what could be is irrational. Studying your chart and determining an objective exit point is reality based and rational.
Another common pitfall is closing a winning position because you are bored with it; its not moving. In Football, after a star running back breaks free for a 50-yard gain, he comes out of the game temporarily for a breather. When he reenters the game he is a serious threat to gain more yards – this is indisputable. So when your position takes a breather after a winning move, the next likely event is further gains – so why close it?
If you can be courageous under fire and strategically patient, foreign exchange trading may be for you. If you’re a natural gunslinger and reckless you will need to tone your act down a notch or two and we can help you make the necessary adjustments. If putting your money at risk makes you a nervous wreck its because you lack the knowledge base to be confident in your decision making.
Patience to Gain Knowledge through Study and Focus
Many new traders believe all you need to profitably trade foreign currencies are charts, technical indicators and a small bankroll. Most of them blow up (lose all their money) within a few weeks or months; some are initially successful and it takes as long as a year before they blow up. A tiny minority with good money management skills, patience, and a market niche go on to be successful traders. Armed with charts, technical indicators, and a small bankroll, the chance of succeeding is probably 500 to 1.
To increase your chances of success to near certainty requires knowledge; acquiring knowledge takes hard work, study, dedication and focus. Compile your knowledge base without taking any shortcuts, thereby assuring a solid foundation to build upon.

What makes a good Trading Strategy?

Ask most NEW traders, and they will tell you about some moving average or combination of indicators or a chart pattern that they use. This is, as the more experienced trader knows, an entry point and not a strategy.
Any trader who is more experienced will say a strategy should also include money management, risk control, perhaps stop losses and of course, an exit point. They might also say that you must let your profits run and cut your losses short. A well-read trader will also tell you that your strategy should fit with your trading personality.
BUT there is one other vital ingredient that many traders forget - and that is to fully understand the "personality" of what you trade. Some traders specialise in say, gold or Brent crude or currencies or they might specialise in a particular index such as the FTSE 100 or the Dow but many traders choose to trade shares. Indeed some traders dabble in a bit of everything. I think this is the area that causes many traders to fail or at least not reach their full potential.
In my view: You absolutely MUST specialise.
I am sure that on the surface most people would say that sounds sensible but here is why it is a MUST!
Superficially, many charts look the same. I bet if you had not seen the charts for some time and someone where to show you a chart of Brent Crude over 6 months and then a chart of Barclays PLC over the same 6 months you would be hard pushed to say which was which purely on the look of the chart.
However, I bet that if you found a trader who trades ONLY Barclays day in and day out and also found someone who trades ONLY Brent Crude day in and day out, both of them would easily identify which was which. WHY?
Because every share, index or commodity has it’s own "personality".
Some will be volatile intra-day, some will follow their sector or the main index (market followers), some will do their own thing, some will spike up and down regularly, some will stop at key moving averages and some will just plough through. Some will move by 5% on average before they retrace and some by 2%. Some will gap up or down regularly, some will not. You get the idea!
Therefore, no matter how good you are at analysing indicators, moving averages, trends and patterns, the same strategy WILL NOT work for everything. I would go so far as to say that a strategy that works well for Bovis Homes, for example, is likely NOT to work for BT Group - they have very different "personalities".
So let’s return to our question: What makes a good trading strategy? Let me answer with a series of ten questions that you need to find answers to, in order to build a REALLY GOOD strategy.
1-What do you want to trade (share, index, commodity, currency, etc)? If your answer is shares (plural) I would urge you to pick one typical share at this stage to really specialise. You can add more later.
2-What "personality" does that share, index etc have?
3-What entry system is the most reliable for that share?
4-What stop loss system is the most effective for that share?
5-What average risk will a typical trade carry?
6-What exit system works well for that share?
7-What is your trading personality (attitude to risk, losses, discipline, how much do you worry etc) and can you trade that strategy without overriding it?
What timescale do you want to trade? (Using intra-day or end of day data)
8-How much data do you keep on past trades to help identify strategy weaknesses?
9-How does all this fit with your trading objectives?
Once you have an answer to each question you need to do one final thing. Make sure all those things fit together and complement each other. For example, if the ideal stop loss position represents a big average risk and conflicts with your own attitude to risk, you need to start again. If you will override your exit point because greed makes you hang in for more, you need to think again. Perhaps you shouldn’t trade that stock in the first place - look for one with a different "personality" which will lead to a strategy you can trade comfortably.
It is a long and sometimes painful iterative journey. You might need to go round and round in ever decreasing circles over a long time. Testing and refining, testing and refining before you can truly have a reliable and repeatable strategy that REALLY WORKS for you.
THEN, you can look for other things to trade that have the same "personality" as your specialist stock, index, commodity or currency.
But if it were easy, everyone would be doing it right?
Good luck and enjoy your trading.

What is DashBoard FX?

DashBoard FX is an institutional-quality Forex Trade Signaling & Market Analysis Software package. It delivers real-time trading alerts as they are identified by our knowledgeable and professional traders. DashBoard FX provides subscribers with optimal Entry/Exit points for Major currency pairs (EUR/USD, USD/JPY, USD/CHF, GBP/USD, USD/CAD) in real-time and allows them to stay on top of the market.

Users also receive detailed trade analytics for each signal along with intra-day market briefings. Trade analytics quickly summarize the technical & fundamental developments, analytical thought processes and rationale behind every trade. Intra-day market briefings for 5 major currency pairs describe key developments in recent trading sessions.

In addition to forex trade signals, DashBoard FX provides subscribers Market Analysis Gauges which are continually updating with streaming data. By taking proprietary algorithms and breaking them down into easy-to-understand visual indicators, DashBoard FX helps subscribers easily assess market conditions and make more informed trading decisions.

Who Can Benefit from Using DashBoard FX?

DashBoard FX is an ideal solution for those that do not have the time or experience to effectively analyze the market.

Whether you are a Day-Trader who is in-and-out of trades actively throughout the day or a Swing-Trader that has a longer-term focus and may hold a position for days at a time, DashBoard FX delivers a signaling solution to match your needs.

Each trader may also have a personal preference in terms of how far profit-taking and stop-loss levels are placed, how actively the market is traded, as well as the margin and leverage used for trading accounts.

DashBoard FX offers two styles, accommodating the diverse trading personalities, DayTrader and SwingTrader.

The primary differences in the two styles are the profit-taking/stop-loss level depths and how actively signals are sent.

Forex Trading Strategy - the Secret of Timing ?

Once you’ve identified a trading opportunity, the next step is to decide EXACTLY when to buy - and this is where many traders go wrong.

Here we explain how to incorporate better market timing into your FOREX strategy - so that you can make bigger profits.

Most traders time their entry levels incorrectly, so here’s the right way to do it:

Using Support and Resistance Correctly

A basic wisdom of market timing is "buy low, sell high" - well, the reality is, if you try this in FOREX trading, you’ll end up losing money. First, let’s define what support and resistance means

A support level is a historical price that traders come in, and buy to "support the market" – and the more times it’s tested, the more valid the support will be.

Conversely, a resistance level is a level on the charts that "resisted prices from moving higher"- again the more times it’s tested, the more significant it becomes.

Why Buy Low and Sell High doesn’t Work

"Buy low, sell high" is accepted wisdom by the majority of traders - but this logic is fundamentally flawed - use it in FOREX trading, and you’re asking for trouble. Why? - If you wait for a pullback, you’re going to miss some of the biggest moves.

Think about it - what if a currency starts to trend and doesn’t pullback? (How often have you seen this?) If you’re waiting for a pullback that never comes, you’ll never get in on the trade – and you’ll miss a major opportunity.

You Need to Feel Uncomfortable

When Trading in the FOREX market, you should usually feel uncomfortable (and that’s why most traders don’t make these trades) - as no one likes to buy or sell after the market has started trending - but doing this will make you money.

The fact is, the more comfortable you feel when entering a trade at support, the less likely the trade will be a big winner.

During any given year, most of the big moves in currencies, take place from new MARKET HIGHS with NO pullback.

If you base your FOREX Trading strategy around waiting for a warm comfy entry, at key support, you’re going to miss the biggest and most profitable trades – so step away from the losing majority of traders.

Your FOREX trading strategy should give you a different mindset - most traders "buy low and sell high" - so you should "buy high and sell higher" – i.e. you should be doing the opposite of what the crowd are doing.

Don’t worry - most traders lose money, and their FOREX Trading strategy is based on the flawed logic we have just discussed - so not doing what they do makes total sense. Therefore, look for breakouts through support and resistance - and sell and buy respectively.

Its Tough Mentally - But it Makes Money!

Sure, it’s hard to do - the majority don’t agree with you - and no one likes to go against the majority. However, it’s the right thing to do, to make your FOREX trading successful. Think about what we’ve just said, and you’ll see it makes logical sense.

Has this Happened to You?

How many times do traders buy into support, and the market breaks support, stops them out and continues to decline. On the other hand, another common scenario is, price never get to support - it simply goes higher - and the trader misses the chance to get in on the trend.

This type of trading is tough mentally - that’s why 90% of traders don’t do it - they want to be comfortable - well being comfortable is great, but you’ll lose money.

Breakouts work, and if you use them in your FOREX Trading strategy, you won’t be comfortable on entry - but you’ll make money - and that will more than compensate.

The way to succeed in FOREX trading is to do what the losing majority don’t do - then you can join the elite 10% of traders who make the big profits - try it and see!

Driving? What's that got to do with Forex Trading?

The other day, while driving to work, with my wife beside me, enjoying the mild winter sun and lost deep in thought, I suddenly remarked, "You know, driving is like forex trading." Startled, my wife said, "Driving? What's that got to do with forex trading? And besides, what do you know about driving anyway?"

The need to maintain professional dignity prevents me from narrating the rest of the conversation.

Many a times we can comprehend something better when we see it in the light of something else that we are already familiar with, well versed in. The metaphor of driving keeps recurring to me in connection with foreign exchange trading. We can feel more at ease with foreign exchange trading if we can see it in the light of driving, something most of us do everyday.

Foreign exchange trading is like driving a car. Some people are Formula One Grand Prix drivers, some drive in African and Himalayan Car Rallies while the majority of us are daily city motorists. Whatever be the road you drive on whatever your vehicle may be like, you need to keep your wits about you and follow the rules of the road.

The maximum number of rules apply to the City Motorist - keep to the left (or to the right, as the case may be), stop at the red light, give the pedestrian the right of way, drive within the prescribed speed limit, don't enter into a one way street and so many more. As long as he adheres to these rules, the motorist can be relatively assured of a safe ride to work and back home and that the traffic police will not bear down upon him. The City Motorist can hardly ever afford even a scratch on the car.

The Rally Driver is a little more adventurous and his sponsors are ready to bear the expenses of the car getting mangled as long as he manages to win the trophy. The same applies to people like Michael Schumacher. Both, however, have to follow the rules of the races they take part in, else they run the risk of getting disqualified.