The mindset actually becomes the foundation on which you lay your strategies before you begin trading in the forex market. People like taking shortcuts in almost everything in life but when it comes to trading, there are no shortcuts. It all depends on how you position your mind on the kind of trading you want to get into.

Forex trading is all about passion, discipline, desire, and of course money because a higher percentage of everyone in the currency trading is simply there for the money.

It is therefore important to get this psychological preparedness of actually learning the rules of trading forex. There is always danger lurking somewhere at the corner in every kind of trade so the best thing to do is to learn how to either avoid that danger or sometimes when you fail to avoid it, you are required to learn how to handle it and move on without losing sight of your forex trading goals.

When you have the desire to make it in the forex market, keep your forex dreams and ambitions constantly alive. Do not let any losses draw you back and keep you away from achieving your goal. One thing to remember too is that discipline is by far the tried and tested unwritten rule in everything you do.

Be disciplined, keep your emotions at be and in control, follow the rules religiously, stick to your strategies, take the chance to learn as much as you can about the forex market, and within no time, success will come beckoning to you. There are several steps to follow if you wish to develop a profitable forex trading mindset.

1. Be Your Own Money Manager

This is where discipline comes in handy. A good trader should be one who has the ability to manage his money wisely. You must have safeguards for your money when it comes to forex trade. Most successful forex traders are known to have good money management skills and that is why they always stay at the top in every trade.

Trading currency is by far the greatest risk that anyone can make. You are not sure whether you are going to gain or lose but you still go ahead to trade. Do not give in to greed by overtrading in order to make more money in fact this has been known to be the cause of losing massively in forex trade. Choose wisely when to place your orders, learn how and when to stop losses, and follow your strategies.

2. Know When to Trade

One of the biggest mistakes that most traders do especially the beginner traders is that they fail to know when to trade. They forget to look at the market trends and place their orders anyhow.

This is the reason why a trader must first learn the market and know how it works before venturing into the live trading. Having prior knowledge of the forex market is essential for a trader because he gets to learn and practice way before getting into the trade and this helps him in developing a successful forex trading mindset. You get to know when to place trades and when to relax and also how to handle losses and not over trade.

3. Be Patient

Many people get into currency trading and want to make quick money within the shortest time possible. They fail to realize the power of patience in trading forex. It is better to have slow, consistent gains in forex exchange than big gains that come once in a long time.

Learn to look at the bigger picture of the market by setting your goals on a long-term basis rather than short-term. By so doing, start your trading on the small daily charts. This will ensure consistent growth as you learn more about the forex market. Also go for quality rather than quantity.

It is better to wait until you see a price action set up that is worth the risk and then place your order. In being patient, you also learn that trading is about winning and losing and therefore gets prepared for anything that might come.

4. Be Organized

Most winners are known to be organized people. They know what they want and how to get it and will therefore use everything at their disposal to work towards achieving their goals.

A forex trader is also expected to be organized. You should at least keep a trading plan or a checklist which acts as your guide to trading markets. It actually contains your short-term and long-term goals and ways of achieving those goals.

A trader should also record his sales in order to have a place to refer to when you need to see the progress of your trade. Always think before you place a trade not after a trade. Make sure you check the price and know when to put stops before finally placing that trade.

5. Have Realistic Expectations

It is important to have expectations that you know you can meet. Do not set high expectations when you are just beginning as this will discourage you from going on especially after the first loss. Also, a trader must learn how to control his emotions.

Keep your emotions far away from the trading market. It is important to know that in trade you win sometimes you lose. Winners who keep staying at the top in every trade have mastered the art of staying level headed even after losing.

Summary

The mind is where everything begins and in forex trade, it is important to have a clear mindset of what you want from the business. Have a positive attitude and believe in your potentials.

To make sure your career doesn’t die because of a simple error, we are naming some common mistakes that end up killing trading careers.

1. Paying Too Much Attention to the Trends

It is good to tune into the latest trends and developments, but if you focus too much on the news and what other traders see, you won’t make an impact. In order to be successful, you have to find a strategy that works for you. Perform your own analysis and find something you feel confident in.

No one knows what the market will do next. So it will be better if you focus on what you know, what you tried and tested. Find something that works for you.

Don’t let the crowd make you lose direction. There will be news stories every hour; you can’t follow everyone.

For example, following current trends of British pound is smart, but if you log into every British Pound sterling GBP news outlook and forecast you will lose track of other currencies. This may kill your career.

Moreover, the news isn’t always trustworthy, and you can’t map your whole plan around it. Don’t make this news and trends the only key component of drafting a plan. Have confidence in your own analysis and strategy.

2. Lack of Planning

When you fail to plan, you plan to fail. This is most true in forex trading. Most beginners don’t have a plan when starting out.  Without a clear vision, you put your goals at risk. You start trading with your emotions instead of analysis.

This is a recipe for disaster. Don’t be over-optimistic because you will lose hope after continuous failures, especially when starting your forex career. So, do your homework and come up with a plan.

Once you made a plan, make sure you stick with it. Another common problem starters have they are not disciplined enough to follow it.

Lack of disciple gets you in trouble because you let your emotions take over. This is a common mistake which makes your loss exceeds your gains.

3. Over Doing Things

A word of advice before you enter the Forex Market, never risk more than you can afford to lose with a single trade.  Beginners believe everything they will touch will turn to gold. This is the reason they overtrade their account size or use too much leverage.

The pioneers never risk more than 1-2% of their equity with a single trade.

High stake trading doesn’t always work. If you take a huge risk, you will end up losing your market. Even if your reasons are good, high stake trade makes you run out of business.

4. Not Cutting Loses

To Win, you need to place calculated trades and control yours loses. Using 1-2% of your equity is an effective way to keep yourself from running out of business.

Don’t enter too manage trades to average down because the market will work against you. This way, you will still get wiped out.

If you want to bet higher, risk 6-10% of your equity. If you invest heavily, your equity gets a high exposure, and the risk of losing is mitigated.

So instead of risking one major risk, create a diversified portfolio of investment. Limit the risk with diversification and low exposure to a particular market.

It’s also important to connect your account with copy trading platform. This will help you to copy the strategies of other successful traders and cut down your losses.

5. Failing to Bank Gains

One of the worst ways to make money with Forex trading is holding out for too long. If you do this, your once prolific trade will lose value. So, bank the profit once your target is achieved. To improve your chances of success, learn more about trail stops.

Trail Stopping is when a stop loss automatically follows the price movement by a set number of pips and percentage of gains.

As the price gets higher, so does the stop. When you close half of position, the trailing stop allows a better return, especially in a strong market before the reversal.

6. Averaging Down Too Often

You need to make your mind how much you want to risk on a trade and stick with your plan. If you don’t have much experience with forex trading, you will fall to the temptation to buy or sell more when a trade goes south.

This averages your loss. If the market turns around, it means you can control the loss or leave with a profit.

The issue with this approach is once you double a losing trade, you lose control of your money, and the results are devastating.

This is why it is important for you to know what the forex broker is offering you in order for you to open an account with him. What forex brokers provide does not differ from one country to another since forex markets are part of a global market.

In this internet age, a client does not have to choose a forex broker who is located in his home country and can choose a broker from anywhere in the world.

Here are some characteristics of a good global forex broker:

1.       Good financial backing

Many new traders do not understand the need to check into the assets of a forex trading brokering firm. They feel that the firm does not need to have a large asset base since they would be getting deposits from clients anywhere. However, this is not true.

A good forex broker needs to have financial backing or it should have a good asset base of its own. With this assurance you will feel confident that your funds with the forex broker are secure and that the forex brokering firm will not become insolvent suddenly. Getting your money out of an insolvent firm can be very difficult.

2.       Efficient trading platform

The trading platform is important software that is used in forex trading. It allows traders to manage their accounts, trade in the market, carry out technical analysis and receive forex news too.

Since it is the application that you use to place orders, it needs to be responsive and quick, given that the forex markets are extremely dynamic and volatile.

There is a simple way of checking these aspects. Every forex broker allows a demo or trial period when you can practice on the platform for a period of time. This is the best way of evaluating a forex trading platform.

3.       Client friendly trading account

The trading account includes many aspects of what the forex broker is offering you. Part of the specific features of the trading account include the spreads offered, the leverage available, the minimum deposit required to open an account and the minimum lot size in which you can trade.

Aspects such as the methods of withdrawal of your funds are also included in the trading account. You need to ensure that access to your account is easy and that you will be able to retrieve your monies when you want to.

4.       Customer service

 The forex markets are open throughout the day and night, starting from Sunday night (when the Australian exchange market opens on its Monday morning) to Friday evening in the United States.

The market never sleeps and therefore the forex brokers providing service to clients should not sleep either. Customer service personnel should be available to answer questions at all times for clients who need clarifications or assistance.

There are grossly four types of indicators and each of them gives you a specific perspective of the Forex market. 

That said, this article will briefly discuss 5 essential indicators that form the baseline of Forex trading, from which a novice trader can evolve into an expert or a funded trader with solid knowledge and skills.

1. Trend Indicators

Trend indicators tell in which direction the market is headed. In other words, if you’re trying to figure out whether the market is in an uptrend or downtrend, trend indicators will reveal that information.

Most traders are trend traders, as a result, they buy in an uptrend when prices are low and as soon as the trend reaches its peak and signs of a reversal become apparent, they sell their currency.

The following are the most common trend indicators to operate in the Forex market:

a. Moving Average (MA)

Most currency pairs are subject to lots of short term volatility that blurs your vision and makes it hard to identify a clear trend. As a way to cut out all the noise, Simple Moving Averages are used. 

Chart 1.a: Moving average

A Simple Moving Average is a line connecting the average closing prices of a currency for a set period of time. It allows you to graphically see whether the exchange rate is going up or down on average.

b. Exponential Moving Averages (EMA)

These are very similar to the simple Moving Average; in fact, they are used for the exact same objective. Exponential Moving Averages, just like Simple Moving Averages, aim to provide a smoothed out picture of the trend line to give you a clearer view of market behavior.  

Chart 1.b: Exponential Moving Average

The only difference is that EMAs shift faster as a result of real-time price changes. Simply put, it offers a more updated view of the market.

2. Momentum Indicators

Every trader should be able to tell how fast currency prices are changing, and this information is used as either confirmation of current market behavior or as part of a trading strategy.

One of the most effective momentum indicators is the MACD – Moving Average Convergence Divergence:

a. Moving Average Convergence Divergence (MACD)

It’s worth noting that indicators aren’t always used on their own, they’re usually combined with other indicators. That is the case of the MACD indicator.

It comprises two exponential moving average lines, typically a 26-day and a 12-day EMA, the MACD line, and finally a signal line drawn on top of the MACD line.

Chart 2.a: Moving Average Convergence Divergence (MACD)

Periods of high momentum are identified when the MACD line crosses above the signal line.

This is one of the most widely used indicators and it allows traders to identify when bullish or bearish momentum is high.

3. Mean Reversion Indicators

In a nutshell, mean reversion indicators tell you how far the price of a particular currency is from its average price in either direction. Furthermore, mean reversion may also be used to measure other market aspects such as volatility.

Here’s a popular mean reversion indicator:

a. Bollinger Bands

Just like the MACD, Bollinger Bands consist of other indicators that makeup the famous bands. 

Chart 3.a: Bollinger bands

They’re made of 3 lines; a simple moving average line and a lower and upper band.

Bollinger bands are mostly used to offset overbought and oversold signals.  Traders believe that once a market is overbought, as indicated by a movement of prices closer to the upper band, a mean reversion will occur, forcing prices to move back to the average price.

An oversold market on the other hand, is depicted by a movement of prices to the lower band.

4. Volume Indicators

Volume is a crucial aspect of technical analysis, simply because it’s undoubtedly the most effective way to gauge market interest, a key aspect when trading currencies.

The vast majority of traders understand the principle of buying low and selling high. However, even though this is normally the goal, it’s not as straightforward as it sounds. Additional factors could be driving market prices high or low, in which case buying or selling will be extremely challenging.

For that reason, traders use volume indicators as a way of confirmation that there are enough buyers or sellers to fulfill their orders and also that there is significant market interest to keep a trend going for a reasonable amount of time.

You’ll need the following indicator to gauge standard volume:

a. Volume by Price Charts (VBP)

It’s a common practice for technical analysts to include volume charts or histograms right underneath a standard candlestick chart. The VBP charts show the volume of a given amount of currency being traded at a specific price level.

Chart 4.a: Volume by Price Charts (VBP)

These charts are used by technical traders to predict areas of support and resistance.

Final words

Now you have a clearer idea of some of the most widely used indicators in Forex trading. Start practicing their use, but don’t forget that you’ll need fundamental analysis in conjunction with your trading strategy to yield better results.

In Forex trading, it’s crucial that you take a look at fundamental factors such as a country’s gross domestic product, consumer price index and retail sales to help you gain a more in-depth understanding of a currency’s value.

By doing this you will be able to anticipate price movements of a specific currency pair.

What separates the winners from the losers is how you handle those trades that run into losses. You should be familiar with the most common saying in all financial markets and make it a mantra.

That is, “cut your losses and let your profits run”. That is a very practical piece of advice which you should always stick to since one bad trade can wipe out your entire forex account even if you were just from a winning streak for the last one hundred trades.

All said and done, knowing when to cut your losses provides the greatest challenge for most traders.

You may prematurely exit a trade only to see the price action reverse to the direction you had previously expected and end up making a loss where your trading strategy had correctly predicted high profits.

At the same time, you may dilly dally a little bit hoping for this reversal only to make your situation worse and end up suffering much higher losses than you can manage.

So how do you know when to cut your losses?

1. Follow the Market

Following market information and the various technical levels that might have an effect on your forex trade positions act as an early warning system for impending losses.

Forex charts are especially useful in identifying trends and predicting any trend reversals. Financial and political news events may also play a significant role in price directions of the positions you are holding.

Forex traders with high experience levels can also be a good source of reliable information and you can access their opinions and commentaries from broadcasts and blogs.

For example, going for a Rakuten open account can allow you start trading and follow the market happenings without any hassles.

2. Detecting Bad Trades

The first duty of all forex traders is to protect their forex capital investment. Therefore, even when you suffer a few losses, your forex capital should remain significant enough to enable you to continue trading and possibly recoup your losses.

To achieve this, you have to learn how to detect bad trades early enough before your losses turn into huge, unmanageable amounts. For early detection, you can check on the following points:

i) Reversal Points

If the trade is placed too close to a likely reversal point, then it is potentially a bad trade.

ii) Resistance

If you have placed a long order at a resistance level, that is potentially a bad trade.

iii) Support

If you have placed a short order very close to a support level, that may be a bad trade.

iv) Reversal Candlesticks

If a short trade bears some bullish reversal candlesticks, you may potentially be in a bad trade. The same applies to long trades that show bearish reversal candlesticks.

v) Other Currency Pairs

If the currency you are trading in your preferred currency pair is moving in a certain pattern when in other currency pairs, you better take note. It will soon move in the same pattern in your currency pair.

So once you have noticed that you are in a losing trade, what do you do? You have to keep a cool head and turn to your forex trading strategy for guidance.

These are some of the points you should have in your strategy.

3. Actions to Take on Bad Trades

Once you have determined that you are on a bad trade with no chances of reversal, you should act fast and decisively to limit the extent of your losses.

There are various ways which forex traders use to exit trades.

Forex Exit Strategies

Most well organized forex traders have an exit strategy for every bad trade they find themselves in.

A common strategy is using the percentage retracement method. This means that if a trade goes to a 3% loss level compared to the total amount of your forex account, then it is time to exit.

Some of the exit methods include:

i) Limit Orders

A trader can instruct the broker to buy or sell a currency when it gets to a certain price. In this way, the trader avoids running into very high losses.

ii) Stop/Loss Orders

Bearing some similarities with a limit order, the stop/loss order is meant to limit the trader’s losses. The order is usually set at a certain percentage below the buying price of the currency.

iii) Trailing Stops

A trailing stop is a kind of stop loss order that shifts as your profits increase. You may set it to follow the price 10 pips behind so in case of a price movement reversal, you will automatically exit the trade only 10 pips behind your highest profit level.

4. Day Trading

Another way to limit your losses is by not holding overnight positions. You may set your trades to end each day just before the trading hours close.

This makes it easier to monitor your position and not be susceptible to surprise price movements that may occur overnight.

5.  Maintain Discipline

You have to always be objective when trading in the forex market. Keep a cool head and never attempt to recoup your profits immediately after a loss.

In fact, just close up shop for the day and come back another day when your mind is fresh and the painful memory of your loss is not strong enough to distract you from following your forex trading strategy to the latter.

Use this time off to assess and analyze the extent of your loss and its effect on your forex account.

6. Let Profits Accumulate

Limiting your losses is very important as it protects your forex account and investment.

But even more important is making profits from your investment. During those times that you are on a winning trade, be patient and allow the winning position to mature to a substantial gain.

Do not give in to the temptation to quickly close the trade to protect the gained profits. You may end up limiting what would have been a very profitable position.

A trailing stop is very effective in both riding a winning position and locking in profits while at the same time limiting losses.

Photo credit: Focusoft

Comparing Renko charts to candlesticks – How different are they?

Technical analysis as we know it today, has come a long way. Most of the books on technical analysis often tend to focus on the three main chart times. Namely, the bar chart, candlestick chart and the line chart.

There are different technical analysis methods that one could use depending on the financial chart style. Technical analysis, after all is all about evaluating historical patterns or behavior to predict future price.

While the line chart, bar chart and the candlestick chart often trump in popularity, there are some custom charts as well. Not as well known, for perhaps many different reasons, these custom charts are quite different.

The main difference is of course in the way they visualize the prices of the financial instruments.

Taking a step back, if we talk about day traders in general, we usually find them moving from one chart type to another. This is perfectly normal as one goes through the experience of trading with the different chart styles before getting comfortable with one.

One of the most common reasons why traders tend to switch their main chart style is the expectation. The general consensus here is that, using a different chart type on a financial chart can yield better results.

But truth is far from it.

While it is correct that the different charts tend to depict price differently, the bottom line is that the information they provide is just the same. Just to extend this further, there are many more chart types than the above three mentioned.

These include:

• Heiken Ashi charts
• Range bar charts
• Point and figure charts
• Renko charts
• Kagi charts

Among the different types mentioned above, we will look at the Renko chart comparing to the candlestick chart.

What is a renko chart?

A renko chart is merely another financial chart type that is used to plot historical prices and plots future prices. The name Renko comes from the Japanese word, Renga, which means brick. Unlike the three traditional chart types mentioned, there is something unique about the Renko charts that makes it quite different.

This uniqueness is the fact that Renko charts are not time based charts. In other words, most of the financial or stock chart types tend to carry price in the y-axis and time on the x-axis. With Renko charts, we only have price plotted on the y-axis.

This leaves the x-axis redundant.

There are certainly some benefits as some point out in using the Renko charts. But it is quite likely that most of this might come from a psychological perspective. Having said that, there is also a bit of truth to it.

In a world of fast paced trading, day traders and speculators wish to gain the extra edge. This edge, most believe might come when you look at financial charts or analyze them differently. This is also one of the reasons why there are so many different ways that one could use the different technical analysis methods (Elliott waves, trend following, breakout and so on).

Below is an example of the three main chart types we talked about earlier and comparing it to the Renko charts.

As you can see from the above chart comparison, clearly, the Renko charts stand out. In the next section we will take a look at the differences and similarities between the Renko chart and the candlestick chart.

Differences between Candlestick and Renko Charts

Talking about the differences between the candlestick and the Renko charts, let’s begin with the obvious and one that we touched upon already.

Renko charts do not account for time

This is the first and the most obvious difference between the Candlestick and the Renko chart.

In a candlestick chart, depending on the chart time period that you are using, each candlestick represents that particular period in time. So, for example, if you were looking at the daily chart, then each candlestick represents the price action for one day.

When you move to the previous candlestick, it represents the price action for the previous day. By looking at the candlestick chart, therefore one is able to quickly understand how much price moved during the period in question.

Once the current period ends, a new candlestick is plotted.

With Renko charts, this is not the case. Focus is given purely to the price movement itself. As a result, the time factor is removed.

Many believe that by removing time from the equation, one gets to see a full view of the price action alone. This, in turn is expected to show price trends more clearly. It is also means that a new Renko brick is plotted only if price moves a certain distance from the previous closing price.

As a result, what you get at the end is merely one brick after another, in a series that looks like an ascending or a descending staircase. Traders can of course configure their renko charts to set the correct brick size.

Another common way to configure the Renko chart is by using the ATR or the average true range. You can read more about how to choose the Renko chart using ATR or fixed size here.

Similarities between Candlestick and Renko Charts

When it comes to the similarities between the Renko charts and candlestick charts is the fact that both these two chart types originated in Japan. Hence, both the candlestick and renko charts are quite ancient.

In terms of color, both the charts represent the same thing. When price is rising, or it is bullish, the candlestick (and the renko chart) can be plotted in Green or White color. Similarly, when price is falling or is bearish, both the candlestick and the renko chart can be plotted in Red or Black.

While traditional Renko charts did not have any tails or wicks, newer charting platforms have begun offering this feature too. These Renko tails show how much price has moved in either direction before closing out.

Both the Candlestick and the Renko charts have the open and close prices. If you include the Renko tails or wicks, you can also see the high and low prices as well.

It is important to mention that in a Renko chart (traditional), there are just open and close prices. But as we mentioned, as newer charting platforms start to show the Renko tails, you can also see the high and low prices.

Talking about the question of prices, both candlestick and renko charts show price on the y-axis. But as we mentioned earlier, with Renko charts, a new brick is plotted only when price increases by a multiple.

Both Candlestick and renko charts also show the market sentiment. Of course, it is more evident on a Renko chart because the trends are clearer, comparing to the candlestick chart. It is mostly because of this reason that traders tend to prefer the Renko charts in their technical analysis.

What is the verdict? Are renko charts better than candlesticks?

Eventually one ends up asking this question.

And as with most things, the answer is subjective. Are you someone who prefers the familiarity of using Candlestick charts? Do you like a traditional technical analysis method that makes use of Candlestick charts? Are chart patterns like Doji, Engulfing bar something you like?

If you answered yes to the above, then candlestick chart is obviously the way to go.

But if you are someone who prefers trying out something new or if you prefer to see price trend evolve then Renko charts might be an option worth considering.

Regardless of what charting type you use, bear in mind that you don’t really get an edge in the markets. At the end of the day, what chart type you use purely depends on how comfortable you are with that chart type. It is also important to note that you should truly understand how the specific chart type you are using helps you in your day trading activity.

About the Author

Ranga, is a day trader and an educator. He first started trading over 12 years ago, having tried the different methods. However, over time, Ranga’s preference for Renko charts grew. Eventually, this led Ranga to start https://renkotraders.com, a blog that talks about Renko charts, trading strategies based on Renko charts and a lot more.

Forex traders do this every day, with each trade they enter. You are human, and all that stress will pile up and come back to bite your rear.Oops!

There are easy tried and tested ways you can deal with your stress before it gets to levels that require strapping you into a strait jacket.

1. Acknowledge

Your first step in dealing with forex trading stress is to acknowledge and accept that you are under stress or at least at risk of being stressed.

Openly admitting to self that you are anxious, feeling threatened, and overwhelmed is your first sure step towards overcoming your trading stress.

Use your trading journal to note down your emotions and their effect on you. Do you get sweaty when in a precarious trading position?

Do you suffer headaches as a result? What are your thoughts, feelings, and actions? Read more on a trading journal here.

2. Switch Off

Stress will most definitely lead to poor trade and poor risk decisions. You will suffer losses if your mind and emotions remain unsettled.

One way to deal with forex trading stress is to simply switch off from trading. Stop watching your price charts, switch off your signals and indicators, and avoid financial and economic news.

If your cell phone and newspapers threaten to pull your back into the market, get rid of them too. Take a deep breath, a walk, or a nap to refresh your mind away from your trades. This will make you more and better focused upon your return.

3. Identify Stress Source

The only way you can address, confront, and eliminate your stress is by first finding its cause.

Once you identify the source of your trading stress then you can determine whether you have genuine cause for worry.

In many instances, simply making an objective assessment of your situation is enough to reduce or eliminate your stress.

If that does not work, then at least the assessment equips you with a better understanding of your situation so you know who to approach for help.

4. Define Goals and Objectives

Frustrations and anxiety generally occur when you feel you are not achieving your goals and objectives.

By clearly defining your goals and objectives, you can get a clear picture of what to do to make sure you fulfill all you desire out of trading.

Poorly defined goals will leave you empty, unfocused, rudderless, and even confused. This will cause a buildup of unresolved tension and anxiety.

Some brokers, like a forex broker in Australia, will give you a dedicated account manager to help you in defining your trading goals.

5. Use Daily Affirmations

Having a trading mantra to remind you of your goals or having a set of affirmations to recite can keep you focused and stress free.

Affirmations strengthen your belief in your abilities and make your emotional, psychological, and physical burdens bearable.

Clear and specific affirmations with achievable goals ease your mind and relieve your stress. Read more on daily affirmations here.

6. Work Out Regularly

Exercise is a fantastic way to relieve all kinds of stress. Pick an exercise regimen that is not too difficult to manage and follow it.

This keeps your body in top shape, your blood and adrenalin pumping, and your mind clear.

With your body less susceptible to illness and the clarity of thought, your stress levels will be significantly lower than when you were not exercising.

7. Watch Your Diet

You are what you eat, and this applies to every sector of your life. Eat healthy well balanced diets in the correct portions.

This will keep your body and mind functioning at their highest levels for longer periods of time.

Frequently replenish your energy during your trading periods by taking nutritious well-spaced snacks.

8. Drink Enough Water

A well hydrated mind and body is less at risk of stress and illness. Water gives you a sharper mind, a more active body, and keener eyesight.

When well hydrated, you also tend to be more focused and your ability to multitask effectively is multiplied. In contrast, when you are thirsty you are more irritable, restless, and of course stressed.

9. Meditate Regularly

Meditation is a superb way to clear your mind and get rid of piling stress. It is also a very cheap way of staying focused and can be done anywhere, even in public places.

Apart from regular meditation, you can also try out relaxing therapies, yoga, and pilates.

Have a routine that does not disrupt your trading times. Remember to engage in meditation daily so as to reap the full long term rewards and keep stress at bay.

            10.Have a Trading Plan

A simple rule that every trader should live by is to plan all trades and trade your plan. Most beginners trade without any clear plan at all, while some of those who have a trading plan regularly trade against their plan.

Sticking to your plan is a sure way of maximizing big forex profits and minimizing losses. Of course when your plan is working out, then your stress levels are significantly lowered.

Choosing the best auto trader guide strategies is not an easy feat. Traders have to try out different available systems to find the ones that work best for them.

While many of the forex trading strategies are available from third-party forex suppliers and brokers are tried and tested, some traders prefer to implement their own strategies.

Creating individual automated systems requires coding proficiency that only specific programs third-party suppliers can offer. However, following the right auto trader guide can make coding the strategies easier to code and implement.

How to Choose an Automated Trading Strategy

If you are new to automated trading, it is hard to choose the best algorithm to use as your trading strategy. The choices range from tried and tested algorithms that you can get off the shelf easily or bespoke algorithms that compliment your past trading habits.

How do you know which one to go with? The following tips will answer the question.

·        Understand the description of the strategy

If you come across a new strategy, you should first understand its description or key logic: the key words to pay attention to include profit target, momentum, and stop-loss order. You should also pay attention to the trend, breakout, range details, and market conditions designed for the strategy. Find an automated strategy that is effective for your target market.

·        Use a demo account

Do not go live with your strategy before backtesting its historical data using a demo account. Backtesting helps to identify the strategy’s profitability and performance before using real capital for trading. Furthermore, it also provides you with other details such as annualized returns, risk-adjusted returns, statistical averages, net profits and losses, market volatility, and others.

·        Use won and lost trades to review the strategy

The automated strategy you choose for your trading will play a major role in carrying out all your trades. Therefore, when evaluating its effectiveness, focus on a larger picture rather than a few details. Start by reviewing the strategy’s last ten performances, which include added pips between currency pairs. If a strategy does not add any pips on an exchange between two currency pairs, you should look at the next one. Do this until you find the one that performs according to your preference. 

·        Consider your day-to-day lifestyle

Before choosing an automated strategy that works well for you, you should also consider your lifestyle. Automated systems require some monitoring. If the state of your job requires you to be away the whole day, you may not have time to monitor the algorithmic system. You should therefore choose a system that does not involve hundreds of day trading trades. Instead, choose a strategy with fewer trade frequencies.

·        What is your personality?

If you are one of those people that find it hard to let go, you might rethink the idea of using an automated algorithm as your trading strategy. Too much fiddling with the automation systems may not go down well if you cannot let go. Choose a system that you can trust to work for you in your absence.

·        How is your budget?

Some automated trading systems are free, but others come at varying prices. High-frequency automated strategies build up commissions fast, which means you should have enough trading find capital before you go for any of them.

Wrapping it up

The forex market stays open 24 hours a day. Using automated trading strategies helps forex traders to make use of the 24-hour parameters. Choosing the best-automated trading strategy is not a walk in the park.

However, with all the good auto trader guides available from a third party and forex brokers, as well as those that you can download, you can find an automated strategy that works well for you without you deviating from your other daily activities.

This means the day trader will usually trade during a single time zone. An exception is when two time zones overlap, such as what happens when the US market opens in the morning and it is still afternoon in Europe.

Day trading is not as easy as it may seem and forex beginners have to be especially careful to acquire the right skills and tools before venturing into day trading.

Market Timing

A day trader needs to be well conversant with technical and fundamental analysis to be successful.

This should be combined with money and risk management strategies to ensure long term profitability.

Click here to read more on risk management.

A viable risk/reward ratio is necessary for one to enjoy long term profitability as a day trader. When using a market timing strategy, a trader needs to have high levels of discipline in order to capture the right trades at the right moment.

The day trader should be adept at following price charts and accurately reading price movements, price volumes, and price trends.

It is necessary for the trader to know all about different candlestick patterns to determine the most ideal trade entry and exit points.

As a day trader, one should know when the markets are most liquid and dynamic with the highest volumes traded.

One should also know which types of economic data have the potential to change currency prices and which time frames are most favorable for their chosen currency pairs.

Trading Price Swings

Many currencies experience erratic price movements at certain times, especially when there is a release of important economic information.

A day trader seeks to predict such movements before they happen so that he can make trades just before the price swings occur.

Trading such short term price swings , using an auto trader broker, is ideal for day traders and small investors because they usually do not have to compete with large investors such as banks.

Margin Trading

Day trading involves the taking advantage of small pip movements to make a profit on short term trades.

However, to gain a substantial profit on just a few pips is very hard to achieve unless you are trading a very large amount of money.

That is why most day traders trade on margin. By borrowing at high leverage levels such as 300:1, 400:1, or even 500:1, a trader controls a much larger trade and stands to benefit so much more from small pip movements.

To trade on margin, the trader needs to open a margin account and deposit money into it. The deposit amount is usually an amount pre-agreed between the trader and the broker.

Typically, no interest is charged on this margin account unless the trader does not close the position by the delivery date and it gets rolled over.

Interest may then be charged depending on the trader’s position and the underlying currencies’ short term interest rates.

To illustrate margin trading, assume a forex investor has $1,000 in his margin account and needs to trade a standard lot worth $100,000.

The margin will be 1% and the leverage will be 100:1, which means the trader will have to borrow $99,000 from the broker to complete the trade.

The broker will use the trader’s $1,000 as security and if the trader undergoes losses that reach the $1,000 mark, the broker initiates a “margin call” which closes out the position unless the trader deposits some more funds into the margin account.

If the trade closes out profitably, the trader gets to keep the profits and repays the borrowed funds without interest.

Momentum Trading

Many beginners enter the forex market with the idea that to be profitable they have to predict future prices. Actually, this is not quite right. To be profitable, a trader has to ride on the market’s price momentum.

A common axiom in technical analysis is that price may often lie, but momentum will always tell the truth.

A Moving Average Convergence Divergence (MACD) histogram is especially handy in trading on momentum in forex trading.

Other useful indicators for measuring momentum include a stochastic oscillator, Commodity Channel Index (CCI), or a Relative Strength Index (RSI).

Scalping

One of the most profitable day trading strategies is scalping. A forex trader buys a currency and holds it for a very short period of time, gaining just a few pips, before s/he sells the currency.

Forex scalping time frames usually last between one minute and 5 minutes. This process is repeated over and over again throughout the trading day.

To be profitable, the trader has to learn how to look for trade signals and accurately interpret them to know when to buy and when to sell.

Additionally, since the pip gains are usually very small, the trader has to rely on very high leverage levels to make substantial profits.

There are forex robots used for forex scalping and offer the trader a fully automated system.

The trader has to teach the robot which signals to look out for and how to react to them.

Hedging

One way to minimize losses in forex trading and ensure a gradual increase in day trading profits is by hedging.

This involves the buying of one currency pair in one trade while at the same time selling the same currency pair in another trade then dropping the loser and going with the winner.

Instead of selling the same currency pair, one may also buy a currency pair that inversely correlates with the bought currency pair.

Summary

When formulating a day trading strategy that works, most traders will find that their system will be a combination of the above day trading strategies.

One should focus more on formulating a strategy that has practical and well thought out risk management strategies which employ favorable risk/reward ratios.

Photo credit: Forex Learning

CFD Trading

Contracts for Difference (CFD) are basically contractual derivative products with two parties (buyer and seller) involved. CFDs can be used in reference to anything from the FX trade to the Binary Option. Each varies based on the underlying tradable asset.

In CFD trading, a broker creates a derivative contract that pays you money in the event of a successful prediction of the price movement of the tradable asset.

These assets include currencies, commodities, bonds, stocks and indices. If you think you can correctly predict the price movement of the asset, then you stand to make a decent income.

Why CFD Trading?

Here are a few reasons behind CFD trading popularity:

Anytime trading: You can trade anytime you feel like 5 days a week (business days)Anywhere: Thanks to technological advancements and online platforms, you can even trade from the comfort of your own bed.

Additional income: Make crypto CFD trading your side business to supplement your monthly pay slip.

Flexibility: CFD trading makes you your own boss. You can take a break whenever you like.

Freedom: You no longer have to stay within the confines of an office. All you need is a PC or mobile device and a stable internet connection.

How Technology is changing CFD trading

It does not take much for one to understand why technological advancements realized over the past two decades have had positive effects on the securities trading spectrum.

The global securities market is volatile – driven by socioeconomic, geopolitics and natural events, it changes every day.

So having all that information available at the tips of your fingers is crucial.

Mobile CFD Trading

Given that you can trade in CFD 24 hours a day, 5 days a week, most investors are were left glued to their computer screens all week long waiting to pounce on any market changes.

Mobile technology is among the notable inventions in the trading industry. Mobile internet technology has revolutionized how the world transacts business and investments.

The online trading industry is itself a clear reflection of this technological advancement. Initially, most brokers relied on a desktop platform.

However, with the internet accessibility innovations, more traders seem to favor the flexibility that comes with mobile trading apps and mobile websites.

The innovations achieved over the past two decades have resulted in more traders than ever enjoying access to trading platforms, market insights and information from top market experts and other industry insiders.

At the same time, this advancement also helps CFD traders with real-time monitoring coupled with other features such as copy trading to complement the traditional educational tools.

Technology is also helping traders use essential features such as pattern recognition scanners which are designed to automatically detect common patterns in the CFD trading market. This makes it easy for traders to make accurate and informed decisions.

Technological advancements are making it easy for traders to access crucial economic calendars on a real-time basis. These calendars are designed and powered by CFD market trackers, such as Dow Jones to help traders keep tabs on current economic events.

Upcoming Online CFD Trading Innovations In numerous ways, the full potential of the mobile technology is yet to be realized on a global scale.

There are still areas where this technology is yet to be implemented. Keep in mind that to enjoy the best of mobile trading, you need access to the internet. Unfortunately, there are areas where internet access is yet to be made widely available.

Another innovation to look forward to is whether a worthy competitor to the Forex MetaTrader 4 platform will emerge.

Although most of the recent inventions seem to focus more on access to trading, it is likely that the next wave will be characterized by game-changing innovations probably focusing on the trading platforms and mobile apps.

Conclusion

Is technology working for CFD trading or against it? It is clear that CFD trading has greatly benefited from advancements in technology, helping traders make trades efficiently and effectively.

In addition, price comparisons and analyses help online traders make well-informed decisions.