First steps in the Forex world.
The rapid development of high-speed Internet has significantly diminished the role of dealing centers as platforms for traders to work, and has divided the already fragmented traders. Personal communication, exchange of opinions and ideas, or even quick help to a friend - all this became somewhat difficult. At the present time, trading is mainly carried out from personal or work computers, and each trader often revolves in a heap of his own problems. Is this good or bad? As with every problem, there are two sides. On the one hand, a trader, and especially a novice trader, has less to listen to the opinions of other, more experienced, although not always successful market players. The negative point is that such isolation makes it impossible to consult on any issues. For example, very often there are questions about choosing or changing a broker, about the advantages and disadvantages of various dealing centers. Especially the lack of information affects those who are at the beginning of a long trader's path.
The question of choosing a broker is far from idle. Moreover, this is the most important question for a person who has chosen a trader's path. The choice of a broker determines not only the comfort of conducting trade transactions, which is important in itself, but also the elementary safety of the invested funds. Yes, and the operations of depositing and withdrawing financial amounts themselves should be simple and understandable for a trader. Therefore, it is best to start the analysis of brokerage firms with an acquaintance with the proposed trading conditions, and it is also worth familiarizing yourself with the procedure for carrying out financial transactions. Forex has long ceased to be the prerogative of the inhabitants of megalopolises. In any place where there is Internet access, anyone can try their hand at trading financial instruments. And it is not necessary to open an account in the geographically closest dealing center, but to carry out financial transactions through a bank branch located nearby. It is enough to register once in the Skrill Neteller payment systems, and the geopolitical remoteness of the trader from the dealing center will fade into the background. Of course, it is understood that the selected brokerage company must necessarily support the work with these Internet payment systems. According to statistics, about 95% of traders solve their financial issues using Skrill and Neteller. And this massiveness in itself speaks of the reliability and convenience of this method of interaction with a broker. Now you can go to the choice of a dealing center, where the trader is going to open a trading account. Today, one-day firms are rare (firms that close immediately as soon as they collect a certain amount of money from people). Nevertheless, there are not so many really successful dealing centers operating for a long time. Often, their fruitful activities are carried out without the pompous and annoying promotions inherent in less successful brokerage firms. Therefore, it is sometimes quite difficult for a beginner to separate the real grains from the chaff shiny with fake.
Any work must be paid. This postulate is equally true for an employee and for a self-employed person. Unfortunately, the realities of our time often make undesirable adjustments to the process of filling the home budget. And a real island of prosperity in this regard is the work of a trader in the financial markets. A very important positive point in the work of a trader is that the principle of his activity practically excludes intermediary chains, because his work is purely individual and to some extent depends only on the work of his broker, the second important positive point is complete freedom to manage his own finances. Especially when the system for depositing and withdrawing funds in the dealing center is integrated with the online payment systems Skrill and Neteller. Today most Forex brokers operating around the world support these electronic payment systems.
Why are these payment systems so popular? First of all, because of security. These systems are highly secure, designed specifically for online payments. Secondly, the convenience of working with the systems. This convenience is associated with a very clear and simple form of financial transactions. It takes very little action to send money or receive it through these systems - even a student can do it. In addition, the transfers themselves are carried out instantly and around the clock. Having closed the deal at 3 am, the trader can immediately send the resulting profit to his wallet. And his order will be executed by the system. All hours are working here, and there is simply no time for breaks. And the procedure for withdrawing money from Skrill and Neteller systems is thought out to the smallest detail. The owner of a web-wallet can exchange his virtual money for cash, transfer it to his own bank account, pay for various services, or even send himself a Western Union transfer anywhere in the world. For example, relaxing in the shade of the palm trees of the Caribbean coast, it is pleasant to conduct a successful trade operation, and it is doubly pleasant to get earned almost immediately so that the time before the opening of the next transaction passes imperceptibly. Both Skrill and Neteller systems allow it. Moreover, this convenience is practically free. The systems charge very low fees for their services; their fees are among the lowest among e-money systems. Plus, Skrill and Neteller have been around for over 15 years. These systems can even be called veterans of internet payments. And to the credit of these veterans, they did not stop at the achieved successes, but continue to develop further in the dynamics of consumer needs. Each year, the list of services of these systems is constantly expanding and integrated into the real spheres of everyday life. Already, payments for utilities can be carried out without getting up from the computer desk. In a word, for a trader, Skrill and Neteller systems are invisible, but very reliable assistants that combine the functions of an accountant, a cashier, and a security guard, and for all this the systems charge very low remuneration. For more than 15 years of work, these benefits have already been appreciated by over 30 million users, and this list is constantly growing. Today it is very difficult to imagine that a trader does not have a web wallet. Forex trading is inextricably linked with the use of Skrill and Neteller systems. Therefore, any novice trader, before starting his / her business, first becomes a Skrill and Neteller user. Fortunately, this procedure is simple and convenient.
Forex market. What is it?
What is Forex? This is money. Moreover, the word Money should be written with a capital letter, because the volume of money supply that daily passes through various marketplaces of the market is really impressive, because according to estimates of various analysts, it is from 8 to 15 trillion dollars. For the most part, this is the money of large exporters who are forced to exchange their earnings from the currency of the country of import through banks for domestic banknotes. Banks investing their savings in one or another currency, insurance and investment funds are widely represented.
It would seem, what does an ordinary man care about these trillions of other people's money? Let them be bought and sold by bank clerks and financial analysts, building up the power of their companies. But no. Recently, due to the computerization of trading operations, work in the Forex market has become available to an ordinary citizen. Modern technology has brought the Forex market through computer monitors to every home. Now anyone can try to catch the bird of luck by watching the fluctuations in world currencies. Buy at a lower price, sell at a higher price is the principle of any trade, including trading in currency pairs on the Forex market. Moreover, various advertisements, widely coming from TV screens and pages of printed publications, tell in sufficient detail about the attractiveness of trading operations through the Forex exchange. Who is interested in this ad? It should be said that the Forex market itself is a global trading platform that is not tied to any country in the world. The connection between the seller of the currency and its buyer is carried out through specialized brokerage houses, which, thanks to the installed software, allow carrying out the mechanisms of financial transactions for their clients. It is these brokerage houses, or otherwise - dealing centers that attract interested individuals and legal entities to trade. Their benefit is explained by the receipt of a certain percentage of commissions, or spread, that is, a small monetary difference between the price of buying a currency and selling it. Naturally, the more market players make trades, the greater the broker's profit. Is it profitable for the trader himself and how much personal money is required to invest in order to extract some income in the future?
One of the really interesting benefits of Forex trading is the marginality of the trade. Simply put - for any trader, the brokerage company guarantees the receipt of a certain loan, or leverage, the amount of which is stipulated when concluding an agreement with a dealing center. Typically, this leverage is scaled 1: 100. That is, for one dollar invested by the client, the broker gives 100 of his own and helps the client to purchase a larger number of banknotes that interest him. It follows from this that ten thousand dollars are not required to open a real account. Moreover, some dealing centers offer to open an account, starting even from an amount of $ 1. Naturally, it will not work to get rich from such a contribution, but as an educational process, such an activity is quite acceptable.
In a word, despite the supporters and opponents, the number of which is approximately the same, the Forex market was yesterday, is today and will be tomorrow, let alone trade on its sites or remain an outside observer, everyone decides independently.
Forex quotes. General concepts.
Unlike the usual price designation, Forex quotes, it is not so much the price of one or another commodity, but rather a reflection of the value of one type of currency relative to another. The instruments presented on the Forex marketplaces, in that part of it, which implies trading in monetary units, are indicated in the form of currency pairs. For example, EUR / USD, GBP / CHF, or AUD / NZD. The currency that is indicated first in this pair is called the base currency, and Forex quotes reflect the ratio of this base currency to the second currency of the pair. Saying that the EUR / USD pair is currently quoted at 1.4755, we mean that right now 1 euro is equivalent to 1.4755 US dollars, or for 1 euro on the Forex market they offer this amount of American currency. The definition of quotations for other currency pairs is the same.
In addition, Forex quotes, when conducting trading operations, are offered by the broker in the form of two values of numbers. An analogy with an ordinary exchange office is appropriate here, where its owner buys currency at one price, and tries to sell it at another. The same is true for Forex brokers. They offer the trader two prices for one financial instrument. One of them is called the bid price and corresponds to the price at which the trader can sell the base currency of a given pair, the second is called the ask price and shows the price of the base currency at which the trader can buy it at a given time. Sales and purchases of the base currency are carried out only in relation to the second currency of this pair. The arithmetic difference between the ask and bid prices is called the spread. For example, having opened an order for the EUR / USD currency pair in the trading terminal, we see the record 1.4935 / 1.4937. Here the price 1.4937 will be the ask price, the value 1.4935 is the bid price, and the difference between the values of these numbers, equal to 2 points, will be determined as a numerical expression of the spread.
The essence of trading operations on the sites of the world financial market comes down to a simple exchange of currencies, which are represented by pairs. So, working with a currency pair, for example EUR / USD, a trader at any time can purchase European currency against the US dollar, or vice versa, sell European currency in relation to its American counterpart. Such a currency pair is included in the definition of a financial instrument. Of course, the very concept of a financial instrument is somewhat broader, in addition to currency pairs, various options, futures, and index quotes are included here.
For simplicity of calculations, any trading account opened by a trader with a brokerage company is calculated in US dollars. Accordingly, the resulting profit or loss is recorded in the values of this world currency. Although, for calculating the monetary equivalent of the trader's account indicators, there is a more precise definition of the point. A pip is a single indicator of the change in the value of a currency. For example, having bought the euro in the aforementioned EUR / USD pair at a price of 1.4500 and closed the deal when the instrument price reached 1.4550, the trader earned 50 points of profit. With a pip value of $ 1, his income was $ 50.
In order to start trading on the Forex market, it is necessary to conclude an appropriate agreement with the selected brokerage company or dealing center. It is the broker that is the link in the trader-Forex chain that connects the workplace of the market participant directly with the trading floor. After that, the necessary software, called a trading terminal, is installed on the user's computer through the broker's website. The most common program is the MetaTrader platform. An intuitive interface, a large number of built-in indicators, the ability to add custom indicators and advisors, options for changing the design, a sufficient amount of educational and reference literature on working with the terminal, make this platform really very popular. Both newcomers to Forex trading and experienced traders feel equally confident on it, and working with the program does not imply confident knowledge of the computer user.
Naturally, Forex trading involves an Internet connection. How else would a broker bring a market participant to trade on the stock exchange? From his computer, a trader, through a special order, gives an order to the broker to buy or sell a particular currency. Moreover, this order must be carried out as soon as possible. You can't do without high-speed internet. Moreover, trading on the Forex market implies a quick change in the situation, therefore, an unexecuted order in time simply deprives the trader of profit. And if such a failure occurred due to the fault of the Internet provider? No one will undertake to calculate the lost profit for a businessman. Therefore, the trader's workplace must be equipped with at least two Internet connections, and from different providers.
So, an agreement has been concluded with a broker, a trading terminal has been installed, an Internet connection is working properly and reliably, Forex trading can be started.
Forex brokers. How to choose.
For anyone who wants to become a participant in the Forex market, sooner or later the question arises of choosing a broker to carry out their trading activities. This question is very important and requires a serious and thoughtful approach. The success of the work depends to a large extent on the choice of the broker, and if the decision is unsuccessful, it certainly will not lead to ruin, but the loss of money, nervous and moral forces can be quite tangible. How not to be mistaken in choosing a financial partner, and start working, concentrating entirely on trading, and not on clarifying the relationship on the legality of certain actions of the broker? Many years of experience of existing traders can help in this matter.
According to a survey of experienced players on trading platforms, in the first place when choosing a financial partner, which include Forex brokers, is firmly the reliability of the company. It will be unpleasant to deposit personal money into a trading account in an organization that will simply cease to exist in a day. And although such cases are no longer so typical in our time, nevertheless, sometimes it happens.
Next, in terms of importance, there is such an aspect as the size of the spread of currency pairs. This question is very relevant for traders who have chosen intraday trading on the Forex market as their activity. Fighting for each point in their trade, working in small time intervals, trading with a spread of 20-25 points is simply unacceptable for them.
The technical aspects of the broker's work are also important for the trader, such as the order execution time and the resulting slippage. Engaging in intraday trading and opening an order at a favorable price, the trader expects that within a few seconds and at the requested value, his order will be brought to the market by the broker. Deep disappointment sometimes awaits market participants when their order is executed after a longer time interval, already calculated in minutes and at the price that was originally planned by the closing price of the transaction.
And, of course, an important factor is a convenient system for depositing and withdrawing funds for a trader. The procedure for replenishing a deposit or withdrawing a certain amount from it should be simple and understandable, and the financial chain itself should contain a minimum number of links. It is desirable that the broker could offer several options for the turnover of finance, for example, bank transfers, electronic payment system.
In order to determine the quality of the brokers' work, you first need to install the trading terminals of the prospective candidates. Use demo accounts to conduct a test trading mode. Next, you should get information about the size of the spreads from the official websites that all Forex brokers have. Well, the most important thing is not to be lazy to collect information from other thematic sites, ask Forex experts.
Mini Forex. A kind of earnings or an illusion?
It is gratifying to note that for those wishing to learn how to trade on Forex platforms, today the trading conditions provided by brokerage companies have become incomparably better than even a few years ago. Some brokerage companies, in an effort to attract more clients to trade financial instruments, have significantly lowered the entry bar for opening deposits. Of course, the realities are such that most of the population will not be able, and will not want to open trading accounts in amounts of several thousand US dollars, and lowering the price threshold was a really mutually beneficial decision that suits both brokerage companies and Forex adherents. If the former decided to make a profit not from qualitative, but from quantitative indicators, attracting more and more interested persons, then the latter acquired a real opportunity to test themselves in a new business with the investment of a small initial capital. This is how the Forex offshoot, called mini Forex, appeared. But lowering the bar for opening deposits is not a complete list of opportunities that modern dealing centers have provided for new and old traders. The most, perhaps, the most important and positive innovation was the division of the trading contract into components, and giving the trader the opportunity to trade not even 0.1, but 0.01 part of the contract. True, even here it was not without cunning. Some brokers were quick to announce the possibility of mini Forex operation on their terminals, indicating the minimum deposit rates of several hundred US dollars, but leaving the minimum value of the trading contract at 0.1 of the main one. Such points should be taken into account.
Naturally, this trend did not go unnoticed by the public and immediately found both supporters and opponents, who believe that mini Forex is not trading, but simply a continuation of the educational process with the addition of adrenaline. You can treat such judgments in different ways, but there are positive aspects in trading on mini Forex, nevertheless. Let's try to justify the main ones:
Firstly, mini Forex can really be regarded as a continuation of your studies. And this is an extremely positive moment! After all, you can hone your skills and raise your account to the level of "big" money, or vice versa, having become disillusioned with trading, do something else without reproaching yourself for large sums of money spent aimlessly. It is unlikely that any other type of entrepreneurial activity will allow you to experiment with a business by investing several tens of dollars.
Secondly. If we take as a postulate the opinion that a trader is considered successful if he is able to increase his trading account by 20-30% per month, and then take a calculator ... a very interesting amount, but for two, three? Moreover, a gradual increase in the deposit occurs simultaneously with the acquisition of experience. Well, if a trader does not have enough knowledge and skills to increase the deposit monthly, then the blows of fate on small investments are perceived incomparably easier than when working with a large account.
Even if supporters and opponents of mini Forex trade continue to argue, this is not the point. The main thing is that anyone can test their strength in a new business for themselves by investing a small amount of money.
Forex training. Where do you learn to be a trader?
The popularization of Forex as a type of interesting and profitable business often raises the question for novice traders - where to get training in Forex trading in order to gain the necessary knowledge for further fruitful work? On the one hand, there is not a single educational institution where professionals of this category are trained, and even in the directory of professions there is no mention of the specialty of a financial market trader, on the other hand, there are such specialists. And there are many of them, including quite successful ones, who for obvious reasons do not advertise their activities. The lack of official recognition of the profession does not prevent them from earning. Where do the representatives of this profession come from?
Most people get their initial training in Forex trading through training courses at brokerage companies or dealing centers. One should not think that those well-known postulates can somehow bring the interested person closer to work in their specialty. Yes, in fact, these courses of study are more focused on other goals. No, they will certainly give some knowledge here, but most of the educational material is mixed with openly advertising statements about the high profitability of a trader's work, and that anyone who wants to can get such a high profit if he opens a real account in this dealing center. The general level of knowledge that such Forex training provides is very low. However, this step is a must for all beginners. Go through, thank for the science and immediately say goodbye to the hospitable broker, in no case succumbing to tempting offers to open a deposit. The training has just begun, and you should not rush to invest real money.
Well, the further process of gaining knowledge, which lasts throughout the entire trader's activity, occurs exclusively as a result of self-education. This is a very difficult and important point. Many beginners, having read one or two books on Forex, consider themselves masters of trading and, after completing their educational activities, are completely immersed in the conduct of foreign exchange operations. The result of their labors is known in advance and it is sad. Few people think that in any other business, to get real results in work, it will take hard work for more than one year. Obviously, first you will need to get an education in a higher educational institution, then for years to gain invaluable experience. In order for a yesterday's student to become a professional in some area, it will take many years of painstaking work. Many people understand this, but not where the conversation concerns work in the Forex market. The apparent ease and simplicity of trading experienced traders hide the hard work of their thoughts, and the profit they receive overshadows the critical self-esteem of new traders. They no longer need Forex training, they know how to open an order and read price charts. This overestimation of one's own strengths is where most of the failures of market players lie. The statistics, which knows everything, says that only 5% of traders are successful, all the rest, sooner or later, experience the bitterness of losing the entire deposit or a large part of it. To avoid this, you should think carefully about the issues of your own education. In addition to basic knowledge, you will need to read more than a dozen special books, some of which you can find on the Internet, for example, on special thematic forums. On the same forums, you can get other useful information. The only thing to remember is that when communicating on the Internet, a novice trader can fall under someone else's influence and begin to think not independently, but through the prism of the concepts of a newly-made guru. This should be avoided. The ultimate goal of Forex training is to develop a trader's own tried and tested trading system. In order to make sure that your developments are correct, you will need to open a demo account with a chosen brokerage company and for a long time, test your developments, polishing the system and honing your skills. And only after that, if you successfully pass the exams for yourself, you can start real work on a small deposit. Well, Forex training always continues, as long as a trader is engaged in trading currency instruments.
Forex books for successful traders.
Any professional human activity implies the formation of a specialist through the training system. The activity of a Forex trader is no exception. Moreover, work on financial platforms is very specific in terms of education, because until now no educational institution trains specialists in this profile. Therefore, the acquisition of the required level of knowledge and relevant skills is an individual occupation of each trader. Nowadays it is quite easy to find a variety of training courses on the Internet. But most of them imply that the trader has some basic knowledge. And it is precisely this basic knowledge that can be gleaned only from special books on which more than one generation of traders has grown up.
Of course, trading in financial instruments is widely covered in various textbooks and teaching materials. Forex books are published with an enviable speed and consistency, their assortment has long gone beyond 1000 titles. And such an abundance of educational literature often plays a cruel joke with a novice trader. He, eagerly rereading everything in a row, collects a lot of information in his head that does not help him, but, on the contrary, interferes with further work. After all, books are written by people who have a certain experience, and this experience is purely individual. And the proposals voiced by the authors of various publications are often contradictory. Therefore, for a beginner, it is better at first to limit yourself to reading generally accepted works. These must-read books include, for example, the books of B. Williams, namely "Trading chaos", "New dimensions in stock trading", "Trading chaos-2". Forex books by this author, despite the fact that they tell in great detail about the complex nature of the Forex market, are written in a simple and accessible language. These works have long been the reference books of professional traders. The methodology for analyzing the market is described in great detail here, the basic concepts of working on financial platforms are given, and the techniques for making a profit are shown. The author also pays great attention to the psychological aspects of a trader's behavior. B. Williams's books were not written yesterday, but they still have not lost their relevance, and this is evidenced by a huge number of reprints and a certain shortage of these works on paper. Usually B. Williams' books are sold like hotcakes in stores, they are so popular among traders of Forex and other foreign exchange markets.
No less important for a trader are the works of another, no less famous author - Alexander Elder: “How to play and win on the stock exchange”, “Trading with Dr. Elder. Encyclopedia of the exchange game "and" Fundamentals of exchange trading ". These works have long won the fame of bestsellers. Elder's Forex books cover all the versatility of a trader's work. It describes in detail both the methods of technical analysis and the psychology of a successful trader and a loser trader. How to become successful and get a stable profit - all this, in great detail, step by step and interestingly, is told by a professional trader, an expert in technical analysis, a person recognized throughout the trading world. Here A. Elder touches upon important issues of risk management, rightly believing that this moment is no less important than the technical methods of working on financial platforms.
And finally, a book that at first glance does not contain specific techniques and recommendations for today's Forex trader. Moreover, the first time it was published back in 1923. But, for almost a century, it was this work that taught a lot to traders of all subsequent generations. This is Edwin Lefebvre's book "Memoirs of a Stock Market Speculator", which is still considered the most famous book about working on the stock exchange. And even if the telegraph is replaced by the Internet, and the value of shares is no longer written in chalk on a blackboard, there are modern programs for analyzing the purchase and sale of instruments. The psychology of a currency speculator, and most importantly, the psychology of the crowd, has not changed over the years. Undoubtedly, this work will be one of the most popular in the modern 21st century.
As it is difficult to imagine a high school graduate not holding a Primer in his hands, it is unlikely that there will be a successful trader who has not read the works of these famous authors. It is on the basis of the materials presented in these books that the professionals of the foreign exchange market build their trading systems and control their own psychological state, skillfully avoiding many of the blunders that the Master of Trading of the past warned about. Smart, as you know, learns from the mistakes of others.
Forex trading. Five commandments of success.
The success of a trader or his failure in Forex trading does not depend on the geographic location of the market participant, specialty, and the availability of an academic degree. Analyzing the invaluable experience of the venerable "gurus" of financial markets, we can distinguish five characteristic features, or commandments, which will help a novice foreign exchange trader to become a successful trader.
1. Don't buy someone else's EA. Agree, if you had such a robot that trades day and night, which allows you to make a profit, would you sell it, and in general - share the very idea with someone? Unlikely. Most likely, people trying to sell such an MTS are not engaged in trading, but in programming. In addition, Forex trading is not so much the trade itself, but the philosophy of life, but any philosophy, it is primarily thoughts and reflections, but can a program replace a person in this? Doubtful.
2. All well-known traders have spent a lot of time on their own training. It doesn't take a genius to be successful when trading Forex. Moreover, anyone can achieve positive results in this business. But first you need to thoroughly understand the subject of study. Two-week courses at dealing centers of Forex brokers provide only the most superficial, introductory material. Combining the study of special materials with trading on a demo account, trading beginners should persistently advance in the educational process, having precisely worked out for themselves certain rules for Forex trading. And it is precisely the development of such rules into the system, the ability to draw up a trading plan that will mark the end of the first part of the training. Because the second part, the perfection of trading, happens all the time.
3. The trading system must be simple. The abundance of indicators heavily clogs up the chart. Complicates analysis. Signals, often contradictory, received from various sources, simply interfere with making the right decision. Looking at the graph loaded with all sorts of multi-colored lines and arrows, one recalls the old adage that the best system is the one whose description will fit on the back of a postage stamp.
4. Strict risk management. Money Management. The success of trading on the Forex market is built on the trader's ability to properly manage the funds of his own trading account. It is not recommended to open positions at once for more than 1% of the size of the deposit. When setting break-even stop-losses, you can, of course, increase the amount of funds involved and up to 2%, but crossing this line further is very dangerous. Forex trading is not the best place for risky operations and adventurous decisions. It should also be remembered that your positions open for trading must always be protected. Do not neglect the setting of protective orders. Better a small loss of funds than the loss of the entire deposit.
5. Discipline. Having established a set of rules for Forex trading, you should strictly adhere to its implementation, regardless of how many negative transactions were in a row. Discipline will keep the inherent emotions of any person under control, giving way to common sense. Because emotional trading is a very quick step to losing your deposit. It is better to skip some time, stay out of the market, calm the senses, but in no case give in to momentary impulses.
Anyone can make money by trading the Forex market. And the effort invested in learning the trading process will sooner or later be rewarded. And these simple rules will only help to bring the time of stable victories closer to the trader, because only positive stability is the measure of success in any business.
Forex trading. The harm of selfishness.
Forex trading does not fit into the framework where teachers of many training courses at dealing centers are trying to drive it, telling about Forex trading as a primitive action - bought cheap, sold dear. If it were that simple, then Forex trading would become the only occupation for people all over the world, though it is not clear who would then buy what and from whom. In fact, trading in foreign exchange instruments differs significantly from the usual concept of trading, primarily in its psychological component. Anyone can be taught to open and close a deal, but only a few succeed in learning to think so that trading operations are successful. Moreover, one of the reasons for unsuccessful trading in the Forex market lies in such a quality inherent in most people as selfishness.
The desire to try their hand at trading in the financial markets usually comes to quite mature, self-sufficient people who have often achieved success in any kind of activity, their own business. These people have their own experience of work, doing business and are accustomed to the fact that others are considered with their opinion. With the same attitude, they start trading on Forex, trying to impose their opinion on the market, to force it to reckon with itself. It is not difficult to guess about the future prospects of such traders.
Nothing complicates the life of a trader as much as himself. A professional trader analyzes the market and makes decisions, guided only by his own trading system, he understands that his vision and forecasting the behavior of a particular currency pair is not needed and interesting to anyone. There is a signal, he buys or sells currency. There is no signal, he sits and waits patiently for him. And that's it, no emotions. The dilettante, trying to show his importance to others, and often to himself, devotes most of his time to forecasts. He tries to impose his opinion on the market, often opening positions intuitively. His own aplomb prevents him from assessing the actual situation, prevents him from making the right trading decisions. Even more bewilderment is caused by the behavior of traders who opened the wrong position and continue to increase it with additional orders, in the hope that the market will “come to its senses” and the trend will turn in the right direction. An error entails an error, and their sum only brings the time of the fiasco closer. For the enormous power of Forex, one person, or even a group of persons, is nothing, just a grain of sand. Currencies will move in one direction or another, obeying only their own laws and patterns, regardless of the wishes of the trader, his opinion. And this in no case should lead a trader to infringement of his dignity. It is necessary to firmly protect your trade from your own "I" and not to confuse the result of trade with your own self-esteem.
Forex trading is a job. The trader's task is to do it well, to achieve some positive results for himself, to make a profit. To do this, you need to see the market, and not yourself in the market. To pacify your ego, to submit to the will of the majority driving a certain trend is a task for a trader. And the quality of its implementation distinguishes true professionals from the total number of trading.
Forex analytics. Whom to believe?
It is known that if you discard the calculations of your own trading system and try to trade according to the forecasts of Forex market analysts, then after a few transactions you can simply leave this occupation, considering it clearly hopeless, because the opinions expressed by various strategists and exchange trading tactics are ambiguous and often even opposite. Although for experienced traders, this phenomenon has long been familiar. They simply do not look for other people's clues, moreover, they do not perceive Forex analytics as a guide to their actions.
Indeed, Forex analytics is the usual opinion of ordinary people, one way or another connected with trading financial instruments. It is not forbidden for anyone to have an opinion on any issue, nor is it forbidden for Forex analysts who express a purely personal point of view on the vision of the market situation. One of them thinks that the dollar will literally collapse against the euro in a month, the other adheres to opposite positions. Another thing is how an ordinary trader treats these forecasts?
It is known that Forex trading has a strong psychological component. Much, if not all, here depends on the state of mind of the trader. Unfortunately, self-confidence does not come immediately. Newcomers to trading are usually deprived of this feeling. Having in their arsenal a unique trading system that has proven by practice the impeccability of their work, they are often very susceptible to the opinion of a more experienced friend, even if not very successful. Therefore, for novice market players, even a passing phrase of a Forex analyst can completely change him, as it turns out later, the correct opinion. Better to avoid this. Preventing someone else's authority from crushing your own opinion is a very important psychological task on the path of trading mastery. Of course, you can listen to the opinions of others, and you can’t fail to hear the analyzes of your comrades, especially when trading in the hall of a dealing center, where Forex analytics are distributed everywhere. Usually, a trader, trading in his trading system, in case of failure begins to experience mental anguish, expressed by the words: "I wish I had listened ...". It is easy to dispute this point of view, but in order to somewhat share this psychological responsibility in the future, it makes sense for a novice trader to combine his efforts with a colleague of approximately the same level of knowledge, or even with several comrades. It is desirable, of course, that their trading systems are similar and the principles of trading are approximately the same. Communicating with each other and analyzing the market by virtue of their knowledge and their own experience, they are more likely to achieve success in trading than by listening to the mixed opinions of trading experts.
And for whom, then, does Forex analytics exist, who listens to the opinions of financial experts? The trouble is that venerable financiers build their forecasts through the prism of their own trading strategies, the secrets of which, for obvious reasons, they do not share. No one except him knows, and in what perspective does the analyst make his forecast, which trading schedule is really working for him, weekly or hourly? It would seem a nuance, but without knowing the features of the trading system, all analytics based on its analysis turns into a set of clever words that are useless for another trader. Only your own calculations based on your own knowledge will provide the trader with a path to victory, and all other Forex analytics are only the subjective opinion of various people.
Forex fundamental and technical analysis.
Any analysis aims to assess the current situation as accurately as possible and take certain steps to improve it. This wording is perfect for Forex trading as well. To understand the present, looking into the past, in order to predict the future - to solve this problem, the trader conducts Forex analysis.
Actually there are two types of analysis of a trading situation - fundamental and technical. Some analysts also note the presence of probabilistic analysis, that is, analysis based on mathematical calculations of probabilistic coincidences of situations of the past in the future.
Perhaps, the Forex market by its nature is not very influenced by news indicators, which are the basis of fundamental analysis. Any trader knows a lot of examples when, when completely negative data on the economy, for example, the United States, was released, the dollar continued to grow, even without reacting to cataclysms. There are also opposite examples. Obviously, the broad geography of the market, when the difference in time zones does not help the players from all over the world to gather at the same time at the trading terminals, makes the relevance of fundamental news somewhat secondary. Most traders prefer technical analysis of Forex to fundamental.
Forex technical analysis incorporates three main trading postulates:
- the price takes into account everything;
- the price moves directionally;
- history repeats itself.
It is the last aspect that makes the trader look thoughtfully at the price charts, determining the possible development of future events on the basis of historical data. It doesn't matter what the trader is guided by in the analysis methodology. Someone calculates the number of waves of movement, someone is guided by price reversal patterns or trend continuation. For some, the combinations of Japanese candlesticks are close and understandable, for others it is enough to know the location of the price relative to the daily average. In any case, a trader conducts technical analysis only by the method of his own trading system. It is important for him to determine the state of the market. The price is directed in the direction of the impulse or vice versa, the currency is in a correction. Understanding this, the player can predict with sufficient confidence the further movement of the currency pair and try to derive personal benefit from this. Ideally, guided by the rule of directional price movement, a trader will try to open a trade in the direction of the current trend, waiting for the end of the corrective price movement. And no matter in what time interval a trader works, entering the market in the direction of the trend is always the most preferable.
Summing up, we can say that trading on the Forex market is not so much about opening or closing a position, but rather an imperceptible preliminary work on comprehending the trading situation. And how well and reliably the trader is able to assess the situation, how correct his Forex analysis will be, the more profitable his further work will be.
Forex strategies. Time component of trade.
Trading currency instruments in the Forex market implies some knowledge of the trader, which goes beyond the ability to open or close a position. Conducting any market analysis becomes meaningless, and even impossible, if the trader has not defined a Forex strategy for himself, has not chosen the most comfortable trading conditions for himself based on the time intervals of price movement. For successful trading in the Forex market, a trader must determine exactly in what time interval (TF) his work on opening and closing deals will be performed. How long should he hold the position, what is the criterion for entering the market or the necessary conditions for closing the position. This is the starting principle of any trading system. It is foolish to speculate about the prospects for changes in the dollar rate by the end of the year, looking at a 15-minute chart. Moreover, analysis of charts of long time periods is unlikely to help successful intraday trading. Although, of course, it is simply necessary to know the direction of the trend of the older TF.
Depending on individual preferences and the size of the trading account, three temporary trading strategies can be distinguished:
- long-term trading implies a long stay in the market (up to several months), the working schedule here is the daily chart, and the analysis is carried out using the weekly TF. This Forex strategy is used by experienced traders and investors and requires a fairly significant amount of the deposit.
- medium-term trading. Here trends exist from several days to several weeks. Working charts in this case, depending on the wishes of the trader, can be hourly or four-hour TF. Preliminary analysis for work is carried out respectively on the four-hour and daily charts. This is the most common type of temporary Forex trading strategy, uniting very green beginners and experienced traders and professional market participants. Relatively low market noise, relatively small stops attract the largest number of traders.
- short-term trading. Working charts, depending on personal wishes, can be 1, 5 or 15 minute charts, some even trade on tick charts. Graphs for analysis, respectively, from 15 minutes to hourly. Trading in such time modes is the lot of high professionals. An instant change in the situation, the risks of short-term price fluctuations make the trader in constant tension during the entire trading time. The pluses of this Forex strategy include small stops. Unfortunately, every novice trader, for various reasons, tries himself in this particular time sector. As a result, an exhausting trading regime sooner or later leads an inexperienced person to make mistakes, which often entails the loss of a trading account.
Choosing the right Forex strategy is a significant component of a trader's success. Without the correct positioning of your trade, without taking into account the time scale, trading takes on a senseless form of intuitive entries and exits, and such intuitiveness will sooner or later lead to the loss of the deposit.
Forex trading signals.
In essence, Forex signals are a kind of algorithm that prompts a trader about the possibility of opening a position in one direction or another. Forex trading signals are generated within the trading system, which guides the trader in his work. For some, this is a breakout of a certain price level, for others - the crossing of averages, in any case, Forex signals serve as a green semaphore signal to start trading.
At the same time, a trader needs to know that Forex signals are a purely individual concept. When trading financial instruments, there is no single command to get started. It depends on many factors, primarily on the time interval that the player has chosen to carry out his currency transactions. Entering the market on a 15 minute chart does not mean a simultaneous command for a trader on a 4 hour chart. Moreover, intraday trading often occurs in opposition to the existing trend of the older TF, and those who trade on long time intervals do not perceive Forex signals of this kind.
In addition, there are confirmed Forex signals and unconfirmed ones. Confirmed trading signals include the signal that has not lost its relevance after a while. So, it is customary to make sure that the received signal is correct, making sure that it does not disappear through a bar or candle, equivalent to the timeframe of the selected chart.
Usually, a trader in his activities is guided by a set of Forex trading signals, not trusting, in turn, each of them. Each trader determines the number of trading signals that confirm decision-making independently, but opens a position only when at least 75% of these signals show one-way action.
Forex trading signals are an important trading tool, but at the same time, trading in the interbank foreign exchange market itself implies a little more than blind obedience to even a confirmed signal. Trading currency pairs is subject to a combination of various aspects, mostly psychological. Therefore, even the most truthful Forex signals are only a tool in the hands of a trader, but how skillful these hands are depends only on the level of training of the market player.
Forex indicators. A look at the future from the past.
The historical set of mathematical functions of various ratios of price, volume for a certain point in time, expressed by a graphical representation of data, is a dry, at first glance, formulation, but very accurately reflects the principle of operation of such irreplaceable trader's assistants as Forex indicators, which are necessary for conducting technical analysis of the market.
With the help of indicators, the player can determine the presence of a trend and the degree of its intensity at any time period of the price chart of the selected pair. Determining the direction of the trend is the most important step in technical analysis. For this alone, we can pay tribute to the programmers who automated the analysis tools so necessary for everyone. Today there are thousands of Forex indicators built using various algorithms. But, basically, Forex indicators are divided into two classes - trend determination indicators and oscillators. Although the fact that oscillators do not indicate the direction of an existing trend is a rather erroneous concept, most of all, their advantage is manifested in a non-trend or flat market.
The mathematical calculation on the basis of which modern Forex indicators are built makes it much easier for a trader to analyze a trading situation. He does not need to collect historical data for many years, scrupulously calculate the scale of the correction or the levels of the end of the trend targets. It is enough to apply a certain set of indicators, and in a matter of moments the necessary information will appear on the price chart. In addition, pragmatic Forex indicators allow the trader to avoid the emotional background of making trading decisions. Especially if his trading system is based on a combination of readings from several diverse indicators. Yes, most likely the trading system itself is mostly based on the use of certain indicators. At the same time, Forex indicators and mechanical trading systems built with their use can in no way replace the work of a trader. Trading in the Forex market is not as easy as it might seem the first time, and blind obedience to indicator signals, without using other knowledge, will never lead a trader to success.
Moreover, the trader should remember that Forex indicators are not predictors that guarantee price action in the market at the next moment in time. Rather, Forex indicators are a statistician who, year after year, collecting bits of fait accompli, allows the trader to guess how further events will develop based on historical data. But the success of his activities in the Forex financial market depends on how professionally a trader can use the information given to him.
Forex programs. Evolution of decision making.
Now it is already difficult to imagine that not so long ago, a trader, for trading on the Forex market, independently plotted the charts of movements of currency pairs, developed his own analysis systems, and for conducting trading operations he called his broker by phone and told about what he needed in this the moment to do - open or close a position.
The development of the Internet greatly facilitated the life of a currency speculator, primarily by the development and implementation of special programs. Forex programs very quickly and firmly entered our life, and their convenience is hard not to appreciate. Indeed, now a trader, as it is called in one click, can give a trading order to a broker, set up his own terminal for analytical work with any indicators and advisors, and receiving new quotes and their graphical display is carried out completely automatically in a continuous mode.
Initially, Forex programs were subdivided into trading and analytical. The former were intended only for communication with the broker, with the help of the latter, the trader could analyze the market situation and make decisions. But, with the advent of the MetaTrader trading terminal, these once separate functions were included in one shell. When installing this platform from the broker's website, it already links the trader to a specific trading platform, and by giving any order, you can be sure that the dealing center system will accept it, understand it and instantly execute it. Besides, MetaTrader is not only a custom functionality. The Meta Quotes Language programming language built into the platform allows a trader to develop his own tools that he needs for fruitful work. These can be various indicators, expert advisors, or even your own mechanical trading systems, the work of which can be tested right there in the terminal in various modes. For all its multifunctionality, the MetaTrader program is very simple for the user. First of all, it is multilingual, which in itself removes a bunch of various problems. Secondly, a very clear interface and various user settings. The platform developers obviously understood that not every successful trader should be a competent programmer, and they managed to brilliantly solve this problem. The built-in support, help and training service is well organized. In great detail and, most importantly, it is accessible, the solution of many questions and problems that may arise when working with the platform is highlighted. It is not surprising that since the release of the first version of the terminal, it has rapidly gained popularity, both for traders and dealing centers, most of which have adopted it. Moreover, a number of large brokerage companies have developed and are successfully implementing Forex training programs on their own websites, where the center's specialists show the principle of a trader's work using the MetaTrader terminal, at the same time introducing them to the skills of conducting trading operations. And the benefits of such training courses are obvious.
Computer technology is developing rapidly. What one could only dream about ten years ago is quickly becoming a familiar reality. MetaTrader has become a popular tool in just a year, first displacing, and then simply replacing other trading platforms. And I must say, this is a really worthy tool for a trader, allowing in his work to concentrate exclusively on the tasks of making a profit.