Category Archives: Forex Basics

What Are Your Goals in Forex?

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180+ Pips on AUD USD

180+ pips on AUD/USD

When people asks me what I do for a living and tell them I have a business called forex trading, people always jump out of joy and ask me to teach them how to do it. It seems that is rare for someone to encounter such a breed of people that you won’t be able to hide your joy and ask questions. It is a pleasure for me to teach. But it can quickly becomes a frustration when people don’t have the willingness to learn. Only the willingness to ask. There are a lot of forex tutorials, resources and beginner tools on the subject that its quite frustrating now to explain fibonacci, limit orders, SMA, margin and leverage to an average person. We all have those basic stuff online and for free. If you come across a forex trader in your life, do not scare him away by asking newbie questions. Educate yourself first so you can ask interesting question that would express your willingness to learn. You may build a good relationship with that person and might improve your trading.

In a business where your character will be tested, I think everyone should be willing to learn by themselves because after all, it is your money. First ask the question, what is your goal for trading forex. Is it to become a millionaire overnight? Is it to retire young? Or is it just a vehicle for you for wealth building?

Whatever your answer to this question ultimately lead to what kind of strategy you will utilize. Every person is different. And every person have a kind of threshold where he can take a loss and not quit. Everybody is different. So learn about yourself. And create your own strategy. Master the fundamentals and you’ll be able to learn faster. And most importantly, be patient and have self discipline.

I do have my personal goal in forex when I started out last year. I haven’t achieve this goal yet. But I’m seeing positive results now more than ever. And that’s because I never stopped learning.

Whatever your goals are in forex, I wish you good luck.

Forex Trading – The Best Business?

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picture-2 My open trade (150+ pip, indicated by blue arrow (buy order)

I think I’m inlove with businesses. Once I see an opportunity, I always wanted to pursue it. But like all busy people, time is the major problem. The most exciting part in doing business is the first few years of it. Its the most exciting where a lot of problems happening and problem solving is a thrill rush. But when I have an idea for a new business, I always do a check to my long term goal. After a few years, 20 or so, I want to retire. Or make money / trade anywhere / anytime and the only business that I can think of that fits the criteria is forex trading.

When I think of food business. I think of customer service (which I hate). Then think of forex where customer service is not present.

Forex trading is the best business model in my opinion and my long term goal should be (logically) go this way. Studying and learning more about forex and testing strategies should be mandatory if I want to be profitable in this trade.

What do you think? Do you think forex trading is the best business model?

Forex 101: Forex Basics – The Requirements

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So I finally started doing a post about the basics of forex trading. This post will not tackle the things like how the forex market work as you can head over to babypips.com or post in the comments section for that and we will try to answer you. We will talk about the things you need to get started trading. Things that are important to the success of your trading career and things you need to remember to not go bankrupt.

To keep on trading and learning at the same time and not blowing your account. Your first goal in trading as a newcomer in this business is to last. Not to make profit, but to last. How many months can you go on trading before you hit 0 on your fund. We can mind the profitability later, what you need first and foremost is experience.

1. You Need to Have Money / Capital / Funds / Moolah – In order to make money work for you, you need to have your workers gathered up. Money makes more money if placed in the right spot. You don’t need to have a lot of it, just enough to get you started. $100 – $1000 is probably more than enough.

2. A Trading Account (Real and Demo) – You need a trading account to start trading in forex. There are a lot of brokers around the internet and I suggest you do some research first before giving them your money. There are a lot of scams out there so be careful.

You need a demo account to practice your trading strategy. You need real account to practice your trading strategy with the components of emotions and the feeling of earning and losing money.

3. A Trading Strategy – In any business, you need a strategy and forex is the largest business in the world. Your entry and exit strategy and money management skills will play a big role in your success. Create your own trading strategy and practice it with your demo account for at least 6 months.

You can develop you own trading strategy or customize the strategy of others. You can find a lot of strategy from books and indicators. Do your research well and practice it. Just make sure you follow it when you trade, you already invested a lot of time developing it.

4. Competitiveness – Forex is the battle between the bulls and the bears. The buyers and the sellers. You will win and lose sometimes. The important thing is, do you have what it takes to get back up in case you lose? The players in the forex market are billionaires, banks, retired generals, business tycoons, politicians, managers, retired olympic athletes which are the most competitive people in the world and you’re about to take them head on. You should be well prepared of the lost and keep moving on up to the point till you become successful.

Things You MUST NOT Have

1. Emotions – Its like poker. Emotions cloud your judgement. You need to have a strategy and the discipline to follow it. Do not give in to emotion. Emotion has no place in the market.

2. Ego – You don’t need ego. Admit it when you’re wrong and cut your losses.

If you have questions or suggestions for the next forex 101 series of posts, kindly put them in the comment section below.

Before You Take The Forex Trade

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Making it simple. Is probably one of the most complex thing we have to discover. With a lot of indicators around, forex traders tend to think that the more indicators they have, the more money they make. What is the difference between a forex trader with no indicators and a forex trader with indicators?

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The forex trader with NO indicators keeps it simple. Indicators tend to confuse forex trader when a lot of indicators doesn’t match. They tend to think too much and not rely on their own decision making to take a trade. This is present among new forex trader where they will try every indicators available and use it. Up to the point where they get their first loss then drop it.

A forex system will bring losses. It will bring winning trades. Some will have more losses than wins. It is ok. As long as the winning trades can cover the losses up to the point that you’re still profitable.

A forex trader will have emotion. But must not be affected by it. This is what makes forex trading addicting. To constantly in the roller coaster ride. You know you are safe, but its still a death defying experience. With a profitable trading system, you know you will win but the price action still affects you.

There are questions that a forex trader can ask himself before taking the trade. Before entering, after the confirmation signal. He asks:

  • What is my profit?
  • Where is my stop loss?
  • Why do I take this trade?

Can simply summarized by asking oneself of the reason for entry (evidence of a profit potential, a set up or confirmation signal), what’s your target profit and how much risk are you willing to make?

These questions are simple. Three questions that a forex trader can answer easily. The problem lies to whether he can keep his emotion. Psychology plays an important role. Forex trading systems work. Banks use them to earn money. But its the person using it makes it possible to NOT to work.