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About yacksyfx

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  1. Part 2 – How to Become a Pro FX Trader: Testing Your Trading Skills (5) Step 5: Create (and use) a Forex trading journal tradingjournalAfter you’ve created a successful Forex trading plan, it’s time to create a Forex trading journal so that you can track your progress as a trader. Your trading journal can be thought of as the “engine” that keeps your trading moving in a disciplined and organized manner. Here are the main reasons to create and use a Forex trading journal if you want to become a pro Forex trader: • Trading journals keep you disciplined – Whilst creating a trading plan will help you become a disciplined trader, it can be another thing all together to remain a disciplined trader. Becoming a disciplined trader means nothing if it all goes out the window after you hit a few losing trades and start trading emotionally as a result. A trading journal provides you with a tangible tool that helps you stay accountable, in essence, you become accountable to your trading journal. At least that’s how you need to think about it. Your trading journal will be a direct and in-your-face reflection of your ability as a trader. If your trading skill is not quite where it should be, you will see this reflected in your trading journal, if your mindset is not quite where it should be, you’ll see this reflected in your trading journal as well. You are creating an on-going journal of your ability or lack thereof to trade the markets successfully. The longer you maintain your journal and trade your trading plan in a disciplined and consistent manner, the more discipline and consistency you will see in your trading results. Over time, you will begin to think of your trading journal as a testament to your ability to trade, and you will be PROUD of it, as you should be. This will work to reinforce your desire to maintain positive trading habits and to not stray off course into emotional-gambler trading land. Source : LEARN TO TRADE ForexMart Facebook Page No Deposit Bonus Up to $300
  2. Part 2 – How to Become a Pro FX Trader: Testing Your Trading Skills (4) HERE is where a Forex trading plan comes in. It is a written (or typed) outline of your overall trading approach, and you have it by your side whenever you are trading. Your trading plan helps you stay true to your trading strategy and to the principals that you decided were best to trade with when you created your trading plan and when you were thus totally objective and unemotional. So, a Forex trading plan gives you a predefined guide to make your decisions off of while analyzing the markets, this allows you to make logical and objective trading decisions rather than the emotional knee-jerk trading decisions that so many traders end up trading off of. If you don’t know how to make a Forex trading plan you should read this article: how to make a Forex trading plan. Oh, and don’t make the common mistake that many traders make of spending the time to create a trading plan and then never using it. If you don’t actually use your trading plan it’s not going to help you (surprise surprise!). Also, you may need to tweak your trading plan as you progress as a trader; nothing wrong with this, as long as you are working on your trading plan while you are not in the market and thus totally objective, you are on the right path. Source : LEARN TO TRADE ForexMart Facebook Page No Deposit Bonus Up to $300
  3. Part 2 – How to Become a Pro FX Trader: Testing Your Trading Skills (3) Step 4: Create (and use) a Forex trading plan In step 3 from last week’s lesson, we left off talking about learning to trade Forex with a high-probability trading strategy like price action. The next step to becoming a professional trader is to turn your trading strategy into a comprehensive yet concise forex trading plan, and actually using that trading plan after creating it. Creating a trading plan around your trading strategy is critical for refining your trading approach and developing an organized and structured trading routine that will guide you when you switch to real money trading as well as help you avoid becoming an emotional trader. Yet, the vast majority of traders never even attempt to create a trading plan, instead, they think they can just “plan” on the go or that they are “so good” at trading that they just don’t need a plan. Well, the vast majority of traders also lose money in the markets…no it’s not a coincidence. When you actually take the time to boil down your trading strategy to its core components and create an effective trading plan out of it, you gain a deeper understanding of your trading strategy and how to use it. You also create a tangible daily guide for your Forex trading that will work to keep you objective, on-track, and disciplined, THIS is the most important reason for creating a good Forex trading plan. After first trying to trade without a trading plan like most traders do, I found that I was straying off course a lot and starting to just gamble my money in the markets rather than sticking to my high-probability forex price action trading edge. I soon realized that it’s one thing to understand your trading strategy in your mind, but it’s another thing all together to actually execute it with discipline and consistency in real-time market conditions. Source : LEARN TO TRADE ForexMart Facebook Page No Deposit Bonus Up to $300
  4. Part 2 – How to Become a Pro FX Trader: Testing Your Trading Skills (2) Why this part of the mini-series is CRITICAL to becoming a pro trader Before we dive into the next 3 steps in this mini-series, I want to take a minute to explain to you guys why the points discussed here today are absolutely critical to becoming a professional Forex trader. I know what you are thinking right now in the back of your head, “Trading plans and journals and demo trading are boring, and I don’t really need these things”. I know you are thinking that because I thought it before too. However, I quickly realized that thinking something alone does not make it true. As much as you might think Forex trading plans and journals are boring, and maybe even demo trading, that does not change the fact that they are critical tools to developing yourself into a professional Forex trader. So, SUCK IT UP and do whatever you have to do to make yourself enjoy the process of creating these tools and using them CONSISTENTLY. If you don’t want to follow these next three steps then I suggest you pack your trading bags now and pursue a different career, because you won’t make it without them, here’s why: Source : LEARN TO TRADE ForexMart Facebook Page No Deposit Bonus Up to $300
  5. Part 2 – How to Become a Pro FX Trader: Testing Your Trading Skills (1) Testing Your Skill in the Market bear-vs-bullLast week, in Part 1 of this mini-series we discussed how to build the foundation of your Forex trading career. If you missed Part 1 click here. Here’s a quick review of what we covered last week: Step 1) Be honest with yourself about Forex trading Step 2) Learn the basics of Forex trading Step 3) Learn to trade Forex with an effective trading strategy In today’s lesson we are going to continue where we left off last week by moving on to developing a Forex trading plan, trading journal, and demo trading. Like it or not, these seemingly “boring” aspects of Forex trading are essential to achieving success as a trader. If you ignore these critical pieces of the “pie”, you will quickly join the crowd of failed traders. Creating a trading plan and journal is the basis of becoming a disciplined trader and developing positive trading habits. After you have completed steps 1-3 in Part 1 of this mini-series, as well as steps 4 and 5 in this part, you can demo-trade your new trading strategy and see how it performs in real-time market conditions. Source : LEARN TO TRADE ForexMart Facebook Page No Deposit Bonus Up to $300
  6. Part 1 – How To Become a Pro Forex Trader: Building the Foundation (4) Step 3: Learning to trade with an effective strategy After you have completed steps 1 and 2, it’s time to learn some real-world trading strategies and really start getting into the “meat” of Forex trading. Now, there are thousands of different ways to trade the market out there, but if you want to learn how to read the raw and natural price dynamics of a market, I suggest you learn to trade forex price action strategies. By making price action trading your primary trading strategy, you will develop chart-reading skills that will last a lifetime and make any other strategy or system you use even more effective. As you probably know by now, I am a huge proponent of “pure” price action trading, and I really feel that it’s the best way to trade the Forex market. The price action strategies and methods that I trade with and teach my students have served me well for many years now, and it’s because there is nothing complicated about them. I simply use my ability to read and interpret the overall market structure to find high-probability price action setups, and I watch for these obvious price action setups forming at key chart levels. Thus, there is no confusion or uncleanliness to my trading approach; it’s all about taking advantage of high-probability price action events in the market and knowing how to make sense of and read the ever-changing market conditions. Source : LEARN TO TRADE ForexMart Facebook Page No Deposit Bonus Up to $300
  7. Part 1 – How To Become a Pro Forex Trader: Building the Foundation (3) Step 2: Learn the basics of Forex trading Next, if you have fully accepted that you need to focus on the process of trading rather than the money, and you know you aren’t going to get rich quick on a small trading account, you should focus on actually learning to trade. Now, it might seem obvious that you should learn the basics first, but most beginning Forex traders simply have no clue what they are doing as they learn to trade. Many of them ignore the basics of Forex trading and of learning how to trade; this is a big mistake because if you really want to become a professional at something you have to start by understanding and building a foundation on the introductory concepts. You should first get a solid education in the foundational concepts of Forex by taking my free beginners Forex course. After you have done this and you thoroughly understand what the Forex market is, why it exists, and how to make sense of it, then you should move on to learning a real-world trading strategy like price action. I can assure you that if you take this one extra step of learning the basics before you start buying trading systems and strategies, it will save you a lot of frustration, time and money, as well as put you far ahead of most beginning traders who simply dive-in head first without first building a solid foundation to trade off of. Source : LEARN TO TRADE ForexMart Facebook Page No Deposit Bonus Up to $300
  8. Part 1 – How To Become a Pro Forex Trader: Building the Foundation (2) You need to think about your trading in terms of dollars risked vs. dollars gained, not in terms of “how much money do I need to make to quit my job and buy a Ferrari”, which is how most beginning traders think. Pretend that you are trading a 1 million dollar account even if your account is only 1 thousand dollars. If you can consistently average a 3R reward each month (meaning a reward of 3 times your overall risk) then that means you are making 3 x 12 = 36R per year. Now, if your per-trade risk on a $1,000 account is $25, that would be $25 x 36 = $900 in a year, or a 90% yearly return; a very very good performance by any professional’s standards. Now, take that 36R and imagine you are trading a $100,000 account; it would equal $90,000 over a year if you risked $2,500 per trade. The return would be $900,000 on a million dollar account if you risked $25,000 per trade. Do you see my point here? Sure, $900 a year might not seem like a life-changing amount of money, but what you need to understand is that if you are consistently making 36R per year on a $1,000 account for example, the exact same processes and thinking that resulted in that $900 and 90% return WOULD result in a life-changing amount on a $100,000 account. So, the point is that focusing on the actual process and mechanics of trading is far more important than trying to make a lot of money on a small account. If you are pulling a number like 36R or even 15 or 20R a year, you will have no problem finding funding for your account or getting a job with a prop trading firm. Before you begin learning how to trade or before you open a demo account, you need to sit down with a pen and paper and make a monthly budget. You need to list all the expenses you have each month and then subtract them from your monthly after-tax income, if you have any 100% disposable income left over then it’s OK to use that money to trade with. If you find you don’t have any disposable income left over each month, you’re better off saving your money or finding a different job until you are able to make some money to trade with. The reason why I am telling you this is because most traders never do this; instead they end up trading with money they really should not be trading with, and also because if you truly trade with only 100% disposable income you will significantly reduce the potential of becoming emotional on any one trade. So, if you really think you have what it takes to become a Forex trader, and you are going to be honest with yourself about what is possible given the amount of starting disposable income you have, then it’s time to move on to the next step of learning the basics of Forex trading… Source : LEARN TO TRADE ForexMart Facebook Page No Deposit Bonus Up to $300
  9. Part 1 – How To Become a Pro Forex Trader: Building the Foundation (1) Building a Foundation for your Forex Trading Career trading-roomThis week, I am starting a 4-part blog series on “How to Become a Professional Forex Trader”. It will be laid out in a step-by-step easy-to-follow manner. However, before we get started I must issue a note of caution; simply reading this 4-part series alone is not going to make you a pro trader. You have to actually use the information provided within this series and understand that there is no “quick-fix” to trading the market for a living.Becoming a pro trader is going to take time and effort on your behalf, and you will probably experience some ups and downs along the way. However, you should not be discouraged, because the sooner you accept this reality, the sooner you can get on the path to becoming a professional currency trader. Now, let’s get cracking… Step 1: Be honest with yourself First off, let me clarify something; becoming a professional trader is the result of first being a consistently successful trader and building up your trading account and trading skills over time. Thus, your aim as you begin your Forex trading journey should be to FIRST become a consistently successful Forex trader, but that does not necessarily mean you will become a “professional” or full-time trader right away. As I mentioned in the opening paragraph, becoming a pro trader is probably going to take a good deal of time if you are starting from a small trading account, but that does not mean you can’t make consistent money each month in the meantime. Consistently successful trading and professional trading might sound like the same thing, but they are not. Your aim should first be set on making consistent money each month relative to your account size, not on becoming a pro trader right out of the gate. You see, if you have a $1,000 trading account for example, you will not be able to make enough money each month to live off of, and if you try to trade your $1,000 account like it’s a bigger account, you’ll end up blowing it out. So, if you eventually want to be a full-time professional Forex trader, you have to first aim a little bit lower; you need to aim to make consistent money each month while simultaneously implementing effective Forex money management. This is called being honest with yourself about what is really possible given your current financial situation, and many traders simply don’t do this. Source : LEARN TO TRADE ForexMart Facebook Page No Deposit Bonus Up to $300
  10. Forex Trading Money Management – An EYE OPENING Article (9) Now we can see why risking 4% (or 2% etc) of your account on each trade is not as efficient as the trader using the fixed $ amount. Important to note that after 4 trades, risking the same dollar amount per trade and effectively utilizing a risk to reward ratio of 1:3, using fixed $ risk per trade, the first traders account is now up by $800 versus $780 on the %4 risk account. Now, If the trader using % risk rule had a draw down period and lost 50% of their account, they effectively have to make back 100% of their capital to be back at break even, now, this may also be so for the trader using the fixed $ risk method, but which trader do you think has the best chance of recovering? Seriously, it could take a very long time to recover from a drawn down using the % risk method. Sure, some will argue that you can drawn down heavier and its more risky to use the fixed $ method, but we are talking about real world trading here, I need to use a method that gives me a chance to recover from losses, not just protect me from losses. With a good trading method and experience, you can use the fixed $ method, which is why I wanted to open your eyes to it. In Summary The power of the money management techniques discussed in this article lies in their ability to consistently and efficiently grow your trading account. There are some underlying assumptions with these recommendations however, mainly that you are trading with money you have no other need for, meaning your life will not be directly impacted if you do lose it all. You also must keep in mind that the whole idea of risk to reward strategies revolves around having an effective edge in the market and knowing when that edge is present and how to use it, you can learn this from my price action forex trading course. While I do not recommend traders use a set risk percentage per trade, I do recommend you risk an amount you are comfortable with; if your risk is keeping you up at night than it is probably too much. If you have $10,000 you may risk something like $200 or $300 per trade.. as a set amount, or whatever your are comfortable with, it may be a lot less, but it will be constant. Also remember, Professional traders have learned to judge their setups based on the quality of the setup, otherwise known as discretion. This comes through screen time and practice, as such; you should develop your skills on a demo account before switching to real money. The money management strategy discussed in this article provides a realistic way to effectively grow your account without evoking the feeling of needing to over-trade which so often happens to traders who practice the % risk method of forex money management. Source : LEARN TO TRADE ForexMart Facebook Page No Deposit Bonus Up to $300
  11. Forex Trading Money Management – An EYE OPENING Article (8) Example 2 – Once again, your trading account value is $5,000 but you are now risking 4% per trade (so that both examples start out with a risk of $200 per trade) : Remember, you have a risk to reward ratio of 1:3 on every trade you take. This means you will make 3 times your risk on every trade that hits your target, if you win on only 50% of your trades, you will still make money: You lose your 1st trade = $5,000 – $200 = $4800 You lose your 2nd trade = $4800 – $192 = $4608 You win your 3rd trade = $4608 + $552 = $5160 You win your 4th trade = $5160 + $619 = $5780 Source : LEARN TO TRADE ForexMart Facebook Page No Deposit Bonus Up to $300
  12. Forex Trading Money Management – An EYE OPENING Article (7) Let’s Compare 2 Examples – One Trader Using the 2 % Rule, and one Trader using Fixed $ Amount. Example 1 – you have a risk to reward ratio of 1:3 on every trade you take. This means you will make 3 times your risk on every trade that hits your target, if you win on only 50% of your trades, you will still make money: Let’s say your trading account value is $5,000 and you risk $200 per trade. You lose your 1st trade = $5,000-$200 = $4,800, You lose your 2nd trade = $4,800-$200 = $4,600, You win your 3rd trade = $4,600+$600 = $5,200 You win your 4th trade = $5,200+$600 = $5,800 From this example we can see that even losing 2 out of every 4 trades you can still make very decent profits by effectively utilizing the power of risk to reward ratios. For comparison purposes, let’s look at this same example using the 2% per trade risk model: Source : LEARN TO TRADE ForexMart Facebook Page No Deposit Bonus Up to $300
  13. Forex Trading Money Management – An EYE OPENING Article (6) The Power of Risk to Reward Professional traders like me and many others concentrate on risk to reward ratios, and not so much on over analyzing the markets or having unrealistically wide profit targets. This is because professional traders understand that trading is a game of probabilities and capital management. It begins with having a definable market edge, or a trading method that is proven to be at least slightly better than random at determining market direction. This edge for me has been price action analysis. The price action trading strategies that I teach and use can have an accuracy rate of upwards of 70-80% if they are used wisely and at the appropriate times. The power of risk to reward comes in with its ability to effectively and consistently build trading accounts. We all hear the old axioms like “let your profits run” and “cut your losses early”, while these are well and fine, they don’t really provide any useful information for new traders to implement. The bottom line is that if you are trading with anything less than about $25,000, you are going to have to take profits at pre-determined intervals if you want to keep your sanity and your trading account growing. Entering trades with open profit targets typically doesn’t work for smaller traders because they end up never taking the profits until the market comes swinging back against them dramatically. (I think this is very important, go back an re read that last sentence) If you know your strike rate is between 40-50% than you can consistently make money in the market by implementing simple risk to reward ratios. By learning to use well-defined price action setups to enter your trades you should able to win a higher percentage of your trades, assuming you TAKE profits. Source : LEARN TO TRADE ForexMart Facebook Page No Deposit Bonus Up to $300
  14. Forex Trading Money Management – An EYE OPENING Article (5) Myth 3: Wider stops risk more money than smaller stops Many traders erroneously believe that if they put a wider stop loss on their trade they will necessarily increase their risk. Similarly, many traders believe that by using a smaller stop loss they will necessarily decrease the risk on the trade. Traders that are holding these false beliefs are doing so because they do not understand the concept of Forex position sizing. Position sizing is the concept of adjusting your position size or the number of lots you are trading, to meet your desired stop loss placement and risk size. For example, say you risk $200 per trade, with a 100 pip stop loss you would trade 2 mini-lots: $2 per pip x 100 pips = $200. Now let’s you want to trade a pin bar forex strategy but the tail is exceptionally long but you would still like to place your stop above the high of the tail even though it will mean you have a 200 pip stop loss. You can still risk the same $200 on this trade, you just need to adjust your position size down to meet this wider stop loss, and you would adjust the position down to 1 mini-lot rather than 2. This means you can risk the same amount on every trade simply by adjusting your position size up or down to meet your desired stop loss width. Let’s now look at an example of what can happen if you don’t practice position sizing effectively by failing to decrease the number of lots you are trading while increasing stop loss distance. Example: Two traders risk the same amount of lots on the same trade setup. Forex Trader A risks 5 lots and has a stop loss of 50 pips, Trader B also risks 5 lots but has a stop loss of 200 pips because he or she believes there is an almost 100% chance that the trade will not go against him or her by 200 pips. The fault with this logic is that typically if a trade begins to go against you with increasing momentum, there theoretically is no limit to when it may stop. And we all know how strong the trends can be in the forex market. Trader A has gotten stopped out with his or her pre-determined risk amount of 5 lots x 50 pips which is a loss of $250. Trader B also got stopped out but his or her loss was much larger because they erroneously hoped that the trade would turn around before moving 200 pips against them. Trader B thus losses 5 lots x 200 pips, but their loss is now a whopping $1,000 instead of the $250 it could have been. We can see from this example why the belief that just widening your stop loss on a trade is not an effective way to increase your trading account value, in fact it is just the opposite; a good way to quickly decrease your trading account value. The fundamental problem that afflicts traders who harbor this believe is a lack of understanding of the power of risk to reward and position sizing. Source : LEARN TO TRADE ForexMart Facebook Page No Deposit Bonus Up to $300
  15. Forex Trading Money Management – An EYE OPENING Article (4) Myth 2: Risking 1% or 2% on every trade is a good way to grow your account This is one of the more common money management myths that you are likely to have heard. While it sounds good in theory, the reality is that the majority if retail forex traders are starting with a trading account that has $5,000 in it or less. So to believe that you will grow your account effectively and relatively quickly by risking 1% or 2% per trade is just silly. Say you lose 5 trades in a row, if you were risking 2% your account is now down to $4,519.60, now you are still risking 2% per trade, but that same 2% is now a smaller position size than it was when your account was at $5,000. Thus, in the % risk model, as you lose trades you automatically reduce your position size. Which is not always the best course of action. There’s psychological evidence that suggests it’s human nature to become more risk averse after a series of losing trades and less risk averse after a series of winning trades, but that doesn’t mean the risk of any one trade becomes more or less simply because you lost or won on your previous trade. As we can see in my article on randomly distributed trading results, your previous trade’s results don’t mean anything for the outcome of your next trade. What ends up happening when traders use the % risk model is that they start off good, they risk 1 or 2% on their first few trades, and maybe they even win them all. But once they begin to hit a string of losers, they realize that all of their gains have been wiped out and it is going to take them quite a long time just to make back the money they have lost. They then proceed to OVER-TRADE and take less than quality setups because they now realize how long it will take them just to get back to break even if they only risk 1% to 2% per trade. So, while this method of money management will allow you to risk small amounts on each trade, and therefore theoretically limit your emotional trading mistakes, most people simply do not have the patience to risk 1 or 2% per trade on their relatively small trading accounts, it will eventually lead to over-trading which is about the worst thing you can do for your bottom line. It is also a difficult task to recover from a drawn down period. Remember, once you drawn down, using a 2 % per trade method, your risk each trade will be smaller, there fore, your rate of recovery on profits is slower and hinders the traders effort. The Most important fact is this.. if you start with $10,000 , and drawn down to $5,000, using a fixed % method, it will take you “much longer” to recover because you started out risking 2% per trade which was $200, but at the $5,000 draw-down level, your only risking $100 per trade, so even if you have a good winning streak, your capital is recovering at “half the rate” it would using “fixed $ per trade risk. Source : LEARN TO TRADE ForexMart Facebook Page No Deposit Bonus Up to $300