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Why I ‘Seriously’ Hate Day Trading

I have really wanted to write an article on why I hate day-trading for some time now…because I actually do HATE it…Day-trading is something that everyone knows about; you could walk up to any stranger and say “what do you think about day-trading?”, and they would probably say something like “risky, but it can make you rich really fast”. Day-trading is one of the main ideas that lures people into the trading world; they think they will make some fast money and live the “dream” if they just learn how to “day-trade”. However, once they try it, most people quickly realize that it’s time intensive, stressful, and extremely difficult to make consistent money at.

I hate the façade of the stereotypical “day-trader”…

There seems to be an impression among the general public that if you’re a financial market speculator of any type you’re a “day-trader” sitting at home in front of multiple monitors making tons of frantic keystrokes and phone calls all day. Indeed, it seems more prestigious for us to tell our friends and acquaintances that we are “day-traders” during a lunch or dinner conversation…because when you tell someone you’re a day-trader they immediately get a certain image in their head. If you say “I’m a daily chart swing-trader and I trade 4 to 10 times per month”….well that just sounds a lot less glamorous doesn’t it?
This Illusion of the “day-trader” is something that appeals to many people simply because they want to say they are “day-traders”…there’s a certain perception of being some young and rich “day-trader” making millions and having a Ferrari…it ain’t reality though…
The reality of a day-trader is a guy who got 2 hours of sleep last night because he was trying to trade the overnight session, now he’s up at 6am trying to day-trade the next session. Many traders get sucked into trying to become a rich day-trader largely because that’s what they think is socially acceptable or “cool”,  and it turns into them being glued to the charts every chance they get and probably not making much money (if any). This is not a healthy way to trade and it’s definitely not a healthy way to learn how to trade.

Top down approach

As a trading educator, it makes me HATE day-trading even more when I think about all the trading websites out there promoting it and how a lot of them are geared towards beginner traders, not to mention how heavily day-trading and scalping are discussed in almost every public trading discussion forum on the internet. Day-trading is something that should only be attempted by a very experienced trader, and probably should just not be attempted at all.
You need to think of trading like building a house; first you need a foundation to build the house on, then as the house progresses you get down to finer and finer details until finally you are discussing how to decorate the interior and what type of TV to buy. As a trader, you NEED to understand how the higher time frame charts work and higher time frame price dynamics before you attempt trading the lower time frames. Trading should ALWAYS be taught and learned in a top-down technical approach, so that you understand what the higher time frames are doing before you try lower time frame trading or day-trading. This is how I teach my students in my trading courses and it’s how I have personally traded for over a decade..

Most Brokers CA$H in on day-traders (not all, but most)

Another reason why I hate day-trading is that there’s definitely a financial incentive for brokers to get people to trade more frequently. It’s very simple, more trades equals more money from spreads or commissions and that equals more money for the broker. So, there’s an underlying bias by many brokers and the greater Forex industry to get traders hooked on trading as frequently as possible. Brokers who have wider spreads make more money off you every time you trade, so they want you to trade. Thus…day-traders make a lot of money for many brokers; this is why you aren’t going to see any information about the perils of day-trading on most brokers’ websites.

It’s worth noting that not all brokers do this; some brokers have very tight spreads and don’t emphasize day-trading, and this is fairer on the trader, but most simply don’t. A Forex broker is in a position of “authority” to the unsuspecting newbie retail trader who assumes the broker well always do what’s in the best interest of their client. The point is this; be sure you choose your broker wisely.
I’ve been trading for over 10 years and I still do not “day-trade”…that should tell you something right there binary options. Again…it comes back to preserving your own capital…when you trade more frequently you give more money to your broker in spreads or commissions, leaving you with less money to trade with when you get high-probability signals in the market.

Stop-hunters love day-traders

Day traders naturally have stop losses closer to the market price since they are typically trading intra-day charts and trying to get quick gains with tight stops. The “big boys” and institutional traders love the average retail day-trader because they give them plenty of stops to “hunt”. Being a day trader and entering a lot of trades each week means it’s a lot harder to have a high winning percentage, largely because you get stopped out so much. Institutional traders have access to information on order flow and where stops are placed; it’s not only brokers who go “stop hunting” but the bigger institutional traders who can “sniff out” where the smaller intra-day traders are placing their stops. Have you ever noticed how if you try to trade intra-day the market tends to hit your stop and then reverse back in the direction of your initial position? The more day-trades you enter the greater risk you run of getting “stop-hunted” by the big boys.

Example Of Stop Hunting In Action

In the chart example below, we are looking at a 15minute USDJPY chart from earlier this week. Now, had you been trying to day-trade this 15 minute chart you probably would have talked yourself into trading all three of the pin bar setups below…
Example of How To Avoid Stop-Hunting
Now take a look at the daily USDJPY chart below…none of those 15 minute failed pin bar setups are even visible…by focusing on the daily chart you give the “stop-hunters” less prey, and you save yourself money, time and stress:

Market Noise: High-frequency and quant algorithm traders hurt retail day-traders

With the advent of high-frequency and quantitative algorithmic trading, we have intra-day charts that are full of false-signals and what I like to call “market noise”. A retail day-trader in today’s markets has a much tougher time trying to turn a profit than they did even about 10 years ago before all this high-frequency computer trading was so prevalent.  These high-frequency traders have what is essentially an “unfair” edge because they see the data that we see but a lot sooner. (you can read an article later about high frequency trading here). This type of trading has really changed the “nature” of intra-day charts from what they used to be, making them more erratic and less predictable, which obviously makes it a lot harder for the average retail day-trader to read the chart…
Note all the “noise” on this chart…it’s a 5 minute chart and is only showing about a 15 pip range…this is a very messy and difficult chart to try and trade…notice all the failed signals and “shake outs” that occurred…this type of trading will chop your account to pieces very fast

Filter out the “B.S.”

Day-trading ingrains and reinforces the “more is better” mindset which is basically gambling, instead of the “less is more” approach of swing trading the higher time frames. As we have seen, today’s retail day-trader is up against some pretty stiff competition in the form of super computers and algorithms that are programmed by math “wizards”. Why waste your time and fry your nerves trying to compete against such players with this type of unfair advantage when there is a much easier and more lucrative way to trade?
This is why I trade the 4 hour with binary brokers 24 and daily charts; they filter out all the “B.S.” that happens on the small time frames as a result of all these super-computer-math-wiz-algorithms. I guess if I really had to explain the difference between day-trading and higher time frame swing trading it would be this; work smarter, not harder. Trading on the higher time frames and ignoring all the chop and “B.S” that day-traders try to deal with is really how you trade smarter. If you want more training and instruction on how to trade “smarter” on the higher time frames, checkout my Forex trading course and members community for more info.

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Plan To Dramatically Improve Your Trading

Let me ask you a question, and please answer yourself honestly: Do you have a plan of action for your daily trading routine or do you just open your charts and randomly start trying to find trades with no logical guidance behind your actions?
Plans give you a “roadmap” of how to go about getting what you want in life. Not having a plan for something makes it harder, it doesn’t matter what it is. Even if you are planning a family vacation that should be full of enjoyment and relaxation, if you don’t have at least a basic guide as to what you will do each day, it’s probably going to end up being confusing, semi-chaotic and highlighted by fights and disagreements rather than fun and laughter. Planning makes everything simpler and easier to accomplish, and a simple plan can put even a complex or lofty goal within reach.
Today, I am going to lay out a simple plan that you can use to improve your trading. The only “catch” with this is whether or not you have the discipline to stick to it. Most people struggle with discipline in the markets, but simplifying your daily trading routine can make it easier to stay on track and remain disciplined. So, let’s discuss the various components of this simple plan that I’ve designed for you and then next week you can get started following it and see if your trading improves.
Note: The steps below are meant as a basic trading guide or plan to help struggling or beginning traders. If you are serious about using this plan, then you should follow it for at least two or three months and then tweak it as you see fit after that.

Step 1: Trade only major markets

The first step to this simple daily trading guide is to be sure you’re only analyzing some of the major markets. I like to stick to themajor forex currency pairs as well as spot Gold, Crude Oil and Dow. Here’s the symbols for the markets that I follow the most frequently and the ones you should follow for this simple trading plan:
That’s 12 markets, more than enough to focus on. If you’re in the USA and you can’t trade spot Gold, Crude or Dow then just focus on the currency pairs I’ve listed.
There really is no need to analyze 20 or 30 markets like many traders do. Besides, if something big happens that really moves the markets, it’s probably going to show up as a price action signal on one of the 12 markets I’ve listed above anyways. If you really want to simplify your daily trading routine, you should scale-back the markets you analyze so that you are just focused on a handful of major markets. The first step in this simple plan is to figure out the markets you will trade and make sure you’re not looking at more than 10 or 12 per day, the list that I use above is suitable for any currency trader to use.

Step 2: Clean up your charts and only trade daily charts

Next, it’s time to get your charts setup. Open the daily charts of the markets I’ve discussed above, or whichever 10 or 12 you want to follow. If you don’t know how to get your charts looking like mine, then read this metatrader 4 tutorial that I wrote, it will help you get all setup.
The second requirement for this simple trading plan is to only look at and trade the daily chart time frames, if you start looking at the 4 hour and 1 hour charts or below, you will have broken your discipline, and I can only vouch that this plan will work for you if you follow it to the T.

Step 3: Pick one setup to trade

This step is critical; you will only be trading one price action signal for this trading routine. Last week, I wrote an article on how to master your trading strategy, I suggest you go read that before implementing the plan I’m laying out in this article. Eventually, you can try learning different entry signals, but for the purpose of this simple trading plan I am designing for you this week, you should only trade one signal. If you start to see that you’ve stopped losing money each month and that your account is growing slowly but surely after using this plan for two or three months, then you can start implementing different entry signals. But, for now, I need you to understand that you have to narrow your focus, remove variables and reduce clutter from your mind and charts to really “turn the corner” in your trading, and the best way to start this process is learning to become a master of one setup at a time.

Step 4: Follow this money management plan

For purposes of simplicity and to show you the power of risk reward, all the trades that you take while following this plan will be set at a 1:2 risk reward. That means, your profit targets will be twice the dollar amount as your risk.
The way to place your stop loss properly is to use the surrounding market structure to figure out the most logical place to put it that gives the trade the best chance at working out but also is not too far away. What this basically means is that you should not place your stop an arbitrary level because you want to trade a certain position size…this is greed, and it will end up working against you in the end. You should have predetermined your 1R risk per trade (this is the dollar amount you risk per trade), then when you find a setup you want to trade you figure out the safest and most logical place to put the stop loss…then you adjust your position size so that you are only risking your predetermined dollar risk amount.
You will place your profit targets with the aim of getting a 2R reward on every trade; that just means two times your risk. However, in placing targets you do also need to consider the surrounding market structure; if a logical 2R reward is not realistically possible because a large key level is in the way, then you might have to reconsider taking the trade.
After you figure out the most logical stop placement you will then adjust your position size down or up to meet your predetermined dollar risk amount. If you need more help on this topic of position sizing, check out this article on risk reward and position sizing.

Step 5: Track your progress in a trading journal

The next part of this simple plan is to make sure you’re recording everything in your trading journal. If you do not have one you can get a trading journal here. Keeping a journal of all your trades is probably something that many traders forget about or that falls to the wayside after a few weeks…but you can’t let it. You NEED the track record created from keeping a journal to make trading feel more like a business and to bring more of a process into your trading routine. The actual process of entering your trades and journaling them will help to keep you disciplined because it reflects back to you your trading results. If your trading results show that you’ve made emotional trading errors like risking more than you knew you should per trade or entering stupid trades that you knew you shouldn’t have…you will see these things in your journal and hopefully you’ll stop doing them.
It’s easy to be lazy and gamble your money in the markets, but when you are forcing yourself to keep a journal of all your trades you will be a lot more aware and conscious of your behavior in the market. If your behavior is that of a gambler, you will then clearly be able to see that YOU are the problem with your trading and that you need to adopt the proper trading mindset to succeed. If your trading journal begins to show a pattern of consistency in following your risk management model and your trading strategy…it will be something you can proud of…few traders have a track record that they are confident in showing to other people or potential investors. You have to use the trading journal as a tool to reinforce positive trading habits and help eradicate negative ones, and you do this by forcing yourself to manually record your trades, think about them and analyze them.

Step 6: Follow the plan

Now, clearly the plan I’ve laid out today will not work if you don’t follow it. You need to be sure that if you commit to this plan you actually follow it. Give it at least two months, and then evaluate where you’re at. Maybe you’ve stopped losing money and are breaking even now, maybe you’ve made a nice profit each month, either way it’s an improvement over losing money each month, and that is the point of the simple plan I’ve laid out here today for you; to get you off the track of hemorrhaging money from your trading account and onto the track of slowly but surely becoming a profitable trader.

Step 7: Challenge yourself

Perhaps the best way to think about the guidelines I’ve laid out for you in today’s article, is that they are a challenge to yourself. Many people have trouble completing even the seemingly simplest tasks; reading a book from cover to cover in two weeks, getting to work on time or early each day, exercising three times a week consistently…whatever the task, it can be very hard for many people to stay focused on it long enough to see its benefits pay off. In trading, this trouble with focus and discipline is an even bigger problem than in most other things we do; because in trading your hard-earned money is on the line each day.
To end today’s lesson, I want you to do something if you’re really serious about following this simple plan that I’ve laid out here today. I want you to either print out this lesson and sign the bottom of it as a pledge that you will follow it, or write yourself a little “commitment” pledge and print it out and sign it. Hang this paper on your wall next to your trading desk or put it somewhere where you will see it each day before you trade. The first step to becoming a profitable trader is seeing if you have the discipline and patience to stick to a simple plan like this for two months. After two months, come back and leave me another comment on this article or drop me an email and tell me about your trading results. If you want to learn more about simple trading strategies that can help you dramatically improve your trading results, checkout my Price Action Trading Course here.

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5 Money Management Secrets for Successful Trading

Money management is like the “elephant in the room” that most traders don’t want to talk about. It can be boring, embarrassing, or even emotionally painful for some traders to talk about risk and capital management, because they know they aren’t doing it right.
However, as with anything in life, talking about the “elephant in the room” is usually the best thing you can do to improve your Forex trading. This means, being honest with yourself and focusing on the “hardest” or most boring things first and as often as necessary. If you ignore these things they will typically grow into huge problems that you can no longer control.
In today’s lesson, I’m going to help you understand some of the more important aspects of managing your risk and capital as you trade the markets. This lesson will answer many questions I get from traders asking about breakeven stops, trailing stop losses, and more. So let’s get started…

Keep risk consistent

The first “secret” I’m going to tell you about is to keep your risk consistent. As Marty Schwartz said in the the market wizards article that I quoted him in, “Also, don’t increase your position size until you have doubled or tripled your capital. Most people make the mistake of increasing their bets as soon as they start making money. That is a quick way to get wiped out.”
Why do I consider this a “secret”? Well, since most traders have a tendency to increase their risk size after a winning trade or after a series of winners, this is typically something you want to avoid. Basically, doing the opposite of whatever “most traders” do can be considered a “secret” of trading…and when it comes to money management there are quite a few of these “secrets”.
I’m a strong proponent of keeping risk consistent not only because it’s how other professional traders operate, but because of lessons learned from my own personal experience as well. Earlier in my career, I was the guy cranking up my risk after a winner…and finally after realizing that this was not the right thing to do, I stopped. Also, from my observations of traders that I help, I know that many traders increase risk after a winner, and this is a big reason they lose…
After you win a few trades you have a tendency to become over-confident…and I should stress that there’s nothing inherently wrong with you if you do this or have done it; it’s actually human nature to become less risk averse after winning a trade or multiple trades. However, it is something you’ll need to put an end to if you want to make money trading the markets. If you’ve read my article about the one thing you need to know about trading, you would know that even if you’re following your trading strategy to the T, your winners and losers are still randomly distributed. This means, after a winning trade there is no logic-based reason to think the next trade will also be a winner….thus no reason to increase your risk size. But, as humans, we like to gamble….and it can be really hard to ignore the feelings of euphoria and confidence after hitting a nice winner…but you HAVE TO if you want to manage your money effectively and make a living in the market.

Withdraw profits

As we discussed above, keeping your risk consistent or “fixed” is one of the keys to successful Forex money management. Professional traders do not jack up their risk exponentially after every winner…this is not a logical or real-world way to manage your risk. Professional traders who make their living in the markets withdraw money from their accounts each month and most will keep their accounts funded to around the same level each month. If you’re withdrawing profits every month then you would not keep increasing your risk amount over time.
What you need to do is build your account up to a level your comfortable with, and then you can start withdrawing profit each month to live off of…thus the amount you risk on each trade would not keep increasing because eventually your trading capital will reach an “equilibrium” level. 

Moving a stop loss to ‘breakeven’ can kill your account

The big secret regarding breakeven stop losses is that you should not move your stop loss to breakeven unless there’s a real price-action based, logical reason to do so. Moving your stop loss to the same level that you just entered at doesn’t make sense if there’s no reason to do so. Moving to breakeven arbitrarily or because you have some pre-decided “rule” to do so is simply not an effective way to manage your trades. How many times have you moved to breakeven only to see the market come back and stop you out and then move on in your favor? You have to give your trades “room to breathe”, and if there’s no reason to tighten your stop or move to breakeven, then don’t.
What you might not realize, is that messing around with your stop loss or manually closing trades out before they’ve had a chance to move, is voluntarily reducing the ability of your trading edge to work in your favor. In short, if you don’t have a logic-based reason to move to breakeven, then you’re moving to breakeven based on emotion; mainly fear. You need to overcome your fear of losing money, because losing part of being a successful trader, and until you learn how to let a trade breathe and move without your constant interference, you will not make money.
Now, I’m not saying that you should never move to breakeven, because there certainly are times when you should. Below are some logical reasons to move your stop loss to breakeven:
• If an opposing signal causes caution and changes market conditions you can take that as a logic-based reason to move to breakeven.
• If the market approaches a key chart level and then starts to show signs of reversing, you should take that as a signal that the market might indeed reverse and then trail your stop to breakeven.
• If you’ve been in a trade over a few days and nothing is happening, you might exit the trade or move to breakeven…this is known as a “time stop”, or using the element of time to manage your trades. Generally speaking, the best trades do tend to work out in your favor soon after you enter.
• If a big news announcement like Non-Farm Payrolls is coming out and you’re up a nice profit, you might want to move to breakeven or monitor the trade. Volatile news announcements like this can often change market conditions.

Don’t be greedy: don’t aim for big targets all the time

Another “secret” of money management is that you have to actually take profits. This might not really seem like a “secret” to you, but I consider it a secret since most traders simply don’t take profits as often as they should…and many traders almost never take profits. Why do you have trouble with taking profits? It’s simple really; it’s hard to take a profit when a trade is in your favor because your natural tendency is to want to leave a trade open that’s in your favor. Whilst it is important to “let your winners run”…you have to pick and choose when you do this; you certainly should not try to let every winning trader run. The market ebbs and flows, and the majority of the time it’s not going to make a really strong directional move without retracing a lot of it. Thus, it makes much more sense as a short-term swing trader to take a solid 2 to 1 or 3 to 1 profit when the market is offering it to you…rather than waiting until the market retraces against your position and moves all the way back towards your entry point or beyond, at which point you will probably exit emotionally since you’re mad you let all that open profit go.
Especially for traders with smaller accounts, you have to be happy taking “bread and butter” rewards of 1 to 1 or 2 to 1 often….there’s nothing wrong with hitting those “singles” and “doubles” to build your trading account as well as your confidence. You have to avoid the temptation of trying to hit a “home run” on every trade.

Knowing when to let a profit run

Every now and then the market will be just ripe for a 10 bagger….a home-run trade. Whilst these trades are rare, they do indeed occur, however you have to avoid the mistake that many traders often make; aiming for a “home-run” on every trade. Most of the time, the market is only going to move a certain range each week and month. For example, the average weekly range on the EURUSD is around 250 pips.
Knowing when to try and let a trade run and when to take the more certain 1 to 1, 2 to 1 or 3 to 1 reward is really where your discretionary price action trading skill comes into play. I’ll be honest here because I do get a lot of emails asking about when to let trades run versus taking a set risk reward ratio, there’s no “concrete” rule I can give you except to say that training, screen time, and “gut” feel for reading the charts are things that you need in order to improve your skill at exiting trades.
I can however give you some simple filters that you can use to assess trades on a case by case basis to help determine whether or not they are good candidates to try and run into a bigger winner:
1. Strong breakout patterns – When the market has spent a while consolidating it will typically lead to a strong breakout up or down. These strong breakouts can often be good candidates for “home-run” trades. However, not every breakout is equal; some are weaker than others and sometimes the market makes a false break before the real breakout occurs. So, we need to exercise caution when trading breakouts, the safest ways to enter a breakout are the following two scenarios:
The chart image below shows us an example of entering the market on a price action setup in “anticipation” of a breakout. This is a more advanced way to enter a breakout but it can provide a tight stop and a very large risk reward potential on the trade. There are usually price action “clues” just before this type of breakout; note the bullish tails on the bars that preceded the inside bar setup in the chart below. This indicated that momentum was building just below resistance for a potential upside breakout, then we got the littleinside bar setup just below the breakout level that provided a nice “anticipation” entry into the market.
The chart image below shows an “anticipation” entry on a price action signal just before the breakout:
The next way to enter a breakout that could lead to the type of trade that you can let run into a bigger winner, is to wait for the market to “confirm” the breakout after a retrace back to resistance or support. Once price breaks above or below a key level it will typically come back and retest it before pushing off again in the direction of the breakout. These types of “confirmed” breakouts from key levels can also be very good opportunities to try and trail your stop to let the trade run.
The chart image below shows a price action signal that formed on a retrace back to the breakout level:
2. Obvious trend continuation signals
Strong trending markets can obviously be good candidates to try and let your trade run into a big winner. We sometimes see very large potential winners in strong trends like the GBPJPY chart below shows. Note, in this example below, the trend was clearly up and so any price action signal that formed in this strong trend would have been a good candidate for a larger gain, we can see the pin bar signal and inside bar setup in the chart below could have been very large winners for anyone who traded them.
The chart image below shows a good example of trading price action trend-continuation signals which can be good candidates for trailing your stop to let the trade grow into a bigger winner:
3. Price action signal at a key level in strong trending market
Another good scenario to look for potential “home-run” trades is after the market retraces to a key level within a trending market. In the chart below we can see a clear example of this when a fakey setup formed recently in the spot Gold market within the structure of the downtrend. We actually discussed this fakey in our February 5th commentary and we can see the market fell significantly lower after forming that signal from resistance. When a market is clearly trending and then it retraces back to a key level and forms an obvious price action signal in-line with the underlying trend, it can often be a good opportunity to look for a larger than average winner.
The chart image below shows a fakey signal that formed after the market had retraced back to a key resistance level within the down-trending market:

The above scenarios can be good for letting your profit run. You would want to begin the trailing process by moving your stop to breakeven once the market clearly shows you that the trend is taking off in your favor. I like to wait until I am up at least 1 times my risk before moving my stop to breakeven. After that, how you trail your stop and exit the trade is something you will have to use discretion to decide; there are many different trailing techniques but none of them are “perfect”. Over time and through training and practice, you will develop a better sense for determining whether or not to trail a stop and how to do it.

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Advantages of the Forex Market

There area unit many benefits of the Forex market over another varieties of monetary commerce.

When talking regarding varied investments that area unit accessible to nearly everybody, there's one kind that springs to mind. The Forex or exchange market has several benefits over different varieties of tradin. Since it's associate over-the-counter (over-the-counter) market, the Forex market is open twenty four hours each day, not like the regular stock or artefact markets. Most investments need a big quantity of cash before you'll be able to make the most of that investment chance. you simply would like atiny low quantity of capital to trade Forex. everybody will enter the market with as very little as $1 to trade a "micro account", that permits you to open positions of one,000 units. One heap of one,000 units of currency is up to one go for small account. every "pip" or "tick" (smallest currency rate movement up or down) is price $0.10 profit or loss, counting on wheather you're going with the market or against it. A Forex mini account offers you management over ten,000 units of currency, wherever one pip is price $1.00. whereas a typical account offers you management over one hundred,000 units of currency, and a pip here is sometimes price $10.00.

Forex is additionally one amongst the foremost liquid markets. once commerce currencies on the spot Forex market you have got full management of your capital, which means that you simply should purchase and sell your positions anytime throughout market open amount. this is often a particular advantage as a result of, if you wish to use your account cash, it are often accessed now while not further commission or waiting periods. several different varieties of investments need holding your cash up for rather long periods of your time.

Also, in Forex, with atiny low quantity of cash, you'll be able to management larger market positions victimization the leverage or margin commerce. Leverage of 1:100 is common within the Fore market. It permits you to manage amounts one hundred times larger than your capital, whereas leverage of 1:500 and 1:1000 are often found with some offshore corporations.

Forex traders are often profitable in optimistic or pessimistic market conditions. securities market traders would like stock costs to rise so as to require a profit, since short-selling may be a subject to strict limits available exchanges. Forex traders will create a profit throughout each uptrends and downtrends. Forex commerce is truly thought of risky however with an honest commerce system to follow, sensible cash management skills, and a few level of self-discipline, the risks of Forex commerce are often decreased  significantly.

The Forex market are often listed anytime and anyplace. As long as you have got access to a laptop and net, you have got the power to trade the Forex market. a very important factor to recollect before jumping into commerce currencies is that it's price active with "paper money", or "fake money", on the demo account. Most exchange brokers have demo accounts wherever you'll be able to transfer their commerce platform and follow in time period with real market knowledge however with "virtual money". whereas profitable demo commerce cannot guarantee your success with real cash, active will provide you with an enormous advantage to become higher ready after you begin commerce along with your real, hard-earned cash.
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Forex Books for Beginners

Here you will find the Forex e-books that provide the basic information on Forex trading. You can learn basic concepts of the Forex market, the technical and fundamental analysis. While all these e-books are recommended for every new Forex trader, they won't be very useful to the very experienced traders.
Almost all Forex e-books are in .pdf format. You'll need Adobe Acrobat Reader to open these e-books. Some of the e-books (those that are in parts) are zipped.
If you are having problems downloading the books and you are using Google Chrome, try right-clicking a book download link and choose 'Save link as...'
If you are the copyright owner of any of these e-books and don't want me to share them, please, contact me and I will gladly remove them.
Candlesticks For Support And Resistance — The basics of trading with candlesticks charts by John H. Forman.
Online Trading Courses — Course #1 lesson #1 by Jake Bernstein.
Commodity Futures Trading for Beginners — by Bruce Babcock.
Hidden Divergence — by Barbara Star, Ph.D.
Peaks and Troughs — by Martin J. Pring.
Reverse Divergences And Momentum — by Martin J. Pring.
Strategy:10 — Low-risk, high-return Forex trading by W. R. Booker & Co.
Trend Determination — A quick, accurate and effective methodology by John Hayden.
Introduction to Forex — by 1st Forex Trading Academy. This trading course intends to provide to all of the students analytical tools on the trading system and methodologies. In this respect, the purpose of the course is to provide an overview of the many strategies that are being used in Forex market and to discuss the steps and tools that are needed in order to use these strategies successfully.
The Six Forces of Forex — by Scott Owens. A small e-book covering the basic and the main problems of Forex trading.
Forex. On-Line Manual for Successful Trading — an introduction into every aspect of the Forex trading including detailed descriptions of the technical and fundamental analysis techniques, by unknown author.
18 Trading Champions Share Their Keys to Top Trading Profits — as the name suggests, the book shares the secrets of the 18 prominent traders with the Forex beginners, by FWN.
The Way to Trade Forex — a 1st chapter of the book that will show you not only Forex basics but also some unusual techniques and strategies that can work for the newbie traders, by Jay Lakhani.
The Truth About Fibonacci Trading — the basic facts and information about Fibonacci levels and their application to the Forex trading, by Bill Poulos.
Quick Guide to Forex Trading — a 2008 edition of the Forex guide for the beginners and private traders issued by Easy-Forex.
Chart Patterns and Technical Indicators — an explanation of the most popular chart patterns and some technical indicators, by unknown author.
Forex Trading — a rather generic all-topic guide for beginners in Forex trading, by Richard Taylor.
Trading Forex: What Investors Need to Know — by NFA. National Futures Association gives introduction to the online retail Forex trading and warns about the potential dangers of such activity.*
My Dog Ate My Forex — by Doug Breiten. A rather generic Forex e-book that, nevertheless, shares some useful insights with the Forex traders on their road to success.
Point & Figure for Forex — by James Chen. An article from 2007 issue of Technical Analysis of Stocks & Commodities magazine. Offers a basic introduction to point-and-figure charting and shows some P&F chart patterns.
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The ‘Coffee Shop’ Forex Traders Movement

Here at Learn To Trade The Market we are introducing what we call the “Coffee Shop Traders Movement” today. This idea came to me recently as I was – surprise surprise – trading from my laptop while in a local coffee shop. I began thinking about how my trading has morphed over the years from messy, complicated and having a big trading desk with multiple monitors, to its current form which is mobile and minimalistic. Trading in this manner actually helps me to keep emotion and over-trading at bay, because rather than walking into an over-the-top trading room with 10 flat-screen monitors where I might feel compelled to enter a trade, I have everything I need to trade successfully on my pencil-thin Ultrabook laptop.
I have found over the years that if there’s what I call a “damn obvious” price action signal on any given day, I will be able to spot it and trade it just fine with only my laptop, whether I’m at home, at a friend’s house or at a coffee shop. I began to think about how trading in this manner meshes perfectly with the simple scaled-back approach that price action analysis brings…it really completes the package ofminimalistic trading. This is in contrast to the façade of the stereotypical “trader” analyzing and trading the markets on a big stack of flat panel monitors while pouring over countless economic news reports and technical indicators all day.

Why you should become a “coffee shop trader”

Recently, I’ve adopted a “minimalist” approach in my personal life that I had already been using in my trading for years. The way that you become a trader who can trade from a coffee shop, a sofa, or anywhere else, is by simplifying your trading, from the strategy you use all the way down to the hardware and software you trade with. I actually got the idea to “simplify” my personal life from the way that simplicity and minimalism had improved my trading. Just as reducing the clutter and variables on my charts worked to increase my time, money, and overall success level in trading, it had virtually the same effect on my personal life.
Trading is perhaps one of the only professions in the world where doing “less” is better for you. Many people have trouble when they start trading because they are used to working long hours, studying long hours, and generally doing as much as possible at their job or school each day. Thus, it’s natural to assume this philosophy should apply to trading as well.
The problem with this is that your actions have exactly zero effect on the markets…all you can do is analyze them and trade a high probability strategy. After you have learned how to trade your strategy and you feel 100% confident with it, all that’s left to do is open up your charts two or three times a day, look for your trade setups and then either enter a trade, possibly adjust stops or targets from a previous trade, or walk away. This notion that you have to read forex news reports and sit at your computer trying to make sense out of 5 different indicators, Elliot Wave and what the guy on CNBC is telling you…is just ludicrous, unnecessary and counter-productive! So stop it!!

How to become a “coffee shop trader”

Becoming a “coffee shop trader” is really the end result of simplifying your trading strategy, minimizing the time you spend analyzing the markets each day and generally just taking a calm and scaled-back approach to trading. Most traders start off in a somewhat haphazard manner, excited to get started but not yet certain of exactly what they are doing. Over time, we either figure out that less is more, or we give up all together. What I mean by that is that most traders over-complicate the trading process and experience a period of trial and error that is usually defined by losing money. They then either reach a point where they give up on trading all together, assuming it’s too difficult for them or that it “can’t be done”, or they come to the realization that all they need to do is chill out a little bit, solidify and simplify their trading strategy and just stop trading so damn much.

 have found that the simplest approach, and the most effective one, is to simply wait patiently for my price action setups to form on the daily chart or the 4 hour chart (occasionally the 1 hour). I then execute my trade if my edge is present or walk away if it’s not. Most of the time I just let the market do the “work” and give my edge it’s proper time and space to play out, rather than messing around with the trade because I “think” the market will stop me out. It’s a funny thing that many traders have a solid trading edge but then through voluntary interference they fail to give their trades proper time to play out and this likely lowers the probability of their trading edge over time.
Trading higher time frames and low-frequency trading is much more conducive to most people’s on-the-go modern lifestyle. The idea with my “coffee shop traders” approach is that by taking a more relaxed and slowed-down approach to trading, a trader will work to forge the correct trading mindset and trading habits. This is in contrast to the frantic pace of day-trading and trading with messy charts or overly-complicated trading systems that many traders seem to prefer (to their own detriment). The majority of retail traders are people with full-time day jobs, and when they try to be “scalpers” or “day-traders” they simply put themselves in a very difficult situation right out of the gate since they don’t have the time they need to dedicate to trading short time frames. My opinion is that all traders should first master higher time frame trading and only after having found success on the 4 hour chart and above should they consider day-trading or scalping. Most traders seem to go in “reverse” by first getting attracted to day-trading and then later moving to the higher time frame charts after they find out that trying to make money on a 5 minute chart is something only a very experience professional trader should try.


Whereas trading is sometimes thought of as a complicated profession that mainly the Ivy-league elite excel at, I teach my students to scale-back their involvement in the markets to the point where they can trade comfortably from a coffee shop or their own home with nothing more than a wireless internet connection and a laptop or iPad. Taking this simplified approach to trading actually helps most traders improve their performance since trading is a highly psychological profession that tempts many traders to become over-involved with the markets, giving rise to emotional trading mistakes.

Being a “coffee shop trader” is not something that just happens overnight. It really is the end result of having your trading strategy mastered to the point where you are 100% confident in your ability to trade it. This means, you can open up your charts, scroll through them quickly and easily determine whether or not there’s something worth trading. You aren’t sitting there for hours stewing over economic news, Elliott Waves, MACDs, Stochastics, or any other messy and unnecessary analysis tools. The coffee shop trader simply needs his Ultrabook/Laptop PC, an internet connection and his own finely-tuned trading skills.
If the “coffee shop trader” approach interests you, but you just need a solid strategy to get started, then I suggest you look at myprice action trading course. Once you have learned everything I teach in it and truly mastered it, you’ll be able to flip open your laptop and almost instantly know if there’s a trade setup worth risking your money on or not. This is how I personally trade and I wouldn’t recommend any other approach to anyone, it sure as hell beats sitting around staring at the markets all day (and night) wasting your time and becoming confused and frustrated. If you follow my members’ daily trade setups commentary, it will act as an effective guide to the daily charts of some of the major Forex pairs each day and it’s an excellent daily companion to the relaxed style of “coffee shop trading” that we’ve discussed here today.

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5 New Year’s Trading Resolutions For 2013

Here we are at year’s end again, and it’s time to stop trading for a bit and reflect on our past year’s trading performance. This means it’s time to get honest with yourself…how did you fare last year in the markets? Can you honestly say you put forth your best effort at being a disciplined and logical trader or did you behave more like someone on a 1 year gambling binge in Las Vegas? Either way, it’s time to get ready for the New Year and take advantage of the psychological “clean slate” that comes with it. Every trader knows their main weaknesses, so when writing our New Year’s trading resolutions and affirmations, don’t be afraid to focus on your weak points and bring them to the surface. Don’t sugar-coat this; everyone has weaknesses when it comes to trading and if you don’t face them head-on you will never strengthen them. Here are 5 trading resolutions for 2013 to get you started; you can add some more of your own to give yourself a nice list of achievable trading goals for the New Year:

1)  I will aim to be a better person in general

I’ll admit it, this first point isn’t just related to trading, it applies to life in general; it could apply to relationships, your job, business, or even to your studies if you’re a student. One reason why most people don’t achieve their New Year’s resolutions is because they get bogged down doing things that are really just a waste of time. Many people have a hard time making efficient and effective use of their time. Many people struggle when it comes to seeing things through from start to finish, especially when it comes to things they aren’t necessarily “forced” to do like when you’re at work and your boss is watching you.
The secret to becoming a better person and trader is to keep the flow of positive thinking and positive habits going…it can be difficult to get back into the gym regularly or back filling out your trading journal regularly, but it’s simply “getting up on the horse” that is usually the hardest part. Once you get going on the right track you start to develop positive habits, and these habits will reinforce themselves in your brain the more you stick with them, creating confidence and making it more likely that you continue to stay on track and get closer to your trading goals or other life goals.

2) I will stick with my trading method

umping from method to method or system to system is a big reason many traders struggle to make money in the markets. You need to commit to one method this year and stick with it, through the good times and bad. Commit yourself to 12 months of continued study of price action trading, follow the teachings in my trading course and daily commentary and fine-tune your own personal price action trading skill. You need to give it a real crack, even in the face of hardship, account draw downs or low confidence…you have to commit to getting back up on the “horse” and keep going. Every method or system is going to have losing trades…it’s part of trading, you can’t give up every time you have two or three losers in a row.
One proven method that will help you stick to price action trading is to decide to focus on one price action setup at a time and really master it. If you’re a new or struggling price action trader you should read my article from last week on How to Profit with Price Action and follow what I say in it. An excellent New Year’s resolution to get your trading on the right track would be to become a “specialist” of one price action setup at a time. Even if it takes you all of 2013 to accomplish this, you have to ask yourself if that would be an improvement over your 2012 trading performance or not, I’m willing to bet it would be.

3) I will limit my trading screen time to 1 hour per day

Most losing traders tend to spend way too much time looking at their charts, trying to find trades and reading economic news. If you take my simplified approach to analyzing and trading the markets with price action on higher time frames, you’ll be able to quickly scan the markets for your price action setups, you’ll save a lot of time and money by not over-trading and hopefully increase your win rate.
Limiting your screen time like this will eliminate most second-guessing and allow you to make cleaner and crisper trading decisions. It will also leave you more time to do other stuff like spend time with your family or focus more on your day job. It’s ironic that it tends to be the people who spend the least amount of time watching the markets tend to make the most money, at least that’s the feedback I’ve got from dealing with over 8,000 traders since 2008.

4) I will become a “minimalist” thinker

Minimalism is like its own religion for some people; they choose to live as minimalists, while this lifestyle won’t be practical for everyone, we definitely need to trade as minimalists…This includes removing indicators and “clutter” from your charts which only clouds decision making, and generally just taking a “minimalist” approach in all aspects of your trading. We want to abide by a basic set of principles and logic that does not complicate the trading process, price action trading fits that mold perfectly.
I recently wrote an article about my journey of becoming a minimalist in all aspects of my life, and I  actually took the idea from the way that I trade; minimally. It seems as though humans have an innate tendency to over-complicate things, from relationships to trading this seems to be the case. Thus, in 2013 one of your main resolutions should be to become a “minimalist trader”. You can do this by sticking to the simple price action trading strategies that I teach, higher time frame trading, and reducing the amount of time you actually focus on analyzing and trading the markets. This minimalist trading approach is something that dramatically improved my personal trading performance and later my everyday life as I got rid of unnecessary possessions and ‘streamlined’ my life.

5) I will read my daily trading affirmations

What’s a trading affirmation you ask? I actually wrote a good article on this earlier this year, check it out here: Daily trading affirmations. You might want to use some of the affirmations in that article as well as some of your own and write out your own daily trading affirmations list that you read every day before you trade.
Reading affirmations to yourself each day before you look at the markets can be an excellent way to keep you focused and on-track. A big part of becoming a successful trader is just remembering that trading is a marathon not a sprint, and to act accordingly. It can be very easy to fall off the right track and start “trading like a machine gunner”, so having a daily reminder to yourself of what you need to do to achieve success, can be a big help.

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