Trading Thoughts Compiled

Hi everyone, i get users that email me their thoughts and personal opinions and some i consider to be great.

I will try to post a little bit whenever I remember to do so and hope others find some benefit to what my readers are sharing. If you don't find these useful, sorry! but it guess everyone will get something different out of everything.

Good luck trading everyone!

Trader's Personality

Forex traders come in many different shapes and sizes. There are male traders, female traders, fat traders, skinny traders, beautiful traders, ugly traders, slow traders, fast traders, professional traders, amateur traders, young traders, old traders … and so on and so forth.

Each trader has their own personality, some of them might have several things in common, but most will be different. Every trader is unique. And it depends on their personality, personal preferences, and situation. How to trade will be a driving factor in determining their success.

In order for you to figure out how to trade, you must first uncover your own trading personality because trading personality will determine the trading style and method that’s compatible for you.

Trading is not like a t-shirt. There is no one-size-fits-all. There is no single plan for all traders.

To do this, self-assessment is be needed to test your personality, behaviors, beliefs, and mindset. Do you consider yourself disciplined? Are you risk averse or a big risk taker? Are you indecisive or spontaneous? Are you patient or a firecracker?

An excellent way to help you with your self-assessment is to keep a trading journal. It will help to analyze your thought processes after the trade, and identify your strengths and weaknesses in trading. Understanding your personality is one thing, but understanding it while you trade is a totally different story. A trading journal allows a trader to review his winning and losing trades and pinpoint specific reasons on why he won or lose.

What is the Best Forex Strategy?

As time pass by, forex trading have became known that its not surprising to see that many individuals are trading forex. Many are trying to go after what is the best forex strategy to apply in their trade.

Forex had become a familiar word that many had heard about. But in reality, forex trading is a tricky subject that is constantly being debated over. Some people said that it is impossible to make money out of it while some traders made a fortune from trading forex. Many people had tried forex and had failed miserably.

Well, in fact, only 5% of traders made it in forex. So, it is really impossible to obtain success in the highly volatile market of forex? So, how many traders do make it in forex? One hard fact about why many people failed in forex is that many failed traders focused in wrong trading techniques and set unrealistic goals or made unrealistic decisions.

Many traders used all sorts of complicated combination of technical indicators with fanciful line and charts. Well it might work for them if they're comfortable looking at it and could interpret them accurately. But for others, it simply blows their mind and confuses them because of such complicated technical chartings that makes their information overloaded.

"If you fail to plan, you plan to fail"

This is an important statement that a trader should always remember. To have a plan is a very big thing in the world of business; this is what a business-minded people always depend to. Because without plan, you don't know where are you going to start, what are you going to start and when are you going to start.

The point here is that you can fill your mind with plenty of information, but without a good trading plan and the discipline to stick to it, you will NEVER be profitable. Think of it that having a trading plan is a map to your success. It will be a constant reminder of how you will make money in this market.

If you can make your living by trading without a plan, people will bow down and hail you as the Master of the Forex. BUT remember, successful traders achieve their goals because of their good plan.

So, be wise, before acting, think first and create an accurate, feasible and reliable plan.

Getting to know Leverage

Before introducing mr. Leverage to you guys, let us first define. The textbook definition of “leverage” is having the ability to control a large amount of money using none or very little of your own money and borrowing the rest.

Newbies underestimate the potential devastating damage that leverage can wreak on their accounts. Understanding leverage is enough to know when to use it and when NOT to use it is critical to success.

Leverage is a very powerful tool that both old and new traders use to destroy their trading capital, it is because they take too lightly its destructive force or ignore it altogether. It is a pity, but the more of them, the easier it is for smart traders to make money. Sad to hear but true.

High leverage is a favorite selling point for MOST forex brokers. Yes, they pitch that you can make a huge killing using huge leverage, but know that you could easily be killed by huge leverage as well.

If you want to give yourself the best chance to succeed, first learn to trade profitably without leverage.

Play it safe. Protect your capital. Be realistic in your expectations and be willing to properly educate yourself.

What kind of trader am I?

This is one of many questions being asked when traders evaluate themselves. To determine this concern, we can identify different trading personalities by time frame. Take a look at these different styles and see which one may fit you.

* Scalping – Scalpers are very short-term traders, usually in and out of trades within seconds. Most forex brokers discourage this type of trading. It’s also extremely dangerous due the high number of lots required to make a decent profit off a couple pips. Not for the faint of heart or shallow pockets.

* Day traders – Day traders open and close positions in the same trading session.

* Swing traders – Swing trading holds trades for days.

* Position trading – Long term position traders hold trades from weeks to months at a time.

Now, identify yourself which one do you belong.

Hey thanks for these, there are some real good ones in there...and definately doesn't get old

i enjoy your post. what are the sure indicators that can help me spot true trends and reversals. i have lost too much faded trends and reversals. can u help me please

unfortunately i dont think there are such things as sure indicators... but to point you in the right direction you can try long term (daily) MACD reversals. those work relatively consistently especially if you can qualify it with some other indicators, hope that helps

thanks for the positive feedback!!

Fundamental Analysis

2 weeks ago, I wrote something about the two types of analysis. The technical analysis and fundamental analysis. But now I am going to focus my blog about fundamental analysis. We're going to discover the deep essence of fundamental analysis.

Again, when we say fundamental analysis, we are talking about the market through economic, social and political forces that affect supply and demand. In other words, you look at whose economy is doing well, and whose economy is not. The idea behind this type of analysis is that if a country’s economy is doing well, their currency will also be doing well. This is because the better a country’s economy, the more trust other countries have in that currency.