Forex Trading Philosophy

Everyone is different. Some suggest to start with demo account. after all we are at learning process, and you will not be risking with real money. But personally, I do not like this approach. I have to risk with real money, I have to feel the pain of losing, I have taste the feeling of winning. Only real money can give you this. one may be successful on demo account for years, but when they bet with real money they panic. they can not stand against the pain, they can not taste the real feeling of being a winner. So, you may bet with real money, really small amount, up to $300. play with cents when 100 pips earn or lose you $10 maximum. GET THE FEELING. please read and read. do not trust indicators. I have had my say about the indicator and for what they serve. there are so many GREAT threats in this forum. Read Crucial Points posts, PIPEASY's posts - building an equity millipede. most importantly BE OPEN MINDED. question everything and and always give yourself question: "what if...?"
Regarding brokers. There are some good threads about brokers. please refer to them.
Good luck.

What expressed in this post is very close to my understanding of FX market:

Here is the explanation of "constant":

Which trading session?
which time frame?
these are important topics in Forex. But what is TIME?

The science of winning. a little about psychology:

http://www.kshitij.com/fxthoughts/forex.shtml:

It may come as a surprise to those who are not Foreign Exchange (forex) traders, but Oriental philosophy is a strong force in the lives of many forex traders. Some of the best forex traders across the world have an abiding interest in the tenets of Zen, Tao and Vedic philosophies.

Besides being the closest example of the elusive economic concept of 'Perfect Competition', the forex market is also a very close work-place reflection of 'life'. It has a rhythm and being of its own, which only the evolved can tune into. Like life, the market is what happens to you while you are busy making other plans. The market can defeat you, break you down. But if you learn to let go, learn to flow with it, to dance with it, it can and does bestow on you both success and fulfillment.

The Philosophy of a Trader
The market is always right. The market never comes to an end. The market is ever-changing, and yet, ever the same.

There is no eternal damnation in the market. The only time you really fail is when you quit in disgust and admit defeat. That is like committing suicide. Those who continue to trade despite the setbacks, are the real heroes, living life the best they know how, evolving and growing through their losses and gains, through their triumphs and defeats, their fears and greeds, their hopes and anxieties. The Trader cannot afford to let yesterday's gains or losses cloud his thinking as he trades today. Though he may be carrying a position over from yesterday, he always has to look at the market afresh. Each trade, each position is a new position. Today is the first day of the rest of his life.

The Market exists by itself, unaffected by and separate from the trader and his emotions. As he slowly begins to tune into the market and its ways, he starts to observe the Tao of the market. Instead of trying to force the market to do his bidding, he starts to embrace Zen and to dance like a Samurai warrior; he starts to live life instead of struggling with it. That is when he starts to make money on a sustained basis.

Zen and the Market
The concept of Zen, they say, cannot be described. If you can describe it, it isn't Zen. Zen can be felt, though. It can be conceptualised. Picture a Judo exponent or a fencer. Picture Bruce Lee. As his hands and legs move all the time - blocking, feinting, chopping, kicking, dodging - do you think he has time to think? He obviously does not. Yet, he is no shoddy amateur either. Though he does not think consciously, all his hard work, discipline and years and hours of excruciatingly painful training pour into every action that he performs. And as he pours himself into each moment, as he lives in that moment with his entire being, he is not using his petty conscious mind. The Force is acting through his body-mind equipment. The supreme Samurai makes himself available to the Force. This 'mindless' living is Zen: When you act without the dead weight of your hopes and anxieties, fears and greeds, your superiorities and your inferiorities; when you just act, when you just live.

A good forex trader is like a Zen practitioner, a Samurai, a fencer, a Judo exponent. He approaches the market with the same mindset. When he plays the market, he is practicing Zen, and in turn, the market reveals to him deeper beauties of Zen.

Gyan, Bhakti and Karma in the Market
Besides Zen, the forex market also holds nuggets of Indian philosophy within the currency rates that keep changing all the time on information screens in football field-sized dealing rooms across the world.

Indian philosophy concerns itself with the quest for the elusive 'Eternal Truth'. It prescribes three paths for reaching the Truth: the Gyan Marg (the path of Intellectual Reasoning), the Karma Marg (the path of Selfless Action),and the Bhakti Marg (the path of Love and Devotion). Seekers of the Truth naturally gravitate towards the path most suited to them. Quite often, there erupts, among the Seekers, an argument as to which is the better path of the three. The experiences of countless Seekers reveals that the Bhakti Marg or path of Love and Devotion is both easier to walk on and reaches the Truth faster than the path of Intellectual Reasoning or Gyan Marg.

In Gyan Marg, the accent is on the use of your intellect to realise a Truth which is larger than yourself, larger than your intellect. The Seeker seeks answers to questions such as, "Who am I? What is eternity? What was there before eternity and what comes after it? Where did I come from, and what is the cause of my being?" He tries to use his limited knowledge to reach pure knowledge. The movement is from the limited to the limitless.

Acceptance and faith, on the other hand, are two of the key characteristics of the Bhakti Marg. The bhakta, from the very outset, accepts that there is a Truth which is pure and eternal, and much bigger than his own intellect can grasp. He loves this Truth- force and devotes himself to it. He sees himself, not as separate from the Truth, but as a part of it. He attempts to reduce the encroaching effects of his small emotions and thoughts on the functioning of the Truth through him, by trying to replace his petty emotions and thoughts with love and devotion for the Truth.

Similarly, the correct forecast as to the direction a currency is headed, is the Truth which all traders in the forex market seek, using techniques like Technical Analysis and Fundamental Analysis. Much like the Seekers, there also exists, a never-ending, traditional controversy or rivalry between Technical Analysts and Fundamental Analysts.

The Fundamental Analyst makes his forecast after reading all the bits and pieces of economic and political news available to him. He analyses streams of economic statistics such as trade figures, investment flows, industrial growth, inflation rates, etc., and uses all this data in conjunction with his economic theories to piece together a forecast. The focus here is not on the market per se, but on deriving the market as a result of number-crunching and economic analysis. This method can be likened to the Gyan Marg as it deals with cause and effect. Its success depends on the analyst putting forth the correct reason for the market being where it is. The pitfall is that it is possible to put forth a number of plausible reasons for the market being where it is.

The Technical Analyst on the other hand, uses charts and graphs to make forecasts. These charts and graphs depict the state of the market at that moment, while also graphically showing the path the market has taken to reach its present state, and the rate being traded in the market at that moment. These charts, with uncanny regularity, trace out familiar pictorial patterns such as Head-and- Shoulders, Double-Bottoms and Triangles. These patterns have been seen to hold true across all traded markets, be they markets for currencies, stocks, bonds, pork bellies, gold or oil. The Technical Analyst does not try to rationalise WHY the market is where it is. He does not need to read any news or look at economic data. He studies the charts, recalls old patterns, and tries to visualise where the market is now headed. This is an intuitive approach, an essentially aesthetic and pictorial approach, which does not concern itself with reasons, but tries to reach the truth almost directly. This method can be likened to the Bhakti Marg.

Ultimately, however, the Truth has to be lived. The Truth as you understand it. The trader has to trade in sync with whichever forecast he believes in, irrespective of the method (Fundamental or Technical) by which it has been derived. This is the path of action or Karma Marg. The trader goes into the market with the foreknowledge that his conception of the Truth, his forecast, may be wrong. He knows that the market will test his forecast. If his conception of the Truth is correct, and if he has traded in line with the conception, he will make money, or else he stands to lose money. This foreknowledge prompts him to place a Stop Loss on his trades - he gets out of the trade when he realises he has done something wrong.

He bears the loss that has occurred, but lives to trade another day. Much like the everyday heroes of real life, living the best they know how, in line with their conception of Truth, but ready to stop, learn, change and grow.

entry... one of the most discussed topics in trading.
what this video has to do with entering a trade?

This video is very interesting! Shows the history of dolls who want to understand why they are being designed by a person who is speaking in the Universe and money! Is it? :nerd:

Regards.

ernadi

Yup.... I think that about sums it up

everybody can extract different meanings and yes your conclusion is interesting one
it says that human can be considered the center of the universe, he is the constant. so what is the perfect entry point for a trade and what this video has to do with that?

i remember a phrase of an professional trader "anticipate and participate". he advises not to predict the market.
hmm... do not these words have similar meaning? one may ask. the answer is no.
here is a nice article about "anticipation vs prediction":

There are lots of signal services, newsletters, and trading rooms offering predictions for the coming days, weeks and months ahead on what the market is going to do. It's a very tempting proposition to give subscribers a peace of mind on what the market is about to happen. Some believe it is possible to see what the market will do and subscribers do follow these services. Unfortunately, predictions don't exist even if these advisors are seers. No one can make the correct predictions even 50% of the time consistently, market is either goes up or goes down.
When traders anticipate what the market will do, is it the same as prediction? Prediction is declaring something will happen exactly in the future with only one outcome while anticipation is to give thought in advance to all possible outcomes. Anticipation requires dealing with problems before they arrive; prediction is expecting something to happen without dealing with. Prediction tends to take a bias or position while anticipate requires careful thought of what might happen: good or bad.
An example of the anticipation is when the trader is watching the prices rising and approaching an old resistance level. He anticipates that the prices may either continue or reverse. He has to make preparations to deal with both scenarios. One is to prepare for the breakout and continue to the upside, he has to determine at which price he will go long and where the stop loss will be place. If the prices reverse, he has to determine where the short entry will be as well as the stop loss. These scenarios prepare him for the next price movements, anticipating what other traders will do when the prices get to the resistance level. If he predicts what prices will do, say, has been going up and continue to go up. He has no plans for the possible reversal. He is focused only on the uptrend move and no on the possible reversal or the consolidation. These scenarios must be constantly considered and planned as the markets continually evolve. This mentality makes a tremendous difference between a successful trader and a losing trader.
Predicting is a loser's game, feeding the need to be right instead of the need to make money. The ego many times is the culprit to show off to other traders how good he is at predicting the market direction. In trading, ego and profitability cannot co-exist. If it's not ego, most traders will look for one direction and then use evidence to support that bias ignoring the evidence that may support the opposite direction. This bias is predicting the future. It tends to carry the mindset until after the trade is made. It may be a profitable trade, but eventually the trader is so convinced of this bias that when trade fails, he'll have no alternative in preparing for the loss.
One of the desired traits of a successful trader is his ability to prepare of all possible outcomes, imagining the scenarios the market may do, up or down, before the trade is made. He knows he cannot predict but he can calculate the probabilities of the market going one way or another. In anticipating the outcome, he has a plan for one outcome or another. What happens if the market goes against his position, where will he exit? What happens if the market goes in favor of his position, where should he exit to take profit?
Anticipating is preparation for both outcomes, good or bad. Calculating how much to lose just as important as how much to expect to win. This means the trader will identify in the chart where he'll see the entry point and two exit points (stop loss and profit target). By having this method, he can identify his risk-to-reward ratio as well as the probability of the success of the trade.
So how do we overcome this dilemma? Probabilities can be made found through rigorous testing historical data based on strategies that the trader plans to trade with them. Finding statistics to back his notion that the strategy works will give him confidence in approaching the market and give the mindset to anticipate and not predict the outcomes. One way is the see the market as it is showing us either by the price action or by indicator.
Recognize that prices or indicator can change direction at anytime. By using statistics to make an educated guess, the trader can find which direction the market will likely go. But probability cannot guarantee the desired outcome. This means a backup plan must be in place, i.e. a stop loss, in case that desired outcome doesn't happen. This is the reason why successful traders have stop loss in place. A stop loss is a deciding factor that determines if the outcome has worked or not. The trader must accept that the market will always be right and trying to be right will prevent the trader from being one with the market and go with the flow.


Article Source: http://EzineArticles.com/664032

is it uptrend or downtrend?
well, it is both.

recognize you illusions

i hope some will find this post helpful:

http://www.forexfactory.com/showthre...20#post3768820

"Whether someone is outwardly confident/arrogant or cautious/doubting doesn't necessarily indicate anything. It is my view that most of us are saddled with a limiting sense of our own self-worth in terms of what we deserve or what we can achieve.

This goes way beyond the touchy-feely quick-fix approaches to loving yourself and involves coming to terms with the acceptability of making money by looking at some pictures and then pressing some buttons (i.e. sitting at home trading electronically).

I'll try to expand a little. My father was a skilled carpenter. He worked hard all his life and he was exceptionally talented in his craft. A hard-working artist, I would say. His income never reflected this. He was paid a relatively low amount in return for being loyal all his working life to a single employer. When I started making money from trading, I was not psychologically prepared for making more in a month than my father ever made in a year.

This has potentially become more of an issue now we live in a world of relative comfort and ease of access to information. We can make money whilst sat in our underwear, never needing to leave the house or even get dressed. Our minds still equate success with hard work. What if trading becomes relatively easy? We are making money but don't feel we are 'earning' it by working hard.

Working out what is stopping you being successful is highly worthwhile. It might be a discomfort with earning more than your father, a sense of unease with raking in large sums whilst people are starving in the world, an internal belief that you are not very bright/capable/successful or that you always make a mess of things eventually.

A good indication such a problem exists can be found in analysing trade records. Are your worst losses always after your biggest gains? Most put this down to over-confidence and/or sloppy trading but my first thought would be self-sabotage. Do you find it hard to take a profit but happy to let losses mount? This might not just be down to poor trading.

The challenge (and it isn't easy) is to identify the reason you are limiting success and address it. This can be in a variety of ways. For example, if you are uncomfortable being wealthy when there is so much poverty and suffering around, make a pledge to donate X% of your profits to charity each month. If you do this, try to donate to something tangible. Maybe an international charity you can also do some volunteer work with or a local children's hospice you can visit. By becoming aware of the good that wealth can achieve it makes it much less unacceptable psychologically.

A search for 'fear of succes' online will reveal a huge amount of information on the subject. Also, I can't find a specific article by him but Brett Steenbarger is always worth reading when it come to trading psychology:

http://www.brettsteenbarger.com/articles.htm

http://www.traderfeed.blogspot.com/

Kind regards,

O N D"

charts... everybody trades what he sees.
how many legs do you see in this picture?

some think trend is up, others think down looking at the same chart... or is it only in our minds?

entry.
how much ammo do you have?
what do you prefer: sniper rifle or machine gun?

this is not just trading. it is war.
be at the right place at the right time. focus. keep emotions under control.
clear your mind. have one shot. make one killing. win the battle before it starts.

The Art of War:

Sun Tzu's "The Art of War" (History Channel Documentary)

enjoy:


www.youtube.com/watch?v=dvscjC1GcbU

just for fun.