New To Forex Trading, or Don’t Know Where Next To Go?
If you are searching for Forex trading training, you are likely to either be just starting on your learning Forex trading journey, or you have been trying for some time but are not yet making money.
If you are new to learning Forex, there is so much free Forex training and information available that I don’t recommend paying for anything. Just Google or search in YouTube “Forex trading training” and you will be swamped. Also this article may be useful on how to start Forex trading.
But if you have been trying for some time and are not yet successful despite all the information you have learned and experience you have gained, then I recommend to you what has made all the difference for me, learning from professional traders week in week out, seeing what they are actually doing and understanding why. I have done this from joining two membership sites Forex Mentor and Trading Academy.
My First Failed Attempt
Starting in 2009 I spent two years and hundreds of hours trying to make money Forex trading, but eventually blew up my account losing about $4,000.
I worked really hard at it, spent many hours every day staring at charts, I was trading purely technically as I had no understanding of the fundamental reasons for price movements, and I often thought I was being unlucky when a piece of news came out which resulted in the market going against me.
The whole experience was stressful and frustrating, with my conclusion it was not possible for an individual to make money Forex trading, it was a game for big institutions.
My New Forex Journey
I started again in January 2016, and am up over 13% this year so far (at time of writing).
And as well as being profitable, I am finding my trading experience a lot more relaxing than my first attempt, with absolutely nothing to do most of the time.
So why is my experience and success different? I think the key points are:
- I now understand why prices are moving as they are, thanks to my latest training,
- I create a weekly trading plan which focuses on very few Forex pairs or other markets, based on the highest probability trades due to the current market fundamentals and current sentiment,
- I am not trying to replace my job within weeks. I am now on this path for the rest of my life, so am focused on making the right trades when the market opportunities arise rather than trying to pull an income from the markets,
- I am trading higher time frames. My main focus is daily charts, but I also go down to four hour charts for more granularity when appropriate, hence I am not staring at charts with my fingers crossed all day.
A Trading Example
As an example of how much progress I have made this year, here is an example of a (non Forex) trade I made yesterday (May 18th 2016). Purely because of timing, my latest trade is an indices trade rather than an FX trade, but once you have learned enough to made money trading Forex, you can trade other markets with exactly the same approach.
Step 1 – Fundamentals
Retails sales from US better than expected last Friday, adding to the speculation that the Fed will raise interest rates in June.
Because of this the USD is gaining strength
Daily USD Index – May 18th 2016
If interest rates rise US companies will need to pay more to finance their debt, so this is negative for US stocks.
On top of this:
– Recent corporate earning are bad. An excerpt from a recent article “U.S. corporate profits, weighed down by the energy slump and slowing global growth, are set to decline for the third straight quarter in the longest slide in earnings since the financial crisis.”. Source: http://www.wsj.com/articles/u-s-corporate-profits-on-pace-for-third-straight-decline-1461872242
– Recent US growth and inflation data has been mainly negative, hence why the Fed wen from a stance in December 2015 of 4 rate hikes in 2016, to we’ll play it by ear depending on global market conditions,
– There is no growth in Europe despite a massive QE program
– Growth in the UK is slowing. A typical recent financial news release
– Chinese growth is slowing, and what growth there is is debt driven, hence not sustainable
So all in all, I am very negative US stocks and I want to short the S&P 500. Step 1 complete.
Step 2 – What is the current sentiment, i.e. are people willing to take risk, or not.
Step 3 – Using Technicals To Decide Entry and Exit Points
12:51 (GMT time) May 17th 2016, 4 hour chart, price had broken north of resistance, but wasn’t sustained, telling me buyers are not interested above resistance, so I shorted at this point with my stop just above the recent 4 hour highs.
S&P 500 – 4 Hour
By 08:24 the following day, the price is continuing to fall
4 hour chart, with my resistance line slightly redrawn
S&P 500 – 4 Hour
So when do I get out? I will gradually lower my stop, keeping it above the resistance line and with some room.
My target is the most recent weekly lows giving me a massive Risk Reward.
S&P 500 – Weekly
Managing the Trade
So how to I feel about this trade? I almost feel nothing at all.
– I know anything can happen at any time, but I am confident with my fundamental analysis that US stocks should be falling
– If I am stopped out now, I have only risked 0.5% of my account
– I will gradually lower my stop as price action permits, so within a few days i will either have been stopped out, or my stop loss will be at my entry price,making it a risk free trade at that point
– With good risk reward trades like this, I will make good money being right less than half the time
– If at some point my fundamental opinion changes (good corporate earning figures, better than expected global growth, etc), I’ll exit my trade at market price.
– At points where there is a good consolidation pattern, or retracement / rejection, I’ll add to my position
– Once / twice a day I’ll check the price when I am reading the latest financial headlines from Bloomberg and CNBC. That’s it, almost nothing else to do.
I know that it is still the early days of my trading journey, but I am really pleased with the progress I have made this year, and am confident that I am on the right path to one day be doing this for a living, giving me the satisfaction, time freedom, and wealth that I want.
What turned my Forex trading around has been joining two membership sites where I get to see what professional traders are planning week in week out, and how they then execute their plans. I can’t recommend these sites enough to everyone who is not achieving the results they want from their trading.
The first site I joined (Forex Mentor) offers a $1 trial, and then is $47 / month. The other site (Trading Academy) is more expensive at $99 / month, but has more of a focus on macro economics which I find invaluable.
Again, if you are new to Forex trading, I don’t recommend to spend money on any Forex trading training or information, but once you have been trying for a while and feel you are no longer making progress, join one of these sites and find out what I am talking about.