Submitted by: Dragan Lukic

In our last article, we discussed four traits which top Forex traders consider to be the difference separating consistent winners from trading losers. This article looks at some other characteristics which any new trader must take into account before delving into the world of Forex trading.

Firstly, think about all the successful businessmen and women, singers, footballers and anyone who has realised a significant amount of achievement in their industry. Chances are their success did not happen overnight. The likes of Richard Branson and Donald Trump did not build their empires at a blink of an eye. Most successful people have had to overcome some kind of failure and then learned from their mistakes before they finally reached their current level. Forex trading is no different. As a new trader upon the completion of your

Forex Trading Training

you must fully accept that losing is part of trading. No indicator or strategy will guarantee to make money on every single trade. The sooner you accept this reality the shallower your learning curve will be.

Another quality cited by great traders is the ability to take control and responsibility for every trading decision made. It s no good blaming someone else such as your broker or your trading platform for your own trading mistakes. Successful traders are able to take responsibility for their actions; both good and bad. By reviewing their trades and keeping a journal they can keep themselves accountable which is something consistent losers are too lazy to do. Furthermore, by being able to take responsibility, great traders do not feel the need to listen to outside advice or opinions before they take their trade. Can you imagine Warren Buffet or George Soros asking his broker for investment tips? Great Forex traders trust and have confidence in themselves and their system, which is the level new traders must aspire to.

Finally, great Forex traders are incredibly patient. They are patient before entering a trade, during a trade and when price reaches their profit target. Before a trade, most amateurs, due to a lack of a strategy, are constantly chasing the market and buying or selling because they can see price moving. Great traders do the complete opposite, they let price come to them – like a lion lurking in the bushes waiting to ambush its prey, professional Forex traders wait until the trade fits their entry rules. When their rules are fully met, because they are not afraid or have no fear of losing (due to sound money & risk management rules, confidence, and a profitable system), they take the trade. Once in the trade, they are patient to allow their edge to play out in the Forex market. Instead of getting excited every time price goes in their favour or upset when price approaches their stop loss, great Forex traders are patient. When price reaches their profit target, they have mastered techniques allowing to them manage the trade in order to capture much more than they were initially hoping for. They do not take quick profits or micro manage their trades like consistent losers will. If you are searching for a

Forex Trading Course

you must ensure that this is a subject that is covered or at least referenced as part of the syllabus.

In our next article (Part 3), we will explore further what top Forex traders consider to be the most important qualities which any new trader must develop before they can see consistent profits.

About the Author: Dragan is a trader and an expert on

Forex Trading Training

. Please visit the Forex Training Worldwide website for more details on our

Forex Trading Course

.

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To answer this question, is day trading profitable ? I will first establish a few points as the foundation. Whether day trading is profitable depends on 4 areas. Only when we are have mastered these 4 areas, then day trading can be very profitable.

These 4 areas are

1 Start up capital

You need a certain level of start up capital to make money from day trading. Depending on the instrument that you are trading, the margin required may be from 2% for forex, to 20% for commodities. Due to the leverage nature of trading, you do not need to put up the full value of the contract.

For starters, even for a small trading account, you would still need to fund about $10,000.

2. Technique and skill

Another important factor that will determine whether you are profitable with day trading is your level of skills in the techniques being applied. There are many techniques that day traders use to determine entry points, take profit and stop loss levels.

This ranges from reversion to the mean strategy to moving averages spring strategy and many others more. Moreover, different strategies makes use of a range of technical indicators which you would have to master.

We make money from day trading primarily by exploiting 2 concepts. One is the idea of trading in the trend whilst the other is trend reversals. All of the strategies and technical indicators is to help to decide on playing on either one or the other.

You can find out more about the different strategiesHere

3. Experience

Another crucial factor that determines how profitable day trading can be is the experience of the trader. A day trader has to be nimble to be profitable. The mantra is to get in fast, get out faster. This takes experience to exploit trend and short term trend reversals within the longer term trend. This is especially true during times of great volatility surrounding major events and announcements.

Day traders can trade anywhere from 1-2 minutes charts, up to 30 minutes chart. As the time duration is short, the price movement tends to be smaller in magnitude and therefore the size of your position relative to your account capital is crucial in determining your profitability and risk management. All these take experience

4. Control of emotions and mental strength

One of the most important factors to determine whether you can make good profits from day trading has more to do with your emotions and mental strength rather than anything else.

Day traders cannot let their emotions get the better of them or they will lose a lot of money. To profit from day trading, traders have to keep their emotions in check. When we got it wrong and our position is taken out by the stop loss, we have to continue and set up new trades.

When we have mastered the techniques and strategies and based on our experience, we must be confident that our winning calls to outnumber our losing calls. Another way to ensure that our wins will be bigger than our losses is risk reward ratio that we set for each trade which is usually 1:2. This means that when we win, we win double our losing trades.

Mental strength is very important in that we must have the mental strength to stick to set up trades based on what is identified. Many times, we tend to end up having more losing trades when we lose this discipline, get overcome by emotions and set up trades that should never have been set up.

Is Day Trading Profitable ?

Once you have control of the 4 factors, day trading can be extremely profitable. For the same amount of startup capital, there can be many trading opportunities over the day. With such velocity, as long as we have a risk reward ratio of 1:2 and executes a higher number of winning trades over losing trades, the profit potential is huge

By Dragan Lukic

One of the basic candlesticks you will study in your

Forex trading course

is the Hanging Man. Whilst we focused on its cousin (the hammer) in our last article, here we will focus on the hanging man, its characteristics and how to use it within your trading strategies you have learnt throughout your

Forex training

.

The Hanging Man

In terms of look and feel the hanging man and the hammer are identical. The main difference is however, that the hanging man appears at the top of an up-trend rather than a down-trend. The reason why it is called a hanging man is because the candle appears to look like a person with their legs hanging beneath their body. Similarly to the hammer, it is not important what colour the the hanging man’s real body actually is. What is important is that the real body is near the sessions high. That is, the hanging man’s open or close need to be near the session’s high as long as it creates a ‘small’ real body at the top of the candle.

As you will learn in your Forex trading course, the hanging man also has to have a long lower shadow. This shadow represents the state of the market throughout the session where the bears have created a sell-off at some point but the bulls stepped in and pushed the stock further upwards. In order to qualify as a hanging man, the stock either closes slightly below the open or slightly above the open. If a long upper shadow appears, the candle is not a hanging man.

Throughout your Forex training you will adopt your own techniques but the basic rule when using the hanging man in your Forex trading strategy is to wait for a confirmation candle. Different Forex traders have different opinions about the type of confirmation that you should look for but we are going to stick to the basic rule of a confirmation candle that closes beneath the hanging man’s real body. However, do not dismiss that some Forex traders are taught throughout their Forex training to only use a candle that opens and closes below the hanging man’s real body. The point is that, just because you see a hanging man at the top of the up-trend does not mean that the trend will change direction. As we mentioned in our prior article (Forex Trading Lesson 1 – Basics of the Hammer) the trend can simply have a rest for a few sessions and once it builds up the energy, continue trending in the same direction. If you find yourself in this position, you must take yourself out of the Forex market straight away. If you don’t you will lose money. This is why a confirmation candle is of up-most importance.

Imagine if you were following the trend and bought the currency pair on the hanging man’s open or the close. You are literally left there hanging in the Forex market. The trick is to make sure the hanging man is at the trend’s high or even at an all-time high and once the confirmation candle comes into play, the Forex market has every chance of changing direction. To give you more of a clue the market may also provide prior few candles with long upper shadows. That means that the selling pressure has begun and bulls are starting to get nervous. At the same time, try and notice if the slope of an up-trend is decreasing. If it is, the up-trend is starting to stall and the bears are starting to acquire the control. How long for, will depend on the surrounding factors but once a hanging man and a confirmation candle appear in this type of scenario, it is certainly a trade to take notice of.

About the Author: Forex Training Worldwide train people around the world how to trade the Forex through our online

Forex trading course

. If you want to know how our

Forex training

can help you make money from the markets please visit the Forex Training Worldwide website.

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