Mentorship That Take You
Inside The Secret Strategies of Rich Traders
Inside The Secret Strategies of Rich Traders
Watch this short analysis video to get my prediction for the short to medium term EUR/USD Trend.
This week we were able to capture an easy 2.1% on just a couple of trades. These are real results traded with real money. If you’d like to learn how you can get these kinds of results click here.
If you’d like these safe, consistent strategies traded for you by me then you’ll want to join my Safe Currency Mirror Trader program. Our Safe Currency Mirror Trader system can be obtained by clicking here. Watch the video in full.
When trading the Forex markets, the most important thing to pay attention to is the way money flows from one region of the world to another. Forex is simply a marketplace that expresses how money flow is happening at the moment. Because of this, it is your job to understand which direction the money is flowing from and where it’s flowing to.
Fundamental factors will determine the flow of money around the world. Under normal circumstances, money will travel to wherever it is treated the best. Corporations, wealthy individuals, and even governments will transfer money from one slowing economy to one that is more expensive and supportive of growth. The economies that are expanding typically will have higher interest rates, and as such their bonds tend to pay out a higher coupon. It’s a simple matter of, “If you were running a sovereign wealth fund for the country of Saudi Arabia, would you rather buy bonds that are paying 3% or 7%?” This is how many large corporations, sovereign wealth funds, and super rich individuals make their decisions.
A lot of times you can figure out which country is doing better by such fundamental indicators as the CPI, PPI, and GDP. When these are rising, or are at least strong, the country is more likely to raise interest rates which will in turn raise the amount of interest that the government is willing to pay in the bond market. This is because in situations where economic strength is prevalent, most people will throw money into the stock market and forgo buying bonds. In this environment, the host country will have to pay a higher percentage interest rate in order to attract the large buyers that are so important.
By paying attention to where money is going to be treated the best, you begin to understand how the super wealthy are thinking. Remember that a simple 7% bond yield might be very exciting to some of these people, as 7% of massive amounts of money in a relatively safe environment are much more exciting than risking large amounts of money in the stock market or Forex markets. Because of this, it is very important to pay attention to bond yields when assessing which one of two economies is most likely to strengthen. When you figure that out, you know which direction a pair “should move”.
One of the most common things a newer trader will do is look for the “Holy Grail”. This mythical trading system comes in several different varieties, but they all have one particular thing in common – they quickly become forgotten as the trader looks for the next “sure thing.
When it comes to your Forex trading, who actually makes all the decisions regarding your trading account? Be honest, is it you or some other random person? In other words, you could be like so many other traders that allow television reporters, friends, spouses, or even your greed or fear place most of your trades.
When you do not take control of your trading decisions, you are loading far too many other variables influence your results. For many traders, it is basing trades off of things they hear on the television, or possibly even something someone said to you. If you find that you are shorting a currency pair based upon some random technical pattern you’ve never heard of, but have entered this trade because some “expert” thinks it’s a short, then you certainly are not in control of what’s going on.
By making all of the trading decisions in your account for yourself, it makes you responsible. If you are responsible for all of your decisions, in theory you should make better decisions in the long run. This doesn’t mean that you won’t make stupid trades. It means on the whole, you will be a better trader, or at least a more consistent trader.
Too many people allow the noise of the markets, the commentators, and the analysts to make trading decisions for them. This is the easy way out, because it gives the trader an excuse when things go wrong. It’s easy to say “See I told you, I wanted to short this pair but that guy on TV said it was a long!” This allows the trader to feel better about making the “wrong” decision. It is simply a mechanism to protect the ego so that the trader can pass the blame on down the road.
Of course, the biggest issue with this is that even if it was the fault of the guy on television, it’s not his account that’s suffering. He doesn’t take losses, so it’s much easier for him to give advice. It’s much more difficult to make the decision when you actually have something riding on it. Because of this, if you are responsible for your trades – in theory your trade should be more well-thought-out.
One of the biggest traps a trader can fall into is to feel the need to constantly “tweak” various aspects of their trading. While it is true that there is always room for improvement, how you go about it can either be helpful, or destructive.
After you’ve been trading for a while, you may find that there are specific chart patterns that you favor. There is no right or wrong, just simply what works for you. Each one of us is going to be significantly different than the other, and as such we will see charts differently. For example, one trader can be a huge flag pattern fan. This trader lives and dies by the flag pattern. However, his trading buddy loves to trade triangles. Neither is better than the other, just better for the specific traders involved.
If you choose to try and optimize your trading, the first thing that you should do is get a demo account for this specific purpose. This will allow you to keep trading in a consistent and reliable manner, while looking to improve your results. Take little bits and pieces of things you like and try to optimize your trading results in the nonthreatening demo environment. Only after several months of proven gains should you consider bringing the tweaks to your live account.
However, you should keep in mind that your optimization should be built upon a foundation of things that already work for you. Your attempts at optimization should be small in nature, as you already have a core system that is working. The idea is to improve upon your trading results, not step backwards this could be easily done if you are trying to change too much in one fell swoop.
As you tweak your system, keep in mind it is much like tuning a piano. The main nuts and bolts of the instrument are going to remain the same, but you are simply trying to slightly adjust in order to produce the results you seek. The idea is to improve performance, not reinvent the wheel.
One of the things that I enjoy the most about trading Forex is that it never ceases to be a challenge. It’s not like something that you learn, and find yourself on autopilot. To be a successful Forex trader, it is a lifelong pursuit as well as being a lifelong passion.
Traders are professionals just like a professor, an airline pilot, or a doctor. A physician will continue taking educational seminars and classes in order to keep his or her skills up to date, and more importantly ensure patient safety. The airline pilot will spend countless hours in airline simulations, as well as other training methods to keep up to date with the newest upgrades to the airplanes that they fly.
For some strange reason, many new Forex traders think that they can succeed in this game without any training. They fail to recognize the fact that they are trading against some of the smartest and best traders in the world. Investment banks like Goldman Sachs don’t hire random people off the street; they only hire people that have proven their economic prowess as well as the ability to trade in a profitable manner.
No matter how good you have become, there is always going to be one or two things that you can do to improve your trading. Perhaps there is a new system, or technique that you haven’t been doing as you have progressed. By learning these new techniques are systems, you are looking the marketplace in the eyes of other people. Perhaps you will notice things that would have been ignored in the past, which may allow you to profit off of alternate setups as opposed to the handful that you have been taking.
Let’s say that you’ve been a profitable trader for a few years. Sometimes traders will find their returns hitting a plateau over time. Let’s pretend that you are making 17% a year on average. This is a great return, and certainly nothing to shun, but let’s just pretend that there’s a couple things that you could use work on.
If you improve your trading by 1% in a couple different places, it will be longer for you have found that your improvement overall will be 10%. While that doesn’t sound like a massive jump in trading profits, as 10% of 17% is only 1.7% – compound interest kicks in, and you will find that your returns will be supercharged over the next few years.
If you find that you are getting 17% a year, why not aim for 18.7?
