Forex Managed Trading » traders

Emini Trading – The Trading Learning Curve

admin — Wed, 29 Jun 2011 01:55:17 +0000

I sometimes get the questions from people interested in trading emini futures for a living about what basically amounts to asking about the length of the trading learning curve.

Here is the answer that I gave one or two of these fellows when I really thought that it was the best and most honest answer taking into account not only the very question but other things they mentioned in their emails: “if you need to ask this question, you don’t have what it takes to make it as a day trader.”

Yes, I know that there are vendors out there who would want you to believe that you can become a trading champ overnight or something to this effect, except that they are plainly dishonest because how exactly would they really know it? No one can know how long it will take you to master day trading. One can only talk about some approximate range, and it’s a pretty wide range. From my experience with many of my students, it is from days (in exceptional cases of people who are well prepared and smart) to weeks and months, even years in some cases. This depends on many factors, and hence how long it takes in individual cases is, on the whole, unpredictable.

If you cannot accept it, then what this tells me is that you cannot accept uncertainty, and hence you are a poor candidate for trading because trading is essentially about handling uncertainty or the risk that comes with it.

And then there is another issue that should be rather easy to understand for every thinking person: your learning curve never really ends. You learn all your life as you should if you want to stay competitive in your field, and the more competitive this field is, the more you need to learn. Day trading, especially day trading highly leveraged markets such as emini futures, is one of the most competitive fields you will ever enter.

But that does mean that you need to keep on trying new things all the time. I don’t think this is really necessary. You may stay within the same framework, and I think this is even much more advisable than the alternative option. What this rather means is that if you are not willing to better yourself as a trader, not willing to perfect your trading, not willing to learn new tricks and study things on your own and practice as much as you can, you may find that your trading becomes rustier and rustier.

I have been trading emini futures for about 9 years now and even if more than half of this period I have spent trading the same methodology, I continued learning all this time. In fact, I believe that in the last four years I have progressed more as a trader than in the first four. I realize that this may sound strange to those who think that there is some definite learning curve, but as this example illustrates, there just isn’t.

There is yet another issue that my experience points to. Namely, that those who after two or so years of trading think they are as good as traders as they ever will become are most likely wrong. What’s worse, believing so may interfere with their growth as traders.

So don’t ask a vendor about the learning curve of the trading course he markets unless you want to find out if he is an honest man. Because if his answer is that it’s short or anything definite and optimistic of this kind, then it’s a sure sign you are dealing with a guy who wants to sell you something desperately and so may be tempted to employ “advertising shortcuts,” to put it euphemistically.

The proper and honest answer is that it varies, but if you want to become a person who trades for a living, the answer is that it ends with your trading career.

Article Source: http://EzineArticles.com/6372676

Tags: traders, trading

Forex Course: A Quick Forex Guide for Traders

admin — Mon, 12 Apr 2010 17:22:48 +0000

In this Forex course we will review some steps you need to take care before you venture into your trading journey. Most traders venture into the Forex market with little or no experience in the Forex market. This results in painful experiences like loosing most of the risk capital, frustration because it seemed so easy to make money, etc.

The first thing you need to realize is that, it is not easy to make money. As every other endeavor in life, where important rewards are to come after mastering it, you need to work hard. You need to get very well educated and experienced before having the possibility to receive important rewards on it. The key on mastering the Forex market relies on commitment, patience and discipline.

Ok, you have decided you are going to trade the Forex market, you have seen several advertisings featuring how easy is to make money in the Forex market. You might think this is your opportunity to reach your financial freedom, right away, time is money, why waiting any longer if you have the opportunity to make money now. I know, I’ve been there, but you have a chance now, I didn’t, no body told me what I am going to tell you.

We, Forex traders, make transactions based on a set of rules. These sets of rules are what we call a Trading System. Our systems tell us the exact time where we need to get in the market and out the market in order to make a profit (i.e. buy low sell high.)

Creating a system is the first big step you need to take care first. Why is this so important? Because you need to build a system that suits your personality, otherwise you are going to find hard to follow it, thus hard to profit from. A system can be based on technical indicators or what we called a mechanical system or based on experience and intuition or what we call discretionary systems. I highly recommend using and trying first a mechanical system, because discretionary systems are dangerous during the early stages of a Forex trader (can lead to indiscipline.) With experience, on later stages, you will find out which signals work better and which ones to avoid.

The next step in this Forex course is to try your system on a demo account. Most Forex brokers offer a demo account, an account with virtual money. This is an excellent choice to test your trading system as there is no money at risk. In this step you will figure out if the strategy works for you. If you feel comfortable trading it, then it is most likely to produce good results. How much time should you stay in this step? It varies, but you shouldn’t go one step further until your system gets consistent profitable results over a period of time. It can take many months, but remember, you need to be patient.

You must be honest to yourself; you need to take every single signal generated by your system, not only the signals you thought were going to work, otherwise, you are going to have problems in the next two steps.

Ok, by know you had consistent profitable results on your demo account. You might think its time to go full. Nope, nope, nope. There is a big difference between trading a demo and a real account. The most important difference lies on emotions (fear, greed, anger, etc.) These are psychological barriers that affect every single decision made by traders regardless of what he/she is trading (stocks, bonds, Forex, futures, grains, etc.) These emotional factors, in my opinion, are the most determinant factor that separates profitable traders from the others.

The next step in this Forex course is specially designed to deal with emotions and to confirm the results obtained in the prior step (consistent results in a demo account.) At this step you need to trade in a real account with limited funds. Some brokers offer fractional lot trading. Meaning you are able to trade any desired amount (even cents.) The important thing here is that these emotions we’ve been talking about are present only when there is real money at risk. At this stage, you are going to see if you are really comfortable trading your system and if you are able to trade with such system, remember different systems produce different emotions. If you are able to produce similar results than those obtained in a demo account, then ready for the next step. If you didn’t, then you might need to create another system, there is chance your system never fit you. If you created consistent profitable results on this stage, you have a chance to produce similar results in the next one, on the other hand, if you didn’t produce good results in this stage, you will not be able to make on the next stage. Remember, you need to do things right, and be honest to yourself.

The last stage is trading in a real account with sufficient funds. If you are at this stage, and have passed successfully every prior stage, then you have a chance to make it, go ahead and try it, you need to be confident in yourself and in your system, your strategy have already produced consistent profitable results, there are reasons to believe you are going to make it. Very few traders fail at this stage (if passed successfully prior stages.)

Trading successfully is no easy task, it requires a lot of work, patience, discipline, and education. By completing the steps outlined in this Forex course, you have a chance to produce profitable results. I repeat it again, you need to be honest to yourself about the results obtained in every stage. Some times you might need expert guidance regarding your system development strategies.

Tags: forex course, traders, trading

Make Money Forex Trading by Utilizing Volatility

admin — Fri, 12 Feb 2010 17:13:50 +0000

Traders in the forex market are now a savvy lot. Almost everyone in the forex market nowadays are self trained in reading charts, or a user of some form of high technology software to trade the forex market. Some have graduated from using simple technical analysis to the new fangled sophistication of neural network forecasting and artificial intelligence. But yet a great majority of these professed experts fail in their trading, losing money from their trading rather than making profits. Why is it so?

The answer lies in the devil within. The traders who win are those who are capable of executing their trading plans with discipline and precision, and more importantly, they can cope with the VOLATILITY of forex trading.

Theory is if you can identify volatile movements, even if they are small, and execute trades with these volatile movements, buying on the lows and selling them at the peaks, you stand to make big profits. However, in practice, many volatile movements are too fast and tiny to be identified in time to be traded profitably. Where larger volatile movements are identified, it is error in judgment and the speed of execution of the trades that reduce the amount of profits.

When I was conducting research into writing a report on how a trader can recoup his losses after a horrendous period of bad trading, I was pleasantly surprised by a veteran trader who told me he was a profitable trader from day one of his starting trading. This is by no means a false claim, because this flamboyant trader has always been known both for his tremendous skill in trading and for being anything but decent about his skills and his ability to make the correct calls in the market.

Being surprised, I asked him what was his profession before he became a professional trader and a trading coach. His answer added to my surprise, because he said, ” I was a professional poker player and the runner up in the Australian poker championship!”.

Therein lies his great success as a forex trader as well, because as a poker player and a champion player at that, he was accustomed to taking calculated risks.

The secret to trading his style was to take calculated risks in his forex trading.

For example, if you have identified a trade, and you have placed a trade, do not place your stops too near the entry price because the odds favor the stops being hit most of the time.

Rather, you can assess the odds and probability of the stops being hit before you place them.

Again, when a trade presents itself, and you can compute that the odds of winning is in place rather than losing, it is then that you can increase your trades.

If you desire to win big, learn to compute the odds of winning, and like the successful poker player, bet big when the odds are in your favor and stay away from a trade where the odds indicate you will lose. This is where forex traders will measure their risk-reward ratios for their favorite trade setups and can identify which trade setup will result in bigger profits and with lower risks. This is a skill that you ought to learn to become more profitable.

Tags: forex, money, traders

Forex Managed Trading » traders

Emini Trading – The Trading Learning Curve

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