It should be self-evident that in order to successfully trade the forex markets, a trader needs to commit to the very best training, which generally means studying at least one forex course. That said, surprisingly few traders actually do so, which probably goes a long way to explaining why 95% of traders lose money in the markets.

We would contend that the best form of forex course training, that gives the maximum chance of profitable trading…

…is to master technical analysis – the art and science of studying forex price charts. This sort of forex course teaches you to understand market price action, forecast where the market is most likely to go, and even determine repeating price patterns and setups that you can then create forex trading systems around.

Example of Elliot Wave Fibonacci Relationship

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This sort of forex course requires that you master the basic concepts of trend, support and resistance, trendlines, oscillators, Fibonacci levels, price patterns, and ultimately Elliott Wave and Gann analysis as well.

Certainly, there can be some limited value in learning some basic fundamental economic analysis if you really wish, but its ultimate application in the foreign currency markets is limited to perhaps timing sudden price movements based on the release of key economic data that the market focuses on. Ultimately, you can do the exact same thing with a calendar, and hence have really little need to extensive forex training in Economics!

Above and beyond all of this though, the most important forex course training that you can possibly engage in is to actually train in becoming an excellent trader, i.e. in the process of trading itself. No amount of head knowledge of economics or technical analysis makes an excellent trader. You become an excellent profitable trader by actually trading, over and over again, making note of successful strategies, and taking heed of mistakes you made. The very best way to do this initially is to either paper trade, or else trade a very small amount indeed. In the beginning, the key to successful trading is simply… to STAY in the game!

Overall then, the subject of forex courses is a broad one, and as complex as the markets themselves. Hence, you should take time in mastering the various areas involved and be patient with yourself as you participate and gradually improve as a forex trader in the currency markets.

Make sure you read the free report The 7 Deadly Mistakes Of Forex Trading which is a full and detailed free forex course in itself, packed with solid tips for increasing your foreign exchange trading profit.

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Psychology Of Trading

by tradingrebel7 on May 27, 2011

Profitable trading is very dependent on ONE single frequently overlooked factor. It is actually NOT the specific market you might choose to trade; be that forex trading, stock trading, bond futures trading, or options on any other for that matter. It is NOT the timeframe  – i.e. short-term day trading vs. much longer-term investment time horizons – that you choose to trade. It most certainly is NOT how much cash you happen to have in your brokerage account. Strangely enough, profitable trading is NOT critically dependent how good your trading information is, be that technical charting methods or macroeconomic fundamentals, or a combination of both.

All of these assuredly have their role to play in your overall trading success, and that is indisputable. Nevertheless, this ONE factor is what my good friend, the late Robert Krausz (featured in Jack Schwager’s “New Market Wizards” book) continually stated was responsible for 70% or even more of a top trader’s success.

So what is that factor, you may ask? It is Psychology!

At first glance, this may seem very strange. Surely, you will argue, when I trade a fixed rules trading system, what possible role could my psychological profile play? If you trade by analyzing the markets via in-depth technical analysis charting, then isn’t your success dependent upon THAT, and not your psychology?

Sadly, it would seem not. Indeed, more than virtually any other skill or profession, in Trading your psychology is so critical that it actually overrides pretty well all else.

In Sport, you could argue that physical fitness and talent are key. In business, you might claim that creating excellent systems approaches and processes, combined with maintenance of top quality relationships and employee management are paramount. However, in online trading it is just YOU, your computer, and the markets.

Hence, whatever you choose to do or not do is ultimately down to your private psychology. Hence, even if you have a proven forex trading system that you purchased for big money, for example, it is still your psychology which determines if you stay with that system when times get tough, or whether you abandon it for some other method. If a sequence of losing trades leave you feeling worthless and sad, and you decide to overtrade so as to make back your losses, thus creating an even worse result than before, it is your trading psychology that was the culprit and that caused you to make those decisions.

It is your beliefs about Money that decide whether you will or will not draw a serious quantity of it into your life. Most human beings have an upper threshold on how much they believe they can earn. This threshold works in exactly the same way as a thermostat. This same phenomenon is present in trading the markets too. If you have a psychological upper limit on what your net worth can be, you will thus make it impossible to make more than that figure from your trading. It will be like an invisible barrier that you cannot break. Every time you hit this barrier, you start to lose in the markets without fail until you are once again returned to your mental comfort level. Once there, you will then discover that your trading miraculously improves once more… until you collide against that barrier yet again. This kind of cyclical behavior is extremely common not only with market traders, but with commission salespeople too.

Psychology also affects your trading SIZE, or rather your trading size affects your psychology and hence your trading. People who have only ever traded two soybean futures contracts in their lives will find that their psychological comfort level, and consequently their trading performance,  is altogether different if they are asked to trade two hundred; same market, same price movements, different trade size and hence different psychology and consequent performance.

If you are a fundamentally negative person with poor self-esteem, the natural result is that you will always tend to take market price action personally, especially when you lose. You will tend to think that the universe/market/broker is conspiring against you to ensure that you fail. This is actually a very common feeling that a LOT of traders share.

However, if you are a person with a positive outlook who follows a disciplined trading approach, your attitude to losses will be completely different. You will see them as an essential part of trading, much as breathing out is an essential part of breathing, and you will not be the least bothered by them.

It all ultimately comes down to your psychology. In addition, despite the term  “trading psychology” being used, it is actually your overall psychological approach to life as a whole that is under examination here. Whatever approach you have to life in general is the approach you will invariably bring to your trading.

The most important aspects of this are (a) your attitude to money, (b) whether your approach to life is basically optimistic or pessimistic, and (c) whether you possess high self-esteem and self-confidence. All of these psychological approaches were largely implanted into you at an extremely early age by your parents and environment. You literally absorbed them without discrimination, at an age when you were simply too young to distinguish between what was true and false. Moreover, without a substantial amount of inner work, this psychological inheritance is extremely hard to change for the better.

A number of methods are available. You may wish to study up on self-hypnosis. General self-help personal development material is definitely valuable in assisting you to unlock the psychological damage of the past. There even exist an increasing number of experts – “Trading Shrinks” if you will – who specialize in helping traders at all levels with the psychology of trading.

It is beyond the scope of this discussion to give you a total solution on how to improve your psychology, and your trading psychology in particular. The first step to change and overcome something like this is to know that it needs changing in the first place! Now that you do know, it is up to you to seek out exactly what you need most in order to make the transformations that will turbo-charge your trading.

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Forex Course – What To Look For Successful Trading In Forex

May 2, 2011

With the enormous potential profits available in the financial markets and the Forex markets in particular, the forex course has become an information product in great demand, at least judging by the number of them being produced these days! Newcomers seeking an education in how to trade would do best to seek out a forex […]

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Options Trading – As Risky As The Reputation?…

April 20, 2011

Options Trading has a reputation for being extremely risky… …but this reputation is in large part undeserved. True, option trades ARE extremely risky – even dangerous if you have no idea what you are doing. However, that is true of all forms of offline or online trading, and trading in options is no exception. While […]

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Commodity Trading – An Overview

April 20, 2011

Commodity Trading… …is strictly speaking the trading of physical commodities  – such as soyabeans, wheat, corn, gold, silver, cattle, oil etc. – or their futures contracts on the established commodity exchanges. Farmers use commodity trading to lock in favourable prices prior to an ensuing harvest. Hence, there are real commercial reasons for trading in commodities. […]

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Online Stock Trading – Is It Right For You?…

April 20, 2011

Stock trading has exploded in popularity as telephone charges and broker fees have collapsed and internet bandwidth has soared. Combine this with the recent trend away from corporate environments in favor of working from home, and you can see how online trading has become both a viable business and an ideal lifestyle. Online stock trading […]

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Forex Trading – Are Currencies The Best Markets For Online Trading?…

April 19, 2011

Forex Trading is catching on like wildfire… …amongst private traders, and there are good reasons for it. Forex  is the largest known financial market in the whole world, and the most liquid to trade in. Also, the requirements to open a currency forex trading account are much less stringent than for stock trades. The term […]

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