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Risk disclaimer: The information presented on our blog are for educational and entertainment purposes only. Nothing on this website serves as investment advice or recommendations. Trading is risky and you can lose more than your initial investment. MyFxMentor cannot be held responsible for any decisions visitors make. Please consult a financial advisor before making any investment decisions. Risk disclaimer.

Lerato Masigo 10/16/19 Lerato Masigo 10/16/19

4 Best Ways To Avoid Losing Money Trading Forex

Forex trading is a skill, and just like every skill, it has to be learnt. However, by understanding some of the common mistakes that traders make, the learning curve can be shortened. Listed below are the some of the best ways to avoid losing money trading forex.

1. Trading Emotionally

One of the key reasons why forex traders lose money is because they trade emotionally. Avoiding emotional trading can be the best way to avoid losing money in forex. When we say trading emotionally, we mean things like revenge trading. People revenge trade when they lose money trading forex and then take ill-conceived trades to try recover that money back.

Another form of emotional trading is over-trading. Some forex traders get a buzz from being in a trade. It is this buzz that makes forex traders again take inappropriate trades just for the excitement.

Another example of emotional trading would be traders not closing losing trades. They don’t close the losing trade because they feel it is bound to turn around, ultimately these can lead to huge losses.

2. Not Using a Stop Loss

Another reason why many forex traders lose money, and is somewhat linked to the above, is related to stop losses. Stop losses are a protection that traders can set to ensure they control the maximum amount of money they can lose on a single trade.

However, many new traders tend to not trade with stop losses. This is because they are told that trades need to be given ample space to move against them before moving into profit. This couldn’t be further from the truth.

If you take high probability trades you shouldn’t need a big stoploss, and if you do, you have taken the wrong trade.

Depending on news events and other market reactions, prices can move extremely quickly. If you don’t have a stop loss, you have no protection against these huge swings.

3. Trading Without a Plan

Yet another reason why forex traders lose money is trading without a plan. A trading plan is a set of rules that you use to determine whether you should enter a trade or not. This could be a simple plan like moving average crosses or a complex plan involving multiple indicators and confluences.

Whatever the plan sticking to it enables the trader to remove the emotions from opening a trade. If it doesn’t meet your plan you simply walk away, no questions asked. Once you have a trading plan you can then begin to modify it and look for patterns between successful and unsuccessful trades, refining your trading plan accordingly.

Not having a trading plan means that you are trading on gut instinct without any real understanding of what you are doing. This is tantamount to gambling, and is one of the biggest mistakes forex traders can make. A successful forex trader needs to be disciplined.

Think of a playbook for a soccer team, or a training regime for a boxer, they are the equivalents of a trading plan. There is a saying, “plan your trade and trade your plan”, and this couldn’t be more true.

4. Oblivious to the News

Finally, another reason that forex traders lose money is being unaware of news releases and economic circumstances. Currency prices are driven by both economic performance for a particular country as well as reaction to things that are happening around the world, such as wars or political instability.

Many forex traders ask the question as to whether technical or fundamental trading is better. The reality is that you need a bit of both to be successful. Technical trading is about finding opportunities on the chart where it is a good place to enter or exit a trade.

However, fundamental data and political news ultimately affects the direction and volatility. Let’s say you discover a head and shoulders pattern on a currency pair, and it’s about to break the neckline. That would suggest a good opportunity to enter the trade.

However, a couple of hours after you enter the trade the central bank of the currency you are selling suddenly increases interest rates. That instantly pushes the trade in the opposite direction and you are stopped out.

So while it’s important to use technical analysis to identify the entries and exits, it’s also vital to keep an eye on economic releases and political events to ensure that your technical analysis is in line with what fundamentally is going to happen to that currency. You don’t need an economics degree to understand fundamentals, there are plenty of resources that forex traders can use.

Just a basic understanding of fundamentals can be the difference between being a successful forex trader or unsuccessful forex trader.

I hope this summary of the best ways to avoid losing money trading forex is useful. There are many more pitfalls that you need to avoid as a new forex trader, but these are some of the most common. Keep an eye out for other articles focusing on other topics to help you become a successful forex trader.

Happy Trading

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Lerato Masigo 10/1/19 Lerato Masigo 10/1/19

A Day In The Life Of A Full-Time Forex Trader

The life of a full-time trader from home can be lonely, as is often the case for work-from-home activities such as freelancing or blogging. It’s not for everyone. As you’ve all come to know our mentor Lerato is a full time forex trader and today he will be sharing his daily routine with us for those of you that aspire to be full time forex traders and some key daily activities that ensure he is always in top condition for the market.

Predominantly his day will start off with a cup of coffee and laptop on his work station. Checking moves from the London session, any expected news feeds to see what might be affecting the markets. Once he has a clear view of the day so far and what the day’s news calendar looks like, he’ll review his watchlist to scan through the trading pairs he has already analysed and share those that are close to his ideal entry price with the MYFXMENTOR trading community.

When everyone else is getting ready for their morning commute, a trader is already working. A traders commute might be from the kitchen to the sofa or work station but they are already on the job and usually even before the day begins they’ve been up in the AM to scan through anything they anticipated. Heres some of the things he has shared with us on how he keeps in check on a daily basis as a full time trader.

Lifestyle Choices

The 24-hour forex grind can be tedious and proper lifestyle choices are needed to build discipline and focus, in turn improving the bottom line. As a result, the full time trader takes as much time working on relaxation and personal health issues as watching world markets. Traders also know how to have fun, taking regular time to get away from their trading screens and unwinding with friends and family.

Many full time traders take physical and mental conditioning even further, quitting smoking, limiting alcohol use and maintaining a healthy diet that keeps weight under control and the mind in an alert state. They also understand that problems with interpersonal relationships can translate immediately into performance shortfalls, so adequate time is taken to deal with spouses, parents and children.

Research & Patience

Research is key, due diligence paramount, and patience is often the thing that keeps it all together. There’s no hurry. A trader might spend the whole day viewing charts without making a single trade. Savvy traders choose their battles wisely. If something catches the trader’s eye in the morning, they’ll place an order or two. The day is starting well, time for a break.

Your money is working for you now, even when you are not there. Take a shower, do the dishes, go jogging. Your trades will be waiting for you when you get back. Of course, you can stay home and keep a close watch too!

There are ways to protect yourself from unexpected price shifts. Two musts are the Stop Loss and the Take Profit. When traders place an order, they can set an amount they’d be happy to earn. There’s no rule for this, it’s a personal preference. Same goes for Stop Loss. How much are you prepared to lose? These two functions are automatic and activate when orders hit the parameters you set. This lets a trader open multiple orders throughout the day without having to keep a minute by minute vigil.

Opening multiple positions is often referred to as diversification (not putting all your eggs in one basket). This way, you can still meet your investment quota of the day, but your results won’t be tied to one decision. It also means that you can use your free time to do other things. Watch a movie or some trading tutorials, read a book, or exercise.

The day is running. Time to check your laptop and see how your orders are doing. Check the graphs and see the movements for the morning and maybe add a few more orders on anything that caught your eye.

The Bottom Line

The trading day ends with a performance and session review, noting characteristics that may impact future strategies and outcomes.

I study my trading journal and try to answer these questions:

What did I do right today?
What did I do wrong today?
What can I do better tomorrow?

Finally, i take a last look at forex pairs not closely watched that day, checking for trading opportunities they may have missed.

Once the trading day is complete… the rest of the day is spent empowering our trading community and family time. :)

Happy Trading

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Lerato Masigo 9/22/19 Lerato Masigo 9/22/19

How To Trade Forex With A Full-Time Job?

Hi Traders,

Do you believe that forex trading is not for the full-time employees, entrepreneurs, and self-employed because it requires too much time and dedication?

This article explains why trading the financial markets is actually possible for both intra-day and long-term traders.

In fact, trading is open to everyone who is willing to try it and offers exciting benefits and opportunities when compared to investing or buying and holding.

Isn’t it such a relief to know that it is possible to succeed at forex even when you have a full time job. To think most successful traders started trading while they had a full time job and later became full time forex traders.

Today we will discuss some of the strategies and ideas for manual trading that can help you balance work, trading and family life at the same time.

Remember to continue on steadily and with much research and diligence. Find a trading mentor that can guide you in your journey to becoming a profitable trader and learn a trading strategy which is profitable . Very soon you will likely be looking at your own consistent account gains. These are some of my top tips for people that have full time jobs and want to learn how to become a profitable trader while still working.

Favourable Market Conditions: Liquidity And Opportunity

Forex access is technically available on a 24/5 basis, but there are specific times and pairs that are conducive to profitable trading. Typically, traders prefer to enter and exit the market during periods of robust participation and market liquidity. Increased liquidity provides the pricing volatility and market efficiency necessary for the creation of profitable trading opportunities.

In forex, periods of time where the regional trading sessions overlap one another produce heightened liquidity on a consistent basis. Listed below are the daily time frames where the regional sessions coincide

In addition to the time of day, the product being traded is a crucial part of market liquidity.

The most frequently traded currency pairs on the forex are known as the "majors." Listed below are the major pairings, although periodic updates representing current trading volumes are possible:

EUR/USD
USD/JPY
GBP/USD
USD/CHF

While working a day job greatly reduces the ability for one to actively trade the premium time slots, knowing what and when to trade is a great place to begin. Developing a practical approach to the market, including concessions to one's schedule, is a big part of creating a sustainable trading plan.

Smart Trading

Active trading can be an all-consuming endeavour. However, given the current technology and resources available to aspiring forex participants, one is able to engage the market on his or her own terms. The following options make forex trading possible for people with a jam-packed work schedule:

Broker-Assisted Executions: Many individuals who cannot fully dedicate themselves to forex trading utilise orders such as BUY LIMITS and SELL LIMITS . These orders are executed by the broker on behalf of the client on a pre specified price. This will the ensure that full time workers do not miss out on trading opportunities that they have planned to trade on a specific day.
Trading Methodology: The disciplines of swing trading, intermediate and long-term investing require very little time in regards to the management of an open position. Due to the longer durations involved, decisions may be made at one's leisure. Swing and Day Trading are great trading methodologies which allow you to run trading opportunities while you go on with your life.
Investing In Trading Signals: Trading signals can also offer great rewards for individuals that are not actively in the market. It is however recommended that you learn how to trade on your own without the need for a signals provider.

Focus On One Trading Strategy

One of the main challenges that traders face is that they have a lot of ideas when it comes to picking trading strategies. There are a lot of different trading strategies, so picking one that works for you is the most important aspect of trading. You should be ruthless when picking a strategy and only work with the best ones, which could be a currency pair giving you the best edge. You can also start by only trading with a couple of currencies in the beginning. Keeping things simple will help you find success. This will allow you to save a lot of time and manage your trading.

Setting Up Alerts

Most trading platforms have notification alerts that inform traders about important events like:

A price level being breached
If orders are triggered
Chart patterns occurring
Indicators meeting certain conditions.

You can also choose to set these alerts to notify you by email or on your desktop. There are a lot of tools that can make trading easier for you, and these alerts ensure you can easily manage forex trading with a full-time job, until you achieve financial freedom.

It's important to realise that there are options for individuals who want to trade, but have limited time resources. Through the use of a broker assisted executions, the selection of a more hands-off trading style, a full-time employee may engage and succeed in the forex.

Happy Trading

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Lerato Masigo 9/2/19 Lerato Masigo 9/2/19

How To Trade Forex For A Living

Every independent forex trader wants to make money from forex trading, that much is for certain.

However, it is surprisingly difficult to get an honest answer from industry professionals on exactly how you can go about making a living from forex trading.

Having unrealistic goals that are really just a fantasy is a massive issue in the forex industry.

You will never be able to achieve any of the goals and find yourself feeling defeated and stop trading. But if you have realistic goals and expectations you can actually achieve, confidence and success can create momentum in your trading which will push you forward towards profitability!

So let’s do away with the fantasy, the bull, and the lies. Let’s see what the real requirements of trading forex for a living are so that you can put yourself on a path to success.

Want to know how to trade forex for a living?

What are the actual risks you will face?
What do you need to do to prepare?
How can you generate multiple streams of income?

Read on to get the answers to all of these questions and more!

Fantasy Vs. Reality

It can be really difficult to separate fantasy from reality when it comes to forex trading. A lot of influencers and supposed forex “mentors” will show you Cars, Lamborghini’s and a chart saying how they have made millions in a month and how you can do just the same.

The reality, however, is not this. Maybe this person is an outlier and found huge success with their trading.

But the majority of traders will start with lower capital and have a much different journey.

You can’t skip to the end where you are making hundreds of thousands of dollars unless you have the capital to do so. The more money you have in trading, the more you make.

The Three Paths in Forex

In forex trading there are three broad paths you can choose from when it comes to what you want your trading career to be:

Make stupid money.
Make a good living.
Grow your wealth.

These options are all open to you but they impact your life in very different ways.

If you want to make stupid money from trading then you are going to need to put a crazy amount of time and effort into it. You can work for prop firms or managed funds – either way, if you want to make stupid money you will have to put in the effort.

What you put in is what you get out. This would be a high-stress lifestyle where you would dedicate a huge chunk of time toward your work.

That works for a lot of people though because the reward is a big salary.

Option number two is the route I have taken where you make a good living, can pay your bills, and be your own boss. You make a living out of forex but not to the financial heights of working for a managed fund.

If you want to make big money, trading with your own capital is not going to get you that big pay day unless you already have a lot of capital.

The last option is a more relaxed approach to trading that still earns you money. You would approach trading as if it were an index fund or an investment.

Building up your wealth with steady progression and no need to make it big. This is a low stress approach that you will typically see older traders take on or traders that have another job.

You would invest your money into your trading account and trade it on the side, growing your wealth.

Each of these paths are viable choices when you look to start trading. Each path will suit different people’s needs and part of your forex journey is figuring out what trading career you want!

Preparing to Trade for a Living

Have An Emergency Fund
Create Additional Income Streams
Don’t Invest All Your Capital On One Trading Account (I Discuss This In-depth On My Program - Diversification)
Invest In A Qualified Forex Mentor

You are self-employed if you are trading forex for a living so you need to protect yourself.

Your first step is to create an emergency fund.

This is an amount of money that you can fall back on in case you get injured, ill, or times generally become hard.

Without an emergency fund you have no floor beneath you to land on in case of an emergency.

Now when it comes to your trading capital you need to be smart. Do not put all the trading capital you have on one trading account. Diversify your trading accounts based on risk level.

The most important part of making forex a living is finding a source for multiple streams of income.

I am the most qualified to discuss this route of trading out of all the other paths because it is what I have done.

I learnt trading and turned it into my career. However, what I learnt early on is that you cannot rely on one single source of income.

You need to diversify your income and that is why i have turned a skill i have learnt into a business, in turn it also allows you to empower people around the world.

It is also important to invest in a qualified forex mentor, you need like minded people that will keep you engaged and build you as a trader.

The thing with forex trading is that the more capital you have to trade with, the more money you make. So the key to making a living out of forex is building your capital up.

If you are solely relying on your trading to do this, it could take you a while. Having that extra income from a different source will help accelerate your forex earnings.

Obviously your trading skills need to be good enough for you to make profits, but once you are confident in your trading you can focus on building up your capital.

Once you have built up your forex account, you can earn a very healthy amount each year without putting your capital in as much risk!

Happy Trading

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Lerato Masigo 8/12/19 Lerato Masigo 8/12/19

Top 5 Chart Patterns Every Trader Should Know

Chart patterns are one of the most effective trading tools for a trader. They are pure price-action, and form on the basis of underlying buying and selling pressure. Chart patterns have a proven track-record, and traders use them to identify continuation or reversal signals, to open positions and identify price targets.

Top 5 Chart Patterns Every Trader Should Know

Chart patterns are specific price formations on a chart that predict future price movements. As technical analysis is based on the assumption that history repeats itself, popular chart patterns have shown that a specific price movement is following a particular formation of price (chart pattern) with high probability. Therefore, chart patterns are grouped into (1) continuation patterns – that signal a continuation in the underlying trend, and (2) reversal patterns – that signal reversal of the underlying trend.

In this article, we will show the top 5 chart patterns that every trader should know. The first part will reveal the reversal patterns and how they are used.

Reversal Patterns

Head and Shoulders

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Head and Shoulders is a reversal chart pattern, that indicates the underlying trend is about to change. It consists of three swing highs, with the middle swing high being the highest. After the middle swing high, a lower high occurs which signals that buyers didn’t have enough strength to pull the price higher. The pattern looks like a head with a left and right shoulder (the three swing highs), and that’s how it got its name. The neckline is connecting the two shoulders, and a break-out below the neckline is considered a selling signal, with a price target being the distance from the top of the head to the neckline. If the Head and Shoulders pattern occurs during a downtrend, the same inverse pattern (with three swing lows) is called an Inverse Head and Shoulders pattern.

Double Top and Double Bottom

Double Top and Double Bottom are another reversal pattern, occurring during up- and downtrend, respectively. A double top, as the name suggests, has two swing highs at about the same, or slightly different price. It shows that buyers didn’t manage to push the price higher, and a trend reversal might be ahead. The trigger signal for opening a sell position is the break of the neckline, with target price being the distance between the top and the support line of the formation. A double bottom pattern is the opposite, with two swing lows. Sellers didn’t have the power to move the price more downward. The trigger signal is the break of the resistance line, with the target price being the distance between the bottom and the resistance line.

Continuation Patterns

Rectangles

A rectangle is a continuation pattern, which means it confirms that the underlying trend should continue. It is divided into bullish and bearish rectangles, depending on the underlying trend. A bullish rectangle appears during an uptrend, when the price enters a congestion phase, during a sideways trading. The price will likely break out in the direction of the preceding trend. The trigger signal is the break of the upper line of the rectangle, with the price target being the height of the rectangle. For the bearish rectangle, the opposite rules apply. It forms during a prevailing downtrend, when the price enters a congestion phase and trades sideways. This means the trend will most likely continue downwards, with the break of the lower rectangle line. The price target is again the height of the rectangle.

Wedges

A wedge is another continuation pattern. A bullish wedge forms during an uptrend, as the price trades inside converging trendlines. These converging trendlines imply that sellers are trying to push the price lower, but don’t have enough strength to win against the buyers. Ultimately, the buyers win and the price breaks through the upper trendline, indicating that the uptrend will resume. Target prices are calculated as the maximal height of the wedge, which is then projected to the point of break-out. A bearish wedge is similar to a bullish one, with the difference that it is appearing during downtrends, and the slope of the wedge is up. Converging trendlines are again showing that buyers interrupted the downtrend, trying to push prices higher. A break-out through the lower trendline indicates that sellers won the battle, and the downtrend is resuming. The target price is, like by bullish wedges, the maximal height of the wedge which is then projected to the point of break-out.

Flags

A flag is very similar to a wedge, with the difference that the trendlines which form the flag are parallel, and not converging. A flag pole is also a part of the flag pattern, because the target price is measured in a different way than by other chart patterns. Flags can be bullish and bearish, with a bullish flag shown on the chart above. A bullish flag forms during an uptrend, with parallel trendlines above and below the price-action, which form a down slope. A break-out above confirms that the uptrend is resuming. A bearish flag is pretty much the same as a bullish flag, with the difference that it forms during downtrends and has an up slope. The price target is measured as the height of the flagpole (green arrow) to the top of the flag, which is then projected to the lowest point of a bullish flag (or highest point of a bearish flag).

We have written this article with the main aim to show you another angle of trading. As can be seen, these chart patterns might help you determine trend direction, but you should not rely solely on them. I have covered the major 5 chart patterns every trader should know. I believe that these are the most important ones, but if you feel like I have omitted an important one, please share with the rest of us in the comments below.

If you are interested in understanding more on how to trade these price patterns with a strategy that is consistently profitable - sign up for one of our forex trading courses with one of our successful mentors. You will get really great forex trading content and mentorship like no other.

Happy Trading

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Lerato Masigo 8/4/19 Lerato Masigo 8/4/19

What Is NFP And Why Is It Widely Watched By Investors

The Nonfarm Payrolls (NFP) are among the biggest market movers in the Forex markets, together with central bank events or interest rate decisions. Although their impact seems to be decreasing over the last few months.

At the first Friday of every month, the U.S. Bureau of Labor Statistics releases the numbers for new job creation in the US – along with other labor market data. The data includes all paid workers, excluding government employees, private households, non-profit organisations and the farming industry.

It’s an important indicator for how well the US economy is doing and investors watch this report closely. Surprises and major changes in the released numbers can lead to significant price movements. In this article, we show you why it’s so important to understand the implications of this release, how to interpret the numbers and how to trade NFP in general.

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There are three parts and news releases for each NFP day:

1) The NFP numbers: how many new jobs have been created/lost

2) The unemployment rate: the overall unemployment rate

3) The hourly wages: how much workers are earning on average

The NFP provides information about the US labor market, how well the economy is doing and what the future holds: if the economy is not doing so well, companies don’t hire as many new people and might even fire some of their employees. Subsequently, those people lose income and can’t spend their money on things which reduces the overall revenue and general consumer spending and slows down the economy further.

On the other hand, when the economy is doing well, companies hire new employees who now have more money available and can use their additional income to buy ‘things’ and boost the economy, further increasing the need for companies to hire more people to meet the demand.

The hourly wages are the final piece of that puzzle because they show the purchasing power of those jobs.

Positive NFP numbers are good for the economy and, thus, investors will buy US-Dollars, anticipating a stronger economy in the future. A worse than expected NFP often leads to a falling US-Dollar as investors sell their US-Dollars.

If you are interested in understanding more on NFP and how to trade NFP - sign up for one of our forex trading courses with one of our successful mentors. You will get really great forex trading content and mentorship like no other.

Happy Trading

Want to join the MyFXMentor Team? See trades taken by our top trading analysts, join our live trading chatroom, and access our strategy library! Simply contact us on bookings@myfxmentor.com

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Lerato Masigo 7/21/19 Lerato Masigo 7/21/19

The Road to Financial Success: Lessons from George Soros

George Soros is famously known as the man who “broke the Bank of England.” He earned this title in 1992, when he made more than a billion dollars shorting the pound sterling. As the manager of the Quantum Endowment Hedge Fund with more than $27 billion in assets under management, he is deemed a legend of trading and investment and there are many things we can learn from him.

George Soros has a net worth of $8,3 billion, making him one of the wealthiest individuals in the world, according to Forbes. Interestingly, he earned the entirety of his fortune without any initial capital or fund.

Just like all masters of their business do, Soros has his own philosophy and perspective regarding financial markets and investment. Below I cite some of his greatest quotes and the meaning behind each of these sayings.

Markets are Unpredictable – Seize Opportunities

“The financial markets generally are unpredictable. So that one has to have different scenarios… The idea that you can actually predict what’s going to happen contradicts my way of looking at the market.”

According to Soros, the markets tend to be biased and one can hardly predict when, where, and how prices will move. What is important here is to be prepared for every scenario that can take place and capitalise on the opportunities that may arise.

Trade with a Proper Risk Reward Ratio

So how you can succeed in the markets in this case? Here is another quote from Mr. Soros:

“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right, and how much you lose when you’re wrong.”

What is important to emphasise here is that you can make money in trading even if you do not win the majority of your trades. How? Through proper risk management and risk reward. It’s really as simple as that. Employing a risk-reward ratio in your trading involves setting up your trades in such a way, so that you make for example twice the amount that you have risked (or even more); this system along with proper risk management will reward you over the course of time.

Keep it Elegant and Simple

Interestingly, Soros is mainly known as a short-term speculator. In practice, this means taking highly leveraged trading positions on the direction of the underlying markets. And here is the philosophic background for it:

“The market is a mathematical hypothesis. The best solutions to it are the elegant and the simple.”

The moral of keeping things simple in life generally pays off, and investing is no exception to this. Soros has built his financial empire by abiding by this rule. Obviously, a simple, clear and effective trading strategy certainly outdoes a complex system that does not work.

Markets Tend to Fluctuate – Study Them Well

At the same time, the nature of markets is not to be overlooked. This is Soros’ perspective on this:

“I put forward a pretty general theory that financial markets are intrinsically unstable. That we really have a false picture when we think about markets tending towards equilibrium.”

Soros advocates that markets do not tend towards equilibrium, on the contrary, they are subject to fluctuations and periodic crises. Equilibrium is merely a false assumption when looking at markets. This means that a good investor should have a good understanding of risk.

Risk Properly

“Risk taking is painful. Either you are willing to bear the pain yourself or you try to pass it on to others. Anyone who is in a risk-taking business but cannot face the consequences is no good. There is nothing like danger to focus the mind, and I do need the excitement connected with taking risks to think clearly. It is an essential part of my thinking ability. Risk taking is, to me, an essential ingredient in thinking clearly.”

if you don’t enjoy taking risks, specifically financial risks, you can hardly survive as a trader. Risk helps focus the mind he says, in a similar way, I feel like I am keener and more aware of the market when I have money at risk. But there is a fine line between being focused and being over-involved and over-trading. Risk can make you stay focused, but you don’t want to spend all your time watching the charts.

Moreover, you must really love this ‘game’ to thrive at it. Some people are just not mentally cut out to take financial risks and be able to operate effectively in the market with their money on the line.

Investment Requires Rational Thinking

“If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.”

To thrive in trading, you should be emotionally detached from it and simply base your decisions on sound judgement, consistency and discipline.

These are just some of Soros’ greatest quotes that point to his unique way of thinking and well-developed business mindset. I hope you got a great deal of inspiration and make good use of his ideas in your own trading.

Happy Trading

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Lerato Masigo 7/14/19 Lerato Masigo 7/14/19

5 Trading Habits That Help New Forex Traders

One of the more important themes that we have discussed before is the need for traders (especially the newbies) to focus on the process rather than the profits.

The idea is that a good, disciplined trader could always turn the odds in his favour if he has honed his skills enough to deal with whatever scenario is thrown his way.

Let’s take a look at some pretty easy (but necessary) trading habits that have helped many traders but might have missed your resolutions radar.

Hopefully, you will give these a better chance (if you haven’t already) over the next few weeks and someday you’ll look back and be thankful that you did!

1. Using Stop Losses

Losing trades are inevitable. Even the best of traders have losing days. Unfortunately, many newbie traders would rather be right than be profitable and using stops would confirm that they are wrong. This could lead to uncontrollable losses and ultimately, blown accounts.

While you can’t control market behaviour, you can control how much you lose per trade. You can widen, tighten, or adjust your stop losses, but make sure that you always have them.

2. Planning Your Trades

If you plan to win, you don’t go into a match without a game plan, which means you also don’t start trading without some kind of strategy or play in mind.

Those who don’t have any plan in mind unnecessarily expose themselves to psychological mistakes that could cost them avoidable losses.

Trading with a plan can be as simple as marking important economic events and chart levels, or it could be as detailed as considering different setups and contingency plans for a single event.

3. Journaling Your Trades

Keeping a journal is a crucial task in any performance or goal-oriented endeavour. Remember that your broker logs only give you the raw data of what happened, not WHY it happened.

Also, you can’t improve what you don’t measure. The key is to have some way to track and stay focused on improving your performance.

Whether it includes just your basic journal statistics or even the overlooked ones, a trading journal is a must-have for consistently profitable traders.

4. Allocating A Specific Time For Trading

Just because forex trading is a 24-hour party doesn’t mean that you should be around the charts all day.

Fact is, a lot of you are part-time traders. This means limited trading time and even less time for other trading activities.

You can still make the most of your trading time though by avoiding distractions and focusing only on trading-related activities during a specific part of the day.

5. Understanding Your Strategy

I have met a lot of newbie traders who have been trading for months but have yet to determine strategies that suit them.

While it’s always good to try out new methods and systems, it’s also great to be able to pin down which currency pairs, time frames, and indicators generally work for you.

This way you’ll at least have some place to start when you’re ready to improve your trading performance.

Remember that trading is a marathon and not a sprint. If you want to trade for another day until you become consistently profitable, you must learn how to successfully address your trading issues and get into the habit of working on and meeting your trading goals.

Happy Trading

Want to join the MyFXMentor Team? See trades taken by our top trading analysts, join our live trading chatroom, and access our strategy library! Simply contact us on bookings@myfxmentor.com

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Lerato Masigo 7/7/19 Lerato Masigo 7/7/19

What is Currency Correlations? And How To Use It In Forex Trading

What is Currency Correlations? And How to Use It In Forex Trading

Trading Forex requires great knowledge of technical indicators and fundamental events. Although most traders tend to focus on one of the aforementioned approaches, today, more and more attention is being paid to proper trading psychology and risk management.

Currency correlation is strongly connected with risk management, and can help you to better understand the market when trading. Understanding of the correlation between currency pairs can help you avoid overtrading.

What is Currency Correlation?

It is simply a measure of how similarly one currency pair moves in comparison to another. When pairs move in the same direction, they have a positive correlation. If they move in the opposite direction, we observe a negative correlation between them. A perfect correlation occurs when pairs move in the same direction, which is extremely rare. Additionally, we say that correlation is high when pairs move in almost the same direction.

Just as an example, let's say that the EURUSD goes up 500 pips in a month.

During that same month, let's say that the GBPUSD goes up 1,000 pips. We are not too concerned about how many pips the pairs moved but how similar the moves were. If the prices went straight up, then they are highly correlated.

If the EURUSD went straight up and the GBPUSD stayed in a range then shot up, they would be less correlated. When they move in the same direction at the same time, up in this case, they are positively correlated.

Negative correlation is when one pair goes up and the other goes down. In this example, if the EURUSD went up at approximately the same time the GBPUSD was going down and to a similar degree, then there would be a high degree of negative correlation.

How does this us help as traders? If there is a high negative or positive correlation, there may be times when one pair moves before the other highly correlated pair and can serve as a forecast or a confirmation of a move in the pair we are trading. In addition, you might want to stay away from taking trades that are two highly correlated because that increases your risk that the same move will affect all your trades in a similar fashion.

Correlation Trading Tips

Bear in mind that correlations do change, and past performance is not always a guaranteed indicator of future correlations. However, this information can be used to develop your own currency correlation strategy, to minimise your portfolio's exposure. Here are some tips to consider:

Avoid positions that cancel each other out: If you see two currency pairs that move in opposite directions nearly all of the time, you should realise that holding long positions in both of those currencies mitigates any potential gain that could be had.
Diversify with minimal risk: By investing in two currency pairs that are almost always positively correlated, one can mitigate risks over time, while maintaining a positive directional view.
Hedge exposure: Losses can be minimised by hedging two currency pairs that hold a near-perfect negative correlation. The reasoning here is simple. If you hold a position with a currency pair that loses value, the opposing currency (which has a negative correlation to that pair) will likely gain, albeit with a lower final value. While such a strategy won't completely mitigate losses, those losses will very likely be reduced.

There are many tools which you can utilise through metatrader which can help you with currency correlations, we at myfxmentor use a currency strength meter which we have created on Metatrader as an EA. If you are interested in understanding more on the advantages of using currency correlations and currency meters, feel free to contact us on info@myfxmentor.com

Happy Trading

Want to join the MyFXMentor Team? See trades taken by our top trading analysts, join our live trading chatroom, and access our strategy library! Simply contact us on bookings@myfxmentor.com

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