LTG GoldRock - The Ultimate Solution for Forex Traders

The ultimate solution for Forex Traders

 

Category: ‘Forex Strategy’ Category

July 25th, 2010
Forex Classroom

7 Principles of Consistency

  1. I objectively identify my edges
  2. I predefine the risk of every trade
  3. I completely accept the risk or I am willing to let go of the trade
  4. I act on my edges without reservation or hesitation
  5. I pay myself as the market makes money available to me
  6. I continually monitor my susceptibility for making errors
  7. I understand the absolute necessity of these principles of consistent success and, therefore, I never violate them
July 12th, 2010
Forex Strategy

Europe’s Dirty Debt is bigger than Wall st.

Another bull fight with Europe's dirty debt could be inevitable.

The International Monetary Fund says European bank losses will hit $1.3 trillion by the end of 2010, which is 35% more than the USA. Europe’s banks have been just as reckless as the US banks in racking up the dirty debt that caused the Global Financial Crisis, and potentially could cause a double dip recession in the later part of 2010. The IMF isn’t immune to its own mistakes, it didn’t see or forecast the GFC to begin with so the numbers and forecasts they provide should be taken with caution. The bottom line is you should not be exposing yourself and over committing in any stock, CFD or long term Forex position for the balance of 2010. Markets are still volatile and there are many long term traders that are currently holding no stock whatsoever and sitting on the sidelines to see the balance of this year come to a close.

Back to Europe’s woes. Banks in Europe have poured $2.5 trillion dollars into Greece, Ireland, Belgium, Portugal and Spain. If these countries fail in the next 18 months (and I see no way out for Portugal and Greece)  you can be assured it will have massive ramifications for the rest of the world, not to mention the complete failure of the Euro dollar. Ask any German what they want and most will tell you they want the Mark back. Ask most French people what they want and the story is the same. They say “bring back the Frank’. And ask any Brit and they will tell you that they are very glad they didn’t enter the Euro. » Continue Reading »

July 5th, 2010
Forex Classroom

Does Your Opinion as a Trader Really Matter?

I have seen many traders blow up trading accounts simply because they refuse to accept they are wrong. They are convinced in their own mind that due to their research and back testing that their strong opinion will be right.

Trading is a funny game and often goes against the grain of human thinking. Generally speaking if you study something long enough and research it using the latest techniques and professional tools available you have a good chance of being right. This is the very type of mindset thinking that people bring into the trading arena and lose.

A few years ago I knew a trader who lost over $50,000 in 3 hours trading futures and dinted his confidence in a big way.  He  employed a friend  who he’d worked with who is an incredibly bright guy. He had previously designed extremely sophisticated town planning systems throughout the world. A very bright guy indeed. The trader that had lost the money said to me one day that his opinion was that his mate had the perfect skills and technical ability to develop a system to get all the money back he’d lost. It was at a relatively early stage in my trading career and I didn’t know much better but all I kept thinking was, I hope he shares it with me if it works.   Needless to say it didn’t, but the talent assembled to research and put together a trading system that showed incredible returns when back tested never materialised when traded live.  Their opinion was wrong. » Continue Reading »

June 30th, 2010
Forex Strategy

Trader Insight: Michael Horneman

GBP JPY Short 06-05-2010

As part of the Trader of the Month Competition we ask for the winners to share their trading journey and advice with their fellow traders. Michael Horneman was 10th on last month’s Trader of the Month Leaderboard and I have no doubt that we will be hearing more from him in the future.

Keep reading to learn about Michael’s Trading Journey and we are also lucky enough to have him share his advice as he offers an insight into his own Trading Plan.

Michael’s Story…

I began trading around 2 1/2 years ago, I first started with learning to trade Eminis. This initial experience is what first got my mindset and phsycology ready for trading financial markets.
I didn’t trade for very long as I had limited capital to begin with, and like most beginner traders lost money, but I learned some great lessons about managing risk and preserving capital. I was also very risky and too willing to trade, I still had in my head a “get rich quick” mentality and was looking to take every trade I could. Looking back this has also been the pattern for the first 6 months I was trading forex with LTG GoldRock.

To make the change from a mindset of working for money and selling my time for money was not easy, and it has taken around 2 years to really begin to understand this in a way that helps you view money differently. » Continue Reading »

June 29th, 2010
Forex Classroom

The Freak Out Trader

Trading can be rollercoaster, but it's important to have the nerve to sit back and enjoy the ride.

The Freak Out Trader can be both a winning and losing trader, but is always a newbie trader as a Freak Out Trader NEVER makes it to professional status with consistent profits.

The Freak Out Traders emotions are let loose to the extent that when they have wins their excitement drives them to freak out and get so excited they think they are bullet proof. The Freak Out Trader also experiences depression and freaks out on the losses too. What is going on subconsciously is that they don’t realise it yet, but the reason why they are freaking out is because they are not in control. The market is in control. They are usually trading too much money, trading too often and don’t really understand the system they are using. These examples usually come down to inexperience and their attachment to money and certainty we all have when we start trading. As a trader you need to have a detachment to the money and learn to trade the probability rather than the expected certainty that humans have when we enter the trading arena.

If a new trader experiences a few winning trades to begin with they are lulled into a false sense of security. They begin to think that “this is too easy” and begin to trade larger sums or over trade and take multiple positions. » Continue Reading »

June 28th, 2010
Forex Classroom

Trading Complication

One of the amazing aspects about trading and making money is that humans often think that to make money the system must be complicated and sophisticated. Certainly most people over complicate trading and think that they need to look the goods with a heap of screens, indicators and often alarms. I’ve seen and heard it time and time again that a trader has come up with a new indicator that’s going to blow the market out of the water, only to find that it fails miserably when it comes to trading it with a live account.

One aspect of trading that you must understand and take on board RIGHT NOW is this. The market is only a two horse race. Buyers and Sellers are the only horses in this race and the price is either going up or down. How simple is that. Yeah I know what you are thinking, it has to be more complicated than that, ITS NOT!   Simply looking at a trend and placing a trade with a trend has the probability of continuing in the direction of the trend rather than reverse and go the other way. But why is it humans consistently try and build systems and indicators that over complicate things. The more complicated you make things the less likely you will make money, period. » Continue Reading »

June 22nd, 2010
Forex Strategy

What’s set to rise?

As a trader you have hunches and opinions and you need to make decisive decisions. During the last few weeks I have been doing a lot of reading of economists I like to listen too and learn from that help me make longer term decisions.

Here in a nut shell are my two opinions and hunches for the next 3 months.

  1. The aussie dollar to continue to steadily rise
  2. We will also see a steady increase in the price of gold.

As Traders it’s important to stay up to date with the latest Forex News and global market movements. It would be ignorant to be in the business of Trading Currencies and not know what is happening around the world to each of the currency pairs.

June 17th, 2010
Forex Strategy

The 3 P’s for Success: Patience, Persistance & Planning.

Narelle McIntyre (pictured left with her Husband) came 5th in May’s Trader of the Month Competition with a Nett Profit of 44.7% Return On Investment. Narelle attributes her success to the 3 P’s of Patience, Persistance and Planning.

” I have been trading forex since May last year with LTG, prior to then I have been watching my husband trade eminis and we have traded options. My involvement has always been in the background but I found Forex to be enjoyable and challenging, so we agreed I would trade Forex and he would continue with Eminis.”

“Previously I was a business owner, after we sold the business I have been working part time but have now taken time off to have the bub. I was planning to return to part time work in August, however if my trading continues as it is I will not be returning to work as the income substitutes my wage.”

Narelle’s Advice for someone starting their trading journey…

For someone just starting out I would advise them to sit back and listen in the trading room first, learn as much as you can from the questions and answers being discussed.Never expect things to happen immediately, patience is a must. Be persistant, don’t give up after one bad month. Find what works for you personally, devise a plan and stick to it. Have someone you are accountable to. I use my husband, I find it easy to lie to myself and justify why I might have made an incorrect decision, but not to him, so I stick to my rules and my plan. Make sure money management is in your plan or rules.

June 14th, 2010
Forex Classroom

Crawl, walk, jog, run and then sprint…

There is one golden rule that you must follow if you are going to trade real money from day  number one. Learn the platform first and then trade micro lots of .10c to prove your success. Don’t kid yourself and think you can just roll with an account with $10k and trade full 1.00 lots  or you will crash and burn. Crawl, walk, jog, run and then sprint. You can potentially make a lot of money and get very rich slowly, but it will usually be quicker than you think if you learn these skills.

Opening an Account

When you start trading Forex, open an account with no more than $1000 dollars. In fact, you can open an account with as little as $200 if you wish. You can add more money to your account in time with your success and profits but here’s an iron clad guarantee. If you can’t turn $1000 into $2000, there is no hope that with more money such as $20,000 that you will turn  that into $40,000. It rarely ever happens and for those that do, it’s usually luck.

June 8th, 2010
Forex Classroom

Is +400 or -400 pips a positive or negative result?

There is a misconception and perhaps an easily overlooked fact about Forex trading and how profits are really calculated.

Forex is an unique market where as the price moves from one pip to another pip you as the trader can chose what each point is going to be worth before you enter the trade. For example if we are buying shares on the stock market each share will have a specific value, for example $1.20. You can’t alter it.

When you invest in Forex, the trading platform will ask what you want each pip (or point) to be worth. In other words if the EURUSD is trading at 1.1976 and it moves to 1.1977 that is one pip. You can chose the smallest volume to be 0.01 which is essentially .10c. You could have each point be worth $10,000 if you account could handle it.

That brings me to the point of traders making or losing pips and applying the real return on investment.

Here is an example trader John.

John takes 10 trades in a month and makes a +400 pip result with a 60% success rate of hitting his profit target.  You would assume that John would be pleased with this result. He can hold his head high as a  winner, he made +400 pips and a nice profit.  Or did he? » Continue Reading »