Currently I am in London speaking with some UK traders and I will give you a report towards the end of the week on anything I believe to be of tangible value for you.

Until then one of our LTG GoldRock Directors is in Arizona USA attending an advanced 2 day workshop with some of the world’s top investors. He sent me an email overnight with the following comments hot off the speaker floor. The major players are saying this…

• Almost all speakers think the US dollar is in trouble this year.
• Speaker Ashish Advani: 7 out of 8 of the main Forex trading countries now have rising inflation.
• Speaker Chuck Butler says Commodities are set to skyrocket this year.
• The Top 2 recommendations at conference: Buy Aussie and Brazilian currencies.
• Overall at conference the following currencies were liked: Australia, Norway. China, Switzerland, Brazil.
• Several speakers believe the U.S. will have a double dip recession.

 I am confident these are the best trading tips ever because no matter who the trader is or what market they trade, or what country they live in, for the super successful, their answers are always the same!

 #1. Money Management

 As a trader you are frankly doomed from day #1 if you don’t commit to understanding money management and being able to manage your risk. It’s the #1 aspect of trading that is challenging to master but once you get into a rhythm of simply chipping away with low risk and high return probability, all you need then is persistence and you will learn a skill that 98% of traders never master. Don’t think about it, don’t acknowledge it, DO IT EVERYDAY you trade. You must commit to the risk on every trade and know what the outcome maybe if the trade moves against you. You must only be risking around 2% of your account size when you first start learning to trade and over time the market will present opportunities when the time is right to risk a little more. This will come with your experience and when your account can handle it.  You must also preserve your capital at every opportunity. This does not mean getting out of a trade early or bringing you stop to break even after 5 ticks, this means being realistic and having a set of trading rules that stipulates that if your account is drawn down say 20%,  you must immediately stop trading the account, re access and then continue once you have decided the time is right. Never as a general rule continue to trade a real live money account once drawn down below 20% of its starting value. At 2% risk that would mean you have taken at worst 10 losing trades in a row. I am sure you would agree that you would be hard pressed to do that if you tried, but you can easily risk 20% of your trading capital in one trade if you are trading with too much money or without a proper stop loss. Commit to learning money management and your trading account will thank you for it over time.

 #2 Discipline & Patience

 Yes I know you have heard it before. Well you are about to hear it again, you must be disciplined with your approach and systematic about how you execute. Each undisciplined action will likely cost you more than you think and likely be one of 3 things. You end up with risking too much, you stay in a trade too long when it moves against you because you are hoping it will improve, or you get out too early rather than let your profit run to the target. All very easy things to do and if you break down your trading into the mistakes you make, not the trading probability system, but the mistakes, these will most likely make up 80% of your losses. Trading success can be defined as being boring, uninteresting and time consuming when you need to wait for a trade set up. However if you approach your trading every day with the mindset that you ARE going to follow your rules, commit to them and stay 110% disciplined you will give yourself ever opportunity at trading success and enjoy a lifetime of profits from the markets.

 Patience is one attribute many of us find difficult to master with the markets because we are talking about money. Nobody wants to be patient with money, we want it as quickly as possible, however in reality you need to be patient as the success is not likely to come to you as quickly as you might think. You can build an incredible lifestyle and career around trading the markets but it doesn’t happen in 3 months, it happens over time by applying the disciplined approach we spoke about above, persistence and lots of patience. Patience in the form of learning to wait for your target to be hit, patience in slowly building your investment size along with success, patience in focusing on one market or system before looking for others, and patience with your family who too will expect a quicker result than what you are likely to give them. All humans are different and there is no pre defined time line for when you will “make it”. Making it in my book is profit in your account every quarter and a steadily rising equity curve and net worth. Discipline, patience and persistence are all hallmarks of great super traders.

 #3 Your trading business

 When you approach your trading you must treat it like any other business. You must be accountable, professional in your approach and honest with yourself at all times. The markets can suck you into believing that because you can make money quickly you can short cut some forms of the game, but as we all know a successful business has a great foundation and is run extremely well in all areas. Not perfect in all areas but there is a genuine focus and commitment to running the business successfully. Trading is no different and the reason often that banks and institutions often make so much money in the markets is that they are SERIOUS about running their trading business, they don’t take second best, they don’t have unrealistic expectations and they are accountable at every turn. How well do you run your trading business? What are your realistic goals? How are you going to reach them? What are you persisting at right now with complete focus and intent? Who are you accountable too and what sort of reporting system do you have? What do you do when things don’t go your way?  All of these questions have answers and I appreciate you may not know the answers to them right now, but you will in time when you implement great money management, discipline and patience and persist persist persist.

Please tell me what you think and give us some feedback. Here it is, just go ahead and click the link to view it.

http://www.youtube.com/watch?v=i7cBCzGHjnQ 

I recently ran a live online classroom session for traders all over the world and showed them how Wall st traders trade the news online. I recorded it and if you would like to view the video you are welcome to click the link below. Or you can simply read a transcript below. Please tell me what you think of this blog post or if you have suggestions for other traders based off your own experiences please leave them for others to see.

http://www.omnovia.com/movies/livetraderglobal/44776

What we are here to talk about today is essentially a topic that I get asked about all of the time and I know that the traders in the trading room get asked about this question all the time as well. So let’s talk about it and let me share with you my experience trading the news and being around successful institutional traders and how they do it.

What we will cover is how they trade the news and give you some tips and information on how you can start trading the news that really mimics the way that institutions and bank do.

Now its important that I tell you that the information that I’m going to provide for you is my honest assessment of the way that bankers and institutional traders that i’ve been around trade the news. I am not saying the advice here the absolute holy grail of trading the news, but it is a very logical way that banks and institutions trade the markets when the news comes out. So what I am going talk about shortly is essentially a few different steps, and the best advice that I can give you right now is grab a pen and paper, and jot some notes down because there is going to be some practicing at the end of this session if you want to start learning how to trade news.

When an institution and a bank is trading the markets there is a bit of a misconception amongst traders around world that banks and institutions have secrets about the way they trade the market, and they’ve got access to things that normal mum and dad traders don’t have access too. That is true to a certain degree but really there are no secrets, and there’s definetly no secrets to trading success or trading the news for that matter. But if there is one trading technique that is quite challenging for a lot of people it is learning how to trade it is the news. But when you get it right over time it can be very financially rewarding.

 Trading the news does take patience as you need to gather your trading team who you’re going to trust and listen to for you.  If the banks or the institutions have a secret or if they have something that they don’t share with others is this.  As an ordinary trader around the world you could never ever hope to make the same returns that banks and institutions do trading the news because you simply don’t have the resources and instant information that you need to trade the news and trade it profitably. The people that you hear on the street, traders on forums, chatrooms, and around the place will say they make money trading the news, but  I can pretty much promise you that a lot of the time it is luck. A lot of the time they just happen to be catching the news announcement at the right time, but what I am going to talk about today is how the logical process works, that many big bank traders use to trade the news and at the end of this blog I am going to talk about how you can potentially start to develop your own trading team to give you the advice on how to trade the news.

 Now as I’ve said before, if banks have secrets or trading systems that you don’t have access to it is not things such as charting or the ability to see when the news is coming out or even what that news might be, what they have is a team of people around them, people that give them instant information and the way in which the banks will decide to trade the news is generally off high important news announcements.

 This is my point number 1, you need to write this down, point number #1 is most major banks and institutions will look to trade a news announcement when it has high priority in the market place and we are going talk about where to go and find the high priority news announcements shortly and what those news announcements are, but right now all you need to know is that generally speaking they will look for the high priority news announcements.

What they are looking to do is this!  They are looking to exploit the news announcement if the news happens to be different to the expectation. For example, a couple of days ago the reserve bank board met and decided that they were going to keep interest rates on hold in Australia. Now if you haven’t been watching the news or even if you are not a trader, if you live in Australia you would have been expecting that interest rates were on the rise.  Now as a currency trader, that is a golden opportunity.

 In the latter part of last year the Australian Federal Reserve decided to put interest rates up after an extended period of dropping them and it was a very very unexpected announcement, everybody expected for rates to be either on hold or maybe up a quarter of a percent.  They actually put them up half a percent therefore it was an unexpected news announcement. Therefore the traders at the institutions, banks, exploit it as it’s different to market expectation and they buy heavily.  If it is a news announcement that is not expected and it gives the opportunity to short the currency, they will do that instead.

A bank trader first of all will do their research and have senior economists and other traders who’ve been in the banking game for decades that know this market in and out and they will have a view on what is going happen. They will have contacts in places that you will never get access too and what they will be doing is putting their trust in these advisors as to what their expectations are. Therefore if these 3 or 4 people are saying they think rates are going to be unchanged and they are indeed put up or down it’s a great opportunity to buy or sell a currency.

Now when the announcement comes out we have an opportunity to do one or two things to place our order.  Let’s assume that the news is unexpected and it’s a buying opportunity.  There are a couple of different orders that traders will often use. A limit order or a market order.  For a market order they wait for the news to come out and place a trade once the news has hit the market. For a limit order they will put in orders above and below the market, so if the market moves suddenly they can then get set and entered into their position quickly. Of course there are limitations and dangers to putting limit orders in before the news come out because often the market likes to move in a particular direction before a news announcement and it may like to move in an upward direction and then all of the sudden the news comes out and the currency drops on whatever currency you are trading.  So it fills you in a long position and all of the sudden its heading the other way.  You’ve now got a situation where you are in a long position and the market is heading short and its completely bamboozled your trading opportunity and you end up losing.

My experience is that the people I’ve seen trade the news are on the ball and on the pace quickly when the news announcement comes out and usually use market orders so they don’t end up in the trap mentioned above.

There is a few things that you need to make sure if you are goning trade the news, you’re really up to speed.   Banks and institutions have got it hand over fists over everybody else, they have instantaneous access to when that news comes out and don’t ever be under the illusion that its anybody other than a major institution and banks that create big moves in the market.  They are the ones that do it, they are the ones that have the instant access and start buying and selling before anybody else.

Major institutions and banks talk to one another and know what each other are potentially going to do, particularly many of them in London.  They will start to buy and they will push the market in one way and people will think,  “oh its gonna go up” so they start buying and then they will head fake and send it the other way. They have instant access to live data feed.

 The most popular instant access feed used by big traders is Bloomberg. Now for the average trader and excuse me for saying average cause you guys are not average, you guys are extraordinary for the fact you are just here and that you are having a go at trading forex.  Bloomberg is a very expensive platform to use as an individual, in fact last time I looked about 1500 dollars or more a month just to have it access, but it gives you the instantaneous data that you need to trade the news. That is of course chicken feed to a bank and it gives them  instantaneous news feed that is coming in, telling them all they need to know.

They use it for a number of things such as what major economists around the world believe will happen on major news announcements.  So #1  they are looking to exploit a difference in what is expected to what actually happens and # 2 they will trust a team of economists, whether it be on Bloomberg or in their banking institution or around their network of friends and traders.  They trust them as to what may happen and what they believe will be the expectation.  And finally #3 they have instant access to the data that is coming out.

Most of the traders that wait for the news to come out and then they place the orders, they will have big profit targets and very very tight stops, they don’t do what the average punter does and put in a big stop expecting it will go the other way, they won’t live in hope. There’s a tight stop and a big target, end of story and there are many many traders in banks that might only trade once or twice a week.

Usually when you look at websites such as www.dailyfx.com you can see the upcoming news announcements for the next week, it will be marked by a low, medium or high symbol. You only need to worry about the ones that say high.  Daily FX  might have that the view it is going to be X.  The question you need to ask is. Do you trust them?  Do you know they person who writes the news, do you know the person who’s put in that high, low or medium announcement on the website? Unless you do, you should get to know them.  

So the point is, if you are going learn how to trade the news, you need to get intimate with a group of people, you need to get intimate with people that are in the know, not just some website that says  it could be this or that, thats not good enough. (that is not a slight on Daily FX they are a very reputable website for this info) You need to do the research and actually start to really find some people that are well respected and trustworthy on their opinions and that takes time to build that up for yourself.

At LTG GoldRock you are fortunate that our trading room director and the team here, we have access to those people and over the next few months we’ll start to share that information with you and we will look to trade some of those news announcements down the track. Now when that news comes out, remember you are going to use a tight stop and you are going to have a bigger profit target. So thats essentially the way in which banks and institutions look to trade the news announcements, the next key thing is what are you going to do? Because let me tell you that unless you take this seriously if you want to learn how to trade the news, theres a lot of money in it.

There’s big money in trading the news but as I have said before it takes practice and here are my few tips on what I think you should do if are interested in learning how to trade the news.

#1 Start out and just look around a few websites, www.daily fx.com or go to google and type in you market news or market moving news and find some websites and find some sites that have the consensus the same.  Generally speaking most of them will get it right when it comes to a high important news announcement. Such as unemployment data, GDP numbers, Non Farm Payroll in the US.  It’s not difficult to find those.

#2  Learn to see what is expected of that news announcement and then look around amongst the people you are starting to research and learn about what they think, what are the major players, the newsreaders  and the economists think. Do they agree with the person you are looking at on that website? Then form a team of people that you trust, that each month is likely to have the same opinion of the news that is about to come out. There will usually be a consensus, a number, either up or down, a specific number, of a quarter of a point, half a point or whether or not unchanged, whatever that maybe make sure that you have your team agreeing that thats what is likely to be expected. Now of course we don’t want it to match the news that comes out, you don’t want expectations to be that rates will stay unchanged and that it be unchanged, because if that happens usually the market wont move, it may jump up and down for a few minutes and all the punters will get in and out and most of them will lose money. You will sit on the sidelines when the news comes out and it says that it meets expectations, its when it doesn’t meet expectations is when you are going to trade.

 #3 Where are you going to get your data from and where are you going to get your instantaneous information. Now there are a couple of places you can do that, you can wait for the news to come out on some websites and I think that would be a risky move. You could watch CNBC or you could watch Bloomberg on tv. Bloomberg on television is not the same as having a Bloomberg terminal on your computer or in the bank. Generally speaking the cheapest and quickest way to find out about those news announcements if you don’t want to spend any money and buy a live data feed, is by watching those channels because any high news announcements particularly Bloomberg they will usually have it instantaneously up on the screen.

So news announcements are a great way to trade but you’ve got to have the understanding of how it works, when it is unexpected, when you have your team of trustworthy advisors advising is expected and the instant data comes out, you place your trade, you have a tight stop and a big profit and just be careful about putting limit orders in place prior to the news.  I’ve been around the traps traders long enough to see that generally speaking in my view, and only again its my view, i’m only giving my view here, using limit orders can be a dangerous ploy unless you really know your stuff well.

Can you trade the news and make money?   Yes you can!  Is it more difficult and challenging than trading a chart and reading trades off a chart in my view, but you can do it?  The reason why I form the view that it is more difficult for the average trader to trade the news is because 99% of traders around the world that are trading forex never have the funds and resources to put that team around them and have the data at their finger tips when the news comes out.  There is another very important point I want to make and it is this.

Many of the small brokers and even some of the bigger ones will block out your platform when the news comes out, so when you are trying to get in and place an order there is no ability to trade. Why do brokers do that? Because they know that news time is a major opportunity for traders to make money so they will block out the platform for 10 or 20 seconds so you can’t trade.  Then the market moves and it’s too late, it’s already gone.  Many times the market may move 50 or 100 points in a matter of seconds and unless you are able to be on an execution platform that will execute that order quickly and instantaneously the profit opportunity is gone. So you need to make sure that when you are practicing trading the news you are watching to see whether or not your broker blokes the major news times.

 Not allowing you to trade around those news times is frustrating. So if you want to trade the news  my best advice is that you take everything onboard and you practice for the next few months.  In fact I think you need to practice for the next 3 to 6 months and get it right before you start trading this market with any sort of decent dollar size. There is a lot of profit to be made in news but as you all know you can also lose money in this market if you don’t know what you are doing.

If you are willing to spend an hour a day learning to trade the news over the next 6 months I do believe you will find it is an incredibly profitable opportunity.

Have you ever felt like quitting? Traders often feel like quitting and most of them eventually do. But did you know that the best traders in the world are also the best quitters?  They do it frequently but it’s just a different type of quitting to the Punters who quit and never make any money.

From my experience there are essentially two types of people who trade Forex.  The first is a group I call the Punters and the second group is a group I call the Traders. The Punters are the ones who risk too much, are in a hurry and don’t know about the “GYM’ theory, and when they get to the Slump which happens a few months after they start, they quit.  The Traders on the other hand are those who understand the GYM theory, are prepared to learn how to master the art of trading and when they get to the Slump, power through it rather than quit and walk away. But the Traders are also great quitters, but not in the sense you may be thinking. They learn how to quit trades, not trading. They quit often, without hesitation and without reservation. And to be a great Trader you must know when to become a great quitter.

Over the last 5 years I have been trading with thousands of traders from all over the world, sharing a front row seat every day through a series of online trading rooms, and being invited to speak at trading seminars and trade shows.  What I have learned is the real truth as to why Punters blow up, but also the real truth about how Traders make fortunes. I have figured out what causes Punters to quit and why they lose and how you can become a Trader and potentially make a fortune.

The rewards at the top for the Traders who make it through the Slump are enormous and just like any field, for those who make it, there is only room at the top for a small few.

Is it hard to reach the top in Forex and become a great Trader? No, because 95% of Punters will quit and if you understand the GYM theory that I am about to teach you there is plenty of room for you at the top.  If you don’t use what I am about to teach you in this report, you will become a Punter and you will quit before you get to the top.

Before I explain the GYM theory let me explain to you what the usual pattern is for people who start Forex trading. First they attend a seminar, see an advert, talk to a friend and are enticed into the Forex world by the lure of great profits in a short period of time. Which incidentally is all very possible? They jump head long into Forex, and open an account. Forex trading is fun to begin with, you’re learning something new that has a potential to make you a fortune, you embrace the rapid learning curve and it keeps you going for the first month or so. Then you hit the Slump, which is the first of a series of losing streaks that start to drain your trading account. The Slump is basically the slog between starting and mastering Forex and making big money. Mastering the Slump is the difference between beginners luck and extraordinary success. You must know how to prepare and get through the Slump.

At this point the Punter starts to surf the internet, buying trading books and joining chat rooms and forums looking for a better trading system, one that works and can make them money. They are in search of the Holy Grail. All the while they continue to lose and are now so emotionally drained that they just can’t give up until they find the Holy Grail of trading signals. They are hopelessly addicted too, they can’t stop themselves, they are out of control, losing consistently, accountable to nobody (yet) and cannot quit. They are in the Slump and the Slump is getting bigger. Quitting however is only around the corner.

It’s often the case that it’s the wealthy people with the most money that when they get to the Slump think they can short cut the system and compromise on learning the skill of trading and how to become a real Trader. Instead they never graduate from being a Punter and don’t know when to quit trades, lose big and give up. Whether it’s the wealthy, middle class or poor, the example I gave above is a classic Punter.

Eventually the Slump gets so big that the Punter simply runs out of money and energy and quits. This sad story is all too common in Forex trading and if only the Punter had the foresight to quit, instead of putting their pride in front of their money. The Slump can be painful for a Punter so it’s easier to quit than to keep going.

One of the stupidest things you can do is to start Forex trading, spend a lot of time and money, get to the Slump and then give up in the middle of the Slump.

The best Traders in the world don’t compromise, they don’t take short cuts and they understand the GYM and Slump theory early. Punters who compromise and take short cuts are in the majority in Forex trading, but are not amongst the Traders in the winner’s circle. You see when you reach the Slump and quit, you are creating scarcity for the Traders who are patiently following the plan and risking little and just persisting with small amounts of money, that soon turn into much larger sums.

It’s easy to be a Punter but it’s easier to be a Trader. So listen up, I am about to tell you how!

What I want to teach you right now is how to seek out the Slump, lean into it and be prepared for when it comes. The Slumps don’t last long when you’ve been to the GYM first and you persist and chip away at your trading. In fact the Slump and the GYM theory is the secret to your success.  The Slump gives you the chance to pull ahead of the Punters and the GYM theory ensures you can always continue to build on your success.

Do you remember when the head coach once said, “While you are out on the track training in the dead of winter, snow all around, freezing cold and wishing you were somewhere warm, your competition is curled up in bed?  Their muscles may be warm but your muscles are getting stronger and next time you meet, the odds are you will win.”  Trading is no different for those who reach the top. In trading you get what you deserve, it’s that straight forward.  But the good news is you don’t need to train for trading in the snow or in the dead of winter.  Being a Trader is easier and less stressful than being a Punter, I guarantee it.

When you get to the Slump people often diversify, they go walkabout. They start to surf the internet, visit book stores and newsstands. They abandon what system they had and go in search of a new one, not realising the system they had was not at fault.  This is the beginning of the end for the Punter, as they spiral out of control and into a tail spin.

To become a great Trader you need to understand the story of the Punter first.

The Punter is someone who never has a foundation for success, and when a few losing trades start to come their way come crashing down like a pack of cards.

Punters don’t admit to themselves fully what they are doing isn’t working and quit.  Rather their pride gets in the way and they blow everything trying to prove they are right. What a waste. It’s so frustrating to me that the solution is so simple but yet the Punter can’t seem to see it.

The Punter quits trading and blames everyone but themselves, and moves onto the next thing, only to get to the Slump and quit again. And the process goes on until they eventually give up trying anything new altogether and settle for being just average. In reality they have settled for being a loser.  Its human nature to quit when it hurts, but it’s the exact point that when it starts to hurt that you recognise you are in the Slump and it’s time to grit your teeth and become a Trader and not a Punter.

If the journey you started was worth doing, then getting to the Slump and quitting is a complete waste of time. Punters attempt to trade many different markets, but never make any profits. If you are not prepared to make it through the Slump then don’t start trading, period!

Punters focus on the short term, rather than the long term and quit when the going gets hard in the Slump. In a moment I am going to show you how to prepare for the Slump and lean into the Slump. Once you know this, it is not good enough to say you are not good enough. You are good enough; the question is will you quit when you get to the Slump or will you prepare for it now and say “bring it on”?

Does the Slump happen only once? No it happens frequently and that’s all the more reason why you need to prepare for it right now. But when you are prepared for it, they Slumps are smaller and don’t last as long.

To get through the Slump you need to know it IS going to happen and prepare for it. To prepare for the Slump you need to understand and learn the GYM theory first.

Have you ever paper traded? 95% or more of paper traders make money. Why? It’s simple; when you are paper trading there is no fear of loss. You simply follow the system and place the trade and you trade freely without hesitation and reservation, just like a seasoned professional Trader. But it is when you switch to real money that the fear of loss grips you and you begin to think and act differently. You open your account with more money than you should. Hey why not, you just made a fortune in paper right? And you begin to trade more money than you should, you risk more than you should and your transition from paper trader to Punter is nearly complete. You feel it is not your fault. The system doesn’t work the same anymore, it all looks and feels different and thus you begin to lose money.

The key to avoiding this trap is to go to the GYM from day one.

Let me give you an example? Let’s assume you want to become a body builder and you’ve joined the local gym. What would happen if you went to the gym and lifted just the bar and never actually lifted 100kg, but you just imagined you did every time? The answer is you would never lift 100kg and you wouldn’t get anywhere, your muscles would not grow? This is the equivalent to paper trading, you don’t get anywhere! You never sweat, you never get put under pressure, you never get to feel the rush and learn to deal with the pressure of the real deal and your trading account never grows.

Picture this.  A Punter walks into the gym and tries to lift 100kg but has never even lifted 20kg before. What do you think happens? They might be able to bench press 1 or 2 reps but they can’t hold the weight and handle the pressure of the 100kg bar and collapse in a heap.

Are you getting my drift yet?

Now let me tell you what the Trader does. He enters the gym and has a goal to lift 100kg’s in weight and win the state championship. He prepares himself first by getting a coach and joins a winning weight lifting team that can show him how professional weightlifters do it. He then learns everything he can about the skill of lifting weights and the techniques required to get the best out of himself. (The equivalent for the Trader is learning about money management not trading systems) He then starts to lift real weight from day one and steadily over time builds up his muscle, steadily increasing the weight as he goes. He never risks injury or failure, but he knows as the weight increases he must stay true to what his coach has taught him and hold his technique and style. He does this over 6 months and rapidly increases his body mass, and in time becomes a professional weightlifter.

Here is the same story for a successful Trader.

The Trader prepares himself by joining a winning trading team with experience to show him the way. He learns everything he can about money management and only risk a maximum of 2% on all his trades and learn how to calculate the risk across the various currency pairs. He opens an account with $1000 and trades within his risk tolerance with micro lots steadily increasing his account size by being able to take every trade that meets the plan and staying with the plan till the profit or stop is hit. He never deviates from the plan unless the trading room director advises too and over time he learns the trade set ups and techniques for himself.

I am sure you have heard a phrase similar to this one before.  A trader can attempt to trade 10 different trade setups and never make a dollar, or they can chose to master 1 trade set up and make a fortune.

Becoming a Trader and going to the gym doesn’t need to be painful, in fact it can be outrageously enjoyable and give you pleasure and opportunity you never dreamed possible.

While you are at the gym you will also learn that strategic quitting is exactly what successful traders train for, they focus every day on when to quit before it gets too painful, but they also know how to push through.

So here is what you need to do to become a Trader and not a Punter.

1. Join a winning Trading team that knows how to quit and quit often.
2. Make sure you go to the gym and learn to trade real money from day one with micro lots so you are actually lifting real weights. Don’t paper trade; it will likely get you nowhere. And being wealthy or having money doesn’t give you a license to short cut the system and lift more weights.
3. To overcome the Slump and reach the long term success that you desire you need to be prepared for it and be able to trade through it. The only way you will be able to trade through it is by building up your trading muscle steadily. When the Slump starts to come you can lean into it with confidence, continuing to step up to your trades with conviction and belief, instead of living in hope and anxiety like a Punter who risks too much and is in too much of a hurry.
4. Don’t go walkabout when the Slump starts to come. Traders hang in there and focus on one thing and don’t diversify at the first sight of failure. Punters jump ship at the first sight of failure and begin the quest for the Holy Grail that does not exist.
5. Don’t be afraid to quit a trade when you learn to see it is no longer working. You won’t have this skill to start with and you will need to reply on your trading team. At LTG GoldRock we have quit dozens of trades quickly and without hesitation and we don’t look back.

The great news is that the market is full of Punters who are giving their money away to the Traders who know how to prepare at the gym and overcome the Slumps.

The question is, will I see you at the gym?

Did you know that it’s a fact that more than 50% of Forex traders don’t understand spreads.

It is critical you understand the basics so you can calculate your risk and reward, so let me share with you a simple and effective way to understand the spread.

Before I begin to explain about the bid and the ask, those of you that have come from other markets to the forex market, it does operate slightly differently.  Unlike the stock market where we are charged a flat commission on our trade or in the event we buy a very large position in the stock market it might be a percentage of our trading size. In the forex market, we have what we call a spread to overcome and that’s essentially the way in which the broker makes its return on investment, providing you the opportunity to use the platform and trade into the foreign currency markets.

The brokers are essentially being quoted their prices from intra-banks, big institutions around the world that enable them to create a market for us being smaller investors to trade. Some currencies around the world have far more liquidity than others and therefore often the prices on offer are better than those less traded currencies.

Some of the major currency pairs around the world today that we like to trade at LTG GoldRock are trading pairs such as EURUSD, GBPUSD, USDJPY, and essentially the major economies around the world. These are the ones that are most commonly traded in margin forex trading and that is exactly the market we are talking about. Essentially when we are buying and selling a position in and out of the forex market, we are taking a position with the broker. The broker is creating a market for us and giving us an opportunity to participate in the foreign currency market. Therefore there is always what we call a bid price and there is also an ask price. The bid price is always the price that you see on the screen, for example if the currency pair that i mentioned before the EURUSD is showing a price of 1.4374 on your platform, this is always what we call the bid price.

Now in currency trading we have an oppoutunity to take a long position, buy into the market and sell at a higher price and we also have an opportunity to go short in the market which means we are selling and we are buying back at a lower price to flatten our trade position. Lets keep things simple and lets talk first of all about  when we are buying into the market and essentially wanting the price to rise and for us to exit at a higher price and make a profit. When we click on our new order window, we will see that we see 2 prices. One is called the bid and one is called the ask. We always buy at the higher price. This is an actual fact the price by which the broker is willing to sell us this order at, we buy at the high price, which is the ask price, and in this example on this currency pair, the spread, the difference between the bid, where the current price is, and the ask price which the broker is asking us to pay is 2 points (EURUSD), some traders call them pips, in this example in this blog post we’ll call them points.

The EURUSD is a common 2 point spread with most brokers, so if we enter a trade we will enter, if we are buying always at the high price which is the ask price here so it is very important for you to appreciate that when we enter a trade and we see the price on our platform what we are actually paying when we are buying is infact the ask price and in this example on the EURUSD which is very common we have a 2 point spread.  Now because there is a 2 point spread here, immediately on our platform in our profit and loss window it will show that you are minus 2 points or if you are trading with $1 per point it would show you as being minus $2 because it is filled you at the ask price, therefore the market will need to move 2 points in our favour, rise in value 2 points before we stand to make a profit. When we exit in our trade we will be exiting at the profit target and as we have entered and the spread has been taken in consideration, as soon as the trade hits our profit target, wherever we have placed that profit target, we will sell at the bid price and exit our trade.

Let’s look at a different example this time and this time we will use the AUDUSD. Again we will be buying. Before we go further you will see on your terminal screen that all different currencies have different spreads, if you have ever wondered the reason why that is, essentially it’s because of what is called liquidity and the volume on offer on these particular currencies at the time of for the brokers.  Some of them are much more liquid therefore they are able to offer a far better spread.  For example there are some currency pairs that offer pretty wide spreads, for example the GBPAUD, the spread is often 9.  We wouldn’t be interested in trading that particular pair because simply we don’t want to the market to move 8 points before we start making a profit. We usually will only trade currencies that have a spread of 5 or less and most of the time we will be placing trades on currencies that have spreads genuinely somewhere between 2 to 3.

Let’s get back to the example and in this case we’ll go back to the AUDUSD and it will usually have a spread of 3. There are some brokers in the forex market that base their spread on the volume on what is happening in the foreign markets today. There are other brokers that set their spreads at a fixed spread each day. At the end of the day it won’t make a major difference to your profit position at the end of the month if you are using a broker that has a difference in spread of 1 point. But certainly I would encourage you not to trade with brokers that have very large spreads and take notice of whenever you set up a broking account  to ensure that the spreads you are being offered are very competitive. If you are a trader at LTG GoldRock, we are always at the fore front of what is happening in the market and we will be able to give you the best advice we can on those relevant brokers who offer the most competitive rate.

So when we are talking buying the AUDUSD  the current price maybe 0.9225, however what the broker is willing to allow us to buy this currency for here is the ask price which is 0.9228 and in this example  3 points is the spread. So if we click the buy button here it will fill us into the market at 0.9228 and it will show up on our platform as us being minus 3 points simply because we have given up 3 points to be able to trade this particular pair and we must overcome the spread before we start to see a profit. So therefore we have bought at the high price which is the ask price and when we sell our position, we will sell our position at the bid price and exit our trade?  O

Of course the platform will replicate across all of the other currencies that you chose to are trade but just be careful not to trade and take positions with brokers that have large spreads of anywhere more than 5, and of course if you are here at LTG GoldRock we’ll ensure that does not happen.

Being able to go short and make money when a currency falls in value is certainly one of the majors reasons why people are attracted to Forex but we need to understand how going short is affected on our platform.

When we go short (sell) we are actually buying back at a lower price and exiting the market and flatten our position. In an example of going short we are selling into the market, in fact we sell at the low price, which is the bid price and again just like we were going long, we’ve got a 2 point spread we need to overcome.  This time we will be filled at the bid price (going long we are filled at the ask price)  when we hit the sell button and our platform immediately will come up infront of us with minus 2 points because that is the spread  that the market offered us when we entered the trade.

Here is the key you MUST KNOW!  Traders often say to me that the price will come to their profit target exceeds the profit target and wonder why it hasn’t exited the trade. IMPORTANT!   Remember we entered this time because we went short at the actual bid price. The platform hasn’t taken into consideration the spread when we go short until it actually reaches our target, in other words, to keep things simple when we are going short it must exceed our profit target by whatever the spread is before it will sell our position.  The reason is because we’ve entered at the bid and thats what happens when we go short, when we go long we actually enter at the ask price, the higher price, but when we are going short we enter at the lower price.

So don’t be confused when you go short  in the market and the price comes to your profit target. It actually needs to go whatever the spread is, past you profit target and it will then sell your order.

So keep that in mind when you are going short, when we are going long, we are entering at the ask price, the higher price and the spread is taken out on our entry, when we are going short, we are entering at the bid price and the spread is taken out on our exit.

It’s really important for you to appreciate that when we do go short and when we want the base currency we are trading to fall it does need to move through our target whatever the spread amount is  for us to exit our trade.  Now if you would like to have the profit target taken out at a particular price, you’ll just need to ensure that you are taking consideration the spread and move the profit target the distance of the spread closer to wherever you want to get out.

I hope you found this post simple and straight forward and easy to follow, if you have any questions you can post a comment here on the blog and we will certainly get back to you as quick as we can.

Lorrie Bennett, one of America’s most exciting Forex teachers and pro traders, has joined the LTG Goldrock faculty.

Lorrie has been trading professionally for over a decade and brings with her an immense knowledge of Forex technical trading.

Lorrie’s specialty is simple set ups. “I have found that some of the most lucrative trading set ups are also some of the simplest.

Complexity is the enemy of day trading. As a mother of 5, i like to keep things simple!”

Lorrie balances her love of trading with a love of Chiropractic and alternative medicine, areas that she has studied deeply for over 10 years.

Ms Bennett is also renowned for her warm and fun attitude as a room moderator, filling her time on air in the LTG Goldrock trading room with amusing anecdotes and wise teaching.

LTG GoldRock is proud to announce the appointment of Mr George Sayers as it’s new Trading Room Director.

George has joined LTG GoldRock following 25 years experience trading the markets from commodities, stocks, futures and FX.  George has worked with Societe Generale Australia Limited, Schroders Australia, Bell Commodities and also managed his own proprietary equity trading fund.  George has a wealth of experience in Proprietary Trading, Technical Strategy and mentoring traders with their strategy, psychology and trading plans.  

George was voted by Institutional currency traders as the number one currency technical strategist. (*2007 State Street market survey) and is now a proud member of the LTG GoldRock trading team.

George believes successful trading signals are only the start of being a consistently profitable trader.   He is a huge believer that the true secret of success lies in strong money management, discipline and focus on trading psychology.

“I am really excited to be working with new traders starting out and the 1000’s of more experienced traders already trading in the rooms.  My success will be judged by how successful you become. “

Also being added to the new Learning Centre is a full history on Forex, how it all began and how the internet changed Forex forever.

You’ll also learn which pairs are the most profitable to trade, how to run a professional trading business and what big banks and million dollar traders look for when charting the markets.

Here’s a few pics of the new Learning Centre under production. The Learning Centre is already taking shape for the members each week with additional tips and videos being added daily. 

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AB seeing if it passes the LTG GoldRock standar

AB’s stand in double for lighting.

Director Siimon Reynolds and Founder Andrew Barnett discuss the makings of the new Learning Centre over lunch.

Taking a break in LA seeing the sights between filming and editing.

One of the beauties of Forex trading is that we can make money if a currency is potentially about to rise or fall. We don’t need a currency to rise in value for us to make money, we can make just as much money when a currency is about to fall in value.

When we are about to buy a currency we will advise you that we are about to go long. That means we are going to be buying a currency and wanting it to increase in value, and again we call this going long when we buy. Now of course at some point in the future whether it is an hour or 48 hours we will sell that currency and with a bit of luck make a profit.

Equally as we bought a currency and can make money when it rises in value we can also sell a currency and make money when it falls and this is called going short. So when you hear us say we are about to take a sell position and go short this simply means we are going to enter a trade and we want the currency to fall in value.  Let me give you a very brief and basic understand of the difference between going long and going short.

Going long we buy something and sell it at a higher or lower price and make a profit or a loss.

People often say to me, Andrew how can I go short on a currency and sell something and buy it back when I don’t own it to begin with. Let me explain how you can go short and make money on virtually anything.

Imagine we are at the fruit market and you are an experienced fruit grower and you know that the price of oranges is going to go down in the next week due to an oversupply of oranges at the market. How can you make money with this knowledge?

You could ask to borrow from another friendly grower a crate of oranges (or a car load LOL) worth $1000. Of course you would need to commit to giving back a crate of oranges to the friendly grower you borrowed them from.  So you borrow a crate of oranges worth $1000 and that same day you sell the crate of oranges at the market for the current market price of $1000. You have $1000 in your pocket and the person who you sold the oranges too has a crate of oranges at the current market price, a fair deal.  The next day the news hits that the market has an oversupply of oranges and within hours the market price for oranges is now $500. Bingo, time to take advantage of the drop in price and give back the crate of oranges you borrowed. You have $1000 in your pocket so you simply buy a crate of oranges at the current market rate of $500 and give back the crate of oranges that you owe the friendly grower.  How much are you left with?  A profit of $500.

Let’s recap what happened.  You borrowed a crate of oranges, sold it, bought it back and made $500.

Now let’s see this works on the currency market. You anticipate that the USD is about to fall, you go short (sell) the USD on your trading platform, the price of the USD does indeed go down in value, you then buy it back and profit from the difference of where you entered and exited.

Now of course if the price of our Oranges had increased in value and not decreased it would have meant we made a loss on our transaction and the same thing would apply if the USD rose in value when we predicted it would fall.