Forex Mentors

It doesn’t matter what type of trading you engage in or what Forex trading system you use, if you don’t have this key factor you will join the losing majority lets look at it in more detail…

Let me ask you a question and try and answer it without pause and have confidence in your answer – here is your question:

What is your trading edge ( defined) which will lead you to success when 95% of traders lose – What is your edge that will make you a winner?

Simple question and most people will get the answer wrong and here are common answers which are NOT a trading edge and will lead to losses.

- I like to trade breaking news and keep on top of events

- I use a Forex robot with a simulated track record and think it will repeat in real time

- I have found a Forex mentor online and will follow him he knows best

- Day trading and scalping is the way to make money

- I work hard so I am bound to be successful

- I am clever so I am bound to be successful

- Predicting the markets in advance is the way to make money

- I have a mathematical theory as human nature repeats it will win

All the above are common answers and none of them will help you win.

A trading edge can be anything you like, it must be based on sound logic and you must have confidence in it and the discipline to trade it through periods of losses.

Most Forex traders are to lazy to work on getting a good Forex education and like to trust experts and robots which have simulated track records and thing they will repeat in real time – but they don’t and there is no easy short cut, that takes the place of a good Forex Education.

You need to have confidence in what you are doing and you will lose at times so you need the discipline to keep losses small and carry on until you hit a home run.

Trading success comes from inner understanding and only you can give yourself that, through your learning which is reflected in your mindset.

If you understand the above, you can win and the effort you have to make, will be well rewarded, with a great second or even life changing income.

If you want to make money trading currencies, then we will show you how to do this in simple steps. Here we will give you the basics and help you build a currency trading system for long term trading success.

Step 1 – Get the Mindset for Success

You cannot get currency trading success from others and there are plenty of people wanting to sell you automated forex robots and systems but they don’t work. If you want to win, you have to understand that you need work and learn currency trading for yourself. If you do this, you will have confidence in what you do and the discipline to follow your system.

Most traders fail because, they don’t have the discipline to follow their system and if you don’t have the discipline to follow it, you don’t have a system!

Step 2 – The Methodology to Base Your System On

The best, simplest and easiest to understand methodology, is to buy or sell breakouts of price, to new market highs or lows.

Look at any forex chart and you will see most major trends start and continue from new market highs or lows. If you can go with them, you can make a lot of money. Most traders don’t and that’s why the majority lose.

Most traders want to wait for a pullback, to buy at a “better price” and of course prices don’t pullback and they sit and watch, as the trend sails over the horizon and makes thousands of dollars in profit and their not in!

Go with breakouts and sure you miss the first bit of the move – but if it’s a good break, you will have a lot of profit ahead of you.

Step 3 – Basics of Your System

You need to understand support and resistance.

Look for levels that are considered important by the market and the more times the level has been tested the better. You then need to confirm that when a break starts, the odds are on your side and it will continue and for this you need to use momentum oscillators.

We have discussed these fully in our other articles but for now, you simply need to know they will help you determine price strength through the breakout point. If price momentum accelerating, the odds are on your side and you can enter.

Look up the stochastic and RSI for this – there great indicators and you can learn how to use them in about 30 minutes.

Step 4 – Money Management

You need to play great defence and defend your equity. Just like all the great football teams, if you have a great defence, the offence will get the opportunities and make them successful.

With breakout trading, your stop is close and obvious (below the breakout point) and you should trail it slowly as the market moves.

Don’t make the mistake of using too much leverage.

You can get up to 400; 1 but 20:1 is plenty, more traders lose due to over leveraging than any other reason.

Putting it all Together

You don’t need a complicated currency trading system, you need to keep it simple so your trading system is robust, in the face of brutal market conditions. The key though is discipline; you must be able to trade through losing periods, until you hit a home run.

If you want to make money trading currencies – you can. The above tips will help you and remember, work smart not hard, keep it simple, get the right mindset and you will enjoy long term currency trading success.

Forex Charting is something anyone can learn and anyone can make profits with here we are going to go through the basics of what you need to get started.

Were going to assume you already know the logic of forex charts and why they work if you don’t look at our other articles. Right lets get started on the basics of forex charting.

Time Period

Forex markets trend and you can see these trends on a chart and you are going to have to decide, what time period you want to trade.

You can day trade ( moves within the day), swing trade within the major trend (moves that last around a couple of days to week), or long term trend follow (moves that last weeks or months)

Don’t try forex day trading or scalping.

The time period is to short and volatility is random and this means you will lose. This leaves you with a choice between swing trading and long term forex trend following.

Swing trading, suits the trader who likes lots of action and lacks patience and it also requires less discipline than trend following, as profits and losses come quickly.

Forex trend following requires patience and discipline – but can be very lucrative, if you lock into the big trends.

Keep It Simple

Forex charting is essentially about keeping it simple and our view is all you need is to use chart formations, support and resistance and a few confirming momentum indicators, to make sure when you execute a trading signal, you have momentum on your side.

The reason simple systems work best is – they are robust and have fewer elements to break than complicated ones.

Now let’s look at the basics of technical analysis applied to swing trading and trend following.

Basics of Swing Trading

You are simply looking for support and resistance levels to hold and trading into them. When you do this always do the following:

-    Wait for momentum to turn down from support or resistance and execute your trading signal. No predicting wait for confirmation from momentum to get the odds on your side.

-    Place your stop immediately and look to take your profit early you are not interested in trailing stops – take the trade in just before the resistance or support is tested.

Long Term Trend Following.

Here you can buy into levels of support or resistance – but the bulk of your trades should be to buy or sell breakouts to new chart highs or lows.

It’s proven that most big moves start form these breaks and you can see this on any forex chart.

The way to execute forex trend following trades is different to swing trading:

-    Again execute your trade in line with momentum.

-    Next place your stop

-    Now here comes the part that will determine how much money you make – trailing your stop.

Most traders are so keen to lock in profits they trail stops too quickly and get bumped out the move early. You’re after the big trends and you need to stay with them and that means trailing your stop behind random volatility.

We like to trail the stop behind the 40 day MA and while this may sound wide ( it is ) it will keep you in the big trends for longer and remember, if you caught just 50% of every major trend you would be very rich!

A Simple Route to FX Profits any Trader Can Learn

To get started with forex charts and get a simple system together should only take about a week and then your all set to get down to making some serious forex profits.

We keep it simple in our forex trading strategy, just basic bar charts a few momentum indicators and that’s it and you should to.

A simple forex trading system will make money, if you apply it with discipline and lead you to currency trading success.