Daniel Lindsay - Daniel is a full time private forex trader and blogger, mainly adopting a scalping / day trading strategy.

Following graduation in 2001, Daniel has steadily developed his experience and knowledge in the forex arena, and in the wider financial sphere.

He has a developing interest in the growing role of fringe currencies in the forex market.
Daniel Lindsay
Daniel is a full time private forex trader and blogger, mainly adopting a scalping / day trading strategy. Following graduation in 2001, Daniel has steadily developed his experience and knowledge in the forex arena, and in the wider financial sphere. He has a developing interest in the growing role of fringe currencies in the forex market.
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A Fighting Chance - A Look At The Best Prep Work For Starting Out In Forex Trading

It doesn’t take long in the world of Forex to realise that success is demanding. One wrong undisciplined trade can be like a knockout punch or one that’s below the belt! The on-line communities are full of stories from aspiring traders that are all looking for answers, for holy grails or easy solutions and for other people to share their hard earned knowledge and ideas. If you are serious about trading then the first thing to understand is that there are no easy answers, no holy grails and that success depends more on you than on the market.

With this in mind, there are some steps you can take when starting out that will prepare you for what lies ahead and give you a fighting chance at cutting it as a trader. The sooner you consider these points the better, as if taken seriously, they will help to shape your trading personality.

Commit

Understand that success will require commitment. Regardless of if you mean to trade automatically or manually there is a lot to learn. Long after you have educated yourself on the fundamentals and basics, the education you require will be on going, as the market evolves so must your understanding. This requires time, effort and attention for which there is no substitute. Don’t just limit yourself to reading information online. Go to forex meet ups, seminars and chat to traders first hand. You’ll probably learn more in a few hours than weeks reading on the internet.

Check our blog regulary for updates on our next forex meet up at our Central London offices.

Take your time

Don’t rush through your training. Rome wasn’t built in a day. Understand the tools at your disposal, what works for you and what doesn’t. If you rush you will miss something and this business is all about edge. Don’t miss your’s by trying to run before you can walk. Respect the training, the value it has and it’s importance. The market will always be there and if you are in too much of a hurry or desperate to make money then this is probably not the right environment for you to expose your capital.

Learn to be patient

This ties in quite relative to the above point, but the value of learning patience will stick with you throughout your whole trading career. Patience will hold you back from trading on impulse and help you stick with discipline to your strategy. Many traders make the mistake of trading through impatience, because they have a target they want to hit and are restless, because they haven’t seen a clear opportunity and they are frustrated. If you can sit patiently through these times and trade only when your system tells you too and when your analysis gives you all the right signals, then you are giving yourself a better fighting chance, and less likelihood of blowing your account.

Journal

Keeping a trading journal is one of the most valuable tools you have at your disposal. In here you should keep everything related to your trades. Here’s what you should include in your trading journal.

• Entry Date – When you entered the trade, also why did you enter.

• Currency pair / security traded.

• Entry buy / sell price – the price of your entry and the direction of the trade.

• Planned Stop – how far you are willing to let the trade go against your direction before stopping out.

• Planned Target – How far you will let the trade run before taking profit.

• Amount of possible risk - Monetary value and percentage of your trading capital.

• Amount of possible   reward - potential earning from the trade.

• Position Size – How many lots are you trading?

• Exit price – The actual price where you left the trade. Also note here the pips you gained or lost.

• Profit/Loss – How much did you make or lose in monetary terms.

• Planned/ Actual Risk Reward Ratio – you want to aim for an outcome where the ratio is of 1:2 minimum on your winning trades

• Exit Date/Time – respective of if trade closed on same day or different trading day.

• Why you traded and when – did you follow your strategy to the letter? Were there any other driving factors?

In addition to the above, you should note down anything else worthy of consideration, whether you see the relevance or not at the time. If there are any strong emotions or mental pulls, frustrations or if there was any pressing news or fundamental data released recently. All of this data for every trade will help shape your strategy and your trading discipline. Over time it will become clear how beneficial it is to keep and monitor this information, how it benefits your evolving trading behaviour.

Strategy

It is vital that you have a strategy as a trader. That you have a system that you trust and follow like law only to be tinkered with or adjusted when the larger paradigm demands it. Your strategy should be an accumulation of all that you have learned about you and the market. What you need to see to justify a trade, how to execute your trade, when not to trade, when to walk away. It should be a system that you have proven to work for at the very least 51% of your trades. Your journal will help you to build your strategy and system by showing what you did and why for your successful and losing trades.

Ask but don’t rely

The forums and Forex communities are excellent environments for building social circles of like minded traders. They are also great learning environments where many experienced traders can offer bits of advice and examples. It is important to remember however, that while these places are great for asking questions you should not rely on them for your success. Any advice is based on someone else’s experience, based on their traits and personality and trading style as much as the market itself. If you become reliant on the advice of others this can also interfere with your learning process as you become lazy.

Manage expectations

You will not turn $1000 into $100000 in your first year, or even in your third. Believe it. Unless you set yourself a realistic target you will blow your account chasing unattainable results. Start small, if you hit that target then increase but never set yourself unattainable goals. You will hurt when you miss them, irrationally try to attain them by going off strategy and ultimately blow your account in an emotional frenzy. Be realistic.

Create a trading space

Tidy desk, tidy mind. To trade well you need to concentrate. You need to have your eye on your charts, on the fundamental releases and on the news. Not on the flies circling your bin and the people walking passed your window. Set yourself a trading space, away from distraction where you can concentrate on your trading. A tidy, neutral space where you can maximise your output, surrounded by the tools and equipment that help you trade.

Thanks for reading and hope this helps you become a better trader.

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