How to Get Your Mindset On the Right Track When Trading Forex?

It is important for Forex traders to get their mindsets on the right track when they start trading Forex. Traders should particularly pay attention to their mindsets and learn to control their emotions as they trade in the Forex market. The best Forex trading system will be nothing without the proper Forex trading psychology. Many traders neglect the fact and then wonder why they can pick the market direction accurately most of the time. However, it still seems that they lose money over the long-run Forex trading, since they don’t work on the correct trading psychology.

The most effective way to maintain the proper Forex trading psychology is to simplify your overall Forex trading. You can particularly simplify your Forex trading system or the amount of time you spend on your Forex charts. If you make everything as simple as possible, you can avoid trading pitfalls which may affect you to develop and maintain the proper trading mindset.

The simple Forex trading virtually has a positive effect on your overall trading psychology. If you are employing a complicated Forex trading strategy which is entirely based on Forex trading software, you should start again from the basics of technical chart analysis and learn to read price movement of the Forex market.

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Learn Forex-How Can Traders Improve Their Forex Trading?

Many Forex traders like to over-trade in the Forex market. Whether they are aware of it or not, the specific Forex trading strategy they employ should allow them to easily spot high-probability trading signals. If you find yourself keep searching for trade setups each week, you need to re-assess the trading strategy you employ and take some time off from the Forex market.

When you over-trade in the Forex market, you essentially trade with money you can’t afford to lose, since Forex traders who over-trade virtually stop re-funding their trading accounts after losing all their money. Therefore, don’t fund your Forex trading account with money that could be better used for other things in your life.

Many Forex traders think it is unnecessary for them to obtain a proper Forex education. Alternately, they choose to learn themselves. Indeed, learning from a structured Forex educational system is the most viable way to become a successful Forex trader. This can help you decrease your learning curve and eliminate most trial and error.

Some Forex traders might spend too much time analyzing the lower time-frame charts. However, why not try to spend most of your time analyzing the daily chart? The daily chart filters out all the randomness of the lower time frames, which makes any signal on the daily chart much more reliable than the same signal on lower time frames. Many traders usually think that trading off the lower time frame charts can help them increase the amount of money or find more opportunities. However, the lower in time frame you go, the lower in probability the signal becomes. Therefore, it is a viable way for Forex traders to spend more time analyzing and trading the daily charts.

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Forex Analysis-Analysis and Suggestions on EUR/USD on 19th Jan. 2012

Yesterday, on the daily Forex chart, we can see that the Euro ended with a candlestick with little or no tail. Despite that the day before yesterday, the euro ended with a candle showing long tail, it still moved up high. After all, nobody is able to predict the high risky Forex market, is it? All what I do every day is just provide you suggestions for your reference. Now, as regularly, where the euro is going today on 19th Jan. 2012?

Technical Forex Analysis

On the 4-hour Forex daily chart, yesterday the euro was positive, almost trending all the way up. However, it did not bring Forex traders many surprises-that is to say, it did not move as what regularly did, which is a little bit hard for Forex traders to handle. At present, the euro is supposed not to reach any higher in the future.

Fundamental Forex Analysis

The markets are now focused on the Greek government’s negotiations with international creditors over the writing down of its debts. Without an agreement, Athens is likely to default on a bond repayment in March and could then trigger a forfeit of the €130bn bail-out agreed by leaders last year. Eyes are also focused on French and Spanish sovereign bond auctions later today.

As Raghee Horner, chief currency analyst for Interbank FX explains: “The daily EUR/USD has rallied to the swing short zone that is between the 20 period SMA close (aggressive) and the 34 period EMA low all while traders ponder what the odds are that the IMF will get an additional $500 billion to begin lending out (the U.S. has opted out) and whether the bulls have enough momentum behind the stream of positive headlines to make a run at 1.3000.”

Trading Suggestion

Downside risk still remains, the support line I analyze is 1.2806 and the resistance line is 1.2953.
I suggest that Forex traders should observe the 30-minute Forex chart for every tiny movement. Suggestion 1: if the euro drops to the line 1.2832, then Forex traders can consider going long. Suggestion 2: if the euro drops to 1.2806. Go short.
Suggestion 3: if the euro drops and breaks out the line 1.2806, but is not able to reach as high as this, Forex traders can consider going short.
Suggestion 4: if the euro reaches as high as 1.2953, go short.

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Best Forex Strategy-How Can Forex Traders Trade the Forex Market Better?

Last time I mentioned how Forex traders can trade both the trend and range Forex market using just one single Forex strategy. Normally there are some things on which Forex traders have to fix a watchful eye.

1.In fast moving market situations (when the signal confirm after one or two long candles) wait till the price bounce back to correctional level of % 23 Fibo and then enter the trade.

2. Most reliable signal confirms when the RSI running above / below 50 line when you go for a Long / Short.

3. A break of RSI Trend Line confirms when the second candle opens on the suggested direction.

4.Don’t ever take the trade unless the second bar opens Above / Below MACD zero line for a Long / Short trade while the MACD signal line will just give you an in advance alert to be ready for the trade.

5. Once again, the crossover of MACD Value and the Signal Line will warn of a potential trade but don’t ever take it unless you have your own reasonable reasons to do that.

6. Don’t ever take second trade of LONG / SHORT in line with the first trade order type unless a FRESH signal of aforementioned conditions confirm to trade.

8. Don’t ever risk more than 5% of your account balance unless you have your reasonable money management rules that suite you.

9. Avoid the side markets by observing a narrowed Bollinger Bands or flat RSI line.

10. Place the Stop Loss 10 pips above / below of bearish / bullish Parabolic SAR first appeared dot or 10 pips Above / Below the current Resistance (R2) / (S2) Support levels.

11. Most of the false signals come when you trade against the major trend of the market. To know how to define the major trend use bigger time frame like daily or even weekly chart and apply the same setup on that chart to know what is probably the right direction of the market. Sometimes when the price touch the 55 EMA line react as a support or resistance level and at the same time you may have a trading signal against this fact. In this case you are probably against the major trend.

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Learn Forex-Start Working on Your Forex Trading Psychology

Forex traders should particularly understand that Forex trading psychology plays an important role in their Forex trading. They often forget how the Forex trading psychology can affect their performance and how integral it is to their overall Forex trading strategy. If traders really want to succeed in the Forex markets, they need to make sure that their mind is in the right place. Here are some practical ways that traders can start from the right mindset.

Many people trade Forex from the wrong mindset, since they often start with the wrong expectations and are unrealistic about their trading goals. Most traders start trading with an urgency to make money in the Forex market. When they start trading from this mindset, they basically tend to be emotional traders. This means they will ultimately lose money in the end.

Therefore, once you start trading with real money, make sure you are not trading to get rich quickly. Also, if you are a Forex beginner, it is a great way to take advantage of good free Forex trading material, such as Forex trading website and others. The one thing to clearly separate the winning traders from the losers is a difference in Forex trading psychology. Thus, make sure your mind is in the right place when trading Forex.

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Best Forex Strategy-How to Trade both Trend and Range Forex Market

The fact is, it is not honestly easy to make money at the end of a year through using this trading set up or the other ones, because as I said already, it is impossible for a trader to predict every next action of the market. The reasons behind this saying, would be “no one had 100 % wining trades in such a market” and the other reason that I personally refer to when I think I’m OK enough in trading is “when I see the huge currency market screen on my laptop, I really see nothing while the real huge market is hidden behind the screen and you don’t actually know what’s going to happen next with unexpected Iraqi, Iranian, Chinese or Mexican gulf storms cases next”. So all I am trying to emphasize is not forget to that a real trader must know as much as he/she can from all market movers first and always has an eye on possibilities that could easily turn to a nightmare. Those possibilities often come up with a 300 pips bar or a scary gap just against your technically approved trade.

Well, whether you have a magic expert indicator or not, with no doubt you must combine at least two different ways or indicators to produce a signal which is reliable for both trendy and range market situations. Briefly I show you how and which ones I prefer to use.

How to Draw the RSI trend line?

You simply have to connect at least two turn points of RSI value line which can interpret into drawing a line which connect the last value line top (the last value line Top is the one that formed much closer to your current signal than the others and match better to correction on the price chart) to next line top with is normally lower than the first top in a short trade and higher than the first top in a Long trade.

The Top of RSI value line is the hump that formed because of a correction (Fibo ratios for correctional pullbacks), so try to filter the useless RSI Tops with the real chart formation as you may get it wrong when a hump has formed on the RSI while there is no correction on the price chart.

Also, if you realized that you actually took the wrong Top for the trade and you already entered the market, please and for god sake, exit the trade and open another one on the true direction of the market.

There is something you need to pay attention, too. Therefore, stay with me!

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Forex Analysis-Analysis and Trading Suggestions of EUR/USD

Yesterday, on the daily Forex chart, we can see that the Euro ended with a candlestick with a long tail, showing that there would strong resistance line above. Actually after the euro met resistance at the line 1.2686, it retraced slightly. However afterwards it soon moved back up again and broke out the resistance with a long white body. Although it then turned afterwards, it did not break out the line 1.2697. Where the euro is going today on 18th Jan. 2012?

Technical Forex Analysis

On the 4-hour Forex daily chart, yesterday the euro trended sideways just below the line 1.2686 and after that it continued going upwards, breaking resistance lines again and again until it met resistance line at 1.2806. The euro dropped directly to the line 1.2710 and then rebounded strongly. For now the euro is still trending sideways.

Fundamental Forex Analysis

The euro is trading in a 1.2741-87 range so far, gaining ground for the third session in a row.
Stronger-than-expected GDP Chinese figures boosted sentiment on Monday, pushing riskier assets prices to higher levels. The upside was propped by positive German data out of the ZEW index, successful EFSF bond auction and a jump in the Empire State MI in the US.
The PSI talks are to resume today and would be one of the risk-events driving the markets in the upcoming weeks.

The cross is up 0.09% at 1.2757 as of writing, with resistance at 1.2810 (hourly high Jan.17) ahead of 1.2879 (high Jan.13) then 1.2898 (low Jan.4) and 1.2946 (high Jan.5).
On the downside, a breach of 1.2711 (hourly low Jan.17) would expose 1.2624 (low Jan.13) then 1.2592 (Lower Bollinger) and 1.2588 (monthly low Aug.14).

Trading Suggestion

Downside risk still remains, the support line I analyze is 1.2686 and the resistance line is 1.2777.
I suggest that Forex traders should observe the 30-minute Forex chart for every tiny movement. Suggestion 1: if the euro reaches the line 1.2765, then Forex traders can consider going short. Suggestion 2: if the euro reaches as high as 1.2777. Go short.
Suggestion 3: if the euro drops and breaks out the line 1.2686, Forex traders can consider going long; while they had better not take any action when the euro breaks out the same line for the second time.

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Best Forex Strategy-How to Be Successful Part-Time Forex Traders

Actually there are very few Forex traders available all the time in the Forex market. As part time Forex traders, it is reasonable that they would worry about missing some tiny movements of the Forex market leading to unnecessary losses. Then what the best Forex strategies that can help part time traders to be successful?

Assuming you cannot even trade for an entire hour or for regular increments during the day, you can still trade the Forex market. Since you cannot watch the market during the day, the following strategies may be implemented so you can be a successful part-time Forex trader:

Best Forex Strategy No.1: Take fewer positions and hold for days.

After studying the market and narrowing down particular chosen currency pairs, you can take only a few positions and hold these positions for a longer period of time. It is critical that you understand the drivers of your currency pairs and have taken the time to really understand your market. Another wise strategy is to put in stop-loss orders with all your trades to minimize any losses if the market moves against you.

Best Forex Strategy No.2: Look at long-term trends.

Instead of looking at hourly or even four-hour charts, you may want to look at the trends for a day or week. This will allow you to trade while looking at your computer only once a day.

Best Forex Strategy No.3: Set up trading orders.

Setting limit, stop-loss or other entry/exit orders can ensure you do not miss opportunities to enter or exit positions. Most trading platforms allow you to set up these orders with no additional fees.

Best Forex Strategy No.4: Use technology!

Set up auto alerts to your mobile phone or email to keep you informed while you are not actively trading.

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