Trading with a day job

Most people think that in order to be a successful trader you need to be monitoring the markets constantly throughout the day. So if you are one of those people who doesn’t have job related to the financial markets or are not able to watch the markets while you are at work, you will probably be thinking that you won’t be able to succeed as a forex trader because you will be missing a lot of trading opportunities. However, the truth is that you do not need to be in front of the charts all day long to catch brilliant trades. This article explains how having a day job be beneficial to your trading habits and how to trade the forex market while keeping your day job.

Having a job that keeps you away from watching the markets can actually be more of an advantage than a disadvantage. There are times when traders need to relax and stay away from the markets in order to be a successful trader. By analysing the charts too much can also lead to analysis paralysis.  This is a situation in which absorbing too much information can prevent you from find good trades. Also, if you are constantly looking at the charts and are trying to areas of entry and exit, then you will probably end up making trades just for the sake of trading rather than placing well thought out trades. To prevent this from happening it is better to give yourself some time off from watching the markets and focus on something else other than trading.

Successfully trading the forex market doesn’t require you to analyse the market for multiple hours. You can spot good trades by just analysing the market for 30-45 minutes. This can be done if you stay away from trading on the lower time frame charts and trade higher time frames such as the daily charts.  It is better to trade on higher time frame charts compared to lower time frames because the higher time frames will give you a clearer direction on of the market trend. The lower time frames contain market noise which is usually mindless back and forth movement without any clear direction. When you trade the daily charts you don’t have to keep looking at the charts all day long. You can analyse the charts when New York for 15-20 minutes to see the market trend and what price action is trying to show you. Based on your analysis you can either place a trade or place pending orders. Once you have placed your trades along with you TP and SL level you can walk away from the screen and let price reach either levels.

 
Trading with a day job is actually better than trading full time. This way you will be trading the daily charts and be placing considerably fewer trades if you were trading full time. This forces you to focus more on the accuracy of you trades. By placing fewer but more accurate trades you will be earning more from you trades and also reducing the amount of money you will be paying your brokers. So if you think about it trading with a day job is actually a benefit rather than a handicap.

The Need of a Forex Trading Plan

Having a forex trading plan is one of the most important factors towards becoming a successful forex trader. Yet, there are so many traders who fail to create a forex trading plan, or usually put it in the back burner for something that they will eventually to at some point of time in near future. However, that time to create a trading plan never arrives and they continue trading without a properly defined trading strategy or trading plan.

Procrastinating on the idea of creating a forex trading plan is a way of inviting random trading and this type of trading usually leads towards blowing out trading accounts. Success in the forex markets is attained by being a disciple trader. Most traders rarely have the self-disciple to make sure that they are trading objectively and not emotionally. By having a forex trading plan, you can have more of a mechanical approach to forex trading and not get misguided by your emotions while trading. Keeping a trading  plan acts like a GPS device that ensures you stay on the path of a disciplined trader rather than being misled into the wrong path of emotional trading.

To be successful in forex trading you need to be accountable for you trading.  A pre-defined trading plan assist in making sure you are held accountable for all the trades you place. There are moments in trading when you face a streak of losing trades, at such times you are likely to become emotional and try to regain all the money back all at once by taking on large trades. Trying to recover all losses in one go usually does more harm to your account than good. This is why a trading plan is need to ensure that all your trades are made for what is best for your account and not for what makes you feel better because you are emotionally hyped up due to your losses. A trading plan serves as a physical reminder that you need to act in the best interest of your trading account and not yourself. 

A well-defined trading plan contains a defined entry strategy with a proper risk: reward ratio in mind. You should already have an exit strategy for your trade even before the trade is made.  In case there is an unforeseen change in the market environment, the trade should be adjusted accordingly in order to manage risk. Once a trade has ended, the trade should be thoroughly analysed to see what went right and what went wrong during the trade, to make sure the same mistakes are not repeated in the next trade.  A trading plan is most effective if it is read on a regular basis, this allows you to assess how you have developed as a trader and keeps you on the right path of what is needed to be a disciplined trader.   A forex trading plan acts like your personal guide to the market, it is there to steer you in the right direction and prevent you from making emotional trading mistakes.

The Importance of Support and Resistance

You’ll often hear analysts talking about a certain security approaching a resistance or support. These are simply price levels or a range of prices that a security or currency doesn’t often go over which is termed as resistance and go under which is termed as support. Generally the Support is the level at which the price seldom falls below and the resistance is the level the price seldom exceeds. Each time the price hits the resistance or support, it appears the price has hit a wall and reverses at least in the short term.

Sometimes with stocks, a support or resistance level will be a round number such as 50,100 or 1000 that represents a psychological barrier to further increases or decreases in price. But in forex, keep in mind that a support or resistance level can vary and is often not an exact number. You should view support and resistance levels as zones rather than a specific number.

Support and resistance analysis is an important part of trends because it can be used to help make trading decisions and identify when a trend may be reversing. These levels can sometimes help a trader identify when to take profits. For e.g.-if a certain price levels is reached, the trader might want to take profits because he knows the price level seldom rises past a particular resistance level. Or alternatively if the trader identifies support level, the price seldom falls below, he could use that information to help him decide on an entry point to his position

The primary reasons why prices behave in the fashion of like hitting a wall and getting reversed because of supply and demand and market psychology. At support level the number of buyers generally exceeds the number of sellers and pushes the price back up and at resistance levels the number of sellers exceeds the number of buyers causing the price to go back down. This could occur frequently in a range until new material information is available that shifts the price to a new range, in which a new support and resistance level would be established.                 

Why role reversal happens? Once a resistance or support level is breached, the roles of resistance and support flip. If the price surges below a support level, the same support level will then become the new resistance level. Conversely, if the price surges above a resistance level, the same resistance will tend to become a new support level. The role reversal will only occur once a strong price move has shifted the price to a new range-often caused by major news or economic reports.

Support and Resistance levels are tools every trader should use and monitor.

LUCRATIVE OFFERS

While doing your research for choosing a Forex Broker you might come across many attractive offers which they might be offering. Don’t ever get attracted by those offers and do analyse the actuals behind that. For e.g. a Forex Broker says that we are giving you a rebate of 1 USD per 100K USD you Trade, but he might have already adjusted the same by increasing the commission or Spreads. So, their Commissions or Spreads might be higher than any other Forex Broker in the Market. Similarly a broker might offer you free Trading Signals or a free Subscription to the daily updates of the market but the same is to hide their high spreads or commission.

 

There might be X number of offers being spammed in your mailbox by these Forex Brokers or flashed High on their website, But never ever fall for them. Always go for the real thing that is actually going to affect your profits while you are enduring to win your Forex trading Heist.

Always keep your eye on the actual features of the Forex broker. See that if he is a ECN Broker or a market maker, what leverage is offered, what are the spreads, how much commission they charge per trade, what is the minimum account size, do they allow News Trading, are they good with Scalpers, how many currency pairs they are offering?

Do read the reviews about the Forex Brokeron various Forums and the Social media sites. This will help you in making the right decision or choosing the right weapons for your Forex Trading fight.

Always remember there is nothing like a free lunch, you have to pay a price for everything in the Financial World you might realise it or not but at the end, it is going to affect your profits. So, always be careful while choosing a Forex Broker and don’t get charmed by the illusive offers they show you as it is just to hide their weakness and get you in the Trap.

Some trading rituals are spoiling the night’s sleep

“An aggressive advertising campaign” is what we find on every site to attract the people either to “promote their services” or to convince them that “we are the best, let us serve you”. This ultimately proves a trick to waste your money. 

“Giving an advice to a fool is like hitting the air with a stick”.

  These asvertisements is something like how they want to look to their clients since communication or promotion via social sites networking is on the boom nowadays due to advancement in technologies.An Internet- a cutting edge technology!

Everybody is searching on the websites for the information related to forex trading. Even I spend time over internet for searching trading news, for analysis or researches, trading strategies, expert’s suggestions, broker’s advice, rapports, trading forums etc. and from my experience I came to know how people get trapped!

“I’m into forex trading, just loving it for fun”,”everybody trying their hand in trading, why should you not?”, “Get rich in few minutes”,“I have quadrupled my income in just few hours”……statements like these presented in advertisements reflects the attitude as if they are the real traders. Actually they are just promoting their services and situation get worse when these services are presented with decent portfolios too.

“The person who asks is a fool for five minutes, but the person who does not ask remains a fool forever”.

Moreover, such ads are just in preparation of giving a “blind eye” to the visitors. This is the reason which is contributing to the fact that 95% traders are losing in the forex market.

Did you ever click on the link that directs to performance of “Warren Buffet’s” statements or his strategies or something like how can you earn money like I do…..?  You may search Google; I can assure you won’t find it!

There is a famous saying “A foolish person is 'quick' to condemn what they do not understand. A wise person is 'slow' to condemn what they do understand.”!

Usually beginners with handful of good results coincidently, are trying to be the “Trading Guru” on the Forums you may see. These are the people creating a big noise on the forums or must say “showing off” their little bit into dramatic manner. Things go worst when people like these hire people to promote the services of ABC Company. And promote their servies in such a manner which force you to say “wow…even I would like to try it”!

Now close your eyes and think for a while that “the recipe for which I got popular among the chefs, would I like to disclose it among other chefs?”  Similarly, if any particular strategy is profitable then why would I sell it? Why would I sell the one from which I have made millions?  Why would I sell, that too at cheapest cost? Hope you getting my point. But I respect the experience that has been shared by some great traders!

However, there are few people who are providing or promoting their services in an honorable manner! I really appreciate the smart people’s business that makes a clear distinction definition from a scammer’s world!

Trust on your knowledge, before getting trapped!