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Below are my 10 Explanations why Pro Forex Traders Earn money And How You Can Do It To.
1. Pro Forex Traders Begin to see the Chart For which It Is, Not What They Want It To Be.
Amateur traders get over-involved in forecasting what's going to happen next on the charts. Predicting long-term market movements is not only an unrealistic approach to trading but the incorrect focus. Other areas of the financial markets are out of your control and also the focus should be on what is currently happening on the chart and not what you think may happen next or what you would like to happen next.
Professional Forex traders focus on the present information on the chart. The simplest way to do this is to forget any open trades you have running, remove the emotion and look only at market direction and potential new set ups. Use rules or approaches for example looking at price cyclicity and value action. Follow you rules, and only when your rules provide you with signals can you trade.
2. Professional Traders Make it simple And Follow Price Action First.
Pro Forex traders have confidence in quality over quantity. They don't overwhelm themselves and their charts with contradicting signals. Their focus is just on the best and the highest probability setups. The best trades should jump off the chart and slap you across the face, professional traders understand that too many indicators hide those trades making things more complicated. Their decision-making process is usually based off price action, cyclicity and support and resistance. It might not be fancy but it is proven to work.
3. Expert Traders Don't Spend All Day Analyzing The Markets.
Advanced traders understand less is more. Many amateur traders result in the mistake in thinking the greater time spent the more money can be created. This is risky as you're overwhelming your mind and charts with so much information everything begins to conflict itself. Secondly, it prevents you from trading just the highest probability setups because the more time spent the more trades you will want to place. The first step, is to clear your charts and chose a maximum of 10 currency pairs. You are able to and should comfortably analyze the markets and put trades in less than 20-30 minutes a day. Your brain can only focus in a high level for your long, and after that time, the mind simply isn't as focused as it should be; that isn't the best way to manage your money. Expert traders comprehend the greatest trades shout out to you from the charts. Try limiting you to ultimately 30 minutes a day, and find out how you're trading develops.
4. Pro Traders Are Practical.
Professional Forex traders concentrate on what they are prepared to lose not what they stand to gain. They have reasonable targets for account growth as they are disciplined and try to risk manage. Pro traders realize that drawdown periods should be considered and they aim for low drawdowns to stay in the game, they allow their profits to grow and compound over time. Expert tradersknow that yes, trading could be highly rewarding but it's not a get quick rich scheme.
Compare the above mindset to your amateur trader who is looking to make as much money as you possibly can as fast as possible, and you can see that a professional trader includes a much more level-headed approach, where an amateur has a 'get rich quick' mentality. Trading sensibly be sure you only take the best opportunities, you risk manage and you have patience to allow time and compounding to develop an account. That amateur approach results in over-trading, losing money and a very disgruntled person. The professional approach results in consistent profits.
Be reasonable and set practical goals. You aren't going to start living off your Forex trading next month if you are trading a $2,000 account. Concentrate on growing your capital to some sensible level where you can draw money each month, and still allow your account to develop.
5. Professionals Use Their brains, Not The 'Sexy' 'Guaranteed' Expert Advisers Or Robots.
Because the old saying goes 'if it appears too best to be true, it probably is'. Professional traders don't fall victim to the over-promised and under delivered expert advisers or robots. Professional traders aren't looking for the 'holy grail' or 'next big thing'. Experienced traders know that these promises are very unlikely to operate long-term, if they work in the first place, and hold no value in them. Pro traders boost their account using mind, their skills as well as their abilities. For that foreseeable future, no software program for $27 can beat a professional trader mindset. The big banks might be able to get automated systems to dedicate yourself them for periods of time, but they have a lot of experienced watching people these robots all day long, with PhD's in complex subjects the rest of us didn't know existed. They have the money, workers and also the infrastructure to deal directly with the major banks, funds and liquidity providers on the level you can only dream of. As you can guess, it costs much more than $27.
6. Professional Forex Traders Don't Pay attention to Others
Nobody cares much more about your money then you definitely do. Pro Traders follow their trading strategies rules and not the opinion of others. They do not risk their money based on what an expert 'analyst' just told millions of people. Most analysts aren't even traders; they have opinions but don't put their own cash on the line for it. If their opinion is incorrect they won't lose money, but you can. You'll find no shortage of opposing 'expert' opinions, that make things overly complicated. Initial step, learn trading strategies with proven results and write your own trading plan and place your trades according to rules not opinions.
7. Professional Traders Concentrate On Technical Analysis First, News Events Last.
Expert traders use technical analysis as their most important approach to market analysis. Technical analysis provides you with areas around the chart where you can buy and sell with full confidence. This is due to repeating patterns and support and resistance levels within the markets. Unlike news events that are difficult to trade profitably because of larger transaction costs and volatile whipsaw because of large volumes of banks and funds entering the marketplace in a very short period of time. A professional trader ought to know what setups they're looking for without fundamental factors. The price action usually has the news release priced into it in advance.
8. Experts Traders Do Not Over Trade. They are able to Walk Away From The Screen.
Amateur traders often struggle to tear themselves away from the charts. Whereas, pro traders understand they can only control their very own behavior not the markets. Watching the cost move up and down all day and night long is a dangerous and tiresome method to trade. Pro traders do their business and walk away; they trust their strategies and rules.
Fantastic way to train you to ultimately walk away is by setting an alarm 30 minutes from the time you take a seat to trade. Make sure the alarm is defined in another room so you must get up to turn them back. Get up and leave behind the charts. The best perk of trading is it can be done in Thirty minutes a day so that you can go and do the things you love so take advantage of this benefit and revel in some hobbies.
9. Pro Forex Traders Have A Discretionary Trading Sense.
Humans have the capability to be greater traders than computers because humans are capable to use 'discretion'. Through education, time and experience with trading the marketplace you can develop your personal trading discretion. Price action trading is rules based, yet open for discretion. Pro traders use high probability trade setups with multiple confirmations that add further substance to the price action setup. Signals will make it 'look' right as well as your discretion can make it 'feel' right. Through education, some time and experience your discretion will advance and you will be able to use this to understand which trades to take and which of them you allow to go by.
10. Experienced Forex Traders Use Straightforward Trading Systems.
The most difficult thing to get my new students to initially accept is that trading is not complex. Learning how to trade doesn't need an advanced specially made indicator, vastly complex mathematical equations or fancy charts. Amateur traders in many cases are surprised to learn most professional traders simply use only a few trading strategies on some currency pairs on higher timeframes or when i like to say it: K.I.S.S.a ensure that it stays stupidly simple trading approach.