2Bull Forex Blog

If you are just starting out in forex trading or an experienced trader not making the gains you would like then these 3 tips are for you. There simple to learn easy to apply and could help you make triple digit annual gains so lets look at them.

1. Trade Less For Bigger Profits

Most traders think that they need to be in the market All the time in case they miss a move or the more they trade the more likely they are to be successful – but this is totally incorrect.

In Forex trading you make your money from being Right and that’s it – the effort you put in does not affect the amount of money you make. In fact in most instances the harder you try and more you trade, the greater your chances of failure.

Why?

Quite simply because the high odds trades don’t come around that often.

This philosophy is based on the famous Pareto principle the 80 / 20 rule.

The rule states that 80% of your results come from 20% of your activities.

This is true in many areas of life including trading Forex.

In forex trading by focusing on the trades with the best odds and ignoring the others, you can improve your profits overall.

By only focusing on this 20%, you will see bigger gains. This is really a common sense rule, yet few Forex traders stop to think about it. Most trade too much and try and force profits but if they were disciplined, patient and only focused on the best trades they would win more.

I know a trader who only trades about 6 times a year and yet they make over 100% annualized gains!
Think about trading less and you will see the logic of the above argument.

2. Don’t Diversify

When you do this resist the allure of diversification, it may reduce risk but if you have a high odds trade, why dilute its potential profit by diversifying with a marginal trade?

If you have a high odds trade go for it and this leads directly on to the next point.

3. Risk More Per Trade

As you only have one trade to focus on and it’s a good one risk as much as you can afford on it forget the accepted investment wisdom of 2 or 5% risk 10 25% minimum – if you believe in the trade go for it.

This is not being rash – its simply acknowledging an investment fact:

Risk goes with reward and the more you risk the more you can make.

This doesn’t mean being rash but your better to risk a lot on a high odds trade, than risk a little on a number of trades with poor profit potential.

Finally – To Make BIG Profits Learn To Love RISK!

The reason most traders never make any money is they are so afraid of risk they actually create it. They trade marginal trades, don’t risk enough and dilute their profit potential.

The fact is if you want to trade currencies you need to enjoy risk and be a speculator and confront and conquer risk – If you do you will make a lot of money. On the other hand if you don’t enjoy risk – don’t trade Forex.

If you want to learn forex and get the best Forex education you need to know about “the turtles” You may never have heard of them but these traders learned to trade in just 14 days ( they had no previous experience and went on to make $100 million! How did they do it? Let’s find out.

In 1984, trading legend Richard Dennis taught a Trend Following trading methodology to the group of students above, to prove that the skills required to trade successfully could be specifically learned by ANYONE.

Dennis was settling An argument with business partner William Eckhardt.

Dennis believed anyone could learn to trade, Eckhardt disagreed.

The “turtle” experiment was then carried out to prove who was right and all the potential traders were from different walks of life and all had no experience of trading.

The group included:

• An actor
• A security guard
• Two card players
• An auditor
• A boy fresh from school
• A woman exchange clerk

The Experiment

This group of 14 traders then proved Dennis right by earning an average annual compound rate of return of 80%, making over $100 million dollars for Dennis and many went on to become trading legends who still trade today.

What You Can Learn From The Turtles?

If you are embarking upon learning Forex trading and getting a Forex education the experiment has several key points you need to consider in your own Forex trading strategy.

The reason most traders fail is simply they cannot get the right mindset to succeed and this sees 95% lose.

The turtle trading experiment taught them the RIGHT MINDSET to trade successfully and gave them a set of rules they could believe in and have confidence in.

The system they were taught was simple, anyone could learn it and Dennis knew that simple systems work best as not only are they more robust in real time trading than complicated ones – but they are easier for traders to have confidence in as well.

Dennis taught them to have confidence in the system they were trading, and follow it rigidly to achieve success and this is the simple formula you need to learn as part of your own Forex education – if you do you could enjoy currency trading success to.

A Simple System + Discipline = Trading Success

Keep in mind they did this all in 14 days!

So its not the effort you put it in that makes a forex trader successful its working smart in the right areas that will give you success.

Remember:

You don’t get a reward in Forex trading for being clever or working hard, you get your reward for being RIGHT – PERIOD.

So when you consider your own Forex trading get a simple system that you can have confidence in and you will then be able to apply it with rigid discipline - this is really the key to currency trading success.

Of course you may not become as rich as the turtles did but if you learn the right Forex education you can become a successful trader the opportunity is open to all and the potential is huge.

Forex trading is an exciting challenge so if you have the right mindset and are prepared to work hard in the right areas you could change your financial future for ever. The question is:

The challenge is open but are you up to the challenge? -If you are welcome to the worlds most exciting business opportunity!

If you are a Forex Trader you need to trend follow -there are however different time frames you can trend follow in and here we will look at the three most popular.

We will look at the merits of each, your chances of success and the best method for your personality, so let’s get started.

Day Trading

Fact: The data within a day will not allow you to get the odds in your favor as the time period is to short – you may as well flip a coin.

Support and resistance levels are simply not valid and volatility can and does, take prices anywhere. In

short, all these short term moves are random and that’s why day’s traders lose.

Think about it:

There are millions of traders, trading several trillions dollars daily and what they do cannot be predicted in a period of hours.

Many vendors appeal to the greed of buyers - they make money from selling their forex trading system and the trader loses in the market.

You will see lots of claims and even a track record but that’s done in hindsight knowing the closing prices!

They never have a real time track record of forex day trading success and you should avoid Forex day trading at all costs.

Swing Trading

The aim here is to catch reactions within major trends which normally last around a week and it’s a great way of trading especially for novice traders.

Swing trading forex trends is exciting, there are plenty of opportunities and you know if you are right or wrong quickly – this makes it easy psychologically.

The key to successful swing trading is always to CONFIRM With momentum indicators - before executing a trade.

Do NOT simply buy into support or sell into resistance see the change come first before you enter the market – do this correctly and it can be very lucrative.

Long Term Trend Following

The most profitable form of trading and also the hardest to master not from the point of view of method - but from the point of view of adopting the right mindset.

If you look at Forex charts you will see Forex that last for months or even years yet, only a small minority of traders have the mental discipline to hold these trends and realize their full profit potential.

Forex trend following requires patience and discipline and it’s hard to acquire as most traders are simply not mentally strong enough to accept big gains.

Of course all traders want big gains but accepting them is the hardest bit.
Let’s look at why this is in more detail.

If money is important to you, then your emotions will be present and they will hinder you in your quest to hold these trends.

When counter trend moves come (which they always do) they will eat into your open equity and the losses in open equity can frighten you to take profits early.

Most traders get excited and nervous when they get a profit and the bigger the profit gets the more tempted they are to bank it before it gets away.

They end up banking early and getting a mediocre or small profit when they could have had a large one.
You need to keep your eyes on the longer term profit you are going to bank and accept that you will have to see dips in equity (sometimes of thousands of dollars in the short term) and simply ride them out.

So which method is best for you?

Well we have already said forex day trading will simply see you lose so that’s out so the choice is swing trading or long term trend following.

You can mix both or if you feel you have the right mindset focus on long term trend following and if you don’t feel you can face the large dips in open equity go for swing trading which is the perfect place for novices to get their feet wet.

If you do both correctly you could make some huge forex profits and enjoy currency trading success – Good luck!

Today, forex trading news is more plentiful than ever. There are numerous sources to choose from and there all delivered at the click of a mouse, so you can get breaking news whenever you wish.

Here we will look at how to use Forex trading news and mistakes to avoid.

First let’s start with a rather startling fact:

100 years ago 90% of traders lost and today the ratio still remains the same.

This is despite better more frequent Forex news, better computers, more powerful software and more information than ever on the markets.

The fact is knowing the news won’t help you win – in fact, it generally helps traders lose! There are 3 main reasons for this:

News is discounted in a split second.

In today’s world of instant communications news is discounted immediately, so by the time you have seen it and had a chance to act upon it, the moment has gone and the market is looking toward the future.

News is Stories

Those analysts are so convincing with their arguments! Their normally great at explaining what has happened - but you can’t trade off what they say, as they have no idea what will happen - there simply stories and opinions.

Will Rodgers once said.

“I only believe what I Read in the papers”

Now he was joking, but its surprising how many traders take what they hear on the news as a recommendation to trade.

News Gets Your Emotions Involved

Humans don’t like to stand alone and the news reflects what the majority want to hear but that is completely different from what you have to do, to trade to win.

The bulk of traders lose and the bulk listen to the news, so if you avoid it, you can step aside and not let your emotions get involved.

If you do this, you can trade in a disciplined fashion and join the elite minority of winners.

If you use forex charts and simply follow price action, you are far more likely to be successful than you would be by following news stories.

WHERE THE NEWS CAN HELP YOU!

There is one great way to use the news:

If you see a very bullish or bearish market and the news supports the prevailing view but the market does not react the way it should – then its time to look for a contrary trade and time your entry points via your forex charts.

It’s a fact that:

Bullish markets collapse when the fundamentals are most bullish and bearish markets rally when the news is at its most bearish.

If you can look for these turning points on your charts and find the news suddenly stops pushing the market the way it should, a contrary trade is developing and a big profitable trade is shaping up.

Finally

The way to use forex news outlined above, is a very powerful profit tool but completely different to the way most forex traders use it!