TOP 10 WEAKNESSES OF NEW TRADERS

Most of the time, people like to discuss on how to strengthen, improve or enhance your skills by doing this and that. Definitely it is highly recommended to take the positive approach. In fact, one of my previous article was on the Top 10 Tips for Beginners in which the focus is more on the do's rather than the don'ts. Fine.

This time, we will do some reverse engineering and therefore we will talk about the common weaknesses of new traders (that I personally seen and did in the past) and see whether you can work out your improvement plan from that. Of course this topic is well covered by other websites and blogs so bear with me if you find the content seems to be "Arrghhh... I know about that" sort of thing. No worries, more importantly, have you done something about it? Of course I don't care but just be true to yourself.

Let's begin.

1. Impulsive - Too Excited and Jumping into Trades

Impulsive trading will always be the top of my list. It is hard to see a new trader to take it easy when they look at the charts and price action. They always get excited without even blinking their eyes when they look at the candlestick movement. Though the daily and 4 hour chart is clearly bullish, they can simply jump and get excited from the 5 minutes (even 1 Minute) candlestick showing a bearish move and say "yeah... it's going down and it's good to sell now" and straight away trigger a SELL order. Wow! I cannot say anything since their confidence is higher than the Mount Everest. Stopping them seems impossible since it's their account but you can guess for sure how the story ends.

THE CURE TO THIS - Stay cool and relax, always.

2. Emotional - Married to their positions due to Weak Psychology

As a result of their impulsiveness and blindness in analyzing the market properly, they will hold their losing positions and cut their profit short when they get it right. A perfect recipe for a loser. I am not saying that they should cut their losses the moment the trade turns RED (your position will always start with red color because of the spread) or let a profitable trade (BLUE) turn to a losing trade by holding it too long. All they need is just to build their ability and confidence to analyse and understand what triggers that trade in the first place, by planning a reasonable TP and SL target before entering any position. Once enter, they should be able to hold it accordingly until their system or rule says to exit.

THE CURE TO THIS - Risk Small, decide on the Risk Reward ratio prior to entry and get ready to lose if you get it wrong. Stay objective with your approach based on probabilities rather than blind hope.

3. Market Chaser - Adrenaline Rush

This is another common problem ranked 3rd in my list. No doubt some new traders have system and method that are taught by their mentors and gurus. But the problem is, they cannot wait for the setup to come and they enter the market regardless what the condition is. I do not blame them 100% on this though since I have seen some mentors are giving their signals and entry methods on time-based rather than technical levels to assess. How can anyone knew for certain that you can buy or sell any currency pair 2 hours from now? If the setup does not meet the required criteria, it is always best to remain patience, stay out and wait until the technical signals give you the green light to enter. This is discipline.

THE CURE TO THIS - Relax. If there is a reason for you not to enter a trade, just stay out. It's all about patience and discipline. Let the market comes to you.

4. Risk Management - Poor

Poor risk management is always the No 1 reason for account destruction and margin calls. Most new traders do not even have this in their trading arsenal and therefore, taking every trade using the maximum leverage hoping for a home run in every single trade. They ALWAYS TAKE BIG RISK! Hoping for big money to flow in. Occasionally they will get it right. But one bad trade will surely put them out of the market permanently, wiping their account out unless they can cut their losses really fast. They believe that if they can succeed in demo, they surely can do the same thing with the real account. Of course the truth is otherwise since there is no emotional factor when trading with the demo money. Those with no risk management is definitely operating their live account like a time bomb. It's just a matter of when, not how.

THE CURE TO THIS - Risk Small, knowing how much at stakes if you get it wrong. Always have an SL, or escape plan in case if the market goes against you.


5. Technical Knowledge - Lacking

This is the core to market analysis. No doubt I have seen traders making profit purely from the price action. But knowing additional things (e.g. MA, Fibo, Support & Resistance) from the technical perspective would really help your decision making. So many times new traders are trapped with blind situations and blame the brokers (even the market) cheating them due to reverse market movement once they enter a trade position. Once I checked, the level they entered was just nice within certain key technical levels (i.e. support, resistance and even key fibonacci levels) where the likeliness of market bounce and reversal was very high. Initially I myself do not pay much attention to these technical indicators. But after being trapped and blinded by certain market move, I realized that it is a key component to my trading decision that I couldn't ignore. You don't have to know and use every single indicators in your trading platform, enough with the basics that I mentioned above, and explore more as the time goes by.

THE CURE TO THIS - Take time to learn one indicator at a time, and practice using them with your demo account first until you become more familiar and comfortable with it.

6. Fundamental Knowledge - Lacking

Same thing like technical, it would really help if you can take time to understand and appreciate the relevant issues with regard to all currency pairs (or commodities) that you are trading. Price movement are driven by human's fear and greed. Hence, on top of your technical analysis, you need to appreciate the sentiment behind it that drives the trend towards either bullishness or bearishness. Key things like the economic calendar events are something that you really cannot take for granted especially when it come to central banks latest financial and fiscal policy. These elements can either make or break your technical analysis so it deserves some serious attention and respect. Period.

THE CURE TO THIS - Take time to read and appreciate the current global issues plus the upcoming economic (and geopolitical) events on your calendar like the US Presidential Election as well as all BREXIT matters.

7. Want Everything Quick and Easy - Greed

Most new traders want to do it the fast way. They just want the signals and all its associated parameters without asking and knowing why. Some even dump their money on others to trade for them. They don't have time to learn and yet they dream of making lots of money from trading. If you have lots of money, this is where the more experienced traders will capitalize on you and taking you for a ride. There is no harm in such intention since everyone wants quick and easy money. It's just that when you don't really understand and appreciate the art behind it, you will always be caught on the bad signals given especially when your risk parameters are not well defined. So learning is still mandatory in a way, since ignorance will really place you in a disadvantage situation especially in the long run.

THE CURE TO THIS - Allocate time to learn and always put realistic target. Investment is like sowing a tree. It takes time to grow and same goes to your financial plan. Don't be scammed and lured by the Lamborghini cars and party on the boats advertisement since those are cheap tricks that work all the time, especially to the ignorance. Wake up! Nothing comes easy guys.

8. Full of Excuses - No time, Lazy & Busy

New traders hardly be true to themselves. They thought they knew this and that already and seldom listen to advice. This is the reason why I am a bit picky when someone approach me to learn about forex. From my experience, 9 out of 10 always want the short cuts. They always want the easy way. No wonder so many out there are easily scammed since the universal crowd will always behave in such a way. Unless they change their mindset, there is no point to dream about being a successful trader.

THE CURE TO THIS - This is attitude. If you don't change it, no one will. It's your choice.

9. No Entry Method and Trade Strategy - Gambler

New traders can accelerate their learning curve if they are willing to apply a particular system or approach to their trading style. But what I see out there, either their mentor are not giving them the right technique or they themselves fail to discipline themselves to follow on what have been taught to them. Furthermore, the lack of effort to learn and explore different techniques available also contribute to the reason why new traders are stuck at certain level and later quit in the end. If you don't establish certain rules or setup parameter for you to trigger a trade (e.g. when the 3EMA cross the 21 EMA upways, it's a buy signal setup), you keep on guessing and trigger your trade without a clear technical rule to follow. As such, it is hard to be consistent with your trade performance.

THE CURE TO THIS - Find a mentor, or books that you can refer to as guidance. Try multiple techniques with your demo account and assess the result. Later transfer them to your real account and evaluate the result as well. With this approach you will keep on learning and discover which technique that suits you most. No doubt over time, you will improve yourself.

10. No Trading Journal - No record of mistakes and keep on repeating them

A Trading Journal is just like your Trading Diary. This is where you keep all your records, thoughts and experiences that you encounter each day. It doesn't have to be microscopic detail since what's important is for you to record the one that matters so that you can improve your performance each day. By doing this, you will automatically learn to be true to yourself. Since this journal is only meant for your eyes, you can write anything about your trading (& thoughts) so there is nothing to be ashamed of regardless how stupid it may sound. Trust me, do this and you can see the difference.

THE CURE TO THIS - Start your trading journal today. Don't delay anymore. You can do it with your Excel file and create several folders to record your winning and losing trades, account levels, your mistakes, your thoughts, your analysis as well as your strategies.

SUMMARY

If you realize, all these points are actually related to one another. The reason I break it into pieces just to make it more specific so that it can be tackled objectively. Worse of all, I even met few new traders who thought that they have the experience already, though they just started 3 months ago. While I appreciate the confidence level, they should have listen more than do the talking.

You see even with considerable number of years of experience that I have, I never feel enough. I always read and put my thoughts inside my trading journal on daily basis. Hence, I always appreciate every moment spent with my fellow friends and traders, regardless new or seasoned, since there will always something new to learn. What more if he is more experience and knowledgeable than the rest. I only talk when asked rather than trying to prove how knowledgeable I am with the group. I have nothing to prove basically since most of the time, I always strive to improve myself from one day to another, believing that learning is an endless process. Furthermore, we all knew that we learn more from listening rather than talking.

You see, when you choose to admit your weaknesses, the way to improve yourself will be wide open. Many people would like to see you succeed but the problem is, we are the biggest enemy to ourselves by limiting our potential through our ignorance in building a good attitude in the first place.

In the end, if you can prove to be successful by doing it your way, great! But the fact is, there are more pretenders than the real contenders out there who are really good at this. You know who you are.

WHAT CAN WE LEARN FROM THE STERLING FLASH CRASH?

I would call it a black Friday for the pound sterling since I personally suffered some significant losses due to this 'flash crash' on 7th October 2016, exactly at 7am local time here seconds after the Tokyo Opened. Painful indeed but this is a fact that traders have to face from time to time. Just need to analyse and move on accordingly.

While the magnitude of the spike was not as much as the one occurred during the BREXIT vote counting day in June, but the manner it crashed in less than 5 minutes, with various brokers giving various lows was something that I believed had caught most traders shocked and unaware. Some blamed this was due to thin liquidity, the auto trading algorithm errors, as well as others are pointing to the 'fat finger' tradings. You can read on this at most other websites so no deliberation is required here. Bloomberg is my favorite by the way.

Though GBP had been stumbling since weeks before, and keep on heading south for the rest of the 1st week of October, no one would have thought that it could go even lower than 1.2600 on that Friday alone.

Personally, I was speculating that the market would take it easy for the day since normally, prior to NFP released, market would technically correct itself with some profit taking and some significant retracement should be seen. Yes all of us knew the bearish trend for sure, but as experience had taught us all, it sure cannot go south all the way since technical correction was believed to be inevitable.

Further to that, with SSI extremely rated at 90% long against 10% short, RSI at severely oversold condition at almost all time frame (e.g. -20 at H4 timeframe), price at the lowest level since 1985, it was widely expected that the spike would have been in the bulls favor (at least) instead of the bears.

But early Friday morning, the seems impossible thing happened when market spiked down to over 1000 pips on certain brokers chart within 15 minutes after the Tokyo opened. My stops was severely hit (100 pips below than my setting, meaning 200 pips instead of 100) and I was left in the dark on what could have happened that brought to such a flash disaster. Yes, it was like tsunami indeed.

You see, this is in fact a very good example that anything can happen in the market. If there is no risk control for such an extreme event, anyone could have been wiped out from the market especially if you are holding a big position relative to your account size.

Nevertheless the night before, somehow there was a funny feeling that told me that this could happen. All the technical indicators were showing strong bearish conditions, no doubt. But the internal psychology had failed me by keep on pouring fear and culprit believe that the market was about to reverse, at least temporarily and that was the key reason on why I was going long for the GBP/USD, trying to pick bottom in which to me, was technically justified.

But see for yourself, no one is protected here. Perhaps it is a good lesson to me as well as the rest of market's participants.

In summary:

1. Know what you are doing, especially the risks involved.
2. Picking bottom is highly risky, regardless what the technical probability was showing.
3. RISK Management is everything. You decide your risk tolerance upfront and get ready to be wrong.
4. Once the previous support broken (i.e. 1.2795), the market can be bottomless for quite sometimes until it finds a new bottom or support.
5. Sentiment can overrule technical, as well as technical can overrule sentiment. In this case, the fear of "HARD BREXIT" sentiment (or whatever the market wants to call it) seems to make its point very clear on how useless the technical indicators could be and how vulnerable sterling is in the coming months.
6. On this case, the FEAR factor is really showing its dominance, driving the sterling to 'yet-to-be-seen' bottom in my honest opinion.
7. It is not easy not to get fully unemotional when you were caught in such situation. Lost is a lost and you just have to accept it. And yes, learn from it as well.

Have a Nice Week Ahead!

THE EASY WAY TO TRADE FOREX

Gotcha! I knew most would be interested in this topic. If you are not one of them, then you can close this page straight away. Go ahead, no hard feeling for sure.

Still here? Then you must be serious about this. So please stay and read.

Definitely there are both options for you to choose, the hard way vs the easy way. But bear in mind that either way, there are always risk involved. So let me share both options here for you to consider.

THE HARD WAY
1. Study the basics and fundamentals of trading.
2. Attend classrooms, training and seminars.
3. Put extra effort in reading the charts and analyzing the market every day and week.
4. Sleep less due to over commitment to trading and watching the chart, especially when you are new.
5. Read every single books and articles that you can find about trading.
6. Develop your own system and method of trading through trial and errors.
7. Experience losing your hard earned money and strive to improve your trading skills every day.
8. Start with small accounts and put a mission to grow it gradually.
9. Learn, learn and learn.

THE EASY WAY
1. Put your money on somebody you trust to trade, make a deal on the profit sharing arrangement.
2. Use and rely fully on EA's (Expert Advisor) and Robots.
3. Subscribe to any signal provider and just follow.
4. Open multiple small positions and pairs. See what happen and close the one in blue and leave the one in red until it becomes blue, or until your account get the Margin Call. Huhu.
5. Only trade with the extra money that you are willing to lose. Not the one that you obtained from a personal loan or your hard earned savings. I mean you really don't mind losing these money.
6. Gamble. Deposit into your real account, take maximum leverage and go gung-ho with your trading with all-or-nothing attitude. Seriously you may get rich quicker if you manage to get it right every time. Do this if you think risk is just a playground to you.

Enough? Maybe not. You see the point here is that you have options in your hand. You just have to choose which one. If you opt for the easy way, chances of turning yourself into a real trader is very much less compared to the hard way.

In my honest opinion, it is all about process. In order for you to become good at something, it takes effort and hard works. When you hear or see someone saying that it doesn't have to be hard or painstaking, most of the time these people are trying to sell you something. Normally, the reality is a total inverse to what they said.

I don't mean to scare you or distance you away from this trading arena. No, that is not my intention. I just want to highlight that you need to put efforts, patience, discipline and time for you to really develop yourself into something at anything that you do. There is no shortcuts.

Once you make progress from one level to another, then the sense of ease will come automatically. Ask a degree students who are pursuing their masters as well as masters students who are pursuing their PhD's. Chances you will get the same answers on their difficulties. But if you reverse the situation, PhD students would say that pursuing their master was not that difficult as well as masters students would say about their degrees.

But during the process of pursuing it, of course they have to face many challenges and obstacles that stood along the way. Only after overcoming them, or learn on how to overcome them, they would feel that things are actually not that difficult as they first thought it was.

So back to trading forex, yes there are easy ways for you to trade the market. You don't need to use all the indicators available as well as studying the fundamental of each pair to the level that you have to know the birthday of the Japanese Prime Minister. Definitely it is not necessary. But for you to come to that level, you just need to past through certain processes that will turn your maturity from a beginner, amateur, professional to a master trader who can later share his knowledge and experiences to develop new traders in the market.

Even after 9 years of doing this, personally I still feel that there is always something new to learn and experience from the market on daily basis. It is endless indeed. But thank god, the knowledge and experience gained are beyond satisfactory level and the process that I had gone through seems to be priceless. Perhaps it is high time to share this with other aspiring traders like you.

On the same note, please guard yourself from scammers. There are just too many out there. If you are not careful, you will probably be their next prey. So please be careful.

10 TIPS FOR BEGINNERS - HOW TO START AND DEVELOP YOUR FOREX TRADING SKILLS?

Dear Friends and Esteemed New Traders,

I have said this before and I am going to say this again. There is no shortcut to success and if it seems too good to be true, it probably is. In fact it is.

Making money (e.g. online) has always been the interest of everyone, anyone. What more if it can be done in an effortless manner. But the fact is, how many successful people out there that has became successful without putting countless effort to their success? If you read their biography, you know that the figures are probably less than 1%, I mean those who made their fortunes through pure luck and inheritance from their rich fathers and families. The rest like us, we have to work for it. Sounds conservative but that is the fact. No fairy tales here.

If you have the time, kindly browse through my archive and you will see that many tips had been shared since I started this forex venture (as well as this blog) back in 2008. In fact if you google enough, these tips and free lessons are almost everywhere. And yes, you can get it for free. But then, some or probably most still prefer to attend paid classrooms, seminars and training simply to learn from the gurus and those who have vast experience dealing with the market. Fine, if you have the money, of course it is no harm to pay thousands for these classes as long as you are happy with it. I am more than happy if my students are willing to pay me thousands as well. Why not?

But I always asked myself whether the money paid is equivalent to the value that I am offering. Of course you need to compensate me a bit at least for my time and energy, but for sure I will not charge anyone a crazy USD55,000 just to be in my inner circle. Yes, I do not drive a Lamborghini but I have a few decent cars that can take me from point A to point B without any problem. Come on, what makes you think anyone could ever afford to pay that hefty amount just to learn from you. I would rather buy a simple house and turn it into a home-stay with that amount of money. Yes of course you have to charge your students for your time and expertise sharing, but the amount has to be sensible. No harm intended though, just expressing my 2 cents.

Anyway, back to the topic, let me simplify the steps that you have to take if ever you wish to start this venture in the first place. Remember, there are no shortcuts. If you want to play football like Cristiano Ronaldo and earns like Cristiano Ronaldo, you have to at least learn and train like Ronaldo on top of the talent that seems to be a prerequisite. Same thing here. And these tips are mainly from my point of view accordingly to what I have gone through.

So let me put it in point forms for your easier understanding.

1. Objective. Always define your objective. Ask yourself why do you want to trade? For sure the answer is making money. But, there are 2 clusters of traders here that you need to understand from Day 1. Are you a trader? or more to a gambler? If you choose to be a gambler, then you can stop reading and open a live account straightaway, and dump all your money there. Well, maybe you can learn on how to be a wise gambler at least. But seriously I mean it. There is no need to learn further here. Period.

But if you choose to be a trader, you need to learn the steps on how to become a real trader. A real trader in my definition is the one who has the proven entry and exit strategy, prudent risk management and strong trading psychology. Patience and discipline is part of trading psychology that you need to really understand and master.

2. Read. Yes, you must be willing to read. So many claims that they don't have time to read, or maybe reading is not something of their 'thing'. But let me ask you a question. How can you understand the fundamental issues of any of your favorite pair if you refuse to read any news related to them? Oh yeah, of course you can listen too. But trust me, reading is much easier to find since there are more reading materials rather than the one you can listen to. So, please spend some times to read and browse through your favorites news channel and analyst columns. It is worth to pay attention.

3. Analyse. Learn to analyse the charts (technical) as well as the fundamentals. As per my previous post, no doubt analysis is important. In fact, one of the key things that you must really understand is where to locate the support and resistance of the price, the Moving Averages, Fibonacci Levels as well as general trends that drive the daily price actions. It takes time surely for your to understand, but it is well worth it.

4. Account. Especially if you are a real beginner, you must get use to the demo account. This is where you learn and experiment all the technical part of your trading. Once you are ready, then only you should open a real account. One serious advise for you to consider, always open your first live account with minimum investment. In fact nowadays there quite a number of brokers who are giving you free money just by opening an account with them. And one of my trading buddies have turned this USD30 into over USD1000 within few months. Awesome indeed. See, the concept here is really simple. You need to learn to drive a small car before you can even think of driving a Ferrari. When you put little, you got little to lose especially for beginners. First thing first, avoid the get-rich-quick mindset in the first place.

5. Prepare. On top of preparing yourself for the knowledge and skills required to trade profitably, most importantly prepare to lose your money, as well as being wrong with your positions. Yup, nobody wants to lose their money but it is a common advise that you must always invest the money that you are willing to lose. It is part of the process, no trader can skip this. So don't put everything that you have into a single trading account since you will pressure yourself unnecessarily. It is a reverse psychology since those who make a living out of this are those who can consistently take losses from time to time when they are wrong. And trust me, you will get it wrong at times so unless you are prepared for this, your risk of losing your account is very much on the higher probability side.

6. Risk. Understand all the risks associated with forex trading and the true meaning of risk management. Learn how to translate this into your trading positions, sizes and dollar at stake for each and every position that you open. Everything in life has its risk but it is how we learnt to mitigate these risks that matter. The problem is, so many ignore this element and end up crying at the end of the day blaming their gurus as deceivers since they were only told the fairy tale parts of the trading journey.

7. Patience. Always look at the big pictures. Learn to wait and hold your breath as well as your index finger from clicking that buy/sell buttons unless you really know the potential consequences. Adrenaline rush as well as impulsiveness are my biggest enemy even until today. I must always remind myself to stay clam and follow the plan accordingly. This is especially true when I chose to stay out the whole day during the UK Referendum vote counts on last 24th June 2016, when the GBP crosses were dropping for more than 1500 pips on average, especially the GBP/JPY with over 2700 pips on that Friday alone. It was tempting though, but by staying out my account is well protected from the wild volatility for the day.

8. Volatility. If there is one word to describe the forex market from the other markets, this will be the word other than the volumes. As per point #7 above, I must admit that this is the one that can really make or break your account if you are not careful about it. Understand the Random Walk Theory. Though most traders do not buy the idea to this 1973 school of thought, still I find it useful to note that nothing is certain in this life except death. Meaning regardless of how good your analysis or strategies are, you still need to open your mind that anything is possible.

Back in 2009, I lost USD3000 in  a matter 30 seconds when a surprise news hit the wire at 3am local time, causing the market to move over 200 pips on all the USD crosses with all my stop losses hit instantly. I thought it was the broker's manipulation but later realize that there was a vote by the House of the US Representatives on the QE and stimulus plan for the US economy. Lucky I had put stops or else I would lose all my account that night since the follow through was imminent.

9. Psychology. Do not be overconfident as well as lack of confidence. This one is best built through experience as well as learning from others. As a trader, taking risk is just part f the game. Always prepare yourself with surprises. Trading psychology is very much related to the twin forces of fear and greed. These are the real beasts that you need to tame within yourself first before you can start reading the market psychology's in general.

Let's put it this way, nobody is a GOD here. So what I am trying to say is that as long as you are humans, the tendency of being right and wrong is just a matter of chances. You put your verdict accordingly as per your analysis and believe, but no one knows for certain on the potential outcomes, not even Soros or Buffett. So what this has got anything to do with your trading psychology is that when you decide to take a position on the market, a sudden jerk of price either in or against your favor should be handled with a "so what?" attitude. Ask yourself whether 'Am I right?' or 'Am I wrong?' on this one and plan your next course of action accordingly. By having this in your mind, you can then avoid the tendency of being impulsive and changing your thoughts at every tick of the price movement. This in my opinion, will build your long term confidence and crucial so that you would not change your market view every now and then. If the strategy works out well, keep it up. If not, it is probably time to stay out and revise your strategy accordingly.

10. Decisions. Learn how and when to pull the trigger when it matters. This is where patience and discipline play its prime role. Learn to be patience and time your entry well. No one knows for certain when and where is the best price to enter regardless of going short or long. By knowing how to read the chart accordingly, you can pick the best possible price zones for you to trigger your orders. You see this is not only about making the right entries for profitable trades, but most importantly applicable to decisions on when to exit a bad trade. Trust me, this is the hardest thing to do in trading. But this is the key to your survival and account protection. When you are wrong, you have to get out. Of course you may ask what if the market make a U-turn back to my favor? Yes, it may. This is where I emphasize that you need to interpret the chart accordingly. Prior to entry, it is mandatory for you to decide where your exit point is, or better known as stop loss in case the trade goes really bad. Otherwise, margin call (MC) will probably be your best friend. I heard some gurus told their students that MC is ok because you will learn from it. Yes indeed it is ok for an account within the hundreds zone. But for account amounting, say 5k and above, margin call is definitely a big NO NO to me.

Just remember that making and losing money is just part of the process, but survival is a must especially when you start trading big accounts. Anything above USD1000 can be treated as big account already especially if you are using leverage 1:200 and above.

Again, these are just my opinions based on what I have personally experience through from the past years. Of course you can get into more details, but the fundamentals are the same.

Hope this helps. Feel free to drop me an email or you can Whatsapp me @ +6011119627262 if you need further assistance.

Have A Nice Day!

THE IMPORTANCE OF ANALYSIS

Analysis is important prior to any decision making since it will give you consistent view on the action that you are about to make. In terms of trading, this includes the decision either to go long, short or simply to stay aside. Though some claims that analysis is just a self-fulfilling prophecy, still it is vital to ensure that you are systematically taking calculated-risk decisions from time to time. Yes you can rely on those reports by market analysts from many online brokers out there. But wouldn't it be nice to generate and having faith in your own analysis instead? So that if anything happen to your trading positions, you know by heart that you are fully responsible instead of blaming those market analysts who provide opinions that made you clicked the buy instead of sell button.

You will also learn a lot from these self-analysis that makes you become more and more independent each day. After all, this is how you learn on how to ride the profits and cut the losses by understanding the key components in your trading. So instead of taking only 10 pips on every trade, you will understand where to put your reasonable profit targets as well as your stop losses by doing a self-market analysis.

Let's get straight to the points. There are basically 5 things that you need to analyse in particular.

1. TECHNICAL ANALYSIS

This is where all your indicators play its role including the Candlestick chart. You name it. Although indicators will show you the past performance of that particular pair, it does not guarantee the future moves, but it will somehow give you the best probabilities based on previous trending and market movements.

Technical always and will always be my first choice of analysis since market tend to repeat by itself from time to time. Furthermore, most market participants are technicians in general. At certain price levels especially at those key support and resistance areas, bulls and bears are clearly taking turns in determining the market directions, regardless whether short or long term. The thing is, the stronger party always win. Again, though many claims that technical levels are self-fulfilling prophecy, still it is a must for all traders to at least learn and understand a few of these indicators. Otherwise, it would be very hard for you to time your entry and exit especially if you plan to scalp the market.

2. FUNDAMENTAL ANALYSIS

Fundamental relates to the background issues (i.e. mainly geopolitical) with regard to any particular pair that you wish to trade. This relates to that country's fiscal and financial policies, interest rates as well as economic fundamentals. When you do fundamental analysis, you basically compare both countries fundamentals (say US vs Japan) and decide which is stronger than the other based on the current fundamental issues.

I don't want to put all the economic jargon here so my definition is always on the basis to simplify your understanding. The simplest way to do the fundamental analysis is to be aware on the weekly economics calendar (& events) and spend a while reading and understanding the online news (i.e. Bloomberg, Telegraph, Action Forex etc) and updates on daily basis. It is not that difficult after all, in fact simpler than the technical analysis.

Keeping yourself updated is a must so that you have the latest issues in your head prior to making any trade decision afterwards. Nevertheless, always bear in mind that fundamental does not necessarily translate into direct market movement and trending since the basis of bullishness and bearishness of each pairs have many elements that has to be factored in. It is what the market participants are doing that moves the market, not simply the fundamental news.

3. SENTIMENT ANALYSIS

Sentiment Analysis is another unique element of trading that some of my trading colleagues are having difficulties to understand. At times, I am personally bombarded with questions "How do you know?", "How sure are you?", "Where did you get this idea?" etc etc. Of course I would not know for certain. No one does. But don't forget that sentiment is something that you can see with your eyes open as well. How the market reacts and move the price is the one that indicates the real sentiment in the market, especially when a strong trending (i.e. Bullish or Bearish) is currently in place. If I can simplify it further, I would say it is how you feel about the market, without being bias to either bulls or bears.

Sentiments do relate to both technical and fundamental analysis. That is the reason why you need to know both. Why? Because the market is made of people and people act accordingly to their believes. Hence for example if a price is approaching a key resistance level, say at 61.8% Fibonacci level, or triple zeros (e.g. 1.3000) it is not necessary that it will make a u-turn there. You need to blend both technical and fundamental issues since this is the one that generate the current sentiment, or so called market believe at that particular moment of time. So if the sentiment is strong, normally the market break all these supposedly resistance or support level without even looking back. They move together like a herd and conduct stampede from time to time that at times leaving you wondering what is going on.


4. PRICE ACTION (PA) ANALYSIS

Price action is basically a part of technical analysis. It is a direct indication on who is in control at that particular point of time or time frame. Hence, even though you plan to go long based on all your analysis above, it is worth to pay attention to the current price action in order to make the best possible entries.

It is simply done by understanding the Japanese candlestick movement accordingly to your favorite time frame. I used to watch even the 5M (5 minutes) time frame previously but nowadays 15M tend to be my favorite. Of course technically I used all the time frame from 15M above, including the monthly chart as well for my PA analysis. But for scalping and entry purpose, 15M as well as 1HR interval tends to be my most preferred time frame for my intra-day trading decisions.

Learn and understand the various patterns of the shooting stars, dojis, hammers and haramis so that in can be translated into your personal trading signals. These patterns are among the easiest thing to understand so spend some times in learning them. Another thing, you need to watch the price momentum as well since during market trending, sideways and breakout, the price momentum varies from one another. Therefore, as mentioned above, understanding the price action patterns is also vital particularly for your entry and exit timing.

5. SELF ANALYSIS

Believe it or not, this is the mother of all analysis. You know why? Because regardless of what is happening in the market, it will do no harm to your trading account as long as you do nothing. Nevertheless, losing control of yourself due to some personal reasons, fatigue, frustration, tension, or probably work stress will definitely be translated into impulsiveness and poor trading decisions. I must admit that this is the hardest analysis to do in trading.

Hence, I would say that on top of all the analysis that I have outlined above, this one you need to ask yourself since no one else can tell about your state of mind except yourself. How to do this? Check my previous 2 posts and you will find the answer on the RWAPD Method. Again, I must emphasize that this is the hardest analysis to master unless you can be true to yourself, throw your ego away, admit your weaknesses and work to improve them as you move on. Otherwise, you will consistently self-destruct your trading accounts.

RESPECT THE NEWS... BUT LISTEN TO THE MARKET

Believe it or not, there are so many instances when technical setups were ruined due to sudden economic news released that either accelerate or reverse the existing trend and market momentum, creating gigantic spikes that either hit your TP or SL (if you have one). One of the best Central Bank that likes to surprise the market from time to time is no other than the BOJ. (Bank of Japan)

To make it worse, retail traders like us especially the newbies have no idea on what was going on. If they got lucky, they may be riding a favorable move that happened to be breaking out right after their entry. Nevertheless for those riding on the opposite site, most will probably be clueless on what was happening and only realized that they were on the wrong side of the market once the official news hit the wire.

So, please be careful.

The point here is simple. If you are a serious trader, regardless whether you are a swinger or (especially) a scalper, please take serious note on all potential economic news for the day, weeks and months. There are many websites out there that highlights these daily and weekly economic news and one of my favorite is forexfactory.com. On top of that, you can also have these on your i-Phone or Android by simply downloading free applications like MyFxBook from the Play Store.

At the same time, do not forget to also check the major news channel and website like Bloomberg, Telegraph, FT, CNBC and CNN since keeping yourself update on the latest central banks policy as well as the current geopolitical sentiment like Brexit, US Presidential election, Turkey Coup attempt, terrorist attacks, QE and stimulus plan is a must since these news will somehow move the market.

I do not ask you to become a market specialist or an expert economist, but again keeping yourself update is a must. All you need to do is just read the headlines, to say the least. It will keep your market views between technical and fundamental in balance at all time. This in return will provide you with the additional edge that you definitely need in making sound trading decisions, regardless of going long, short or simply stay out from the market for any pair that you wish to trade.

You know why this is important? Regardless of how technical you are, the market is always fundamentally driven by humans. Traders are made of humans that conceal the emotional feeling of greed and fear at all time.

Therefore as a serious trader, it is our task to continuously analyse and understand the market's behavior and psychology based on the latest sentiments. Sentiment in my simple definition, is the market's believe that will normally last longer than you expected until the next news hit the wire.

On the other hand, no doubt that technical move works best when there is no big news around the corner, in which market technicians will utilize all sort of technical tools available in their trading platform to speculate the next potential move by market participants, especially the Moving Averages', Fibonacci, Support and Resistance Levels, RSI etc just to name a few. You too should take advantage accordingly when this is happening since the conditioning of market's psychology will be probably based on equal technical perspective.

But when big news like the NFP, FOMC, Interest Rate, GDP, CPI/PPI etc, most market technicians will stay away at least for a while due to potential high volatility that these news will bring once the figures are released. So again, please be careful.

Now back to the original topic above, again please respect the news but listen to the market.

What is meant here is very simple.

Whenever there are significant economic news for the week or the day, say NFP at 8.30am EST on the first Friday of the month, take note on the data released at that particular time. So unless you want to gamble with your trade, it is worth to respect these specific time and do not assume how the market will react. No one knows for certain.

Now it comes to the listening part.

After the news release, do not bother about the economic figure so much. What matters now is how the market response to that figures? What sort of sentiment is created after this news released?

This is definitely more critical to your trading decisions since you should not blindly going long for the USD even though the US data were super positive. How the market response must be observed and listened closely since there are many underlying reasons that generates the bullishness or the bearishness of the market participants in general. Movement could be in favor to the USD due to Risk Aversion but can also go against the USD due to Risk Appetite.

The easiest way is let the market settle down, and follow the trend afterwards.

In short, pay attention to the news release, understand the sentiment and later just follow the trend based on the price action. The good thing on paying attention to these news release as well as observing the market's response is that it will provide you with better entry opportunities, regardless what position that you are taking in the market.

There is no need to be emotional here. Just accept the fact that the market is always right, regardless what they are doing. If you cannot stand the heat, just stay out at least for a while. Period.

IT IS ALL ABOUT PATIENCE & DISCIPLINE...

Refining a technical system, understanding the fundamentals of the market, absorbing the markets' sentiment as well as studying the price actions are all the basic elements of making good entries and identifying good setups for your trade.

But none of these are useful unless you have blend them well with true self-patience and discipline.

Trust me, even after 9 years of trading forex, I still regard these 2 components are the remaining 20% of the subject that I have yet to fully graduate. It's definitely easy said than done for sure. By looking at the figure itself, clearly it is a Pareto Rule in which these 20% gaps consistently contribute to the 80% of my trading problems.

PATIENCE... PATIENCE... PATIENCE...

If only I could wait a little bit longer, I would have gotten a better entry or probably exit price for the trade. If I could be a little bit more patience, If, If and If... the story lines remain the same.

DISCIPLINE... DISCIPLINE... DISCIPLINE...

Same thing here. Why didn't I stick to the Risk Management plan that I have developed upfront? Why was I so impulsive to jump in without really seeing the big picture? Why didn't I stick to the set TP and SL target? and so on. Lack of discipline making you into a highly emotional trader that decides impulsively from time to time.

Sounds common right? I knew you agree with me.

Nevertheless, there is a solution to these problems.

PRACTICE... PRACTICE... PRACTICE...

Yes. Practice makes perfect. What else?

Patience and Discipline can be practiced indeed. Though it may take a while, but through a systematic approach for your trading, you will improve your patience and discipline as time goes by.

Let me give you some tips on how to practice patience and discipline for your trading. I call it the RWAPD Method. Of course I developed this myself and self-applied on day to day basis. Trust me, it works!

1. Relax - Always start your day with a deep breath. Just relax. If caffeine can help you on that, go get a cup of coffee before you switch on your MT4.

2. Wait and Watch - Sit in front of your notebook and watch what's going on. As you know, the markets are basically having 4 kind of moves in general, so just watch what the market is doing right now whether it is ranging sideways, choppy, trending or about to break out.

3. Analyse and Assess - After doing the first two, then only you start analyzing and assessing the overall market's condition. What time is it now? Is the market tradable? Who's in control - The Bulls vs The Bears? Is there any news coming up? Where are the support and resistance? Etc etc. Analysis should cover all the 4 elements of technical, fundamental, sentiment as well as price action.

4. Paper Trade - Now that you have analysed the market accordingly, doesn't mean that the market will move accordingly to your analysis. Unless you really see a very good setup in front of your eyes that gives you no reason not to enter, the best is always to paper trade. This is how you develop your patience and discipline accordingly by not jumping into the market straight away. Just open imaginary positions by writing the intended short or long position on a piece of paper, or probably in your trading journal if you have one. From there, see how it goes. If the Paper Trade turns out to be good, wait for the next wave to enter. If it turns out to be bad, you knew that you saved yourself for a better trade then. Don't worry on missing a good trade, worry more on entering a bad trade. Yes, it is that simple.

5. Decision - Now after doing all the 4 things above, it is time to decide. Should you enter or should you just stay away from the market. Of course you can also set pending orders, which is totally up to you. If not sure, take my advise just by staying out, at least for a while. Why? This is because to me "NO TRADE IS ALWAYS BETTER THAN A BAD TRADE". So you decide wisely. The make or break of your account is just a click away from the market. If you are not careful, the market will always have this power of mass destruction to your account, and vise versa.

Alright. I hope it helps especially to those aspiring new traders out there. I am not an expert but for sure I know what I'm doing.

Till then, have a nice day!

IT'S BEEN 3 YEARS SINCE MY LAST POST

Wow. Surprisingly it is 3 years indeed. Now that I am working in the middle of the Iraqi desert, I guess the photo below is pretty relevant. Nothing to do with forex though. :)

Nevertheless, at the time of this writing:
1. Brent Crude is at USD 34.74 and WTI is at USD33.62 (had hit as low as USD27 on previous weeks)
2. The world economy looks gloomy in general.
3. The crisis in Middle East continues. (you can Google since I am not qualified to write about this)
4. Kedah is about to change it's Chief Minister.
5. Malaysian PM still Najib Tun Razak.
6. Ringgit Malaysia (RM) is at 4.15 against the greenback.
7. Gasoline price is at RM2.05 for RON97 and RM1.75 for RON95. Thanks to the Government, finally some sensible reduction with regards to World's crude price.

Well, as far as forex trading is concern, I guess the skill remain intact as it is since I still monitor the market as well as price action on daily basis. Accounts remain alive with minimum amount of investment. The fact is I am not a millionaire to date since I still need to keep my day job for security reasons. But of course there is always Plan B in case of anything, and definitely trading is one of it.

Looking at the trending of the market, I just want to share one of the fundamental knowledge that I learned previously. Among the key things that every forex trader must know with regard to market movement are as follows:
1. Trending Up or Down (Bullish vs Bearish)
2. Sideways within certain price range (Sheepish)
3. Breakouts - a tsunami of either up/down side, especially during news release (i.e. NFP, Interest Rate, BREXIT, CPI/PPI etc)
4. Choppy or Zig Zagging - this is my own definition based on experience. Something that is not in the Economic Calendar but certainly can kill your account. Normally an equal strength between the Bulls and the Bears.

There you go. 4 type of market movements that you need to understand. plus one more as below.

5. Quiet & Thin - hardly move either way wit low liquidity. Normally during Bank Holidays, Monday morning as well as late evening after London session is close. Careful not to trade during these hours since it is subject to market makers manipulation with bigger spreads on every currency pairs.

Back to daily life, I have been working in the Middle East for the past 18 months (yes, same job with same company) and with average internet connection over there (luckily still has connection) definitely trading the forex spot market will be a big NO NO. Well never mind. Until next time (perhaps another 3 years LOL), take care folks.

PLANNING IS JUST AS VITAL AS PROPER EXECUTION...

There are too many instances when people did question me about the planning that I have or currently doing. Yes although they have a point in saying that there is no point of good planning if we can never execute it as per plan, but still planning is still everything in any single thing that I do in a day.

Without doubt, I believe most will not argue on this point.

Just in case those who questioned me do read this article by accident or purpose, let me re-iterate the importance of having a plan in anything that you do, no matter what.

1. Every single minute spent on planning will save you 10 minutes in terms of execution. Have heard this before? Yes, I really believe in this phrase.

2. You are like committing suicide when you embark or adventure into something without first knowing at what you're playing with and without proper entry or exit plan.

3. Fail to plan and you are planning to fail. Sounds common too...

4. Planning will provide you with a benchmark whether everything is on track or otherwise.

5, Planning will give you better chances of success.

6. If you read Sun Tzu's Art of War... it is all about planning on how the Chinese Ancients are preparing themselve for Wars... and even applicable to today's business world.

7. You jump I jump... No such thing man... I must know where you are planning to jump first... So, planning to me... is almost everything.

If I have 10 hours of getting the jobs done, I would spend at least 6 hours on the planning works...

Even in your marriage and relationship with others... you need to plan what are the things that you are going to embark and achieve together.

Trading forex? Of course... I would spend hours and days on the planning side.

So much to write indeed but I decided to cut it short coz the point is... Start planning now! It is something that you should enjoy doing at the same time because it's give you a vivid image of the futures...

Even in golf I need to plan every shot before making one... Whether the execution is 100% according to plan or not, that is different story...

THINGS ARE HAPPENING... I SUPPOSED...

Having a glance on the forex market today, I have a bad feeling that things are falling apart, indeed. The worries that we read, watched and listened from previous years are turning into reality, NOW rather than sooner or later.

Gooossshhhh... It's like a big tsunami is on its way... Where is Captain America? WHAT IS GOING ON WITH THE US DOLLAR?

Will it collapse as per what everybody is saying? The consequences of printing money at will...

Even the Americans are losing confidence on its own currency. Then what about us?

Let's look at gold prices and precious metals for instance. No one is dare enough to hold the dollar any longer, well at least from a laymen point of view.

Well, my view doesn't really matter indeed at this point as what matters are what is happening next?

What I knew for sure is that the biggest holder of US bonds and treasuries are liquidating their assets in US Dollar in stages... meaning getting away from the dollar as soon as they could...

The NIA (National Inflation Association) of the United States are sending alerts for Americans to be prepared and ready for hyper-inflation and how they correctly predicted the rise of metal price almost perfectly...

I am scared indeed. The video that I watched a few months back was telling the truth...

IT IS HAPPENING GUYS!

Could this be the collapse of the world financial system or would it be the United States alone? In due time, we shall see...

For now, take care of your money and don't keep it in your savings account... Buy properties, lands, metals or whatever investment mechanisms that you could trust since the paper money is losing its value... faster that you could imagine.

But of course, you need to keep some for your roti canai and groceries... ;)

Have A Nice Day.

A DIRECT EQUATION INDEED...

The longer I stay and watch the market without doing anything, the more I realized and agreed on what trading is all about, regardless of what system or indicators that I am using.

I come to a conclusion that it's always the basic principles that prevail. This is just a game of probability and proper risk management.

The bare candlesticks of  the weekly, daily, 4 hourly and hourly movement are always the best things to study and analyse, plus some Fibonacci levels to watch, moving averages, market volume as well as RSI and Stochastics (and some others as you wish to use) that really serve as road signs on where are the likelihood of these bulls and bears could be running.

Initially, back in January 2008, I thought trading was indeed simple. I can always make money simply by using a 97 dollar robot or system that later proven to be otherwise.

Then I made it into a complicated beast by really studying every single thing that I could, buying every forex book available at amazon.com, reading every single article that I could find from google, and participate in forums that I thought could give me some edge with my trading decision. In the end, I still lose money along the way, as 90% of traders always do. Sounds common and pathetic right?

So, where is this going? I knew by heart that most (if not all) traders felt the same way as I did and 90% of them either keep on losing money or totally pull themselves out of this trading arena.

To me, the key is always about learning. Learning is a must and a continuous process. But not many, and I mean most traders forget about the basic principle of achieving success in whatever they do.

It's all about hard work and perseverance on top of their learning efforts. Nothing comes easy guys...

Something that I learned from golf, life is full of hazards and risk that you have to face. It's always there. It's either you embrace them or stay away from them. You have the options and you got to take it accordingly to your capability rather than emotional basis.

So when I look back at trading, I always see the hazards and risk involved whenever I start planning to open a position in the market. It is a direct equation of my own action and decision.

What I meant by direct equation is really simple...

1. BIG RISK = BIG REWARD
2. SMALL RISK = SMALL REWARD
3. CALCULATED RISK = LONG TERM REWARD

So, which one do you prefer? For No 1, you all knew the consequences. The aftermath of such risk taking attitude is normally, short and painful.

So, stay out from No 1.

For No 2, small risk could result in long term survival but chances are, you may not make it to the top. Base on research and analysis, small businesses could only prosper if and only if you have the consistent volumes. In this case, unless you have a 100,000 dollar account, then keeping your position small would not be very wise as it could take 100 years for you to build up a strong account. Even that, if you keep on losing on small risk, the final numbers would still be big and equivalent to No 1, considering that you keep on losing, which to me, could and had happened occasionally.

So, use No 2 only on highly uncertain situations. Or best still, don't take risk at all in such condition.

Hence, now it comes No 3 which is calculated risk. This is the risk that you have to embrace accordingly to your capability and calculative skills. The big question is on when and how to take calculated risk accordingly.

This is the secret that i wish to share with you guys... it works very well...

1. Stay out from the market as long as possible... don't even bother to watch... pretend that you are not interested... just do something else...

2. Watch the market without any interest and make your own analysis base on the movement that had happened... treat yourself as a currency analyst and produce an opinion...

3. Factorised both the technical and fundamental aspect of the market and emphatized on what is really going on... still... stay out...

4. Read action forex, check the economic calendar and browse through bloomberg in order to see whether there is any key geo-political news that you may miss out (ie tsunami and nucklear issue of Japan).

5. Last but not least, look at the charts and ask yourself whether is there any reason for you not to enter the market at this point of time? If yes, stay out and wait for the next day...

Those written above may sound conservative at first... but trust me guys... try it and you'll see... Base on the 5 elements, then take risk accordingly to your account size... perhaps 3% to 5% of your account size should be good enough. Sometimes, I do risk up to 10% when the situation is really favorable.

So, in conclusion, risk accordingly and embrace them... you can't get it right all the time anyway. But one thing for sure, if you're wrong... just get out and raise the white flag... don't ever fight the market force.

Fighting the market is like you alone fighting your own government... there's no way you can win.

Till then... take care and have a nice day.

ALL TRADERS MUST SEE THIS...

This video is not produced by me... but rather a reknowned economic expert whom is worth for you to pay attention to. Thanks Sanusi for pointing this out... it is scary indeed...

Just click here.

Have A Nice Day

MY LATEST RULES OF ENTRY...

I've been pretty busy lately due to some ongoing works and personal matters that need to be resolved. Anyway, just to share some of my written rules of trading that I apply personally whenever I am in front of my trading screens... it works so well for me...

1. NO MATTER WHAT... DO NOT ENTER THE MARKET BLINDLY... WE’RE SNIPING HERE SO DON’T WASTE YOUR BULLETS OR BE TRAPPED UNNECESSARILY. THE ENEMIES ARE SMART!

2. Check out Action Forex. Get the general ideas on what’s going on fundamentally.

3. Mark up the key technical levels mentioned in action fx on the trading whiteboard.

4. Check the Bloomberg for any potential breaking news.

5. Later, checkout the weekly and daily economic news release. What and when will be the high volume trading hours probability. Plan.

6. Then technically, check the Fibonacci levels on pairs that you see tradable. Check level on all timeframes from 4 hrs, Daily to Weekly.

7. Analyse the price action on each pair for the day. BULLISH, BEARISH OR SIDEWAYS?

8. What is the current direction and range so far?

9. Main pairs would be EUR/USD, GBP/USD and AUD/USD.

10. Crosses would be EUR/JPY, GBP/JPY and AUD/JPY.

11. Remaining two’s are USD/JPY and USD/CAD.

12. NOT SURE? Demo trade first and feel the market’s psychology. Watch the 15EMAs closely.

13. Generally we have equal buyers vs sellers, buyers dominance or sellers dominance.

14. LOOK AT THE BIG PICTURE. See what is happening and make a choice. Mark it up on your whiteboard. Buy/Sell ONLY at these critical lines – pivot, support, resistance and MA.

15. REMINDER : Normally it is not easy for an established trend to change direction, but you must time your entry and exit accordingly.

16. DO NOT BE TOO CONFIDENT OR TOO FEAR IN TAKING DECISIONS.

17. POSITION ACCORDINGLY BASE ON CALCULATED SAFETY MEASURES.

18. HOW MUCH ARE YOU WILLING TO LOSE IN CASE IF YOU’RE WRONG? ONLY TAKE CALCULATED RISKS...

19. THINK...

20. ACCOUNT PROTECTION IS THE MAIN OBJECTIVE IN EVERY SINGLE TRADE.

21. WHEN YOU ARE WRONG, GET OUT… OR AT LEAST STICK TO THE DTR (Dollar To Risk) DECIDED EARLIER.

Have A Nice Weekend... ;)

HAVE I GRADUATED FROM THE FOREX SCHOOL?

I guess not, still plenty to learn for sure... and before I forget, Happy belated New Year 2011 to everyone who is reading this...

There's nothing much to write actually on my 1st post for 2011. But frankly speaking, I am really considering my options to either retire early or changing my careers within this coming months, though not really sure which direction is the best for now.

2010 was full of challenges and some of them are still here for me to face and manage. I am indeed in a mid-career crisis at the moment that requires deeper thinking and considerations before any major decision could be taken.

As far as my forex is concern, I do believe that I deserve a degree after doing it almost every day for the past 3 years, or perhaps at least an advance diploma. This year onwards, I am probably pursuing my master degree already and maybe in the next 5 years, perhaps I deserve a PhD by the time I could have and manage a 6 figure account.

Anyway, most importantly is to make money to survive and prosper. This is a business after all so I should cut all the nonsense and focus on what I need to do to become an even better trader.

As I always said and mentioned repeatedly, this thing requires a lot of patience and discipline in order to succeed. Nothing comes easy for sure but it does become easier as you cruise along with strong patience and believe.The key words here are continuous learning and never give up...

Making Money vs Losing Money... either way it has its own implication. When you make money, you feel like angels, getting it right most of the time, happy and a little bit greedy here and there as you never felt enough... but when you loose money, you learn to appreciate the market better, the importance of proper risk management and ways to control yourself from knocking your head to the wall.

Both have its pros and cons but of course... the consequences of losing money could be greater as not all of us have the strength to take such knocks.

Last but not least... have I graduated from the forex school? I don't think so as learning is always a continuous process. Once you feel complacent about the skills and experiences that you already gained, you will become lazy and careless in which these will be the major killers to the potential growth.

For sure I am more experienced now than 3 years ago but still... the future remains a mystery... I can plan but the rest, I have to leave it to the Creator to decide... perhaps my 1st million will come from here, or perhaps from something else that I never thought about... Either way, I don't mind as long as it comes from a Halal source...

Have a Blessing New Year Guys & Gals... ;)

FOREX... 15 THINGS THAT YOU MUST UNDERSTAND BEFORE YOU START...

1. RISK INVOLVED

After 3 years of doing this, I strongly believe that this should be the utmost importance of all. Without it, trust me, your account is just like a time-bomb. A matter of when rather than how it will burn out. Of course you may not appreciate this at the beginning of your trading journey, but sooner or later you will know that trading successfully is all about prudent risk management. Without it, like I said before, all you need is a single mistake to burn out everything. One simple mistake... that's all. To experience this, just open a real account, regardless of how much you deposited in, risk everything in one single trade and hang-on to your losing position... just see what happen. KAABOOM! (though you may profited initially for the first few trades)

2. IT'S NOT A "GET RICH QUICK SCHEME"

Most (new) traders treat trading like a big casino where they can dump their hard-earned cash and turn it into a million dollar within 3 months. You may get lucky at times, but your luck will definitely running out sooner or later. Try as you may, but I can guarantee that you can never become rich quickly by trading. It takes time to become successful at anything.

3. TECHNICAL INDICATORS

These are the real instrument that you MUST understand before you trade. Regardless of what system or indicators that you choose to buy or apply, just make sure that you thoroughly understand what the indicators are telling, I mean the market behaviors in particular. There are just too many hypes out there telling you the short cuts of trading. Trading is pretty simple actually but to make it even simpler by simply buying or selling currency pairs base 100% of signals are very very risky indeed. Why, because there is no system that can fit 100% on every market's condition. Each system has its own advantages vs disadvantages.

4. FUNDAMENTAL INDICATORS

Just like technical, fundamental indicators have its own equal share on the market. Some traders even rely 100% on fundamental rather than technical in their trading decision. Talking about fundamental though, to me anything that creates fear or greed is something that worth for you to put your attention on. Why? Because we're all human. We have fear and greed and learning how to control and manipulate these two factors are something that is worthwhile to our trading decision. Fundamental includes political, geological and economic news, calendar as well as economic facts and figures. Easy said, anything that the country or bank leaders are doing has its own effect on the market. My point is, just pay attention and understand the sentiment accordingly.

5. FOREX TERMS AND JARGONS

Though these terms do not guarantee your profit but somehow you need to know them. Otherwise how do you call yourself a trader when you are blurred when people are talking about margin, leverage, spread and all those forex jargons? Got the point? You don't need to remember all but if you can come to a point when you can fully comprehend a report talking about risk aversion versus risk appetite, then you should be ok.

6. WHAT TYPE OF TRADERS ARE YOU?

Well, this is definitely going to take you some times before you can really figure it out. Are you a scalper or a swinger? What type of risk appetite that you have within you? Are you a wolf, a ship, a bear or what? Try to know and understand yourself first.

7. THE IMPORTANCE OF DEMO ACCOUNT

Guys & Ladies, demo account is a practise account that is crash-proof because you don't have real money in it. It is important though because it's like a driving range if you compare it to golf... A place where you start learning how to swing, hit the ball cleanly and drive it to distance. You need to keep your demo account alive regardless of whether you have a live account or not. This is the place where you check your strategy, counter check your temptation and so on. Yes it is easy to play demo, but if you want to listen to my advice, treat the demo like real and treat the real like demo... and tell me the result... That is one of my little secret indeed...

8. PSYCHOLOGICAL AND EMOTIONAL CONTROL

Are you a balanced person? If you can't control your temper, chances are you can't become a good trader. You need to be very calm, relax and steady during trading or otherwise most of your trading decision would be based on impulsiveness rather than logical and technical justification.

9. WHAT DRIVES THE MARKET?

The point here is to understand that the main driver of the pair prices (ie USD/JPY @ 84.00) are people. People BUY and people SELL regardless of where they came from, banks, institutional, retail etc. The underlying factors of buying vs selling is all depending on FEAR vs GREED... in which people buy when they feel optimist that the price will go up, and sell when they believe that the price will go down. Either way, no one is 100% correct because majority wins. Understand this first before you start learning in detail about Advance candlesticks, Ichimoku, Rising Star etc etc which to me, is less important. This is the most basic element and yet so many fail to appreciate the concept.

10. THE MARKET HOURS AND VOLUMES

The 5 sessions in a day that you need to pay attention to are Sydney, Tokyo, Dubai, London and New York. Normally what matters are mainly London across New York hours but I include Dubai as well as there are surprises coming from the Middle East countries that are worth for you to pay attention as well. Watch the volumes as well as this is a direct indicator of volatility on price actions that you may take advantage of. Compare these hours to your local time and mark them accordingly. The point here is that not all hours are tradable especially the Asian Session where normally volumes are low and price actions are pretty static.


11. HOW TO MAKE ENTRY DECISION?

Have a system or perhaps buy one if you need to. Study and understand how the system works and follow it dilligently. Base on experience, it is easier and more accurate to make a trade decision base on technical indicators rather than fundamental but you need to blend it well with market hours, news and fundamental aspects of the overall market sentiment. Only enter when you have no reason not to enter. If you are 50/50, either stay out or cut your risk factor to 50% than normal...

12. LEARN TO OBSERVE AND DO NOTHING BUT WATCH

Yes, this is all about patience and discipline. The reason behind this is simply to train yourself from being impulsive in making your entry decision. Definitely it is not easy but if you can master this one, the rest are just piece of cakes. Trust me, you will appreciate the market better simply by watching and analysing what is happening in the market.

13. YOUR TRADING HOURS

Determine your best trading hours in a particular day or week. If you have a family to take care of, just like me, you can't take them for granted by simply sitting in front of your trading station all day long. You need to go out and plan your time accordingly. Plan in advance so that you can minimise distractions during your trading hours... but of course... stay flexible.

14. TRADING TOOLS AND FACILITIES

A notebook, pc and a desk should be sufficient enough to start but somehow are not sufficient for you to make good decision with your entries. More screens will give you better perspective on the market's condition, especially the price actions on several inter-related pairs that you plan to trade. Invest a bit because it's worth it... perhaps one item at a time.

15. MARKET CONDITION

Ranging, Trending and Breaking. The 3 basic types of market movement. Each has its own advantages and disadvantages and I don't plan to elaborate them any further here. 60% of the time, the market is always ranging. 30% trending either bullish or bearish and 10% breaking out, either up or down. Learn how to identify market mode and take advantage accordingly. That's all. You may need different type of strategy for different type of market's condition.

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All in all, all these may sound too complicated for you especially if you are a complete beginner.

The fact is... IT IS.

But trust me, these things listed above are do-able and master-able, meaning that you too can and will grab the concepts provided you give enough time for yourself to learn.

I tried my best to simplify them. Though trading wise you don't actually need to remember all of these elements, but the fact is you need to know them, one at a time and master the ideas in a pre-determined period of time, say 6 months to 3 years for example.

Just imagine a pilot and a passenger of a Boeing 747. Are they equal in particular? Yes they do in terms of humanity and perhaps physical too. But thinking about the skills, training, experience, competency and responsibility involved... I believe no question is asked on who's who.

The pilots are lesser than 10% from the passengers and yet they are the one who makes money rather than the passengers. Does this sound familiar from trading perspective?

So ask yourself and if you get my point, unless you have the intention to become a pilot in this trading arena which is not easy from the beginning, you better spend your money somewhere else rather than keep on paying the pilots and hoping that someday you will be able to fly the Boeing by yourself just like you did in your PS3 or X-Box consoles.

Trust me, it's not gonna happen unless you go to a pilot school.

HOW TO TIME YOUR ENTRY WELL... FOR SCALPERS...

1. First and foremost, avoid the Asian Session or at least minimise your trading activity. Market volume is particularly low during most Asian Sessions.

2. Trade the London Session only. This session is always the best as it presents a whole bundle of opportunities to scalp either way using a smaller time-frame, in which in this case I always prefer the 15 minutes.

3. Be particularly aware of the 1 hour interval, followed by 15 minutes and so on. Minimise your entry anything in between. I personally do not prefer or recommend the M1 timeframe but there are scalpers using this TF for sure.

4. Check the economic news release time for the day. Either you enter 15 minutes before or after the news or just stay out. Never be caught unaware... It's costly.

5. Watch and mark the daily top and bottom plus previous day top and bottom as well as the week's high and low. These levels are vital for scalpers in order to time your entry particularly during a directionless market.

6. Scalpers should use more technical indicators rather than fundamental.

7. Set your trading plan upfront and stick to the plan, ie 100 pips (ie 10 pips x 10 trades) or 100 dollars. What is your target/aim for the day. Go for it...

8. Study the market condition first. Not all days are good for you to scalp. If the market is not moving, just stay out... don't put blind hope unless you have a technical reason to hold on to your position.

9. Choose your tradable pair accordingly. Do not trade all the pairs or open too many positions that you yourself start to forget about.

10. Above all, always apply strict money management rules. You will be wrong at times for sure but prudent money management strategy will protect your account. Of course this is easy said than done...

Last but not least, set your TP and SL accordingly, normally in a close range in which from my point of view, scalpers shall focus more on entry accuracy rather than aiming for a home-run in each trade.

It's a bit tedious but statistically, it has shown that scalping is more exciting and profitable to me.

Have A Nice Day.