The main problem that most new and experienced traders face is foreign exchange market, - stability of earnings. Situations when profit from currency speculation fluctuates from zero to half of capital, and sometimes even turns into a loss, are familiar to everyone. How to make trading more predictable? How to consistently make money on the Forex market? Let's look at the reasons why trading is becoming gambling with unpredictable results, and ways to make trading income more constant.
The main enemy of a trader is lack of discipline
In trading, discipline is as important as having a good trading strategy. Traders who constantly violate the rules of their own system rarely achieve success in the Forex market. There is no talk of stability of results with this approach. Why is it so important to adhere to the rules of a trading strategy and not open trades under the influence of intuition?
Any trading system, whether copyrighted or posted on the Internet, must be tested on historical data and a demo account before being used with real money. This stage is necessary to obtain statistics and have a clear idea of what you can count on in the future. Essentially, with qualitative testing you can predict future financial results your trading using this system.
What happens when a trader deviates from the rules of the strategy? Having opened a trade at least once not following a signal, there is no longer any point in counting on getting the result expected from testing. If the order is profitable, you will increase total profit per month. Otherwise, you will receive unjustified losses. The more often you break the rules and trade not according to signals, the greater the spread from loss to profit you will have.
If you are thinking about how to consistently make money on the Forex market, never be influenced by intuition if your trading system is already debugged to the point of automation. Chasing short-term profits can have dire consequences for your trading account.
How to consistently make money on the Forex market without trading?
The good thing about the foreign exchange market is that you can earn income both from independent trading and in a passive way. The second option is suitable for beginners or those currency speculators who have not yet achieved stability in their trading. You can make money on Forex without trading by investing in successful traders. To do this, brokers have their own PAMM platforms, where you can select profitable managers and entrust them with managing your money.
Before choosing a PAMM service, you should evaluate the broker who owns it. It is important that this is not a company that was registered yesterday. One of the largest and most reputable PAMM platforms belongs to the broker Alpari or Forex4You.
The second nuance concerns the choice of PAMM accounts in which you are going to invest money. The primary parameter that you should pay attention to is the life of the account or the period of public trading of the managing trader. It is necessary to select accounts with a history of at least one year. During this time, the manager will generate positive or negative statistics, by which you can evaluate the success of his trading.
Not all investors know how to consistently make money on the Forex market without trading, which is why income from PAMM investing fluctuates with the same frequency as the income from independent trading for an undisciplined trader. To obtain stable results, an investor must create a safe portfolio of conservative managers whose trading throughout the year has not been subject to sharp changes in terms of losses and profits.
There is no point in chasing high income levels in PAMM investing. Managerial traders who perform well rarely trade successfully over the long term. Profits at the level of growth of 50% of capital per month and above are not permanent and are often accompanied by high risks. Such managers are called aggressors. Their total share in the portfolio should not exceed 3-5% of the number of PAMM accounts, or even be absent altogether.
It should be noted that achieving stability in the field of PAMM investing is much easier than in independent trading. Learning the principles of smart investing is faster and easier than learning all the intricacies of trading from technical analysis to Elliott wave theory.
Competent money management as a guarantee of stability for a trader
There are only two basic principles of risk management that a trader needs to know. The first one says: “Let profits grow, cut losses in the bud.” The second is the correct choice of trading volume when concluding a transaction. To figure out how to consistently make money on the Forex market, you need to find out why you need to manage your capital wisely.
Often traders, due to uncertainty in their actions and for a number of other psychological reasons, rush to close an order as soon as it enters the positive zone. Losses are kept until the last minute, which sometimes has an extremely negative impact on the deposit balance. To make money on Forex and not lose, you need to do the opposite. Uncertainty in a trading strategy can be easily overcome by lengthy and thorough testing of the system on a demo account or history. Only when you are confident in each open order, only then will you easily hold a profitable trade to the required level.
The second problem for traders who have not yet achieved stability is the periodic or constant excess of the permissible lot. If the trade turns out to be profitable, the trader's income increases, but since most people neglect the rule described above, losses from such maneuvers often turn out to be much greater than random profits. Do not risk more than 2-5% of your capital in your trading for a series of simultaneously open transactions. Your trading will be safer and your profits more stable.
In fact, achieving stable trading income figures is not that difficult. It is important not to exceed risks and trade according to a proven trading strategy. This is enough to make the foreign exchange market your only and very good employer.
We remember that the profitability of trading very much depends on
Greetings, dear readers! All the holidays have passed, the usual working rhythm is getting back to normal, so I will continue to share my trading experience with you. IN everyday life Every trader would like to make stable money on Forex (or other markets), let’s find out if this is possible? This question probably interests everyone, so read carefully!
Most people go to work, where they receive monthly wages, approximately the same amount every month. This is called stable income. At least for those people who work like this. It's not bad to be 99% sure that you will have money at the end of the month. Many people start studying stock trading after or during work where there was such a remuneration system. Of course, you want to earn more, otherwise, why change your job? At the same time, the desire remains stable, that is, to receive money every month, like “all other” people. Is this desire justified?
According to my observations, for a person stability means confidence. If there is no confidence, then anxiety appears. So it turns out that unstable income puts pressure on the nerves. Although, many factors are not taken into account. For example, even if you receive a monthly salary, you can quit your job, be deceived by your superiors, etc. Maybe it's just a habit to measure your life in months? You pay monthly for an apartment, for a telephone, take a month off, and so on... Maybe it’s worth moving away from this view of your life? So, that's it, we need to end this lyrical digression! :-)
Is it possible to make stable money on Forex?
Yes, really!!! But this stability may not be the same as those around us are used to seeing it. As I already said, stability for most people is monthly payment. But what if we achieve annual stability? That is, the same stability, but in a different time interval! In most cases this is what happens. If we take hedge funds, then no one looks at monthly results; professionals evaluate their work for at least a year. And even in this case, nothing guarantees that the year will not bring losses.
This post does not concern scalping trading, which requires large volumes and, as a result, large trading volumes. The bottom line is that for big money, not a single broker will provide leverage of 1:100. If it will provide at all. The more money, the more difficult it is to trade using such strategies. With such trading, you can certainly earn a stable monthly income on Forex, but the prospects for working with big money are vague.
Let's return to the main topic. Imagine that an ordinary trader took the place of a hedge fund. He strictly follows his strategies, but the year turns out to be unprofitable. Does this mean he is a bad trader? No, it’s just the way the market situation developed. This is fine. He is a profitable trader and earns a steady income despite this year's results. Stable earnings on Forex means that you will earn money periodically and will not lose. I think this is an appropriate description! This does not mean at all that you will earn money right away in a certain period. The nature of earning money financial markets probabilistic, and how this probability will turn out in a certain time interval is simply unknown!
For example, for my trading the average performance is +90% per year, this is the average since 2000. But a certain year can turn out any way! In 2008 there was about 200% profit. And for the past 2012, only about 10% (I talked more about my earnings in the article:).
You need to look at stability more globally, and move away from the stereotype of measuring your life monthly. Yes, you will not receive a salary every month, you will have drawdowns, or profitable periods that you cannot predict, this is an unknown element. But if you follow a profitable vehicle, you will be confident in the final result! Don't expect immediate profits, just do what needs to be done.
Take a look at PAMM accounts! There are no perfectly beautiful graphs. This does not apply to Martingale trading, which was discussed in the previous article: . In this case, you can consistently make money on Forex, but in the end you will still lose money. It is quite normal for other profitable accounts to be stuck in long drawdowns, and even if there were none, they will happen sooner or later.
These are the realities of this business. This cannot be taken away. But I like this business. I like to increase the probability of my earnings, reduce risks, I like to open trades without knowing how they will end! Maybe it’s a profit, maybe it’s a loss. I like to work on my emotions! All of these are pros for me that outweigh the cons. In this article I described how my working day goes, such a routine is a HUGE plus for me! If you look at it monthly, then earnings on Forex are unstable. :-)
By the way, I am currently engaged in individual training in Forex trading. I can teach you a specific intraday strategy with proven results. I focus on trading practice, which I consider the most effective approach! If you have the desire, then positive results will not keep you waiting. Read more in the article:.
Now I have to finish, it’s still unusual to still work after a break, especially since the weekend is approaching... I’m planning to visit another city, I’ll go on a visit, I love to travel! Again I was drawn somewhere! :-)
I invite readers to subscribe to blog updates by email in the form below, so you will receive announcements of new articles immediately after they are published. Or add to social networks, I will be glad! I wish you to really make money on Forex, bye!
P.S. This is tough!!! 299 on the speedometer, how many times did you drive into oncoming traffic?
In this article we will talk about how to make money smartly on Forex. The technique that will be described below belongs to Linda Raschke, one of the best female traders in the world. Before moving on to the strategy review, be sure to read Linda's biography. Her path is continuous training manual, which is useful to study for both beginners and experienced market representatives.
Let's return to the question of how to make money on forex. This is a multi-currency hourly strategy that is designed for trend trading after deep price corrections.
System setup
To begin, you will need to open the daily chart (D1) of any asset, download and add an indicator called “MomPinboll” to the terminal.
Appearance of the chart with the “MomPinboll” indicator
This concludes the preparatory part, and we can move on to reviewing trading conditions.
Purchase
- Visually assess the trend on the daily timeframe. Without indicators, it should be clear that the movement is upward.
- We are waiting for the MomPinboll line to drop below level 30. The candle where this condition is met is marked with a green rectangle.
- Let's move on to H1.
- Place a pending order to enter a Buy Stop 20 points above the high of the signal candle.
The green rectangle in this picture is a daily candle on an hourly interval. After switching to H1, the MomPinboll indicator will not be needed, so you can remove it if you wish.
- The moment of entry into the purchase. Optimal size Stop Loss: 70-100 points.
- Take Profit is set at a distance exceeding SL by 4-7 times.
- If after 8 trading days the placed order does not work, the transaction is cancelled.
- Repeated entries are not used.
- Alternative to TP: floating SL, distant from the price in steps of 100 points.
- We do not invest more than 3% of the trading account amount in one transaction.
Sale
- We evaluate the trend at D 1 (a clear downward movement should be visible).
- We are waiting for the MomPinboll line to rise above level 70. We mark the control candle.
- Let's move on to H1.
- Place a pending order to enter a sell position (Sell Stop) 20 points below the low of the signal candle.
Courtney Smith
How to consistently make money on the FOREX market
Published with the assistance of the International Financial Holding FIBO Group, Ltd.
Editor V. Mylov
Project Manager A. Polovnikova
Corrector E. Smetannikova
Computer layout S. Novikov
Design Creative Bureau "Howard Roark"
© Publication in Russian, translation, design. Alpina Publisher LLC, 2012
All rights reserved. No part of the electronic copy of this book may be reproduced in any form or by any means, including posting on the Internet or corporate networks, for private or public use without the written permission of the copyright owner.
Dedicated to my parents and comrade in arms
Preface
Trading on the free foreign exchange market (FOREX) is one of the most exciting and profitable activities in the world. This is despite the fact that approximately 90% of traders lose money. The purpose of the book is to increase the number successful traders.
Can you make a living trading FOREX?
Let me explain.
So, it is a common belief that approximately 90% of traders lose money trading FOREX, approximately 5% remain with their money and only the remaining 5% make money. I have not come across any scientific evidence for this claim, but I have spoken with executives at various brokerage firms who have told me that something similar generally happens to traders. My own experience a top manager in the futures and options market also confirms these grim statistics.
In the 1960s The federal government conducted a study of futures traders and found that the picture was similar, although not quite as bleak.
The same 90% lost money, but already after commission payments. In reality, the rate of return before commissions was approximately 7%. The main reason for the losses was commissions. In theory, then, the 7% profit represents the equivalent of the insurance premium that companies paid to speculators for the risks of commercial transactions. FOREX trading does not involve any commissions (and futures commissions are now much lower than they used to be), so I doubt that this factor is that important today.
However, FOREX has other transaction costs in the form of the difference between the bid and bid rates. The costs of buying at the buyer's price and selling at the seller's price on each transaction seriously affect the trading results for the year.
Let's assume that the trading account has $10,000 for mini-trades, and for each trade the difference between the bid and ask price is 3 pips. If we make one trade per day, or 250 trades per year, that's $750 in additional costs. And every year we need to earn more than this amount to make a profit. As a result, we start the year with 7.5% debt. Therefore, in order to finish our trading for the year at least without losses, you need to make a profit at least this 7.5%.
I think that these assumptions are true for most traders. Look at your own experience - where you are now and what you need to overcome to move beyond breakeven.
In fact, things could be much worse. The most common form of FOREX trading is spot trading with retail FOREX brokers such as FXCM or Sterling Gent. Brokers receive additional profit from every transaction and every day. I'll explain what this looks like in Chapter 1, but please remember that brokers actually set the bid/ask spread every day. This adds another, say, $3 per open position per day. Let's say you only have one position per day, which adds up to another $750 over the course of a year. Now, in order to earn something, we need to repay 15% of the debt.
Investors make money on the stock market, but most often because fluctuations in stock market occur more strongly and for a long time, and not because such investors are more professional. In addition, when investing in stocks, you are not limited by time. Futures and options have an expiration date. FOREX does not have it, but high leverage does not allow players to hold positions for years, as in the stock market, where investors often do not close positions whose prices are falling, in the hope that the day will come when they will rise again. On FOREX this is technically possible, but it happens extremely rarely.
High leverage creates a get-rich-quick mentality in FOREX trading, which works against the trader. In contrast, normal stock investing involves buying and holding stocks.
Leverage pressure causes the average FOREX trader to make many mistakes. And the cost of such errors is incomparable with stock transactions, where there is no such burden.
Summarizing all the above differences, we can say that it is much more difficult for a FOREX trader to make money than for a trader on the market securities. But…
The subtitle of the American edition of this book can be translated as - “Lifetime income guaranteed.” It was inspired by the title of a bad poker manual that came out about twenty years ago. I truly believe that the material in my book can provide you with a lifetime income. And these are not empty words. This is what is required of you. You must strictly follow my instructions. You must not deviate from them. Do everything with impeccable precision. Only after you have fully mastered the material can you begin to create. This self-discipline is critical to achieving success. If you trade carelessly, you will return to the category of failed traders. Neither you nor I want this.
I will not tire of repeating: stick to the plan outlined in the book, and you will become a successful trader. You will be able to live a life that few can afford.
I wrote most of of this book, living on the sea coast in Belize. I am writing this foreword on a plane en route to Singapore, where I will speak to an audience of approximately 2,200 people and then travel the beaches of Southeast Asia.
And what allows me to do all this? Internet. That's it. I conduct all analytical work and transactions online. I can't live in the middle of nowhere because I need the Internet, but I can still afford an impressive lifestyle. My first stop after performing in Singapore was in Bali, where I spent a whole week.
Moreover, I don’t even need constant access to the Internet; literally fifteen minutes a day is enough. But I prefer to stay there longer because I need to post a lot of different educational videos on my educational websites and this requires more time and availability high-speed Internet. But a few minutes in an internet cafe in China or London or wherever is all I need. The real goal for me, as for most people trading FOREX, is not to make a lot of money, but to gain freedom.
I know I've painted a pretty bleak picture of how difficult it is to make money in FOREX. But we are not only talking about high earnings, but also about the fact that you can guarantee yourself an income for life. Of course, this is a very loud statement.
How do I know this? Why are you so sure of this?
I have been training traders for over 25 years and telling them about my methods. And, more importantly, I teach retail traders who have no trading experience at all, let alone FOREX trading. This gives me special pleasure: I really like watching people start new life. Each of my students makes money on FOREX, except one. (And he is only slightly in the red.)
One day I foolishly suggested curriculum called "Superprofit". A short but intensive program that cost $2000. The crazy thing was that I guaranteed a refund if the student did not double his investment in a year. Idiot!
Everyone in the group, with one exception, completed the task. These were ordinary retail investors; no pros. And only one woman, who was unable to double her investment, asked for her money back, and I returned it. By the way, she earned 70% in a year.
So, my statement is confirmed by practice. And I am sure that you can do it too!
But (you can’t do without “buts”) you must act with impeccable precision.
That's right. This is the secret.
Now read the book. Develop a plan. Make money. And live the way you dreamed of.
Contents at a Glance
I have designed this book so that it will be useful for anyone who wants to make money trading FOREX - from beginner to professional.
How to consistently make money on the FOREX market Courtney Smith
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Title: How to make money consistently on the FOREX market
About the book “How to Make Consistent Money in the FOREX Market” by Courtney Smith
Professional, clear, systematic and accessible. This is how one can characterize the book by Courtney Smith, an experienced trader who went through the school of working in large investment banks, has extensive experience in individual trading and, importantly, teaching experience. Many approaches proposed by the author are not new development, but they are modified taking into account the current state of the market and built into an integral system, which allows achieving stable good results in trade. In addition to market analysis and trading techniques, the book pays serious attention to psychological aspects work and risk management.
The book is structured in such a way that it will be useful to both novice traders and experienced professionals, and in fact is a comprehensive textbook on all aspects of Forex trading.
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