Your FOREX Trading Potential Can Be Predicted By Looking At Your Daily Emotional Behavior

As hundreds and thousands of articles have been written on the subject of trading the markets, and with the emergence of new financial instruments every day, I feel compelled to put together a dissertation on the most important element of trading, the emotional effect.   Before detailing the key elements, I will offer to you the thoughts of two prominent individuals. They do not need any introduction, as their work is known and appreciated all over the world. I am sure you will love their insight into the human psyche.   "When dealing with people, remember you are not dealing with creatures of logic but creatures of emotion". Dale Carnegie (1888-1955)   "Let's not forget that the little emotions are the great captains of our lives and we obey them without realizing it". Vincent...

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Learn To See The Line Between The Trading Plan And Your Emotional Impulses

The vast majority of Forex education organizations fail to address the only true characteristic of a market place, the human nature.   You can easily find loads of charts, pivot points, moving averages, trend lines and all sorts of Fibonacci ratios, together with the latest in trading automation. Any Forex website publishes some or all of these data, along with myriads of other details, interviews and opinions.   You may even get entry and exit signals, support and resistance levels, all of which could appear as sufficient in the decision making process.   I was under the same impression as a beginner, I was at the same level as an intermediate trader and only heavy losses and low risk/reward decisions made me look for a different approach to trading.   If you are aware...

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Forex Trading: The Fear Factor

Market knowledge and ability to understand analysis will only get you so far in forex trading, but without the nerve to actively compete risking your own money in the process you can never become a successful trader. Wagering huge volumes of money in a market as susceptible to change is liable to cause a whole range of opposing emotions; fear, excitement and anxiety just to name a few. Battling against your emotions in order to complete a successful deal is one of the major hurdles, which must be overcome if you are to become a trader able to close huge deals and earn vast sums of money. If you can overcome or even use these emotions to make trades on the Forex then a successful career may be beckoning, but failure to do so will almost certainly cost you a substantial amount of money and end...

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Trading Psychology: Mistakes in a Trading Environment

When it comes to trading, one of the most neglected subjects are those dealing with trading psychology. Most traders spend days, months and even years trying to find the right system. But having a system is just part of the game. Don't get us wrong, it is very important to have a system that perfectly suits the trader, but it is as important as having a money management plan, or to understand all psychology barriers that may affect the trader decisions and other issues. In order to succeed in this business, there must be equilibrium between all important aspects of trading.   In the trading environment, when you lose a trade, what is the first idea that pops up in your mind? It would probably be, "There must be something wrong with my system", or "I knew it, I shouldn't have taken this...

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Forex: No psychological limitations

Back when I first started learning about investing, I decided to start from the beginning and read basic books on personal finance as well as "guides" for understanding all of the investment world in a nut shell. Most of these authors were very knowledgeable and informative, but their investment advice was far too conservative for my taste. They would literally write chapter after chapter talking about the differences between conservative investing, which according to them generally yields somewhere around 5% PA, as opposed to "risky" investing which usually meant a diversified stock/mutual fund portfolio yielding (in my mind) only slightly higher averages. What kind of returns can you expect in the stock market? Well they say the market has gone up an average of 10% a year since Adam and...

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Forex Market Trading And The Mind Games

First, what is Forex: The FOREX or Foreign Exchange market is the largest financial market in the world, with an volume of more than $1.5 trillion daily, dealing in currencies. Unlike other financial markets, the Forex market has no physical location, no central exchange. It operates through an electronic network of banks, corporations and individuals trading one currency for another.   Mind Games defined: Mind Games are a kind of social interaction where participants try to screw with one anothers' heads. The concept is most often used colloquially to refer to deceitful, confusing or Machiavellian situations. However some mind games are described by the psychology of transactional analysis.   When it comes to trading on the Forex market, winning is a matter of the mind rather than...

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Emotions And Forex Trading Don't Mix

The key to making money in the currency exchange market is to avoid emotional decisions and to follow a carefully thought out strategy that takes the current market and history into account. Going with your gut is not the way to go in the Forex market. Going with your gut could cost you money. Forex trading is a highly volatile market where emotions tend to run high. Emotions can influence your trading decisions, unless you have a strategy planned in advance, and stick to it, no matter what you think you're seeing at the moment. The keys to success in Forex are system, analysis and perseverance.   Most experienced traders tell novice traders that they need to develop a system — and stick to it no matter what. Letting your emotions rule your decisions can hurt your trading in a number...

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Why Psychiatrists Make Better Traders Than Expert Economists?

It should be noted that millionaire traders, Elder, Williams and some others are in fact professional psychiatrists. And it is not accidental that not the economists are the leaders and most successful traders, but professional psychiatrists and psychotherapists. Think about it. You will become a successful trader when you understand why it happens with Forex. You will understand what your Forex mistakes are, and why you are making them. And when you correct these mistakes you will become a trader who has no psychological barriers and obstacles on his way to better earnings in the Forex market.   So, why do the psychiatrists make better traders than economists who, as one would think, have the Forex market at their finger tips?   The economists are confused by:   — the fact...

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Entry Orders

Entry Orders are executed the moment the market price reaches your specified price and opens a new position. The price can be above or below the current trading price. There are four types of Entry Orders: 1. Entry-Limit-Buy: wait until the price goes lower than the current price (used in buying). 2. Entry-Stop-Buy: wait until the price goes higher than the current price (used in buying). 3. Entry-Limit-Sell (going short): wait until the price goes higher than the current price (used in selling). 4. Entry-Stop-Sell (going short): wait until the price goes lower than the current price (used in selling). For example, if you want to buy Google shares, but not until the price drops to $450, you would place an Entry-limit Buy Order at $450. If the price never drops to that...

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Trailing Stop

The Trailing Stop feature allows traders to place a Stop Loss Order which automatically updates to lock in profits as the market moves in the trader’s favour. Trailing Stops can be placed by clicking the 'Advanced' button when creating a 'Market Order'.  There are four ways to enter a Stop Loss Order: 1. You enter a Trailing Stop Price. For example, if your stock is selling at $40 per share, you might enter a Trailing Stop Loss Order at $37.50 per share. 2. You enter a Maximum Loss Amount. Plus500 will then calculate the relevant Trailing Stop. 3. You enter the distance in Pips from the current price. Plus500 will then calculate the relevant Stop Loss price. 4. You enter a percentage from the current price. Plus500 will then calculate the relevant Stop Loss price. Example of a Trailing...

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Protect Your Profits

The Stop Loss Order is used to protect your profits on a stock that is rising. You decide the price you want to close an instrument at and instruct Plus500 to close the position if this price is reached.  There are four ways to enter a Stop Loss Order.  1. You enter a trading price. For example, if your stock is selling at $40 per share, you could enter a Stop Loss Order for $37.50 per share. When the stock price drops to $37.50, it trips the Stop Loss Order and Plus500 sells it.  2. You enter a maximum loss amount. Plus500 will then calculate the relevant Stop Loss price.  3. You enter the distance in Pips from the current price. Plus500 will then calculate the relevant Stop Loss price.  4. You enter a percentage from the current price. Plus500 will then calculate...

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Order Types

Buying and Selling at Market PricesYou can use Plus500 to buy and sell instruments at the current market price (within the price ranges that are set for the specific instrument). The 'Market Range' for each instrument is shown in the Buy/Sell popup box that appears when you click on 'Buy' or 'Sell' in the trader lobby. Stop LimitA Stop Limit Order is a way to protect your profits, should the instrument (Forex, Stock, Commodity or Index) rise. The stop limit order instructs Plus500 to sell an instrument when, and if, the instrument reaches a certain price. Stop Loss – (Maximum Loss)A Stop Loss Order is a way to protect yourself from a loss, should the instrument (Forex, Stock, Commodity or Index) fall. The Stop Loss Order instructs Plus500 to sell the instrument when, and if, the instrument...

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Initial Margin & Maintenance Margin

Initial MarginIn order to open a new position, available account equity must exceed Initial Margin Level requirement. The Initial Margin Level requirement is specific to each financial instrument. To see the Initial Margin Level for a specific instrument go to the main lobby screen of Plus500 trading platform, select the instrument you wish to view and click on ‘Details’ on the far right hand side of the screen. A popup box will appear and the Initial Margin Level in shown in the top right hand corner of the box. Maintenance MarginIn order to keep a new position open, you must ensure the available account equity exceeds the Maintenance Margin Level. Maintenance Margin Level requirements are specific to each financial instrument. To see the ‘Maintenance Margin Level’ for a specific instrument...

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Margin Call

The Maintenance Margin Level is the minimum amount of equity you need to maintain an open position. If your equity falls below this minimum amount, Plus500 will execute a Margin Call and close any open positions until your account equity exceeds the Maintenance Margin Level requirement. Example of how a Margin Call can occur: You signed up and deposited $600 via credit card * Balance: $600 (Deposits - Withdraws + P&L of closed positions) * Available Balance: $600 (Balance + P&L of open positions - Initial Margins) * P&L = $0 (total profit and loss of all open positions including daily premiums) * Equity: $600 (Balance + P&L of open positions) 11.30am - you buy 10 Google Shares (CFDs) at $540.00 * The total amount you bought is: 10*$540.00 = $5400 * The Initial Margin that...

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Closing a Position

Once you have Opened a Position the figures for the instrument you have chosen in the 'High/Low' column will change to a button stating 'Close Position'. Simply click this ‘Close Position’ button and a popup box will appear for you to confirm or cancel your close.  Source : Plus500....

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Opening a Position

To open a position press the ‘Buy’ button next to the instrument in the main lobby screen. A popup box will appear containing the following (fields will vary dependent on which instrument you have chosen to buy): * Amount for Forex Purchase: Enter the number of basic units/lots that you wish to purchase. * Number of Shares for Stocks: Enter the amount of shares that you wish to purchase. You need only to have a small percentage of the original value you are bidding for. * Number of Contracts for Indices: Enter the amount of contracts that you wish to purchase. Each index point is worth a certain amount - usually 1USD or 1EUR depending which market the index is traded on. * Close at Profit Rate (Stop Limit): Enter the 'Close at Profit' amount that you wish to sell the instrument....

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Trading with Demo Money

The best way to learn how trading works at Plus500 is to download our free software, open an account and trade with demo money. Also read through the online help pages to get you trading quickly and effectively. Free Demo Account features: * No time limit * Real market conditions - everything exactly as real trading conditions * No risk - learn all the Plus500 features without risking your capital * Setup, check and simulate trading strategies * Online help and support team backup Source : Plus500....

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Trading at Plus500

Trading at Plus500 is straightforward and easy with no commissions or hidden fees. Plus500 is compensated for its services through the bid/ask spread. Our trading platform lets you buy any financial instrument listed on our website and sell it as quickly as a couple of seconds later.  The main lobby of the software contains the buy/sell prices of all the instruments available. When entering an order to buy an instrument, the advanced trading platform allows you to add a stop loss, profit limit or trailing stop to protect your position - and profits.  Trading example: You signed up and deposited $5,000 via MoneyBookers. * Balance: $5000. (Deposits - Withdraws + P&L of closed positions) * P&L = $0. (Total profit and loss of all open positions including daily premiums) *...

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