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How To Use Seasonal Trends In Forex Trading

There are many strategies and techniques that you can adopt for forex trading. One of these is using seasonal trends as a way to predict how the markets will move. This is because regular fluctuations or patterns occur, depending on what time of year it is. Analysts have demonstrated that it is possible to make reasonably reliable seasonal predictions.

 

Here’s how forex traders use these patterns to enhance their profits. Seasonal trading shouldn’t be adopted as a complete trading strategy; you will certainly need other factors in place to trade effectively. However, an awareness of seasonal patterns can help you to make better trading decisions, especially at certain times of the year.

 

What is seasonality?

When traders talk about seasonality, they are referring to predictable trends that repeat over a number of years. Of course, there are always curve balls that throw things off kilter, such as pandemics and wars. However, when a pattern is repeated on a one year cycle up to 80% or 90% of the time over a number of years, it’s regarded as sustainable and significant.

 

To understand seasonal patterns, analysts focus solely on price and time, and filter out the noise of indicators. Remember that any results are based on averages, and therefore they should only be used in combination with other technical analysis.

 

Why do seasonal patterns occur in forex?

There are some known factors that cause cyclical patterns in the forex and other financial markets, although it is not an exact science. Some theories do not appear to hold much weight, or are disputable, while other patterns seem to defy an easy explanation. Season can refer to calendar events, as well as the climatic conditions.

 

There are a few reliable and predictable seasonal events which will always have an impact. For example, holiday periods, especially those which are widely celebrated in the US, affect the forex markets. There will be an increased demand for consumer goods and food around Christmas, Thanksgiving and Halloween for example.

 

During the summer vacation period, there will be demand for other goods, such as air conditioning units and outdoor furniture. Petrol consumption tends to rise during the summer as people take more holidays and trips out. Foreign travel tends to be higher during summer months, which can affect the forex markets.

 

The climate also affects seasonal trends, and while this is in some ways predictable, there are of course always variables. For example, poorer than average summer weather may mean tourism and foreign travel is weaker than expected, and there is less demand than anticipated for certain consumer goods, while demand for others is unseasonably high.

 

The weather may also influence harvests and food production, if it has been a poor or unpredictable year. This in turn affects the trade balance of the countries who are major exporters of the affected produce, and the currency may correspondingly fall to lower than expected levels.

 

The wider forces that move the financial markets, known as macroeconomics, are particularly unstable at the moment. Some factors are also interrelated to seasonality, such as climate change. The world is starting to experience major and disruptive episodes of wildfire, flooding, storms, and drought, on a more frequent basis than in the past.

 

Therefore, it is important to keep up with geopolitical events and understand how these may drive the forex markets. Currently, the war in Ukraine is driving oil prices to record highs for example, which will inflate the currencies of major oil producing economies, and negatively impact those countries who rely heavily on imported oil.

 

There are certain economic announcements which are made at fixed times throughout the year, such as taxation rates, interest rate adjustments, and so on. It is helpful to obtain an economic calendar to help you keep track of the economic data releases which are relevant to forex trading.

 

Some data releases will only have a minor impact, or not be relevant to your currency pairs. There are certain predictable figures which impact the USD. Since this is by far the most commonly traded currency, it is important to track these key releases. Look out for unemployment figures, interest rate rises, inflation levels, and the GDP.

 

The market will also react strongly to sudden geopolitical events, such as outbreaks of war, pandemics, natural disasters, elections, and other signs of political instability. As we are living through relatively turbulent times at the moment, it is important to follow current affairs closely as part of your seasonal trading strategy.

 

So, while some seasonal events are cyclical and patterns can be identified over a one year period, there may well be macroeconomic or environmental factors which cause anomalies. It is best not to react too hastily to these however, because sometimes the expected market reactions do not occur, or the market may whipsaw.

 

What is a seasonal trading strategy?

When it comes to incorporating seasonality into your trading strategy, it is important to start with the wider time frame, i.e. years, then break it down into quarters, months, weeks, and so on, until you begin to look at times of day. This is known as a top-down strategy, and it applies whether you are a scalp trader, a day trader, or a swing trader.

 

There are some generalities that can be applied to the forex market as a whole. For example, September is usually a month of high volatility, which presents good profit-making opportunities for break out traders, for example.

 

Breakout traders identify a key price level that they expect the price to break through, and then buy or sell at that price to gain a maximum profit. The strategy works best when the market is moving strongly in one direction, hence the advantage of predicting periods of high volatility in advance.

 

To learn in more depth about breakout trading, it’s important to understand support and resistance levels, which can be plotted on a graph or chart. Support refers to the price level where a downturn in the market is expected to pause, because of favourable conditions and increased demand.

 

A resistance zone is where an uptrend in the market is predicted to pause for a temporary period. Traders watch support and resistance levels to judge which way the markets will turn, and seasonality is one of the factors that they take into account. 

 

If the direction of travel is wrong, the position can be quickly closed to minimise losses. The timing, pace and volume of support and resistance are carefully monitored by breakout traders, to enable them to refine down to the last second when to make a trade, or reduce or increase a position size with more leverage.

 

How seasonality affects currency pairs

Anyone who has learned anything about trading will have noticed that the forex market is geared around the US dollar. It is a pair in about 85% of all currency transactions, so obviously this means that when it comes to using seasonal trends, it makes sense to look at what direction the USD is moving in, with other major currency pairs.

 

The EUR/USD tends to be in a weaker position at the start of the year in January, as foreign currency is invested overseas. The USD then tends to rally as new placements are made. The USD/EUR tends to reach a low, or ‘bottom’ around mid-February, and then climbs steadily again to a peak in April. August tends to be the worst month, before the September upturn.

 

The USD/GBP tends to follow behind the curve of the EUR/USD, bottoming out in March, before climbing throughout April. It then tends to peak in August.

 

The USD/CAD currency pair tends to rise during the early months of the year, before peaking by the end of February. It then peaks again in August, and declines in September. October and November are generally stronger months.

 

For the USD/JPY, the month of October tends to be the strongest trading time of the year. There doesn’t seem to be any official explanation of why this is the case, but it is certainly a statistically significant trend that has been identified over the years. During August, the JPY also tends to be in a strong position against the USD, the GBP, and the EUR.

 

Conclusion

In conclusion, currencies tend to move in predictable patterns year on year. Traders can identify these patterns with a top down approach to price and time analysis. to help them understand when to make the most profitable trades for different currency pairs.

 

Seasonality should not be used as a single trading strategy, but it can be used in combination with other techniques to help you make the most profitable trades.

 

If you want to learn in more depth about using cycles to improve your profits, you could also study time-based trading strategies. This will help you make a more detailed analysis of how months, days of the week, and the time of day affect the markets.

 

If you are looking for instant forex funding, please get in touch today.

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How To Beat The Disposition Effect In Forex Trading

In forex trading, the disposition effect refers to the psychological tendency to sell assets that are making a profit too early, and to hold onto losing assets for too long, in the hope that things will turn around. Both of these behaviours are a barrier to making the best rewards from your forex trading. Here’s a look at how you can overcome it.

 

Acknowledge your biases

Psychologists think that we react disproportionately when faced with a potential gain or a potential loss, because the pain of losing is more intense and damaging that the pleasure of making a gain. This probably has a sound evolutionary basis, because in previous eras, it could literally mean the difference between life and death.

 

So we are talking about powerful and primitive human emotions here, which to a certain extent, we have learnt to supress in modern life. However, our subconscious mind is always at play, and when we are under pressure and the stakes are high, our emotional state can go into red alert.

 

Even experienced professional traders stay on their guard against the mind’s natural tendency to be loss averse, and conversely, to take irrational risks. It is not a sign of weakness to admit that sometimes, we all make subjective decisions based on gut reactions, rather than analytical and objective decisions.

 

In fact, acknowledging you will sometimes take illogical risks, or be too loss averse, is a sign of mental strength. It’s the way the human mind is designed. Admitting it puts you in a better position to understand and tackle your biases, and therefore makes you less prone to letting them get in the way of a sound trading decision.

 

How do you recognise the disposition effect?

So, you’ve accepted that you are prone to the same patterns of thought as everyone else. You are already gaining a competitive advantage over your trading rivals, by understanding the need to tackle the disposition effect in your own trading.

 

Review your records of your last month’s trading. Look for situations where you have closed a profitable position quickly, when holding out for longer would have led to a bigger profit. Also look at your losing trades. Have you hung on to any of them in the hope of a price swing, even though you had no logical evidence that this may happen?

 

If you can see a tendency to settle for the minimum profit, and/or hold on to a losing position for too long, thus increasing your losses, then you are falling prey to the disposition effect. Even if you don’t see these patterns, or you are a novice without much experience behind you, it can still help to broaden your understanding of cognitive biases.

 

Overconfidence and pride can be just as dangerous as excessive loss aversion when it comes to forex trading. There’s nothing wrong with enjoying your successes, or feeling disappointed in failure; after all, these are often the emotions that drive us all. However, a good trader is always on the lookout for pitfalls, and keeps an eye on the bigger picture.

 

Loss aversion, cognitive bias, the pleasure/pain principle, subjective thinking, the greed and fear drive, being led by the emotions; call it what you like, we are all prone to it, especially when we are under pressure to make a quick decision.

 

How do you avoid it?

On the face of it, avoiding the disposition effect is straightforward: don’t hold on to losing positions for too long, and don’t sell profitable ones too soon. However, as we have seen, the mind has a natural bias to do both of these things. Neither will lead to optimal success as a trader, and if unchecked, it can cause real damage financially and personally.

 

Have a clear trading plan

One of the most effective ways to keep your thought processes clear and rational is to plan ahead. Setting targets which are compatible with your trading goals and risk tolerance levels, and then having the mental and emotional resilience to stick to them, is the number one method to avoid making unplanned and unwise trading decisions.

 

However, avoid setting yourself fixed numerical targets. Rather, form your plan around determining your position size, and defining your entry and exit points. Above all, your framework should be based on the well-known SMART acronym: it must be Specific, Measurable, Achievable, Relevant, and Time-bound.

 

Know your risk parameters

Start by defining your risk tolerance. This means making an honest and realistic assessment of how much capital you have to play with. Make a spreadsheet documenting your monthly income and outgoings, and any savings you wish to use as capital. This will give you an idea of how much of your own money you are willing and able to invest.

 

A modest amount of capital is no barrier to entry into trading, because many brokers will offer forex instant funding with leverage. However, you must decide in advance how much loss you are prepared to risk on each trade. This should be in proportion the amount of capital you have put up.

 

If the loss margin is enough to keep you anxiously glued to screens and charts for hours, then it is too much! Your trading decisions will be more likely to be based on fear and greed, than a sound trading strategy. The amount you can stand to lose should not leave you feeling edgy and uncomfortable.

 

Know yourself

While some of the psychological traits we have discussed are universal to all humans, we are also individuals with different temperaments and personalities. Some of us tend to be phlegmatic and methodical, others are more highly strung and impulsive. We can learn to use our individual traits to our advantage in trading.

 

For example, a thorough and detail orientated person will thrive on market analysis and may have the edge in making logical decisions. However, they should be aware not to let their risk aversion get the better of them.

 

A more instinctive person who likes to keep an eye on the bigger picture may have the advantage in getting ahead of a curve and making quick decisions. However, they may need to guard against unnecessary risk taking and overconfidence.

 

Look after yourself

Whatever your personality is like, we can all benefit from a lifestyle that boosts our mental and physical wellbeing. When we are well nourished and well rested, we are going to make better decisions, and be less tempted to cut corners and take risks, than if we are stressed and burnt out.

 

Avoid letting your trading become all consuming, whether you are working it around a day job, or making it your full-time occupation. It is important to have downtime, whether to socialise, exercise, or just chill out. It allows the mind to process the events of the day, and keeps our resilience levels topped up, so we are not floored by minor setbacks.

 

Many traders, as well as other highly successful entrepreneurs, like to include some meditation time before they start their day. This helps to focus the mind and sets them up for the rigours ahead. The techniques can also be drawn on in stressful moments throughout the day, to help with mental clarity and concentration.

 

Meditation can take a bit of practice if you’ve not tried it before. There are plenty of apps and books which can talk you through simple techniques, such as diaphragmatic breathing, progressive muscle relaxation, and so on. It’s worth preserving with even it at first, you find it difficult or don’t notice the benefits straight away.

 

Over time, you will find that even 10 minutes of sitting quietly can help you ground yourself, and move beyond those superficial thoughts and emotions which tend to crowd our minds during the daytime. Some people find it helps them with the more abstract thinking that is useful when analysing graphs and charts, and other market data.

 

Beware of social pressure

Be careful about your social network, both on and offline. If you mix with other traders and swap stories, be aware that this may lead you to seek pride, and become overly fearful of regret and loss. Peer pressure, and the tendency to try and boost our social status, can lead to emotional rather than rational trading decisions.

 

Our mind’s negative bias means that regretful thoughts often keep us awake at night, going over what you should have done, or what might have been. Unfairly, our successes rarely have the same impact. We could have experienced five successful or pleasurable events during the day, but it will be one negative experience that comes back to haunt us.

 

Good traders learn not to wallow for too long in success or failure. This is a well-known technique of positive psychology, which is useful to learn about, not just in a trading context; it can help with other areas of our professional, personal, and social lives.

 

In conclusion, we need to acknowledge the disposition effect in trading, and combat it through a solid trading strategy, combined with building up an emotional distance around our decision making.

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The Importance Of A Daily Trading Routine

It can be easy to underestimate just how necessary it is to nail down your daily trading routine, especially if you are a novice. It might seem like a game fuelled by instinct and the thrill of the moment, but most successful forex traders will tell you that a well organised and disciplined approach is crucial if you want to make progress. 

 

You can read as many books on forex or take as many online courses as you like, and that is important, but it must be matched by a structured daily routine. There’s no benefit to knowing how to drive a car if you don’t follow the rules of the road; in fact you will probably have an expensive crash, and the same applies to trading.

 

What is the purpose of a trading routine?

The trading routine is a part of your wider trading strategy, which you must have worked out before you even think of going live on the markets. It should include the details of each daily task, set down in a checklist to make sure that you miss nothing out.

 

Even if you don’t normally make lists and think you have a good memory, writing things down can help you focus your ideas, keep accurate records of your trading methods, and ensure that you don’t miss out on those small details. It can help you maintain your discipline if you are tempted to cut corners, which can lead to big mistakes.

 

A routine is doubly important if you are prone to getting side-tracked, or work in a place where distractions and interruptions are difficult to avoid. This may be true for many amateur traders, who fit trading into evenings and weekends, when family are around or friends are prone to dropping in.

 

What should your routine include?

Meditation

Before you even start to make decisions, it is important to make sure that you are in the right frame of mind. If you are sceptical about this, it is worth noting that many of the people who succeed in high powered positions respect the power of meditation.

 

Meditation helps you to build resilience, improve your concentration, and reduce your stress levels. It’s a technique used by elite athletes, CEOs, and top celebrities to help them optimise their performance, and is just as important as exercise and eating healthily for mental alertness and clarity.

 

Meditation can take as little as five minutes, or even an hour; it’s up to you, but even a little can go a long way. There are plenty of in-depth guides and apps which can talk you through the various techniques. Simply by sitting still in a relaxed posture, free from interruptions and focusing on the rise and fall of your breath, is a good place to start.

 

The real purpose of practicing this is to learn to let go of those busy superficial thoughts that crowd our minds as we go through the day. Once you get used to accessing this state of mind, you can check yourself when you find yourself in a stressful situation, and ground your mind. This helps to prevent you making errors and poor decisions under pressure.

 

Some people like to use visualisation techniques to prepare themselves for the rigours ahead. Others find that meditation helps them access the left side of the brain, which is where we do our abstract thinking, that can help when analysing charts and patterns.

 

Review your economic calendar

So you’ve calmed your mind and are raring to go. Start by checking up on your economic calendar for data releases that affect the movement of the forex markets. Look out for the latest unemployment rates, interest rates, inflation rates, commodities, and all the other factors that can influence the currency prices.

 

If there has been a significant political announcement or geopolitical event, be prepared to deal with some volatility in the markets.

 

Study the current market conditions

Check up on overnight activity and the previous day’s price charts. Note if the prices are trending in a consistent direction, or if they are moving within a range bound. Use moving averages to help you get a better overall picture. If you are new to forex trading, it can help to read up on how to identify trending markets.

 

The best trading opportunities can occur in defined and larger trading ranges. Learn how to identify support and resistance levels, as these are key to reading the market. However, beware of the temptation to get too bogged down in details, and spend hours looking at charts. This can cloud your judgement and be counterproductive.

 

Check your current positions

Review your open positions next. If the information you have gathered from the economic news or from your market analysis is likely to affect their performance, now is the time to carry out any adjustments. For example, you may want to move a stop loss order to mitigate against further losses, or to protect a position which is performing well.

 

There may be positions you are ready to close or exit from. Remember to always refer to your trading strategy, and do not be tempted to deviate from it, unless there are unforeseen external factors which are causing turbulence in the markets.

Look for potential setups

Looking for new trade setups is essential of course, but don’t be tempted to skip any of the previously outlined steps. This is a mistake that most novice traders make, in their eagerness to get started. Even if you have a solid trading strategy, a disorganised approach will soon take away the benefits.

 

If your strategy is trend-based, look for favourable conditions, which you should have already defined in your previous work. Once you have a clear opportunity, narrow down the precise time you want to enter the trade. This could be during a support or resistance phase, for example.

 

You should have a clearly defined decision-making process as to which is your favoured strategy. If the conditions to make a trade are all present, the risk should be managed with a stop-loss order, especially if you are new to trading. Where you place your stop-loss will depend on whether you are making a short trade, or a longer trade over days or weeks.

 

A stop-loss order automatically triggers an instruction to sell the currency pair once a certain market price has been reached, to protect against the risk of making a significant loss.

 

Once the stop-loss is triggered, it becomes a market order, which means that the contract is executed at the market price, which may be higher or lower than the currency price. The position of the stop-loss can be moved after it has first been entered, to protect a long-term trade that is performing well, for example.

 

If you would prefer to have a guaranteed price limit, you could choose to set a stop-limit order, which buys or sells at the market price. However if the conditions are not met and the trade is not executed, then you are unprotected against losses in the event of a sudden sharp downturn.

 

Review your records

One important step that many amateur forex traders overlook is keeping a trade journal. This is a notebook or spreadsheet where you write down the details of each trade you make. It doesn’t have to be in great detail, but it should at least record which currency pairs you traded, at what time, your reasons for doing so, and if the trade made a profit or loss.

 

This might seem like an annoying and unnecessary piece of admin, but far from it; it is a tool employed by all effective forex traders. The reason is that it helps to track performance over a period of time. This tells you if your strategies are working, or if you need to have a rethink. It can help you see which forex pairs and time zones work best for you.

 

After you have been trading for a period of time, review your records to help you spot successful runs, or losing streaks. This doesn’t necessarily mean you need to make dramatic changes, as they can happen to the most experienced of traders. However, it may help you to see where you are going wrong, or indeed, right!

 

At the end of the day

It is helpful to do some prep to set you up for the following day, such as looking over the economic calendar for any significant events or data releases. It may also be a chance to do some more extensive chart analysis to keep your eye on the bigger picture. Have one final check for any alerts on your trading platform, and then you should wrap up for the day.

 

It’s important not to lose sight of your work-life balance, as rest and relaxation are important to maintain your psychological resilience. As we have discussed earlier, a crowded mind and a tense body can lead to stress and anxiety, and this will have a negative impact on your trading performance. Get plenty of sleep, and you are ready to roll again.

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10 Golden Rules Of Forex Trading

Embarking on a career as an FX trader is certainly an exciting endeavour and one that can see you reap some serious financial rewards… if you’re disciplined and objective enough to keep a handle on your emotions, no matter what happens day to day.

 

Even the most seasoned of traders will have let their heart rule their head at some point during trading hours and this almost always ends in a loss, so it’s important that you develop the psychological skills and resilience you need to stick to your trading plan, without emotions and knee jerk reactions leading you down a wayward path.

 

Consistency is key when it comes to trading and there are no shortcuts you can take to start turning a profit. It’s all about developing a successful strategy over time, across a variety of trades… and this is where a disciplined nature will stand you in excellent stead.

 

Of course, when the markets are flying and you’re right in the eye of the storm, this can be easier said than done – and you shouldn’t expect to get it right each and every time, especially if you’re just starting out.

 

Practice makes perfect, as they say, so give yourself the time you need to really perfect your strategy and cement your outlook, so you’re able to react accordingly, regardless of what happens.

 

To help keep you on track, we’ve compiled some of the top Golden Rules of Forex Trading to drive success and ensure that your career is a lucrative – and enjoyable – one.

 

1. Get some sleep

 

While the markets may never sleep, it’s imperative that you do. Exhaustion never did anyone any good and if you’re over-trading, you’re more likely to make bad decisions, which won’t help your back pocket in any way. Make sure you’re scheduling proper time for sleep so that you can stay alert, on point and ready to take on the trading day.

 

2. Use a demo account

 

Don’t just jump into the feeding pool feet first without putting some practice in beforehand. It’s important for you to know what to expect and for you to find out just how robust your trading strategy is before you trade currency pairs in the real world.

 

All the most successful traders will have cut their teeth using a demo account – and you would be wise to follow in their footsteps, as well.

 

3. Avoid making predictions

 

Of course, it’s necessary and advisable for traders to monitor the news and keep a close eye on what’s going on, but the danger comes when you try to predict outcomes and work out where you think the market is going, making your trades based on your own projections.

 

Ultimately, this is a recipe for disaster and you could take some serious hits as a result, or potentially miss out on some lucrative opportunities.

 

Instead, focus on being patient and waiting for hints and indications from the market itself as to where it’s going and what’s likely to happen so that you can capitalise on that and start raking in the wins.

 

4. Always follow your trading strategy

 

Confidence is key when it comes to trading and if you’re second guessing yourself, or finding yourself occasionally being swayed by what you see happening on websites, what other traders are doing or even advice from friends or family, you’re sure to see progress start to stall.

 

Don’t forget – you dedicated a lot of time and effort into devising your strategy, so you need to have trust in yourself and the research you’ve done, following your trading plan through to the end, no matter how tempting it may be to go in another direction. Your analysis is the one that matters, so try to avoid being steered by outside influences.

 

5. Prioritise risk management

 

Risk management is one of the most important lessons that any trader can learn and it should always be positioned at the very heart of your trading plan. After all, you can’t play with what you don’t have – so it’s important that you don’t put it all on the line.

 

The first rule of risk management is to work out what the odds are of your trade being successful. For this, you’ll need to have a solid understanding of how the market works and how you’re going to control or manage the risks involved with specific trades, working out a cut-out point and what potential losses you’re willing to accept.

 

Remember – if your losses would be too substantial for you to handle, avoid the trade at all costs. You’ll likely find yourself becoming too emotionally involved, putting your ability to think objective under serious stress and pressure. And, as we all know, an emotional trader is a trader in trouble.

 

6. Only trade what you can afford

 

The trading world is a fast-paced one and fortunes can easily turn on a dime, so it’s essential that you only ever trade with what you can afford to lose. Bad days are sure to happen to each and every trader and losses are inevitable, so avoid investing everything you have and putting all your eggs in one basket.

 

Avoid investing more than between two and three per cent of your bankroll on a trade and make sure you stick to the system you’ve devised where risk and money management are concerned.

 

The reason your strategy exists is to keep you on track and you will have compiled it when you were cool and clear-headed, making decisions based on facts and facts alone… so it’s the one to trust and fall back on when you’re making trades in real time.

 

7. Be kind to yourself

 

Never forget – bad trades can and will happen. You need to accept this reality before you start your trading career, or you could find your emotional health and wellbeing really takes a beating, alongside your bank account.

 

The key to future success will be in how you handle the bad days. If you give yourself a hard time when faced with failure, you can start to lose confidence in yourself and this could then have an impact on how you trade, creating a vicious cycle of loss and emotional abuse.

 

A big loss can lead you to questioning yourself to such an extent that you start getting out of trades too quickly or holding onto them for too long, getting into too many for you to handle, missing out on opportunities for fear of failure… there’s a lot that can go wrong!

 

So when you are in a sticky situation and have a big loss on your hands, accept it, don’t dwell on it, forgive yourself and move on. And don’t forget – every loss also represents a learning opportunity, so analyse what took place and see what lessons exist therein.

 

8. Less is more

 

Because the FX trading world is so exciting, it’s very easy indeed to get caught up in it all – particularly when you’re just starting out. Before you know it, you have currency pairs flying around here, there and everywhere… and that’s where the trouble starts.

 

It’s essential that you only make moves on two or three trades at the beginning, so you can test out your trading strategy, see how it works in real time and how you react when trading with actual finances.

 

If you take on too much, you’ll likely find yourself overwhelmed and struggling to keep track of it all, so only increase your trades when you’re good and ready. There’s no rush and it’s all about maintaining control of the situation.

 

9. Keep a journal

 

Knowledge is power for FX traders, but there’s so much of it flying around that it can be incredibly difficult to keep track of what’s going on and how it should affect your trading strategy.

 

This is where a journal really comes into its own, helping you to document daily activity and analysis of the trades you’ve made. This, in turn, helps you see where you’ve gone wrong, what changes (if any) to make, which trends are working, which are on the downward slope and so on. Organisation is key and a diary of sorts will help you keep your thinking clear.

 

10. Have fun

 

Yes, trading is a business and it can be a very lucrative one, but if you start taking it too seriously and forget to enjoy yourself, you could see yourself taking on more losses and making more dubious decisions, all in the pursuit of money.

 

Greed is just one of the many emotions you need to keep in check when trading and the best way to do this is to make sure you’re not just in it for the cold hard cash.

 

There are all sorts of ways you can have fun while trading, everything from joining forums to chat to like-minded people and taking regular breaks to refresh your approach to watching market-inspired movies or reading books on the topic.

 

Looking for a funded trading account? Get in touch with FTUK to find out more.

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Test your basic forex knowledge with our simple trading quiz!

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Trading is such a simple yet complex world. Every time you take a new pathway or learn something new, there is always a challenge to overcome. With many traders quitting early due to mental roadblocks it’s often a good idea to refresh yourself with the basics. See how you get on with our quiz and rank yourself!

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7 Trading lessons to learn from films

The dreaded burnout is a very real fear for anyone trading in currency pairs, young or old, novice or experienced career trader. It’s something you’ve really got to keep an eye on, checking in with yourself and your mental and emotional state regularly so you know you’re still thinking and acting clearly, and not buckling under the pressure.

 

When you’re trading, you’re constantly bombarded with stressful situations, many of which just appear out of nowhere, so you’ve got to make immediate or difficult decisions all the time… which is sure to take its toll over time, affecting your outlook, your temperament, the way you think and the way you react in times of trouble.

 

Overtrading, too many losses, extreme market conditions, unrealistic expectations of what you’re going to achieve – all of these can lead to burnout if you’re not careful, but one of the best ways to stop this is, quite simply, by taking a break!

 

Of course, trading is exhilarating and exciting, which is why you want to do it all the time, especially when you’re first starting out. But it’s important to take a step back regularly, so you can unwind, relax and get away from all the stress… something that will only prove beneficial to your trading when you do go back to it, don’t forget.

 

That being said, just because you’re not trading doesn’t mean that you have to turn your back on your passion altogether and there are countless movies and documentaries out there that are sure to be of interest from a trader’s perspective. So, with that in mind, here are a couple you might like to check out.

 

Rogue Trader

 

This 1999 movie starring Ewan McGregor tells the true story of Nick Leeson, who once upon a time worked for Barings Bank as general manager of the trading floor on the SIMEX exchange. It charts his stratospheric rise to the top – and his fall from grace. Nick goes on to hide some massive losses, eventually climbing to more than £800 million.

 

While the flick was not well received by critics (and it has a rating of 30 per cent on Rotten Tomatoes), there are some lessons that can be taken away from it, as an FX trader.

 

It’s certainly an excellent reminder, for example, to keep emotions in check and not get too cocky or overconfident, as well as knowing when to quit… and actually going through with it. Chasing money lost is never a good winning strategy, after all.

 

Floored

 

Rewind even further to 2009 and you’ll find Floored, a documentary film focusing on the trading floors of Chicago and charting how computerised trading changed the way the business operated. Those traders unable to evolve and adapt to the new world order were left to fall behind, their skills no longer relevant.

 

This could well be just the cautionary tale you need to make sure you stay up to date with all the latest technological innovations and advancements, so you can see how they might help you with your trading.

 

It’s important to keep an open mind where your trading strategy is concerned, after all – and remember! Nothing lasts forever, so the ability to remain flexible with your approach could prove invaluable in the future.

 

This film also represents a great opportunity for new traders to gain some helpful insights into life as a trader and how it can affect people and the various aspects of their lives.

 

Margin Call

 

2011’s Margin Call (with an A-list cast including Stanley Tucci, Jeremy Irons and Demi Moore) takes place over the course of 24 hours at an investment bank on Wall Street at the start of the 2007/2008 financial crisis.

 

The investment firm discovers that its portfolio is entirely worthless… so the question is: Hang on and implement damage control (if possible), or sell the assets before the news hits the headlines?

 

One of the biggest takeaways from this film for traders is to never borrow money to make a trade. Only trade with what you can afford to lose, or you could find yourself in a pretty big hole.

 

But, for traders, it’s also important to be aware that fluctuations in the markets can and will happen – and the key is how you react when tides have turned and how you weather those storms.

 

Gains and losses are a natural part of the cycle, so always keep your trading strategy in mind and stick to the plan, no matter what happens. There is no room for knee-jerk reactions when trading, after all.

 

Traders: Millions by the Minute

 

This is a two-part BBC documentary focusing on FX trading in London, New York, Amsterdam and Chicago, including both city-based professionals and those trading from home, showing how they juggle trade and home life successfully.

 

For new traders, in particular, this would be a hugely beneficial watch, as it will show you just how involved everything is and what you need to do in order to see the successes you’ve always dreamed of.

 

The Wolf of Wall Street

 

No list of trading movies would ever be complete without a mention of The Wolf of Wall Street, starring everybody’s favourite Leonardo DiCaprio as Wall Street stockbroker Jordan Belfort.

 

If you haven’t seen it yet, it’s an incredibly entertaining, exciting and fast-paced film that’s a great watch even if it’s just for the sake of pure enjoyment, but if you’re looking for some takeaway lessons to benefit your trading strategy and approach, there are lots of those as well.

 

All the entertainment aside, perhaps the main lesson you can take from The Wolf of Wall Street is to make sure that you have a very clear vision of what you want to achieve, why you want to achieve it and how you plan to go about doing it.

 

Without a proper plan and strategy in place and knowledge of how the markets work, you will find it hard to navigate your way through the world of FX trading.

 

Billion Dollar Day

 

Another BBC documentary, this time from 1986, which follows various currency brokers and traders, providing some amazing insights into forex. Despite it being nearly 40 years old, the film is still a firm favourite among traders, so definitely well worth a watch.

 

From an educational perspective, Billion Dollar Day shows you just how important it is for you to know how to manage your losses.

 

All the professional traders featured in the documentary sustain losses and it’s absolutely inevitable that you will too… but it’s all about how you bounce back from there without letting it affect you that will determine the success of your trading career.

 

Boiler Room

 

Boiler Room (2000) tells the tale of Seth Davis (played by Giovani Ribisi), a 19-year-old college dropout who runs an unlicensed casino from his house… until he’s offered the opportunity to join brokerage firm JT Marlin as a trainee stockbroker. But all is not as it seems…

 

There are lots of investment lessons that can be taken away from Boiler Room, but one of the most pertinent perhaps is to make sure you don’t lose sight of what really matters and what life is really all about.

 

In the film, the characters find it hard to claw back their losses and the effects of this are far-reaching (without giving too much away), taking its toll in all areas of their lives. For the majority of traders, this won’t be too much of a threat – as long as they’re practising excellent money management and have a trading strategy to stick to.

 

But it’s also a great warning to make sure that you’re not becoming entirely consumed by your trading career. Striking a good work-life balance is essential and you’ll find that taking time away from your currency pairs will only benefit you in the long run and you’ll be better placed to trade well when you do pick it back up again.

 

Remember that there can be too much of a good thing, so make sure you’re scheduling regular breaks and spending time with friends and family. You’ll return to your desk fully refreshed and with a brand-new fresh perspective.

 

Looking for a funded forex trading account? Check out what FTUK has to offer and get in touch with the team today to start trading when you like, where you like.

 

You can join any of our funding programmes and start gaining proprietary trading experience immediately. Our traders come from all over the world – all you need is internet access and a robust trading strategy to get going.

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INTERVIEW WITH RICHARD NASR

https://www.youtube.com/watch?v=iSTTHoDtt-g

We recently interviewed Richard Nasr from RichTL. Rich shares some of his trading methods and offerings as a trader coach.

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WHERE TO LEARN ONLINE FOREX TRADING

There is a lot to learn for new traders, from fundamental principles to trading techniques, risk management, including proper platform training. A quick guide where to learn online Forex trading.

Trading in the Forex market requires expertise and knowledge because it is more popularly known. There is a lot to learn for new traders, from fundamental principles to trading techniques, risk management, including proper platform training. Once you’ve gained the confidence to start Forex trading, you’ll need to keep up with market trends, financial forecasts, and worldwide events that may affect the market.

You’ll also want to keep updating your trading abilities and learning how to make more lucrative deals. Isn’t it about time you got into the Forex market? It is one of the most successful ways to make money. You may benefit from a wide range of advantages, including trading options that are available 24 hours a day, high liquidity, and exposure to volatile currency pairs.

Forex trading courses

One of the best approaches to learn how to trade Forex is to find the best Forex training courses available on the market today. However, how can you tell which courses on Forex trading are worth your time and money? Would you please look at the best Forex trading course ratings from our series on the best trading courses?

When it comes to Forex trading, it gives you the most options and a lot to think about. Fortunately, there is a wealth of knowledge accessible online, and it is straightforward for both novice and expert Forex traders to learn everything they need to understand with maybe a little bit of study.

It would be best if you were sure that the information you select is authentic and trustworthy. If you’re looking for news, technical indications, strategic counsel, and instructional resources, the websites you visit should be reliable.

FX Academy

FX Academy is a web-based educational institution and provides a wide range of free currency and trading programs. Students will experience better at comfortable if they start with the general introduction to Forex trading. Forex traders, on the other hand, may opt to pursue specialist programs in trading, assessment, and risk management.

Four forex specialists from DailyForex.com conduct classes at FX Academy. Every session is comprised of self-paced multimedia lessons. There are some entertaining quizzes to face, and there is some easy research to do as well.

According to the information provided, these online Forex courses seem to earn money by referring participants to associated brokerage companies, although this is not stated. While in a public platform, this does not offer adequate one-on-one assistance. There is no need to acquire anything, and with a bit of time and work, you may get a lot of knowledge despite the low cost.

ForexSignals.com

ForexSignals.com is our top choice for a complete Forex trading education. ForexSignals.com was launched in 2012 by the well-known trader and economic instructor Nick McDonald, who has a large worldwide following. For the most part, ForexSignals serves as a data and education center for the Forex market.

We feel that the most remarkable Forex trading program is one that combines good training with best-in-class tools, a more intimate trading environment, and mentorship from top-tier trading specialists. There is a seven-day money-back guarantee if you’re not pleased for any reason with ForexSignals.com’s all-inclusive package, that includes particular training classes, access to professional trading tools, and continuing expert assistance.

The objective of ForexSignals.com is to teach its students how and when to trade by applying their trend-detection and signal-generation processes. To reinforce their expertise and training, professional Forex traders trade using the precise information they educate them.

The method seems to work. The social trading room has amassed 83,000 members and a YouTube channel with 253,000 subscribers in barely eight years. Nerdy traders should start with lessons at a trading school taught by seasoned professionals. A total of six sections makes up each of the two courses. Each one comprises 136 films lasting one hour each. Before getting into more technical elements of trading, the article covers certain fundamentals.

Forex School Online

Forex School Online is run by Professor Jonathan Fox, and teaches the basics of currency exchange trading in a seven-step process. This includes creating a personal plan, understanding trade types and risks, and selecting the optimal deal for your goals.

The basic starting training is free, as is a wealth of blog and multimedia content, which you may enjoy earlier or after completing the course. This is worth mentioning that the website appears to make money by collaborating with a recommended brokerage. However, you’re under no need to register or use that broker for your currency trading needs.

Beginner Forex traders might use the free training to understand how the marketplace runs without putting real money down immediately. You would not receive a similar degree of manufacturing value and skill in creating a high-end webpage as you would with a premium course. However, you cannot compete on price, so if you finish it and discover yourself demanding extra, this can open the door to even more challenging courses.

Pro Forex Mentor

This online Forex trading course, like many others available online, was created as a result of an absence of reputable online training resources. The founder, Marc Walton, began trading in 2002, but he was ready to give up after only three years because of the abundance of online mentors.

Walton was guided by a mentor and developed his Forex trading skills to the point where he could work for a hedge fund and manage money for individuals. As he progressed, others began asking him for advice and support, which eventually led to the creation of Forex Mentor Pro throughout 2008.

Three levels of teaching are available to you. Each level offers access to a private forum for members only, along with video lessons on three various Forex trading strategies you may use. Students have the option of making monthly payments and receiving all of the advantages mentioned above.

Yearly plans include priority help and a 30-minute mentor phone call, making them more customized. It costs one time and includes a 60-minute consultation with a mentor for lifetime access, as well as twice-yearly evaluations of progress and the effects of a personalized plan.

Six-Figure Capital

With Six-Figure Capital, both beginners and expert Forex traders may quickly improve their trading skills. Lewis Glasgow, a partner at Six-Figure Capital, came up with a curriculum. A 14-day training course called “Expert, the Science and Art of Trading” provides traders with a plethora of trading material packed into nineteen videos that are released every two weeks.

According to Lewis Glasgow, attending his course will educate you on how to benefit from market structure. Glasgow, who is opposed to the unnecessary complexities of Forex trading, just joined the market in 2013, making him a unique newbie. After receiving worldwide fame for successfully designing a unique signal-generating technology, he founded Six Figure Capital throughout the United Kingdom in 2016.

His unexpected success sparked a love for coaching in him, which resulted in this 14-day workshop. Glasgow’s harmonic various design course that he considers as one of the most sophisticated forex trading education accessible, is continued in this curriculum.

Simpler Trading

The process of Forex trading is getting more streamlined. With a worldwide reputation for offering high-quality financial training resources, trading is well acknowledged. On the Easier Trading site, around eight prominent Forex traders with a great deal of Forex trading expertise and experience supply traders and students looking for top-tier ideas.

Lectures, presentations, online chat groups, and mentoring are all methods Simpler Trading uses to give trading training. You may get in touch with the professionals at any time of the day or night via phone, digitally, or in real-time communication. They are available 24/7.

Based on your trading strategy and skill level, you could choose from a variety of 66 courses. Simpler Trading strategies may benefit Forex traders of all experience levels. As an alternative to traditional classroom teaching techniques, instructors might employ tools like Fibonacci research and directed investment.

eToro Trading School

The eToro Trading School’s one-day course covers a wide variety of topics in financial trading, including forex, cryptocurrencies, and stocks. Henry Ward, a seasoned broker with over ten years of experience, teaches the course in person.

The information is best suited to rookie traders or those who want to learn more while putting their toes into the water, despite the course’s claims to the contrary. A crash course on financial markets, language, and trading essentials will be provided to you throughout this course.

Beginners will benefit from the course’s discussion on trading personas, perhaps the most valuable part. This should assist you in identifying the sort of trader or investment strategy that is most suited to your personality. For those who can’t attend classes in person, there appears to be a collection of online lectures, complete with podcasts, in Canary Wharf, London.

Asia Forex Mentor

The finest trading education provider in Singapore has been named by the Global Banking and Finance Awards 2020 as Asia Forex Mentor. Ezekiel Chew has been teaching Forex trading to individuals interested since 2008, when he started his own company.

The primary goal of the course is to offer students a systematic approach to trading currencies. FX traders are the target audience for these programs. Even though the currency market remains the primary emphasis, the fundamental concept may be applied to the stock market as well.

Subscribers get unlimited access to all teachable video courses for the rest of their lives. New Forex traders looking to get a better grasp of foreign exchange trading may start with this method, which is well-structured and easy to use.

To keep his skills sharp, Ezekiel works at money management firms and banks, teaching Forex traders. The training seems to place a strong focus on the foreign exchange market because of Asia Forex Mentor’s status as the region’s leading currency educator.

However, Asia Forex Mentor is one of the finest since it provides lifetime access for an affordable one-time charge. Asia Forex Mentor When it comes to risk management and psychology, Ezekiel is a standout. This comprehensive course covers all parts of the forex market from beginning to end.

Udemy

The financial markets react dramatically to developments in the economic headlines. As a result, Forex traders must learn how to profit significantly from these announcements via news-based Trading. The course, like the others on our list, is accessible on Udemy and is self-paced. The training is excellent for Forex traders seeking a time-effective trading technique. It teaches students how to benefit from live commercial news events by leveraging them.

Additionally, it discusses the tools that retail traders may use to mimic professional institutions’ tactics, as well as why news affects the markets. Students will also learn how to develop trading plans ahead of a critical economic event.

Forex traders of all skill levels are welcome to participate. However, prior knowledge in Forex trading is preferred. Setting up and utilizing your trading account will be covered in the course. However, Forex traders with a history of successful trading will be at an advantage.

Conclusion where to learn online Forex trading

The Forex trading sector is still in its infancy. It’s growing more popular due to the low starting balance requirements and the substantial leverage available to those who want to engage in trading. Despite the rise of cryptocurrencies such as bitcoin and Litecoin, interest in Forex trading classes hasn’t dwindled.

A newcomer to online Forex trading should equip themselves with the necessary information before getting started. Only Forex traders who have obtained sufficient instruction may expect long-term success and earnings. However, taking a course in Forex trading is just the beginning of your journey to financial freedom. Paper trading and virtual FX account is indeed the second important factor to take into consideration.

You may utilize a simulator to practice what you learned at your selected school as a novice. Learn about price movement, day trading, or swing trading, and put your newfound knowledge from your preferred online Forex school courses into action.

The best way to know regarding Forex trading is to perform it online. From the convenience of your own home, you may learn, practice, and maintain your profession. Such courses would equip you with the knowledge and skills you need to begin in the exciting world of FX.

Bear in mind that international currency trading could be risky, with several investors going bankrupt. Whether you’re prepared to face that risk, starting with a beginner choice such as FX Academy is a fine place to begin. Expensive courses might be preferable for specific individuals, depending on their previous learning and knowledge goals.

 

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