Why Is It A Must To Choose A Trading Strategy That Suits You?
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Today I want to talk about something that might be your biggest downfall. We are mostly introduced to Forex Trading through social media where we are invited to some seminar. Forex seminars are all about introducing us to the idea and not really about the realities of trading. Most of us just dived in without understanding what is expected from us or what to expect except the money making part.
There’s one Forex market and thousands of ways to trade it. There is no one way to trade the markets but there’s definitely that one trading strategy that suits your lifestyle and personality. I am all about sharing my own experiences and practical solutions/tips that will help to improve your trading no matter how you choose to trade. But since I am the author here, I will refer a lot to how I personally trade and how it has made my life easier. Of course this has everything to do with me choosing a trading strategy that suits my lifestyle and personality.
Do you know the kind of person that you are?
You cannot separate yourself from being a trader. There’s only one you. Your personality plays a big role in how you’ll perform with your trading. I have been trading for so many years and I have tried lots of methods which in the end were not really accommodating my lifestyle and personality and that led to frustrations. When I finally found the one trading strategy that suits my personality, I never looked back. When I decided to offer my coaching services, I knew I had to cater for the individuals who are also like me. Read more about my private mentorship HERE.
Mind your lifestyle and personality
Let’s say you are a trader who also has a 9-5 job, a business or still studying. Clearly you cannot afford to stay up all night babysitting your trades. You really need to consider a trading strategy that will not require you to stay up all night, or a trading strategy that will not require you to stay glued to your trades the whole day. You definitely need a good night sleep for you to be able to concentrate in class, function/perform well in your job or business. It makes perfect sense right? These are the people that I cater for, the people who are like me. We want to trade but we also do not want to be consumed by it as we also have a life to live. Not everyone is like us though. All I am saying is, you need to look at your lifestyle and your personality. If how you trade right now is not accommodating those two, you are probably feeling miserable already, hence you need to re-think your plan.
This post is not about which trading strategy works and which one doesn’t. I don’t know how you trade and I am not here to tell you how you should trade. It is all about whether you can work with your chosen trading strategy or not. Does is suit your lifestyle or not? Does is accommodate your personality or not? If it doesn’t, the time to change is now. No matter how great that trading strategy can be, if it doesn’t accommodate you and your needs, then you shouldn’t use it.
A great example of this would be someone who wants to trade all day at random times, that person cannot juggle a job, school, business, parenthood plus trading, remember there’s only one you. That person cannot survive trading with me because as mentioned above, my method works better for someone who wants to have a life apart from trading. Finding out should not be a challenge. Just ask yourself these two questions. Does it suit your lifestyle and does it accommodate your personality? If it does, you’ve won the first battle and the next step would be to practice it over and over again without breaking until you cannot get it wrong.
To me, it makes no sense to switch from one strategy to another while overlooking your lifestyle and personality. How are you going to master something that makes you so miserable? Before I decided to consider my lifestyle, I was always so grumpy my son even said I control the mood in the house. If you are keen in knowing how I stopped all the chaos and drama that was going on in my life at that time, you may like to read this post HERE. These are the tips that you can use to make your own trading less challenging. Thank you for stopping by. I hope this helps. If you think it does, it means more people need to see it. Please kindly share with your peers.
Goal: A goal is an idea of the future desired results that a person envisions, plans and commits to achieve. See, the definition is not only a desire, it is a desire that is followed by planning and commitment. Without planning and commitment, your desires will remain just that, desires.
Most people (like me) got introduced to Forex trading through social media and of course it was sold to us as the quickest and the easiest way to make money. Clearly, we were lied to and most of us have since found out that there’s a lot that goes in, in order to make it a success. In search of more information about trading, most people would attend Forex trading seminars which are mostly about “how to get rich quick and fire your boss”. Most people are just diving in without proper information on what they should expect or should be expected from them. I do not dismiss the fact that that can be achieved, but definitely not after 2 days of learning how to trade. Your mindset has to be in the right place as well. For that reason, it is easier to think that one can just be successful without proper planning.
Why are you trading?
This is the first question that you should ask yourself. You must first determine your WHY? Your WHY will lead you to determining how you are going to achieve your goal. You cannot think about achieving a goal without including planning. Now, you are on the right track, you are now planning how you’ll achieve your goal, be it short/long term.
How are you planning to achieve your Forex trading goals?
You need to know how you are going to trade your account (your trading method of choice). Once you have your method of choice, you’ll need to stick to it until you can master it. Successful trading is not only about the strategy but mostly about you. You’ll have to work more on yourself to develop self-control.
I’ve been talking to some of the traders that I personally mentor about why they trade. To my surprise, most of them do not have a clear goal of why they trade. Some of them do know why they trade. See some of the responses I got from them.
“I trade because I want to make money”
This response is not good enough. Of course we all want to make money but being clear about what do you want to do with the money that you want to make and when do you want to make it, is what you should focus on. That on its own can have an impact in how you develop self-discipline and focus.
“I trade for a monthly income to pay for my child’s school needs”
This woman knows exactly what she wants to achieve with her trading account and she has been achieving it for the past year. She is also not easily influenced by what she sees on social media or how other traders trade. Her why keeps pushing her to the right direction and her focus is on another level. She also has a full time job. It is highly possible to trade for a monthly income.
“I Trade So That I Can Withdraw A Lump sum To Grow My Other Business”
This one has a long term goal, she is trading and compounding her profits in order to withdraw for her other business. I also think that’s the main reason why she’s been doing so well for the past few years, her goal gives her the right push.
I can go on and on sharing the responses, but that would make this post too long. One more thing that I always say is that your Forex account must sustain itself. Your monthly data must come from your trading account. I hope you do get an idea of how you can also set your own Forex trading goals using the tips I shared on this post. Thank you for stopping by. Kindly spread the word by sharing this post with your peers.
Geopolitical Risk: A risk that an investment could suffer as a result of political instability, political issues and unexpected developments in the country’s government.
How Do Geopolitics Affect The Forex Markets?
Investors will often invest in a country where the economy is performing well and they see opportunities. If there are slight uncertainties about the future of their investments due to a country’s unstable politics, investors are likely to look for an immediate exit. If they decide to do so, the country’s currency gets negatively impacted and starts to sell off as they move their money to other countries where they feel that their investments are safer. Even a single tweet can cause uncertainties. Not so long ago the President of the United States Of America Donald Trump sent out a tweet about trade wars and the markets got jitters and went insane within a day.
Examples Of Geopolitics
Tensions between nations
General elections
Brexit
Wars
Snap elections
Natural disasters such as hurricanes, floods, earthquakes.
Why Do We As Traders Care?
Wars seems to have the most negative effect because infrastructure gets destroyed during wars and that leads to severe economic frustrations. Investors fear wars. Being an investor in the currency markets means you are also affected by all these. You do not have to admit that you are, but you are affected whether you like it or not. When GBP fell by 10% overnight during the U.K referendum, it fell for all investors including those who think that geopolitics do not matter. When the British Prime Minister Theresa May triggered the article 50, the markets got jitters and everyone got affected whether you were aware of it or not. When U.K had their snap elections GBP got impacted for all investors. When Euro fell to its 14 year low against the U.S Dollar on Brexit it did so for all investors. These are some of the events that make me to never regret my decision to trade that way that I do now because all these are never a nasty surprise to me.
A few months ago on the 6th of October 2017, the storms that hit the U.S had a greater impact on the labour market and as a result the Non-Farm Payrolls figure came out very low from what was expected. The forecast was 82K and the actual figure was -33K. It was all because of a natural disaster.
In closing, if you have invested in Forex, beware that there are geopolitical events that can affect your trading. Currencies like U.S Dollar because Trump is always busy, also EUR and GBP due to Brexit . Thank you for stopping by.
In the past week I have mentioned OPEC a lot on my social media posts. I have been getting messages from individuals who are keen to understand more about OPEC . I then decided to put up this blog post hoping to simplify it for anyone who is interested to know. As currency traders, it benefits us to understand the markets.
What does OPEC stand for?
OPEC stands for Organization of the Petroleum Exporting Countries. This organization comprises of 14 nations and it was founded in 1960. There are some other countries which are non OPEC members (Canada is one of them). It’s Head Quarters are in Vienna where they usually hold their conferences/meetings.
What is their mission?
To unify the petroleum policies of it’s member countries
To stabilize oil markets
To regulate the supply to consumers by ensuring that there are no oil shortages.
Why does OPEC hold conferences/meetings?
They do so to discuss the oil production output. They meet up to discuss among other things the barrels of oil that they want to produce per day. The latest OPEC meeting which was the 174th meeting, was held in Vienna on the 22nd of June. Congo was also approved with immediate effect as a member of OPEC. They also mentioned that the oil market has improved over the past 6 months. They came into an agreement to increase crude oil production by 1 million B/D (barrels per day) on paper. The markets didn’t really think it was enough though. The markets thought it was oversold. The oil ministers also acknowledged that not all members will be in a position to increase the barrel production right away. It might be a bit difficult for Iran since it was hit by the U.S sanctions that has hindered it’s energy exports. In actual fact, the increase will be around 600 000 B/D.
What actually happens when they pump more barrels of oil per day?
Major oil producers decide to pump more oil to prevent shortages in supply. The president of the United States Of America, Donald Trump has been publicly expressing his support for more output in his recent tweets and he definitely welcomed the deal to pump more barrels.
How does increasing the oil output affect the oil price?
Producing more barrels of oil helps in reducing the price. In short, increased oil production=less oil price and decreased oil production= higher oil price. If OPEC can decide to decrease the oil production, definitely the oil price will rise higher. With the higher Crude oil price comes a higher fuel price, higher food prices and a lot more. I hope I have managed to at least break it down in a more simpler way like I always try. Thank you for stopping by. Kindly share this post using the share buttons below.
Almost every trader that I’ve spoken to knows that greed can really mess up with one’s account, but none of them seems to be getting over their greed. I thought of putting up this blog post because I understand how challenging this can be. I have suffered from the same and I can now share a few tips on how you can overcome it. With most traders, greed starts as envy and progresses to greed that you can’t control. Don’t worry though, I overcame it and you can definitely overcome it. My mentees and I gave it a name, we call it “Tom’s tendencies”
What exactly is greed?
According to its definition, greed is a selfish want for something beyond one’s need. Greed is when you are unable to control the urge to keep on trading even when you’ve actually exceeded your daily target. You just keep wanting more and more until you give away all your daily profits at the end of the day plus half of your capital or even all of it.
How does greed start?
When you don’t treat your trading account as your personal affair but share it with everyone who gives you a hint that they also trade. I know this because that is how my own greed started during my early days of trading. I used to follow every page as long as I saw the word “Forex”. To me, the word had an ability to create all sorts of unrealistic expectations. You cannot blame me though because almost all the groups I joined portrayed it as the easiest way to make millions spending just few minutes on your smart phone. This girl right here wanted to make it big fast and quick just so she can also fit in with other children. Little did she know that she was about to face a long and rocky journey ahead of her.
You know when you follow every Forex group that you come across, you meet some traders who are pure gamblers but because it is easier to follow a bad trend than to do the right thing, you are likely to mess up your own trading plan and follow none of it. When you see other traders posting their screen shots showing their profits and lot sizes making you feel very envious and end up following their footsteps, neglecting your own trading plan in the process.
The best thing that I’ve ever done for my trading journey was to remove myself from all those groups. It helped me to focus on my own account (which was very small at that time) and my trading plan. Yep, all the noise was filtered and I could focus (which is what I needed anyway).I really had no business increasing my Lot size like I used to. It was all because I was envying other traders and my envy was soon turned into greed. All that got me was nothing but pain and losses. Margin call was the order of the day and it was a normal thing to me. Stop the envy, focus , focus and focus even more without adding unnecessary pressure to yourself. Forget about your friends, they are not contributing any cent to your trading account akere (sorry I got tempted to use my favorite word,please allow me to)
Accept Your Account As it Is
By accepting your account as it is, I mean that you need to understand that if you only invested $500 in your trading account you may not be able to make the same returns as someone who invested $5000. You also need to accept that there may be some restrictions in terms of the financial instruments that you can trade. You may wish to trade Brnt Crude oil , DAX or other stock indices but only to find out that they are too expensive for your account and you can’t afford to trade them, accept that.
There is absolutely nothing wrong with not trading all the financial instruments that you see on your market watch. Actually, you can even do just fine trading one currency pair. Relax and accept your account size it is and treat it accordingly. One of the realities of trading is that your earning potential is highly dependent to your start up capital (I know someone might just stop reading right here because the comforting lies sound sweeter than the reality/truth). The reality can be very unpleasant. Work out your own trading plan, do not just do that nje (my favorite word again) follow it without compromise.
Is It Difficult To Overcome Greed?
Anything, I mean anything is possible when your mind is made up. Make up your own mind and you can easily overcome greed. I did and you can do it too. Thank you for stopping by, kindly share the post with your peers.
Why Demo Account Seems To Differ From Real Account
Welcome back to my blog. Today I will address one of the frequently asked questions about how demo account seems to differ from the real account for many traders. I have traded both accounts (obviously).We all start with a virtual account then move to the real account as soon as we feel ready. I think it makes more sense to share my own demo Vs real account trading experience and also of those that I have recently spoken to regarding this subject. It was a week ago when I spoke to one of my mentees who has been on demo account for a couple of months now, this is what he said
“Effects of being on demo for a long time are not good. It’s easy to ignore the rules and be not focused. That’s what I have realized. I need to be on live as soon as possible. Strategy part of trading can be mastered on demo, but the emotion part is not covered at all and it is the most important part of trading″
I fully agreed with him because that’s exactly what I noticed with my own demo trading experience. When I was still on demo account I thought I was just going to cruise on real account because of how I perfected the skill on demo account and the amount of time I spent trading on demo. To my surprise, that was not the case at all. As soon as I started with the real account, my confidence went out of the window. I started to worry and the fear started to cripple in. The outcomes from my trading suddenly changed drastically. Last week Friday, I was talking to my other mentee who has been trading live account for some time now but she still has some challenges there and there that she needs to overcome. She still does check in on her demo account sometimes (it happens when you are scared to just enter a trade on real account or maybe when you are not trusting your own analysis at the time). She actually inspired this post and I told her that I will write this blog post and feature her comments on the demo Vs real account matter. This is what she said just after we traded our 3rd Canada CPI and I was doing a follow up on how she did (I trade together with my mentees)
“I went to demo and made a lot of money. Sometimes I don’t understand why I make so much money on demo account using the same strategy”
My conversation with her went on and on and I was telling her why she needs to forget about demo trading now and focus on acquiring the experience needed for real trading account. The main reason why she makes more money on demo account using the very same strategy is that she is emotionally relaxed when using the virtual money that comes with demo account than when she is trading her own money. I know it was the case with me as well and so it is for many traders out there. There’s a thin line between being careful and being scared and scared money never makes money.
Benefits Of Demo Account
There’s a lot that a newbie needs to learn as far as Forex market is concerned. Brokers do provide a virtual account which comes with virtual money for practice/learning purposes. Demo/virtual account does give an idea of how the live trading account operates. A newbie will actually get a feel of how the buying and selling are done in the markets and that’s the benefit of learning from a virtual account without risking your own money. The reality though is that the experience/ success that you might achieve on demo account does not indicate the live/real account experience/ success. It is advisable to practice/ learn using a demo account with the understanding that how you perform on demo account has got nothing to do with how you’ll perform on real/live account.
How Long Must One Practice On Demo Before Real Account
There is no straight answer to that question. I suggest that as soon as you understand how the buying and selling works and the strategy that you’ll be using. Of course, there’s a lot more that goes into trading successfully than just a strategy. You’ll have to acquire a good money management skill as well. All of the above mentioned can be achieved using a demo account. You can practice on your demo account for 10 years, but your first day on real account will feel exactly like that first trade you placed on demo account 10 years ago. See, all that experience you got from demo trading will not matter at all. You will need a new set of skills and experience for your live account. I always advise my own mentees to spend some time on demo and get the real test as soon as possible. A trader needs 2 sets of experience, the one acquired from demo and the one from real account which is the one that you need the most. Trade on demo, but do not delay yourself by staying there for too long.
Opening A Real Account
I published a blog post some time ago about start up capital on real account. You can read it HERE. On the post, I mentioned how you can start small and add more funds as you get more experience. I also spoke about how trading a smaller account can be discouraging and frustrating as everything move slower. With the right kind of support/mentorship, you can start with an amount that can give you a better trading environment (less stressful). Whatever amount you decide to start with, be ready to learn all over again. The live account seems to be different from demo account because of the emotional attachment we tend to have when real money is involved. How we handle and respond to pressures that come with trading on demo account is totally different from how we deal with them on real account.
Use demo account to learn, but don’t delay yourself by trading it for years and years. There are other issues that may arise with real account that you did not really bother to pay attention to while you were on demo. Slippages, re quotes and sometimes just the slowness of your internet connection. We tend to ignore these on demo platforms and only realize them on live account because our money is involved and we become extra careful. Being careless while on demo is the order of the day, we can leave trades running unattended without fearing or thinking about the losses or swaps. One can blow a demo account and request more virtual money from the broker.
Do you think you are ready for your live account? Do talk to me for recommendations or you can check these FSB regulated brokers and sign up with one of them (for the safety of your funds, always trade with regulated brokers) I have personally worked with the recommended brokers and they can be trusted with your funds. For private lessons & mentorship, check out this page for more information. Thank you for stopping by. Kindly share this post should you find it valuable.
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