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March 9th, 2007 @ 3:20 am by Mihai Marinescu

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Following yesterday’s comments (on which are the best currencies to trade), I shall now try to suggest a few brief solutions for those traders who keep changing the pairs they trade, hoping this will result in better performance.

As I said before, good trading has little to do with the pair(s) we choose to trade. If we have a clear trading strategy and the ability to respect our trading plan, then we already have a first possible answer to our question: the best pairs to trade are those which we already tested, and which – as a result of our testing – seem to yield better results in the long run. If we developed a strategy, tested it for example on EUR/USD, USD/JPY and EUR/SEK and saw that USD/JPY seems to respond better and generate more profit, then we must give this pair priority, at least for as long as we follow this strategy. It is a simple obvious fact, but one that requires discipline and patience: if we decide to trade only, say, USD/JPY signals, then our trading must reflect this decision. Never go for impulses like: “come on, let’s go crazy for once, let’s trade a new pair and see what happens”. Demo accounts may be appropriate for this kind of approach, live accounts are not… Trading is not for those looking for a thrill, but for educated and organized individuals who are ready to treat it seriously.

The coherence of our strategy (based on extensive testing on several pairs) should be the most important factor when deciding which pairs to trade. However, if we are to choose between the vast array of currency pairs available and have not developed a trading plan just yet, there are still some small but very important points we should take into account. Minor and simplistic as they may seem, in the long run they can seriously tip the scales in our favor. Read the rest of this entry »

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March 7th, 2007 @ 12:57 pm by Paul Wallace

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Fear is defined as ‘the anticipation of pain’, which is very often linked to a past outcome. As traders it can be the defining element between success and failure for an individual. We can have the most elegant and sophisticated of trading strategies but if we’re paralyzed by fear then we will amount to nothing!

  • How many times have you ‘sat on your hands’ and avoided pulling the trigger?
  • How many times have you seen a fantastic set-up in the market only to ignore the opportunity because it wasn’t perfect?
  • How many times have you convinced yourself that when you’re a better/more confident/ better capitalized trader then you’ll take those trades?

To be continued…

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February 28th, 2007 @ 11:18 am by Sunil Mangwani

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It’s really not that difficult.

Keep things simple, do not over complicate things by following too many indicators, decide on a trade plan – and follow it diligently, with no exceptions.

If the market does not give you the setup (as per your trade plan), take a break, go golfing, go swimming. The markets will always be there, and your setups will appear.

It’s better to wait for a high probability trade to occur, than to enter the markets just because you want to trade.

Divergence is considered to be one of the few leading indicators of price, and has a high success ratio. It occurs when there is a discrepancy between the price and a technical oscillator indicator such as Stochastic, RSI, MACD, or CCI.

We can define it as the failure of the indicator to confirm the higher high or lower low of the price, causing a discrepancy or “divergence”.

Example of a divergence trade

The precise way to trade these setups is taught in our Live Trading Room:

We lay down conditions to determine if it is a valid setup, and define exact points of entry, stop and targets.
The relevant levels for this example are marked on the chart, and they are instantly calculated as soon as the setup occurs.

The one thing you can learn from this post is that you must spend some time on getting a good education. In the business of trading, you are the asset, and you must invest in yourself.

Shorten your learning curve, by taking advantage of other traders’ experience!

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February 26th, 2007 @ 1:08 am by Eugene Teplitsky

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I believe an appropriate way to start a blog would be to tell a little about what it is about, why we decided to run it, and what we see beyond the horizon.

FX Instructor is by no means a big company, but we have big dreams for a company our size. All of us have had quite a few years of experience in Forex, seeing markets go up and down, watching as firms slide into mediocrity as new, more competitive offerings appear, and marveling at the fantastic amount of enthusiasm with which new traders have been rushing onto the market, to try their hand at getting rich.

The fact that most of those traders rush right out of the market very soon, having lost all their money, is a fact which has not gone entirely over our heads. This is the reality of Forex – heck, its the reality of any market where future movement is ultimately unpredictable. The lack of any training compounds this problem, as does a lack of knowledge, experience, unlimited trading funds, omniscience, time travel, or a guiding voice to tell you “don’t forget to stop up!”.

So thats when the Idea Lightbulb™ came on, and we had this idea – “Hey! If beginning traders visiting our educational website could join other traders, and our mentors, in discussing forex, eventually even the least experienced traders will learn to think like professionals!”.

The $1,000,000,000 question is: will it work? I guess we’ll see! I hope you join us for future installments of market commentaries, discussions, and other random chatter. We’d love to hear what you think.

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