We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides Download
EUR/USD
Bullish
GBP/USD
Bearish
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Bitcoin
Bullish
More View more
Breaking news

Markets Extend Losses, Dow Jones Down Over 14 Percent for the Week

Real Time News
  • Commodities Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.62% Gold: -4.32% Silver: -6.92% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/uFMwSUHLiP
  • Fed Chair Powell: - Economy remains fundamentally strong - Virus is developing risks to economic activity $DXY $SPX
  • Fed Chair Powell says monitoring virus and will act appropriately $DXY - BBG
  • With market fears running rampant on the coronavirus, stocks are undergoing a nasty sell-off while the Dollar is rallying against the high-yielding Mexican #Peso. Get your $USDMXN technical analysis from @PaulRobinsonFX here: https://t.co/5e7owNOyTg https://t.co/VY8MWVhvTs
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.05%, while traders in USD/CAD are at opposite extremes with 73.48%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/QTWGPOR6bP
  • Indices Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Germany 30: -0.16% France 40: -0.18% US 500: -2.46% Wall Street: -3.14% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/eN2E5ICK1n
  • France confirms 57 coronavirus cases as of Friday - BBG
  • Worlds largest trade fair cancelled in Berlin due to coronavirus - BBG
  • The $CAD has put in a weak start to 2020 as safe haven assets are in the limelight on fears surrounding #coronavirus. Get your market update from @AustinKarlFX and @FxWestwater here: https://t.co/YutnK6qSRH https://t.co/oOypzw0anQ
  • In addition to the #coronavirus, the #Fed balance sheet fell slightly (-0.31%) this week which typically is downside risk for #SP500. As has been the case since January, there hasn't really been a material uptake which means relatively stagnant liquidity conditions #repos https://t.co/1zMmNihPy3
Trading is Methodical - Markets are Emotional

Trading is Methodical - Markets are Emotional

2013-10-30 03:13:00
Jeremy Wagner, CEWA-M, Senior Strategist
Share:

Talking Points

  • Reasonable market expectations are a key to consistency
  • A trader’s method is often projected as the market being methodical
  • Learn to lose to become a better winner - trade in the smallest trade size possible

Over the next few days, we wanted to draw out some key concepts to help you manage expectations of the market to become disciplined with your forex trading.

The first part of this multi-part series is designed to remind you that trading is methodical and that markets are emotional.

Newer traders think a market HAS to behave a certain way.  It is our trading plan that is methodical.

It sounds simple and makes intuitive sense, yet too often many traders expect the opposite. As a result of expecting the opposite, we get roped into emotional situations that devastate our account equity.

For example, traders tend to get emotional because they think the market is methodical. Traders will have a methodical approach such as using trend lines to enter trades. Assuming this approach has worked reasonably well in the past, if the market moves against the position, the trader is surprised. There is a support trend line, the market HAS to bounce higher, yet it moved lower.

In essence, the trader has projected their methodical approach onto the market and begins to believe the market is methodical. When we believe the market is methodical, we rationalize the trend line break as a false break and hope prices return to a profitable level.

As you can see, the trader let their emotions into their trading by assuming the market was methodical. When the market doesn’t do what we expect, then we let poor trading techniques into our trading plan and account. Poor trading techniques such as adding to a losing position, using no stop loss, or widening a stop loss level are common mistakes emotional traders make.

What to Expect From Your New Forex Account

As we place trades and orders in our account, remember that your strategy of when to place orders is THE method and do not want over emphasize each pip, trade, or market movement. Each trade is just one of a thousand insignificant trades. Trading is a game of 3 steps forward then 2 steps backward. When you expect perfection, you will be disappointed. Therefore, expect losing trades.

You may be wondering, how many losses are needed to become a better winner?

A common misconception is that a strategy’s success hinges on a high win ratio. That is simply not true. Some of the best strategies win only 40-50% of the time.

What is a good win ratio? There is no grand formula. It is not a one size fits all approach, but determine the strategy’s edge using the win ratio. Then confidently trade your method and let the market’s emotions determine the outcome of the trade.

Lastly, expect losses to be incurred and prepare for them through low leverage so the majority of your equity is preserved.

Part 2 - Take What the Market Gives You

Part 3 - Disciplined FX Trading - Touching Lines

Part 4 - The First of 10 Trades

---Written by Jeremy Wagner, CEWA-M, Head Trading Instructor, DailyFX Education

Follow me on Twitter at @JWagnerFXTrader.

See Jeremy’s recent articles at his DailyFX Forex Educators Bio Page.

New to the FX market? Save hours in figuring out what FOREX trading is all about.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.