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  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/PO93mIKAZP
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjLdTSk https://t.co/CHE6IOq3K5
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Learn about the importance of the ISM manufacturing index here: https://t.co/Xr3xtoFpZy https://t.co/Agl1q6EQyu
  • Take a closer look visually at the most influential global importers and exporters here: https://t.co/G58J1dg6y3 https://t.co/UmubxiDXGc
  • Trading bias allows traders to make informative decisions when dealing in the market. This relates to both novice and experienced traders alike. Start learning how you may be able to make more informed decisions here: https://t.co/rz7fqhRoMG https://t.co/e4G1gTGhex
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/pS48NIuwqX
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here: https://t.co/arxYmtQeUn https://t.co/gFVVZTGbe1
  • Forex quotes reflect the price of different currencies at any point in time. Since a trader’s profit or loss is determined by movements in price, it is essential to develop a sound understanding of how to read currency pairs. Learn how to read quotes here: https://t.co/CNtqrKWDBY https://t.co/nHXiNJhLes
  • A currency carry trade involves borrowing a low-yielding currency in order to buy a higher yielding currency in an attempt to profit from the interest rate differential. Find out if the carry trade suits your trading style here: https://t.co/7t4BzmLg8w https://t.co/h0TmJcZeqr
  • $USDCAD sold off aggressively last week, putting it into position to test the important 2017 low; trading bias is neutral to bearish. Get your market update from @PaulRobinsonFX here: https://t.co/sphxUAW9TB https://t.co/ZhsTeJOOM8
Becoming a Better Trader: Q&A Session

Becoming a Better Trader: Q&A Session

Paul Robinson, Strategist

Check out this guide for tips on Building Confidence in Trading.

Today, we did a bi-weekly Q&A session where the room was opened up for questions pertaining to topics impacting trader performance. Next Thursday, for the “Becoming a Better Trader” webinar series we’ll discuss a specific topic. The subject has yet to be determined, but you can check the Webinar Calendar next week for details.

One trader asked about event-risk and how to handle it; do you take a position into the event, wait until after, trade the actual event itself? First off, knowing what risks are out there which could impact the market whether you have a position or not is important. Even if you are a technical trader. It depends largely on your time-frame, but if you are holding positions for a few days or longer then maintaining a position, whether it be in full or partial, through events is common practice. This is where having defined risk in terms of position size and stops and limits in place becomes important. If the event causes the position to move against you and take out your stop-loss, then so be it. Losses are part of trading. The outcome could also push your trade towards the intended target. Market trends and chart patterns are essentially a footprint of all market participants involved, and with that said, if you are in the path of least resistance then the news-flow will typically be in your favor. Not always, of course. Major events into the weekend are another story due to liquidity issues, and avoiding these without a solid plan of action is a prudent idea. These are typically rare, i.e. French elections.

Another trader said she was having difficulties handling the down periods (drawdowns) from a psychological standpoint.This is a topic we discuss frequently because it’s a natural part of trading. Even the best of the best going through stretches where they face difficulties and experience drawdowns. The key is to mitigate the severity of the drawdown through sound risk management rules and taking certain actions to help turn it around. Taking a little time away when struggling, even if for only a day or 2, can do wonders for the psyche. This is called, “getting out of the fire”. It’s a good idea to look at recent trading activity and identify any mistakes being made. You can’t correct something if you don’t know exactly what’s wrong. Sometimes market conditions just aren’t conducive to your trading style (i.e. trading breakouts in a low-volatility, range-bound market). In this case, you might be overtrading and need to back-off. One way to know if you are making the ‘right’ trades within your trading plan is to utilize a checklist. A checklist, whether physical or mental, will help keep you honest in your decision-making process. Certain boxes which you have pre-determined to qualify as characteristics of a good trade need to be checked off for a quality set-up.

For the full conversation, please see the video above…

Related webinars: Creating a Trading Plan; Handling Drawdowns ;Risk Management; Analysis, keeping it simple; 6 Mistakes Traders Make; Focusing on the Process; Building Consistency

---Written by Paul Robinson, Market Analyst

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You can follow Paul on Twitter at @PaulRobinonFX.

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

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