Category: How to Master in Trading – Advanced

The purpose of the category How to master in trading – advanced is to give experienced traders an insight into the new trading techniques. Very often they are very rarely used because they require advanced knowledge in many fields – from complex mathematical operations and calculations to the usage of high-level trading tools. Traders-Paradise’s goal is to inform about them. But not only that. The main intention is to make them familiar to all traders. No matter are they beginners or elite.

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In trading, just like it is in many fields, having advanced knowledge is an advantage per se. Thanks to our excellent analysts and experts, the most advanced techniques are available to the traders. Moreover, each of them is fully explained, with real trading examples. All complicated mathematical calculations are explained in detail. So, traders need to have on hand this valuable information and samples.

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Concerning beginners’ already gathered knowledge, sometimes the explanation in the posts in the category How To Master Trading- Advanced will not be enough clear no matter how much we want that. Simply, to understand what our team writes here, the visitor will need to improve the skills. For them, Traders-Paradise has one simple piece of advice – visit one of our categories designed and written exclusively for the beginners.
This category – How to Master In Trading – Advanced is directed at elite traders. The impressive thing is that all posts and articles are very precise in explanation no matter how complicated the subject is. All advanced trading techniques, methods, strategies are understandable thanks to comprehensive and detailed explanations.

How to select trading signals?
Trading signals are important for successful trading but too many of them will confuse you

By Guy Avtalyon

To select trading signals, your beliefs are the most important driver.

You must have the right trading signals to guide you in the intensively competitive environments you will find in the stock market, futures, forex, and options markets.

The challenge is that it is not as simple as finding the best trading signal. Because just like everything else in your trading system, your signals should be based on your beliefs and your trading strategy.

If this is not the case you will have trouble pulling the trigger when you get a signal.

Because of the way you enter and exit the market should be based on what you believe about your trading strategy and how the markets work.

How to select trading signals based on beliefs?

Your beliefs about the market are the most important determinant of your ideal trading system.

The first step to ensure you select a trading signal which matches your beliefs is to document your beliefs about trade setups, entry signals, exit signals, and initial stop losses.
Some traders believe that there is absolutely no value in using trial and error trying all different entry triggers / buy signals/sell signals hoping to find something that works.

According to such traders, trial and error in trading signal selection will result in a curve-fitted, worthless trading system. That can be true at some point.

The influence of trading signals

When you apply the trial and error method, you get a curve showing the past data. You can get a system that works fantastically well on past data but doesn’t work tomorrow or into the future.

Maybe, for that reason, it is better to start with your beliefs and your trading strategy and select trading signals that support these to reduce your chance of curve fitting.

When you change your approach you can found enormous benefits which included:
- Greater clarity on objectives
- Reduced need for optimization
- Greater real-time profitability
- Reduced development time
- Simplified system design
To be clear.

The internet is a wonderful tool, but the vast amount of information and companies/people dispensing forex trading signals and advice can be daunting and confusing to newer traders.

Advanced traders already can recognize what constitutes quality versus hype.

Forex signal services

No one forex signal service will ever meet the needs of all traders, but a good service must.

Few trading services post their performance. There are several reasons for this:

The performance is simply not worth showing as it does little to motivate.
The raw data, no matter how robust, falls on deaf ears.

The first consideration is that looking for a trading signal that generates a profitable trade on its own is nonsensical. You may get the best entry signal ever created. It will be useless unless you adopt this rule as part of your trading system. Also, you’ll need all of the required components working together. Otherwise, there is no way you will make money in the long run.

A complete trading system needs each of the following:

Objectives
Setup
Entry trigger
Initial stop loss
Exits

Money management and Position size rules

The trade entry trigger is just one part of the complete system.

Many people also suggest that it is the least important part of the system. Entry triggers are the area most prone to curve fitting, over-optimization, and random noise in the market.

Actually, how you exit a trade once you are in determines how much profit you make from it.

Remember, simple is better than complex. Fewer rules is better than more rules. Complex trading systems with many rules may not perform well in the future.

Well, it is more difficult to warp fit a simple system with several rules to past data. Hence, if you have many rules and complex manipulations you can easily fit your system to the past data. This will perform it largely useless in the future!

One trader told us: ”Use simple trading signals that fit your trading strategy and beliefs”. That helps a lot.
13th September 2018
Do trading signals work?

2 min read

The answer is Yes!

Of course yes. A successful trader can be a great signals provider.

They work but you have to follow instructions, do right money management and choose a good signal provider that show real performance, not scammers.

Off course there are signal providers which work. Some are even free of costs to you, Some work on a subscription basis. The problem is to find the right signal on these platforms.

Yes, they do. Trading signals work.

But it has to combine with the overall market scenario as well. Awareness about the happening in the financial world on micro and macro levels is important to fully trust a trading signal.

Trading signals always require a stop loss to be put along while following a signal.

Trading Signals are meant to be an assistance, not reliance. One should never ever follow trading signals blindly.

Always do your own research before investing in any asset class be it forex crypto or stocks. Trading signals work as a good confluence for trade setups.

That helps!

Trading signals in Forex trading.

It is possible to find a number of courses for FX signals. There are a lot of websites that are dedicated to such a service, and social media makes it possible for people to share Forex signals free versions and premium versions. There are three main groups of people that are responsible for sending such signals out

Traders
Affiliates
Scammers

And you will see, many of them are scammers but a very few honest people are still out there.

Forex trading signals serve as signposts or indicators of when/how to act on a particular currency. It is important for investors to know how to read signals.

Trading signals work in a variety of designs, from bear/bull designs to geometric shapes, and can bring attention to important currency details.

Why should an investor have to know how to read these things? For the same reason, drivers have to learn how to recognize road signs: if you don’t know what the signs mean, you could end up ruined. Forex signal trading cannot be taken lightly. It is home to a rapidly changing environment where some online brokers manipulate the original data feed to cause errors in the marketplace and earn a profit over them

We show you these groups in the order in which they can be trusted.

It is common to find traders that are looking to share their ideas with the outside world.

Their main aim in doing so is to earn a reputation of being a good trader, help out other people, and simply support the place that was once supporting them when they were new to FX trading. Usually, it is possible to find traders that are sharing FX signals free on various forums.

What does such a trader, signal seller try to aim?

Traders try to send reliable signals by performing their own analysis and providing exactly the same information that they are using in their own trades

Affiliates represent another group of signal providers.

You can get free daily Forex signals from this group once you have signed up for an account with a broker using their affiliate link.

In this way, affiliates can still make a commission on the trades you make, but the signals remain free to you. However, not every person has enough time to support both his affiliate business and his trading activities.

So you should be cautious about this group of signal providers.

Sometimes the quality of their signals may drop because they put more accent on their own promotion. But you can still treat such signals with a decent level of trust.

But remember, it is a must to have former testing of their daily free Forex signals on a demo account.

Scammers are the people you should be avoided, because they are only interested in making an affiliate commission from you, or just making you purchase their ‘free’ signals. Such providers usually employ quite obvious methods of attracting clients. They provide a few free Forex signals online and later ask you to buy premium signals.

After you have signed up for free, you will be sent some signals, but they will do the same to the other people that have signed up.

Some of these people are going to receive BUY orders, others will be provided with SELL orders. This way a scammer can split his audience in half.

The first 50% is going to profitable and another 50% will be losing.

So do not fall for scams, as they cannot deliver anything close to the best Free forex signals. Some trading signals/strategies work very well as long as they aren’t “overused”.

You can have a go with them and see if they can produce what they claim. They have to let you know the result. If they can’t, never subscribe to that signal service!

Risk Disclosure (read carefully!)

11th September 2018
Signal Provider – How To Pick Right One?

Picking the good signal provider can be harder than anyone can imagine. Truly nightmare.

By Guy Avtalyon

A signal provider can help you but also ruin you. Many forex traders use forex signal providers’ services to make money. Traders who struggle to make profitable trades in the forex market can leverage off successful forex traders by using their signals in their trades.

Not every forex signal provider out there is authentic and attempting to make sense of which ones are con artists. And ones which are genuine can be an overwhelming assignment.

Finding the right signal provider is the challenge

Finding a reliable forex signal service can seem like a challenge. There are those signal providers that are professional and transparent.

And unfortunately, there are those providers that do not always have their members’ best interest in mind.

It is up to you. You have to do your due diligence. To be sure that you are working with an honest forex signals provider. The one you can trust and have faith in.

There are several things the trader would consider when are going to pick your signal provider.

A trader should be aware that there are a lot of hardcore scammers in the market. They are working very hard to provide fake, low quality, and substandard forex signals.

Most of these hardcore scammers have no background. Or training in any financial matters. And usually, feed the trader with performance statistics that are imaginary.

But yet convincing to a trader who is not smart enough.

The best way a trader can deal with this problem is by spending at least 5 minutes looking at what other traders are saying about this respective signals provider.

This will help him or her in making an informed and proper judgment.

Another way is by the trader looking at the level of detail contained in the signals provided by the forex signal provider. If he or she realizes that it just entails a few charts with a loss or profitable line, the trader has a reason to think twice before following such signals.

A trader should look for testimonials about various forex signal providers available in the market. A trader should look at what other players in the industry are saying about the available signal providers. This will enable the trader to choose the best provider in terms of accuracy, quality, timeliness, and affordability of the services offered.

What trader should check?

The trader should check the number of TPs the providers have in one trade.

Also, the trader should check how the providers put together the performance statistics.

Check if the providers have a trade by trade statistics.

The bottom line is that any trader who wants to be profitable in the long term should start learning by himself or herself about forex signals through experience and self-training.

If you search for forex signal providers on the web, you will most likely be unable to recognize the sites of scammers from genuine suppliers.

Scammers’ sites are so comparative and competitive.

Sometimes you can feel that clueless forex merchants typically get gotten in the scammer’s site rather than the genuine forex signal supplier. When they understood that the signal is not profiting, it would have been past the point of no return.

The scammers had officially taken the cash and it is past the point where it is possible to do anything.

Signal providers will give you entry and exit signals but remember you have no idea how they came up with the entry and exit points, all you have to do is follow.

With all these promises, you will be tempted to subscribe. That is the moment it will dawn on you that whatever you have subscribed to is a pack of lies.

Forex Signal providers are typically separated into two different groups

It is based on how they generate their trading ideas – technical analysis and fundamental analysts.

Technical Analysts base their trading decisions on chart analysis including support and resistance levels, candlestick patterns, price channels, market structure, or other technical approaches. Many technical analysts have a proprietary method for analyzing the markets. And the highly successful ones have spent many years researching and testing their methodology. All over historical data and in real-time market conditions.

Fundamental Analysts base their trading decisions on economic and news related data. This could be in the form of long-term interest rate analysis, inflation, central bank policy, employment reports, sentiment surveys, and more.

Some are longer-term position traders while many others are shorter-term traders that try to catch volatility spikes after an anticipated news release.

Some traders may think “reliable” means having a high win rate, but that is not really what you primarily want to be looking at.

Actually, win rates are not that important as a metric by itself. You must also analyze the average risk to reward in conjunction with the win rate.

There are strategies with 90% win rates that can lose money and then there are strategies with 30% win rates that can make money.

Another factor to consider is the technology the signal provider is using. Do they have a reliable platform to send out notifications and are there multiple ways for you to receive the alerts? But there is something important also. Do the trading alerts always detail the buy and sell signals, or present stop-loss levels and targets? Or do they only provide superficial information such as entries but no exit details? These are some of the factors you need to consider.

So how can you find out if a provider is reputable and worth your time?

Sign up for a Trial – Sometimes this the best way to get started is by signing up for a forex signals trial. You may get a real sense of the quality of service by diving in and taking a test drive. Many signal providers offer a 1 or 2 week trial for members.

Join their Email List – Another way to find a provider is by joining their email newsletter. You will find the value that they provide for free. So, you can evaluate whether their premium forex signals service will meet your expectations.

Check their Track Record – Every single reputable FX signal provider will implement a performance record detailing their published trades. This is a good way to find their average pip profit per month. Their risk parameters, average win percentage, and other related metrics.

Google them – Yes, simply Google them. Are they mentioned in any important trade publications or articles? What type of social following do they have?

Do everything possible to find with whom you are dealing. Just don’t be one of those naysayers.
Check it, try it, test it, and make your own conclusion.

10th September 2018
Trade signals – What Is It and How To Use?

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2 min read

Trade signals are simply when someone is making a trade call. Either to buy or sell a security or other asset, generated by analysis.

They show you that it is a good time to buy or sell a particular security.

So if they believe an asset will go higher or lower, they will tell you via some kind of message, email or software. After that, it is up to you to follow or not to follow.

Actually, trading signal is a alert that is based on technical indicators.

Trade signals come in a variety of forms. They can be bull or bear pennants, rectangles, triangles, and wedges, as well as head-and-shoulders chart patterns. Trade signals may also bring attention to abnormal volumes, options activity, and short interest.

There are lots of trade signals

As anyone can make calls, the challenge often is finding one run by an actual trader. These type of services exist in the institutional world as well. They just tend to be a little more accurate than ones you find available to retail traders.

Market Signal is an unintentional or passive passage of information or indication between participants of a market. For example, If a firm issues bonds it indirectly shows that it needs capital and also desires to retain control. Thus instead of equity capita,l it prefers loan capital. It is based on technical indicators. And usually is the sign for when to sell or buy a particular product.

It also brings the attention of users to the other options available, abnormal growth and short-term interests.

Trade signals in volatile markets

Using signals in volatile markets can help to point out opportunities to the investors. Also, they will signal them if they disappear.

There are usually two ways to deliver market signal: send news and activity. The market signal expects to deliver consumer, rivals and outlet member. And the earlier studying of the market signal which is mainly a concentration of signal’s influence.

For instance, it is the price signal where costly products make the customer think it is made of high-quality raw material.

That is a kind of advertisement in which the main aim is to make the customer think that a certain enterprise has more advantage.

Every company doesn’t market in a static environment, the competitor and member of the outlet will make prediction and reaction to enterprises, their decisions process is a dynamic market mechanism.

Trade signals in Forex

In Forex, traders are using trade signals all over the world to aid them in making critical decisions about their trades. They are one of the most important tools a trader has, and almost all traders choose to use them in one way or another.

There are many types of signals systems, some are offered for free while others for a fee but take in mind that a trustworthy service should include information about taking profit and stop loss configurations.

A forex signal is a suggestion for entering a trade on a currency pair, usually at a specific price and time.

Who can generate the trade signal? Human-analyst or an automated Forex robot supply a subscriber of the forex signal service. They are usually sent via email, website, SMS, RSS, tweet.

The majority of signal providers focus on supplying signals based on technical analysis and a minority work on fundamental analysis or price action.

Technical analysis, such as Ichimoku and candlestick charting, show both short and long-term price trends giving the signal provider flexibility in supplying a range of trade options.

The fundamental analysis gives longer-term trade ideas. Price action gives extremely short-term trade ideas, often more suited to scalping.

Trade signal in the stock market

The signal in the stock market is developed by George Lane. It is an indicator that measures the relationship between an issue’s closing price and its price range over a predetermined period of time.

A short note about George Lane (1921 – 2004): He was a securities trader, author, educator, speaker, and technical analyst. He was part of a group of futures traders in Chicago who developed the stochastic oscillator (also known as “Lane’s stochastics”). This is one of the core indicators used today among technical analysts. Lane was also President of Investment Educators Inc. in Watseka, Illinois, where he taught investors and financial professionals basic and advanced technical analysis methods. He popularized the stochastic oscillator.

Stock trading signals

Stock trading signals are simply the implementation of a trading system or method.

The actual signal is given when a traders system determines all criteria necessary for a new buy. Signal are met now and a new buy order can be placed by the trader.

Stock trading signals are most often associated with technical analysis. This is a study of price action and derivatives of price action.

An example of a technical analysis price indicator may be a Moving Average or MACD. Traders can receive stock signals on thousands of trading methods.

Trading stocks can be extremely lucrative when you are able to find trading signals that are proven to be effective. Trusted stocks signals help you predict the market investing in stocks. Doing that with live trading signals sent directly to your device, in the app. With this, you will be able to get live rates on hundreds of different assets.

How does it work?

The software scours social media and accumulates posts, comments, etc that include keywords of interest. All this data is then filtered and crunched to produce interesting statistics. Showing the true public opinion using their words, giving an in-depth insight into public minds.

Risk Disclosure (read carefully!)

9th September 2018
What is Speculation? Trading or Gambling?

3 min read

The definition of speculation says:

The speculation involves trading a financial instrument involving high risk, in expectation of significant returns.
The motive is to take maximum advantage of fluctuations in the market.

Who are speculators?

Speculators are prevalent in the markets where price movements of securities are highly frequent and volatile. They play very important roles in the markets. Because they can absorb excess risk. And provide much-needed liquidity in the market by buying and selling when other investors don’t participate.

What is speculation?

Let’s be clear.

Speculation is the purchase of an asset (a commodity, goods, or real estate) with the hope that it will become more worthy in the future.

Speaking about finance as a field, speculation is also the practice of engaging in risky financial transactions. In an attempt to profit from short-term fluctuations in the market value of a tradable financial instrument.

Rather than attempting to profit from the underlying financial attributes embodied in the instrument such as capital gains, dividends, or interest.

Not one speculator pay attention to the fundamental value of a security. Instead, speculators are focused purely on price movements. Speculation can involve any tradable good or financial instrument. Speculators are particularly familiar with markets for stocks, bonds, commodity futures, currencies, fine art, collectibles, real estate, and derivatives.

Why speculators are important?

Speculators play one of four primary roles in financial markets, besides hedgers, who engage in transactions to offset some other pre-existing risk, arbitrageurs who look for profit from situations where fungible instruments trade at different prices in different market segments, and investors who seek profit through long-term ownership of an instrument’s underlying attributes.

Why wouldn’t we consult history?

The appearance of the stock ticker machine in 1867, removed the obligation for traders to be physically present on the floor of a stock exchange. Since then, stock speculation went through a dramatic expansion through the end of the 1920s.

The number of shareholders increased tremendously. Let’ say, from 4.4 million in 1900 to 26 million in 1932.

Whether speculation has a place in the portfolios of investors is the subject of much debate. Some investors believe the market is always fairly priced. They are thinking about speculation as an unreliable and unwise way to profits. Speculators believe that the market has a lot of variables and each of them is the opportunity for capital growth.

The view of what distinguishes investment from speculation and speculation from excessive speculation varies widely among pundits, legislators, and academics.

Speculation as higher risk

Some sources note that speculation is simply a higher risk form of investment. Others define speculation more narrowly as positions not characterized as hedging.

The U.S. Commodity Futures Trading Commission defines a speculator as “a trader who does not hedge, but who trades with the objective of achieving profits through the successful anticipation of price movements.”

The agency emphasizes that speculators serve important market functions. But defines excessive speculation as harmful to the proper functioning of futures markets.

Frankly, some speculation is necessary and unavoidable.

Why?

In many common-stock situations, you can find substantial possibilities of both profit and loss, and the risks therein must be assumed by someone.

True?

Many long-term investors, even those who buy and hold for decades, maybe classified as speculators. Of course, excepting only the rare few who are primarily motivated by income. Or the safety of principal and not eventually selling at a profit.

We already conclude the trading is art.

But we have to admit that speculators are real artists.

Yes, we know that some market pros have the opinion that speculators are gamblers. But as we said above, a healthy market is made up of not only hedgers and arbitrageurs, but also speculators.

Economist John Maynard Keynes said that speculation is knowing the future of the market better than the market itself.

And you know who Keynes was. This giant of finance, English economist, journalist, and financier is best known for his Keynesian economics, theories on the causes of prolonged unemployment.

He developed, so-called, Keynesian economics during the 1930s in an attempt to understand the Great Depression. Keynesian economics is a theory of total spending in the economy (called aggregate demand). And its effects on output and inflation.

A Keynesian believes that aggregate demand is influenced by a host of economic decisions, both public and private and sometimes behaves erratically.

Let’s go back to speculations.

Speculation usually involves more risks than investment.

That’s true.

But, everyone has to recognize the price-stabilizing role of speculators. One who tends to even out price-fluctuations due to changes in the conditions of demand or supply. Only because they have better than average foresight.

One of them explained the benefits of speculation. Victor Niederhoffer, in his book “The Speculator as Hero” wrote:

”Let’s consider some of the principles that explain the causes of shortages and surpluses and the role of speculators. When a harvest is too small to satisfy consumption at its normal rate, speculators come in, hoping to profit from the scarcity by buying. Their purchases raise the price, thereby checking consumption so that the smaller supply will last longer. Producers encouraged by the high price further lessen the shortage by growing or importing to reduce the shortage. On the other side, when the price is higher than the speculators think the facts warrant, they sell. This reduces prices, encouraging consumption and exports and helping to reduce the surplus.”

The art of speculating covers a wide range of trading tactics. Including pairs trading, swing trading, employing hedging strategies and recognizing chart patterns. Speculators are well skilled at fundamental analysis. Including spot over- or under-valued companies, the amount of short interest a company holds. And, analysis of earnings and other SEC statements. A speculator with skills and good performance knows that the short-term movements of the investment markets are largely tied to world events.

According to the Los Angeles Times, baby boomers are trying a new investment strategy for their retirements accounts.
Instead of the passive investment strategy that most employees use, an increasing number of people have turned to speculate. In an attempt to catch up on shortfalls in their retirement accounts.

How to become speculator?

Every trader who wants to become speculator has to spend many years of learning, watching, practicing.

Such one must learn how the market behaves and watch how favorite stocks react to market events.

For many traders, the book, “How to Make Money in Stocks” by William O’Neil, is a value for learning the art of speculation.

This book and many others provide ambitious trader practical tips on trading and risk management.

Speculation popularity is spreading rapidly because of the easy access to world investment markets through online brokerage portals.

But speculation is difficult to master, so you have to learn a lot if you mean to become speculator one day.

After you have a continuous track record of success through both up and down markets, it’s time to consider speculating with real money.

Successful speculating takes a lot of skill, time and experience to master. Most people who work outside of the financial industry don’t have that.

That’s why the speculators are real artists.

Risk Disclosure (read carefully!)

7th September 2018
The Barriers to Learning About Stocks and how to avoid them

Be objective, don’t expect the success overnight, have reasonable expectations, think in all probabilities.

By Guy Avtalyon

First of all, never base your decisions on emotions, rumors, or rush to the next hot opportunity. This is one of the most influential barriers to learning about stocks.

You will end up losing money as a result. Some investors despite their problems, continue with the same actions and keep getting the same bad results.
Investors have to remove barriers on their path to success. Otherwise, success will never come. All investors must seek to continuously remove new barriers as they appear.

What kind of barriers to learning about stocks you may have?

Emotions

The fear and greed! Many investors experienced the obscure of ability to rationally consider through an investing opportunity. This leads to poor investment decisions and a loss of money.

For instance, it is in an investor’s best interest to sell high and buy low, investors hate to sell winners and are unwilling to buy out-of-favor stocks. Why so many investors hold winning investments too long? When they fall back, they continue to hold on to them, hoping they will return to their previous highs. They even lie that they will sell if the price returns to the level at which they bought it.

Also, there are investors who hold on to losing investments! Okay, they might be in love but why to hold for so long? They have some hope. If they wait and hold longer, their shares will recover. That might happen never.

They can sell to at least break even, very often such investors become losers. Because their capital is tied up in a losing investment and is unable to produce a return. This reduces account balances and expands stress levels.

Most investors admit that holding investments too long is the mistake that was most detrimental to their success.

Less knowledge

Some investors think if you just buy and sell the right stock, you will always make money.

That’s wrong! Totally mistake! Barriers to learning about stocks!

Sometimes, investors can have less understanding of how markets work. That drives stock prices and successful investing performance.

Also, so many investors tend to overestimate their strength to beat the market. As a result, they take on unnecessary risks. People are often drawn to powerful performance, even when it’s not sustainable.

Many investors follow the hottest sector and don’t have a sufficient understanding of the risks involved.

For instance, investors realize they should not overweight their portfolios with too much money in one investment, but they continue to do so. It isn’t rare that people buy too much stock in the company where they are employed, because the company’s available retirement funds and use of options as a part of their compensation package makes this easy.

Barriers to learning about stocks may leave investors with a portfolio that lacks diversification.

Some other investors don’t understand how bonds work, and they avoid them. Few of them realize that bonds hold a preferred position should a company declare bankruptcy.

Many others don’t realize that when interest rates rise, bond prices go down. When it comes to understanding important concepts such as how a central bank sets interest rates and the yield curve, even fewer investors have sufficient knowledge to make rational decisions.

And more interesting, most investors do not know when to sell a stock that has substantially appreciated. They continue to hold the stock instead of selling part of their position.

In that way, they could capture some of the profit and make capital convenient and available for other investments. They can’t realize that as the price of the stock goes up their portfolio becomes even more unbalanced.

The market has the ability to balance portfolios for investors, sometimes to their astonishment. Many investors are confused by the idea that rebalancing entails selling some of the investments that have performed best and buying more quality stocks that have lagged.

Losing the Bigger Picture

Despite many investors like to say they invest with a long-term perspective, they continue to make decisions based on short-term movements and ideas. Most investors believe that setting long-term goals for such things as buying a home or providing for retirement are important. But still, they fail to establish viable financial plans to do so.

Without these plans, their decisions are decaying. Basing decisions on unpredictable market fluctuations can be very dangerous because there is a good chance that these investors will make the wrong decision. That can obstruct their ability to achieve their long-term goals.

When the investors realize that the market has risen, they pour cash into stocks and mutual funds, trying to grab part of the profit the professionals have realized. When the market puts in a decline, some investors panic and sell close the bottom. And very often, this pattern continues, causing such investors to lose much of their capital.

How to remove barriers to learning about stocks

No matter what your barriers are, it is important to put together and plan to remove them. Here are some steps you can take to eliminate these barriers to your investing success. Experts advise doing this.

* Learn to monitor your performance: Measuring your performance creates a record of what has worked and what has not. This can help you to recognize problems that you repeat. You should record the overall market trend, the sector trend, the reason for making the trade, the exit target, and the trailing stop. Do this for each trade no matter if you sell or buy. This record is very useful in evaluating your investing activities and can be used to identify what barriers you are meeting that obstruct your success.

* After you have measured your actions, you can identify what you have to change: Inspect your past tradings and find patterns that show to barriers to success. Maybe you impulsively buy the next stock without thinking? Does your explanation prove to be wrong most of the time? The key is to identify the investing behavior that inhibits your performance.

Stay focused and avoid barriers

* Stay focused on what you need to change. Like any effort to change behavior, you must remain focused on the actions you take to reinforce the investing behavior you wish to have. If you think you are not focused on how to change your behavior, then take a break from your investing until you recover your focus.

* Determine how you will understand your losses. Keep in mind that losses are part of investing. Learning how to deal with them is one of the most important pieces of successful investing behavior. You have to define what your loss looks like through your stop loss and reasons for the trade. You must accept the loss as part of the trading. Accepting a loss is a trading skill that is a crucial behavior. Making a losing trade ahs to be an acceptable process in your trading strategy, you’ll eliminate the emotion and fear that comes from a loss. You’ll jump to the next opportunity without fear.

* Become an expert at one investing strategy: There are many ways to evaluate the market and select stocks that offer good investment opportunities. Don’t try to understand every perspective on a stock. It is best to get to know one reliable investing strategy. In that way, you will gain confidence in your investing access. This knowledge will form a valid base for your investing. And when you become an expert you can expand your knowledge base by adding a new approach.

Think twice to avoid barriers

* Think in probabilities: The market is in permanent movement. It forces the investor to continually evaluate the risk-reward ratio of each opportunity. You can’t move the market, that’s why you need to rate what is the greatest possibility that will move the market, key sectors and the stocks you are watching. Evaluating what is most possible to happen in the sense of probabilities could help you to make a valid investing estimation.

* Learn how to be objective: Many investors want to believe that the market will do what they think it should do, rather than what it actually does. Any limits you place on the market will usually turn out to be wrong. The market does what the market does. Investors are best served if they maintain an objective perspective. If you are neutral, then you will not feel any pressure to move quickly. You will not be afraid to make an investment decision. And the most important, you will not force your opinion on the market, but rather sense what the market is trying to tell you.

Do not expect this to happen overnight. Removing the barrier is a long-term process. But if you have a defined plan, you will be able to create a program to remove the barriers that keep you from achieving success as an investor.

31st August 2018
Trade in Indian stock market and win in the markets
To trade in India, you must have an exit strategy. And hesitancy isn’t helpful.

By Guy Avtalyon

To start trade in Indian stock market, you’ll need :

1. trading account
2. demat account
3. savings account

Trading and demat accounts are combinedly created which are then linked to your savings account.

A trading account is used to buy or sell the shares while a demat account is used to store the shares.

A great help when creating these accounts may come from the broker for a minimum charge. We would suggest you find a flat broker as the brokerage is less.

In India, the broker must be SEBI certified.

The markets are a mind game and to win this game, you will need a good plan and education.

You have to think before you do anything. It is necessary to measure every move because it will have an influence on your next moves. You must have a strategy in mind to modify in case things do n’t correspond with your plan.

The most important thing will be to follow the plan consistently. Actually, there is no sure-shot formula for success in the stock market. Just like any other skills, a new investor can learn stock with trial and error coupled with patience, discipline, research, and a sound understanding of the market.

What should your plan have?

How to trade in the Indian stock market?

You have to define a logical expectation of return from your capital. How much capital to be put? There are some examples.

Rs 25000/- is just a suggestive minimum, but depending on your strategy you have to find what is convenient capital requirement build on your style of investing or trading. To win this game, you have to decide the right mix of players which means, you have to work out a list of stocks, indices, options, that work for you in order to score your return objectives.

So, the most important is to design a strategy to pick stocks/contracts to trade/invest in. You have to define a clear risk management strategy. If some stock is having a bad day on the market, you have to formulate a strategy, how much diversified the portfolio should be in order to cut losers and hold on to winners. This means a clear well-defined risk management strategy.

You have to have well-defined rules when entering the basic factors. For example, results, sales growth, or technical factors like breakout along with a clear exit strategy. This means you have to have some entry and exit strategy.

HOW TO MAKE YOUR RISK MANAGEMENT

Risk Rules: The first step is to define how much to risk or how much to lose on one single trade.

Just on the available trading or investing capital, you should decide reasonable limits you are comfortable losing. This is important because if you know the loss taking capacity, then trades will be done without fear of losing. And when fear is not disturbing, you can make a decision without any emotions in your mind. Fear of loss is the biggest barrier in trading and investing and the only way to overcome is pre-defining the risk rules in the form of loss-limits.

Size of the trade: Don’t bet everything on one trade and go broke. Or bet too little and disable full profits to stay in the business.

Both of these will drive you off the markets. In the first case, there is too many emotions or greed. When the trade goes against, it will be hard to press the exit button and you go broke because the position was large. The right side of the trade is such that which limits the losses to 1% or max 2% of the trading capital.

Why trade in the Indian stock market

There are some examples, for the people in India especially. On a trading capital e.g. Rs 2 lac, you can afford to lose max Rs 4000. Therefore actually trading is at 3000. And stop-loss is put in 2800, hence maximum loss per share would be 200.

But 4000 is the maximum loss defined, as per strategy, therefore 4000/200 = 20 share can be bought at 3000 entailing a total investment of Rs. 60,000 (3000*20). With max risk at Rs. 4000 on this trade. Similarly, for investments, you should not invest more than 10% of the capital in any single stock. For the capital of Rs.2 lac, max Rs. 20,000 can be invested in a single stock, thereby creating a portfolio of 20 stocks.

These rules are not mathematical rules of exactness, they are suggestive and followed hence as best practices.

Exit strategy: In trading, you must have an exit strategy. It is important to know when to get out and mark profits or losses.

What can help you to trade in the Indian market?

Hesitance isn’t helpful when trade in the Indian stock market.

Some traders in India have a pre-defined profit target of three times risk. If risk per trade is estimated at Rs. 4000 then the profit will be registered when Rs.12000 profits are achieved.

The other exit strategy is when prices fall 10% from the top value. In that case and only then, the trader will square a long position. There are different ways of exiting the trade, it is crucial to have the exit strategy in place before entering the combat zone called the stock market.

Stop-loss strategy: No matter what strategy you adopt, 90% of trades is how to control the losses. Portfolio returns often look bad because of a few trades went wrong where the exit stop loss wasn’t defined or activate.

Because leverage is used this is more important in trading.

You generally keep a stop exit when price adversely moves beyond, say 2 times average true range (ATR) or crosses key support or resistance field.

Some prefer to keep the stop at 8% of the purchase price when we are speaking about investing. Whatever your strategies are, it is a must to exit a losing trade.

Trading vs Investing

Both require a different set of skills, mental attitudes, and different rules.

The important decision-making points wherein strategy differs are Stop Loss or Hold On, long term or short term, analyzing price or analyzing the value, to follow the market or to predict are some of the contrasting and opposite action points which need to be applied to either investing or trading to the exclusion of each other. Doesn’t matter whether you are a trader or investor.

Markets swing both ways, the bear market is going to follow the bull market.

That means you should not have a prejudice towards long trades, selling short should also be done with the same comfort.

By refusing to sell short you forgo huge opportunity to make money when the markets are in bear zone.
Keep in mind, money can be made in 2 ways when trading:
1. Buying Low and Selling High!
2. Selling High and Buying Low!
The hardest thing in the financial markets is the ability to consistently execute the plan with strong discipline.

This rarely happens and that is why the results are so poor. The majority of the traders do not make money, because they lack discipline. To control over self all the time is really hard, but stay disciplined all the time is the most important ingredient for success.

Whoever does it has wealth.

Trading and Investing are essentially connected with human emotions.

Basically, the human being makes the decision but the emotions act as barriers that impede good decisions. Sometimes the biggest battle is inside your own mind. To be a successful trader or investor you need to understand your own temperament. Whether you are patient or impatient, fearful, or fearless. A slow decision-maker or fast decision-maker, emotional or unemotional.

Identify your psychological outlook and select the style which suits you the best, and you can have sustained success in trading and investing. Any money-making skills have to be self-acquired. You can’t postpone efforts to self-learn the art of making money through hard work and education. There is nothing that can substitute self-acquired knowledge and experience. You will have to write your own test in the markets.
No copying or cheating will help you to pass the test! So, don’t listen to too many forecasters or advisers!

What is the math of profit

It is very easy when trade in the Indian stock market.

Reduce costs, profits will automatically increase.

Businesses are becoming digital driving down their cost of operations dramatically.
Every trader and investor must act in order to reduce costs and increase profits dramatically.

And you have to go with the trend.

Once the phase of the market is identified as a bull or bear, then one should trade or invest in that direction.

Also, it is not necessary to trade obsessively. Unfortunately, more tradings don’t mean more returns. Contrary, as investors’ motion increases, return decreases. Sometimes if there is no clear trend in the markets, it might be better to be an observer than be a compulsory participant. Both, in life simple things are more effective and in trading or investing. The strategy should be simple and easily understood too.

The key to success is to stick to your rules of entry/exit points, to have solid risk management, self-control to stick to the plan. Also, the ability to control your emotions is the key to success. There is no other mystery to success in the markets.

And read about the best Indian investors.
19th August 2018
What are the basic types of Forex trading?

Whatever measure, guide, or indicator you are looking for, whatever the time frame, there are 3 basic types of trades.

Guy Avtalyon

In this post, I’ll explain the basic types of Forex trading. What caused this subject?
Regardless of personal experience in trading, conversations, and exchange of views with other traders are valuable. In one of such conversations, the topic was the types of tradings. After many hours and a lot of coffee, we had one conclusion: There are 3 types of trading.

I need your attention for a minute. Let me explain this.

True is, whatever measure, guide, or indicator you are looking for, whatever the time frame, there are only 3 types of trades.

I meet a lot of people thinking they’ve mastered trading. The problem is they didn’t understand the differences between the trades they took.

Sure thing is, it will be easier for you if you know the ultimate goal and what can you expect from the trade you took. And it is possible if you know the type of trade you just implemented. This is very important because your knowledge is what determines where to place your stop loss and your take profit.

When a professional trader enters a trade, he knows exactly what he’s trading.

And my trading friends and me, we can recognize 3 types of trading.

Reversal trade
Breakout trade
Pullback trade

Each of those trades has some special characteristics. I’ll tell you more about each of them. Depending on the market you’re trading, the success of each type of trades may be different.

What are the basic types of Forex trading?

Some traders are attracted to trade all of those types for a limited number of currency pairs. But others are specialized in only one of those trades.

When a professional trader enters some trade, he must know what he is trading.

What is REVERSAL TRADE?

A lot of traders think that implementing Reversal trades is composed of “calling a top” or “calling a bottom”.
However, this isn’t quite true. Actually, the entry price of a reversal trade is often in a previous zone of support or resistance.

Reversal trades are among the most popular basic types of Forex trading because of their ability to be easily spotted. They take place in a ranging market.

As you can see the buyers were very aggressive on the chart above because they pushed the price up all the way to point 1 from an original support zone. But, once the price hit a resistance zone (marked as 1), buyers started to take profit. And several traders began to short the currency pair and got more aggressive.

They took control of the market. This had for the result to create a strong rapid decrease in price.

At point 2, the same result came, which was a good opportunity to enter a Reversal trade. The sellers placed their orders at that level and the buyers began to take profit because they knew the price had reversed in the past at the same level.

The stop loss should be placed above the highest point (A) and the take profit someplace below the resistance zone. It is okay to expect a risk-to-reward of 1:2.

BREAKOUT TRADE is one of the basic types of Forex trading

Breakouts trades are usually made by a strong continuous movement in a direction. Therefore, some traders call it an acceleration because the movement is fast.

This is a typical example of the Breakout trade. Take a look!

The bulls were confident and kept pushing the price higher and higher to point 1. At that price, the sellers became more aggressive and took control of the market until the buyers showed even more power.

The level pointed with a 2 shows a price at which bears are known to get more aggressive in the market. But, they were not aggressive when the price reached that level.

Because there were no traders wanting to sell the currency pair aggressively, more and more traders went long, thus pushing the price higher and breaking through the resistance level.

The stop loss on that trade should be somewhat below the resistance zone that was broken. So, the take profit level is above the zone. It is okay to expect a risk-to-reward of 1:2.

PULLBACK TRADE

Pullback trades are usually more solid because the retracement back to a previous price level represents a certain confirmation.

(Retracement is the temporary reversal in the direction of a stock’s price that goes against the prevailing trend. But remember, a retracement does not signify a change in the larger trend.)

As you can see, a pullback trade is characterized by a retracement, often to the previous support or resistance zone.

Take a look at the chart above!

The price kept ranging between a support and resistance zone. At point 2, no one was aggressive enough to move the price significantly higher or lower. Once the price broke above the resistance zone at point 3, several traders began to feel excited about their profit so far.

Most of them thought that this high price might be a good opportunity to take a profit. But, as more and more people took profit on long trades, the price slowly decreased. When the price got back to the previous resistance zone, some traders began to feel that this price was too low.

The traders then bought the currency pair again (at point 4) to force the price up.

The stop loss on that trade should be somewhat below the resistance zone that was broken. The take profit point should be someplace above the zone. It is okay to expect a risk-to-reward of 1:2.

How to use the basic types of Forex trading

Look at the top of this post.

When a professional trader enters a trade, he knows exactly what he’s trading. But do you know too?

Study your previous trades and recognize the types of trades you were entering. Then ask yourself this simple question:

”Did I make this as well as I could?”

If you get YES as an answer, you are a very good trader. But if your answer is NO this will help you to make progress.

15th August 2018
Successful Forex traders – What are the characteristics of them?

2 min read

As we know almost 95% of Forex traders fails. But 5% have success.

So what is it that puts these traders in the top 5 percent?

Typical reasons such as experience, discipline, and fortitude?

We’ve all heard about that. But what is it that really makes them spot?

In this article, I’m going to analyze lesser-known characteristics that successful Forex traders have in common.

When I say successful Forex traders I mean consistently profitable.

Let me be crystal clear.

So many people talk about whether anyone can consistently profit from trading Forex.

I know because I made big research for finding proof on the internet. I found articles, testimonials, videos… And what I found is that is the truth.

Anyone can make consistent profit trading Forex and don’t ever let anyone tell you something different.

And what did I find?

What’s the secret to success?

I have to say, the only secret is that there is no secret.

But there is a piece of advice that will fully determine whether or not you are profitable. It’s a kind of habit.

Every single successful Forex trader has it in common, and it’s not something you can negotiate.

Successful traders never give up!

I know because I found the stories.

The ones about how some man tried for 3 years to make this Forex thing work, but with poor result. And he thought he just wasn’t for it. He failed because he didn’t recognize that his breakthrough moment was waiting for him just around the corner.

That is the problem.

There are so many traders who were fighting for years and suddenly took a break just before they made progress.

I know, they were exhausted by a large number of failures. But if they had a couple of trades more, they would have succeeded.

Never give up! This applies to all important things in life, but it’s never been truer than it is when it comes to becoming a successful Forex trader.

They don’t “lose”

Ok, every Forex trader has losses. That’s true.

But, there is some difference between how the novice trader loses and how the successful Forex trader loses. What makes this difference?

In one word – mindset.

Most novices in the Forex market view a loss as a bad thing.

Oh, no! It’s only one step on your way to winning.

The successful trader doesn’t view it as bad or wrong. It’s not a penalty because the Forex market isn’t able to do such things.

Forex market doesn’t know where you entered the market or where your stop loss was.

So, where you find a possibility to be punished? Nowhere, it is completely impossible.

Yes, I know! Making money is much more enjoyable than losing money.

If your trade doesn’t go your way doesn’t mean you should take it personally or emotionally. Stop to think like this and prevent this hole to be deeper! The successful Forex trader has the mindset that a loss is simply feedback.

Losses are useful, they are very good teachers, they can be a powerful way to learn. Even a trade that ends up as a loss can be the right decision. How is that possible? If you’ve defined your edge, and the setup met all of your criteria to enter the market, then you did all you can do. The rest is up to the market. But some days the market just doesn’t play along. It isn’t your fault.

Instead of giving up, you should ask yourself “would I take this same setup again next week if it presented itself?”

If your answer is YES you are on the right path. But every time your answer is NO, you need to take a step back, figure out where something went wrong and correct it for the next trade.

Each loss is an investment in your trading education. This is a constructive way of spending your own money. It is an investment with the best Forex trainer in the world – the market.

They use price action

Actually, they are using some form of price action as part of their trading strategy. Because price action plays a major role in any strategy.

It can develop and make stronger any trading strategy by providing areas to watch for potential entries as well as profit targets.

A successful Forex trader has defined edge.

Why the edge is so important?

An edge is everything about the way you trade. An edge can help you to put the odds in your favor.

Edge is a combination of the time frame you trade, your risk to reward ratio, the key levels you’ve identified, the price action strategies you use, etc.

It is also important for your pre and post-trade routine. How do you handle losses or what do you do when you win? All of this, make up your trading edge.

You don’t have to master all of these factors that make up your edge at once or to start putting the odds in your favor.

It is better to master one set of factors and then leisurely expand to others to further clarify your edge.

This should be the favorite way to learn. Become a master of two or three factors. You’ll find much less stressful than trying to become good at twenty factors. When you’ve mastered three or four things, expand the others to put together the odds in your favor.

Successful Forex trader never tries too hard.

Because the successful forex traders know, trying hard is a sign that something isn’t right. Trying to force a trading strategy to work will only lead to destructive behavior, such as emotional trading.

I remember the story of my friend when he first started trading Forex. He was spending countless hours studying setups. He spent hours and days and weeks doing so, ending up taking a completely different trade setup only to watch the original setup move in the intended direction without him.

He was trying too hard to make it work. As soon as he stopped over-analyzing trade setups and trying to make them work, his profit curve started to rise.

Now he is spending 20 minutes per day looking at his charts.

They think in terms of money risked.

You’ve never met a successful Forex trader who didn’t know how much money they were risking on any given trade.

Surprising, the small number of traders don’t think about how much money is at risk before opening a trade. This is because they’re using an arbitrary percentage to calculate risk, such as one or two percent of their trading account balance.

The trader’s only interested in how much money is at risk – they could care less about the percentage. They always define their risk in terms of money.

They may use a percentage as an entrance of how much they’re allowed to risk, but when it comes to fully accept the risk before putting on the trade, they think only about money.

And successful Forex traders know when to walk away.

Walking away can be especially difficult after a trade. Our emotions are running wild and often take the best of us. Taking a break after a win will allow your emotions to settle. After the win, you may feel excited and proud of yourself.

Yeah, you have every right to be. But pride and excitement are inadmissible in the Forex market.

After a loss, you can go straight to the trap if try to go through the charts again looking for a new setup. Remember, your loss in some trade is just feedback. Take it as a signal to look at what you could have done differently. Successful Forex traders never do that.

The key to becoming successful isn’t about eliminating emotions after a loss, it’s about channeling them in a way that will make you a better trader.

And let’s go to the top of this article.

The only way you can fail at becoming a successful Forex trader\ is if you give up. The next time you lose a trade just remember that not giving up is the #1 key to becoming a successful Forex trader.

And you know what?

Becoming a successful Forex trader is a marathon, not a sprint. So, keep it in your mind!

Risk Disclosure (read carefully!)

8th August 2018
Investment Opportunities – How To Identify

It isn’t easy to find investment opportunities and anyone can fall into many traps while seeking that. Here is how to avoid them.

By Guy Avtalyon

Someone would say: We all know the basic words to successful investing: Buy low and sell high. But it isn’t so easy to find good investment opportunities.

What else or different you can tell us?

First of all, I have to tell you that investors need to have rules.

Otherwise, the common saying can be difficult to perform, especially when many of your friends and colleagues are doing the opposite. If you don’t have a solid structure and order you are predestined to fail.

Investing or trading is like a robotic work, without emotion and always strong adherent to your rules.

You can find more and more investment opportunities opening themselves up to the investors. But not all of them are good investment opportunities. In fact, so many opportunities have drawbacks. First, you can be confused and may not pick the right one. Second, you might want to pick too many. That is dangerous per se. You can end up running like a headless fly, monitoring too many stocks, with investing more than it is reasonable. Hence, you may neglect something very important for your investment goals and financial security. The consequence easily could be your empty bank account or you’ll end up in debts.
The following are things to look for when finding an investment opportunity. If some investment opportunity has most of these things or all of them, you are looking at one that is likely to bring you wealth.

For example, if you don’t see yourself owning stock in a company you are looking for in the next ten years, then you should stay away from investing in that company. Most of the money made in business investments come from owning stock in the company. Investors are leaving it alone until the value rises and reinvesting your dividends versus rapidly buying and selling your stock in a business. That is the so-called long-term viability.

You have to measure the risk involved in a market investment against the potential reward. A good ratio is one to three. After that, you should set up a maximum acceptable loss.

What is the first rule of investing?

BUY LOW!

Determine the baseline value for an investment or trade, and wait to buy it until the price is below what is reasonable. When the stock market declines and other investors panicked and start short selling, that is the best time to look for buying opportunities. Ideally, you want to purchase an asset after the price falls significantly, with the expectation that it will rise again in the future and produce a good return.

All rules of investing

The second rule of all investment is to SELL HIGH!

After the price rises dramatically it is time to consider selling an asset. This is often a time of stock market growth when many people are impatient to buy into a rising market. When some investment shows significant gains, this is the ideal time to cash out and lock in your return. You could gather the income into a secure investment or look for a new underperforming asset and try to repeat your success.

How to find investment opportunities?

The golden rule is to LEARN FROM YOUR LOSSES! Yes!

In trying to buy low and sell high, you are forced to make some mistakes. If it is easy to buy low and sell high, everyone would do it. Try not to lose sleep over it or give up investing altogether when you lose money on some investment. Maybe you just have to take a break for a while and later capture market returns with an index fund. Or you will learn to more carefully research investment before putting more than you can luxuriously afford to lose on the line. Your fears can’t be the limiting factor that mutes your potential. Let that storm be the fuel that moves you to success.

Where to find investment opportunities?

Use your fear to produce better outcomes!

You should have a list of the investments you have made in the past. Think about what you could do to produce better outcomes in the future. You can get colossal insight from physically writing down outcomes you would like to avoid. That can prevent you from making emotional investment decisions. If you have a financial planner or adviser or someone else who will look over your investment ideas, that adds gravely deeper layers of reliability and responsibility.

You have to have a plan to avoid later regrets!

Of course, that large loss can cause you to regret because of bad investment decision. There’s also the regret that comes from watching other investments got wings. When you have a good plan of inventorying and you analyze your investment options often, that can help avoid a negative result. Writing it down makes it easier to stick to a plan.

Ultimately, investing is about finding the lifestyle that you want to live. So, you can’t do that if never find good Investment opportunities.

Choosing wisely may produce enough wealth to allow you to retire sooner or walk away from an annoying job. All you need is to use logic and stick to a financial plan to successfully build wealth.

31st July 2018