Key Lessons for Forex Traders: What I Learnt from 8 Published and Professional Traders
Every Forex trader travels along a definite path. From amateur to pro.
Truth is, slightly more than 90% of beginners give up along missing the gem — being a profitable trader.
If you are among the resilient cohort — read on. And be inspired towards the brighter side of the grind. You’ll get a treat of a hands-on feeling of what it takes to taste the waters of successful trading.
As with every profession, educating oneself is important. It’s not equal to the foul mistakes you can make devoid of knowledge!
My journey in brief
Part of my morphing out includes reading books out there. And Amazon Kindle is one golden treasure you too can scoop useful relish from.
I share excerpts from 8 authors whom I explore towards making me the trader I’m today.
Thanks to my persistence. I take my thirst for knowledge as a blessing. And that’s why I went on a study-spree.
Here you’ll find spiking points from each Trader/Writer. Most of them draw from life experiences trading.
Rayner runs a site helping traders via https://www.tradingwithrayner.com/. My best grasp on the concept of reading candlesticks is from his book: Monster Guide to Trading candle Sticks. You too can grab a copy from his site.
Whilst digging out for gems, I came across his book on Amazon Price action Trading Secrets and here are three key takeaways from the book:
Trading low lot sizes — this is in tandem with all other capital protection rules. Rayner gives a clear example of a Forex trader who took high lots, but now drives taxis for a living.
His clarion call- Trade low lots… and you’ll be in FX for as long as you wish. Myself, I cannot stress this better than Rayner. Starting out…please take it as your cardinal rule.
According to Rayner, every asset-pair in the market follows four definite market cycles:
And you can spot the market cycle right by looking at the price line against the position of SMAs 200 and 100.
Rayner also comes out right regarding OPM or Other People’s Money. It’s a concept you can ride on to build a substantial capital base.
However, I caution that this is not a leeway you may exploit with high lots! Never at best, always adhere to the capital protection rule first.
Simple. Cut off the greed!!! And never risk more than 5% capital per trade.
Rayner is a great mentor if you are starting and established as well. Take your time to learn for free, purchase eBooks and other helpful stuff via his site.
Paul joins the arena with his book title: The Black Book of Forex Trading.
- As a trading professional, Paul guides readers to take caution starting with capital protection.
Surely, no one owns the markets and since trade predictions go wrong, it’s always best to pay the caution- trading low lot sizes and place stop loss positions.
However, I feel that Paul comes out very clearly by describing pitfalls that hit upcoming traders like a brick in the head! And one is the glaring eventuality of Black Swans.
Black Swans are unpredictable happenings that can occur at any moment, rattling markets and the traders therein.
The best way to survive the black swans is covering any open positions with a stop-loss (SL).
Paul gives scenarios where Black swans have blown out accounts of brokers, leave alone traders. And it’s not always a bad idea to have two or three brokers holding your capital, just in case.
On a rare note, however, black swans moving in your favor would increase the worth of your account say ten-fold. Unfortunately, so rare for an occurrence.
My excerpts from Damir arise from his eBook: 50 Pips A Day Forex Strategy. And two critical notes from the eBook are:
Position sizing where you trade lots commensurate with the capital in your account. Of course, picking from caution with proper risk management. The first rule is for an FX trader to protect their capital, profiting comes in later.
Also, Damir is more emphatic towards reading the markets via what the candlesticks formations mean. And for sure, candlesticks on any time frame relay back a message to traders according to how they appear.
Candlestick shapes plus other formations like trend lines and patterns offer clear points of trade entry and exit.
It’s core for every trader to learn the language of candle-sticks. Grasp the meanings of Dojis, Haramis, and engulfing candlesticks among others. And for professionalism, clear your entry positions by reading candlesticks in your trading timeframe alongside another indicator or two concurrently.
Buzhylov steps into the arena with the book: Get Rich Trading Gold: Gold trading strategies revealed.
Reading through, you’ll grasp 5 key strategies to help firm your trade entries. Also, he lays emphasis on the point that Gold as a safe haven is subject to price manipulation.
That too is information that can give you an edge, if you are a gold monger- of course via the candlesticks way.
As a trader, your role is to analyze the markets for trends and firm your position according to the moving averages (SMA’s) within a specific timeframe.
The analytical model is visualizing retracements alongside larger time-frame trends. Therefore, a trader must master the drawing of trend lines. And it’s fine to consider the minor trends that arise within the direction of the main trend (at a longer time frame).
Arguably, some traders only do the commodity — Gold, and the few I know like its volatility. It’s what creates opportunities for them to cash in.
Alan is a Gold monger and he shares insights via the book title: SPOT GOLD TRADING ON FOREX PLATFORM: THIS IS A PRACTICAL, USABLE AND EASY-TO-APPLY MANUAL FOR TRADING SPOT GOLD (INVESTING)
- Reading through, you savor notes on — What moves Gold: The Fundamentals comprising 8 critical factors. And I believe grasping the concepts regarding each will up-stake your odds towards being a winner trader.
- Alan is also emphatic on trading gold with the reversal trading strategies. Sift through to grasp what it means when you spot the Morning and Evening Doji candles.
- Lastly, tech has changed, and its rattles are now into trading. Alan shares very strategic points if you are of the idea that robots or EAs should open and close your positions. So before you press the order buttons, make sure to listen and understand what Alan says regarding Expert Advisors.
Pro-tip: There’s so much noise about Robots/Expert Advisors in the trading Space. The reality is, some are genuine and some are scams. If you have no or little exposure, do undertake adequate due diligence before committing payments.
In my own words, a suitable EA will close more winning trades than it closes winning ones. Overall, you keep growing your account reasonably.
Andres E. Pedraza
Andres signs off an overview of his book that he’s ‘from somewhere in Pennsylvania’ and shares his experience scaling the trading trajectory- from taking part-time shots to going at it full time.
Andres writes — Excelling in FX is an achievable feat as he shares via his journey. Primarily, Andres emphasis is on traders managing their emotions whilst trading — an aspect where robots or Expert Advisors can plug out the human feelings from the frenzy
The point is prominent — about weeding out your greed and in place plugging in a great risk management strategy (Protection of Capital first), Andres and Callum are very very clear — FX is not a get-rich-quick scheme.
You can also relish great inspiration from another book, done by Andres alone: Making It in the Forex Market: From Zero to $5,000 Per Month (Special FX Academy). The overarching point from it is trading on top of critical analysis and decision-making.
Ideally, Andres pivots on the Pareto Principle. 80% of your profits arise from 20% of winning trades you take.
Moving on regarding Andres and Callum, aspiring traders have opportunities for mentorship through the Special FX Academy platform. You stand the chance to access loads of learning from the Special FX Academy in the form of freebies as well as a premium hands-on analytics and mentorship program.
By mentioning the mentorship aspect, it’s one that many formal schools miss out there and especially for trading scenes. Luckily, the gurus in the trading space know most of whatever you need to adapt well towards firming your grasp towards the glazing realities of FX trading.
Linking with a real and willing mentor increases your chances of success. It shortens your learning curve magically, whilst cautioning you from the pitfalls you risk falling into while learning on the job (FX).
James shares his insights into riding on winning strategies to thrive in FX trading. And that’s at the core is the book: Forex for Beginners: How to Make Money in Forex Trading (Currency Trading Strategies)
According to Stuart, what comes out with crystal clarity is — success in Forex trading is not a random occurrence. It’s a sum of a deliberate effort by a willing trader to understand the basics, yet keep ever digging deeper towards perfecting everything.
And the best route is to trade via winning strategies. Strategies arise from tried and tested models which arise from careful plans: to protect your capital first and next aim at winning more trades than you lose.
Never lie to yourself — the truth is no one is a master of the markets. Professionals lose trades too and you are not an exception!
It’s out of established models that a trader monitors market performance, and via a strategy establishes very clear entry and exit signals to increase their profiting potential for every trade.
Last on the list of books I’ve gone through is one by Salman: Forex Survival Manual: Save Your Trading Account From Collapsing. Truth be told, many beginner traders blow accounts by trading incorrectly.
However, quite awkward but brutally honest, the Forex Survival Manual underscores the concept of the Whales and Sharks within the trading spaces.
In reality, most traders are individuals with small amounts of capital. The glaring truth is, that is not an excuse for not succeeding as a trader!
According to Salman, being small you have to know the whales and the sharks in the trading arena. Whales are banks and pension funds that move the markets. Sharks are your enemies, and they comprise some brokers. Sharks scheme to pretend to move the markets in one direction, only for them to abandon and prey on your open positions.
If you can spot the whales from the sharks — Great! You can trade safely, profitably along the direction of prices the whales move to!
Wrapping up Everything
Successful trading is a reality that firms up once you follow a matrix of critical ingredients. Since no master of the markets exists, winning trades is a matter of plugging in everything correctly- through strategies and plans.
What else should I add?
In FX trading, always keep at bay the greed factor. And you hit this right by trading both low-lot sizes and leverages. It’s not a get-rich-quick scheme. So yours is success by learning and hard work on refining winning strategies, rinse-repeating over in light of spotting a probable set up to win profits or at the least keep your capital intact.
As part of the updates, master your grasp on the technicals -what past price performance says.
Never ignore the fundamentals — what reactions price may face out of global events.
Also, never ignore the market sentiments and target to lay hands on correct information in a timely fashion.
Go on to explore books and courses out there — and good mentors too. You can learn for free or part with some fee, it’s never equal to the losses you incur trading blindly!
Consider free eBooks on Amazon — and by free does not imply they contain information of a lesser degree than you need to apply on your way to successful trading.
If you are starting, pick from my archives — the hard lessons I distil here. And go on to coin your applicable FX winning strategy.