Wednesday 18 November 2015
Sunday 31 August 2014
Thursday 14 August 2014
How to Handle Trading Losses
Last time we discussed how to handle trading losses. We focused on how to control your emotions when you lose money. Once you can do this, what happens next? Suppose you've made a string of trading losses. You are feeling calm and collected, and are ready to do something about it. What should you do?
There are two options here.
Option 1: You can do nothing, and carry on with the same trading strategy you already use.
Option 2: You can stop trading and come up with a new strategy before starting again.
Depending on the situation, either of the options may be suitable. When deciding what you do, you need to first analyze your losses. The key question you need to answer is this: Are my losses consistent with my trading strategy?
What do I mean by this? Suppose you have backtested your trading strategy and are implementing it live. If you analyze the backtest results, you should get a good idea of what the losses look like. For example, if you have a strategy that trades daily or less frequently, you should expect to have some months where you lose money.
From your backtest results, you should also get an idea of the magnitude of potential losses. The next step is to compare your actual losses with your backtest results. Then you can ask whether your losses are consistent with your trading strategy.
If your losses are consistent with your strategy, the best thing to do is carry on executing your trading strategy. Assuming your trading strategy is a good one, you should return to profitability soon.
What happens if the losses are not consistent with the strategy? What happens if you are losing a lot more money than you expect to? Now things change. At this point, you should consider going back to the drawing board.
It is likely that the trading strategy no longer works as well as it should. At this point, it is time to come up with a new trading strategy.
Here's a little secret about all trading strategies: At some point, every strategy stops working. Why is this? Market conditions change over time, and market patterns do as well. So at some point the strategy that you are using will become obsolete.
When you encounter trading losses, you need to evaluate whether your strategy has become obsolete. And if so, you need a new strategy.
What many traders (myself included) do is have a pipeline of different strategies. Even while I'm trading a strategy now, I'm simultaneously working on developing new strategies. That way, if my current strategy stops working, I can replace it with another one.
To be a successful trader, you need to be always researching new strategies. You never know when market conditions change, and you need to be ready for when they do.
Handling trading losses consists of the following steps:
Keep your emotions in check and ensure that you are making rational decisions.
Evaluate whether your losses are consistent with your trading strategy.
If they are consistent, then carry on implementing your strategy as normal.
If they are not consistent, then you need to change your strategy before trading again.
If you follow these 4 steps, you'll learn to handle trading losses correctly. And this will ensure that you are profitable over the long term.
There are two options here.
Option 1: You can do nothing, and carry on with the same trading strategy you already use.
Option 2: You can stop trading and come up with a new strategy before starting again.
Depending on the situation, either of the options may be suitable. When deciding what you do, you need to first analyze your losses. The key question you need to answer is this: Are my losses consistent with my trading strategy?
What do I mean by this? Suppose you have backtested your trading strategy and are implementing it live. If you analyze the backtest results, you should get a good idea of what the losses look like. For example, if you have a strategy that trades daily or less frequently, you should expect to have some months where you lose money.
From your backtest results, you should also get an idea of the magnitude of potential losses. The next step is to compare your actual losses with your backtest results. Then you can ask whether your losses are consistent with your trading strategy.
If your losses are consistent with your strategy, the best thing to do is carry on executing your trading strategy. Assuming your trading strategy is a good one, you should return to profitability soon.
What happens if the losses are not consistent with the strategy? What happens if you are losing a lot more money than you expect to? Now things change. At this point, you should consider going back to the drawing board.
It is likely that the trading strategy no longer works as well as it should. At this point, it is time to come up with a new trading strategy.
Here's a little secret about all trading strategies: At some point, every strategy stops working. Why is this? Market conditions change over time, and market patterns do as well. So at some point the strategy that you are using will become obsolete.
When you encounter trading losses, you need to evaluate whether your strategy has become obsolete. And if so, you need a new strategy.
What many traders (myself included) do is have a pipeline of different strategies. Even while I'm trading a strategy now, I'm simultaneously working on developing new strategies. That way, if my current strategy stops working, I can replace it with another one.
To be a successful trader, you need to be always researching new strategies. You never know when market conditions change, and you need to be ready for when they do.
Handling trading losses consists of the following steps:
Keep your emotions in check and ensure that you are making rational decisions.
Evaluate whether your losses are consistent with your trading strategy.
If they are consistent, then carry on implementing your strategy as normal.
If they are not consistent, then you need to change your strategy before trading again.
If you follow these 4 steps, you'll learn to handle trading losses correctly. And this will ensure that you are profitable over the long term.
Wednesday 13 August 2014
ROBOFOREX - Depositing Without Commission
USE ROBOTS - TAKE PROFIT
The goal of RoboForex is to provide quality services at the international Forex exchange market. We have a great variety of Forex trading accounts (from Micro Cent accounts for beginners to professional ECN accounts provided by Currenex), a convenient Live Account, trading terminals MetaTrader4, MetaTrader5,cTrader, Currenex Viking Trader a wide range of trading instruments, Bridge functionality with fully integrated Straight Through Processing (STP) – all these factors allow our clients to implement any kind of trading strategy. Just give the orders and leave everything else to RoboForex!
LiteForex Review
LiteForex Video Review:
LiteForex is an up and coming Forex dealer that offers Forex trading in a straightforward and no-nonsense manner. The company has been around since 2005, and can offer accounts with as little as $1, making it a perfect place to learn the markets. The dealer also pays interest of 3.5% on the balance of your account that is not involved in trading as well, offering a way to increase your profits over time.
Platform
LiteForex uses the MetaTrader 4 and 5 platforms, both of which are well known throughout the world, and have placed millions upon millions of trades over the years. It also offers a web-based basic platform which is more suited to monitoring positions instead of analytics as it is much more basic than the MetaTrader platforms.
Customer Service
LiteForex offers a call center, a call back feature, and live chat and forum rooms from which to get customer service. Because of this, there is always a way to get in touch with a representative if you need one.
Reliability
LiteForex has been around for over 6 years, and is reliable. The platform, the MetaTrader 4 or 5, are both well-known and reliable as well.
Commissions and Spreads
LiteForex offers floating spreads without a commission. Most of the major pairs are within a 2-3 pip parameter.
Promotions
LiteForex is constantly offering various type of promotions, and at the time of this writing was willing to offer an extra $200 to the trader’s account for joining.
Conclusion
LiteForex is a good up and coming player in the Forex markets. The spreads are good, and the ability to deposit with so many options is a huge plus. The dealer seems to be a great place for beginners because of the ability to open an account with so little starting capital.
Pros:
- Variable spreads. This keeps the spread tight, which is one of your biggest expenses as a trader.
- The MetaTrader platforms are well-known and reliable. It has been being used for years, and is very stable.
- Accounts can be started with as little as $1.
- The deposit process is simple and quick, as you can use a bank wire, credit and debit cards, MoneyBookers, Liberty Reserve, Perfect Money, WebMoney, Liqpay, OK Pay, Alert Pay. Withdraw can be done in reverse.
Cons:
- Limited to only Forex, so if you are looking to trade other markets, you will need another broker.
- The variable spreads can be an issue during news events, but only if you are looking to scalp the news announcement.
RoboForex Review
ROBOFOREX LP ("RoboForex") is registered in New Zealand, registration number 2538375. Our main specialization is providing individuals and organizations with services in international financial markets. RoboForex is a partner of several leading brokerage software developers and applies the STP model with the Bridge Technology to work with its Prime Broker and execute customers’ orders in Non-Dealing Desk mode.
RoboForex gives clients an option to select the terms of trading operations: fixed or floating spread, “4 digits” or “5 digits”, instant execution or market execution.
ROBOFOREX LP is in continuous development. By extending the list of trading instruments, creating new products and implementing cutting-edge technologies, RoboForex is always in contact with its customers and partners. We look forward to long term cooperation with our clients, and also to their loyalty.
Focusing on professional participants, Roboforex creates and maintains conditions for the effective use of free cash assets. By offering liquidity with low spreads RoboForex strives towards it's main goal - to create conditions for private and corporate investors to freely access global financial markets. We keep and multiply our main asset - our reputation.
Focusing on professional participants, Roboforex creates and maintains conditions for the effective use of free cash assets. By offering liquidity with low spreads RoboForex strives towards it's main goal - to create conditions for private and corporate investors to freely access global financial markets. We keep and multiply our main asset - our reputation.
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