Currency correlation measures the extend in which two individual currency pairs move in the same or in opposite directions. It´s usually expressed as a percentage, from -100% to +100%. Positive correlations (from 0% to 100%) indicate how much two pairs move in the same direction. Negative correlations (from 0% to -100%) indicate how much two pairs move in opposite...
1. As a novice trader, one of the biggest mistakes you can make, especially after having had a number of successful trades, is thinking you know what you are doing when you actually don´t. This will be the cause of every trading error you have the potential to make.
2. It takes absolutely no skill at all to place a winning trade. It does to consistently do...
TEST YOUR TRADING SYSTEM
I will not go deep into this, because it quickly becomes a shouting match on who has the best system, which is usually more about ego than fact. It is sufficient to say that I have seen / know of profitable traders who use fundamentals, price patterns, Elliot waves, renko, moving averages, structure levels, pitchforks, trend rules and...
As we all know, when we open a trade, there is no guarantee it will be a winner. Given the win rate of a certain trading strategy, there is a random distribution between wins and losses. We trade to make money over a larger number of trades, not to win every individual trade, which would simply be unrealistic. That is why it’s important to be confident when we...
I personally follow 4 central banks in detail: FED (USD), ECB (EUR), BoJ (JPY) and BoE (GBP). Knowing the monetary policies of these banks and how they differ, helps me in trading the following 6 major pairs: EU, GU, UJ, EJ, EG and GJ. I also follow three other central banks, be it more at a distance and with less detail: SNB, RBA and BoC. The banks to follow...
POTENTIAL SCR*W FACTOR
1. Must have a centralised price feed to insure reliability of quote.
1a. There should be no delays, re-quotes, rejections or manipulations of price.
2. Check fine print of contract for any unfair rules they may impose upon you as a trader.
3. Are there conditions in the broker agreement under which profits can be made void and if yes,...
BROKER RISK PROFILE
1. Must be regulated by a regulatory authority.
2. Must have a (relatively) clean regulatory record.
3. Must have they been in business for several years.
4. Must have a segregated bank account for holding retail client funds.
5. Must be a member of a compensation fund, which compensates losses (up to a certain amount) in case of...
FINDING TRADE CANDIDATES
You can only profit from that which you can anticipate. So here I describe in detail the steps I take to identify potential trading opportunities. I ensure that as many ideas as possible are taken into consideration. I list 13 concrete steps to do this and how to prioritise the trade candidates. One of those steps, indeed, is scanning the...
REASONS TO TRADE
I write in detail why I trade, what I find appealing about it, what motivates me and why I believe I can be a good trader, based on my characteristics as a person and my skillset / competency profile. Tip: its important to be honest in the assessment of yourself and its wise to include input from others to objectify your profile.
MY APPROACH
I...
