Daily FX | Dynamic Trader Blog

Secret to Dynamic Trading

Today I am going to share the secrets to becoming a successful dynamic trader.

Hello Dynamic Traders and welcome to a fun packed week of forex trading. It is Monday morning and the markets are open with the GBPUSD sliding and USDJPY climbing. Lots of news out this week and rate decisions are the main focus for traders. News, news, news and it is easy to get caught up on what news to watch out for and what to ignore. I am not going to go through the fundamentals as I trade based mainly of technicals but be in no doubt, majority of the time the news is already factored in to the price and for this reason I am a technical trader. I am aware and do pay attention to news items though and stay out during the hot zones.

So, the secret to successful trading. Well, most traders starting off assume it is having an indicator that is never wrong and they go in search of this elusive indicator. Others think it is a 100% accurate strategy and they go off in search of this strategy. Well, it is neither of these. In fact the points that make what we call a dynamic trader are listed below.

• Know where and why to enter in to a market
• Know where and why to set your stop loss
• Know where to set profit targets
• Manage the trade

Mix the above with good forex education, add a rule based trading plan and throw in a trading log and you have a recipe to become a dynamic trader. Sound too simple to be true to some of you? Right now, some of you reading this will go off and spend thousands on a black box system or a flashing green and red light telling you when to buy and sell software or a fee paying tip service. How you decide to progress is your choice but the end result will be the time tested points above to become a good trader and that has not changed since 1792 when the NYSE was formed by 24 stock brokers and merchants.

I am lucky as I had Javid mentor me and that saved me a lot of time, effort and mistakes. If you are fed up of losing trades after losing trades and never seem to have any form of profitable consistency then start to develop your own trading plan. If you have never had forex education then visit here often and I will share some helpful advice and information. More importantly though, get yourself the trading education required to become a trader if you truly want to make a success in this field.

Good trading.

Forex Analyst
Anne Chapman

Dynamic Traders

What makes a Dynamic Trader?

A Dynamic Trader first and foremost has the ability to detach themselves from the market emotionally. An emotional resilience is undoubtedly the biggest advantage when trading the markets. The markets consist of human emotions and also over 90% of losing traders (mainly as a result of emotion and lack of education). Detaching emotions from trading is 75% towards a successful Dynamic Trader.

In addition a constant desire to improve is essential. A Dynamic Trader as the name suggests does not and cannot remain static and needs to be able to adapt to the ever changing market conditions.

The Dynamic Trader does not look to chase markets or incorporate heavy risks into trading but uses a structured rule based form of trading which involves discipline and intellignece.

Dynamic Traders look for high probability set ups with the odds stacked in their favour as opposed to trade and pray. Many traders hold on to losing positions and pray that price goes back in the direction they are trading in. This is a recipe for disaster and Dynamic Traders always cut their losses quickly giving them the ability to trade tomorrow.

A traders approach is very important which is why new traders should aim to become Dynamic Traders.

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Forex Analyst
Anne Chapman

Trading Diary

A trading diary is an essential element of trading yet one many traders decide to bypass. Every trader should keep track of their trades to identify  why and how they took the trade and why and how they exited the trade. Below is a list of information a traders log should contain.

• Date
• Time of entry
• Entry price
• Position size
• Risk size
• Profit target
• Exit price
• Results
• Lessons learned

Our trading diary contains more information than the above stated but if you currently do not log your trades then this is a starting point for your own personal traders journal.

Once you have a months trades documented in your trading diary then you should start with analyzing the trades and work out where you can improve your forex trading. This is a very important exercise and  well worth taking the time out to do as it will be one of the best ways to improve your trading approach.

You can learn more about forex trading by signing up to our FREE lesson newsletters at www.fxcps.com

Good trading.

Money Management

Many new forex traders we have come across seem to find money management boring. Well, like it or not, money management play an extremely important part of trading and to ignore it is to admit defeat before the battle even begins.

Money management not only restricts your losses but it also give you your profits.

Before taking a trade you need to stack the odds in your favour. This is something we go through on our courses and mentoring sessions and is much too vast a topic to explain in a few paragraphs here. Once the odds are stacked in your favour then you need to identify your entry point. After that an exit point needs to be established and this is where the stop loss comes in to action. Your stop loss is your safety net and very important in limiting your losses and giving you the ability the trade for another day.

The positioning of your stop loss is as important as when to enter a trade. We have seen many traders scared of having a big loss that they place the stop loss only a few pips from the entry point. This scared method of trading inevitably leads to more losses than profits.

Stop loss levels are very important and unless a trader uses them correctly they will only cause losses by a trade taking out your stop and then reversing and going in the direction you were hoping for in the first place.

Hopefully those of you we have mentored are applying our strategies for not only entries but also stops.

Good trading.
Anne Chapman