Do You Have An Unconscious Trading Bias?
Do you have a trading bias? Or are you a trader that is comfortable on both sides of the market?
What is a trading bias?
A trading bias can be an opinion about the market, or a certain currency pair, but it could also be an unconscious behavioural pattern that is affecting your profitability in the market.
Many traders do not realize they have an unconscious trading bias, but recognizing that you have one, and understanding how it can impact your trading performance, is something that you may need to do in order to make yourself a better trader.
Trader psychology does play an important role in trading, fear and greed are the most common problems that traders have to deal with on a daily basis, but if you have been trading for a while, as I have, there are some interesting characteristics that you may be applying to your trading behaviour, without actually realizing it.
When I first started trading.
I have been trading for almost 25 years. I first started trading equities in the early 90’s. When I started out on my trading career all those years ago, I did not have all the sophisticated charting software that we have today. I remember having to plot my charts on graph paper that I purchased from WH Smiths.
I first started out as a retail investor rather than a trader, plotting my charts by hand with end of the day prices taken from the Financial Times. My strategy was to buy and hold, buying value on dips, and following the long term trend. I had never heard of shorting, and with the limited resources available to me, I only really had the option to buy stock. So my brain was conditioned to only look for buying opportunities.
This early learned behaviour pattern has unconsciously been carried with me all my trading career. Even now when I am trading, I always feel more comfortable when buying rather than selling. These early trading experiences have shaped my trading psychology to this day, and there will be others in the same mindset.
Did you start your trading career buying equities?
If you started out in equities as I did, there is a good chance you will be more comfortable with long positions, rather than short positions, as I am. This bias does not stop me from taking short trades, but it just feels a little more normal when I am long.
If you keep a trading diary as most traders do, it would be a good idea to look back at the trades you have taken, and compare your long trades against your short trades. Are you taking more longs than shorts, or vice versa? Also look at the profitability of your longs verses your shorts.
An unconscious trading bias can also affect the length of time you stay in trades, so check that too. Are you mostly staying in long trades or short trades?
Knowledge is the biggest asset to trading profitability in my opinion, but it will help your trading if you can understand your trading behaviour, and recognize any trading bias that you may have, that could be affecting your profitability in the market.
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Beware Of Binary Options Scammers
I have had emails in recent weeks from people who have been ripped off by binary options scammers.
So why are are people emailing me you may ask?
Well these low life indiviuals who run these scam websites, are using my good name, and my website to promote their scams, to make it look like i have some sort of involvement in their operation.
So i just want to state here and now i do not have any involvement in any binary options brokers or websites. Binary options are nothing more than a scam, so steer well clear of them.
So how do these companies use my name?
If you do a search on Google for Rob Taylor Forex, or Rob Taylor Trade Forex Make Money, you will see the binary options scammers websites come up in the search results.
These results are nothing more than manipulated doorway pages that forward onto their crooked websites. This process of manipulating the search results is illegal, as well as damaging to my reputation.
I have contacted Google about this, and i have reported these websites to the appropriate authorities. So hopefully they will be dealt with pretty soon, and my repulation will not be further damaged by these crooks.
I should see it as a copmpliment really, that these companies are prepared to use my good name and my company to promote their illegal activities, but when i get emails from people telling me that they have lost almost £500,000 to these conmen it makes me feel sick. So i have to act against these individuals to protect myself, and the unfortunate people that fall for their lies.
We cannot let these people carry on with these illegal activities, that are ruining peoples lives, so they can live the good life while others suffer.
So if anyone is using my name or my company to promote illegal activities, then i suggest you remove any reference to me or my company from your marketing efforts at once. As i will take the appropriate action to protect myself and my business.
If anyone sees any websites that are using my name or my company to promote illegal activities, i would appreciate it if you could email me and let me know about it. Thank you.
3 Critical Tips For Choosing A Forex Broker
The importance of choosing the right forex broker is often underestimated. New traders with dreams of getting rich quick often look for features that are not important, and can even do more harm than good. In this article, we describe the three most important things to look for when choosing a forex broker.
1. Choose a broker who is subject to strong forex regulation.
The importance of this cannot be understated. Unregulated forex brokers are able to take advantage of you in ways you do not even realize. A prime example is slippage. Slippage is the difference between the price your trade is executed at, verses the price that was quoted when you placed the order. Slippage is a normal part of trading, because prices fluctuate all the time, and can easily move in the short time between when you place an order, and when it executes. However, unregulated brokers can pass the unfavorable slippage on to you, but keep the favorable slippage for themselves. This increases your transactions costs, and the effect can be significant over time, especially if you are a scalper.
The CFTC & NFA have arguably the strictest forex regulation in the world, and they audit their brokers regularly to make sure that slippage practices are neutral. This is just one of many ways that forex regulation can protect you as a trader.
2. Choose a broker who obeys the law.
This may seem obvious. However, it may surprise you to know that as of May 2015 there are only two forex brokers left in the United States who have never been fined by the regulators. The rest have been fined or banned from doing further business. Even in the face of strong regulation and regular audits, forex brokers still try to get away with cheating their clients. Do you want this kind of broker handling your money? Of course not. If you screen for United States forex brokers from this broker review page, you can easily see which brokers have been fined, and which have a clean regulatory record.
3. Choose a broker with low transaction costs.
Transaction costs are a lot lower than they used to be, and you may think this does not matter much to your trading anymore. If so, you are mistaken, and the following example illustrates why:
Say your starting account balance is $20,000. You have a simple trading system with a 30 pip stop loss and a 30 pip take profit level. You leverage 10:1 and you win 55% of your trades. Broker A offers a spread + commission of 2.5 pips, and Broker B offers a spread + commissions on only 0.7 pips. You make 450 roundtrip trades per year, which is just under two trades per day. The following chart shows the results after one year:
The chart shows that with Broker A:
• 83% of your gross profits get lost to transaction costs
• Your net profit for the year would be $4,500 or 22%
With Broker B:
• Only 23% of your gross profits get lost to transaction costs
• Your net profit for the year would be $20,700, or 104%
In this example, you are clearly better off with Broker B. The difference in transaction costs will have the greatest impact to your trading if you trade frequently, or have a narrow trading edge.
This article was kindly provided by Forex Scam Alerts, who provide advice about the risks of forex trading and how to avoid scams.
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The Secret To Successful Forex Trading
What does the market do everyday?
If you think about it logically the market can do 3 things every day. It can go up, it can go down, it can go sideways, but it always does something. The market does not stay at the same price for 24 hours, its always moving, it never stays still, and if its moving, its moving for a reason, and if you understand why its moving, then there are opportunities to make money from those moves.
Most traders fail to understand why the market moves as it does.
They think price goes up because people are buying, they think price goes down because people are selling, and they think the market goes sideways because people are not buying or selling.
That can sometimes be the case, but its not always the case. Most traders react to what they see on the chart, if they see prices going up they buy. If they see prices going down they sell.
So why is it that 95% of traders lose money, if they are doing what the chart is telling them to do?
Why traders lose money in the market.
The reason most traders lose is because they buy when they should be selling, and they sell when they should be buying. The reason they lose is because they buy when prices go up, but because they don’t know why the price is going up, they don’t know how long to hold the trade for, when prices then reverse they get stopped out. The same applies if price is going down.
How much money would you be able to make if you knew why price was going up or down, and you knew how long you could hold your trade for to make maximum profit. Not because of buying or selling, but because of some other factor that’s making price move.
So you have had no success with buying or selling into a move, so you try to catch the bottom or the top of a move. Prices start going up, so you sell. Prices start going down so you buy. Prices keep going so you add to your losing trade, and prices still keep going. When you have been stopped out prices then reverse.
Why did you lose your money? For the same reason that you lost it before. Because you were buying when you should be have been selling, and you were selling when you should have been buying. Whether you are trend trading, or counter trend trading you need to know why prices are moving, and whether you should be buying or selling.
Its not just as simple as buyers or sellers. Prices move for many reasons, and you need to know that reason before you enter a trade, so you are on the right side of the move.
Understanding the Forex market.
I get a lot of calls from traders that think i have some sort of magic formula for trading the markets. A holy grail, or a guaranteed method for Forex trading success. Well guys i have to confess that i don’t have such a thing, as such a thing does not exist. No one knows with a 100% confidence what will happen next in the Forex market. But if you fully understand what is making prices move, and take high probability trades based on that understanding, then you can be a successful trader.
I am not the master of the market, or a Forex trading guru, and i cannot promise you untold riches by enrolling on my training and mentoring program, but what i can promise you is that i will teach you what you need to know in order for you to be successful, and if you devote the time required to learn what i teach, then you will be a consistently profitable trader.
Embrace new ideas and beliefs.
How i trade, and what i teach is very unlike what you may have come across before, and it can take some traders longer than others to fully embrace what i teach, and adapt their trading strategies accordingly. It can be a struggle for some traders to get in the mindset of how a professional Forex trader thinks, and how he trades.
If you have been trading for a number of years and losing money all that time, it can be hard to let go of your learned behavior, and look at the market in a different way. Some traders however, will see my stuff as a light bulb moment in their trading journey, and my teachings will literally transform their trading overnight.
So to any prospective students reading this, if you are considering coming on board with me, please have an open mind, and be prepared to embrace new ideas and thought processes about how the market works. What i have to say will turn your understanding of the market on its head, so be prepared for some shocking revelations.
Use your understanding to trade with confidence.
I trade Forex with confidence and an unrivaled understanding of the forces that drive the market. My entries and exits in the market are based on high probability reversal points.
Some of my entries and exits are so precise, that it does sometimes seem like the market is dancing to my tune, which has prompted some of my students to ask me if i have a contact on the inside, someone feeding me information on where to enter and exit the market. 🙂
It does sometimes look that way, but i can assure you i do not have a contact on the inside, and there is no slight of hand involved.
Everything i trade and teach is based in what the chart is telling me to do. I am not going to go into detail about how i trade, and how i teach, but its all based on market knowledge. All the information you need to do what i do is contained within the chart.
Don’t waste time and effort with free education.
There are many Forex training companies, or individuals that will give away free information, or make videos of how you should trade the market. There are 1000’s of free videos on You Tube that you can spend years trawling through. I respect those people for taking the time to put together training videos to help people learn how to trade Forex. But the sad fact is they are a waste of your time and effort.
You have heard of the saying you don’t get something for nothing, well its true 99% of the time. You can spend a few years going through all this stuff on You Tube, and don’t get me wrong, its entertaining stuff, and you will learn a lot of the basics, but as far as making money goes, there will be very little in there that will help you in that regard.
The secret to successful Forex trading.
I am going to give you something now that will help you in your journey to becoming a profitable trader. This is a very important part of what i do, and in my opinion is the real secret to successful Forex trading.
Most people think the Forex market is random, but its not. I have been in this business long enough to know that no matter how random it looks, its not random. The market is very structured. The same things happen, time and time again in the market, and when you understand the market as i do, you can easily pick up on these recurring events, and use them to make a profit from the market.
This is what i teach you in my training course. I teach you to recognise the recurring events in the market, and how to profit from them. And i am not talking about chart patterns, like head and shoulders. Although head and shoulders are a very good pattern, if you know how to trade them correctly.
I am not talking about buying and selling at trend lines, or support and resistance levels. I am not talking about Elliot Wave, or Harmonics, or Moving Averages, or MACD or Bollinger Bands or any other indicator that you can find to give you trade signals. What i am talking about here are the guaranteed moves in the market that happen every day.
Use what you know about the market to make money.
This may seem like a strange statement, but try and think about what i have just said.
Use what you know about the market to make money. Think about what you know about the market, and what makes price move. What do you really know, with the highest probability? Work out what you are most confident about, and trade based on that.
If you are unsure about how price is going to move then don’t trade. You need to focus on probability to be successful. Be proactive in your trading not reactive. Analise the market for probability, and trade when the probability of a successful trade is most in your favor.
Thanks for visiting my site, and have a great day. 🙂