How To Trade Blog: 2021

Wednesday, December 8, 2021

Newbie Trading Psychology: When Traders Are Chickens

This is another funny story about trading psychology like the Crowd psychology in the previous article. Today, we’ll go to a restaurant, which is very famous for its Newbie BBQ Chicken dishes.

BBQ Chicken

Unlike the industrial way of raising chickens, the American West is famous for its grilled BBQ chicken. People let the chickens out in the garden, let them walk around so that the meat is firm and tastier. One day, a customer came into a restaurant.

– Hello.

– Yes! The chef hastily ran out

– Mr. Market wants to eat BBQ chicken?

– Yes. Please wait for 30 minutes.

The chef went to the garden, began to throw the rice on the ground so that chickens slowly gathered.

After a while of rolling his eyes to see which chickens are qualified for “meat”, he used a basket (a tool that specializes in catching chickens) and… yup.

The chicken flapped its wings in the basket, trying to struggle. The chef reached in, strangled the chicken, and pulled it out. After feathering and cleaning, BBQ chicken started to be served to Mr. Market.

Do you see yourself in it? Probably not. Now we’re back to reality with Newbie’s story.

One fine day, Newbie surfed Facebook, Youtube, etc. Some money-making pictures caught his eyes. Newbie is curious and clicks to view and join Telegram groups. Here, the group owners began to show off their knowledge, show off their money and how to get rich…

Is it easy to make money? Newbie began thinking. At first, he didn’t believe it. The second time, Newbie started to notice. For the 5th time, he started to learn. For the 10th time, he opened an account and deposited to become a trader. And… he lost all his money to the market.

So what do you think? Are new traders any different from chickens? Are the teachers, experts, YouTubers… any different from the chef? And of course, the person enjoying the BBQ chicken is still Mr. Market.

What is Newbie’s trading psychology?

I know have many types of new trader’ trading psychology like greedy, FOMO, curious, active, confident… Let me go deeper for you to understand.

Chicken Fomo

After surfing Facebook, seeing the newsfeed of friends all talking about Bitcoin, everyone says that coming is a great opportunity for Crypto. Being afraid of missing the opportunity to make money, “chicken” also started to trade Coin.

This type of “chicken” has no knowledge. So when seeing what other people do, he imitates it. As a result, he either gets scammed or loses every penny in his pocket.

This is exactly how the market works. When the price is hot, the media constantly reports with a lot of attractive news to pull money from new people (without knowledge) to the market. Then, they will be “trimmed” gently.

Must-read articles:

– What is Fomo? Why is Fomo dangerous?

– Crowd psychology.

Active chicken

This is the type of “chicken” that you can easily come across. They have the knowledge, know how to analyze and predict, or trade with a Demo account. But they merely have any real profit.

Trading and making money in the market is a psychological game, where the person with bravery, patience, and discipline is the winner. On the contrary, being too active will easily lose money. The “active chickens” like to flap their wings, like drawing charts with indicators, and then fall into a vortex. Find a trading strategy => lose money => try to find another strategy => and lose money again…

Greedy chicken

This type of “chicken” likes to look at other people’s wallets. They want to get rich quickly. Therefore, when entering the market, they trade continuously with large volumes.

Of course, in the first few trades, Mr. Market “throws the rice”, feeds and fattens his chickens. Then, when the “chicken” has enough weight, it will become a delicious dish for him.

What are you wondering?

Newbie is chicken?

Your question may be Is it true that being a new trader is a chicken?

The answer is that’s right.

You can learn, learn more, have more knowledge. But trading psychology or emotions are the problem in the game of money. Does anyone tell you that?

Let’s think about it. The market as we know it has been around for hundreds of years. Knowledge abounds online. You can find them by Google, by Youtube… anyone can learn. And then, 95% of traders still lose money to the market.

Again, those who think that just learning knowledge about technical analysis, fundamental analysis… is enough to make money in the market, really are chickens.

How to get out of the chicken life?

The answer is money and time. These are the two things that Newbies have to put into the market in exchange for experience. No one can help them but themselves.

No one tells the “chicken” that the game of money is a game of psychology. Whether the price rises or falls, it affects emotions, “Chicken” will gradually lose control, forgetting all the knowledge learned.

Each person’s knowledge and awareness will help them lose less money and time and realize more problems in the process.

In short, if you have the knowledge and experience, you will have a chance to get out of the chicken life. Otherwise, you will forever be just a delicious meal for others.

So how can Newbie make money?

Reply: Let’s become a chef.

Look and do the same as what the chef has done.

– Become a Youtuber, who draws, makes videos to share trading strategies to make money from Youtube.

– Be a teacher or an analyst, who shows knowledge and predict to make money for teaching.

– Become an IB (Introduce Broker), showing off your account and money to have customers register with your affiliate link.

……..

What if you want to become a trader? Spend money and time buying psychological experiences.

Your question should be Why doesn’t any trader show you a 1-year history of trading and making money from Forex?

Answer: For those who can money from the market for real, they do it in silence. They don’t need to do youtube, be experts, or Ibs. They just need to focus on the market and make money.

Conclusion

The game of money is a game of psychology. Newcomers to this market, no matter what they do, will still have to spend time and money in exchange for emotional experiences.

Hope you understand what I’m saying in this post. Love!!!

The post Newbie Trading Psychology: When Traders Are Chickens appeared first on How To Trade Blog.

source https://howtotradeblog.com/newbie-trading-psychology/

Wednesday, December 1, 2021

Crowd Psychology: The Law Of Greed And Fear In The Market

Before getting into this extremely important article, I will tell you a story. It’s about the crowd psychology of the Bull and Bear forest.

Bull and Bear forest

Once upon a time!

In a certain forest, 3 bulls were looking for food. They accidentally got lost in a forest and saw a lot of young grass.

Naturally, 3 bulls ran into the pasture to enjoy. Suddenly, 5 bears appeared to attack and chase bulls. 3 weak bulls run away!!!!!

Bulls were not gentle. They couldn’t ignore such delicious food so they called their friends. 3 bulls call a whole herd of more than a dozen bulls back into the forest to chase away the bears. Besides, the bulls spread the news, calling all the other healthy bulls near and far to attack together.

The deeper into the forest, the more grass. But the bears are crowded and extremely aggressive. The war at this time was extremely fierce. No one gave up on either side, just like that.

At this time, almost all the bulls in the forest participated in the war. To strengthen their position, the bulls called many other animals that did not have the fighting power to come in such as deer, chicken, pig, dog… There are even mice.

The other animals didn’t know the truth. They just heard from bulls that there was a lot of food so they followed. All of them tried to spread the word to get more support to fight the bears.

They outnumbered the bears and won the fight. BUT NOW, the first 3 bulls and their herd that had participated in the initial fight were full. They silently left, leaving behind chickens, pigs, deer, etc. in the forest.

At that time, the bears began to counterattack. A loud roar awakened the chickens and pigs. Now, without the bulls to protect, the chickens and pigs began to run away, screaming and trampling each other.

What is the outcome? The bulls were full and retreated to their home to rest and recuperate. What about the bears? They freely tore the chickens and pigs… And just like that, when the bears were full, they were not interested in war with the bulls. Thus, they retreated to the forest. At this point, the herd of bulls has recovered and begins a new feeding cycle.

The story of the deep forest repeats itself. Bears and bulls have their turn getting full, while pigs, chickens, deer, dogs… get butchered.

Imagine the market that you and I are trading is the forest above. Then, who are you and I? A bear and a bull? Or a pig and a chicken?

Crowd psychology is the law of the market

If you may not have noticed, let me illustrate a period of GOLD (2007 – 2012) on the monthly chart.

(1) The first is the foraging process of the bulls. The gold price during this period went sideways.

(2) Suddenly, the bulls found the pasture near a forest and rushed to eat grass. The gold price increased sharply, from $670 to more than $1000.

Stage 1 and 2: Herd of bulls was eating grass

(3) The bears at this time came in and chased the bulls. The gold price decreased from $1025 to $725.

Stage 3: The bears came in and chased the bulls

(4) Now, the Bull called more friends and spread the news about food to other animals. All of them fiercely rushed into the forest to save the grass and fight the bears. The price of gold increased sharply, from $725 at the end of 2008 to $1900 at the end of 2011.

Stage 4: The bull called more friends and other animals to attack together

(5) The bulls were full and silently left the forest. The price started to distribute the top and moved sideways in the range of $1550 to $1800.

Stage 5: The bulls were full and silently left the forest

(6) When the Bear knew for sure that the Bull had retreated. A general attack broke out. All the pigs, chickens, deer, etc. became delicious prey for the bears. The gold price fell sharply from $1770 to $1200.

After a while butchering the pigs and chickens, the bears were full. They retreated into the forest. The forest was now in equilibrium again.

Let me show you the full picture of the market during this period.

How to take advantage of Crowd Psychology

‘Be Fearful When Others Are Greedy and Greedy When Others Are Fearful’

This is the most quintessential saying about crowd psychology. Most of the participants in the market (Coin, Gold, Forex, Stocks…) are chickens, pigs, deer… They are animals with no fighting power in the market. When they appear, that’s the moment you should quietly leave.

On the contrary, the chickens and pigs after a period of being slaughtered by the bears began to fear. That is when the bears are full and the bulls will sooner or later return to the process of feeding. This is when you enter the market.

That is the rule. It has existed for thousands of years in any market.

Think about it! Let’s go to an example of the Coin market of the years 2017-2018.

Bitcoin from 2017 – 2018

This is the full picture of Bitcoin in two years from 2017 to 2018.

(i) Before October 2017, BTC (Bitcoin) price was only sideways and fluctuated below $5,000.

(ii) Suddenly, huge cash flow poured into the market. In 2 months (from October to December), BTC price from $5,000 flew straight up to nearly $20,000.

(iii) Now, the press, media reported about BTC. The whole world started talking about BTC. Non-combatant animals (dogs, pigs, chickens…) started appearing and entering the market. They said BTC would increase to 100,000$ and be the common currency of the future…. Those who call themselves investors have been pouring money into buying Bitcoin continuously.

(iv) In the end, when everyone traded and talked about BTC, its price went from $17,000 to $6,000. Most of the money of retail investors is the reward for the Bears.

Once again, the Law of Market Psychology is applied. Delicious food is never for the masses. So, when you see the crowd starting to get greedy and rush into the market, leave quietly.

Summary

At the end of each wave, when the bulls leave, positive news will appear. A series of good indicators, good articles will be published to stimulate the crowd psychology to participate in the market.

Remember that when non-combatant animals enter the market, that is the most dangerous time. If you don’t leave quickly, the bears will tear you apart.

Many thanks to Zet UG – who gives me such good examples.

Love!!

The post Crowd Psychology: The Law Of Greed And Fear In The Market appeared first on How To Trade Blog.

source https://howtotradeblog.com/crowd-psychology/

Monday, November 22, 2021

What Is FOMO? Causes And How To Deal With FOMO In Trading

FOMO is a thing that almost all traders meet when trading in the market. What is FOMO? Why is it so dangerous? The causes and how to overcome it? I will answer these questions in this article.

Bitcoin’s 7 crazy days

On December 16, 2017, when the price of Bitcoin (BTC) was at $19,500/BTC, I posted this status on my Facebook.

This Caption can be understood as Bitcoin is creating Fomo. Either sell out and leave the market or die.

On December 19, 2017, Bitcoin price dropped to $17,000/BTC. The crowd was still cheering and buying frantically.

On the morning of December 21, the earthquake of BTC took place. The sharks began to sell and the price dropped like never before. Fear covered the Coin market. Everything happened at breakneck speed from $17,000 – $15,000 – $13000… Now the crowd started to panic and turned to sell BTC. All ran away, which made the BTC drop to nearly $10,000.

After the thought that everything was broken, the bottom-fishing money flow appeared. It pulled the BTC price soar to $15,000.

Bitcoin created Fomo for the second time

7 days with 2 times of FOMO, from $19,000 BTC price plummeted to nearly $10,000 and then rose back to $15,000. Crowds are like slaughtered pigs, led by the market to buy high and sell low. After all, they left the market empty-handed.

Until now, this is still considered one of the most expensive Fomo lessons in the Crypto market. You can review it on Tradingview of the last days of 2017.

Ok! Now we come to today’s article. The market will always create Fomo sentiment. It will always be the traders who pay to experience and understand the concept of that negative sentiment. If you haven’t lost money yet, here’s an article that will save you hundreds or thousands of dollars.

What is FOMO?

FOMO is an acronym for Fear Of Missing Out, which is understood as a psychological syndrome of fear of losing opportunities.

Fomo psychology in trading means traders always have a feeling of fear that they will miss trading opportunities.

For example, you see people rushing to buy gold. Experts and news simultaneously predict the gold price will go higher. You are afraid that the more you wait, the more the price increases. So you follow the crowd to buy gold (like the gold Fomo story below).

Or like you are waiting to buy Bitcoin. You feel restless, worried that the price will not return to the Buy zone. As soon as the price pops up, you are afraid of losing the opportunity and immediately jump into BUY trades. You would ignore all previous plans and BUY as quickly as possible.

Traders always have a feeling of fear that they will miss trading opportunities

In short, Fomo is a fear of missing opportunity made up by you. You always feel it slip out of your hands. The more you fear, the more you will want to act.

Most traders when participating in any market (Forex, Crypto, stock…) at least experience Fomo once and lose money. So if you’ve been through Fomo, don’t be shy because everyone has been like that. HAHAA!!!!!

The Gold Fomo story

This is one of the super classic lessons about the gold Fomo. I will try to use pictures and explanations for you to understand. Gold price from July 2020 to August 2020.

(1) When gold rallied from 1800 to 1950 (beyond the peak of 2011), Fomo sentiment started to be activated.

(2) Media, experts, international news continuously reported that Gold would surpass $2,000 and increase to $3,000 within the next year. Or like the economic crisis caused by Covid 19 would bring gold to $3,000 in the future… Lots of good news supported a bullish scenario for gold. The crowd started buying gold. Even newbies and amateurs also came to the market to trade Gold.

(3) What happened next? Gold plummeted sharply for 3 days in a row (from $2,075 to $1,910). The crowd was panicking. They changed from BUY to SELL positions as quickly as possible. Once again, the Fomo SELL sentiment took place and the market continued to lead traders.

(4) What was the result? After strongly stepping on the gold price in the 186x area to pull the panic to the extreme, large cash flow started to rush in, pulling the market back up to the $2,000 mark. Gold rose again like “there has never been a breakup”.

What about traders? After 2 strong slaps of the market, perhaps they have come to their senses. But the money in their accounts has been long gone.

The result of the whole Gold Fomo process

Why is Fomo in trading dangerous?

Fomo entails fear of losing money

“The market is a device for transferring money from the impatient to the patient. – Warren Buffett.”

The market that you and I know has zero-sum. It doesn’t print money. Money goes from one person to another. The more impatient you are, the more you want to act. So when you have made a decision, the probability that you make a mistake is extremely high.

Then Fear of losing an opportunity will lead to action => Rushing action will lead to mistakes => When you’re wrong, you’ll be afraid of losing money => Fear of losing money so you don’t dare to cut your loss => Your account will have nothing left.

It will be like a loop over and over. If you don’t realize it soon enough, the price you have to pay is enormous.

The nature of the market

The market nature is to create a Fomo to pull the crowd in, then reverse and “take all the money” to Mr. Market’s pocket.

Let me give you a view of some waves and phases where the market creates FOMO by pushing the price up quickly and sharply.

The first wave is in the early of 2018 from Coin ETH. The price rose rapidly and strongly from $700 to nearly $1,400 to create FOMO, then plummeted. Most of the traders participating in the market were stuck in line and swing at the top.

The next wave is Gold in 2011. The market also pulled the price up quickly and strongly, leading to the FOMO. Then it created a peak distribution followed by a sharp bearish reversal.

General scenario: Pulling the price up quickly and strongly, spreading Fomo sentiment throughout the market. When the traders’ money flow ” enter, the price reverses sharply then traders lose money.

Now you know, the market will always create Fomo under such a scenario. It activates your greed and also your fear of missing out. And when you jump into the game, you will always be behind and being led by the market.

Causes of Fomo

Crowd psychology

Do you plan to trade Gold or Coin? Do you plan to buy stocks in a good price zone? When the crowd is looking in a direction, chances are you will throw all those plans and look in their direction too.

Believe me. When you enter this market, you will see it clearly. The crowd navigates you. They constantly post technical analysis, good news to back their decisions.

Crowd behavior is very pervasive and you will be affected. You don’t want to be late and miss the opportunity to make money. You are afraid of losing the opportunity every hundred years.

So the result is you follow the crowd and the crowd loses money.

Trading emotions

All surveys show that gambling or financial games involving money give people a very stimulating feeling. Maybe it’s greed or addiction. Sometimes it’s fear. But traders like the excitement of entering an order, nervously watching the price movement of each transaction.

I also don’t know exactly how to explain it. But I believe most traders have experienced something like that at least once. It’s not that they don’t know, but this is exactly an emotion of trading, emotion in the games of money.

It is this emotion that urges you to always watch the price, watch the chart, watch the news… Then, the more you watch, the more you fear losing opportunities. Fomo mentality keeps repeating. Therefore, as soon as the price moves quickly and strongly, you will be swept up in the market.

How to deal with Fomo

Do everything slow

It is rumored that Zhang Sanfeng lived to be 169 years old. But in fact, he only lived nearly 150 years old. His secret is to live slowly, breathe slowly and practice tai chi.

A turtle’s lifespan is 300 years. And the reason is the same, slow walking, slow heart rate, and slow breathing.

The slower you go, the longer you live. This is the way of life, but it is also the way of trading. The slower you go, the more time you have to think and make the right decisions.

More importantly, when you’re slow, you learn patience. You will avoid rapid traps of the market. You will never let the market control you.

Keep the money safe

You may be wondering If I don’t hurry, will I lose a good investment opportunity?

But the opportunity is not always there. The market will be there tomorrow, next weeks, months, even hundreds of years from now.

In the end, the market is still the same, still exists with a lot of opportunities. But when you lose all of your money, it means there are no opportunities.

Remember that all the investing geniuses in the world just advise you to keep your money safe and sound. No one is advising you to make money at all costs.

Stay away from the crowd

Remember Dogecoin (The Coin of Elon Musk)? It is one of the FOMO hits of 2021 worth putting in a Textbook. The boss of Tesla Corporation is the man who creates Fomo all over the world and engulfs all the investors with just a few Twitter statuses. In the end, the money goes to the pockets of the creators and the rest was buried in the grave of history.

In investing, never let the crowd decide your money. You can be wrong. Others can be wrong. Experts can be wrong sometimes. But the crowd is certainly wrong.

Conclusion

I do not cover trading knowledge in this article. For the sake of simplicity, I know that even if you have more knowledge, you will still fall into the Fomo trap and still lose money like everyone else.

Fomo is like a mental illness. You cannot use indicators or price patterns to fix it. You can only face and step through it with bravery, with the patience inside of you.

What if you can’t? So let the market lead you to your final resting place!!!!!

The post What Is FOMO? Causes And How To Deal With FOMO In Trading appeared first on How To Trade Blog.

source https://howtotradeblog.com/what-is-fomo/

Tuesday, November 16, 2021

6 Money Management Strategies In Forex Trading You Should Learn & Avoid

The secret that helps you make profits safely is not from the trading strategy. It comes from the money management strategies in trading.

“In trading, it doesn’t matter whether you are right or wrong. What matters is how much you make when you’re right and how much you lose when you’re wrong.” – George Soros

You may not know Soros’ win rate is only 23%. You don’t hear wrong. The so-called genius of speculation has an extremely modest winning rate. But if we take the time to read, his wins are stunning.

– The short selling British Pound in 1992 brought Soros more than 1 billion USD.

– The deal crashed the Thai Baht (1997) with a total estimated profit of about 800 million USD.

– The short sale of Japanese Yen (2013) made a profit of more than 1.2 billion USD.

George Soros became a billionaire just as he said. Lose the least when wrong and win the most when right. And it is encapsulated into 2 words: MONEY MANAGEMENT.

In this article, I will write about 3 topics:

– What is money management? Why should we do money management in trading?

– Principles of money management.

– Money management strategies in Forex and Gold trading (applied to all markets).

What is money management in trading?

Money management in trading is the process of controlling your investment amount.

There are two important issues in money management. (1) Minimize risk and (2) Keep profits safe during trading.

For professional traders, money management is the work of controlling risk in the trading process. And money management is no other than emotional management.

Why do we need money management in trading?

To survive

Has anyone told you the market is like a battlefield? It doesn’t print money and everyone tries to take money from each other. Even the trading brokers are trying to “eat up” your money.

Therefore, your first lesson when entering the market is to adapt and survive. To achieve that goal, all you need is money management.

There is a general rule on every market you participate in such as Coins, Stocks, Forex, Commodities, etc. As long as you have money in your account to survive long enough, profits will come naturally to your pocket.

Solve psychological problems

The game of money is a psychological game. It’s not that you analyze or predict the market wrong. But the problems lie in your mentality. Is it good enough to do exactly what you planned? How to overcome the psychological issues?

The answer is the same – Money Management. Why do I say that?

If you know in advance how much money you will lose, your mentality will be much more stable. For example, you can earn $3000 per month and each trade you make will lose $30 (only 1% worth) of your total monthly income. So what is there to fear?

Aim for profit

Now, take a look. Every time you open a trade, you play a probability game. Although the probability of winning will be high, there is still a certain loss rate.

So how can you win the most when you’re right and lose the least when you’re wrong?

The answer is still Money Management. Only then will your account be profitable.

5 principles of money management in trading

Cut loss

The successful mantra in trading is cut loss. If you do it well, you will earn money.

The holy grail in trading also revolves around only 2 words – Cut loss.

It’s not sure you will make money after knowing how to make a stop loss but you will survive. On the contrary, it’s no doubt that you will lose money if you don’t use stop-loss. Remember, it’s 100%. Don’t believe it? You can try.

Stop unrealistic dream

When I started with Forex, I used to think that I would be financially free and become a rich man. I can go anywhere in the world and buy whatever I want… Has anyone infected your head with those things?

The more you expect, the more you are disappointed. The more you are disappointed, the more negative you are. These will make you lose over and over again. It’s like a vicious cycle

Let’s try to lower your expectations, set small goals to survive and adapt. Then make small and steady profits. You will be like a child learning to crawl, to walk, to speak…

If from the very beginning, you think of making a lot of money, you will be disappointed. But if you think it takes money to learn and adapt, then when you get small profits, you will feel much more positive.

Slow thinking

Try to do everything slowly. You don’t have to be fast. The market will still be there. The opportunity to make money is always there. There’s no need to rush.

Slow means to have a clear trading plan, sit back and wait for the market to create “delicious” opportunities to trade with your money. Be ready to use stop loss when you’re wrong. And dare to wait for the price to reach the profit-taking level.

When you have a slow mindset, you will learn patience. You will not get carried away by the market. You are also willing to pass up the opportunity to keep your money safe.

Slowing down a little bit, breathing deeper, and patience are the foundation of all money management strategies in trading.

Trading plan

Planning is an important preparation step. In money management, you need to know in advance exactly how much you will lose for each trading decision. Of course, the plan is just on paper, but without preparation, you will be in chaos.

Sticking to a plan is also the best way to practice discipline in this tough and risky market.

Learn how to win big

Most traders use the loss-holding strategy very well but their profit-holding skills are not that good. This is a psychological disease that the market sows in the trader’s head.

If you use stop-loss right but can’t take profit enough, the result is that you still lose money.

I often call this problem “Early profit-taking”. For example, when you’re wrong, you use stop loss and lose $50. But when you’re right, you only win $20. In general, the account is still at a loss.

I have written in detail each money management strategy in trading. Now I’ll just repeat it and put the article links in. Please click to read, understand and use accordingly.

3 Money management strategies you should learn in trading

The 2% rule and Trailing Stop

For each trade, you can only lose up to 2% of the total money in your account (2% rule). For example, you have $1000. Then you can only lose up to $20 in one trade.

What about Take Profit? I encourage you to use Trailing Stops to maximize profits.

And here is the tool to help you calculate lot size. Lot size calculator.

R:R ratio

R:R ratio is suitable for Day Traders – intraday trading, with clear Stop Loss and Take Profit.

If your trading strategy is stable, you can combine it with a reasonable R:R ratio to make as much profit R as possible.

Profit-holding

“When your prediction is right, you have to throw continuous kicks”. Use Profit-holding to increase profitability when the market moves in line with your prediction.

3 Money management strategies you should avoid in trading

Martingale betting system

Double when you lose – Continue until you have nothing left. This is the truth of the Martingale betting system.

But the point is how much your mental strength can handle. The game of money is a game of psychology. When you trade with large amounts of money, the psychological pressure will be great.

As fear takes over you, the more you try to trade, the more wrong you will be. With Martingale, consecutive mistakes will burn all your money to ashes.

Loss-holding

This is the suicide money management of many traders, especially newbies. When their predictions are wrong, instead of using stop-loss, they hold loss and hope that the market would bounce back to break even and gain some small profits.

Of course, with the Loss-holding strategy, sometimes they escape from the hand of Death. But sooner or later, they will lose everything in their account.

All-in

All-in is to put all your money in a single trade. I have talked about 2 ways: (1) Active all-in and (2) Passive all-in. You can find the detailed article here.

To conclude

I have been in this market for more than 8 years. Most of the teachers or traders who share experience will talk about the method of placing orders first and how to manage money later.

I think the opposite should be done. Learn how to manage money first and learn trading strategies later. I have shared the reason clearly. You need to survive before thinking about making money.

With good money management, you will control risk and emotions in trading better. These are my thoughts. What about you? Let’s leave a comment below to discuss with us.

Love!!!!!

The post 6 Money Management Strategies In Forex Trading You Should Learn & Avoid appeared first on How To Trade Blog.

source https://howtotradeblog.com/money-management-in-trading/

Wednesday, November 10, 2021

How To Trade Forex With All-in Strategy And Unlimited Leverage

Usually, no one recommends All-In capital management. It’s not wise to bet everything you have on a single trade. Win big or lose everything.

However, I have witnessed some people make money from all-in-style. So I will rewrite and share in the most honest way. If you find it suitable, you can try it.

In this market, profit is the answer. There is no right method or strategy if you are not making money. Do not praise or criticize any method or strategy. Let’s read and absorb it based on the spirit of learning and expanding knowledge.

What is All-in?

All-in in poker means to bet all your money currently on the table on a single hand.

All-in in Forex means to put all the money you have in your account into a single trade. If you are wrong, your account will have nothing left (burned). If you’re right, you’ll earn a big amount.

Usually, there will be 2 cases where traders do all-in in Forex trading:

(1) Passive All-in. They just lost a large amount of money and only had a small amount in the account. So they decide to make an all-in transaction. if win, they will recover the losses. If lose, they quit.

For example, my account has $750 left. So I open 1 SELL EUR/USD trade with Stop Loss 40 pips and all in. So the trading volume of this SELL order is 2.5 lots. If the price touches SL, the account balance will go to 0.

(2) Active All-in. Simply put that traders use all-in as a capital management strategy. Usually, they just sit and do nothing. But when the moment comes, they will go all out.

In this article, I will write about case (2). Use all-in as a strategy to make profits in Forex. The strategy is called All-in with an unlimited account in Exness trading platform.

For instance, you have $500 left in your account and trade 30 lots of Gold. If win, you get several thousand dollars (more than 5 times the capital). If lose, you lose $500. Is it worth a try?

Trading with Exness Unlimited Leverage account

How to trade Forex with All-in strategy and Unlimited Leverage

Step 1: Open Exness account and get the IB link

Click on this red text and register: Open an Exness Free account with IB link.

Why you must do this?

(1) Exness has an Unlimited leverage account. With a balance of less than $1000, you can open 3 consecutive transactions of 20 lots (or even more).

(2) All-in is also a strategy for you to increase the trading volume and get the commission. In a nutshell, you become a referral for Exness and get the commission from your transactions. It means if you win you will have a big profit. If not, you get a little commission back.

Step 2: How to all-in

When trading with an Unlimited account, just inching 1 pip can make your account burn out. Therefore, there is no specific method to win for sure.

Thun, the best way to all-in is to trade on news (the news is strong enough to affect the currency pair you trade). At that time, the price is likely to fluctuate in a certain direction, either increasing strongly or decreasing sharply.

For example, if you trade gold (XAU/USD), focus on the times of the US news (NonFarm, CPI, PPI, GDP… or the Fed – FOMC). These are the periods when the gold price can be very volatile. You can follow and enter the trading order.

Of course, if you trade in the wrong direction, your money will be all gone. On the contrary, if you are right, start moving the SL. Use the Trailing Stop technique to protect your profits.

Step 3: Deposit and withdrawal strategy in all-in trading

Active All-in is a deposit and trading game. The outcome will usually be: Lose more than win. Therefore, you must not leave too much money in the account.

For example, you have $10,000 and want to use the all-in capital management strategy. Then let’s split it into 20 top-ups, 500$ each time. Deposit when you lose and withdraw when you win.

Then, with 20 all-in times, you only need to win 3 out of those 20 chances. You will get your full amount back. Moreover, Exness will pay you a small commission for trading with high volume.

Earn commissions with Exness Unlimited leverage account

Step 4: Forex trading is just a side job

If you consider Forex trading as a full-time job, the all-in strategy is not for you. This strategy is only for those who consider Forex as a side business and focus on strong news.

It’s because not every day the market has news that is strong enough for you to bet all in. Therefore, full-time traders with all-in capital management will not be able to beat the market.

Ok. Basically, you already know how to do all-in. That’s all I want to share in this article.

To conclude

There are only 2 results when you go all-in with the Unlimited leverage account. (1) Earn many times the amount of money spent and (2) Lose all. It’s quite dangerous, right? But if someone is making money from this strategy, they’re still doing it right.

I absolutely do not recommend this type of trading. The article is only for you to have a more perspective on trading and capital management.

The post How To Trade Forex With All-in Strategy And Unlimited Leverage appeared first on How To Trade Blog.

source https://howtotradeblog.com/forex-capital-management-all-in-style/