forex Archives - My Blog

How To Protect Yourself From Forex Scams

admin — Wed, 13 Jul 2022 04:20:09 +0000

Notes on Jul 13, 2022

So what have we learned?

Scams ARE real!

Yes! Really bad people are out there trying to make a dishonest living. However, unlucky for them, you are smart!

You know that the only way to succeed in currency trading is to learn from square one and gain trading experience!

Now say this three times out loud:

“I will not fall for no-risk robots! I will not succumb to guaranteed returns! Lastly, I will not be lazy and let someone else trade me lucky charms *cough* I mean my money for me!”

Now that we have that over with, let’s close out with some questions our viewers have asked us countless times!

Q: How can I protect myself from fraud?

A: Easy. Be educated. Be smart. Know what a scam looks like. Anything that seems too good to be true usually really isn’t true.

Q: How do I choose a forex broker?

A: First and foremost, make sure the broker is regulated by a national agency. DYOR. Research, research, and do more research!

Q: Can forex managed accounts be trusted?

A: If your forex manager is yourself, yes! If not, I’d exercise extreme caution. But if you’re persistent and want to find out the hard way, do a background check and make sure the person has proper licenses and certifications.

You should find out if the person’s forex activities are regulated and by whom. If the person is not regulated, you may be exposed to additional risks.

Q: Are forex robots profitable?

A: It’s possible, but because they’re usually built for a specific set of conditions, their profitability, and how long it may be profitable depends on the market.

Like human traders, they can go on long profitable runs, have a long string of losing trades in a row, or see-saw somewhere in-between.

If you take anything away from the school about them, just don’t think they’re a “set-and-forget” solution to trading; they must be monitored closely as well.

Q: Who do I contact if I suspect fraud?

A: There are specific organizations depending on your location.

United States:

CFTC: https://www.cftc.gov/LearnAndProtect/RedressReparations/index.htm

NFA: https://www.nfa.futures.org/complaintnet/complaint.aspx

United Kingdom:

FCA: How to complain

ActionFraud – the UK’s national fraud and Internet crime reporting center: https://www.actionfraud.police.uk/

Australia:

ASIC: How to complain

Scamwatch: https://www.scamwatch.gov.au/report-a-scam

Cyprus:

CySEC: How to complain

Singapore:

MAS: How to complain

You can find a comprehensive list of regulatory organizations for different countries here.

Q: Where can I capture me a leprechaun?

A: Look for a unicorn. Where you’ll find a unicorn, you’ll find a leprechaun!

So remember, forex scams DO exist.

Be wary of them and hold onto your hard-earned money.

The good news is that there ARE legitimate forex companies out there.

Make sure you do thorough research on a company if you are thinking about giving them a shot.

Ask other forex traders on the forums if they’ve had experiences with them.

There is a wealth of information on the Internet so do your homework, use your head, and you’ll be just fine.

The post How To Protect Yourself From Forex Scams appeared first on My Blog.

Foreign Regulatory Agencies

admin — Wed, 13 Jul 2022 04:16:29 +0000

Notes on Jul 13, 2022

UK: The FCA and PRA

If you live in the U.K., the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) are for you!

On April 1, 2013, both of these agencies replaced the Financial Services Authority (FSA) as the financial industry’s regulatory bodies.

The Financial Conduct Authority is a non-government agency funded by the firms they regulate, and they are accountable to a Board appointed by the Treasury.

Their goal is to protect consumers, ensure industry stability, and promote healthy competition in the financial services industry through the regulation of financial advisers, asset managers, or any firm not covered by the PRA.

FCA website: http://www.fca.org.uk

The Prudential Regulation Authority is a part of the Bank of England, and its main role is to promote a healthy UK financial system through the regulation and supervision of banks, credit unions, major investment firms, and insurers.

PRA website: http://www.bankofengland.co.uk/pra

Denmark: Finanstilsynet

The Danish FSA was formed in January 1988 and was charged with supervising financial activities in Denmark. Members of the FSA are monitored in an attempt to protect investors and prevent market abuse.

Finanstilsynet’s website: https://www.dfsa.dk/

Switzerland: Swiss Federal Department of Finance

The Federal Department of Finance or FDF was formed in 1848. While the FDF is the overseer of financials in Switzerland, it is the Swiss Financial Market Supervisory Authority or FINMA that regulates the banks, securities dealers, and stock exchanges.

FINMA acts like the big brother in Switzerland and does pretty much the same as the other regulatory agencies.

FDF’s website: https://www.efd.admin.ch/efd/en/home.html

FINMA’s website: https://www.finma.ch/en/

Switzerland: Association Romande des intermediares financiers

This organization is similar to FINMA in that they are both from Switzerland, but this body is based in the French-speaking part of Switzerland. ARIF was formed in 1999. It too acts as a regulatory agency with members abiding by certain rules and laws.

ARIF’s website: https://arif.ch/en/

Hong Kong Securities and Futures Commission

The Hong Kong Securities and Futures Commission (SFC) was formed in May 1989 due to the ineffective efforts of two regulating bodies. With a combined single organization, the SFC took charge. It monitors all futures and securities-related activities in Hong Kong.

SFC’s website: https://www.sfc.hk/en/

Australian Securities and Investments Commission

Founded in 1991, the Australian Securities and Investments Commission (ASIC) acts as a corporate regulator in Australia. ASIC regulates companies, financial markets, and financial service organizations as well as insurance, and credit.

The organization aims to maintain fairness in the market environment.

ASIC’s website: https://asic.gov.au/

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U.S. Regulatory Agencies

admin — Wed, 13 Jul 2022 04:14:14 +0000

Notes on Jul 13, 2022

Despite the forex market is the largest financial market in the world, it remains largely unregulated.

There is no international organization or global agency that monitors and oversees the currency trading occurring all over the world in the interbank.

Due to the unregulated nature of the spot FX market, this opens up the opportunity for forex scams and frauds.

While there is no international organization to protect forex traders like there is S.H.I.E.L.D. to protect the world, there are countries that monitor and oversee forex trading activity, including forex brokers, that occur within their borders.

If you are trading forex in the United States, there are two major regulatory agencies that you should be aware of.

Commodities Futures Trade Commission (CFTC)

In the United States, we like to call the CFTC… Big Brother.

This agency was developed in 1974 to protect individuals in futures and commodities trading.

Since futures include the currency market, the CFTC “naturally” protects forex traders as well.

From 1974 to the present, the CFTC has undergone many changes in hopes of improving trading conditions and creating a level playing field for everyone.

The CFTC is also responsible for publishing the Commitments of Traders Report (COT) every Friday (the CFTC receives data from reporting firms on Wednesday, which it corrects and verifies for release on Friday).

Five commissioners appointed by the President, the offices of the Chairman and the agency’s operating units make up the Commission. The Commission has 3 offices along with HQ located in Washington, D.C. – Chicago, Kansas City, New York.

Futures exchanges are also located in these cities. So if you have a problem with them, you can make your way over there and bust out your uzis and spray them. Just kidding. Don’t do that – they’re the good guys. They’re here to help you.

Imagine if there was no organization out there to protect you. There would be a lot more scammers, and brokers would cheat their clients in a heartbeat. The CFTC provides orders in a market that would otherwise be chaotic.

The mission of the CFTC is to protect market users and the public from fraud, manipulation, and abusive practices related to the sale of commodities and financial futures and options. In the “unregulated” forex market, this regulatory agency will help you determine if a forex company is reliable or trustworthy.

The CFTC’s Website can be found here:

http://www.cftc.gov/index.htm

If you need to file a complaint or report suspicious activities:

http://www.cftc.gov/consumerprotection/redressreparations/index.htm

National Futures Association (NFA)

The NFA is an industry-wide self-propelling organization created in 1982 that regulates the futures market in the United States.

By self-propelling, we mean that the NFA collects dues in order to sustain itself without having to rely on taxpayers’ dollars.

If the CFTC is Big Brother, then we like to call the NFA…Little Big Brother. NFA’s activities are overseen by the Commodity Futures Trading Commission (CFTC), the government agency responsible for regulating the U.S. futures industry.

The NFA’s mission is to:

Ensure futures industry integrity
Protect market participants
Enforce NFA members to meet their regulatory responsibilities

Virtually every firm or individual who conducts futures or options on futures business with the public must be registered with the CFTC and a Member of NFA. NFA performs the registration process on behalf of the CFTC.

NFA Member categories include Commodity Trading Advisors (CTA), Commodity Pool Operators (CPO), Futures Commission Merchants (FCM), and Introducing Brokers (IB).

In order to conduct any business in the futures market, you would have to be a member of the NFA. To be a member of the NFA, an organization would have to pass a screening done by the NFA and comply with NFA standards and regulations.

These rules and regulations provide market integrity and a level playing field for all, and not just for investors.

Over time, they have been making significant progress. In order to resolve future-related issues, the NFA began an arbitration method in 1983. In 1991, a mediation program was developed as a faster way to resolve disputes.

In late 2001, the NFA started to accept claims online. Members could also start registering online in 2002.

In 2004, the NFA started to submit digital images of fingerprint cards to the FBI enabling quicker background checks and shorter registration times. What an active organization! This goes to show that they keep up with the times. Who knows, they might just make their own iPad app. Ha!

Along with the CFTC, the NFA provides investors and individuals with security and protection from fraud and scams.

The NFA’s website can be found at http://www.nfa.futures.org/index.asp.

How can I learn more about the forex broker with whom I am trading?

In the U.S., only regulated entities, such as banks, insurance companies, broker-dealers or futures commission merchants, and affiliates of regulated entities may enter into off-exchange forex trades with retail customers.

You can verify CFTC registration and NFA membership status of a particular firm or individual and check their disciplinary history by calling NFA at 800-621-3570 or by checking the broker/firm information section (BASIC) of NFA’s website.

BASIC is a free tool that you can use to research the background of forex brokers doing business in the United States.

If you live outside the U.S., make sure to ask the forex broker how it is regulated and check with its regulator about the specific broker’s registration status and background.

What should I do if I have a problem with my forex account?

Disagreements are bound to occur from time to time in any industry.

Your first step should be to contact the firm you have a disagreement with and try to reach a settlement.

Both the CFTC and NFA offer programs that may be available for resolving monetary disputes involving your forex account.

Whether NFA or the CFTC can accept your case depends on several factors, however, including the party your claim is against.

How to File a Claim if You Believe You’ve Lost Money Due to Unfair or Improper Treatment by an NFA Member

NFA offers an arbitration program to help customers and NFA Members resolve disputes. Information about NFA’s arbitration program is available by calling NFA at 800-621-3570 or visiting the Dispute Resolution section of its Web site at www.nfa.futures.org.

How to File a Claim if You Have a Dispute That Can’t Be Resolved with a CFTC Registered Firm

The CFTC offers a reparation program for resolving disputes. If you want information about filing a CFTC reparations complaint, contact the CFTC’s Office of Proceedings at 202-418-5250 or visit the CFTC’s website.

How to File a Complaint or Report Suspicious Business Practices

In addition, if you suspect any wrongdoing or improper business conduct in your forex account, you may contact or file a complaint with NFA by telephone at 800-621-3570 or online at www.nfa.futures.org/basicnet/Complaint.aspx.

You may also file a complaint with the CFTC. The CFTC has prepared a questionnaire form to assist the public in reporting suspicious activities or transactions.

The questionnaire form is available on the CFTC’s Web site at http://www.cftc.gov/enf/enfform.htm

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Forex Broker Scams

admin — Wed, 13 Jul 2022 04:11:31 +0000

Notes on Jul 13, 2022

Watch out for forex broker scams!

Believe it or not, there are some brokers who “cheat” their clients.

One way they do so is by manipulating bid/ask spreads.

Normal spreads between brokers would be around 2-3 pips but scammers would have spreads around 7-8 pips.

Seven pips might not seem like a lot, but it does add up.

Imagine each time a client trades, he has to pay a spread of 7 pips. Imagine if he takes just a few trades per day.

Multiply that by hundreds or even thousands of other clueless clients, you’d be rakin’ in the dough!

Another way is by stop hunting.

Remember, forex brokers know where clients place their stops.

Sometimes, they’ll make a run for those stops, causing their clients’ positions to close out.

Fortunately, many, but not all, broker shenanigans are considered old school.

Thanks to new rules from regulatory agencies such as the Commodities Futures Trading Commission and the National Futures Association, these old scams have been cracked down upon.

You should choose a forex broker that is registered with a regulatory agency.

In the U.S., look for brokers registered as a Futures Commission Merchant (FCM) with the CFTC and an NFA member. Be wary of those brokers that are not regulated by the CFTC and the NFA.

You should know that the CFTC and NFA were made to protect the public against fraud, manipulation, and abusive trade practices.

Be careful, it’s often difficult to distinguish between regulated and unregulated forex brokers!

You can verify the CFTC registration and NFA membership status of a particular broker and check their disciplinary history by phoning NFA at (800) 621-3570 or by checking the broker/firm information section (BASIC) at the NFA’s website!

If you’re trading forex outside the US, you’re in luck! Other countries have regulatory agencies as well and protect individuals as well. More will be mentioned about them later.

If the broker in question is not registered or regulated by any national agency, then DO NOT deposit your money with them. We warned ya, so don’t complain to us if you don’t get your money back!

Stay away from non-regulated firms!

Also, don’t be shy to also ask around in our forex forums. It doesn’t hurt to get personal opinions.

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Forex Signals

admin — Wed, 13 Jul 2022 04:09:49 +0000

Notes on Jul 13, 2022

Forex signal services do everything a robot does except the actual execution of trade entries.

Besides possibly using an automated program, a “professional” trader may generate trading signals (for a fee, of course) for clients to act upon.

However, you may be paying for a signal in which you do not know the rationale behind each signal and how the “professional” came up with it.

You have no idea what the basis for the trade is, just that the “professional” is telling you that it’s a good time to buy or sell.

In the end, you are relying on the analysis of a third-party source that is NOT your own.

In a typical forex signal service, the programmer creates a set of technical indicators and rules and the program runs to those specifications.

If price action satisfies the conditions of the signal service, then some kind of notification or alert via email or text message will be sent to the user to react.

It is ultimately up to the user to decide whether or not to take the signal and trade it.

While this may sound more beneficial as you have a choice on whether or not to take a trade, the signal service is still programmed to a constant set of rules.

As we mentioned earlier, the forex market is in a constant state of change.

While the forex signal service might have been profitable in the past, there is no guarantee that it will be profitable in the future.

One other thing to think about is if the forex signal service is so profitable, why would the creator want to share the profit?

Like forex robots, the scam isn’t the service itself, but the way it’s marketed.

You may see ads from scammers that promise you’ll make a bajillion dollars with their signals.

Many traders will look at the ad and think, “A bajillion dollars!? I could do anything I want with a bajillion dollars!”

Now stop. Think about it. Massage your lip or chin. Think.

If that were true, why even run a forex signals business in the first place? Instead, they should be focusing on trading with their signals and making a bajillion dollars for themselves.

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Forex Robots

admin — Wed, 13 Jul 2022 04:07:55 +0000

Notes on Jul 13, 2022

Forex robot scams encompass Expert Advisors (also famously known as EAs) and other automated trading systems.

What is a forex robot?

In the forex world, a “robot” is a program that strictly uses technical signals to enter into trades and lets the human sleep in a hammock on a beach while he “makes” money.

With a push of a button, the forex robot runs continuously, making trades signaled by mathematical algorithms applied to past price history.

In other words, they run automated mechanical systems, whether or not the user is in front of the computer or not.

The problem is that forex robots and their pre-wired thinking do not compensate for ever-changing market conditions.

Market behavior is dynamic, constantly moving in an infinite variation of three movements: up, down, or sideways.

Most robots are not programmed for all environments, or to recognize a change in the trading environment. As a result, losses occur and they can be huge if not closely watched or managed.

Now, the scam isn’t the forex robot itself but how they are marketed. Scammers will often try to sell these robots and automated systems as the “holy grail” of trading, promising you’ll retire sometime next week.

And they sell them at “human affordable” prices ranging from $20 to $5000.

OMG!! Only $20?? For the chance to make ridiculous money??? That sounds like a bargain!

All right, stop. Collaborate and listen.

If the creator is making big bucks with the system, why would he/she try to sell it and share the profit?

And why for only $20?! You can barely get a decent meal at Chick-fil-A for you and your sweetums with $20!

The only real profit for these fraudulent people is the revenue generated from the sales of their forex “R2-D2s.”

The scammer will try to entice you with historical data and back-testing logs.

DOUBLE OMG!!

It’s back-tested!! It must work!!! And it’s only $20!! That’s less than a PS4 game!

All right, stop. Collaborate and listen. Again.

Sure, it might look highly profitable. However, in the forex market, there is no such thing as a consistent market. Conditions are changing all the time. The past has little effect on the future in a changing market.

We don’t know for certain that what happened in past will happen again in the future. There are too many variables to consider.

Plus, you don’t know if these scammers are making up the results anyways. They could just input random numbers into an excel file as most people wouldn’t bother checking if they are accurate or not.

Our advice?

Stay away from automated systems and robots until you become a master trader AND programmer.

Beginners know nothing about trading or how forex markets behave, so they will not understand how the robot works, what environments they are best suited for, or how to tweak and adjust the system.

It is best to actually learn how to trade consistently before you make the decision to let a program do it for you.

Think about it this way: Would you give a total stranger (with no brain to boot!) your hard-earned money to invest without having a clue on what he/she was doing?

Didn’t think so!

Forex robots can be a great tool, but let’s be real -there is no perfect “one” that will work in all environments, all the time.

Shoot, even the quant funds and algorithmic traders on Wall Street can lose money, and they have Ph.D. mathematicians and financial engineers creating their programs!

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Forex Scams

admin — Wed, 13 Jul 2022 04:05:26 +0000

Notes on Jul 13, 2022

“Buy my ‘End of the Rainbow’ system and you’ll be able to make at least 100,000,000%!!!”

It’s like finding the end of a real rainbow but easier!! Guaranteed profit worth a hundred pots of gold with absolutely no risk!

Don’t be a sucker!

You’ve probably heard or seen something similar on TV ads, online pop-ups, or even from your next-door neighbor.

I know what you’re thinking… This is too good to be true! I mean I do believe in leprechauns and I do feel lucky when I eat my Lucky Charms cereal but I don’t know about this system.

Nine and a half times out of ten…

IT IS A SCAM!!!

One of the first things you must learn about the forex market is that although it is enjoyable and exciting, there is no magic button that will instantly turn your pennies into millions of dollars.

You may have already heard about forex scams that are littering the forex world.

They’re everywhere!

Dishonest people are constantly trying to swindle people like every single day.

With the relatively new availability of the forex market, people aren’t as familiar with currencies are as they are with stocks and bonds.

This makes it easier for conniving companies and scheming individuals to mislead people into thinking that making money trading forex is as easy as clicking a button with their “End of the Rainbow” system.

There is good news and bad news.

Bad news first.

Scams DO exist.

They are real and they sucker people who think they can’t be misled. If caught in a scam, you can and may lose all the money that you “invested.”

However, there is very good news!

In the following lesson, we will teach you about the different types of scams out there, how to prepare yourself, and what you can do in case you encounter a scam.

We will also describe the regulatory agencies that have jurisdiction in scam cases.

Remember, not all forex companies are bad.

DYOR.

Do.

Your.

Own.

Research.

Just do your research and you’ll be fine.

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Forex Managed Accounts

admin — Wed, 13 Jul 2022 04:03:53 +0000

Notes on Jul 13, 2022

Don’t have time to learn how to trade forex? Want to be part of the Billionaire’s Club?

If you answered “yes” to these two questions, the forex managed accounts scam is the fraud for you!

You can call our hotline at 1-800-4XFRAUDS!

This scam operates by having an investor “invest” with a “professional” trader, who trades the investor’s capital for a percentage of the profits.

This can sound appealing, especially to beginners who have no idea what they are doing or don’t have the time to learn.

They figure, “Well, he’s a ‘professional’ – he must know what he’s doing! It’s 100 times better than if I traded by myself!”

The problem with this is that the user is placing complete trust of his/her money into the hands of a complete stranger.

In a way, it’s like taking candy from a baby.

In many cases of managed accounts, the manager actually appropriates funds towards unrelated luxury items such as cars, islands, and castles.

When finally caught, the manager is not able to pay back the whole amount of stolen capital resulting in unhappy clients and multi-million dollar lawsuits.

Yes, we know it seems extreme but, more often than not, it happens and people can lose their entire investment.

Not ALL managed accounts are bad though. Some do have many years of trading experience and are well-qualified in trading real money, but that’s more the exception than the norm.

Some trading platforms even offer an option to let traders act as managers using the account structure of the broker.

This prevents an individual from taking funds to spend on Los Angeles Lakers tickets, trips to the Bahamas, or an Aston Martin Valkyrie.

While this is a safer option compared to letting an independent manager trade your money, you still lose out on the priceless knowledge and experience gained through studying forex trading.

If there is one thing we want to stress to traders, it is EDUCATION

There is simply no replacement for experience gained through personal studying and trading.

In the end, the only surefire way to be profitable in the forex market is to be knowledgeable, practice, and stay disciplined.

We’ll leave you with just one question.

Would you trust your hard-earned money with a complete stranger?

If you’re still itching to try out managed forex accounts, make sure you do your homework and find a CREDIBLE manager.

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What Makes a Good Trader?

admin — Tue, 12 Jul 2022 03:09:41 +0000

Notes on Jul 12, 2022

What separates good traders from bad traders?

A good trader realizes that trading is patience, discipline, and requires a trading approach adapted to their specific psychological profile.

A good trader concentrates on the PROCESS of trading, and not just on the result.

Here’s a list of other things that good traders do:

What Good Traders Do

A good trader knows if they have sufficient risk capital in order to achieve their financial objectives.

A good trader always acts according to their own judgment. They think for themselves rather than be blindly influenced by others.

A good trader never trades on hope. They analyze the market and take calculated risks.

A good trader stays out of the market when in doubt.

A good trader does not chase the market. They wait for signals to appear based on their market analysis and trading strategy.

A good trader does not overtrade.

A good trader does not fight against the trend. While they may trade pullbacks or countertrend swings, they are aware that this price movement is temporary.

A good trader always knows the reward-to-risk ratio of every trade.

A good trader cuts their losses instead of hoping that the trade will turn around.

A good trader allows their profits to run until an exit signal based on their trading strategy is triggered.

A good trader always analyzes their closed trades to find any lessons on how they can improve.

A good trader is patient and knows that there are periods when they don’t need to trade.

A good trader never widens a stop loss.

A good trader never cancels a stop loss.

A good trader treats each trade separately.

A good trader exits the market when in doubt.

A good trader does not blindly follow the advice of others.

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Tips for Forex Trading Beginners

admin — Tue, 12 Jul 2022 03:08:19 +0000

Notes on Jul 12, 2022

As a beginner, you’ve taken your first steps towards learning the basics of forex trading.

But it only gets harder from here. Just like learning how to walk, you have to take baby steps, and in between, you will fall, but you get back up and press forward.

If you’re trying your hand at forex trading for the first time, know that most beginner traders are best served by keeping things simple.

Here are some trading tips every trader should keep in mind before trading currencies.

1. Educate Yourself

We can’t emphasize enough the importance of educating yourself and learning as much as you can about the forex market.

Find quality forex education sources like our The School of Pipsology.

Before risking real money, make sure to study the different currency pairs and understand what makes their prices go up and down.

2. Create a Plan and Stick to the Plan

You are the most rational before placing a trade and most irrational during your trade.

This is why you need to always have a plan prior to opening a position.

Creating a trading plan is a critical component of successful trading.

A trading plan is an organized approach to executing a trading system that you’ve developed based on your market analysis and outlook while factoring in risk management and personal psychology.

With a trading plan, you’re able to know if you’re headed in the right direction. You’ll have a framework to measure your trading performance, which you’ll be able to monitor continually.

This allows you to trade with less emotion and stress.

3. Practice

In real life, you may have a plan to drive from Point A to Point B if you don’t know how to drive the car that’ll get you there, then your plan is futile.

The same applies to your trading plan. You should “test drive” your trading plan first until you become proficient in executing the plan.

It’s important to learn how to use the features of a trading platform before you start trading on it.

Fortunately, traders can test out each platform using a demo account, which means no real money is at risk.

A demo account allows you to put your trading plan to the test in real-market conditions, without risking any real money.

4. Keep It Slow and Steady

One key to trading is consistency.

All traders have lost money, but if you maintain a positive edge, you have a better chance of staying profitable.

Educating yourself and creating a trading plan is good, but the real test is sticking to that plan through hardcore discipline.

A trading plan is only effective if it’s followed. You have to stick with it.

5. Know Your Limits

As a new trader, you have to know your limits.

First of all, do you have enough money to trade? Forex will not make you rich quickly! So make sure that the money you’ll be putting at risk (called “risk capital“) is money that you can actually lose.

If you need that money to pay the bills, then you should think twice about trading.

If you do have the money, then you need to know how much you’re willing to risk on each trade, sticking with leverage ratios within those risk limits, and never opening a position size that’s so big that it could blow your account.

A lot of traders fail because they don’t understand trading with margin and ignore the effects of leverage. This shouldn’t be you.

6. Keep Your Emotions in Check

To become consistently profitable, you have to stay rational and emotionally detached.

Many novice traders ride an emotional rollercoaster, feeling on top of the world after a win, but down in the dumps after a loss.

In contrast, most experienced traders stay calm and relaxed even after a series of losses. They don’t let the natural ups and downs of trading affect them emotionally.

Don’t fall prey to the most dangerous emotion in trading.

Emotional stability, matched with proper risk management, is the name of the game.

7. Stay Open-Minded

While having discipline is a very important trait for a trader, you also have to be wary that if you’re too stuck in your ways, you’ll end up imposing our ideas on what the market should do, instead of reacting to what is actually happening.

Constantly question the market and your trading plan.

Asking questions enables you to look at different perspectives of the market that you initially may not be aware of.

This practice will make you think of other potential scenarios that may emerge and enable you to become a better “listener” of the markets, rather an “imposer” of your own thoughts and views that in reality, may not mean zilch to the market.

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