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How do you cope with a series of losing trades?

In this video:
01:08 What We Do As A Technical Trader
03:20 An Important Aspect of Trading
04:00 How To Improve Your Trading

How do you cope with a series of losing trades? Let’s talk about that and more right now.

Hi, Forex traders, Andrew Mitchem here, the owner of The Forex Trading Coach and today’s video and podcast, I want to talk about the inevitable losing trades. No one likes them, but everybody has them, some more than most. The point of this podcast and video is to try and help you overcome what happens when you have a series of losing trades. For some people, two or three trades could be really bad, some people might be able to cope with ten losing trades in a row.

Whatever it is, it’s quite difficult to accept it, but you need to accept losing trades, because everybody, every trader does, no matter how good they are, they have losing trades. Some people have losing days, you have losing weeks. Some even have losing months. Now of course we try and eliminate those as much as possible, but you have to be prepared for that to potentially happen. Why? Well, trading’s not an absolute certainty, it’s not a given.

What We Do As A Technical Trader

A very technical trader like me, really what we’re doing is we’re looking at patterns and price action and we’re looking for probability, because if it happened so many times before, that we see this certain pattern setting up, then the likelihood is that it’s going to be a winning trade X number of times out of ten in the future. Regardless of the setup, you can have a perfect setup and it can still go wrong. Doesn’t matter, even if you’re a fundamental trader, you can be taking news announcements and trades can still go wrong, so it doesn’t matter whether you’re a technical or fundamental. You have to accept losing trades as part of the business of being a Forex trader.

How to overcome that?

Well, several tips that I have for you and I’ve mentioned this so many times before, but the important thing is to have low risk per trade. If you have low risk per trade, you can cope with a number of losing trades.

I’ll give you an example. Yesterday I took three trades well actually I took four trades on the daily charts. Three of them got completely stopped out. I have a half percent (0.5%) risk on each of those trades, so on those three losing trades, I lost one and a half percent (1.5%) of my account just yesterday. Not great, but it’s the way that trading goes.

I had some fairly good setups, and I was quite comfortable with the setups, they just didn’t work out. Again, it’s just probability. You can have the perfect looking setup and sometimes it will go completely against you. If you look at your charts on the Pound/New Zealand Dollar (GBP/NZD), for instance, which was one of those trades, the British Pound’s been going up and up and up, the Kiwi dollar’s been going down and down. Had the perfect setup, we had interest rate news out of New Zealand. There she dropped the interest rate, yet the Kiwi dollar went up.

Of course there’s all sorts of reasons why that is in terms of they only dropped it by twenty five points, potentially it could have been fifty and then into the European session, we had lower than expected retail sales at all of the UK, which then dropped the British pound. There was me thinking, a strong British pound, weak Kiwi, in the end we got the complete opposite, the trade got stopped out. I just have to accept that’s a part of trading.

An Important Aspect of Trading

The important thing is, is to not change your strategy around just because you’ve had a few losing trades and it’s a really important aspect.

So many people who I get emails from and I speak to, they just, they come to me and they say, “Look Andrew, how can you help me to improve my trading?”

The problem is that so many people have one or two, or three or four losing trades and then they start changing things. They don’t have confidence in their system, they try changing things, they start adding something to their system, they look elsewhere. Whatever it might be, and that becomes the issue.

How To Improve Your Trading

My advice is, first of all of course you need a strategy that suits you, one that’s profitable of course in the long run and one that suits your style of trading. Once you have that, stick to it, don’t go chopping and changing all the time. Accept that market conditions change all the time, but if you have confidence in that strategy, you can see the setups, you’re happy to take them, you have low risk, you have high returns per trade when you do get successful trades, then that allows you to have a few losing trades because you know full well that you get a profitable trade and that more than that weighs two or three losing trades.

It’s really important to do that. Don’t go chopping and changing your strategy, but of course you need a strategy in the first place. If you don’t have one, then of course I’m able to help suggest some ideas for you, but what I really do suggest, if you haven’t been on them, is to jump on to one of my free webinars that I hold each week for new traders and for more experienced and frustrated traders. Jump on to one of those two and you can just get an understanding of the way that I trade and how that could potentially help you to develop your own strategy and your own way of trading.

That’s it for this week and don’t be worried about losing trades. Everybody gets soaked, side hit and over the top when they have profitable trades and winning trades, but of course like anything. There’s the good and the bad and you have to be able to cope with both without too much emotions coming into it.

Have a great weekend and I look forward to talking to you this time next week. This is Andrew Mitchem from The Forex Trading Coach.

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Why I Hate Fridays As A Forex Trader?

In this video:

00:42 Why I never get bored of Forex
01:52 The Way That I Trade
05:24 The Simple Process of Forex Trading

I hate Fridays. Most people think I’m crazy because they hate Mondays. But I hate Fridays. Let me share with you why right now.

Hi Forex traders, it’s Andrew Mitchem here I’m the Forex Trading Coach and in today’s video and podcast I wanted to explain to you why I actually hate Fridays. As I mentioned most people, they hate Mondays. After having the weekend off, people really look forward to Fridays and they hate going back to work on Monday. Why is that? It’s probably because most people actually hate their job. They don’t actually enjoy what they’re doing. They’re more forced to be in sort of that job for an income or whatever the reasons may be.

Why I never get bored of Forex

But for me, as a Forex trader, and someone who is really passionate about Forex trading and has been for the last 12+ years. I never get bored of Forex. I always look forward to it. It’s always changing. The market is always changing. There’s’ different reasons why price is changing. Fundamental reasons, all sorts of reasons, technical reasons why things change on a daily basis. It just keeps the whole spark and the whole interest in trading alive all the time.

As a trader you actually need that. If you don’t have that enjoyment and that passion to want to see what’s happening in the markets and see what’s happening etc… What’s happening around different countries around the world? If you don’t have that passion, then maybe Forex is not for you and potentially it’s maybe time to look at something else.

But if you are someone that wants to be a trader; who wants to get into trading… You don’t need to spend all day and night trading. You definitely don’t need to do that, far from it. In fact, complete opposite. But you still need to have an interest in it and a bit of an enjoyment and a passion in trading. Otherwise, why do it, you may as well go look at some other form of investment.

The Way That I Trade

For me as a trader, it doesn’t mean to say that I’m glued to my charts all day and night. Far from it. Just yesterday, for example, I traded once in the morning at 9:00 o’clock in the morning my time, which is actually 5:00pm New York time when the daily charts closed. At that time I looked at the 1-hour charts, the 4-hours, the 6, the 8, and the 12-hour charts and of course the daily charts. Then I went flying all day. I was out flying to a beautiful island called Waikiki Island with my wife and my youngest daughter and we went off for the day. I came back in the evening my time and looked at 4-hour charts at 5:00 in the evening my time, and then at 9:00 in the evening my time which is now 5:00am New York time.

I looked again at the 1-hour, the 4-hour, the 6 and the 12-hour charts. That’s it, that’s all I did. Just traded 3 individual times within the day and still had some great trades. You’d have known by looking at charts this week, we’ve had some amazing strength in the British Pound (GBP). We’ve had lots of weakness in the New Zealand Dollar (NZD and also in the Euro (EUR). Yesterday, I took 2 trades on the New Zealand/US (NZD/USD) and the New Zealand/Yen (NZD/JPY), short term both of them. While I was away, I stopped for lunch on the helicopter trip and looked at my phone. I’d seen both trades had hit profits.

You don’t have to be there at the time, staring at charts all day and night, watching 1-minute and 5-minute charts. Those times seem to suit some people and that’s absolutely fine. But, you don’t have to be there all the time… Because I trade less within day and I try to find to look for the higher quality setups on those longer time frame charts… Because that’s what suits me personally, it means that I don’t get bored because it’s not like I have to spend the entire day sitting, watching charts again. You don’t have to do that. That’s I think one of the points that so many people who are new to trading and more experienced people, they get frustrated with trading. They almost become bored and tired of it because they just sat just watching chats all day. It drives you completely mad. It’s boring.

For those people they would be looking forward to the end of the week just to have a rest. Whereas the way that I trade; looking at charts, 2 or 3, 4 times a day sometimes. You never get bored of that, you never get tired of that, because you can plan your day around it really.

There’s been a lot of Pound strength as mentioned and also there’s been that weakness in the Kiwi and in the Euro but you put those together into the mix and anybody who’s been looking at strength in the Pound/New Zealand Dollar (GBP/NZD) for example, go and look at your charts to see what that’s done this week. Look at the Euro Pound. Look how that’s fallen this week. It’s using the strength and currencies that are looking strong, the weakness in currencies that are looking weak. Put the 2 together, look for technical setups, ideally looking to trade in those same directions as that overall strength and weakness. Do that together, once or twice, 3 times a day and on the longer time frame charts.

The Simple Process of Forex Trading

Know what you’re looking for and your trading becomes quite a simple process. If you don’t know what you’re looking for, what I highly suggest you do is jump onto one of the 2 free webinars that I hold each week. Find them on my website. My whole webinar is for people who are brand new to trading. I also hold webinars for people who are more experienced in trading and maybe getting a little bit frustrated because it’s just not working for you. So, make sure you jump onto one of those 2 webinars, if you haven’t already done so.

That’s it for this week. Have a great weekend. If you can’t trade, well none of us can trade at weekends. Go and do something else and look forward to getting back into some trading on Monday.

Talk to you next week. Bye.

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Don’t let a few bad trades ruin your trading account

In this video:
00:29 Solutions to Your Trading Problems
01:18 Trading Calculator: How does it work?
02:31 The Good News!

Don’t let a few bad trades ruin your trading account. Let’s talk about that more right now.

Hi Forex traders, it’s Andrew Mitchem here, the The Forex Trading Coach. Today is Friday the 10th of July and I’ve got two items I’d like to share with you. One piece of good news and one piece of not so good news but also there’s a story there of how I can help you.

Solutions to Your Trading Problems

Let’s start with the bad piece of news first. It’s an email that I‘ve had come through this week. It’s not from a client, so it’s from a non-client and the person said to me, “Look, hey Andrew, my trading’s going reasonably well but what I’m finding is that every time I take a loss, it generally is a big loss and it completely wipes out all the gains that I’ve taken and my account goes from being growing okay to sort of back negative again. What can I do to prevent that?”

Really, it’s a very simple solution. You see, the way that I trade, and you’d know that I trade this way if you’d been following me now for a number of months or even years, is that I have an equal risk on every single trade that I take and I’ve got a fantastic trading calculator that works on the MT4 platform that can really help you.

Trading Calculator: How does it work?

If you don’t have a copy of that, just jump onto my website, look on the top of my website and there’s a tab that says “Calculator”. Download that and store that onto your MT4 account, whether it’s a live or a demo account, any broker it will work.

What that does, is it allows you to really easily get the accurate position size that you need on every trade that you take regardless of your account size, regardless of the direction of the trade, regardless of the currency pay, regardless of the stop loss of the trade, doesn’t matter. All that is easily entered into the calculator. It takes like about two or three seconds to do each time you want to take a trade.

It gives you the exact position size needed to keep equal risk on every single one of the trades that you take. It’s just invaluable and so it would actually eliminate the problem that this person had. There’s no point in making lots of little, small, tiny gains and then you get one whopping big losing trade that completely wipes out all of that good that you’ve done. Get yourself that calculator it will just help eliminate all of those issues. I hope that really helps. That was the bad issue for the week.

The Good News!

The good issue for the week, and I’m pleased to say it’s from a coaching client of mine, from a guy called Craig over in Australia. Craig sent me through an email this week and he said, look Andrew, I had a great week last week and what I’m doing is, I’m taking trades with the main trends, looking for pull backs, everything that you teach in the course. Last week Craig made an incredible 15.5% account gain with only half percent risk per trade, so every single one of those trades had equal control of risk, but he made a 15.5% gain on 16 trades in the week.

Ten winning trades, six losing trades, I think that works out around a 63% win rate on profitable trades. That’s fairly good, it’s not an 80 or 90 percent win rate and you don’t need it. Now the reason why you don’t need that is because I think Craig said that his average return per trade was around a 2.5 to 1 reward to risk, so if he had a losing trade, he lost, let’s say if he was trading 1%, he’d lose one percent of his account and if it was a profitable trade, the average trade made 2.5%. Divide those figures in half, because Craig was taking only a 0.5% risk per trade, but an amazing result. 15.5% just in one week on a live account by having very low controlled risk.

I hope that those two work together really well.

1. You can see, why you need to have controlled risk.

2. You can see that when you have controlled risk and you have high reward to risk ratios within your trading, the results that can be achieved.

If you’d like to know more, jump onto one of my webinars. That’s what I suggest that you do. Have a look onto one of those webinars. I hold two each week. One is for new traders, one is for more experienced traders. Jump onto one of those and I can fill in a lot of details with you and help you along your trading journeys.

That’s it for now. Have a great weekend and I look forward to catching up with you this time next week. Once again, this is Andrew Mitchem, the Forex Trading Coach.

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Why It’s Important To Understand What The Charts Are Telling You

In this video:
00:28 What’s happening on Your Charts
03:41 Why Does The Market Just Suddenly Stop
04: 42 The Best Style of Webinar For You

I wanted to talk about why is really important to understand what your charts are telling you. Let’s talk about that and more right now.

Hi forex traders, it’s Andrew Mitchem here. I am the Forex Trading Coach and today is Friday the 3rd of July.

The Importance of What Your Charts Are Telling You

In this video and podcast I want to talk to you more about why it’s really important to understand what’s happening on your charts, why looking at your charts and having an understanding of what they’re telling you is so important for your success as a forex trader.

Let’s talk about that.

As you would probably already know I’m a big fan of candle patterns, Japanese candle patterns. Why? Well they tell me in a really easy to understand format what’s happening in the market right now. Now what’s happening on the right-hand side of the chart in real time, and that’s the only way you can really make money as a forex trader. Hindsight is fantastic to getting an understanding of what might happen, but right now at the right-hand side of the chart in real time is where it’s all going to happen for you, your success or failure as a trader.

Candle patterns help determine that, they help show me that in a pictorial form. I can look at the price axis and see what the actual price is, but a quick glance at a candle pattern and it can tell me whether the currency pair is in indecisive mode where it’s going sideways and range bad, or whether we’re currently in good strong trends. That can help me so much because let’s say for example the market is going sideways and there’s indecision within the candle patterns, lots of pin bars and lots of dodgy style candles. It’s telling me that really neither the buyers nor the sellers are in control overall of the market right now.

That’s looking at the time frame of the chart that I’m looking at. Nobody is really in control. There’s no strong uptrend, there’s no strong downtrend, really always in sideways action on the markets. What that is telling me is really if I’m looking to place a new trade why would I bother looking at that particular currency pair, move on and look at another currency pair. What I’m really looking for is a currency pair that’s showing me a good strong trend right now.

So what can you do? Well you can then get into the market if you see an opportunity for a new position. Or what you can do is if you were in a big strong uptrend you can then wait for a pullback, wait for a retracement, and get in at a lower price, a better price than what the market is giving you right now.

Then once you see bullish candle patterns after a retracement, after a pullback, then it’s a great opportunity to jump in with buy trades and ride the market back up again in the overall direction. But after it’s had that breather, after it’s had that room to pullback and retracements.

Because no market does that, no market goes straight up. Price would always go up and down and come back and go up again and pullback, always having retracements within any movement, so always look for those opportunities to wait for the pullback. Right now the market is going against your overall direction and then wait for that opportunity to buy again in that uptrend, and exactly the same in reverse, obviously, for a sell trade.

That’s the way I really like to look at trades. If I’m in a trade right now and I see a series of indecision candles, dodgy candles, the price not really moving, then I need to start thinking, well why is that? If I’m at a buy trend right now and all of a sudden the market suddenly goes flat, is it the time of day, have we hit a resistance level in terms of the price, or a pivot point or a previous swing high?

Why Does The Market Just Suddenly Stop

Why is it that all of a sudden after a nice big strong trend and I’m in currently into really good profit let’s say, why does the market just suddenly stop?

I need to make a decision there. Am I then at that point going to close my trade, part of it, all of it? I’m anticipating potentially after some stalling we might then be getting that reversal that I’m talking about, that pullback, that retracement.

Do I want to wait for that retracement to happen and remain in the market? Or;

Do I want to exit my position at a fairly decent profit and then wait for a retracement and then look to re-enter again?

Those are the decisions you need to make, but the price action and candle patterns can really help you with that.

If you’d like to know more what I really suggest you do is jump onto one of the webinars that I hold, free webinars each week. I have a webinar if you’re brand new to trading, if you’ve been trading for let’s say less than six months, and I have another type of webinar that is designed for people who are probably more frustrated with their trading, who’ve been trading for quite a while but it’s just not happening for you yet.

The Best Style of Webinar For You

Decide which is the best style of webinar for you, either new traders or slightly more experienced traders, jump onto one of those two webinars and I’ll give you some really great information and tips to help you progress further with your forex trading.

Once again, this is Andrew Mitchem here. I’m the Forex Trading Coach.

Thanks for watching. Don’t forget that if you do have any topics or trading conversations you’d like me to discuss on future videos and podcasts exactly like this just send me an email andrew@theforextradingcoach.com and I’ll answer those on future editions for you.

Talk to you then. Bye.

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When is the right time to join the party?

In This Video:
01:30 Back Testing Has Many Limitations
03:20 Back Testing Is Excellent For A Mechanical System
03:53 The Best Practise Is From The Right Hand Side Of The Chart

Can back testing really help your Forex results? Let’s talk about that and more, right now.

Hi Forex Traders, it’s Andrew Mitchem here, the Forex Trading Coach, and today is Friday the 26th of June. In this video and podcast I want to talk about back testing.

I have an email here from Nicholai who is a client of mine, and he said, “First of all Andrew, another great start to the week. I’m up +16% on a live account since April, trading just once a day at 5 o’clock New York time on the daily charts; the 12-hour, 8-hour, 6-hour and 4-hours. I don’t take anywhere near as many trades as I used to, only the highest probability set-ups, and this is what has really helped me progress further.”

First of all, that is a fantastic result, Nicholai, up +16% April, May, June; in two and a half months, up +16% trading just once a day. So that’s not watching charts all day long, it’s just trading once a day for probably fifteen minutes total per day.

But actually, on to the question. Nicholai said, “Andrew, can back testing really help me as a trader?”

Lots of people out there – lots of gurus – advise that you buy back testing software and they firmly believe that it can speed up your journey to becoming a successful trader.

Do you believe that our eyes can be trained quicker when we look for the same set up on back testing rather than doing it live?”

Back Testing Has Many Limitations

So here’s my take on back testing. Yes, it can be useful. No doubt about it, it can be useful, but you have to remember there are many limitations to when you’re looking at your strategy in hindsight with back testing data. A whole heap of things, such as:

Obviously it’s not live so you don’t have the emotions within your trading.
What was the sentiment like in the market at the time?
You know, what day of the week was it?

Was it the beginning of the week, was it middle of the week, end of the week?
What time of day was it?

What was the strength and weakness with all the currencies at the time?

How was the currency that you’re looking at performing against other currencies at the time?

What was the news at the time?

You know, had there been any news announcement just prior, or the day before, or was something about to be announced?

Did it affect that currency?

So there’s all sorts of different things that you cannot quite get to feel real when you’re back testing.

What time of year was it?

Was it coming up to a holiday like Christmas or Easter, or was it in the middle of July and August, which is the northern hemisphere’s summertime when the market generally goes a bit quieter.

So all those things just that you need to understand with any back testing, whether it’s proper software or whether you’re just looking back through your charts, just bear in mind that there are those limitations there. And, as I’ve mentioned, it’s not trading from the right hand side of the chart, so it’s quite easy with back testing to say, yes I would have done this, or I would have got out here, or I would have put my profit way up here, or whatever it might be.

But, would you really do that if it was live, with real money? That’s the things to consider.

Back Testing Is Excellent For A Mechanical System

If you have a 100% mechanical system – so if A and B line up, then you do C – if that’s the way that you trade, then absolutely back testing could be just a really easy to follow the set-up and to get fairly accurate results. But if you have some form of discretion and human input into your trading approach then just consider those limitations.

The Best Practise Is From The Right Hand Side Of The Chart

You know, absolutely go back and look at charts and look and what might have happened and what you might have done to train your eye. But don’t forget, that the best form of practise you can do is from the right hand side of the chart, in real time, right now, without any benefit of what’s coming. There’s no hindsight there. This is where we are right now in the market. This is where I see the currency pair that I am looking at; this is the price; this is how it is performing against other currencies; this is any upcoming news that’s affecting it.

Right now; right hand side of the chart: trade from there. Even if you trade – if you want to move on from demo – just trade small amounts, just micro-lots. Just on a live account so you have the feeling of real money, and of making or losing real money because that has a whole psychological … You know, what affects you and your heart and your head, those two factors can be huge within your trading.

So, Nicholai, to answer your question, yes use it if you find it useful. In terms of back testing, don’t be completely reliant on its results. Trade from the right hand side of the chart. Look at charts in real time. And, as you mention right at the top of your email here, “16% since April, trading just once a day” you’re doing most of it right anyway.

For everybody else who is struggling and wants some information and help and advice on back testing that would be my take on it.

So, I hope that helps you. If you have any questions, just send them through to me andrew@theforextradingcoach.com

Have a fantastic weekend, and I look forward to talking to you this time next week.

Bye for now.

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News Trading: How To Do It And What To Expect From It

In This Video:
2:22 The Challenges With News Trading
3:05 Trade With Charts For Big Impact
6:05 Base Trades on Technical Analysis

Let’s talk about news trading; how to do it and what to expect from it. So let’s talk about that more, right now.

Hi Forex Traders, it’s Andrew Mitchem here, the Forex Trading Coach, and today is Friday, the 19th of June and in this video and podcast I want to talk about trading the news as a Forex trader.

I get asked questions quite often about news trading, and although I am now a technical trader, I have traded the news in the past. I had another email came through here just this week from Seya, and Seya says, “Hi Andrew I am a big fan of yours and without fail I always listen to your weekly podcast and I read your daily news updates on your website. Can you talk about news trading i.e. the higher impact data events like the Fed rate decisions etc?

So, the way I look at trading is this: as a technical trader I look at the charts. Yes, news affects how the charts develop and without a doubt we have to be aware of the higher impact news announcements, because that’s how the market moves. Sentiment changes on news announcements.

Now, about eleven or twelve years ago when I started trading Forex, I used to trade the news quite often because back then, things were different and, like most things in life, times change. And back then I used to make a lot of money out of straddling things like the non-farm payrolls or non-farm employment change that it’s called today. And back then you could do that. You could put a buy stop on above the current price and a sell stop below the current price. And, as I’ve mentioned many times, and it is also in my book, I make around 12% on my first non-farm payroll news announcement by having a straddle. I had a ten grand account back then and I made about twelve hundred dollars in less than thirty seconds! Let’s say a buy stop got filled, as soon as I could delete the sell stop. I was in a big, frantic panic. I closed the buy stop out. I made 12 % on live account on my very first non-farm payroll. And I thought, wow this is so amazing, this is so easy! But back then you could do those type of things.

The Challenges With News Trading

But today, things have moved on. Brokers have made that a lot harder to do. You get price freezes during news announcements, you get big gaps, you get wide spreads before the announcement, you get spikes up and down. You just can’t straddle the news like you used to be able to do. You get other things. If you place an order in there you suddenly find there’s a big spike up, let’s say, and you get filled way up here whereas you asked to be filled down here, so you get those types of things happen. And really it makes it very hard to trade news as like a straddle trade.

People do have things like they will wait for a news announcement and they’ll place a trade after that news, and that’s fine if you have a method that works. And of course there are news traders out there that make a lot of money out of trading.

Trade With Charts For Big Impact

But me as a technical trader, I much prefer to look at the charts because the charts, especially the longer timeframe charts, tell me where the news is likely to move the market. So I have a fairly good understanding of whether the news is likely to be better or worse than anticipated by what’s already been shown, several hours sometimes, several days sometimes, in advance of that news announcement actually happening.

So this is how I look at news trading. Now, as a technical trader (not a fundamental trader), if I am trading 4-hour charts and higher than that, so 6-hour charts or daily charts, whatever it might be, the news doesn’t really affect those trades as in getting a stop out because those longer timeframe chart trades, any whip soaring in the price action over news announcement doesn’t really affect them. However, if I am trading anything lower than a 4-hour chart, so let’s say a 1-hour chart or 15-minute chart, I’m really aware of those high impact news announcements that affect the currency that I am actually trading.

So, as an example, if I was trading the Australian Dollar/US Dollar (AUD/USD), and there was a high impact news announcement coming out of Australia, quite soon and I am already in the trade, then I’d likely close that trade or at least close part of that trade before that high impact news announcement. If I was trading a 15-minute chart on the Aussie/US Dollar and the news announcement was coming out, let’s say, within the next hour, I probably wouldn’t even take the trade. Because I am getting a high impact news announcement that is likely to affect the pair that I am trading.

However, at the same time, let’s say I was trading the British Pound/Japanese Yen (GBP/JPY), for example. That currency pair is so unlikely to be affected by that Australian dollar news announcement that it doesn’t really matter what timeframe trade I am trading if I am trading the pound-yen because the pound-yen is highly unlikely to be affected by any Australian dollar news.

It all depends on which pair you are trading, what timeframe you’re trading, what the news announcement is, what type it is and what currency pair it is likely to affect. So that’s the way I like to trade today.

To be honest, as a technical trader the vast majority of my trades are not affected by news announcements at all. I don’t sit up all day and not watching news announcements because back then, twelve years ago, when I took that first non-farm payroll trade, that happened at 2:30 in the morning for the local time here, which was 8:30, in New York at the time. And I just couldn’t sleep. It was such a thrill. I made 12% on my live account in like 30 seconds. It was just incredible. I could not get to sleep that night. But, like I said, things change.

Base Trades on Technical Analysis

You have to develop and evolve as the market changes and as brokers change, and so as a technical trader today, I much prefer to look at the charts like I see behind me here and look at what the charts are telling me is likely to happen and take a trade based on technical analysis.

So, that’s my view on how to trade the news. In short, I don’t specifically trade the news as such. But everybody is different, and like I said, there are people who make money out of technical trading and fundamental trading and a combination of both.

I hope that helps. Any questions that you have, just email me andrew@theforextradingcoach.com and I’ll make sure that I answer your questions on future videos and podcasts.

So, that’s it for now. Have a great weekend and I look forward to talking to you this time next week.

Bye for now.

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Why Trading Forex Beats Being a Farmer

In This Video:
00:54 The Challenges of Farming
01:57 Forex Gives you Complete Control
03:59 An Email about Trading Skills

I want to talk about why trading Forex beats being a farmer, so let’s get into that right now!

Hi Forex Traders, it’s Andrew Mitchem here, today is Friday the 12th of June and in today’s video and podcast, I want to explain to you the differences between what I used to do, which is being a dairy farmer, and what I have done for the last 12-years, which is being a Forex Trader or a currency trader.

And I want to explain why in my opinion, what I currently do now far outweighs being a dairy farmer, so let’s talk about that because I’ve got fairly good experience about both. Now, I was born on a dairy farm, I’ve been educated in agriculture, I moved to New Zealand 19-years ago to continue farming. I’ve owned a farm, I’ve sold a farm – so I’ve got a fairly good understanding of farming.

The Challenges of Farming
But the problem with farming, and dairy farming in particular, is that so many aspects of it are outside of your control.

• You don’t have any control over the weather, the climate.
• You don’t have any control over disease.
• You don’t have control over a lot of your costs such as fuels and fertilizers and feed costs.
• You don’t have control over legislation in terms of safety requirements and food hygiene requirements that come in.

Everything that adds to your cost and really does affect your business in so many ways and you have really little control over all of those things. Yet you have a massive amount of assets tied up, capital tied up within the animals or within the farm.

And a lot of people seem to think, for some reason that you don’t have much control over what you are doing when you’re a Forex trader. But actually I believe that that’s incorrect. I believe that you actually have a lot of control over what you’re doing as a trader and let me explain why.

Forex Gives you Complete Control

You see, when you’re trading Forex, you have control over what you trade – which currency pair you trade, when you trade; what time-frames you trade; which direction you trade; you can be a technical trader, a fundamental trader or a combination of both; you can control your risk that you take on a trade. You can close part of a trade, you can move stop losses, you can close all of your trades, you can do whatever you like.

Of course you can’t control the actual movements within the market but that’s where education and knowledge comes in and understanding price patterns and what’s happened previously in terms of support and resistance and how that’s likely to affect your trades going forward.

But when it actually comes to be able to manage your trades and place your trades, you actually have a huge amount of control – far more than you probably do within farming when major parts that affect your business are completely out of your control. And also don’t forget the actual barriers of entry – the cost of being a dairy farmer are enormous and involve huge amounts of debts for most people whereas the cost of entry into trading – a computer and Internet connection, if you want to go well with your trading – likely some form of education – and then, once you’re ready to go from demo to live, some form of assets in terms of account to trade on. But really, that’s quite low when you consider the barriers to entry for trading as opposed to farming.

So I hope that explains it – I’ve seen both sides of the equation – I’ve seen the physical aspect of being a farmer and I’ve seen the online version and what I’ve done for the last 12-years of being a trader. So to me they are two very different aspects there but I’m more than comfortable and happy with the option that I am currently doing because to me, it far outweighs any farming benefits.

So that’s the actual theme of the video and podcast!

An Email about Trading Skills

I also wanted to share with you – I’ve got an email here that was sent to me yesterday from a client, Chris, who took a trade on the British Pound/Australian Dollar (GBP/AUD) 4-hour chart. It was a trade he said that he took before unemployment figures were announced in Australia so he took it for a technical reason. And he had a trade on that hit a 150-pip profit for a 34-pip stop-loss, It gave him a 4.4 to 1 reward to risk and he said that the take-profit was hit within 40-minutes of actually placing the trade so with half a percent (0.50%) risk on that, that was a 2.2% account gain in 40-minutes on a technical trade that had the fundamentals following through but the technicals were already telling Chris what to do and in advance of the news coming out.

And secondly, fantastic news on a live webinar held for my clients last night. Gustav, a client of mine who’s doing extremely well – took two trades on the five-minute charts – so we’ve gone from Chris here with a 4-hour chart down to Gustav with a 5-minute chart. Just shows that the strategy works on all time-frames.

But Gustav took two trades while I was on the webinar live, and made four-percent (4%) gain on his account just on those two trades. And it happened while we were live on the webinar and we were looking at the trades and he said, I am putting the trade on now – here’s my stop, here’s my profit – I’ve closed a part of this trade and the other one’s hit profit.

Brilliant trading – just identified two nice pull backs on the Euro/British Pound (EUR/GBP), on the 5-minute chart. I was actually on the same pair, in the same direction on a 1-hour timeframe that I took live on the webinar. Gustav went down to 5-minute charts and took two trades. Four percent (4%) gain in a matter of minutes so just shows what can be done.

So hope you’ve enjoyed the video and podcast. If you have any questions you’d like me to answer in the future videos and podcasts, any subjects of my trading, how I can help you – just send me an email: andrew@theforextradingcoach.com.

Look forward to talking to you this time next week.

Have a fantastic weekend and a great trading week, next week.

Bye for now.

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What’s the difference between a Trading Strategy and a Trading System? 

In This Video:
00:48 What is a Trading Strategy?
01:34 The Benefits of a Trading Strategy
03:19 Where do you Get that Education?

What’s the difference between a trading strategy and a trading system?

Let’s find out that and lots more, right now!

Hi Forex Traders, it’s Andrew Mitchem here, the Forex Trading Coach, today coming from beautiful Queenstown in the south island of New Zealand and as you can see behind me, it’s just an absolute stunning day here, bit of snow on the hills, getting ready for ski season. If you’re listening on the podcast, sorry you missed outfor an absolute stunning view behind.

So, in today’s video and podcast, I want to talk about the difference between a trading strategy and a trading system.

I’ve had an email here from Nikolai and he said, “Andrew, Can you let me know why having a strategy, not a system, can be more beneficial to my trading success?”

So, let’s really just talk about the difference between the two.

What is a Trading Strategy?

I have what I call a trading strategy. I don’t have a system!

A system to me is something that’s quite mechanical let’s say that if this happens, then do that. And you generally find that a lot of systems are things that people have coded into robots, EAs, expert advisors; that type of thing. And they’re fine!If that works for you and if you’ve got something that’s quite rigid, quite mechanical that works for you – if this crosses over that, then do this; exit after so much time or so many pips – that’s fine! If that works for you, great, go for it!

But for me personally, I much prefer trading strategy because I’m a technical trader. I like to look at the market, like to analyse the market, look at price-action, candle patterns, etc. and that’s what a trading strategy actually allows me to do.

The Benefits of a Trading Strategy

It allows me to be a little bit more flexible. You know, I don’t always trade exactly the same setups.

If I see what looks like a really good setup, I might think – hey look, it looks good but I’m already in that pair with another time-frame chart; I may already be looking at that pair coming to some form of exhaustion or possible reversal, so therefore though the setup’s good, I can see a reason not to take it – you know in terms of you might be buying at a round number or a resistance level – whatever it might be, well there could be news coming up on that particular pair.

So, I like to have flexibility in terms of my strategy itself. I also like flexibility in terms of the money management. I am quite strict on money management – I like to always want to have no more than half of one percent of my account traded, any risk on any trade. If the trade goes wrong, I lose no more than half of one percent. However, I might change that – I might go down to quarter of one-percent if I’ve got multiple trades open or multiple trades open on the same pair.

I might have a trade open, let’s say, on the Euro/US Dollar (EUR/USD) on the daily chart and the weekly chart and now I’m seeing a good setup on the 4-hour chart – all in the same direction – but now I am quite exposed to buy trades on the Euro/US Dollar (EUR/USD).

If I see this 4-hour chart setup and it’s a really good one, then I just might reduce my risk down to, say, quarter of one percent. Again, it’s adding a little bit of common sense, a little bit of flexibility within the system and that’s really what I call a strategy.

If that was a trading system, you’d be very rigid and say, you know, every trade has to be the same and the setups there so I’m going to take it. I might look at closing a trade part early if I see a reason to do that and again, that’s the strategy.

Elaborating with Other Trading Facets

Look at indicators for example – Bollinger Bands!

If the price action is near the upper Bollinger Band, a lot of people look at that and think – well, that means it’s reached the resistance area therefore, the pair’s now likely to fall away, and reverse. I also can trade like that if I see a simple candle pattern. But if I see, let’s say, a bullish candle pattern, near the upper Bollinger Band, there’s no reason at all to think that the upper Bollinger Band is going to mean the instant reversal of that pair.

And so therefore, you look at your charts how often you see bullish patterns and the price just goes up and up and up. Same withstochastics, just because it’s over-bought doesn’t mean the price is going to drop. Just because it’s over-sold doesn’t mean to say the price is going to rise. And again, that becomes the difference with some human input and common sense and experience as opposed to a system which is quite rigid.

So, in my opinion, a strategy – a trading strategy – which is what I teach, what I trade myself, is a far better option for your longer term success than a system. So Nikolai, hope that answers that question for you and I hope that everybody else watching has benefited from that!

If you have any subjects that you’d like me to talk about – any trading topics, just send me an email: andrew@theforextradingcoach.com and I’ll make future videos and podcasts answering your questions for you.

So that’s it for today – as you can see behind, like I mentioned absolutely cracker of a day here in Queenstown, beautiful blue skies, lots of snow starting to appear on the mountain ready for ski-season, it’s just about a few weeks away.

So that’s it for now. This is Andrew Mitchem, the owner of the Forex Trading Coach, talk to you soon.

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Why do so many people give up Forex Trading?

In This Video:
01:28 The Leading Cause of Forex Dropouts
02:46 Education is the Problem – not the Market
04:18 Where do you Get that Education?

So why do so many people give up Forex trading? Let’s talk about that right now!

Hi traders, it’s Andrew Mitchem here, the Forex Trading Coach and today is Friday the 29th of May and I want to talk to you about that really important topic and conversation because I want to help you avoid being in the 95% group! I want you to be in the 5% group that are making money who are enjoying their trading and doing really well. Forget the 95% – that’s where the majority are.

But why are so many people in that 95% group?

Why are so many people losing money?

Why are so many people giving up?

The Leading Cause of Forex Dropouts

Well, to answer that question, we need to come back to the beginning. You see, with Forex, it’s such an easy market to get into, it’s all over the Internet; it’s just made out to be so easy to get into everything you need – even a demo account – an easy to open live account, even choose a broker from pretty much anywhere – they’re not all good but you know, you can choose a broker from wherever you like and you need an Internet connection!

You can try trade from your phone, from your iPad, from your desktop – whatever it might be, it’s so easy. The barriers to entry are very, very low and everybody makes it out to be so easy itself because, you know, you just need this magic indicator, you need this robot, whatever it might be, or this signal service or something and it’s going to make you a fortune and solve all your problems.

The problem is, in reality, it’s not quite like that – as so many people find out – and that’s why I think so many people give up. But the problem is, and it’s not like any other industry out there at all, why is it that so many people get into this business and this market of Forex trading, yet very few seek education?

You know, I can’t think of anything else that you’d do that’s brand new to you, that you have very little knowledge or understanding of, but you don’t go out there and seek some form of knowledge and some understanding, talk to someone – some education you know.

Education is the Problem – not the Market

Why do people just throw money at a Forex account with no strategy? They don’t have any goals, they don’t have any understanding of the market; they don’t really know what they’re doing but they’re happy to throw money and because they’re happy to throw money at it, it’s no wonder that 95% of all traders are losing money and then consequently give up through losing interest or losing faith in the market.

And then, the problem is people start blaming the broker, they start blaming the market; they think that the market is trading against them, you know, whatever it might be and this is as a result of people not investing in themselves – that is the biggest problem!

So, I’m here to tell you that it does take time to be a good trader! You know, I‘ve been there myself, I’ve been right there from the absolute beginning – I just wish that when I started trading, I had someone good to go to, who I could follow along and gain a strategy from, to help me along and to shortcut those initial few years where I really wasn’t making any money!

Doing a lot of research and going a lot of up and down on my account but I was making nothing really. So, look at education as an investment. If you really are serious about starting trading, look at spending some money first on education. You know, you can have a huge account but it means nothing if you don’t know how to trade it.

I get the opposite end of the scale quite often – people coming to me saying, “Oh, I can’t afford education – I’ve only got $1,000 in my account.” You know, $1,000 is almost pointless in your account if you still don’t know how to trade it – you have to have the education first. Because get that right and the money will follow afterwards!

Where do you Get that Education?

But education, again, like most things out there is not just a one-size-fits-all. It needs to be education from someone who’s actively trading day-in and day-out. Not someone who’s running around the world on the stage, getting paid a fortune for just promoting because they are a really good speaker. You need someone who’s going to help you on a day-by-day basis with a practical, easy to understand system. Watch someone trading; gain knowledge and understanding from the market on a daily basis.

You need that help from a Forex Trader – a real trader – someone who’s out there trading day-in, day-out; who’s done it for years, who knows what’s happening in the market; who’s seen all sorts of people – from absolute beginners to experienced people; all types of traders from different places, different backgrounds – and that’s what you need as a trader because ultimately, you have two choices:

You either understand trading and you do really well and you join the 5% group or;
You join the rest!
And, you really don’t want to join the rest. 95% people are going that way – don’t join them!

If Forex is something you really are interested in, come along to the five-percent group – the one’s that are making money, the one’s that are enjoying their trading, understand the market and know what they’re doing. If that sounds like you, give me a call or drop me an email: andrew@theforextradingcoach.com.

Have a look at my website, there’s heaps of information on there to help you get started with your trading.

Look forward to helping you really soon!

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Do You Need To Be Good At Maths To Be a Good Trader?

In This Video:
00:39 First Question of the Week – Math Problem!
01:44 Second Question of the Week – Strategy Reveals
03:13 Client Side Success

Do you need to be good at maths in order to be a good Forex trader?

I want to share that and a client’s fantastic results where he made nine and a half percent (9.5%) for the week and more details with you, right now!

Hi Forex traders, it’s Andrew Mitchem here, the Forex Trading Coach and in today’s video and podcast, I’d like to share with you a couple of questions that I’ve had sent through to me from a viewer and, also, as I mentioned, I’ve got a fantastic account increase of nine and a half percent from one of my clients who made that last week – I’d like to share that with you as well.

First Question of the Week – Math Problem!

So the first question here is: “Hi Andrew, do you need to be good at maths in order to be successful a Forex trader?”

And I suppose when you think about it, we’re dealing with numbers, we’re dealing with patterns quite a lot and so, yes it does help. You know if you’re talking of a price action, price levels; if you’re looking at calculations in terms of working out your risk or your reward, then yes, numerical skills obviously would be an advantage but the benefit and beauty we all have in Forex trading today is that there are so many tools out there – and I’ve got lot-size calculators and I’ve got scripts that my clients have that can work out the risk for you and place the trade for you even – based on a set risk!

So, having some skill-set in maths is important, yes, but it is not an absolute critical factor in determining whether you’re going to be a good trader or not. Probably more important is having a sound strategy, being able to implement it and be able to see it in real time and being consistent with that strategy is probably just as important!

Second Question of the Week – Strategy Reveals

The second question is, “Why are you sharing your strategy as a lot of traders believe if you disclose your strategy, it will stop working?”

And you know, I suppose I get asked that question quite a lot and it’s a very good logical question. Well, the Forex market is enormous, you know – I can’t really see how one strategy even if you share it with thousands and thousands of traders is really going to influence the market that much.

You see, I base my trading on price-action and candlestick patterns and it works across all currency pairs, across all time-frame charts. I’ve been trading that exact way for over 8-years now. The beauty is it works across all market conditions because if you think about it, if there’s nice trends going on then there’s lots of good price-action pattern showing.

If the market’s a little bit flat or subdued on one particular time-frame then you just don’t take any trades on that time-frame – Very little is setting up!

But more than often, if you go down to a different time frame, generally the shorter time-frames, you’ll always see a suitable trade somewhere if you really want to go hunting for it. The discipline of the trader though is to have the time-frames and the time of the day that suits you to trade and sticking to that – don’t go searching and hunting for trades – it’s just not worth it!

But, yeah, to answer the question – the market, the Forex market, is enormous! I can’t really ever see, you know, one person’s strategy is going to be that powerful that it influences the entire market – I can’t see it!

Client Side Success

And lastly, the third thing, and this is a great email that I received at the weekend from a client:”Andrew, just to let you know, I had another great trading week” – and notice it’s “another”. It’s not a one-off, it’s ‘another’ great trading week. 43-trades, 26, wins; 17-losses; 61% win-rate; my account increased by 9.5% for the week with a half of 1% risk per trade.

So notice how this client’s using the risk management that I always implement – of half of 1% or 0.5% risk – so very low risk per trade!

He did take a lot of trades, mostly on 6-hours, 12-hours and daily charts but a nine and a half percent gain on his live-account just for the week. So, just goes to show what can be achieved if you have that sound strategy, low risk, high returns per trade and just keep doing it!

See the setups, take the setups, profit of +9.5% in the week – you cannot argue with that!

So, thanks everybody for sending through questions and trading results. If you have any questions you like, that you’d like me to talk about and answer in podcasts and videos like this, just drop me an email: andrew@theforextradingcoach.com and I look forward to bringing you more information and Forex Trading tips this time, next week!