By Sam Seiden, Online Trading Academy Instructor
Being the leader of the Extended Learning Track (XLT) Forex and Futures programs at Online Trading Academy, I spend most of my time trading and teaching others how to trade by way of my computer. I just completed a multi-day Forex trading conference in Spain which was put on by FXStreet.com, a resource and research website for Forex traders. While I stay away from the typical expos and conferences, I participated as a speaker/trainer in this one for a very specific reason. My responsibility was to give a one hour lecture and then lead three, three-hour live trading sessions. I found this unique and very beneficial for traders so I decided to do it. While the conference was great, I realized two important things that every Stock, Futures, and Forex trader needs to be aware of.
The first and most important has to do with discipline and patience. I always assume people hear too much on this topic so I don't mention it much but - WOW, was I wrong. During the live trading sessions, I would first teach the students how to quantify Demand (support) and Supply (resistance) on the charts. I would then walk them through a detailed yet simple lesson and set of rules and then we would actually set up trading opportunities live and enter the trade when price would reach our pre-determined demand and supply levels. Here is one of the trading opportunities I set up.
This is a chart of the Canadian Dollar. Keep in mind that what I am writing about has nothing to do with Forex specifically. We could be talking about a stock or any market we trade for that matter. As you have seen in so many of my letters, we had a quality demand level, a decent supply level, and price dropped right into the demand level for a low risk / high reward buying opportunity. Also, based on the "odds enhancers" we had just gone over in the training session, this was a very high probability trading opportunity.
What was so shocking to me is that when it was time to actually enter the trade, hardly anyone actually bought and half the group was trading a demo account. They started asking whether I thought the level would hold and if we should wait for some confirmation of a rally, oversold oscillators, or perhaps moving averages to turn higher. To make a long story short, very few traders in the group bought even though the entire trade was handed to them, the risk was very small, and the reward was very ideal. After prices turned higher, some of the people began to buy. As price moved even higher, more and more in the group felt comfortable buying even though as price moved higher, risk was increasing dramatically. Fear of a small loss was greater than the desire for a low risk entry. What became apparent was that discipline was the issue.
The second issue came during the lecture when I was going over the rules. I clearly suggested that people pay close attention to the specific rules of which there were only four. While some wrote them down, others wrote part of the rules and then later asked, "What were those rules you talked about before?" It was as if it was some hard work writing four simple rules. I am not complaining at all and these were very nice and smart people in the group. These issues are not about my group but people in general. I realized that you can hand someone golden nuggets but they just might see the gold as a rock with some color on it. No matter how much you show and tell, I realized that it all comes from within and that we all have to take responsibility for our beliefs and actions (or lack of actions). It was an amazing experience for me but I guess that's what makes a market.
A few words on FXStreet.com. This is a quality resource for traders of all types. They also have plenty of education on Forex trading. I provide two webinars for them each month and some of these are recorded and kept on their website for your review if you like. While they have many helpful areas on their website, here are a few that traders seem to look at often.
Rates and charts Section: http://www.fxstreet.com/rates-charts/
In this section, you will find rates along with pivot point levels, trend analysis, and more. On the left side of the page, you can find charts of just about any Forex pair you can think of.
Currencies at a glance: http://www.fxstreet.com/rates-charts/currencies-glance/
This is a good section for any trader, Stocks, Futures, or Forex. It really gives you a quick snapshot of where any Forex pair is and an idea of where it may be headed. Of course, when determining where a currency may be headed, make sure you look to the chart for that information.
Real Time Economic Calendar: http://www.fxstreet.com/fundamental/economic-calendar/
For any trader that wants to view a high quality, interactive economic calendar, this is one you need to see. Spend some time here; there is really as much information as you would ever need.
Have a great day.
- Sam Seiden
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