How to get to the level of consistent profits from Forex in the FASTEST WAY? Tips for self-taught. By Dariusz Swierk PhD.

As I was conducting research on main success factors in forex trading and the path which leads from the beginnings to the profitability (and sometimes overwhelming financial success), I want to discuss a few things that come from these studies.

I’ll describe the systems and wrong approach to them, then the environment in which we learn really fast and I’ll conclude with some remarks on the motivation for appropriate action – which will bring the quickest success.

What I conclude from the interviews (http://tinyurl.com/6kd4odh) is that many traders don’t have any tested and explicit system. And it concerns not only beginners, but also people who are a few months or even more in business. No wonder that they aren’t able to achieve systematic profits – sometimes even any profits!

What to do to make a big step towards the systematic profits?

Step One: Analysis of 100 signals
Make review at least one hundred signals back. Undo the market, let’s say – two hundred signals back and start the analysis. When input, when the output, at what times, what indexes show. Very useful is here the Metatrader.
Take screenshots of the market look and put them to the text editing program and describe them, just a few words of comment (a very good program for this is, for example, Fast Stone Capture, find it on Google).

Write what you understand – but also what you don’t understand. It’s very important to understand the system and to clarify any ambiguities before the ‘real game’.

For example, in the description of the system was that the entrance is at the end of the candle, which was the first to go beyond the crossing averages. Sl is small because it’s just 7 pips. Even a cursory analysis showed that if a candle has more than 15 pips – the withdrawal of 7 is often, then there is a typical long movement. But system designer didn’t take this into consideration and didn’t describe it.

These are the things you’ll have to decide – and create your version of the system.

Obviously the best would be if you discover any shortcomings in the analysis phase, because during the live game (or even a demo) when there’ll join the emotions – you’ll experience a loss and it’ll be hard to find their reason. Because when it comes to emotions – your mental abilities goes down, in the case of strong emotions (losses) up to 25-30% of normal.

Hence, a preliminary analysis of 100 signals of the new system is priceless, quite soon you’ll discover the weaknesses and ambiguities. And I want to emphasize – you’ll always find something and that’s natural.

Therefore I have another hint for you – start with systems which are very well described by their authors.

FOR MORE GO TO: http://tinyurl.com/6kd4odh

Step Two: Analysis of signals without the knowledge of what happens next
When you have some knowledge of the mechanical side of the system, go to the “paper trading” – that is (you still have 100 signals) in MT4 market move by 1 candle forward and “play”. In Metatrader you use the F12 key.


Take a good look on signals emerging on the right side of your screen, because in that form you’ll see them in reality – without the knowledge of what happened next.

Take a screenshot, put it into Word and write your brief description. Analyze a few signals each day until you’ll know the system “inside out” in the way you’ll play it later.

Then at some time, e. g. once a week, – analyze those signals again. Doing so will give you the fastest growth in the understanding and intuition of the system. You’ll find that over time some things about which you had doubts had become clear.

After these 100 “inputs” you already have some vision of a system, signals appearance, the appearance of the markets.
Take advantage of the archive calendar of news on ForexFactory or topics that describe the behavior of pairs – when the market suddenly freezes for a while and then shoots sharply in either party – it’s in the most situations caused by news.

All this may make you get more intuition – when to play and when not. Usually it’s that even though the signal from the system we don’t enter the market – when near us stands some strong support or resistance.

Step three: Transactions on the demo
The next step is 100 transactions on the demo. At this phase you have even more excellent simulation of a real game.
Remember that the more you’ll learn from the system behavior in different market situations – the sooner you’ll make money on the real market.

And again you can speed up understanding of your development and the system by describing your entries.
Writing things which prompted you to enter the market, what feelings and thoughts you had – will give you at this stage another great advantage: you’ll understand how “works” your decision-making process, and what usually accompanies your decision to enter the market.

Based on the descriptions, e. g. every week, you’ll better understand yourself and you’ll know the impact of your psyche on your results.

Of course, it’s important that you write down ALL of your entries.

What told me one of the great traders with whom I did an interview is that at the beginning quarter of entries was… outside the system… He couldn’t say why.

Well, it’s simple: when emotions are being turned on there is a strong disorder on decision-making process and then it’s easy for unconsidered decisions. And there is the question: “what I was thinking then?”

Usually nothing wise, so if you don’t know the other methods – analysis of your bad inputs will show you weak points of your psyche and decision-making process.

Note that each event:

- entry into the market ,
- determine the size of the position,
- defining SL and TP,
- moving SL, TP – in general managing the position in the open orders,

…requires your decision.

And the decision is made from: your knowledge, skills and… mental processes, including emotions. So if you have good and tested system, what decides of your success is… psyche. That’s why the psychology of trading is so important for your profits.

The more you practice – the better are the results.
You can also use existing market simulations, as simulation of real game. They’ll also greatly speed up mastering the system.

At first stage the most important thing for you is not earning money but learning, especially comprehensive study of the system.

That’s what make you be able to quickly make money on Forex.
Consider the following situation: on the road enters a young driver who doesn’t know the basic rules of behavior on the road and basic maneuvers.

Think about a young boxer who, after reading one book wants to stand in the ring with the professionals.
What effects we can expect?

Without putting a large amount of work in the beginning there won’t be any results. There will be some effect – loss, and it will continue as long as you will learn a system from beginning to end. Doing it like average traders – may take a minimum of one year, maybe even one and a half or two years.

It’s better to devote, let’s say, two months of hard work according to what I wrote, focusing on one, getting to know the ins and outs and being in a completely different point going on live.

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Step Four: live transactions.
Create an account with a broker who allows to play with micro stakes.
Live market is a little different, though in the case of TF higher than the M5 it doesn’t matter.
I know people who start trading from the M1 and are doing well – in this case, start the game on the M1 with the minimum rate allowed by broker.

During the first contact with live trading I suggest making 50 – 100 live transactions with a minimum stakes.
Why?

Well, after an intense training, which you had previously passed you shouldn’t have any troubles with the mechanics of the system.

However, the reactions of your psyche remain unknown. Hence the need to familiarize yourself with the presence in the market, accustom to the fact that when we make an order, we gain or incur a loss.

During this period, if you’re a beginner, remember:
1. Strong emotions decrease the ability to analyze the situation and ability to learning. Therefore, avoid strong emotions, avoid emotions at all.
2. Emotions disturb the analysis (you can have only 20-30% of your normal analytical skills), that’s the reason why looking back you wonder “how could I do this?”.
3. Play small stakes at the beginning, with no euphoria in the case of an income and without any regrets in the case of loss. In this ‘mental optimum’ work at all the time in your career as trader.

FOR MORE GO TO: http://tinyurl.com/6kd4odh