Month: October 2015

One of the downsides of pursuing online forex trading as a full time career is the lonesomeness that characterizes online trading.

Unless you are a bigshot forex trader who reports to a bank in the morning, sits on a leather swivel chair and conducts meetings with clients the whole day, you probably won’t have the luxury of meeting other experienced traders.

But thanks to the internet, you can find a good forex mentor by doing a simple Google search.

There are hundreds of online forex ‘mentors’ on the internet. A handful of them are right here in Kenya. But not everyone who calls themselves a forex mentor is genuine. Some are out to grab your money and run. Some have never pulled any successful forex trade setups.

What are the important factors that you should consider when choosing an online forex mentor?

Here are some qualities that a good forex mentor should have:

1. Credibility

Any good forex trainer should have evidence that whatever they are saying is real. A good forex mentor should have a track record of successful forex trading (3+ years). There should be records to back up his or her claim and students that s/he has mentored to give testimonials.

2. Inspiring

A forex mentor should be someone who inspires you; someone that you can look up to. In essence, mentoring should go beyond forex trading.

Conversations with your forex mentor should include your projected goals, aspirations, money management, and possibly faith and relationships.

Your online forex mentor should have your best interests at heart. He or she should be able to guide you towards your desired lifestyle.

3. Trustworthy

Trust plays a very big role in every form of relationship. If you cannot trust your forex mentor, that relationship is doomed from the very start.

You need to be able to open up to that person about your greatest fears and aspirations. You have to trust this person’s advice and judgement. You will most probably be adopting his forex trading strategy and he will be critiquing your trades.

Most importantly, you will soon be moving from a demo trade account to a live account. Do you trust this person enough to let him or her give you the proper advice on how to trade your money?

4. Honest

The forex market is unpredictable. Loses happen as frequently as profits do. If your forex mentor promises you 100% success, he is probably not being honest with you.

A genuine forex mentor does not sugarcoat the risks involved in online forex trading. It is his job as a mentor to help you prepare for the realities of the forex market.

5. Encourages independence

Don’t fall in love with the forex market who never rebukes you to try trade setups on your own.

A good forex mentor should be able to instill confidence in you and make you feel that you can stand on your own. After all, at the end of the day, you are the one to make calls on how you trade your money.

I am not going to tell you that finding a good forex mentor will be easy or that these characteristics will immediately be apparent when you start chatting with your mentor.

However, you can always try your luck by chatting and interacting with other online forex traders in Facebook, Twitter, and forex forums.

What Should You Learn from your Forex Mentor?

Many aspiring forex traders jump into forex training programs without understanding what is in it for them. Do you know what it is that you want to learn from your forex mentor?

If you don’t know what you want to get from your forex trainer, it will be very difficult for you to find a trainer who suits you. Do yourself a favor. Spend a few hours Googling information about forex trading and absorbing as much as you can before seeking a mentor.

 

Is there anything like the fear of success? I know you are thinking that I am kidding or I am being sarcastic. No. I am not.

The fear of success is as real as the fear of failure. Never felt it? Count yourself among the few lucky forex traders in Kenya.

The fear of success is, in fact, more calamitous than the fear of failure because a lot of traders do not know that it exists.

We all say that we want to be successful. We want to make enough money to give our families the kind of lifestyle that they deserve, but subconsciously, we are freaking afraid of all the changes that come with success.

You see, success comes with new and higher expectations. I compare it to a soccer player who scores the most goals and skyrockets to become the top player in that football season. The chances are that the player will set his goals higher during the next season. He will want to score more goals and surpass what he scored the previous season.

And therein lies the problem.

The Pressure of Success

For a lot of people, the pressure that results from a one-time splendid performance may keep them from even trying.

In our case, the soccer player may be afraid that if he tries, he will fall short of how he performed in his excelling football season. He’d rather remain on the sidelines than try and make a fool of himself.

Have you ever felt something closer to this?

This situation is not uncommon. After all, a lot of us grew up being grilled about the importance of excelling in whatever we do.

This pressure to excel makes online forex trading more difficult because no matter how much you try to become better, you cannot avoid making losses. They are part and parcel of trading. You can’t win in all your trades.

Mostly, the fear of success in forex stems from being anxious that you could be on the wrong side of a trade setup.

Many traders identify an incredible entry signal. The pips are just right, and if the trade goes their way, they would walk away with a tidy profit, but the fear of success holds them back.

A few hours later, they are beating themselves up as they would indeed have walked away with a tidy sum of profit.

What can you do to banish the fear of success once and for all? Here are 7 tips:

i.             Focus on the process not the profits

The problem with many forex traders in Kenya (and around the world) is that they focus so much on the profits they stand to gain. If they lose on a trade, their confidence is instantly shattered. The one-time loss keeps them from jumping in on entry signals that they would normally take.

One plausible solution to this is to put the profits and losses out of your mind and focus only on your trading strategy. By doing this, you not only take away the pressure to perform but also get to understand what can be done to improve your forex trading strategy.

ii.           Have an open mind

The behavior of the forex market is constantly changing, which means that you also need to constantly change your trading strategies.

The problem with many forex traders is that they believe that they have to be right; that their strategies are right. They do not want to admit that they were wrong. They are afraid that the market will make them appear foolish.

To overcome this fear, you need to let of your need to always be correct. This will relieve you of the pressure of wanting to be right all the time. It will free your mind to concentrate on and better understand what is happening in the forex market at that particular moment.

iii.         Set realistic trading goals

Goals in forex trading help you bridge the gap between your hopes and reality. If you set unrealistic goals, you set yourself up for a tirade of disappointments. The disappointments affect your mental state and impair your decision making capabilities.

By setting realistic trading goals, you begin to see how far you are from achieving them. You get to a clear mental picture of what it will take to achieve your goals. If they seem far-fetched, you can always cut back on your expectations.

Trading in the short-term is more profitable that trading in the long term.

You can only predict the market correctly in the long term.

The stochastics is oversold so the market is bound to go downwards.

Forex trading is difficult.

Forex trading is easy.

Online forex trading is lucrative and worth every single shot.

Technical analysis is the best way to figure out the markets.

What do all the above statements have in common?

All of them are beliefs about the forex market. All of them shape what we call the trading psychology of the person who holds the belief.

Can you identify any belief that you subscribe to from the ones listed here?

I will let you into a secret about any kind of belief.

Beliefs are hard and painful to let go. Some of our beliefs are formed from traumatic experience that we’ve had. These beliefs and perceptions may not be necessarily bad, but how do they affect your forex trading career.

Online Forex Trading is all Beliefs

Online forex trading allows you maximum freedom to do as you wish.

There is no teacher to cajole you from taking a certain trade.

You have the freedom to decide which trading session you will use to place your trades.

You decide the currency pairs that you will trade, and

You choose the maximum or minimum lot size you will trade

So, if the forex market accords you all this freedom, what dictates your trading decisions?

The simple answer lies in beliefs.

You may think that your forex trading decisions are determined by a piece of news or a movement of a technical indicator on the charts, but it is not. It is your basest belief about the news or the technical indicator that influences you to make whichever trading decision that you make.

You can trace back the path to every trading decision you have ever made on your beliefs.

For instance, why do you prefer to trade a certain currency pair and not another one?

Or why do you use the particular trade setup that you use?

If you trace back the answer to the above questions, you will be shocked to realize that these decisions emanate from a strongly held belief.

Becoming aware of the beliefs that shape your trading decisions is the first powerful weapon you have in your trading arsenal.

What are your beliefs about online forex trading?

Let us do something practical here. Take a pen and paper and see if you can list at least 7 trading decisions that you have.

Here are mine:

  • I must always trade using a predetermined trade plan
  • Forex trading is as risky as any other investment you decide to make
  • I must have a risk/reward ratio charted out before I place any trade, and this must always be 3:1
  • Support and resistance levels are extremely crucial when it comes to predicting and analyzing the market
  • Trading the forex market is all about beliefs!
  • And these are not all…

Looking at the above, I can already see how each one of these beliefs shape my trading decisions. Can you see the same when you look at your 7 beliefs?

Where Do Your Beliefs Stem From?

I have already mentioned that most beliefs are formed after going through a traumatic encounter, but this is not the only source of your beliefs.

  1. Nature/Evolutionary

At the most basic level, beliefs are evolutionary. They are programmed into us as part of fight or flight that has evolved for over thousands of years. Beliefs, just like emotions, are hardwired into our DNA, our very fabric that makes us human.

  1. Environment

Most of your other beliefs are a byproduct of your upbringing. Would you have different beliefs if you grew up in the USA’s city of New York as opposed to some estate in Kenya? Definitely Yes.

  1. Indoctrination

Other beliefs are indoctrinated into us. To a certain degree, a lot of people (apart from the truly enlightened) accept commonly held beliefs. As we grow up, our subconscious collects, accepts and stores a set of beliefs without questioning them.

  1. Identity beliefs

Some beliefs are as a result of whom we believe ourselves to be. “I am technical trader” is an example of an identity belief.

Are Your Beliefs About the Forex Market Useful?

“We trade our beliefs about the market”~ Van K. Tharp

There are a lot of different approaches to the market as there are traders. This is because every trader has a different beliefs about the market.

In a nutshell, we all see what we want to see.

The good news is that we get to choose our own beliefs. No one can impose a belief on us. And this is where the real power of beliefs about the FX market is realized.

We also get to decide whether the belief is useful to our trading. We can safely disregard and discard the beliefs that are not helping our trades. For instance, I believe that when the %K and %D lines of the slow stochastics cross below the 20-level mark, it becomes a signal to go long on my favorite currency pairs.

Although I know that the two stochastics lines do not have any influence on the forex market, I still choose to believe them. Right now, it serves me to hold on to this belief. If a day comes when this belief no longer holds true, I will easily abandon it.

Here is the thing. If your current beliefs about the forex market do not serve your best interests, you need to let go.

What are the beliefs of top forex traders?

If you take one thing out of this article, let it be this: You can take beliefs on and off. You should take off the beliefs that are contributing NEGATIVELY to your career and put on the beliefs that will help you become the next successful forex trader in Kenya.

During my few years of trading the forex market, I have interacted, studied and analyzed the beliefs of many successful traders. Most of them tend to have a set of similar trade beliefs:

  1. They take full responsibility of their actions in the market
  2. They understand that position sizing is the key to scoring their FX trade goals
  • Although they might be wrong more times than they are right, they still make money on the forex market
  1. They take trading seriously. Their investment in the forex market is a business, not a hobby.
  2. They realize that losses are part of the business, and they are ready to face their losses, pick themselves up and look for the next trading signal
  3. They diligently record their results.
  • They are comfortable with taking carefully calculated risks
  • They understand the importance of risk-reward ratios
  1. They believe that they can make profits in the forex market
  2. They have full confidence in their forex trading strategies.

Do any of these beliefs compare to the ones that you already have? If none of them does, it is probably the high time that you started reevaluating your forex trading beliefs.

How to reorganize your beliefs about online forex trading

Have you ever observed that you can have conflicting beliefs at the same time? This is because you are a mixture of conflicting parts.

Inside you, there could be any of the following parts:

  • A trader part
  • A rebellious part
  • A caring parent part
  • A gambler part, and
  • A fun part, just to mention a few

Each of these parts form who you are. Each one of them can have a great impact on how you approach online forex trading. For instance, the fun part may dictate that you open a position in the market out of boredom, whilst the trader part warns you that you should wait until you see a clear entry signal.

Fortunately, the process of reorganizing your beliefs is a simple one.

Firstly, you need to realize that you want to acquire a certain belief. For instance, if you believe that position sizing is a significant part of your forex trading strategy (and if you were not calculating position size before), then you can learn about position sizing and apply it on the next trade you place.

If there is no negative charge impeding the adoption of the belief, and if you continue to consistently take action, you will easily acquire this new belief.

However, if there is a negative emotional charge that is impeding the adoption of this new belief, such as the gambler part tempting you to take exceedingly bigger positions in the market, then it will be difficult for you to acquire this belief.

Van K. Tharp in his book, Trading Beyond the Matrix, gives 2 suggestions that you should try:

i.             Feelings Release:

The feelings release process involves completely changing the way we react to negative feelings and thoughts.

Instead of continuing to resist them, you embrace them fully. This serves to dissipate the power that that feeling has over you. After some time, the feeling fizzles out.

ii.           Parts integration:

Parts integration involves letting the different parts of yourself negotiate and make mutual decisions. For instance, the fun part of you may enter into discussion with the trader part of you. The fun part decides to give way to the trader part in exchange for the trader part stepping aside for the fun part during the weekend.

This may sound weird, but trust me, the moment I tried it with one of my nasty beliefs, I experienced transformational effect in my career.

iii.          Create a Self-Improvement Routine for your trading beliefs

Becoming a successful forex trader requires constant and consistent refinements.

The best athletes work on their mental part of performance as much as they work on their physical training and physique.

The same applies to successful forex traders. They work on their psychology as much as they work on refining their trading techniques.

As beliefs are a central part of your forex trading psychology, you should considering having a beliefs self-improvement routine.

Your beliefs improvement routine can include:

  1. Listing your current beliefs about forex trading in paper and pen
  2. Listing your current beliefs about your forex trading strategy

A powerful beliefs system will help to shape your trades for the better.

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Online forex trading is something that you can do and make a lot of money. However, before you start banking the big money, you need to learn how to trade the forex market.

In this article, I want to steal you into one of the secrets about learning online forex trading in Kenya. I’ve had the privilege to train many beginner, intermediate and advanced forex traders in Kenya. In all of them I have realized one thing. Many think that their greatest hindrance to making profits in the forex market is because they have not learned a certain technique.

Nothing could be further from the truth.

Learning online forex trading has more to do with how you handle and deal with yourself. While it is true that there are a few technicalities you need to muster before you can begin to trade profitably, the biggest challenge is learning how to control yourself.

Fighting your perceptions

The first thing that beginner forex traders need to overcome is the perception that currency trading is a get-rich-quick kind-of-a-thing.

I don’t blame you if you are looking to venture into FX as a shortcut to immense riches. This perception is created by many websites that tout forex trading as a way to make money fast and get rich quickly. In real sense, these websites do not have your best interests at heart. They want to take advantage of your newbie vulnerability to steal money from you!

Forex trading is not a shortcut to infinite wealth. Don’t venture into it if you want to make a quick killing and retire within your first year of trading. You will be thoroughly frustrated.

It is important that you approach internet forex trading with the right attitude.

Getting Your Feet Wet

Once you have dispelled all the myths that tout FX trading as a get rich quick, it is time to get your feet wet. When you are learning to swim, you don’t dive into the water head first. You first get your feet wet, test the depth of the water, and slowly waddle towards the deep end. Anything short of that is a recipe for an untimely death by drowning.

The same thing applies to online currency exchange trade. Here is a list of things that you need to do as you prepare to venture into forex trading:

  • Start reading

The first step to venturing into forex is getting an education. There are a few ways you can use to learn online forex trading, but whichever you choose, make sure that you are learning. You will need to learn the terms and lingo used in the currency exchange market as well as the strategies used to trade.

If you cannot manage to learn forex on your own, you may consider hiring enrolling for online forex trading classes in your town. Having a mentor to hold your hand simplifies the learning process and is faster than trying to learn everything on your own.

  • Research online forex brokers

All retail forex traders trade the forex market through forex brokers. However, not all brokers are born equal. Some are nothing but scams that will disappear with your profits after you’ve been pouring out your heart and soul on trades.

Some brokers require high starting capitals while others allow you to start trading with a small deposit. You will need to spend some time reading forex broker reviews and visiting their websites to understand how they operate.

Some of the things that you should keep in mind when researching forex brokers include:

  1. Check whether the broker is registered with the requisite authorities in their country of jurisdiction. This is a crucial step that will help you differentiate  real serious brokers versus those who are out to get you.
  2. What is the minimum deposit allowed by the broker? Is it an amount that you can easily raise without investing money that you cannot afford to lose? If you have less than $2000 to invest, you should probably seek those brokers who will allow you to trade in micro lots.
  3. Ease of deposits and withdrawals: You do not want to be stuck with a broker that can’t let you withdraw your profits easily. Which deposit and withdrawal channels does the broker offer? Are you comfortable with at least one of them. Keep in mind that many brokers will only let you withdraw your profits into the same account you used to fund the account.

If you have ease of mind with your broker, you will manage to allocate more time to analysis and fine-tuning your strategy. Doing your due diligence before settling on a broker goes a long way and can greatly enhance your chances of becoming the next successful Kenyan forex trader.

  • Open a demo trading account

After you have read many forex broker reviews and settled on a few that look promising, you will need to open a demo account to test how trading on their platforms looks like.

Many legitimate forex brokers (such as Easy Forex) will let you open a free demo account to pilot test their trading interface. They will even load the account with virtual money.

The free demo accounts allow you to learn more about the forex market and to practice trading with zero risk.

  • Test out some strategies

So far so good. Up to this point you should have some solid information about FX trading and a demo account. It is not time to put what you’ve been learning into practice. After you learned how to operate the demo account, it is time to test out some strategies.

I am assuming that you took step 1 very seriously and learned all that there is to learn in online forex trading. Which strategy did you think is the best to trade forex? Test it now.

I suggest that you spend a lot of time practicing trading strategies on the demo account. Devote time to your demo trades daily, and do not upgrade to a live account until you are making profits on the demo account. I repeat. Do not risk your ‘real’ money if you have not started making consistent profits on a demo account.

  • Open a live account

The final learning step is to open a live trading account. You will need a scanned copy of your original national ID card and a bank statement or utility bill.

Start by depositing a small amount into your real account and trade small lots. Better still, follow this link to get free $25.00 that you can use to start trading on your live account.

If you have gone up to this step without despairing, give yourself a pat on the back. To sum up what you’ve learned today, go slow when you are new to online forex trading. Take your time before you open a live account. Find a mentor to hold your hand. Practice on a demo account until you are sure of yourself, and once you open a live account, trade small.

Till next time. I am still yours trully. Patrick Mahinge.

Online forex trading is a lucrative venture with a very low entry barrier. You only need to learn how to trade forex and you are on your way to making some good retirement money.

If you have heard about online FX trade (aka online currency exchange) and decided it is a venture you would like to pursue, you will need to spend some time (and money?) learning how the forex market operates. Before we go any further, let me say that I am a big advocate for learning online forex trading. With the high rate of unemployment in Kenya and salaries that never grow proportionally to your needs, you’ve every reason to want to invest in online currency trading.

The second thing that I’d like to mention is that nothing beats experience. If you want to learn how to trade forex, your best bet will be to start trading. When you are a beginner, you should open a demo account on Easy Forex. The demo account allows you to practice trading with virtual currency. You do not put any of your money at risk. And conversely, you do not take any profits to the bank. But you will gain a lot of experience from trading forex on the Easy Forex demo account.

The downside of trading on a demo account, however, is that you do not experience how it feels to have your hard earned money on the line. I’d therefore recommend that you open a micro-account, deposit a few hundred shillings in it and use it to learn how to trade. It is by far the best way to learn how to trade forex.

In today’s article, I am going to show you a few ways that you can use to study forex and become a pro in it in less than 4 weeks.

Free Online Courses and Forex Tutorials

The internet is a mine of information. Seriously. There is so much information online and all you need is to know how to use Google. Some good places to find free online forex courses and tutorials include:

  • Individual forex broker’s websites
  • BabyPips.com
  • Investopedia.com

Although there is all the information you need about FX trading in websites and blogs, you need to be wary of websites where you are getting your information. Some may contain outdated information while a majority publish information just for the sake of publishing.

Another downside with using online forex tutorials is that you may suffer from information overload. Every forex trader develops his or her own forex trading system. The information you get online is therefore very subjective.

To adequately utilize the information you get in online forex trade tutorials, you will need to sieve much of the information and only retain the one that you are going to use.

YouTube Videos and Tutorials

Don’t underestimate the power of YouTube when it comes to learning online forex. There are many informative video tutorials on YouTube. If you are keen, you will learn how to trade online forex in no time and be on your way to investing in this lucrative trade.

The best way to use YouTube Video tutorials is when you already have a demo account. This will allow you to practice what you learn.

If you have not registered for a demo account, click here to register and download the MT4 trading software from Easy Forex.

However, just like with the many forex training courses and tutorials that you will find on free blogs and websites, some YouTube videos can be misleading. Internet marketers will post crappy videos as they seek to make money from advertisements placed on their YouTube channels. You will therefore need to approach the training videos selectively.

Hiring a Forex Trainer or Mentor

If you have a few thousand shillings to spare, hiring a forex trainer or mentor is one of the best ways to learn the ins and outs of the forex market. A lot of forex traders who offer trading classes in Kenya will charge you an average of 50,000/= for a few days of training.

The best thing with hiring a trainer is that they give you concise and concrete information that you can put to use immediately and recoup your investment.