On-site training venue is suitable for Hong Kong, a compact city, where travelling is convenient and fast . Until the Institute is set up, we will be using mini bootcamps (for on-site training) and online material and activities to get validation for our training approach and teaching methods.
by P J Lal, CEO,
As a business journalist and financial trading educator, I was trained to hunt for information.
I have spent more than 30 years scanning physical libraries as well as online search engines to locate actionable information for my own trading practice.
Most helpful has been the 12000+ hours spent on watching the charts.
But now new Artificial Intelligence-based digital tools are available. A committed trader can achieve excellence in a couple of months without really putting in time on reading the charts or watching the trading screen.
I would like you to veer off the kind of arduous journey that I went through in acquiring the trading skills.
I am sharing here all the material that I found was most useful and helpful in making decisions and acting upon them. It is all based on my personal experience.
48 Hours is what it takes to be a demo trader
This course will put you on track to trade fx within 48 hours as long as you don't insist on learning all the concepts.
When I look back at the initial five years that I put in to become a profitable trader, I realise how dynamically the digital age is helping cut the learning curve. I won't be surprised if somebody comes out with a 8-minute solution in near future.
For the time being, please treat this power course as an effective learning tool to trade fx market using Mobile phones.
Back to school
Just focus on three areas for study and practice:
1. How currencies are traded, prices are quoted and transactions are executed.
2. Just do it: Practice, Practice and Practice
3. Start so small that it doesn't affect your lifestyle or encroach upon your living expenses. Missing a few vacations or a few pleasures and investing the amount saved in trading forex is worth the try. Scale down your expectations and you will start picking up the trading skills fast.
The fx market is like any other market where profit or loss is made by buying or selling things.
If you are clear about how in any market deals are made by cutting prices when quantity exceeds demand and jacking up the prices when goods become scarce, it will not take more than 20 minutes, for you to understand what moves the currency market.
As is the case with any open or auction market, supply and demand ultimately should normally determine the price levels. But don't take it for granted that it will always happen that way.
Sometimes even the market participants' perception or belief triggers price volatility. It is termed as market sentiment. Typical example of this would be the much hyped cryptocurrency market. The cryptocurrency which is not backed by any asset seems to have no rational basis for attracting buyers and sellers. Yet, a market has been created by a group of traders who think they will find buyers who will be willing to buy the instruments from them and in turn they will be able to sell at a higher price to a new set of buyers.
Practice maketh a man perfect is a very old proverb and holds true.
I will show how you can apply for a demo account, register it, get login and password, download the mobile paper trading platform and execute a few trades.
You will need to practice on the demo platform so that you don't make execution mistakes. Like instead of buying you end up selling.
You have to figure out how to calculate profit or loss well. A few trades self-executed will make you understand the process easily rather than reading about it. Be liberal in practising on the paper trading account. After all, real money is not at stake.
Having understood the rationale behind the market movements and using a mobile online platform to execute the trades, it's time to source ideas for trading as well as drawing a risk plan.
Calculating risk would require a basic knowledge of trade-related math concepts that even a mathematically challenged person can understand. Your risk exposure should match with your capacity to tolerate risk. Otherwise, it will lead to serious psychological issues.
A trading risk plan should not take more than 30 minutes to work out.
Initially, generating trade ideas would require understanding of the fundamentals that influence the fx market sentiment, and some technicals which capture past trends and price pattern. The price action theory also somewhat veers around past actions .
Technicals are derived from the study of charts and indicators. It is quite time-consuming and requires a steep learning curve.
If you want to train yourself as a decisive fx trader, I would advise you to skip Technical Analysis and focus on understanding how fundamental and geo-political events trigger liquidity and volatility and the price action that follows thereafter.
We have sourced quite a few good free digital tools that can come to our help without us really putting in any manual efforts to get same results as any manual work could fetch.
Should I use my own time when powerful online tools can deliver the results in a couple of seconds?
Unless you are addicted to or enjoy playing video games on colorful charts, avoid them if the technical analysis process takes more than 5 minutes to obtain decision-making help.
Understanding price action provides us a window to assess reality while technicals provides with a perception and a false sense of security. Price action study before taking the trade should not take more than 5 minutes.
Paper trading gives you a chance to start with any random strategy only to learn how the platform is used comprehensively. In the process, you may see your entire demo money gone. Let that happen and you will understand how tough is trading on FX market.
Open another account and this time practise a specific trading strategy or try to build one for yourself. This will force you to take a deeper look into how the market really works. Expect your paper money not to vanish fast.
After some time finally try another 2 to 4 strategies and settle down on one which you like and stick to it.
I believe in specialisation and my advice would be to stick to just one strategy and one currency pair that works for you.
I have used just one strategy for years. No point in exploring various strategies and getting confused to such an extent that you become a zombie.
My strategy demands that I should look for price locations where I expect the trading to become intense.
If you read news or just headlines on a daily basis and try to correlate it with the fx price movements, you would be doing fundamental analysis. You will gain an understanding of how the economic and geopolitical events move the financial markets.
Fundamentals refer to release of economic reports and geopolitical events.
Analysing the technicals, price movements and fundamentals should help you develop your own bias for market direction.
Will the market go up or down or stall? You have to take these decisions in a matter of minutes before entering the trades.
No advance preparation is needed on a daily basis. On a weekly basis, keep aside 1 hour to locate probable volatility push points or trigger lines on the monthly and weekly economic events calendar.
If you are not inclined to do even that, there again you have a few digital solutions. But some of them won't be free.
Which currency pair to buy or sell?
Why think too much about it? Let us stick to just one currency pair which is most liquid. I have found it worthwhile making friends with EURUSD pair.
What is good time to trade?
Is it good to trade when the market opens or closes? A cursory look at daily volatility and hot hours statistics will be good enough.
This should give you an idea of what could be the realistic price level that may be touched in a minute, hour, day or a week?
The simple mathematical part involves manually calculating the probable profit or loss.
Risk assessment and money management
How much profit can you expect if the trade goes in your favour?
How long do you have to keep your trade on and take a risk?
What could be the loss if the trade goes in adverse direction?
Are you risk-averse? If yes, no harm. Are you aggressive? Why not?
All this will be considered when preparing the risk management plan.
Ready to go
You should go to the market when you have
- an idea of what to buy or sell and when to enter and exit.
- registered for a paper trading demo account for execution,
- registered for an access to real-time analytics to monitor your performance.
I am endeavouring to ensure that you should start demo trading for practice within 48 hours and live trading in 88 hours.
All along, I will be making sure that you don't get overloaded with information.
Market noise can affect your ability to take right decisions.
Just do it! approach requires you to understand the bare essentials that would help you execute the trades without fear .
By the time you finish the rapid power learning course you will be in a position to understand:
- What drives fx market
- what to trade
- when to buy or sell
- when to exit
- How to execute the trades online using a Smartphone
- How to avoid market noise and control emotions
- How to generate trading ideas on demand using free online mobile apps or online tools.
Outsourcing the job
Having come to this stage, do you feel you don't want to spare even 15 minutes on the trading chores? You feel like outsourcing the job. Either to a professional advisor or a digital wealth manager.
If that is the case, are you prepared to conduct quality checks on the performance of advisors quality ?
Yes, I will show you that way too.
Automated Trading robots
Have you heard about Automated Trading robots? I am sure some of you might have seen a lot of Google ads from trading robot or black box suppliers promising you the moon?
If you "wanna-get-rich-with-robots," it is possible. I would advise you to go for such tools only after having done trading for a year at least and are in a position to understand the processes thoroughly and be in a position to set up your system of conducting quality checks to select the robots to use.
A Black Box or trading robots frees you from a lot of tasks when you know exactly what you are doing. For example, some traders use it only to enter the trades and manage exits manually. You have to find the weak and strong points of your trading and utilise the black box for tasks you feel can best be performed by using an automated process. Most of the successful traders adopt an approach of semi-automated trading.
Take your own time to practise and gain proficiency.
You have to keep in mind that financial trading is largely influenced by the behavioral biases of the participants.
There can’t be a one-size-fits-all solution.
Every person is unique and psychology plays the most important part in one becoming a successful trader.
You have to absorb in-depth learning in bite-sized chunks at your own pace.
I found it easier to acquire knowledge through action first and retained it by further research later.
Leap before you think has worked for me well.
How much information do you really need?
It is incumbent upon you to avoid overloading yourself with information. I have filtered it so that you can focus on what is essential to be a real trader and take decisions.
The real secret of successful financial trading is pretty much buried under lots of unnecessary information. A lot of it intentionally because a host of educators depend on referral fee as well as recurring income from teaching as well as encouraging bigger trading volumes.
Greed traps take various shapes - almost all promising quick riches in shortest possible time and with smaller capital invested.
You are lured with paper capital from $10000 to $1 million deposited in your demo account and you make thousands with an over-leveraged account and think you can duplicate same with real money.
Providing huge leverage is not a favour to a trader but a tool in the hands of a referral agent - also called Introducing Broker - to generate bigger volumes.
Real successful trading is doing exactly the opposite of what your IB advisor wants you to do.
As long as you treat paper trading as a short-term training and practising tool, it's fine.
It could take you a few weeks to years to succeed.
You can be a Formula 1 racing car driver not necessarily by driving cars for years and years. Experience does help but passion and dedication make a big difference.
With a couple of years devoted to practising trading with patience and discipline, a trader is able to pull money out of the market seemingly at will.
You could well be that person if you treat trading as a business which requires passion and commitment.