Trading Tools

Updated by Jonbert Davidsen ∴ Saturday, April 15, 2017

Some people overcomplicate trading. I base my statement on the difference between what I read, and what I do myself when I trade Forex. 

Gifted Musicians 

When gifted musicians play, it’s easy. They practice for years. It's hard learning to play, but once they manage it, it’s easy. If I ask them how it can be so easy them, they answer "I practiced, practiced and practiced." The same is true for tradingWhen experienced traders are in the markets, it’s easy to stay profitable. They practiced their technical and fundament skills for years. At some point it just became easy. 

Trading tools
Here are some of the tools retail traders use when planning their trades.

Traders are Generous 

Unlike many other business areas, good traders share what they do.Still, replicating them is difficult. Every trader has a subjective part complicating the process of just copy their methods and techniques and achieving the same results. 

A Better Characteristic 

Instead of saying trading as such is difficult and trading is complicated, I find it more accurate to say, being a newcomer in trading is complicated. And, to get from being new to being consistently profitable difficult. Once a trader becomes consistently profitable, he finds trading just as easy as the musician, who masters his instrument.

National Holidays and Market Hours

In trading, it's an advantage being a self-starter. I'm observing, analyzing and interpreting the markets all by myself. Rather than taking any trading statement for granted, I want to understand trading myself and find my own way through the trading jungle. It would be more straightforward just adopting views from trading teachers, but I prefer learning by myself with first-hand market experience. I'm passionate about music. I love to play guitar and piano. I see similarities between music and trading. The Forex market is like a jukebox. The more the trader listens to the jukebox, the better he becomes at predicting "what's next."With this link you always see when the Forex markets music plays.I also keep an eye on national holidays.

General Market Conditions

Like musicians, traders decide several aspects of a potential trade before they're opening the Forex charts on the trading platform and place a limit order. Guitarplayers tune their guitar before they play. I tune my expectations with the Oanda's currency strength heat map before I fire up my trading platform. The heat map gives me a clue where to look for trade setups. The Forex heat map from myfxbook presents some of the same information. I'm a retail forex trader, a small fish among sharks and big whales. I have one chance staying in the fishbowl, without being eaten: Sit on the back of the sharks and large whales. Curreny Heat Maps give me a clue where I find the next ride.

Forex Fundamentals

I was lucky to have a great social science teacher when I took The Higher Preparatory Examination (hf) in Denmark. She had a great way teaching politics and related it to international economics. I loved the lessons about: • International trade• Inflation• Gross Domestic Product (GDP)The lessons went like this: The teacher handed out a text about some problem. We read the text. Discussed the topics and used the economic theory we knew. I used to be in a group with three classmates.

Four Classmates

All four became teachers. Two in Greenland. Two in Denmark. We learned much from the discussion because: • We were passionate about learning,and. . .• We felt we were good at what we did. Sometimes we were wrong, but the teacher respected and encouraged us to develop our skills. Reading and having group discussions is a powerful learning tool when done with friends.

Study Fundamentals Online

Today, anyone can read Gross Domestic Product (GDP), monetary policy, international trade and inflation on Wikipedia. In trading, it helps knowing what these terms mean, and the theory behind them. I'm looking at the GDP, employment trends, interest rates. TradingEconomics is a great place getting these numbers.  I practice relating the fundamentals to what I see on the daily Forex charts. It's exciting, and I get more proficient with time. As I relate price movements to underlying economic trends, I see the themes, driving the markets. The big Forex fundamentals movers are governments. They have the power to change country policies. Also, central banks because they have the power to change interest rates. I keep an eye on the calendar from DailyFX showing when 10 Central Banks committees meet. Also, I monitor the schedule from Central Bank News, because it includes more meetings than the first link. By looking at the historical numbers and combine it with different forecasts, I train myself to read the fundamentals in a bigger perspective.

Economic Calendars 

Economic calendars give me information about: • When staying out of the markets• Fundamental economic trends Sometimes I use the Calendar from Forex Factory, since I like to read some of the articles posted with the news there.

Positions Calculating and Money Management

With the position calculator, I ensure I trade aligned with my money management rules. Before I enter a trade The rules define my max risk per trade and what I'm willing to risk of the total portfolio. When I'm trading When I sell or buy a currency, I do it with more than one position. The money management rules tell me when to take profit and how to manage the stop loss on each of the positions, for example when to move it to break-even. Alarms Once one of my limit orders gets activated, I have taken all the important decisions. The rest is just managing the trade.Limit orders lower the risk of emotional trading and offer me better entries with lesser screen-time, than market orders.When an order is executed, I get an email from my broker. Then I know it's time to set alarms in TradingView. They monitor when to move my stop loss to break-even, or when to activate a trailing stop loss. Most trading platforms offer such a service also, but I prefer using providers like tradingView for these types of alarms.

Central Banks

Sometimes I visit these central banks online. It's a way, using what I've learned about Forex fundamentals. The central banks have repports describing the areas where they operate. In read some of these, not so much to get ideas, more to get my attentions aimed at trends and problems in the different areas. Federal Reserve System Bank of Japan European Central Bank Bank of England Reserve Bank of New Zealand Swiss National Bank Bank of Canada Reserve Bank of Australia Ideas for further reading:See: Tools for Lifestyle Freedom See: The Retail Forex Trader See: About Jonbert DavidsenPlease remember to share this post with your friends on social media sites!

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