Powerful laws to win with the strategy Long Term.

Powerful laws to win with the strategy: Long Term. Forex strategy

Rediscovering the basics

If you're a trader with significant experience, you've probably experienced what I am to tell you, if you're a beginner, sometime in your life of trader you will happen: the desire to improve every day our performance as a trader and our consistent profits in the Forex market, leads us to investigate and test new techniques, special strategies, combinations of graphics and more complicated indicators; leading in some cases to get lost within a sea of technicalities such that, at the end, we don't even remember how it managed to win, sometimes even more, with 2 or 3 basic concepts that we driving when we started.

Many of us have gone through this situation more than once. Some have decided that the trading was not for them, others, perhaps like you, that they were losing the North and the passion they had when they started and therefore decided to return to the basics, where everything was easier and maybe even win more.

Today I would like to remind you of those basic, I want to remind you the easiest way to make money in trading, the method that every beginner should be applied when he began his career in the Forex market: our "old friend", the technique Long Term.

Who has just begun?

All have been there, none of us (race traders) "was born learned", as my grandmother used to say. In the same way, all face the fears and doubts of Beginner:

"I don't understand anything about finances! I'm not made for this!"

"It is a risky activity! “There are that have nerves of steel to make trading!"

"I'd like, but I don't have the time to devote to trading!"

"I know that it is something that I am passionate about; that my family and friends tell me I cannot devote to Forex, because it would lose everything as in a lottery!"

Am I wrong or before it went any of these ideas through your mind. If you're a beginner may still have it. Don't worry, if you're willing to learn enough to dedicate yourself professionally to the trading, have good money (Money Management) management and control your emotions to an extent, can calmly make trading and earn more money than you will lose.

Let me tell you that this is the key; there is no crystal ball that will tell you exactly what to do to win always. On the other hand, often lose money in this famous market Forex, because no technology is foolproof. The secret is to make more money than you lose.

The good news is that today you will know the basic rules that you must follow to use the technique Long Term with a 70% success or long term. 

First law: Dedicated only 5 minutes a day

If you're a beginner, it is likely to have a primary occupation which you occupied all day. Possibly you have decided to invest some of your savings in the trading, seeing the "depressing" bank interest rates.

This technique requires only a few minutes a day to review the daily graphs (1-d) or four hours (4 H), finally, graphics of large periods of time. You don't have to spend all day behind the movement of an action or a bonus. You simply take a look when you return from work, it can be, and make your decisions based on the movement of the day.

If you think about it, this technique is ideal for a beginner, you commit not few mistakes all day in front of a computer, you're thinking if you should buy or sell.

Second law: It defines the trend

First thing you should do a trader who chooses to apply Long Term technique in the Forex market is to observe the movement of prices on the market, to set the trend in which price moves with the greatest possible safety.

How do I do it? If I suspect that it is a bullish trend, stroke a line that touches the minimum that has touched the price during the rise of the price. This line should point upwards; in this case we are in the presence of an uptrend.

Conversely, a tendency to lower, or bass, I suspect that the price falls and the line would be draw playing the maximum prices that has "drawn" the price while I was down. If the line points straight down, we have found a downward trend.

One way of helping us understand the direction of a trend, is with the use of a moving average of 21 periods (21 EMA). If the sails are above the moving average is an uptrend. If they are below, it is then a downtrend.

This graph has been mapped an ascending line touching the minimum requirements (points indicated) that price played in its upward movement. This line represents the tendency, in this case, bullish.

Third law: He expects a setback

"Everything that comes up, need to get off". "Any trend must breathe." We could define as well recoil, let me explain better: If you see the graphics of any financial instrument, you will notice that the price never moves in a straight line, on the other hand, draws a sort of waves, rise and lower setting minimum and maximum.

When price goes up, for example, in a bullish trend, "take breaks" to "breathe". I.e., at certain points, the price reverses slight and momentarily, in this case down, then return to your address, the main upward trend. This is a kick.

Here the problem is recognizing it is a kick or a reversal of trend, thing that could "lie us strategy".

In this case, it more advisable is requesting the help of the good Fibonacci. This indicator is optimum to establish the progression of a trend, indicating us if the recoil of the price in a trend bullish or bearish exceeds certain percentages; in that case, we could be in the presence of an investment.

The graph, which represents an upward trend, has identified the moments in which the price has moved in reverse to the main trend direction. These corrections of the price are called kicks, and are normal in the movement of the price of any instrument financial.

Fourth law: It identifies the signal and enters

Everything is ready. If you've identified the trend and saw that the reverse occurred, now only you can expect the start signal to enter with your position.

Now that price was a setback, the trend should return to your main course. You should take advantage of this new movement of the price. But when?, how to identify if the price will continue its trend?

Here come into play various theories, I'll only give you one of the safest; one that it has brought us Forex totaled the most positions with profit in the Forex market. You cannot always cause this signal, but for us, when this candle is draws it is as when in the 100-meter starting firing is heard.

I'm talking about famous call (drawn in a candlestick chart) sailing: PIN BAR or Hammer (hammer, because of its shape).

In an uptrend, the PIN BAR will be drawn with the body (the head) to top and the nose (the longest line) down. It will obviously be contrary in a downtrend.

This is your start signal to place your orders on the Forex market.

In a candlestick chart, are "drawn" different types of candles, depending on the price of entry and closing, as well as the highest and the lowest. In this case a candle Pin Bar of a bullish trend is highlighted. He is characterized by a formation similar to a hammer, this is also known as "hammer". In the Pin Bar, the "body" is located in one end of sailing, having this "body" as no more than 1/3 the size of the entire sail. It usually indicates the end of the "kick" and the continuation of the primary trend.

Fifth law: It protects your orders

A mistake many beginners make is to believe that everything is already done. Nothing further from the truth. If we do not place backorders position output could easily lose a very good entry or even turn it into a huge loss. Therefore, that is of vital importance to protect entries with a STOP LOSS and TAKE PROFIT.

If I open a LONG position, i.e., buy; immediately after purchasing I place STOP LOSS below the BAR PIN which it was drawn.

Then I fixed my TAKE PROFIT at the same relative distance, above my entry. For example, if my STOP LOSS 100 pips put it below the price of entry, TAKE PROFIT will place it 100 pips above the entry price.

However, it is possible to place not only TAKE PROFIT, but it could be two or more, thus increasing our risk/benefit (Risk Reward) to 1:2 or 1:3.

This benefit will further increase when the price has reached the first TAKE PROFIT, because at that time I can level my STOP LOSS up to the price of entry (ENTRY). Now my operation will be zero risk.

This graph indicates how ideally should be provided after entry into a position pending orders, then that has been created a Pin Bar. The blue dotted line indicates the entrance, the Red the position of Stop Loss and Take Profit area green.

Conclusions

Possibly this is not one so picturesque strategy for traders who love the adrenaline in the Forex market, but it is, without a doubt, a winning strategy, which has shown an average of 70% of earnings.

Another advantage that is worth considering is the fact of working with graphics daily or 4 hours, finally, graphics with Time Frame so long, makes the market, news, rumors not influencing prices, producing wrong signals.

If you are a novice trader or if you want to go back to basics and enjoy peace of mind while you make trading and earn money, I advise you to try this technique. You can devote part of your capital to this strategy, if you want to try other routes, but not discard, and above all, remember to respect the "powerful laws of the Long Term".

REFERENCE: http://profesionforex.com/mercado-forex-5-santas-leyes-long-term/

Japanese candles. Trend change signals

Japanese candles: Introduction and trend change signals

HISTORY OF JAPANESE CANDLESTICKS

Japanese candles (or candlesticks) is a technique of graphs and analysis used in the economy. It arises in the Japan in the 18th century in the rice market with a few principles very similar to technical analysis used in the West whose bases were exposed in the Dow theory.

The development of Japanese candles and all your theory are attributed mostly to Homma, wholesaler of natural rice of Sakata, Japan. While the beginnings of Homma were very basic, if compared with the techniques of candlesticks today, were the bases so they are as we know them. Candlestick analysis is one of the oldest and most used in the world technical analysis categories.

WHAT ARE THE JAPANESE CANDLESTICKS?

Analysis technical Japanese, is based on the study of patterns or models of candles, is useful for anyone wishing to have another tool at your disposal. Candlestick charts are currently one of the most commonly used in technical analysis since in many cases in each of your candles we can interpret the psychology of the market and have more information of the price of the asset for example: opening price, price locking, minimum and maximum price, etc.

Candlestick analysis is responsible for the effect, not the cause of the psychology of the markets. Why is considered the analysis of Japanese candlesticks within the categories of technical analysis.

Markets are influenced by the emotions of investors involved in it; therefore we must use some methods of technical analysis to look at the behavior of these psychological factors. The candlesticks are the interaction of the actors involved in a market.

The home of candlestick analysis is the beginning of the analysis of this type. The different types of candles have different meanings, and the Japanese have defined different primary candles based on the opening prices, maximum, minimum and close relationship. The understanding of these basic candles is the beginning of the analysis of this type of graphic

THE UTILITY HAVE THE CANDLESTICKS?

If we compare the analysis of Japanese candlesticks with a graph of bars, etc., we can see that a particular trading day is represented in any type of chart, but its use and interpretation are easier on the candlestick chart. To have more practice and familiarize yourself, graphics of Japanese candlesticks (candlestick) will become an essential part of your analysis, and most will never traditional bar charts.

Information is similar to the one of other graphics, but they are visually easier to interpret.

SIGNS OF CHANGE FROM UPTREND 

There are different patterns, or signs of Japanese candlesticks that can give us an indication of a possible change of trend from bearish to bullish. It should take into account that these are not 100% safe or infallible.

The following is a classification of Japanese candlesticks which suggest a change from uptrend with a high degree of probability.

• Morning star or Morningstar (Morning Star).

Their reliability depends among other things determine a trend clearly bearish, mature and important support area. If after bearish factors occur as those mentioned above and also appear the formation "Morningstar" or as "morning star", we could have a trend change signal. His name is very representative of this bullish pattern because it symbolizes the awakening of the rises in prices.

It is figure consists of 3 candles: the first is a big red candle. It occurs in a defined downward trend. The second candle opens with a gap and has small real body whose opening and closing below the previous to being able to be a green or red candle candlestick. The third candle is large and opens with gap upward and closes within the levels of the first candlestick's body.

• Morning star doji or Lucero of the Doji Alba (Morning Doji Star).

Tiene las mismas características de la figura de “estrella de la mañana”, la diferencia está básicamente en que en este caso, si la segunda vela es un doji, toma el nombre de “estrella de la mañana doji” y tiene implicaciones alcistas más fuertes que la anterior pauta, siendo paralela su interpretación. Si el precio del activo cae por debajo de los mínimos de esta figura de tres velas, se descartan sus efectos al alza.

• Kick or bullish Coz (Kicking).

The figure of kick or bullish Coz is composed of two large candles without shadows (Marubozus). This is one of the formations of candles that does not require a prior guideline in any sense. It requires no bullish or bearish trend but is his strength alone.

The first candle is a red candle and the second is pure reflection of a "bullish kick" because there is a gap, and while shadow, draw a green candle with a clasp, is which is above the opening and Maxima. It is a very bullish pattern, since after a fall and minimum closure occurs something that launches it upward. If you want greater reliability you can expect a third candle and verify that the close is higher than the previous day. The gap is essential in this guideline.

• Baby abandoned bullish (abandoned baby).

This is a figure consists of 3 candles that can be bullish or bearish. Bullish abandoned baby is a figure of three sails similar to the Morningstar doji, with the particularity that the central doji is "abandoned" and its bull-market effects are stronger. The abandoned term refers to the doji is isolated from the other two sails, i.e. occurs surrounded by gaps. The first candle is black and occurs after a downtrend. The second candle is a doji that opens with gap and closes below the minimum of the previous candlestick as well as its maximum which is also less than the minimum of the first candle. The third candle is green is always above the doji. This third candle opens with gap and closes within the body of the Red candle. The doji is a level that suggests a support and its effects would be eliminated if the quote does rupture of such support.

• Small hidden swallow (swallow baby skin).

In this this figure all guideline candles are red, it is a pattern of changing trends of bearish to bullish.

This training will occur in a bearish trend which produces two red candles without shadow, i.e. two sails down with closures in minimum. The third candle opens with bearish gap but closes with inverted hammer that can mean an attitude. The fourth candle opens with an upward gap above the maximum of the previous candlestick. Opens more up but loses strength and ends up closing in what could be a support. The asset continuously visits those levels of support, but without violating them. To confirm such guideline is need that the active closing above the candle above and with a rebound strong.

• Three white soldiers (Three White Soldiers).

It is a formation of trend from bearish to bullish. This figure is made up of three sails, which reproduces the graphic. There should be a trend defined downward before making this figure. It is a very strong change formation and is contrary to 3 "black crows" training.

Much better if the bodies of candles are great since more bullish is considered. The reliability of the figure increases if the shadows of the second and third candle are very small or non-existent, i.e., that the closing occurs at the highs to close. Support area is marked by the minimum of first candle.

• Three upward Interior candles (three inside up).

It is a figure of changing trends of bearish to bullish composed of three bulls Interior candles. It is opposite figure of three sails Interior bearish. There is a downward trend and shows a big red candle and followed a smaller candle in which is contained the body and shadows within the previous candlestick.

In this guideline, he is confirmed by a third white candle that necessarily would have to close above the close of the second but he acquires stronger predictive if the close is above the previous peak. The color of the second Candle may have variants in its color and its size, being most important to change the trend that is a doji. If in addition, the third candle is presented with a gap to the upside and closes above the maximum of the previous candles acquires much more importance in the change of trend.

• Three Bull outdoor candles (Three Outside Up).

It is a pattern of trend reversal, which occurs after a clearly downward trend. Also called "envelope bullish confirmation". It is formed by three Bull outdoor candles. The first candlestick is red and is then given a bullish surround candle in the following which is finally confirmed with the third candle that closes above the previous closing.

It is confident of trend reversal if this pattern if the movement is accompanied by loud or a bullish gap. It can be either at the end of a downtrend as a correction of an uptrend.

How to draw support and resistance

How to draw support and resistance

Both the resistance and the brackets are two of the most basic concepts in the technical analysis of financial markets. And when we talk about basic concepts we mean that they are very simple to understand and they are one of the pillars on which are founded the technical analysis. First that all are going to define its support and that it is a resistance.

Resistance is defined as a level or price above the current price at which sales force stop and finally exceed the strength of purchase with which puts an end to the bullish momentum. This causes that the price starts to fall and even reverse the upward trend. In a graph like the one shown in the following figure as previous highs reached by the price before falling resistances can be identified. In an uptrend, as ever higher maximum resistances can be displayed.

The concept of support on the other hand is the opposite of resistance. Defines support as a level or price below the current price, in which the purchase force even and finally exceed the sales force, whereupon the bearish momentum looks stopped what will cause that the price goes up and even reverse the downward trend. Usually in a graph stands reached minimum can be identified until the price begins to rise. In a downtrend, supports increasingly lower minimum can be identified.

The following image shows several real-world examples of resistance and support.

RELATIVE STRENGTH OF THE SUPPORT AND RESISTANCE

Some experts and analysts use a classification of supports and resistances and divided them into strong, middle and weak. However there is some controversy regarding the validity of this classification since it tends to be rather subjective. However, there are some criteria that most analysts agree to determine the strength of a resistance or support level. These criteria are as follows:

A resistance or support is considered strong depending on how many times has been tested by the price without having been crossed permanently. I.e. more times has been touched a level of resistance or support by price keeping as such, can be considered that that level is stronger than one that has resisted less time to have been tested for the price.

A resistance or support level is strengthened as quotes go away from it (it) after having it tested. For example, if the price moves by 10% with respect to a resistance or support, this level is deemed stronger than other which price turned away only about 5%.

Between greater times that has existed a resistance or support, stronger. For example, a resistance that has been in force for 2 years is considered stronger than a resistance that has only a few days of existence.

THE TREND AND THE RELATIONSHIP WITH THOSE SUPPORTS AND RESISTANCES

When analyzing the trends in price charts, you can see that they are formed by a series of valleys and ridges that are produced by the movements of the prices. It is so in an uptrend there is a series of valleys and ridges successive increasingly higher, i.e., a succession of resistances and supports increasingly older.

When the market is in an uptrend, the levels of resistance represent breaks or rest areas in the path upward, which stop the action of the price temporarily, unable to do it permanently. An upward trend is to continue, is required the price exceeds the resistance level earlier, in such a way that reaches a new peak. Each time that the price tests a previous peak, the upward trend is in a critical period during which it could happen that the price does not exceed the previous resistance, which would indicate a sign of weakness in the prevailing trend. Likewise, it is necessary that the minimum are successively larger than the previous minimum. Where the price of the asset falls and reaches the front bracket, it is at a sign of weakness in the trend. 

Finally, if the price falls below the level of the front bracket, it is likely you are before a possible change of uptrend bassist.

Price Action Strategy. Forex

FOREX TRADING STRATEGY. Price Action Strategy

Forex strategy revolves around the principles of the analysis of the price action. Below explains the method of Forex in detail so that you can understand it and operate it successfully.

Keep it Simple

The key principle of the price action strategy is to keep things simple. We are against complicating the trading more than necessary. Much simpler is the method, the more effective it is.

Some strategies are full of indicators absolute chaos. This is not the way for trading.

The Price Action Strategy aims to keep the graphics as clean as possible. In fact, the only thing that put candle charts is a few lines of support/resistance. The method is based on the reading and the understanding of prices by the reading of candles and the use of support and resistance lines. 

This means that the method is very simple to use and relatively stress-free. Here's a picture showing my chart of the EUR/USD

1 hour.

This is one of the benefits of using the analysis of the action of the price.

Indicators needed for this Trading strategy

So there is this Forex strategy trading indicators to use. Yes, you heard right, there are indicators.

If you want to take action on the basis of what is happening with his pair of currencies at the moment, then, only you can be based on data at current prices so it should use the price action analysis.

Currency pairs Forex in that this strategy works

The Forex Trading strategy will work on any currency pair that is free floating and be negotiated regularly. This is because the method relies on the behavior of the price. This means that you can use this trading strategy to successfully negotiate any currency pair on its platform of operations.

Having said that, I prefer to concentrate on only a few currency pairs because it is very annoying to treat of keep a record of many pairs at the same time. I think that it should be a teacher who does so. So I concentrate mostly 2 currency pairs. I mostly business the pair EUR/USD and GBP/USD pair. I usually operate. 

These currency pairs, since they are the most predictable and its movement is smoother. You don't find jumps randomly unless there has been a news very unexpected, which is quite rare. Also prefer to operate in the session of London, which is when these pairs are most active.

This strategy works best on longer periods.

Once again, since this method is based on the action of the price can be negotiated in any time frame, I like 1 hour upwards. I mainly focus on plots of 1 hr., 4 HR and daily. These are always the more profitable, because the patterns are easier to detect and lead to more consistent earnings. 

Analysis of the price action types 

First of all, I use two forms of analysis of the action of the price:

Support/resistance lines.

Analysis of candles.

How to enter a transaction through my strategy Forex Trading?

Due to the recent economic uncertainty of the countries that have been in danger of losing its ratings of credit, etc., the money is not negotiating as you normally would, so now I only do trading of reversions. Miro reversion settings forts that are formed on the side top/bottom of my areas of support/resistance. Once formed a pattern that indicates that a change has been established and I find price activation, entered in the trade. I do several trades each week and so far I've had a rate of 85% gain.

The objectives and the stops of the strategy

Goals: My goal is approximately 30-50 pips per transaction.

Stop the: put my stop between 15-30 pips away from the entrance.

These objectives differ in different market conditions, so please check the minimum/maximum in the he joined the operation to have more up-to-date information.

How to adjust the strategy around the economic news

I use the Forex Factory calendar to keep track of economic data that will come out and that affect the pairs that I operate. If there is any news of high impact (red/orange), that it will be for the dollar American, the euro or the British pound, then remain out of the market in that currency. I will not go in a 30 minutes before the news or after the news operation.

As you can see the Forex strategy is simple and allows you to make pips in any market condition, with the majority of Forex currency pairs.

Areas of support and resistance

One of the most common mistakes and it bothers most new operators is that they completely ignore areas of support and resistance. Sufficient importance is not to support and resistance areas in web sites and books of Forex. Most of the people prefer to focus on support and resistance lazy. These are the lines that are they calculated using formulas such as points pivot or Fibonacci. While the areas of support and resistance lazy have some use, place their own areas of support and resistance, is a much better and more accurate.

Reference: https://g8fx.files.wordpress.com/2012/05/nick-2012-es.pdf

Strategy to capture pips on the opening of Forex

Strategy to capture pips on the opening of the markets of Forex

Probably the most noticed that the price moves a lot of pips at the opening of the main markets in the Forex (European, American session, etc.). Therefore, any trader take these movements and obtain some pips would like. The only problem is that during the opening of the markets, it is difficult to know in that direction will move the price, since the behavior in the first few minutes is quite chaotic.

For that reason, we present the following trading strategy that can help improve your chances of winning some pips whenever it opens an important market. An important aspect of this system is that it does not use technical indicators, is based solely on the price action.

As we will see below the rules are complex, but require attention and practice.

This strategy is similar to the following which was developed to operate for important news on the market:

Market news based trading system

System configuration

Ø  1 chart of candles with a time frame of 5 minutes or 1 minute.

Ø  Recommended currency pairs: EUR/USD, GBP/USD and GBP/JPY. The system was originally tested with these currency pairs, but can try to apply to another.

Ø  Important market openings: United States, Europe, United Kingdom and Japan.

Ø  Technical indicators: none.

System rules

At the beginning it is not necessary that the trader knows the direction of the market movement. To enter, we're going to enforce orders buy stop and sell stop running only if the price reaches them.

-First place a buy stop order around 5 pips above the maximum and a sell stop order around 5 pips below the minimum of the first candles that form after the opening of the market.

-The amount of candles which we will take into account depends on the time frame in which we are operating. In a 5-minute time frame we use 1-2 candles; in a 1 minute time frame we use 2-5 candles.

-For the stop sign of losses we have 2 possibilities:

Place a stop-loss at a distance of 20 pips of the point where the initial purchase order would be executed.

Place a stop-loss 2-3 pips above maximum (sales order), or under the minimum (purchase order) of the initial candles used to determine the price to open position.

In this case we use the stop-loss that is closest to the input level.

-For the profit taking is recommended to move stop loss 5 pips below (operation of purchase) or above (transaction) current price once the market has moved at least 6 pips in favor of the operation. But we can move the stop loss so close, we can use the shortest possible distance and began to follow the price with the stop loss once the price has moved this distance more 1 pip. But we can move the stop loss at all then you can use a fixed Take Profit of 5-10 pips.

-If there is one or more pending orders without running once after 5 minutes from the close of the initial candles (used to place orders buy stop and sell stop) formed after the opening of the market, it should cancel these orders and wait for the next opportunity.

Considerations

-This strategy probably works in some cases for the news, but if we want it to apply during these events have to be careful if we operate with a broker that it significantly increases the spreads. This significantly increases the chances of losses.

-System I have not tried so far it is not my favorite style of negotiation, why is recommended to evaluate it before with a demo account to see your current performance.

-The system was originally developed to operate in the pairs listed at the beginning. If you want to apply in another pair of currency or type of market trader should be a preliminary investigation before risking your money.

Reference: http://www.tecnicasdetrading.com/2017/02/estrategia-capturar-pips-apertura-mercados-forex.html

Psychology in Forex

Psychology in Forex

There are many features and abilities that require traders in order to be successful in the financial markets. The ability to understand the fundamentals that move the markets, determine the direction of the current trend, read price charts and detect patterns that offer opportunities to enter the market, are just a few of the traits you need all trader. However, none of these is as important as the ability to control emotions and maintain discipline.

In the trading psychology

The psychological aspect in trading is tremendously important and the reason is quite simple: A trader enters and leaves the market constantly and you need to make quick decisions in a short time. To achieve this, you need to have a certain presence of mind. In addition, must have discipline, in such a way to follow to the letter your trading plan which in the long run, is the difference between being profitable or finish without a penny in the account. Emotions have simply no place in the trading, and operator that manages to get rid of them to operate in the market has the assured way.

The understanding of the fear

When a trader sees that its operations are in red numbers and bad news will be known shortly that may affect the market negatively for it, it is not uncommon to begin to feel fear and to be dominated by this as negative emotion. When this happens, the trader can react and be tempted to liquidate all their positions or refrain from entering the market and take more risks. If you do this, you can perhaps avoid certain losses but also Miss good opportunities and profits that these entail.

Operators must understand the fear by what is a natural reaction to what we perceive as a threat (in this case a threat to their capital and the profit). Quantify the fear can help. Or perhaps better to combat the fear by analyzing what is not causing fear and why we are fearful, i.e. where and why.

Likewise, if a trader before entering the market, which is causing him to fear and anxiety and prevents to take good decisions, you can combat those feelings better and learn to avoid them when you are operating in the market. Also can isolate and identify those negative feelings during the sessions of the market in such way that can focus on what the market is doing and not on what you're feeling. Of course that this is not simple and need practical, but is necessary for the peace of mind of the trader and is clear for their investment capital. 

Greed: our worst enemy 

There is an old adage on Wall Street: the pigs end up at the slaughterhouse. Greed drives many traders to maintain their winning positions for too long trying to get the most juice possible operations. This behavior can be very destructive to our account since the trader is exposed to the risk of losing a large percentage of the profit e even a winning position stops becoming a loser just for being too greedy.

Greed is not easy to overcome. This is due to that within us there is an instinct that makes us try to always be better and a little more. The trader must learn to recognize this instinct when it occurs and develop trading plans based reasonable criteria and not on the emotion that you feel when you win or lose a certain amount. We must remember that trading is one business like any other and we handle it that way.

The importance of having a trading plan 

To have their minds where they should be before being dominated by destructive emotions, the investor must devote the necessary time to create trading rules before entering the market. For this purpose operators can set limits that can serve as guidelines based on its relationship risk/reward that normally used in their operations. By means of these limits, the trader can set when closing a winning or losing position regardless of emotions.

Of course that set price limits for closing a position cannot be the only rule. For example, a trader can set shortly before important economic announcements that will close all their positions to avoid the volatility that the market under those conditions.

Another limit that can impose a trader refers to the amount that can win or lose in one day and the maximum number of operations that will be per session. In other words, if you win or lose a specific amount, close the platform and terminates the session for that day.

Conclusions

While it is very important to be able to read a price chart and use the best platform for the execution of the operations, the key factor for success in the financial markets is the psychological component which must never be underestimated. Also requires a proper trading plan and sufficient discipline to follow it to the letter.