Can you call yourself a Forex Guru? Let’s check! Take the test and find out how many interesting uncommon facts about Forex do you know
There are plenty of opportunities to make money, you only need to pay attention. Phongphat Wetchakarn is a simple young man from Thailand, a former student and a trader in his part-time. He didn’t have a lot of trading experience, instead, he used his knowledge and common sense to make the most out of $123 bonus.
Here’s a screenshot of his MyFXbook account, you can also see it here.
As it shown on the screenshot, he made a $49453.00 profit using only our $123 bonus and trading only on Wednesday, Thursday, Monday and Tuesday, just a few days after the American presidential elections. Let’s have a closer look at the history of his trading.
Phongphat used Fundamental analysis for most and managed to get such good results trading on the news. It is not a surprise that you can make more money trading on the news, but it takes preparation and some investigation to make a good prediction. Besides, it is important to stay in touch with the news and always search for a good moment to make a profit. If you want to know more about trading news, make sure you read our article here.
If you want to make money trading on the news, the second important thing you need is always to be aware of what’s going on in the market and why is it happening. Make it a habit to check economic calendar and read the news. Always practice and analyze your trading and you will be able to reach similar results.
Here’s a short interview with Phongphat Wetchakarn that we managed to take right after his successful trading.
FBS: Hello! Tell us a little about yourself: how old are you, where did you study, what do you do for a living?
Phongphat: I am 22 years old, and I graduated from Bangkok University. At the moment, my main and only way to earn money is Forex trading.
FBS: How did you become an FBS client?
Phongphat: I started trading with FBS on my friends' advice. A great number of lucrative promotions was the main reason why my friends and I found FBS appealing.
FBS: Did you at once start trading on a real account, or did you try your hand on a demo account first?
Phongphat: For a few years I was trading on a demo account, and only occasionally I allowed myself to trade with real money. Personally, I found trading on a demo account even more difficult than on a real one.
FBS: What trading strategy did you use?
Phongphat: I prefer fundamental analysis for currency trading.
FBS: What advice can you give to beginner traders?
Phongphat: Every time you lose money, ask yourself why it happened. The same is true when you make money - ask yourself: "Why?" You have to gain experience. The market is always unpredictable. I chose fundamental analysis, but when I was trading in profit, I used technical analysis as well.
FBS: Will you recommend FBS to others?
Phongphat: I will definitely recommend FBS to my friends.
FBS: What are your plans for the future? Do you have a goal or a dream?
Phongphat: My goal is to become a major investor.
All the secrets will be revealed, and the masks will be off! It’s time to find out who do you belong to. Find out your trader type by answering several questions!
So, you want to become a Forex trader – be your own boss, trade currencies, make a lot of money. The natural question is “Where to start?”. We prepared a simple answer! Below you will find several steps which will form a short way to your financial freedom. Please note that every step contains a link that offers a clear explanation what to do.
The Forex market is one of the most dynamic and competitive markets. By its initial nature it is a system that develops rapidly and is very sensitive to all kinds of challenges and changes in the world. The market follows trends, and the market creates trends itself. Facing the new era of social globalization, social trading came to power.
A walkthrough for 5 levels on the way to a successful trading
Everybody wants to rule the world – or at least to enjoy the life at its fullest, and often it requires money. Elon Musk can casually pop a bottle of champagne worth more than one’s month salary, while others… well, can’t do the same. In search of an additional income source many people come to trading.
Forex is surrounded by myths, misconceptions and concerns. Beginner traders start their quest to successful trading with 5 levels – read out walkthrough and get ready to earn!
This popular resource for Forex traders hardly requires an introduction, but for those of you who only recently got interested in the investment field, Forex Factory is one of the biggest informational resources about Forex on the internet. It provides traders with economic news, market charts, calendar and of course, the forum.
So why is it so attractive for traders? First of all, it’s free. Forex Factory survives mostly only on advertisement and endorsement of Forex brokers. They openly talk about it and you can find all the information, including prices of advertisement, in the media kit section of their website. And the second reasons is, it’s a vast base of knowledge. For 14 years they collected Forex strategies, guides, news and discussions on pretty much everything that is related to Forex.
Each newcomer wonders, what features a trader should have to achieve an outstanding success at Forex market. One thinks this over and over again, dreaming of incredible profits, while, sometimes educating of these skills take a lot of time and efforts. But, can you imagine that there are people who have innate trader’s instincts? That’s the case of the most powerful trader on Wall Street you surely never heard of. Steven Cohen is an American hedge fund manager who was ranked by Forbes at the 106th richest man in the world and the 35th overall in the United States.
Steven Cohen was born in 1956 in Great Neck, New York, where his father was a dress manufacturer in Manhattan's garment district, and his mother was a part-time piano teacher. Growing up in big Jewish family among seven brothers and sisters, he got used to concentrate on the essentials from the very early childhood.
Young Cohen credits his willingness to take risks to his love of poker, which he played extensively in high school. He graduated with a degree in economics from the Wharton School at the University of Pennsylvania where he opened a brokerage account with $1,000 through the help of a friend. Word through the grapevine is that the money had been set aside for study.
At the age of 21 future billionaire got a job in Wall Street as a junior trader in the options department at Gruntal & Co. Legend has actually it that he made $8,000 in profit on his very first day on the job. Just 6 years later his profits were ranking $100,000 a day, and he was eventually managing a $75 million portfolio and a team of six traders.
In 1992, Cohen started his own company called S.A.C. Capital Partners with $20 million from his own pocket. Do you often meet people who have a fortune of $ 20 million at the age of 35? The firm managed $14 billion in equity as of 2009. He was dubbed the “hedge fund king” in a Wall Street Journal article in 2006, ranking 94th in Time’s 100 list of most influential people the following year.
He first suffered losses in 2008 in the midst of the financial crisis. Then, overnight his firm had lost $150 million, or 1.5% of its assets. But even then Stephen Cohen did not lose heart.
He spent most days trading stocks on his 180-person trading floor in Stamford, Connecticut. He and 100 portfolio managers bought and sold 100 million shares a day, about 1 percent of all shares traded on U.S. exchanges.
Everything changed dramatically in 2013 when Mr. Cohen faced civil charges in for failing to prevent insider trading in S.A.C. Capital Advisors. He was plead guilty to these violations, paid a $1.8 billion fine, and agreed to stop managing funds for clients until 2018. Still, he is known to maintain a net worth of $12.7 billion as of May this year.
Steven A. Cohen was prohibited from managing money for outside investors for two years after failing to properly police the actions of a trader at his former firm, SAC Capital Advisors. The ban expired on Dec. 31.
For two years Mr. Cohen has been patiently planting the seeds for a comeback. He registered a new fund, Stamford Harbor Capital, in 2016. He hired a marketing firm to meet with prospective investors. And he showed up in Las Vegas in the early 2017 for one of the hedge fund industry’s most prominent conferences. So, hedge fund king is back to the stage again.
So, what’s a secret of Cohen’s stunning success?
Though he is called a professional of short-term transactions and the king of hedge funds, Steven Cohen’s strategy is far from rocket science. One can even call it a supernatural luck, but as a matter of fact he combines lots of information coming at him from all directions with a good feel for how the markets are moving to make market bets.
He prefers to get a lot of support, so he is definitely not a lone wolf as many other traders fighting their own battles.
Steven Cohen strongly believes that the main reason for his success is his talent to build an incredible team.
The 20000-sqare-feet trading room, at SAC Capital Advisors was usually chilled to 21 degrees to keep traders alert. Mr. Cohen was sitting at its center likes it that way. Phones were blinking rather than ringing. Computer hard drives had moved off the trading floor to eliminate hum. Rows of traders wearing SAC fleece jackets kept a sharp look-out how Forex legend was trading.
Cohen was always an adherent of short-term trading
As it was mentioned by his colleagues; he sometimes managed to enter up to 300 transactions per day, not delving into any economic details. The head of SAC believes that the biggest profit can be gained as a result of stopples monitoring of the quotes during the working day. If you constantly watch the changes in the charts, after a while you can learn to predict the market movement. For years, Stephen Cohen has bought and sold shares of companies, not even knowing their profile.
Cohen doesn’t like to waste time on trifles like selecting undervalued or overvalued assets.
He developed a special program that did most of the routine work for him.
Incidentally, Steven Cohen alleged that his fund was disliked just because he did not invest but traded.
At this point, if we sum up all the money for various funds run by Steven Cohen’s inferiors, the capital scrip will amount to $1.2 trillion. According to various sources, 2% of transactions on the stock exchange are owned by his funds.
Sharing his priceless trading experience, Steven Cohen advices one to define clearly what they are, and not try to be what they’re not. Being a day trader, trade during the day. If you are an investor, then be an investor. It’s like a comedian who gets up on stage and starts singing. What’s he singing for? He’s a comedian. Well, have you decided who you are? Ready to check it?
Some people still think Forex Market is a scam. Of course, it sounds ridiculous for traders and people with a degree in finance, but other people often take this statement seriously. Simple lack of understanding of economy may result in creating myths and lies about Forex, which unfortunately can discourage a lot of people with high potential.
“Forex is simply the market of the currencies. It is similar to real estate or auto market. You can’t say the auto market is a scam.” Robert Parker, CEO of Holborn Assets - Holistic Financial Planning Services, Dubai.
Charging bull of the Financial District in Manhattan, New York City.
Forex is simply a market, it is used by governments, banks, companies, and simple people. Have you ever travelled somewhere? If you have, you should know that you are going to need some foreign currency on your trip, which you can buy from your local bank (and most likely not at the best price).
Do you want to buy some foreign products? You can do that because a business owner bought foreign currency to buy that product and then sell it to you at a higher price. No one, of course, would call this businessman Forex scammer.
Everybody uses Forex in daily life, but not everyone gets to profit from it. Why is it considered to be a scam then? The answer is simple: they don’t understand it. People who come to the Market without any knowledge or preparation and expect to become millionaires in just one day are not very good at coping with the results of their own actions. They simply throw money at their broker and expect to get rich in one click, and when they fail, they blame the market.
“Markets are never wrong – opinions often are.” -Jesse Livermore.
According to the Bank for International Settlements, trading in foreign exchange markets averaged $5.1 trillion per day in April 2016. The fact that some people cannot make money through Forex trading doesn’t mean Forex is a scam – there are plenty of Forex traders who made it their profession for life.
“Most people give up long before they get to this point. They blow through their first trading account and get discouraged, think their brokers are sabotaging them” Felix De Vliegher, 10+ years Forex trader.
So, if Forex trading is legit, why people give it up? The answer is: they don’t get prepared, they lose control of their emotions, they can’t stick with a trading plan long enough, and they don’t educate themselves. As a result, they lose and blame the market. Just as with any other business. But if you are prepared, Forex can be your source of financial freedom.
Nassim Nicholas Taleb is one of the finest original thinkers of modern era. He deserves all attention he gets as he made a bunch of money doing things that other people haven't done or haven’t even dared to do before.
This elitist, snooty rogue was born in 1960 in Amioun, Lebanon, a son of Dr. Najib Taleb, an oncologist and researcher in anthropology, and his wife Minerva Ghosn. His family rich and influential Greek Orthodox believers, a minority religion even in a country of minority religions. His grandfather and great-grandfather was deputy prime ministers, and his great-great-great-great grandfather was the governor of Ottoman Mount Lebanon.
Taleb received his bachelor and master in science degrees from the University of Paris. He holds an MBA from the Wharton School at the University of Pennsylvania and a PhD in Management Science (his thesis was on the mathematics of derivatives pricing) from the University of Paris (Dauphine) under the direction of Hélyette Geman.
He started out as a trader, worked as a quantitative analyst and ran his own investment firm, but the more he studied statistics, the more he became convinced that the entire financial system was a keg of dynamite that was ready to blow.
He became famous for writing books like Fooled By Randomness and The Black Swan that challenged conventional views about financial models and the mathematical statistics on which they are based.
In the 1980s Nassim Taleb worked as an options market maker. That means he made most of his money by supporting customer flow. He sold options for slightly higher prices than he bought them, and counted on the orders evening out so he had little net position. If he started building up a net position, he would change his prices to equalize things.
Nassim was a profitable trader and doing quite well, but his big killing came the day of the October 19, 1987 stock market crash. He had accumulated a large position in near-worthless out-of-the-money Eurodollar futures puts. The Eurodollar future is a bet on the three month bank interest rate, and pays $25 per one basis point move (such as from 7.5% to 7.51%). A big day is a 10 basis point move, $250 per contract. But October 19, 1987 saw a move 10 times that size, $2,500 per contract as rates moved from about 7.5% to 8.5%.
The swings on an out-of-the-money put (which makes money when interest rates go up) are even larger. A short-term put at 8% might sell for $100 when rates were 7.5%, but would be worth maybe $1,500 when rates went up to 8.5%.
Nassim was holding enough of these puts to make $35 million. This was his biggest win in the markets by far, and he attributed it to luck. It started him thinking that five years of constant work was worth less than one lucky break.
One could say that people with a lot of money can exercise strategies that would be ludicrous or dangerous or that would bankrupt people of lesser means and luck still plays more of a role, but that does not negate the fact that Nassim Taleb is a genius trader.
Taleb’s most famous forecasts
In 2003 Nassim Taleb predicted a high probability of the government-sponsored institution Fannie Mae collapse. While Fannie Mae was considered a highly trusted expert on risk management in the mortgage market, Taleb analyzed its risks and gave an extremely negative outlook. He compared it to sitting on a barrel of dynamite vulnerable to the slightest hiccup. This forecast caused a wave of outrage and a lot of attacks in the financial world, but finally came true. Eventually, the collapse of Fannie Mae cost the US taxpayers hundreds of billions of dollars.
On October 19, 1987, Black Monday, when the Dow Jones Industrial Average dropped 22.6%, gave Taleb profit of about $40 million. It was the largest market drop in modern history. The occurrence of the event lays outside of something that anyone except Nassim Taleb could have imagined on the previous day. Later it was qualified as a Black Swan.
In his forecasts for the near future, he asserts that for the time being there is no need to fear a third world war, since countries that can afford it prefer to do this by others' hands. He talks about the "Black Swan" of confrontation between the West and China or the West and Islam.
So, what is Nassim Taleb’s trading strategy?
Taleb considers himself less a businessman than a researcher of randomness, and says that he used trading to attain independence and freedom from authority.
1. Taleb makes bets on hard-to-forecast events (Black Swans)
Taleb talks about "Black Swans" as hard-to-predictable and rare events that happen unexpectedly, deliver positive or negative consequences and strongly affect the entire initial system.
2. He safeguards his investor’s money against negative “Black Swans”
Taleb was a pioneer of tail risk hedging (now called "black swan protection"), whereby investors are insured against extreme market moves. He says that reaping dividends the way he has means dwelling in the land of "Mediocristan" instead of "Extremistan".
Mediocristan are the events that can be predicted on the basis of previous data. Take 1000 people from all over the world. African and Chukchi, the fattest man in the world and a Chinese woman. The average value (2 eyes, average weight, 4 limbs, and m) will give a complete picture of the properties of the entire sample. And even the thickest person in the world won’t make significant changes in the mean.
Extremistan describes social, not physical, phenomena. Take the cash prosperity of 1000 people around the world. And add to this sample, for example, Bill Gates. The average earnings in this sample will be 99.9% for Bill Gates (and will not say a word about the sample of 1000 people). "In Extremistan the inequality is so big that one single example can give a disproportionately large increase in the aggregate or the general amount," Taleb says.
3. Nassim Taleb keeps a balance between the risk for earning and the need for maximum retention of funds.
As a trader, his strategy has been to safeguard investors against crises while reaping rewards from rare events (Black Swan), and thus his trading career has included several jackpots followed by lengthy dry spells.
4. The basic position he likes to hold is to sell at-the-money options and buy out-of-the-money options; both put and calls.
The idea is that people overestimate that chance that a normal-sized move will occur. You get rich in general systematically betting that either nothing will happen or something big will happen.
His book “Dynamic Hedging” is about options trading from the practitioner’s point of view. It tells that one must really know what he's doing, if he does not only understand how this complicated trade works, but is able to exploit the edge cases.
5. Taleb’s strategy is based on the idea that some options are systematically mispriced because the fat-tailedness of the probability distributions of market returns.
When using this strategy, you need to be prepared, both financially and psychologically, to remain calm when you feel that you are "losing" money for years. It is enough to win 1 time to recoup everything!
Taleb says he made fortunes using this method several times over the past two decades. The strategy can make uncapped returns in a very large market move. Why don’t you check it?
Most of ordinary people and new investors have a very little idea of who is Forex Guru? Whether it’s a fakir conjuring benefits from your trading soar to the heavens or a high-caliber trader ready to support and share his or her experience with you? Of course, the second option is closer to the truth. But, as Forex Gurus are hardly flying in the skies and wearing colorful tight suits like most super heroes, the biggest question steel remains “How to recognize them and where to look for real Guru?”
In the common sense, Guru is a teacher and especially intellectual guide in matters of fundamental concern. Looking for reliable mentor, please, remember that Forex trading isn’t about predicting what happens next. It’s about having system with an edge. Don't ever trust a teacher without a track record, because usually those traders wish to hide their own failure and continue to provide a second class trading or teaching service. I’m absolutely sure that you will be careful choosing trading Guru, but few hints to detect scam won’t be waste, for sure.
First of all, beware of “so called” Gurus that tend to post regularly, but all of their setups posted are after the fact. Meaning the trade is already over and they show that it is a winner if you follow his trading strategy. Anyone can do that by trading on hindsight. There is no any value in doing this except to mislead the masses.
Another group of scam Gurus tends to post a number of trading setups. However out of all the setups that are posted, probably only a handful will be winning trades. The rest are all losers. When the winning trades are achieved, they will go around posting their winners all over the internet. Giving the audience the impression that they are very accurate and suffer no losses. What happens to the losing trades? Well they hide it and keep silent about it.
Last group of fake Gurus are a little more intelligent compared to the earlier. They behave similarly except for the fact that they do post their losses. For example, they post 10 trades and only have 3 winners and 7 losers. They will go around showing off their 3 winning trades but when it comes to the losing ones, probably only 1 out of the 7 will be mention. Thus giving the impression that they are being honest and credible. But they forgot we’re not stupid either.
We know that one of the best examples of a trade service verification that checks with the server to ensure that the trader is telling the truth about how they trade is provided by Myfxbook automated analytical tool. You shouldn't trust any anyone offering services that do not provide verified results. Myfxbook has several inbuilt methods to prevent trade manipulation: you can still place a manipulated Myfxbook on the website, but Myfxbook simply flags this, and it’s up to other traders to recognize these flags or not.
Perhaps, I told you enough about the scammers. Now it's high time to talk about real super-professional traders whose advice will greatly help you to succeed in Forex trading. I’m not going to make you bored and broadcast long time about how to look for the right people; I will simply give you a list of the top-most reliable and trusted trading Gurus. Following those people, you'll get just the right amount of daily Forex news, insightful analysis and some enjoyable banter in between.
1. Kathy Lien is an internationally published author and Chief Strategist of DailyFX.com, one of the world's most popular online websites for currency research. A seasoned FX analyst and trader, Kathy has direct interbank experience. Prior to joining FXCM, Kathy worked in JPMorgan Chase's Cross Markets and Foreign Exchange Trading groups using both technical and fundamental analysis to trade FX spot and options.
2. Katie Martin is the head of fastFT, The Financial Times breaking news service. She also writes for other parts of the FT, mainly about markets. She was previously at the Wall St Journal and Dow Jones.
3. John Kicklighter is a Senior Currency Strategist and head of DailyFX in New York City and San Francisco where he specializes in combining fundamental and technical analysis with money management. Actively trading since he was a teenager, his experience ranges from spot currency, financial futures, commodities, stocks and options on all these instruments for his personal accounts.
4. Blake Morrow is the Chief Currency Strategist for Wizetrade. Blake has over 18 years of trading experience and has been a co- owner of a Dallas based brokerage firm and LiquidTrader Technologies. Currently, Blake does analysis for thousands of individual traders on his “The Morning Edge” webinar covering inter-market relationships and Forex.
5. Ashraf Laidi is an independent global markets strategist with over 15 years' experience. He is author of "Currency Trading & Intermarket Analysis", and founder of AshrafLaidi.com.
Now, when you got all tips and precious list of the most experienced and trusted Forex traders I am absolutely sure in the success of your trading future. Just take your time to learn hard from the best of the best trading Gurus and beware of scams!
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