The 2013 Forex KAIZEN Manifesto

A "checkerboard trader" hops and jumps all over the board trying to find the perfect system. He or she is jumping from one sure thing to another trying to find that holy grail.

Lack of fundamental trading knowledge is really the primary cause for so much struggling and time wasting, and it's sad. It's the reason why the overwhelming majority of people new to the Internet will fail in achieving their dreams even if they buy lots of automated systems, study the traditional indicators religiously, and work extremely hard.

I'm going to address the issues I see, because I know from past experience that my unique perspective can really make a tremendous difference in your trading. I cannot sit on the sidelines and allow so many dreams to fall by the wayside due to a misunderstanding of how successful trades are executed. I will expose those issues, one by one, and you will gain clarity about your relationship to this skill (and how to improve it substantially) that you've never had before.

To put online trading into perspective we have to go back in history a bit, before online trading.

If the names Larry Williams, Joe DiNapoli, and Jake Berstein mean nothing to you, that's not important. What is important is that these gentlemen and many others like them could do no wrong in the 1960s, 70s, and even 80s. They were super traders, making money with the simplest of systems.

They all gained such a reputation that they began selling their advice and counsel, and some still do today. Unfortunately, they don't seem to have updated their systems.

The most well-known trading phenomenon and story of all time may be that of the Turtles. These 14 students of Richard Dennis and William Eckhardt amassed fortunes by trading breakouts and made the trend following method famous.

As time and technology advanced, automation began to take over. The triggers that Williams and others had been using for entry and exit began to be packaged as indicators and sold to the trading public.

Why not? They had worked so wonderfully for such a long time.

But, unwittingly, these innovations were setting the stage for the confusion, frustration, and despair among today's traders. Why? None of them work like they used to.

I don't blame Williams, DiNapoli, Bernstein, et al. for anything devious. They were just trying to pass on some of their expertise. In fact, logic would tell you that these inventions were good-hearted. What they didn't anticipate is that these tools are now being used as weapons - no, a better word is "bait" - to extract money from the uneducated trader.

And I can't blame the brokerages that build these indicators into their platforms. They perceive it as a service feature that they must have in order to compete. But I can tell you for a fact that some professional traders watch the action around these indicators and trade against the amateurs, taking the other side of their trades.

Obstacles to Achieving the Success You Want As a Trader

Now that you know how the game has evolved, you should stop for a few minutes and reflect on how you have played it so far. Let's take a look at the obstacles you might face in actually creating a powerful methodology that has staying power.

By exposing and eliminating these problems, you'll be able to reach your goal faster (and easier) than you ever thought possible. These are the same overriding concepts on which ultra-wealthy traders operate.

Let's take a look at one fundamental problem most traders experience:

Symptoms: Buying anything that looks like it'll make you money, getting no results.

Cause: Opportunistic Thinking

Problem: Lack of Strategy

The very first obstacle we need to look at is you and your thinking. There are two different diametrically opposed ways of thinking when it comes to trading. There's opportunistic thinking and strategic thinking.

Having No Strategy Creates Frustration, Despair, Discouragement, and Failure

There are measurable actions in each trade that can be planned, becoming a part of your strategy. They are:

1. Environment

Have you assessed the environment in which you plan to trade? Is it volatile? Is it trending? Is it choppy? Is it being driven by scheduled news announcements? What time of day is it? Is it a rollover day? Is it subject to seasonal influences? Is it a popular market? What time frame is most appropriate? Should I use more than one time frame to assess the environment? What does the economic calendar say for today? How do I assess the overall environment? Should I use indicators or some other method?

2. Money Management / Position Size

What is your account size now? How much of your account can you risk on this trade? What position size will maximize the return? Where must your stop be? Will the stop placement jeopardize your risk tolerance? Is the MFE/MAE ratio favorable to your planned position size? Are there correlations in your positions?

3. Entry

At what price should you enter? Should you enter at the market? Should you enter on a breakout at a specific stop price? Should you enter on a pullback with a limit order? At what time of the session should you enter, based on the environment in this market? Do you go all in with one entry, or is it best to scale in? Should you plan to average down? Am I going to use an indicator? What indicator(s) should I use? Why am I entering this trade?

4. Position Management

Should you leave this position on overnight? Are trailing stops appropriate for this trade? Would chandelier stops work better? Should you add to the position, based on market behavior? At what point do you minimize the risk of losing focus with an action or protective order? Have I reached my daily loss limit? Should I hedge my position?

5. Exit

Should I exit at the market? Would a limit order be better? Would a stop order be even better? Should I trail the position now that exit is the strategy? Should I scale out or exit all the position with one order? Has the trade met my target? Did I have a target? Has the environment changed, requiring an exit even though my target hasn't been hit? Why am I exiting this trade?

6. Post-trade Reflection / Assessment

How much money did you make / lose? What mistakes were made? How can you improve the step(s) in which the mistake(s) were made? What were the metrics for this trade - MFE, MAE, hold time, session traded, position size, trade direction, and others?

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I beg your pardon for taking so much time on the negative. If you have two to three years' experience in the Forex market, all this negative stuff is probably familiar to you. If you're brand new to the arena, you need to hear this and become aware of it, so that you don't experience so much frustration in the future. But enough is enough, so let's get to the positive side of this manifesto.

To make a sustainable, substantive change in your life, you must do something substantially different. So what's different about what's being proposed in the Manifesto?

The first aspect of your strategy addressed is your mindset. Now, that's not revolutionary in the world of teaching these skills. There have been thousands of books and articles written on mindset with regards to how you should view your trading practices and how you should manage your mental state to achieve success. I have many of those books in my library and have studied them all, because I place this factor at the top of the list in successful trading.

However, the most important aspect of mindset in the KAIZEN system is that of treating your trading involvement like a business. You must view it as a business, no matter what your level of participation is - part-time private speculator or full-time investment advisor and money manager - as well as everything in between. Once you have established that mindset, then the principles of KAIZEN can be applied to create a powerful flood of improvements in your technique.

Most people don't think of trading as a series of actions or process steps, but that's exactly what it is. A business mindset helps you see that. And like any business enterprise, you must operate within certain standards for each step. Furthermore, KAIZEN is a process in itself - one of making continuous improvements to those standards.

Amateur traders think of trade success or failure in terms of the whole transaction. In other words, "I got in here, and I got out there. I lost money, so I failed." You will learn why that is a counter-productive way of looking at your trading, because it offers almost no useful feedback that leads to improvement. And this is what I mean by that: What step(s) of the process caused the failure? What about the environment, if anything, caused this trade to go wrong? What happened in the next step, and the next?

By breaking down each transaction into stages and evaluating each, just as if your trade had been processed on an assembly line, you will begin to discover your strengths and weaknesses. By analyzing each step in the process for each trade, you will establish a system of continuous improvement that will transform you from that defenseless "fish" into the grizzly bear.

This is KAIZEN, the system that made Japan the leading automobile manufacturer in the world. Anthony Robbins combined KAIZEN and neuro-linguistic programming to create a global self-help revolution. And it spawned many other performance improvement models, such as Six Sigma™. Employed as a means to learn and implement proven trading techniques in the correct way, it is explosive and highly rewarding.

The Internet is flooded with training, coaching, automation, gimmicks, tricks, magic bullets, and outrageous claims for making money day-trading. These shortcuts are as prolific as weight loss solutions, yet most of us are still fat and broke.

STOP, right now, and take stock of your part in all this folly. Where has it led you; what have you achieved that is sustainable? If you're reading this, I think I know the embarrassing, humiliating answer... and you do, too.

You can change that by reading the complete report at forexkaizen.org, where you will also find a little video that will make you happy for the next two hours - if not all day. It's all free and my gift to you today. Providing useful tips, reviews, articles and writings on forex online.

Forex Trading versus Real Estate

Forex trading and real estate are completely different investment opportunities, but they can be compared alongside each other. If you are looking to get into either, you should consider the pros and cons of both.

First off, you should decide whether you are more interested in passive income or capital gains. With real estate, you can rent out property to tenants, thus allowing you to achieve passive income. However you can also sell off your properties for more than you bought them for, thus allowing you to achieve capital gains. With this type of trading, you can use short-term trading strategies to make capital gains and you can use long-term trading strategies to make more passive income. When looking at the two investment opportunities like this, you can see that both Forex trading and real estate can allow you to achieve both passive income and capital gains.

However, real estate does require a much greater initial outlay than Forex trading does, since the minimum deposits offered by Forex brokers today, tend to be very competitive and low. Also, you will probably want to go with Forex trading particularly if you are looking for capital gains. This type of trading can be used to make passive income as already mentioned, but the prices of currency pairs do tend to fluctuate a lot more than the prices of properties, so capital gains are thought to be more easily achieved through trading currencies.

Another advantage of the Forex market, is its liquidity. You can buy and sell currencies in huge volumes within seconds, with just a click of a button. You can also trade on margin, using leverage to control more currency than you actually hold. With real estate, if you want to sell a property for example, you will most likely have to wait weeks if not months before you eventually find someone that is interested in purchasing the property you are selling.

Forex trading is also a lot more easier and convenient. You can trade from your own computer through your chosen Forex broker's trading platform at any time of day, since the market for currencies is open all day every day (not including the weekends). There are no negotiations and such like there are with real estate; when selling properties or advertising to potential tenants, you have to educate others about your properties etc. This is because no two properties are exactly the same; properties are not homogeneous products.

There are also some other complications when it comes to real estate; you will most likely have to hire others to take care of some of the work for you, like estate agents, lawyers etc. Not only does this all add to the complication of investing in real estate, but it also costs you good money and transaction costs generally are much higher in real estate than in Forex trading. There can also be issues with actual transactions in real estate; sometimes lawyers are required to sort out bad buyers, but in Forex trading, your Forex broker will guarantee that all of your transaction run smoothly no matter what; for example if you are looking to buy a particular currency pair your broker will ensure that you do get to buy the currency pair in question.

With real estate, you also tend to get stuck when the real estate market isn't doing too well. Also when you suspect that the prices of properties will fall in the future, you will also get stuck; you will have to choose to either wait it out or sell up quickly, which can be quite stressful. With Forex trading though, when you suspect that the prices of particular currencies will fall in the future, you can simply exchange those currencies in question for other currencies and then buy them back again in the future.

In conclusion, both Forex trading and real estate are legitimate investment opportunities in their own right. However, Forex trading is more ideal for the average investor. Both Forex trading and real estate can allow individual investors to achieve both passive income and capital gains, though it might be better to trade currencies for capital gains in particular. Forex trading also requires much less initial outlay. It is also much more convenient, easier, quicker and cheaper. It is also worth remembering that currencies are homogeneous and the currency market is highly liquid; these both act as advantages of Forex trading. Profits can also be achieved in the FX market, regardless of whether currencies are going down or up.

How Forex Trading Works is a resourceful website that serves to deliver free, online content relating to Forex trading, to anyone and everyone. Providing useful tips, reviews, articles and writings on forex online.

How Students Can Trade Forex Profitably

Students can trade Forex profitably, just like any other Forex trader can. As a student, you will probably find yourself tight on money. However, at the same time you will probably have a good deal of time to work and make money, depending on your course. Forex trading can be a great way for a student to make money comfortably in their accommodation when they are not working on their academic studies.

First of all, if you are a student and are looking to make money trading currencies, you should know that it isn't as easy as it sounds. You can't just open an account, deposit money and guess your way to success. Traditional Forex trading takes a lot of work, so you do need to be prepared to do the work required.

If you don't like the sound of having to dedicate lots of time to your Forex trading, you should consider joining a social network for Forex traders. Some networks will allow you to copy other Forex traders automatically. This way you can have fun, do minimal work and let your money work for you. Of course there is some skill involved and you will need to seek out the top Forex traders within networks and invest your money wisely, however it is fair to say that this way of trading currencies is a lot less demanding than the traditional way.

As a student Forex trader, you should also make sure that you don't risk more money than you can afford to lose and you should ensure that you take your Forex trading career one step at a time. Don't look for fast gains as they most likely won't happen. They could of course, but you can't keep up big gains consistently unless you have discovered a truly innovative way of trading the markets. The Forex market is always adapting though, so you will always need to test and adapt. It isn't easy to trade currencies successfully by any means, or at least not consistently. Before you even get started with traditional Forex trading, with live currencies, you should already have studied and practiced.

Before you even place your first live order, you should know the basics, understand fundamental analysis, know all about the technical side of Forex trading, have a clear plan for your trading career outlining all of your tactics and have a set strategy that you plan on following. You will also of course need a good Forex broker and the right tools to help you succeed. Some practice also goes a long way. So all in all, there's a lot that goes into a Forex trader's career. If this all sounds exciting to you, then search up some Forex brokers and get started today. You could become a Forex trading millionaire one day. If this all sounds too much to you though, you could simply join a social network for Forex traders as previously suggested, which you might find more appealing.

In conclusion, students can become successful Forex traders too, however students must realize that they will have to put in just as much work as everyone else in order to succeed in the Forex market. Students can make a lot of money trading currencies, but they must understand that taking a professional approach to Forex trading is important. If you are a student and you like the sound of trading currencies in order to make some extra money or perhaps even a lot of money, you should get started as soon as you can and work as hard as you can. If you fit your Forex trading endeavours around your academic studies, you could absolutely become a successful Forex trader.

How Forex Trading Works is a resourceful website that serves to deliver free, online content relating to Forex trading, to anyone and everyone. Providing useful tips, reviews, articles and writings on forex online.

How to Not Fail in Forex Trading

In order to make money in the Forex market, you obviously need to place trades that end up being profitable for you. You need to make wise decisions and place orders that put your account into a profit, rather than into a loss. However, this is all easier said than done.

When beginners just get started, they will usually get to grips with the basics and then start placing their first few orders. The wise ones will do a lot of reading beforehand and start with a demo account, before then moving onto trading with live currencies after they have built up some confidence and experienced a certain level of success with their demo accounts.

However, most beginners will lose with their first trade. A lot of beginners will lose all of their first few trades and some might even blow their entire account away in their first week or even on their first day. It's easy to blow money in the Forex market. It's not hard to blow your entire Forex trading account away with just one trade. The point is, that it is impossible to not fail, but this doesn't mean it isn't impossible to make profits in the Forex market.

It isn't confusing as it might sound. In order to make profits in the market for currencies, you simply need to make sure that your gains are greater than your losses. Even the most successful Forex traders in the world draw losses on a regular basis. Unless you have billions of capital and are able to influence the markets on yourself with your vast spending power, losses are unfortunately inevitable. However, it doesn't mean profits are out of your reach. Independent Forex traders can make millions if they pull it off effectively.

So, instead of trying to find out how to not fail in Forex trading, you should focus more on how to fail less than you are now. Just focus on winning as much as you can. This is simple and you probably knew this to be the case already, but just don't expect to win every single time. If you are winning but seem to be losing more than you are gaining, you need to increase the number of profitable trades to place.

In order to improve your win/loss ratio, you need to identify what is causing your losses. Perhaps your analysis is inaccurate and is leading you to make bad decisions. This is a common reason why people lose in the markets. It is because Forex traders simply conduct poor analysis and go on to make bad decisions, without doing proper and thorough analysis using a variety of different sources. This is especially important when trading fundamentals and news, as a lot of news sources can be biased.

Your tactics and strategy definitely come into play too. A Forex trading plan outlining all of the techniques you plan on using is important to have. You also need to make sure that you are following this plan and not simply ignoring it. If you ignore your trading plan, then it's pointless you even having it. Your strategy is basically what you are doing, i.e. what kind of profits you are looking for and how you plan on getting those profits. For example, you might be looking for long-term profits and you might aim to get those profits through using particular technical indicators and trading long-term price trends.

There are other reasons why you can fail in the Forex market too. Some Forex traders use poor tools and software which lead them to losses. Some Forex traders also seem to choose brokers that have high spreads, poor customer service, a poor trading platform with minimal features and so on. The Forex broker you choose will obviously depend on your previous experience, needs and so on, but it's important to find a reliable, trustworthy and reputable broker that is also regulated by a relevant regulatory authority. This is for your own safety but taking the necessary precautions can also lead you to make more profits in the Forex market.

In conclusion, there are plenty of reasons why you can fail in the Forex market, which is why it is important to know exactly what you are doing before you put any of your money on the line. Never failing in the Forex market is pretty impossible, however what is possible, is improving your win/loss ratio which is what you should really aim to do as a Forex trader.

How Forex Trading Works is a resourceful website that serves to deliver free, online content relating to Forex trading, to anyone and everyone. Providing useful tips, reviews, articles and writings on forex online.