Exclusive Forex Trading Tips from Alchemy Markets Founder
In a world where social media and market opinions are abundant, forex traders continue to run into a big problem: how to successfully navigate the market.
If they can’t crack the code, it leads to serious issues such as loss of trading capital and loss of confidence. When left unchecked, that loss of confidence can lead to even more losses as risky behaviors are implemented to recover the losses and capital back.
Therefore, gaining insights from a seasoned authority becomes not only advantageous but needed for consistent trading. We caught up with Bobby Winters, the founder of a leading forex broker Alchemy Markets.
Bobby not only acknowledges the hurdles faced by traders but offers a unique solution by sharing a portion of his arsenal of forex trading tips.
Host: Thank you for joining us today. Let’s dive right in. What, in your experience, are the key obstacles forex traders often find themselves grappling with?
Bobby: My pleasure. Forex trading is multi-dimensional, and traders often encounter several challenges. These challenges can be external and are created by other people to which the trader must react. Also, the trader will face internal struggles, such as psychological and emotional challenges, that emerge from within themselves as they manage their positions and trading accounts.
Host: That’s interesting. What are some examples of external challenges that traders need to be aware of?
Bobby: External challenges are obstacles created by others. For example, the trends on the charts, trading spreads and commissions and safety of funds are items outside of the trader’s control.
With that said, the trader can learn how to overcome those external challenges. For example, we have an excellent analytical team that teaches you how to spot market trends and shifts in sentiment.
Also, trading spreads and commissions are a cost to the trader. You can have a knack for spotting and trading the trends in the market, but if your broker is charging you too much, it eats away at your capital. Likewise, the cheapest broker in spreads and commissions is not always the safest or easiest to withdraw profits from.
At Alchemy, you are trading with a regulated broker with over 60 different FX trading pairs to choose from. We are able to provide you with institutional level liquidity and pricing that allows you to save on spreads and commissions. We take care of the external challenges for you as much as possible so the trader can spend more time honing and improving their strategy.
Additionally, our trading technology allows for some of the fastest execution speeds in the industry at under 10 milliseconds from anywhere in the world. Nobody likes to get hung up waiting for the trade to execute in a volatile market.
Host: That’s great! You have removed a lot of the external barriers for traders. Now, let’s discuss the internal challenges a trader might face. What barriers do you typically see?
Bobby: Remember, an internal challenge would be an obstacle that the trader essentially creates themselves. For example, after taking on a couple of losing trades, the trader might ratchet up their leverage on the next trade to make back their losses. The challenge in this scenario could be a couple of things. First, the trader may need to level up their skill in reading the market’s trends. That could account for a string of losing trades.
However, even good chart readers will experience a losing streak.
More importantly, trying to make up for losing trades by immediately taking on new trades is called revenge trading. Revenge trading typically leads to additional losses because the judgment of the trader is clouded. They are more concerned about making up for losing trades than finding good quality trades that fit their strategy.
Host: Very interesting. What are some other internal obstacles you’ve noticed from traders?
Bobby: Another prominent internal challenge is based on Prospect Theory. Prospect Theory simply states that the trader’s value of a loss tends to weigh more heavily on a trader’s mind than a win of similar monetary value. How this applies more practically, traders tend to cut their winning trades early before reaching the target and let their losing trades run longer and not implement a stop loss. Traders will go to extreme measures to prevent locking in and closing out a losing trade.
This is a tough emotional challenge to overcome and it results in a very high win percentage but the trader tends to lose in their account over the long haul. This can lead to a loss of confidence for the trader thinking they don’t have what it takes to be successful. In reality, they need to understand these human thought patterns and implement a strategy to overcome them. Solutions like sticking to your stop loss and take profit levels is a start.
We understand that traders succumbing to these ill desires may be partly caused by lacking confidence in understanding the market’s trends. That’s why we have an exceptional research team that is experts in chart reading who share their knowledge of the trends and key levels so you can become more confident in your trade exit. We also offer free tools with Alchemy Markets to help you become more confident in your trading abilities.
Host: That makes a lot of sense. Unfortunately, we are out of time for today, but I would like to hear more the next time we meet. Thank you again for joining us.
Bobby: Thank you as well.
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