TOWER ONE FX GROUP

Are you up for continuing to learn FOREX Trading? Great!!! Knowing how people in general go about their business, it is very likely that you have already signed up with a broker. If you haven't, time has come to open a demo account, there is no need to start with a real account just yet.

We have a profitable system that we have backtested and validated. Will it now stand the test of experience? That is up to you to prove now!

Remember that trading a demo account is not the same as trading with real, hard earned money. The good thing with a demo account is that you can iron out certain minor flaws and learn how the system behaves on real-time data. It is extremely important to put a lot of time and effort into this step. You really need to bust your butt here. Train yourself over and over again. Every time you train you encounter something new and unexpected and you do not want to experience that during trading with real money.

The whole trading experience needs to become second nature to you. You must know exactly what to do in all the different situations that might come up during a session. That only comes with experience. However, if you cannot turn a profit with a demo account you will certainly not make it with real money.

Trading What you cannot experience with a demo account is the pressure real money puts on you psychologically. The more precious the money is to you, the higher the pressure. This pressure will force mistakes that you normally would not do. As time goes by though, the pressure will abate as your confidence improves. If you approach trading in a whimsical fashion, your confidence will not improve and the pressure will be on until you cannot stand it any more and throw in the towel. Now, do you understand why it is so important to trade with a system YOU have backtested and validated?

Before you let go of your demo account you should have traded a minimum of 30 trades. Below this number, your trading result is not statistically valid. Try to collect some 50 to 100 trades to be on the safe side. The more trades you have made the more experience you will have. You can never go wrong with practicing trading, up to a point of course. You should use a Trade Log so you can register every trade.

I have prepared design for you please send your request in my email towermcs@gmail.com. Using the Trade Log it is easy to get a good picture of your trading performance. Sum your winning trades to get gross profit and losing trades to get gross loss. Divide gross profit with gross loss to get Profit Factor (anything above 2 is excellent). Also compare number of winning trades relative to total trades.

Repeat the above until you are profitable. Your profitability should be close to the profitability that we got in our validation. It doesn't matter if it is slightly worse now than when we did our validation. Remember what I have said earlier about trading is not an exact science. Also there is no point in trying to perfect your trading on a demo account, since real trading put on a new dimension (stress of losing etc) to the experience. You must be at least decently profitable before continuing though.If you have decided to trade daily bars, it would take quite some time for you to collect 50 trades. In order to speed up the process, trade several of the major currency pairs. Do not choose the ones with a Bid/Ask-spread of more than 5 pips.

Assuming that you have passed all the above steps with success you are now ready to play with the big boys. More on that in the next step.


Tip: I have previously said that for a novice trader it is better to trade higher resolutions, ie better to start with 5 min bars than 4 hour bars. However, if you have a problem with turning a profit on a high resolution, start trading daily bars. The reason for this is simply that when trading daily bars you have so much more time to make a decision. For a novice trader, the lack of time forces errors and errors makes bad trades and losses. Actually, one of my finest and most profitable trades was made trading daily bars.


Action Step: In this step you will set a trading goal for you to work towards. The goal should be a stretch-goal, i.e a goal that is reasonable but at the same time put a little pressure on you to achieve it. Don't overdo it, your mind will just disregard it if it is to far off. You must feel comfortable with your goal, but at the same time give you a minor adrenaline kick. Write down your stretch-goal as a super-short story. This story should contain an image or images of you (for example looking at a monthly statement confirming your goal) and a positive emotional attachment (fulfillment, happiness etc) to that goal. The more senses (hearing, touch etc) you can include the better it is. Write down the story until it has become second nature. You should be able to repeat the whole story without looking at your notes. Imagine your image, emotions and senses as you tell your story. Continued in the next Action Step.


Go to the next part, Step 6.