Can you be Taught how to Trade

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Contents

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Exploiting the edge from historical market patterns

Thursday, August 11, 2020

Can Successful Trading Be Taught?

Can successful trading be taught? Consider this excellent post from Bella at SMB, describing what the folks at SMB have learned from the training and mentoring of successful traders. That post rings true for me, because I personally know (and have worked with) most of the traders Bella speaks about. I have observed their development and can vouch for the qualities that have made them winners.

What is clear from my observations and experience is that patterns that have a positive edge in trading can be identified and taught. What is also clear is that learning those patterns doesn’t become successful trading until those patterns are truly internalized. The many hours of study and performance review serve one important purpose: taking a pattern that is “out there” and becoming so familiar with it that you learn to feel it internally.

Consider raising a child from birth. At first, you’re a clumsy parent, trying to figure out what the baby needs, reading through parenting guides, and reacting and overreacting to every cry. Gradually, you begin to read your baby. one cry is different from another. one kind of holding and rocking works, another doesn’t. As you gain intimate experience with that child, you develop a feel for parenting. You get to the point where you can anticipate your baby’s needs in real time.

There is no way of achieving that kind of parenting skill and success without having plenty of baby time. It’s not uncommon to see fathers struggle with knowing what to do with their babies simply because they have been so busy at work that they haven’t spent the kind of intimate baby time that gives them a feel for their child’s needs.

It is very similar in markets. Screen time is what gives us the intimacy with patterns that enables us to internalize them. You can teach a pattern to three different traders and you can teach parenting skills to three different parents. Ultimately, it will be the trader and parent who cultivates repeated, intimate experience that is most likely to turn the information from teaching into lived performance skills.

Bella says something interesting in this regard: it is not unusual for a trader to not be successful in their first year. It is often several years before the new trader can become a meaningfully profitable trader. Deliberate practice takes time. The best traders find a trading niche that exploits their talents, derive a passionate interest from their work as a result, use that passionate energy to drive their practice and review, and accelerate their learning curves as a result. But there always is a significant learning curve, with plenty of bumps along the way.

Medical school is a structured training process, honed over years of research and practice. The new medical student starts with classroom learning (anatomy, physiology, pathology), moves to learning interview skills (how to take a history and physical), then moves to shadowing and assisting practicing physicians across different specialties, then takes on more responsibility within a specialty of their choice under close supervision and mentoring. No one expects a first year med student to conduct a surgical procedure; by the end of their undergraduate training, they are actively working in the OR as part of a surgical team.

What I’ve seen among trading firms that are successful in growing talent is that they operate very much like medical schools. They teach information, they embed new students in teams and encourage learning from a mentor, and they encourage students to specialize in areas that speak to their interests and talents. That is the process that Bella describes, and it is an excellent example of how talent can grow through properly structured apprenticeship.

Further Reading: Can Individual Traders Succeed in Today’s Markets?
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I Will Teach You How To Become A Day Trader in 5 Steps!

The world of the day trader sounds pretty exciting, but is it really possible to dip into the market for a fast profit and be done for the day? I’m sure you know what my answer is.

Can you be a day trader? Absolutely. But you can’t just dive right in and expect to thrive. That’s a sure-fire way to lose all your capital in the blink of an eye. Don’t do it.

If you want to day trade for a living, then you need to start with the right mindset and dedicate massive time and effort to your trading education. I want you to get started the right way, so read this first.

This guide will give you the information you need to get started. Let’s do this.

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Table of Contents

What Is Day Trading?

Day trading is buying and selling a security within the same trading day. The pure day trader ends the trading day in a cash position; nothing is held overnight. Most day trading is done in the stock and foreign exchange (forex) markets, but it could be any market.

For example, let’s say you buy shares in Company X because you expect the price to go up that day. Then, you sell your shares on the same day. If you did your research and opened and closed your position at the right times, you ended up with a profit.

Day trading is different from buy-and-hold investing and swing trading.

Buy-and-hold is just what it sounds like: you buy shares of a stock and hold them because you believe in the fundamentals of the business. You believe owning the stock will give you long-term returns.

Swing trading is similar to day trading. The difference is, you hold the position open overnight or even for several days or weeks. Some day traders make some swing trade plays. I don’t recommend it for beginners, but once you get to know the game, it’s another strategy to use.

Benefits of Day Trading

Day trading is the ultimate laptop lifestyle. You can trade from anywhere with a laptop, trading software, and a high-speed internet connection. Want to trade sitting by the pool in Bali? It’s awesome. But to get there, you have to do your homework. You can’t cheat success in the stock market.

There are other benefits, of course. You don’t have to go into some office for a J-O-B. You’re your own boss and you can start small and work your way up. Unless, of course, you trade for some big bank, which I don’t recommend unless you’re obsessed with that sort of thing. Not for me.

Life of a Day Trader

Is it true a day trader only works a couple of hours a day? That’s misleading. There are some dishonest trading coaches out there who push this idea. While it’s true you might only trade for a short time each day, you have to include time for research.

When I was learning, I put in hours and hours every day. I skipped classes in high school and college to research and trade. I call it the hustle and the grind. I hope you’re getting the idea that this is a marathon and not a sprint. Yes, I have several millionaire students, but they put in the time.** They studied their asses off and they keep learning.

How to Become a Day Trader in 5 Steps

You might see the term ‘active trading’ as you continue to learn. Active trading is more of a general term. According to Investopedia, it means “the act of buying and selling securities based on short-term movements to profit from movements on a short-term stock chart.” So, day trading is a type of active trading.

Do you want to know how to become a day trader? There are some concepts you need to understand. Let’s take a look.

1. Risk Management

I encourage you to trade small when you’re first starting out and lack experience. You can always get more aggressive later on. The other thing I recommend is to cut losses fast … or as my student Tim Grittani says, “cut losses intelligently.”

Every big loss I had back in 2003 and 2004 happened when my ego got the best of me. I threw my day trading risk management out the window trying to force trades that weren’t there. I was so focused on trying to prove myself to attract investors into my hedge fund, that I broke all my own rules. They were near disastrous mistakes.

2. Technical Analysis

I don’t just pick any random stock, I want the stocks to prove themselves. This means I’ve done my homework, I know what the company is about, I’ve searched for news and watched the charts. Technical analysis starts with being able to read a chart. Here’s a quick infographic for you on how to read a stock chart.

3. Stock Market Patterns

One of the most important things I teach is to recognize stock market patterns. These patterns pop up again and again. You can learn to take advantage of these patterns even trading conservatively. I’m not saying that I’m gonna win every time. Don’t misunderstand me. It’s a question of preparation. If you know the patterns inside and out, then you can act.

4. Day Trading Software

Day traders use software, or electronic trading platforms, to chart and trade. There are a lot of choices when it comes to trading software. Not all are created the same. For example, some software allows you to trade only stocks or funds. Other software is geared toward forex or futures.

To help you choose your software consider the answers to these questions. Does the platform support the type of trading you do? If you want to trade penny stocks then your trading software has to include those kinds of stocks. Does the trading software connect with your online broker? And does the software have the features you need for research on the go?

StocksToTrade.com

I’ve used a lot of different trading software over the last 20 years. One of the things I found annoying was that some of the software wasn’t set up to deal with penny stocks. Another thing I found was I had to visit a bunch of sites to get the information I needed to make a trade.

Finally, I was inspired to build a better platform. One designed by traders for traders.

We worked our asses off to create what, in my opinion, is the best trading platform out there:

5. Choose the Best Online Broker for Day Trading

What are the best online stock brokers? What are the worst brokers? What are the safest brokers? What are the most dangerous brokers? These are all valid questions. I’ve tried dozens of brokers in my life — maybe even hundreds.

One thing to consider is different brokers are good for different strategies. Lately, I’ve been dip buying. I use E*Trade and Interactive Brokers but you could use Schwab, Fidelity, or TD Ameritrade for dip buying penny stocks.

You want a big, well-known, broker that has decent execution and does the job you need it to do. While you don’t want to overpay on commissions, don’t be afraid to pay them. I look at it like this: If you cheap-out on your broker it’s like cheaping-out on your education. Don’t do it. Instead, educate yourself. Invest in your education.

Be wary of offshore brokers. Offshore brokers are not FDIC (Federal Deposit Insurance Corporation) insured. E*Trade, for example, is FDIC insured. This means if something goes terribly wrong with the financial markets you are insured up to $250,000. But if you’re trading with an offshore broker you aren’t insured.

Order Execution Time is Key

You need to understand this: There are brokers who charge little or no commissions but you get screwed by bad order execution.

So you might save $5 or $10 per trade but you lose $50 or $100 because they don’t execute the order fast enough. This is one of the reasons I stick with big, safe companies like E*Trade.

Remember, it’s all about the bottom line. Profit or loss. So don’t try to get away without paying commissions. In many ways, commissions are a good thing. When you consider the commissions it keeps you from overtrading. I see people throwing money out by making these tiny trades because they don’t have to pay a commission. They throw $50 on this or $20 on that … with no strategy.

E*Trade or Ameritrade

I get this question often: “Which should I use, E*Trade or TD Ameritrade?” I can’t make that decision for you because it depends on your requirements. I use E*Trade but that doesn’t mean it’s better, it only means it suits me better. As you learn to become a day trader you’ll have to make some decisions. Do your homework.

To reiterate: Look for a company with good order execution time and one that does everything you need it to do. If it takes having accounts with two companies, so be it.

Day Trading Account Requirements

There are some requirements you need to consider if you’re going to be a day trader. Thankfully, there are a couple of regulatory bodies with everyone’s best interest in mind. There’s the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC). FINRA is a not-for-profit self-regulatory body for the financial industry. The SEC is a government body created to protect individual investors.

SEC Regulation and the Pattern Day Trader Rule

The pattern day trader (PDT) rule defines a day trader as someone who makes more than four trades within a five-day trading period. The rule requires the trader to maintain an account balance of at least $25,000. Keep in mind some brokers have their own requirements that exceed this industry standard.

The SEC supports the PDT rule on your behalf and FINRA supports the rule on the behalf of the industry. There was a time I didn’t like this rule. But since I’ve been teaching for the last decade I’ve come to appreciate it. It keeps inexperienced traders from getting into the addictive trading behavior. It’s there for your protection as you start your trading journey.

You can still trade with a smaller account, you just can’t trade as often. But that’s good because it makes you do more research and be more careful about each trade you make. It will help you develop better habits and self-discipline.

Key Tips on How to Become a Successful Day Trader

How can you become a good day trader? Let’s put it all together into a nice, workable plan. Keep in mind that before you make a single trade you have some studying to do. But this will help you along the way. I recommend my Trader Checklist as a good place to start.

#1 Cut Losses Fast

When I first started trading I didn’t have enough money in my account to let losses run. Little did I know how important that was for my success. I had no choice but to cut my losses fast. It became a habit to cut losses. There were only a couple of times when I broke my own rule and I paid dearly, so it was ingrained. Until I got cocky, that is …

Remember me telling you about my losses in 2003 and 2004? Those losses happened because I tried to force trades and ignored my own rules about when to get into a trade. At that time I was shorting stocks and my rule was to wait for sideways price movement before I got in on the short. I also wanted to see important price level breakthroughs before I started shorting.

Instead, I let my ego get in the way. I got impatient. I had one three-month run where I lost over $100,000 each month. Not because I followed my plan — because I went against my own rule to cut losses fast.

So learn this now, before you even start: Cut losses quickly.

#2 Fine Tune With Small Accounts

Since I started teaching, every year I take one of my accounts and bring the balance down to $12,000. To help my students, I go back to the beginning and trade my way up in that account. I do this for two reasons: First, it forces me to think like a beginning trader in regards to the PDT rule. Second, it forces me to make smaller trades and be more careful.

I force myself to play small to be a better teacher and a better trader. I’m more conservative and I don’t let my ego get in the way. I recommend you have several small accounts once you’re ready — spread it out and fine-tune your strategy and discipline.

#3 Avoid Leverage

Don’t use leverage. Ever. I hope you heed this advice.

There are times when you’ll use a margin account. Specifically for short-selling. Using a margin account for short selling doesn’t have to involve leverage. You can learn how to do this with my Pennystocking Silver lessons.

At first, keep your margin account separate from your regular account. This goes back to having more than one small account as you develop your strategy.

#4 Never Stop Learning

You’re going to hear (or read) this from me again and again. I can’t repeat this enough: Never stop learning.

Keep studying. Learn from your winning trades and learn from your losing trades. Apply what you learn and don’t let your ego get in the way!

Day trading penny stocks is not a get-rich-quick scheme. There are other so-called gurus out there who want you to believe you can get rich quick. Or that once you know a play you’ve got it for life. That’s bullshit.

You have to keep learning. Did you know that the word guru means to bring from darkness into light? Even though I don’t like to call myself a guru I want to bring you from lack of knowledge into the light of knowledge. Never. Stop. Learning.

Join My Trading Challenge

There’s a ton of crap out there on the internet. There are over five million hits for ‘how to become a day trader with $100.’

You can spend hours lost on a ‘how to become a day trader’ Reddit thread. You’ll find so much information that it’s almost impossible to decipher real from fake.

I want students in my Trading Challenge to avoid the boneheaded mistakes I made along the way.

Want to join a community of humble badasses on their way to freedom and the laptop lifestyle?** Apply to join the Trading Challenge today. I look forward to seeing you there.

The Bottom Line

What does it take to be a day trader? Now you’re more informed. Go back and read this post again and then bookmark it. Also, check out the links I shared in this post to get more information on those specific terms, concepts, and related topics. Believe it or not, this blog actually isn’t about me — it’s about you and your future.

The life of a day trader can be pretty damn good, but you have to get an education. Learn to manage your risk, master the patterns, and set yourself up with some rules.

Have you started day trading? Are you ready to start? What’s holding you back? Leave a comment below.

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About

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

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      Comments ( 6 )
      Hey Everyone,

      As many of you already know I grew up in a middle class family and didn’t have many luxuries. But through trading I was able to change my circumstances –not just for me — but for my parents as well. I now want to help you and thousands of other people from all around the world achieve similar results!

      Which is why I’ve launched my Trading Challenge. I’m extremely determined to create a millionaire trader out of one my students and hopefully it will be you.

      So when you get a chance make sure you check it out.

      PS: Don’t forget to check out my free Penny Stock Guide, it will teach you everything you need to know about trading. :)

      Tim, I need you to personally call me before I subscribe and take you on as my mentor. If you want the individual who is going to go above the rest then I need the mentor who is going to do the same. I look forward to hearing from you and I will join your team. I’m as good as they get and my trades have a 75% success rate, but I want more.

      LOL no it doesn’t work like that, if you want to learn, go apply at http://tim.ly/sykesmc and prove yourself, if you have any doubts don’t do it, that’s the beauty of my being real

      Thanks for sharing the post The way you narrated the Intraday trading post is good and understanding. After reading this post. I learned some new things. Please let me know for the upcoming posts.

      Knowledge facilitates growth & development.

      Leave a Reply Cancel reply

      About Timothy Sykes

      I became a self-made millionaire by the age of 21, trading thousands of Penny Stocks – yep you read that right, penny stocks. You may have heard . Read more

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      ** Results may not be typical and may vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here..

      Millionaire Media 80 S.W. 8th Street Suite 2000 Miami, Florida 33130 United States (203) 980-1361 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

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      Reading time: 27 minutes

      Did you know the United Kingdom is the fifth largest economy in the world? This is just one of the reasons the British pound is one of the world’s largest tradable currencies. With rising global tensions led by the United States, a changing relationship with the European Union and an active central bank in the Bank of England, this is one of the best times in history to learn how to trade GBP/USD.

      In this article, you will discover how the GBP USD exchange rate works, which factors influence its price, the best trading account for pound/dollar trading and the best GBP/USD technical analysis tools to learn when to buy or sell the currency pair, as well as a GBPUSD trading strategy you can start with right away!

      What is the GBPUSD?

      GBPUSD is the symbol for the British pound to US dollar exchange rate. The British pound is called the base currency and the US dollar is called the terms currency. The quote of the currency pair shows the number of US dollars needed to buy one British pound.

      For example, let’s say the GBP/USD exchange rate reads 1.2500.

      If buying, the quote shows how many units of the terms currency is needed to buy one unit of the base currency. So, in this example, you need to have 1.25 USD to buy 1 GBP.

      If selling, the quote shows how many units of the terms currency you get for selling one unit of the base currency. In the example above, you will receive 1.25 USD when you sell 1 GBP. So how does this work for Forex traders?

      How does the GBPUSD work?

      When it comes to trading Forex and the British pound to US dollar exchange rate your Forex broker will quote two prices for GBPUSD, such as:

      In the GBPUSD quote above, there is a bid price and ask price whose levels will constantly fluctuate. A unit of measurement in the GBPUSD quote is called a pip, which is 0.0001 of the quoted price. If the bid price moves from 1.27366 to 1.27376, this is a one pip move.

      The difference between the bid and ask price is called the spread. In the example above the spread is actually less than one pip (1.27366 – 1.27373 = 0.00007, using 0.0001 Forex pip measurement means this is 0.7 pips). The last digit in the quote is used by trading robots for precision pricing.

      The spread value is one cost of trading. If you buy at the ask price of 1.27373 and immediately sold without any price movement, you would lose 0.7 pips as you would have sold at the bid price of 1.27366. Therefore, the market needs to go more than 0.7 pips higher before you can close out at the bid price at a profit.

      The best spreads on GBPUSD are usually found during the best hours to trade GBPUSD and on certain advanced trading accounts like Zero.MT4 – all of which are discussed further in the article.

      Let’s take a look at two possible trading scenarios, remembering that the ask price is a trader’s buy price and the bid price is a trader’s sell price, with an average spread of one pip:

      Will GBP rise against USD?

      If the trader buys at the ask price of 1.2737 and the GBPUSD quote moved to 1.2757 Bid / 1.2758 Ask, then the trader can exit at the bid price (the sell price) of 1.2757. This means the trader would have made 20 pips profit (1.2737 – 1.2757).

      However, if the market went from 1.2737 back down to 1.2717 Bid / 1.2718 Ask, the trader will have lost 20 pips (1.2737 – 1.2717).

      Will GBP fall against USD?

      Forex traders can also profit from a falling market by initiating a sell, or short trade. For example, let’s say the trader sells at 1.2736 and the British pound fell against the US dollar producing a new GBPUSD quote of 1.2715 Bid / 1.2716 Ask.

      The trader can exit their trade at the ask price (the buy price) of 1.2716. This means the trader would have made 20 pips profit (1.2736 – 1.2706), as they shorted GBPUSD predicting the market would go lower.

      However, if the market went from their entry price of 1.2736 up to 1.2755 Bid / 1.2756 Ask, the trader will have lost 20 pips (1.2736 – 1.2756), as they shorted the currency pair expecting the pound to fall against the US dollar.

      The next question for many aspiring traders then is what moves the GBP to USD exchange rate? Many traders believe that if they monitor the different influences on the GBP/USD exchange rate it can help in forecasting whether the currency pair will rise or fall.

      If you think the GBP will rise or fall against the USD you can test trading ideas by making the trade on a free demo account! To open your FREE demo account, click the banner below:

      What Moves the GBP/USD?

      As the United Kingdom is such a large trading nation, there are many factors that hich influence the price of GBP/USD. International demand for the British pound, central bank policy, political tensions all plays a big part. Here are a few key fundamental and economic indicators to take into account:

      • The UK and US Economy – International demand for a currency will move toward economies that are strong and growing. Therefore, when the UK economy is looking strong and the US economy is looking weak, this could lead to a rise in the GBPUSD exchange rate.
      • Bank of England (BoE) Policy – The UK’s central bank meets once a month to release the Bank of England Monetary Policy Summary report which details the reasons on why the members of the bank have decided to either cut interest rates, increase interest rates or keep them on hold. Typically, a currency will fall on the threat of interest rate cuts and rise on the optimism of rising interest rates.
      • Politics and Government – Political events can cause huge movements in a currency as we saw by the collapse of the British pound to US dollar exchange rate after the UK’s vote to leave the EU called Brexit. Government elections and a change in political parties can also have a huge impact on the GBP/USD price.
      • Economic Data – While the above events can affect the long-term trends of the market, there are smaller economic data announcements that influence the GBP USD price in the short-term. These are economic announcements such as retail sales, inflation and employment figures.

      Check the GBP/USD Calendar While You Trade

      Many short-term traders like to day trade GBPUSD around high-impact news announcements to try and capture the volatility these news items may provide. Longer-term traders also like to track news announcements that can impact GBPUSD to identify any trends in good or bad economic data. You will learn more about GBP/USD trading strategies further down the article.

      How do you access an economic calendar so you can know about upcoming, potentially market-moving news announcements? One of the best ways is to use the Premium Analytics feature exclusively for Admiral Markets users.

      Once you have opened your Admiral Markets account visit the homepage and select Premium Analytics from the Analytics tab, as seen below:

      Once logged in, expand the Economic Calendar found on the bottom left. You can use the Advanced Filter option to only list economic news items for the United Kingdom and the United States as these are the most likely to affect GBPUSD.

      From here we can view all the upcoming news items that are likely to affect the GBPUSD exchange rate price. Clicking on each of these will give you an explanation on what the news item is at the bottom left as well as what analysts are forecasting for the result. In the bottom right you can also find the latest news on GBPUSD, powered by Dow Jones.

      There are also a lot more features in the Premium Analytics and the Admiral Markets homepage that can help you in your trading decisions such as a Fundamental Analysis and Technical Analysis section, along with a Trader’s Blog. Now you are armed with some of the most powerful tools in the business, the next step is to make sure you have the right trading account set up.

      Once you have your trading account setup, it will allow you to follow the other tips in this article, including following the GBPUSD trading strategy, using technical analysis on the GBPUSD and following the tutorial on how to buy and sell GBP/USD.

      What is the Best Trading Account for GBP USD?

      Picking the best trading account for GBPUSD trading is a very important decision. With Admiral Markets there are three popular accounts types for trading the British pound US dollar exchange rate. These are:

      The Trade.MT4 MT4 Trading Account

      The Trade.MT4 MT4 trading account is a popular option for trading GBPUSD on MetaTrader 4 – the world’s most popular trading platform. Here are some more details:

      • Minimum deposit: 200 EUR / USD / GBP / CHF
      • Account balance currencies: EUR, GBP, USD, and more
      • Markets available: Currencies including GBPUSD, Indices and Commodities
      • Spreads: GBP/USD minimum spread 0.1 pip, typical spread 1 pip
      • Commissions: Commission free
      • Platforms: MetaTrader 4, MetaTrader Web Trader, MetaTrader Mobile Trading

      The Zero.MT4 Trading Account

      The Zero.MT4 account is a unique offering for those who want to elevate their trading level on GBPUSD MT4. The account is based on Admiral Markets’ own STP technology so traders can trade directly with top-tier liquidity providers. Access to this advanced offering also comes with additional benefits:

      • Minimum deposit: 200 EUR / USD / GBP / CHF
      • Account balance currencies: EUR, GBP, USD and more
      • Markets available: Currencies, including GBPUSD-ECN
      • Spreads: GBP/USD minimum spread 0.1 pip, typical spread 0.6 pips
      • Commissions: GBP/USD 3 USD per 1 lot (100,000 units of currency) per side
      • Platform: MetaTrader 4, MetaTrader Web Trader, MetaTrader Mobile Trading

      The Trade.MT5 Trading Account

      The Trade.MT5 trading account is another popular account type for multi asset class traders. One of the biggest differences is that the range of markets available on MetaTrader 5 is far bigger than that on MT4. There are some additional benefits as described below:

      • Minimum deposit: 200 EUR / USD / GBP / CHF
      • Account balance currencies: EUR, GBP, USD and more
      • Markets available: Currencies, Stock CFDs, Index CFDs, ETF CFDs, Bond CFDs, Cryptocurrency CFDs, Commodity CFDs
      • Spreads: GBP/USD minimum spread 0.1, typical spread 1 pip
      • Commissions: Commission free, apart from Stock and ETF CFDs at 0.01 USD per share with 1 USD minimum
      • Platform: MetaTrader 4, MetaTrader Web Trader, MetaTrader Mobile Trading
      • Market depth: Exclusive to MetaTrader 5, you can view the order book to assess the liquidity of the instrument you are viewing

      One of the major differences with the Zero.MT4 account is the fact the spreads start from 0 pips with an additional commission charge per lot, or 100,000 units of currency traded. With this account you can also trade inside the spread value with no requirements on minimum volume (order can start from just 0.01 lot).

      The lower cost of spread, lightning fast execution and ability to trade in the interbank market makes this the go-to platform for serious Forex traders.

      Admiral Markets users also have access to the exclusive MetaTrader Supreme Edition plugin packed full of advanced and highly useful tools in trading GBPUSD, as the next section shows.

      GBPUSD Technical Analysis: Learn when to buy GBP/USD, or sell

      So far, you have learnt that the GBPUSD exchange rate moves in pips and the major factors that influence the movement of the currency pair. Now that you also have access to one of the best trading accounts for Forex traders, as listed in the previous section, we can now focus on identifying the best time to trade the GBP/USD before going through how to buy and sell the currency pair in your trading platform.

      Let’s start by looking at a recent four-hour chart of the GBPUSD:

      Disclaimer: Charts for financial instruments in this article are for illustrative purposes and does not constitute trading advice or a solicitation to buy or sell any financial instrument provided by Admiral Markets (CFDs, ETFs, Shares). Past performance is not necessarily an indication of future performance.

      Traders will often use technical analysis to analyse the information on the chart. Essentially, a GBPUSD technical analysis process will involve looking at previous price action patterns and cycles to help determine what could happen next. Often, traders will also use trading indicators to help in their decision-making process of what is happening in the currency pair at the current moment in time and what could happen in the future.

      Traders who have downloaded the free Admiral Markets MetaTrader Supreme Edition have an edge in using advanced tools to help with their GBPUSD technical analysis. Here are just a few tools that could prove to be effective:

      GBPUSD MetaTrader Supreme Edition Symbol Info Indicator

      Source: Admiral Markets MetaTrader 4 Supreme Edition, GBPUSD, H4 – Data range: from Jun 6, 2020, to June 24, 2020, accessed on June 24, 2020, at 10:15 pm BST. – Please note: Past performance is not a reliable indicator of future results.

      A powerful GBPUSD indicator is the Admiral Markets Symbol Info indicator which is part. To put this on a chart in MetaTrader, first download the Admiral Markets’ MetaTrader Supreme Edition plugin. To learn how to do this, watch the video below:

      Once this has been downloaded, open your platform and follow the steps below to gain access to the Admiral Symbol Info indicator:

      1. Select the Trade Navigator window (Ctrl+N) which will open a side window on the left side of the chart.
      2. Find ‘Admiral Symbol Info’ in the window under Indicators -> Examples.
      3. Select the indicator by dragging and dropping on to the chart.
      4. Select Chart -> Indicators List -> Admiral Symbol Info if you would like to customise any settings.

      In the settings above, it has been customised to quickly tell the trader where each of the different timeframes (Weekly, Daily, H4, H1, M30, M15, M5 and M1) are trading relative to a specific indicator. In this instance, they are:

      • EMAs – Exponential Moving Averages
      • MACD – Moving Average Convergence Divergence
      • CCI – Commodity Channel Index

      So how can GBPUSD traders use this to their advantage? Well the first line in the Admiral Symbol Info indicator is the EMA20. As it is has a blue circle under each of the timeframes it is saying that price is above its respective 20 period moving average on those timeframes. The only red is the weekly chart which means that price is below the EMA20 on this timeframe.

      When a market is trading above the EMA20 it is often seen as a bullish sign. This means that, in this example, the British pound to US dollar exchange rate is bullish on seven different timeframes suggesting the pound is much stronger than the dollar.

      The Admiral Symbol Info is very useful in giving the trader quick information on the bullish, or bearishness of GBPUSD on multiple timeframes and across multiple indicators.

      GBPUSD MetaTrader Supreme Edition Sentiment Trader Indicator

      Source: Admiral Markets MetaTrader 4 Supreme Edition, GBPUSD, H4 – Data range: from Jun 6, 2020, to June 24, 2020, accessed on June 24, 2020, at 10:15 pm BST. – Please note: Past performance is not a reliable indicator of future results.

      Another powerful indicator is knowing the market sentiment on GBPUSD, which the Sentiment Trader indicator provides. To put this on the chart, after downloading the Admiral Markets MetaTrader Supreme Edition plugin, follow these steps:

      1. Select the Trade Navigator window (Ctrl+N) which will open a side window on the left side of the chart.
      2. Find ‘Sentiment Trader’ in the window under Indicators -> Expert Advisors.
      3. Select the indicator by dragging and dropping on to the chart.

      In this example, it is showing that the sentiment on GBPUSD is 50% which is to be expected as the time it was taken is when the US session has closed and traders are waiting for Asia markets to open. This value is constantly fluctuating and could swing wildly in high volume trading hours when European and US desks are open, potentially giving the trader an additional edge in the market.

      Admiral Markets offers professional traders the ability to significantly enhance their trading experience by boosting the MetaTrader platform with MetaTrader Supreme Edition. Gain access to excellent additional features such as the correlation matrix, the latest real-time market data and insights from professional trading experts and other fantastic tools. Get all of this and much more by clicking the banner below and starting your FREE download!

      How to Buy and Sell the GBPUSD

      There are multiple ways to buy and sell the GBPUSD using the Admiral Markets MetaTrader platform. Advanced traders may use the ‘one click trading’ function which – at just one click of a button – a trader can be in a live trade on the GBP/USD. However, to learn how to trade GBPUSD, using orders may be the best place to start.

      GBP/USD Live Trading Ticket

      Source: Admiral Markets MetaTrader 4 Supreme Edition, GBPUSD, H4 – Data range: from Jun 3, 2020, to June 24, 2020, accessed on June 24, 2020, at 10:15 pm BST. – Please note: Past performance is not a reliable indicator of future results.

      Trade GBPUSD with these following steps:

      1. Analyse the market using technical analysis, or the parameters of a trading strategy and determine whether you believe the market will go higher (buying) or go lower (selling).
      2. Right-click, select Trading then New Order. Alternatively, press F9 on your keyboard and a GBPUSD live trading ticket will pop up.
      3. Enter Volume value. This is how many units of currency you want to trade. 1 lot = 100,000 units of currency. The lowest volume value is 0.01 lots.
      4. Enter Stop Loss value. A stop-loss is used to exit the trade at a predetermined price level to minimise losses if the market moves against you.
      5. Enter Take Profit value. A take-profit is used to exit the trade at a predetermined price level to maximise any gains and close out any profit.
      6. Click ‘Buy at Market’ or ‘Sell at Market’ depending on which direction you believe the market will go.
      7. You can view, amend or close your live trade through the Terminal window (Ctrl+T) where you will find all your live trades, pending orders and account history.

      GBP/USD Volatility and Daily Ranges

      As there are many influences on the British pound US dollar exchange rate, the volatility of the currency pair can change significantly over time. GBPUSD volatility is evident through using the Aerage True Range (ATR) indicator.

      Source: Admiral Markets MetaTrader 4, GBPUSD, Weekly – Data range: from June 10, 2020, to June 24, 2020, accessed on June 24, 2020, at 11:36 am BST. – Please note: Past performance is not a reliable indicator of future results.

      The ATR indicator, as shown by the blue line in the chart above, shows the average range of the last fourteen bars for the timeframe displayed. It is clear to see the average range increasing early on and then peaking in the middle. This coincides with the Brexit announcement which massively increased volatility in the currency pair. The impact of Brexit on GBPUSD was huge.

      In fact, at the ATR’s peak, the average weekly range for GBPUSD was around 470 pips. The highest ATR reading for 2020 has been 276 pips. A massive reduction in volatility after the initial impact of Brexit on the GBPUSD subsides.

      The ATR indicator can also help identify the best hours to trade GBP USD.

      The Best Hours to Trade GBP/USD

      Source: Admiral Markets MetaTrader 4, GBPUSD, H1 – Data range: from June 3, 2020, to June 24, 2020, accessed on June 24, 2020, at 9:57 pm BST. – Please note: Past performance is not a reliable indicator of future results.

      In the hourly chart of the GBPUSD above, the ATR indicator continues to move around from peak to trough. This is because pound/dollar volatility is constantly changing as markets digest news items. However, traders may find the most amount of volatility occurs during major session opening hours and the least amount of volatility outside of these hours.

      This is why many traders believe the best hours to trade GBP/USD are during the opening hours of the major market sessions, even though you can trade GBPUSD 24 hours a day, five days a week.

      So what are the major session opening hours?

      • European session – 7am to 5pm BST
      • US session – 1pm to 9pm BST
      • Asia session – 12pm – 5am BST

      A GBPUSD Trading Strategy Example

      There are many popular types of trading strategies to trade GBPUSD. The important part is to keep it simple and follow a process, rather than chasing the outcome you want, which can ultimately lead to building poor trading habits.

      In order to keep it simple, let’s use some well-known, popular tools to build the beginning of a possible GBPUSD price action trading strategy:

      Source: Admiral Markets MetaTrader 4, GBPUSD, H4 – Data range: from May 13, 2020, to June 24, 2020, accessed on June 24, 2020, at 10:10 pm BST. – Please note: Past performance is not a reliable indicator of future results.

      The above four-hour chart (H4) of GBP/USD shows a 34-period exponential moving average (34 EMA) plotted on price. To put this on your chart, select the Insert tab at the top of the chart, then Indicators, Trend and Moving Average.

      Then in the popup box input a period of 34 and MA method of Exponential and a Style of blue to colour the moving average line.

      Moving average indicators are often used as a trend filter to quickly determine who is control of the market, buyers or sellers, thereby giving us a set of rules to start with:

      • Rule 1: Go long when the price is above the 34 EMA.
      • Rule 2: Go short when the price is below the 34 EMA.

      Now we have a possible directional bias, how do we time a trade? This is where price action trading becomes useful. There are many patterns that can be used in price action trading, two of the most common candlestick patterns are ‘the hammer’ and ‘shooting star’.

      The hammer price action trading pattern, as shown above, is a bullish signal which signifies the failure of sellers to close the market at a new low and buyers surging back into the market, to close near the high.

      The shooting star price action trading pattern, as shown above, is the opposite of the hammer pattern. It’s a bearish signal which signifies the failure of buyers to close the market at a new high, and sellers surging back into the market, to close near the low.

      We can now further elaborate on our rules:

      • Rule 1: Go long when the price is above the 34 EMA and hammer price action pattern is formed.
      • Rule 2: Go short when the price is below the 34 EMA and shooting start price action pattern is formed.

      Source: Admiral Markets MetaTrader 4, GBPUSD, H4 – Data range: from May 13, 2020, to June 24, 2020, accessed on June 24, 2020, at 10:15 pm BST. – Please note: Past performance is not a reliable indicator of future results.

      The chart above highlights occurrences of both rule one and rule two. In most cases, the market continued to trade in the direction of the moving average and price action pattern suggestion. There will be occasions where your chosen trading rules will be less effective and result in losing trades, as in some of the yellow boxes above. This is why risk management and using a stop loss will prove to be beneficial in the long run.

      This strategy has not been tested historically for its effectiveness, it merely serves as a starting point to build upon. Traders can take this one step further by experimenting with different moving average values, learning additional price action patterns in the Admiral Markets Educational library, adjust the timeframes and use the advanced tools from the MetaTrader Supreme Edition plugin.

      While a GBPUSD trading strategy can prove to be effective it is also important to understand the bigger picture opportunities as well.

      Opportunities on GBP USD Forecast For 2020

      2020 could be a historic year for GBPUSD trading with Great Britain finally leaving the European Union. Over the year 2020, the turmoil in the UK government continued with Boris Johnson becoming the successor of Theresa May. Johnson didn’t get the Brexit, as promised, finalised, but EU leaders at least agreed on a flexible extension of the Brexit date from October 31, 2020 to the end of January 2020. Depending on the resulting outcome and impact on the UK economy which will naturally affect the monetary policy of the BoE, there should be plenty of opportunities on GBPUSD for the flexible trader looking at the big picture.

      Source: Admiral Markets MetaTrader 5, GBPUSD, Weekly – Data range: from Oct 1, 2020, to June 24, 2020, accessed on June 24, 2020, at 10:30 pm BST. – Please note: Past performance is not a reliable indicator of future results.

      The weekly chart of GBP/USD above shows the currency pair trading currently trading in a regressive mode, correcting most of its losses which occurred over Q2 and Q3 in 2020. But below 1.3350/3400, bears stay in control and only a sustainable break back above 1.3400 would brighten the overall technical picture.

      Fundamentally, if the UK political landscape can improve, and certainty can be provided through a clear direction on Brexit, there may be a case on why GBPUSD may rise in the long run. However, if the situation worsens, forcing the BoE to aggressively loosen monetary policy, a drop below 1.2000 with a minimum target around 1.1500 could be likely.

      Why trade GBP/USD with Admiral Markets?

      If you trade the dollar-pound Forex pair with Admiral Markets, you can:

      • Trade 24 hours a day, five days a week.
      • Use leverage of up to 1:500 for Professional clients and up to 1:30 for Retail clients.
      • Trade with a well-established, highly regulated company including regulation from the highly respected UK’s Financial Conduct Authority.
      • Access the fastest and most secure trading platforms from MetaTrader on desktop, web or mobile.
      • Trade with institutional grade spreads as low as 0 pips with Zero.MT4 and connect directly with tier one liquidity providers.
      • Access the Admiral Markets MetaTrader Supreme Edition plugin for advanced trading tools such as the Sentiment Trader and Advanced Order functionality completely free!
      • Benefit from our negative balance protection policy for peace of mind.

      If you’re feeling inspired to start trading, or this article has provided some extra insight to your existing trading knowledge, you may be pleased to know that Admiral Markets provides the ability to trade with Forex and CFDs on up to 80+ currencies, with the latest market updates and technical analysis provided for FREE! Click the banner below to open your live account today!

      About Admiral Markets

      Admiral Markets is a multi-award winning, globally regulated Forex and CFD broker, offering trading on over 8,000 financial instruments via the world’s most popular trading platforms: MetaTrader 4 and MetaTrader 5. Start trading today!

      This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.

      Honestly Speaking: Why I Teach Forex Trading… And Charge For It

      Multiple times, I got asked why I started a podcast in the first place and why I, later on, created the DesireToTRADE Academy, a community traders pay to be part of. In other words, why do I teach Forex trading?

      “After all, if I were that successful of a trader, why would I be teaching?”, some say. Maybe I should be scared to share my trading techniques…

      So in this article, I want to break down the topic of why I teach Forex trading, but I’ll have to start exploring a few misconceptions when it comes to teaching to trade. By the end, you should understand the real reasons why I teach as well as more on the power of teaching.

      Misconception #1: If You Teach Others, You’ll Lose Your Edge

      Maybe I should be scared to share my trading techniques. That intrigued me as I received the following message a few days ago:

      That made me reflect on the broad picture of trading. Can a trader really lose its edge as he’s teaching others to trade?

      I don’t think so, at least not in the Forex market. We’re talking about a market having a turnover that may exceed 4 trillion dollars per day (FxPros.Net). Even if multiple people do the same thing as you’re doing, your edge won’t disappear.

      However, an edge can, and is even likely to disappear over time as Mike Bellafiore said in his interview on the podcast. Markets change and successful traders know that. My strategies aren’t set in stone and they may become obsolete with time but I’m totally willing to adapt (that’s the key).

      Misconception #2: If You Make Money Trading, You Need To Teach For Free

      Yeah, that’s a great question…If you’re making money trading, why would you charge to help others? Aren’t you supposed to give everything away for free?

      With all the scams in the trading industry and people charging thousands of dollars for things that aren’t worth the price, you can certainly get suspicious about coaches who are looking for your money. I get that.

      But don’t expect everything for free.

      The main reason why I charge for the training I provide is that I know how volatile trading income can be.

      Don’t get me wrong…

      It’s not that you can’t make a living from trading, but trading for a living involves a much higher level of stress.

      That’s why having multiple streams of income makes life much more comfortable for traders. If you want to learn more, listen to the interview with Moritz Czubatinski.

      Of course, you can trade a large account and live below your means. That’s the way some traders prefer to go and I totally acknowledge that, but that’s not what would fulfill me in life.

      The other interesting thing I’ve found is that you (yes you!) take a course much more seriously when you have to pay for it.

      It has been proven that the more you charge for anything, the more people get committed to a training. And I don’t want to teach to people who aren’t committed.

      If you were to tell everyone you know that you were going to figure out how to trade for a living no matter what, the pressure would be pretty high to follow-through, right? That’s called accountability and the same happens when people have to put down money for something.

      So in short, paying for a course makes you more likely to follow through.

      3 Reasons Why I Teach Forex Trading

      After going through those misconceptions, I want to share with you the top 3 reasons why I teach Forex trading. Those do not come in order of importance. I just thought about 3 and kept it simple.

      Reason #1: I Love To Teach And Feel I Contribute

      Usually, a trading day is either good or bad. You can do everything flawlessly and still lose money. That doesn’t always feel good, agreed?

      But when I get off a call and know I truly helped someone, I can’t feel any other way than happy. That’s a wonderful feeling.

      In fact, a few years ago I went through an exercise of figuring out my personal values. It turns out that impact is really near the top of my list (just below freedom). I just have a strong desire to make an impact on people.

      I also figured out in the past years through teaching on several subjects, from English to statistics & economics, that I love to teach. It has always been a way for me to have a positive impact.

      Reason #2: Teaching Makes Me Better

      In Creating Your Forex Trading Strategy Playbook, I discussed the importance of teaching your plan to someone else if you want to execute it better and make it a habit.

      Teaching something will always be, for me, the best way to learn.

      Don’t get me wrong here… you can’t teach Forex trading from day #1.

      The way it works is you start slowly accumulating knowledge and then share it with the people around you.

      For instance, when I started the Desire To Trade Podcast, I was clueless about everything that surrounded trading other than my own trading strategy. Then, I started interviewing successful traders and began reading books. I even hired a coach!

      It took me at least 1 year to assimilate what I learned, but I’m now at the stage of sharing it with the people around me (and you’re part of those people!).

      Reason #3: I’m Looking To Grow My Trading Capital

      It wouldn’t be honest saying I teach only for the pleasure it provides me.

      As Zig Ziglar said,

      “Money isn’t the most important thing in life, but it’s reasonably close to oxygen on the ‘gotta have it’ scale.”

      In the end, we all need money to live in this world. There’s no other way.

      At the time of writing this article, I’m still growing my trading capital and place most of what I earn into that trading account.

      While I’ve been fortunate enough to have people invest in me (i.e. trusting me to trade for them), I still need to do my part. That means growing my personal trading account.

      Here’s The Deal…

      Although I’ve provided you with those reasons for why I teach Forex trading, I have a clear goal in mind. I come in to teach with the mindset that whatever you invest in anything I offer (the DesireToTRADE Academy for instance) is money you should be able to make back.

      I like to believe that I don’t provide courses, I provide transformations. That’s the ultimate goal with everything surrounding this blog, the podcast, and the Academy.

      Any struggles you’re facing right now? Anything that resonated with you from this article? Comment below or post in the Facebook group!

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