Six Specific Ways to Learn How to Win in FX
How can I win in FX? Not only in FX, but in the world of markets such as stock investing and Bitcoin, the more you know, the more strangely you end up feeling you can’t win. It’s mysterious, isn’t it? This time, I will analyze the causes and write an article about how to fight to win in FX.
Concrete methods to acquire a winning method in FX
What should you do to acquire a way to win in FX? I think many people are curious about what winning traders are doing. “To acquire a way to win in FX.” For that, it is important to analyze the differences between winning traders and losing traders, thoroughly eliminate the areas common to losing traders, and thoroughly absorb the areas common to winning traders. Continuing to win in FX is not easy. I, the site administrator, also recognize that I am always in a precarious situation.To acquire a winning method in FX, analyze the reasons you stopped succeeding in the market
As you gain experience in FX, you often hear that “I was winning at first, but suddenly I couldn’t win anymore.” Why is that?
First, there are various factors, but I believe there are two major causes. One of them istrading that mismanages riskI think that’s the cause. Examples of mismanaging risk include...● After a winning streak, getting overconfident and trading with large lots, resulting in a big loss.
● Trying to recover losses with even larger lots, but the emotional swings in profit and loss outpace you, leading you to repeatedly take profits at small price moves.
● Realizing a position is in sizable loss against your expectation, but the stop-loss is too wide to cut, so you average down.
● When averaging down and winning, small wins; when losing, a decisive defeat occurred.
● After a big loss, fear of carrying floating losses leads you to cut losses sooner than your planned level.
As you experience these misuses of risk, you become unable to fully take risk. Also, the width of gains narrows, making trading intervals shorter, and you end up trading a lot without a clear edge in your mental state and trading rules. In other words, you develop what’s called the “posi posi disease.” The second ispreconceptions and biases caused by information overloadWith the development of the Internet, you can access real-time information from many sources. In FX especially, there are abundant media such as YouTube videos, websites, blogs, newspapers, and magazines.● Trying to recover losses with even larger lots, but the emotional swings in profit and loss outpace you, leading you to repeatedly take profits at small price moves.
● Realizing a position is in sizable loss against your expectation, but the stop-loss is too wide to cut, so you average down.
● When averaging down and winning, small wins; when losing, a decisive defeat occurred.
● After a big loss, fear of carrying floating losses leads you to cut losses sooner than your planned level.
While this media is convenient, it also creates a large number of traders who hold the preconception that “this is how it must be” or “it must be this way.” Moreover, the stronger the media’s reach, the stronger the preconceptions. In the market, preconceptions dull your sense of opportunity and can cause you to misjudge situations where you should cut losses. One striking example is the recent Trump volatility, when media worldwide claimed a strong dollar and stock decline, but instead the dollar weakened and stocks rose. Media information does not give you an advantage to win in FX merely by having it. If that information won’t leave your mind and you can’t avoid preconceptions, sometimes it is better to deliberately avoid information to improve your FX outcomes.To acquire a winning method in FX, understand the essence of the market
From analyzing why you stopped winning, to taking risks fully and moving with the market without bias, the remaining question is how to measure the risks you take and how to follow the market without bias. To solve that, you need to understand the essence of the market. The essence of the market is, bluntly, human behavior itself. To win in the market, you must analyze and understand human actions from various angles.● Where long-position traders take profits or cut losses.
● Where short-position traders take profits or cut losses.
● When observing traders, where they take positions.
By understanding this, you can long at points where a drop is likely to stop and you can exit long positions where a rally is likely to stall. This human behavior has long been studied in the field of technical analysis, which systematizes statistics over many years. Technical analysis covers a wide range and can be hard for beginners, but it is essential knowledge to win in FX, so please learn it.● Where short-position traders take profits or cut losses.
● When observing traders, where they take positions.
To acquire a winning method in FX, create scenarios for how the market will move
Once you understand the market’s essence, you’ll naturally see the appropriate risk-taking and profit-claiming points, and you’ll realize it’s better not to rely on media information. To win in FX, you should not challenge the market in a haphazard, last-minute gamble. Most losing traders probably enter without much thought or research and start judging and researching only after entering, thinking, Was my entry correct? Here, if you set this up, you can expect this much profit up to here, and if you don’t cut losses here, you face this much risk until〇〇. Related articles：Scenario for USD/JPY movementEven after entering, there is some possibility to consider exits, such as where to admit defeat or where to lock in profits, but if your position is not flat, it will always be foggy. This little effort before facing the market is necessary to win consistently in FX. (How to build a scenario is discussed inYouTube videos.)To win in FX, establish a trading plan and rules based on scenarios
A trading plan is about where to enter and exit, the risk, and the expected profit, and it involves looking at the charts ahead of time, predicting the possible investor behavior a rational person would take, and planning with a reasoned estimate to gain an edge. On the other hand, trading rules specify in more concrete terms how to enter and exit. For example, if you planned to enter on a breakout, an example of trading rules would be...● If the market has been consolidating for more than XX periods and there are YY peaks, enter with a stop at the high price.
● If the market has been consolidating for XX periods and there are YY peaks, apply a filter of ZZ.
● If the market has been consolidating for XX periods and there are no peaks, skip et cetera…
Returning to trading plans and trading rules, to determine entry points and exit points, it is important to understand probability and expected value.● With this setup, you have a 60% win rate, so with a 15 PIPS profit and a 20 PIPS stop, you still have profit, so enter.
● With this pattern, you have a 40% win rate, but if you can make 35 PIPS of profit and a 20 PIPS stop, you’ll still have profit, so enter when this pattern occurs.
One particular stock had over 60% chance of a Friday bullish candlestick and an ATR of 100 yen, so buy at the open and set a price target 70 yen higher; if unable to take profits, close at the end of the day.
Quite simple, right? No room for mistakes. When I was investing in stocks, I recorded trades with a self-made Excel tool, registered vendors on platforms like CrowdWorks or Lancers to create Excel VBA tools for 20-30 thousand yen, tracking a stock’s 5-day moving average, weekly highs and lows, weekday effects, candlestick traits, and more, all available online.In FX, you can also use MT4, a powerful free trading tool that allows backtesting data for over ten years in a short time, but in any case you must verify that your entry method has a positive expected value and continue to work hard to win consistently.To acquire a winning method in FX, keep a trading journal consistently
Technical analysis is fundamentally about a scenario that remains valid as long as humans participate in the market or core instincts do not change, but trading rules can change. In markets, there is no method that remains valid for years. In other words, entry rules that worked up to a point may suddenly stop working. So, the trading journal becomes essential.
If you keep a trading journal, you’ll know when your entry rules stop working, and you might also find rules that perform well. Additionally, keeping records may reveal the times of day or chart patterns where your entry rules perform best or the direction of trends. To continue winning in FX, you need to persistently do things that other traders find bothersome.To acquire a winning method in FX, strictly implement money management rules
Trading does not offer a guaranteed paradise. It is a money game where you seek an edge amid ongoing uncertainty and place bets on probability. No matter how much edge you have, you will experience losses, and depending on how you take risk, you may deplete your capital during a losing streak. Considering that one-year survival rates for day traders are around 10%, money management is not as easy as it looks. So, what exact money management should be implemented? In textbooks, one risk per trade and one-day risk are recommended, with per-trade risk limited to 2% and daily risk limited to 5%. If you win and lose with appropriate lots, you won’t be expelled easily. If you survive in the market, you’ll have chances to apply FX-winning methods in practice. Many legendary traders have been expelled once or twice, but they kept trying and eventually built immense wealth. Adhere to money management and discipline, and join the FX winners.Concrete methods to win in FX and summary
How was it? I’ve written this article incorporating the site administrator’s experiences and methods to win in FX. To win in FX, analyze the causes of not winning in the market and understand human behavior, the essence of the market. After understanding human actions, carefully envision price movements, and build a trading plan on that basis. When a scenario presents itself, enter based on trading rules and exit according to the scenario and rules. Establish the advantages of your trading rules, and keep a trading journal to monitor capital and manage money according to your situation. I hope this article proves helpful to you.× ![]()
