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Coensio’s mini guide

 Hello fellow traders!

In this section I’ll cover my personal view on how to become a profitable (currency exchange) trader. I’ll not point here to any trading system or indicator, but I hope I can put you on the right track to success. That’s my main goal here, just to share my knowledge and help you to avoid the common mistakes and so, to spare you some time and money. In this short article I’ll also try to transfer my basic knowledge, that helped me to become a successful trader. I’ll also share some external links for all places*, I’m visiting on regular basis. There is so much “BS” out there, I dare to say that 98% of stuff you are reading on the net, has nothing to do with profitable trading. In most cases, the goal is to rip you off of your money. No wonder that only 5% of all traders are making money in this business. It is pretty sad, but it is true, FOREX world is like a jungle, that is full of predators, you need to be careful out there! While reading this, you should keep it in mind, that this is only my personal view and it can differ from all other stuff you have read on the net so far. So, that being said, let’s begin…

Trading currency exchange market is not an easy thing to learn. Without being bold, I can say that I’m a pretty smart guy, but yet, it took me several years to master the art of trading and still I’m learning new things every single day! In other words: trading has nothing to do with being smart! It has everything to do with what kind of person you are. In the market, you are fighting against all other people, but your worst enemy is YOU! Furthermore, I can also ensure you, there is no FOREX secret, or secret trading system or a magic indicator nor a secret strategy. In my opinion, in order to be successful, you will only need the following ingredients:

1. Some basic knowledge and basic understanding of how the market works.
The bigger your knowledge will be, the bigger advantage you will have over other traders, so the bigger your chances will be for making successful trades. Simply said, the “knowledge is power” rule applies very well to trading. Furthermore, you need to understand the forces that are moving the market price. The biggest “rookie” mistake is over-concentrating on the technical analysis, charts, systems and indicators, while the true is, that the long and also midterm market movements are dictated by the macroeconomic events. Learn the fundamentals, learn about central banks and macro economic news and how their are affecting the market direction. Trade always in the right fundamental direction, it will help you a lot! 

2. A trading system that will give you a winning “edge”.
The majority of beginning traders, is always looking for this one perfect system, the “holly grail”, that will always automatically point the right price direction for them. They are browsing through the forums, testing one strategy after the other, continuously switching between trading systems and also spending thousands of dollars on commercial systems, webinars, books, etc.. and in the end, the sad result is that non of those things is working for them. So why is it so hard? Because there are not many purely mechanical trading systems, that are based on some technical indicators, that will work for everybody. If you know a technical system based on some simple mechanical rules, for example: entry long when one indicator is crossing some level and other indicator has some other level and that system is making a 2% ROI a month, please, but please let me know, and I’ll program an EA for you, totally free and we will become very rich! 😉 But let’s get serious for a moment here, in fact there are not many profitable systems out there, that are purely based on some automatic, technical chart analysis. The only reason, that those systems work for some traders, is their experience and their intuition they have developed over the years when trading the same system over and over again. Trading is like learning how to swim or how to ride a bike. It’s is a skill which can not be transferred by rules! For example, if I would write a book with a title “learn to swim”, explaining my swimming technique with photos and movies of how I swim, I can ensure you, that you want be able to swim after reading that book. You will probably drawn within 2minutes and that is exactly what happens to most traders, their simply blow up their account within weeks. But that’s life, it happens to everybody, with no exceptions. However, lucky enough there are some things you can do about it.

For example, learn from a profitable professional trader (see links below), “buddy-up” with someone, join a trading community, learn from people that are showing some good positive results. Do not spent much time on the “popular” trading forums, it’s a waste of your time!

If you have some programming skills, learn the MQL language, it is very easy and it will give you much deeper understanding of how the market mechanism works. You will be flexible and you will be able to program your own tools or even to develop your own trading system.

Get grasp on all important fundamental factors, follow the direction that is dictated by central banks and macro economics events.   

Master the art of technical analysis. In first stage you only need to learn about: support and resistance levels, candle patterns and price action, ADR, moving averages, and optionally Fibonacci levels and Bollinger bands. Do not make it too complicated, trading rules should be clear and easy. Too much complexity will lead to hesitation and this will always lead to a big loss of your money!

Learn trading only on the higher timeframes! D1 or H4, occasionally H1. 

Trade like a sniper! Be very patient and take only trades with a high level of confluence. At least 3 main factors must be in confluence (pointing in the same direction). For example take trades only when: (1) there is a clear price action pattern (2) at an important SR level (3) which is corresponding with your fundamental directional bias for coming period. 

Learn about the money management rules. Take only the high probability trades with a risk-reward ratio > 1:2. 

3. Determination and most importantly: the iron DISCIPLINE!
There is a good reason for that why I’ve used capital letters for keyword “discipline”. This is the most important keyelement of your success. If you are a person who is lacking discipline, then do not even think about trading, just go to the casino. Being disciplined helps you to follow your trading method even when your “gut feeling” is telling you something else. Market doesn’t care about your feelings, you must find a stable trading method that works for the long term and you must stick to it, no matter what your feeling is telling you. Note that a trading method is more than a trading system. Your method should determine your whole behavior as a trader. For example it should tell you where to look for fundamental information, how to interpret the info, when to trade and when not to trade and even when you will look at the charts. In other words your method should control your trading habits. Make a clear plan for all things you need to do every day and follow it step by step! 

4. A good broker.
If they say that “your broker is you friend”, it is not entirely true. The correct phrase is “a good broker is your friend and all other brokers just want your money”. When trading, it is extremely important that selected broker will fit to your trading strategy or method. For example if you are short term trader, trading with a broker with large fixed spread, will lead to unneeded losses. On the other hand, trading news or other volatile events with a dynamic spread will introduce unneeded risks. So make sure you understand all conditions you are trading with and make sure those conditions fit well to your trading method. 

So I hope you can see and understand that trading is a skill that everybody can learn. It’s is not a hoax, there is no magic, there are no secrets. Learning how to trade profitably will not be an easy journey but it really can be done. Follow the simple logic, learn from your mistakes and practice, practice, practice and you will eventually get there. The “5%” winner club is waiting for you;)
Coensio’s recommended places:
– a good source of free reliable market news
– another good source of fundamental analysis
– forex news events and analysis
– great forex course with some decent community
– learn trading skils from a professional trader (very good course!)
– free overview of commercial EA’s, backtests and forward test results
– a profitable EA!


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Short about me

Welcome to my Blog!

My name is Chris, I'm a Dutch engineer with Polish roots. By day I'm an engineer, system trader and an internet entrepreneur, and by night I'm fighting internet crime;) I hope you will enjoy my website and my free MT4 software. Do not forget to check out my blog.
B.t.w: 'coensio' (Latin) = assessing, assessment, census, estimating, opinion, rating, taxing.

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