What Kind of Trader Are You? - Forex Smart Tools Newsletter Volume One

Forex Smart Tools Newsletter ~ Volume One

Welcome to the Newsletter Series

We are not here to sell you a hot new strategy. There are plenty of people doing that already.

Instead, we are here to help you decipher for yourself which of your strategies are good and which are not – to weed out those strategies that will lead you to ruin from those that will let you walk the razor's edge to financial success in your trading.

Every two weeks we will send you one core concept covering the science of trade analysis and money management, all designed to increase your equity curve. In this way, we will develop a sequential curriculum of study to help you become a more profitable and professional Forex trader. We offer these free newsletters to support our Forex Smart Tools owners and those on our mailing list.

And who are we? We ourselves are full-time professional Forex traders. We've been trading since 2005 and are members of the National Futures Association (NFA). Our private firm is registered with the CFTC as a CTA: Commodity Trade Advisor.

In our own experience, we saw that no one had created the tools we needed to quickly make precise trading decisions based on intelligent money management, and to analyze the trades after we took them – so we created them ourselves. These two pieces of software come from our real-life trading experience, and are designed to be intuitive, easy-to-use and accurate, while offering a high degree of customization to fit your own style of trading. For us, these tools made the difference between being consistently profitable in our trading – and not! We ourselves use them every day we trade.

Good trading to you all, Evelyn & Mindy
www.forexSmartTools.com    skype: forexSmartTools    twitter: @forexsmarttools

Lesson One: Three Kinds of Traders

We've identified 3 kinds of traders. See if you can place yourself into one of these three categories:

1) The Thrill Seeker:

Trading is a thrill. You have a whole bunch of ways you trade, with a variety of things you see that get you into the market, and a variety of factors that get you out of each trade. You're not really sure which works the best. Sometimes you're profitable, sometimes you take a big hit; generally your equity curve is pointing downward over time. You're intrigued by trading, but not sure if you're going to make this work for you over the long haul.

2) The Aspiring Student

You've taken a course or two... or thirty... from some "Forex Guru", and try to follow what you've been taught. Sometimes the approach you've learned fits with what you see the markets doing and you get ecstatic and hopeful; other times the market does just the opposite and you get discouraged and want to quit. Your equity curve and your emotions are up and down like a yo-yo. You're not ready to let go of your day job yet.

3) The Independent Thinker

You've taken everything you've learned and been taught, and you're starting to think about it for yourself in a logical and orderly way. You're separating the good trades from the bad and you spend time after each trading session and at the end of each week looking back at what you did and what you could have done better. Each trade becomes a platform for learning. You've committed to being able to trade Forex for your livelihood – whatever it takes.

Which are you?

For ourselves, our own path to mastery went through each of these stages... from intrigued thrill-seekers to the good-little students... to independent free-thinkers. Our equity curve didn't start the upward slope until we made it to stage three.

Accountability is one of the main factors of success as a Forex trader. Start keeping a Trade Log and see for yourself. You'll be much less likely to impulsively take a trade if you know that you have to take screen shots, log it and justify your entry, stop loss and exit. You'll find that you have much more patience to sit like a duck hunter and wait for all of your trade requirements to be in order.

There are no traders who are in stage three who do not keep a careful record of their trades. If you use the Forex Smart Tools Trade Log, we make this easy for you to do. But whether you use our Log or not, the sooner you keep careful track of each and every trade you take, the faster you'll see your trading skills improve.

Risk Disclaimer

Before deciding to participate in the Forex market, you should carefully consider your investment objectives, level of experience and risk appetite. Most importantly, do not invest money you cannot afford to lose.  There is considerable exposure to risk in any off-exchange foreign exchange transaction, including, but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair.  Moreover, the leveraged nature of Forex trading means that any market movement will have an equally proportional effect on your deposited funds. This may work against you as well as for you. The possibility exists that you could sustain a total loss of initial margin funds and be required to deposit additional funds to maintain your position. If you fail to meet any margin requirement, your position may be liquidated and you will be responsible for any resulting losses.