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A trade closed at breakeven is one that is neither a winner nor a loser. It closes at a particular price where profit and losses both equal to zero, or close enough.

The beauty of breakeven trades is that, although you may not increase your account with them, they enable you to protect your capital, which is crucial when being a part of this game.

Let's discuss the two types of regular breakeven trades and the psychology behind them.

Scenario 1

The above scenario usually unfolds through wild swings of price action and unpredictable market events, and it's a smart move to protect your capital and exit at breakeven.

However, traders often end up with breakeven trades for the wrong reasons, usually encounter fear and see a positive trade turn negative.

Scenario 2

You've been in a trade that hasn't been going well, and you are finally starting to see price creep back towards your entry level. Although it's never really a good idea to let losing trades run, doing so can work to our advantage.

As the saying says, "cut losses short, let profits run", and of course no one wants to close out on a trade in a loss, but sometimes it's the better thing to do; it gives you more time and energy to focus on other potential setups, instead of dreading the losing trade you're in right now.

Hope can lead a trader to hold a losing trade which they should have exited a long time ago. Closing a trade at breakeven is the best that you can do, and that doing so can save you from taking on more significant losses than necessary.

But obviously, no one knows exactly what will happen, so it's not like we can "choose" which scenario we want to make a reality. It's way easier said than done, but the message I'm trying to portray here, is that it's okay to close out early on a trade that is not moving in your favour.

It's essential to keep track of your breakeven trades; they reveal a lot about how you keep yourself together in times of extreme stress.

Next time you close at breakeven, take a step back and ask yourself what that zero in the P/L column means. Did you execute your trade according to plan, and the market just didn’t go your way? Or were you overcome by fear, greed, or hope?

Charge it towards your experience, make the adjustment to your forex trading plans, and move forward.

A key component of being successful in the trading field is by maintaining consistent long-term results. This article is to draw your attention to some of the more nuanced aspects of successful trading that you may or may not have been paying attention to, which can essentially make or break your account.

Though I can't promise you success, if you read and implement the three points discussed below, you should see some improvement in your trading results.

1) NOT Trading is a Part of the Game

To anyone not aware of the power of staying on the sideline, this is one of the easiest ways to maintain consistency in trading. Immediately it sounds counter-intuitive, but it works.

To know when not to trade, you need to know when to trade. This would involve mastering an effective trading strategy such as price action trading, market structure trading, news trading, or preferably a combination of all three.

By having a good mixture of confluences in your trade setups, you will know your trading edge and when to trade. When you see a setup without a good mixture of confluences, then you'll know to not enter.

An example of this would be if you see a mixture of price action sell signals on Gold, such as a descending triangle pattern on the daily timeframe, maybe a rising wedge on the H4 timeframe, or anything else pointing towards a sell on Gold from a technical aspect. However, maybe the Fed just came out and announced that inflation is on the rise in the US, and fundamentally the USD is not performing too well. This mixture of buy and sell signals could make you step back and stay on the sidelines to see what happens next.

Always remember that by not trading, you are not losing money. Obviously, the long-term goal is to make a fantastic ROI, so eventually, we will have to enter some trades. However, stepping back for a day, or maybe even a week, isn't a bad idea. It allows you to see what's going on and how market prices are reacting to specific events.

2) What is the Long-Term Goal?

You need to work out what you want from this, and how you will realistically achieve this goal. For example, my goal in trading is to make a 60-100% ROI per year. Looking back at my past three years of trading, I've noticed my winning months average out to about 6-10% ROI per month swing trading and barely paying much attention to my positions. Just simply finding amazing setups and letting them run until either SL or TP, while trailing stops when in profit.

Making 60-100% per year is much better than making 170% in February, then losing it all in March. Your chances of becoming successful in this field are improved simply by taking a part-time view on your trading, rather than wanting to be a full-time trader straight away.

3) Develop Your Trading Habits

You need to develop a consistent trading routine that is devoid of gambling-like behaviour. By becoming organised and disciplined, you'll develop a routine that reinforces positive habits instead of negative and possibly costly ones.

A common negative habit is entering a trade by over-leveraging or even over-trading, you win one or two of these gamble trades, and that easily you've began to reinforce a bad habit that is hard to break. These trades never last, and usually one bad trade can wipe out all your winnings.

An example of a positive habit is checking a pip value calculator and working out a safe lot size to use to enter a setup you have. By doing this, you know you're using a position size, which dependant on your stop loss, you're only risking x% of your account. I personally recommend risking 1-2% per trade.

This obviously goes without saying, but you're better off choosing and sticking to positive habits rather than negative ones. Positive habits lead to positive long-term results and overall performance in the trading game.

Trading Without a Strategy

Developing and trading with a strategy is the easiest way to improve your trading. Emotions are one of the hardest barriers to overcome in trading, but by trading with a plan you not only remove your emotions from the equation but also guarantee more consistency. You will be able to see what doesn't work and can fine tune your strategy accordingly. Its highly recommend that you start off in a demo account to develop a strategy.

Improper Risk Management

Ask any trader what the most important aspect of trading is and they will say risk management. Risk management isn't just keeping your losses small and not risking more than x percent of your account in one trade. In fact one of the easiest mistakes to make is being too cautious. Too often people see their trade run into profit and instantly move their stop loss to break even or just close the position. Its important that you give the market the respect to run you into a proper profit at which point you can consider moving your stop. This is another reason why sticking to a plan is really important .

Ignoring Fundamentals

When starting out it can be easy to get wrapped up in the charts, analysing the candles, looking for the perfect technical pattern, it's easy to forget what drives the currency markets: Banks and large institutions moving their money around to invest and get the highest interest on their capital. And while its less relevant on the lower timeframes, the impact of fundamentals should never be underestimated. I wrote an article on the main factors that influence the markets here.

Blindly Trading Other People's Signals

Trading off signals is a trap. Like many other 'get rich quick' schemes on social media, if you get lucky they may work for you in the short term but are almost never viable long term. Even if you find some consistent signals, your not actually learning anything, and in the long run you are setting yourself up for failure. Signals can be a good way of learning if you understand exactly why the person making the trade is doing so and how you can apply it to your own trading.

Trading doesn't have to be complex. In fact, in all of my trading experience, almost all of the money I have made has come from the simplest market approaches. In this post, I'm going to share with you one of my best trades for the month of March, 2021, and the entry style I used to make almost 3 grand in just a few short days.

The month of March started out slow. I had some winners, some losers, but by the end of the month I was just slightly negative for the month. To anyone who's been trading for a while, you know negative months happen. But no matter how long you've been trading, they can still be quite frustrating - especially when you're sticking to the plan but nothing seems to be playing out right.

In the last week of the month however, a setup I had been waiting for on NZD/JPY finally started to poke its head up. This setup is one of my favorites, and often has the potential to produce some great risk to reward opportunities. So I took the trade...

If you're looking to see all of my trades in real time, I share all of them in our private discord server. If you'd like to join, you can use code READER to get 25% OFF. Click HERE to sign up!

So what's the setup?

Well let's rewind and take a closer look.

My main reasons for taking the trade, as mentioned in the trade alert sent to members:

- Bought NZD/JPY at a key demand zone where buyers were strong historically

- Risked 50 pips initially on the trade in case I was wrong

- Bullish on NZDJPY due to a continued recovery environment, favoring the faster growing economy (NZD)

- Planned to trail stops if price went in my favor


At first the trade moved slow, but once it started running, it really kept going. From there I trailed my stop loss using price action and key zones to protect the trade from sudden reversals. Ultimately, price kept running and I ended up stopping out for a profit of over $2700.00!

So I have to add some context here. I'm trading with a larger trading account than most newer traders, so not everyone is going to be able to make those sort of gains. But - the point is that regardless of account size, some of the best gains come from the simplest approaches.

I had a plan in case I was wrong, I had a strong reason for entering long, and I had a plan to let the trade run if it went in my favor. Finally, keeping a journal is a key for holding yourself accountable!

I share my trades inside of our private discord for members, and spend a lot of time answering questions and explaining my trades fully. If you have any interest in joining our community, you get access to a whole bunch of cool stuff like trade alerts, chatroom access, and live coaching webinars. If you'd like to join, you can use code READER to get 25% OFF. Click HERE to sign up!

Thanks for reading, and maybe I'll see you inside the private group!

- Nick Syiek, Founder & Market Analyst at A1 Trading

With anything you do in life, setting goals and expectations is crucial. It keeps you on the right track and provides benchmarks to ultimately, obtain the long-term goal; being a wealthy profitable trader.

However, I've come to realise that setting these small benchmarks can actually be quite dangerous. Setting these too high or too unrealistic, we're just setting ourselves up for disappointment and failure from the pressure of achieving it in not enough time.

Usually, as a brand new trader, you quite quickly learn how hard trading is, from the performance aspect, all the way to the psychological aspect, probably the most difficult. Here are 3 trading goals that often lead to disappointment:

1) Learn Quicker By Taking More Trades

Taking more trades and being in the market technically makes you gain more experience, but it doesn't mean you'll learn how to trade properly any quicker than if you took fewer trades.

In fact, this dangerous goal and mindset will lead to overtrading, which we all know is a common pitfall for new traders, leading to failure.

Quality over quantity, you've definitely heard this phrase before, and this same rule applies in trading. Instead of being in 4/5 separate trades, focus on one or two trades, make sure you have many confluences in your trading, learn how to get that perfect entry, and everything else that comes with opening and closing a trade from start to finish.

2) Make $5000 Per Month With My $250 Account

Come on, who are you honestly trying to fool? I get it, after you've seen all these Instagram gurus preach that you can make so much money and you've finally decided to take the leap and open an account, you quickly learn that making $5,000 in a trade from 10 pips, requires a 6-figure account, which almost everyone does not have.

Medical students do not become skilled surgeons overnight. Apprentices do not become mechanics overnight. This same rule applies in trading. You, someone who just found out about trading through a couple of Instagram ads, do not become a pro millionaire trader overnight.

It's pretty absurd that some people genuinely believe that this is obtainable because I can tell you first hands myself, I've lost more than £20,000 before I made my first £1,000.

Like any profession, it takes years of practice and experience to develop the skills needed to turn trading into your primary income source. You're simply setting yourself up for disappointment if you try to fight this statement.

3) Trading Is All About The Money

The profits you make do indeed determine your strategy's effectiveness, but this doesn't necessarily dictate success on a day-to-day basis. Trading is a long-term skill, not something you quickly do to make a bit of extra cash for the day.

Instead of gauging daily success on how much you want to make, focus instead on monthly percentage profit gains. Instead of aiming to achieve $50 per day, strive to achieve +10% per month with a $10,000 account. This way, you can achieve that same target just over a more extended period of time.

Trading isn't just about the money you make, but instead the actual skill behind it. Being able to interpret data about the economy to your advantage and taking "educated guesses" as to the direction of a market. This can be done through technical or fundamental analysis or both.

In an environment that requires a lot of focus and concentration, getting rid of this unnecessary baggage takes a lot of weight off your shoulders and, in the end, becoming a profitable long-term trader.

I myself, have personally been actively trading the Foreign Exchange market for coming up to 3 years now. Here's a list of the most important lessons I learned after my first year, and I'm sure most people can relate to these points.

Trade What You See, Not What You Think

The first major lesson I learned was that you should not always be hanging on to your existing biases. This way, you'll be much more likely to win more trades if you trade what the market is telling you now rather than what it was telling you two weeks ago.

A profitable trader is open-minded and prepared for alternative market behaviours and is always ready to take on new circumstances ahead of them.

Whether it's failed break and retests, this can be anything, weaker-than-expected job reports, if one thing was expected to form in the market, but something else did, react to what is actively going on and take precaution there.

Stick to Your Plan

A plan must consist of a set of rules when you may or may not execute a trade. Many traders make the mistake to go around their plan because they think it will work out anyway.

Sometimes people also say that even when they stick to their plan, they feel it will not work out. As a result of this, you take trades on gut feelings, make sudden adjustments, and deviate from the plan, which is a sign of trouble. Whether a trade goes wrong or right, you need to build up a portfolio of trades based on a specific strategy in order to work out accuracy and overall win rate.

One way to help you stick to the plan is to keep a detailed trading journal showing your statistics. Once you see that your trading plan does work and is yielding positive results, it could give you more motivation and confidence to stick to the plan and follow through.

Patience is a Virtue

Trading is easy, marking up charts is easy; setting up trades is easy. The hard part of trading is learning how to be patient and disciplined enough to make the right trading decisions consistently.

Patience in trading is as simple as waiting for good trade setups to arise or waiting for price to hit your entry and exit levels. It sounds so simple, but yet it's so hard, and I understand. Many traders like to secure the profits they earnt and forget about the overall long-term move in the market, which can make them more than 3x the amount they're securing.

Trading is a marathon, not a sprint. No matter what you see on the internet, everyone deep down knows that trading is no getting rich quick scheme, quite the opposite in fact if done incorrectly. Opportunities are always around the corner and, if you're patient, you'll learn how to profitably trade in any environment the market will throw at you at any time.

Risk Management is the Key to Success

Risk management…. ah…. this is what separated a trader from a gambler. We're all in this game to make money that we have work for us to make us more money, and with this comes managing our risk exposure.

This includes no overleveraging, risking more than you can afford to lose, practising proper position sizing and no disregarding stop losses. This also comes with the proper knowledge or margin, leverage and drawdown, and managing these all.

Remember, it's easy to click "buy" or "sell" or risk half your account per trade, but doing this does not help you find your edge enough against the market to be consistently profitable in the long run.

From the past almost 3 years of trading, I can for sure say this was the most important lesson I've learned.

Late last night, news came out that President Trump tested positive for COVID. He began taking quarantine measures immediately, and soon after, futures tumbled by over 1% in a matter of minutes. Today's choppiness tells us something about what direction the market will head in the short term.

The best way to prepare for what is about to happen is by managing risk. Although there is a lot of uncertainty, it does not mean that we should be taking big bets on either direction. If you plan on preserving your capital, the best way to trade is through small lots relative to your account. There's no way to predict what can happen, and patience is required to stick with whatever trade is going on.

Here's what the market choppiness is telling us:

Taking a look on the hourly chart with nothing drawn, you can see that not much has happened in the passed few days direction-wise. If you longed or shorted on the 29th of last month, you'd be near breakeven had you stayed in. This is purely a traders' market in the short term which means the market cannot decide on a direction.

When price looks uncertain, that's usually an indicator that a big move is on the horizon. With today's additional choppiness, we have to consider a couple of factors:
1.) Trump's positive test will mean a delay in presidential debates, causing further uncertainty on who is going to pull away in the election.
2.) Unemployment drops to 7% which is the lowest we've seen since March. This is a good sign of economic recovery.
3.) Investors and analysts have been saying for a while that the economy and the market are at a disconnect, so economic news doesn't really matter.
4.) Biden tests negative.
5.) Risk-off sentiment increases.

There's too much going on right now to gauge what is good or bad news, and what news outweighs other news. The overall theory I have is that the market will have to decide which direction it wants to move. And I personally think that starting today or next week, the market will be headed lower with Trump's health in mind. If he continues to have no symptoms, things will likely float upward. But in the meantime, it's too soon to know. Next week will definitely be a decision point.

Conclusion

In our community, we're encouraging traders to keep lot sizes small. We also mention that it is time to be patient with each trade.

SPX500 4H chart

Right now, it looks like a potential head and shoulders pattern in the making on the 4H chart as price fluctuates up and down. At the time of writing this, we're an hour to close, and price is moving heavy in either direction. This is why small lots are important. Whether you are long, short or in between, remember to keep an eye out for price movements and behaviors in the week to come as well as some heavy volatility.
Hope everyone is trading safely!


Disclaimer:

Please note that this email is my personal opinion only. I am not a licensed financial advisor, and any information shared or discussed is not to be construed as investment advice. Trading and investing involves a degree of risk, and is not suitable to all investors. Please consult with your financial advisor before making any sort of investment decisions.

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EUR/USDBearish
GBP/USDBearish
AUD/NZDBearish
XAU/USDBullish
SPX500Bearish

EU struggles to pass 1.2000s as US markets fall from overvalued prices in the stock market. The pair is back in a support zone showing that price wants to go lower. A break in that support zone (which is a common pattern we see in a couple other pairs) would be a sign that we are in for continued downtrend.

GU comes back for a second test on support without making a promising rally on the daily chart. GU has very strong support on the daily chart with June support and the 200 DMA. A bounce would seem likely, however, a break would be very bearish for the pair that's been running up since March.

AUDNZD falls to another low as it comes up to resistance. Key support is not very clear on the daily chart except for the 200 DMA way down at around 1.6000s. Gold continues to fall as well which is not good for the Aussie.

Gold now breaks through support, and a close below it would be more bearish for this metal. No clear support lies on the daily chart until the 200 DMA as well. A short term bearish bias is definitely viable for gold, but only because USD rises in times of panic or crisis. USD will continue to rise as markets fall, but that will not last over the long term in my opinion. For reasons stated in the other articles I've written, USD will fall again due to the immense amount of money printing we saw earlier this year with inflation rising. Gold also tends to outperform the markets and is less volatile. This pair is definitely a safer place to put your money.

Before I continue, do you see a pattern here? All these pairs are dropping, but why? What all these pairs have in common is their correlation to US equities. When the US market falls, these pairs drop as well. When the market saw its largest bull market in history, so did these pairs.

After creating lower lows on the daily chart, the market continued to sell off hard as soon as it opened this morning. SPX500 is currently hovering on support, but key support lies on the 200 DMA. If price comes down here, we will definitely see a bounce, but the question is: will it be enough for another bull rally? The market historically uses that moving average as a place to long again, but uncertainties with the election, coronavirus vaccine, cases rising again, lack of stimulus, inflation, suffering economy, etc. is aligning for a fearful market. After a season of greed, fear steps in and takes over market sentiment. With September being a month of selling also contributes to bearish sentiment. This is because the months before are usually high-profit periods for investors.

Regardless of the fear taking place, I think this downside movement is healthy for our market. A correction like this was a long time coming, but the bulls wouldn't let it drop. What we're seeing is just a big flush out of stocks so the market can find a balance at 'reasonable' prices for investors to find more attractive. If you plan on investing or putting some money in to the market now, the best thing to do is to dip your toes in. Don't be swayed one way or the other, just be ready to hold whatever you have for the long run. With a small amount of your portfolio in the market or major pairs, you can always long again if prices continues to work against you.

Remember, this is not a time to panic like most sellers. Keep a cool head and trade on! With proper risk management, there is nothing to worry about; especially in the long run. Stay safe and trade safe.


Disclaimer:

Please note that this email is my personal opinion only. I am not a licensed financial advisor, and any information shared or discussed is not to be construed as investment advice. Trading and investing involves a degree of risk, and is not suitable to all investors. Please consult with your financial advisor before making any sort of investment decisions.

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Last week was rough for the market as the S&P and Nasdaq draw lower lows on the daily chart. The Dow Jones Industrial was the only index to look in the best shape as tech continues to fall under pressure.

NAS100 on the daily

The main drivers for the market, which have been carrying pairs like GBPUSD and EURUSD, are tech stocks. In order to see a rebound in US indices and those major pairs would be for FAANG to have a good week, which might be the case. One factor to consider for Monday morning is the sentiment around Battery Day.

Tesla's Battery Day

This Tuesday will provide further insight on the development and advancements Tesla has made for their battery. The company is hyping up the news around the event as the EV maker will announce their new "million mile battery". This would be a huge breakthrough for Tesla and its stock, but will it be enough to push the markets and major USD pair up?

What to consider

A Barron's article analysts sounds uncertain for Tesla's rebound. He holds a price target of $272 a share which is nearly half of what the stock is worth now. However, quoted from the article, the author states that, "Anything below $100 per kilowatt hour, along with a credible plan to get there, should be a win for Tesla shareholders." Other analysts mentioned in the article provide a more generous PT in the $300s.

On top of this, COVID cases are rising back again as worldwide and US cases reach new heights. Profit-taking is another factor after the bull rally. The upside of investing now is very minimal considering the unlikeliness of reach all time highs again. As investors take their money off the table, the bigger question remains where those profits go back in to. Interest may move from heavy tech investments to dividend stocks. Portfolios may lessen the stake in the market overall. Next week will definitely be interesting for the market.

Conclusion

From a macro perspective, I'm looking at what could happen over time. I am also writing at the time of the futures market opening. Futures are dropping early on, and already down 14 points for the SPX500, but a lot can change over night and throughout the week. Tesla's rebound from lows shows investors are excited about the battery day report, but overall demand for stocks seems to be getting weaker. With analysts expecting tech to correct further, this week may be volatile.


Disclaimer:

Please note that this email is my personal opinion only. I am not a licensed financial advisor, and any information shared or discussed is not to be construed as investment advice. Trading and investing involves a degree of risk, and is not suitable to all investors. Please consult with your financial advisor before making any sort of investment decisions.

GBP/USDBearish
XAU/USDBullish
SPX500Bearish

GBP/USD

GU broke a long term upward trend line on the daily and 4H charts which dipped price below key support. With poor Brexit news and an uncertain US economy, the pair is stuck near a decision point. The pair has been climbing for months after the crash in March, but now faces heavy resistance. Bad retail sales reports on USD is probably what's causing this rally up to resistance, but my overall sentiment remains bearish, and a possible future lower low will come out of this on the 4H chart.

Indices will have a volatile day as the Fed chairman is set to speak at 2:30 EST with FOMC economic projections at 2:00. The SPX still hovers below resistance on the 4H chart after its steep decline starting from 2 weeks ago. Today will provide further insight on the market's direction from now up until the election. The 200 SMA on the 4H chart suggests that price is very uncertain on where to go. It seems to be taking turns stabilizing just under or over the moving average as investors wait for the FOMC projections. I remain bearish for the week unless price breaks over that resistance level around 3430s.

After breaking out of former wedge, gold makes higher lows on the 4H chart and hovers around the 200 SMA. In the long run, gold outperforms the benchmarks, but still dips a little with each market retracement in the short run. Big money and analysts think that this metal has the potential to climb as US economy and USD decline. I remain bullish on this metal and believe that a test at 1990s would be likely in the next few weeks. However, poor US economic data could hinder the stock market which could adversely affect gold. The dips are not as momentous and recoveries outperform indices.


Disclaimer:

Please note that this email is my personal opinion only. I am not a licensed financial advisor, and any information shared or discussed is not to be construed as investment advice. Trading and investing involves a degree of risk, and is not suitable to all investors. Please consult with your financial advisor before making any sort of investment decisions.

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A1 Trading Company

A1 Trading Company is a financial services and media business founded in Atlanta, USA.
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