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Beginner’s Guide to Cryptocurrency Trading

Read Time: 7 Minutes

If you’ve hung around the Internet in the past five years, you’ve probably heard of the term “Bitcoin” or “cryptocurrency” being thrown about.


But what is cryptocurrency, and how does it work? How is it any different from the money we’ve grown used to over the past century? And how does cryptocurrency trading work?


People are talking about getting rich or blowing away their savings on this new technology, and it’s safe to say that cryptocurrency has taken the finance and tech industries by storm.


If you’re a little unfamiliar with cryptocurrency and you want to see what the hype has been all about, read on to get answers to your questions about cryptocurrency and cryptocurrency trading.

 

What is cryptocurrency?


In simple terms, cryptocurrency is a digital currency. It doesn’t exist in physical form and exists only in the digital world.


The main uses for cryptocurrency are “store of value,” currency, and as a traded item.


Cryptocurrency as a store of value is a fairly simple concept: you buy it and hold on to it while its value increases. This kind of use is why phrases like “investing in cryptocurrency” have popped up.


Since, for some people, the value of cryptocurrency will only increase as it becomes more widely accepted, they see cryptocurrency as more of a speculative investment than a commodity.


Whether or not cryptocurrency is a good investment will remain to be seen in the future, but it’s definitely true that the value of Bitcoin, the most popular cryptocurrency, has skyrocketed in the past years. Although with much volatility along the way to say the least.


As a currency, it works fairly like money, where you can use it to buy goods and services. A decade ago, you could use it to buy things only in the niche areas of the Internet. However, the acceptance of cryptocurrency is spreading more and more, and in some countries like El Salvador, Bitcoin has even become legal tender.


Like our typical currency (called fiat), the value of cryptocurrency also changes constantly. This is why there are markets for cryptocurrency trading available, and we’ll talk about that more later on.

 

What are the most popular cryptocurrencies to trade?


There are plenty of digital currencies around, and the most popular one, Bitcoin, is just one of many. There’s also Ethereum, Stellar, Ripple XRP, and Litecoin, which are some of the most traded cryptocurrencies around.


In more recent news, you’ve probably heard of Dogecoin as well. It’s a more niche meme that has gotten a lot of attention (Thanks, Elon!) as a cryptocurrency for trading, mostly because it saw a sudden increase in trading volume.


There are thousands of different cryptocurrencies out there, which just shows how versatile cryptocurrency is. If you want to trade cryptocurrencies, you can easily do so on platforms like Fusion Markets. These work very similarly to forex markets, where people buy and sell cryptocurrency regularly.


However, if you’re looking to trade cryptocurrency, it’s always important to do your research on which ones are good and which ones are not.

 

Benefits of cryptocurrency trading


For most traders, the biggest benefit of cryptocurrency trading is its novelty. Since cryptocurrency is still in its relative infancy, it has plenty of room to grow, and as it does, many believe that the value will only go higher and higher.


Another benefit is the fact that the cryptocurrency trading market is 24/7. Unlike trading individual stocks between 10am and 4pm (like in Australia), or even 24/5 like Forex, Crypto runs 24/7.


As long as people are willing to buy and willing to sell, the market will always run. This means that you don’t have to wait for market hours if you want to make a trade.


One more thing to note is the volatility. Cryptocurrency is volatile, much more volatile than forex and stocks. The prices of cryptocurrency can rise and plunge in a matter of seconds for seemingly no good reason, and for a lot of people, this volatility brings in a lot of excitement yet is not for the faint hearted.

 

Risk management


Of course, the things that make cryptocurrency trading the most exciting are also the biggest risks.


The volatility of cryptocurrency means that it can plunge just as easily as it rose. In fact, if you look at a price chart of Bitcoin, you’ll see that there have been multiple plunges that caused people to think that it was the end of crypto.


Additionally, the fact that the markets are open 24/7 means that the price can change significantly while you’re away, much like forex trading. It’s on you to make sure that you can trade while maintaining a good work/life balance.

 

Main differences between crypto and forex/fiat


While cryptocurrency is a digital currency, it doesn’t mean it’s the same as the money you have on a wallet such as PayPal.


Fiat currency like the US Dollar or the Euro is backed by physical currency. This means that for every dollar you have on your online account, there’s an equivalent physical form stored somewhere.


In contrast, cryptocurrency is purely digital. There’s no withdrawing it for cash, and the closest you can get is putting it in cold storage wallets instead of keeping it at an exchange, but that’s about it.


One more thing to note is that fiat currency is centralized finance, meaning that it’s regulated by the government that issues it. The US Government regulates and prints the US Dollar, for instance.


On the other hand, cryptocurrency is decentralized finance or “defi.” There’s no particular institution that regulates it. Instead, every single computer that’s on the network, or the “blockchain,” works to validate every transaction that takes place.


Basically, all computers monitor everything instead of trusting one institution (like a government) to do it for everybody. This aspect of cryptocurrency is the most appealing for many people because of its libertarian aspects since it’s free from government or bank control.


Additionally, the decentralized nature of the blockchain makes it so that it’s harder to commit fraud. Since all computers monitor the ledger of transactions, anyone who would want to make a fraudulent transaction would have to defraud all the computers on the blockchain.


That’s a lot of computers across the world.

 

There’s so much more to cryptocurrency, and we’ve barely scratched the surface of the technology behind it. We are witnessing a digital revolution in the making, so if this article has gotten you interested, and if you want to dip your toes in, it’s always best to do a lot of research and practice on a demo account first before spending your hard-earned money.

 


30/09/2021
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Power of Identity-based habits for a trader

“It takes 21 days to form a habit and 90 days to form a lifestyle”. 


Most of us have probably heard of that quote already. It sounds simple, right? Who would have thought that you only needed three weeks to build a habit? 

Imagine how much better our lives could be after a year with plenty of good habits that we want to adopt.  


Whether you want to improve your physical health or performance in the financial markets, adopting good habits is the way to achieve it. 

Unfortunately, we’ve all heard the not-so-successful stories. A New Year’s Resolution falls off after three days, leading to an initially motivated person being the same as he was a year ago. 


There are 52 weeks in a year. If it takes three weeks to build a habit, you should have formed 17 good habits by then. If only it was that easy! 

 

Why is it important to build habits? 


Your habits are your small, everyday actions and decisions, and the sum of your habits defines your life. 


Good habits form the foundation for a good lifestyle. For example, exercising regularly and getting enough sleep are good habits examples. Conversely, bad habits build up to form a bad lifestyle. Eating junk food every day is an example. 


Who you are and where you are right now is simply the outcome of all your habits. Your overall health is the result of your eating and exercise habits.  

Your trading mindset and your performance in the financial markets are the results of your trading habits. 


You’ll notice that the most successful traders don’t just make good trading decisions; they have good trading habits that form the foundation for their decisions.  
 
But when you’re starting out, we think one simple habit to instill in yourself is one associated with your identity.  

 

What are identity-based habits? 


Identity-based habits are habits that are based on who we are or who we want to be.  

Imagine a circle with two other circles inside it, like an onion with layers. In this case, we have three layers. 


The outermost circle are outcome-based habits. In this circle, we focus on the what. What do I want to do? What do I want to happen? For example, an outcome-based habit could be, “I want to lose 5kg this month.” 


The middle circle is performance-based habits. Here, we focus on the how. So in the same weight loss example, a performance-based habit could be changing your gym routine, your diet, or how often your workout.  


The inner circle, the most important circle, is where identity-based habits are. Here, we focus on the who. Who am I as a forex trader? Who do I want to be? These are purely intrinsically based.  


A person who wants to lose weight would adopt an identity of, “I am a person who moves more,” or “I am a person with a healthy weight and a healthy lifestyle. This is what a healthy person does, so I will do this, too.” 

Identity-based habits go deeper than outcomes and involve your worldview, beliefs, and perception about yourself. 

All three kinds of habits are connected with one another. Your identity influences how you do things. This, in turn, affects what you achieve. 


The problem is, most of us are too concerned with outcomes. As a result, our habits fall off pretty quickly because we didn’t have the foundation. 

Remember the New Year’s resolution example? Those people don’t usually achieve their resolutions because they focus too much on the results when they should be focusing on their identity first. 

Identity goes far beyond just one’s lifestyle. Even politicians revolve their discussions around people’s identities (identity politics). 

Who you identify as affects not just what you do but what you believe in and how you see the world around you. 

 

How does having an identity benefit your trading? 


Having an identity forms a solid foundation for your actions and your habits. 

Imagine two forex traders with a fair amount of trading experience. For September, they set a target profit: $5,000. 

The first trader does not have an identity; he just cares about the outcome. He looks at the $5,000 profit goal and focuses only on that. He analyzes each trade carefully, but there is no real consistency to it.  


He gets frustrated every time forex trading results in a loss because it makes it harder to achieve his desired outcome. 

On the other hand, the second trader has an identity. He identifies as a good forex trader. The $5,000 goal profit is not the real goal because he knows that it’s something that good forex traders have. 


Instead, he focuses on being a good forex trader. He asks himself, “I am a good forex trader, and what does a good forex trader practice?” 

From here, he studies not just the financial markets but also the best traders. He adopts a good trading mindset and trading psychology and starts to build trading habits. He does this not because he wants to earn a $5,000 profit but because he wants to identify with what a ‘good’ forex trader does, he thinks more in terms of systems than outcomes.  


Who do you think will be more likely to reach their target? 


Of course, it’s trader #2. He goes beyond focusing on the outcomes. He actually lays the foundation by building good habits and adopting the proper trading mindset. He does all this because he has an identity, something which trader #1 does not have. 

 

Building identity-based habits for traders 


To build identity-based habits, the first thing you should do is look inward. Don’t worry about outcomes just yet. 

Instead of asking yourself, “What do I want?” You should ask yourself, “Who am I?” or “Who do I want to be?” 

Instead of focusing on a target profit, start with your identity. 


Do you want to be a successful forex trader? What do these people do that you can? 

Successful forex traders usually keep a journal to track their successes and failures. They also keep a balanced lifestyle, are aware of their biases, get enough sleep, and adapt to change. There are plenty of other habits, but these examples are good for a start. 


The best thing you could do if you’re starting out as a forex trader and reading this is to constantly ask yourself “What would a good forex trader do right now”? Would they be learning more about the markets or practicing on a demo or would they be watching Netflix? Simple questions to ask but the power of your life is determined by the power of the questions you ask yourself.  


It would be good to adapt all these too, but remember you’re not adopting these habits because of what you want. You’re adapting these habits because of who you are. 


Identity-based habits last longer and lead to more success because they involve a deeper part of you.  


When you inevitably encounter setbacks and make mistakes, you won’t get too frustrated with yourself and make emotional, impulsive decisions because you know that your habits are in the right place. 



10/09/2021
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Your New Secret Trading Weapon: Sleep

Sleepless nights are a common predicament for most traders. It is the only time you are not consciously screening the markets. As stressful as it can be to sleep with volatile open positions, it is extremely important that you beat the urge to make impulsive moves and that you give your brain some rest.


Since the forex markets run 24/5, most people barely get enough sleep while the markets are open. But this kind of lifestyle will ultimately lead you to make sub-optimal biased trading decisions.


Depending on which part of the world you’re in, the markets might move the most while you should be asleep. For those here in Australia, we are sleeping while the US is in their trading day, which, when you have large open positions active in the market, can make it even more difficult to get a good sleep.


But here’s the thing most traders are not thinking about. Getting a good night’s sleep every day is just as crucial as your fundamental and technical knowledge. Still, many of us tend to overlook a good rest, thinking we can survive on far less than we need. Let’s look at why sleep is essential for forex trading and how to cultivate a good sleep routine.

 

Why is sleep important for traders?

Sleep plays a big part in our mental wellness, which then affects our decision-making for the day.When you’re placing trades that involve vast amounts of money along with prices that change every second, you want the part of your brain that makes decisions (the pre-frontal cortex, if we’re being precise) to be in tiptop shape.


Ask any elite athlete what one of the most essential tools they have for recovery is, and it’s often sleep. Lebron James, for example, reportedly sleeps as much as 10 hours a night. Now I know what you’re thinking, “Well, I’m not an elite athlete and I’m certainly not Lebron”. But you are trying to obtain peak (trading) performance, right?


Trading involves competent risk management. Before you execute those trades, you want to have a clear picture of the risks and benefits so that you can make calculated and well-informed decisions. When you don’t allow your body and mind to rest well, your practical decision-making is overshadowed by restless behavior patterns.


Basically, good sleep keeps you sharp and productive. On the other hand, studies show that lack of sleep tends to impair decision-making involving complex factors and unexpected occurrences, which occurs quite a lot when the markets are open. By having good sleep regularly, you allow your brain to make unimpaired decisions compared to when you are sleep-deprived.


And speaking of the brain…  

What’s the science behind it?


First, let’s look at what goes on in your brain when you sleep.

Throughout the day, when you’re awake, the brain accumulates metabolic waste. You don’t even have to exercise or move around to accumulate it. Your body already expends energy by just keeping your basic functions running, like breathing and pumping blood.


In using energy, metabolic waste builds up in various parts of your body, your brain included. In time, the buildup can interfere with the peak functions of your brain. When you sleep, your brain sees the perfect opportunity to do some house cleaning. The brain has a built-in waste removal system which is called the glymphatic system.

Sure, the glymphatic system also works while you’re awake, but the cleanup process is at least twice as fast when you’re asleep. This is because your brain knows that there’s not much going on in your body, which allows it to focus on clearing up.


This is why you always feel refreshed and focused when you wake up after a good night’s sleep. And since mental wellness plays a huge part in your trading psychology and your trading mindset, you always want to be in this “clear” state whenever you’re trading. When you’re sleep-deprived, the part of your brain in charge of your fight or flight reactions — the amygdala — is far more stimulated than it would be when you’ve had a normal amount of sleep.


What does this mean for you as a trader?


Well, try to go back to the last time your fight or flight reaction (or amygdala hijack) got triggered. Maybe you were in a disagreement with a colleague or a friend, or you were in an emergency. Wasn’t it hard to stay focused because you felt like a thousand things were going on at once? Now think about how you feel when you’re sleep-deprived and a trade isn’t going your way and a new announcement means you need to think about the implications and what’s next for the market. Are you at your best cognitively at this point? Probably not.


A stimulated amygdala makes it hard to make logical decisions. It also cuts off access to your pre-frontal cortex, which is in charge of making logical decisions. And as forex traders, our trading mindset should always be governed by logical, not emotional, decisions.


Unfortunately, your brain is more likely to go into fight or flight mode with a lack of sleep. You aren’t thinking or seeing the market clearly. Maybe you’re paranoid about your trade, or you see things that aren’t there, or maybe you enter or exit the trade too early.
  

How does a good night’s sleep benefit your trading?

A good night’s sleep gives you good preparation for the trades you’ll be making the next day. Your brain is clearer, and your mind is sharper. When you look at the charts, you’ll be less likely to be influenced by sudden price fluctuations, which we know are all too common in financial markets, particularly in forex trading.


By consistently making good forex trading decisions, you’re more likely to see bigger gains in your trades.


In fact, one study  suggested that sleep-deprived forex traders had relatively lower returns because their decision-making skills were affected.


A good night’s sleep also promotes a healthy work-life balance. You may be a forex trader, but it’s also important to look into your personal health outside the financial markets. You feel more energized and alert when you are awake, allowing you to see new opportunities in the market that an otherwise tired trader might not. This could be your edge.  


Tips for sleeping better

Now that we’ve talked about why sleep is important, let’s talk about developing good sleeping habits.

First, reduce your screen exposure before bedtime. Blue light keeps our brains alert, and this is the kind of light that you usually see from your phones and your living room lights.


Put the phone down and shut off your computer. As hard as it is, that will mean trying to keep your eyes off the charts. Try having herbal tea (Peppermint, chamomile is best for relaxing), reading a physical book (to avoid more screentime), or doing something that relaxes you to get your brain ready for bed. If you really must check your phone or computer late at night, try using apps that make the screen appear “warmer,” giving it an orange tint or via “dark mode” starting from a couple of hours before your bedtime.


Orange lighting is less harsh compared to blue light, which makes it easier to eventually fall asleep.

Second, if you can afford it, separate your workspace from your bedroom. You want your brain to associate your bedroom with rest and relaxation so that as soon as you walk into the bedroom, your brain “gets” it and starts powering down. Playing on your phone or laptop in bed is likely confusing your brain.


Third, keep your room to a cool temperature. Ideally, between 18-20 degrees Celsius.


Finally, one of the worst things you can do is get up and check your phone or computer for what’s happening in the market. The screentime on your eyes, the adrenaline rush, and more will only cause you to make an emotional decision.


If it makes you feel better, a stop-loss or a take profit takes a lot of the unknowns out of the equation. Your trade will either have one of three things happen: It’s still open, it’s been closed with profit, or closed with a loss. By leaving the outcome to the market, you are more likely to think too heavily about it all through the night.


Forex trading is not all about the technical and analytical aspects. A sound body complements a sound mind. You should take care of both aspects to make sure you are at your best. In our view, a well-rested trader will likely exceed a sleep-deprived trader that’s not at peak cognitive performance.

26/08/2021
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Why is MetaTrader 4 so popular?

Anyone who’s into forex trading will undoubtedly have heard of MT4, which stands for MetaTrader 4. It’s the most popular forex trading platform out there, and for good reason. 


Unusually for a technology platform, it is 16 years old and continues to stand the test of time with users around the world and with all sorts of different experience levels. In today’s article, we wanted to provide our thoughts on the reason it’s still so popular 


MT4 was developed and released by MetaQuotes Software in 2005. Throughout its years of existence, it has since grown and made a name for itself as the leading platform in retail forex trading. Nowadays, millions of forex traders around the world use it regularly. 

Foreign exchange brokers like Fusion Markets are also licensed to provide MT4 for their clients. 


While primarily used for forex trading, it also lets a broker easily plug-in the ability to trade indices, cryptocurrency, and other asset classes such as commodities. Brokers like Fusion are offering over 120+ products on MT4.  It’s more than just your everyday exchange platform, though. It’s got excellent built-in charts for those who use technical analysis and its secret weapon, expert advisors are the most popular feature.

Expert Advisors are 3rd party automated trading systems. Something close to 70% of trades executed on MT4 are automated trades and their popularity continues to grow. Add in mobile apps for all platforms, in-built news (or trade ideas like Fusion offers), trading signals and much more, all of this works together to give you a more holistic look into the market to make well-informed trading decisions.

 Here are just a few reasons MT4 continues to remain as popular as ever.


1. It has robots and automated trading

When people think of trading in the financial markets, most people tend to picture sitting around and watching the screen all day.  

Forex is different in that it runs 24/5.  If there is one thing that keeps traders from switching to other trading platforms, it’s the availability of self-developed or 3rd party robots and expert advisors, essentially algorithms that run trading strategies around the clock. This means that forex traders can use programming to automatically execute deals for them when certain conditions are present. Let’s explain a little bit.


Technical analysis of forex trading is a deep topic. There are many methods of analyzing whether a particular currency is worth buying or selling. Among these include moving averages, convergences, and chart patterns. We won’t go into technical analysis in this article but suffice to say that there’s a lot to consider if we want to confirm if a trade should be taken or not. Monitoring different currencies using multiple methods can be exhausting in the forex market, where global currencies are traded 24/5.


Manually monitoring multiple charts is also slow and cumbersome because humans have a limit on how fast they can read and analyze data. That’s where MT4’s automated trading comes in. Using predefined lines of code, the trading robots can scan thousands, of forex markets and check to see if the forex trader’s predefined buy or sell conditions are met. Bridgewater, one of the world’s largest hedge funds uses over 100 million data points. Good luck trying to beat that with just your brain alone. With automated systems like EAs, while those off the shelf are unlikely to have as many data points as Bridgewater, these will still be faster than any human could be.


In forex trading, prices can change in the blink of an eye. Thus, the traders who can execute a deal as fast as possible protect themselves from market fluctuations. Those who prefer to just rely on the wisdom and experience of the more seasoned forex traders can use MT4’s signal trading feature, which basically lets them copy all or some of someone else’s trading moves on the platform. It does this automatically.


Alternatively, you can utilise Fusion’s own copy trading platform, Fusion+. By using MT4’s trading robots, forex traders can just input their commands and let the algorithms/EAs do the heavy lifting.  


2. It capitalizes on the network effect.

Humans are innately social creatures. We want to do what others do, and we want what others have. It’s a convenient way to make ourselves feel secure and validated. If everyone uses a particular forex trading software, others will soon hop in. Network effects refer to technology platforms and refer to the concept that the more users that are on the platform, the stronger the platform becomes. Think about it. No one wants to use Facebook if there are no friends you know on there. Therefore, the more people that use MT4, the more trading groups, videos and resources there will be, the more robots that developers will build for the platform and so on.


According to MetaQuotes, the developer of MT4, the platform now has millions of users and continues to grow. A large part of this is thanks to existing network effects which can be difficult for other platforms to overcome. There are thousands of brokers out there offering MT4 to their clients. Again, the more brokers that offer it, the more newly established forex brokers feel like they have to. For any new broker looking to come into the business, MT4 is the first service they think of because the rest of the business uses it too. Even ‘legacy’ brokers from the 1970’s such as IG have launched a version of MT4. Basically, if a forex trader is not using MT4, they will at least have heard of it. This increases the chances that they will eventually use the platform themselves if speaking to other traders they know.


The whole platform ecosystem becomes like a flywheel and makes it hard for other platforms serving the same market to compete with. 

 
3. It’s easy, fast, and reliable.
 

Despite being a forex trading platform, MT4 does a splendid job at making things simple and easy to learn for its users. Remember the trading robots we talked about? They can all be purchased in MT4’s own Market. Users don’t have to scour the Internet looking for the best trading robot because MT4 has thousands of available ones in their selection.

 

MT4 also offers many trading tools, like market orders, pending orders, and stop orders, which any trader can appreciate. The platform offers 23 analytical objects and 30 technical indicators, along with interactive charts and timeframes to give forex traders all the information that they’ll need right at their fingertips. There’s also mobile trading with MT4. By now, we already know that the forex market runs 24/5, but not all of us are in front of our computers all the time. When we’re out doing something else, the only “computer” we really have is our phone.


Finally, MT4 also gives users relevant alerts and financial news to prepare for unexpected price movements.
 Developing a platform can take years of hard work, mistakes along the way and more. With MT4 you get reliability more than anything else. The bugs have been ironed out and while

we know it’s not the best-looking platform on the market, it is rock-solid and runs on almost every device such as Windows, Mac, iOS, Androids and tablets.  


4. It’s a blank canvas
 

It’s important to note that while many brokers offer this platform to clients, it initially comes as an empty shell. It is what the broker puts into it that makes it so exciting. You can put the equivalent of a Ferrari engine into it or a
Hyundai.  

With Fusion, we have always tried to use the best from day one.  

We are obsessed with making your trading experience better than any other MT4 broker out there.  
 
We launched with strong liquidity providers to undercut our competition and provide a lower cost of trade than other brokers before us. We built tools to help manage your account easily and with a simple interface. For example, we spend a lot of our resources on building tools to make your trading life easier and provide a unique trading experience. Things like the ‘my performance’ feature, Fusion+ copy trading and more.   

 

Summing it up 

In essence, MT4 is like an all-in-one platform for accessing the world’s largest markets. Those interested in the markets can choose a low-cost broker with no minimum deposit like Fusion and be up and running within five minutes. Not sure how, what or when to trade? You can trade with robots and EAs, follow other successful traders via Fusion+, or if you’re keen to learn yourself, then gain access to more resources like videos and trading communities than any other platform available today.  

It’s no wonder that MT4 has reached the level of popularity it currently has. Fast, reliable, filled and filled with something for everyone, it’s no surprise so many people around the world are using it. It’s also hard to see when it might be knocked off the top spot.  


13/08/2021
Beginners
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A Beginner’s Guide to Automated Trading

Read Time: 8 Minutes

If you are a regular trader and you’ve realized that trading is taking up way too much of your time, you might want to look into automated trading.


For the uninitiated, automated trading involves inputting a set of commands that will automatically execute when certain conditions are met.


You can set your buying price and selling price in advance. When the stock or currency price meets the price you’ve set beforehand, trading software (like MetaTrader) will automatically execute your trade. For the more seasoned traders, you can also base the buying and selling points on conditions like moving averages or convergences. You can even go more complex with algorithmic trading, using complicated algorithms you write yourself to execute trades. This is where trading robots come in, and they can be pretty good at what they do.


The best thing about automated trading is that you don’t have to spend hours upon hours monitoring graphs and charts, waiting for the best time to trade. This is wonderful for forex trading, where the markets are open 24/5.


Additionally, automated trading gives you (or at least, your trading robot) the power to scan millions of different charts at a speed that no human ever could.


There are even features like Fusion+ copy trading, where you can set the program to automatically copy a trader’s actions. If there’s a forex trader you really trust, for example, then you can save yourself the hassle and just set the software to copy all their trades.


Of course, automated trading takes a little learning to get into, which is why we are providing this beginner’s guide to automated trading.

 

1)     Buy off the shelf to start


There are a number of platforms that offer automated trading software. There’s no need to build a trading robot from scratch, especially if you’re just starting out.


Trading platforms like MetaTrader4 — the most popular forex trading platform — have tools that allow you to get into automated forex trading. You can check out the “Market” tab in your trade terminal section within the platform and have a browse of a wide range of EAs/robots to purchase to get started.


Their platform lets you use trading robots built by others (there are paid and free versions) and if you want to start off with a small amount of capital just to see how it feels, this is the place to do it.


2)     Know the difference between a good robot and a bad robot


As with any software you plan to download and use, you should know if the robot you’re planning to use is a good one. After all, real money is involved here.


In forex trading, where markets run 24/7, you don’t want to waste your money on a trading robot that gives you losses.


First, you can consider the track record of the trading robot. This can be as easy as looking at the robot’s reviews on the website itself or looking it up on forex trading forums where you’re bound to find forex traders who regularly use robots.


Second, just look at the website itself. If it looks unprofessional or promises unrealistic returns, you’ll want to stay away. One of the primary rules in forex trading is that if a deal is too good to be true, it probably is.


Third, look at the price itself. Trading robots are complicated software that took a lot of work to make. You’ll be hard-pressed to find good robots that are cheap or even free. If you see a trading robot that’s a little too cheap for you, keep looking.


Finally, you can find plenty of third-party websites such as Myfxbook.com, Forex Peace Army, or the MetaTrader Market that let you find the most popular robots, reviews from real traders that have used the EAs. We recommend doing a lot of research on the sites above before you dive straight in.

 

3)     If building your own, know what’s involved.


As we said, trading robots are complicated software that run on immense lines of code. If you want to build your own, you’ll need the necessary coding and programming skills.


It can take months to build a successful trading robot, and it will take a lot of trial and error, along with plenty of frustration.


If you have an idea for what you want but want someone else to build your automated trading robot without getting into too many complications, you can look at possible vendors like TradingCoders or Robotmaker that can build them for you.


Automatic trading robot builders give you a clean interface where you can build and edit your trading robot without learning complicated programming from scratch.


Regardless of how you choose to build your robot, you’ll still need a lot of market and technical analysis skills to succeed, especially if you are entrusting others to build something for you. Study well beforehand and know exactly what you’re getting into.

 

4)     You’re going to need a virtual private server.


Again, the markets in forex trading are open 24/5. Good trading opportunities come and go in the blink of an eye. The last thing you want to happen is missing a good trade because you suddenly had connectivity issues.


By using a virtual private server like the vendors from Fusion Markets Sponsored VPS (Virtual Private Server), your trading terminal can be connected 24/7 on a virtual machine. You’re basically using a constantly connected server to give you more reliable connectivity so that you are always online and not missing out on trades.


A good VPS will give you not only consistent connectivity but also low latency and fast executions. In forex trading and algorithmic trading, every millisecond counts, so you might as well use the best available tools out there.


Automated trading can be a lot of work at first. Still, it can also be very rewarding once you’ve established your own system. Hopefully, we’ve given you enough information to get you started on your very own automated forex trading journey.



06/08/2021
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Nine Simple Trading Rules You Need to Know


If you want to cross the line between being an investor and being a trader, there are some things you should keep in mind. The rewards are higher, but there is much more at stake. You could lose hundreds, if not thousands of dollars in a day. I have been trading on MetaTrader for years. I have watched people gain and lose fortunes multiple times. Throughout those years, I have come up with essential truths to always keep in mind when trading:  





1.   Trading is both easy and difficult.  


There is a misleading simplicity when it comes to trading. As long as you diversify, stick to your strategy, never go all in, and always secure your profits, you can stick around for very long. 

However, trading becomes difficult because of the human aspect and our hidden biases. We tend to get greedy and blinded by small gains or by big losses. We tend to abandon our long-term strategies because of what we see in the short term, and this is where Rule Number 2 comes in… 

 

2.   Psychology is everything   


Trading is not all about watching the charts and the news 24/7. There is a more significant, underrated aspect of trading: your mindset. How sure are you that you can stick to your strategy even though you just lost $4,000.00 yesterday? 

Forex trading will expose you to the highest highs and the lowest lows. Throughout all these, you have to keep a stable mentality and not let impulsive decisions take control. You can have the best strategy in the world, but if you can’t learn to handle your emotional state, you won’t go far.   

The better you are at controlling your emotional impulses, the more successful you will be in trading and finance in general.  


3.   Everything in moderation, including moderation   


The money you are trading should never comprise all your assets. As they say, only trade as much as you are willing to lose. In the world of trading, you will come across individuals with stories of overnight riches because they went all-in. But that can only last for so long.  

Try to resist the temptation of being greedy and remember that wealth is not built overnight. It requires consistency and time. 

Of course, there will be exceptions when you have to break this rule, especially if you see huge opportunities present themselves in the market. However, the general rule still stands; practice moderation in most things, including trading.  


4.   Risk and reward  


Trading is a high-risk, high-reward game. While you might get caught up in the rewards, it's also important to be grounded by the risks. 

The fact that you can make $10,000.00 in two hours also means that you can lose $20,000.00 in the same two hours. If you are a beginner, you might want to stick to low-cost trading for now so that you also risk less money. 

Once you begin gaining experience, you can then start moving to larger trade sizes or expanding into different asset classes.  


5.   Leverage is your best friend and your worst enemy  


To leverage means to trade using borrowed money. It can be your best friend because you can earn more than you ordinarily could if you get a good trade. However, it can also be your worst enemy because if you are on the wrong end of a losing trade, you end up losing more than you might be capable of paying. 


As a general rule, avoid leveraging yourself too hard (think 1:500 leverage), especially if you are a new trader. Most traders getting started should think between 1:30 and 1:100 to get the hang of it. 


6.   Understand what game you are playing  


By now, we’ve already established that trading has risks. Forex trading, while playing by slightly different rules, is no exception. No matter what kind of trader you are, you should always understand and mentally prepare.  

Before you even make your first trade, even if you are trading with low-cost brokers like Fusion, you have to accept that while you can make money, you can also lose money. 


Too many think that trading is a get-rich-quick scheme, and all they must do is sign up on MetaTrader or any Australian forex broker, make a few clicks, and watch the money roll in. These are the kinds of people who end up losing money in their first week. 

The truth is, trading may be quite lucrative for some, but it requires hours and hours of studying, just like if you’re training to be a pilot, you aren’t expected to fly the fastest fighter jet before getting some practice.  


There are complicated analytical methods like technical analysis and fundamental analysis that professionals use to determine the value of a stock or a foreign currency. This way, they know exactly when to buy or when to sell. 

If you really want to get into trading, be it stock trading or forex trading, you have to put in the work and start learning. Remember, real money is at stake here.  


7.   Be responsible for your own trading.  


You might come across plenty of gurus and recommendations online, but at the end of the day, the only person gaining or losing money, is you? 

Remember that whatever happens to your trades will only affect you. It will not affect anyone else's portfolio, so there is no use blaming others if you lose money. 

Similar to #6, remember that different players in the market play different games. Your friend Michael who introduced you to forex might be a scalper taking short-term trades, whereas you might feel more comfortable as a long-term trader, which doesn’t make one better than the other. You do need to know what game YOU are playing, though.  

If you take responsibility for your trades, it is more likely that you will treat your failures as learning experiences to do better next time. Failure is the best teacher, and that leads us right to Rule Number 8….  


8.   The best investment: Your own learning   


Indeed, the best investment you can make is in yourself. If you are beginning to dip your toes into the world of finance, you might want to stay away from the markets (for now) and start investing in books and learning materials to give you an edge. Or practice slowly with a demo forex account or a small live account to test.  

The gains you can make from trading and investing may last you a week or a month, but the gains you make from investing in your own education will last you a lifetime. 

The more knowledge and information you have when you trade, the more likely you will be making successful trades in the future.   


9.   Don't be crazy  


Trading will give you plenty of temptations. You might think that you can buy low now and sell at a really high price tomorrow, so you want to pour in your life's savings all in one go. 

Stop. 

Trading requires discipline, and there's no reason to go crazy all in one go because of speculation. There is much to learn in the world of trading. 

You will be in here for a long time, so take it slow and enjoy the ride.  

29/07/2021
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