How to recognise a Forex guru
Dear Traders,
Forex trading is a popular full-time or part-time job and hobby.
Due to its popularity, you must be aware that there are lots of dodgy salesmen who scam for a living.
A good mentor is like a good franchisor:
- they have been through all the problems; and
- have streamlined an effective system that reduces loss; while
- maximising profit.
The hardest part of becoming a successful Forex trader is getting the right education.
Getting off to the right start is vital.
A bad start in learning to trade can have a massive psychological impact and affect the rest of your trading career.
It's also important to find the right learning resources, fundamental data feeds and charting software.
There are six key qualities that mentoring gurus need to meet to be deemed worthwhile.
Consistency in methodology and charts
You should be able to make decisions based on the information given by the Forex guru.
Some teachers look only at the underlying fundamentals of the company or economy and then use a chart to determine the best time to execute the trade.
Others will use pure technical analysis.
But some are watching the whole picture - determining the best technical levels based on both fundamental and technical alignment.
The latter is your best choice.
When you decide on a guru and their methodology, remember that they need to be three things:
- clear
- concise
- consistent.
Pre-fact analysis
In my opinion, this is the core trait of any Forex guru or analyst.
Simply put, most traders don't care what happened after an event, i.e. post-fact.
What matters to them is the edge.
The primary strengths of real-time, pre-fact technical analysis are efficiency, practicality and utility.
What you learn by reading accurate analysis can be used to:
- improve the methodology of your choice; and
- entries plus exits for any currency pairs.
Pre-fact analysis can be used across other markets and different timeframes.
Forex gurus think differently
Sometimes, good opportunities are where no one else would expect them to be.
If you always follow the herd, your result might be the same - not good enough.
If you hear a tip that there will be a movement one way, everyone else probably heard it too:
...so you and everyone else wants to take advantage of the tip…
...which will keep your trading results average at best.
If a Forex guru is suggesting you move against the herd, you should listen.
Why?
That guru has a lot more experience trading and analysing the market than you do.
It doesn't mean you need to do exactly what your mentor says, and you can certainly watch the results of his suggestion.
If he's right - you'll know that you can take action next time.
Don't forget:
...the key is finding situations where most of the technical signals point in the same direction.
I call it POC (Points of Confluence).
These high-probability POC zones are usually profitable.
Flexibility
True Forex gurus should have confidence in their ability to see the future.
They are able to:
- assess whether events undermine; or
- reinforce that view; and
- adapt to market change.
A good Forex guru will teach you to adapt to the constantly changing market.
The markets are not the same as they were five years ago, let alone 10.
For this reason most of the systems do not work anymore:
...they haven't adapted to the current markets.
Good Forex trading gurus follow a certain methodology and adapt it to present market conditions.
They never deviate from a good methodology, unless market volatility or sentiment change comes into play.
Commit to helping other traders
Analysing the markets the proper way is not easy, let alone if you opt to trade it.
Hours and hours of screening time are needed to efficiently analyse the market.
Most successful Forex gurus started with little or nothing in terms of trading capital:
...but they built their success…
...even in the face of people telling them that it couldn't be done.
The emotional drive of fear and greed will be life and death to most traders.
Highly successful Forex gurus understand that the market is always right, no matter what they may think.
They have respect for the market.
They are willing to share facts
Analysis and trading is not the same.
As a matter of fact, it is a completely different field.
Analysts don't need to think about money management, risk factor, need/greed, emotions etc.
Traders do.
Switching your position from an analyst to a trader, is not something you see often.
I prefer to be both.
Showing pre-fact and post-fact results, is a must for every successful Forex guru.
When it comes to trading, an account statement is sufficient.
But for analysis - pre and post-fact snapshots are great ways to show performance.
On Twitter plus my webinars, I have been showing pre and post-fact results to keep accurate, detailed records.
Once the trade is executed, you can go back and analyse how it performed.
In the video below, you can watch how I show pre-fact and post-fact results:
The bottom line
You have all the knowledge you need in the form of websites, books, forums, webinars, articles and social networks.
All this info is cost-efficient to access and fairly comprehensive.
Trading success will depend on your ability to:
- observe the markets
- trust your own initiative and ideas
- access effective trading knowledge.
Your Forex guru should help you to achieve your trading goals.
Even if you only follow our technical analysis section, the knowledge you gain will be a giant step towards trading consistency and hopefully success.
What has been your experience with Forex gurus?
Let us know in the comments below.
Cheers and safe trading,
Nenad
