TRADER MAGAZINE

JANUARY - MARCH 2019

MEDIUM-TERM CONSOLIDATION ENDED. STRATEGISTS SAY FED PAUSE, SLOWING US ECONOMY TO HURT DOLLAR

decline

GLOBAL ECONOMIC OU TLOOK 2019

M ASTER ING THE TRADINGMENTAL GAME

THE STATE OFFOREX RESERVES

TRUMP’S WARO N T H E F E D

C R Y P T O S TO WATC H T H I S Y E A R US dollar

FXCONTENTs

GLOBAL ECONOMIC OUTLOOK FOR 2019 While Europe and the US have to cope with both political issues and economic headwinds, emerging markets may come back into favor this year

07

Understand the market and work on the key trading skills

27

05 EDITOR’S NOTE

FUNDAMENTAL ANALYSIS25 Ditching the U.S. Dollar Emerges as a Popular Call for 2019: Strategists say Fed pause, slowing U.S. economy to hurt dollar

MONETARY POLICIES42 Trump’s War on the Fed: For President Trump the Federal Reserve “has gone crazy”. The same charge has been leveled against Trump, but there might be a method to his madness

70 Could the FED finance a Universal Basic Income? Calls for a Universal Basic Income have been increasing but could the Federal Reserve alone do the job?

TRADING PSYCHOLOGY 47 Developing the Mind of a Highly

Effective Trader: Learn the three aspects that have to be combined in order to create the conditions of effective trading

INTERVIEW38 Christian Schurholz talks about TradersClub24, one of the largest trading communities for German speaking traders

WORLD CURRENCIES62 The State of Global Foreign Exchange Reserves: What does the Currency Composition of Official Foreign Exchange Reserves teach us about the strengths and weaknesses of the main currencies?

RETAIL FX59 Three retail trading industry trends: Key factors which will influence the

FX market and create a better regulated environment for retail traders

CRYPTOCURRENCIES52 Cryptocurrencies To Watch In 2019: An introduction to some small market cap currencies which are in it for the long haul

66 Bitcoin Will Regain Its Dominance In 2019: An analysis of the cryptocurrency markets and Bitcoin developments for the new year

58 Cryptocurrency Jargon explained: a quick reference glossary for some common crypto-terms

75 CONFERENCES AND SEMINARS

76 ECONOMIC CALENDAR

THE TRADING MENTAL GAME

18 US DOLLAR DECLINE

Medium-term Consolidations Ended; First Leg of Dollar decline through 2019

FX TRADER MAGAZINE January - March 2019 3

The Trading Mental Game

Good traders focus

on building their

skills, while bad

traders focus on the

money

Forget about usual

behaviora l patterns.

The market is

a c o m p l e t e l y

dif ferent world.

The market can be like

a powerful drug and

there is a real risk that

you could become ad-

dicted.

In this series of articles, the author will guide you through the most important trading skills which traders should know to survive and win on the markets. You will learn that if you can improve your skills by only 10% in each of the four macro-areas of trading - The Market, The Mind, The Method, and The Money Management - your combined efforts could result in more than 100% improvement in your trading performance.

by Rodolfo Festa Bianchet

FXTRADING PSYCHOLOGY

FX TRADER MAGAZINE January - March 2019 27

Introduction

Most traders have a limited knowledge of the fundamental trading rules, both from a psychological and methodology point of view. This is one of the main reasons why they fail and suffer p s y c h o l o g i c a l damages, which can also have consequences in their personal lives.

In this series of articles, I’d like to show and explain why losing traders have fixed expectations and flexible trading rules, whereas winning traders have flexible expectations and fixed trading rules. I have been training p r o f e s s i o n a l investors for many years and I believe it is very important to inform traders about a few basic principles, which will help them avoid the pitfalls and risks associated with trading, such as burning their trading account rapidly, or suffer painful losses. Trading should be considered as a serious and risky journey, and in this article, I’m sharing my experience as an analyst, a trader, and a coach.

Many traders fall victims of the markets precisely because they take the game too lightly. My objective is to give you the right knowledge and tools to prevent that from happening and prepare you for

the great and exciting challenge that the markets certainly offer. I will explain the most important building blocks on which you will be able to work to improve your trading results. These four blocks are what I call the “fundamentals of successful trading”. You will find out that the hardest part is to apply these principles, not to learn and remember them.

You have probably already read about the similarities between sports and trading. Both require a great amount of discipline and commitment. When I was a teenager, and a committed soccer fan, I remember watching an

interview with a successful coach – his name was Nils Liedholm - who was asked: “Why are you asking A.C. Milan champions to spend 30 minutes everyday practicing on the fundamentals of soccer game?”, he replied something that I will always r e m e m b e r : “ C h a m p i o n s do this all their life and that’s the reason why they become champions”.

When you start competing in a particular type of sport, you don’t become a champion at the very beginning, obviously. On the contrary, you need to learn specific skills and build on them, one by one, in order to set up the path to becoming a champion. But there is also a big difference between sports and trading, which most traders tend to ignore. Why do you think somebody who starts doing sports

The best way to reach success in trading is to stop focussing on the money

TRADING PSYCHOLOGYFX

28 FX TRADER MAGAZINE January - March 2019