5 Most Overlooked Keys to Successful Forex Trading

Forget about trading systems for a minute. Let's talk about the other keys to successful Forex trading.

If you listen closely, you will hear successful traders mention these things. But many times, they are not emphasized nearly enough. So in this post, I'll highlight the five most overlooked keys to success in trading.

1. Backtesting
I've noticed that there is one thing, more than anything else, that gets glazed over in trader interviews and trading presentations…

The power of backtesting.

For example, I went to a Meetup this past weekend to learn about how this guy trades Forex.


SEE ALSO: How this Trader Was Able to Quit His Dream Job to Trade for a Living

His presentation was good and it lasted about two hours. His Trader Personality needs a high win rate to feel successful. Therefore, that is what he worked on and his win rate is really high.

It's 90%+, for some strategies and currency pairs.

I'm taking him at his word here, I didn't see any verified results. But based on what he said, I believe him. The trade-off is that he has a lower average R multiple per trade.

Remember, there are no free lunches. There is always a trade-off.

However, the point is, that out of this 120+ minute presentation, he spent about 5 minutes on backtesting. He and his trading buddy backtested the crap out of their stop loss placement strategy.

It was actually a funny story because he said that he learned a stop loss strategy from a famous trader. He went back to that trader after he was finished testing and showed him the results.

The famous trader was floored and said:

You actually tested that? Nobody I talk to does that.

From what I could tell, most of the people at the Meetup could care less about this story. Nobody took notes on that part.

But to me, that was one of the most important points in his presentation.

Too bad he didn't spend a little more time on it.

The moral of the story is that you need to backtest to gain confidence in your system and to figure out what actually works.

If you want to get started with Forex backtesting read this post.

…and don't just take my word for it.

These professional traders say the same thing here, here, here and here.

2. Mindset
Sunrise Meditation

Are you trading poorly because you're embarrassed?

That might not make sense right now, but according to Joan Soktin, that is the most common reason why many people are not where they want to be financially. If you want to learn more, you can listen to that interview.

The point is that we may not be fully aware of why we do the things we do. Our subconscious programming determines most of our everyday lives, regardless if we realize it or not.

So you need to take a step back and ask yourself why you do the things you do…

Why do you take profits too early?
Why do you revenge trade?
Why do you seem to make the same mistakes over and over?
Meditation can help with this process. But there are other ways that we can improve our mindset.

One thing we can do more often is forgive yourself. Many times, we are way too hard on ourselves and tell ourselves mean things.

If you can give yourself some leeway to make a few mistakes, you will be surprised at how much more you will accomplish.

This is just one of the mindset strategies that can help you become a better trader.

Almost all successful traders that I have talked to say that your mindset is much more important than your actual trading system. In fact, that is what we focused on the most during the London Conference.

To learn the mindset skills that can make you a better trader, I recommend listening to this interview and this interview.

3. Personality Matching
Matching personality

Most trading courses say that their system is the best system in the world and it is the only one that you should be trading.

Sure, it might be great.

But unless you understand your trading personality, there is a very good chance that it's not great for you. Even if you had the most profitable trading system ever, you will probably still lose money.

Find out why here.

…and they have to talk in those absolute terms because they are in business to sell courses.

Just like all of the hot women/men out there are not good marriage material, not all of the profitable trading systems out there will match your personality.

To learn how to figure out your Trading Personality, read this post.

…when it comes to your dating personality…sorry, but you will have to find another blog for that.

4. Different Colored Glasses
Everyone sees the world differently.

Woman in car

Me.

You.

That famous trader on the internet.

Just remember this, every time you listen to a trader. Many of them will talk in terms of absolutes.

…you can only make 25% per year in Forex trading.

…you should risk 2% per trade.

But remember that this is THEIR reality.

It might not be your reality.

You might be able to make 60% per year trading the exact same system. Your risk tolerance may only allow you to risk 0.5% per trade.

So learn what you can from them.

Just keep in mind that the only absolutes are what work for you.

5. Incremental Automation
A lot of newer traders I talk to think that their trading has to be completely manual or completely automated.

Not true.

You can automate certain parts of your trading and keep certain parts manual. This is called Incremental Automation.

For example, you can enter your trades manually, then turn on a trading bot to trail your exit stop. Or you could setup trading alerts that notify you of your favorite chart patterns.

Even simple alerts on TradingView can help you stay on top of your trades.


Final Thoughts on the Keys to Successful Forex Trading
So those are the five keys to Forex trading success, that I feel don't get enough love.

Everyone talks about entries/ exits and trading systems. They are important, for sure.

But I would argue that these things are even more important.

Happy trading!
https://www.tradingheroes.com/keys-successful-forex-trading/

How to Maximize Cryptocurrency Returns with the Baseball Cap Chart Pattern

As I write this, Bitcoin has just hit $18,000 for the first time. Crazy right?! This is when I believe that the word “bubble” starts to become very relevant.

The office manager at your job, your neighbor and your hair stylist are now going to start talking about Bitcoin, if they aren't already.

….wait for it….wait for it…

We saw this in the dot com boom, the real estate boom and every other bubble in human history. If you don’t believe me, read the book Extraordinary Popular Delusions and the Madness of Crowds, which can be found here.

But isn’t this new blockchain technology here to stay?

Certainly.

However, just like the tech companies of the dot com bomb, a large majority of cryptocurrencies out there will not survive. A lot of them have no product and are just jumping on the bandwagon to make a quick buck on an ICO.

So how can you protect yourself and still try to maximize your profits?

I believe that one of the keys is to wait for the Baseball Cap chart pattern.

In this post, I’ll show you why it works, when it will probably stop working and I’ll share with you my own personal experience that has led me to use this pattern.

Table Of Contents

The Baseball Cap Chart Pattern Explained

Baseball Cap Examples

GameCredits

Ripple

When the Baseball Cap Cryptocurrency Pattern Will Stop Working

Conclusion

The Baseball Cap Chart Pattern Explained
It’s called a Baseball Cap because it looks sort of like the top of a hat and a bill.

Like this example in Litecoin.

Litecoin chart

The pattern happens because of the nature of the cryptocurrency market right now. Here's a video that I did that explains the technical chart pattern.



Cryptocurrencies are not something that the general public understands very well yet.

Almost everyone understands how real estate and stocks work. But how can you create a new currency out of thin air?

…is a common question.

So the prices of cryptocurrencies are much more susceptible to pump and dumps.

When an uneducated public learns about a new feature that was added to a cryptocurrency, a rush of new buyers can come in and inflate the price very quickly. Once they find out that the currency wasn't as good as they thought, or they get bored, they will dump it and move on to the next “hot tip.”

A rapid rise can also be caused by a newly educated public that just figured out legitimate reasons why they should be buying a certain cryptocurrency.

But how can you tell the difference between the two?

Research and the Baseball Cap pattern are your best weapons in this emerging market. They won’t always be right, but they will greatly increase your odds of picking the currencies that will keep appreciating.

After all, that’s why they call it trading…and not easymoneymaking.

Before you go buying any ol’ crypto with this pattern, you first have to understand that this will only work with cryptocurrencies that actually have a solid use case and real world value.

So you need to do your research before you even look at a chart. Understand why the cryptocurrency is useful and if it solves a big problem.

It’s like buying a tech stock.

This research will also help you hang on to a currency if the price blasts off. It can be easy to take your profit too early if you don’t have a good reason to keep holding the currency.

Once you have a few cryptocurrencies that you have researched and believe in, then it’s time to look at the charts.

Yes, it can be tempting to buy when a chart is going parabolic, like this…

Bitcoin chart

After you have done all that research, you will probably think that the currency is going to the moon and it doesn’t matter where you buy.

Hold on there tiger.

You need to optimize your entry by waiting for the Baseball Cap.

What goes straight up, must come down.

So wait for the market to pull back and stabilize at a defined level. This is where the market is catching its breath and could go on another run.

If price continues to drop and does not stabilize, then you know that there is nobody there to “catch” the price and it is not time to get into the market yet.

How long should the market stabilize? Based on past results, two months or more is ideal, but the minimum seems to be one month.

Here's an example of a long base that happened in EOS.

Baseball Cap chart pattern base

Understanding this one simple pattern can save you a ton of money and protect you from a world of hurt.

Of course, there are no guarantees in trading and price could continue to drop from a base. But that sure beats buying at the top and getting rocked.

FOMO is a bitch, avoid it at all costs.

Baseball Cap Examples
Now let's take a look at two charts. One where the pattern worked and one where it didn't.

GameCredits
This is a cryptocurrency that I believe won't make it. They have created a currency that allows video game players to do things like earn money and buy upgrades inside games.

Basically a universal game credits system. Players could earn money in one game and use them to buy upgrades in another game.

There is probably a need for it. But my question is: Why not just use another cryptocurrency like Bitcoin or Ripple? That would be a much better incentive for game players because people could spend that money in the real world.

When your local coffee shop starts accepting Ripple, of course.

Thus, while many cryptocurrencies have been taking off, GameCredits has languished. It is sill forming the Baseball Cap chart pattern, but the research side of the equation does not warrant a buy, in my opinion.

That could change of course. But this is an example where looking at the pattern alone won't make you any money. The fundamental analysis has to be solid too.

GameCredits

Ripple
I actually started buying Ripple at a bad time. That was before I figured out this chart pattern. I was buying it on the first big push, at about $0.35.

After the first big drop, I got smart and looked for a basing level. That's when I was able to get some at about $0.24, a much better price.

We had to wait awhile for this pattern to play out, but it eventually did.

Ripple will probably be one of the cryptocurrencies that succeeds, in my opinion. Bloomberg just added it their terminal, along with Litecoin and Ethereum.

Ripple chart

When the Baseball Cap Cryptocurrency Pattern Will Stop Working
I believe that there will be a point when this chart pattern will stop working.

Once cryptocurrencies become mainstream and more heavily traded like stocks, futures or Forex, then you will probably have to look to the more traditional technical chart patterns to make trading decisions, like support/resistance, head and shoulders, the pin bar and the outside bar.

In addition, if the cryptocurrency market ever goes through an extended bear market, then all bets are off and the Baseball Cap won't work. This pattern relies on the strong bullish bias of the cryptocurrency market right now.

You have to remember that there is a huge pool of potential cryptocurrency buyers who don't know anything about the market right now. Once they learn about cryptocurrencies and there are no more new buyers left, then we will stop having these huge price run ups.

Excessive government regulation could also slow down the growth of cryptocurrencies and kill the bullish bias.

Until then, keep an eye out for this chart pattern because it can be very profitable. This video will show you some examples.



Again, remember that past performance does not guarantee future results and you need to do your fundamental research on a cryptocurrency before you even look at a chart.

Conclusion
I recently met a guy who has literally multiplied his retirement account by purchasing Ether. His strategy was to buy when he started to see price come down, because he believed that it will eventually go back up.

That’s really dangerous.

It works well in very bullish markets, but you will get slaughtered in even a moderate bear market.

This guy has since pulled out his original investment capital and now only has his gains in the market. He even admits that he was lucky.

The moral of the story is to keep your risk low and don’t go “all-in.” Watch for the Baseball Cap chart pattern because it can help you find a good place to buy.

Luck is not a strategy.

Do your homework, be patient and stay safe in this wild and crazy market. Things will only get more volatile from here.
https://www.tradingheroes.com/cryptocurrency-baseball-cap-chart-pattern/

3 Things Successful Traders Have in Common

After talking to hundreds of traders over the years, there are really only three things that separate the successful traders from the unsuccessful ones. Like most things that work well in trading, these three things are very simple.

Note that I said simple, not easy.

So if you are still searching for consistently profitable trading, then it is likely that you need to improve in one of these key areas.

The Right Trading System
Trading Computer

I’m not talking about a trading system that makes the most money.

All successful traders have found a trading system or systems that match their unique personality.

That could mean a high win rate (but low R multiple) trend following system, or it could be low win rate (but high R multiple) countertrend system.

…or whatever. There are so many ways to trade successfully.

UPCOMING EVENT (Sep 2018): The Online Trading Summit with Rolf Schlotmann, Yvan Byeajee and...

But the key is to find trading systems that work for you.

How do you do that? Well, it boils down to figuring out the following:

Are you more of a fundamental trader, technical trader, or a little of both?
If you are a technical trader, are you a breakout, trend or countertrend trader?
What is your ideal trading timeframe? Is it day, swing or position trading?
What is your overall risk tolerance?
As soon as you can confidently answer at least three of those questions, then the number of trading systems that would match your personality drops significantly. This makes it much easier to find a trading system match.

Action Step
If you haven’t downloaded my free book on how to pick the right trading system for you, then I would highly recommend that you go here and download it before you continue reading this post.

It will give you more details on how to figure out the best trading system for you.

An Upgraded Mindset
Happy man

Yes, upgraded.

I have not heard of any successful traders, who were successful from day one.

Successful traders are made, not born.

We have to work on our mindsets in order to withstand the unique challenges of trading.

The right trading mindset consists of several different components:

Perseverance
Ability to put in regular work
Being able to withstand drawdowns
Not getting too excited when a trade goes your way
Following your trading plan
…to name a few.

You probably need to work on one or more of these traits (like all traders), so here's how to get started…

Action Step
In order to upgrade your mindset, you need to understand your current weaknesses. This might take a little longer than you may think because your weaknesses may be hard to figure out.

As I have worked on my own weaknesses and watched others do the same, one thing is very apparent. A majority of our bad habits, neuroses and insecurities, come from events in our childhoods.

We may think that we have all grown up to be well adjusted adults. But from what I have seen, nothing is further from the truth.

Most of us still have mental weaknesses that trading will expose in a second.

So try to figure out where your trading mistakes are coming from.

Is it from bad habits that you picked up as a kid?
Is it from a traumatic experience that happened in middle school?
Many of these events lurk in our subconscious, locked away from our daily awareness. The easiest way to start exposing these subconscious thoughts is to start a daily journal.

You could write it in Evernote, but studies show that you engage more of your brain when you put pen to paper. Whichever you prefer, just start doing it.

Every day, write down your feelings about events during the day. Also write down your dreams. As you review your journal at the end of the week, you will start to see some patterns emerge.

This will help you understand why you do some of the things that you do.

…or maybe you already know what you are doing wrong, but feel helpless to fix it.

Once you identify the behavior that you want to correct, then seek out people, tools and courses that can help you fix your behavior. Here is a short list of resources I recommend.

The Advanced Traders Mindset Course
The You Get What You Trade For Course (inside the Naked Forex Forum)
Inner Talk subliminal recordings
The Power of Habit book
Talking to a friend about your challenges or seeking help from a professional can also provide another perspective. Keep working at it until you figure it out.

It's not easy, but the rewards are tremendous!

A Community of Like-Minded Individuals
Trader meetup

Finally, many successful traders have joined a community that helped them achieve their success. Sometimes, that community was just one other person.

I know a few traders who have figured it out totally on their own.

But most traders have benefited from being in the right group. You can call it the mastermind effect or group flow.

Finding the right trading group or buddy can help you with:

Education: A good community can help you learn faster because there are more knowledgable people in the group. It's like when elite athletes train with other elite athletes to get better at their sport. You are the average of the 5 people you surround yourself with, so surround carefully.
Identifying signals: If you are in a group that trades the same systems, then you can help each other spot trading opportunities. This can prevent you from missing those big trades. A group can also help you stay away from bad trades.
Moral support: When you aren't trading well, a good community can keep you positive and prevent you from revenge trading.
If you don't find a compatible trading buddy or group on the first try, don't get discouraged. Keep working at it.

Here’s how I would recommend getting started…

Action Step
If you would like to reap the benefits of a trading community, there are a couple of ways that you can go about it. Some people prefer to work with one or two people, while others like the social interaction of a larger group.

There is no right or wrong answer. If you aren't sure what is the best for you, try both and see how you like them.

Find a Trading Buddy
I have personally found a trading buddy to be a HUGE help. This person helps keep you accountable and you can bounce trading ideas off each other.

It can be tough to find the right person however, and you may need to try out several different people before you find a good match. To find a trading buddy, you can go to a conference or talk to other traders in the trading courses you have purchased.

Based on my experience, here are some things that you should look for in a trading buddy:

In a similar timezone: It can work if you are in very different timezones, but it is much easier to schedule conversations if you are in a similar timezone and have similar work schedules.
Mutual respect: You must respect each other or your arrangement will fail. You must respect the other person's time and stay accountable. Be the person you want to work with and you will attract similar types of people.
Similar trading knowledge level: If you know a lot about trading and the other person doesn’t, then you will always be waiting for them to catch up. It works best when you have a similar level of knowledge.
Different strengths and weaknesses: It helps a lot when your strengths are their weaknesses and vice versa. This allows one person to be the “expert” and coach the other.
Dedication: Is this person committed to learning how to trade or are they just “trying it out?” You want to make sure that your trading buddy is dedicated to learning how to trade. There are no guarantees of course, but the more dedicated the person is, the better.
Find a Trading Community
I would recommend seeking out private online communities where there is a specific focus and it is moderated by a team that you trust.

That means that you should stay off any of the big Forex forums out there like BabyPips or Forex Factory. There are always a few idiots on those forums that bring the level of the forum down to third grade name calling.

There are many private communities out there, so do some searching and find something that appeals to you.

If you need some help getting started, here are a few resources that might work.

First, I would recommend our free Facebook group. If you want to learn how to test and develop a trading system, then our paid Forex Trading Strategy Development Course can help too.

Another one of the best paid forums out there is the Naked Forex Now Community. The reason I always recommend it is because you get access to so many resources, for one low monthly price.

Walter also does a great job of highlighting other successful strategies from people in the group, not only his own. Everyone in the group is cool and they try to help each other out.

You can also join a Meetup group in your area.

Again, there are many others out there.

So do your research and find the one that you like.

Conclusion
Although these three keys to trading success may seem simple enough to take advantage of, they can be quite hard to get right. But now that you understand their importance, it's time to get to get to work.

Follow the action steps in each of the sections above and you will be on your way to following in the footsteps of successful traders before you. It takes hard work and dedication to succeed at trading.

But so does anything worthwhile in life.

Keep going…





Disclaimer: Some links on this page are affiliate links. We do make a commission if you purchase through these links, but it does not cost you anything extra and we only promote products and services that we personally use and wholeheartedly believe in. A portion of the proceeds are donated to my charity partners.
https://www.tradingheroes.com/successful-traders-common/

Three Drives Pattern Explained

The Three Drives Pattern is a well-known harmonic chart pattern. It is a relative of the ABCD pattern, for reasons you will learn about in a bit.

This pattern was mentioned in Robert Prechter‘s famous book “Elliot Wave Principle.”

In this post, I will explain how to identify it and show you how it is traded. If you want to learn how this pattern works, this post will give you everything you need to know.

But that's not all…

I will also show you how to backtest the pattern so you can find out if it is really something that you want to pursue in your live trading.

Here we go…

How to Identify the Three-Drive
The pattern consists of a series of three higher highs or lower lows, which signals a potential reversal.

SEE ALSO: How this Trader Was Able to Quit His Dream Job to Trade for a Living

Sometimes the reversal can be a huge move because the built-up pressure is finally released. Not always of course, but that is what happens when it works well.

Are there time and distance requirements for the moves? Some books say yes, others say no. So I'm going to take the most basic explanation that I think all Three Drives traders can agree on.

Let's take a look at how it works…

Bullish Three Drives
Bullish 3 drives example

In the bullish version of this pattern, there are three drives or pushes in the upward direction. After each push, there is a retracement, marked A and B. The retracements are a 0.618 Fibonacci retracement of the previous drive.

The next drive needs to end near the 1.272 Fibonacci extension for the price action to qualify for the for the pattern. When price gets close to the drive 3 point at the 1.272 extension, you would put in an order to sell.

Your target would be the 0.618 retracement of the entire move from point zero to the top of drive 3.

At least that is how the textbooks teach it. So that is where you should start testing it.

Let's take a look at a real example, so you can get a better idea of how this works.

This is the GBPUSD 4 hour chart on May 16, 2016, on TradingView and Oanda data. For those of you who want to follow along at home.

Here's what the chart looks like when we mark point zero.

Chart 1 - Point Zero

The first retracement hits the 0.618 Fibo level almost exactly.

Chart 2 - Drive 1

Now if you Fibo the retracement, you will see that price extended way beyond the 1.272 extension. So if you were following the rules of the Three Drives Pattern exactly, this would no longer be a valid signal.

Chart 3 - Fibonacci extension violation

However, just for fun, let's keep going…

The next retracement also blows through the 0.618 retracement level.

Chart 4 - Invalid retracement

The next push hits the 1.272 Fibonacci extension exactly.

Chart 5 - Fibonacci extension

Then when we look for a profit target, the 0.618 Fibo retracement of the entire move.  In this example, that gets hit easily.

Chart 6 - Profit target

So in summary, this was not a textbook pattern, but it would have ultimately worked out. That brings up the question:

Should I follow the system exactly or should I allow the rules to be bent?

Well, that all depends on what your backtesting tells you.

Bearish Three Drives
Then of course, the bearish pattern is the same thing, but upside down.

Bearish 3 Drives

How to Trade this Harmonic Forex Pattern
Just like with any other trading strategy, different traders will trade this pattern in different ways. But let's take a look at the most commonly taught way to trade this setup.

It is a good starting point for you to do your own testing and optimization.

There are basically three ways that you could enter a trade:

Put in a pending order at the last 1.272 level, with a stop loss guess
Wait for the market to print a strong rejection bar, like a Pin Bar or Outside Bar, then enter the trade, with a stop loss on the other side of the bar
Wait for the market to break through the 1.272 level, then put in a pending order if the market drops below the 1.272 level and use the previous swing high/low as the stop loss
Most resources will tell you to wait for the level to be rejected, then put in a trade (#2). So let's go with that method for now.

Potential Optimizations
When you are testing, one way that you could potentially optimize your entry, is to look for divergence of some sort. RSI can be a good indicator to use.

RSI divergence example

As you can see from the example above, drives 2 and 3 form higher highs on the chart, but RSI forms a lower high on drive 3.

Another potential optimization is to look to see if the top of drive 3 matches up with a previous major support or resistance point. In the same example, the turning point does indeed match up with a resistance level.  Resistance level example

How to Backtest the Three Drives Pattern
Alright, now let's get down to business.

After most traders read about a trading strategy, they go directly into trading it in their live account.

…and big surprise, they lose money and they say that it doesn't work. There are so many things that can go wrong in between the time you learn a trading method and actually trading it with real money.

Here's a short list:

You misread the instructions
You are risking too much per trade and are freaking out every time your trade moves one pip
The trading method doesn't actually work and it turns out that everything on the internet is not true
You start trading it correctly and forget the rules because you didn't write them down
You think you know better and keep changing the rules
You second guess yourself and miss good trades
And more
These are natural mistakes that all humans make. Myself included. So why risk your hard-earned money on your unproven skills?

First, write down the exact rules of the system that you want to test. You can download the backtesting plan worksheet for free here. This will ensure that you do not deviate from your plan.

Next, you need to backtest your system and make sure that it has positive expectancy. Fire up Forex Tester and test your system. If it does not work in backtesting, then it certainly won't work in live trading.

Once you have a system that works in backtesting, then move it into a demo account. Do not risk real money at this point.

Only when you are comfortable in a demo account, should you even consider trading live.

To learn all of these steps in detail and much more, join the Forex Trading Strategy Development Program.

Other Resources
Here are some other resources that you can use to learn more about this chart pattern. It is always a good idea to look at how others are trading a chart pattern, to get ideas on how you can improve your strategy.

You don't have to follow them exactly and you will probably throw out a lot of the ideas. But it only takes one good idea to dramatically improve your results.

TradingView Three Drives tag – These are charts that community members have posted on the TradingView website.
YouTube videos – Here are the search results for videos related to this chart pattern.
A Close Cousin: The ABCD Pattern
One pattern that you will hear associated with the Three Drives is the ABCD Pattern. This could also be called the Two Drives pattern…I guess.

ABCD pattern

If I had to choose, I would personally start testing the Three Drives first because there is a greater chance that price will reverse after three moves, than two. Price simply has to travel a longer distance and therefore will be more “tired.”

Conclusion
So that is how you identify the Three Drives technical chart pattern. Remember that just because you see other traders using this pattern, does not mean that it will work for you.

You need to backtest it for yourself and figure out if it matches your trading personality.

Never take anyone's word that a trading system works.

Not even me 🙂

Do you own homework and you will progress much faster as a trader.



Disclaimer: Some links on this page are affiliate links. We do make a commission if you purchase through these links, but it does not cost you anything extra and we only promote products and services that we personally use and wholeheartedly believe in. A portion of the proceeds are donated to my charity partners.
https://www.tradingheroes.com/three-drives-pattern-explained/

Compounding Forex Profits: A 2,381 Percent Example

In a previous backtesting post, I revealed the results from a backtest of Trending Outside Bars. That strategy yielded an average 75% win rate and an average 18% return on seven pairs, over about 16 years.

Yeah, those results won't buy you a Ferrari any time soon.

But I presented the data that way to make a point:

It can be easy to give up on a trading strategy in backtesting when you don't make huge return every year.

That can be a big mistake, as I'll demonstrate in this post.

Reminder: Backtesting has its limitations, but it is a great start for building a trading system. Most of the successful traders I know attribute their success to backtesting, but there are different ways to learn to trade. Past performance does not guarantee future results.

The Leverage of Compounding Forex Profits
You have probably read a lot about the magic of compounding Forex profits with a bunch of theoretical numbers thrown into a spreadsheet. That's a great start, but let's look at a real life example from a round of testing that I did.

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As I mentioned in the beginning, the results I presented only included seven pairs. Many traders test one pair, then they get discouraged that they only made 18% over 16 years.

So they give up and move on to the next system. Welcome to the Trading Silodrome.

But they miss two important leverage points:

Compounding
Trading more pairs/timeframes
Here's how that 18% can turn into 2,381%…

To see the complete results of this trading system, sign up for TraderEvo, our comprehensive trader training program.

Test Results with Compounding
After I did the test with seven pairs, I expanded the test to all 27 currency pairs that I want to trade live. This can potentially multiply the advantage of the system over several currency pairs. The results were quite good, but still not impressive without compounding.

This is a screenshot from my backtesting journal spreadsheet.

Backtesting trading results

Again, averages can kill your motivation. The average return for all the pairs dropped to 12.81%. On the bright side, the average win rate increased to 77.33%.

If you added the returns, as I did above in the spreadsheet, you would get a sum of 324.32%. That could cause you to give up right now. 324.32% divided by 16 years is 20.27% per year.

Pretty good, but probably not what most traders are looking for.

However, that only shows you part of the potential of the system. You need to take compounding into consideration.

Before we move on, some of you will argue that this next result isn't accurate either because most traders will have to withdraw money for living expenses, taxes, etc. Yes, that is true and you will need to build this into your calculations later. At this point, I simply want to demonstrate the full potential of the system. This can be the key realizing that you have a viable trading system, instead of giving up too soon.

Combine All Results
The key to getting your compounded return is to put all of your trades into one spreadsheet, so you can create your own calculations. Doing this will also show you your maximum number of losing trades, max drawdown, etc. That can be tough to visualize when you are only testing one Forex pair at a time.

In Forex Tester, you can simply export your backtesting results to a CSV file, then import it into your favorite analysis software, like Excel.

Export history to file

Then sort your file by trade open date.

Trade open date

Now you can set variables for your percent risk per trade and your starting balance. Then you can change those settings to see how that would affect your end result.

If you need help setting this up, here's how to do it:

Calculate the R value for each trade: (stop loss – entry price) / (close price – entry price). I wouldn't worry about the figuring out the decimal points for JPY pairs and buy vs sell. You can use the absolute value of that calculation and use another result field to add a plus or minus. For example, if you have a 3R absolute calculation, you could look at the $ amount profit/loss to determine if it should be a +3R or a -3R.
Multiply the R calculation above by a percent risk per trade field that you create. So if you are risking 1% per trade and a trade makes 3R, then you would make 3%.
Then add or subtract the percentage lost/gained on each trade from a running balance column that you create. I usually start with a $10,000 starting balance.
To get these spreadsheets, sign up for TraderEvo.

The Compounded Return
Then you will have a total compounded return at the bottom of your spreadsheet. This is the number that you should be interested in.

When I compounded this system, taking 1% risk on each trade, the final result was 2,381.48%. That works out to be 11.97% per month, on average.

Now that's more like it!

Compounded return

When I change the risk per trade to 2%, the total return changes to 53,465.93%.

That is some serious compounding.

Remember, you cannot simply risk more to make more. You have to find the balance between a good return and being able to handle the drawdowns. With more reward comes more risk.

Conclusion
This is just the first step in the Trading System Launch process.

Remember that it goes:

Backtesting > Forward Testing > Live Trading

The actual results you get in live trading will probably be a little different from your backtesting. But it is very important to start with backtesting so you know if your system has positive expectancy or not.

Before you give up on a trading system, remember to factor compounding into your calculations.

It could make all the difference.

To see the complete results of this trading system, sign up for TraderEvo.



Disclaimer: Some links on this page are affiliate links. We do make a commission if you purchase through these links, but it does not cost you anything extra and we only promote products and services that we personally use and wholeheartedly believe in. A portion of the proceeds are donated to my charity partners.
https://www.tradingheroes.com/compounding-forex-profits/

Why the Future of Cryptocurrency is in Consolidation

As traders, we make money by identifying potentially profitable situations in the markets. This might be identifying chart patterns, playing a certain type of news event or understanding the fundamental dynamics behind price movements.

So when it comes to cryptocurrencies, it is helpful to think two steps ahead and imagine what the cryptocurrency landscape will look like, 5 years from now.

Sure, all your buddies are making 400% returns on those crapcoins now. But will they still have those profits in a year?

Will Bitcoin still be king?

Or will there be many cryptocurrencies happily sitting around the campfire, singing Kumbaya?

Nobody really knows and I'm the last person who you should be listening to, when it comes to making predictions about the technology behind cryptocurrencies.

However, I would like to give you some ideas to think about before you make your next investment or trade. This is based on my current understanding, personal experience and research on the cryptocurrency markets.

As you know, things change quickly in the cryptocurrency world, so what I think today, might change tomorrow. But if we stay informed and keep an eye on the big picture, then we should be able to see changes coming, much sooner than the general public.

This is one of those big picture ideas:

The cryptocurrency markets will consolidate dramatically.

Here's how that might happen…

Bridging the Gap Between Fiat and Digital Currency
Bridging the gap

Money as we know it, or fiat currency, has been masquerading as digital currency for quite awhile. Systems like Fedwire, PayPal and ACH have allowed you to transmit fiat currency digitally.

But even though it's digital, there are still so many rules when it comes to when and were you can send that money. If you are in the US, have you ever tried to send money to someone in Nigeria, via PayPal?

Good luck with that.

The promise of Bitcoin and other cryptocurrencies is to give anyone the ability to send money to anyone they choose, regardless of location, nationality or bank affiliation. But having so many different cryptocurrencies available can cause a problem, because you will have to exchange the currency you own for the currency that your counterparty wants to get paid in.

For example, let's say that you own $1,200 worth of DASH right now. But you want to by a new pair of pants from a website that only accepts Ripple.

On most exchanges right now, you will have to exchange your DASH for Bitcoin or Ethereum, then trade the Bitcoin/Ethereum for Ripple. That's two additional transactions and that can make your pants pretty damn expensive.

The Need for Seamless Currency Exchanges
This is where Interledger-type solutions come in. This protocol would make the exchange of digital and fiat currencies completely transparent to the two parties involved. I recently went to an Interledger Meetup in San Francisco and it made me realize that this type of solution is necessary and will probably be available very soon. Interledger has a working prototype and similar projects probably do too.

It was a fun event.

…and the fact that they had wine didn't hurt.


I also realized that when this becomes available, then there should be a fairly rapid consolidation of cryptocurrencies, leading to most people in the general public only holding 2-3 primary currencies to pay for things in real life.

Here's why…

Take a very specific use case token like Storj. You will only have it if you want to store data on the Storj network, or you want to make money by renting out your drive space to people on the network. Right now, people are buying it for pure speculation. But they will need to sell it at some point because you can't buy a new TV on Amazon with Storj.

Something like Interledger should make the process of turning Storj into US dollars, fast and easy.

Therefore, the value of these types of coins will probably drop in value very quickly when something like Interledger goes online:

Coins tied to very specific services like: Sia, Storj and Civic
Coins that have very high transaction costs
Coins that have very slow transaction speeds
Which brings me to Bitcoin…

Have You Actually Used It? Bitcoin Fails as a Real World Currency
With all the hype surrounding Bitcoin at the moment, not many people have actually stopped to try and buy something with it.

Let me tell you, it's pretty shit.

I tried to buy a Ledger Nano S from the Ledger website and the transaction timed out. But I was still charged for the transaction.

…and it cost me 15% more than if I bought with Paypal…which I will never get back, even after the refund.

I'm not the only one who believes this. The founder of Bitcoin.com has sold all of his Bitcoin and says that it is useless.

It's important to understand the shortcomings of Bitcoin and other cryptocurrencies because it is the reason why an Interledger-like solution might lead to a consolidation of the cryptocurrency markets.

Why Something Like Interledger Could Lead to Cryptocurrency Consolidation
In a nutshell, Interledger works by creating a network of trusted dealers who do currency exchanges. Transactions run through this network, when an acceptable “path” is found. It may take multiple “hops” to finally exchange the source currency for the destination currency.

For example, let's say that you want to spend your Monero to buy a new M6 straight from the factory, in Euros. BMW M6

The transaction might look something like this:

Dealer A: Accepts Monero from you and coverts it to Ripple
Dealer B: Accepts Dealer A's Ripple and converts it to USD
Dealer C: Accepts Dealer B's USD and coverts it into EUR and sends it to BMW
Obviously, the more dealers the transaction has to go through, the more transaction costs there are and the more expensive the transaction gets.

Therefore, these networks will probably start to rely on a select few currencies to keep the transaction costs low. On the customer side, people will probably want to keep the same currencies on hand because they know that it will lower their transaction costs, through the network and person to person.

So the coins that will probably win out are the coins with the fastest transaction time and the lowest transaction cost.

Hint: It's not Bitcoin.

But it could be, if the Lightning Network can create a solid product.

So many possibilities 🙂

Conclusion
Interledger is not the only group that is trying to do this. There are other teams working on similar solutions.

It's not important to know all of the details, but it is important to understand how these solutions will affect the overall cryptocurrency landscape. The ICOs that survive may not be as valuable as you think they will be, simply because it will be so easy to exchange for them, only when you need them.

The real winners in the cryptocurrency world should be the solutions that actually deliver on the promises that Bitcoin was supposed to provide…cheap, fast, monetary transactions to anyone in the world.

Which cryptocurrencies do you think will be the ultimate winners?
https://www.tradingheroes.com/cryptocurrency-consolidation/

The 9 to 5 Worker’s Guide to Becoming a Profitable Trader

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It can be tough to learn how to trade with a full-time job. On top of that, obligations to friends and family can make it hard to study trading courses, backtest and trade.

I totally get it.

But if you really want to enjoy the freedoms that trading can provide, you will have to figure out how to make it work within the constraints of your current situation.

…and you will also have to make a few sacrifices.

So if you are NOT ready to commit to learning to trade after/before work, then you can stop reading right now. There is no magic trading system or “insider secret” that will replace hard work.

However if you are ready to put in the effort to make your dream a reality, then let's take a look at how to learn as quickly and efficiently as possible. We all have 24 hours a day and you need to make every second count.

Successful traders have done it…and so can you.

SEE ALSO: The Yoga Teacher Who Became a Successful Forex Trader

How Much Time Do You Have? No, Really.
The first thing you need to do is accurately assess how much time you have to spend on trading. In your Lamborghini-fueled enthusiasm, you will probably overestimate how much time you have to study and trade.

Almost everyone does.

So take a couple of deep breaths.

Then do this…

Start by counting up the number of hours per week, that you think you will be able to devote to learning to trade.

Be realistic and only count distraction-free hours. For example, if you have to watch your kids, that cannot be counted as quality study time.

Count your hours right now.

You can do it mentally or write it down on that piece of paper on your desk.

Got it?

Good.

Now cut that number in half.

Yes, seriously.

Great, now you have a total weekly number of hours that you can spend on your trading education. Even if it's only a couple of hours, that's fine.

You need to start somewhere.

Next, figure out the specific times that you will be able sit down and study trading.

Is it from 9pm to 11pm on Tuesday and Friday?

Write down a schedule that would work well for you.

Excellent, you now have an education calendar!

Again, even if this schedule looks like too little time to make progress, don't worry. You have to start somewhere and even a couple of hours a week can make a huge difference, if you use the other tips that I will give you in this guide.

Have you heard of the 10,000 hour rule?

If you have, then forget about it because it's worthless.

Some people require a lot less than 10,000 hours to achieve mastery, and some people need more.

My point is that dividing 10,000 hours by the number of hours you will spend in a week, will not necessarily determine how many weeks it will take you to become a profitable trader.

It is the quality of the time that you spend on mastering trading, not the quantity.

If you don't believe me, then read this article.

Now that we have that out of the way, it's time to turn your schedule into a habit. If you've had trouble sticking to a new schedule in the past, then this is what you may have been missing…

Habits Rule Everything Around Me
After reading The Power of Habit, I realized that there are certain actions that I do, that are not entirely my fault. However, once I learned that, I understood that it was my responsibility to forgive myself and figure out how to change the habits that are not helping me reach my goals.

Everyone has these habits…both good and bad.

Knowing how to create good habits and get rid of bad ones is crucial to your success.

In the book, Charles Duhigg cites studies of people who have lost their ability to remember things, due to injury or disease. There is one study in particular, that vividly illustrates why our habits are not always logical and why willpower alone can be useless.

A man had a disease where a virus destroyed the parts of his brain that are responsible for short term memory. He could not remember even the simplest facts, for more than a couple of seconds.

One day, his wife could not find him in the house and she freaked out. She was about to call the cops when he walked through the front door.

He didn't know where he had been or how he remembered that this was his house. But somehow, he was able to take a walk around the neighborhood and find his way back home.

How was this possible?

It turned out that his wife had taken him on frequent walks down the block and back to their house. They had taken that walk so many times, that it was engrained into a part of his brain that was not damaged.

In other words, it was a habit.

So he was acting out of habit, instead of memory or willpower. This shows that habits reside in a part of our brains that is separate from memory.

Therefore, simply remembering that you need to work on your trading will not help you create a habit. Putting it on your calendar is not enough. Trying to use willpower to overcome previously engrained habits can be equally futile.

You need to do a positive action repetitively, to turn it into a good habit and overwrite bad habits.

Working man

The secret to success is to start small because you are more likely to do a simple action than a complex one. Even if you start with only 10 minutes a week, just get started. You will begin to see results and your confidence will grow.

For more great tips on how to form rock-solid habits, read this article.

Join a Community
Most trading sites will tell you to start your journey by taking a trading course. While that can be helpful, I believe that there is a step that should actually go before taking a trading course.

Find a community of like-minded individuals.

Doing this can give you the power of Group Flow. Some call it a mastermind group.

When you join a group that is committed to the same goals, you gain strength from each other and you will be more likely to persevere through tough times.

It doesn't matter what group you join, as long as you feel motivated and safe there. If you have trouble finding one, then consider joining our free community.

To get focused accountability, you can also choose to join our paid trading mastermind.

Once you have found a group, it's time to move on to finding the right education…

What Should You Study to Become a Profitable Trader?
Aright, now that you have a study schedule set up, you understand how to turn it into a habit and have some trading buddies, let's address the elephant in the room.

Elephant

What you should study to become a profitable trader?

Instead of recommending a particular course or trading system, I've found that it's much more useful to setup some filters on what you won't study.

Otherwise, you will try to study too many things at once and get overwhelmed.

One key filter is the timeframe filter.

Since you have a day job, you will have a very limited number of hours to study and trade. Therefore, you should limit yourself to the following options:

Trading the weekly or daily timeframe
Daytrading, but only during a fixed number of hours, like the London or New York open
If I had to suggest one timeframe for people with 9 to 5 jobs, it would be the daily timeframe.

This allows you to check your charts for a few minutes, once per day. Then you can spend the rest of the time reading or testing.

To learn some daily chart trading strategies, go here.

If you would like to see the complete backtesting results of daily chart trading systems, join the Trading Strategy Development Program.

There are a couple of tested trading strategies in there that have a high win rate. However, that is not the only key to success in trading.

Wondering how to choose the best timeframe for you? In reality, you may have to do some experimenting, but the key is to choose one timeframe right now and stick with it until you have a valid reason why it doesn't work for you.

Jumping between timeframes is the worst thing you can do and will slow you down.

Worried that you won't get enough trades on the daily charts?

No problem.

You can simply add more trading strategies or trade more pairs.

Fundamental, Trend, Countertrend or Breakout?
From there, you should set a trading style filter.

Are you more of a fundamental or technical trader?

Again, you may not have enough experience to understand which one you are best at yet. The key is to stick with one and only study trading strategies that fit that criteria.

Start with the one that appeals to you most.

This will allow you to maximize your time and give yourself the best chance of getting good at one thing, instead of being terrible at multiple things.

Need some resources?

If you need a jumping off point, you can follow this guy for fundamental trading.

Follow this guy or this guy for technical trading.

Want to daytrade? I suggest following her.

We also have tested technical trading strategies here.

Conclusion
Many people want to quit their office job and start trading full-time as soon as possible. But in reality, the move to full-time trading is usually a gradual transition, not a cold-turkey type thing.

Trying to do too much at once will burn you out and turn you off to trading altogether.

To avoid that, take it slow…

Focus on one thing at a time, form the right habits, and you will probably be surprised at what you can achieve. Even with a day job 🙂


Disclaimer: Some links on this page are affiliate links. We do make a commission if you purchase through these links, but it does not cost you anything extra and we only promote products and services that we personally use and wholeheartedly believe in. A portion of the proceeds are donated to my charity partners.
https://www.tradingheroes.com/profitable-trader-with-day-job/
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The Cryptocurrency Sectors Cheatsheet

There are different sectors in the stock market and it is important to understand each sector because their prices tend to move together.

Likewise, you need to be aware of cryptocurrency sectors in order to understand how new innovations, laws and public interest will affect similar cryptocurrencies. So in this post, we will break down all of the cryptocurrencies that we know of and will put them into logical sectors.

Keep in mind that this categorization has been done to the best of our ability and there may be mistakes, depending on our understanding of the cryptocurrency and/or how the developers have explained it. Projects also evolve over time and may shift their focus.

Note: This is for informational purposes only and is not trading or investing advice. Our only goal here is to create as complete a list as possible, to serve as a jumping off point for your research. Trading cryptocurrencies is risky, do your own research and if in doubt, DO NOT BUY.

This list will be updated as much as possible, but if you see something missing, let us know in the comments.

Alright, let's get into it…

Financial Transaction Cryptocurrency Sector
Paying for cookies

Yes, all cryptocurrencies are essentially used for financial transactions. But these currencies were created solely for that purpose.

Bitcoin (BTC) – “Digital gold” and the first widely popular cryptocurrency.
Bitcoin Cash (BCH) – A hard fork that tries to improve on Bitcoin by having faster transaction times and lower fees.
Bitcoin Gold (BTG) – A hard fork that tries to improve on Bitcoin by being GPU mineable, has a more frequent difficulty adjustment and replay protection.
Decred (DCR) – A currency where stakeholders make the decisions and rules can change over time.
Electroneum (ETN) – A mobile-first cryptocurrency. I don't know why that makes a difference because you can use a mobile device for many currencies, but that's what their website says.
Litecoin (LTC) – “Digital silver” and a fork of Bitcoin started by Charlie Lee.
Ripple (XRP) – Primarily focused on facilitating bank-to-bank, cross border transactions.
IOTA (IOTA) – Wants to be THE currency for Internet of Things (IoT) transactions. Uses supposedly next generation cryptocurrency technology in the Directed Acyclic Graph (DAG).
Hcash (HSR) – “Hcash is hard” is probably my favorite quote from their explainer video. I wonder what kind of gun it carries. Seriously, it's an interesting hybrid of both blockchain (like Bitcoin) and DAG (like IOTA) technologies. The Toyota Prius of cryptocurrencies.
Monacoin (MONA) – The first Japanese cryptocurrency.
Nexus (NXS) – The website and founder do a terrible job of explaining the benefits. As far as I can tell, it's a cryptocurrency that uses satellites to maintain the uptime of the network and diversify the type of nodes that run on the network.
Stellar (XLM) – “Move money across borders quickly, reliably, and for fractions of a penny.”
RaiBlocks (XRB) – Instant, feeless and scalable transactions. Sound familiar yet?
Dogecoin (DOGE) – The currency that started as a joke, but became quite popular. I guess a lot of people found the joke really, really funny.
DigiByte (DGB) – Pretty much promises everything that other currencies do. The only difference might be their MultiAlgo mining feature.
Private Digital Currency Subsector
A subset of the Digital Currency Sector are private digital currencies. The goal of these currencies is to make financial transactions 100% private.

BitcoinDark (BTCD) – Project moved to Komodo Coin.
Monero (XMR) – By some accounts, the most secure private currency out there.
Zcash (ZEC) – No features really stand out from others on this list.
Zclassic (ZCL) – A hard fork of Zcash, removes the 20% fee.
DASH (DASH) – Again, there's nothing with their technology that really stands out, but they do seem to have more adoption from real-life vendors than other currencies in this subsector.
Verge (XVG) – Boasts a ~5 second transaction time.
Bytecoin (BCN) – Private transactions…you get the picture.
PIVX (PIVX) – The website says that its masternodes are more profitable than other currencies that use masternodes. Great if you run a masternode. Otherwise, no apparent unique end-user benefits.
Fiat Pegged Subsector
Basecoin – Can be pegged to any index you can get a price feed for. They have a good explainer PDF.
Tether (USDT) – A substitute for the US Dollar. Very helpful when you need to lock in profits on exchanges.
NuBits (USNBT) – Pegged to the US Dollar.
Exchange Based Coin Subsector
These cryptocurrencies serve different functions on their respective exchanges.

0x (ZRX) – Enables ERC20 tokens to be traded easily.
Bitconnect (BCC) – Has all the signs of a ponzi scheme (folded).
Binance (BNB) – Primarily used to pay trading fees on the exchange.
Cobinhood (COB) – Zero fees cryptocurrency exchange, with very limited currencies available to trade. A blatant rip off of Robinhood, but with a name that doesn't sound nearly as good.
Ethos (ETHOS) – They want to “demystify” cryptocurrency and make it so anyone can safely and easily buy and store cryptocurrency.
KuCoin (KCS) – Users get a discount on trading fees on the platform by holding a certain amount of KuCoin. There doesn't appear to be much benefit to traders beyond this.
Kyber Network (KNC) – Allows cross-chain payments and cryptocurrency derivatives.
TenX (PAY) – Convert and spend cryptocurrencies anywhere with an app or debit card.
OmiseGO (OMG) – Wants to allow seamless exchange between fiat and digital currencies. Success depends on the launch of the Plasma Network.
Qash (QASH) – Provides liquidity to the cryptocurrency market.
Waves (WAVES) – Allows fast exchange and trading of cryptocurrencies.
Social Tipping Subsector
Have you ever wanted to give someone some money for a fantastic social media post? I haven't, but these currencies want to make that a regular occurrence.

ReddCoin (RDD) – Allows people to send tips for post on social network.
Steem (STEEM) – “Blockchain-based rewards platform for publishers to monetize content and grow community.”
Marijuana Subsector
A lot of US growers keep a ton of money in cash because of the large gray areas in the laws (legal at the state level, but illegal at the national level). These coins want to provide a safer way for these businesses to store, send and receive money.

Potcoin (POT) – Banking for the legal marijuana industry.
DopeCoin (DOPE) – Pseudo-anonymous transactions, ~1 minute execution time and zero fees.
Cannation (CNNC) – Not a lot of information on their website, they probably got hungry and went to Roscoe's Chicken and Waffles instead of finishing the website. But bonus points for the 1990s-esque spinning coin GIF on their homepage.
HempCoin (THC) – Wants to be the catch-all solution for the entire marijuana/hemp industry, from farming to dispensaries. Built on Bitcoin source code.
Gaming Rewards Subsector
Currencies for rewards, purchasing game assets and more.

Experience Points (XP) – For incentives in games and educational content.
GameCredits (GAME) – A currency for the video game industry.
Storm (STORM) – Gamified micro tasks. Think blockchain Amazon Mechanical Turk.
Porn Subsector
No introduction needed here. One of the biggest online industries in the world.

Titcoin (TIT) – Uh yeah, self explanatory.
TittieCoin (TTC) – “Naughty but Classy,” LOL.
Sexcoin (SXC) – You get the idea.
Application Platforms Cryptocurrency Sector
Application servers

These are platforms that allow developers to create distributed apps (dApps).

Aeternity (AE) – The primary benefit of this platform is that most smart contracts are executed off of the blockchain. This means that they can be executed almost instantly and can be private. Only when there is a conflict, will the blockchain be used to enforce the terms of the smart contracts.
Byteball (GBYTE) – This blockchain offers a hodgepodge of different features, from requesting payments, to buying/selling insurance, to prediction markets.
DeepBrain Chain (DBC) – AI applications platform.
Ethereum (ETH) – Arguably the most popular distributed applications platform.
Ethereum Classic (ETC) – A hard fork of Ethereum, where they honor an early hack of the network. In the early history of Ethereum, a hacker stole some money from the network. The primary developers of Ethereum decided to get the money back by essentially reversing the transaction. A minority of people believed that this action went against the decentralized nature of cryptocurrency because a few people had the power to reverse a transaction. The Ethereum Classic currency was born from that minority wanting to keep the status quo.
Cardano (ADA) – They say that they are the first “provably secure proof-of-stake algorithm.”
DragonChain (DRGN) – Disney-created cryptocurrency and platform. Focused on business services.
EOS (EOS) – At the time this is being written, there doesn't appear to be any specific characteristics that differentiate EOS from other platforms. Simply fill in the ________ with the usual buzzwords…decentralized, fast, scalable, etc.
Kin (KIN) – Billing itself is a “community currency,” it seems like their goal is to bring together a few social community apps and have them use Kin as the primary currency.
Neblio (NEBL) – Another enterprise focused blockchain platform project.
MaidSafe (MAID) – A data network, that can operate without human intervention.
NEM (NEM) – Based on Smart Assets, which is their term for things like coins, signature, a status update, or whatever you decide to create.
Nxt (NXT) – Application platform for FinTech, crowdfunding and governance.
NEO (NEO) – The Chinese version of Ethereum.
Rchain (RHOC) – Powered by the RhoVM that uses side-chains to speed up processing.
SingularityNET – (AGI) – A platform for AI-as-a-Service applications.
Stratis (STRAT) – They are a little different in that they provide some value added services to enterprises wanting blockchain solutions. Strangely they offer solutions in .NET, which seems like a step backwards.
Qtum (QTUM) – A mashup of Bitcoin and Ethereum code for business applications.
Icon (ICX) – Another platform that wants to build an ecosystem of apps, where currencies and technolgy of the apps can be easily exchanged between members of the platform.
Lisk (LSK) – Integrates with GitHub to help developers leverage existing code and communities.
Blockchain As A Service Subsector
These platforms make it easy for businesses to launch their own blockchains.

Ardor (ARDR) – Built on NXT technology. Allows companies to build their own child blockchain and related currency. These child chains are secured by the primary Ardor parent chain. Ardor-based currencies can easily be traded with each other. Ardor's solution to blockchain bloat is to have nodes that function as archives, unloading a lot of information from the primary blockchain, while still retaining vital history.
Ark (ARK) – The primary benefit of Ark is the ability to launch a new blockchain quickly, while using the best technologies from other blockchains.
Komodo (KMD) – There isn't an actual whitepaper for this project yet, but it seems focused on allowing companies to launch their own blockchain in a few minutes and create an ICO.
Digital Asset Portfolio Investment Subsector
Iconomi (ICN) – Allows anyone to either create or invest in digital asset portfolios. Possibly a good option for investors who want to place money with proven portfolio managers. Also allows talented portfolio mangers to get investors and grow their assets under management.
Blockchain Asset Backed Loans
You might not have to cash out of your cryptocurrency gains and pay the short term capital gains taxes (check with a certified accountant). Hang on to your assets and simply lend them out.

Salt (SALT) – Lend money against your existing cryptocurrency assets.
ETHLend (LEND) – Another peer-to-peer lending network. Get a 25% deployment fee discount when paying with LEND.
Advertising Sector
Basic Attention Token (BAT) – Blockchain based digital advertising. Wants to solve the problem of fraud and inaccurate tracking of ad data.
Digital Assets Exchange Subsector
Wax (WAX) – Buy and sell things like video game assets.
Digital Voting Subsector
The idea of a totally digital voting system is a little scary. But if it works, it would be ideal. Especially if you live in Florida.

Horizon State (HST) – Secure digital ballot box with identity protection.
Vote Coin (VOT) – Public elections, opinion polls and crowdfunding.
Online Gambling Subsector
FunFair (FUN) – Wants to be the go-to currency for online casinos.
Edgeless (EDG) – An online casino that supposedly has no edge.
Financial Services Subsector
These cryptocurrencies provide a platform for financial services.

Bitshares (BTS) – Decentralized banking and exchange on a blockchain.
Veritaseum (VERI) – Peer-to-peer capital markets. Their catchphrase: “Imagine Having Keys to the Internet in 1994” worries me on several different levels.
Mobile Data Marketplace Subsector
Dent (DENT) – Allows anyone to buy or sell mobile data plans at the best price. You never overpay because you only buy what you need.
Credit Subsector
Ripio Credit Network (RCN) – Latin America based peer-to-peer credit network.
Bloom (BLT) – They want to replace the existing credit scores with their BloomScore. On top of that, they want to provide a platform for identification and credit tracking.
Physical Asset Digitization Subsector
These coins basically allow you to take physical assets and trade/track them on a blockchain.

Bytom (BTM) – They have a properly shit explainer video, so it's tough to get a good idea of what the benefits of the platform are. Based on the rest of the website however, it seems like want to create a marketplace for things like securities, information and bonds.
DigixDAO (DGD) – Gold bullion marketplace, cryptocurrency backed by physical gold.
Forecasting Subsector
A forecasting or prediction network is basically a fancy term for: “you can gamble on anything.” But seriously, according to these sites, the collective wisdom of the crowd is much more accurate at predicting future events, than any one person, opinion polls or group of experts.

I would have to see this in action to believe it, but their logic certainly makes sense. The basic idea is that only people with relevant information about an event will place a bet and people who are just gambling will eventually lose all their money and go away.

Augur (REP) – Anyone in the world can create a prediction market by asking a question about anything. Seed the market with some initial funds and get a cut of the trading fees.
Gnosis (GNO) – They do an excellent job of explaining their platform, benefits and its use cases. Watch the video and read their FAQ.
Shared Computing Power Subsector
These cryptocurrencies allow people on the network to rent out their personal computer's computing power and earn cryptocurrency.

FoldingCoin (FLDC) – Help Stanford University find cures to the world's worst diseases.
Substratum (SUB) – Allocate your spare computing power to help run the free and decentralized internet.
Golem (GNT) – A decentralized supercomputer.
Aelf (ELF) – Decentralized cloud computing.
Ethereum Browser Subsector
Status (STN) – A mobile app that allows you to send/receive Ether, browse Ethereum apps and buy/sell Ether locally.
Supply Chain Management Subsector
Vechain (VEN) – They want to make it easy to manage all aspects of the supply chain on a secure blockchain.
Energy Grid Management Subsector
Power Ledger (POWR) – Trade electricity peer-to-peer and get paid in real-time.
Grid+ (GRID) – On electricity trading with the Agent device.
Data Storage Subsector
Blockchains will probably replace some of the major storage services like Dropbox.

Storj (STORJ) – Runs on top of the Ethereum blockchain, an ERC20 token. Their solution seems more dynamic than Sia. No deposit required to host files.
Sia (SC) – Runs on their own blockchain. You must put up a deposit to be a host.
Factom (FCT) – Targeted at document storage and verification for Enterprise, Government and Non-Profit organizations.
Filecoin (FIL) – Similar to Storj and Sia.
Blockchain Interoperability Subsector
Aion (AION) – Allows different blockchains to exchange information and currency.
Off-Chain Privacy Network Subsector
Enigma (ENG) – They are a bit of…yeah, exactly like their name says. They provide an off-chain solution for keeping information private. But there isn't much more information on their website than that.
Medical Records Subsector
Having a central repository for all health related data has not been able to be done for several reasons, a big one being privacy. But blockchain technology could make it a reality.

Dentacoin (DCN) – Global medical records.
Medibloc (MED) – Blockchain based healthcare records.
Insurance Subsector
Medishares (MDS) – Their goal is to streamline the medical insurance industry, including payments.
Invoicing Subsector
Not a sexy sector, but still something that businesses need.

Populous (PPT) – Allows businesses to sell their invoices at a discount to unlock their funds faster. Basically a note trading platform invoices.
Request (REQ) – Allows anyone to request a payment.
VR Subsector
Decentraland (MANA) – Think of it as a blockchain version of Second Life.
Content Publishing Subsector
These platforms allow you to publish content to a blockchain, which can make it free from corporate rules and censorship.

Tron (TRON) – “Internet 4.0 blockchain application development platform.” That might be a stretch.
LBRY Credits (LBC) – Think blockchain YouTube.
SingularDTV (SNGLS) – Allows artists to create their own tokens to raise money for their projects. Gramatik is the first artist on the platform. They also want to branch out to build a platforms for rights management and peer-to-peer distribution.
Porn Subsector
This technically a sub-subsector of content publishing, but given its own set of unique industry problems, it is probably best to put it in its own subsector.  Porn has always run into censorship issues and blockchain technology could be a way to finally escape that.

SpankChain (SPANK) – A cryptocurrency and technology platform for the porn industry. They are primarily targeting webcam models to start.
FAPcoin (FAP) – In case the name wasn't obvious enough, they will support online video, merchandise, webcam models and more.
Conclusion
Yes, new cryptocurrencies come out every day, so this might not be a complete list. We will do our best to stay on top of all the coins out there.

But if you know of any that should be on this list, leave a comment below and we will add it in the right place.
https://www.tradingheroes.com/cryptocurrency-sectors-cheatsheet/

5 Simple Reasons That Trading Plans Fail

Having a written trading plan is one of the keys to success in trading. But have you ever wondered why even the most well-thought-out trading plans fail?

Well, it's because writing down your trading plan is just the first step.

You cannot expect to write down a trading plan and have it magically make money for you. There are some additional actions that you have to take to make a trading plan work well.

…and sometimes, you also have to know when it's time to throw everything out and start fresh.

So here are the five reasons why trading plans fail, how to tell if it is the right one for you and how you can make your current plan much more effective.

Why trading plans fail (and how to fix them)

1. It Has Not Been Properly Tested
This is pretty common…

You buy a course and learn the trading method.

SEE ALSO: My Favorite Trading Books


Great!

The strategy makes sense, so you write down the rules and immediately start trading it in your live trading account.

Not so great.

After trading it for a month, you lose 10% of your account and give up on the trading strategy.

This is how the Trading Silodrome starts (not a good thing).

You could have avoided this by testing your plan before trading real money.

Testing your trading plan does three things:

It shows you if your strategy has positive expectancy or not.
It gives you confidence to execute your plan.
It shows you approximately what results you can expect.
To get started with testing you can read this post on backtesting. Some trading strategies can only be forward tested and if that is the case, you can skip to this post on forward testing.

Writing down your trading plan is essential. But once you have a plan, be sure to test it before you ever risk real money.

Test your trading strategy

2. It Does Not Fit Your Personality and Lifestyle
Let's say that your t-shirt size is an extra large. Would you wear a shirt that is a size extra small?

Of course not.

Well, at least not in public. What you do in the privacy of your own home is your own business.

My point is a trading plan that doesn't fit won't work, just like that t-shirt.

Yet, many traders insist on trading a trading strategy that does not fit their personality and/or lifestyle. There are basically three elements to your Trading Personality…

Timeframe
Trading Setups Category
Risk Tolerance
If you do not take the time to figure these things out, then you could lose money with an otherwise great trading system. Or even worse, you could be trading a method that has almost zero chance of working for you.

Read those posts to learn more about how to figure out your Trading Personality.

3. The Plan is Incomplete
Ship run aground

Are there holes in your trading plan? If there are situations that you are not prepared for, then you will probably run aground when you face these situations.

…like the ship above.

You may handle these situations correctly…or you may not.

But why leave that up to chance?

Some scenarios to consider are:

How many losses in a row should you allow before you take a break and evaluate?
Is there a situation where you may need to break certain rules?
When should you not trade (during news events, holidays, certain days of the week, etc.)?
How much correlation are you willing to have in your open trades?
It's not always possible to account for every single scenario. But do your best in the beginning and keep an eye out for new ones and add them to your plan.

Speaking of which…

4. It Does Not Evolve
Trading plans are meant to be a set of rules that you follow strictly, to make money over time.

At first glance, they seem like they should be written on marble tablets and displayed at the Louvre. In other words, once they are written, they shouldn't be changed.

But in reality, you need to allow for a certain degree of flexibility in your plan.

Some trading plans work well on the first try.

Others need time to evolve.

Like a fine wine, your trading plan might be pretty good in the beginning, but can only reach its true potential with age.

There are several different reasons why a trading plan may need to evolve:

It can become more optimized, such as improving the entry
It may need to change with your life events (kids, retirement, new job, etc.)
You may want to incorporate other trading concepts like pyramiding or scaling
You want to simplify the process
Market conditions change, so you need to tweak your strategy
When you are too rigid with your plan, you lock yourself into a paradigm that might not work in the future.

Yes, you need to have a written trading plan that works. But you must also be somewhat flexible.

Just be sure that the changes actually improve your results before you add them to your plan.

5.  You Don't Turn it Into a Habit
Studies show that as much as 45% of our everyday behaviors are controlled by habits.

Think about that for a minute…

Almost half of things that you do during the day are a result of pre-programmed routines that have been set in the past…and not always by you. Some of these habits have been consciously created, but most of them have not.

Many are the result of what we picked up as kids or young adults and are so deeply engrained that we do not think twice about them.

But therein lies the potential roadblocks to your success.

Habits can foil your trading plan in two ways:

Existing bad habits can prevent you from doing what needs to be done
Not forming good habits will not allow you to maximize your trading plan
If you are interested in learning how habits are formed and how to change them, I recommend reading this book. Overwriting bad habits and consciously creating new, productive habits will allow you to get the most out of your trading plan.

I would recommend journaling everything you do on a daily basis, for a week. This will start to expose your bad habits and where you may have room to improve.

Final Thoughts on Why Trading Plans Fail
Having a written trading plan is essential to successful trading, especially if you are prone to acting impulsively. But a trading plan alone will not make you a consistently profitable trader.

There is much more work that you have to do in order to leverage that trading plan into a consistent track record. If you are having trouble finding consistently, even with a great trading plan, your trading plan may not be the culprit.

If you need in-depth help with this, join our TraderEvo Program. It will take you through each step in the process of learning to trade, regardless of your current experience level. We approach learning to


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https://www.tradingheroes.com/why-trading-plans-fail/