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Always keep in mind that the markets are not random; they are impacted by economic news. Integrating fundamentals into your day trading can assist in planning your trading week, reducing the time spent analyzing charts day and night, and enabling you to trade while managing your 9-5 job, school, or business. I’ve released a podcast episode titled “Why you shouldn’t ignore fundamentals.” You can listen to it here.
If you reside in South Africa, you are aware of the significant challenge we face with our electricity, resulting in daily load-shedding. During these power outages, the network is impacted, leading to occasional slow internet connection.
When you have incorporated the fundamentals, you can plan around them and ensure that you don’t schedule any trading sessions during that time. This is to avoid a situation where you find yourself stuck in trades. If you have been trading but only relying on technical analysis and wish to start incorporating fundamentals and learning how the markets work, enrol in my Fundamental Analysis Course, mentorship, and coaching.
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A Central bank is a national bank that provides financial and banking services for its country’s government and commercial banking system.
What is the role and function of A Central Bank?
To set official bank rates used to manage inflation and exchange rates
To issue a country’s currency
To set targets and monitor economic data while they implement special tools.
One of the special tools that a Central Bank usesis Interest/bank rate adjustments. When a Central Bank sees a need to hike or cut its rates, they do as they see fit.
Why do Central Banks hike the Interest Rates?
When the economy is growing at a rate that may lead to hyperinflation (monetary inflation occurring at a very high rate) that is when the Central Bank hikes the county’s interest rate.
Why do Central Banks cut the Interest Rates?
Central banks may cut the Interest Rates to encourage people to borrow more money at a lower rate, be it for new houses or businesses. The aim is to make saving money less attractive as the returns are lower when the rates are cut. The other reason is to make the country’s currency expensive and to encourage the citizens to buy local goods.
About the Reserve Bank of Australia (RBA)
The Reserve Bank of Australia releases its interest rates 8 times a year, excluding January. On February 6th, the RBA had its first meeting of the year. On June 18th, they held their 4th meeting and kept the interest rates at 4.35%.
Why Do We (traders) Care About Interest Rates?
Interest rates are a primary tool that a central bank uses to evaluate its currency. If the plan is to hike, it strengthens the currency, and if the plan is to cut, it weakens the currency.
Below are the RBA ’s 2024 dates to help you plan your year better. Thank you for stopping by. Please help me reach as many traders as possible by sharing this post. Should you wish to learn how to trade the Interest Rates, you can check my fundamental analysis course.
Hello subscribers and readers, if you just stumbled upon this blog, greetings to you too. Feel free to subscribe for future blog post notifications. In this post, I share 5 things that traders need to understand.
You Will Get Scared
Being scared is normal for a beginner trader because trading can initially be scary. The biggest challenge though is when you allow it to turn into fear. Allowing it to turn into fear means you let it affect you long after you’ve experienced it. Fear can also be crippling.
Most traders deal not only with their fears but also the fears of others. They carry other people’s stories as their own. They could read stories on the internet about how others have lost money and been scammed through Forex schemes (there are plenty of those). Acknowledge that you are scared but don’t make other people’s stories yours, create your own story. I have published a mindset booklet ” titled “Shift your Mind Shift your Money” to help you fix this because winning starts in the mind.
Being scared is not a permanent state. Scared money never grows. Being too scared to take a trade will result in you parking your money in a trading account and never utilising your trading skills on a real level. The only way to get over the fear is to place trades whenever opportunities arise.
You Will Panic
If there’s one thing that a beginner trader can’t escape is panicking. We all start trading on the demo account before trading the live/real account. Whatever emotions we work on while trading on the demo will need to be worked on again after starting a live account. This is simply because you can’t assess your emotions while trading fake money, everything you feel is on a demo level. For that reason, it is in your best interest to not trade on the demo account for too long because it’s not a real thing and it doesn’t challenge you on a real level. I have published a podcast episode on this topic, you can listen HERE.
To remedy this, the best thing to do is to detach from the money and focus on getting it right while trading a small volume/lot size. Panicking a lot will make you miss great opportunities or even close your trades prematurely. When you panic, you are also likely to want to place a trade on the demo first before placing it on the live account, which delays your progress. You become a better driver by driving on the real roads not on a sport field where you don’t encounter real traffic and driving among other cars and drivers. Detach from the results and focus on the process of getting your desired results.
You Will Have A Crappy Trade
I know you don’t want to hear this one but you won’t always be 100% correct. There will be times when you won’t get the results you want, make bad decisions, and get into a bad trade. What separates winners from losers is the actions they take when that happens. You should have an exit strategy that doesn’t harm your account or lead to a margin call.
You Will Need Emotional Control
Like most beginner traders, you are likely to battle with that small voice that keeps telling you you will lose money. You have probably lost some money before and you know maybe a few people who have lost money in trading. Detach from other people’s stories as mentioned in the above paragraph and focus on creating yours. To overcome that nagging voice you need to understand that there is risk involved in trading just like there’s risk involved in any investment or business and risk can be managed.
You Will Feel Like Giving Up.
Yes, you will feel like giving up especially if you are desperate to see the results. One thing that can help you is to view your trading account as a business and understand that a business needs you to be patient and for you to nurture it to grow. I have published an episode on my podcast about what to do when you feel like giving up.
Risk can be managed, but you will need to manage yourself as well, take calculated risks, and learn how to manage your trading capital. Keep a Trading Journal to help you track your progress and do not dwell much on what you can achieve daily, rather do a weekly or monthly progress. I have published a trading journal to help you do just that.
Thank you for taking the time to read this post. Please help me reach as many traders as possible by sharing it. For all your practical and realistic trading psychology needs, you can follow and indulge in my podcast.
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