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Would you rather be right or be rational?

Fusion Markets

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Read Time: 5 Minutes.

In trading, as in life, we are faced with the need to assess complex situations and quickly make judgements or decisions. And in both cases, we can’t be certain what the outcome of those snap decisions will be. Though we have to deal with the consequences regardless, even if they don’t reveal themselves for some time.


I wonder how many of us look back at the choices we made and judge them solely by the outcome they achieved, be that good or bad, rather than looking at how we got to that endpoint?


Behavioural psychologists believe that if we look at events purely in terms of their results, we are under the influence of outcome bias and as such we are likely to have a flawed view on risk and reward.


That outlook has been famously summed up in the phrase “picking up dimes in front of a steam roller” which has been variously attributed to Nassim Taleb and or economists Martin Wolf/John Kay.


Whoever coined the term (no pun intended) got it just right, because if you are picking up those coins then yes you are acquiring money, but you can only afford to slip up once and then it will be game over, and in a very messy way.


Another renowned economist, John Maynard Keynes, wrote on the subject of risk-reward and outcomes, just over 100 hundred years ago, in his treatise on probability.


Where Keynes thinking differed from traditional schools of thought was that he believed that an event could be, what he called, objectively probable, even if it didn’t actually take place. And that it would remain so even if you were looking back at events at a future point in time.


For Keynes, it was more important to be rational in your decision making than to be right.


Keynes of course also famously said that “the markets can remain irrational for far longer than you can remain solvent “  


That is one of my favourite quotes on investing. It neatly sums up the practicalities of being rational versus being right, as far as a trader is concerned - Being right doesn’t necessarily make you money and in fact, even if you are right waiting for that to be proven could cost you a fortune.


Whereas being rational or pragmatic, and acknowledging that the market is “directionally right “ but for the wrong reasons (which is usually the sheer weight of money) is one thing. But then trading with the market until the point when the crowd realises their folly, is likely to be a more profitable approach in the long term.


After all, by adopting this approach you don’t have to time the market at all instead you just need to watch for the points at which the crowd turns. And to that, we can use momentum and sentiment indicators, which you can set up in advance.


In short, when it comes to trading at least, the process is more important than the outcome.


The British military has a saying which runs as follows: Failing to prepare is preparing to fail.


As a trader it’s hard to fault the logic in that statement, because if we believe that there is a symmetry between risk and reward, inputs and outputs, effort and results, and in trading where there must be a loser to offset every winner, why wouldn't you believe that?


Then if we don't prepare properly for each trade we make; we are not giving ourselves the best possible chance of making money.


We often say that a systemised approach to trading is the best one to adopt. What we mean is that we should have a framework of rules that we follow in each trade we make.


And we don't let our hearts rule our head or worst of all let our egos’ fools us into thinking that we have some special insight our secret trading sauce. Because in 99.9 times out of a hundred that won't be even remotely true.


Talent and luck will carry you only so far and many a sportsperson has built a successful career by recognising their own abilities and limitations, and then working hard to improve their technique and approach.


And in turn in recognising the weaknesses in their opponents game, which they can then exploit.


The opponents may still score against them but if they are reducing the rate at which they can score then they are doing something right, and they are slanting the odds of a positive outcome in their favour.


In trading, you won't win every contest but if you win more than you lose and have bigger wins and smaller loses, then, over the long term you will definitely come out on top.


Trading Psychology Trading Insights Trading Tips Hidden Bias

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General
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TradingView vs. MetaTrader
Read time: 8 minutes.
   

For technical analysis traders, choosing the right trading platform is crucial for success. In this article, we'll compare two industry-leading platforms: TradingView and MetaTrader, highlighting their unique features and helping you decide which one best suits your trading style.



Table of Contents




Key Takeaways


  • TradingView offers an intuitive interface and advanced charting tools, ideal for visual learners and technical analysis.
  • MetaTrader provides powerful automation capabilities and faster execution, especially suitable for experienced traders.
  • Fusion Markets' TradingView connection is powered by cTrader, which may introduce some lag but offers simple bot creation with PineScript.
  • MetaTrader has an older interface but excels in customisation and supports a wider range of markets, including stocks.
  • Both platforms can be connected to your Fusion account for direct trading.
  • Consider trialling both platforms on a demo account to determine which best fits your trading style.


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TradingView


TradingView is renowned for its user-friendly interface and advanced charting tools. It caters to traders of all levels, offering an intuitive design that simplifies the trading process. One of TradingView's standout features is its extensive library of indicators and drawing tools, making it a favourite among visual learners who rely heavily on technical analysis. There’s almost no drawing tool or indicator that you cannot find on TradingView. 

 

TradingView's interface is not only easy to navigate but also highly customisable, allowing users to set up their workspace according to their preferences. This flexibility is particularly beneficial for traders who like to have all their essential tools and information readily accessible. And the best part, it syncs across all your devices, with a downloadable app for your phone and computer.  

 

The platform also has a strong community aspect, allowing traders to share ideas, strategies, and charts with others. This social feature provides a collaborative environment where traders can learn from each other and share strategies and technical tools. 


The platform's social network is vibrant, with millions of traders from around the world sharing their insights and analysis. This community-driven approach can be incredibly valuable for both novice and experienced traders looking to gain different perspectives and improve their trading strategies. 


TradingView provides most of its products for free, but its paid subscription-based model is what really brings it to life. With additional chart types and the ability to load multiple charts on one screen, the value is present for technical-based traders. 


For traders, understanding how to read the forex economic calendar is crucial, and TradingView makes it easy to stay informed. Major economic events, such as interest rate announcements, employment reports, and GDP releases, can significantly impact market movements. The economic calendar provides traders with a roadmap of these events, helping them anticipate volatility, make informed trading decisions, and align their strategies with broader economic trends. With TradingView, traders can seamlessly integrate these key dates into their workflow, ensuring they are prepared to respond effectively to market changes.


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MetaTrader


MetaTrader is arguably the most well-known forex trading platform. Having been around for a very long time (2005), it’s long been the go-to for most traders, with most now using MetaTrader4, or MetaTrader5. 

 

Known for its powerful automation capabilities, which are particularly appealing to experienced traders, the platform offers advanced features such as Expert Advisors (EAs), allowing users to automate their trading strategies. This can be a game-changer for those who want to implement complex trading systems without constant manual intervention. 

 

MetaTrader’s automation capabilities extend beyond just executing trades. The platform allows traders to back-test their strategies using historical data, providing valuable insights into the potential performance of their trading systems. This feature is particularly useful for traders who wish to develop their own EAs and want to ensure they perform well under various market conditions. 

 

Though somewhat dated, MetaTrader provides deep market access with features like multiple order types, comprehensive charting tools, and a range of technical analysis options. Its robust architecture supports a wide array of customisations and add-ons, giving traders the flexibility to tailor the platform to their specific needs. Whether you are trading forex, commodities, or CFDs, Meta Trader's extensive range of tools and functionalities ensures you have everything you need to make informed trading decisions. 

MetaTrader is completely free to use, with the option of purchasing additional EA’s, drawing tools, or various other add-ons from third-party users through the MQL5 market.  



Forex Platform Comparison: TradingView vs. MetaTrader


MetaTrader v TradingView Table



Which is Right for You?


Choose TradingView if you value:

  • Intuitive interface and advanced charting tools
  • Community insights and social trading features
  • Ease of use for beginners
  • Simple bot creation with PineScript


Choose MetaTrader if you prioritise:

  • Powerful automation capabilities with Expert Advisors
  • Fast execution speeds, especially with a VPS
  • Access to a wide range of markets, including stocks
  • Advanced customisation and flexibility



Conclusion


Both TradingView and MetaTrader offer unique strengths that cater to different trading styles and preferences. Consider your trading goals, experience level, and the features most important to you when making your choice. 

We recommend trialling both platforms on a demo account to determine which suits your trading style best. Both can be connected to your Fusion account for direct trading. 



For More Information:



    Still unsure? Reach out to our friendly help team at [email protected] using the chat function on the bottom right of this screen.

    25/09/2024
    General
    post image main
    Understanding Different Types of Trading Accounts

    Trading accounts serve as the cornerstone of the trading journey, providing individuals access to financial markets where they can buy and sell various assets. These accounts not only facilitate trading activities but also play a crucial role in managing funds, tracking performance, and executing strategies.  


    However, with numerous options available, selecting the right trading account can be daunting, especially for novice traders. In this guide, we'll unravel the intricacies of trading accounts, compare demo accounts with live ones (Zero | Classic), explore different types of live trading accounts, and offer guidance on choosing the most suitable account type based on individual needs and goals. 


    Contents



    Demo vs. Live Accounts


    Before diving into the complexities of live trading accounts, it's essential to understand the distinction between demo accounts and live accounts.
     

    Demo accounts, also known as paper trading accounts, provide a simulated environment for practice. They allow traders to test trading strategies, familiarise themselves with platform features, and observe market dynamics. These accounts use virtual money, eliminating financial risk. However, they have limitations: trades aren't executed in real markets, potentially causing time and price discrepancies, and large orders can be filled at unrealistic prices due to artificial liquidity.
     

    While demo accounts offer a risk-free way to gain trading experience, they lack the emotional involvement and psychological challenges present in live trading. This can often become a problem for new traders as they results they observe on a demo account may not be replicated on a live account. This is because risking your own hard-earned cash introduced a plethora of emotions that get in the way of you thinking clearly and making calculated decisions.


    Transitioning from a demo account to a live one is a crucial step for aspiring traders. Live accounts involve real money, introducing emotions such as fear, greed, and anxiety into the trading equation. While demo accounts serve as valuable learning tools, they cannot replicate the psychological impact of trading with real funds. Therefore, transitioning to a live account is essential for traders to develop the discipline, emotional resilience, and decision-making skills necessary for success in the live market environment.

     

    Demo v Live Accounts



    Types of Live Trading Accounts


    When it comes to live trading accounts, Fusion Markets offers a variety of options tailored to meet the diverse needs and preferences of traders. Let's explore the key features, advantages, and potential drawbacks of each type: 


    Classic Account


    The Classic account option caters to forex traders seeking a straightforward and convenient trading experience. Created with user comfort as a priority, there's no need to fret over commission calculations prior to each trade.  


    We streamline the process by factoring in costs through spreads, eliminating the hassle of additional fees or complex computations.  


    With the Classic account, what you see is precisely what you receive, delivering simplicity and peace of mind to traders. 

    Classic Account

    Learn more about our Classic account 


    Zero Account


    With a commission of $2.25 per side and spreads at 0.0, our Zero Account allows clients to engage in trading with raw spreads, offering a seamless and cost-effective trading experience. This account option appeals particularly to traders accustomed to managing their own commission calculations.


    Ideal for active traders and scalpers seeking tight spreads and low trading costs.

    Zero Account

    Learn more about our Zero account. 


    Swap-Free Account


    Tailored for traders adhering to religious beliefs prohibiting the receipt or payment of overnight swaps, our Swap-Free Accounts offer a no-interest solution.


    Enjoy access to over 50 of the world’s leading financial instruments, including Forex Pairs and Indices, at our signature low rates.


    Available across all account types, providing flexibility for traders with specific religious or cultural requirements.


    Swap Free 

    Learn more about our Swap-Free account 


    Pro Account


    This account is designed to allow AU and ASIC traders access to higher leverage. As a Fusion Pro client, you will have advantages over those with ordinary accounts. Some of those perks include accessing events, having a dedicated client manager, and gaining access to leverage as high as 1:500.


    Although the Fusion Pro account has many perks, in order for you to be eligible for this account you must fill in either the Wealth Test or the Sophisticated Investor Test here.

     

    Fusion Pro Account 

    Learn more about our Pro Account.



    Factors to Consider When Choosing an Account


    Selecting the right trading account involves careful consideration of various factors to ensure alignment with individual trading goals and preferences. Here are some essential considerations to keep in mind:


    Risk Tolerance


    Risk tolerance plays a pivotal role in determining the suitability of a forex account type for each trader. It reflects an individual's comfort level with market volatility, potential losses, and overall risk exposure.


    When selecting a forex account type, it's crucial to align the account's features and trading conditions with your risk tolerance. For instance, traders with a low risk tolerance may prefer accounts with lower leverage, higher liquidity, and robust risk management features to minimise potential losses.


    On the other hand, traders with a higher risk tolerance may opt for accounts with higher leverage and potentially higher returns, albeit with increased risk.


    Trading Experience


    Trading experience is a key factor to consider when selecting a forex account type as it directly influences a trader's comfort level, skill set, and familiarity with market dynamics.
     

    Novice traders who are new to the forex market may prefer account types that offer simplified trading conditions, educational resources, and demo account options to practice and hone their skills without risking real capital.
     

    Experienced traders with a deep understanding of market mechanics and proven trading strategies may seek advanced account types with features such as customisable leverage, access to advanced trading tools, and stop out levels. By aligning the account type with their trading experience, traders can optimise their trading environment to suit their knowledge level, maximise potential profits, and minimise the likelihood of costly mistakes.
     

    Consider your level of trading experience and opt for an account that suits your skill level, whether you're a novice or seasoned trader.


    Account Size and Leverage


    Account size and leverage are critical factors to consider when selecting a forex account type, as they directly impact trading capital and risk exposure.

    Traders with smaller account sizes may prefer account types that offer lower minimum deposit requirements and more conservative leverage options to manage risk effectively and preserve capital. Whereas traders with larger account sizes may have more flexibility in choosing account types with higher leverage options, allowing them to maximise potential returns while maintaining prudent risk management practices.

    Additionally, traders with varying risk preferences may opt for account types that offer customisable leverage settings to align with their risk tolerance and trading strategies. By carefully evaluating account size and leverage options, traders can tailor their trading environment to suit their individual risk preferences, capital constraints, and long-term financial goals. All Fusion accounts have no minimum account size requirements, providing flexibility for traders of all sizes.


    Cost of Trading


    Spreads and commissions are crucial considerations when selecting a forex account type, as they directly impact trading costs and profitability.

    Traders employing high-frequency trading strategies or frequent position turnover may prioritise account types with low spreads and commission rates to optimise trading performance and efficiency. We understand the importance of tight spreads, and you can review our historical spreads to see our commitment to competitive pricing. All our account types offer the same low costs, ensuring consistency and transparency. Conversely, traders with longer-term investment horizons may be less concerned with spreads and commissions and prioritise other account features, such as access to a diverse range of financial instruments or advanced trading tools.



    Guidance on Selecting the Right Account


    To choose the right trading account, it's essential to conduct thorough research, compare different options, and consider your individual needs and objectives. Here are some practical steps to guide you through the selection process:


    Step One – Research Account Types


    Explore the features, benefits, and costs of each account type offered by Fusion Markets, and identify the one that best aligns with your trading style and preferences. 


    Step Two – Assess Trading Conditions


    Evaluate the trading conditions, including spreads, execution speed, available assets, and platform compatibility, to ensure optimal trading experience.


    Step Three– Start Small


    Consider starting with a smaller account size and gradually scaling up as you gain experience and confidence in your trading abilities.


    Step Four – Review and Adjust


    Regularly review your trading performance and account settings, and be prepared to adjust your chosen account type if necessary to adapt to changing market conditions or evolving trading goals.



    Conclusion


    Understanding the different types of trading accounts is essential for novice traders embarking on their trading journey. By comparing demo accounts with live ones, exploring various live trading account types, and considering key factors when choosing an account, traders can make informed decisions that align with their goals and preferences.


    Explore Fusion Markets' range of account options Fusion Markets Trading Accounts to find the perfect fit for your needs. Remember, selecting the right trading account is a critical step towards achieving success in the dynamic world of financial markets.


    27/06/2024
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