Forex Trading – a Simple, Easy Tip to Increase your Profits
Forex trading is all about getting the odds in your favor to reduce rsik and increase reward. The simple tip below is ignored by most traders - yet if you include it in your trading plan, will see your risk decrease and profits increase and that’s what all traders want!Most novice traders don’t use this tip and lose. Learn the significance of this tip and use it and it is simply: Trade with Price MomentumMany traders like to predict where prices are going to go – but they should really be trading on the facts and that’s exactly what looking at shifts in price momentum does. It gives you clues to where prices may go next.Lets Loom at a common error that novice traders make to illustrate the point. Many traders love to buy dips to support and many will use trend lines or moving averages. As prices approach the support level, they buy into the support and hope that it holds. This is a huge mistake! If you rely on “hope” you are going to lose. This is why looking at price momentum is so important. If the momentum of price starts to weaken into support and turns the odds of support holding have increased. Acting on the FactsTo watch prices come into support and rather than diving in and taking a position - WAIT for price momentum to weaken into support and turn back up away from support. This is the clue to take a position, as price momentum is now moving away from support and odds favour the bulls.Why dont traders fo this more often?Traders find this hard to do, as they don’t like the fact they missed a bit of the move by waiting, but this is the only way to get the odds on your side. Consider this: Support obviously can either hold or break and you don’t know which will occur in advance it’s impossible to predict – you are simply guessing and that’s a good way to lose. If you look at price momentum you will be acting on confirmation that the odds are in your favour. A trader who is patent and disciplined and acts on confirmation has a far better chance of success than one who guesses or predicts where prices may go. So what are good indicators to look at? The best indicator by far in our opinion is the stochastic indicator – we don’t have enough room to cover it in detail here but it’s a great indicator for graphically showing shifts in price momentum. We like to combine the above indicator with the Relative Strength Index(RSI), another great momentum indicator. We never take a trade unless price momentum points the same way as our trade. Forex trading is an odds game and by using momentum indicators you will increase your chances of success and of course your profit potential.
Forex Swing Trading – Swing Trade your Way to Regular Profit
The rise of online forex trading means that anyone can swing trade for short term profits, Its not only profitable, its easy to learn, good fun and that's what trading should be. Forex swing trading online provides the ideal market for the methodology of swing trading.So why are currency markets the ideal for swing trading? Lets first of all define what forex swing trading actually is Forex Swing trading aims to identify intermediate swings in price, that can last from anywhere from a few days, to a few weeks. This is not day trading – day trading has no reliable data as the period is to short and you cant make money. Swing trading here means still looking at short time frames, but the data is reliable enough for you to get the odds in your favor.The following conditions make FOREX swing trading potentially such a lucrative way of trading1. Liquidity Each day the global forex markets see trillions of dollars transacted.This is a 24 hour market and is the world’s biggest investment marketplace. The huge size of the markets allows traders to open and close transactions quickly, to lock in profits and minimize losses.2. Volatility Currency markets are volatile and this is why a short term trading method such as forex swing trading can be so profitable. A volatile moving market is essential for swing trading. This volatility means a large number of potential opportunities that are presented to forex traders. 3. Transaction costsLow transaction costs that were once the preserve of large institutions, now any trader can get 3 – 5 pip spreads meaning short term trading is viable for any trader Swing trades come regularly While currencies present long term trends, there are many profitable swing trading opportunities within them.These shorter trends last for a few days to a few weeks and they offer regular high reward low risk trading opportunities for forex swing traders 5 Psychology is easy to learnMany traders lack patience and want to have quick action well that’s exactly what you get with forex swing trading. FOREX swing trading offers them a lot of trades regularly and you don’t need the patience of a long term trend follower. Swing trades tend to either run to profit quickly or loss, keeping the trader interested, motivated, disciplined and focused. This is an ideal way of trading for someone who loves trading. Forex swing trading is also Easy to learn you can simply use support and resistance lines with some confirming momentum indicators. For example, we use just stochastics and RSI – It’s simple and a stress free way of trading and best of all can make big profits with low risk.FOREX Swing trading is fun and very profitable and that’s the way trading should be.
Moving Averages – Use Them Correctly for Bigger Profits
Moving averages are used frequently by forex traders and are a useful tool if used correctly.Many traders however don’t know how to use moving averages correctly and lose. Here we will look at their advantages and disadvantages and how to apply them correctly. There purposeMoving averages (no matter what period is used) all have the same aim:They identify trends over specific periods smoothing out the day-to-day price fluctuations that are simply caused by market volatility.The equation is simple:The closing price is added up and divided by the period of the moving average.Popular moving averages200 Day moving averages are popular for tracking longer term trends and 20 to 60 Day moving averages are used to identify intermediate trends.5 to 20 Days are popular for short cycles.Below you will find two common errors made by novice traders when trading with moving averages.1. Using Them as a leading Indicator When using moving averages novice traders frequently use them as a leading indicator to place trades in the market. If using moving averages you need to understand this:Moving averages are a lagging indicator NOT a leading indicator.They therefore should not be used on their own to initiate new trades. The fundamental error many traders make is to simply buy dips to the moving average and “hope” they hold. Just like buying dips to support at a trend line (without evidence of a change in price momentum) this trading method leads to losses. Moving averages should not be used as a leading indicator and you should time entry with a momentum indicator such as the stochastic. 2. Using moving averages in short time periods We all have time frames we like, We personally use 18, 40 and 200 day averages to help us identify trends, but today we have seen a rise in people using moving averages in time frames that are simply to short. Using moving averages for a few days or less is pointless. I have even seen people using hourly moving averages! This is crazy and recipe for disaster. Many day traders use moving averages, but the periods are so short their meaningless and they give moving averages a bad name! They lose and blame the indicator but it’s their fault for being stupid and using the indicator incorrectly. The correct way to use moving averages Experiment with timescales, but you can use moving averages to indicate layers of support and resistance and alert you to a potential trading opportunity to trade. You can with moving averages isolate areas to enter trades with good risk to reward and then time your entry with a momentum indicator.
Forex Trading Myths – Why Buying Low Selling High Will Lose you Money!
This may seem odd as it’s an accepted wisdom, but if you try and apply it in your forex trading strategy you will lose money. If you don’t realise why this is - read on and we will explain why. Of course, the aim of all traders is to buy in at the bottom of trends and sell out at peaks – but it’s impossible to do and the way most forex traders do it means they lose. The key to understanding why you can’t do it, is to realize that you have to predict in advance where prices will go or buy into a low or sell into a high and “hope” the levels hold.Fact is you can’t predict where forex prices are likely to go and if you rely on hope then you shouldn’t be trading forex. What you have to do is not predict but get confirmation of price momentum changes, above the level of support - BEFORE executing your forex trading signals. A simple example will show you how to do this. Many Forex traders watch a support level such as, Fibonacci level, pivot point etc, and as prices come to perceived support; they simply buy into it just above the level. There logic is, they are in at a low “if” the level holds – of course the important word here is “if”. Support lines, Fibonacci levels, pivot points break frequently, so if you try and buy into them just hoping they will hold you will buy the low will see you lose.A better way to trade:Is to use price momentum to check that support and resistance will hold - and then trade on confirmation. Trading on confirmation gets the odds on your side trying to predict will see you lose it’s as simple as that. So how do spot changes in price momentum? Great indicators to use are the stochastic and relative Strength Index (RSI) You simply watch for prices to move to support and then turn up supported by RSI or stochastic. You won’t buy the bottom you will miss a good bit of the move, but by trading in this way you will get stopped out less and always trade with the odds – this means bigger forex profits longer term. “Buy low sell high” is an accepted investment and many traders accept it at face value trade and lose. Over 90% of forex traders lose and “buying low selling high” without confirmation will see you join them, don’t fall into this trap.
Forex Scalping - Making Regular Profits to Build Long Term Wealth
It’s a traders dream, getting in and out of the market each day and earning a few hundred dollars here and there which over time to make huge long term profits. It’s the aim of an increasing number of traders, but you need to be aware of one important fact. Day trading does not work and intra day trading in forex markets means the only person who gets scalped is the person trying it – normally of their entire trading account quickly. So why doesn’t forex day trading and scalping work? The answer is obvious if you think about it, so here it is: Each day trillions of dollars are traded by millions of traders who fall into four main groups:1. Hedgers – Who are not looking to profit from currency fluctuations but simply looking to hedge their portfolios.2. Central Banks – big players, who intervene occasionally to stabilize currency, markets should they believe it necessary.3. Large traders – Well capitalized individuals and professional money managers. 4. Small speculators – Everyone else. They all think differently and they all have different objectives and different methods and to say you predict what these vast diverse groups or traders will do in under a day or less is laughable. But people buy into the myth and they lose all the time. So why do people attempt it? Well many are attracted by marketing copy that promise riches with low risk, but of course the people who tell them this and sell them the secrets, don’t trade themselves they make their money selling courses. Other traders think it is a low risk way to trade but if you cannot predict where short term volatility will take prices you will lose – you can’t get the odds in your favour and may as well flip a coin. So forex scalping does not work and by its nature will never work as volatility can and does take prices anywhere in a day. Ever seen anyone who sells a course or claims to have made money forex scalping with the proof? By this I mean a real time track record ( not a meaningless hypothetical track record done in hindsight) no neither have I. Forex scalping is not a guaranteed way to win, it’s a guaranteed way to lose in forex trading and lose quickly. Forget the hype of forex scalping and see the reality for what it is, a great way to lose.If you want to trade currency markets get the odds in your favour by trading in periods where the data can actually help you put the odds in your favour.
Forex Education – 4 Accepted Investment Wisdoms That Will Lose you Money
If you think about it around 95% of traders lose all their equity and lose money and only around 5% make big gains. The losing majority follow 4 accepted wisdoms in their forex education and if you fall into the same trap you will lose to, so let’s look at them. 1. An expert knows best This is partly true, but the experts in forex trading who make the big gains certainly won’t tell you how they do it – there to busy making money, to bother selling their secrets. The ”experts” that sell currency e-books for $100 or so, are certainly experts, but at marketing. Doesn’t’ that copy look appealing? Follow them and make money automatically, every month and all backed up by a simulated hypothetical track record done knowing the closing prices.Reality is: Most of them are junk and you can get better information for free on the net. To make money you need to do it yourself and forget about anyone else helping you learn forex trading information that will make you a fortune. 2. You can predict market behavior Another accepted wisdom that is dead wrong is – you can predict the market with scientific theory as prices move to a natural law. Let’s hear it for investment theories such as Elliot Wave. Elliot wave says markets move to scientific patterns but of course can’t tell you what they are! If any theory could of course predict market behavior in advance there would be no market as we would all know the price. 3. More is better Lots of clever people trade currencies and they have complicated forex trading strategies, using neural networks, artificial intelligence and chaos theory, bad news is they don’t work. There is no correlation between how hard you work at forex trading and how much money you make, just as there is no correlation between how complicated a system is and how much money it makes. Currency trading success is all about learning the right information ( and this means working smart rather than hard) and simple systems beat complicated systems, as they are more robust. So all those people who tell you that you have to work hard and be clever are wrong – you need to work smart and keep it simple. 4. Above all else protect a profit Forex trading is risky and if you don’t take meaningful risks you wont make a lot of money. Most traders however try and protect profits and limit losses so much they are guaranteed to lose. Here is what they do: 1. Diversify – Another word for this is dilute profits 2. Day trade – the best way to lose money – it doesn’t work 3. Trail stops quickly to lock in profit – translated as get minor profit when you could have made a large one. 4. Risk 2% per trade – Well if you don’t risk a lot you won’t make much either!All the above are accepted wisdoms of online currency trading and all will prevent you from making forex profits. If you understand the above and try a different type of forex education - that teaches you how to learn forex trading a different way, which is not accepted by the majority and you could join the elite 5% who make big gains trading Forex markets.
The History of FOREX Trading
The origin of FOREX trading traces its history to centuries ago. Different currencies and the need to exchange them had existed since the Babylonians. They are credited with the first use of paper notes and receipts. Speculation hardly ever happened, and certainly the enormous speculative activity in the market today would have been frowned upon.
In those days, the value of goods were expressed in terms of other goods(also called as the Barter System). The obvious limitations of such a system encouraged establishing more generally accepted mediums of exchange. It was important that a common base of value could be established. In some economies, items such as teeth, feathers even stones served this purpose, but soon various metals, in particular gold and silver, established themselves as an accepted means of payment as well as a reliable storage of value. Trade was carried among people of Africa, Asia etc through this system.
Coins were initially minted from the preferred metal and in stable political regimes, the introduction of a paper form of governmental I.O.U. during the Middle Ages also gained acceptance. This type of I.O.U. was introduced more successfully through force than through persuasion and is now the basis of today’s modern currencies.
Before the First World war, most Central banks supported their currencies with convertibility to gold. However, the gold exchange standard had its weaknesses of boom-bust patterns. As an economy strengthened, it would import a great deal from out of the country until it ran down its gold reserves required to support its money; as a result, the money supply would diminish, interest rates escalate and economic activity slowed to the point of recession. Ultimately, prices of commodities had hit bottom, appearing attractive to other nations, who would sprint into buying fury that injected the economy with gold until it increased its money supply, drive down interest rates and restore wealth into the economy.. However, for this type of gold exchange, there was not necessarily a Centrals bank need for full coverage of the government's currency reserves. This did not occur very often, however when a group mindset fostered this disastrous notion of converting back to gold in mass, panic resulted in so-called "Run on banks " The combination of a greater supply of paper money without the gold to cover led to devastating inflation and resulting political instability. The Great Depression and the removal of the gold standard in 1931 created a serious lull in FOREX market activity. From 1931 until 1973, the FOREX market went through a series of changes. These changes greatly affected the global economies at the time and speculation in the FOREX markets during these times was little.
In order to protect local national interests, increased foreign exchange controls were introduced to prevent market forces from punishing monetary irresponsibility.
Near the end of World War II, the Bretton Woods agreement was reached on the initiative of the USA in July 1944. The conference held in Bretton Woods, New Hampshire rejected John Maynard Keynes suggestion for a new world reserve currency in favor of a system built on the US Dollar. International institutions such as the IMF, The World Bank and GATT were created in the same period as the emerging victors of WWII searched for a way to avoid the destabilizing monetary crises leading to the war. The Bretton Woods agreement resulted in a system of fixed exchange rates that reinstated The Gold Standard partly, fixing the USD at $35.00 per ounce of Gold and fixing the other main currencies to the dollar, initially intended to be on a permanent basis.
The Bretton Woods system came under increasing pressure as national economies moved in different directions during the 1960’s. A number of realignments held the system alive for a long time but eventually Bretton Woods collapsed in the early 1970’s following president Nixon's suspension of the gold convertibility in August 1971. The dollar was not any longer suited as the sole international currency at a time when it was under severe pressure from increasing US budget and trade deficits.
The last few decades have seen foreign exchange trading develop into the world’s largest global market. Restrictions on capital flows have been removed in most countries, leaving the market forces free to adjust foreign exchange rates according to their perceived values.
The European Economic Community introduced a new system of fixed exchange rates in 1979, the European Monetary System. The quest continued in Europe for currency stability with the 1991 signing of The Maastricht treaty. This was to not only fix exchange rates but also actually replace many of them with the Euro in 2002. London was, and remains the principal offshore market. In the 1980s, it became the key center in the Eurodollar market when British banks began lending dollars as an alternative to pounds in order to maintain their leading position in global finance.
In Asia, the lack of sustainability of fixed foreign exchange rates has gained new relevance with the events in South East Asia in the latter part of 1997, where currency after currency was devalued against the US dollar, leaving other fixed exchange rates in particular in South America also looking very vulnerable.
While commercial companies have had to face a much more volatile currency environment in recent years, investors and financial institutions have discovered a new playground. The FOREX exchange market initially worked under the central banks and the governmental institutions but later on it accommodated the various institutions, at present it also includes the dot com booms and the world wide web. The size of the FOREX market now dwarfs any other investment market. The foreign exchange market is the largest financial market in the world. Approximately 1.9 trillion dollars are traded daily in the foreign exchange market. It is estimated that more than USD 1,200 Billion are traded every day. It can be said easily that FOREX market is a lucrative opportunity for the modern day savvy investor.
In those days, the value of goods were expressed in terms of other goods(also called as the Barter System). The obvious limitations of such a system encouraged establishing more generally accepted mediums of exchange. It was important that a common base of value could be established. In some economies, items such as teeth, feathers even stones served this purpose, but soon various metals, in particular gold and silver, established themselves as an accepted means of payment as well as a reliable storage of value. Trade was carried among people of Africa, Asia etc through this system.
Coins were initially minted from the preferred metal and in stable political regimes, the introduction of a paper form of governmental I.O.U. during the Middle Ages also gained acceptance. This type of I.O.U. was introduced more successfully through force than through persuasion and is now the basis of today’s modern currencies.
Before the First World war, most Central banks supported their currencies with convertibility to gold. However, the gold exchange standard had its weaknesses of boom-bust patterns. As an economy strengthened, it would import a great deal from out of the country until it ran down its gold reserves required to support its money; as a result, the money supply would diminish, interest rates escalate and economic activity slowed to the point of recession. Ultimately, prices of commodities had hit bottom, appearing attractive to other nations, who would sprint into buying fury that injected the economy with gold until it increased its money supply, drive down interest rates and restore wealth into the economy.. However, for this type of gold exchange, there was not necessarily a Centrals bank need for full coverage of the government's currency reserves. This did not occur very often, however when a group mindset fostered this disastrous notion of converting back to gold in mass, panic resulted in so-called "Run on banks " The combination of a greater supply of paper money without the gold to cover led to devastating inflation and resulting political instability. The Great Depression and the removal of the gold standard in 1931 created a serious lull in FOREX market activity. From 1931 until 1973, the FOREX market went through a series of changes. These changes greatly affected the global economies at the time and speculation in the FOREX markets during these times was little.
In order to protect local national interests, increased foreign exchange controls were introduced to prevent market forces from punishing monetary irresponsibility.
Near the end of World War II, the Bretton Woods agreement was reached on the initiative of the USA in July 1944. The conference held in Bretton Woods, New Hampshire rejected John Maynard Keynes suggestion for a new world reserve currency in favor of a system built on the US Dollar. International institutions such as the IMF, The World Bank and GATT were created in the same period as the emerging victors of WWII searched for a way to avoid the destabilizing monetary crises leading to the war. The Bretton Woods agreement resulted in a system of fixed exchange rates that reinstated The Gold Standard partly, fixing the USD at $35.00 per ounce of Gold and fixing the other main currencies to the dollar, initially intended to be on a permanent basis.
The Bretton Woods system came under increasing pressure as national economies moved in different directions during the 1960’s. A number of realignments held the system alive for a long time but eventually Bretton Woods collapsed in the early 1970’s following president Nixon's suspension of the gold convertibility in August 1971. The dollar was not any longer suited as the sole international currency at a time when it was under severe pressure from increasing US budget and trade deficits.
The last few decades have seen foreign exchange trading develop into the world’s largest global market. Restrictions on capital flows have been removed in most countries, leaving the market forces free to adjust foreign exchange rates according to their perceived values.
The European Economic Community introduced a new system of fixed exchange rates in 1979, the European Monetary System. The quest continued in Europe for currency stability with the 1991 signing of The Maastricht treaty. This was to not only fix exchange rates but also actually replace many of them with the Euro in 2002. London was, and remains the principal offshore market. In the 1980s, it became the key center in the Eurodollar market when British banks began lending dollars as an alternative to pounds in order to maintain their leading position in global finance.
In Asia, the lack of sustainability of fixed foreign exchange rates has gained new relevance with the events in South East Asia in the latter part of 1997, where currency after currency was devalued against the US dollar, leaving other fixed exchange rates in particular in South America also looking very vulnerable.
While commercial companies have had to face a much more volatile currency environment in recent years, investors and financial institutions have discovered a new playground. The FOREX exchange market initially worked under the central banks and the governmental institutions but later on it accommodated the various institutions, at present it also includes the dot com booms and the world wide web. The size of the FOREX market now dwarfs any other investment market. The foreign exchange market is the largest financial market in the world. Approximately 1.9 trillion dollars are traded daily in the foreign exchange market. It is estimated that more than USD 1,200 Billion are traded every day. It can be said easily that FOREX market is a lucrative opportunity for the modern day savvy investor.
Your Mother Could Make Money In Forex Trading
The question would be not whether she could but rather would she enter the Forex trading market. The Forex day trading arena is a veritable snake pit ripe for scam artists to bilk money out of unwary investors. On the other hand, it is a forum for educated traders with the correct education, tools, and trading strategy to make a handsome income.
Becoming a successful Forex trader basically comes down to four things; 1) attaining the correct education, 2) using Forex tools which 3) use your own personal trading strategy, and 4) finding the correct Forex broker to fulfill your requirements. Let’s look at these individually:
Attaining the correct education. Your Mother may not know the difference between a Forex PIP and one of the backup singers for Gladys Knight. So would you send her to one of those infomercial Forex riches classes to find out? We hope not! There are literally hundreds of training courses and materials out there for proper training. Word of mouth recommendations might be the best path to follow here.
Forex tools can also do many things like send trading signals and various buy/sell alerts to your desktop or mobile device based on what your personal trading philosophy dictates. Many of these tools are software based and some are provided via your favorite Forex trading sites. Not all people base decisions based on these signals though and use things like technical and fundamental analysis to determine when to buy or sell.
It also is essential to develop your own personal trading strategy. Your ability to assume certain risks might not exactly be what other traders or your broker recommends. A Forex trading strategy is not something generic and involves your personal game plan.
Before trading FOREX you need to set up an account with a FOREX broker. You may feel overwhelmed by the number of brokers who offer their services online. Deciding on a broker requires a little bit of research on your part, but the time spent will give you insight into the services that are available and fees charged by various brokers.
One of the most important ways to make the greatest return (and, also carry a greater loss risk) in Forex trading is with the use of a margin account. These accounts may let you trade as much as $100k in currency for as little as $1000. Margin accounts are the lifeblood of FOREX trading, so be sure you understand the broker's margin terms before setting up an account. You need to know the margin requirements and how margin is calculated. Does margin change according to the currency traded? Is it the same every day of the week? Some brokers may offer different margins for mini and standard accounts.
Used correctly and together, the above items can lead to a comfortable part or full time income. If you don’t use all the information available to you, though, you may as well let Mom take the weekend visit to Vegas with her money to see Gladys Knight. Make sure that she has developed her own Forex trading strategy and has used “paper trades” many times before actually beginning trading for real. Better that ole Mom is equipped to make some real money rather than throwing it away on the gaming tables.
Becoming a successful Forex trader basically comes down to four things; 1) attaining the correct education, 2) using Forex tools which 3) use your own personal trading strategy, and 4) finding the correct Forex broker to fulfill your requirements. Let’s look at these individually:
Attaining the correct education. Your Mother may not know the difference between a Forex PIP and one of the backup singers for Gladys Knight. So would you send her to one of those infomercial Forex riches classes to find out? We hope not! There are literally hundreds of training courses and materials out there for proper training. Word of mouth recommendations might be the best path to follow here.
Forex tools can also do many things like send trading signals and various buy/sell alerts to your desktop or mobile device based on what your personal trading philosophy dictates. Many of these tools are software based and some are provided via your favorite Forex trading sites. Not all people base decisions based on these signals though and use things like technical and fundamental analysis to determine when to buy or sell.
It also is essential to develop your own personal trading strategy. Your ability to assume certain risks might not exactly be what other traders or your broker recommends. A Forex trading strategy is not something generic and involves your personal game plan.
Before trading FOREX you need to set up an account with a FOREX broker. You may feel overwhelmed by the number of brokers who offer their services online. Deciding on a broker requires a little bit of research on your part, but the time spent will give you insight into the services that are available and fees charged by various brokers.
One of the most important ways to make the greatest return (and, also carry a greater loss risk) in Forex trading is with the use of a margin account. These accounts may let you trade as much as $100k in currency for as little as $1000. Margin accounts are the lifeblood of FOREX trading, so be sure you understand the broker's margin terms before setting up an account. You need to know the margin requirements and how margin is calculated. Does margin change according to the currency traded? Is it the same every day of the week? Some brokers may offer different margins for mini and standard accounts.
Used correctly and together, the above items can lead to a comfortable part or full time income. If you don’t use all the information available to you, though, you may as well let Mom take the weekend visit to Vegas with her money to see Gladys Knight. Make sure that she has developed her own Forex trading strategy and has used “paper trades” many times before actually beginning trading for real. Better that ole Mom is equipped to make some real money rather than throwing it away on the gaming tables.
Forex Trading: Investment Secret Of The Rich And Powerful
If you search on the internet you’ll find millions of investment programs such as real estate, stock trading, bond trading, mutual funds, CDs, auction programs and various internet programs.
I have not done many internet income opportunities or programs or affiliate programs because I had been lucky to discover a very easy way to make money through forex trading, (Foreign currency trading) safely on the internet.
Perhaps you know about only stock trading or bond trading which are common, but not forex trading.
Forex trading is the most profitable and attractive internet income opportunity because you can do it from home or office and from any country in the world.
In forex trading, you don’t need to do any marketing or selling or internet promotion to succeed.
In currency forex trading, you don’t need to spend thousands of dollars to do any internet promotion.
In forex online trading, you don’t need any stocks or warehousing.
In forex online trading , all that you’ve to do is open an account with one of the brokers with as little as $300 or $2000.
Then follow simple instructions to buy and sell the currencies.
When the price of the currency is low, you buy.
In a few seconds or minutes, the price will go up, and you sell it and make a profit.
By so doing , in a day, you can easily make $500-$1000 by just buying, selling and trading these foreign currencies for about 3 or 4 hrs!
And get this:
You don’t even have to be stuck sitting behind your computer buying and selling these foreign currencies.
You can enter all your buy trades and specify the sell prices you desire and then log off.
Whenever the values of these foreign currencies rise and your selling prices reach, the currencies will be automatically sold for you and you make money!
You can do currency forex trading and at the same time keep your day job, because in forex online trading, there is no work to do.
In the future when you have made hundreds of thousands of dollars, you may then quit your job and just keep doing currency forex trading forever and go on permanent vacation!
To understand the beauty of forex online trading Picture this:
In the morning, you get up from sleep at 6 am.
You go to your bathroom and have your shower.
At 7am, you hurry and eat your breakfast.
At 7.20 am, you login into your day forex trading account on the internet and spend 10 minutes to buy about 3 or 4 different currencies, [for example British Pound, Euro, CHF (Swiss Currency) and Yen (Japanese currency).]
You can specify the price at which you wish to sell each currency.
Then you can log off.
By 9 am, you’re at work in your office or business place.
You do your job as usual and by 5 pm, you’re finished and heading home.
When you get back home around 6.30 pm, you login into your day forex trading account to see how much money you’ve made.
Holy Molly, there in your account it says you have made $750!
“Is this for real?”, you wonder…
Yes, it is. (Your eyes are not deceiving you…)
$750 in a day for just clicking your mouse twice and doing no work?
(Whereas at your job, you work 8 hrs, but make only probably $150..)
This is how easy it is to make money from day forex trading.
But before you use real money to open a live forex system trading account, you have to open a free trial (demo) account (forex simulation trading) and practice first, to understand how it works and to acquire the right skills.
This free demo (trial) forex system trading account (forex simulation trading) will help you to reduce a lot of risks that can lead to loss.
In forex system trading, you can choose how much money to invest, how much money to make and when to make it.
You can make money daily, 365 days all year from forex trading.
Your computer can be transformed into an “ATM” machine that cranks out cash for you daily (without large investment or hassles) from forex trading.
In day forex trading, you can choose what type of risk you can manage, when to invest and when not to invest.
In Currency forex trading, you’re the boss. You may do as you please.
When day forex trading is compared to other investment programs such as stock trading, bond trading, mutual funds, real estate and regular business, it is evident that forex online trading is the fastest and greatest way to make money in the world.
Forex system trading is a 2.5 trillion dollars daily business and it is larger than all the stock trading in the world combined.
These are some of the reasons why I believe that forex system trading is the best internet income opportunity.
Perhaps from reading this article you’ll now come to know why currency forex trading is the secret behind the greatest wealth on earth and why it has been kept hidden from the average people of the world and therefore little known to the masses.
May these forex trading insights open your eyes to the possibility of infinite wealth and success that can be yours from day forex trading.
I have not done many internet income opportunities or programs or affiliate programs because I had been lucky to discover a very easy way to make money through forex trading, (Foreign currency trading) safely on the internet.
Perhaps you know about only stock trading or bond trading which are common, but not forex trading.
Forex trading is the most profitable and attractive internet income opportunity because you can do it from home or office and from any country in the world.
In forex trading, you don’t need to do any marketing or selling or internet promotion to succeed.
In currency forex trading, you don’t need to spend thousands of dollars to do any internet promotion.
In forex online trading, you don’t need any stocks or warehousing.
In forex online trading , all that you’ve to do is open an account with one of the brokers with as little as $300 or $2000.
Then follow simple instructions to buy and sell the currencies.
When the price of the currency is low, you buy.
In a few seconds or minutes, the price will go up, and you sell it and make a profit.
By so doing , in a day, you can easily make $500-$1000 by just buying, selling and trading these foreign currencies for about 3 or 4 hrs!
And get this:
You don’t even have to be stuck sitting behind your computer buying and selling these foreign currencies.
You can enter all your buy trades and specify the sell prices you desire and then log off.
Whenever the values of these foreign currencies rise and your selling prices reach, the currencies will be automatically sold for you and you make money!
You can do currency forex trading and at the same time keep your day job, because in forex online trading, there is no work to do.
In the future when you have made hundreds of thousands of dollars, you may then quit your job and just keep doing currency forex trading forever and go on permanent vacation!
To understand the beauty of forex online trading Picture this:
In the morning, you get up from sleep at 6 am.
You go to your bathroom and have your shower.
At 7am, you hurry and eat your breakfast.
At 7.20 am, you login into your day forex trading account on the internet and spend 10 minutes to buy about 3 or 4 different currencies, [for example British Pound, Euro, CHF (Swiss Currency) and Yen (Japanese currency).]
You can specify the price at which you wish to sell each currency.
Then you can log off.
By 9 am, you’re at work in your office or business place.
You do your job as usual and by 5 pm, you’re finished and heading home.
When you get back home around 6.30 pm, you login into your day forex trading account to see how much money you’ve made.
Holy Molly, there in your account it says you have made $750!
“Is this for real?”, you wonder…
Yes, it is. (Your eyes are not deceiving you…)
$750 in a day for just clicking your mouse twice and doing no work?
(Whereas at your job, you work 8 hrs, but make only probably $150..)
This is how easy it is to make money from day forex trading.
But before you use real money to open a live forex system trading account, you have to open a free trial (demo) account (forex simulation trading) and practice first, to understand how it works and to acquire the right skills.
This free demo (trial) forex system trading account (forex simulation trading) will help you to reduce a lot of risks that can lead to loss.
In forex system trading, you can choose how much money to invest, how much money to make and when to make it.
You can make money daily, 365 days all year from forex trading.
Your computer can be transformed into an “ATM” machine that cranks out cash for you daily (without large investment or hassles) from forex trading.
In day forex trading, you can choose what type of risk you can manage, when to invest and when not to invest.
In Currency forex trading, you’re the boss. You may do as you please.
When day forex trading is compared to other investment programs such as stock trading, bond trading, mutual funds, real estate and regular business, it is evident that forex online trading is the fastest and greatest way to make money in the world.
Forex system trading is a 2.5 trillion dollars daily business and it is larger than all the stock trading in the world combined.
These are some of the reasons why I believe that forex system trading is the best internet income opportunity.
Perhaps from reading this article you’ll now come to know why currency forex trading is the secret behind the greatest wealth on earth and why it has been kept hidden from the average people of the world and therefore little known to the masses.
May these forex trading insights open your eyes to the possibility of infinite wealth and success that can be yours from day forex trading.
Finding Reliable Forex Signals
You guys know how hard it's to find a reliable forex signals and most of the forex signals services are very expensive ranging from $199 to $500 per month. And worse of all, there's no guarantee of this.
To find a good service, you must make sure that you get their free trial before you really subscribe to the service. 1 to 2 weeks is good enought to prove that whether they are reliable or not.
You want to find a forex signals service just because you don't have time or you don't have a good skills in trading forex. I understand your felling and that's why I've created a blog for people who want to get the free forex signals.
But I have day job as well. I don't post forex signals every day but if you can catch some, you got your money into the bank! :)
By that, I wish you to have a good trading in forex world!
To find a good service, you must make sure that you get their free trial before you really subscribe to the service. 1 to 2 weeks is good enought to prove that whether they are reliable or not.
You want to find a forex signals service just because you don't have time or you don't have a good skills in trading forex. I understand your felling and that's why I've created a blog for people who want to get the free forex signals.
But I have day job as well. I don't post forex signals every day but if you can catch some, you got your money into the bank! :)
By that, I wish you to have a good trading in forex world!
Trading Forex To Advance Your Financial Position
Everyday, currencies are traded in an international foreign exchange market, otherwise known as the forex market, with the main marketplaces (otherwise known as bourses) existing in the world’s financial centes New York, London, Tokyo, Frankfurt and Zurich. Historically, the only way to participate was from the trading floor of one of these bourses, but today, people can trade forex from anywhere through a secure internet connection and a PC.
Today’s traders operate in a global network, taking positions in the market and making investment decisions based on either relative value between two currencies, or a particular currency’s actual price. Currency value fluctuations are constantly renegotiated through trading activity, and this activity, and the corresponding currency values are also indicators of the levels of currency supply.
An example of market behaviour greater demand for the Euro might indicate a weakening supply. Low supply and increased demand will drive the price of the Euro up against other currencies like the dollar, until the price better reflects what traders are prepared to pay when short supply exists. Another way to look at this situation is this higher demand means it will cost more dollars to buy the Euro, which equates to a weakening of the dollar in comparison. Analysis of situations such as in this example forms the basis for a trader’s investment decisions, and they will purchase or sell currency accordingly.
This should be remembered, as while many see the foreign exchange market as the vehicle for converting their home currency while travelling abroad, many others choose to use the market to advance their financial position and secure their future.
Today’s traders operate in a global network, taking positions in the market and making investment decisions based on either relative value between two currencies, or a particular currency’s actual price. Currency value fluctuations are constantly renegotiated through trading activity, and this activity, and the corresponding currency values are also indicators of the levels of currency supply.
An example of market behaviour greater demand for the Euro might indicate a weakening supply. Low supply and increased demand will drive the price of the Euro up against other currencies like the dollar, until the price better reflects what traders are prepared to pay when short supply exists. Another way to look at this situation is this higher demand means it will cost more dollars to buy the Euro, which equates to a weakening of the dollar in comparison. Analysis of situations such as in this example forms the basis for a trader’s investment decisions, and they will purchase or sell currency accordingly.
This should be remembered, as while many see the foreign exchange market as the vehicle for converting their home currency while travelling abroad, many others choose to use the market to advance their financial position and secure their future.
Day Trading Forex Market Behaviour
Technology advances like the internet have spawned a new craze, where anyone with a secure internet connection prepared to undertake a small amount of training can engage in trading foreign exchange on the forex market.
Just as a day trader will closely track stock price movements on the Dow Jones Industrial Average, all over the world forex traders monitor currency fluctuations in a similar fashion.
Forex traders have the aim of using the smallest amount of one currency, say the US dollar, to purchase another currency like the British Pound. If supply of the pound lessens in a busy market, it will cost more dollars to buy pounds, and the forex trader hopes to sell their pounds at a higher than their purchase price. In many respects, this type of trading behaviour is very similar to trading in stocks, where the aim of nearly all traders is to buy low and sell high.
The trading process works under a bid/ask system. In the above example, a forex trader might bid 10 dollars in return for 5.7 British pounds, and the seller of the pounds could be asking 11 dollars for the same amount of pounds. If the seller accepts the bid, the trader then hopes the pound continues to increase in price, so that when time comes to sell, they can get in excess of the 10 dollars initially paid.
As only registered traders have access to this auction process, most online speculators will trade through a bank or broking house. Such brokerages charge a commission for facilitating the trades, and forex traders should consider these transaction costs when calculating their selling offer when time comes to exit their position, as this will influence their profit margin.
The global foreign exchange market can trade in excess of a trillion dollars a day. Sheer market size means there is considerable money to be made, and lost, through miscalculation. It is neither a guaranteed, nor easy path to riches, so traders should be educated in how to play the market. Instructional packages are available, and should be carefully reviewed as they can easily range in quality and price.
Just as a day trader will closely track stock price movements on the Dow Jones Industrial Average, all over the world forex traders monitor currency fluctuations in a similar fashion.
Forex traders have the aim of using the smallest amount of one currency, say the US dollar, to purchase another currency like the British Pound. If supply of the pound lessens in a busy market, it will cost more dollars to buy pounds, and the forex trader hopes to sell their pounds at a higher than their purchase price. In many respects, this type of trading behaviour is very similar to trading in stocks, where the aim of nearly all traders is to buy low and sell high.
The trading process works under a bid/ask system. In the above example, a forex trader might bid 10 dollars in return for 5.7 British pounds, and the seller of the pounds could be asking 11 dollars for the same amount of pounds. If the seller accepts the bid, the trader then hopes the pound continues to increase in price, so that when time comes to sell, they can get in excess of the 10 dollars initially paid.
As only registered traders have access to this auction process, most online speculators will trade through a bank or broking house. Such brokerages charge a commission for facilitating the trades, and forex traders should consider these transaction costs when calculating their selling offer when time comes to exit their position, as this will influence their profit margin.
The global foreign exchange market can trade in excess of a trillion dollars a day. Sheer market size means there is considerable money to be made, and lost, through miscalculation. It is neither a guaranteed, nor easy path to riches, so traders should be educated in how to play the market. Instructional packages are available, and should be carefully reviewed as they can easily range in quality and price.
Forex Avenue: The Road to Riches
In my continuing quest to provide visitors of my site with a large amount of options to chose from when considering working from home I have done some research on Forex trading. I first learned of Forex trading while pursuing my MBA program. For those of you who have never heard of this, Forex trading is the exchange of foreign currency.
I know I would have never even know this was an option for making money had I not found out in class. Most of the really big corporations have departments of people that do this for a living because it can be very lucrative if done correctly. The best news I have learned about this process of exchanging currencies is that many of the websites that you can sign up with to do this offer free trial accounts to help you learn before you invest your money into trying it. You won’t make any money in the trial accounts if you do well, it is just pretend money essentially but with the real market conditions. If you do well in the trial account you will know if this is something you want to try on your own.
Benefits to Forex trading are that is can be done 24/7 whereas the stock market is a business hours only exchange. It is 24/7 because it is done with countries around the world so clearly there are countries that are awake and working while we sleep. Another benefit is you are in control of the trading on your account. You do not need to hire a licensed broker to make your trades and charge you fees. Along those same lines, anyone who does any investing most likely knows that some funds require you to own then for a certain period of time or pay early withdrawal fees. You do not need to concern yourself with this either. One last benefit that I would like to point out is the fact that Forex is not really subject to the same kinds of swings in the market that stocks are subject to. Of course if you always buy and sell the same currencies then there will be market swings. But, because there are hundreds of currencies out there, there is always going to be something for you to make money on because while one currency is up in value another one is down and vice versa.
I know I would have never even know this was an option for making money had I not found out in class. Most of the really big corporations have departments of people that do this for a living because it can be very lucrative if done correctly. The best news I have learned about this process of exchanging currencies is that many of the websites that you can sign up with to do this offer free trial accounts to help you learn before you invest your money into trying it. You won’t make any money in the trial accounts if you do well, it is just pretend money essentially but with the real market conditions. If you do well in the trial account you will know if this is something you want to try on your own.
Benefits to Forex trading are that is can be done 24/7 whereas the stock market is a business hours only exchange. It is 24/7 because it is done with countries around the world so clearly there are countries that are awake and working while we sleep. Another benefit is you are in control of the trading on your account. You do not need to hire a licensed broker to make your trades and charge you fees. Along those same lines, anyone who does any investing most likely knows that some funds require you to own then for a certain period of time or pay early withdrawal fees. You do not need to concern yourself with this either. One last benefit that I would like to point out is the fact that Forex is not really subject to the same kinds of swings in the market that stocks are subject to. Of course if you always buy and sell the same currencies then there will be market swings. But, because there are hundreds of currencies out there, there is always going to be something for you to make money on because while one currency is up in value another one is down and vice versa.
Forex Currency Trading, A Great Work At Home Opportunity.
Everyday more and more people looking for a work at home opportunity and the possibility of braking free from the corporate world without losing their current lifestyle and even improving it, realize that the world of forex currency trading could be the answer to what they have been looking for.
Some of the great reasons why FOREX trading is such a great way of entering the capital markets are; it's easy accessibility thanks to the widespread use of the internet, the fact that currency trading is all commission-free and also the low transaction costs involved. All the best forex brokers will facilitate you a trading account with these characteristics and even Mini Forex traders (i.e., traders starting with accounts having a capital as low as $250), who are just starting in this field, can buy and sell currencies online always commission-free.
When trading the forex markets you don't have to worry everyday about fees you may have to pay your broker; there are also none of the usual fees to which futures and equity traders are used to pay every day the enter a trade; no exchange or clearing fees, no NFA or SEC fees.
You may be asking how forex brokers make money if they don't charge you fees for placing trades. They make money thanks to one characteristic of currency markets, this is, they are over-the-counter markets and trading them involves a bid/ask spread and that's how the brokers make money. Thankfully the currency markets are capable of offering you a round-the-clock liquidity and this way you will receive tight, competitive spreads both in intra-day and night trades, without worrying about having big spreads in prices.
Once you have decided to enter and learn how to trade forex, always remember that practice and more practice makes the master and one of the best ways to get a feel for the market is to paper trade. No one wants to experiment with their own hard earned money; this is why many brokers came up with an innovative idea that would take all the risk from trying out forex trading. This way of trading is called simulation trading or paper trading as mentioned above, and the premise is simple. The program is an exact copy of the broker or trading systems real-time trading program. The main difference is that they allow you to “play” the market just as you would if you were actually investing, but obviously without the persistent worry of losing your money. You can do a simulation trade with a set amount of money, usually around $50,000 dollars. You can practice setting bid and ask prices, and using their various analysis tools provided by the broker software, which is the same you would have in a real account.
From all these facts you can see there are many advantages, and lots of money to be made, if you decide to enter the world of forex currency trading and learn the basics of the markets behavior.
Some of the great reasons why FOREX trading is such a great way of entering the capital markets are; it's easy accessibility thanks to the widespread use of the internet, the fact that currency trading is all commission-free and also the low transaction costs involved. All the best forex brokers will facilitate you a trading account with these characteristics and even Mini Forex traders (i.e., traders starting with accounts having a capital as low as $250), who are just starting in this field, can buy and sell currencies online always commission-free.
When trading the forex markets you don't have to worry everyday about fees you may have to pay your broker; there are also none of the usual fees to which futures and equity traders are used to pay every day the enter a trade; no exchange or clearing fees, no NFA or SEC fees.
You may be asking how forex brokers make money if they don't charge you fees for placing trades. They make money thanks to one characteristic of currency markets, this is, they are over-the-counter markets and trading them involves a bid/ask spread and that's how the brokers make money. Thankfully the currency markets are capable of offering you a round-the-clock liquidity and this way you will receive tight, competitive spreads both in intra-day and night trades, without worrying about having big spreads in prices.
Once you have decided to enter and learn how to trade forex, always remember that practice and more practice makes the master and one of the best ways to get a feel for the market is to paper trade. No one wants to experiment with their own hard earned money; this is why many brokers came up with an innovative idea that would take all the risk from trying out forex trading. This way of trading is called simulation trading or paper trading as mentioned above, and the premise is simple. The program is an exact copy of the broker or trading systems real-time trading program. The main difference is that they allow you to “play” the market just as you would if you were actually investing, but obviously without the persistent worry of losing your money. You can do a simulation trade with a set amount of money, usually around $50,000 dollars. You can practice setting bid and ask prices, and using their various analysis tools provided by the broker software, which is the same you would have in a real account.
From all these facts you can see there are many advantages, and lots of money to be made, if you decide to enter the world of forex currency trading and learn the basics of the markets behavior.
Forex Trading Guide
Like many people I am sure you are interested to know more about Forex trading. To put it bluntly Forex trading can be either one the best ways to make or lose LOTS of money. Only those who take the Forex market seriously will be able to make money with it in the long term. The Forex trading market is beyond a doubt the world’s largest market where all exchanges happen instantaneously. Thus, trades are a key challenge for even the most knowledgeable Forex bankers and traders. They have to learn and consider many factors before performing even a single trade. At first when currencies began to be traded openly, only large banks were allowed to perform trades. These days, due to the advent of internet trading and margin accounts almost anybody can begin Forex trading. This in turn, has added to the liquidity of the Forex market, and has resulted in a huge increase in the number of individuals who are now active in the market. So, does this mean it is easy to earn money through Forex trading? To answer this we must consider a few things. Some data by Forex brokers seems to suggest that 90 percent of traders end up of losing their capital, 5 percent of traders have been able to break even and only 5 percent of them attain steady beneficial results. Thus, it seems that trading successfully is no simple task. However, if you can learn to be among the 5 percent who make consistent money you can do extremely well by using Forex trading. To help you in this end I have listed five key ways to improve your odds dramatically of making money in the Forex market. 1. Education Successful traders are knowledgeable about the Forex market. They have chosen to educate themselves about every single vital detail of Forex trading. The best traders know that every trade that they perform is an opportunity to learn something new. 2. Forex Trading System All of the profitable traders have a Forex trading system or strategy. Furthermore, they have the will power to stick strictly to that system, because the best traders know that by sticking with their system they stand a far greater chance of earning money. 3. Price Behavior Knowledgeable and successful traders also include price behavior in their systems. They have learned that prices can change quickly and suddenly but are prepared to deal with those situations when they arrive. 4. Trading Psychology First-rate traders are aware of psychological issues that affect the choices of other traders make when Forex trading. They know that people do not always act rationally, and as a result this can alter the expected outcome of a trade. This can help them both when deciding to enter into a trade or when to exit. 5. Money Management This is far and away the most important factor that will determine whether or not you become a successful trader. Averting the hazard of financial ruin is the main concern of all top traders. This means both adequately funding your trading account (only with money you can afford to live without of course) and never entering into trades that can potentially wipe out all of your assets. Better to start trading small and always use stop-loss orders to guarantee that your first trades are not also your last. This is by no means an exhaustive list of everything you need to know but it outlines some of the areas you need to consider before making even that first trade. Now you know that it is not easy to earn money in the Forex market, however it is achievable. However, success does not happen overnight and anyone promising you that it can is trying to sell you snake oil. It is an ongoing processes not something you pick up in a weekend. Trading success depends on the trader, and how hard you are willing to work to achieve your Forex trading goals. Also, remember to try to have some fun. The clearest sign that Forex trading is not for you is if you find the prospect of learning about how the Forex market works boring or dull. If this is the case you won’t stick with it long enough to make money and you will be among the 90 percent who fail. Just remember these three important things: be disciplined in your trading habits, manager your money wisely and enjoy the experience of Forex trading.
The Dangers Of Highly Leveraged Trading In Forex
If you are a forex trader considering one of these '400-1 leverage' offers, you should first know: 1. The rules of the game you are about to play. 2. About leverage in Forex and how it works, not for you, but for the broker. Here is how it works: Leverage can be beneficial but it can be your worst enemy. 400-1 means that US$1000 can control a $400,000 position say against the Yen. This is great but it also means that even a small move against your position can wipe your account clean. This is obviously very bad news for you but great news for the broker! Why Is It Great News For Them? Well, the first thing that traders must realise is that Forex firms make their own markets - they make the bid-offer price to clients. They use the assumption that as most highly leveraged speculators lose then it's good business to take the opposite position to them. This is done automatically, so when a client buys Dollars against the Yen, the broker sells short the Dollar. When the client covers the position (either for a profit or loss) the broker is taken out also. If the client wins the broker loses and vice-versa. This is how the leverage game is played. So, who do you think usually wins in this game? No, not you. It’s the broker. It’s a statistics game and the statistics say highly leveraged speculators lose. Ok then. If the brokers stand to gain when a client loses, what is the best way to make sure that the clients lose Bigtime? Easy, let them trade huge positions on a limited amount of capital so that the odds even for the best and most talented traders are pretty much - ZERO. Why do you think that the ads of '400-1 leverage' are splashed all over the brokers websites? They are selling you the supposed ‘benefit’ when in turn, the reality is that the only ‘benefit’ is to them. Conclusion: If you want to play the leverage game in forex, understand how the game works. The game basically works this way: The broker is the shark. The retail trader is shark food. If you are serious in your quest to make money currency trading – educate yourself on the risks involved.
“Stop Hunting” - a Simple FOREX Strategy
Today FOREX world is built around large leverage and constant use of margin, in equities, standard margin is set at 2:1, in options, the leverage increases to 10:1, in the futures market, the leverage factor is increased to 20:1, but in the FOREX market the leverage sets the highest bar by increasing to 100:1 ratio and can climb up to 200:1 meaning that you can invest $100 for a $20,000 value control! An experienced trader would limit his leverage to no more than 10:1. Alongside leverage usage, or as in many FOREX rookies’ cases using too much leverage, comes the opportunity for either extremely profitable or extraordinarily dangerous and huge loses. You can double your account overnight or lose it all in a matter of hours if you make use of the full margin at your disposal. Considering that fact, most FOREX traders use “stops” order / “stop-loss” - they simply do not have the luxury of nursing a losing trade for too long because their positions are highly leveraged, and here you can step in and take advantage of this knowledge. Stop order in a nutshell is a form of insurance or security measure that is given to buy or sell when a currencies' price surpasses a particular point. Using stop loss is critical for long-term survival. By setting a predetermined entry or exit price, investors usually use this system to minimize their loses when off for the business day or any other situation in which they are unable to monitor their portfolio for an extended period. The main FOREX strategy which takes advantage of this knowledge is “Stop Hunting” , which attempts to force some foreign currency exchange investors out of their positions by driving the price of a currency pair to a level where many investors have chosen to set their stop-loss orders (aka “weak longs”), by understanding that the human mind naturally seeks order, most stops are clustered around round numbers ending in "00" (i.e. if the EUR/USD pair was trading at 1.1380 and rising in value, most stops would reside within one or two points of the 1.1400 price point rather than, say, 1.1417). Absorbing that fact alone is priceless knowledge (the price of a currency pair can experience sharp moves when many stop losses are triggered); professional traders place their stops at less crowded and more unusual locations. The possibility of profit from these unique dynamics of the foreign currency market is huge and proven.
A Synopsis Of What It Takes To Trade The Forex Market With Success!
This is the first article of a series whose purpose is both educational and practical.And above all they aim to be interactive meaning that any comments suggestions or ideas are more than welcome. Lets start from the basics.The first thing someone needs is very good education.And this requires a lot of thorough research as there are many sources but not all are worth the money for their services.So in this sense an online forex course could be a good idea along with some books.But here comes the first major problem.Which course and which books,which aspects to cover?The technical analysis issue?The maxim go with the trend?The candlesticks analysis?And which system to use and follow?There are thousands of them!So before we even begin a trader is confused.And confusion is a very bad enemy but it can be arranged.How it can be arranged?With some simple steps.Such as simplicity.The more you know the better chances you have to succeed trading forex and it all comes down to probabilities. Education is a must to all trading aspects from stocks to futures to forex.But forex has two unique features.High liquidity and extremely high leverage.And although the liquidity is a very good feature high leverage is not.At least not until you know what you are doing.Here we focus again on education.Besides a participation in a forex course either online or not,an amount that will be put away as an investment for education is the first thing a trader must do.Some ideas are to focus on analyzing the current conditions of the market and to have a bias for a specific currency pair.A system such as following the trend could be the core of a trading strategy.And a demo account with many virtual trades as many as possible for a long period of time is the next step. Now the most important part of the trading action is to make a plan,stick to it and apply very strict money management rules because if the capital is finished and it very easy this to happen then our trading career will finish within a few days,months or even hours. Lets face the truth that trading is not easy.It is unfortunately far more easy for someone to lose all his account rather than make wild profits beyond each expectation.That is because emotions and psychology are very crucial for success.Some of the most important emotions are fear,uncertainty,euphoria and revenge.Revenge comes into play very very often as when someone loses an amount wants desperately to get it back and often the outcome is that more loses come simply because the trader is on the wrong side of the trend! Discipline and patience are virtues that distinguish a good trader from a mediocre trader.Without specific goals and a written procedure a trader is like a cargo ship that has sailed without any destination.Someday the fuel will be exhausted and many dangers from the weather to the potential physical damages may happen.Risks exist all the time.The point is how to deal with them. One of the most useful phrases is taken from the movie Forrest Gump.Life is like a box of chocolates,you never know what you gonna get! It is true.Be as prepared as possible.Do not let the brokers excite you promising very high returns and extremely high leverage.Do some very thorough research before opening an account funded with real money.Compare the bid-ask spreads and technical support to name only a few aspects. Be very skeptical to previous results as offered from many signal services.The major aim should be to learn to trade and make your own decisions and not blindly follow some others decisions and opinions. Confidense and experience come with the passage of time. So we mentioned simplicity before.Being realistic and having a controlled life balance is very important.One major goal should be consistency so as to have the ability to make profits each month and keep them. Fundamental news are another important issue and in essence the technical analysis is the mirror of fundamentals.Expectations change rapidly and emotions also.And if you think about it emotions and expectations mainly move the forex market.Most times like the recent Fed rate hike decision a move is under way but the danger is when it will be finished and certainly not getting in at the wrong time after all the move is completed. The best approach for a trader would be to set specific goals and if achieved then stop trading.The worst idea is to trade in a choppy market where random noise will make it difficult to get specific profits. So a tested system with very precise rules such as entering exiting and having stop-loss orders may not be a holly grail but is surely one very good approach to start with and focus on it.Pivot points are such a system.At least it is a good start.They encompass education,discipline,strict criteria,targets and are a proven system that major players use.They are not foolproof always as nothing is certain but they deal with high probabilities and this is very important. Also a very practical way is to act as organizes as possible.Meaning that : 1.Develop your own trading journal where you will be writing down your trades and a brief explanation of what made you place a particular trade so as to evaluate performance.Note each day the major economic releases if any because it is often wise to be out of the market before the release of the news and trade only after having a much clearer opinion of what price action may be.Remember it is all about high probabilities. 2.A risk/reward ratio of 1:2 meaning that you risk an amount to get at least the twice if all go well is suggested but sometimes it is best to be conservative and even apply an 1:1 ratio by applying very strict risk management risking no more than 2-3% of total capital per trade.Survival is everything. 3.It would be a good idea from time to time to have breaks from trading.Opportunities exist always so stopping trading when losses of 10-20% maximum of trading capital have accumulated is a good way to revaluate what is going on before a large amount of capital is lost.Trading is not gambling it is a way of investment.The philosophy should be to define realistic goals such as a number of pips per day and if achieved then stop trading.Greed is another bad enemy of traders.On the contrary the notion of compounding profits and retiring a portion of them each month is a good way to build a solid account and keep monitoring its growth. So in this first article we touched briefly many ideas from education to psychology to a proven trading system etc.Each idea will have more in depth analysis in the very near future.Your comments and suggestions will help us a lot to focus on what you need or want to analyze.Above all interactive communication brings the best results.
Earn Unlimited Money Trading in Global Forex
Global money trading involves the buying and selling of world's currencies, par excellence the most formidable ones on the fx markets. Initially only the privileged few like the enormous banks and big shot financiers had access to this remarkably lucrative market. But with the ubiquitous presence of internet, the suitable time for trading in global forex is not restricted in the hands of the big players. The hobby investors can also tap the high profit potential of the forex market to make some great money. There are some typical advantages related with trading money in the global forex market that has made it the world's largest money spinning market. foremost of all, while the national stock market operates with work hours, the Global forex stays open 24 hours a day. The fx-market opens every day in Sydney moving westward as the day advances. A truly globalized market, the trading moves around the globe as the trading opens in each major center, first to Tokyo, London, and New York. Thus, unlike any other financial market, you can instantly correspond to any type of fluctuations in any currency followed by economic, social and political events. And you can easily take decision the time they occur---day or night. Unlike the domestic stock market, you do not have to deal with a share agent and do not have to pay any commsiion for making the trade. The FX market is Over the Counter type of market. It operates on the 'interbank' basis. Thus transactions are conducted between two parties in two different parts of the world via internet or over the telephone. Then leverage is also essentially high in this market and practically you can make deals 100 times greater than the value of your deposit money. You do not have to be present in person in the market to carry on the trade. As this market is not like any other markets you can think of. Trading is not restricted to any centralized location. Trading occurs worldwide and Forex is the world's largest and most intense market. The currency trading involves the business on the spot between the US dollar and the six major currencies (Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar). Thus it is a enormous market which can not be controlled by any single factor or player. There is impossible for one man to control and manipulate the market in his favors. This trait makes it the most exciting market in the world. beside the major players like Central banks, private banks, multinational corporations, and money managers the little man in the street can also make unlimited money in the forex market. So you can clearly see that there are significant opportunities of making money in this biggest market of the world. But there are risk factors as well. The aggressive day traders might experience substantial profit-loss swings per day. Fortunately, there are no daily limits on foreign exchange trading and no restrictions on trading hours other than the weekend. This implies you will always get an opportunity to react to the particular trends and a lower risk of getting trapped into bad deals without the opportunity of getting out.
Success On Forex With Forex Trading Strategies
To become involved in the wonderful and sometimes addictive world of Forex, you will need to have a strategy in place to succeed. There are many forex trading strategies that will help you to push forward in the game, it is just a matter of going out there and finding one that works for you. To begin with, it is wise to consult with the experts about various forex trading strategies that might help you understand the Forex trading system a bit better. You can find many online forums that will help and you can take part in seminars where highly experienced instructors will explain the whole system and various strategies in detail. You might even be able to practice some of the forex trading strategies with a demo account. You must also understand the forex charts in order to gain information about certain trends. This is probably one of the most important factors in forex trading strategies. Once you understand the way trends are moving and changing, and you are able to recognize and predict the patterns within these charts, you are well on your way to begin trading with success on the Forex. Some strategies are very technical and require practice and understanding initially. At least at first, do not think that the forex is a way to get rich quickly. Initially, quick riches may not be possible as the exchange rate fluctuations will be slight, and it will take time for you to get the hang of it and make profits. Also be prepared, because you cannot win all of the time. Hopefully by using some of the online forex strategies you will win more often than not. One of the forex trading strategies that you can start with is to learn which markets or trends to target. After learning a little bit more about the forex, you should be able to choose a market or trend that is more likely to be profitable. Be careful not to put all of your cash into one trend though, as this could backfire. Rather put smaller, more logical amounts of money into different trends so that you have a better chance of at least some of your investments profiting. If you have any doubts at all about the forex trading strategies and trading on a specific trend then listen to your instincts. You should feel 100 percent comfortable with everything that you are trading on and not have any hesitations at all. If you don't feel comfortable, then make sure you learn as much as you can before you begin trading. Information is king, and the more you know the higher your earning potential.
Momentum Trading
One of the most basic and widely used indicators is that of momentum. Before I go on to tell you how we can use the momentum indicator to trade with, I want to explain the difference between a leading and a lagging indictor.Nearly all indicators are lagging indicators. That is to say that the price must first move in order for the indicators to react. So you will inevitable get a situation e.g. where the market will rise shortly followed by the indicator. This is where the term lagging comes form in trading.On the other hand, an indictor that forecasts the move before it happens is called a leading indictor. If for example the indictor peaks and then turns down before price peaks and turns down then that would be a leading indictor.You can use most indicators as both depending on how you mix them with time frames and settings. The reason I mention this is that momentum can be a very good leading indictor when used in a particular way.Let's first talk about what a momentum indictor is - simply a visual reference point of whether a security is rising or falling and how fast that rise or fall is. Construction of the indictor is simple - just subtract the close of the security X (whatever period you want)days ago from today's close.The resulting number can then be plotted around a zero line. For example let's say we were looking at a 10 period momentum indictor. You would simply deduct today's close from the close 10 days ago. If the close was higher than the close 10 days ago then it would be plotted above the zero line. If on the other hand the close was lower than the close 10 days ago, the it would be plotted below the zero line.As you would expect - if the momentum line is rising and above the zero line we can interpret that as a strong bullish trend. If the momentum line is below the zero line and falling we can interpret that as a strong bearish trend.As you can see from our first chart, momentum can be a ver y good confirmation indictor. If you were using a moving average or a trend line to help determine trend, then a cross above or below the zero line could be just the confirmation you need.In the example above I was using a 34 period exponential average of the close. Price came back up and closed above the average and shortly afterwards the momentum indictor also closed above the zero line confirming the move. Not only that but the momentum line has remained above the zero line since the cross over. This would give you confidence that the trend is still in force.In our next chart there are two important points I want you to take note of - the first is that of divergence.Divergence is when an indictor does the opposite of what the price on the chart is doing. In our example the momentum indictor started to turn down but the price continued up. This is bearish divergence. Often when this happens it is an early warning that the market is in an exhaust move. The indictor is giving us an advanced warning that the market might be getting ready for a move in the opposite direction from which it was previously heading. The opposite is obviously true for bullish divergence.Next I want you to look at the three points I have marked as extreme on the chart. For get the reading at these points - visually you can see that the three points are lower than the other points around them. When you have an extremely low reading in an uptrend then you have a good trading opportunity to go lon g. If you h ave an extremely high reading in a downtrend then you have a good opportunity to go short.You could further confirm this by a shorter moving average crossing a lon ger aver age or as I have done with a little trend line. Nice, simple technique that will keep you on the right side of the trend and give you some great entry points.
High Low Breakout Technique
This technique can be used for any market that has a decent daily range. If you look at any chart, what do you see? You should see a succession of bars that are doing one of three things. 1. Going up 2. Going down 3. Going sideways Unless today's bar turns out to be an inside day or very rarely the high and low of today are exactly the same as the high and low as yesterday, then we will have a new high or low. Think about it. Today's bar, in all probability will make a higher high than yesterday's bar or a lower low than yesterday's bar. This information is very powerful.For example, company XYZ had a range of 200 points (high minus the low) yesterday. Today the high might be 50 points higher than yesterday's bar or 50 points lower than yesterday's bar. If we can find the average daily distance between the high of yesterday's bar to the high of today's bar and the average daily distance between the low of yesterday's bar and the low of today's bar, then we might have a trading opportunity. Make yourself a little excel sheet or grab a pen and paper and start tracking the high and lows of each day. Then deduct the high of today from yesterday's high and the low of today from yesterday's low. After you have a few days worth of data you can get an average. On the excel sheet, below the first five columns are the date, open, high, low and close. "DR" is daily range, "TH-YH" is today's high minus yesterday's high and "YL-TL" is yesterday's low minus today's low. In the "TH-YH" column, I only record an entry if today's high is greater than yesterday's high and in the "YL-TL" I only record an entry if today's low is lower than yesterday's low. All pretty simple stuff. OK, as you can see, the example of the GBP/USD (Pound/Dollar). The average breakout up was 54 pips and the average breakout down was 60 pips. The next thing to do is apply this knowledge to our trading.On the 2nd September the high was 1.7972 and the low was 1.7864. We are looking for a breakout of either of these points. It doesn't matter which way. So on the 3rd September you mark the previous day's high and low and monitor what happens when it reaches these points. The way I trade this setup is to wait for the market to test the low or high of the previous day and then pullback. I don't enter on a break of the previous day's high/low, I wait for a pullback of either a test of the high/low or a break of the high/low. As you can see from the chart, the market came down and tested the low of 1.7864 and then pulled back. The low that was made was just a few pips lower than the previous day's low and formed a little support area. That support area is the breakout point. You can place an entry order a couple of pips below the support area with a target of the average "YL-TL" as a target, which in this case was 60 pips. The stop is a bit more tricky. If the pullback is not too big you can place your stop just above the pullback area (resistance). If the distance is too great, then just use Dollar stop. You can even take this down to a 1 minute chart and scalp the market with a very tight stop. There are loads of ways to trade this setup. You could add some indicators for confirmation. You could use the entry as setup for a position trade. You could even concentrate on inside day's where the breakout might have a much larger range. However you decide to trade it, at least take note of the previous day's high and low.
Intraday Trading Tactics
In this lesson I want to discuss intraday tactics that you should be aware of when you start to trade intraday.By intraday I mean very short time frames such as 1 minute, 5 minute and 15 minute charts. This will apply to traders who actively trade and probably trade frequently during the course of the day.Regardless of what technique you use to enter and exit the market this approach will aid you in deciding if you are on the wrong or right side of the market.The first thing you should do when trading intraday regardless of the security is to have some general idea of where the market has been recently. You cannot of course start the day with a strong directional bias. The reason you cannot start the day with a strong bias is that intraday the markets can be very volatile and if you have stubbornly decided the market will go one way and it starts to go another you will find it difficult to change direction. This is because you will try and convince yourself that the move against you is temporary.To overcome this directional bias I use the following discipline to help tell me when the market is doing something different from what I expect. To analyze the market first think of what happens in a typical up trend or down trend.Let's say that in an up trend the last two-day have made higher highs and higher lows. The close has also been higher for the last two days.In order for that little up trend to continue what should happen? For the up trend to continue on day 3 you would expect a higher low, a higher high and a higher close right! So lets look at what should happen on the third day. On day 3 I would first like to see a low in place in the early part of the day. I often find that when an up trend is continuing the low is made first. In a down trend I like to see the high of the day made in the early part of the session.As you can see from the chart above of day 3. We had the open then early in the day a low was made. As the d ay progressed the high of the day was made towards the later part of the day and then finally the close.So how does this information help me? Well, if for example the low of day three continued lower than the low of day 2 I would begin to wonder if the market was retracing or reversing.If the low of day three took out the low of day 2 when I expected it not too I would stand aside until I had a clearer picture of where the market was headed. It may just be that the market will continue up after making a low lower than day 2 but why take the risk.I also like to see the low of day 3 tested in some way. As you can see from the chart the low was made then the market made some progress upward and then came back down to near the newly formed low where it found support (buyers).This for me is a great indication that there is some demand at that level and gives me an opportunity to enter th e market with very little risk as I can place my stop under the newly formed low.As openings can be volatile I like to watch the first 30 minutes to 60 minutes to see how the market is shaping up before taking a position. I start with no definite directional bias but I am aware of what has been happening in the last few days and if it does what I assume it will do then I am ready to take action.If it does not do what I assume it will do then I know that I may have miss-read the market and am ready to rethink my tactics for the rest of the day. As you should know by now the market is always right so its OK to have an opinion but don't get married to it. If the market takes out the low of day 2, stand aside and rethink your approach for the rest of the day particularly if the move is a strong move in the opposite direction from where you thought the market would go.The one thing you shouldn't do is wake up thinking that the market is going up (or down) and just keeps trading in that direction. Don't fight the market, it will always win. Just go with the flow and realize when you are not going your way.
Understanding Stochastics
The foreign exchange markets move when some force makes one currency either more or less valuable than another. The cumulative purchase and sales of a currency cause it to move up or down and to become more or less valuable in relation to other currencies. The primary factors influencing exchange rates include: - The balance of payments - The state of the economy - Implications drawn from chart analysis - Political and psychological factors - Ebb and flow of capital between nations, known as Purchasing Power Parity (PPP) is the central factor that determines market momentum.- A change in government or central bank policies - Slowly shifting economic and social conditions - Fundamental economic forces such as inflation and interest rates- Faith in a government s ability to stand behind its currency will also impact currency prices- Activities by professional currency managers, generally on behalf of a pool of funds, have also become a factor in moving the market. All these things create movements in currencies that usually tend to persist once they begin. Professional currency traders usually keep their eyes out for changes in monetary policies and the forces that shape currency trends. George Lane was the originator of the sochastics in the 1970's. Lane observed that as prices increase in an up trend, closing prices tend to be closer to the upper end of bars and in a down trend closing prices tend to be nearer the lower end of bars. Lane developed stochastics to discern the relationship between the closing price and the high and low of a bar. Typically used to identify overbought and oversold conditions the indicator consists of two lines: % K and %D. These two lines fluctuate in a vertical range between 0 and 100. Readings above 80 are considered overbought and readings below 20 are considered oversold.Stochastics can also be use to generate buy and sell signals. When the faster %K line crosses above the slower %D line and the lines are below 20, a buy signal is generated. When the %K lines crosses below the %D line and the lines are above 80 a sell signal is generated. Well as usual just to be contrary to everyone I don't use the stochastics to signal overbought or oversold although I do take note of the readings. I like to use them as possible buy and sell opportunities after defining a trend. If the trend is up as in the example below on the AUD (Australian Dollar) I like to only take buy signals regardless of the reading as long as the trend remains in place. I ignore the sell signals. I purposefully weaken the stochastics to give me more signals and I use 8,3,3 as my settings.This gives more signals and shows the hand of the weaker players. The same is true of selling in a down trend. I ignore the buy signals and only take the sell signals. I don't use stochastics on their own as trading method as all the settings I have tried ultimately resulted in to many wipsaws. Experiment with different settings and consider adding this indicator to your trading arsenal.
Where To Place Your Trading Stop
Many traders have a problem defining where they should place their stop loss. They have no problem entering a trade but often have a problem defining where they should take profits or cut their loses. In this lesson we will cover some of the popular methods of choosing a stop loss.1. Dollar value.2. Support and resistance.3. Fibonacci.A lot will also depend on your trading time frame but for this exercise I shall use 4 hourly charts as a compromise between our longer-term traders and the intraday day traders. A trader using a dollar value stop loss will place his stop loss (stop) a given number of dollars away from where he entered the market.In the example of EUR/USD the trader enters the market long at 1.0840 on the breakout of resistance at 1.0835. He determines that he will use a dollar value as his stop of $300. This makes his stop level of 1.0810 (30 pips at $10 per pip). If the market should retrace 30 pips or more then his stop will be hit and he will be out of the market.When using support or resistance for placing a stop a trader will first determine where they will get into the market and if long will then place their stop under the nearest support. If they are short they will place the stop above the nearest resistance.In the case of the EUR/USD the trader goes long at 1.0750 which a break of resistance at 1.0746 and places his stop at 1.0680, which is a few pips away from support at 1.0683. Although the break of the resistance level of 1.0746 should eventually become support when you enter a trade you don't know if the break is real or false so the safer place is the most recent support.When using fibonacci to place your stop you would first measure the move and in the case of the USD/JPY the move was from 117.85 to 119.52. This gave us three retracement levels 118.88 (38.2%), 118.68 (50%) and 118.49 (61.8%). In this example the trader entered the market slightly ahead of the 38.2% at 118.90 and placed his stop at 118.45 just below the 61.8% retracement. He could just as easily have used the 50% retracement depending on the market and market conditions.The three methods we discussed in this lesson are not all the ways to place a stop loss but they are the most common. The question you are probably asking now is which method is the best. Well, there is no right answer to this, it depends on many factors such as account size personal preference and what method you have back tested for optimal results. In the case of the dollar value method the disadvantage is that the dollar amount may no be logical for the market conditions.You may find that by using this method you are taken out to frequently only to find the market taking off in the direction of the original trade. The best way to overcome this is to do some back testing to find the best amount for the market you are trading. The advantage is that is easy to implement. There is no working out of figures or levels and you can place your stop as soon as you get into the market.The second method of using support and resistance may be very logical but the distance between where you enter the market and where you can place your stop may be so large that the dollar amount would put your account in jeopardy. The way round this would be to only take trades that fitted in with your level of risk and personality.The last method of using fibonacci is very adaptable but can also mean that your stop is so far away that your dollar risk could be too large. The alternative could be to use the 50% retracement instead of the 61.8% retracement to place your stop. The advantage is that fibonacci retracement can be very accurate.There is no reason why you can not use all three methods and use a particular stop loss placement depending on market conditions. You will also find that you will probably have a particular method that you prefer. First back test each method then find the one that most suits your trading style and fits in with your risk tolerance.
What is Support and Resistance
It is very important to understand the concept of support and resistance.In up trends, every time price drops to the up trend line and then resume their advance, the trend line has acted as support to the price up trend. Support can also be found at prices of previous support or resistance.In down trends, every time price rises to the down trend line and then resume their decline, the down trend line has acted as resistance to the upward move of market prices.Resistance can also be expected at prices of previous support or resistance. Once levels of support or resistance have been violated then invariably these reverse their roles, so that previous support becomes resistance and previous resistance becomes support.Consider the following. When price action drops to a certain level the bulls (i.e., the buyers) take control and prevent prices from falling further. Similar to support, a "resistance" level is the point at which sellers take control of prices and prevent them from rising higher. The price at which a trade takes place is the price at which a bull and bear agree to do business. It represents the consensus of their expectations. The bulls think prices will move higher and the bears think prices will move lower.Support levels indicate the price where the majority of investors believe that prices will move higher, and resistance levels indicate the price at which a majority of investors feel prices will move lower.When investor expectations change, they often do so abruptly. Note how when prices rose above the resistance level they did so decisively. Also similarly with support.The development of support and resistance levels is probably the most noticeable and reoccurring event on price charts.The penetration of support/resistance levels can be triggered by fundamental changes that are above or below investor expectations (e.g., changes in interest rates, government announcements, etc.) or by self-fulfilling prophecy (investors buy as they see prices rise). The cause is not as significant as the effect, new expectations lead to new price levels.As you can see from the charts above. Some times the price will just keep going through support and resistance and sometimes it will come back to test its previous support or resistance line. This applies also to trend lines. We will be going into this in more detail in future chapters when we cover learning to trade.It is essential to understand the concept of support and resistance. The validity of a trend line is dependent on its duration and the number of times it has been successfully tested.The longer the trend line has been in effect and the more times it has been successfully tested the more important the trend line becomes. Consequently when a trend line of long duration, which has been successfully tested many times, has been violated then an important reversal of trend has likely occurred.However, on no account exit the market until definitive evidence of trend termination has occurred. Remember another trading mantra -- The trend is the trend until proved otherwise -- to ignore this dictum is to unnecessarily deny yourself profits.
Forex Building Blocks that Works
Day trading the foreign currency market is definitely one of the more challenging endeavors an aspiring trader can pursue. The higher degree of leverage available in this market can increase profits, but it equally accelerates losses as well.This makes the issue of trade timing, selection, and mental attitude that much more critical to success. This also makes newbie trader get very confused.I wrote this short article to make that confusion away. Before entering the market, let's look at four building blocks that I believe to be foundations to your trading.#1st FoundationAlways follow and understand the daily forex news and analysis of the professional currency analysts. Even though your trading system is based solely on technical analysis of charts, it is very important to get a birds-eye view of the markets and the news that affects the price. Knowing what the key technical "support" and "resistance" levels in the currency pair that you want to trade are also valuable. Fortunately, all the best forex news and analysis is available for free on the internet. For example, take a look at dailyfx.com, forexnews.com, fxstreet.com, currencypro.com, or do Google search on "forex news" keywords.#2nd FoundationI highly recommend you to follow 1 or 2 major currency pairs only. Why? It gets far too complicated to keep tabs on all four. I also recommend that traders choose one of the majors because the spread is the best and they are the most liquid. For example, USD/CHF is one of the most liquid fairs that move every day.#3rd FoundationOnly enter the market when you are ready and when the technical/fundamental indicators say when. Never get into trade without stop losses. It is important to be disciplined and to stick to a plan. Don't just trade based on your "gut" feeling. Use technical indicators outlined and always enter in stop losses on every trade.#4th FoundationPractice made perfect. As old Wiseman say, there is no substitute for hard work and diligence. It is recommended to practice on a demo account and pretend the virtual money is your own real money. Do not open a live trading account until you are really confident and make some profit on a demo account. Stick to the plan and you will be successful.Last but not least, remember, caution is the best way forward in trading. Don't risk money you can't afford to lose, don't trade with live cash until you have paper traded for at least three months and control your emotions.
Lost in Forex Loss
An email prompted me to consider the significance of taking responsibility in trading. There is a natural tendency for most people, in any area of life, to not take responsibility for results and behaviors that appear negative. We want to see ourselves in a good light and it is tempting to try to avoid responsibility for acts that we consider bad.I have noticed for example, that liars (I mean here people who habitually lie) do not see themselves as liars. For every lie that they are conscious of, they have their justifications. In their mind the lie would have been to save someone else's embarrassment or disappointment; something that allows the liar to feel that not only they are not acting deceitfully, but they are actually doing a good and kind act. I remember once a teacher at my junior school crudely picking some bit of stuck food out of his teeth. After he had finished he justified himself by saying to us (8 year olds) that he only did it because he knew that we had no table manners. We weren't judging him; he was judging himself and using us as his scapegoat. We all lie to some degree and I don't have a problem with that; what I do consider important is how we explain the lie to ourselves. When you lie are you honest with yourself about it, or do you make up a story to yourself so you don't feel guilty? It is a difficult question to answer, but one that will say a lot about your trading. The most important, the most difficult, and the first skill that a trader must learn is to cut their losses quickly. It is essential (as we all have read many, many times); we only lose significant money by holding onto losing positions. So why do so many (perhaps all) of us find it so difficult? What is it about cutting a loss that is so hard? The answer, I believe, is in what we say to ourselves about what a loss means. It is the meaning we attach to a loss that determines whether we can accept it and let it go; or whether we refuse to accept it and in so doing hold on to it. What we resist persists. If a loss means something bad about you; if it means you're a loser, or a failure or just no good, or doomed to financial subsistence or whatever; then you won't be willing to accept it. Take it to an extreme, if it was a life or death matter, if you were going to be beheaded if you have a losing trade; you would never, ever, accept the loss, you would hold on for ever and as soon as the position was 1 point in profit, you would grab it immediately! Isn't that how many of us trade now? If so, ask yourself what does a losing trade mean about you? If a loss means something negative about us we won't want to accept it, this is human nature. We would rather hold on as long as we can and then, when we inevitably have to take the loss because it is now too big; too big to hide, too big to ignore, too big to refuse to accept; we look for our scapegoat. The 'they' of the market: the controllers, the insiders, the manipulators, or even the market itself; anything but to take the judgement that the loss implies. The objective of our self-deceit is to avoid the judgement that the loss imposes. In the same way that the teacher condemned the school children in order to avoid the judgement about his manners, so do we look to shift the blame to some third party. Significance of loss. The problem here lies, not with our self-deceit, but with the meaning that we attach to having a loss. If a loss means something negative, of course we don't want to accept it; but if a loss had no significance to us, accepting it would be easy.
How To Nail The Market When Everyone Else Is Wrong
Picture the scene -- you have done your an alysis and have been waiting for the breakout of a range. You might even have identified a head and shoulders or double bottom. So anyway, you have a trade all set up and you are just waiting for the move.Let's say you have identified a rectangle and are waiting fo r the breakout. You have your orders set up so that if it breaks up you are automatically taken long. You're trading an hourly chart so you are checking it frequently to see if there has been any movement. Suddenly bang the market starts motoring up. Your buy stop takes you long and you are sitting pretty. You start to watch the market and check to see that your stop loss is in place. Then suddenly without warning the same bar that mad e you feel like you should start counting your money tu rns around and heads back down.As it heads back down you just know it's going to take your stop - and it does. Now you no longer have a position. You start to look around for another entry or setup to get a trade on: but wait -- we just missed a huge opportunity.In this lesson I want to explain a great way to benefit when everyone else is wrong. Here's the theory. Most trader are very single minded when they trade. They get an idea into their head and it stays there.Once they have decided they are going to go long on a breakout they generally stick with it. This is particularly true of well-defined technical levels like the 52-week high or low. It could even be a trend line or chart pattern. The thing is, it could be anything.If you follow only one or two markets you will know what I am taking about. Even though you shouldn't listen to other traders you will probably have a fair idea of where the major support and resistance levels everyone is watching.Remember also that trading is as much about the study of human behavior as anything else. Once one of those big levels breaks everybody and their dog will try and get on the right side of the move. This is where we come in listen up, this is important. When The Market Doesn't Do What You Expected It To Do, Chances Are It's Probably Doing The Opposite.For example lets look at our greedy little friends who went long on the breakout and got wrong footed. Some of their stops will have been taken and some of the kamikaze crowd without stops will be filling their pants. This is exactly where we jump in when everybody else is exercising damage control. To take advantage of this we need two plans. Plan A and Plan B. As you probably guessed, Plan A is to go with the crowed: if the market breaks in the direction you first assumed it might, then you are there. You have an entry point, a stop loss level and a probable target already worked out.Plan B is where we excel. If the market breaks the other way, we also have a plan. In the chart above you can see that we had a down trend followed by some consolidation. The market first went down to form support and then head ed back up to the upper trend line. Now very often consolidation will break in the same direction as the trend, so it wouldn't be unreasonable to expect the market to break down, which it did. This would have taken us short, with a stop probably at the previous resistance and a measured target on the down side of the difference between the support and resistance.This is what happened next. Instead of continuing down the very next bar became a reversal bar. For the two period reversals up, the first period should be at the end of a strong down move. The close should be near the low of that period and it is preferable that this low is a new recent low. The second period should open near the close of the first period and should regain most if not all of the first period's losses and close near the high of the first period. There does not need to be a reversal bar for this to work. It just so happens there was one in this example. So now the market is doing exactly the opposite of what we expected. Being the opportunists that all good traders should be we close the short position and open a long position with a stop below the low of the failed breakout.We are now long the market with a stop loss in place - but we need a target. The first target I would head for would be the previous resistance. The reason I would choose this is simple. We may be headed into a long period of consolidation and the price might start oscillating between support and resistance.However as the failed breakout also happened to be a two period reversal, I might keep the long and just monitor what happens at the resistance level. Depending on market conditions I might also have an order to add to my long position.The important thing here good buddies, is to always b e ready to exploit what the market is doing. When you see an obvious failure of a - trend line, support/resistance or a chart pattern, have a plan in place to take action. Don't just watch it exploit it.I know some traders who only trade this way. They watch for easily identifiable patterns, which everyone is watching and exploit the failed move.
Must Know Basics For The Forex Beginner
Even as recently as ten years ago, the forex currency trading market was difficult to enter, so only large banking and institutional firms had access to the tools and systems required to invest in the forex trading game. This has all changed; now anyone can invest in forex. As you read this article, you will begin to understand more about the forex, so you can be a more informed investor.The forex currency trading beginner must know what forex currency trading is, why it is done, and also how it is done. The currency or forex currency trading is nothing but exchanging one currency to get another. Here, currency is bought for currency and currency is sold for currency. Why does one sell or buy currency? The answer is simple, to trade so that one derives profit from it.When a person buys a currency, he has technically studied the movement of that particular currency and knows when it will become higher and he will be able to gain maximum profits out of it. This is called speculative currency trading.When buying and selling in the forex market, you'll see that there are four "currency pairs" that dominate the percentage of trades. Those four are the Euro vs U.S. Dollar, US Dollar vs Japanese Yen, US Dollar vs Swiss Franc, and US Dollar vs British Pound.Unlike the domestic stock markets, the forex currency trading is open for trades 24 hours a day. Much like the phrase "it's always noon somewhere," it's always business hours at some region of the globe. Since every country trades on the FX market, and it's open all day, the daily volume is roughly $1.2 trillion, which dwarfs that of the NYSE. Another comparison to make in order to truly realize the magnitude of the forex currency trading market is with the currency futures market (which has around 1 percent of the daily volume).There may be a need to buy goods or avail certain services from the different countries and then also the currency exchange is done. Yet the maximum number of currency exchanges is done for trading purposes. Here the trader must be aware of the most liquid currencies which change fast, as the amount of profit derived from them is more.Forex currency trading market is not specific to particular countries but is a global market that works twenty four hours a day. It is one of the biggest global markets where unlimited amounts of money are exchanged day and night. Though it involves high risk factors this is still one of the most traded items around the world.Now that you have learned more about forex, you can better make a decision on whether or not to invest in it.
Cynthia Kase Relies on Proprietary Technical Indicators
Trader and consultant Cynthia Kase relies on a series of proprietary technical indicators that has developed for her trading signals. Kase makes her trading decisions strictly based on these technical indicators and doesn't rely on fundamental analysis at all.Kase was first exposed to trading in August 1983, when her employer at the time-Standard Oil of California-transferred her to the trading department as part of a management development program. With a background in chemical engineering, Kase brought a new perspective to the trading room."Two things happened in 1983 that were interesting and important for oil trading," Kase noted. "In 1983, the crude oil contract was introduced and also the other thing that happened was that the PC finally made its way into the business," she added."I got them to put a computer in the trading room," Kase said. "For a trader (in the early 1980s), I was fairly computer literate because I had an engineering background," she explained.Some of the early lessons Kase said she learned regarding trading were that "you have to be a bit of a loner if you are going to trade well. You can't listen to what everyone else thinks. I think it is important to stay focused, get enough sleep, remain calm and everything else will fall into place. You can't care too much."While Kase calls herself strictly a technical trader now, "I didn't start to trade technically until 1985," she said. "Technical trading is a lot more complicated that it seems on face value," she added."It takes a lot of work-it's not like-take two days to read John Murphy's book and go trade," Kase said, referring to Technical Analysis of the Futures Markets by John J- Murphy, often considered the "bible" for market technicians.Over the years, Kase began to develop her own technical indicators, which she now offers to her clients. Currently, Kase trades for herself, but also acts as a consultant to about three dozen corporate clients."I am a mainstream technician in that I use pattern, momentum and trend," Kase explained. However, "my indicators use statistics, as opposed to empirical observation," Kase noted.Two of Kase's statistically based tools are the PeakOscilltor, a momentum indicator that can be cross-compared between markets and Dev-Stop, a volatility-adjusted stop technique.Kase authored a three-part series in the April, May and June 1996 issues of "Futures Magazine" that readers may refer to for more details on her technical indicators.In terms of time frame, Kase said she does not trade intraday, but that her average trade lasts three to 10 days. "My trading techniques are very focused on exit strategies, not entry points," Kase said. "I take profits more quickly. I take a lot more winning trades, but the wins are smaller. I take partial profits on danger signals, such as reversal patterns and momentum divergences," Kase said."It is more important to be right than to make that big win," she added. Kase currently only forecasts the energy markets, but notes that her technical indicators work in all markets. In her personal trading she prefers "to trade physical versus financial futures, as they are too influenced by random and political events," Kase explained.On advice for beginning futures traders, Kase said, "the only way to learn how to trade is to trade." However, Kase warns that potential traders "have to ask why? If it's because you want to make a lot of money, you'll never succeed," she said.For a private trader, "I would never recommend that anyone trade without $50,000 to throw away and two year's income set aside. Make sure money is not an issue," she said."If you can't afford to work for two years without making a cent, then you shouldn't be trading," Kase added. "For young people, I'd recommend working for a broker, for a trading house. Personally, I think your odds of success are better," she said.Kase concluded, "The three most important things are one: you can't listen to other people; two: there is no easy way. There is no Holy Grail. Hard work and application is what is going to make a good trader and three: it has to be fun."
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