Most Internet visitors have heard about Forex also known as Foreign Exchange market at least once. There's truly a whole lot of information about it that came out last years. Forex is really huge - nearly 3 trillions of dollars are exchanged daily on the planet! This sum is often used in ads, that often sound like "3 000 000 000 000 dollars - take your piece of cake, that's very easy!"
Well, unfortunately that's not true, that's just a marketing trick and nothing more. Without the proper knowledge and trading skills you won't get any profits as a forex trader at all, you'll just lose your money. It all comes down to your knowledge, skills and trading experience. But how to get those skills and experience? Where to start? In this article I want to give you the basic steps every beginner should make.
As a forex trader you surely should know the basic terminology. That's where that "forex novice tutorials" really come into play! There are literally hundreds of them all over the Internet and some of them are free. Just pick one or two and read them carefully. Many forex starters don't begin their trading for too long. They keep consuming and absorbing information while their trading experience is almost zero. I recommend to study your first tutorial for some time but then begin to do your exact steps in your trading practice.
Many tutorials and guides recommend to start from mini-forex accounts to feel the real money on the one hand, but not to risk too much capital on the other hand. I agree - it's the best choice available for my opinion. A lot of forex brokers offer mini accounts, and I'll recommend one of them at the end of this article (see the resourse box for the details). You need to learn the basics of technical and fundamental analysis. Then begin to study trading indicators, pick yourself a currency pair and make some trial deals. Just buy, sell and see what happens. Try to experiment with different currencies, charts, indicators etc.
After you feel yourself comfortable with your trading platform, you need to pick yourself a trading system. There are a lot of them offered to the public today. My advice is: don't make things too complex and complicated, just pick some free simple forex trading strategy and try it on your mini-forex account. Remember: only result matters, not the complexity of the system. If it's too difficult, you'll fail in mastering it and won't make any profit. So my advice for your first trading system is: as simple as possible.
Ok, so what now? Testing. You need to test your strategy and, if it doesn't prove itself, pick another one. A lot of traders recommend to test on paper or on demo accounts, while other say mini-forex is best for this purposes. I think that if you can put several hundred dollars for testing your system, just do it. A lot of forex starters did well on demo but failed after opening a real account so it's better for you just to get used to real money. But please don't make your initial deposit too high, it'll make no difference for your trading, remember that your first purpose in just to gain the basic experience. My advice for the first mini-deposit is two hundred - one thousand dollars, that will be quite enough.
About the Author
I am a freelance writer and write in many areas including finance, advertising, investments and trading.I recommend you to try out this Forex Trading Platform. No Download. Open Account in 5 Minutes. Trade USD vs. All Major Currencies. Start for As Little As $100. Leverage Up to 200:1. Use Your Credit Card to deposit funds. See you later!
Wednesday, January 30, 2008
Forex Charts - Avoid This Common Deadly Mistake or Lose by Monica Hendrix
If there is one basic mistake traders make and continue to make it's the one in this article and if you make it you will simply lose all your money and do it quickly, so here is the forex chart mistake to avoid.
The mistake is the forex prices can be predicted on forex charts.
No they can't...
Of course if you are predicting you are hoping and guessing and that won't get you far in any venture in life, let alone forex trading.
Of course there are many vendors who will tell you prices can be predicted with scientific accuracy and the naïve trader swallows it.
The most popular scientific theories are based around the works of - Gann, Elliot wave and Fibonacci.
These guys never made money with their theories and neither will you - because the fact that markets move at all, proves there is no scientific theory... If there were a scientific theory, we would all know the price in advance and there would be no market - common sense really.
Other forex traders predict but they don't believe in scientific theories - their just trying to buy low and sell high and this doesn't work either.
For example - a trader sees the price dip to just above support, assumes it will hold and executes his trading signal. Of course sometimes it works, most of the time it does not.
Rather than hoping guessing or predicting - you need to get the odds in your favour. Forex trading is a game of odds not certainties but get them on your side and you can make a ton of money.
The Way To Win With Forex Charts
Lets say you see prices dip to support you don't buy you wait for momentum to turn up (you can read about momentum oscillators in our other articles) this gives you advance warning of a shift in price velocity and shows the level is likely to hold.
You can also use momentum to follow a break of support and trading breakouts is very profitable.
It's a fact that most big bullish or bearish moves start from new market lows or new highs and by following the breaks with momentum on your side you can catch the biggest trends.
So remember:
The next time you see someone say they can predict market tops or bottoms with 90% market accuracy - you know their lying and that if you try and predict with your forex charts, you simply lose all your money and do it quickly.
Use your forex charts correctly. Trade the odds, confirm each move with momentum and enjoy long term currency trading success.
About the Author
NEW! 2 X FREE ESSENTIAL TRADER PDFS
For free 2 x trading Pdf's with 90 of pages of essential info and an exclusive forex trading system for beginners visit our website at: http://www.learncurrencytradingonline.com
The mistake is the forex prices can be predicted on forex charts.
No they can't...
Of course if you are predicting you are hoping and guessing and that won't get you far in any venture in life, let alone forex trading.
Of course there are many vendors who will tell you prices can be predicted with scientific accuracy and the naïve trader swallows it.
The most popular scientific theories are based around the works of - Gann, Elliot wave and Fibonacci.
These guys never made money with their theories and neither will you - because the fact that markets move at all, proves there is no scientific theory... If there were a scientific theory, we would all know the price in advance and there would be no market - common sense really.
Other forex traders predict but they don't believe in scientific theories - their just trying to buy low and sell high and this doesn't work either.
For example - a trader sees the price dip to just above support, assumes it will hold and executes his trading signal. Of course sometimes it works, most of the time it does not.
Rather than hoping guessing or predicting - you need to get the odds in your favour. Forex trading is a game of odds not certainties but get them on your side and you can make a ton of money.
The Way To Win With Forex Charts
Lets say you see prices dip to support you don't buy you wait for momentum to turn up (you can read about momentum oscillators in our other articles) this gives you advance warning of a shift in price velocity and shows the level is likely to hold.
You can also use momentum to follow a break of support and trading breakouts is very profitable.
It's a fact that most big bullish or bearish moves start from new market lows or new highs and by following the breaks with momentum on your side you can catch the biggest trends.
So remember:
The next time you see someone say they can predict market tops or bottoms with 90% market accuracy - you know their lying and that if you try and predict with your forex charts, you simply lose all your money and do it quickly.
Use your forex charts correctly. Trade the odds, confirm each move with momentum and enjoy long term currency trading success.
About the Author
NEW! 2 X FREE ESSENTIAL TRADER PDFS
For free 2 x trading Pdf's with 90 of pages of essential info and an exclusive forex trading system for beginners visit our website at: http://www.learncurrencytradingonline.com
Saturday, January 26, 2008
Where To Find The Best Forex Trading Forums
If you are an individual that likes to invest in the foreign exchange market, then spending some time on forums dedicated to Forex trading may be helpful for you. Of course, some of these online forums are a better use of your time than others. Here are a few tips to help you find forums that will help you interact with other investors and benefit from the association.
One of the easiest methods of getting a lead on helpful forums is to talk with your dealer. There is a good chance that he or she will know of at least a couple of forums that would be right for you. Spend some time looking into these forums and see if they seem to do the trick. If not, you may pick up some good leads on other forums that might be of interest.
Another approach to finding the right Forex trading forums is to conduct an Internet search using your preferred currencies as part of the search criteria. By focusing your search more on forums that tend to deal more with the types of currency that you are interested in trading, you eliminate spending time checking out various boards that do not include the type of information you want. There are a number of forums online that focus more on the intricacies of working with specific currencies, so chances are you will find at least a few that will be just what you had in mind.
Keep in mind that as you search through the Internet, you will come across quite a few forums that will catch your eye. Make sure that as you go, you bookmark the ones that seem to be likely prospects for long term participation. Don't feel that you have to limit the number of forums you bookmark. If there is something that makes you feel a particular forum might be helpful, then include it in your favorites.
As you become more familiar with the forums you chose, several will begin to stand out from the rest of the pack. When this begins to occur, start trimming back your list of Forex trading forums a little at a time. Don't be in a big hurry to do this; as long as you feel there is some value to checking on a given forum from time to time, then keep the link handy. Over time, you will probably develop an affinity for a handful of forums and can delete the rest at that point.
Finding the right Forex trading forums is not a task you will complete in a day or two. That means patience will be very important in finding and evaluating different forums over a period of time. Just relax and take your time as you go through the steps necessary to decide if a forum is right for you. In the end, the results will be well worth your time and effort.
For more information on how to trade Forex like a pro, visit Forex Advisory Services now! Here you'll find tons of informative articles, as well as full reviews on the top Forex products and programs available today!
Article Source: http://EzineArticles.com/?expert=John_Q_Locke
One of the easiest methods of getting a lead on helpful forums is to talk with your dealer. There is a good chance that he or she will know of at least a couple of forums that would be right for you. Spend some time looking into these forums and see if they seem to do the trick. If not, you may pick up some good leads on other forums that might be of interest.
Another approach to finding the right Forex trading forums is to conduct an Internet search using your preferred currencies as part of the search criteria. By focusing your search more on forums that tend to deal more with the types of currency that you are interested in trading, you eliminate spending time checking out various boards that do not include the type of information you want. There are a number of forums online that focus more on the intricacies of working with specific currencies, so chances are you will find at least a few that will be just what you had in mind.
Keep in mind that as you search through the Internet, you will come across quite a few forums that will catch your eye. Make sure that as you go, you bookmark the ones that seem to be likely prospects for long term participation. Don't feel that you have to limit the number of forums you bookmark. If there is something that makes you feel a particular forum might be helpful, then include it in your favorites.
As you become more familiar with the forums you chose, several will begin to stand out from the rest of the pack. When this begins to occur, start trimming back your list of Forex trading forums a little at a time. Don't be in a big hurry to do this; as long as you feel there is some value to checking on a given forum from time to time, then keep the link handy. Over time, you will probably develop an affinity for a handful of forums and can delete the rest at that point.
Finding the right Forex trading forums is not a task you will complete in a day or two. That means patience will be very important in finding and evaluating different forums over a period of time. Just relax and take your time as you go through the steps necessary to decide if a forum is right for you. In the end, the results will be well worth your time and effort.
For more information on how to trade Forex like a pro, visit Forex Advisory Services now! Here you'll find tons of informative articles, as well as full reviews on the top Forex products and programs available today!
Article Source: http://EzineArticles.com/?expert=John_Q_Locke
Forex Trading System Strategies: How to Create a Simple But Accurate Forex Trading System by Gregory DeVictor
The foreign exchange market, or Forex market, is an around-the-clock cash market where the currencies of nations are bought and sold. The value of your Forex investment increases or decreases because of changes in the currency exchange rate or Forex rate. These changes can occur at any time, and often result from economic and political events. The purpose of this article is to present Forex trading system wisdom and strategies from some of the world's trading greats.
Do Not Play With Your Trading Losses: According to William Eckhardt, These evidently instinctive human tendencies spell doom for the trader - take your profits, but play with your losses.
Good Money Management Alone Is Not Enough: According to Monroe Trout, Good Money Management alone isn't going to increase your edge at all. If your system isn't any good, you're still going to lose money, no matter how effective your money management rules are. But if you have an approach that makes money, then money management can make the difference between success and failure.
Don't Optimize Trading Size: According to William Eckhardt, Trading Size is one aspect you don't want to optimize. The optimum comes just before the precipice. Do Not Play Catch Up: According to Richard Dennis, I learned to avoid trying to catch up or double up to recoup losses. I also learned that a certain amount of loss will affect your judgment, so you have to put some time between that loss and the next trade.
Trade Small: According to Mark Ritchie, I think it's generally a good idea that when you put on a trade, it should be so small that it seems almost a waste of your time. Always trade at a level that seems too small.
Do Not Override Your System Too Often: According to William Eckhardt, You should try to express your enthusiasm and ingenuity by doing research at night, not by overriding your system during the day. Overriding is something you should do only in unexpected circumstances - and then only with great forethought. If you find yourself overriding routinely, it's a sure sign that there's something that you want in the system that hasn't been included.
It Is A Skill You Can Learn: According to Michael Marcus, I think to be in the upper echelon of successful traders requires an innate skill, a gift. It's just like being a great violinist. But to be a competent trader and make money is a skill you can learn.
Be Greedy When Others Are Fearful: According to Warren Buffett, Be greedy when others are fearful.
Courage: According to Bill Lipschutz, It is not enough to simply have the insight to see something apart from the rest of the crowd, you also need to have the courage to act on it and to stay with it. It's very difficult to be different from the rest of the crowd the majority of the time, which by definition is what you are doing if you are a successful trader.
Not Losing Money: According to Linda Bradford Raschke, The good traders are the ones who can hold their ground the majority of the month and participate in that small handful of trades that are windfalls. The real skill is in not LOSING money!
Trading Forex on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite.
About the Author
Gregory DeVictor is a consultant who has been developing and marketing web sites since 1999. You can avoid the mistakes that 90% of Forex traders make and become part of the select 10% group of successful Forex traders. Learn more at: http://www.forex-trading-system.name
Do Not Play With Your Trading Losses: According to William Eckhardt, These evidently instinctive human tendencies spell doom for the trader - take your profits, but play with your losses.
Good Money Management Alone Is Not Enough: According to Monroe Trout, Good Money Management alone isn't going to increase your edge at all. If your system isn't any good, you're still going to lose money, no matter how effective your money management rules are. But if you have an approach that makes money, then money management can make the difference between success and failure.
Don't Optimize Trading Size: According to William Eckhardt, Trading Size is one aspect you don't want to optimize. The optimum comes just before the precipice. Do Not Play Catch Up: According to Richard Dennis, I learned to avoid trying to catch up or double up to recoup losses. I also learned that a certain amount of loss will affect your judgment, so you have to put some time between that loss and the next trade.
Trade Small: According to Mark Ritchie, I think it's generally a good idea that when you put on a trade, it should be so small that it seems almost a waste of your time. Always trade at a level that seems too small.
Do Not Override Your System Too Often: According to William Eckhardt, You should try to express your enthusiasm and ingenuity by doing research at night, not by overriding your system during the day. Overriding is something you should do only in unexpected circumstances - and then only with great forethought. If you find yourself overriding routinely, it's a sure sign that there's something that you want in the system that hasn't been included.
It Is A Skill You Can Learn: According to Michael Marcus, I think to be in the upper echelon of successful traders requires an innate skill, a gift. It's just like being a great violinist. But to be a competent trader and make money is a skill you can learn.
Be Greedy When Others Are Fearful: According to Warren Buffett, Be greedy when others are fearful.
Courage: According to Bill Lipschutz, It is not enough to simply have the insight to see something apart from the rest of the crowd, you also need to have the courage to act on it and to stay with it. It's very difficult to be different from the rest of the crowd the majority of the time, which by definition is what you are doing if you are a successful trader.
Not Losing Money: According to Linda Bradford Raschke, The good traders are the ones who can hold their ground the majority of the month and participate in that small handful of trades that are windfalls. The real skill is in not LOSING money!
Trading Forex on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite.
About the Author
Gregory DeVictor is a consultant who has been developing and marketing web sites since 1999. You can avoid the mistakes that 90% of Forex traders make and become part of the select 10% group of successful Forex traders. Learn more at: http://www.forex-trading-system.name
Friday, January 25, 2008
Forex - How to choose the best Broker for YOUR needs by Nick Moseley
Choosing a good FX currency broker can be as complex as Forex trading itself. For this reason you need to do your background work as tightly as you would (if not more so in fact) for a really big trade. Here are some tips to keep in mind to make your research and choice easier.
In the U.S., any worthwhile Forex broker will be registered as a Futures Commercial Merchant (FCM) with the CFTC (Commodities Futures Trading Commission). Finding one doesn't end the need for research, it's just the bare minimum you should require.
Since Forex trades are highly leveraged (in effect, the broker 'lends' an investor up to 99% of the money required to make a trade), the broker you select should be associated with a firm with deep pockets.
Forex accounts are not FDIC (Federal Deposit Insurance Corporation) insured, so you can not expect the U.S. government, or any other authority to bail out the broker firm or repay you if the market turns critically downward. Large institutions, with ample capital to withstand downturns in the market, and rapid drains on their deposits if clients withdraw en masse, are crucial to your financial peace of mind.
Beyond those rock bottom basics there are many options.
Since the Forex markets trade 24 hours per day all around the world, you may want to trade after normal business hours in your home country. Whether your broker resides in the same country (usually, for language and legal reasons) or not, you want one who will pick up the phone when you call.
Forex trading has moved into the Internet age, but it is still very much a phone-based business. Getting a broker on the phone at any time of the day or night can mean the difference between profit and loss. Sometimes, big profit or loss.
Since Forex brokers don't work off standard commissions the way stock or bond brokers do, you need to research the firm's spreads. Forex trading is always done in currency pairs. A spread is the difference between the bid and ask price - what the broker pays to buy versus the amount they sell a currency for.
Some brokers offer fixed spreads on some or all trades. This has the advantage of predictability. It's a kind of fixed 'commission'. But that may or may not suit your trading style or your budget, since they tend to be larger than variable spreads.
All brokers will offer a "standard" account to a qualified budget proven client. Typically you have to fill out an application form that states you have adequate capital and understand the risks involved in Forex trading. Standard accounts trade currency in standard lots of 100,000 units. You can't buy 100 euros for $150, you have to buy 100,000 euros.
Since that's a very large investment for the average trader, brokers offer leverage. Professional traders use leverage as well, of course. So basically you put in, say 1% of the total, the broker covers the 99%. That has huge profit (or loss) potential, but it entails significant risk. So be aware of a broker's margin call policy.
Many brokers today will offer some form of 'mini' account. Instead of trading in standard lots, they trade in smaller units, such as 10,000. This lowers the investment required from, say $2,500 to only $250. Most clients can easily meet that minimum.
But that lower leverage requirement limits the potential for profits. That may or may not suit your investment needs. Only you can decide.
You'll want a broker with software that provides you with the research and other trading tools you will need to be effective in Forex trading. Forex investing is much more complex and volatile than even stock or bond trading, which is already not simple when done well.
Be sure to use the trial accounts offered and make several 'fake' trades in order to test out the software and research available. You need real-time prices - Forex moves very fast - and lots of technical and fundamental analysis information at your fingertips.
There are websites and forums where specific brokers are discussed, but take what's said there with a grain of salt. Just as with complaints about vendors on eBay or Amazon and other large Internet trading arenas, a few bad remarks shouldn't ruin the reputation of honorable brokers.
Beyond all that, the factors become a little more difficult to judge. Above everything, you want to feel you trust the person on the other end of the line. They are not there to be your friend or listen to personal complaints or trade tips. But you should get the sense that they are competent, professional and ethical.
Take your time to research. After all, your decision will affect ALL your trades.
About the Author
From London, Nick now lives in Stockholm with wife Lena and Gunnar a Border Terrier. He likes long forest and lakes walks, is learning Swedish and loves making money from investments that are as cunning as a fox and go up even when the markets go down! He runs http://www.forex-master-trader.info which promotes a system called Forex Trend Trader and offers a free Forex for Beginners email course.
In the U.S., any worthwhile Forex broker will be registered as a Futures Commercial Merchant (FCM) with the CFTC (Commodities Futures Trading Commission). Finding one doesn't end the need for research, it's just the bare minimum you should require.
Since Forex trades are highly leveraged (in effect, the broker 'lends' an investor up to 99% of the money required to make a trade), the broker you select should be associated with a firm with deep pockets.
Forex accounts are not FDIC (Federal Deposit Insurance Corporation) insured, so you can not expect the U.S. government, or any other authority to bail out the broker firm or repay you if the market turns critically downward. Large institutions, with ample capital to withstand downturns in the market, and rapid drains on their deposits if clients withdraw en masse, are crucial to your financial peace of mind.
Beyond those rock bottom basics there are many options.
Since the Forex markets trade 24 hours per day all around the world, you may want to trade after normal business hours in your home country. Whether your broker resides in the same country (usually, for language and legal reasons) or not, you want one who will pick up the phone when you call.
Forex trading has moved into the Internet age, but it is still very much a phone-based business. Getting a broker on the phone at any time of the day or night can mean the difference between profit and loss. Sometimes, big profit or loss.
Since Forex brokers don't work off standard commissions the way stock or bond brokers do, you need to research the firm's spreads. Forex trading is always done in currency pairs. A spread is the difference between the bid and ask price - what the broker pays to buy versus the amount they sell a currency for.
Some brokers offer fixed spreads on some or all trades. This has the advantage of predictability. It's a kind of fixed 'commission'. But that may or may not suit your trading style or your budget, since they tend to be larger than variable spreads.
All brokers will offer a "standard" account to a qualified budget proven client. Typically you have to fill out an application form that states you have adequate capital and understand the risks involved in Forex trading. Standard accounts trade currency in standard lots of 100,000 units. You can't buy 100 euros for $150, you have to buy 100,000 euros.
Since that's a very large investment for the average trader, brokers offer leverage. Professional traders use leverage as well, of course. So basically you put in, say 1% of the total, the broker covers the 99%. That has huge profit (or loss) potential, but it entails significant risk. So be aware of a broker's margin call policy.
Many brokers today will offer some form of 'mini' account. Instead of trading in standard lots, they trade in smaller units, such as 10,000. This lowers the investment required from, say $2,500 to only $250. Most clients can easily meet that minimum.
But that lower leverage requirement limits the potential for profits. That may or may not suit your investment needs. Only you can decide.
You'll want a broker with software that provides you with the research and other trading tools you will need to be effective in Forex trading. Forex investing is much more complex and volatile than even stock or bond trading, which is already not simple when done well.
Be sure to use the trial accounts offered and make several 'fake' trades in order to test out the software and research available. You need real-time prices - Forex moves very fast - and lots of technical and fundamental analysis information at your fingertips.
There are websites and forums where specific brokers are discussed, but take what's said there with a grain of salt. Just as with complaints about vendors on eBay or Amazon and other large Internet trading arenas, a few bad remarks shouldn't ruin the reputation of honorable brokers.
Beyond all that, the factors become a little more difficult to judge. Above everything, you want to feel you trust the person on the other end of the line. They are not there to be your friend or listen to personal complaints or trade tips. But you should get the sense that they are competent, professional and ethical.
Take your time to research. After all, your decision will affect ALL your trades.
About the Author
From London, Nick now lives in Stockholm with wife Lena and Gunnar a Border Terrier. He likes long forest and lakes walks, is learning Swedish and loves making money from investments that are as cunning as a fox and go up even when the markets go down! He runs http://www.forex-master-trader.info which promotes a system called Forex Trend Trader and offers a free Forex for Beginners email course.
Profitable Forex Trading: Stop Asking Questions! by Harold Hsu
I heard this saying a few years ago: "If you have to ask you shouldn't be trading" And I thought to myself, wow, that's such a simple, yet powerful statement!
Think about it. If you had a reliable, trading system that consistently got you trading profits, would you EVER have to ask anyone else's opinion? Would you have to ask anyone questions about trading?
You see, too many traders today are asking question after question without bothering to find out the answers for themselves. These people scour online forums and websites, asking questions about trading and waiting for someone to provide a quick reply. And in the end, these people don't really learn anything except how to confuse themselves.
I think you'll agree with me that good traders are action-orientated. They look for news reports to read, plan out their trading systems, and execute their orders based on their research and knowledge. But what good traders Don't do however, is to ask other traders' opinions. One good reason for this is because more than 90% of the traders in the World today are losing traders anyway! Why get advice from people who can't trade for themselves?
Also, if you keep posing questions to different people, you'll eventually get very confused yourself. This is because many people trade in different ways. If you're a long-term trend trader, why ask advice from a day trader? If you're a value investor, then why seek an opinion from a momentum trader? This is a complete waste of time and effort.
Asking too many questions takes away your ability to feel responsible for your own actions. If a trade fails, it's not your fault right? After all, you took this trading advice from someone else... let's just blame that guy! He gave you bad trading advice and it's his fault that you lost money!
But guess what, that guy doesn't care. He's not the one losing money... you are! So take full ownership of your trading career, and find out the answers to your own questions if you have to. Don't rely on anyone else but yourself.
About the Author
To learn more, download my free 26-page guide here: "Forex Trading Traps!"
Harold Hsu is the owner of http://ForexSystemProfits.com where he provides premium Forex trading information and resources.
Think about it. If you had a reliable, trading system that consistently got you trading profits, would you EVER have to ask anyone else's opinion? Would you have to ask anyone questions about trading?
You see, too many traders today are asking question after question without bothering to find out the answers for themselves. These people scour online forums and websites, asking questions about trading and waiting for someone to provide a quick reply. And in the end, these people don't really learn anything except how to confuse themselves.
I think you'll agree with me that good traders are action-orientated. They look for news reports to read, plan out their trading systems, and execute their orders based on their research and knowledge. But what good traders Don't do however, is to ask other traders' opinions. One good reason for this is because more than 90% of the traders in the World today are losing traders anyway! Why get advice from people who can't trade for themselves?
Also, if you keep posing questions to different people, you'll eventually get very confused yourself. This is because many people trade in different ways. If you're a long-term trend trader, why ask advice from a day trader? If you're a value investor, then why seek an opinion from a momentum trader? This is a complete waste of time and effort.
Asking too many questions takes away your ability to feel responsible for your own actions. If a trade fails, it's not your fault right? After all, you took this trading advice from someone else... let's just blame that guy! He gave you bad trading advice and it's his fault that you lost money!
But guess what, that guy doesn't care. He's not the one losing money... you are! So take full ownership of your trading career, and find out the answers to your own questions if you have to. Don't rely on anyone else but yourself.
About the Author
To learn more, download my free 26-page guide here: "Forex Trading Traps!"
Harold Hsu is the owner of http://ForexSystemProfits.com where he provides premium Forex trading information and resources.
Thursday, January 24, 2008
Forex Trading - How To Keep A Trade Log by Harold Hsu
When many people think about a trade log, they often think along the lines of keeping a diary... you write down your trade details in pen (or pencil) and paper, right? While this may be one way of keeping a trade log, it's actually not the best one.
One of the best (and most convenient) ways of keeping a trade log is to do it on your computer. While many traders like to use a Microsoft Word document for this purpose, I personally prefer to use Excel instead.
But although the Microsoft Excel application is great for data entry, it's perhaps not too useful for writing down paragraphs of notes. Both Word and Excel have their own pros and cons... and it's up to you to decide which is best for you.
Computer software documents are easy to store and retrieve: just click 'Save' to keep it, and it's only a "double-click" away if you need to refer to it again. However, don't forget to keep backup copies of your trade log... you'll never know when technology might break down and fail.
Another choice is to use a tape recorder. This is often preferred by traders who don't particularly like to write. They just need to press the record button, and start speaking about their trade criteria and their feelings about a trade. This is the easiest way to record your trade details, but is also unfortunately the most tedious in terms of data retrieval (if you want to pull out past records, you'll have to listen through the entire voice recording).
Whichever method you choose, just make sure that you're comfortable and consistent with it. Don't use voice recordings today and then use a Word document tomorrow to log your trades. Your notes will end up all over the place, which makes future data retrieval a nightmare. Keep things simple and neat: always use the same format to log your trades.
About the Author
To learn more, download my free 26-page guide here: "Forex Trading Traps!"
Harold Hsu is the owner of http://ForexSystemProfits.com where he provides premium Forex trading information and resources.
One of the best (and most convenient) ways of keeping a trade log is to do it on your computer. While many traders like to use a Microsoft Word document for this purpose, I personally prefer to use Excel instead.
But although the Microsoft Excel application is great for data entry, it's perhaps not too useful for writing down paragraphs of notes. Both Word and Excel have their own pros and cons... and it's up to you to decide which is best for you.
Computer software documents are easy to store and retrieve: just click 'Save' to keep it, and it's only a "double-click" away if you need to refer to it again. However, don't forget to keep backup copies of your trade log... you'll never know when technology might break down and fail.
Another choice is to use a tape recorder. This is often preferred by traders who don't particularly like to write. They just need to press the record button, and start speaking about their trade criteria and their feelings about a trade. This is the easiest way to record your trade details, but is also unfortunately the most tedious in terms of data retrieval (if you want to pull out past records, you'll have to listen through the entire voice recording).
Whichever method you choose, just make sure that you're comfortable and consistent with it. Don't use voice recordings today and then use a Word document tomorrow to log your trades. Your notes will end up all over the place, which makes future data retrieval a nightmare. Keep things simple and neat: always use the same format to log your trades.
About the Author
To learn more, download my free 26-page guide here: "Forex Trading Traps!"
Harold Hsu is the owner of http://ForexSystemProfits.com where he provides premium Forex trading information and resources.
Forex Trading Logs: 4 Important Details To Include by Harold Hsu
Many traders know it’s a good idea to keep a trading log… but what exactly does a trader keep in his log?
While different people keep records of different details, here are 4 important points that you absolutely must include in your own log…
Detail #1: Entry/Exit setup (entry criteria)
The entry setup criteria is basically the market conditions which are required to trigger a buy or sell signal, according to your trading system (you DO have a trading system, right?)
This log serves as a reminder to yourself not to trade against the rules of your own system. Every time you’re tempted to enter into a trade that doesn’t follow your system rules, this step will hopefully remind you not to make that trade. Also, past entry setup logs help you to decide if a losing trade could have been avoided. If your log shows that you completely obeyed the rules of your system, then don’t beat yourself over a loss… you did the right thing.
Detail #2: Entry price & Lot Size
The lot size log serves to help you stick to your money management rules (you DO have a money management system, right?), and the entry/exit price helps you to calculate your pip gain or loss.
Detail #3: Time & Date
This log enables you to go back and analyze any specific trade you wish to examine. Without the time and date, you won’t know which portion of the trading charts you should be looking at.
Detail #4: Your Feelings
This is perhaps one of the most important logs to make. You’ll need to keep a record about how you feel about the trades that you took. Were you hesitant? Or were you confident? Keeping a record of your feelings helps you become aware of your psychological state when trading, and can be very helpful with identifying patterns in your trading behaviour.
About the Author
To learn more, download my free 26-page guide here: "Forex Trading Traps!"
Harold Hsu is the owner of http://ForexSystemProfits.com where he provides premium Forex trading information and resources.
While different people keep records of different details, here are 4 important points that you absolutely must include in your own log…
Detail #1: Entry/Exit setup (entry criteria)
The entry setup criteria is basically the market conditions which are required to trigger a buy or sell signal, according to your trading system (you DO have a trading system, right?)
This log serves as a reminder to yourself not to trade against the rules of your own system. Every time you’re tempted to enter into a trade that doesn’t follow your system rules, this step will hopefully remind you not to make that trade. Also, past entry setup logs help you to decide if a losing trade could have been avoided. If your log shows that you completely obeyed the rules of your system, then don’t beat yourself over a loss… you did the right thing.
Detail #2: Entry price & Lot Size
The lot size log serves to help you stick to your money management rules (you DO have a money management system, right?), and the entry/exit price helps you to calculate your pip gain or loss.
Detail #3: Time & Date
This log enables you to go back and analyze any specific trade you wish to examine. Without the time and date, you won’t know which portion of the trading charts you should be looking at.
Detail #4: Your Feelings
This is perhaps one of the most important logs to make. You’ll need to keep a record about how you feel about the trades that you took. Were you hesitant? Or were you confident? Keeping a record of your feelings helps you become aware of your psychological state when trading, and can be very helpful with identifying patterns in your trading behaviour.
About the Author
To learn more, download my free 26-page guide here: "Forex Trading Traps!"
Harold Hsu is the owner of http://ForexSystemProfits.com where he provides premium Forex trading information and resources.
Tuesday, January 22, 2008
Forex Market Information by T. Houser
Foreign exchange market thrives on forex information. The market is highly sensitive to all the news, which influences the price movement of currencies. It is also sensitive to the potential factors that may have a huge effect on currency pricing trends. The forex market is a great absorber of all the events and activities happening in the world economic zone and reflects that in the currency prices both spot and future.
If you want to be a consistently good performer in the forex market, you will need to keep yourself abreast of all the market movement and factors behind that. Remember that there are no easy way outs or short cuts. The only way to make a large profit is to tap the forex information and act on it fast. The market is highly profitable but it is also hugely risky. It rewards only those who are quick paced, informed and have a great sense of timing. Forex trading requires information and education. It also requires consistency and a disciplined performance. Even the greatest trading strategies can fail miserably if you fail to apply them in the most opportune manner. It is here that forex information can come to your benefit greatly.
Forex market is dependant upon the economic policies pursued by countries. The political and economic stability is one of the greatest factors exuding confidence in the consistent price movements. Inflationary tendencies, EXIM performance, global capital inflows, capital market performance, convertibility all have an influence on the currency prices and their trading patter in the forex market. You need to have fair amount of understanding to be a successful investor and trader.
The Forex market is huge. Much larger than the capital market and is more sophisticated and advanced. A large number of institutions like banks, investment managers and currency houses play aggressively in the market. In this scenario, your chances of beating the crowd and make good money depends upon quality of forex information available to you. Do your charting and technical analysis. Look for trends and patterns. It is always a good idea to concentrate on a few big patterns in a week and benefit from that. You can do that if you do your analysis correctly based on integration of data elements on a real time or near real time basis.
An understanding of the trading systems and its features can help you respond to events much faster. It is extremely important to be clinical in your approach rather then being emotional and attached to your investment. You have to learn not only to how to make profit but also how to limit your losses. Your forex information would help you do that with charting, technical parameters, patterns and trends, currency quotes, forex news items and brokerage recommendations forming part of your information bank. Foreign currency market is a great place for those who have an interest in making money the intelligent way. The market has been the success story of a large number of players and you can be one of them with the right forex information in your kitty.
About the Author
Are you interested in learning about the Forex Online Currency System? Our site provides plenty of useful information regarding Forex Trading. by T.D. Houser
If you want to be a consistently good performer in the forex market, you will need to keep yourself abreast of all the market movement and factors behind that. Remember that there are no easy way outs or short cuts. The only way to make a large profit is to tap the forex information and act on it fast. The market is highly profitable but it is also hugely risky. It rewards only those who are quick paced, informed and have a great sense of timing. Forex trading requires information and education. It also requires consistency and a disciplined performance. Even the greatest trading strategies can fail miserably if you fail to apply them in the most opportune manner. It is here that forex information can come to your benefit greatly.
Forex market is dependant upon the economic policies pursued by countries. The political and economic stability is one of the greatest factors exuding confidence in the consistent price movements. Inflationary tendencies, EXIM performance, global capital inflows, capital market performance, convertibility all have an influence on the currency prices and their trading patter in the forex market. You need to have fair amount of understanding to be a successful investor and trader.
The Forex market is huge. Much larger than the capital market and is more sophisticated and advanced. A large number of institutions like banks, investment managers and currency houses play aggressively in the market. In this scenario, your chances of beating the crowd and make good money depends upon quality of forex information available to you. Do your charting and technical analysis. Look for trends and patterns. It is always a good idea to concentrate on a few big patterns in a week and benefit from that. You can do that if you do your analysis correctly based on integration of data elements on a real time or near real time basis.
An understanding of the trading systems and its features can help you respond to events much faster. It is extremely important to be clinical in your approach rather then being emotional and attached to your investment. You have to learn not only to how to make profit but also how to limit your losses. Your forex information would help you do that with charting, technical parameters, patterns and trends, currency quotes, forex news items and brokerage recommendations forming part of your information bank. Foreign currency market is a great place for those who have an interest in making money the intelligent way. The market has been the success story of a large number of players and you can be one of them with the right forex information in your kitty.
About the Author
Are you interested in learning about the Forex Online Currency System? Our site provides plenty of useful information regarding Forex Trading. by T.D. Houser
Forex Trading Strategy - Managing Expectations and Finding the Strongest Trends by Tom Long
I have seen many new forex traders who while looking for at least 20 pips a day, end up losing big in an effort to reach this plateau. The problem is that the market environment changes to the point where there are many days where solid trading opportunities just cannot be found.
So the new trader puts on a trade that they normally would not even think about. If that trade becomes a loser, they now have to win that loss back and then another 20 pips before the end of the day. You can see how this can turn into a nightmare after a couple of questionable setups end up as losing trades in the same day.
I think a better goal is to strive to be profitable every month. If you end up with $1 more in your account at the end of the month from the beginning of the month, give yourself a pat on the back for being profitable. It is a series of monthly gains that can result in big returns. But you must treat trading as a business instead of a get rich quick scheme and keep your expectations realistic.
For almost all of 2007, many students in the FX Power Courses were buying pullbacks in the EUR/USD and selling rallies in the USD/CAD and doing quite well since they were trading with the trend. But trading has become more difficult lately as there has been little follow through on any move up in the EUR/USD or move down in the USD/CAD.
The difference is that they are still trading last year’s strongest trends and not taking another look at all of the pairs to judge the current trends. We have talked about the first step in finding a trade is to identify the strongest trends and to only trade in that same direction. But the strongest trends one month may not be the strongest trends in the next month.
Just because you made some money selling rallies in the USD/CAD all last spring, summer and fall, does not mean that this is the pair to trade in the winter. The first step is still to find the strongest trend to trade and that means be very picky each time you check the daily charts. Check out the current daily chart of the EUR/USD and compare that to the daily chart of the EUR/GBP. Which trend is stronger? That is the pair that you should be trading as the strongest trends offer the best trading opportunities.
Many times I hear from new traders who state that their goal is to make a certain number of pips every day. While it is important to establish goals in any endeavor, any benchmarks should be geared around your improvement as a trader and not about what you expect the market to give you.
Tom Long is an instructor of FXPowercourse.com, a tutorial site for forex brought to you by FXCM.com
About the Author
Tom Long is an instructor of FXPowercourse.com a forex trading course from FXCM.com.
So the new trader puts on a trade that they normally would not even think about. If that trade becomes a loser, they now have to win that loss back and then another 20 pips before the end of the day. You can see how this can turn into a nightmare after a couple of questionable setups end up as losing trades in the same day.
I think a better goal is to strive to be profitable every month. If you end up with $1 more in your account at the end of the month from the beginning of the month, give yourself a pat on the back for being profitable. It is a series of monthly gains that can result in big returns. But you must treat trading as a business instead of a get rich quick scheme and keep your expectations realistic.
For almost all of 2007, many students in the FX Power Courses were buying pullbacks in the EUR/USD and selling rallies in the USD/CAD and doing quite well since they were trading with the trend. But trading has become more difficult lately as there has been little follow through on any move up in the EUR/USD or move down in the USD/CAD.
The difference is that they are still trading last year’s strongest trends and not taking another look at all of the pairs to judge the current trends. We have talked about the first step in finding a trade is to identify the strongest trends and to only trade in that same direction. But the strongest trends one month may not be the strongest trends in the next month.
Just because you made some money selling rallies in the USD/CAD all last spring, summer and fall, does not mean that this is the pair to trade in the winter. The first step is still to find the strongest trend to trade and that means be very picky each time you check the daily charts. Check out the current daily chart of the EUR/USD and compare that to the daily chart of the EUR/GBP. Which trend is stronger? That is the pair that you should be trading as the strongest trends offer the best trading opportunities.
Many times I hear from new traders who state that their goal is to make a certain number of pips every day. While it is important to establish goals in any endeavor, any benchmarks should be geared around your improvement as a trader and not about what you expect the market to give you.
Tom Long is an instructor of FXPowercourse.com, a tutorial site for forex brought to you by FXCM.com
About the Author
Tom Long is an instructor of FXPowercourse.com a forex trading course from FXCM.com.
Saturday, January 19, 2008
Forex Trading - Breakout Systems
While there are many different varieties of Forex trading systems, one of the most reliable types are those that involve breakouts.
What is a breakout?
They are basically price movements that shoot out of a price consolidation range. Breakouts can occur either above resistance or below support levels.
What is the significance of it?
A breakout from a recent price consolidation typically indicates that prices are likely to keep moving in the same direction. If the breakout occurs above resistance levels, prices are likely to keep going up. If the it occurs below support levels, prices are likely to keep going down.
Why are breakouts good predictors of future price movement?
When the market price moves below support levels for example, it means that the buyers that were supporting the price have "run out of steam", resulting in the sellers pushing price down. And because the buyers have no more "strength", the remaining sellers are expected to further push the market price even lower.
The opposite is true for prices that breakout above resistance levels.
Are they 100% accurate in predicting future price movements?
Unfortunately, the answer is no. There is actually no single method that can predict future price movements with a 100% certainty. Price breakouts are only one of the many indicators you should include in your trading system and strategies.
I have entered into many trades where price breakouts reversed almost immediately after I placed my trade, so please be aware that prices may not always keep moving in the same direction.
To learn more, download my free 26-page guide here: "Forex Trading Traps!"
Harold Hsu is the owner of ForexSystemProfits.com where he provides premium Forex trading information and resources.
Article Source: http://EzineArticles.com/?expert=Harold_Hsu
What is a breakout?
They are basically price movements that shoot out of a price consolidation range. Breakouts can occur either above resistance or below support levels.
What is the significance of it?
A breakout from a recent price consolidation typically indicates that prices are likely to keep moving in the same direction. If the breakout occurs above resistance levels, prices are likely to keep going up. If the it occurs below support levels, prices are likely to keep going down.
Why are breakouts good predictors of future price movement?
When the market price moves below support levels for example, it means that the buyers that were supporting the price have "run out of steam", resulting in the sellers pushing price down. And because the buyers have no more "strength", the remaining sellers are expected to further push the market price even lower.
The opposite is true for prices that breakout above resistance levels.
Are they 100% accurate in predicting future price movements?
Unfortunately, the answer is no. There is actually no single method that can predict future price movements with a 100% certainty. Price breakouts are only one of the many indicators you should include in your trading system and strategies.
I have entered into many trades where price breakouts reversed almost immediately after I placed my trade, so please be aware that prices may not always keep moving in the same direction.
To learn more, download my free 26-page guide here: "Forex Trading Traps!"
Harold Hsu is the owner of ForexSystemProfits.com where he provides premium Forex trading information and resources.
Article Source: http://EzineArticles.com/?expert=Harold_Hsu
How Many Kinds Of Main Strategies Are There In Forex Trading?
There may be dozens of strategies in Forex trading. Let's just talk about the roots.
Nature Of Market:
Every thing in the universe has its NATURE. So is Forex market. So is every currencies pair in this market. For example, GBP/JPY always moves faster, and its wave range is longer than other pairs, such as a hundred pips during a day or even a hour. EUR/GBP generally waves narrowly several pips only within a day. For American, EUR/USD and GBP/USD like to sleep in day and dance at night. AUD/USD and NZD/USD look like twin, they commonly act in the same style, if one of they goes north, another one does not like to go south. But EUR/USD and USD/CHF are doomed to be enemy, while one of them flies up like a hydrogen balloon, the counterpart mostly will drop like a lead ball. And so on, so on.
Once we find this kind of "Nature of Market", we can develop and figure out some strategies for particular currencies pairs, just follow their nature, predict their moving direction and range. Then we will get our own trading strategy and system.
Fundamental Trading:
In Forex market, many professional analysts like to use a kind of method to predict the future. It is so-called "Fundamental Analysis". Based on this method, they develop many kinds of strategies to trade Forex. These are strategies of forecasting the future price movements of currencies based on economic, political, environmental and other relevant factors and statistics that will affect the basic supply and demand of whatever underlies the foreign currencies.
If you like to try Fundamental Trading, you need learn and understand a lot of finance knowledge. Actually, not only finance knowledge, you need to be interested at many things of this world, including politics, economy, geography, culture, diplomacy, even military affairs. And you need to study the core underlying elements that influence the economy of a particular entity. For example, when the USA's GDP or employment report is strong, you begin to get a fairly clear picture: the general health of America's economy is good. So the US dollar should be stronger than other currencies. But how far can the US dollar go? Fundamental Trading may not answer this question very accurately. You may need to come up with other precise tools as to how best to translate this information into entry and exit points for a particular trading strategy.
Hedge:
In finance, a hedge is an investment that is taken out specifically to reduce the risk in another investment. Hedging is a strategy designed to minimize exposure to an unwanted business risk, while still allowing the business to profit from an investment activity.
In FOREX, there are two kinds of similar "hedging" strategies:
1, Buy and Sell the same currencies pair, same lots, same timing. Then let it go. While one of those orders goes north, the counterpart will go south. After the winner takes profit, we can wait for the loser turning around. In a yo-yo market, this method works well.
For example, buy 2 lots GBP/USD at 2.0003, at the same time sell 2 lots GBP/USD at 1.9997. While the rate rises up to 2.0053, we close the buy order and take profit 50 pips. Now, the sell order will draw down around 50 pips. Let's wait for the rate falling down, it will fall down usually, especially in yo-yo market environment. If the rate drops down to 2.0037, close the sell order, the sell order will lose 40 pips. Does it hurt? No. Don't forget the 50 pips we have taken at the buy order. Totally, we can get 50-40=10 pips. Furthermore, if the rate keeps falling, let's say down to 2.0027, we can take 50-30=20 pips, etc.
Some people would doubt it... doesn't this "strategy" sound like hedging flat for nothing, just paying double spread? Why bother? Well, they are right, because we forgot mentioning the key point: timing of closing orders. When to close the winning order to set a foundation and when to close the losing order to lock the profit, there are some tricks inside. Experienced traders use technical analysis skills to decide this vital timing. Believe it or not, those experienced traders say that this method helps them screening false signals out.
This kind of "Yo-Yo Hedge" can work at any currencies pair.
2, Buy (or sell) unequal lots of special currencies pairs and buy unequal quantities of another kinds of currencies pairs which usually move in the opposite direction. This seems a "Semi-Hedge" trading strategy. It is created based on "Correlation" between some particular currencies pairs. So it is not suitable for every currencies pair.
Actually, this kind of hedge has another feature: earning SWAP! You earn interest daily on the held position which can yield up to 50% per year of your full account balance.
There are several pairs can do it. Such as EUR/USD Vs. USD /CHF, GBP/USD Vs. USD/CHF, AUD/USD Vs. NZD/USD, EUR/JPY Vs. CHF/JPY, GBP/JPY Vs. CHF/JPY.
Let's take the EUR/USD and the CHF/USD pairs.
These pairs are historically negatively correlative 93-98% of the time. That is when one pair goes up the other goes down, and vice versa, up to 98% of the time. In a high leverage account (as high as 400:1 or 500:1), you could earn 50% SWAP interest in a year. How? Let's say you have $5,000 in your account and a 10% risk margin set. If the net interest we receive is 1.25% annually, this 1.25% interest will be enlarged to 50% per annum, by the 400:1 leverage.
And, this return does not include the buy low/sell high profits.
But, if the base of this kind of hedge collapses, it means the "Correlation" does not exist any more, for example the "Correlation" drops under 50% or lower, there will be a disaster.
Arbitrage:
Some people call "Arbitrage" as a risk free strategy. But other people call it as a trick which looks like the cat pawing chestnuts from a fire. But in theory, its risk is minimum in deed. We introduce three types of arbitrage strategies here:
1, Triangle Arbitrage: Searching for two highly fast-moving pairs (like EUR/USD and USD/JPY), the price of a not-so-fast moving pair like EURJPY should always be derived by multiplying (or dividing, etc) the fast-moving pairs. So for example, if EUR/USD is 1.4871 and USD/JPY is 108.24, the logical price of EUR/JPY should be 1.2 x 120 = 160.96. But at the same time, the real EUR/JPY rate is 160.90. The slower moving pair lags behind the logical price, then profit opportunity comes.
In practice currencies are quoted with a bid ask spread, so a trader should be careful that he is actually buying at the quoted ask price, and selling at the quoted bid price. Other transaction costs, such as commissions, might also invalidate the apparent free lunch.
More pairs:
AUD/CAD CAD/JPY AUD/JPY
AUD/CAD GBP/CAD GBP/AUD
AUD/CAD USD/CAD AUD/USD
AUD/CHF CHF/JPY AUD/JPY
AUD/CHF GBP/CHF GBP/AUD
AUD/CHF USD/CHF AUD/USD
AUD/JPY EUR/JPY EUR/AUD
AUD/JPY GBP/JPY GBP/AUD
AUD/JPY USD/JPY AUD/USD
AUD/USD GBP/USD GBP/AUD
AUD/USD USD/CAD AUD/CAD
AUD/USD USD/CHF AUD/CHF
AUD/USD USD/JPY AUD/JPY
CAD/JPY EUR/JPY EUR/CAD
CAD/JPY GBP/JPY GBP/CAD
CAD/JPY USD/JPY USD/CAD
CHF/JPY EUR/JPY EUR/CHF
CHF/JPY GBP/JPY GBP/CHF
EUR/AUD AUD/CHF EUR/CHF
EUR/AUD AUD/JPY EUR/JPY
EUR/AUD AUD/USD EUR/USD
EUR/AUD GBP/AUD EUR/GBP
EUR/CAD AUD/CAD EUR/AUD
EUR/CAD GBP/CAD EUR/CAD
EUR/CAD USD/CAD EUR/USD
EUR/CHF AUD/CHF EUR/AUD
EUR/CHF GBP/CHF EUR/GBP
EUR/CHF USD/CHF EUR/USD
EUR/GBP GBP/AUD EUR/AUD
EUR/GBP GBP/CAD EUR/CAD
EUR/GBP GBP/CHF EUR/CHF
EUR/GBP GBP/JPY EUR/JPY
EUR/GBP GBP/USD EUR/USD
EUR/JPY GBP/JPY EUR/GBP
EUR/JPY USD/JPY EUR/USD
EUR/USD GBP/USD EUR/GBP
EUR/USD USD/JPY EUR/JPY
GBP/JPY USD/JPY GBP/USD
2, Hedging Arbitrage:
This technique is the safest ever, and the most profitable of all hedging techniques while keeping minimal risks. This technique uses the arbitrage of roll over interest rates (SWAP) between two brokers.
One broker which pays or charges roll over interest at end of day, and the other should not charge or pay this kind of roll over SWAP interest. The main idea about this type of Hedge Arbitrage is to open a position of currency (Fore example, the highest SWAP GBP/JPY) at a broker which will pay you a high interest for every night the position is carried, and to open a reverse of that position for the same currency with the broker that does not charge interest for carrying the trade. This way you will gain the interest or SWAP that is credited to your account, risk-free.
3, Netting Arbitrage:
The main idea behind the strategy is, using differences between cross rates (such as EUR/USD, GBP/USD, and EUR/GBP) at different markets.
For example, suppose you had opened the following positions:
buy 1 lot EUR/USD at 1.4867;
sell 1 lot EUR/GBP at 0.7600;
and sell 0.76 lot GBP/USD at 1.9586.
The netting/clearing gives the following results:Long EUR from the first pair and short EUR from the second pair gives zero exposure in EUR.Long position in GBP from the second pair and short position from the third pair gives zero exposure in GBP.Short position from the first pair ($148,670.00) in USD and long position from the third pair ($195,860.00*0.76) in USD gives you $183.60 profit without open positions and exposures. Simple? Not really for small traders, may be for those "big brothers" only. Because it is really hard to play spread, slippage, stop loss hunting or so on games against brokers.
Carry Trading:
Carry trading is a well known trading strategy which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate. Then this investor can make profit from the difference of these two interest rates.
JPY is currently considered to be the most popular currency to use as the low interest yielding currency in the carry trade, because its interest rate is the lowest of the world almost at 0. And GBP is currently considered to be the high yielding currency. So are NZD and AUD.
When we buy these currencies pairs: GBP/JPY, AUD/JPY, GBP/CHF, USD/JPY, or EUR/CHF; Or sell: EUR/AUD, EUR/GBP, AUD/NZD; Both actions can yield positive SWAP roll over interest. If combining with some kinds of hedge trading, we can make as high as 100% profit annually and keep the risk low.
The big risk in a carry trading is the uncertainty of exchange rates. Also, these transactions are generally done with a high leverage, so a small movement in exchange rates can result in huge losses unless hedged appropriately.
Martingale:
Originally, martingale referred to a class of betting strategies popular in 18th century France. In Forex trading, the strategy let the trader double his/her order lots after every loss, so that the first win would recover all previous losses plus win a profit equal to the original investment. In the example below, you bought 1 lot EUR/USD at 1.4650. Unfortunately, the rate drops. You play it in martingale way, "double down", buy two lots, you need the EUR/USD to rally from 1.4630 to 1.4640 to break even. As the price moves lower and you add four lots, you only need it to rally to 1.4625 instead of 1.4640 to break even. The more lots you add, the lower your average entry price. Even though you may lose 100 pips on the first lot of the EUR/USD if the price hits 1.4550, you only need the currencies pair to rally to 1.4569 to break even on your entire holdings. Once the rate goes up one more pip, you will win a lot.
EUR/USD Lots Average or Breakeven Price
1.4650 1 1.4650
1.4630 2 1.4640
1.4610 4 1.4625
1.4590 8 1.4605
1.4570 16 1.4588
1.4550 32 1.4569
The Martingale strategy needs a very strict money management and you must understand that in the beginning money will be coming slowly, but if you lose the patience and raise risk level up to much, you may not hang on to the end to see the turn-around.
Anti-Martingale:
The anti-martingale strategy is the opposite of the better known martingale approach. This approach instead increases order lots after wins, while reducing them after a loss. Using an anti-martingale risk management scheme will increase profits during time periods when a trading approach is working well, while automatically decreasing exposure during portions of the cycle where trading is unprofitable. This is believed to decrease the risk of ruin for trading.
Grid:
Basically the trader sets a series of entry limit orders X pips from the current price, for example 15 pips. Some experienced traders like to use the Fibonacci Series Numbers (0, 1, 1, 2, 3, 5, 8, 13, ...) or Golden Section Numbers to make this grid. Once price hits the level the limit order is executed. Then every 15 pips there is another order at limit price executed. And so on. In a yo-yo market, while the price moves up or down, there always be some limit orders executed. Once the order is taken profit, and the price moves to its original level again, a new limit order shall be executed again, then repeat the same process. Just open orders and take profits in a set of "grid". It is simple and easy, but hard to deal with when and how to close all orders, especially the Stop Loss. Some experts say we do not need stop loss, but will you take the chance to hold your all positions till "Margin Call?"
Day trading:
This refers to the practice of buying and selling currencies pairs such that all positions will usually be closed within the same Forex the trading day. The day trading idea comes from stock market. Day traders rapidly buy and sell stocks throughout the day in the hope that their stocks will continue climbing or falling in value for the seconds to minutes they own the stock, allowing them to lock in quick profits. Day trading is extremely risky and can result in substantial financial losses in a very short period of time. Under the rules of NYSE and NASD, customers who are deemed "pattern day traders" must have at least $25,000 in their accounts and can only trade in margin accounts.
But in Forex market, every one can be a day trader to do day trading. Actually, more than day trading, they can do "scalping".
Scalping:
Scalping is a trading style where small price gaps created by the bid-ask spreads are exploited. It normally involves establishing and liquidating a position quickly, usually within minutes or even seconds. It means trying to get a few points (1~3 pips only, no greed, no long term) off the market every time. This strategy is based on a fact: approximately 70 to 80% of the time, the market is in a consolidation pattern. What this means is that for the majority of time the market is not making significant moves. For example, after the USA market is closed and before the Europe market is open, the Forex market tends to range in a consolidation channel for hours at a time before making another significant move in one direction. This kind of market behavior pattern is ideal for Forex scalping. Every time you enter the market, wait 10 or 20 minutes, once you have several pips gain then cash it and go.
Scalping has some features:
1, Lower exposure, lower risks. Scalpers are only exposed in a relatively short period.
2, Smaller moves, easier to obtain. The normal wave of the market will give you several pips easily.
3, Large volume, adding profits up. Since the profit obtained per share or contract is very small due to its target of spread, they need to trade large in order to add up the profits. Scalping is not suitable for small-capital traders.
But be careful, not every broker welcomes this kind of scalping strategy. If you scalp it too quick and thin, let's say you just hit 1 pip every 2 or 3 minutes then run, and repeat it again and again within a day, every day, you must feel high, eh? But the broker may be not happy and bans you. You will be kicked out because of your successful scalping!
Break-Out:
Using the Bollinger Bands indicator on a chart, we will find every Forex currencies pair is waving in a "band", or a channel. By finding major support and resistance levels with technical analysis, a Break-Out strategy trader will buy this pair at the lower level of support (bottom of the band/channel) and sell them near resistance (top of the band/channel). Till now there is not a Break-Out yet.
Once the price breaks the upper range line with larger-than-average volume, or the opposite: the price breaks the lower range line with larger-than-average volume, the chance is coming. The idea of this strategy is that when a currencies pair breaks out of the channel, it usually experiences a large price movement in the direction of the breakout. So buy it at the price breaks the upper range line and continue to hold it until the rate has risen a distance comparable to the height of the range. If it goes down instead, stop losses as it penetrates the upper range line. Or, sell it at the price breaks the lower range line, and continue to hold it until the rate has fallen a distance comparable to the height of the range. If it goes up instead, stop losses as it penetrates the lower range line.
Pivot:
Besides Support and Resistance levels, many foreign exchange traders like to use another indicator to analyze and predict currency pairs' price changes, it is so-called: the Pivot Point. To calculate and analyze pivot is a subset of technical analysis, with this bench mark, traders can locate the rotation point of the trend, and this is very helpful for deciding when and where to buy or sell.
Classical Pivot Point, Support and Resistance Formulas are as follows:
Look at any one chart, the pivot is an average of the previous bar's high, low, and closing prices. In the following formula, "H" represents the previous bar's high, "L" represents the previous bar's low, and "C" represents the previous bar's closing price.
Current Bar's Pivot Point (P)=Previous Bar's (H+L+C)/3
First level of support and resistance can be calculated as follows:
First Resistance Level (R1)=(2*P)-L
First Support Level (S1)=(2*P)-H
Likewise, the second level of support and resistance:
Second Resistance Level (R2)=P+(R1-S1)
Second Support Level (S2)=P-(R1-S1)
Since many currency pairs tend to fluctuate between Support and Resistance levels, and these levels are calculated based on Pivot points, so when a trend or breakout trader knows where the pivot point is, it will enable him/her to find out key levels that need to be broken for a move to qualify as a breakout.
News Trading:
The system is developed based on economic news events from around the world. Nearly half of those announcements have moved the market significantly. Before a big news is coming, we can buy and sell some currencies pairs at the same time, same lots, set stop loss prices for them. After the news is released, especially for the big one, both sides of buy order and sell order will jump significantly. No matter which order is a winner, just let it go. And the loser will hit the Stop Loss, just let it be. The winner's gain minus the loser's loss, it is your news trading profit. For example, Non-Farm Payrolls/Employment Report - The NFP is the most influential news release of every month. It's announced on the first Friday of the month at 8:30am EST for the prior month. We can put a buy order and a sell order at market prices for GBP/USD, at 8:29 am EST. Don't forget, set 30 pips Stop Loss level for them. Wait 2 minutes only, the news is announced, it is a big one! Then the sell order jumps over 100 pips, and the buy order drops like a brick. The brick hits the Stop Loss and the pain is over. Totally, your gain could be 100-30=70 pips. Quick and easy, cool enough?
Trend Following:
It is so simple, just follow the trend. Buy it is the most difficult strategy because no one can tell you 100% for sure what is the right TREND. Go to look at a weekly chat of USD/CAD, if you had shorted this pair in September 2001 and held it till September 2007, you know what the trend means.
The most famous trend analysis tool seems the Wave Principle. In the 1930s, Ralph Nelson Elliott discovered that stock market prices trend and reverse in recognizable patterns. Elliott isolated five such patterns, or "waves," that recur in market price data.
Another trend analysis guru should be W. D. Gann. In 1908, Gann discovered what he called the "market time factor", which made him one of the pioneers of technical analysis. To test his new strategy, he opened one account with $300 and one with $150. It turned out to be wildly successful: Gann was able to make $25,000 profit with his $300 account in only three months; meanwhile, he made $12,000 profit with his $150 account in only 30 days! After his results were verified, he became famous on Wall Street as one of the best forecasters of all time.
Back to the chat of USD/CAD, now, please tell me, how to follow the trend? Will USD/CAD continue the trend which is going south further to 0.6000, or, another trend going north reversely back to 1.6000?
If you would like to find out more about Forex trading, come and visit us at http://www.vdux.com
If you want to download our Raingull Automated Trading Software EA, please come to http://www.raingull.com
Article Source: http://EzineArticles.com/?expert=Victor_Mars
Nature Of Market:
Every thing in the universe has its NATURE. So is Forex market. So is every currencies pair in this market. For example, GBP/JPY always moves faster, and its wave range is longer than other pairs, such as a hundred pips during a day or even a hour. EUR/GBP generally waves narrowly several pips only within a day. For American, EUR/USD and GBP/USD like to sleep in day and dance at night. AUD/USD and NZD/USD look like twin, they commonly act in the same style, if one of they goes north, another one does not like to go south. But EUR/USD and USD/CHF are doomed to be enemy, while one of them flies up like a hydrogen balloon, the counterpart mostly will drop like a lead ball. And so on, so on.
Once we find this kind of "Nature of Market", we can develop and figure out some strategies for particular currencies pairs, just follow their nature, predict their moving direction and range. Then we will get our own trading strategy and system.
Fundamental Trading:
In Forex market, many professional analysts like to use a kind of method to predict the future. It is so-called "Fundamental Analysis". Based on this method, they develop many kinds of strategies to trade Forex. These are strategies of forecasting the future price movements of currencies based on economic, political, environmental and other relevant factors and statistics that will affect the basic supply and demand of whatever underlies the foreign currencies.
If you like to try Fundamental Trading, you need learn and understand a lot of finance knowledge. Actually, not only finance knowledge, you need to be interested at many things of this world, including politics, economy, geography, culture, diplomacy, even military affairs. And you need to study the core underlying elements that influence the economy of a particular entity. For example, when the USA's GDP or employment report is strong, you begin to get a fairly clear picture: the general health of America's economy is good. So the US dollar should be stronger than other currencies. But how far can the US dollar go? Fundamental Trading may not answer this question very accurately. You may need to come up with other precise tools as to how best to translate this information into entry and exit points for a particular trading strategy.
Hedge:
In finance, a hedge is an investment that is taken out specifically to reduce the risk in another investment. Hedging is a strategy designed to minimize exposure to an unwanted business risk, while still allowing the business to profit from an investment activity.
In FOREX, there are two kinds of similar "hedging" strategies:
1, Buy and Sell the same currencies pair, same lots, same timing. Then let it go. While one of those orders goes north, the counterpart will go south. After the winner takes profit, we can wait for the loser turning around. In a yo-yo market, this method works well.
For example, buy 2 lots GBP/USD at 2.0003, at the same time sell 2 lots GBP/USD at 1.9997. While the rate rises up to 2.0053, we close the buy order and take profit 50 pips. Now, the sell order will draw down around 50 pips. Let's wait for the rate falling down, it will fall down usually, especially in yo-yo market environment. If the rate drops down to 2.0037, close the sell order, the sell order will lose 40 pips. Does it hurt? No. Don't forget the 50 pips we have taken at the buy order. Totally, we can get 50-40=10 pips. Furthermore, if the rate keeps falling, let's say down to 2.0027, we can take 50-30=20 pips, etc.
Some people would doubt it... doesn't this "strategy" sound like hedging flat for nothing, just paying double spread? Why bother? Well, they are right, because we forgot mentioning the key point: timing of closing orders. When to close the winning order to set a foundation and when to close the losing order to lock the profit, there are some tricks inside. Experienced traders use technical analysis skills to decide this vital timing. Believe it or not, those experienced traders say that this method helps them screening false signals out.
This kind of "Yo-Yo Hedge" can work at any currencies pair.
2, Buy (or sell) unequal lots of special currencies pairs and buy unequal quantities of another kinds of currencies pairs which usually move in the opposite direction. This seems a "Semi-Hedge" trading strategy. It is created based on "Correlation" between some particular currencies pairs. So it is not suitable for every currencies pair.
Actually, this kind of hedge has another feature: earning SWAP! You earn interest daily on the held position which can yield up to 50% per year of your full account balance.
There are several pairs can do it. Such as EUR/USD Vs. USD /CHF, GBP/USD Vs. USD/CHF, AUD/USD Vs. NZD/USD, EUR/JPY Vs. CHF/JPY, GBP/JPY Vs. CHF/JPY.
Let's take the EUR/USD and the CHF/USD pairs.
These pairs are historically negatively correlative 93-98% of the time. That is when one pair goes up the other goes down, and vice versa, up to 98% of the time. In a high leverage account (as high as 400:1 or 500:1), you could earn 50% SWAP interest in a year. How? Let's say you have $5,000 in your account and a 10% risk margin set. If the net interest we receive is 1.25% annually, this 1.25% interest will be enlarged to 50% per annum, by the 400:1 leverage.
And, this return does not include the buy low/sell high profits.
But, if the base of this kind of hedge collapses, it means the "Correlation" does not exist any more, for example the "Correlation" drops under 50% or lower, there will be a disaster.
Arbitrage:
Some people call "Arbitrage" as a risk free strategy. But other people call it as a trick which looks like the cat pawing chestnuts from a fire. But in theory, its risk is minimum in deed. We introduce three types of arbitrage strategies here:
1, Triangle Arbitrage: Searching for two highly fast-moving pairs (like EUR/USD and USD/JPY), the price of a not-so-fast moving pair like EURJPY should always be derived by multiplying (or dividing, etc) the fast-moving pairs. So for example, if EUR/USD is 1.4871 and USD/JPY is 108.24, the logical price of EUR/JPY should be 1.2 x 120 = 160.96. But at the same time, the real EUR/JPY rate is 160.90. The slower moving pair lags behind the logical price, then profit opportunity comes.
In practice currencies are quoted with a bid ask spread, so a trader should be careful that he is actually buying at the quoted ask price, and selling at the quoted bid price. Other transaction costs, such as commissions, might also invalidate the apparent free lunch.
More pairs:
AUD/CAD CAD/JPY AUD/JPY
AUD/CAD GBP/CAD GBP/AUD
AUD/CAD USD/CAD AUD/USD
AUD/CHF CHF/JPY AUD/JPY
AUD/CHF GBP/CHF GBP/AUD
AUD/CHF USD/CHF AUD/USD
AUD/JPY EUR/JPY EUR/AUD
AUD/JPY GBP/JPY GBP/AUD
AUD/JPY USD/JPY AUD/USD
AUD/USD GBP/USD GBP/AUD
AUD/USD USD/CAD AUD/CAD
AUD/USD USD/CHF AUD/CHF
AUD/USD USD/JPY AUD/JPY
CAD/JPY EUR/JPY EUR/CAD
CAD/JPY GBP/JPY GBP/CAD
CAD/JPY USD/JPY USD/CAD
CHF/JPY EUR/JPY EUR/CHF
CHF/JPY GBP/JPY GBP/CHF
EUR/AUD AUD/CHF EUR/CHF
EUR/AUD AUD/JPY EUR/JPY
EUR/AUD AUD/USD EUR/USD
EUR/AUD GBP/AUD EUR/GBP
EUR/CAD AUD/CAD EUR/AUD
EUR/CAD GBP/CAD EUR/CAD
EUR/CAD USD/CAD EUR/USD
EUR/CHF AUD/CHF EUR/AUD
EUR/CHF GBP/CHF EUR/GBP
EUR/CHF USD/CHF EUR/USD
EUR/GBP GBP/AUD EUR/AUD
EUR/GBP GBP/CAD EUR/CAD
EUR/GBP GBP/CHF EUR/CHF
EUR/GBP GBP/JPY EUR/JPY
EUR/GBP GBP/USD EUR/USD
EUR/JPY GBP/JPY EUR/GBP
EUR/JPY USD/JPY EUR/USD
EUR/USD GBP/USD EUR/GBP
EUR/USD USD/JPY EUR/JPY
GBP/JPY USD/JPY GBP/USD
2, Hedging Arbitrage:
This technique is the safest ever, and the most profitable of all hedging techniques while keeping minimal risks. This technique uses the arbitrage of roll over interest rates (SWAP) between two brokers.
One broker which pays or charges roll over interest at end of day, and the other should not charge or pay this kind of roll over SWAP interest. The main idea about this type of Hedge Arbitrage is to open a position of currency (Fore example, the highest SWAP GBP/JPY) at a broker which will pay you a high interest for every night the position is carried, and to open a reverse of that position for the same currency with the broker that does not charge interest for carrying the trade. This way you will gain the interest or SWAP that is credited to your account, risk-free.
3, Netting Arbitrage:
The main idea behind the strategy is, using differences between cross rates (such as EUR/USD, GBP/USD, and EUR/GBP) at different markets.
For example, suppose you had opened the following positions:
buy 1 lot EUR/USD at 1.4867;
sell 1 lot EUR/GBP at 0.7600;
and sell 0.76 lot GBP/USD at 1.9586.
The netting/clearing gives the following results:Long EUR from the first pair and short EUR from the second pair gives zero exposure in EUR.Long position in GBP from the second pair and short position from the third pair gives zero exposure in GBP.Short position from the first pair ($148,670.00) in USD and long position from the third pair ($195,860.00*0.76) in USD gives you $183.60 profit without open positions and exposures. Simple? Not really for small traders, may be for those "big brothers" only. Because it is really hard to play spread, slippage, stop loss hunting or so on games against brokers.
Carry Trading:
Carry trading is a well known trading strategy which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate. Then this investor can make profit from the difference of these two interest rates.
JPY is currently considered to be the most popular currency to use as the low interest yielding currency in the carry trade, because its interest rate is the lowest of the world almost at 0. And GBP is currently considered to be the high yielding currency. So are NZD and AUD.
When we buy these currencies pairs: GBP/JPY, AUD/JPY, GBP/CHF, USD/JPY, or EUR/CHF; Or sell: EUR/AUD, EUR/GBP, AUD/NZD; Both actions can yield positive SWAP roll over interest. If combining with some kinds of hedge trading, we can make as high as 100% profit annually and keep the risk low.
The big risk in a carry trading is the uncertainty of exchange rates. Also, these transactions are generally done with a high leverage, so a small movement in exchange rates can result in huge losses unless hedged appropriately.
Martingale:
Originally, martingale referred to a class of betting strategies popular in 18th century France. In Forex trading, the strategy let the trader double his/her order lots after every loss, so that the first win would recover all previous losses plus win a profit equal to the original investment. In the example below, you bought 1 lot EUR/USD at 1.4650. Unfortunately, the rate drops. You play it in martingale way, "double down", buy two lots, you need the EUR/USD to rally from 1.4630 to 1.4640 to break even. As the price moves lower and you add four lots, you only need it to rally to 1.4625 instead of 1.4640 to break even. The more lots you add, the lower your average entry price. Even though you may lose 100 pips on the first lot of the EUR/USD if the price hits 1.4550, you only need the currencies pair to rally to 1.4569 to break even on your entire holdings. Once the rate goes up one more pip, you will win a lot.
EUR/USD Lots Average or Breakeven Price
1.4650 1 1.4650
1.4630 2 1.4640
1.4610 4 1.4625
1.4590 8 1.4605
1.4570 16 1.4588
1.4550 32 1.4569
The Martingale strategy needs a very strict money management and you must understand that in the beginning money will be coming slowly, but if you lose the patience and raise risk level up to much, you may not hang on to the end to see the turn-around.
Anti-Martingale:
The anti-martingale strategy is the opposite of the better known martingale approach. This approach instead increases order lots after wins, while reducing them after a loss. Using an anti-martingale risk management scheme will increase profits during time periods when a trading approach is working well, while automatically decreasing exposure during portions of the cycle where trading is unprofitable. This is believed to decrease the risk of ruin for trading.
Grid:
Basically the trader sets a series of entry limit orders X pips from the current price, for example 15 pips. Some experienced traders like to use the Fibonacci Series Numbers (0, 1, 1, 2, 3, 5, 8, 13, ...) or Golden Section Numbers to make this grid. Once price hits the level the limit order is executed. Then every 15 pips there is another order at limit price executed. And so on. In a yo-yo market, while the price moves up or down, there always be some limit orders executed. Once the order is taken profit, and the price moves to its original level again, a new limit order shall be executed again, then repeat the same process. Just open orders and take profits in a set of "grid". It is simple and easy, but hard to deal with when and how to close all orders, especially the Stop Loss. Some experts say we do not need stop loss, but will you take the chance to hold your all positions till "Margin Call?"
Day trading:
This refers to the practice of buying and selling currencies pairs such that all positions will usually be closed within the same Forex the trading day. The day trading idea comes from stock market. Day traders rapidly buy and sell stocks throughout the day in the hope that their stocks will continue climbing or falling in value for the seconds to minutes they own the stock, allowing them to lock in quick profits. Day trading is extremely risky and can result in substantial financial losses in a very short period of time. Under the rules of NYSE and NASD, customers who are deemed "pattern day traders" must have at least $25,000 in their accounts and can only trade in margin accounts.
But in Forex market, every one can be a day trader to do day trading. Actually, more than day trading, they can do "scalping".
Scalping:
Scalping is a trading style where small price gaps created by the bid-ask spreads are exploited. It normally involves establishing and liquidating a position quickly, usually within minutes or even seconds. It means trying to get a few points (1~3 pips only, no greed, no long term) off the market every time. This strategy is based on a fact: approximately 70 to 80% of the time, the market is in a consolidation pattern. What this means is that for the majority of time the market is not making significant moves. For example, after the USA market is closed and before the Europe market is open, the Forex market tends to range in a consolidation channel for hours at a time before making another significant move in one direction. This kind of market behavior pattern is ideal for Forex scalping. Every time you enter the market, wait 10 or 20 minutes, once you have several pips gain then cash it and go.
Scalping has some features:
1, Lower exposure, lower risks. Scalpers are only exposed in a relatively short period.
2, Smaller moves, easier to obtain. The normal wave of the market will give you several pips easily.
3, Large volume, adding profits up. Since the profit obtained per share or contract is very small due to its target of spread, they need to trade large in order to add up the profits. Scalping is not suitable for small-capital traders.
But be careful, not every broker welcomes this kind of scalping strategy. If you scalp it too quick and thin, let's say you just hit 1 pip every 2 or 3 minutes then run, and repeat it again and again within a day, every day, you must feel high, eh? But the broker may be not happy and bans you. You will be kicked out because of your successful scalping!
Break-Out:
Using the Bollinger Bands indicator on a chart, we will find every Forex currencies pair is waving in a "band", or a channel. By finding major support and resistance levels with technical analysis, a Break-Out strategy trader will buy this pair at the lower level of support (bottom of the band/channel) and sell them near resistance (top of the band/channel). Till now there is not a Break-Out yet.
Once the price breaks the upper range line with larger-than-average volume, or the opposite: the price breaks the lower range line with larger-than-average volume, the chance is coming. The idea of this strategy is that when a currencies pair breaks out of the channel, it usually experiences a large price movement in the direction of the breakout. So buy it at the price breaks the upper range line and continue to hold it until the rate has risen a distance comparable to the height of the range. If it goes down instead, stop losses as it penetrates the upper range line. Or, sell it at the price breaks the lower range line, and continue to hold it until the rate has fallen a distance comparable to the height of the range. If it goes up instead, stop losses as it penetrates the lower range line.
Pivot:
Besides Support and Resistance levels, many foreign exchange traders like to use another indicator to analyze and predict currency pairs' price changes, it is so-called: the Pivot Point. To calculate and analyze pivot is a subset of technical analysis, with this bench mark, traders can locate the rotation point of the trend, and this is very helpful for deciding when and where to buy or sell.
Classical Pivot Point, Support and Resistance Formulas are as follows:
Look at any one chart, the pivot is an average of the previous bar's high, low, and closing prices. In the following formula, "H" represents the previous bar's high, "L" represents the previous bar's low, and "C" represents the previous bar's closing price.
Current Bar's Pivot Point (P)=Previous Bar's (H+L+C)/3
First level of support and resistance can be calculated as follows:
First Resistance Level (R1)=(2*P)-L
First Support Level (S1)=(2*P)-H
Likewise, the second level of support and resistance:
Second Resistance Level (R2)=P+(R1-S1)
Second Support Level (S2)=P-(R1-S1)
Since many currency pairs tend to fluctuate between Support and Resistance levels, and these levels are calculated based on Pivot points, so when a trend or breakout trader knows where the pivot point is, it will enable him/her to find out key levels that need to be broken for a move to qualify as a breakout.
News Trading:
The system is developed based on economic news events from around the world. Nearly half of those announcements have moved the market significantly. Before a big news is coming, we can buy and sell some currencies pairs at the same time, same lots, set stop loss prices for them. After the news is released, especially for the big one, both sides of buy order and sell order will jump significantly. No matter which order is a winner, just let it go. And the loser will hit the Stop Loss, just let it be. The winner's gain minus the loser's loss, it is your news trading profit. For example, Non-Farm Payrolls/Employment Report - The NFP is the most influential news release of every month. It's announced on the first Friday of the month at 8:30am EST for the prior month. We can put a buy order and a sell order at market prices for GBP/USD, at 8:29 am EST. Don't forget, set 30 pips Stop Loss level for them. Wait 2 minutes only, the news is announced, it is a big one! Then the sell order jumps over 100 pips, and the buy order drops like a brick. The brick hits the Stop Loss and the pain is over. Totally, your gain could be 100-30=70 pips. Quick and easy, cool enough?
Trend Following:
It is so simple, just follow the trend. Buy it is the most difficult strategy because no one can tell you 100% for sure what is the right TREND. Go to look at a weekly chat of USD/CAD, if you had shorted this pair in September 2001 and held it till September 2007, you know what the trend means.
The most famous trend analysis tool seems the Wave Principle. In the 1930s, Ralph Nelson Elliott discovered that stock market prices trend and reverse in recognizable patterns. Elliott isolated five such patterns, or "waves," that recur in market price data.
Another trend analysis guru should be W. D. Gann. In 1908, Gann discovered what he called the "market time factor", which made him one of the pioneers of technical analysis. To test his new strategy, he opened one account with $300 and one with $150. It turned out to be wildly successful: Gann was able to make $25,000 profit with his $300 account in only three months; meanwhile, he made $12,000 profit with his $150 account in only 30 days! After his results were verified, he became famous on Wall Street as one of the best forecasters of all time.
Back to the chat of USD/CAD, now, please tell me, how to follow the trend? Will USD/CAD continue the trend which is going south further to 0.6000, or, another trend going north reversely back to 1.6000?
If you would like to find out more about Forex trading, come and visit us at http://www.vdux.com
If you want to download our Raingull Automated Trading Software EA, please come to http://www.raingull.com
Article Source: http://EzineArticles.com/?expert=Victor_Mars
Friday, January 18, 2008
Online Forex Trading Strategies
Forex trading strategies are the key to successful forex trading or online currency trading. A knowledge of these forex trading strategies can mean the difference between a profit and a loss and it is therefore imperative that you fully understand the strategies used in forex trading.
Forex trading is very different from trading in stocks and using forex trading strategies will give you more advantages and help you realize even greater profits in the short term. There are a wide range of forex trading strategies available to investors and one of the most useful of these forex trading strategies is a strategy known as leverage.
This forex trading strategy is designed to allow online currency traders to avail of more funds than are deposited and by using this forex trading strategy you can maximize the forex trading benefits. Using this strategy you can actually utilize as much as 100 times the amount in your deposit account against any forex trade which will make backing higher yielding transactions even easier and therefore allowing better results in your forex trading
The leverage forex trading strategy is used on a regular basis and allows investors to take advantage of short term fluctuations in the forex market.
Another commonly used forex trading strategy is known as the stop loss order. This forex trading strategy is used to protect investors and it creates a predetermined point at which the investor will not trade. Using this forex trading strategy allows investors to minimize losses. This strategy can however, backfire and the investor can run the risk of stopping their forex trading which could actually go higher and it really is up to the individual trader to choose whether or not to use this forex trading strategy.
An automatic entry order is another of the forex trading strategies that is commonly used and this strategy is used to allow investors to enter into forex trading when the price is right for them. The price is predetermined and once reached the investor will automatically enter into the trading.
All these forex trading strategies are designed to help investors get the most from their forex trading and help to minimize their losses. As mentioned earlier knowledge of these forex trading strategies is vital if you wish to be successful in forex trading.
We have made the most comprehensive research on Forex trading. Check it out on Online Forex System – Secrets Revealed. All about Forex on http://www.leandernet.com/Forex/Online_forex_trading.php
Article Source: http://EzineArticles.com/?expert=Oliver_Turner
Forex trading is very different from trading in stocks and using forex trading strategies will give you more advantages and help you realize even greater profits in the short term. There are a wide range of forex trading strategies available to investors and one of the most useful of these forex trading strategies is a strategy known as leverage.
This forex trading strategy is designed to allow online currency traders to avail of more funds than are deposited and by using this forex trading strategy you can maximize the forex trading benefits. Using this strategy you can actually utilize as much as 100 times the amount in your deposit account against any forex trade which will make backing higher yielding transactions even easier and therefore allowing better results in your forex trading
The leverage forex trading strategy is used on a regular basis and allows investors to take advantage of short term fluctuations in the forex market.
Another commonly used forex trading strategy is known as the stop loss order. This forex trading strategy is used to protect investors and it creates a predetermined point at which the investor will not trade. Using this forex trading strategy allows investors to minimize losses. This strategy can however, backfire and the investor can run the risk of stopping their forex trading which could actually go higher and it really is up to the individual trader to choose whether or not to use this forex trading strategy.
An automatic entry order is another of the forex trading strategies that is commonly used and this strategy is used to allow investors to enter into forex trading when the price is right for them. The price is predetermined and once reached the investor will automatically enter into the trading.
All these forex trading strategies are designed to help investors get the most from their forex trading and help to minimize their losses. As mentioned earlier knowledge of these forex trading strategies is vital if you wish to be successful in forex trading.
We have made the most comprehensive research on Forex trading. Check it out on Online Forex System – Secrets Revealed. All about Forex on http://www.leandernet.com/Forex/Online_forex_trading.php
Article Source: http://EzineArticles.com/?expert=Oliver_Turner
Thursday, January 17, 2008
Forex Online Trading - What NOT To Believe
Learning to trade Forex is not difficult at all. In my experience, it takes the average person about 10 days to learn enough to begin trading.
However, it's a fact that almost 95% of all Forex traders fail to make any money!
One of the reasons, I believe, why so many retail traders lose money is because they buy into all the hype and unrealistic expectations that some unscrupulous Forex marketers want them to believe. This results in many traders not getting the right education and information in order to trade profitably.
The marketers want you to believe that there's a "hidden secret" to profitable Forex trading. They want you to believe that there are top-level "underground" traders out there that hold the "holy grail" of Forex trading... and that they're willing to sell it to you at a low price of under two hundred dollars.
Come on, who are they trying to kid? No one would possibly buy into this hogwash, would they?
Unfortunately, as much as common sense tells them this is probably too good to be true, thousands of people every month buy into these scam trading "systems". It's sad, but it's the truth.
In all honesty, there are no hidden secrets to successful Forex trading. Good trading involves logical, rational thinking coupled with hard work and discipline. That's pretty much all you'll need - not some super "black hat", mysterious "underground" trading system that will make you an instant millionaire.
But many people don't like to hear about this truth because it just doesn't sound sexy or exciting. They like to think that trading is like being in a casino - you just have to strike it rich once, and you'll be set for life! Yeah, right.
So please, don't fall into this way of thinking. Just put in the hard work, and be persistent. The rewards will pay off handsomely.
To learn more, download my free 26-page guide here: "Forex Trading Traps!"
Harold Hsu is the owner of ForexSystemProfits.com where he provides premium Forex trading information and resources.
Article Source: http://EzineArticles.com/?expert=Harold_Hsu
However, it's a fact that almost 95% of all Forex traders fail to make any money!
One of the reasons, I believe, why so many retail traders lose money is because they buy into all the hype and unrealistic expectations that some unscrupulous Forex marketers want them to believe. This results in many traders not getting the right education and information in order to trade profitably.
The marketers want you to believe that there's a "hidden secret" to profitable Forex trading. They want you to believe that there are top-level "underground" traders out there that hold the "holy grail" of Forex trading... and that they're willing to sell it to you at a low price of under two hundred dollars.
Come on, who are they trying to kid? No one would possibly buy into this hogwash, would they?
Unfortunately, as much as common sense tells them this is probably too good to be true, thousands of people every month buy into these scam trading "systems". It's sad, but it's the truth.
In all honesty, there are no hidden secrets to successful Forex trading. Good trading involves logical, rational thinking coupled with hard work and discipline. That's pretty much all you'll need - not some super "black hat", mysterious "underground" trading system that will make you an instant millionaire.
But many people don't like to hear about this truth because it just doesn't sound sexy or exciting. They like to think that trading is like being in a casino - you just have to strike it rich once, and you'll be set for life! Yeah, right.
So please, don't fall into this way of thinking. Just put in the hard work, and be persistent. The rewards will pay off handsomely.
To learn more, download my free 26-page guide here: "Forex Trading Traps!"
Harold Hsu is the owner of ForexSystemProfits.com where he provides premium Forex trading information and resources.
Article Source: http://EzineArticles.com/?expert=Harold_Hsu
Using Law of Attraction to Increase your Wealth Creating Opportunity in Forex Trading
Forex Trading is just one of the many wealth crating mean and process to achieve wealth. As far as wealth goes, you don't need money to be happy. A lot of people refer to cliché like "Money is not everything". There is truth to that statement but the opposite also holds true- without money you may have nothing!
I believe wealth will only follow those who 'think' and 'see' themselves as wealthy. Only then will the Universe present you with wealth creation opportunities. If you have the opportunities but don't act upon them, you will not be able to convert it to real wealth. Forex Trading is one of the many conversions to wealth.
Before we could achieve anything in life, we need first to condition our minds. We need to feed our brains with all positive thoughts. Positive affirmations can help to overcome all negative thoughts and assist in promoting a healthy state of mind.
Most of us don't realize that if we constantly tell ourselves negative things, we are building a destructive belief system. A negative but powerful barrier, which limit and prevent us from achieving success in life. Many self improvement gurus have mentioned that one of the most effective ways to change this belief system is to replace misguided negative messages with new positive ones.
Many Gurus said that the power of positive affirmations will make itself felt if you repeat them DAILY and when you are thinking negatively. The Law of Attraction is perfect and will follow only your thoughts and actions.
Personally I try to watch these videos just before the start of a new Forex Trading day. It really inspires me to make TODAY successful
The following affirmations are those from the video clip of MarcyFromMaui under the title "The Secret Riches Visualization Tool". You can also develop others of your own. Tell yourself:
"I am a money magnet
Everything I touch turns to gold
I have more riches than King Soloman's mines
Money falls like an avalanche over me
There is more money being printed for me right now
I am receiving money making ideas every day
I am receiving unexpected checks in the mail
I have more than enough money for everything that I want
I have my dream home
I have the best of everything
I am grateful and celebrate everyday
I know when to ask for what
I wantNo matter what it is that
I wantNo matter how impossible it may seem
I believe and know its mine
The answer must be... (your wish is my command)"
Of all the money making opportunities, Forex Trading is just one method that you can act upon to attain your goals to abundant of wealth.
JoonTrader is the owner of forexdiscover.com For further recommended resources on how to make money in Forex Trading. Click here to grab the secret to consistent pips.
Article Source: http://EzineArticles.com/?expert=Joon_Trade
I believe wealth will only follow those who 'think' and 'see' themselves as wealthy. Only then will the Universe present you with wealth creation opportunities. If you have the opportunities but don't act upon them, you will not be able to convert it to real wealth. Forex Trading is one of the many conversions to wealth.
Before we could achieve anything in life, we need first to condition our minds. We need to feed our brains with all positive thoughts. Positive affirmations can help to overcome all negative thoughts and assist in promoting a healthy state of mind.
Most of us don't realize that if we constantly tell ourselves negative things, we are building a destructive belief system. A negative but powerful barrier, which limit and prevent us from achieving success in life. Many self improvement gurus have mentioned that one of the most effective ways to change this belief system is to replace misguided negative messages with new positive ones.
Many Gurus said that the power of positive affirmations will make itself felt if you repeat them DAILY and when you are thinking negatively. The Law of Attraction is perfect and will follow only your thoughts and actions.
Personally I try to watch these videos just before the start of a new Forex Trading day. It really inspires me to make TODAY successful
The following affirmations are those from the video clip of MarcyFromMaui under the title "The Secret Riches Visualization Tool". You can also develop others of your own. Tell yourself:
"I am a money magnet
Everything I touch turns to gold
I have more riches than King Soloman's mines
Money falls like an avalanche over me
There is more money being printed for me right now
I am receiving money making ideas every day
I am receiving unexpected checks in the mail
I have more than enough money for everything that I want
I have my dream home
I have the best of everything
I am grateful and celebrate everyday
I know when to ask for what
I wantNo matter what it is that
I wantNo matter how impossible it may seem
I believe and know its mine
The answer must be... (your wish is my command)"
Of all the money making opportunities, Forex Trading is just one method that you can act upon to attain your goals to abundant of wealth.
JoonTrader is the owner of forexdiscover.com For further recommended resources on how to make money in Forex Trading. Click here to grab the secret to consistent pips.
Article Source: http://EzineArticles.com/?expert=Joon_Trade
Saturday, January 12, 2008
Forex Charts - Avoid These Myths or Lose Money Quickly
Using forex charts and technical analysis is a great way to enjoy currency trading success - the problem is most traders fall victim to common myths and join the 95% of losing traders. Here we will look at the forex chart myths to avoid.
1. Do Not Try and Predict!
Probably the most common error of all is when a forex trader tries to predict where a price is going to go to next and it's doomed to failure - Why?
Because if you predict you are hoping and guessing and you will find your predictions are about as accurate as your horoscope.
You don't get anywhere in life by predicting and certainly not forex trading - you need to trade the reality of price change.
2. Trade Valid Data
If you want to trade successfully you need to trade the odds and you cant do that in forex day trading because the time period is to short for the data to be valid. It doesn't matter how good your forex trading system is, apply it to day trading and you will lose.
3. Complicating a Trading Plan
It's a well know fact that simple trading systems work better than complicated ones as they are more robust in the face of ever changing brutal market conditions. Add to many indicators in and your system will have more elements to break.
So remember keep your currency trading system simple and profitable.
4. Not Buying Breakouts
Most traders like to buy low and sell high and this is a by product of trying to predict. Traders simply don't like buying trends in motion when they have missed a bit of the move - well if you don't, you will never catch the really big trends and will lose.
It's a fact that most major moves start from new market highs NOT market lows - so you need to forget buy low sell high, as a way to make money and think- buy high sell higher.
5. The Markets Move To a Scientific Theory
Many traders believe that as human nature is constant there must be a repetitive scientific formula that markets move to and they fall for scientific theories such as those sold by discipline of Gann, Elliot and Fibonacci and they lose.
Why?
Because its pretty obvious that markets don't move to a scientific theory as if it did we would all know the price in advance and their would be no market!
This is really common sense but you would be surprised at how many traders base their forex trading strategies on scientific nonsense.
6. No Indicator works all the time
This is obvious however you would be surprised at how many traders simply think buying dips to a moving average is a great way to make money! Always use a combination of 2 or 3 complimentary indicators and it's always good to use support and resistance lines as well, when generating a trading signal.
7. Using Indicators Incorrectly
We just gave you an example of using an indicator in isolation and also buying a dip to a moving average is incorrect usage - Why?
Because it's a lagging indicator and cannot confirm trades - you need to combine it with a leading indicator.
Another example is traders who set stop losses at the outer bands of the Bollinger band - this is not a good idea, because it's a volatility band that changes all the time, may move your stop to far away and cause you a big loss.
The above are common errors and if you make any of them you will lose. Forex charts are a great way to make money, charting is simple to learn, time efficient and works so learn how to use your forex charts correctly, by avoiding the above errors and you can enjoy long term forex success.
PROFESSIONAL FOREX TRADING COURSEand FREE ESSENTIAL TRADER PDFS
For free 2 x trading Pdf's with 90 of pages of essential info and an exclusive Currency Trading System visit our website at: http://www.learncurrencytradingonline.com
Article Source: http://EzineArticles.com/?expert=Kelly_Price
1. Do Not Try and Predict!
Probably the most common error of all is when a forex trader tries to predict where a price is going to go to next and it's doomed to failure - Why?
Because if you predict you are hoping and guessing and you will find your predictions are about as accurate as your horoscope.
You don't get anywhere in life by predicting and certainly not forex trading - you need to trade the reality of price change.
2. Trade Valid Data
If you want to trade successfully you need to trade the odds and you cant do that in forex day trading because the time period is to short for the data to be valid. It doesn't matter how good your forex trading system is, apply it to day trading and you will lose.
3. Complicating a Trading Plan
It's a well know fact that simple trading systems work better than complicated ones as they are more robust in the face of ever changing brutal market conditions. Add to many indicators in and your system will have more elements to break.
So remember keep your currency trading system simple and profitable.
4. Not Buying Breakouts
Most traders like to buy low and sell high and this is a by product of trying to predict. Traders simply don't like buying trends in motion when they have missed a bit of the move - well if you don't, you will never catch the really big trends and will lose.
It's a fact that most major moves start from new market highs NOT market lows - so you need to forget buy low sell high, as a way to make money and think- buy high sell higher.
5. The Markets Move To a Scientific Theory
Many traders believe that as human nature is constant there must be a repetitive scientific formula that markets move to and they fall for scientific theories such as those sold by discipline of Gann, Elliot and Fibonacci and they lose.
Why?
Because its pretty obvious that markets don't move to a scientific theory as if it did we would all know the price in advance and their would be no market!
This is really common sense but you would be surprised at how many traders base their forex trading strategies on scientific nonsense.
6. No Indicator works all the time
This is obvious however you would be surprised at how many traders simply think buying dips to a moving average is a great way to make money! Always use a combination of 2 or 3 complimentary indicators and it's always good to use support and resistance lines as well, when generating a trading signal.
7. Using Indicators Incorrectly
We just gave you an example of using an indicator in isolation and also buying a dip to a moving average is incorrect usage - Why?
Because it's a lagging indicator and cannot confirm trades - you need to combine it with a leading indicator.
Another example is traders who set stop losses at the outer bands of the Bollinger band - this is not a good idea, because it's a volatility band that changes all the time, may move your stop to far away and cause you a big loss.
The above are common errors and if you make any of them you will lose. Forex charts are a great way to make money, charting is simple to learn, time efficient and works so learn how to use your forex charts correctly, by avoiding the above errors and you can enjoy long term forex success.
PROFESSIONAL FOREX TRADING COURSEand FREE ESSENTIAL TRADER PDFS
For free 2 x trading Pdf's with 90 of pages of essential info and an exclusive Currency Trading System visit our website at: http://www.learncurrencytradingonline.com
Article Source: http://EzineArticles.com/?expert=Kelly_Price
Forex Trading For Beginners - A Lesson from the Turtles for Forex Success
Here we are going to outline the story of "the turtles" who were a group of people who had never traded before and went on to make over $100 million in just four years. This article is all about learning forex trading for beginners and the lessons that you can learn from the turtles, for long term forex success.
The story begins over 20 years ago in 1983, when trading legend Richard Dennis decided to prove that anyone could learn currency trading - with the right training so, he conducted an experiment.
He gathered a group of 14 people together, from all walks of life, both sexes, various ages, who had varying levels of education and then set about teaching them to trade in just 14 days.
After the 14 days training was completed, he had taught them a forex trading strategy to execute in real time and set them up with real money and real accounts - the result?
This group of traders went on to make $100 million dollars in just 4 years and many went on to become trading legends.
So what can you learn from this experiment?
The first point is - it shows the potential of trading using leverage and although you may not make as much money as the turtles with your forex trading system, it shows that anyone can learn if, they have a desire to learn and the right education.
It also shows that trading is a specifically learned skill, not some god given gift and that all people can learn. It showed that to win at forex trading you don't' need to work hard but work smart and get the right forex education, rather than knowledge for knowledge sake.
Perhaps the most important point that you can learn from the experiment is:
If you read the writings and interviews with formal turtles, they all stress that the system was easy to learn, the hard part was following it with discipline.
This is a common problem for any involved in trading.
It's hard to continually execute your trading signals with discipline, when you are in a period of drawdown and losses. This is why it is so vital to have the knowledge and confidence in what you are doing to hold your discipline.
THE REAL KEY TO SUCCESS
Is inner understanding of what you are doing, to enable you to have the confidence to execute your trading strategy with discipline.
Today, many traders simply don't want to do this - they want to follow a guru or expert and think they can give them success with no effort and of course they lose.
Dennis knew that for his disciples to trade successfully, he had to teach them how and why the method worked, so they understood what they were doing and could hold their nerve.
The fact is currency trading success looks easy to achieve but it eludes most traders, because they can't hold their nerve and trade with discipline.
While the turtle experiment took place over 20 years ago, the lessons it can teach us are as valid today as they ever were.
Forex trading for beginners looks straightforward to most newbie's - but the turtle lesson shows us, not only what you need to do but give any trader inspiration in their trading career with the success that they achieved.
This story inspired me to trade and hope it inspires you to.
PROFESSIONAL FOREX TRADING COURSEand FREE ESSENTIAL TRADER PDFS
For free 2 x trading Pdf's with 90 of pages of essential info and an exclusive Forex Trading For Beginners course visit our website at: http://www.learncurrencytradingonline.com
Article Source: http://EzineArticles.com/?expert=Monica_Hendrix
The story begins over 20 years ago in 1983, when trading legend Richard Dennis decided to prove that anyone could learn currency trading - with the right training so, he conducted an experiment.
He gathered a group of 14 people together, from all walks of life, both sexes, various ages, who had varying levels of education and then set about teaching them to trade in just 14 days.
After the 14 days training was completed, he had taught them a forex trading strategy to execute in real time and set them up with real money and real accounts - the result?
This group of traders went on to make $100 million dollars in just 4 years and many went on to become trading legends.
So what can you learn from this experiment?
The first point is - it shows the potential of trading using leverage and although you may not make as much money as the turtles with your forex trading system, it shows that anyone can learn if, they have a desire to learn and the right education.
It also shows that trading is a specifically learned skill, not some god given gift and that all people can learn. It showed that to win at forex trading you don't' need to work hard but work smart and get the right forex education, rather than knowledge for knowledge sake.
Perhaps the most important point that you can learn from the experiment is:
If you read the writings and interviews with formal turtles, they all stress that the system was easy to learn, the hard part was following it with discipline.
This is a common problem for any involved in trading.
It's hard to continually execute your trading signals with discipline, when you are in a period of drawdown and losses. This is why it is so vital to have the knowledge and confidence in what you are doing to hold your discipline.
THE REAL KEY TO SUCCESS
Is inner understanding of what you are doing, to enable you to have the confidence to execute your trading strategy with discipline.
Today, many traders simply don't want to do this - they want to follow a guru or expert and think they can give them success with no effort and of course they lose.
Dennis knew that for his disciples to trade successfully, he had to teach them how and why the method worked, so they understood what they were doing and could hold their nerve.
The fact is currency trading success looks easy to achieve but it eludes most traders, because they can't hold their nerve and trade with discipline.
While the turtle experiment took place over 20 years ago, the lessons it can teach us are as valid today as they ever were.
Forex trading for beginners looks straightforward to most newbie's - but the turtle lesson shows us, not only what you need to do but give any trader inspiration in their trading career with the success that they achieved.
This story inspired me to trade and hope it inspires you to.
PROFESSIONAL FOREX TRADING COURSEand FREE ESSENTIAL TRADER PDFS
For free 2 x trading Pdf's with 90 of pages of essential info and an exclusive Forex Trading For Beginners course visit our website at: http://www.learncurrencytradingonline.com
Article Source: http://EzineArticles.com/?expert=Monica_Hendrix
Friday, January 11, 2008
Forex and the Risk Element
Time and time again I hear the statement that trading on a margin account is a risky business. In fact the NFA and CFTC require that all brokers and agents inform the public of the risks of trading on the foreign exchange.
So how much risk is actually involved in trading Forex? Is it any riskier than engaging in any other kind of business?
Let us first look at the hypothetical case of John and Mary. Each of them opened a forex trading account and funded it with $50,000. Both of them operated on a margin set at 100:1.
John traded very conservatively using one regular lot per trade and applying reasonable money management principals. Unfortunately, John was a poor decision maker and did little to improve his trading skills. Over a period of time, John lost his entire investment.
Mary had no intention of being shackled by the constraints of money management and traded to the maximum of her account margin, each trade carrying the maximum lot size permitted. After a few spectacular gains, Mary's luck ran out and her account was wiped out. Despite being in profit to the tune of $2,500,000 she had lost it all and her original investment was gone too.
So who took the most risk?
If you answered Mary - you are wrong!
Mary is a multi-millionaire. She has several mansions two yachts and a private jet. Her main income is from oil and her company owns some of the largest oil reserves in the world. The possibility of losing $50,000 for Mary is a very small risk. It is similar for her to that of anyone purchasing a lottery ticket - nice if it gives you a few million dollars, but no big deal if it doesn't.
John on the other hand was in a very different situation. John had taken a mortgage on his house to fund his trading account. He had no savings and had even given up his job to start full time trading.
As you can see from the two tales above, risk is about more than what percentage of your account you put at risk.
In our next example, Mike and Sarah both open mini accounts with $5,000. Both are using a margin of 100:1. Neither Mike nor Sarah are independently wealthy but each can easily afford to lose their $5000 without it adversely affecting their lives.
Both start trading and due to lack of experience do not fare very well. After a short time Mike stops live trading and starts to practice in a demo account. Mike seeks help and knowledge and then practices in his demo account to hone those new found skills.
When Mike starts to trade his live account again he uses very strict money management and a well developed trading system. Mike has not yet made a fortune, but he is starting to recover some of the investment that he lost.
Sarah continued to trade without any help. She is still managing to stay afloat.
So who was at the most risk in this example? I would suggest that it was Sarah. Her luck is still holding but if your trading style is built upon luck. You are at great risk.
Trading the forex market requires that you develop a style of risk management. It is necessary to understand the true risk of each trade as it applies to both the market in general and to you in particular.
If you always trade with money that you can afford to lose, your total risk is reduced. If you learn how to trade effectively, then your risk is further reduced and likewise if you adopt a strict regime of money management your risk is again reduced.
Trading will always carry a level of risk. If you intend to adopt trading as a career or investment vehicle, it is up to you to do everything in your power to learn how to properly assess and manage the risk.
Martin Bottomley is a full time professional forex trader, acknowledged author, forex tutor and co-developer of forex trading software including The Amazing Stealth Forex Trading system. You will find information at: http://www.stealthforex.com
Article Source: http://EzineArticles.com/?expert=Martin_J_Bottomley
So how much risk is actually involved in trading Forex? Is it any riskier than engaging in any other kind of business?
Let us first look at the hypothetical case of John and Mary. Each of them opened a forex trading account and funded it with $50,000. Both of them operated on a margin set at 100:1.
John traded very conservatively using one regular lot per trade and applying reasonable money management principals. Unfortunately, John was a poor decision maker and did little to improve his trading skills. Over a period of time, John lost his entire investment.
Mary had no intention of being shackled by the constraints of money management and traded to the maximum of her account margin, each trade carrying the maximum lot size permitted. After a few spectacular gains, Mary's luck ran out and her account was wiped out. Despite being in profit to the tune of $2,500,000 she had lost it all and her original investment was gone too.
So who took the most risk?
If you answered Mary - you are wrong!
Mary is a multi-millionaire. She has several mansions two yachts and a private jet. Her main income is from oil and her company owns some of the largest oil reserves in the world. The possibility of losing $50,000 for Mary is a very small risk. It is similar for her to that of anyone purchasing a lottery ticket - nice if it gives you a few million dollars, but no big deal if it doesn't.
John on the other hand was in a very different situation. John had taken a mortgage on his house to fund his trading account. He had no savings and had even given up his job to start full time trading.
As you can see from the two tales above, risk is about more than what percentage of your account you put at risk.
In our next example, Mike and Sarah both open mini accounts with $5,000. Both are using a margin of 100:1. Neither Mike nor Sarah are independently wealthy but each can easily afford to lose their $5000 without it adversely affecting their lives.
Both start trading and due to lack of experience do not fare very well. After a short time Mike stops live trading and starts to practice in a demo account. Mike seeks help and knowledge and then practices in his demo account to hone those new found skills.
When Mike starts to trade his live account again he uses very strict money management and a well developed trading system. Mike has not yet made a fortune, but he is starting to recover some of the investment that he lost.
Sarah continued to trade without any help. She is still managing to stay afloat.
So who was at the most risk in this example? I would suggest that it was Sarah. Her luck is still holding but if your trading style is built upon luck. You are at great risk.
Trading the forex market requires that you develop a style of risk management. It is necessary to understand the true risk of each trade as it applies to both the market in general and to you in particular.
If you always trade with money that you can afford to lose, your total risk is reduced. If you learn how to trade effectively, then your risk is further reduced and likewise if you adopt a strict regime of money management your risk is again reduced.
Trading will always carry a level of risk. If you intend to adopt trading as a career or investment vehicle, it is up to you to do everything in your power to learn how to properly assess and manage the risk.
Martin Bottomley is a full time professional forex trader, acknowledged author, forex tutor and co-developer of forex trading software including The Amazing Stealth Forex Trading system. You will find information at: http://www.stealthforex.com
Article Source: http://EzineArticles.com/?expert=Martin_J_Bottomley
Forex Day Trading - Are You Ready?
What is a day trader?
Day traders open and close their trade positions by the end of each day. They usually take their profits (or losses) on smaller market price fluctuations of about 10-25 pips. They include both institutional traders (like the big banks) and retail traders (like you and me).
In this article, I'll assume that you're interested in becoming a retail day trader (and not an institutional day trader).
What it takes to be a retail day trader
You'll first have to consider these questions:
1. Am I ready to commit to the time demands?
Day trading often requires you to sit in front of the computer for long hours in anticipation of good market entry setups. Because traders open and close their trades in the short time span of a few hours (or minutes), every opportunity for a good entry is precious. As a retail trader, you really can't afford to let good entry setups slip away. If you'll need to be constantly away from your trading terminal (or computer), then trading might not be for you.
2. Am I ready to commit to the physical strains?
This is similar to the previous point. As mentioned before, day trading requires you to sit in front of your trading terminal for long periods of time. Many people make the mistake of thinking that Forex trading only takes one or two hours a day - but in reality that's very far from the truth. Profitable trading requires high levels of concentration for long periods of time, and unfortunately these demands are a little too harsh for a lot of people. Backaches, eye strains and headaches are common complaints among would-be traders; and if you're unable to handle these harsh physical demands, perhaps a better option would be to consider swing trading, or position trading instead.
Conclusion
These are just some of the considerations you should think about when deciding on the trading style you wish to adopt. Too many people think that it only takes a little effort and time, but that's hardly the case. In my experience, day trading is pretty demanding, so you'll need to be both physically and emotionally prepared to handle it.
Harold Hsu is the owner of http://www.ForexSystemProfits.com where he provides premium Forex trading information and resources.
Harold is currently giving away a free 26-page report on how to trade profitably in the Forex market, and you can get it now at http://www.ForexSystemProfits.com
Article Source: http://EzineArticles.com/?expert=Harold_Hsu
Day traders open and close their trade positions by the end of each day. They usually take their profits (or losses) on smaller market price fluctuations of about 10-25 pips. They include both institutional traders (like the big banks) and retail traders (like you and me).
In this article, I'll assume that you're interested in becoming a retail day trader (and not an institutional day trader).
What it takes to be a retail day trader
You'll first have to consider these questions:
1. Am I ready to commit to the time demands?
Day trading often requires you to sit in front of the computer for long hours in anticipation of good market entry setups. Because traders open and close their trades in the short time span of a few hours (or minutes), every opportunity for a good entry is precious. As a retail trader, you really can't afford to let good entry setups slip away. If you'll need to be constantly away from your trading terminal (or computer), then trading might not be for you.
2. Am I ready to commit to the physical strains?
This is similar to the previous point. As mentioned before, day trading requires you to sit in front of your trading terminal for long periods of time. Many people make the mistake of thinking that Forex trading only takes one or two hours a day - but in reality that's very far from the truth. Profitable trading requires high levels of concentration for long periods of time, and unfortunately these demands are a little too harsh for a lot of people. Backaches, eye strains and headaches are common complaints among would-be traders; and if you're unable to handle these harsh physical demands, perhaps a better option would be to consider swing trading, or position trading instead.
Conclusion
These are just some of the considerations you should think about when deciding on the trading style you wish to adopt. Too many people think that it only takes a little effort and time, but that's hardly the case. In my experience, day trading is pretty demanding, so you'll need to be both physically and emotionally prepared to handle it.
Harold Hsu is the owner of http://www.ForexSystemProfits.com where he provides premium Forex trading information and resources.
Harold is currently giving away a free 26-page report on how to trade profitably in the Forex market, and you can get it now at http://www.ForexSystemProfits.com
Article Source: http://EzineArticles.com/?expert=Harold_Hsu
Monday, January 7, 2008
Forex Trading Secrets - Can You Really Rely On The Books?
As more and more people are considering investments as a way to take care of their futures, the forex market is booming. There is much material on the market, both in print and on the Internet, about the latest investment trend. Most of it boasts to offer forex trading secrets that are unique and can help the individual to succeed. Experience should tell consumers to be wary of such boasts, and yet individuals buy it like it is going out of fashion!
The question is, just how useful are the forex trading secrets that various publications offer?
The answer is dependent on the source of the forex trading secrets and the credibility behind their boasts. There are a number of sales letters on the Internet that offer to give a beginner forex trading secrets but those secrets can actually simply be an overview of how to trade on the forex market.
The problem is that nobody can distinguish between a book genuinely offering forex trading secrets from one that gives an overview of the concept until it is too late. A sales letter is designed to market an ebook without revealing the content and that is exactly what it does! It is not until you pay that you can distinguish the genuine forex trading secret books from those that masquerade as genuine!
Although there are fewer actual published books available on forex trading secrets than there are ebooks available on the Internet, a good number of them are worth investing in if you are looking for specific help in order to trade successfully. Forex trading secrets books such as Forex Revolution: An Insider’s Guide To The World Of Foreign Exchange Trading by Peter Rosenstreich, can provide an amazing insight into forex trading secrets and is endorsed by the UK’s Financial Times. This gives it far more credibility than an ebook on forex trading secrets could ever hope to achieve.
If you are looking for a cheaper option to learn the forex trading secrets and have a few hours to spare then there is always the option of trawling through the Internet articles and websites dedicated to the forex market and forex trading secrets. It can take quite some time to find useful tips, but the little gems that are present in articles that take up web space can revolutionize your forex experience. Just a few helpful secrets could increase your profits, as long as they are accurate and credible!
Simon Aridej is the owner NewForexLive.com a site which provides a good information about forex trading tips, how to trade like a professional forex trading free forex trading ebook and much more. You can download forex trading ebook for free by Click Here!
Article Source: http://EzineArticles.com/?expert=Simon_Aridej
The question is, just how useful are the forex trading secrets that various publications offer?
The answer is dependent on the source of the forex trading secrets and the credibility behind their boasts. There are a number of sales letters on the Internet that offer to give a beginner forex trading secrets but those secrets can actually simply be an overview of how to trade on the forex market.
The problem is that nobody can distinguish between a book genuinely offering forex trading secrets from one that gives an overview of the concept until it is too late. A sales letter is designed to market an ebook without revealing the content and that is exactly what it does! It is not until you pay that you can distinguish the genuine forex trading secret books from those that masquerade as genuine!
Although there are fewer actual published books available on forex trading secrets than there are ebooks available on the Internet, a good number of them are worth investing in if you are looking for specific help in order to trade successfully. Forex trading secrets books such as Forex Revolution: An Insider’s Guide To The World Of Foreign Exchange Trading by Peter Rosenstreich, can provide an amazing insight into forex trading secrets and is endorsed by the UK’s Financial Times. This gives it far more credibility than an ebook on forex trading secrets could ever hope to achieve.
If you are looking for a cheaper option to learn the forex trading secrets and have a few hours to spare then there is always the option of trawling through the Internet articles and websites dedicated to the forex market and forex trading secrets. It can take quite some time to find useful tips, but the little gems that are present in articles that take up web space can revolutionize your forex experience. Just a few helpful secrets could increase your profits, as long as they are accurate and credible!
Simon Aridej is the owner NewForexLive.com a site which provides a good information about forex trading tips, how to trade like a professional forex trading free forex trading ebook and much more. You can download forex trading ebook for free by Click Here!
Article Source: http://EzineArticles.com/?expert=Simon_Aridej
Forex Trading - An Introduction
Forex Trading as commonly called stands for Foreign Exchange Trading. It is biggest financial trading market in the world having a daily turnover in excess of US$1 Trillion. The figure signifies a volume amounting to about 28 times the combined volume of all US equity trading markets.
Forex Trading means buying of one foreign currency by paying in another. Each transaction involves a purchase and a sale of currency at the same time, since currency trading is always done in pairs for example USD/EUR or USD/GBP etc.
Foreign Currency trading or Forex Trading is undertaken for two purposes. About 5-7% of the transactions are undertaken by institutions that do business in foreign lands or companies that have to convert their foreign currency earnings into domestic currency. The rest of the Forex Trading is done purely on speculative basis with profit objectives.
For trading by speculation purposes, the best profit making opportunity lies in most traded currencies (obviously the currencies of most economically advanced countries) also called the "majors" in Forex Trading parlance. They consist of US Dollar, GB Pounds, Japanese Yen, European Unions EURO, Swiss Franc, Canadian Dollar, Australian Dollar etc.
The Forex Trading market is a 24 hour market, beginning at Sydney sunrise and opening markets westward as the sun rises, Tokyo, London, New York in that order. This facilitates investors around the globe to respond immediately to value fluctuations of their holdings caused by political, economic or social events occurring around the world, be it day or night.
The Forex Trading market does not operate through any offices or exchanges as in case of other financial markets. It is considered OTC (over the counter) or ‘interbank’ market since the trade is conducted between parties over the telephonic or electronic network only. Forex Trading is the biggest financial volume business but happens behind the curtains with complete transparency
Divyansh sharma is a successful foreign exchange trader. you can learn more about his techniques at http://www.forexbulls.com
Article Source: http://EzineArticles.com/?expert=Divyansh_Sharma
Forex Trading means buying of one foreign currency by paying in another. Each transaction involves a purchase and a sale of currency at the same time, since currency trading is always done in pairs for example USD/EUR or USD/GBP etc.
Foreign Currency trading or Forex Trading is undertaken for two purposes. About 5-7% of the transactions are undertaken by institutions that do business in foreign lands or companies that have to convert their foreign currency earnings into domestic currency. The rest of the Forex Trading is done purely on speculative basis with profit objectives.
For trading by speculation purposes, the best profit making opportunity lies in most traded currencies (obviously the currencies of most economically advanced countries) also called the "majors" in Forex Trading parlance. They consist of US Dollar, GB Pounds, Japanese Yen, European Unions EURO, Swiss Franc, Canadian Dollar, Australian Dollar etc.
The Forex Trading market is a 24 hour market, beginning at Sydney sunrise and opening markets westward as the sun rises, Tokyo, London, New York in that order. This facilitates investors around the globe to respond immediately to value fluctuations of their holdings caused by political, economic or social events occurring around the world, be it day or night.
The Forex Trading market does not operate through any offices or exchanges as in case of other financial markets. It is considered OTC (over the counter) or ‘interbank’ market since the trade is conducted between parties over the telephonic or electronic network only. Forex Trading is the biggest financial volume business but happens behind the curtains with complete transparency
Divyansh sharma is a successful foreign exchange trader. you can learn more about his techniques at http://www.forexbulls.com
Article Source: http://EzineArticles.com/?expert=Divyansh_Sharma
Saturday, January 5, 2008
Six Forex Trading Tips for Newbies
You have decided to be a trader in the forex market, and you have no idea on how to begin. Let's first start by defining what the forex market is and what it does.
The term "forex", also known as the foreign exchange is a market for the sale and purchase of all kinds of currencies. It originated in the early 1970's when floating currencies and free exchange rates were first introduced. At this time, the forex market traders were the ones who set the value of one type of currency against another.
Nowadays, the market forces determine the value of a currency against another. One unique aspect of the Forex market is that very little trading qualifications are required of anyone intending to trade therein. Independence from external control ensures that only the market forces influence the currency prices. As the largest financial market, with trades reaching up to 1.5 trillion U.S. dollars, or USD, the money moves so fast, it’s impossible for a single investor to substantially affect the price of any major foreign currency.
In addition, unlike any stock that is rarely traded, forex traders are able to open and close any positions within seconds, because there are always a number of willing buyers and sellers.
1. The first thing you need to do is open a forex account. You will have to fill an application form which includes a margin agreement stating if the broker will be allowed to intervene with any trade when it appears too risky. Since most trades are done using the broker's money, it is only logical that he protect his interests. However, once you have established an account, you can fund it and begin trading in the forex market.
2. Adopt a trading strategy, that has proven to be successful for you. Remember that strategies will work differently for different traders, so don't try to adopt a strategy that works well for another trader. It might backfire on you. The two available approaches are either technical analysis or fundamental analysis. A combination of the two is a more preferred choice for experienced traders.
3.Understand that prices move by trends. Forex has a popular saying, “The trend is your friend.” There are certain movements that have been studied over many years in order to identify a pattern in the trend. These trends need to be understood in order to understand a good trading strategy. For small accounts that are $25,000 and under, trading with a trend may help improving your odds when compared to bi-directional trading. Most newbie’s will look to trade in any direction, when they should be trading with a trend.
4. Ensure you know which are the top five currencies pairs in the foreign exchange. These are USD/Yen, Swiss franc/USD, Euro/Yen, Euro/USD and Pound/USD.
5. For newbies, it is advisable to maintain two accounts to ensure you learn to play the trading game. Keep one real account, one that you will actually use to trade real money; and the second account should be a demo, one that you can use to test alternative moves in the trading game. You can easily use your demo account to shadow the trades in your real account so you can widen your stops to see if you are being too conservative or not.
6. Always examine the one hour, four hour and daily charts that concern your trades. Although you can trade at 15 and 30 minute time intervals, doing so requires a handful of dexterity.
The Author
Gerald Njuguna is the owner of http://www.diamondringscare.com, a site where you can read more articles on diamonds. Visit the site to read more information on how to clean diamonds here: http://www.diamondringscare.com/clean-diamond-rings.htm
The term "forex", also known as the foreign exchange is a market for the sale and purchase of all kinds of currencies. It originated in the early 1970's when floating currencies and free exchange rates were first introduced. At this time, the forex market traders were the ones who set the value of one type of currency against another.
Nowadays, the market forces determine the value of a currency against another. One unique aspect of the Forex market is that very little trading qualifications are required of anyone intending to trade therein. Independence from external control ensures that only the market forces influence the currency prices. As the largest financial market, with trades reaching up to 1.5 trillion U.S. dollars, or USD, the money moves so fast, it’s impossible for a single investor to substantially affect the price of any major foreign currency.
In addition, unlike any stock that is rarely traded, forex traders are able to open and close any positions within seconds, because there are always a number of willing buyers and sellers.
1. The first thing you need to do is open a forex account. You will have to fill an application form which includes a margin agreement stating if the broker will be allowed to intervene with any trade when it appears too risky. Since most trades are done using the broker's money, it is only logical that he protect his interests. However, once you have established an account, you can fund it and begin trading in the forex market.
2. Adopt a trading strategy, that has proven to be successful for you. Remember that strategies will work differently for different traders, so don't try to adopt a strategy that works well for another trader. It might backfire on you. The two available approaches are either technical analysis or fundamental analysis. A combination of the two is a more preferred choice for experienced traders.
3.Understand that prices move by trends. Forex has a popular saying, “The trend is your friend.” There are certain movements that have been studied over many years in order to identify a pattern in the trend. These trends need to be understood in order to understand a good trading strategy. For small accounts that are $25,000 and under, trading with a trend may help improving your odds when compared to bi-directional trading. Most newbie’s will look to trade in any direction, when they should be trading with a trend.
4. Ensure you know which are the top five currencies pairs in the foreign exchange. These are USD/Yen, Swiss franc/USD, Euro/Yen, Euro/USD and Pound/USD.
5. For newbies, it is advisable to maintain two accounts to ensure you learn to play the trading game. Keep one real account, one that you will actually use to trade real money; and the second account should be a demo, one that you can use to test alternative moves in the trading game. You can easily use your demo account to shadow the trades in your real account so you can widen your stops to see if you are being too conservative or not.
6. Always examine the one hour, four hour and daily charts that concern your trades. Although you can trade at 15 and 30 minute time intervals, doing so requires a handful of dexterity.
The Author
Gerald Njuguna is the owner of http://www.diamondringscare.com, a site where you can read more articles on diamonds. Visit the site to read more information on how to clean diamonds here: http://www.diamondringscare.com/clean-diamond-rings.htm
Forex Trading and Risk-Return ratio
Forex trading is fast becoming the top method of making money on the internet and plenty of average people are trying their hand at becoming millionaires. For most people, forex trading is a much needed source of a second income, to supplement their current single income from their main profession. However, the true potential to become very wealthy is not tapped by most such investors and they earn mere pennies on the dollar, compared with what they could be earning. While everyone has their own forex currency trading system, this will be in proportion to your risk appetite and will only bring the returns that you strive for.
While there are many ways to invest your money in currency, most people play safe by either investing small amounts or spreading their money very thin across the various currencies they are invested in. This makes for a very small return but practically no risk potential, since the bases are mostly covered so that if one currency depreciates, the other appreciates and the losses are minimal. However, clearly this will never make the forex trader a millionaire.
Life is short, and most forex trading millionaires made their money fast off the forex market. These individuals are generally highly leveraged, because they know that money makes money, and the more money they invest, the greater the risk and the greater the potential reward. Also, betting on unlikely currencies is risky and can have a huge potential upside.
So what exactly will leveraging yourself mean for you? You can start with a portfolio, meaning that you put your investment towards buying a part of the forex trading. Then, you buy shares of the forex trading the world over, depending on what countries appeal to you. The prices of these shares may rise slowly to increase your portfolio, and you are still playing safe. Once your total portfolio value goes over the 5000 dollar mark, you as a forex trader can apply for something known as a console, which now puts you in the position to act as an agent for others. At this point, you can process exchanges for small investors who want to buy and sell currencies through you. For each transaction processed, you will earn a fee of 6% and this can roll into your portfolio, increasing further, making your status as a forex trader more credible.
Other than an unlikely event such as a war or natural calamity, nothing on the forex market will give you a sudden unexpected windfall. Do not expect to become a millionaire over night. You will have to plan and strategize, and most importantly, leverage yourself, to truly make a lot of money. The forex market will generally move like the stock market, in small digits and only when you have plenty of money spread out on the forex market do you stand a chance of making a great deal of profit.
While this type of trading is not for the faint hearted, experience in forex trading will bring some confidence to your forex trading strategy, especially as you learn which systems work for you and which don't. As your level of confidence grows, the process will seem much less daunting. However, it is great to be cautious and be sure of any risks you take. That said, do remember that millionaires are always highly leveraged in the forex market – take calculated risks.
About The Author
Andrew Daigle is the owner, creator and author of many successful websites including ForexBoost at http://www.ForexBoost.com , a free forex training resource and http://www.CashCurve.com for learning about many different online business opportunities.
While there are many ways to invest your money in currency, most people play safe by either investing small amounts or spreading their money very thin across the various currencies they are invested in. This makes for a very small return but practically no risk potential, since the bases are mostly covered so that if one currency depreciates, the other appreciates and the losses are minimal. However, clearly this will never make the forex trader a millionaire.
Life is short, and most forex trading millionaires made their money fast off the forex market. These individuals are generally highly leveraged, because they know that money makes money, and the more money they invest, the greater the risk and the greater the potential reward. Also, betting on unlikely currencies is risky and can have a huge potential upside.
So what exactly will leveraging yourself mean for you? You can start with a portfolio, meaning that you put your investment towards buying a part of the forex trading. Then, you buy shares of the forex trading the world over, depending on what countries appeal to you. The prices of these shares may rise slowly to increase your portfolio, and you are still playing safe. Once your total portfolio value goes over the 5000 dollar mark, you as a forex trader can apply for something known as a console, which now puts you in the position to act as an agent for others. At this point, you can process exchanges for small investors who want to buy and sell currencies through you. For each transaction processed, you will earn a fee of 6% and this can roll into your portfolio, increasing further, making your status as a forex trader more credible.
Other than an unlikely event such as a war or natural calamity, nothing on the forex market will give you a sudden unexpected windfall. Do not expect to become a millionaire over night. You will have to plan and strategize, and most importantly, leverage yourself, to truly make a lot of money. The forex market will generally move like the stock market, in small digits and only when you have plenty of money spread out on the forex market do you stand a chance of making a great deal of profit.
While this type of trading is not for the faint hearted, experience in forex trading will bring some confidence to your forex trading strategy, especially as you learn which systems work for you and which don't. As your level of confidence grows, the process will seem much less daunting. However, it is great to be cautious and be sure of any risks you take. That said, do remember that millionaires are always highly leveraged in the forex market – take calculated risks.
About The Author
Andrew Daigle is the owner, creator and author of many successful websites including ForexBoost at http://www.ForexBoost.com , a free forex training resource and http://www.CashCurve.com for learning about many different online business opportunities.
Thursday, January 3, 2008
Forex Trading - 6 Character Traits That Cause 95% Of Traders To Lose by kelly Price
Forex trading is all about having the right method but also the right attitude. Here we will look at 10 character traits that the losing 95% of traders have and if you want to enjoy currency trading success you need to avoid them.
Here they are in no particular order of importance.
1. I am not responsible
A symbol of losers - they think success will come with no effort on their behalf and blame everyone else for their failure from the tip they got from friend, newswire or broker, to the market being against them.
These people make up a surprising amount of the losing majority and they fail to see that no one can give them success but themselves. Instead of seeing this they do the following.
2. I Like to take expert advice
If you do be very careful as most of the people who put themselves out as experts on the net are anything but - their marketing companies and have never traded in their lives.
Again a vast amount of traders buy systems with unbelievable track records and then are surprised when they fail in real time (they never look at the disclaimer that says the track record is a simulation and not real). If something looks to good to be true it probably is and this is very true in forex trading.
If you follow an expert and have not done your homework on the logic they base their views on, then you are unlikely to have the confidence to follow their method with discipline when it hits a losing period.
If you don't follow a method with discipline then you have no method at all.
3. I don't like being wrong
Well in forex trading your going to be wrong a lot of the time, as only you can be wrong and the market price is always right - no matter what you or I think. Most traders hate taking a loss and looking stupid but the markets do that to everyone and even the best traders lose at times.
If you try and argue with the price and justify your position, you will run up losses and lose and your emotions will take over.
4. I deserve to win I am smart
I have met some very clever people in forex trading and the majority of them lose - if you think that being smart helps you then it won't.
In forex trading you get paid for being right with your trading signal that's it and it's a fact that the best forex trading systems are simple.
They work far better than complicated ones as they have fewer elements to break.
Clever people tend to over elaborate their trading and think the more they put in the more they get out but this does not apply in forex trading.
If you want to make money keep it simple and remember forex trading is probably 20% method and 80% mindset.
5. I am not a patient person
If you are an anxious or nervous person then you are unlikely to win at forex trading. You need patience to wait for the right opportunities and you need patience to hold positions through short term volatility to bigger profits.
If you are an anxious trader you will probably let your emotions get the better of you trade too much, engage in revenge trading etc and lose.
There of course other losing traits but the above are very common ones and hold anyone of them and you will lose.
Forex trading is not hard to learn anyone can do it but most fail because they don't realize that correct mindset is the key to success. To be successful at forex trading you need to rely on yourself, have a deep understanding of why your method works, so you can have the confidence to apply it with discipline.
If you understand the above you can avoid these common losing traits and get a mindset for forex trading success.
About the Author
New! 2 X FREE FOREX Trader Pdfs
For a wealth of free forex education, currency trading course and some FREE Currency Trading PDF's visit our website at: http://www.learncurrencytradingonline.com
Here they are in no particular order of importance.
1. I am not responsible
A symbol of losers - they think success will come with no effort on their behalf and blame everyone else for their failure from the tip they got from friend, newswire or broker, to the market being against them.
These people make up a surprising amount of the losing majority and they fail to see that no one can give them success but themselves. Instead of seeing this they do the following.
2. I Like to take expert advice
If you do be very careful as most of the people who put themselves out as experts on the net are anything but - their marketing companies and have never traded in their lives.
Again a vast amount of traders buy systems with unbelievable track records and then are surprised when they fail in real time (they never look at the disclaimer that says the track record is a simulation and not real). If something looks to good to be true it probably is and this is very true in forex trading.
If you follow an expert and have not done your homework on the logic they base their views on, then you are unlikely to have the confidence to follow their method with discipline when it hits a losing period.
If you don't follow a method with discipline then you have no method at all.
3. I don't like being wrong
Well in forex trading your going to be wrong a lot of the time, as only you can be wrong and the market price is always right - no matter what you or I think. Most traders hate taking a loss and looking stupid but the markets do that to everyone and even the best traders lose at times.
If you try and argue with the price and justify your position, you will run up losses and lose and your emotions will take over.
4. I deserve to win I am smart
I have met some very clever people in forex trading and the majority of them lose - if you think that being smart helps you then it won't.
In forex trading you get paid for being right with your trading signal that's it and it's a fact that the best forex trading systems are simple.
They work far better than complicated ones as they have fewer elements to break.
Clever people tend to over elaborate their trading and think the more they put in the more they get out but this does not apply in forex trading.
If you want to make money keep it simple and remember forex trading is probably 20% method and 80% mindset.
5. I am not a patient person
If you are an anxious or nervous person then you are unlikely to win at forex trading. You need patience to wait for the right opportunities and you need patience to hold positions through short term volatility to bigger profits.
If you are an anxious trader you will probably let your emotions get the better of you trade too much, engage in revenge trading etc and lose.
There of course other losing traits but the above are very common ones and hold anyone of them and you will lose.
Forex trading is not hard to learn anyone can do it but most fail because they don't realize that correct mindset is the key to success. To be successful at forex trading you need to rely on yourself, have a deep understanding of why your method works, so you can have the confidence to apply it with discipline.
If you understand the above you can avoid these common losing traits and get a mindset for forex trading success.
About the Author
New! 2 X FREE FOREX Trader Pdfs
For a wealth of free forex education, currency trading course and some FREE Currency Trading PDF's visit our website at: http://www.learncurrencytradingonline.com
Forex Traders: Are they Gamblers? by Harold Hsu
Forex trading can be a very lucrative activity for retail traders. We've all heard about traders that make a few thousand dollars in only a couple of hours - which makes trading sound like easy money! Unfortunately, what we don't hear about quite as often are the traders who lose twice that amount, in only half of that time.
With such large amounts of money so easily won and lost every day in the currency markets, it's no wonder that so many people think of Forex trading as nothing more than a legalized gambling activity.
But that's where they're wrong. This is one of the biggest misconceptions by the public and amateur traders.
So please allow me to explain my point: When someone gambles, that person is essentially betting on chance.
For example, when betting 'heads' on a coin flip, there is an equal (50%) chance of winning or losing. There are only two possible outcomes here: either you win (heads), or you lose (tails). And both outcomes are equally likely.
If you keep betting 'heads' on the coin flip, after a number of tries you'll most likely win roughly 50% of all your bets. That's what basic statistics teaches us.
However, it may shock you to know that only 10% of Forex traders actually make money trading. The other 90% are traders that consistently lose money.
Think about that for a second.
If you bet on coin flips with nine other people (ten in total, including you), and only one person keeps winning, would you still think this was a game of pure chance?
Of course not, right? If it were truly a game of pure chance, then most of the time we should have five winners and five losers.
But this is not what's happening in the Forex market! In Forex, out of every ten traders, only one is making money.
So now we know that Forex trading is definitely not a game of chance - at least not to the winning traders. The traders who treat trading like a gamble are likely those who constitute the 90% of losing traders.
Don't be like the losing traders - do your homework before you trade, and don't take wild guesses. Learning to trade profitably can be challenging, but the rewards are more than worth it.
About the Author
Harold Hsu is the owner of http://www.ForexSystemProfits.com where he provides premium Forex trading information and resources. He is currently giving away a free 26-page report on how to trade profitably in the Forex market, and you can get it now at http://www.ForexSystemProfits.com.
With such large amounts of money so easily won and lost every day in the currency markets, it's no wonder that so many people think of Forex trading as nothing more than a legalized gambling activity.
But that's where they're wrong. This is one of the biggest misconceptions by the public and amateur traders.
So please allow me to explain my point: When someone gambles, that person is essentially betting on chance.
For example, when betting 'heads' on a coin flip, there is an equal (50%) chance of winning or losing. There are only two possible outcomes here: either you win (heads), or you lose (tails). And both outcomes are equally likely.
If you keep betting 'heads' on the coin flip, after a number of tries you'll most likely win roughly 50% of all your bets. That's what basic statistics teaches us.
However, it may shock you to know that only 10% of Forex traders actually make money trading. The other 90% are traders that consistently lose money.
Think about that for a second.
If you bet on coin flips with nine other people (ten in total, including you), and only one person keeps winning, would you still think this was a game of pure chance?
Of course not, right? If it were truly a game of pure chance, then most of the time we should have five winners and five losers.
But this is not what's happening in the Forex market! In Forex, out of every ten traders, only one is making money.
So now we know that Forex trading is definitely not a game of chance - at least not to the winning traders. The traders who treat trading like a gamble are likely those who constitute the 90% of losing traders.
Don't be like the losing traders - do your homework before you trade, and don't take wild guesses. Learning to trade profitably can be challenging, but the rewards are more than worth it.
About the Author
Harold Hsu is the owner of http://www.ForexSystemProfits.com where he provides premium Forex trading information and resources. He is currently giving away a free 26-page report on how to trade profitably in the Forex market, and you can get it now at http://www.ForexSystemProfits.com.
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