Be Lucky In Forex Commodity Trading Online

How to Manage Your Forex Commodity Trading Money For Maximum Profit

noreply@blogger.com (Admin) — Wed, 02 Apr 2008 16:21:00 +0000

Before you begin to Forex commodity trading, you need to learn the basics of money management first. One of the things you need to do is to decide how much money you can afford to lose on a single trade, but just as importantly, you need to have a system set up that you decide you're going to follow when you do your trades.

One of the biggest mistakes beginning traders make is that they decide they're going to try to gamble and try to win the jackpot, but that's not the way to make true money in Forex trading. Most important is that you make consistently profitable trades with an occasional loss.

It's true that some people do make money if they "gamble" in Forex trading, but most people don't. If you truly want to be a successful Forex trader with a consistent profit set up, you'll need to have a system in place that will make you consistent and regular profits, rather than exceptionally large ones on occasion. This way, you don't have to simply depend on luck; you can actually depend on your own experience and a set protocol to help ensure profitability.

Just as with anything else, it's easier to lose money with Forex trading than it is to make it. For example, you can certainly gamble 50% of what you have set aside on a single trade; it's also true that you can lose that money. What happens, then, if you lose the other 50% on a next trade? When you gamble, you might often talk about a "winning streak" or "losing streak," but you don't want this as a Forex trader. You want to have consistent wins you garner yourself through a system you've set up, along with an occasional loss.

So instead of thinking like a gambler, think like the casino owner. Make sure that you win more often than you lose. How can you do this?

Trade with just a small percentage of what you have set aside for Forex trading. Let's say that you have starting capital of $10,000. You are going to come out much further ahead over the long run if you only risk 5% of that capital on every trade instead of 10%. Therefore, go for the smaller percentage per trade and simply make more trades. This means that even if you only come out ahead on 70% of your Forex trades, you'll not only still make an overall profit, but your losses will be much more comfortable and will be much more readily absorbed. This also helps offset the fact that you may very well have 10 losing trades in a row before you have another winning one.

Take a look at the chart below to see how utilizing 5% of your bankroll instead of 10% of your bankroll per trade will affect you:

10 Percent of Bankroll:

Bank - Trade

$10,000 - $1,000

$9,000 - $900

$8,100 - $810

$7,290 - $729

$6,561 - $656

$5,905 - $591

$5,314 - $531

$4,783 - $478

$4,305 - $430

$3,874 - $387

5 Percent of Bankroll:

Bank - Trade

$10,000 - $500

$9,500 - $475

$9,025 - $451

$8,574 - $429

$8,145 - $407

$7,738 - $387

$7,351 - $368

$6,983 - $349

$6,634 - $332

$6,302 - $315

After 10 losing trades with 10% of your bankroll, you'll have $3487 left in your account. However, with 5% risked per trade, you'll have $5,987. This gives you a much greater cushion after each trade to bounce back. Assuming a 70% profitable trade versus 30% losing trade ratio, this means that you should expect to get 10 consecutive losing trades every 1024 trades.

If you risk no more than 5% of your bankroll at any one time, you should be able to ride out even significant losing streaks. In addition, if you choose, you can choose to trade with larger margins once your account amounts increase. This will help you post even greater profits (along with proportionately larger losses as well, of course, although overall your profits may significantly increase).

One note to make trades easier for you is that if 5% of your current bankroll happens to be an odd number, round down to the nearest convenient number, such as $600 instead of $613. This makes the math easier to keep track of.

Ian Armstrong is an avid Forex enthusiast.

He strongly recommends the free beginner's guide to forex trading, available directly from Forex Trading Systems

Article Source: http://EzineArticles.com/?expert=Ian_Armstrong

Forex Trading - Anyone Can Learn the Skills to Win, But 95 Percent of Traders Lose, Why?

noreply@blogger.com (Admin) — Sun, 09 Mar 2008 12:26:00 +0000

It's a fact anyone can learn the skills needed to win at forex or other commodity trading - but they don't and the reason why is, they neglect the major factor they need to learn to achieve forex commodity success. Understand this factor and how important it is and you can win.

This is a simple equation for forex commodity market success:

Correct Knowledge = Understanding = Confidence = Discipline = Forex Success

What's obvious about the above?
That your forex trading system or the system you use is not important, providing it's logical and based on trading the odds - but your understanding, confidence and the way you apply it is. You can have a good forex trading strategy and fail here's why:

How do most forex traders learn to trade?

They day trade, or they trade mechanical systems sold by vendors, with simulated track records and we have two problems here that are the route cause of trader losses:

1. Day trading is not the correct knowledge to learn - it doesn't work!

It's based on ridiculous assumptions i.e. you can predict what millions of traders will do in a day!

2. If you use a mechanical system you cannot follow it unless you understand how and why it works (ok most the forex trading systems sold on the net are junk) but even if you do find a successful one, you still have to follow it with discipline through periods of losses. You won't follow it, if you don't understand it or have confidence in it!

Learning the correct forex knowledge and getting a robust forex strategy together is easy - the hard part is applying it. Understand this - success rests with you, not your broker, friends, vendors or anyone else - YOU.

Many forex traders hate taking responsibility and cry like babies when they lose, its everyone's fault but theirs - but it isn't.

If they lose it's their fault.

Successful forex trading involves you getting and applying the right knowledge and applying it is the hard part. All forex trading systems lose, for sometimes weeks on end (and that includes the best) so you have to accept responsibility and have the confidence and discipline to follow your plan.

Why Its Forex Trading is so Hard and The Rewards so High?

You are trading against the market and it is always right and only you can be wrong. Your success is down to your market timing and how accurate you're trading signals are and that's it. Sure, the market will prove you wrong and sure the market will make you look stupid - but that's trading.

So if you understand the above, then your forex education is all about:

Getting a logical method that puts the odds on your side, having confidence in it and trading it with discipline, through good times and bad times.

It's easy to learn currency trading - but it's harder to get discipline however, if you accept this and want success, forex trading can reward you with a fantastic and sometimes even life changing income. Currency trading success is in your hands - are you up for the challenge?

If the answer is yes - welcome to the exciting and lucrative world of global FX trading.

Live The Dream
Become A Professional Forex Trader From Home!
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Get 2 x free trading guides and discover more on Successful Forex Trading visit our website at: http://www.learncurrencytradingonline.com

Article Source: http://EzineArticles.com/?expert=Kelly_Price

Best Times To Place Your Commodity Trading Signals

noreply@blogger.com (Admin) — Fri, 07 Mar 2008 14:59:00 +0000

If you want to make money forex commodity trading you don't need to constantly watch prices - this is a total myth. You really only need to look twice maybe three times a day at most and that's it. So what are the best times to trade?

The first point I want to make is you will hear a lot of rubbish written about the best times to trade.
Today there is a huge market in telling people they have to be in touch with price quotes all the time to make money - Nonsense!

This is normally put about by day traders (who all lose anyway as all short term movements are random) who think that it helps them. They also put about another myth - stop loss hunting by brokers! Forex brokers don't need to do this, because day traders have their stops within random volatility and will get stopped out anyway.

So What Is The Best Time To Trade?

If you are swing trading or trend following the best times to trade are:

After the close of the American Stock markets or the Start of the London Session.

When I started forex trading we didn't really have a retail forex market at all and everyone traded forex futures. We all tended to base our trading on the close of the US markets, it worked very well and I still use this time frame to this day.

Today, the London trading hours see most volume and the USA next.

The Asian market is not really significant in terms of trend direction you need to focus on the big two.

My trading is always done at the close of the US markets and I check London Open and that's it.

All the moves that you see intra day are random so don't watch them.

You hear of traders staring at quote screens and I always think why?

It won't help you make money, stresses you out, gets your emotions involved and it's boring!

So if you want to trade forex or other commodity and you want to get good times to initiate your trading signals, I would use the close of New York and if still not totally sure, wait for London and that's it.

Forex trading is all about making money and traders who think that watching quotes all day need to brush up on their forex education, as it won't help them win.

By: Monica Hendrix

Article Directory: http://www.articledashboard.com

NEW! 2 X FREE TRADER PDFS
& PROFESSIONAL FOREX COURSE For a wealth of free forex education, currency trading course, free PDF's and more on Currency Trading Basics visit our website at: www.learncurrencytradingonline.com

Trading The Fundamental News

noreply@blogger.com (Admin) — Sat, 23 Feb 2008 12:35:00 +0000

While technical analysis is critical to currency trading - especially for pinpointing entries and exits - it is insufficient on its own for creating a comprehensive trading game plan. Market sentiment in FX is driven primarily by the economic and geopolitical news of the day. The key players in the currency market - Fortune 500 multinationals, the world's central banks, multibillion-dollar hedge funds and the top tier investment banks that service them - do not care if there is a double top in the EUR/JPY on the hourly candles. Instead, they formulate their trades by analyzing the most recent economic news and geopolitical developments, as well as the latest pronouncements from G-7 monetary authorities. Therefore, the proper approach to FX trading can be summarized as follows: trigger fundamentally, enter and exit technically.

Popular wisdom in the market states that traders who want to trade fundamentally should choose a longer time frame involving daily, or even weekly, charts. Those traders who want to trade more short term (hourly charts, for example) should focus strictly on technical setups. As with so much conventional wisdom in FX, this bit of advice couldn't be more wrong. For the purposes of this article, we define scalping in FX as using short-term time frames (usually hourly charts or smaller) to make trades with targets and stops approximately 20-30 points in length. Not only is it possible to scalp FX fundamentally, but retail traders actually have a significant advantage over larger market players when it comes to executing their trades.

Macroeconomic News Moves the Market
One of the great aspects of the currency market is that it trades off macroeconomic news that is transparent, impossible to fabricate and readily available to all market participants at the same time. (To learn more, see Trading On News Releases.) The key news that drives the FX market is governmental economic data such as the latest employment statistics, GDP growth rates, trade balance reports, inflation readings and interest rate announcements. These reports are typically released every month and can been previewed on economic calendars such as the ones published on Daily FX and FXStreet.com.

Not only is the release of this data planned well in advance, but it is also reported instantaneously through a variety of news outlets including Bloomberg, Reuters, Dow Jones and CNBC, making it universally accessible. There's no need for traders to know about a secret contract that Intel may have negotiated, or the super-cool new product that a company like Apple just prototyped at its labs in Cupertino, California. In FX, headline economic data really does move markets, and currency traders can take advantage of that fact. More importantly, individual traders often have a decided advantage in reacting to the news faster than the larger corporate and hedge fund players.

Retail Traders Can React Quickly
As the most liquid financial market in the world, forex trades almost US$2 trillion each day in volume (in April 2004, the Bank for International Settlements (BIS) reported that the forex market traded US$1.9 trillion a day). Most retail brokers will provide liquidity up to $20 million, meaning that they will allow any trader to buy up to $20 million worth of a currency pair at the current ask or to sell the same amount at the present bid. This trade size can accommodate 99% of all retail orders, making it easy for traders to open a position quickly without affecting the market. However, larger players that are looking to place trades worth hundreds of millions or even billions of dollars at a time will move markets. Therefore, by reacting quickly, retail traders in FX have a chance to front-run the big players and benefit from any momentum generated by that order flow. Economic news, whether favorable or unfavorable, can take up to several hours to fully filter through the market as traders adjust to the new information. This type of time frame offers astute retail traders a great opportunity to take advantage of the situation and scalp short-term profits as the pressure from the big players moves prices in the direction of the news.

How the Best Fundamental Scalps Occur
If event-driven scalping were as easy as buying good news and selling bad news, every FX trader would be inordinately rich. Of course, success is not that simple. First and foremost, good or bad economic results in and of themselves are usually meaningless to the market. FX markets trade on expectations and perception. Therefore, relative comparisons matter much more than absolute ones. For example, suppose the United States reported quarterly GDP growth of 5%, while the eurozone reported GDP results of only 1.5%. At first glance, it would appear that EUR/USD should decline because the U.S. results clearly show superior growth. However, if the market expected 7% GDP numbers from the U.S. and only 0.5% readings from the eurozone, the exact opposite might occur because eurozone news would have exceeded expectations, while U.S. results would have come up short.

However, playing the expectations game alone is not enough to create profitable trades. This is where technicals become integral to a successful fundamental setup. The best, most profitable fundamental scalps occur under technically extreme conditions. These highest-probability setups are created when a favorable fundamental surprise takes place under technically oversold conditions and vice versa. At that moment, the currency can bounce like a rubber ball off pavement, as every market participant who is short scrambles to cover his or her position. The same dynamic occurs in reverse. If prices are extremely overbought and fundamental news shocks to the downside, most market players will rush for the exits, creating a stampede of sell orders that generates a strong momentum-driven move that can be profitably traded to the downside.

Figure 1

Examples
Figure 1 shows an example of an actual fundamental scalp that a trader could have traded in the EUR/USD. On April 6, 2006, the euro was rallying against the U.S. dollar ahead of the monthly meeting of the European Central Bank. Rumors were flying on FX dealing desks that the ECB would surprise the market by raising rates by 25 basis points to 2.75%. The pair had become technically overbought, trading to the upper Bollinger band on the hourly charts as traders positioned for the news. When the announcement came that rates would stay the same (at 2.5%), prices receded, forming a red candle on the hourly charts. At the close of that candle, a trader could have gone short at 1.2306 using the swing high of 1.2331 as his or her stop and targeting the lower Bollinger band value of 1.2250 as his or her profit. (To learn more, see The Basics Of Bollinger Bands and Using Bollinger Band "Bands" To Gauge Trends.)

Forex News Trading Tip: How To Trade The FOMC

noreply@blogger.com (Admin) — Sun, 17 Feb 2008 12:34:00 +0000

The Federal Open Market Committee (FOMC) decision on interest rates is one of the most powerful market movers in the forex market and when the markets move traders trading the news have the opportunity to make money.

The FOMC sets the discount rate or federal funds rate and because interest rates are set higher to induce foreign investment and therefore fight inflation during times of prosperity and lower to increase spending during recessions they are one of the main factors influencing the strength of the dollar.

Economic indicators play a huge role in the forex trading especially for traders who approach the market through fundamental analysis and trade the news. The Federal Open Market Committee (FOMC) interest rate decision is one of the most influential indicators for the US dollar and you can be sure after the news is released there is going to be volatility in the markets and volatility is what traders thrive on.

I have heard many 'traders' say never to trade the news and especially the FOMC. Although the FOMC interest decision is a news event and can fall under the category of through fundamental analysis I am a technician and I believe that charts always price everything in. However I guarantee the market does not know what exactly the Feds comments and decision will be, therefore it is not priced in yet and this will cause the markets to react when they do find out. This is confirmed by the change in price after the decision and the continuation in the days following.

I have been trading the Fed for eight years now and yes I have been burnt in the past and that is exactly how I have come to learn how to trade it properly. The most common pattern to trade the Fed is the whip-saw. But do not be fearful of it, embrace it. Here is how it happens, first there is a large spike one direction (traders come in and follow that direction)followed by a large spike in the opposite direction (those same traders now sell their first position at a loss and reverse their position - this is when I take a position in the direction of the original move)followed by an extended move back in the direction of the original spike (all the emotional trades are left sick to their stomachs) and I am left holding a very nice position setting myself up to capture a larger than average market move.

If this pattern does not play out exactly as outlined I stand on the sidelines and do not trade at all. Because the markets are moving fast in the period following the FOMC interest rate decision I am watching a very short time frame, mainly the one and five minute charts.

Forex Trading Money Management Principles

noreply@blogger.com (Admin) — Sun, 17 Feb 2008 12:11:00 +0000

Trade With Sufficient Capital

One of the worst blunders that forex traders can make is attempting to trade without sufficient capital.

The trader with limited capital not only will be a worried trader, always looking to minimize losses beyond the point of realistic trading, but he will also frequently be taken out of the trading game before he can realize any sense of success trading the method(s) or patterns.

Exercise Discipline

Discipline is probably one of the most overused words in forex trading education. However, despite the clich¨¦, discipline continues to be the most important behaviour one can master to become a profitable trader. Discipline is the ability to plan your work and work your plan.

It's the ability to give your trade the time to develop without hastily taking yourself out of the market simply because you are uncomfortable with risk. Discipline is also the ability to continue to trade the methods and patterns even after you¡¯ve suffered losses. Do your best to cultivate the degree of discipline required to be a world-class trader.

Employ Risk-to-Reward Ratios

The following shows you possible risk-to reward ratios, and the win ratios required to break even in a trading system.

Risk-to-Reward Ratio (in pips)and Win Ratio Required to Break Even(%)

40/20 (2 to 1) = 67%, 40/40 (1 to1) = 50%, 40/60 (1 to 1.5) = 40%,
40/80 (1 to 2) = 33.5%,
60/20 (3 to 1) = 75%,
60/60 (1 to 1) = 50%,
60 /90 (1 to 1.5) = 40%,
60/120 (1 to 2) = 33.5%

Important Note

Never risk more pips on a trade then you plan to make. It doesn't make sense to risk 100 pips in order to make only 10. Why? See below example.

Profit taking level (pips): 10
Stop used or pips at risk: 100

You win 10 times which makes 100 winning pips. You ONLY lose once and have to give back all profits!!!

This type of trading makes no sense and you will lose on the long term guaranteed!

About the Author

Toby Smitz - Daily Operations Forex Trading with free education

How to be a Successful Forex Commodity Trader

noreply@blogger.com (Admin) — Mon, 28 Jan 2008 18:00:00 +0000

Only have basic knowledge about forex commodity trading is not enough to guarantee your success in this commodity bussines. To be a successful forex commodity trader there are several point that you must have. Let discuss this one by one that i think you should have to be success :

1. Trading Strategy
I believe that every forex trader should have a good strategy or system that allready tested before, without having good strategy you will never successful in forex trading. If you allready have one good forex trading strategy that make profit i suggest you to stick with it and dont change you strategy just because anyone tells you that there are another strategy that can make you rich.

2. Money Management
Money management is very important if you wanna success with your forex commodity trading. I have seen many trader failed because they dont manage their money to trade
and all they can say is "oh i shouldn't risk that much for this trade". Control your money and don't let your money control you.

3. Stop Loss
Allways use stop loss in every trade. If you not using stop loss it means you playing 50:50, don't ever let the loosing trader become bigger there is allways another trade to make.

4. Indicators
Find indicators that suitable for you. Never make a trade just because of your feeling tells you to. Even simple Moving Average indicator can make profit for you if you know how.

5. Analysis
Make your forex trading analysis before and after the trade. By doing this you know the reason why you make profit or losses in a trade.

There are many more point for you to be a successful forex commodity trader that i don't mention in this article. If you thought one feel free to give it by make comment.

Forex Trading Strategy - Simple Tips For Huge Gains

noreply@blogger.com (Admin) — Sat, 19 Jan 2008 17:47:00 +0000

If you want a forex trading strategy for success then these simple tips can help you make big gains. There simple to learn, easy to apply and even better will enhance your profit potential.

1. Get a Simple Method You Understand
To make money at trading you need a method you understand and can have confidence in because if you do you will have the discipline to follow it.

Many traders blindly follow others and lose because they haven't the confidence when they hit a period of losses to stay with the system. If you don't have the discipline to follow your forex trading strategy, you don't have one! Many traders are lazy or greedy and don't understand that confidence comes from understanding and learning currency trading for themselves.

2. Be Patient

Many new traders want to trade all the time - they think the more they trade the greater their chances of forex trading success - their wrong. You don't get paid for effort, you get paid for being RIGHT and that's it.

I know traders who trade all the time and lose and others who trade a few times a year and several hundred percent!

3. Look For Breakouts

It's a fact that most big trends develop from new highs or lows. Most traders however can't buy these as they want to wait for a pullback to get in at a better price and miss the trade. You can make money simply by buying high odds breakouts and we have covered this in numerous other articles - check them out.

4. Have The Courage To Accept Big Gains

A paradox of forex traders is that most traders want big gains but can't accept them. Why?

Because they can't deal with volatility, they hit a big potential trend and get a profit, the bigger it gets the more excited they get but the problem is daily swings eat into their open equity and they snatch the profit.

If you are trading long term trends you can see on a forex chart that they last for months or even years and can yield huge profits - but they dip back every so often - if you don't accept this, you wont maximize your profits. You have to accept big short term swings against you, to pile up profits longer term.

5. Don't Diversify

If you are trading a small account and looking for high odds trades don't diversify.

Diversification just means you will dilute your profit potential. Instead risk as much as you can on a high odds trade and have the courage of your conviction. Forex trading success is all about taking calculated risks, with as much as you can afford at the right time.

If you like the buzz of trading or you are not prepared to learn the basics your going to lose but if you incorporate the above trading tips in your forex trading strategy you can make a lot of money and build serious wealth.

By: kelly Price

Article Directory: http://www.articledashboard.com

PROFESSIONAL FOREX TRADING COURSE
and FREE ESSENTIAL TRADER PDFS For free 2 x trading Pdf's with 90 of pages of essential info and an exclusive Forex trading course visit our website at: www.learncurrencytradingonline.com

Five Basic Human Weaknesses In Forex Commodity Trading

noreply@blogger.com (Admin) — Thu, 17 Jan 2008 10:45:00 +0000

Five basic human weaknesses in Forex Commodity trading: Greed, fear, impatience, pride and lack of knowledge. How do these emotions can cause so many Forex traders to lose money? Let’s examine this five.

1. Greed
Greed can cause poor forex Commodity traders increasing the size of their trading positions the moment they’re still in a winning position trade. This often results in these forex commodity traders having the largest position size trade just before the market turns in the opposite direction. As a result, this causes them to suffer large losses.

2. Fear

Fear makes people avoid entering into good trades because they don’t know what they’re doing. Heard of the phrase “buy low, sell high”? Unfortunately, many traders think that this is true. The profitable traders however, know that a more accurate phrase would be: “buy high, sell higher” or in other words Trends is your friend, forex trader who know how to trade the trends will make profits.

Fear is often the result of not knowing what one is doing. If you have a proper, reliable forex trading system, fear shouldn’t be in your forex trading vocabulary.

3. Impatience

The opposite of fear, impatience can lead people to enter into trades when there are no clear forex trading signals. Needless to say, most of these impatient trades usually turn out to be unprofitable.

4. Pride

This is very possibly the worst forex commodity trading weakness of all! Pride makes a forex trader hold on to losing positions with the false hope that the position will turn around in his favour. Winning forex traders are humble, and aren’t afraid to admit that they’ve made a mistake when they lose money. After all, no one can be right all the time!

Unfortunately, many losing forex commodity traders refuse to admit that they’re wrong, and often lose money to pay for their pride.

5. Lack of Knowledge
The most important thing in Forex Commodity trading is you must have proper knowledge
before you jump into forex trading. Lack of knowledge can cause many forex trader loosing their money.

Understanding the effects of this five basic human weaknesses is crucial before a trader can be a consistently profitable trader. Overcome this weakness and train yourself with proper forex knowledge and diciplines, and don’t fall into this traps yourself!

Forex Trading As An Online Money Making Business

noreply@blogger.com (Admin) — Sat, 08 Dec 2007 12:22:00 +0000

For many Forex Trading beginners, after many days and nights of learning and digesting Forex courses, purchasing of various Forex Trading Software and System, you still find yourself with a huge hole in your initial capital.

As times go by, slowly, your dreams of financial freedom and success begin to fade. You will begin to ask yourself, are you a failure? Are you not intelligent enough to become a profitable trader? After all, there are many successful trading experts out there who are living their Online Money Making dreams....

So the money making online million dollar question - Are you cut out to be a profitable Forex Currency Trading trader? Yes, you can become a profitable Forex trader! You just need to treat your online Forex Trading like running a successful online money making Business.

Forex Trading Style

Similar to Stock Trading or any form Investment Trading. You must ask yourself - what is your trading style - news trading, swing trading, momentum trading, pattern trading and intraday or longer term trading? It is alright to have a "library" of trading style or setups, but what most profitable trader does is to concentrate on a niche or particular trading style. Learn to do one thing consistently well instead of trying to master too many trading methodologies. You have to pick a style that suits you.

Online Forex Trading Plan

What is your foreign currency trading plan? Before any trade entry, you have to ask yourself is this the right set up entry for your trading style? Where is your exact trade entry point? What are your Stop Loss target? What is your profit target?

Anyone involves in Foreign Currency Trading and not having a well defined stop loss is going to have their entire online trading account wipe out before they even realized it. I knew someone did just that recently. A US$10,000 account was wiped out within a week without Stop Loss trading a few currency pairs. You also need to know what is your profit target point is. What is the point of having an winning trade but your trading account does not make money. For one simple reason, you didn't take the winning money from your trade and market reversal against you.

Forex Trading Profit & Loss Plan

Lots of beginners don't realized the important of reward to risk factor in Forex Trading. You will never make money online if you risk $500 but make $100.

Follow your Well-Defined Forex Trading Plan

Once you have written down a well-defined trading plan, you must have the discipline to stick to it. All beginners must remember that Discipline and Money Management are the two most import aspects of trading. Even the greatest Forex Trading System or methodologies will fail if you can't stick to it.

JoonTrader is the owner of www.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

Forex Scalping - Trading For a Living the Facts You Need to Know

noreply@blogger.com (Admin) — Sat, 08 Dec 2007 12:07:00 +0000

Forex scalpers rely on trading regularly they don’t aim for big profits they aim for consistent small gains that mount up over time and aim for large annual profits with this method of trading. Forex scalping is popular so read on for the facts.

Firstly lets make it clear now it doesn’t work never has and never will.

Don’t believe me? Then read on and I will give you ALL the facts.

Fact: Short Term Volatility is Random

You have millions of traders who trade trillions of dollars and to say you can measure what is going to happen in a few hours is ridiculous. You cannot predict what this diverse mass of people are going to do and it’s never been possible.

All short term volatility is random and prices can and do go anywhere in short periods – support and resistance levels are meaningless. You can’t get the odds in your favour and you will lose – period

Fact: Vendors claim it makes money but have no evidence

The fact is they make money selling courses - they win you lose. They have the sense not to trade themselves and normally put out a hypothetical track record – which is exactly what it implies its hypothetical, done in hindsight, knowing the closing prices – Well, that’s hard.

You and I can both do that but in the real world you don’t have the luxury of knowing the price!

You would think that someone would have the guts to trade it for real but no, these guys know it’s a good story and don’t risk cash in the market and if they cant make money for real with it, why should you trust it?

Fact: It Breaks a Fundamental Rule of Trading

Which is, “run your profits and cut your losses” of course forex scalpers keep their profits small ( and they have a lot of them) but they can’t even get lucky and catch and run a big profit!

Forex scalpers only want a few pips and don’t run profits this is ridiculous.

So you have lots of small losses and when a scalper is lucky enough to get a profit ( and forex scalpers get lucky now and again) it gets closed out quickly.

Well that is simply a recipe to wipe out equity lots of small losses an profits that cant cover them – it’s not the market that gets scalped it’s the trader.

The myth that forex scalpers and day traders make money is put about by brokers who make a lot of money from day traders and others who see a good story and a marketing opportunity but that’s all it is a good story - with no basis in fact.

Naive and greedy traders swallow the story trade lose and wonder why!

If they had done their homework, they would see that trading is an odds game and trying to scalp the market is doomed to failure and really, you would do just as well tossing a coin.

Don’t fall for the myth that forex scalping makes money finally, if you do find a real time long term track record I would be interested to know about it – I have been unable to find one in 25 years.

NEW! PROFESSIONAL FOREX COURSE AND FREE TRADING PDF's

For free trading guides and an exclusive Forex Trading Course visit our website at: http://www.learncurrencytradingonline.com/index.html

Article Source: http://EzineArticles.com/?expert=Monica_Hendrix

What a Good Forex TradingTraining Program Should Include

noreply@blogger.com (Admin) — Mon, 26 Nov 2007 05:00:00 +0000

Should new Forex traders take Forex trading courses or join a Forex training program? Definitely yes; by now you have probably heard that only 5% of traders achieve consistent profitable results when trading the Forex market. The main reason for this is the lack of education. Don't get me wrong here, taking a Forex training program or a Forex trading course won't guarantee profitable results, nothing can, but choosing the right Forex training program or Forex trading course will definitely put the odds in your favor.

Before spending any amount of money on any Forex trading course or Forex training program there are some important aspects you need to take in consideration. There are many training programs available, but not every one of them suits the needs of every trader.

The first thing you should be looking in a Forex training program is the content of the material. Unfortunately, most courses or training programs focus or spend most of the time on basic concepts. Though these basic concepts are important, spending most of the course on them won't help the trader to make consistent results.

The following subjects are what I consider the most important aspects of trading and every training program or trading course should address:

Forex trading basics.

Review basic concepts such as: margin, type of orders, a little background, bid/ask, rollover, etc. You need to make sure you understand every single concept to perfection.

Main drawbacks of Forex traders.

Being aware of the common mistakes made by Forex traders and knowing how to handle them will prevent new traders from making those mistakes.

Technical and fundamental analysis.

These are the two main approaches adopted by Forex traders. Knowing how to properly apply each concept will definitely put the odds in your favor.

The three pillars of Forex trading. I consider that these three subjects have the most impact on every trader trading account.

Forex trading system development.

Having the right system is a must if you want to have consistent profitable results. Having a system that doesn't fit you will cause a series of problems that will make your trading account vanish away (second guessing the system, not following your system, etc.)

Money management.

This is considered by many successful traders to be the most important single aspect of trading. Money management helps to increase your profits geometrically and at the same time limit your losses (i.e. a good risk reward ratio of about 2:1 will make you money in a Forex trading system that is right only 38% of the time.)

Trading psychology.

Being aware and knowing hot to handle the psychological barriers that affect every trader decision will put the odds in your favor.

Other important aspects every training program should include are:

Developing habits for success (such as discipline patience, taking responsibility of every action, commitment, etc.,) understanding and taking our trading as a business, risk and trade management.

Another important aspect you should take into consideration when choosing a Forex training program is the mechanics of it, getting to know how the training program works.

A good Forex course will have the following:

A live conference room, to apply everything learned under live market conditions.

One-on-one coaching, every trader has different needs and requires special attention. For instance a trader wanting to improve the system and requires individual feedback from the instructor about it.

Online trading course, a course that could be accessible through internet. A plus is a course where you are able to access the course at the convenient time for you, so you don't have to change your lifestyle.

A forum, where members can talk just about everything related to the Forex market and the Forex training program.

Trading the Forex market is no easy task. It requires a lot of hard work. Making the right decision will definitely put the odds in your favor. Take your time when doing your diligence because it is a big and important step in a trader's trading career.

Forex Trading : Forex Boredom

noreply@blogger.com (Admin) — Fri, 23 Nov 2007 14:58:00 +0000

Watching and waiting is a position. If the thought of this is boring, you may not be cut out to become a successful forex trader.

A lot of people ask me “how many hours do you trade the forex?” and my answer is that I generally trade every trading day from the start of the London Open until the end of the New York session and occasionally beyond.

At the weekend I usually carry out various forex studies and I read various publications from other prominent traders.

I do think that it is important to explain that although I am trading for a lot of hours, this does not mean that I am in an active trade for all of that time, in fact I am on average in an active trade for very little of that time.

Many new and inexperienced traders seem to have the idea that trading is about placing trades, and that the watching and waiting is very boring. I suppose that this is quite a natural assumption, but it is an assumption that is quite incorrect.

The biggest part of trading ‘ and the hardest part for many ‘ is spent studying, planning, watching and waiting for high probability trades.

I am often asked if I get bored just sitting in front of the PC watching and waiting.

Do I ever get bored with forex? ‘ No, not bored - Sometimes, however, I just am not in the mood for forex, so at those rare times when I just do not want to think about the forex ‘ I do something else. I don’t agonise about it, I just accept that there is no point in trying to think forex when I am not in the mood to do so.

I love everything about forex trading. If I didn’t, I would do something else to earn a living, but I do not just sit facing the PC screen, motionless, watching and waiting.

I study the charts, I look at what has happened, I look at what is happening, I try to foresee what will happen and why, I look at the inter- relationship between the different currency pairs.

I study the fundamental side of the market a great deal. I like to know why things happen.

I use all of the information that I study to make sure that I am constantly aware of the ever changing facets of the forex market and to ensure that my trading system is as up to date as possible.

If you find that the only part of trading that you enjoy is “being in a trade” or “closing a trade in profit”, you may well be in the wrong business.

To become highly successful in any field of endeavour, it is essential to have a passion for the subject.

Does this mean that you will never be bored? ‘ No, but being bored should be a rarity not the usual way you feel about it.

The more that you love the whole subject of forex, the more successful you will become.

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 more information at: http://www.stealthforex.com

Deadly Forex Trading Mistakes That Assure Failure

noreply@blogger.com (Admin) — Sat, 10 Nov 2007 06:28:00 +0000

Before venturing into your forex trading journey there are some things you need to be aware of, otherwise you could succeed on your trading adventure, and we don't want that to happen, do we? This Forex trading guide will help you track the most costly mistakes Forex traders do.
First of all, make sure you don't have a trading system. Having a trading system might increase the odds of your success. If you have a system, you will have an objective way to get in and out the market. When traders create their trading systems they think objectively since there is no position to be taken at the moment. If there is no position to be taken, there is also no money at risk, if there is no money at risk, we do think objectively and are open to every possibility, thus we are able to find low risk trading opportunities. So make sure you don't have a system and trade based on a randomly approach.

If you have already created your trading system, then don't follow it, be undisciplined. If you follow your system, there is a possibility that you can profit from the Forex trading market based on the trading opportunities you have found. If you want to fail on your trading, be sure to be undisciplined.
Don't get educated. Most successful traders are very well educated in the market they trade (stocks, Forex, futures, etc.) If you get educated, you might acquire the knowledge and experience you require to master the Forex market. Don't read about the Forex market, don't enroll into Forex training programs and don't even look at historical charts.
Don't use any money management technique. The purpose of money management is to avoid the risk of ruin, but at the same time it helps you boost your profits, allowing them to grow geometrically. For instance, by using no money management techniques, there is a possibility that in loosing 10 trades in a row you could empty your trading account. On the other hand, by applying simple money management techniques you can avoid it. So make sure, if you want to fail, don't even consider money management.
Forget about psychological issues. You need to get every trade to win. Successful traders know that they don't need to win every trade in order to profit from the market. This is one characteristic that is hard to understand and really apply. Why? Because we are taught, since kids, that any number below 70% is a bad number. In the Forex trading environment, this is not true.
Don't even consider using a Risk-reward (RR) ratio greater than 1-1. If you use a RR ratio of 1-2 (willing to make twice the amount risked in one trade) then you only need a system that is right around 50% to make money. If you use a RR ratio of 1-3 (willing to make three times the amount risked in one trade) then you will need a system that is right around 40% of the time to make money. So make sure to use a RR ratio below 1-1.
By applying every point outlined in this Forex training guide, you will almost assure your failure in your Forex trading journey. Do the opposite, and you will have the possibility to achieve what every trader is looking for: consistent profitable results.

Forex Strategy: Trading with Stochastics

noreply@blogger.com (Admin) — Sat, 10 Nov 2007 06:17:00 +0000

Stochastics are amongst the most popular technical indicators when it comes to Forex Trading. Unfortunately most traders use them incorrectly. In this article we will review the correct way to use this popular technical indicator.

George Lane developed this indicator in the late 1950s. Stochastics measure the current close relative to the range (high/low) over a set of periods.

Stochastics consist of two lines:

%K – Is the main line and is usually displayed as a solid line

%D – Is simply a moving average of the %K and is usually displayed as a dotted line

There are three types of Stochastics: Full, fast and slow stochastics. Slow stochastics are simply a smother version of the fast stochastics, and full stochastics are even a smother version of the slow stochastics.

Interpretation:

Buy when %K falls below the oversold level (below 20) and rises back above the same level.

Sell when %K rises above de overbought level (above 80) and falls back below the same level.

The interpretation above is how most traders and investors use them; however, it only works when the market is trendless or ranging. When the market is trending, a reading above the overbought territory isn't necessary a bearish signal, while a reading below de oversold territory isn't necessary bullish signal.

Trending market

When the market is trending is necessary to adapt the oscillator to the same conditions: When the market is trending up, then the signals with the higher probability of success are those in direction of the trend “Buy signals”, on the other hand when the market is trending down, selling signals offer the lowest risk opportunities.

Thus when the market is trending up, we will only look for oversold conditions (when the stochastics fall below the oversold level [below 20] and rises back above the same level) to get ready to trade, and in the same way, when the market is trending down we will only look for overbought conditions (when the stochastics rise above de overbought level [above 80] and falls back below the same level.
Taking all overbought/oversold signals during a trending market will lead us to many whipsaws. If you are not comfortable with the number of signals given, try expanding your trading to other currency pairs.

Trend-less market

During a ranging market we could use the interpretation explained above to trade off stochastics.

Divergence

Divergence trades are amongst the most reliable trading signals in the Forex market. A divergence occurs either when the indicator reaches new highs/lows and the market fails to do it or the market reaches new highs/lows and the indicator fails to do it. Both conditions mean that the market isn't as strong as it used to be giving us opportunities to profit from the market.

Stochastics can also be used to trade off divergences.

Price behavior

A price behavior can be incorporated into any kind of system or Forex strategy. When using divergences or overbought/oversold condition with a price behavior approach, the probability of success of our signals increases enormously. Why? Because price dictates at the end, how all indicators will behave, it also gives us a lot of information about the probable direction it will take in the future.

Forex Trading: Let your winners run

noreply@blogger.com (Admin) — Wed, 07 Nov 2007 14:20:00 +0000

This saying is bartered about like some kind of wise words from above - cut your losses and let you winners run.

I think that most of us in the 1KT know about cutting losses - that's the easy bit, hell if we dont then we go broke right? Or do we?

BUT 'let your profits run' is harped on by almost every guru and book writer on the planet - unfortunately they never answer the inevitable question that follows "how far?"

How far is letting a profit run? if you allow a 1 pip trade to go to 2 pips you've let it run. if you let a 10 pip trade go to 500 you've let it run - when exactly is enough?

To give some background to differing opinions before the floodgates of posts follow, please allow me to present some popular opinions and their reasoning behind them.

1. trade it till it's dead - in this scenario you take a trend trade and then stay in the trade until the trend shows it has broken - ie the sequence of higher lows has been broken in an uptrend or the lower highs are broken in a downtrend.

I myself carried an experiment out in 2005 regarding this issue. what i did was produce a spreadsheet with every trade i took in it. for each trade there was what the actual trade made if left till the trend broke and what the result would have been had you taken 10, 20, 30 etc pips on each trade - this went all the way up to 200 pips (i was trading 5 and 15 min charts at the time)

the object of the sheet was to calculate my ideal take profit - so for example if at 70 pips take profit it made more money than at 80 then 70 would be best.

After 150 trades it was time to assess the results and they really suprised me.

what i thought would happen was that as most of my trades did not go father than 50 pips that the ideal take profit would be somewhere between 30 and 50 pips - that taking say 50 would pay for the big runners that i would miss because id get 50 instead of say 20 when the trend had broken.

even though the vast majority of my trades went a maximum of 50 pips ish and they probarbly closed at +20 or less as predicted there were a few trades that went much more even to almost 200 - they were not regular but they had to be factored in.

after 150 trades the results were in - the best take profit, from an account gain perspective was .... no take profit!, just close at the trend end!

This really kind of blew my mind - even though on the majority of my trades i was giving back sometimes 50% or more of the move it still made more money than taking a set value. - the runners paid for the lost retraces and then some. - the differences weren't small either they were large.

The problem with leaving the trades on the table are obvious - psychologically most of the time you feel like you are giving pips back.

2. Take Profits regularly and let the losers run.

This is a dirk de toit kind of standpoint from bird watching in lion country - although letting the losers run forever is not the idea as I will explain.

Basically in this strategy you decide on the underlying trend using fundamentals OR longer term charts (after all they tell you where the trend is not where the fundies say it should be)

you then identify a place on the longer term charts where you will class the trend as broken and that's where all your stops will be - you are going to trade in one direction only.

so you decide the trend is long so you are only going to trade long and your chosen method is to buy dips.

each time you take a trade you look for profits that you are comfortable with, say 40 pips in the case of Mr du-toit. if the dip was not really a dip you leave the trade in because chances are price will come back anyway with the prevailing trend. you buy the next dip again and just leave trade 1 there - trade 2 you again take your 40 pips etc. all with low leverage of course.

you carry on buying these dips and treating each trade as an individual trade taking profit everytime. The losing trades are only closed when the underlying trend is changed by either fundamental means or whatever method you have chosen.

The plus side of this method is that because you are always with the underlying trend you get a lot of winners - even if sometimes you have to wait for them - Dirk claims around 85% and others back up this figure so i have no reason to doubt them.

the downside is that when you do have to close losers because the trend changes they are larger than the winners, often several hundred pips and that is when the drawdowns happen.

the theory is that you have lots of wins and the wins make more than the large losers.

3. Reduction take profits.

The third one to cover is where you close say half the position at specified levels and let the rest run.

Van tharp in his books says this is folly and you would always make more money by leaving the whole position in - and i'm sure that this is true but i can't comment on it as ive never done it.

Discussion:

Although we look at the market scientifically there is also the psychological aspects of trading. Im sure than those who follow Dirk's method of 85% winners feel much better MOST OF THE TIME that do those who trade looking for the big one who only win say 35% of the time.

There are many ways of looking at this and i'm sure all have some relevance, however more than anything, as an active trader and money manager I have to not only rely on cold maths and physics, but also on my emotinal well being.

which is harder - having a w/l of say 35% which produces drawdowns regularly or having an 85% w/l which produces drawdowns much less regularly but when they do they are large and take longer to get out of?

i can tell you that the 35% method produces drawdowns in about2-3 weeks and then they come out of those drawdowns spectacularly fast, like in 2 days or so to new highs.

im guessing that the other method produces them the other way around - a hard drawdown in a day or so that then takes 2-3 weeks to pull out of.

The way I have traditionally traded has been the 35% W/L way and I can now suffer some very hard drawdowns without it bothering me too much as I know how they turn around.

To be good at this I had to mentally condition myself that if i took money off the table before a trade was over that i did a bad thing - even if it made money. I made it hurt when i took 50 pips and the trend went to 200.

what i would really like to know is that those who take money at set pip levels, say 30 pips or whatever, how do you mentally train yourself NOT to kick your ass really hard when those trades go on another few hundred pips or so without you on board?

also interested in other views on taking profits or cutting losers etc but please try and keep the topic fresh and not just saying 'this is what i do' - tell us why and how you control the mental downside to your strategy (every way has a downside)

Source : http://www.forexfactory.com/showthread.php?t=54070

Trying Forex Trading with the Best Strategy and Approach

noreply@blogger.com (Admin) — Wed, 07 Nov 2007 12:00:00 +0000

With the day things are today, more people are getting interested in investing their money to make them grow faster. The problem is, not too many people are willing to take the risk of investing it because of the risks, so some of them just let their money rut in banks. Not that there's anything wrong with banks, it's just that they have low rates and the money takes a long time to grow. If you want real money, you have to have the guts to risk it. Making money needs money; risks are always involved if you want to have money fast and big.

One of the largest arenas wherein you can invest your savings is the Forex. Forex trading has been around for decades already and is regarded as the largest financial forum in the whole world with an estimated 3.1 trillion dollars of volume everyday. The Forex (Foreign Exchange) trading is open 24 hours and never sleeps. Transactions are done all over the world via telephones and computers, money exchanges hand in the number of millions in just mere seconds. The Forex Trading is composed of thousands of banks and individual Forex trading companies that monitors development all over the world, developments that may influence the value of their currency. Forex trading deals with the exchange of currencies from different countries. The idea is to determine the rise and fall of the value of a certain currency and trade when it is deemed advisable.

For small Forex trading transactions, managed accounts are the ideal, they are for the cautious because they have the least risky participation. Here you entrust your investments along with others to a reliable, honest and ethical seasoned Forex brokers. These Forex brokers use their extensive knowledge and lengthy experience and use their strategy to make your money grow, for a fee of course.

With the rise of the internet, Forex trading can be done in a click of the mouse. Money travels through space and wires all the time. The computers have done a big help in the growth of Forex trading, transactions can now be done anytime anywhere. Since somebody is up at a given time everyday anywhere in the world, you will never lose someone to trade with.

There are two basic and fundamental ways to analyze and evaluate foreign exchange trading. There is the technical analysis and the fundamental analysis. There is a huge difference between the two. In Fundamental analysis, Forex analyzers and brokers watch out for causes to market fluctuation. These causes may include the political condition of the country, their laws and legislations, financial policies, their growth rate and other factors as well. Technical analysis of Forex trading includes graphs, charts and other method of measuring past data to see the indication of the rise and fall of currencies. They get all the information they need and use them to calculate and forecast the possible direction of a certain currency.

There are lots to learn about Forex trading; even the seasoned broker learns something new everyday. Forex trading has huge returns in an instant if you catch the right moment and transaction. But always remember there is till the risk, Forex trading can be quite a gamble, especially if your forecast is wrong. Before investing your money in any firm, try to investigate about its record and history in Forex trading.

About the author:

Online entrepreneur Sara Jenkins, is dedicated to helping others and their needs to succeed in life by offering free tips everyday. To learn more about her free tips program, and to sign up for her FREE how-to articles and FREE bonus how-to books and resources, visit www.forexlove.com

Forex Trading : How to be a Profitable Forex Trading Trader

noreply@blogger.com (Admin) — Sat, 03 Nov 2007 11:46:00 +0000

" Forex Trading is so hard. I seldom have a winning trade!" " Forex Trading is so easy. I just have another winning streak for the entire week!"

Two Groups of Forex Traders - The Losers And The Winners

Read the two statements above again. These are two of the main statements I often hear from friends who are trading forex. Diametrically opposite, these two statements contrast greatly between themselves- one group of traders finding forex trading so very difficult for themselves, hardly able to get a winning trade. Traders from this group are fumbling at the ropes, trying to become profitable traders and to be able to bring home the roost. Traders of another group are the happier ones. They are consistently profitable in their trades. They are the winners in the forex market.
You look around - and you see others are doing so well in forex trading, and amassingpersonal wealth, even trading for a living- some of them making thousands of dollars each time they trade- and you think you should be one of them.

Why 90% Of Forex Traders Are Losers

So why is it that 90% of the traders in forex not making consistent money? What is it that the other 10% of the traders have that make them the superb winners?

Currency trading was until recently the domain of the super rich and of the big time institutions. Unless you are well oiled, and have deep pockets or a huge sum of money as a capital support, it is not likely for you to even access currency trading.

However, this changed with time, especially when forex mini accounts were created, leading to a surge in people wanting to trade in forex.

This led to a problem...and the problem began to become bigger and bigger and exists till this day.

Forex trading is just simply exploding, with over $2 trillion dollars worth of currencies transacted every single day, with this accelerated growth bringing along problems.

Many people are getting into forex trading without the proper training and proper education as traders. The easy accessibility of the internet made it worst. Many beginners merely scour the internet based websites, picking up morsels of trading knowledge on forex here and there and started to trade. Not that self education is not enough, but the nature of forex trading is such that those who are successful traders are simply not telling how they trade. Most successful traders are traders, their time being occupied by their trading and research into trading setups and have no time to promote their trading signals on the internet. To them, they are first and foremost traders and not educators, and there is simply no reason to post their skills or give away their secrets of successful trading for free on the internet.

The easy access of the internet has led to a proliferation of websites featuring some common trading systems purportedly useful for forex trading. The popularity of forex trading has led to a viral duplication of these websites with almost similar content, until a big majority of forex traders who gleaned their "education" and training from the internet to concentrate on such systems, without knowing exactly when they are suitable for use and when they should not be used at all.

Among other factors, this is one of the main factors why a big majority of the self-taught forex traders are not making any money, or at best are inconsistent in their trading. Most of them are just using the wrong tools or the wrong trading systems and have not gotten to master their trades or themselves.

Sun Tzu"s Art of War Provides The Solution To Your Trading Blues

Sun Tzu's Art of War provides a key solution to successful battle, which can be extrapolated to forex trading.

Sun Tzu's Art of War called it: "Know Your Enemy"

And your enemy in forex trading is merely the forex market itself and you- the person itself.

To win in the forex market, you must know the forex market itself - in other words, you must get to understand the currency-pairs that you are trading on. Spend time to study their price movements. Know what trading patterns and setups occur time and again in those currency-pairs. Be familiar with the risk-reward ratios of each specific trade pattern for those currency-pairs you are trading. Define and apply a specific trading strategy for those currency-pairs you trade. Know when to enter and exit the market and when to stay away. The best way to ensure you are doing it correctly is to get another experienced and successful trader to mentor or to show you the ropes. Budget to learn before you trade.

As to the other part of the battle, you need to see the part of you, yourself who is the enemy. Forex trading involves decision making where your risk tolerance is put to the test, where emotions of greed and fear will play a daily tug of war within your heart. The solution to win this emotional battle is to trade with discipline. Adopting a winning strategy, a winning plan complete with risk management and ensuring you do not deviate from that plan is a necessity for you to win. Again, have your mentor to show you and to fine tune that trading plan.

You can join the 10% of forex traders who are consistent winners, and start to create a consistent income trading from home, away from the rat race if you are prepared to learn.

source: http://forex-trading.cashflowpc.biz

Forex Trading : Can You Be A Successful Forex Trader Trading Just One Indicator Only?

noreply@blogger.com (Admin) — Sat, 03 Nov 2007 11:36:00 +0000

In a quiet moment last weekend I was wondering if you could trade forex full-time just using one technical indicator.

My conclusion was that it would be extremely difficult, if not impossible, to make consistent profits, but then I remembered back to when I first started trading forex a few years ago, and realizing that back then I pretty much only used one indicator - the Exponential Moving Average / EMA (15), and did make consistent profits.

Technically speaking I didn't use only one indicator as I also displayed the EMA (50) and EMA (100) on the same chart to help me decide on exit strategies, and nowadays I use a lot more indicators to confirm my positions, but nevertheless I still think this basic approach of using an EMA (15) on a 30-minute chart could still generate regular profits.

The trick is to look for currencies that have been trending strongly in one directionfor a few days with a rising or falling EMA (15), and wait until this EMA changes direction and signals a reversal.

Furthermore when this EMA does change direction you ideally want to enter into a position when the price is close to or touching this EMA for maximum value. Place stops about 20 or 25 points below this EMA in the rare instances where you get a false reversal, but in most cases the reversal will happen and you can potentially make 30-200 pips depending on the strength and momentum of the reversal.

Also, you ideally want to trade in the direction of the long-term trend, so let's take a real-life example – the GBP/USD.

The long-term yearly trend has been upwards so we ideally want to find positions where the EMA (15) has been heading downwards for a few days and watch for a change in direction, so we're trading in the direction of the long-term trend.

If you look at a 30 minute chart of this pair for this month (October), you can see three obvious instances of this happening.

The first instance was between 3/10 and 4/10 when the price fell from 2.0440 to 2.0280 before bouncing back and heading upwards again. The EMA (15) started heading upwards as well between 2.0310 and 2.0320 and there were plenty of opportunities to trade close to this EMA to get maximum value (sometimes the price blasts through the EMA without retracing, making it hard to get any value from the trade).

As you can see, this upwards trend continued until the price reached a peak of 2.4030 so you could potentially have made a profit of 100+ pips, but even if you'd held out until the EMA (15) started heading downwards which was confirmed around about the 2.3080 mark on 5/10, you could still have netted about 70 pips profit.

Similar set-ups occurred on 9/10 when there was another 100+ point reversal, and on 12/10 when there was a slightly smaller move, so as you can see there are always good opportunities to trade this one indicator alone and make pretty good profits.

Therefore to answer my original question yes I believe you can make regular profits trading just one indicator, because I myself have done so in the past, but it makes far more sense to use additional indicators as well to confirm your positions, and to find additional positions to take.

Forex Trading & The Science Of Getting Rich

noreply@blogger.com (Admin) — Thu, 01 Nov 2007 18:52:00 +0000

I first became aware of “the science of getting rich” a number of years ago when someone sent me a reprint of a book of that name by Wallace Wattle.

The book is a very “dry” read but the author claimed that getting rich was an exacting science which means that if anyone applied the rules – to the letter, then the outcome, by scientific definition, would be a true replication.

In other words, if one were to apply the rules of “the science of getting rich”, one would inevitably become rich.

In many ways, not dissimilar to applying a trading system that is proven to work, provided the user applies the system rules exactly, then the same success should be replicated time and time again.

You will recall – unless you have been trading Lunar Currencies (joke) – that we recently had a liquidity problem in the markets brought about by the meltdown in the sub-prime mortgage market.

In “the science of getting rich”, Wallace Wattle points out the necessity of generosity. In fact he states that one must give freely and although I may be slightly misquoting he suggests that “one should never miss the opportunity to give”.

It is a fact that almost all successful people give away money. I know that this may sound unlikely but check it out.

Warren Buffett has pledged to gradually give 85% of his Berkshire stock valued at around $40 million to five foundations. A dominant five-sixths of the shares will go to the world’s largest philanthropic organization, the $30 billion Bill & Melinda Gates Foundation. Yes that’s right, Bill Gates of Microsoft fame gives away very large amounts of his fortune to charitable causes. Warren Buffett and Bill Gates are far from being alone in giving away money.

Perhaps wealthy people understand more than most that the cycle of money must be kept in motion. You need to give to receive.
So what do “the science of getting rich” and forex trading have to do with each other?

In my opinion, rather a lot!

As we saw with the credit crunch, when money stops flowing, it causes a ripple effect that increasingly affects more and more people. As long as the money flow continues, there is opportunity for all, but when it stops, there is nothing but trouble ahead.

With the act of giving, according to “the science of getting rich”, one is perpetuating the mental attitude of plenty. In essence you are in the mind set of “I have plenty so I can give freely with the full expectation that I will receive even more”.

Being in the right mind set is a very important part of becoming a successful trader.

It is rather like “Trading in the Zone” (an excellent book on trading attitude by Mark Douglas). When you are in the mentality of winning, you carry on winning, but when you are in the mentality of “lack” you are just waiting for failure, which surely will come along.

If you would like to dynamically improve your trading there are a number of things you might consider, and these could include making sure that you have a well proven trading system, making sure that you are always in the “right” mind set when trading and being prepared to “pass on” some of you winnings to a good cause.

Applying Poker Strategies to Trading The Markets

noreply@blogger.com (Admin) — Wed, 31 Oct 2007 12:03:00 +0000

By: James Lee

As a professional no-limit holdem poker player prior to my trading career, I find that both professions share many similarities. Poker and trading are both a game of probabilities. Individual psychological makeup is also important to control emotions during times of tilt and euphoria.

In poker, a player can choose the stake he is willing to play. In the futures markets the stakes are chosen by the size of the trade. However, one of the biggest differences I found is as follows:

1. In poker, you are automatically offered the option to play a hand that you are dealt. For example, in no-limit holdem this can be a Q10, KK, 10J, 2-7, etc....

Each starting hand begins with a probability. For example, pocket 9's has a 52.4% favorite against an AK suited. The odds of getting dealt a pocket pair are 5.88%.

2. In trading, you are not automatically dealt starting hands. Starting hands in poker equals setups in trading. In order to hold a pocket pair, you must find a trading setup.

Each setup has its own set of probabilities. A setup that offers a 80% winning probability should be ranked higher than a setup that offers a 50% winning probability. The more setups a trader has the more ammunition or hands he has to play with. If a trader only trades moving average crosses, this is like playing only a KQ in poker. In poker, waiting for pocket AA's will slowly drain your capital with blinds and is definitely not the way to get rich. However, a poker player who is flexible to play a variety of hands with a variety of styles is the better player.

A trader needs to have different entry/exit and risk parameters for each setup. If one of your setups involves moving average crosses, make sure you apply different entry/exit and risk parameters from a scalping setup.

I like to consider my trading freestyle. I am very flexible with the different setups I have. Trading requires creativity. Novice traders apply too much science into trading and not enough art.

Trading should be compared to a game of limit holdem. No trade is worth all your chips so do not hold a no-limit mentality. When in doubt, stay flat. As long as you play the right hands and control your losses, a trader should come out ahead.

Good luck and best of trading.

Understanding Fundamental and Technical Analysis to Make Profit

noreply@blogger.com (Admin) — Thu, 25 Oct 2007 11:50:00 +0000

All successful traders have forex trading strategies that they follow to make profitable trades. These forex trading strategies are generally based on a strategy that allows them to find good trades. And the strategy is based on some form of market analysis. Successful traders need some way to interpret and even predict the movements of the market.

There are two basic approaches to analysing market movements, in both equity markets and the forex market. These are technical analysis and fundamental analysis. However, technical analysis is much more likely to be used by traders. Still, it's good to have an understanding of both types of analysis, so that you can decide which type would work best for your forex trading strategies.

In fundamental analysis, you are basically valuing either a business, for equity markets, or a country, for forex. If you think it's hard enough to value one company, you should try valuing a whole country. It can be quite difficult to do, but there are indicators that can be studied to give insight into how the country works. A few indicators you might want to study are: Non farm payrolls, Purchasing Managers Index, also known as PMI, Consumer Price Index, also known as CPI, Retail Sales, and Durable Goods.

Most traders in the forex market only use fundamental analysis to predict long term trends. However, some traders do forex trading strategies that trade short term on the reactions to different news releases. There are also quite a variety of meetings where you can get quotes and commentary that can affect markets just as much as any news release or indicator report. These meetings are often discussing interest rates, inflation, and other issues that have the ability to affect currency values.

Even changes in how things are worded in statements addressing these types of issues, such as the Federal Reserve chairman's comments on interest rates, can cause volatility in the market. Two important meetings that you should watch for are the Federal Open Market Committee and the Humphrey Hawkins Hearings.

Just by reading the reports and examining the commentary, forex trading strategies in fundamental analyst can get a better understanding of most long term market trends. Keeping up on these developments will also allow short term traders to profit from extraordinary happenings. If you do decide to follow forex trading strategies in fundamental analyst, you want to keep an economic calendar handy at all times so you know when these reports are released. Your broker may also be able to provide you with real time access to this kind of information.

Just like their counterparts in the equity markets, technical analysts in the forex market analyze price trends. The only real difference between technical analysis in forex and technical analysis in equities is the time frame. forex markets are open 24 hours a day.

Because of this, some forms of technical analysis that factor in time have to be modified so that they can work in the 24 hour forex market. Some of the most common forms of technical analysis used in forex are: Elliott Waves, Fibonacci studies, Parabolic SAR, and Pivot points.

Many forex trading strategies in technical analysts combine technical indicators to make more accurate predictions. The most common tendency is to combine Fibonacci studies with Elliott Waves. Others prefer to create entire trading systems in an effort to repeatedly locate similar buying and selling conditions.

Whichever form of forex trading strategies in any kind of analysis you choose, it's best to make sure you learn as much as possible about it and your market. Then you will be able to use you knowledge to create a trading system that will suit your needs, and help you to become a profitable trader in the forex market.

Interest Rates Drive The Forex Markets

noreply@blogger.com (Admin) — Thu, 25 Oct 2007 11:41:00 +0000

The Forex, or foreign currency exchange, is all about money. Money from all over the world is bought, sold and traded. On the Forex, anyone can buy and sell currency and with possibly come out ahead in the end. When dealing with the foreign currency exchange, it is possible to buy the currency of one country, sell it and make a profit. For example, a broker might buy a Japanese yen when the yen to dollar ratio increases, then sell the yens and buy back American dollars for a profit.

Interest Rates defined: Interest rates are LIBOR-based for currencies of disbursement plus a spread which is dependent on the complexity of the transaction and the risk profile of the applicant.
The foreign exchange market, sometimes known as the Forex market, is one that is affected by several things. The market itself is becoming one of the most popular forms of trading today. It once was reserved for the richest of the rich, however today with lower minimums; this is a market that draws people from all financial levels. The attractive thing about this market is both its leverage and it liquidity. Many people with a grand background in the Forex system can take very little money and turn it into a lot using the foreign exchange market. However, when you have expertise in the foreign exchange market, you must also be aware of things that affect it. Being aware of these things is part of making logical and rational decisions of trading.

Interest rates are something that drives the foreign exchange market. While currency prices are what the market is all about, interest rates have a direct affect on those prices. Therefore, to be able to understand the current foreign exchange market, one must understand the current conditions of each individual interest rate. While economic and political conditions are also among the things that greatly affect the Forex, there is nothing that affects it more than interest rates. Something to remember is that money often follows interest rates. When the interest rates raise, investors will want to capitalize high returns and you will see money flowing into the country. When one country's interest rates rise, their currency is seen as being stronger than other currencies. This happens because investors seek more of that currency to profit more. Otherwise, it is seen as a good thing when interest rates rise and a bad thing when they fall.

Government participation in the Forex is not an uncommon action. Sometimes governments will flood the foreign exchange market with their own domestic currency. This action may seem foolish to someone who knows nothing about the foreign exchange market, however to those who know it well, it makes perfect sense. When governments flood the Forex with their own domestic currency, they are attempting to lower the price. When they buy their own domestic currency, they are attempting to raise the price. One might know this strategy as Central Bank intervention. Governments do this to help their overall economy. This is a type of action that keeps the foreign exchange market strong and steady. When you have extremely large players making appearances to keep everything as fair as possible, you create an attractive market.

While interest rates can drive the market for a short time, the nature of the foreign exchange market makes it difficult for them to drive it for a long period of time. The design of the market, with it being large in size and volume, restricts interest rates from having complete control over the system. Many times however, experts try to figure out when interest rates will rise or fall. The most common thing they do in order to keep up with rates is to pay attention to economic inflation indicators. Sometimes investors and experts will also listen to speeches from politicians and other influential people. They can pick apart clues in order to make a guess before the announcements are made. Most of the time, there is a little advance notice before interest rates move.

As you can see, the influences of interest rates on the foreign exchange market are strong. They can help determine which countries' currencies are the strongest. This of course is relative to all other currencies in the market at the time. When you think about the rise and fall of interest rates, you can remember that when interest rates fall, it is typically a good thing for investors and for domestic currency. When rates fall, it is not such a great thing. When rates stay low for an extended period of time, the market may seem a little dull, however the great thing about the foreign exchange market is that when government gets involved, which it usually does at these down times, there is hope for improvement. So, if you are beginning to learn about the foreign exchange market, don't forget to pay attention to the rise and fall of interest rates around you in order to make the best investment decisions possible.

How to Make Cash Using a Good Forex Trading System

noreply@blogger.com (Admin) — Thu, 25 Oct 2007 11:30:00 +0000

A majority of people who use Forex trading systems online become very focused on making money immediately without thinking that they need to be educated first prior to going in there and making decisions that may cost a lot of cash. Foreign exchange currency trading presents traders a real opportunity to achieve profits. All that one needs to do is simply approach the market sensibly and use the proper tools available.

Anyone who chose to begin trading in the Foreign Exchange market did so with the sole intention of making more money. Not one of these traders want or plan to lose money, however, around 90% of all traders lose their money. People should know that earning money through the use of Forex Trading Systems requires time and effort. The main reason for such a high rate of loss is not the trader's lack of ability, nor is it the difficulty of online forex trading. The cause of these losses is the individual's lack of focus on the development of forex currency businesses.
A variety of foreign trading systems are available for use online. The key to success in using these systems is not merely the know how on how to operate it. It is also important to be informed and educated about what you are getting yourself into. The market should be approached like any other business.

To help maximize the gains in your trading experience through forex trading systems, here are a few simple steps to follow. Before getting your hands dirty and delving into forex trading, you should acquire a complete understanding of online foreign exchange trading. Look into what the market really is about, learn how to read price charts, and figure out what drives the market. Try to learn all the essential basics of the foreign exchange market.

The next thing you should do is learn from other people's mistakes. There are a lot of unfortunate occasions that may cost you your money. Be aware of all the possible mistakes traders make to keep yourself from making them. This will save you a lot of money in the long run.

Approach the forex trading market as you would any business. Create a business structure to keep your trading endeavors consistent. There are a lot of resources available to aid you in doing this, all you have to do is look for them online. Systemize your online trading business. Use the available services provided by your forex trading system or platform. And, lastly, do not let your emotions rule your decision making process. You do not necessarily have to turn off your emotions, you simply need to know how these emotions affect your decision making.

Using forex trading systems for online trading gives traders the chance to earn well through providing tools that can help in approaching the forex market as any business endeavor. Educate yourself and use your resources wisely. This way, you are sure to create and maintain a consistent profit margin.

Online Trading Tools

noreply@blogger.com (Admin) — Wed, 24 Oct 2007 03:09:00 +0000

Once an exclusive domain for trading firms and brokers, trading on the stock market has evolved remarkably in the last decade or so. The main reason behind this is the remarkable development in the field of communication technology and especially internet. With internet you can be at several places at the same time.

This has allowed people to trade on stocks and shares right from the comforts of his own house. However, the share market is a place where you have to be on the pulse at every moment and you just cannot afford to fall back on the pace. To match the best trading firms and the brokers present on the floor of the stock exchange you need to have the best possible set-up at your home. The three components of your set up are hardware, net connection and software. We will discuss each individually.

Internet Connection

To place your orders and get instant processing you will have to have a broadband connection or you just wouldn't be able to get the rates you are looking for. With so much traffic these days, a dial-up connection just wouldn't work.

Hardware

Trading online necessarily requires you to have the best computer. You need no install all the hardware. For example you will not need a DVD writer to trade online. But there are a few things that you must not compromise on. First have a wide screen monitor. This helps you to see the maximum amount of data at one point of time. Or you will need to minimize and maximize the windows. Next we come to the processor. A decent level processor should be good enough. Anything upwards of 2 GHz will work.

What you will need is speed and that will be provided by the RAM you have. Nothing less than 1 GB will do. Ideally it should be 2 GB or more. The hard disk should also have plenty of space. Go for at least 100 GB of HDD space. And try to keep the HDD as free as possible and don't run too many programs at a time, definitely not while trading. A video card will allow you to get the best live feeds.

Software

The hardware and the net connection will be put to full use with the back-up of a great software platform. These platforms not only provide you with live data regarding the stock market, but also organize your data so that it is easier for you to find them quickly and understand them better.