FOREX And STOCK EXCHANGE TRADING

Trading With Meta Trader

2011-11-26T15:35:00.001-08:00

Trading with Meta Trader is becoming fruitful for traders. Meta Trader 4 or MT4 is a free online trading plate form which gives the trader an opportunity to have a sentiments free trading. As I have already discussed in my previous article that trading is more like a mind game. A trader does not loose money until he loses nerves. MT4 is a trade station which enables the trader to plan the entire trade strategy and then execution is all automatic. That's the reason that such trade is also called automated trade. The developed strategy parameters are called "expert advisers". A trader trading with MT4 programs his strategy into the "expert advisor", which get active and keep reading the live exchange rates and keep looking when the indicators show him the accurate scenario to open the trade according to the indicators advised by the trader's strategy. When all the conditions are met, the "expert advisor" automatically opens the trade with the given size and time-frame. This open position is meant to be closed by the EA at certain given condition or profit/loss level. Since it is a trading robot and have no sentiments like human, therefore human error and sentiments do not effect it and it makes either profitable or a loosing trade and closes the entry.

Once trading with meta trader, we exactly follow the rules which is taught in the very first lesson of online trading, that one should control the emotion. One should always trade the plan and should never change the trading plan after opening the trade. This key to success is very well followed while trading with meta trader. We can also say that MT4 trade station is a trader for traders.

All of the above is positive element of MT4 trade station. There are some set backs too with MT4. Previously we used to have MT4 stations which used to work only when out desktop computer is on. But now many Forex brokers have offered online MT4 facilities where you select the EA yourself and it keeps trading as per the plan given. The draw back is that all the expert ad visors are not good for all the currency pairs or stock exchanges in all time frames. There fore while selecting and EA we must back test is very carefully, although past results does not guarantee the future trades. Even then trading without the sentiments is such a big advantage that all other drawbacks are manageable. Since it consistently follows the plan therefore if we monitor the trades done on MT4, they are mostly put the account in positive directions.

While making trades on MT4, One must account for the approximate number of trades in the given conditions and money management. MT4 is not a money making machine, but it is just a faithful servant who will do as you order it, regardless of making profit or giving loss.

Stock Exchange Vs Forex

2011-11-24T08:28:00.001-08:00

Stock Exchange is more like a share market. I view it as a source to create surplus liquidity for corporates, which enables them to handle big projects which they would not be able to go for without floating their share to the public for investment. Different companies compete each other under the rules and regulations of same country or economy. The cattagory of competition is not product based but it is based upon the profitability. More profit a company makes, higher is its share price. Investor is neither interested in the product the company sells, nor in the exchange rate. Only thing which matters is the growth rate of that company.

In stock exchange investor only buys to sell, it is always the share verses the currency. There fore Investor must buy something in order to sell. In other words it is one way market. You can not sell what you have not bought. Where as forex is economic war field for countries and economies.

In forex the investor can sell what he has never bought. He can sell currency to buy another. With his available liquidity he can sell any currency which he did not have and can get the other currency purely based on speculations. In stock exchange the speculations are based upon international news and fundamentals, because stock exchanges are locally driven. But in Forex market all the fundamentals are compared between the countries, thus concluding the strength or weakness of a currency against other.

One thing which never changes between Forex Market and Stock exchange is the technical analysis. Moving averages, stochastic, Bollinger band, RSI, ROC, parabolic SAR, momentum and all other technical indicators are applied and worthy in the same passion on both the markets, and this is an edge for a technical traders that he can trade in any market without much studies of the local prevailing scenarios. There are many traders who are trading in all the stock markets and Forex at the same time as portfolio based on their technical analysis. In the next article i will discuss in details how stock exchanges operates and the terms used in the stock exchange.

Money Exchange Rate

2011-11-21T09:38:00.000-08:00

Money Exchange rate is in fact a ratio between two economies. For Example if Rate of Country A/Rate of Country B>1, the economy of country B is considered to be stronger. While trading we often use the term that a currency is getting stronger against an other. What we mean is that the economy of one country is getting healthier compared to the other one. For Example if US dollar is getting healthier against Japanese Yen then the pair of USD/JPY will go up, means now it will take more yens to buy 1 dollar.

There are many websites which are offering free exchange rate calculator and tools. In Forex trading what effects a trader is the mindset. When we see a currency getting stronger the first thing comes in mind is that it is going higher and thus a potential of dropping soon is established. But one thing trader undermines that it may reach sky high before coming down, hence many small traders with lesser equity get vanished off.

To make a right trade prediction one should not have an open position already place. Secondly trader must keep the history of that pair in mind. At times the rates are driven by fundamentals and get deflated soon. But mostly they are driven by historic points in the bigger time frame. I always advice the traders to have a very good money management. Always decide where to exit before you place the entry. Never Plan as you go, must plan the stop loss and profit taking plans before you enter and then never change it. This is the best tip of today. Have a nice trading day.

GBP/USD MOVING DOWN

2009-11-20T04:28:00.000-08:00

GBP/USD is moving down in midterm. Though the big trend is up, this is the immense correction which started on wednesday and is likely to continue for till tuesday. The expected level of this down move is 1.6284 which is the bottom of daily bollinger band. Faliure of 1.6250 will establish a range from 1.6284 to 1.6900. This range is likely to be broken upward and the cable might reach 1.77 in the beginning of december favoring the major trend.

Current down move is supported by the bollinger band swings and is likely to support to ease up and refuel the major upmove. Thats the reason that the down move is immense and is eating up the small traders. The big players are sitting calmly till the cable reaches 1.6284 where bulls are sitting. Care is needed for entring shorts. Since the USD has no buyers and a weaker USD will help US to strenghten the economy. Therefore we assume that the current move is just a retrace and will die at 1.6284

my trades

2009-07-13T12:40:00.000-07:00

A Million Dollar Advice

2009-04-24T06:35:00.000-07:00

When the human factor comes into play the strategies tend to go wrong. It involves passions and ability to stick to plan in order to be successful. Many forex traders end up loosing account because they keep reading different analysis after entering the market with trade and then keep changing their mind. Some of them even repent soon on their entry and cut the trade in loss. The confidence on their own analysis will not find place until unless they are ready to take the loss till their stop loss point and this is the key to success of their trades. A million dollar advice is that never start experimenting your EAs on real money. There are many brokers who offer demo account with virtual money. You trade with the virtual money in the real market conditions. This helps you to gain confidence and you can see the results of your applied strategies with the fear of loosing money. While you are in a trade, you will find many arguments supporting the both sides of trade. Remember this difference of opinion makes the market move to either direction. Just make your own analysis. And once made Just stick to the plan. Using the demo or practice accounts with virtual money is the best way to see how good you can analyse the market and apply a strategy. Happy Trading...

Forex Robots

2009-04-24T06:24:00.000-07:00

Forex robots are available in the online forex trading market. They are just the softwares which apply your strategy on your account. In my veiw they just do what you feed into them. The only advantage is that these robots are free of emotions. They are there to apply the strategy no matter you make money or not. They donot get tired sitting on the system like human. Neither have highblood pressure when the market whipsaws. These robots are not good for small equities. One can apply and test them on larger accounts, but it is always advisable to use these robots on demo accounts first. Since these robots are meant to apply the same strategy in the similar circumstances, therefore always test them for atleast one month and make different charts for different timeframes to judge the performance. Only after a comprehensive test a forex robo system can be said to be safe for live trading.

New to Forex Trading

2009-04-24T06:05:00.000-07:00

All the friend who are new in the field of forex trading. This is a piece of advice. There are two type of brokerage firms

1. The trading firms which offer offer their trading software and training. This training is just how to use that software and how to enter and exit from a trade. This type of training shall never help you saving and growing your money.

2. There are firms which offer a trading software and different analysis tools within the software. They also provide you with the latest news related to forex and news forecast which helps you to make you way. at the same time they provide you virtual money to trade in the market. This virtual money helps you to polish you trading skills. You can easily monitor the result of the your analysis after applying it through your virtual money account.

Now the advice is that never play with the real money in the beginning. Always master the strategies on demo accounts with virtual money before playing the real. Happy Trading.

Trading for Freedom

2009-04-24T05:52:00.000-07:00

Why we trade? The answer is for money. We all need money to get freedom. Freedom to move around and freedom to spent. Since the forex market is open round the clock, this is a dillema the most of the traders spent maximum of their time sitting infront of their computer watching their entries. They loose freedom to move around on the first hand. Since they are watching all the time, when market takes a retrace, pressure builds up and human factor comes into play. This pressure makes them cut their entries in losses even before their stop loss point. So they loose their money and hence freedom to spent too. So when the trade is planned and made after an analysis, just define stops and limits and move away from your screens. This will make you grow your money. This works. Try it.

Selection of Broker for Forex

2009-04-24T05:39:00.000-07:00

At the moment there are hundereds of brokers offering forex trading platforms. Do not just jump into it with real money. You may encounter a spam website and will result in using your money. Always read website reviews before trusting. For website reviews just put the web address in the google search bar and you will find the links to the public openion regarding that perticular web site. Be aware of scams. There are websites which offer you a high rate of return on your money like 200-300% per month. Dont get deceived by the words and do not get pumped by the words "special offer" "Only for today" etc. People usually donot let loose the offer and resultingly loose their money to those scamers. Remeber "a fraude cannot get accomplished unless it blows the greed in you". So do not let your greed play with your money.

Forex Trading Psychology

2009-04-24T05:19:00.000-07:00

Trading forex is a risky business. A lots of passions and control on your nerves is the key to success. You must have following things in your mind while entering a trade.
1. You must know why you are entering into a trade. At times the traders forget the reason why they entered. After making the moves they keep looking at other indicators and overlook the reason to their entry. This makes them cut themselves in loss and later the when the market moves to the same direction, it makes them repent on their decision.
2. Always use a simple system consisting of not more than 3 to 4 indicators. Remember it is the consistency which makes you successful.
3. Set your profit point and risk level(stop loss) before you enter the trade and do not change it unnecessarily.
4. If a set of indicators give you a loosing trade do not change the system, because every system is successful 60-80%. Do not get bugged by the 20% loosing time. Other wise you will loose the next 80%wins.
5. Do not trade more than 1% of your equity if you are a beginner. make your successes consistent and then move the trade amount to 10% of your equity.

These are very simple rules to follow. So use them and happy trading.

International Money Market

2009-04-22T04:07:00.000-07:00

Trading forex is one of the worlds largest business in the world. This infact is the only market which is open round the clock starting from sunday 5pm EST to Friday 4pm EST. EST stands for eastern standard time which is the official time clock of United States of America. Many professional traders prefer to trade in forex instead of stocks and commodities because of its timing. Another reason could be the market is two way. This is a comparison of one currency to the other. Two currecies make a pair. When it is a pair the trade takes place. For Example Great Britain Pound (GBP) and US dollar (USD) form a pair GBP/USD. When GBP gets stronger because of some technical or fundamental reason against dollar the currency pair moves up. When US economy takes a lead against UK and GBP weaken against USD, the graph of the movement of pair stalls. Traders either buy or sell the pair depending upon their speculations and analysis. At present their are thousands of strategies and indicators which are being used to make the best of analysis to make money through forex. Similarly there are thousands of comments exist about this market. They all depend upon the good and bad experiences of the trader. In this web site you will find what makes a trade successful and what happened when it goes other way round.