All The Best: Online Forex Articles

Advantages And Disadvantages Of Currency Trading

2008-11-29T11:44:00.000-08:00

Currency trading, or Foreign Exchange trading is rapidly becoming very popular around the world because of the exciting rewards it promises to offer.

Earlier, currency trading was available only to huge corporations and monopolies. They had unlimited resources and investment capabilities. Small scale investors or individuals were unable to participate because it was just too overwhelming.

Fortunately things are fast changing now. For the first time in the history of currency trading, even individuals and small-scale investors can think of currency trading. Because of the advent of the Internet and advancement in technology, a lot of information is now available to individuals. They now have the resources to speculate and make investments, oftentimes
free of cost.

Currency trading is most certainly not risk free. Like any other work that involves financial transactions, it has its own negative points. Just one example is the unpredictability of currencies. Since currencies rise and fall almost every second, they might be extremely high one minute and absolutely useless the next.

Thus, currency traders must be on guard at all times to be in touch with the changes that keep taking place on the market. Since the foreign exchange market runs 24 hours a day, monitoring it every moment can be quite a tedious task.

Another important thing to remember is that when one currency value falls, another shoots up. After all, these currencies are trading against each other and this balance has to be maintained. Thus, to minimize risks, trade on major currencies such as the Dollar, the Pound or the Yen. Since they are the most traded currencies, their value will not catapult too drastically - these are valuable currencies.

Make sure your research on the subject of currency trading is thorough before you delve into the actual trading. The returns might look tempting to you, but if you jump into it rashly then you stand to lose rather than gain these returns. The amounts of energy and finances you need to invest in this trade are considerable and thus it would be better to exercise caution about delving into the trade.

Keep yourself up-to-date by either doing this yourself or hiring an expert to do it for you. Knowledge about the market also lessens the chances of you being duped into trading at the wrong time. You will not be dependent on anyone else to know when to sell or buy and thus invulnerable to cheats.

Forex Training for Forex Trading

2008-11-27T11:41:00.000-08:00

Forex trading also known as FX trading is among one of the very few businesses that an investor can get started in with a small investment and realize large profits, FX training is availbale to ensure success. FX trading is virtually open 24 hours a day fully automated via the Internet. Large networks of banks are electronically connected 24 hours a day and are not linked to a specific trading floor for business trades to occur. The rate of exchange determines the FX trading and is influenced globally by political and economic factors.

The trading of currency allows a trader to earn a profit both during rising and falling markets. Forex while not a market in the traditional sense is a very powerful trade to get into. Currency trading markets can be 50 to 100 times more in volume than on the New York Stock Exchange. Forex trading is unique to any other market and with its flexibilities has become one of the largest trading markets in the world. FOREX is the acronym for "Foreign Exchange Market". The foreign exchange market is where one country's currency is exchanged for another’s through a floating exchange rate system.

Forex trading is very attractive to traders because it offers freedoms that are unparalleled to traditional trading markets. Trades can be completed through brokers, companies that deal in funds and within your own country by yourself. You simple open either a CFD account or a Spread Betting Account to trade in the Foreign Exchange and begin your trading. Forex trading requires some caution and if you are new to the world of Forex trading some research and studying would be advisable. Forex signals are paid services that can be useful and can be purchased through various brokers and independent Forex annalists. Forex trading strategies are key to anyone’s success with trading currency online, knowing how, when and which one to use is also key.

Changing daily market conditions will dictate trading activity on any given day. Market movements occur at inopportune times, staying on top of these movements will allow you to capitalize on these movements when they are to your advantage. There are many FX trading courses available that are easy to understand and give an individual investor the knowledge they need to trade in the largest financial market in the world, in addition it allows the trader to earn a profit during both rising or falling markets. Currency traders can take advantage of all profitable market conditions. Becoming a Forex trader allows you to choose your own hours to work since the foreign exchange market is open 24-hours a day.

Venturing into Forex trading or a new investment requires a little time to do some homework or research. You should be aware that there is always some risk involved in any new venture, getting prepared is an important part. You can never have too much knowledge about anything do your research online. Invest in a broker at first and learn from them, if a broker is not for you than invest in an online course or ebook that covers all the bases of Forex trading and the terminology used in trading. Check out the Forex signals that are available, they give you signal when it would be the most advantageous for you to buy currency or sell currency. You enter in the currencies you want to trade and it keeps track of them and issues signals when its a good buying time and selling time.

With the increasing popularity of currency trading and the possibility for small investors to receive a high return on their investment it has become an increasingly popular investment alternative. Another plus to Forex trading is that there is no lag in the dissemination of information across the globe. Probably the most exciting is the fact that profits can be generated whether a currency pair is "up" or "down". FX trading allows you to start small and learn, much like riding a bike if you fall off just dust yourself off and get back on, the more you do it the better you get. There is an endless supply of information and resources available for FX training to ensure your success in the Forex trading.

Forex: The Most Common Flaws

2008-11-25T11:38:00.000-08:00

Flaws due to multi indicators and due to the principle of confluence:

Many traders are very much attracted to the sophistication offered by the multi indicators and use them in their forex trading systems. Many of the confluence system indicators show the price movement and in no way adds any value to the trade. Due to this, the traders either end up over bought or over sold technical indicators like the stochastic, momentum indicators, candle stick chart pattern recognition, Bollinger band breaks out even neural networks which are supposed to be artificial intelligent systems. The technical indicators just show signals which are similar to buy or sell or hold, making the signal generated to be correct. Theoretically it sounds good but in reality to arrive at a conclusion might be difficult. As a result the traders are confused in making a right decision. They either enter too late or too early or remain still without being able to make a decision to enter the market. The major flaw is due to the use of useless trading system which does not serve the purpose to make profits, but confuses the traders and complicates the forex trading until the trader loses.

Another dangerous flaw found in Forex trading is of an emotional nature interwoven into the process. It is fear and greed of the trader. A profitable forex trade can lead to exuberance and over joy, but this is the time when greed comes in and crosses the aspects of risk management. When a trader is hooked to winning, out of greed he over-rides all aspects to see more and more profits, only to see them crash to earth. They wait for the prices to regain, but in dismay may some time and with worst possible losses. This is the time when fear crops up and paralyses the trader not making him to open up any position. Hence while trading, the trader should not override the emotional side of trading, stick to discipline of the trade which can prevent them from committing the flaw of Forex trading.

Another kind of flaw can happen when the trader is an unconcerned person or the one who is lazy, or with no drive to gain profits or feels the need to be profitable. These people would have entered into forex trading due to hearing it as an easy game. For them it is not a trade which involves skill, trade management, preparation and re-investment. It is a fun game for them, where loses do not make any difference to them. Such persons make a wrong footing, with a wrong objective.

Flaws in Forex trading due to the inadequate knowledge of the trader:

Some of the losers start with good purpose in the trade. Even though they had gained some knowledge from here and there they might find it difficult to apply them practically in the trade. Inadequate knowledge might be the major flaw which stops them from achieving success.

Best Forex Trading Strategies

2008-11-23T11:35:00.000-08:00

Forex trading has a big appeal among the people due to the possibility of creating instant wealth. If Forex trading is equipped with a good strategy, preferably a unique one will be of great help in achieving success. Forex trading strategies reduce the risk irrespective of the person’s participation in position trading, or day trading, or swing trading provided they are disciplined enough to stick to the strategy adopted. The best forex trading strategies are adopted by forex traders who are blessed with keen market sense and also who are able to privy to get inside information. On the basis of that information they develop forex investment strategies. The Forex trading strategies which are devised after observing the market for quite sometime gain profits by rising above the odds. The forex traders who are best in their profession do not enter a trade without devising an exit strategy. They are the people who know very well when to minimize their losses and when to maximize their profits. They are very disciplined in doing both.

Leverage strategy: Forex trading strategies help achieve success in forex trading or online currency trading. Forex trading differs from trading stocks and the use of forex trading strategies help the person to gain more profits in a very short period. There are many forex trading strategies adopted by the investors, the most useful among these strategies is called as the leverage. This forex trading strategy allows the online traders to get more funds than the deposited amount; by adopting this strategy the benefits are maximized. This strategy helps in utilizing the amount deposited in the account even up to 100 times against any forex trading by backing high yield transactions very easily and better results are got. This leverage Forex trading strategy is used by the traders on a regular basis to take advantage of fluctuations happening in the forex market in short term.

Stop loss order strategy: Stop loss order forex trading strategy is also used commonly among Forex traders. This strategy protects the investors and creates a situation called the predetermined point, not allowing the investor to trade when it is reached. This Forex trading strategy minimizes the losses. Sometimes this strategy might backfire and make the investor to run the risk of stopping their trading leading to a higher loss, hence it is up to the trader to use or not to use this Forex trading strategy.

Automatic entry order strategy: An automatic entry order Forex trading strategy is also one of the widely used strategies. This strategy allows the investors to participate in the trading activity when the price is suitable for them. Here the price is already determined and when the situation is reached the investor enters into the Forex trading automatically.

Apart from the above strategies, there are certain basic rules to be followed as strategies to gain profits in Forex trading:

The amount exposed in the foreign currency trading should always be kept in track to ensure to be within the accepted levels. While trading, the trader should not be very greedy or breach when keeping the returns in mind which is expected out of the transactions. The main objective should be kept in mind; it might be either capital appreciation or constant returns or high profits. Keeping track of ones own experience will reward at a later stage.

Investment should be within the affordability to lose. Also relying on expert’s opinions, history prices, and analytical statements may be effective some time rather than going by their own instincts.

Benefits of online forex trading

2008-11-21T11:32:00.000-08:00

In the past, online Forex trading was limited to only big financial institutions and banks who were the only ones benefiting out of it. But, now due to the availability of the Internet, brokers, individuals, brokerage firms and governments agencies, we can have an access to online Forex trading with ease. Internet technology has enabled every one to reap the benefits of online forex trading. Online Forex trading is considered as the largest financial market of the world due to the huge volume of business handled everyday.

Online Forex trading has become very popular due to the ability of the computers to make complex charts which was not possible in the past as people could not afford to access the internet and high powered computers in their homes.

Benefits of online forex trading:

With the advent of the online Forex trading, forex traders can do business round the clock irrespective of the geographical location they have been placed. This is very important in contributing to the growth of the forex trading industry to the extent that the daily transactions have been increased to two trillion USD.

Opening of an online Forex trading account is very easy as there are many people who can offer this kind service to the trader. But they need to be very sure that they too deal with the same kind of currencies which the trader is interested in. There are free practice accounts allowing to test the skills of the trader offered by the provider with the usage of funny money before making transaction with real cash.

The traders can trade in different markets with different currencies at the same time without any problems. This is only possible because of online forex trading. This has brought in lot of flexibility and liquidity in online Forex trading. The trader is able to trade and access quotes in real time with online forex transactions.

Another important benefit of online Forex trading is that, it has eliminated the bulls and bears of the trade. We can say that the only trade market without the bulls and bears is the online forex trading market.

The most prominent feature of online forex trading is the way it is being operated transparently. There is no hide and seek involved in the process. It makes it easy to compare and spot trends making the decision to buy or sell at the right time with ease. This is only possible due to availability of the information instantly to everyone all over the globe.

Online Forex trading does not involve any commission, or exchange fees, or hidden costs etc. The trade is done in a very fast pace as there is no kind of any delay involved in it. It takes only seconds to execute the trade, fill or confirm the same. Also it provides greater leverage to the small traders than any other market could offer them.

Although there is lot of benefits involved in the online Forex trading, there is also a flip side to it. Not everyone who had invested their money in online forex trading has become rich. The reason for that is online forex trading is very risky. The trader has to take a decision within a transaction of the second which can end up with a profit or with a loss.

Forex Market: The Big Dogs Or Cool As A Cat?

2008-11-19T11:27:00.000-08:00

I have a dog and also a cat.

I live in a fairly rural part of an island where there is an abundance of lizards.

Both my dog and my cat like to catch lizards.

Both are very dedicated to the task and spend many hours each day in this seemingly endless pursuit.

As I have said, both the dog and the cat have the same goal, and yet they approach the task in very different ways.

Ted, my dog, rushes out as soon as the door is opened, tail wagging, barking at full cry and starts his ritual hunt. If he can actually see a lizard he rushes straight after it, but of course the lizards know he is coming almost before he has left the house, and they retreat in a flash to their hideaway.

Undeterred, Ted continues his energetic search of all of the nooks and crannies in which he once saw a lizard.

Rarely if ever does Ted catch a lizard, but he loves to try.

My cat, (no name) could not be more different from Ted if he tried.

Cat never rushes out of the house, but prefers a leisurely stretch, a slow but scrutinizing stroll to his favourite vantage point where he makes himself very comfortable and then he just sits still, sometimes for hours.

Every once in a while, an unwary lizard moves within striking distance of what appears to be the statue of a cat and in an instant, Cat has added another lizard to his long list of trophies.

Cat is a formidable lizard hunter.

So what has this to do with currency trading?

Aside from being a professional forex trader, I also sell copies of my forex trading system, The Amazing Stealth Forex System and I offer a free unlimited email support facility to all of my purchasers.

I receive, as you can imagine, a great many questions and comments with two particular themes being received more often than any other.

One is in relation to my thoughts on what "the big dogs" are doing and the other is why the system did not "recommend" any (or many) trades Yesterday – Last night – This morning - or whenever the particular trader in question wanted to trade but did not get a system trade set up.

My answer to the first question is usually similar to this:

I really do not worry about what the "Big Dogs" are up to as it will not affect my system trading, but if you really want to know, you can look them up for free at the "Commitment of Traders" (COT).

And to the second my answer is:

Even a great forex trading system like The Amazing Stealth Forex System can only alert you to high probability trades if there are any. The system highlights the opportunity, it does not control the market.

The most successful traders are the ones who have learned to have the patience and self discipline to watch and wait for the right opportunity…..and then they strike.

It was whilst idly watching both my dog and cat that I realized that if they were both traders, the attributes of the Ted would put him in the category of the 95% of traders that lose money.

Ted is all enthusiasm with no patience. Lots of energy but no self control. Eager to the task but not prepared to watch and wait.

Whereas the attributes of Cat would easily place him in the top 5% of traders that make money.

He has a method that works and he sticks to it. Cat is infinitely patient and has fantastic self discipline. Cat knows that it is pointless to make a move until the conditions put the odds firmly in his favour. When everything lines up, Cat strikes.

For this reason, I highly recommend that you stop trying to trade like a Big Dog and consider trading like a Cat.

Automated Systems Make Forex Trading Easier

2008-11-17T11:21:00.000-08:00

If you're serious about Forex trading, or foreign currency exchange trading, you'll need a way to monitor and control your transactions without having to keep up with it around the clock. That's where automated Forex systems can help a great deal. Many automated Forex software programs have been developed to make trading life easier. Let's explore the benefits of these systems and see how they can work for you.

Save Time on Forex Monitoring

With automated Forex, you can analyze your Forex trading in real time and make changes to your real account - all through one application. Many newer systems will connect to Forex signals that are generated by the trading systems. The signals go to your real account so you can know your open positions and manage your Forex trading from one place. These easy day trade signals make management much easier from day to day when you are unable to take time to monitor all your trading systems or to open and close positions as needed. It's like having an expert advisor system right in your computer!

No Hands-On Trading Needed

With automated Forex, there's no need to do hands-on Forex trading. The software does it for you. And the good news is it keeps on working while you sleep! It takes trades day or night so you can rest easy while the software keeps your Forex trades up-to-date and profitable.

Save and Make More Money with Forex Automation

Time management is one of the keys to Forex success. Automated Forex gives you an opportunity to save and make more money because you won't miss important Forex trading opportunities as you would when you have to monitor your trading systems all on your own. As a professional trader, you can have multiple trading systems in different markets (EUR-USD and others) and still keep up with them all successfully when you automate. The software will trade multiple systems for you, which enables you to reduce your trading risks and level out your equity curve.

Practice Forex Trading

Some automated Forex systems will allow you to create practice accounts so you can learn how to use the system properly without risk. It's much better to make mistakes with a dummy account and virtual money than to lose your real money as you're learning! If you are unable to create a practice account with your automated system, find a separate software program or an online application with which you can practice.

Trader Psychology Not a Factor

Automated Forex goes beyond your own thinking and analyzes the market using real data related to the Forex market. Your own trading psychology might cause you to make costly decisions due to emotions or rash thoughts about the market. You might be too emotionally involved to do your own trading at times. But automated Forex will do it for you, helping you overcome this issue.

With automated Forex trading, you can have peace of mind knowing that your little "expert advisor" is always watching and trading for you!

Forex Trading: The Best Currencies To Trade

2008-11-15T11:19:00.000-08:00

When you're first starting out it can be fairly difficult to decide which currencies are the best ones to trade. Do you watch all of them or only concentrate on one or two?

Well in truth there's no right and wrong answer. If you have a rigid trading system which produces consistent profits whatever the currency pair, then you may want to open a window for each pair, ideally on a multiple monitor set-up, so you can watch for your entry criteria to be met for any of these pairs.

So for example, let's say your trading criteria is a MACD crossover, a Supertrend change of colour, and RSI in overbought/oversold territory.

In this instance, you would simply create graphs containing this data for every major currency pair, and wait for a suitable entry for any of them.

That's one approach. Another approach, and one favoured by myself, is to only concentrate on the major pairs. This is because they are the most traded, and therefore charting patterns and technical indicators are generally more reliable and tradeable.

Another reason why I take this approach is because these pairs have the tightest spreads. This is extremely important because you really don't want to be trading pairs that have wide spreads simply because it limits your profits more and puts added pressure on you to make correct calls.

Over time these wider spreads can really eat into your profits, so I generally stick to three of the four major currency pairs - GBP/USD, EUR/USD and USD/JPY (USD/CHF is the other but that has a spread of 4 points with the broker I use).

I can easily watch these three pairs at once and watch for any entry points, but if you're just starting out, another approach could be to just concentrate on one pair. You will find that although most pairs follow technical indicators very well, each pair has it's own personality and so by concentrating on just one pair, and learning how it behaves, you may find this is the most profitable approach to take.

Another factor is your location and the time at which you are available to trade. For example, the GBP/USD is most active between around 8.00 GMT and 20.00 GMT, so if you're based in Australia, for example, you would miss most of the action if you wanted to trade in the daytime where you are.

So to conclude, there aren't really any best currencies to trade, each pair is potentially very profitable. However, the major pairs generally have the tightest spreads and are the most actively traded, and generally conform very well to technical analysis, so these are the currencies I would recommend trading.

Learn Forex Trading Basics

2008-11-13T11:01:00.000-08:00

This article gives an introduction about the basics of trading Forex online, a brief explanation of the markets and the major benefits of trading forex online. Foreign exchange or forex are all terms used to describe the trading of the world's many currencies. The forex market is the largest market in the world, with trades amounting to more than 1.5 trillion dollars every day. The foreign exchange market has no central clearing house or exchange and is considered an over-the-counter (OTC) market. Forex traders are generating incredible wealth day after day from the comfort of their home. Foreign exchange is normally traded on margin. A relatively small deposit can control much larger positions in the market.

Forex trading takes place directly between the two counterparts necessary to make a transaction, whether over the telephone or on electronic brokerage networks all over the world. This is a trade that includes simultaneous buying of one currency and selling of another one. There are two reasons to buy and sell currencies. About 5% of daily turnover is from companies, and governments that buy or sell products and services in a foreign country must convert profits made in foreign currencies into their domestic currency. The other 95% is trading for profit, or speculation. The currency combination used in the trade is called a cross (for example, the Euro/US Dollar, or the GB Pound/Japanese Yen.).

The market is called the spot market because trades are settled immediately, or “on the spot”. One of the major benefits of trading forex is the opportunity to trade 24 hours a day from Sunday evening (20:00 GMT) to Friday evening (22:00 GMT). Unlike stock trading, currency trading on the Forex market is not cut short at the "close" of each day's trading. The benefit of Forex being a 24 hour a day market is that there are little or no gaps in the market, meaning there is no chance that prices will close one day and reopen the next day. The fact that forex is often traded without commissions makes it very attractive as an investment opportunity for investors who want to deal on a frequent basis.

Since the market is always moving, there are always trading opportunities, whether a currency is strengthening or weakening in relation to another currency. When you trade currencies, they literally work against each other. Different currencies pay different interest rates. The interest rate differential doesn't usually affect trade considerations unless you plan on holding a position with a large differential for a long period of time. This is one of the main driving forces behind foreign exchange trends. You can have both a positive and a negative interest rate differential, so it may work for or against you when you make a trade. It is inherently attractive to be a buyer of a currency that pays a high interest rate while being short a currency that has a low interest rate. Fortunately, there are no daily limits on foreign exchange trading and no restrictions on trading hours other than the weekend. This means that there will nearly always be an opportunity to react to moves in the main currency markets and a low risk of getting caught without the opportunity of getting out.

A Forex trading method with a high winning percentage is rewarding psychologically, keeps your morale high and is enjoyable to trade. A string of profits will build your confidence. Losses have to be kept small and wins should be larger than losses. You can make big money working only a few hours a day or week on your computer. You can trade from anywhere in the world where there is an internet connection.

Learn Forex: Getting Started in the Marketplace

2008-11-11T10:58:00.000-08:00

For someone with zero experience and knowledge in the Forex market, getting started in the trading can be an overwhelming task. Various pitfalls, such as huge losses, can discourage even the most experienced trader. Since Forex trading can be a confusing business, you need to follow several guidelines to success.

First, learn Forex trading by choosing the most qualified brokerage firm. Although some firms are better than others are, you have a ton of options in terms of age, reputation and courses to offer. Generally, you should choose a well-established company with a good reputation that is tied to banks or various financial institutions. To ensure that a brokerage firm is legitimate, check if the company is registered with the Commodity Futures Trading Commission.

To learn Forex trading effectively, the brokerage firm should provide you with multiple research tools, such as charts, real-time quotes, trading techniques and research reports. You should choose a firm that offers its account holders as much information as possible. Be aware that the more knowledgeable you are with Forex trading, the more successful you can become in the market. Lastly, choose a highly regarded brokerage form with favorable spread. Be aware that a company with a good spread means that the firm takes off the top of each trade, translating into more profit for you.

In order to learn Forex trading, you need hands-on courses that allow you to experience the market firsthand. Of course, investing money without proper knowledge can lead to disastrous losses, so opening up a demo account should be your next move. With this demo account, you learn Forex trading firsthand because you will be given a pretend balance, which you could use to play around and experience the feel for Forex trading before using real money.

Most demo accounts are free-of-charge for an entire month. During this time, you can learn Forex trading and all its features, techniques and tricks without losing any money. Plus, you are able to master the software, which enables you to make fast trades when the time comes to trade. It is important not to rush the 1-month trial period because this is the most important phase of your trading course.

Once you learn Forex trading and experience a whole month's worth of market experience, then you can now use a real account with actual money. However, never invest large amounts of money; start small and try not to break the bank when getting started in the market place. By choosing a good broker, maximizing the benefits of a demo account and taking your investment one-step at a time, you learn Forex trading can be a fulfilling experience when executed the right way.

What To Do Before You Learn Forex Trading

2008-11-09T10:25:00.000-08:00

When you learn forex trading through online courses, on-location classes, hands-on lessons and other sources, it should explain to you that Forex is not a risk-free business. Although many become successful traders and double their investments, all traders have experienced losses. Most traders are aware of possibilities that trades would go against them. As such, you should learn Forex trading the realistic way and understand that to minimize risks; you should take caution and use trading tools properly.

To minimize losses and trade profitably, you should learn Forex one-step at a time. However, you should consider several things before you choose a course and learn Forex trading. These include scams and risks associated with trading Forex.

A few years ago, Forex scams were extremely rampant. Although the Forex industry dramatically cleaned up plenty of fraudulent brokers, you still need to be cautious when signing up with a brokerage firm. Generally, reputable Forex brokers are associated with large financial institutions, such as insurance companies and banks. They should be registered with your respective government agencies. For instance, in the U.S., brokers should register with the Commodities Futures Trading Commission or become a member of the National Futures Association. After you learn Forex trading but you are still in doubt with a particular broker, then it is best to check with the Better Business Bureau and your local Consumer Protection Bureau.

Even if you deal with a broker of good reputation, there are still plenty of risks to Forex trading. Each trade is subject to volatile markets, unexpected rate changes and even political events that may affect worldwide currencies. When you learn Forex trading using a quality course or attending a reputable school, you will learn different trading risks involving the exchange rate, interest rate, credit and country risks. Since each type of risks present different losses, it is important that you understand how to limit these risks and avoid them as much as possible.

The key to limiting risks and avoiding scams is education. When you learn Forex trading, you develop a solid trading strategy, making you an expert in telling when it is a good time to enter or exit the market as well as determining what kinds of movements to expect. After one course, you should be able to read financial charts, study indicators and master the basics of technical analysis.

As a general rule, you should never place money in the Forex market that you cannot afford to lose. If you are still uncertain of your Forex skills and knowledge, the only way to limit trading risks is through proper education. If you really want to become successful at Forex, you need to have patience, effort and time to learn Forex trading the right way.

The Mindset of The Successful Forex Trader

2008-11-07T10:20:00.000-08:00

Let me begin by saying that if you want to get into forex or currency trading online, DO NOT begin by buying a guide or a training course.

Too many low-lifes out there pander to the uninformed by selling them overpriced guides and manuals, sometimes for a few thousand dollars each.

A forex mentoring course can be a good option once you know the basics of forex and want to hone your skils, but there is just so much good information available on the internet for free that you could literally become an all-star trader without paying anything for education.

Today we are going to talk about the way you need to think if you want to be a profitable forex trader.

I consider myself to be pretty profitable when it comes to forex trading, and my first banking internship on the Foreign Exchange floor was when I was 16! (I was the youngest intern they ever had!) I got hooked on trading, and have been doing it ever since.

One thing that is really necessary to your success is to READ. Alot! The more you know about forex trading, the easier (and more profitable) it will be.

You want to know the mechanics of the forex markets from the inside-out. I'm not going to spend time discussing the practical aspects of the forex market, as you can and should discover this though your own reading.

When you begin to get comfortable with your knowledge of what this market is, how it works, and how to place successful trades, you are in a position where you can feel confident in your trading abilities.

The most important thing that the successful currency trader possess is the ability to separate his emotions from his trading. Confidence in your trading abilities is one important aspect to being emotionally detached from your trades, and the other aspect has to do with the way you fund your live trading account.

Make sure that when you put money into your live forex account, it is extra money that you do not need to survive and could afford to lose. If you are trading with the money that you need to pay your car insurance, your trading will be highly emotional and likely to fail.

In a way, this is kind of ironic, because I'm sure you've heard the saying that 9 out of 10 of new traders fail. Well, traders that CARE and are highly emotional about growing their forex account are the ones that lose their shirts, when the traders that DON'T CARE and have no emotional attachment to their trading make most of the profit.

That's the irony: The less you care about making money in the forex market, the more money you tend to make!

But also realize that you are not 'not caring' out of negligence (pardon the double negative), but rather because you are so confident in your trading abilities that you KNOW that in the long run you will always win.

To the successful forex trader, trading is not so much about making money as it is about collecting pips in their trading account!

Profitable forex trader's also tend to develop and follow their own trading systems. Finding or creating a certain system and trading within it is also important to successful trading.

Best Forex Education

2008-11-05T10:15:00.000-08:00

Forex has become very popular in the last few years as it has allowed people to make a stream of income in the comfort of their own home. If done successful this can actually replace your full time job and you can devote all of your time to trading online currencies and live very comfortably depending on your experience and skills. You may think that this sounds like the stock market but it doesn’t for many reasons, one being that there is no static place you can trade forex. It is done all around the world which makes it very popular to do over the internet to make life much easier and more convenient.

You can take part in forex transactions at any time during the working day, the market will open up first thing in the morning in Australia and as it becomes morning across the world more markets open up allowing people to trade their currency rapidly and more importantly with ease. Each transaction you take part inside the forex market is ended very quickly making it popular because there is no waiting around or delay in anything. This means you can trade currency and then trade it straight away if you have noticed something that could be beneficial. The forex market attracts people from all walks of life such as banks, financial brokers and speculators, financial institutions and ordinary people in their spare. No matter how much money you have ready to invest you can be sure to make a profit, as long as you know what you are doing.

With it becoming so popular and a quick method to make some extra money people from all over the world are beginning to see the advantages of learning the principles behind this currency trading market and are trying to learn it inside out making it more likely to succeed at it. If you are having problems you can always consult the experts who will provide you with advice, tricks and tips in the forex game helping you make more money.

If you want to become a true forex marketer you should always watch the news and look out for changes in different countries wealth, if you can find information out that has relevance to this market you will stand in good stead to make money from it. For example if you were to find out that the Chinese banks and wealth are suffering making their currency decrease in value you will want to sell all of it as quickly as possible before they become worthless. Watching out for things such as inflation will give you a good head start to making money in the forex market so if you want to do this full time there is a lot of work involved. Don’t just think that you can log in and trade for a few hours a day and then do what ever you like.

Many people don’t like risking their money in this particular market, if you are one of them you can still benefit from downloading the client and using the free money that you get when you sign up. This works in exactly the same way but you are not risking any real money in it.

Forex Trading Money Management

2008-11-03T10:12:00.000-08:00

As part of your Forex trading strategy, you must be able to manage the money that you invest in trades and determine when it is advantageous to enter or exit a trade. Most trading strategies are good for determining when a trade should be entered, but not all strategies establish an exit. If your Forex trading strategy does not provide exit points, you will still need some method of determining when to exit.

Profit and Loss (P/L) - Forex trading systems provide one of the easiest forms of executing and monitoring profit and loss (P/L) in investments. P/Ls in the spot market are generally measured in decimal units. A calculation of the long and short position for a leveraged currency pair will easily provide you with the amount of profit and the amount of loss.

Gains to Losses - You also need a method of predicting the chance of profiting from your trades in order to decide how much money to invest in your Forex trading strategy. By calculating the ratio of gains to losses you will be able to determine if your trades are providing a higher percentage of gains than losses. If your trades are gaining then you need not invest more money into already winning trades.

Risks to Reward - Since Forex trading systems involve risk, you need to able to measure the risk taken as compared to reward received. A risk/reward ratio may be determined by dividing a take-profit spread by a corresponding stop-limit spread. No rollover or interest rate differential is required. You are cautioned against allocating more than 10% of your total investment funds into a single trade as either margin or risk. Your Forex trading techniques should include enough funds to allow you to engage in multiple trades. If some trades result in loss, those losses have the potential to be recovered with other winning trades. If half or more of your trades result in loss, you need to analyze and adjust your Forex trading strategy.

Limiting Losses - You may limit the amount of loss by adjusting take-profit and stop-limit orders relative to the entry market price. By raising stop-limit orders and lowering take-profit orders, you may reduce loss potential. If prices create adverse results, you may eliminate any further loss by manually liquidating the trade. If price moves are favorable, you may increase your limits. In some instances it may be advantageous to raise the stop-limit order above the market entry price. This guarantees a profit of at least the originally targeted price and at most, the newly established price.

If you have taken a long position, you should avoid lowering stop-limit orders and accept a loss or trade a different currency pair. Take-profit orders should only be lowered in long positions if a reversal is anticipated. Otherwise, you should liquidate. If you have taken a short position, you should avoid increasing stop-limit orders and only increase take-profit orders in anticipation of a reversal. Many large losses are due to moving and removing stop-loss orders. The Forex trading strategy for uncertain traders should be to liquidate trades for small losses or small profits rather than hanging around to suffer a greater loss.

With most Forex strategies, stop-loss orders are typically placed below and above previous highs or lows. However, you may find it advantageous to set your stops according to market volatility. Using charts of recent currency pairs you should be able to gauge shifts in volatility. This information could then be used to set stops and price objectives. This method may also be used to establish entry points in the market.

Mini Forex Trading Account

2008-11-01T10:07:00.000-07:00

Learning about this subject will help you more in the long run than you may realize, until the time comes when you really need it.

Open a small online FOREX trading account first before considering of investing big if you're a beginner. FOREX trading is risky if you dont have enough experience. If your meaning is to get some experience and not interested in making big investment yet, you can begin by investing $50 - $100 first and see how it goes. To trade with such small amounts is the best way to get known with FOREX marketplace. It is greatly better than working with demo accounts, where you're not genuinely risking your money and there are no returns at all with these accounts.

You can start an online FOREX trading account and some website let you register from as little as $50. Do not laugh small accounts are a good customs to get your feet wet before invest all your money inside. Also, mini FOREX trading does not undergo the illiquidity of many futures mini-contracts, as everybody feeds from the same currency team. Not only that, you can begin trading in 5 minutes or less. You can immediately deposit the margins of the deals and trade instantly.

In the beginning of this article, we went over the basics. Now, we will look at this topic a little more in-depth.

Small accounts are a great way to start and develop your important trading expertise. Consider to wish a FOREX trading platform with high competitive spreads. This way will save your FOREX trading expenses. It can be as low as 3 to 5 pips, depending on how greatly money you want to trade.

I would want to give a few tips before you start an online FOREX trading account. Everybody is emotionally close to their money. You must have emotional detachment from your FOREX trading account. Otherwise, each taint trade will swarm you with stress, fret and fright. Just be calm when you trade and you can do greatly better.

Having this information handy will help you a great deal the next time you find yourself in need of it.

Best Forex Articles

2008-10-31T22:50:00.000-07:00

How To Choose A Forex Trading Platform?

Forex Currency Trading - The Best Way To Make Money?

How To Create A Simple But Accurate Forex Trading System

How To Pick A Profitable Forex System?

Forex Trading - Good Money Management Alone Is Not Enough

Forex - Jumping Aboard for Giant Breakout Profits

What is The Most Traded Currency In The World?

Forex Trading - a 50% win rate

Futures Online Trading: The True Story

Forex Fundamentals: Good News for the Dollar

What is Forex Market?

Can We Make Money trading the Forex Market?

How To Find The Right Forex Trading Strategy?

Online Forex Trading - The Only Way

Forex Trading - Compared to Gambling

Forex - Short Term Trading, Not for Beginners

How To Choose a Forex Broker?

Page 1 - 2 - 3 - 4 - 5 - 6 - 7 - 8

How To Choose A Forex Trading Platform?

2008-10-30T01:08:00.000-07:00

Our introduction to this topic will include the basics, which will be followed by a more in depth look at this topic.

Getting an account with an online FOREX trading platform account regularly consists of four steps: selecting an account type, registration, account activation and confirmation. Here are few tips of choosing a great platform

1. Open a mini account
Try opening a minuscule FOREX account with two or three platforms if you desire and ultimately consolidating your money to the one that seems to work best for you. Take time making decisions on which FOREX trading platform you want to work with and don't be troubled to ask tons of questions.

2. Get spot account
Make certain you're getting a FOREX spot account and not forwards and futures account. Almost everybody uses spot market as it is easier to rollover your position.

3. Policies
Be certain that you feel comfortable with FOREX trading platform policies before registering. Look for these few stuff

- Bid/ask price on main currency pairs

We hope that the first part of this article as brought you a lot of much needed information on the subject at hand.

- quantity of margin that is vital per trade

- lowest trading unit size

- No unknown commissions or other trading fees

- Reliability of the trading platform

4. Competitive spreads
Look for the most competitive spreads as this will lower your expense when you trade FOREX. If you're trading thickly, it might expense you a complete lot addition of money for not receiving a great competitive spreads. Competitive spreads varies about 3 to 5 pips and if you're receiving a paste of 8 pips or more, just snub this platform.

5. Transparency
Transparency of the trading platform is also important to make certainly they never charge you extra costs. Sometimes, they might make a blunder and charge you more and this might expense you an addition expenses you didn't want. Select which online FOREX trading platform prudently before trading currencies. Open a mini account in 2 or 3 platforms before choosing which platform you want to use in long term. Assess it for few weeks and see which gives you the best deal. Getting an account in a incorrect online FOREX trading platform can make you to fail both your time and money.

Seeing is believing, but sometimes we can't all experience every subject in life. This article hopes to make up for that by providing you with a valuable resource of information on this topic.

Forex Currency Trading - The Best Way To Make Money?

2008-10-30T01:05:00.000-07:00

The Foreign Exchange market (Forex) is truly the largest exchange in the world. The amount of dollars traded on the Forex market on a daily basis is in the trillions. Most of this currency trading takes place between between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. However, individual traders are starting to get in the mix, using internet discount brokers such as Etrade to participate in the currency exchange market.

There is no central exchange or meeting place for the Forex. All trading is done over computer networks between traders in different parts of the world. Also, unlike the stock market, the foreign exchange market is open 24 hours per day, because it is a global market. A trader in Hong Kong may be exchanging currency with a trader in Australia while an American trader is sleeping.

There are several different markets within the Forex exchange system. First, there is the spot market. The spot market deals with trades that are based on the current values of currencies. One person trades a certain amount of currency with another trader in exchange for an equivalent amount of a different foreign currency. Spot trades take two days for settlement.

The other two types of foreign exchange markets are the forward and futures markets. In the forward market, the buyer and seller agree on an exchange rate and a transaction date is set for a specific time in the future, at which point the trade is executed regardless of what the rates are at that time. On the futures market, futures contracts are bought and sold based upon a standard contract size and maturity date. Futures trades take place on public commodities markets.

A currency quote is listed differently from a stock quote. Stocks are quoted in terms of price per share. Currency exchange prices are listed as either a direct quote or an indirect quote. A direct quote uses the domestic currency as the base and the foreign currency as the quote. An indirect quote works the exact opposite way.

So, if you were to view a quote in an American newspaper that said USD/JPY = 75, that would be a direct quote and would mean that $1 of U.S. currency is equal to 75 Japanese yen. If that same quote appeared in that same American newspaper and was listed as JPY/USD = 0.013, that would be an example of an indirect quote.

As with stock prices, currency exchange prices have a bid and ask spread. The current bid is the amount of foreign currency that someone is willing to spend in order to buy $1 U.S. base currency. The ask is the amount of foreign currency that someone is demanding in order to be willing to sell $1 U.S. base currency.

The Forex markets are generally considered to be less volatile than then stock market because within the course of a trading day, it is highly unlikely for the value of a single currency to move all that much. With equities, it is not uncommon for a trader to buy a stock, and then a negative press release causes the stock to lose considerable value within a day or even a couple of hours. Sometimes, however, the Forex can be volatile. If there is a significant economic or political development with a certain country, the currency of that country can lose value quickly.

There is a higher degree of liquidity on the currency exchange then there is on the stock exchange because the currency exchange is open 24 hours per day and because the very nature of currency exchange is to bet on when certain currencies will go up or down; so, it is easy to sell your position in a certain currency even when the value of that money is going down. A plummeting stock is more difficult to unload, but not impossible.

If you want to begin currency tranding, try to set aside some money and open an account with an online broker. Start slowly, then as you get the hang of it, work your way up to larger trades and higher volume. However, do not gamble your nest egg on currency trading because inexperienced traders can lose everything they have rather quickly in spite of the relative safety of the Forex market.

How To Create A Simple But Accurate Forex Trading System

2008-10-29T01:03:00.000-07:00

The foreign exchange market, or Forex market, is an around-the-clock cash market where the currencies of nations are bought and sold. The value of your Forex investment increases or decreases because of changes in the currency exchange rate or Forex rate. These changes can occur at any time, and often result from economic and political events. The purpose of this article is to present Forex trading system strategies from some of the world's trading greats.

Do Not Play With Your Trading Losses: According to William Eckhardt, These evidently instinctive human tendencies spell doom for the trader - take your profits, but play with your losses.

Good Money Management Alone Is Not Enough: According to Monroe Trout, Good Money Management alone isn't going to increase your edge at all. If your system isn't any good, you're still going to lose money, no matter how effective your money management rules are. But if you have an approach that makes money, then money management can make the difference between success and failure.

Don't Optimize Trading Size: According to William Eckhardt, Trading Size is one aspect you don't want to optimize. The optimum comes just before the precipice.

Do Not Play Catch Up: According to Richard Dennis, I learned to avoid trying to catch up or double up to recoup losses. I also learned that a certain amount of loss will affect your judgment, so you have to put some time between that loss and the next trade.

Trade Small: According to Mark Ritchie, I think it's generally a good idea that when you put on a trade, it should be so small that it seems almost a waste of your time. Always trade at a level that seems too small.

Do Not Override Your System Too Often: According to William Eckhardt, You should try to express your enthusiasm and ingenuity by doing research at night, not by overriding your system during the day. Overriding is something you should do only in unexpected circumstances - and then only with great forethought. If you find yourself overriding routinely, it's a sure sign that there's something that you want in the system that hasn't been included.

It Is A Skill You Can Learn: According to Michael Marcus, I think to be in the upper echelon of successful traders requires an innate skill, a gift. It's just like being a great violinist. But to be a competent trader and make money is a skill you can learn.

Courage: According to Bill Lipschutz, It is not enough to simply have the insight to see something apart from the rest of the crowd, you also need to have the courage to act on it and to stay with it. It's very difficult to be different from the rest of the crowd the majority of the time, which by definition is what you are doing if you are a successful trader.

Not Losing Money: According to Linda Bradford Raschke, The good traders are the ones who can hold their ground the majority of the month and participate in that small handful of trades that are windfalls. The real skill is in not LOSING money!

Trading Forex on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite.

How To Pick A Profitable Forex System?

2008-10-27T01:01:00.000-07:00

How To Pick A Good Forex Broker And A Profitable Forex System?

Forex trade has come to stay, because many people are benefiting from it. That being the situation, some people got licensed to become brokers, but not all of them will serve you satisfactorily. Therefore, you have to look at the following before accepting a broker with which to open a Forex trading account.

What Is The Spread Of Displayed Prices; Are They Fixed Or Variable?

Currencies are not like stocks that are traded through a central exchange; instead, different brokers handle currency trading by displaying prices on their websites, meaning that spread depends on your broker’s policy. For instance, some brokers do the fixed spread, deducing that at whatever time or trading period it remains the same. On the contrary, several other brokers make use of the variable spread, which, as the name implies, has no firm spread and so may give the impression of being okay and small in your favor for a moment, and before you blink an eyelid, it turns hostile as the market hurts up and the broker broadens the spread. Make certain that the broker you intend to use operates the fixed spread.

Speed And Honor:

In some cases brokers may renege to honor their display prices after you push the Buy or Sell button. Learn a broker’s honesty by first registering a test account as a test drive. By so doing you will also be in a position to see how fast it takes to complete your order. Don’t get tied up with a broker who takes ten or more minutes to complete and validate your order.

Efficient Forex System:

Effective Forex trading software should put on view live prices for you to expectantly trade at, and also offers both Limit and Stop orders. A consistent Forex system should ideally offer a system of attaching those to your entry order. It should also possess the One-Cancels-Other orders feature that permits you to take your options and leave the software to carry on with its work. The most imperative feature of a good Forex trading system is simplicity, for if you do not quite understand your trading platform how can you profit from its use?

Broker Support:

Forex trading is a nonstop 24 hour market procedure that demands a 24 hour Broker support. Phone connection between you and your Broker is very elemental. Whether it be daylight in your part of the planet and dead of night in your Broker’s part of planet, there ought to, as a necessity always be someone over there to attend to you. You mat want to be able to close positions over the phone if suddenly you experience Internet outage.

Broker Financial Backing

Finally, for the purpose of unearthing all the above, you should examine the company you intend to trade with. Brokers do not function in vacuum, they are regulated, but irregularities are as old as commerce. Be sure that your broker makes both their parentage and financial backing clear. If they balk on this very important clarification, do not register with them. You need only that broker with a solid financial backing.

Forex Trading - Good Money Management Alone Is Not Enough

2008-10-25T00:58:00.000-07:00

Forex is an abbreviated name for foreign exchange. The Forex trading market is an around-the-clock cash market where the currencies of nations are bought and sold, typically via brokers. For many years, the Forex market was dominated by large institutions such as banks and brokerage firms. However, the Forex market has experienced a major change over the past several years, as a growing number of private investors and traders just like you have started to actively participate and trade. The purpose of this article is to reveal Forex trading strategies that withstand the test of time.

Have An Open Mind: According to Mark Twain, It's not what we don't know that hurts us; it's what we know for sure that just ain't so.

Good Money Management Alone Is Not Enough: According to Monroe Trout, Good Money Management alone isn't going to increase your edge at all. If your system isn't any good, you're still going to lose money, no matter how effective your money management rules are. But if you have an approach that makes money, then money management can make the difference between success and failure.

Do Not Play Catch Up: According to Richard Dennis, I learned to avoid trying to catch up or double up to recoup losses. I also learned that a certain amount of loss will affect your judgment, so you have to put some time between that loss and the next trade.

Trading System: According to Howard Abell, The trading system gives the trader the ability to control his or her emotional states rather than allowing them to control him. A system is a disciplined method for organizing dynamic, ever-changing market phenomena.

Trade Small: According to Mark Ritchie, I think it's generally a good idea that when you put on a trade, it should be so small that it seems almost a waste of your time. Always trade at a level that seems too small.

Be Greedy When Others Are Fearful: According to Warren Buffet, Be greedy when others are fearful.

Courage: According to Bill Lipschutz, It is not enough to simply have the insight to see something apart from the rest of the crowd, you also need to have the courage to act on it and to stay with it. It's very difficult to be different from the rest of the crowd the majority of the time, which by definition is what you are doing if you are a successful trader.

Limit Your Losses: According to Linda Bradford Raschke, The market will decide how much profit to give you. Only you can decide how much to limit your loss.

Good Trades: According to Van K. Tharp, Good Trades Seldom go too far against us.

Always Changing: According to Jack D. Schwager, The markets are always changing, and they are always the same.

The Strategy: According to Sun-Tzu, All men can see those tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved.

Sit On Your Hands: According to Bill Lipschutz, If most traders would learn to sit on their hands 50 per cent of the time, they would make a lot more money.

Psychological Makeup: According to Leo Melamed, You learn to distinguish the good traders from the bad, the successful techniques from the unsuccessful, and the good habits from the faulty. You also learn to distinguish the lover from the fighter, the winners from the losers, the serious from the frivolous, the cerebral from the superficial, and the friend from the foe. But above all, you learn that the psychological makeup of the trader is the single most critical element of success.

Trading Forex on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite.

Forex - Jumping Aboard for Giant Breakout Profits

2008-10-23T00:55:00.000-07:00

A "breakout" is when the market suddenly and quickly jumps out of its recently established range to either gain, or lose, price dramatically. Often times a breakout will occur out of a counter-trend market, but this isn't always the case.

In fact, many of the articles you will find about breakouts online will actually be focusing only on breakouts that come out of a counter-trend market. While this is the most common type of breakout that Forex trading systems concentrate on, the other breakouts should not be ignored because they also offer excellent opportunities for a Forex trader to make good money.

When a market is counter-trending, traders are watching a market that is staying contained between a high and low range, but the market is moving sideways. When a day's trading ends up pushing the currency value out of that contained channel, that's a breakout to the upside, and it can go either way, higher or lower. No matter which direction it takes, there is money to be made off of it as long as you're on the right side of the breakout.

But breakouts aren't limited just to forming out of counter-trend markets! They can also take place coming out of a trending market. When a market is trending in either direction, there still is a normal range that determines a trend. When the market breaks out beyond the normal range of the trend, that movement is also considered a breakout.

Breakout trading offers opportunity since jumping on the right side of a breakout early offers potential profit in a Forex market. They provide a chance to ride a strong sudden surge of volatility to provide quick and large profits. While breakouts are rarer than other types of market movement, they offer the most money to be made.

This strategy sounds simple, but the problem with playing a breakout is that breakouts are technically unstable, and no one knows how long they will last or when they will suddenly reverse. There are also "false breakouts" where the market appears to be breaking, but isn't.

There are strategies and indicators that that try and pin point a potential breakout. Some of the most popular include:

1. Using pivot lows and pivot highs to determine potential "pivot points" that indicate an upcoming breakout
2. Fibonacci retracement methods
3. Using multiple moving averages

There are many methods to try and find a breakout, and once an identified breakout begins, a trailing stop is one of the best ways to take maximum advantage of this situation.

What is The Most Traded Currency In The World?

2008-10-21T00:53:00.000-07:00

Forex Trading the Top U.S. Economic News Reports

The US dollar is the most traded currency in the world and an understanding of US economic indicators is important in understanding the US dollar and its role in the currency trading system. Some of the most important U.S. economic indicators include the gross domestic product (GDP), producer price index (PPI), consumer price index (CPI), industrial production (IP), durable goods & services, employment cost index (ECI), retail sales index (RSI) and housing starts. These indicators have the potential to generate volume and move market prices around the globe.

Gross Domestic Product (GDP) - The gross domestic product is a measure of all economic activity in the economy. The GDP represents the total market value of all goods and services produced by both domestic and foreign companies within the borders of the US. The GDP should measure between 3% and 5% for advanced industrialized nations such as the U.S., Europe and Japan. A growth of less than 3% indicates a stalling economy and a growth of more than 5% indicates that the economy is on the verge of inflation.

The U.S. Bureau of Economic Analysis (BEA) publishes two measures of the GDP. One measure is based on expenditures while the other measure is based on incomes. The GDP publishes an advance release of the GDP following each quarter of the year, which contains, among other things, estimates for data not previously released, trade balances and inventories. This is considered to be the most important release while other BEA releases are considered less significant.

Producer Price Index (PPI) - The PPI measures price changes in the manufacturing sector as the average change that domestic producers in manufacturing, agriculture, forestry, electric utilities, natural gas, mining and fisheries receive in selling prices. The PPIs used most often in US economic analyses are measures for crude, intermediate and finished goods.

Consumer Price Index (CPI) - The CPI measures the average price paid by urban consumers for a fixed basket of goods and services. Urban consumers are largest base of consumers, totaling about 80% of the U.S. population More than 200 categories of goods and services are included in the calculation of the CPI. The measure of the CPI includes taxes and user fees connected with goods and service, but it excludes the volatile food and energy components of consumer spending.

Industrial Production (IP) - IP is a chain-weighted measure of the change in production for the nation's factories, utilities and mines. An IP is determined for types of industries and types of markets. Since the IP is a measure of industrial capacity and available industrial resources, IP may also be called capacity utilization. Since manufacturing accounts for about one-fourth of the economy, IP rates indicate the capacity of the country's factories.

Durable Goods and Services - Durable goods and services are a measure of new orders placed with domestic manufacturers for immediately delivery and delivery in the future. A durable good or service is a good that lasts or a service that extends for a period of more than three years.

Employment Cost Index (ECI) - The ECI is an estimated measure of the number of full-time and part-time employees in businesses and government. It is based on more than 500 industries in 50 states and 255 metropolitan areas. Data are collected from surveys of employer payrolls and includes wage as well as non-wage costs of employment.

Retail Sales Index (RSI) - The RSI is an estimate of the total monthly sales from retailers. It is a measure of consumer consumption and confidence. Data are collected from a sampling of retail establishments throughout the country. Retail sales include the sale of services, durable goods and non-durable goods. It includes excise taxes and excludes sales taxes.

Housing Starts - Housing starts is an estimate of the number excavations for foundations of residential properties. An analysis of housing starts measures the change in housing start levels from month to month.

Forex Trading - a 50% win rate

2008-10-19T00:51:00.000-07:00

To be realistic, most people will have a win loss ratio no better than 50%. The reason so many people lose money in Forex trading is that with a 50% win rate, they lose much more money than when they win.

It is possible to make money in Forex trading by picking winning trades with no better statistical advantage than flipping a coin.

How can someone make money when you only get half the trades right? That means 5 out of every 10 trades are losers. Well, if your money management is set up with the right profit loss ratio, it is possible.

Let's use 30 pips as a profit target on every trade and 20 pips as a stop loss on every trade. We will use 10 trades to make it easier using percentages. Winning 5 trades at 30 pips per trade, nets 150 pips profit. Losing 5 trades at 20 pips per trade is 100 pips loss. The net profit for ten trades is 50 pips gain. With one contract, this is $500.00 or one mini-contract, this is $50.00 per ten trades.

Let's say you get better at your trading and win 60% trades. Winning 6 trades at 30 pips per trade, nets 180 pips profit. Losing 4 trades at 20 pips per trade is 80 pips loss. The net profit for ten trades is 100 pips. With one contract, this is $1,000.00 or one mini-contract, this is $100.00 profit per ten trades.

A more rare win percentage is 70%. But working out the math, 7 winning trades at 30 pips, nets 210 pips profit. Losing 3 trades at 20 pips per trade is 60 pips loss. The net profit for ten trades is 150 pips. With one contract, this is $1,500.00 or one mini-contract, this is $150.00 profit per ten trades.

This shows that even with only 50 % wins, money can be made. Using a 3:2 profit loss ratio is profitable for making money in Forex trading. This could mean using a 60 point target with a 40 point stop loss as well.

Using a smaller ratio like a 30 point target and 30 point stop loss, a 1:1 ratio will only give a profit with a win rate greater than 50%. You may find that your trading strategy can only get a 20 point target so you may need to do the 1:1 ratio. Using the 3:2 ratio, with a 20 point target, you will have less than 20 as a stop loss and this is too small of a stop loss for Forex trading. There are so many market forces that can swing more than 20 pips and hit your stop loss. Practically speaking, you need to work with the currency pairs with the smallest spreads when using a 20 point stop.

Now, knowing the right target loss ratio, the right trading strategy needs to be incorporated to make this work. Finding the right strategy is vital to this ratio.

Futures Online Trading: The True Story

2008-10-17T00:47:00.000-07:00

By: Jim Canter

Is your online trading experience like mine? For the first twelve to fifteen years, after I began online trading, I read every book that came my way. I enrolled in special day trading courses and went to talks on the subject and paid for software programs that might help create a unique trading system of my own.

What I ended up with was a smaller bank account. I'm not saying anything about the months and years I wasted. Everything was a waste; the books, seminars, programs, and indicators - none of them helped too much. Not one of them trades before the market movement.

What You Can Expect From An Effective Commodity Trading System:

In the end, what is important is being able to predict the price of the commodity you speculate in. Traders who are truly successful make profitable calls time and again, without the benefit of studies or pointers, often resulting in ten point trades and more. They call trades in real time and their calls are made well before the market heads that way.

Ascertain that the system you use works under any market condition. Not only that, you should be able to use it for all future, commodity or stock trading, as well as e-mini day trading.

What Future You Should Opt To Trade:

My personal recommendation is to trade a future that allows you to day trade regardless of the fact that as a mere individual, as opposed to a big company, you may not have much money.

Any future will give you sufficient leverage, when you consider the diversity of stocks it's possible for you to trade, and there are a number of them - the same futures traded by large institutions. In addition, you should not have to pay a lot to be allowed to trade. Most importantly, you should not have to spend hundreds of hours in research, or using stock screeners and analyzing charts in each and every time frame.

You must be able to fill the contracts immediately and the market should usually move favorably.

The Difference An Effective Trading System Can Make For You:

A commodity trading system that works well will teach you to forecast accurately. If you encounter a system like this and understand it, it will perplex you as to how you could have missed it; admittedly, it is not easily discernable till someone shows it to you. Once that is done, many new trading opportunities await you.

On-line day trading may seem to be very complex but it can be simple. You can have fun making great money in future system trading, without any of the stress and worry that usually is linked with day trading. It's all in knowing how to forecast correctly and once you master how to do it, success is yours for as long as you live.

To recapitulate, my initial trading plans only resulted in my losing money on the market. Until I found this program. I don't claim it's a magic wand, but it comes close.

How To Be Sure The System Is Really Good:

There are a number of advisors for commodity trading who claim their commodity trading software program is infallible. Bear in mind that these claims have to be proven first. If someone tells you about a fantastic software package for futures trading, tell the vendors you want to look at their trading record.

How much have they grossed while trading futures, over a fairly extended period of time? Do the people who use their system average 10 points per day? Will they let you watch them predict the market while a session is on before the market movement, with some precision? Will they allow you to use the system for some time before you decide?

If you venture into day trading online without having clear answers to these questions, you may end up going under, as almost happened to me.

Forex Fundamentals: Good News for the Dollar

2008-10-15T00:42:00.000-07:00

By: Andrew Shiveley

Over the past six months it seems like almost every major finance magazine has published an article related to the weakness of the dollar. If you are a currency trader like I am then this topic is particularly relevant to you because you need to know what the long-term trends of each currency are so that you can make profitable trades.

What you probably have not been reading about in the news are some of the events that have been happening behind the scenes or that will be happening in the near future, and why the American economy will ultimately regain its strength.

The single most significant factor affecting the American dollar is the trade balance, and the biggest portion of this problem is related to our war in the Middle East that should never have been authorized, yet is still costing us billions of dollars every single day. I will not spend a lot of time talking about the horrendous actions of the Bush administration (namely that they defrauded their way into office in order to wage a cultural genocide for the sake of gaining control over oil), but there are truly good things that have been happening behind the scenes and that will be happening in the near future.

You will not hear about many of these things in the mass media news outlets in America such as CNN and ABC, and there is an exceedingly simple reason why these manipulated news networks try to convince the American people that there is a threat of danger when really none exists at all: War is profitable. There are powerful groups in our world today whose agendas are motivated by greed and control, and these people engage in heartless wartime profiteering so that they may satisfy their lust for power. But it is not all bad: I will discuss some of the wondrous events that are causing these groups to rapidly lose their power, and what all of this information means for the currency markets.

The Bush Administration has dropped to single-digit approval ratings, and millions of Americans have gone to websites such as Impeach Bush and spoken out about their opinions of why this man is no longer our leader. Dennis Kucinich, a representative from my home state of Ohio that I have had the pleasure of meeting, is leading the way for the eventual impeachment and forcible removal from office of Bush and his war-mongering cronies.

The Bush Administration has inadvertently caused a global recession with their desire to wage a heartless war, and the signs are strong that the global community has finally come together and told these warmongers "Enough!" They are rapidly losing power as people are becoming more conscious and aware of the fact that they have been lied to by the controlled mass media outlets.

If you are looking for really good forex trading opportunities, I would be willing to bet that when the news releases come out stating things such as Bush's impeachment or other things that peace-loving people the world over are working to create, there will be a large jump in the value of the dollar in the window of a day or two.

The really good news for the dollar and for the American people is coming from Japan. The Japanese are the largest holders of foreign dollar reserves (around $5 trillion dollars), and they have openly declared that they will no longer fund the American war effort.

The reason why I remain optimistic about the future of the American economy is because of the two main presidential candidates that have come forward to lead our country. In my mind (and in accordance with recent political data), the two main candidates in the 2008 presidential election will be Barack Obama and Ron Paul. Both of these men are benevolent leaders and are sufficiently equipped to rectify the errors of the Bush Administration, and Ron Paul has openly stated that he will abolish the Federal Reserve and the IRS to create a more prosperous America.

In the last paragraph, notice that I said the "American economy" and not the dollar. This is an important point, because many benevolent and powerful leaders are discussing new potential monetary systems for the United States that can lead to greater prosperity. The Federal Reserve system is based upon perpetual debt, and it is not sustainable because it steals wealth from the American people and puts it into the pockets of a few. This is all very good news, and so you may be wondering how this plays into your forex trading.

The dollar will continue to go down so long as our war is not stopped, and so for the next few months until the Bush Administration is forcibly removed from office or until they simply fade away to be replaced by a new leader, there will still be a downwards trend for the USD.

After our war ends due to internal political pressure from our benevolent leaders as well as financial pressure from the Japanese, many Japanese leaders are discussing the possibility of using their foreign dollar reserves to create a global humanitarian mission where they can bring knowledge and modern telecommunications access to countries that have not been able to provide it for themselves.

As this happens the American economy will regain strength because our trade balance will become much more sustainable. So ultimately for your forex trading, the downwards trend for the dollar will continue until these big benevolent changes occur, afterwards the American economy (as well as the global economy as a whole) will regain its stability.

What is Forex Market?

2008-10-13T00:38:00.000-07:00

The Forex Market does more than 2 trillion dollars a day and you probably never heard of it. Forex is the acronym for the Foreign Exchange Market, where one country’s currency is exchanged for that of another through a floating-exchange-rate system. It is the world’s largest financial market, with estimated daily turnover of 2.5 trillion.

Forex trading is not bound to any one trading floor and is not a market in the traditional sense because there is no central exchange. Instead, the entire market is run electronically, within a network of banks. continuously over a 24-hour period. The market opens Sunday at 5 p.m. {est} and goes through Friday afternoon at 4:30 p.m. {est}.

Banks have a natural flow of foreign exchange business from their customers, who buy and sell currency to their individual needs. The banks must manage their own currency deposits in the changing light of their customers’ transactions. To hedge or not to hedge? This is a way to basically minimize their potential for loss, often referred to as a hedge.

Investment managers also now deal globally. And they also must take positions in the different currencies, as well as in more traditional instruments, such as bonds and equities. For example , if a mutual fund is invested in U.S. bonds, the manger must decide if the fund should be invested in U.S. dollars or in a different currency. Again it is a question of hedging, another layer of risk to manage.

In theory, foreign exchange dates back to ancient times, when traders first began exchange exchanging coins from different countries. However, the foreign exchange industry itself is the newest of the financial markets.

In the last hundred years, the foreign exchange market has undergone some dramatic transformations. In 1944, the postwar foreign exchange system was established as a result of a multination conference held at Bretton Woods, New Hampshire. That system remained intact until the early 1970’s.

Major Forex participants include commercial investment banks and central banks. Other participants include corporations, hedge funds, and millions of traders worldwide. The top seven banks that provide liquidity in this market include Bank of America, Credit Suisse, First Boston, Goldman Sachs, HSBC, J.P. Morgan, Morgan Stanley, Dean Whitter, and USB Warburg.

As times change and many individual investors begin looking for an alternative to the stock market, the Forex is growing daily, with an average daily volume reaching upwards from 1.5 trillion to 3.5 trillion. Now than ever, the Forex will play in the wealth transfer of tomorrow.

London remains the world’s largest foreign exchange center, with daily turnover during April 1995 of $464 billion, or 35 percent of the world’s daily total volume. In the same period, both the Federal Reserve Bank of New York and the Bank of Japan reported smaller increases of 46 and 35 percent, to $344 billion and $161 billion.

In addition, London remains the most diversified Forex Market. In New York, 64 percent is between the U.S. dollar and four major currencies(euro, Japanese yen, British pounds sterling and the Swiss France. The Forex has experienced spectacular growth in volume ever since currencies were allowed to float freely against each other. While the daily volume in 1977 was US$5 billion, it increased to US$600 billion in 1987 and reached the US$1.5 trillion to 2.5 trillion mark since 2000.

While it is tempting to see the potential profits you can make in the Forex Market, the risk is huge. It is estimated that 95% of people involved in the Forex Market lose their money within 30 days. The top traders in the world have years of experience, must watch an intricate set of graphs and charts and still must make an educated guess on which trade to make. The Forex Market is always changing and is soon China currency will be part of the market which will clearly make this Market even bigger.

Can We Make Money trading the Forex Market?

2008-10-11T00:30:00.000-07:00

There are hunderds of ways that you can make money in the forex market. This discussion makes sure that you are considering all your options when looking at Forex Trading as a money making opportunity. After all, the main purpose of Forex Trading is to make money.

There are so many forex traders that follow a particular way of forex trading and in the end don't succeed in the main goal of making money. This is because their ego, pride and determination to succeed at a particular method has the effect of blinding them to other forex trading money making opportunities. Let's look at these Forex trading money making opportunities in more detail.

Option 1:- The self trader is someone who generally develops a personal money making trading method. This is done by doing a few forex trading courses, reading a few trading books, experimenting with a number of trading techniques, demo trading and live trading until a personal money making trading style is found. This is a long and challenging process and it can take years to get there. Estimates are that only 3% to 5 % of traders make maney this way. However once you are there you have developed a money making skill for life. This approach to money making forex trading takes considerable time and effort.

Option 2:- With the growth of part time traders (who mainly have day jobs) an alternative to the above forex trading money making approach has become very popular. Money can be made by buying a forex trading system that has been tested and proven. The system is either delivered as a live course, as a book or Ebook or even purpose built software. The idea is to then merely follow the rules of the system by the letter. Although not entirely for novice traders this approach has the benefit using such a system is that it may have been thoroughly tested and proven and could cut years off the option 1 alternative. Some of the programmed money making forex trading strategies (for example expert advisors) can even be linked to your dealing station automating the whole forex trading money making process completely.

Option 3:- Find someone who is already making money trading the forex market and the copy their deals. Make sure that these services have a good record of consistent money making. The deals can be obtained by going into an electronic trading room in a live trading environment, or alternatively they can be received via SMS, emails or access to a password protected website. You would then "blindly" copy all the signals or alerts into your broker dealing station and hopefully make lots of money from that.

Option 4:You could just make money by entrusting a Forex trading money manager with your funds. They will then create a money making opportunity for you.

All the money making options above carry considerable risk if not performed in a careful and in a thorough way. Most traders find themselves caught in the Option 1 process and do not even consider the other forex trading money making alternatives. If you are one of them, seriously consider the other options. Besides the fact that they could be less stressful and more profitable they could be less damaging to you in many ways.

If you are new to Forex Trading be aware and investigate all the Forex money making opportunities, because there are many if you are prepared to do your homework finding them.

There will be follow-on articles going into the above options in greater detail. These will be featured in this directory. Make sure you do not miss them.

How To Find The Right Forex Trading Strategy?

2008-10-09T00:33:00.000-07:00

Finding the right Forex trading strategy can be difficult, as there is so much information out there on the web. Some of it is really good information, and some of it is thick complicated garbage that is actually designed to be confusing enough that you won't be able to clearly see that it's a rip off until it's too late. It can be hard to figure out which trading systems can actually make you profitable trading the Forex, and which are a bunch of garbage being sold from modern day snake oil salesmen.

To have an effective Forex trading strategy, you need to first understand the basics of how the Forex market works. Get yourself as much free information as possible. No matter what a trading strategy says, there are certain ways the Forex market works, and certain ways it simply does not.

Having specific knowledge will help you be able to analyze what each sales pitch is promising and even throw up some red flags if a Forex trading system you're looking at seems to employ a strategy that doesn't make sense compared to what you've read about the markets. Having knowledge can also help you when you realize that terms like "martingale" and "anti-martingale" can be translated to "gambling theory" and "non gambling theory." Makes a big difference in which one you want to trust in a volatile market, doesn't it?

At the very least you should understand the difference between technical analysis and fundamental analysis, and get an idea of how each views the Forex market. The two are very different ways of analyzing currency pairs, and both have their obvious ups and downs. Many professional traders use a combination of both methods.

At this point, what you want is not a home made Forex trading strategy, but an established and effective Forex trading system that you can rely on to guide you to making a killing in the Forex market. They are out there, and whether or not you profit almost always comes down to how effective your system is.

Finding a great strategy that can trade the market when it is trending, counter-trending, and in breakout modes will help to ensure that your forays into the Forex market will result in a growing bank account and a growing smile on your face. Remember, when finding the right Forex trading strategy, you're looking for a proven Forex trading system.

Online Forex Trading - The Only Way

2008-10-07T00:30:00.000-07:00

Online Forex trading is really the only way to go when trading in Forex and is, in fact, the only way to get into currency trading in the Forex market. Unlike the stock market and local commodity markets, the world wide Forex market doesn't have a market floor where you can go and put in an order. There is no opening and closing time because each nation doesn't have their own market. The Forex is truly a global market, and can be traded from any time zone at any time, making the Internet the only way to trade the Forex.

The changing of technology over the last twenty years, especially with the Internet advancing enough to allow online trading, has really opened the Forex market for any trader anywhere to be able to trade the Forex.

Online Forex Trading is made possible through Forex trading platforms and software that allow traders to track currencies, analyze the charts and graphs, and make buy and sell decisions for currency pairs based on that information. Since the world market is always open somewhere, you can trade currency at virtually any time of the day or night, any day of the week. There is always someone looking to make a trade, and if you want to bet on the market directly opposite of them, you have a trading partner.

Aside from finding a trustworthy and reliable online Forex platform that you can use to trade online, you will also want to have a successful, established, and reliable Forex trading system that will help guide you in how to buy and sell, go short or long, and make a lot of profit doing it. The Forex platform, the Forex system, and the Forex software all have to work together to assure you of the best possible chance of beating the market in online Forex trading. Since the entire market is online, you will want to make yourself comfortable with it before jumping in for real trades.

The combination of these factors is what will determine whether or not you are poised for success as a Forex trader. Failing to have even one down can make it very difficult to make a profit, and the old adage goes perfectly with the Forex: "Where there is great risk, there is great reward." There are great possible awards to trading the Forex, but let no one kid you, there is plenty of risk left, as well.

It's not enough just to have the best Forex platforms or software, but you need a trading system that you know is profitable and won't let you down. After all, it's your money on the line.

Forex Trading - Compared to Gambling

2008-10-05T00:26:00.000-07:00

Forex trading by stacking the odds in your favour

Often forex trading is compared to gambling. Some who follow the random market theory support this view. However some technical analysis experts would argue that technical analysis Forex techniques stack the odds in the favour of the trader. Sound money management and risk management are another ways of stacking the odds in the favour of the trader.

How much do the odds have to be in the favour of the trader for them to make money? Often a trading success rate of 70% to 80% is assumed as the requirement to make money. At 70% your gains would be $700 (assuming gains and losses of $100 per transactions) and losses would be $300 resulting in an overall gain of $400. Let's take a closer look at this assumption.

In Forex trading, when the price approaches strong resistance or support, the question is: will the price bounce back or violate the barrier? Good channel traders and support and resistance traders will tell you that in general there is a 70% chance of a bounce and only a 30% chance of a breakout. These are important statistics.

The other statistic is that when there is a false breakout (60% of the time) it will only go say 25 pips past the barrier and then be forced back. Knowing this statistic is another big advantage for traders. Most indicators or trading methods have these kinds of statistics.

The risk management technique that experienced traders use is the risk compared to reward ratio. Many will only enter trades that allow them to gain 200% of what they risk (their stop loss). This is a particularly powerful way of trading as they make $200 on successful deals and only lose $100 on positive deals. This means that if they had a 50% success transaction success rate, on 10 transactions, they would earn $ 1000 on successful transactions and only loose $500 on unsuccessful ones. A gain of $500 in spite of only having a 50% success rate. Much better than the $400 gain calculate above.

Just like card counters who make money from BlackJack you need to develop the skill of stacking the odds in your favour when Forex trading. This means knowing technical analysis very well and knowing the characteristics of the forex market very well.

Clever money management is also used by BlackJack card counters. When the packs are rich of high value cards they would progressively increase the value of their bets. They would bet very low or not participate when the odds are not favourable. This is one of the most neglected aspects of Forex trading and as a Forex trader you need to develop this skill.

Remember the trader above who achieved a 50% success rate and made money because a 200 to 100 return on risk ratio was used. Now imagine that only 1 lot was used for higher risk trades and 2 lots were used higher probability trades. The gains will now be $2 000 ($200 x 5 x 2) and the losses $ 500 ($100 x 5 x 1). A $ 2000 gain compared to $ 500 loss. Now we talking. Remember this is still at a 50% success rate. This $1500 gain at 50% accuracy compares well with the $400 gain at 70% accuracy.

The above is only an introduction of how some successful traders do not let losses worry them as they have the odds stacked in their favour. Many trading firms (including ours) take their traders through a course of Casino game gambling odds to show them how easy it is to make money on the forex when you stack the odds in your favour.

Forex - Short Term Trading, Not for Beginners

2008-10-03T00:24:00.000-07:00

Day trading is exactly what it sounds like: trading that all takes place in one day. In Forex day trading the short term is the main focus, meaning all entrances into, and exits from, the market need to take place within the same day.

In fact, often times day trades can take only a few hours to enter and end, with the hope that each trade nets a small profit, and that those small profits add up.

Day trading right now seems to be the trendy thing for new traders, but one thing that beginning Forex traders should know is that day trading is a pretty advanced Forex trading strategy, and shouldnt be jumped into by newbies.

Day trading requires a quick entry and exit and the ability to efficiently use technical analysis and apply it directly to your trades. The strategy used by day traders isnt to find one long term trade that does well, but to find several smaller trades that make a few pips here and a few pips there.

At the end of the day the strategy is to have enough wins over losses that they add up to a solid profit for the trader.

If you have ten small gains and three small losses from Forex day trading, then the hope is that those combined gains will give you a pretty solid profit on the day. Thats how day trading works, making it a far more aggressive form of Forex trading than Forex swing trading or long term trading.

Scalping is an extreme example of day trading in the Forex markets. Traders who employ scalping trading methods (appropriately nicknamed scalpers) are traders who buy into a position intending to see quick movement and profit off a short transaction, often times within a minute or a couple minutes of making their entry into the market.

True scalping involves when a trader opens and closes a position in literally minutes - or sometimes even less than a minute!

This quick in and out is hoping that after a quick movement and show of profit, and immediate exit will in theory help minimize risk while collecting smaller profits bit by bit. This is an advanced type of trading, that shouldnt be tried by pure beginners into the Forex market, though if you get a good system and some experience, this could become an option down the line.

If youre just getting started, learn about long term trades first, which tend to be at least a little more stable.

How To Choose a Forex Broker?

2008-10-01T00:22:00.000-07:00

Looking for a Forex broker can be a difficult search for traders who just dont know where to look. If you are looking for a broker, then there are certain questions you need to be sure to ask prospective brokers to make sure you find the reputable broker you wish to work with.

There are more questions that are good to ask, and each person may have others they want to add to the list, but these are a great base for what you will need to ask to make sure the brokerage firm is one you actually want to consider.

1. How long have you been in business and how many clients do you have? Obviously the longer they have been around, the better the sign. Having a large number of customers for a long time can also help to allay any fears.

2. What regulatory authority is your brokerage firm registered with, and in what country? The NFA (National Futures Association) audits books and is one of the best current regulators. The Forex market is currently far less regulated than stocks, bonds, and commodities - and so this is a very important question.

3. How fast is the order execution? It should be a second or less than a second. With modern technology theres no reason for it to take any longer.

4. Are you attached to any bank or lending institution? Banks are more heavily regulated, which gives extra peace of mind, as well as financial security.

5. What country is your corporation held? The right answer is any country with strict banking laws and oversight. The wrong answer is anywhere else.

6. What type of a broker are you? There are Market Makers (MM) and Electronic Communications Networks, and youll want to know the difference between the two and which fits your needs best.

7. What is the minimum account trading size? This is important to remember to make sure your position isnt closed out because youre short on funds to cover.

8. What is the margin requirement? 1% is standard, but lower is better. The more control you have, the better.

9. Is my money held by a public or private company? You want it held by a public company, because they are insured. If a company goes bankrupt, you have a better chance of getting your money back.

These are nine questions that are absolutely essential to ask a Forex broker to find out if that brokering service is for you or not.

Best Forex Articles

2008-09-30T23:06:00.002-07:00

Forex Trading Mind Set

Japanese Candlesticks and Foreign Exchange Trading

Forex Trading Automated Systems

Forex Trading Software Scam

How To Choose Which Currency Pairs To Trade?

Biggest Shorcut in Learning Forex

Best Forex Trading Robots

Forex Trading - Fibonacci Tecnique

How News Can Effect Currency Trading

Forex Trading - The Easy Way

How To Become a Successful Forex Trader

Forex Broker Scam Promoted

Forex Broker Scam

Page 1 - 2 - 3 - 4 - 5 - 6 - 7 - 8

Forex Trading Mind Set

2008-09-30T00:20:00.000-07:00

Foreign Currency Exchange Trading Psychology

Most of the people who engage in Forex trading lose. Indeed, the industry estimates that more traders lose than profit. And they lose for a reason. They have not properly prepared themselves with a Forex education and the proper mindset to be a successful trader. In the cold cruel world of Forex currency trading, you're on your own. It's you against the market. All over the Internet, you can find so called experts touting Forex trading systems with extraordinary sure win claims. If it was so easy, everyone would be a millionaire. The true winners are the ones who have taken the time and effort to carefully devise currency trading strategies that have been thoroughly tested beforehand to produce positive successful results.

Listen to Yourself

You are the only one that can make yourself successful. Everyone is trying to sell some kind of system to fools, who think they're going to get rich instantaneously. It just doesn't happen that way. You can use trading systems and tools to get successful results, but there is no such thing as a free ride. Only through hard work on your part will you be able to develop Forex trading strategies that produce the results that you desire. You should begin your education and training with Forex experts, while building your own skill set to ultimately create your Forex trading system. Forex trading is like any other business. To be a successful forex trader, you need to educate yourself. Great forex traders become better and better because they continue learning. This gives them the edge they need to stay on top of their game so they can go on and become even better traders.

Make Your Forex Trading System Rules

Everyone lives in a society based on rules that must be followed. In the Forex trading markets, except for some simple market procedures and practices, there are basically no rules or structures that govern your operation. You have to take the responsibility for all your own actions. If you win, it's because of you. If you lose, it's not because of the broker, a market, or the government. It's because of you. You have to develop the trading rules and structure to successfully exploit the possibilities that are available in Forex currency trading.

If you are an individual who has a deep confidence in his or her personal abilities, with the discipline to be able to work hard to develop the currency trading strategies necessary for a Forex trading system, then Forex trading is for you. If you have the mindset to be an individual away from the crowd, with no one telling you the rules or laws that need to be obeyed, then you should be part of the minority that enjoys spectacular Forex trading success. Your profit as a successful currency exchange trader can be extraordinary and if you know what you are doing and have the discipline to follow your trading rules, there's no limit to your profit potential.

Japanese Candlesticks And Foreign Exchange Trading

2008-09-28T00:19:00.000-07:00

Do you think of anything when I say the phrase, "Japanese candlesticks?" In fact, this has a lot to do with trading in foreign exchange.

Candle charts (also called "Japanese candlesticks") were originally created in Japan several centuries ago so that rice could be traded. Today, thousands of traders use the same charting "system" to track price movement.

Many people find that candle charts are easier to read than standard bar charts are, and therefore, they have become very popular. In fact, most Forex charts you see are in the format of Japanese candlesticks.

Candle charts are made up from the opening and closing prices, as well as high and low prices.

If a price opens lower than it closes (in other words rises during trading), a hollow candle is drawn on the chart (usually in white or green).

If a price opens higher than it closes (in other words falls during trading) a filled candle is drawn, usually in red or black in color.

Many online brokers today used the red and green color scheme rather than the white and black color scheme. Trends can be easily seen even by newcomers this way, because green candles signify price increases while red candles indicate that price has decreased.

It's not just designed this way for "newbies", either. Any trader, regardless of experience or skill, needs to be able to have a clear visual system of evaluating data. It's essential to his or her decision making process.

However, moving on from the "history" of Japanese Candlesticks and how they relate to Forex trading - let's evaluate why they're significant.

It's simple: The significance is that they represent our ability to bring simplicity to complex transactions without losing accuracy.

Whether the context is trading rice in the 14th century or trading the Euro/USD currency pair in 2008 from your high-speed connection, the fact remains that you don't have to be an expert to understand and profit from complex markets.

The tools you need to succeed have already been developed. All you have to do is practice using them, and you'll quickly be able to see how what would normally be complex can - through practice and experience - become as simple as any other basic task.

The only question is this: Are you willing to put in the time until it becomes simple?

Ancient rice traders depended on tools like this for their livelihood.

There's no reason why you can't either. And it could end up being a whole lot more valuable than, say, rice.

Forex Trading Automated Systems

2008-09-26T00:16:00.000-07:00

Being in the forex game, I wanted to get an edge and masterfully own every single pip I could possibly get my hand on. Being also that the learning curve was quite opulent and sometimes wasn't really in my favor, I needed an alternative to the hours of technical analysis and research on news and historical data.

I was pressed to find a solution that would let me be able to make trades without the aggravation of the fore mentioned. I looked into using EMA crosses, and news trading, and a couple of other crazy things, only to lose more money and turn more hairs to grey over it.

One day I found the Expert Advisor. What an Expert Advisor is, is an automated trading system, ported to Metatrader 4's Trading Platform. The dealbreaker here, is that you need an account with a forex broker, which supports Metatrader 4. There are at least a few dozen forex brokers who use Metatrader, and a couple of them should fit your trading requirements like a glove.

Why should you consider looking into an expert advisor? Easy!

1. They trade while you sleep, and never need rest at all. It is a software module that works with Metatrader 4, and never crashes!

2. They never need a salary, bathroom breaks, sleep, food, benefits, or anything else that a human trader would need.

3. They are very easy to download, install into Metatrader 4, turn on, and throw them to the wolves to start making money! This process from purchase to operation takes not even 10 minutes.

4. 60 Day Money Back Guarantee. Most Expert Advisors have satisfaction guarantees, just in case you are not satisfied with the results that the Expert Advisor provides, or just have a problem with the system.

5. Have a life, be with family or friends. Make the real money and not work a 9-5! You think it is easier said than done, but seriously, the reality is, when you can make a sustainable, survivable income from Forex, you would fire your boss!

6. One I could recommend off of the bat, is Forex Funnel. This Forex Automated Trading System has generated a great work at home income, and has documented proof as well! A system that has made $600,000 in four years time, and $150,000 in one years time.

You owe it to yourself! Try the Forex Funnel Today!

Forex Trading Software Scam

2008-09-24T00:12:00.000-07:00

Have you ever encountered an online promotion for a forex system, strategy or software? If so, I bet that the promoter promises great wealth in no time, something like "this incredible system makes $3,000 a day "or" I am making money in my sleep using this automated trading software" and so on. Very tempting for some of us. And as this "Forex Systems" hype is relatively new, even veteran traders ask themselves whether these systems are for real.

The exactness is that some of these forex merchandise are indeed total scams. But absolute is again not logical to foresee that ALL of them worth nobody. Luckily, we live in the hot poop ticks, locality a scam cannot hold office close for spun out. So if you encounter a forex system, strategy or software for sale, conclude not carry lazy and search the net for relevant blogs, forex forums and reviews. If the product is a scam, you will familiar conceive physical quite delicate. However, lease ' s spiel that you treasure a decent, reliable Forex System - what rap you assume from sound? Will positive well deliver? Fine, flying start by commercial the following questions:

Am I disciplined?

Most traders purchase a first-rate trading system or software but operate not have the discipline to trade according to the system ' s rules. Some traders achieve not credence the system they have tried bought and endeavor to chicken feed the rules from day one. Others certainty the system prime, but next a few bad trades source losing confidence and contract apprehensiveness and attraction genie their decisions. I itch admit - substantial was very insolvable for me to faith a system that was created by someone too many. Solitary when I tacit the logic late the system I began to fashion confidence, traded stow away discipline and somewhere made profits.

Are my expectations fitting my ration?

The size of your trading invoice will halt your lifelike profit expectations. If you have a mini account ( a keep of between 500 to 10, 000 US dollars ), irrefutable means that for trading the EUR / USD, a 1 pip movement in your favor equals 1 US dollar in profit. So if you are a very rad trader stifle a very superb trading system, a stupendous trading point veil a total of 500 pips hike, equals US$ 500 in profit. I guess you cannot quit your job yet. But if you have a one million dollar account, you can definitely earn US$ 1, 000 per pip. So it takes only 3 pips to make US$3, 000 a day. I hope you get the point.

Do I have enough knowledge?

Even the best system is operated by a real person. And each trader is a unique individual. Consequently, if you ask a group of traders to trade the same system, under the same conditions, you will probably get totally different results. Yes, some traders do make money in their sleep using profitable forex systems, but the human factor will always be there. So get yourself a good trading system, but do not stop there. Be ready to acquire a sound knowledge in forex trading and keep expending your knowledge over time.

How to Choose Which Currency Pairs to Trade Forex?

2008-09-23T00:10:00.000-07:00

Forex Trading involves buying one currency in a currency pair, by selling the other. So if one is trading in EUR/USD, the trade may involve buying EUR by selling USD at the current market rate or vice-versa. Similarly buying EUR in EUR/GBP would require GBP to be sold.

Unlike options or stocks which have lots of companies that can be traded on, the forex market has got limited currency combinations which can be used to place the trades.

Despite this, often people wonder which currency pairs should be chosen for trading? Should it be USD based or should it be the one that is heavily volatile or should it be some other?

Lets look at few parameters which can be used to decide -

1. What is the pip spread involved - The biggest factor to be considered is the spread between the currencies. In layman's terms, Spread is a difference between the sell price and the ask price of forex currency pairs as given by the forex broker. In other words, it is a commission of the broker or agent through which the trades are made. The lower the spread, the better it is for the forex trader. The lowest spread I have seen is in EUR/USD, which has the average spread is 2 pips to 3 pips. Typically a spread of upto 5-6 pips is good enough to trade.

2. What is the liquidity? - The more the liquidity, that means the higher is the amount of money being traded on that currency pair. So, this eventually means that that particular currency pair moves a lot in a the trading sessions. Its better to trade on such from a day trading perspective as the trades don't need to be kept open for a longer time. I have seen that the GBP/USD is heavily liquidated. On average it moves about 100-150 pips everyday. This is followed by EUR/USD and USD/CHF.

3. How does the currency pair behaves? - Does it move technically or is it primarily fundamental driven? The one that is primarily fundamental driven doesn't has much regard for technical analysis. I have seen JPY (Yen) as one such currency which is heavily fundamental analysis driven.

So, these are the some factors that can be used in identifying the currency pairs to be traded on. Though these factors are not an exhaustive list, they can be used as minimum basic rules. The pip spread is one important criteria. The lower, the better it is. However the currency pair should also be sufficiently liquidated as this means that there will be significant pips movement during a trading day.

Biggest Shortcut in Learning Forex

2008-09-21T00:04:00.000-07:00

I am going to give you probably the biggest shortcut in learning in your entire life. In fact, you probably would have a much more pleasant time in school if they had just shared these few things with you. It deals with the actual physical way that our brains learn. If you want to learn something quickly. I mean literally, if you want to take something and virtually put it into your mind, there are very few things that you have to avoid and just a few things you have to do. Okay?

First of all, you want to avoid sitting too long. I mean, literally sitting. Most of us sit down, plop down and go, I am going to go through all of these videos by Mac and I am going to run through all of them tonight. Before you have known it, you have gone through probably six hours of information. It is practically midnight. You are bone tired. You feel like you are ready to strike a match on your mouth because it is so dry. You haven’t taken a water break. You haven’t gone to the bathroom. You are just miserable. That’s not the way to do it. Your brain literally has a physical limit with how much information you can put in it at one time. You also want to avoid and this is something, if there are any teachers on the line, you are probably going to be shocked; you don’t want to take note. Now I will qualify that in a minute.

You don’t want to take notes and here’s why. If you hear me say something and then you are writing it down, I don’t stop talking. Right? I continue talking while you are writing and I am here to tell you, you are even less likely to retain the information that is coming out of my mouth if you are writing at the same time.

Researches have found out that on any information that you read, hear or see; meaning a video or something like that you are going to forget 60% of it inside of 48 hours. Sixty percent; in fact, most people inside of three days, are going to forget 80 to 90% of what they heard. Most of the time it is because they are sitting too long, they are taking notes; they are trying to do what most of us found in school. It’s called cramming which is try to shove all the information in our brains as quickly as possible.

The best forex trading robots

2008-09-19T00:04:00.001-07:00

It is extremely difficult to make a living from forex trading and getting to the stage where you can make consistent profits takes an awful lot of time and effort. In fact very few people actually manage to become successful traders, so forex robots are an ideal solution for people new to forex trading.

It took me several years of losing money and experimenting with lots of different systems before I started to consistently make money from forex trading, and it's the same for a lot of other people as well. Very few people start making profits straight away.

Furthermore some people go through a steep learning curve and often blow a few bankrolls and still can't devise a profitable method of trading. In fact estimates suggest that around 95% of forex traders actually lose money, so is it really worth wasting so much time and effort learning how to trade successfully, when there's no guarantee you will be profitable at the end of it?

Well luckily you no longer need to because forex trading robots are now widely available to the general public. They used to be used exclusively by trading professionals working for large banks, but that's not the case any more. You can now purchase complete trading robots for a very reasonable price that will place trades for you automatically. Best of all they are programmed to make winning trades using complex algorithms and technical data.

This means that you don't need to know very much about forex trading yourself. All you do after you've purchased the trading robot is to set it up to work on Metatrader4, which is a charting platform used by a lot of reputable brokers, and then enter your stakes. The robot will then place trades automatically every time it's specified trading criteria are met.

If it's a good system, then it should hopefully make money for you, although you have to be careful about which robots you buy because they are not all as profitable as they may at first appear. All robots are capable of losing money sometimes, but if you choose one that has a solid track record over the past few years then they will often live up to their billing.

The best forex trading robots are the ones that stick to sound money management rules which means that they keep losses small and set their targets further away than the stop loss. These are the ones that have the capability of accumulating wealth over the long run, and are generally much more profitable than some of the more hyped up trading robots that are currently on the market.

Forex Trading - Fibonacci Technique

2008-09-17T00:02:00.000-07:00

Fibonacci was the nickname of the person whose real name was Leonardo Pisano and he developed the now famous Fibonacci sequence of numbers. He was born in Pisa in the 12th century. He observed the Great Pyramid of Gizeh in Egypt and created this sequence of numbers. He was a genius mathematician who came up with this sequence.

The sequence tells you that the third number is effectively the sum of previous two numbers.

The sequence is something like this

1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144 and so on.

Now the real value of this sequence lies in the fact the ratio or the proportion of adjacent terms is 1.618 or the inverse is .618. This ratio is known as the golden ratio or the divine ratio. This divine ratio is really divine in terms of giving out a suitable analysis to a given issue and has been applied in many situation including stock and forex markets.

Fibonacci ratios describe the relation between trend and countertrend markets. That mans that 38%, 50 % and 62% are main numbers that form the primary pullback numbers. The way to apply them is to apply these percentages to a particular trend in each direction and then try to predict how the countertrend will act.

The hard part of the Fibonacci sequence is to check out where to trade and use the Fibonacci sequence. If you try to use this on an absolute bottom low or high you will get good results but if you apply the grids on Elliot wave start formation which is the double bottom or double top then you will be get correct results and you will begin to realize the genius of Fibonacci. A lot of expert traders use this to get a handle on the inefficiencies in the market and make profit from them.

There are softwares available in the markets which help you hone you Fibonacci trading skills. Make sure to learn all the technical stuff before you trade. Also merely learning the technical stuff will not be of help if you are trying to make money using the currency trading. You need to understand several other factors for the same like the economic indicators namely the leading and the lagging indicators.

Make the bets of this sequence to locate opportunities in the forex market and help get the best of the other traders.

How News Can Effect Currency Trading?

2008-09-15T23:48:00.000-07:00

Regardless of whether you are simply playing around in Forex or doing a full-blown Forex trading situation, it is critical that you remain on top of the Forex news around the globe that could potentially effect your investments. As a matter of fact, some of the day traders around the globe say that following the news throughout the world can be somewhat addictive. With the globalization and decentralization of the news each and every day, it appears there is constantly something of interest that is happening.

Financial News

Just to give you a few examples that are interesting from recent Forex news stories that FX day traders have encountered. Forex currencies are always traded in a pairs type of situation, so stories typically refer to two different currencies. These forex news stories directly are correlated to finance and currency.

- A recent story that indicated that traders had just tipped to a net short position right on the same day that the British pound increased to a 200 plus point rally.

- Forex trader carefully monitors the U.S. housing slump, trying to estimate the market for the mortgage futures.

- When the United States federal reserve made it's latest rate cut, one Forex news service indicated that the overall expectations for the U.S. Dollar were "falling like a rock".

- Fears of a recession within the United States might drive the
US dollar even lower than it already it is. (In Forex tradig, the reality that the dollar falls is not thought of as a negative, provided that the trader leverages the fall when making a trade for higher priced, higher value currencies around the world).

Political News

Financial and currency news are not just the only stories of news of interests to Forex traders as well as investors. Forex traders also have a lot of interest in political news that may have an impact on different countries currencies.

- Events that are tragic such as a political leader getting assassinated can effect the currency futures in the nation where the events happen and can also have a trickle down effect to the surrounding areas; for instance, the assassination of Benazir Bhutto in Pakistan.

- Disasters of the natural kind, such as a hurricane or typhoon or even an earthquake has the capability of consuming a great deal of a nations resources. Hence, Forex traders watch news of these types of natural disasters.

- Political events, such as the U.S. presidential election cycle has substantial consequences on the valuation of currency; hence, Forex news incorporates updates on presidential candidates, general elections, primary elections.

Forex Trading Robot - The Easy Way

2008-09-13T23:36:00.000-07:00

Forex Trading is the world's largest financial market with an estimated daily average turnover between $1.5 trillion to $2.5 trillion that we cannot doubt. If we want to make profit from this investment, there are some related knowledges that we definitely need to know. Forex trading training doesn't have to be the daunting, intimidating task that it seems to be. Most of us haven't even heard of forex, so what is it? Forex trading is like driving. You will hurt yourself and the others if you start driving before you learn it properly.

Foreign exchange is the purchase or sale of a currency against sale or purchase of another. The FOREX market is the global interbank market where all currencies are traded. Foreign currencies are constantly and simultaneously bought and sold across local and global markets and traders' investments increase or decrease in value based upon currency movements. Foreign exchange market conditions can change at any time in response to real-time events.

Forex trading is the most lucrative home based business at the moment. It is a business where you can earn an income without selling anything, without pitching a sale to people and without running around after clients. Forex trading opportunities are a reality for more and more people everyday --- people just like you and me. Forex trading skills and the trading system! If you want to work less than 20 hours a day at home, if you want to make millions by trading freely at home, if you want to have financial freedom by trading Forex; you better LEARN Forex trading before you start trading Forex.

Forex trading is a serious business and it is vitally important that you are properly educated and informed before committing your hard-earned money to the markets.

Traders are able to trade at any convenient time, no matter where their location. Furthermore, forex traders can always react quickly to any market altering news.

The Forex trading course that you are pursuing, you should assure that it covers the basics and technical evaluation part. The Forex dealers are always in a stress and it is very important how to handle the stressful conditions. The forex trading system you will learn is simple to understand and easy to apply and you can see if you have what it takes risk FREE. You have everything to gain and nothing to lose. The Forex trading software, Forex AutoPilot, completely automates the FX trading process relieving traders from the constant process of monitoring the foreign exchange market. For a more in depth analysis and report of the software limitations and functionality please follow the link to my site at the end of this article.

The Forex Trading Robot is unaffected by a person's mental, physical and emotional condition, thus the trading process is speedier and more diversified. This system causes minimal problems which can be easily remedied by testing Forex systems.

Choose aspects of the different systems that are out there that fit your trading style best, and then build your Forex trading system. Choose Forex trading software to trade very easily online. Learn about Forex currency trading system methods, tips and strategies.

How To Become A Success Forex Trader?

2008-09-11T23:36:00.001-07:00

Before you start your career on forex currency trading world, you must aware the risk on forex because some people only thing that forex is a heaven of make money. Forex market is very liquid, more than three billion us dollars transaction value in forex market traded everyday. If you have aware about the risk in forex trading, you will act carefully and use logical analysis rather than using your emotion.

To act based on your logic, you have to understand the pattern or movement on currency pair and what factors can affect currency trend movement, there is technical factor which observes trend pattern from historical data with math calculations to predict future currency trend movement, beside technical factor there is fundamental factor, which consist of economics issues or news released. The use of technical analysis and fundamental analysis will define a specific forex trading system.

Generally, there are two kinds of system which help traders to analize and predict future currency trend movement :

1.Automated Forex System
This kind of forex system works automatically, including open an order, setting up the stop loss and target point, until close the order. Traders who use this kind of forex system will just sit relax in front of their metatrader chart monitor and wait the result whether they get profit or die tryin. Many cases, an automated forex system or called expert advisor bring more negative results or loss rather than positive results. As you know, a programmable system can not act properly if there is a significant economics news or event published. This kind of system only works for certain condition.

2. Manual Forex System
Traders who use manual forex system must observe or monitor currency pairs trend movement to decide what kind of order is proper. Manual forex system method consists of forex indicators or tools which can help traders to analize currency trend movement and decide what action is the best. Result from using manual forex system is vary among traders, it is mainly depend on traders experienced. Experienced traders who using manual forex system will easily get profits as much as what they want, and they never think to use automated forex system to replace manual forex system.

Manual forex system provide better results than automated forex system, IF traders who use manual forex system have enough experienced on forex trading, while automated forex system works for all kind of traders even for someone who just heard about forex yesterday, but this automatic system only works for certain condition, and it absolutely does not guarantee the traders to get profit.

Forex Broker Scams - Promoted

2008-09-09T23:32:00.000-07:00

In recent years, investors have witnessed increased number of investment opportunities and offerings. While the complexity and success of these investment products vary, technological innovation has made the Forex market one of the fastest growth areas. Many of the leading Forex brokers reported up to 500% rise in the number of new retail customers. However, the growth of the Forex market has been accompanied by a sharp rise in foreign currency trading scams.

Many of these Forex scams are promoted on the radio, television, newspapers and the Internet. Investors who fall victim to these schemes, often lose all of their money.

As an illustration, let’s examine the facts of a recent case involving Forex fraud and its consequences. W learned of a foreign currency trading opportunity through an infomercial on the radio. K, the owner of a Forex asset management firm, spoke during the infomercial, promising viewers significant profits with minimum risk. After seeing the infomercial, W contacted K, and later attended a seminar presented by K and his firm. The seminar was so convincing that W wrote a check to K for $100,000.

Several months later, W received statements (which were false) from K’s firm reflecting significant returns on his initial $100,000 investment. Thereafter, W attended another seminar and decided to invest more money. W took a loan and invested another $800,000 in K’s Forex trading operation. Short while after W’s second investment, the Securities and Exchange Commission filed a complaint against K and his firm for engaging in a scheme to defraud investors. K’s firm’s assets were frozen, including the $900,000 invested by W. A receiver was appointed to distribute the remaining assets of K’s firm to defrauded investors. The assets were distributed on pro-rata basis with no legal preference given to any of the victims. Since K’s firm’s assets were not enough to satisfy all of the defrauded investor’s claims, W received only about $22,000 of the $900,000 he invested.

Since a whole book can be written on the various tactics and methods used by Forex scam artists, in this article, I will focus on the major warning signs that one needs to identify to avoid falling victim to Forex swindlers.

1. Promises of Little or No Risk

If you encounter a Forex firm that claims to have developed a foreign currency trading strategy that carries very little or no risk, stay away. The reason Forex trading can be very profitable is because it also carries a very high risk of loss. The Forex market is very volatile, and, without good money management, an investor can lose most if not all her capital within few days. Thus, individuals and firms who make claims that are far from market realities, as is riskless Forex trading, are really after your money.

2. Guarantees of Large Profits

Beware of firms that guarantee large profits in Forex trading. These so called “guarantees” are mere ploys to entice investors and make them believe that their money is safe and that they will definitely make large profits. Such claims are simply untrue, because even the best professional traders cannot guarantee that they will make a profit any given day. The Forex market, as most financial markets, is very unpredictable. Hence, be suspicious of such claims and those who make them.

3. Employment Ads For Forex Traders

Many Forex trading firms use employment ads to attract individuals with capital to trade using their systems. The employment ads, which often appear in newspapers and on the Internet, state that a foreign currency trading firm is looking for individuals to teach them how to trade the foreign currency market using firm capital. Those who reply to the ad are convinced by the firm that they will make a fortune trading currencies if they participate in the firm’s training program. During the training process, which often occurs on a demo system, the novice traders are encouraged and told that their demo trading records show that have made significant profits, that they are ready to make real money and would very successful. Despite the firm’s assessment of the novice trader as a brilliant newcomer, no firm capital is provided to the trader, instead the excited novice is told to use her own capital to trade using the firm’s platform. In addition to various fees imposed on traders using the firm’s platform, the Forex firm makes money as an introducing broker. Each time the novice trader trades through the firm’s system, a good part of the spread charged by the broker is shared and goes into the firm’s coffers. After few months, the novice trader loses all of her capital and leaves. The Forex firm, having made money during the novice trader’s short stint, moves on to new traders eager to become rich trading foreign currencies.

4. Is the Forex Firm a CFTC or NFA Member

Before you sign a check and give your capital to a Forex company, make sure you investigate the entity. Check to see whether the Forex firm, with which you want to do business, is registered with the United States Commodity Futures Trading Commission or the National Futures Association. Many scam artists falsely claim that their firms are registered with the CFTC or the NFA to gain a perspective investor’s trust. Do not trust anyone, research the firm and the background of the individuals involved before parting with your hard earned money.

The Internet has paved the way for many new opportunities for retail investors. The Forex market is both exciting and fast paced. Investor’s who are careful and diligent are likely to avoid the perils of this market, and will profit from the growth and opportunities of foreign currency trading.

Forex Broker Scams

2008-09-07T06:04:00.000-07:00

If you already trade the Forex market, this isn't new to you. Although, if you are a beginner, please be aware that this is a common thing in Forex.

For trading in any financial market you need a broker. As the Forex market isn't regulated, you have to make a better due diligence to find a good broker than in any other financial market that is regulated like stocks, futures or options.

I have encountered several things that you should avoid in a broker. All the criteria I'm going to refer have to be accomplished in order for you to have safety of funds.

In the first place, you should avoid forex brokers that are based offshore, in third world countries or brokers that don't even state where they are based. I'm telling you this because of the safety of your funds. As there are many forex broker scams, you need to pay special attention to this factor. If your present broker or the broker you are thinking of opening an account with has this characteristic, my advice is to look somewhere else.

In the second place, the forex broker you choose can't trade against you. This may seem new to you but there are a lot of forex brokers out there that are doing this. Of course, as they are stronger than you, a simple trader, they will always win and you will always lose. Please be aware of this situation.

In the third place, you should read reviews about your broker or the broker you are thinking of using. It is always important to read what other traders think about them, their executions, their spreads and even their customer support. You should read their webpage but nothing is better that asking or reading about them from someone that is already using their services.

Finally, don't let the money and greed talk too loud. If a forex broker allows you to trade with just $100, it's because they allow you to have a big leverage. Using big leverage is not a good idea because, if you have a small account, you can get ripped off with just a loss. Of course, you can use this leverage in your favor if it is a small percentage of your money. But if you're trading with just $100, there's no space for leveraging without incurring in a very high risk of losing your entire account in a single trade.

Don't get discouraged by the fact that there are so many forex broker scams. There are also good and solid forex brokers. You just have to do a deeper search in order to find one that fits your needs and your security.

Classic Divergence

2008-09-05T07:03:00.000-07:00

Classic divergence is one of the best-known types of non-confirmation. A divergence is a separation between price and indicator that warns of a possible short- to intermediateterm change of trend.

A bullish divergence arises during a down move when price makes either a lower low or a double bottom but the indicator makes a higher low or a double bottom. A bearish divergence occurs during an up move when price makes either a higher high or a double top and the indicator makes a lower high or a double top. Classic divergences can occur at price tops or bottoms and also at price corrections.

The chart of PepsiCo [PEP] in Figure 1 shows both a bearish and a bullish divergence. The stock price rose from April to the end of May 1995. The oscillator made a top in early to mid-May at point A.

However, when price made a top in late May (point B), the oscillator made a second top at a lower level. This was a sign that price momentum was decreasing and warned of a potential change in trend either from up to down or sideways. The stock made a corrective decline going into July. At the price low in mid-July (point D), the oscillator made a second bottom, but at a higher level. This signaled that downside momentum had decreased and either a potential rally or sideways move could occur. The bullish divergence was confirmed as price resumed its up move.

Hidden Divergence

2008-09-03T06:03:00.000-07:00

Divergence, which is a term that technicians use when two or more averages or indices fail to show confirming trends, is one of the mainstays of technical analysis. Here’s a new way to use oscillators and divergence as well as methods to locate entry levels during a trend.

Most technical indicators mirror or confirm price movement. When price moves up, the indicator moves up; when price moves down, the indicator moves down. When prices peak, the indicator peaks; and when prices bottom, the indicator bottoms. Sometimes, however, a discrepancy occurs between price and indicator movement. That discrepancy is known as nonconfirmation and can be seen most clearly on overbought or oversold indicators as well as on indicators that move above or below a zero line.

Many traders only learn to recognize the type of nonconfirmation that occurs at market tops and bottoms, which is the classic divergence. But there are other forms of nonconfirmation I call hidden divergence (HD) that, when present, offer additional profit potential.

Hidden divergences are the opposite of classic divergences. Classic divergence looks for lower low prices accompanied by higher indicator values at price bottoms and higher high prices accompanied by lower indicator values at price tops. Hidden divergences, on the other hand, seek higher price lows accompanied by lower indicator values during up moves and lower price highs accompanied by higher indicator values during down moves. Most hidden divergences signal continuation moves in the direction of the prevailing trend.

Here are examples of each type of nonconfirmation using stock and commodity charts. Even though many indicators display nonconfirmations, I will use a five- to 15-unit (5-15) price oscillator to illustrate various nonconfirmations. The oscillator is simply the difference between a five-unit exponential moving average (EMA) of the closing price and a 15-unit exponential moving average of the closing price. The value of that difference fluctuates above and below a zero line.

Best Forex Articles

2008-08-29T04:59:00.001-07:00

Beware of Courses in Currency Trading

Currency Trading Forecast - The Dangers of looking to Far Ahead

The Best Forex Trading Books

How to Become a Currency Forex Trader

How To Find The Best Currency Trading System?

What is Currency Trading System?

Why do 95% of Traders Lose Money?

How To Making Money Fast In Forex Trading

Learn Forex & Live The Dream

Big Profits are Made Trend Following the Currencies

Using Forex charts is an art not a science

Page 1 - 2 - 3 - 4 - 5 - 6 - 7 - 8

Beware of Courses in Currency Trading

2008-08-26T06:29:00.000-07:00

There are many courses in currency trading and we offer one on this site but what makes a good currency trading course? Let’s have a look at some key elements that a course should contain to help you get the right forex education and achieve long term currency trading success.

Firstly look for realism, don’t be deceived by people telling you that you can make a fortune with no effort – you can’t. If you want to get a course in currency trading then it is up to you to learn the logic, understand it, have confidence in it and apply it with discipline, to lead you to long term success.

Here are some points to be aware of when buying a currency trading course.

1. Beware of courses that Claim Scientific Accuracy

There are many courses that will tell you they can trade with scientific accuracy - but they can’t. If there was a scientific theory of market movement, there would actually be no market, as we would all know the price in advance.

Forex trading is a game of odds - NOT certainties and any system can lose money in the short term, that simply the reality of trading.

2. Beware of courses that Use Far Out Theories

The king of these is Fibonacci and trading Fibonacci retracements.

The Fibonacci number sequence has nothing to do with trading and if Leonardo Fibonacci were around today (he died in the thirteenth century) he would probably be bemused at the way financial traders have hijacked his theory and applied it to trading.

The theory was originally used to solve a problem to do with the copulation of rabbits and has nothing to do with finance.

Traders present it as a scientific theory for trading but it is anything but – if it were scientific the retracements would work every time and they don’t they work some of the time but you can pick any retracement percentage you like and it will work some the time – but that’s not scientific!

Other similar theories are Gann and Elliot wave, both claim to be scientific but are not – leave them to the far out crowd and dreamers.

3. Beware of The Track Record

Anyone can make up any track record and many vendors do!

Be cautious when you see one that looks to good to be true, as it will normally be accompanied by the following disclaimer or a similar one, read it carefully:

"CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".

If a vendor puts this disclaimer on a track record, they can simulate anything they want in hindsight knowing the closing prices. Of course doing this is a lot easier than trading for real and not knowing what they are!

4. Beware of Courses that Promise Regular Income

How on earth can you promise a regular income from a market that’s so un-predictable?

Not even the best currency trading systems win all the time and all will have periods of drawdown and losses furthermore, you can never anticipate how long they will last.

Over the longer term a soundly based forex trading strategy should make money - but in shorter time frames anything can happen

5. Beware of Day Trading and Scalping Courses

Forex day trading and scalping is simply one of the best ways to wipeout your account equity. Volatility in short term time frames is random, support and resistance levels are meaningless and you can’t get the odds in your favor – period.

If you ever see a day trading system that produces a track record of gains look for the disclaimer we have highlighted in point 3.

Avoid day trading systems!

6. Beware of Courses with No Satisfaction Guarantee

Any currency trading course will make claims and give you the benefits it thinks it will give you and that’s fair enough – but the vendor is asking you to believe these claims and you therefore should have a right to have your money back, if the course does not deliver what you expect.

You should look for a guarantee that offers to rebate your money in FULL with no penalties after a trial period should you not be satisfied.

Finding a Currency Trading Course that’s Right for You

What you are looking for is a course that suits your personality.

This means you can have one that is simply rules that you have to execute, or can have one that gives you a set of manual guidelines - but allows you to pull the trigger.

Execution Only or Manual Override?

As a general rule it takes tremendous confidence and discipline to execute trading signals, so if you opt for this method make sure that you are have the rules revealed to you, you understand them and you have rock solid confidence in them to follow them with discipline.

Other currency trading courses will give you a manual override i.e a broad set of rules for you to apply on set ups you think are best. There are still rules to follow, but you don’t have to execute every trade. These courses will also give you options on stops, money management and targets. These can be easier for traders to follow, as the forex trader actually has control over the set ups you take.

The method you choose will be down to your own personality and is very much a personal choice.

Trend following or Swing Trading

There are two methods to choose from, you can either swing trade or follow long term trends. Again, the method you choose will be down to your personality.

Following a long term forex trading system takes a lot more discipline than following a forex swing trading system. Why?

Because with long term forex trend following you have to hold on to the trade when open equity dips. These dips in open equity can sometimes be thousands of dollars and it’s hard to hold the trend through them. Sure, long term forex trend following is rewarding but it requires a lot of discipline, as well as the patience to wait for the big trends to emerge.

Swing trading needs less discipline as you don’t hold trades for very long and profits and losses are taken quickly.

Some currency trading courses can be adapted to trade both methods and ours is one of them. Before you start to trade, decide which method is best for you, or mix them together.

What’s The Trading Edge?

The forex course you choose should give you something that is a trading edge.

A trading edge is the part of the course that gives your forex trading strategy the ability to enter the elite 5% of winning traders and should be defined.

It’s is this edge you need to understand and be able to apply with confidence, to enjoy currency trading success.

Newsletters and Support

You should be entitled to 24 hour support so make sure you can ask questions as and when you wish. If you find a forex course that also offers a newsletter to help you spot the trades you can then see how the vendor applies it and this is a great way to further your forex education. This allows you to follow and learn on paper and see if the vendor applying his system is profitable.

If you find a good currency course you should find clear logical reasons on how and why the system works understand and have confidence in it and then be able to apply the methodology yourself with discipline.

You are looking not to just blindly follow – but learn the logic and apply it yourself.

There are many good courses in currency trading – but one size doesn’t fit all.

You need to find a course that not only you have confidence in but also one that suits your trading personality. Courses in currency trading can be an effective way of helping you develop a sound logical forex trading strategy which will lead you to longer term currency trading success.

Currency Trading Forecast - The Dangers of looking to Far Ahead

2008-08-24T06:27:00.000-07:00

Currency Trading Forecast

Today there are more services than ever that will claim they can help with currency trading forecasts and there are numerous experts, who try and forecast the future movements of currency markets.

In this section we will look at currency trading forecasts in more detail and what you need to know to do it successfully.

The Dangers of looking to Far Ahead

You will often see currency trading forecasts for months or a year ahead but these need to be treated with caution - as there are lots of variables that can and do change rapidly, so never look to far ahead. To forecast currency prices use the facts you have that are immediately available and use these as a basis for forecasting.

The reason currency trading forecasting is so difficult, is because prices do not just respond to the facts; they move based upon how traders see the facts. Understanding this relationship is an important part of your forex education. Lets look at why.

The Relationship between Value and Sentiment

Humans determine the price of anything and currency markets are no different.

We all have the same facts to look at but we draw our own conclusions individually on what we see. Humans are not logical; they are creatures of emotion and respond to greed and fear.

Throughout history the emotions of greed and fear see traders spike prices away from fair value. These sentiment spikes never last for long and prices eventually fall back to fair value. These spikes are easy to see on a forex chart and can be traded for profit.

If you want to enjoy currency trading success, you need to forecast when these spikes in sentiment are going to change.

As a forex trader the aim of your forex trading system is - to trade anticipate and trade these shifts in sentiment and use them to execute your trading signal at the right time when the odds are in your favor.

Forecasting the Fundamentals

Many traders like to trade forex facts that they see on newswires or in the papers.

While stories based upon the facts sound logical and convincing, as currency trading forecasts there normally convincing, logical and wrong.

The reason for this is the traders who trade these stories are not!

It’s a fact that markets make important tops or bottoms when the markets are at their most bullish or bearish – this is investor psychology at work. Markets become too bullish or bearish and break back towards fair value.

So it’s impossible to trade the supply and demand fundamentals in isolation, as by themselves they give no clues to where prices will go next.

Forecasting With Technical Analysis

For more in depth information on technical analysis, its advantages and how to use forex charts - you can read the sections on this site. In this section we are going to simply point out that, forex charts take into account both the fundamentals and investor psychology.

Forex technical analysis simply assumes that all known fundamentals will quickly show up in price action (and in our world of instant communications this is truer than ever before) however, it also shows how investors perceive the fundamentals.

A currency trader using forex technical analysis is not concerned with how and why prices move; he simply wants to make forex profits when they do.

Judging Sentiment

The important point to keep in mind is that we can all look at the news and forecast where currency prices may go and we may or may not be right - however, by simply following and acting on price action on a chart we are effectively trading the reality of price change or trade the truth.

We don’t have to make a currency trading forecast, we simply trade the reality.

If you make this the basis of your forex trading strategy then you can enjoy currency trading success.

You will often see news stories that will say a trend will go on for ever and this indicates a bullish or bearish price extreme which is driven by greed and fear and it will exhaust itself. A piece of bullish forex news that does not move currency higher or bearish news that doesn’t push prices lower, is telling you that a change maybe at hand.

There is an old saying:

“If you can hold your head while everyone around them is losing theirs you probably haven’t heard the news”

In FX trading you have - but you have drawn different conclusions and are making a currency trading forecast against the majority. To do this you simply need to look at your forex trading charts for clues to where prices may go next.

If you understand the above relationship between sentiment and the fundamentals
You will have a head start in your quest for profits

You can trade with the trend until an extreme is reached and then look for turning points. You are making a currency trading forecast but you are also not acting on it until you see evidence of a change on a forex chart. You’re trading the confirmation or the truth and if you do this you can enjoy success.

The Best Forex Trading Books

2008-08-21T06:22:00.000-07:00

10 Of the Best

Below you will find my ten of the best currency trading books and there not just for currency traders they are for any form of trading and apply to all markets. Any list of best currency books is of course subjective and this list is no exception. The list comes from reading thousands of books over the last 25 years.

These books won’t tell you how to trade or execute trading signals – building a currency trading system is a personal affair but they will run you through the concepts of trading and most importantly, the areas that many traders neglect namely – obtaining the right mindset for success, executing a trading plan with discipline and strict money management techniques.

It’s a fact that anyone can learn to trade and anyone can build a trading method but the areas that most traders neglect are in the mind. Traders generally fail due to poor money management techniques and lack of discipline.

The books below are listed in no order of importance - but these ten books will in my humble opinion help anyone become a better trader. I hope you enjoy them as much as I did.

1.Market Wizards (Jack Schwager)

Schwager interviews 17 trading legends including Richard Dennis, Paul Tudor Jones, Ed Seykota, Marty Schwartz, Tom Baldwin and others. One of the top-selling trading books of all-time and with good reason – if you can’t learn from these guys you can’t learn from anyone!

2. The New Market Wizards (Jack Schwager)

Follows the same format as the original book - another host of trading legends share their insights and knowledge on trading the markets.

3. Extraordinary Popular Delusions and Madness of Crowds – Charles Mackay

Over 100 years old and a timeless lesson for those who think that market behaviour can be predicted. If you ever get the feeling that a market simply can’t go any higher or lower read this book!

4. Trader Vic – Methods of a Wall Street Master (Victor Sperandeo)

Victor Sperandeo is one of those traders who piles up consistent gains year after year and here he shares his insight on everything to do with trading - from psychology, to trend following correctly, to money management.

5. The Disciplined Trader Developing Winning Attitudes (Mark Douglas)

This book was the one that really rammed home to me how important discipline in trading is and how hard it is to achieve in terms of mindset no matter how well prepared you feel you are or how good your trading system is. The ideas and concepts in the book are well presented, if somewhat repetitive. The author examines the psychology of fear that often hinders traders achieve trading success. Traders either love this book or hate it but those who dismiss it have either not read it or have not taken a very close look at themselves.

6. What I Learned Losing a Million Dollars – (Jim Paul Brendan Moynihan)

This books focus is on losing and as it correctly states

There are many different ways to make money but only a few ways to lose it.

Part biography and part a lesson in money management – if you only thought money management was placing a stop you need this book.

One of the most unique books you will ever read. It correctly points out that trading and investing are personal journeys of discovery; about finding out who you are, and then how to manage what you find and use this understanding to trade successfully in the markets. The reason why most traders never make money - it never occurs to them that trading is all about self knowledge not the method they are using.

7. The Way of the Turtle – (Curtis Faith)

While visiting a turtle farm, legendary trader Richard Dennis had a bet with his big pal and trading partner - Bill Eckhardt that great traders didn't have to be born - they could be made. To settle the bet, they recruited a group of individuals from all walks of life, gave them accounts to trade, and trained them for two weeks - hence the Turtle Traders. The Turtles earned more than $100 million in less than four years.

Here the most successful turtle Curtis Faith goes through the experiment in great depth offering his unique perspective on the experience, he explains why the Turtle Way works in today’s markets and how to apply it. He also shares his wisdom on taking risks, choosing your own path, and learning from your trading mistakes.

9. Technical Analysis of Financial Markets – (John Murphy)

A typical book from Murphy, well thought out, well presented and over 500 pages on just about everything you could ever want to know about using technical analysis on forex, or any other financial market.

This is a great reference book for any serious trader’s book library.

10. Currency Trading Fro Dummies – Mark Galant and Brian Dolan

If you have read of the other “for dummies” books you know what to expect. A great introduction and a lot more insight to being a successful trader than you would expect from a beginners book - the perfect book for novice traders.

How to Become a Currency Forex Trader

2008-08-18T06:25:00.000-07:00

Can anyone become a currency trader from home? The answer is yes, everything about successful currency trading can be specifically learned, by anyone with a desire to succeed but you must avoid common Currency myths and work on getting the right forex education.

Anyone can learn Currency trading here’s the Proof

A graphic illustration of how anyone can learn to trade was provided by legendary trader Richard Dennis - who took a group of people who had never traded before and taught them to trade in just 14 days.

The Result?

They went on to make $100 million dollars in 4 years and many became trading legends. This group Known as the turtles conclusively proved that everything about trading can be specifically learned.

But how do you go about becoming a currency trader and making regular forex profits?

The answer is you don’t need to work hard – but you need to work smart and just as importantly, get the right mindset for success.

Currency trading success is based on a sound logical forex trading strategy but also relies on the discipline to apply it, through periods of losses and to enjoy longer term success.

If you don’t have the discipline to apply your method, you simply don’t have one!

The Basics of a Sound Forex Trading Strategy.

* It should be simple – all the best currency trading systems are, as they tend to be more robust than complicated ones which have too many elements to break.
* The simplest and most time efficient way to trade is by using technical analysis and study forex charts. Here you need to isolate and spot important levels of support and resistance and then trade looking for the level to hold or break.
* A Good forex trading strategy will NOT try and predict in advance but will act on the reality of price momentum changes – either looking for these levels to break or hold, by measuring the velocity of price.
* You should never try and predict - you should use some momentum oscillators to confirm the moves and then execute your trading signal. You should keep in mind that some of the best high odds trades come from breakouts of new highs or lows and going with these breaks can yield substantial profits.
* Try and keep the rules of your trading system as objective as possible – if you have too much subjectivity in your system, your emotions can get involved and you will lose.
* Always assume the worst when you place your trade. Calculate your loss and make sure you have a stop in place – never use a mental stop.

The easy bit is getting your currency trading system together it should only take a few weeks study, the hard part is applying it with discipline.

To Win You Must Have This!

Discipline is a hard trait to acquire for most traders.

To acquire discipline, you need to educate yourself and know everything about the currency trading system you are going to use.

Only by having a complete understanding of how and why your system works, will you acquire confidence in its ability to be successful and from this confidence comes discipline.

The reason many traders don’t succeed is they blindly follow experts and systems they don’t understand. As soon as they hit a few losses, their discipline goes because they don’t have confidence in what their doing.

The biggest mental barrier for any trader is executing his trading signals in the face of consecutive losses (all traders will have them and they can last for weeks or months) and it is in these periods that you must stick with your system and not throw in the towel.

It sounds easy to do but is anything but – it’s very hard. If you want to achieve success you need to base your strategy on the right knowledge to obtain confidence and achieve discipline.

Work Smart NOT Hard

If you want to become a currency trader you don’t need to work hard as we have said you need to work smart AND treat it like you would any other business – one where you have to learn the basics and understand what you are doing. While this may sound obvious, it’s surprising how many traders thing forex trading is easy. They think they can follow some mentor blindly, or a story from the news and make money – it’s not that easy and you wouldn’t expect it to be, with the rewards on offer in forex trading.

If you want to become a currency trader from home you can - if you have the desire to succeed and a willingness to work smart and learn the right knowledge.

If you invest time and effort in becoming a currency trader you could enjoy currency trading success and you could set yourself up with an income stream that can create significant wealth. If you want to become a currency trader anyone has the potential but it’s up to you to realize it.

How To Find The Best Currency Trading System

2008-08-16T06:17:00.000-07:00

We have already gone through the basics points you need to keep in mind when buying or constructing a currency trading system. Here we want to look at the elements that go into making the best currency trading systems.

While the best systems all have differences in the indicators used and their trading styles, they tend to all share common elements that allow their users to achieve long term currency trading success.

First we will look at these common elements and then give some general guidelines if you are considering building your own currency trading system.

Simplicity

The best currency trading systems all tend to be simple.

One of the biggest myths of currency trading system design is the more complex you make it or the more work you put into it the more likely it is to be successful – this is simply not true.

Simple forex trading systems work best, because they tend to be very robust in the face of ever changing brutal market conditions.

Make a system too complex and it will have too many elements to break. Generally a good currency trading system will contain just a few parameters or rules, to generate forex trading signals.

Logic

Most of the best FX systems will use support and resistance and a breakout methodology as a base and look to follow trends - either of an intermediate or long term nature.

They will identify areas of support and resistance and use momentum or leading indicators to confirm trades and execute correct market timing - when support or resistance has been proven to hold or break.

The best currency trading systems tend to react to currency prices and act upon the reality of price change - they do not try and predict the future.

Generally the best systems are trend following and aim to keep losses small and run profitable trends. The ratio of profit per trade against loss per trade varies but is normally at least 3:1.

There is of course a variance here, depending on whether the system is involved in forex swing trading or long term trend following.

Drawdown & Recovery

All the best currency trading systems have these and if they do not, then their simulated or hypothetical track records that have NEVER been traded for real.

The fact is in forex trading, risk goes with reward and drawdown is a natural consequence of taking risk. Even the best trading systems can lose 20 – 30% and have drawdowns of several weeks or months – this is simply the nature of currency exchange markets.

Many trading systems are based upon sound logic but fail because they do not have correct money management. In many instances they try so hard to restrict risk they actually create it.

Money Management

Is critical to the success of any forex trading system and money management does not mean just placing a stop - it means having a money management plan for the whole account.

All the best currency trading systems have well thought out money management rules – the key with any system is play great defence and protect what they have as a first priority.

Objectivity

The best currency trading systems work to a set objective rules to determine the execution of trading signals and exact market timing.

Objectivity and rules mean - anyone can operate the system, if they know the rules.

We see many trading systems which leave so much subjectivity up to the user (good examples are Elliot Wave, cycles etc) that they are not systems at all and success or failure depends on the forex traders judgement.

What Can You Expect In Terms Of Forex Profits?

Without taking excessive risks then we would say that over a 3 – 5 year period, the best currency trading systems can generate compound growth of between around 30 – 50%, with drawdowns in the region of 15 – 25%. If you can find a system that can achieve this, you are will have one of the best currency trading systems.

Building Your Own

While many traders think building their won system and making it part of their forex trading strategy is hard but it’s actually quite simple with today’s online trading platforms and currency trading software.

The points you should keep in mind are:

1. Decide your time frame depending on your trading personality.
2. Use support and resistance and breakout methodology as a good base.
3. Be selective and only trade valid support and resistance.
4. Use a few confirming indicators (such as RSI, stochastic, ADX, MACD etc) to execute your trading signals and confirm your entry points. This will help you keep your trading system robust and avoid curve fitting.
5. Test it on back data going back 5 – 10 years the longer the time frame the better.
6. Make your rules as objective as possible to stop your emotions getting involved.
7. Study standard deviation of price and make sure your stops take into account volatility. Put a stop to close and market noise will stop you out and to far behind and you risk a wipe out of equity. Stop placement and trailing is critical to your forex success.
8. Construct a money management framework for the overall account.
9. When you have done all the above make sure you know you’re “trading edge” This is the factor which will enable you to enter the elite 5% of winning currency traders, who make consistent forex profits.

If you don’t know your trading edge then you don’t have one!

So it’s back to your forex education and building another system.

Final Words…

Get the right currency trading system either from a vendor or if you build one yourself and you can enjoy currency trading success for very little effort and have your own fund management system to build long term wealth for you.

The effort you put into choosing or developing a currency trading system, will be well rewarded in terms of profit - if you choose the best currency systems or maybe you can build one yourself!

What is Currency Trading System

2008-08-13T06:15:00.000-07:00

In this article we will look at the basics of a successful currency trading system. We look at factors to consider when building one yourself or if you plan to buy a ready made currency trading system from a vendor.

You can incorporate a good currency trading system into your forex trading strategy and enjoy currency trading success.

In the section best currency trading system we will look at what separates the best trading systems from the losing majority - but let’s review the basics you need to consider first.

Time Span

First you need to decide what timescale you wish to trade over.

Do you want to long term trend follow, swing trade in forex or use a forex day trading system?

This is really a matter of choice, except in forex day trading. Forex day trading systems don’t and will never enjoy long term success, so don’t be tempted to try one, as all short term volatility is random and no day trading system will work.

If you are a patient trader then long term trend following would be a good choice - but you need to be very disciplined and accept short term drawdowns in open equity against you.

If you are not so disciplined, then swing trading in currency is a good choice.

These trading systems trade more frequently, there is plenty of action and profits and losses are banked quickly.

Responding To Market Action

Never be tempted to buy a forex trading system or base it on the logic of predicting where price action will go – it won’t work.

Why?

Because prediction is another word for hoping or guessing and that won’t make you money in life generally and certainly not currency trading.

There are a lot of currency traders who sell the myth that you can predict market movements in advance. Such as systems based on Fibonacci, W D Gann and Elliot Wave theory and none of them work and the reason is obvious:

If FX markets could be predicted with scientific accuracy, then we would all know the price in advance and there would be no market! This is common sense - leave the scientific theories to the dreamers and far out investment community and concentrate on trading the reality of price change.

If a currency trading system trades the reality of price change, it’s trading facts not guessing or hoping and will have a much better chance of success.

Always keep in mind that forex trading is a game of odds - not certainties.

Track Records & Back Testing

There is a huge market in currency trading systems on the net and most don’t have a real track record. They do however have a simulated track record done in hindsight which means that vendors can present any track record they like and they do.

You often see track records with extra ordinary track records in back testing which totally fail in real time trading.

If you are buying a currency trading system, its best to stick with one that has a real time track record - with audited account statements. After all, if the vendor does not have the confidence to trade it why should you?

If you are building your own trading system, then you also need to make sure you don’t “curve fit” it.

Curve fitting is simply bending the system to fit the data.

One trader I know likened this to shooting at a barn door blindly and then drawing a bulls-eye around each and everyone AFTERWARDS!

Its temping to curve fit, to make your system perfect and the best way to avoid it is use a long segment of data, don’t use too many rules and trade every currency in the same way.

Many forex traders create unique rules, for currencies and different markets but logic tells you as no two segments of data will ever repeat this is doomed to failure.

Keep your system simple and it will be more robust in real trading and more likely to succeed – add to much curve fitting and bending your system to fit the data and it will break.

Discipline Comes From Understanding

If you build your own trading system or follow a ready made one you must understand and have confidence in the logic, to follow the system and execute your trading signal with discipline.

If you don’t understand why it will work and help you enjoy success you will throw in the towel when losses occur. If you don’t have the discipline to follow a forex trading system you don’t have one!

If you follow a vendor make sure you understand the system and why it will work long term. If you build your own this is not normally a problem as you will know the logic you put into it.

Drawdown

All currency trading systems no matter how good they are at marketing timing, will have periods of losses - that’s simply the reality of forex trading. Make sure you are comfortable with the drawdown and by this we don’t mean the average drawdown – but peak to valley drawdown.

Assume that you enter the system on the worst day and check the size of drawdown and period to recovery and that it matches your risk tolerance.

Always assume your worst drawdown is in front of you.

A Time Saving Way to Make Profits

If you have a currency trading system you will normally only need end of day data (not a live forex data feed) and it should take you around 30 minutes a day to execute. Pick the right currency trading system and for very little effort you can enjoy tremendous gains and picking a profitable currency trading system is the subject of our next section - best currency trading systems.

Why do 95% of Traders Lose Money?

2008-08-11T06:05:00.000-07:00

If you have read the other information we have provided on this site you will understand that - Forex trading is simple to learn, and anyone can acquire the skills to trade successfully.

So, the obvious question you may ask is why do 95% of traders lose money?

Many traders lose because they have poor methods, however many have good methods but still lose. The reason for this is - they lack the correct mindset to succeed.

If you want to win at Forex trading you need the right knowledge but you also need to have the right mindset, if you don’t you will lose.

Here we will take a look at how to adopt the correct mindset the millionaire traders have and you need too. If you can acquire them, you are on the way to achieving currency trading success.

1. Desire and Passion

If you want success in anything in life - including forex trading, then you must desire success. If you have desire, then you’ll do what’s required to succeed. If you look at any of the legendary traders, they all had desire - and they loved what they did with a passion.

Currency trading success requires effort, as the rewards are immense - if you have the desire to succeed, you will acknowledge this and put in the required effort to succeed and make no mistake – the rewards for your effort can be life changing.

So if you have the desire and passion to succeed then chances are you will. Now lets look at how to channel this desire and passion, to become a successful Forex Trader.

2. Work Smart Not Hard

If you have read the Forex Education section – you will have read about “the turtles” - a group of people who had never traded before but learnt to do so in 14 days and went on to make millions.

They did this by working smart, NOT hard - and there is a big difference.

In many jobs you get paid for the effort you put in. When you trade FOREX you earn your reward simply for being right.

When you learn currency trading focus on working smart and acquiring the right knowledge and ignore all the Forex Myths which cause the bulk of traders to lose.

If you work smart, you can learn to trade in just a few weeks and in under an hour a day, you could soon be piling up big consistent profits.

The key to trading success is to have confidence in what you are doing - this leads to discipline and ultimate trading success. Let’s look at this in more detail, as most traders never acquire these traits and lose.

3. Confidence

You hear traders talk a lot about discipline being a key to success in currency trading - but you don’t hear them talk so much about confidence. However, confidence is a vital ingredient when implementing any successful forex trading strategy.

We are involved in Forex Education - we can give you the tools you need to be successful – BUT you need to learn them and have confidence in them YOURSELF.

To have confidence, you need to understand exactly how and why a forex trading strategy works and will continue to work.

This is essential when you hit a losing streak (all traders have them even the world’s best traders, so you need to be prepared for them) you need to have the confidence to stick with your forex trading system and trade it with discipline through losing periods, to ultimate long term trading success.

If you have confidence, you can acquire the key trait all traders need:

4. Discipline

Discipline is the key to forex trading success.

If you don’t trade your method with discipline – you don’t have a method at all!

It’s not as easy to trade in a disciplined fashion as many people believe, but if you take the time and trouble to learn a method and have confidence in it, then you will be able to trade in a disciplined fashion.

If you trade with discipline, you will be doing what 90% of traders don’t do and you will have a trading edge.

Discipline comes from all the points we have discussed earlier:

Desire, knowledge and confidence which give you the inner belief to follow your trading method and execute it in the correct manner for long term trading success.

Success From Within

People like ourselves can help you achieve currency trading success, by giving you the tools however, the ultimate person who will determine how much money you will make is you!

Fact: Anyone can learn forex trading and anyone can become a successful trader.

Forex trading is a challenge, its exciting, it’s fun and can offer you an income that other people only dream about so, Are you ready for a challenge and do you have the desire to succeed?

If so, welcome to the world’s most exciting business opportunity!

How To Making Money Fast In Forex Trading

2008-08-08T06:03:00.000-07:00

If you are trading Forex and making mediocre or average gains and want to improve your overall profitability, then this section is for you.

The ways to improve profitability enclosed in this section are simple and they have worked for us and will work for you. These are simple yet powerful tips any Forex trader should consider.

A good place to start is with a timeless classic investment book - the Zurich Axioms by Max Gunther it’s a book any trader should read.

The wisdom is simple, timeless, unconventional, funny, exciting, and is one of the most inspiring investment books ever written.

The 12 major and 16 minor Zurich Axioms in the book are a set of principles, providing a philosophy, to incorporate in your Forex trading strategy to help you manage risk and increase profitability.

Several of the Axioms fly right in the face of accepted investment wisdom - however the Swiss investors who wrote them became very rich, while most investors who follow conventional wisdom do not and keep in mind 90% of speculators lose so being in the minority is not such a bad thing!

“Resist the allure of diversification”

Diversify your investments is accepted as a way to make money longer term and reduce risk - but all it does is dilute your potential profit and in many instances increase your chances of losing.

You will read a lot about risking 2% per trade and spreading your trades - but if you are like most Forex traders and trading a small account of under $10,000 you won’t make much risking $200.00!

The Zurich Axioms encourage you NOT to diversify for small gains, but to look for the big potential winners and risk more. This does not mean you are being rash – far from it, you are simply risking more on the high odds trades and ignoring the ones that don’t have good profit potential.

Many traders simply trade to much but in Forex trading you don’t get paid for how much effort you put in – you get your reward for being RIGHT with your trading signals – PERIOD.

So cut down the amount of trading signals you execute and only focus on the really good trades that have the best profit potential.

The Pareto 80 / 20 Rule

The above philosophy is related to famous the 80 / 20 rule or Pareto principle.

The rule states that 80% of your results come from 20% of your activities - and this is true in many areas of life in sales, business and trading Forex.

The rule postulates that by concentrating on the best investments, and ignoring the others, you can improve your profitability dramatically – by simply searching and acting on the 20% of “good trades” that yield the really big profits.

By only focusing on this 20%, you will see bigger gains. This is really a common sense rule, yet very few Forex traders know it or use it.

Most Forex traders are obsessed with trading to often, they think if their not in the market they will miss a move. Other traders try trading in ways that simply offer them no chance of success like Forex day trading.

I know traders that make triple digit annual gains and only trade once a month and I know other traders who trade all the time and lose.

Keep in mind - the aim of Forex trading is to make money nothing else matters, so don’t trade often and when you trade the best opportunities and risk more.

Accept and Enjoy Risk!

The major reason traders don’t win is they are so frightened of risk; they actually create it and lose. Does this mean you should take unnecessary risks, or act in a rash and cavalier manner?

No it doesn’t - but to make big gains you have to take calculated risks when the time is right and a good trade presents itself.

The Zurich Axioms show you how to confront risk in a positive way, manage it, and enjoy the challenge – the speculators who wrote the book enjoyed risk and the challenge of making money – If you don’t enjoy the challenge of risk, then you will lose.

Lets look at two of the Axiom’s on risk which compliment the one above on diversification – which tells us why most traders lose.

1. “Worry is not a sickness but a sign of health...If you are not worried, you are not risking enough”.

How often are you told only to risk what you can afford to lose in investing - when you know you should risk more?

You then see the gains you could have made - but you didn’t have the conviction to go for the trade and then you were left wondering about what might have been?

2. “Always play for meaningful stakes..if an amount is so small that its loss won't make any significant difference, then it isn't likely to bring any significant gains either”.

If you don’t risk much, you won’t gain much as we have already stated. If however you load up the high odds trades then you will increase your profitability.

If you have a sound Forex Trading strategy you have confidence in then the above tips are common sense and will increase your FX profits.

Risk Reward & You

The major mistake most Forex Traders make is they think that they can restrict the risk of Forex trading to minimal levels and still win – this is simply not true.

If you try and restrict risk to much by placing stops to close you will simply guarantee you will be stopped out by normal market volatility. It may look like it’s less risky but its guaranteeing you will lose so it’s actually very risky!

Volatility and leverage creates both risk and opportunity in online currency trading, you need accept this risk and then spot the trades that offer the best odds of success and go for them.

If you do, you will actually decrease your risk and increase your profits dramatically.

If of course you don’t like taking risks then you shouldn’t trade currencies as you will lose.

Learn Forex & Live The Dream

2008-08-06T06:01:00.000-07:00

Everything about forex trading can be learned with the right forex education and here we are going to give you a great example of what can be achieved.

You don’t need to work hard to win at forex trading you just need to learn the RIGHT knowledge.

A perfect example of this is the “turtle” experiment, which is outlined below.

In just two weeks a group of 14 people from different walks of life were taught to trade financial markets, and these traders nicknamed the “turtles” became world famous.

The turtle experiment proved ANYONE can become a successful trader with the right education and everything about trading can be specifically learned.

Traders with no experience learned the tools to make millions in just two weeks, and they represented a variety of different people, from all walks of life including:

· An actor

· A security guard

· Two professional card players

· An auditor

· A boy who had just left school

· A woman who used to be an exchange clerk

They then went on to make annualized 70% returns!

Is Trading a Learned Skill, or is it all Down to innate Ability?

In 1984, Richard Dennis taught a Trend Following trading methodology to the group of students above, to prove anyone, no matter what their profession, could be taught the skills required to trade successfully.

Dennis was settling a debate with his friend and business partner William Eckhardt. Dennis believed anyone could learn to trade and Eckhardt disagreed - the “turtle” experiment was conducted to settle the debate.

The Experiment

The group of 14 traders he taught (the turtles) earned an average annual compound rate of return of 80% proving Dennis right and making him $100 million dollars!

What the Experiment Proved

The experiment with the “turtles” showed that anyone could indeed be taught to trade - all they had to do was learn, and follow a set of rules.

What you can learn from the Turtle experiment

Trading actually looks quite simple, yet few succeed and the fact is 95% of traders lose all their money.

The reason most traders fail is simply they cannot get the right mindset to succeed. The turtle trading experiment taught them the RIGHT MINDSET to trade successfully

The system they were taught was essentially simple, so simple in fact, that anyone could learn it and he combined this with giving the traders not just the system and rules but also the mindset to succeed and trade it with discipline.

Dennis realized that most traders can’t trade with discipline, their emotions get involved and they end up losing.

Why is Discipline so Important?

Quite simply, without the discipline to follow your method, you don’t have a method at all, and are doomed to failure - money management breaks down and losses inevitably follow.

Dennis taught them to have confidence in the system they were trading, and follow it rigidly to achieve success.

A Simple System + Discipline = Trading Success

Dennis knew that complicated trading methods are NOT likely to be more successful than simple ones – as a general rule, a simple trading system is more likely to be successful than a complicated one, as its more robust.

Simple systems are easier to understand as well – this meant the turtles had confidence in the system and could apply it with discipline.

So, What can we Learn from the Turtles?

Well, we know that anyone can learn to trade successfully and it can be do quickly.

We also know that simple systems applied with discipline and strict money management will work over time.

To become a successful trader you need a simple method that you can understand and have confidence in.

Just as confidence flows from understanding, discipline flows from confidence and it is the discipline to follow your method through losing periods which, is the key to long term success

You may not be as successful as the turtles but you can become a successful trader and you can make a lot of money.

Trading offers ANYONE the chance to build wealth - all you need to do is have the right mindset and learn the right knowledge.

Are you prepared for a challenge that could change your financial future forever? If you are, trading offers you the route to financial success.

Big Profits are Made Trend Following the Currencies

2008-08-04T05:59:00.000-07:00

Forex Trend Following

How To Get Your Share!

If you are a Forex Trader than you need to liquidate losing trades quickly and run profitable trades to pile up big long term profits. Many traders don’t know how to do this and this section will give you some basics to follow and advantages and disadvantages of various methods.

Forex trend following can be done in various different ways and here we will examine the merits of each and how they can bring you currency trading success.

Day Trading

More novice traders try to catch trends in daily time frames than any other method however, this method of trend following is doomed to failure.

Fact: The data within a day is totally unreliable and support and resistance levels are meaningless. Volatility can and does, take prices anywhere and all daily movements are random.

You can’t get the odds in your favour and you can’t win – PERIOD

There are countless millions of traders, trading trillions of dollars daily and it’s laughable to think that you can trade in such a short term time frame and win.

So why do so many traders try it?

Well, it’s a good story and many vendors appeal to the greed and naivety of investors and try and sell them forex trading systems or courses, but they don’t trade them! They make money from selling their product - they win by selling their product and the trader loses in the market.

Don’t fall for the myth of Forex day trading!

Advantages: None!

Keep in mind: You are guaranteed to lose, as you can never get the odds in your favour.

Swing Trading

Swing trading is perhaps the easiest way for novice forex traders to learn a Forex trading system. The aim is to catch reactions in major trends which normally last a few days to a week.

Swing trading has the advantage of there are plenty of trades to go for and you know if you are right or wrong quickly. Forex swing trading is easy psychologically, as you have obvious stop levels, small loses and profits are generally banked quickly.

The key to successful swing trading is to spot valid areas of support and resistance and then use momentum indicators, to execute trading signals in line with shifts in price momentum. For example, traders would wait for a test of support and for price momentum to turn up away from support and then trade to the long side.

The key with swing trading is always to CONFIRM With momentum indicators - before executing a trading signal.

EVER simply hope a level will hold or try and predict as you will lose.

Advantages: Easy to learn, its fun, there are lots of trades, it can be very profitable and it’s easy psychologically.

Keep In Mind: Make sure you don’t just guess or hope with swing trading and you use momentum indicators to confirm your trading signals.

Long Term Trend Following

The most lucrative form of trading and also the toughest way to trade.

If you look at Forex trends you will very often see trends that last for months or even years yet, very few traders have the mental discipline to hold these trends and milk them for all they’re worth.

Forex trend following requires patience, to wait for and enter these trends when the risk/ reward is at its best and then have the mental discipline to follow them.

Why is it so hard to do?

Because most traders are not mentally prepared to accept big gains.

The above may sound odd - as surely all forex want big gains?

The answer is yes they do, but accepting them is another matter.

The problem is - if money is important to you (as it is to most traders) then counter trend moves, which eat into your open equity, can tempt you to bank a profit early.

Most traders get excited when they get a profit and the bigger it gets the more tempted they are to take it, before it gets away. As volatility eats into open equity the temptation becomes too great for most traders and they bank early.

They end up taking an average profit or mediocre one, when they could have had a huge one.

If you are long term trend following you need the courage of your conviction and tremendous mental discipline to ignore counter trend swings and keep your eyes on the bigger prize.

Forex trend following is tough mentally but the rewards are immense, if it is done correctly and you have the right mindset.

Advantages: You can make huge profits!

Keep in mind: You need to be patient when timing entry levels and you also need to be able to psychologically handle short term severe dips in open equity. You need to keep your eyes focused on the end prize - not the short term swings against you. It’s not easy to do but very lucrative.

New Trends & Turning Points

It is the dream of most traders to be able to catch important market tops and bottoms.

Catching these turning points offers low risk and high rewards, as you are in at the stat of a new trend and these turning points normally see profits piled up quickly.

Catching turning points is satisfying, very profitable and its not has hard to do as many traders think.

If you use sentiment tools such as % bullish and Net Traders Positions, you will with a little practice, be able to spot these turning points forming. Then you can time entry with on your forex charts.

The key is to WAIT for clear confirmation of a trend change - before getting on board.

These moves don’t come around very often but if you look out for them, they will give you some great profits coupled with low risk.

Advantages: Great risk to reward, it’s a lot easier to do than many traders think and it gets you in at the start of big trends which, normally see big profits emerge quickly.

Keep in mind: You need to be careful in timing your entry and enter at the right time furthermore; these trades only come around a few times a year, so you have to be patient and wait for the right opportunities

Final words

You can make money with all the above methods of trend following (except day trading) and the method of Forex trend following you choose is down to personal preference.

You can focus on one of the above - or combine all of them together in your forex trading strategy and seek big profits in the worlds most lucrative and exciting investment market

–Good luck!

Using Forex charts is an art not a science

2008-08-01T05:56:00.000-07:00

Forex Charts - 5 Simple Steps To Big Profit Potential

If you have read the section on Technical Analysis then you will understand that you can build substantial long term profits – but you need to use Forex charts correctly.

Using Forex charts is an art not a science.

Here we will outline how to use for Forex charts in the correct way and the basics for building a successful Forex Trading system.

1. Keep It Simple

Many traders think that the more effort they put into their Forex trading strategy and the more complicated it is - the more they will make in terms of profit.

The above view is totally incorrect.

It’s a well known fact that a simple Forex trading system with just a few indicators, is more likely to be successful than one that is to complicated.

Why?

Quite simply, a simple system will be more robust in the face of ever changing market conditions, as there are fewer elements to break.

2. Trade Valid Data

You need to trade data that is valid and can be used on your Forex charts to increase your odds of success.

The biggest error a forex trader can make is to try Forex day trading – it doesn’t work as the data is to0 short to be reliable.

Forex day trading causes traders to lose because volatility in short term time frames is totally random and can and does take prices anywhere. Support and resistance levels are meaningless and you cannot trade them.

Stick to either long term trend following or swing trading depending on which suits your personality.

3. Support, Resistance & Breakouts

All successful traders use support and resistance levels to enter and exit the market.

While traders like to buy into support and sell into resistance i.e. “buy low sell high”,

most traders ignore a strategy that can be even more profitable which is buying a break of resistance.

If you want to make money in Forex trading you need to buy these beaks.

Traders like to “buy low and sell high” when they miss a breakout, they wait for the pullback to get in at a “better price” but the price doesn’t pullback and they miss the move.

The fact is that most of the biggest currency trends start from new market highs NOT market lows.

If you want to catch the really big trends then remember that - “buy high sell higher” is very profitable - although its uncomfortable psychologically buying a new market high – it is a proven high profit Forex Trading strategy.

4. Use Momentum Indicators

If you want to win at forex trading you need to learn to trade with price momentum.

One of the biggest errors traders make is to think that they can predict Forex price direction. If you try predicting forex prices, you are hoping or guessing and that is not the way to make money in any business – especially forex trading.

Rather than relying on hope – trade with price momentum.

For example, if you wanted to buy into a support level – you would wait for a test of the support and price momentum to accelerate away from support and enter with momentum. This means you are trading with the odds in your favor and not relying on hope.

All the worlds top traders use price momentum as part of their forex trading strategy and you need to as well.

5. Be Objective Not Subjective

When using indicators to execute trading signals make sure you are as objective as possible. Avoid indicators that involve subjectivity and stick with ones that are objective.

For example, subjective indicators such as cycles, Elliot Waves, Seasonals etc and use indicators that fit objective rules. This will help you stay disciplined and Keep your emotions out of your trading.

6. Back Testing & Curve Fitting

Many traders like to test their systems on back data and they look for perfection and end up “curve fitting” which sees the system profitable in back testing but lose in real time trading.

So what is curve fitting?

Curve fitting involves tweaking rules and parameters so that they fit the data, making the trading system profitable.

A good analogy is:

Shooting at a barn door, a then afterwards drawing a bulls-eye around every shot!

In forex trading, traders try and get or improve profitability by tweaking the system rules to fit the data. They add unique rules and parameters, for different market conditions and different currencies.

Of course, the forex market will move differently in the future and you can’t bend going forward so, the system collapses.

If a system is based on sound logic, it should work regardless of the market conditions or the currencies traded and should contain very few rules or parameters.

Don’t try and bend the rules of any trading system to fit the data - it will not work going forward.

Obey the Rules of the Market

The market is all powerful and you need to obey its rules to enjoy success.

It’s similar to being the captain of a ship – your charts can help you navigate the ocean and earn a living but you need to be careful! If you use your forex charts incorrectly and break the rules you will lose.

Respect the Forex market, use forex charts in the right way and you can pile up big long term profits.

Best Forex Articles

2008-07-30T04:34:00.000-07:00

What is Forex Technical Analysis?

How Forex Prices Move - The Equation For Forex Price Movement?

Swing Trading for Beginners Tips

Don't Believe These Forex Myths

What is the importance of a Forex education?

Currency Trading Strategy

How To Effectively Learn Currency Trading

Here is your guide to a swing trading in forex with a system designed to make regular capital gains

Currency ExchangeTrading Made Easy And Effective

How To Become Wealthy Trading Forex?

A Few Words Of Caution - Forex AutoPilot

How To Become a Successful Forex Trader from Home

Learn Forex Movement or Lose Your Money

Page 1 - 2 - 3 - 4 - 5 - 6 - 7 - 8

What is Forex Technical Analysis?

2008-07-28T05:54:00.000-07:00

For Bigger Profit Potential

If you have read the section how and Why Prices Move you will understand that knowing the fundamentals does not guarantee currency trading success – You need to be able to measure trader psychology as well.

Forex technical analysis helps you see both and gives you the overall picture.

Many traders don’t fully understand the advantages of technical analysis – and refuse to believe that it works here, we will show you how Forex technical analysis gives you the complete picture to help you trade successfully.

What is Forex Technical Analysis?

It is simply defined as the study of price action through the use of charts - for the purpose of identifying price trends and if used correctly – it works.

Forex technical analysis uses the following equation:

Market Perception (trader psychology) + Fundamentals = Price Movement

All Forex technical analysis does is assume that all known fundamentals are quickly reflected in price action (and in the 21st century with instant communications this is truer than ever) - so it simply concentrates on following price action.

Price action reflects all the fundamentals, and more importantly, how all the participants in the Forex markets perceive them.

Traders who study fundamentals claim technical analysis can’t work - because you need to know and study the fundamentals, to know where prices are going - this is simply not true.

Some of the largest price moves in history, have occurred with little or no change in the fundamentals.

It’s a fact that markets ( not just Forex Markets ) are most bullish at market tops and most bearish at market bottoms.

Why?

Quite simply human psychology was at work – and Forex technical analysis studies this and the fundamentals together.

Learn to use technical analysis, and you will see the reality as it is - rather than listening to the opinions of others or letting your emotions get involved.

You are in effect trading the truth and the truth is:

The market price itself is the correct true price - not what you or anyone else thinks it should be.

Forex technical analysis makes the following 3 assumptions:

1. Markets Discount

All fundamentals show up quickly in the price action, when you use technical analysis.

You are therefore studying the fundamentals, as they are – and of course, you are seeing how the participants perceive them at the same time.

2. Trends Persist

This is obvious by simply looking at any Forex chart.

Forex technical analysis also assumes that a trend in motion is more likely to continue than reverse.

Your aim is to lock into these trends and trade them for profit.

3. History Repeats

The core belief of Forex chartists is that technical analysis works because what has happened in the past, will happen again.

Human behavior repeats itself – as human nature never changes Price patterns simply reflect shifts in human psychology, we can therefore assume that certain patterns and trends will repeat themselves – time and time again.

Trading the Odds with Currency Technical Analysis

In gambling, the aim is to get the odds in your favor - and in trading; your aim should be to trade only when the odds are in your favor.

Just like the successful gambler you won’t win very hand - but you will win more than you lose and by constantly trading the odds you will achieve currency trading success.

If you have read the section Forex Myths you will understand that technical analysis is an art rather than a science.

You need to devise a Forex Trading strategy that uses technical analysis the right way to enable you to build long term wealth.

How Forex Prices Move - The Equation For Forex Price Movement

2008-07-25T05:51:00.000-07:00

Most novice traders fail to understand how and why prices really move.

Here we will give you an introduction to how and why prices move and how you can take advantage of these movements for profit. Let’s look at some key points in relation to how and why prices move.

Markets Do Not Move To a Scientific Formula

Firstly, let’s get rid of this myth.

Many traders believe this and numerous vendors on the net perpetrate the myth of markets moving to a scientific law which appeals to the greed and naivety of traders.

Common sense tells us that markets don’t move scientifically:

If markets moved scientifically, there’d be no market as we’d all know the price in advance!

A forex market by its nature, involves uncertainty - that’s what makes a market move - the fact that human nature is un-predictable.

Trading the Odds for Profit

While you are not trading certainties but that doesn’t mean you can’t make a lot of money, you can - by trading the odds.

With a sound trading method that runs profits and cuts losses quickly you can build significant long term wealth.

It is no coincidence that many of the world’s top traders started out as either blackjack or poker players. The reason for this is - any good card player knows he won’t win every hand but if they bet when the odds are in their favor and fold when there not, they will make a lot of money longer term.

Trading is simply an odds game.

If you know how to calculate the odds correctly, you can win and build significant long term wealth. Let’s look at how to get the odds in your favor.

Price Movement – The fundamentals

Many traders like to trade off news stories and watch the fundamentals, it’s popular but will trading news stories make traders money? Let’s find out.

A currency trader, who makes trades based upon fundamental analysis, will look at the supply and demand situation relevant to the particular currency studied, and try and predict the impact of such factors as:

* The health of the economy
* Economic policy
* Interest rates
* Balance of payments
* Employment
* Trade deficit
* Political factors

And many more.

On the face of it fundamental analysis provides a logical and rational basis for investment decisions however there are problems in applying it and traders who try and trade off the news generally lose.

The main problems are:

1. Markets Discounts

We live in a world of instant communications where traders can and do get the news in a split second - the fundamentals are instantly discounted and the market is looking to the future.

By the time you have seen, studied and acted on the news - it’s already been discounted.

2. Investor Psychology

Another major problem is that the fundamentals are there for all to see but individual traders all reach different conclusions based upon what they have seen furthermore, humans are not logical beings!

Prices reflect the fundamentals but they also reflect the emotions of the participants and investor psychology is THE major influence on price.

The equation for market movement is simple:

Fundamentals (supply and demand facts) + Human Perception (investor psychology) = Market Price

Swing Trading for Beginners Tips

2008-07-23T06:14:00.000-07:00

Swing trading for beginners is the subject of this section and we have already covered some basics of this already in currency swing trading so check it out.

Here we want to outline why swing trading is an ideal form of trading for novice traders and those who lack patience.

Many forex traders look at long term trend following in forex and think that it’s the most lucrative way to make money, after all the big currency trends last for weeks and months and if you can lock into and hold them, then you can make stellar profits.

The problem is:

Most traders are not mentally equipped to do this and cannot get the right mindset to trend follow. Swing trading can be just as profitable and for beginners in particular, swing trading is the better place to start.

Lets look at why.

Long Term Trend Following V Currency Swing Trading

The hardest form of trading to master not from the point of view of method - but from the point of view of adopting the right mindset is long term trend following as we have just stated.

If you look at any Forex chart, you will see Forex trends that last for months or even years yet, only a small minority of forex traders have the discipline and correct mindset to hold these trends and milk them for their full profit potential.

All traders want to make big gains but capturing them is the hardest bit.

If money is important to you, (as it is to most forex traders) then your emotions will be present and they will play havoc with your discipline, in you in your quest to hold these trends.

When counter trend moves come, they will reduce your open equity profits (sometimes by thousands of dollars quickly) and the losses in open equity can frighten you to take profits early.

Most traders get excited and nervous when they get a profit and the bigger the profit gets; the more tempted they are to bank it before it gets away. Most forex traders end up banking early and getting a small or marginal profit, when they could have had a huge profit.

That’s why swing trading for beginners is the best strategy to try first – it requires less discipline and is less demanding, in terms of your mindset and attitude.

Swing Trading for beginners Advantages

The aim is to catch reactions within major trends which normally last around a week and profits can be taken quickly.

Swing trading forex trends is exciting, there are plenty of trades and you know if you are right or wrong quickly – this makes it easy on the mind and psychologically better for most forex traders especially novice traders.

Swing trading is the best form of short term trading that works. Day trading sounds great in theory - but in practice doesn’t work as the data is not valid, whereas it is in swing trading.

We have all ready given the basics of what swing trading for beginners is and in this section why it is a great method to trade and can be very profitable part of your forex trading strategy.

Next we need to design a forex trading system for swing trading and this is simple:

You can get a swing trading system together in a few days - that’s robust, offers great risk to reward and is easy to understand, so you can execute your trading signals with confidence and discipline.

Now we are going to look at building a swing trading for beginners system - so click the link here swing trading in forex and let’s get started.

Don't Believe These Forex Myths

2008-07-22T05:49:00.000-07:00

95% of traders lose when trading currencies and they don’t need to – in many cases they believe various myths that are spread by vendors, using hyped advertising copy which appeals to greedy and naive traders to buy courses and forex trading systems, which simply don’t work.

Below you will find the six common myths that cause the bulk of currency traders to lose and if you believe any of them - you will lose too.

1. You should always be in the Market

Many traders love excitement, and their view is, if they are in the market they will catch the big move. Well they may - but chances are they won’t.

The really big trends only come a few times a year in each currency - and you should stay out the market until they come, otherwise you will take losses, as you will be trading low odds trades, with little chance of success.

You don’t earn a reward in currency trading for effort or how often you trade – you earn your reward from being right.

Be selective in your trading and you will see your profits soar.

2. Diversification Reduces Risk

Diversification simply dilutes your profit potential if you have a small currency account.

You catch a big move, and your other trades lose, or give you only marginal profits, reducing your overall profitability.

You need to have confidence to go for the big moves, when they occur, and hit them hard with as much as you can afford.

Currency trading success is all about taking calculated risks when the odds are in your favor.

If the trade looks good, then you need to have the courage and conviction to go for it and risk as much as you can afford.

3. Day Trading Makes Money

This is perhaps the biggest myth in currency trading – Forex day traders DON’T make money!

Many vendors spread this myth, as it makes a good story.

It’s a good story and they make their money from course sales NOT trading.

All short-term volatility is random – prices can and do move anywhere in a day and support and resistance levels are meaningless.

In forex day trading you 100% guaranteed to lose over time as you cant get the odds in your favor – PERIOD.

4. Predicting is the Correct Way to Make Profits

Trying to PREDICT where prices are going to top and bottom will see you lose.

Why?

Because, you are relying on hope and guessing and that’s not a good way to make money in any venture, especially currency trading.

The only way to trade is to wait for the market to CONFIRM a trend is under way, and then execute your trading signal.

You will not buy the bottom or sell the high, but you can’t do that anyway, so there is no point in trying.

By trading with price momentum on your side, you have the odds in your favor.

So Remember:

Don’t predict confirm all your trading signals with momentum before you enter a trade and trade with the odds.

5. Buy Low sell high Is The Best Way To Make Money

This point is related to the above. You cannot do it as you are involved in prediction. Always keep this point in mind:

Most big trends start from new market HIGHS NOT market lows.

So if you fail to trade these moves you will miss a lot of the best moves waiting for pullbacks that never come.

6. Markets Move Scientifically

Again this is related to the myth of predicting currency moves.

You will see many vendors saying they can trade market tops and bottoms with scientific accuracy – RUBBISH!

If markets moved to a scientific theory, we would all know the price in advance and there would be no market!

It’s the difference of opinion and unpredictability of price direction that makes a market – this is common sense.

Despite the above, many Forex traders still believe in scientific theories such as - Elliot Wave and The Fibonacci Number Sequence.

These theories don’t work and never will.

Elliot made no money from his theory and neither will you.

As for the Fibonacci number sequence – This was devised in the 12th century, to solve a problem to do with the copulation of rabbits and has nothing to do with finance.

Leave the above theories to the dreamers and traders who believe it’s easy to make money.

When you trade you are involved in trading odds NOT certainties, don’t believe anyone who tells you otherwise.

7. Markets are the Same Today as they Were Hundreds of Years Ago

No there not!

Trends now are much more volatile than they were even 50 years ago.

Why?

Today, with the Internet, price information and news reaches traders in a split second.

This increases volatility as everyone has the same information at once - and everyone tries to enter and exit the market at the same time.

This was not so even 20 years ago - the trends are still there, but volatility is much higher - traders get the direction of the trend right, but they find themselves stopped out by the volatility of the market and watch as the trade they were stopped out goes on to pile up huge profits.

How often has this happened to you?

It happens to all Forex traders.

Dealing with volatility, is one of the major challenges of any trader wanting to develop a successful Forex trading strategy.

8. You Can Buy Success From Someone Else

You cannot buy success from someone else.

Some vendors can help you but success comes from within.

Even if you follow someone’s advice, always make sure you know the logic it’s based upon.

You need to do this to have the confidence and discipline to stick with your trading plan when you hit a losing period

In conclusion, someone can help you achieve currency trading success but you need to know how and why their methods and not follow them blindly.

The above myths are commonly accepted - avoid them or you will join the majority of traders that lose in currency trading.

What is the importance of a Forex education?

2008-07-19T05:46:00.000-07:00

What is the importance of a Forex education? While Forex may not mean much to the average consumer, in actuality everything we know in American commerce is affected by Forex, the foreign exchange market. Every time the American dollar reduces in value or inflates, it's because of the world scene of financing. Only someone who follows the goings-on of the foreign exchange market could understand why all avenues relate to each other and are affected.

Some have carefully studied the foreign exchange market over the years and have planned their investments according to predicted changes. The shrewdest of investors have profited immensely, as they were able to learn the market, see disaster coming and knew exactly what to do in order to minimize their losses. Of course, learning all of these financial aspects would involve a solid Forex education.

If you are in business, whether doing business online or if your company is expanding to overseas locations, then the foreign exchange market will be of paramount concern to you. Forex doesn't merely involve foreign currency but also trade, politics and worldwide economics. (Namely, how one entity affects another on a global scale.) Have you ever desired to learn more about Forex finance and trading but weren't sure how to get started?

Even if you are not a trained economist, you can still learn how Forex operates through many affordable online resources. A Forex education is available online from such companies as the Forex Club Academy. The Forex Club Academy offers an easy-to-follow text course that explains the fundamentals of Forex trading through e-books, video aids and other visual methods of teaching. This makes the course easy to understand regardless of your educational background. For more information on what the academy can offer you visit the Colt FX website.

Currency Trading Strategy

2008-07-16T05:44:00.000-07:00

These are my currency trading strategy ideas that I have developed from people constantly asking me the same questions over and over again. These should help you develop the proper behavior to make profitable trades over the long term.

How should I look at currency?

You need to look at currencies as pairs and not just single entities. You have to take into consideration that money is fiat. What that means is that it's just paper. An apple is worth what it is because it has value. Paper money is just worth what paper is. The other value comes from economic stability, populations belief in the government, etc. Since all these points don't actually make value, and essentially is all the same thing (paper), currency needs to be compared against one another. When you compare them, you're going to get the proper value.

How do I find the bargains in forex trading?

There is no such thing as bargains in this game. What you need to start looking at is how much you can sell a currency for in the future. That's the most important point. You don't make any money from buying currency, you make it all from selling. You need to get out of this "consumer" trap where you think cheaper is better. Selling price is the better. Buying an expensive currency that you can sell for 10% more in the future, is better than buying a cheap currency that you might be able to sell for 5% more.

How do I get over the stress of trading?

Being a confident trader is probably one of the most important characteristics to have. I understand though that becoming confident requires positive experience at doing it. The best thing you can do is take advantage of your demo account, which allows you to make real live simulated trades. You can do this until you're confident enough to use your real money.

How To Effectively Learn Currency Trading

2008-07-13T05:42:00.000-07:00

To effectively learn currency trading can be long process, but if you stick to that process, I guarantee you will become very good at it. This is a business that really favors effective learning through experience and if you're willing to do that, you will do great.

Do I need a plan?

Yes. Everyday, you should have a plan of action. Something that lists each action in order. This is the best way to apply a technique over and over again. You can look back after a short period of time and determine if the plan is good or not. If you don't have a plan, that means you're going to have to figure it out every time you attempt to trade. You're going to have to invest a lot of energy on figuring that out, and you won't have much energy left over to apply it. That is why you need a daily plan you apply over and over again. It makes it easy on the head and for you.

What on the news should I be watching out for?

You should be looking out for economic and political news. The political news should mainly about economic issues, but things like domestic terrorism can have an effect. What is going on inside a country has an effect on the value of a currency. Each currency is just a piece of paper, the value comes for the economy of a country. Pay particular attention to economic news like interest rates, GDP growth, unemployment rates, etc. Also pay attention to political policies that effect taxes, regulations, business, etc.

What kind of software should I get?

You should get a nice piece of forex software that is automated, like Forex Killer. It will automatically do your trades and find out profitable trends for you to profit on.

Here is your guide to a swing trading in forex with a system designed to make regular capital gains

2008-07-12T06:11:00.000-07:00

Swing Trading in Forex

Building a Swing Trading System in 4 Simple Steps

If you do not know what swing trading in forex is, check out the background at currency swing trading and if you want to know why its one of the easiest forms of trading psychologically, check out our section swing trading for beginners

Here we are going to look at swing trading in forex from the standpoint of building a simple forex trading system, based on catching swing trades which is easy to understand, easy to apply and even better, can make big forex profits.

Here is your guide to a swing trading in forex with a system designed to make regular capital gains, whilst at the same time keeping losses to a minimum

Step 1 – Spot Support and Resistance

You need to use trend lines and spot areas of support or resistance to trade into.

Look for 3 tests or more – the more tests there are of course, the more valid and important the level will be.

Now you have spotted the opportunity, you need to time your trading signal and correct timing is crucial to success.

Step 2 - Trade with Price Momentum

Many traders simply like to go short into resistance or long into support, as it’s tested but this will never work.

If you do this, you are guessing or hoping the level will hold and the market will not reward you for this.

You don’t have the odds on your side and you will end up a loser.

With swing trading in forex (or any other method of trading for that matter) you need to trade the odds and get them in your favor and this means getting confirmation. You need to trade with confirmation of price momentum on your side BEFORE you execute your trading signal.

You therefore need to wait for a test of support or resistance.

Then Wait

Watch for the currency to turn away from support or resistance with accelerating price momentum and THEN execute trade.

You are trading with price momentum and the odds are in your favor.

Sure you won’t catch the turn exactly and you miss a bit of profit - but if you trade this way and grab 60 – 70% of the potential overall profit, you will make a lot of money and this is the aim of any forex trading system.

Which Indicators Are Best?

Try these:

The stochastic and the Relative Strength Index (RSI) as a good pair to start with.

We don’t have enough time to explain them in detail here - but these are superb momentum indicators.

There are many others - just pick and choose a few you like best but don’t use too many – up to 3 is fine.

When swing trading in forex, your system should be simple and robust – if you complicate it you will lose, as there will be too many elements to break.

Step 3 - Stop Reverse on Breakouts

For example, if you are trading into resistance that is at a market high, you may want to use a stop reverse upon a break.

Most major trends start from new market highs NOT market lows.

If prices break out go with the break.

The initial breakout of strong resistance, will see stops hit and new trend followers kick in and by taking the turn, you can go with this momentum.

Be careful – you should only do this into strong resistance that is considered valid by the market participants. This will ensure you don’t get caught trading false or weak breakout trades.

Step 4 Take Profits Too Soon

When swing trading in forex, your profits can disappear quickly, so you need to make sure that you get them in the bank, when the risk reward is in your favor – before recoil in price sets off a counter move.

Take your profits early and by this we mean.

BEFORE they test the next level of support and resistance.

Your aim is to “hit and run”, the closer the trade moves to a target the more chance you have of a reversal so get out early. You may miss some of the move - but as we said earlier (on getting into the trade) that doesn’t matter - your aim is 60 – 70% of the overall profit potential.

If you can do this regularly, you will make you a lot of money and ensure your forex trading strategy is successful over the long run.

Other points in relation to a successful swing trading method we covered earlier in other sections - but their important so to repeat:

Only trade liquid, volatile major currencies and pick a broker that offers you tight 2 – 3 pip spreads, so they do not impact on your overall forex profits.

A Simple Way to Make Big Profits!

Swing trading in forex is simple to learn, easy to apply and requires far less discipline than longer term trend following. It’s also exciting, fun and ideal for either novice traders or seasoned market veterans – learn and enjoy forex swing trading today.

Currency ExchangeTrading Made Easy And Effective

2008-07-10T05:40:00.000-07:00

I'm going to share with you currency trading made easy and effective. This is a great business to get into. With a few trillion dollars in trades a day, that makes it the largest market in the world. There has been an opportunity for the small traders to now compete along side the large traders and make a profit.

You're going to need a daily plan to get this right. The worst thing you can do is get up in the morning, head to the computer and figure out what you're going to do to make a buck. That's just a waste of time. You need to have a step by step plan. You need to follow that step by step plan. After you try it for a little bit, you can evaluate its effectiveness. When you force yourself to think of a new plan and strategy each day, you're just wasting your energy on that. You miss the fact that you need energy to do the work required of you. Be a good and effective trader; have a plan.

Everyday on the news there is economic and political news. It's an important task for you to look at this before you start trading to make sure there isn't something being released that could be detrimental to the price of currency. Economic news like GDP or unemployment rates will have an affect on currency prices. The more alarming the news, the more volatile the currency market will be. Also watch out for political policies that have changes to economic policy; like taxes, regulations, etc.

Lastly, you'll want to get yourself a good software package for trading forex. I recommend Forex Killer. It has a great automated feature that can allow the software to handle the trades. It also can find and identify trends that you could make a profit on.

How To Become Wealthy Trading Forex

2008-07-07T05:39:00.000-07:00

Let 's look at 5 things to avoid if you want to make consistent money with Forex.

Let's start with 5 common errors you should avoid.

1. Stay away from day trading the market. With all the volatility and numerous outside influences, it is a losing proposition to get involved in day trading.

2. Avoid guess work. Trying to predict what is going to happen on the Forex market is difficult at best. The trader that falls into this trap will eventually come back to bite you because trading currency simply cannot be guessed.

3. Don't trade with money you cannot afford to lose. Trading with money that should be allocated on your personal budget elsewhere is plain unsmart. Traders do dumb things when they panic and trading with money you really don't have causes panic.

4. Do not try to buy a currency low and sell it high. This may work in the equity market but with currency trading it is not the way to go. It translates into having to predict again where highs or lows will form.

The truth is many major market moves begin from new market highs not lows. The best way to do it is buying the breaks as the chances are more in your corner and you often see large trends come up if, the breakout is from a genuine resistance level.

5. Do not trade without help. You should start off trading Forex with a practice account.

Most importantly, get a really good, reliable software program that is tested and has proven results.

A Few Words Of Caution - Forex AutoPilot

2008-07-04T05:31:00.000-07:00

Forex Autopilot is one of the most popular currency trading softwares in the world today and is used by thousands of people all over the world. Many people report excellent results with ForexAutopilot, and the creators of the software are quick to advertise these successes to get more people to purchase their program.

This is all to be expected, but it's time that someone gives out a few words of caution about this program because it's not perfect and it is possible to make mistakes with it. Costly ones.

If you want to make the most money with FAPS (short for Forex AutoPilot) than you need to read this article and avoid these common mistakes:

1. Following the software ignorantly - Forexautopilot is an automated trading software which means that it can make trades for you without your participation. It has a high success rate and so you can let it run on its own. But that doesn't mean you need to be ignorant of how the market operates. You should continue to educate yourself on the forex market. It will help you make more money.

2. Thinking you can't lose - No forex software is perfect. This includes Forex Auto Pilot and don't let anyone tell you otherwise. If you're looking for perfect certainty than stick to your job and hope that there won't be any cutbacks soon. I'm sorry if I'm harsh, but you need to understand that Forex AutoPilot can make losing trades. It just does so relatively rarely. This means that you shouldn't trade more money than you can afford to lose. It takes a lot of profitable trades to make up for a large losing one. Remember that.

3. Expecting too much - People think they'll become instant millionaires with Forex Autopilot. It won't happen overnight. It won't happen in a month either. This is a tool, not a magical spell. How much money you'll make depends also on your experience, your starting capital, market fluctuations, and other factors. To avoid useless disappointment, set yourself short term and realistic goals.

How To Become a Successful Forex Trader from Home

2008-07-03T06:07:00.000-07:00

In The World’s Most Exciting and Profitable Business!

If you want financial freedom then the global Forex markets offer you the potential to realize your dreams and best of all you can see the potential - RISK FREE!

Forex trading is one of the few ways to build wealth quickly; everything about successful trading can be specifically learned - by ANYONE with the desire to succeed.

No Previous Experience Necessary

Here we will show you how to build big consistent profits with PROVEN Forex trading strategies the pro’s use and you can to build wealth - even if you have never traded before.

The World’s Perfect Business

First let’s consider the advantages of this unique business opportunity

* Work from home and build wealth in around an hour a day.
* You can take breaks and holidays when you wish.
* This business can be learned by anyone with the desire to succeed.
* All you need is a computer and an internet connection and your all set.
* No need for expensive staff, stock, premises or marketing.
* There is never a recession and always opportunities for profit.
* You can get started with just a few hundred dollars.
* You can get leverage on your deposit to increase wealth building potential. If for example you deposit $1,000 your broker will give you leverage of 200:1 allowing you to trade $100,000!

Leverage The Key To Building Wealth FAST

It is this opportunity to leverage your money that makes the potential so great in terms of making money fast - however leverage is a double edged sword and can work for or against you.

The key to success is to employ strict risk control to keep losses small and run the big profits – more of that in a moment but you may be asking yourself:

Can anyone really learn to trade Forex?

The answer is yes and the story below will illustrate the potential.

In 1983 legendary trader Richard Dennis set out to prove this.

He got a group of people who had never traded before, who were from all walks of life and all ages and taught them a trading method in 14 days, he then set them off to trade their own accounts.

The Result?

They made Dennis $100 million dollars and went on to become some of the most famous traders of all time!

The fact is anyone can learn how to trade and while of course you may not become as rich as the above group, the opportunity to build wealth and become a successful trader is open ALL.

If you have a desire to succeed, a willingness to learn and want to change your financial future then you can succeed.

The ONLY Way to Make Forex Profits

Thousands of new and inexperienced traders are charged hundreds, even thousands of dollars by self proclaimed experts for mechanical buy and sell signal systems which they claim will generate profits without you making any effort!

Guess what?

They will ALL lose you money.

If trading was that simple, then everyone would be traders and no one would work!

Listen to what I Say, as I am no self proclaimed expert I am a trader with 25 years experience and will tell you - if you want to achieve financial freedom understand this fact.

95% of traders fail - who is to blame? Bad luck? The Markets?

No.

Trading success has nothing to do with luck - it has everything to do with YOU.

If you don’t want to learn and are not prepared to put in any effort, you won’t win at forex trading. If you want to make money in life it requires you learn skills.

The good news is that if you apply yourself and learn the correct knowledge, you can learn the skills you need to succeed quickly and easily.

They will last a lifetime and could put you on..

Learn Forex Movement or Lose Your Money

2008-07-01T05:29:00.001-07:00

If you've done your homework on retail Forex trading, you'll come to realize that the market is geared to make you lose money.

The big financial institutions around the world have all the necessary human talent, technology and resources to 'hunt' for your money, and let's not forget the smaller pip spreads that they enjoy. Add to this the fact that many brokers have been known to trade against their clients (i.e. taking opposing trade positions), and you'll have every reason to fear for the loss your money.

Play to your strengths

That's why it's important that you have an edge in the way you trade to balance the field. You'll need to take advantage of your position as a retail trader, to avoid falling prey to the big institutional traders. Play to your strengths as a retail trader!

Strength #1 - No Pressure To Perform

Unlike institutional traders who are constantly under pressure to perform, retail traders (like you and me) have the luxury of cherry-picking the trades with the highest winning probability. The idea here is to enter into fewer, but more potentially profitable trades.

The more traders you enter, the more chance you give the institutional traders to take your money. Don't give them any such opportunities.

Strength #2 - Small And Agile

Unlike institutional traders who have to trade with hundreds of thousands of dollars (or more), retail traders typically trade with much smaller amounts of money. This enables us to suffer from less slippage and gives us the opportunity to ride on most price trends, since our trades generally won't influence prices.

This means that retail traders are able to quickly enter and exit the market for small (but quick) profits. This is an area where few institutional traders can go. Because of the sheer size of the funds they trade, institutional traders rarely have the opportunity to move in and out of their positions quickly. Use this to your advantage.

Best Forex Articles

2008-06-30T03:15:00.000-07:00

How To Trade Forex Trading Like A Pro

How do you find a good broker?

Introduction to Fundamental Analysis

Forex Market Drivers

What are Economic Indicators?

Tailoring Your Technical Approach to Currency "Personalities"

Using Indicators to Identify Trends

Trading Short-Term Trends

Technical Indicators

What is Technical Analysis?

Best Advice For The Forex Currency Trader

Why Understanding it is Your Key To Big Profits When Enter Forex Trading

The Best Forex Signal Services

How To Discover The Secrets Of Forex Riches

How To Smartly Win In Forex

What is The Important Criteria In Reviewing Forex Software

Is This Forex Currency Trading System A Scam?

What Is The Key Points To Consider To Get The Best Currency Trading System

How To Know If You Are Likely To Be A Winner On Forex Trading

What You Need To Do To Win On Forex Trading

3 Rules To Avoid Forex Autopilot Scams

What Makes Forex Price Changes?

Why YOU Should Trading FOREX?

Strategy: Low-risk, High-return Forex Trading

Page 1 - 2 - 3 - 4 - 5 - 6 - 7 - 8

How To Trade Forex Trading Like A Pro

2008-06-28T05:27:00.000-07:00

I'm here to help you learn how to trade forex and do it like a professional. This is a big business with a potential to make big money, but the fact is that 90% of people that get involved in this lose money. That means only a small 10% are actually doing good at this and here is what they do.

Control Your Emotions: There are two types of traders; the calculated one and the emotional one. You definitely don't want to be the emotional trader. The emotional person is the one that ends up being the pathetic gambler that loses their life savings. The calculated person is the one that is making trades based completely on numbers. They're making good moves and profiting. They never get caught up in the moment or get upset. Be smart and be a calculated person.
Use Your Demo Software: When you have a trading platform, you're going to have a demo account. This allows you to learn how to trade forex without having to use any real money. It works as a real live simulator where you make and follow trades, but never use any real money. It is probably the best tool you can get your hands on because you can do hundreds of trades practicing a strategy, until you're comfortable enough to use your real money.
Be Confident, But Reserved: You're going to need to develop a sense of confidence. If you can't get that confidence, you're going to have a rough ride because you're going to be stressed out with each trade. You need to trust enough in your trading decisions. With that said, a lot of people get overconfident and this leads to bad trading decisions. Therefore, you need to be confident, but reserved.

How do you find a good broker?

2008-06-25T05:25:00.000-07:00

I want to make you the best forex trader and I hope to do it with this advice. There is no need to be intimidated by this $3 trillion a day market, you should be excited to have the potential to have a share of the profit.

How do you find a good broker?

Brokers are everywhere on the internet and since it is so easy to put one up on the internet, often you'll run into poor quality ones or even scams. Some are decent and the rare few are amazing. The broker is what holds your money, so there is absolutely no reason to slack in this area. The best place to find out about these are at online forex forums. You can google to find them and you should be able to find hundreds of threads on various brokers. You'll notice there is a consensus about which one is the best. All the posts are generally unbiased, so you can make the choice on your own.

When should I trade?

Make sure you trade during the peak hours. The reason for this is that the volume is so high. The high volume means that currency will be persuaded by market forces. During times when the volume is low, a large bank can make a trade and cause a currency to go in a different direction. Stick with the peak hours.

What should I do during the day?

Develop a routine that works for you. The last thing you want is a new struggle each day. Some people like to think that is a good thing, but it is mentally tiring. The best thing you can do is set up routines that you do everyday. These will evolve throughout time and it'll help you become a more profitable trader.

Introduction to Fundamental Analysis

2008-06-24T10:13:00.000-07:00

Fundamental analysis studies the core underlying elements that influence the economy of a particular entity, like a stock or currency. It attempts to predict price action and trends by analyzing economic indicators, government policy, societal and other factors within a business cycle framework.

If you think of the markets as a big clock, fundamentals are the gears and springs that move the hands around the face. Anyone can tell you what time it is now, but the fundamentalist knows about the inner workings that move the clock's hands towards times (or prices) in the future.

Are you a technician or fundamentalist?

There's a tendency to pigeonhole traders into two distinct schools: fundamental or technical. In fact, most smart traders favor a blended approach versus being a purist of either type.

Fundamentalists need to keep an eye on signals derived from price charts, while few technicians can afford to completely ignore impending economic data, critical political decisions or pressing societal issues that influence price action.

Forecasting economic conditions using models

Fundamental analysis is very effective at forecasting economic conditions, but not necessarily exact market prices. Studying GDP forecasts or employment reports can give you a fairly clear picture of an economy's health and the forces at work behind it. But you still need a method to translate that into specific trade entry and exit points.

The bridge between fundamental data and a specific trading strategy usually comes from a trader model. These models use current and historical empirical data to estimate future prices and translate those into specific trades.

Beware of "analysis paralysis"

Forecasting models are both art and science, with so many different approaches that traders can get overloaded. It can be tough to decide when you know enough to pull the trigger on a trade with confidence.

Many traders switch to technical analysis at this point to test their hunches and see when price patterns suggest an entry.

Look for fundamental drivers first

The fundamentals include everything that makes a country and its currency tick. From interest rates and central bank policy to natural disasters, the fundamentals are a dynamic mix of distinct plans, erratic behaviors and unforeseen events.

That said, not every development will move a country's currency. Try to start by identifying the most influential contributors to this mix versus following every fundamental out there.

Next: Forex Market Drivers

Forex Market Drivers

2008-06-24T10:10:00.000-07:00

Rising interest rates strength that country's currency

A common way to think about interest rates is how much it's going to cost to borrow money, whether for our mortgages or how much we'll earn on our bond and money market investments. Interest rate policy is a key driver of currency prices and typically a strategy for new currency traders.

Fundamentally, if a country raises its interest rates, its currency prices will strengthen because the higher interest rates attract more foreign investors.

For example, higher rates in the Eurozone may prompt U.S. investors to sell U.S. dollars and buy bonds in Euros. Similarly, if interest rates increase in Switzerland, those investors may decide to sell their Euro-bonds and move into bonds in Swiss francs (CHF), driving Euros down and Swiss francs up.

When gold goes up, the USD goes down (and vice versa)

Historically, gold is a "safe haven", a country-neutral investment and an alternative to the world's other reserve currency, the U.S. dollar. That means gold prices have an inverse relationship to the USD, offering several ways for currency traders to take advantage of that relationship.

For example, if gold breaks an important price level, you'd expect gold to move higher. With this in mind, you might sell dollars and buy Euros, for example, as a proxy for higher gold prices.

Rising gold prices help major gold producers

Australia is the world's third largest exporter of gold, and Canada is the third largest producer worldwide. These two major currencies tend to strengthen as gold prices rise. You might consider going long these currencies when gold is increasing in value, or trade your GBP or JPY for these currencies when gold is on the rise.

Oil-dependent countries weaken as oil prices rise

Just as airlines and other oil-dependent industries are hurt by rising oil prices, so are the currencies of oil-dependent countries like the U.S. or Japan, both of which are massively dependent on foreign oil.

If you believe oil prices will continue to rise, you can consider buying commodity-based economies like Australia or Canada or selling oil-dependent currencies.

Next: Economic Indicators 101

What are Economic Indicators?

2008-06-24T10:07:00.000-07:00

Economic indicators are snippets of financial and economic data published regularly by governmental agencies and the private sector. These statistics help market observers monitor the economy's pulse - so it's no surprise that they're religiously followed by almost everyone in the financial markets.

With so many people poised to react to the same information, economic indicators have tremendous potential to generate volume and to move prices. It might seem like you need an advanced economics degree to parse all this data accurately - but in fact traders need only keep a few simple guidelines in mind to making trading decisions based on this data.
Mark your economic calendars

Know exactly when each economic indicator will be released. You can find these calendars at the New York Federal Reserve Bank's site; FOREX.com clients can simply login to MyAccount and click on Economic Calendars.

Watching the economic calendar not only helps you consider trades around these events, it helps explain otherwise unanticipated price actions during those periods. Consider this scenario: it's Monday morning and the USD has been in a tailspin for 3 weeks, with many traders short USD positions as a result. On Friday, however, U.S. employment data is scheduled to be released. If that report looks promising, traders may start unwinding their short positions before Friday, leading to a short-term rally in USD through the week.

What does this data mean for the economy?

You need not understand every nuance of each data release, but you should try to grasp key, large-scale relationships between reports and what they measure in the economy. For example, you should know which indicators measure the economy's growth (gross domestic product, or GDP) versus those that measure inflation (PPI, CPI) or employment strength (non-farm payrolls).

Not all economic indicators can move markets

The market often pays more attention to certain indicators under certain conditions - and that focus can change over time. For example, if prices (inflation) are not a crucial issue for a given country, but its economic growth is problematic, traders may pay less attention to inflation data and focus on employment data or GDP reports.

Watch for the unexpected

Often the data itself may not be as important as whether or not it falls within market expectations. If a given report differs widely and unexpectedly from what economists and market pundits were anticipating, market volatility and potential trading opportunities may result.

At the same time, be careful of pulling the trigger too quickly when an indicator falls outside expectations. Each new economic indicator release contains revisions to previously released data. Here's an example:

Don't get caught up in details

While your macroeconomics professor may appreciate all the nuances of an economic report, traders need to filter data judiciously for their own purposes: making intelligent trading decisions.

For example, many new traders watch the headline of the employment report, assuming that new jobs are key to economic growth. That may be true generally, but in trading terms non-farm payrolls is the figure traders watch most closely and therefore has the biggest impact on markets.

Similarly, PPI measures changes in producer prices generally - but traders tend to watch PPI excluding food and energy as a market driver. Food and energy data tend to be much too volatilve and subject to revisions to provide an accurate reading on producer price changes.

There are two sides to every trade

Hopefully this has helped you realize the importance of watching economic indicators - and knowing which data are most likely to move markets and impact currency traders.

Just remember that no trader's knowledge can be complete all the time. You might have a great handle on economic data published in the U.S. - but there are times when data published in Europe or Australia might have surprising impact on your currency market. Doing your homework before trading any currency will help you stay on guard.

Economic indicators: a currency's vital signs

Traders can measure the economic health of a given country (and its currency) through its economic indicators - but, just like a doctor monitoring a patient's vital signs, not all stats count equally. Here's a primer of the key economic indicators that often impact currency traders.

Economic indicators divide into leading and lagging indicators:

* Leading indicators are economic factors that change BEFORE the economy starts to follow a particular trend. They're used to predict changes in the economy.
* Lagging indicators are economic factors that change AFTER the economy has already begun to follow a particular trend. They're used to confirm changes in the economy.

Major economic indicators

Gross Domestic Product (GDP)

The sum of all goods and services produced either by domestic or foreign companies. GDP indicates the pace at which a country's economy is growing (or shrinking) and is considered the broadest indicator of economic output and growth.

Industrial Production

A chain-weighted measure of the change in the production of the nation's factories, mines and utilities, industrial production also measures the country's industrial capacity and how fully it's being used (capacity utilization).

The manufacturing sector accounts for one-quarter of the major currencies' economies, so it's critical to watch the health of factories and whether their capacity is being maximized.
Purchasing Managers Index (PMI)

The National Association of Purchasing Managers (NAPM), now called the Institute for Supply Management, releases a monthly composite index of national manufacturing conditions. The index includes data on new orders, production, supplier delivery times, backlogs, inventories, prices, employment, export and import orders. It is divided into manufacturing and non-manufacturing sub-indices.

Producer Price Index (PPI)

Measures average changes in selling prices received by domestic producers in the manufacturing, mining, agriculture, and electric utility industries.

The PPIs most often used for economic analysis are those for finished goods, intermediate goods, and crude goods.

Consumer Price Index (CPI)

Measures the average price level paid by urban consumers (80% of the population in major currency countries) for a fixed basket of goods and services. It reports price changes in over 200 categories.

The CPI also includes various user fees and taxes directly associated with the prices of specific goods and services.

Durable Goods

Durable Goods Orders measures new orders placed with domestic manufacturers for immediate and future delivery of factory hard goods. A durable good is a product that lasts over three years, during which its services are extended.

Companies and consumers sometimes put off purchases of durable goods during tough economic times - so this figure is a useful measure of certain kinds of customer demand.

Employment Cost Index (ECI)

Payroll employment is a measure of the number of jobs at larger companies in more than 500 industries in all 50 U.S. states and 255 metropolitan areas. ECI counts the number of paid employees working part-time or full-time in the nation's business and government establishments.

Retail Sales

Measures total receipts of retail stores from samples representing all sizes and kinds of business in retail trade throughout the nation. It is the timeliest indicator of broad consumer spending patterns and is adjusted for normal seasonal variation, holidays, and trading-day differences.

Retail sales include durable and nondurable merchandise sold, and services and excise taxes incidental to the sale of merchandise. It doesn't include sales taxes collected directly from the customer.

Housing Starts

Measures the number of residential units on which construction is begun each month. A "start" refers to excavation of the foundation of a residential home.

Housing is usually one of the first sectors to react to interest rate changes. Significant reaction of start/permits to changing interest rates signals interest rates are nearing trough or peak. To analyze, focus on the percentage change in levels from the previous month. Report is released around the middle of the following month.

Next: Currency Pair "Personalities"

Tailoring Your Technical Approach to Currency "Personalities"

2008-06-24T09:55:00.000-07:00

Every currency pair has qualities unique to it. Find out what those qualities are.

Much has been written about the suitability of technical analysis for trading in the currency markets. While this is undoubtedly true, it can leave traders, particularly those new to the currency markets, with the impression that all technical tools are equally applicable to all major currency pairs. Perhaps most dangerous from the standpoint of profitability, it can also seduce traders into searching for the proverbial silver bullet: that magic technical tool or study that works for all currency pairs, all the time. However, anyone who has traded forex for any length of time will recognize that, for example, dollar/Yen (USD/JPY) and dollar/Swiss (USD/CHF) trade in distinctly different fashions.

Why, then, should a one-size-fits-all technical approach be expected to produce steady trading results? Instead, traders are more likely to experience improved results if they recognize the differences between the major currency pairs and employ different technical strategies to them. This article will explore some of the differences between the major currency pairs and suggest technical approaches that are best suited to each pair's behavioral tendencies.

The Biggie
By far the most actively traded currency pair is euro/dollar (EUR/USD), accounting for 28 percent of daily global volume in the most recent Bank for International Settlements (BIS) survey of currency market activity. EUR/USD receives further interest from volume generated by the Euro-crosses (e.g. euro/British pound (EUR/GBP), EUR/CHF and EUR/JPY, and this interest tends to be contrary to the underlying U.S. dollar direction. For example, in a U.S. dollar-negative environment, the Euro will have an underlying bid stemming from overall U.S. dollar selling. However, less liquid dollar pairs (e.g. USD/CHF) will be sold through the more liquid Euro crosses, in this case resulting in EUR/CHF selling, which introduces a Euro offer into the EUR/USD market.

This two-way interest tends to slow Euro movements relative to other major dollar pairs and makes it an attractive market for short-term traders, who can exploit "backing and filling." On the other hand, this depth of liquidity also means EUR/USD tends to experience prolonged, seemingly inconclusive tests of technical levels, whether generated by trendline analysis or Fibonacci/Elliott wave calculations. This suggests breakout traders need to allow for a greater margin of error: 20-30 pips. (A pip is the smallest increment in which a foreign currency can trade with respect to identifying breaks of technical levels.) Another way to gauge whether EUR/USD is breaking out is to look to the less liquid USD/CHF and GBP/USD. If these pairs have broken equivalent technical levels, for example recent daily highs, then EUR/USD is likely to do the same after a lag. If "Swissy" and "Cable" (popular name for British pound) are stalling at those levels, then EUR/USD will likely fail as well.

Customize Your Settings
In terms of technical studies, the overwhelming depth of EUR/USD suggests that momentum oscillators are well-suited to trading the euro, but traders should consider adjusting the studies' parameters (increase time periods) to account for the relatively plodding, back-and-fill movements of EUR/USD. See Figure 1. In this sense, reliance on very short-term indicators (less than 30 minutes) exposes traders to an increased likelihood of "whipsaw" movements. Moving average convergence divergence (MACD) as a momentum study is well-suited to EUR/USD, particularly because it utilizes exponential moving averages (greater weight to more recent prices, less to old prices) in conjunction with a third moving average, resulting in fewer Chartfalse crossovers. Short-term (hourly) momentum divergences routinely occur in EUR/USD, but they need to be confirmed by breaks of price levels identified though trendline analysis to suggest an actionable trade. When larger moves are underway, traders are also likely to find the directional movement indicator (DMI) system useful for confirming whether a trend is in place, in which case momentum readings should be discounted, and might choose to rely on DI+/DI- crossovers for additional trade entry signals.

Second Place
The next most actively traded currency pair is USD/JPY, which accounted for 17 percent of daily global volume in the 2004 BIS survey of currency market turnover. USD/JPY has traditionally been the most politically sensitive currency pair, with successive U.S. governments using the exchange rate as a lever in trade negotiations with Japan. While China has recently replaced Japan as the Asian market evoking U.S. trade tensions, USD/JPY still acts as a regional currency proxy for China and other less-liquid, highly regulated Asian currencies. In this sense, USD/JPY is frequently prone to extended trending periods as trade or regional political themes (e.g. yuan revaluation) play out.

For day-to-day trading, however, the most significant feature of USD/JPY is the heavy influence exerted by Japanese institutional investors and asset managers. Due to a culture of intra-Japanese collegiality, including extensive position and strategy information-sharing, Japanese asset managers frequently act in the same direction on the yen in the currency market. In concrete terms, this frequently manifests itself in clusters of orders at similar price or technical levels, which then reinforce those levels as points of support or resistance. Once these levels are breached, similar clusters of stop loss orders are frequently just behind, which in turn fuel the breakout. Also, as the Japanese investment community moves en masse into a particular trade, they tend to drive the market away from themselves for periods of time, all the while adjusting their orders to the new price levels, for instance raising limit buy orders as the price rises.

An alternate tactic frequently employed by Japanese asset managers is to stagger orders to take advantage of any short-term reversals in the direction of the larger trend. For example, if USD/JPY is at 115.00 and trending higher, USD/JPY buying orders would be placed at arbitrary price points, such as 114.75, 114.50, 114.25 and 114.00, to take advantage of any pullback in the broader trend. This also helps explain why USD/JPY frequently encounters support or resistance at numerically round levels, even though there may be no other corresponding technical significance.

Take A Look at Trendlines
Turning to the technical side of USD/JPY, the foregoing discussion suggests trendline analysis as perhaps the most significant technical tool for trading USD/JPY. Because of the clustering of Japanese institutional orders around technical or price levels, USD/JPY tends to experience fewer false breaks of trendlines. For example, large-scale selling interest at technical resistance will need to be absorbed if the technical level is to be broken. This is likely to happen only if a larger market move is unfolding, and this suggests any break will be sustained. This makes USD/JPY attractive for breakout traders who employ stop-loss entry orders on breaks of trendline support or resistance. Short-Chartterm trendlines, such as hourly or 15 minutes, can be used effectively, but traders need to operate on a similarly short-term basis; daily closing levels hold the most meaning in USD/JPY. In terms of chart analysis, Japanese institutional asset managers rely heavily on candlestick charts (which depend heavily on daily close levels) and traders would be well-advised to learn to recognize major candlestick patterns, such as doji, hanging man, tweezer tops/bottoms and the like. See Figure 2. When it comes to significant trend reversals or pauses, daily close (5 p.m. EST), candlesticks can be highly reliable leading indicators.

The yen discussion above also highlighted the factors behind the propensity of USD/JPY to trend over the medium-term (multiweek). This facet suggests traders should look to trend following tools such as moving averages (21- and 55-day perio ds are heavily used), DMI, and Parabolic SAR. (This refers to J. Welles Wilder Jr.'s Parabolic System. SAR stands for stop and reverse.) Momentum oscillators such as the relative strength index (RSI), MACD or stochastics should generally be avoided, especially intraday, due to the trending and institutional nature driving USD/JPY. While a momentum indicator may reverse course, typically suggesting a potential trade, price action often fails to reverse enough to make the trade worthwhile due to underlying institutional interest. Instead of reversing along with momentum, USD/JPY price action will frequently settle into a sideways range, allowing momentum studies to continue to unwind, until the underlying trend resumes. Finally, Ichimoku analysis (roughly translated as one-glance cloud chart) is another largely Japanese-specific trend identification system that highlights trends and major reversals.

A Look At Some Illiquid Currencies
Having looked at the two most heavily traded currency pairs, let's now examine two of the least liquid major currency pairs, USD/CHF and GBP/USD, which pose special challenges to technically oriented traders. The so-called Swissy holds a place among the major currency pairs due to Switzerland's unique status as a global investment haven; estimates are that nearly one-third of the world's private assets are held in Switzerland. The Swiss franc has also acted historically as a so-called "safe-haven" currency alternative to the U.S. dollar in times of geo-political uncertainty, but this dimension has largely faded since the end of the Cold War. Today, USD/CHF trades mostly based on overall U.S. dollar sentiment, as opposed to Swiss-based economic fundamentals. The Swiss National Bank (SNB) is primarily concerned with the franc's value relative to the euro, since the vast majority of Swiss trade is with the European Union, and Swiss fundamental developments are primarily reflected in the EUR/CHF cross rate.

Liquidity in USD/CHF is never very good, and this makes it a favorite "whipping horse" for hedge funds and other speculative interests looking to maximize the bang for their buck. The lower liquidity and higher volatility of Swissy also makes it a significant leading indicator for major U.S. dollar movements. Figure 3 illustrates an example of a recent break of major daily trendline support in USD/CHF that took place a full day before EUR/USD and USD/JPY broke equivalent levels. Swissy will also lead the way in shorter-term movements, but the overall volatility and general jitteriness of USD/CHF price action makes false breaks of technical levels common. These false breaks are frequently stop-loss driven and it is not unusual for prices to trade 15-25 points through a support/resistance level before reversing after the stop losses have been triggered. In strong directional moves, USD/CHF price action tends toward extreme one-way traffic, with minimal backing and filling in comparison to EUR/USD.

Cable (GBP/USD), or sterling, also suffers from relatively poor liquidity and this is in part due to its higher pip value (U.S. dollars) and the relatively Euro-centric basis of U.K. trade. Sterling shares many of the same trading characteristics of Swissy outlined just above, but Cable will also react sharply to U.K. fundamental data as well as to U.S. news. Sterling's price action will also display extreme one-way tendencies during larger moves, as traders caught on the wrong side chase the illiquid market to the extremes.

Focus On Risk Management
The volatility and illiquidity of Swissy and sterling suggests traders need to use a more proactive overall approach to trading these pairs, particularly concerning risk management (i.e. position size in relation to stop levels). With regard to technical tools, the tendency for both pairs to make short-term false breaks of chart levels suggests breakout traders need to be particularly disciplined concerning stop entry levels and should consider a greater margin of error on the order of 30-35 points. In this sense, trendline analysis of periods less than an hour tends to generate more noise than tradable break points, so a focus on longer time periods (four hours-daily) is likely to be more successful in identifying meaningful breaks. By the same token, once a breakout occurs, surpassing the margin of error, the ensuing one-way price action favors traders who are quick on the trigger, and this suggests employing resting stop-loss entry orders to reduce slippage. For those positioned with a move, trailing stops with an acceleration factor, such as parabolic SAR, are well suited to riding out directional volatility until a price reversal signals an exit. Of course, placing contigent orders may not necessarily limit your losses.

The volatility inherent in Cable and Swissy makes the use of short-term (hourly and shorter) momentum oscillators problematic, due to both false crossovers and divergences between price/momentum that frequently occur in these time frames. Longer-period oscillators (four hours and more) are best used to highlight potential reversals or divergent price action, but volatility discourages initiating trades based on these alone. Instead, momentum signals need to be confirmed by other indicators, such as breaks of trendlines, Fibonacci retracements or parabolic levels, before a trade is initiated.

Try A Larger Retracement
With regard to Fibonacci retracement levels, the greater volatility of Cable and Swissy frequently sees them exceed 61.8-percent retracements, only to stall later at the 76.4-percent level, by which time most short-term Elliott wave followers have been stopped out. Short-term spike reversals of greater than 30 points also serve as a reliable way to identify when a directional surge, especially intraday, is completed, and these can be used as both profit taking and counter-trend trading signals. For counter-trend, corrective trades based on spike reversals, stops should be placed slightly beyond the extreme of the spike low/high. A final technical study that is well suited to the explosiveness of Swissy and sterling is the Williams %R, an overbought/oversold momentum indicator, which frequently acts as a leading indicator of price reversals. The overbought/oversold bands should be adjusted to -10/-90 to fit the higher volatility of Cable and Swissy. As with all overbought/oversold studies, however, price action needs to reverse course first before trades are initiated.

It's Not One Size Fits All
Traders who seek to apply technical trading approaches to the currency market should be aware of the differences in the trading characteristics of the major currency pairs. Just because the euro and the pound are both traded against the dollar does not mean they will trade identically to each other. A more thorough understanding of the various market traits of currencies suggests that certain technical tools are better suited to some currency pairs than others. A currency-specific approach to applying technical analysis is more likely to produce successful results than a one-size-fits-all application across all currency pairs.

Using Indicators to Identify Trends

2008-06-24T09:40:00.000-07:00

Using Indicators to Identify Trends

You've probably heard the expression "the trend is your friend" - but what does it mean? If your trend takes a sudden counter-move and your trailing stop activates at a loss, it's natural to ask yourself: how can you be sure the next trend will be more friendly?

Confirm the trend is real

Using technical indicators in combination can help ensure a potential trend has staying power - a good habit for all kinds of technical trading, but especially in forex. Currencies tend to move in trends naturally due to long-term macroeconomic factors and short-term international capital flows. All of this makes it that much harder to see a trade-able trend that will last.

Trendlines

From a trader's perspective, a trend is a predictable price response at levels of support or resistance that change over time. Trendlines mark these levels, with support acting as the "floor" and resistance as the "ceiling". When prices break through either of these levels, that signals a trend for that movement to continue.

It's easy to draw perfect trendlines on historical charts - but harder to be right when the trend is still developing. Still trendlines help focus your attention on finding support and resistance levels, the first step to identifying a new trend.

Start by drawing trendlines over longer timeframes (daily or weekly charts) and then carry them forward into shorter timeframes (hourly or 4-hourly). That way you'll highlight the most important support and resistance levels first and not lose the major trend development by chasing a short-term, minor one.

Directional Movement Indicator (DMI)

Developed by J. Welles Wilder, the DMI minimizes the guesswork in spotting trends and helps confirm trendline analysis.

The DMI system has two parts:

* ADX (average directional movement index). If the ADX reading is above 20, that indicates a "real" or sustainable trend. The ADX also measures the trend's strength: the >higher the ADX, the stronger the trend.

The ADX also provides an early indicator of a trend's end. When it drops from its highest level, it may be time to exit the position and wait for a fresh signal from the the DI+/DI-.

* DI+ and DI- lines. When DI+ crosses up through DI-, that's considered a buy sign. When the opposite happens, that's usually a sell sign.

Wilder recommends following the "extreme point rule" to confirm the signals. Note the extreme point for that period in the direction of the crossover (the high if DI+ crosses up over DI-; the low if DI- crosses up over DI+). Only if that extreme point is breached in the subsequent period is a trade signal confirmed.

Many traders use the parabolic indicator along with the ADX to identify a trend's end. The parabolic indicator follows the price action but accelerates its own rate of increase over time and in response to the trend. The parabolic continually closes in on the price, and only a steadily accelerating price rise (the essence of a trend) will prevent the price from falling below the parabolic, signaling an end to the trend.

Trading short-term

The methods above can be used for short-term decision making, even in markets that are trading sideways - a "trendless" market.

However, if you're trading short-term, don't ignore the big picture entirely. There's no point in trying to ride a short-term trend that is counter to the larger trend.

Trading Short-Term Trends

2008-06-24T09:36:00.000-07:00

Cashing in on Short-Term Currency Trends

Most of the time, markets don't show a clear trend - they bounce back and forth between support and resistance levels. This sideways movement is called a trading range. Below is a strategy that can help you identify entry points on short-term trends, while protecting your profits with trailing stops.+

Trade Set-up

The strategy uses two charts with different time periods (10-minute and hourly), along with two technical indicators: a 200-bar moving average and a 14-bar slow stochastic study.

Step 1: Identify a trend

Compare the moving averages on both charts. A trend may be developing when price is consistently above or below the moving averages on both charts.

Step 2: Pinpoint entry

Once you've identified a trend, look for the following two conditions at the same time on the 10-minute chart:

1. Price is no more than 20 pips above (to buy) or 20 pips below (to sell) the MA.

2. The "fast" stochastic (%K) crosses above the "slow" stochastic (%D) below 20 (to buy), or crosses below the "slow" stochastic above 80 (to sell).

Step 3: Ride the trend

Set a trailing stop after the trade entry.

On a LONG position, the stop order should be 10 pips BELOW the 200-period MA on the 10-minute chart. You'll RAISE the stop as the trade goes in your favor.

On a SHORT position, place the stop 10 pips ABOVE the MA. You'll LOWER the stop as the trade goes in your favor.

An example: EUR/USD, June 2002

Step 1: compare the hourly and 10-minute EUR/USD charts. Look for a time when price is above the 200-period moving averages on both charts.

On the hourly chart, price is almost exclusively above the 200-hour moving average, indicating a persistent uptrend.

On the 10-minute chart, price moves (and remains above) the moving average in the last third of the chart.

Step 2: pinpoint the entry zone - when the market is within 20 pips of the moving average on the 10- minute chart, and the stochastic lines cross. As indicated in the chart, conditions are right around 8pm on June 27.

Buy EUR/USD at .9883
Protective t-stop set at .9858 (10 pips below MA)

Sell EUR/USD at .9992
Protective t-stop has moved up to .9967

Profit = 84 pips, or US $840

+ Placing contingent orders may not necessarily limit your losses.

Next: Using Indicators to Identify Trends

Technical Indicators

2008-06-24T09:33:00.000-07:00

Using Technical Indicators

Price charts help traders identify trade-able market trends - while technical indicators help them judge a trend's strength and sustainability.

If an indicator suggests a reversal, confirm the shift before you act. That might mean waiting for another period to confirm the same indicator's signal, or checking out another indicator. Patience will help you read the signals accurately and respond accordingly.

Types of Moving Averages

One of the most widely used indicators, moving averages help traders verify existing trends, identify emerging trends, and view overextended trends about to reverse. As the name suggests, these are lines overlaid on a chart that "average out" short-term price fluctuations, so you can see the long-term price trend.

A simple moving average weighs each price point over the specified period equally. The trader defines whether the high, low, or close is used, and these price points are added together and averaged, forming a line.

A weighted moving average gives more emphasis to the latest data. It smoothes out a price curve, while making the average more responsive to recent price changes.

An exponential moving average weighs more recent price data in a different way. An exponential moving average multiplies a percentage of the most recent price by the previous period's average price.

Finding the best moving averages and period for your pair.

It can take a while to find the best combination of moving average and period length for your currency pair. The right combo will make the trend you're looking for clearly visible, as it develops. Finding that optimal fit is called curve fitting.

Usually traders start by comparing a few timeframes for their moving averages over a historical chart. Then you can compare how well and how early each timeframe signaled changes in the price data as they developed, then adjust accordingly.

When you've found a moving average that works well for your currency pair, you can consider this as a line of support for long positions or resistance for short positions. If prices cross this line, that often signals a currency is reversing course. Here's an example:

Longer-term moving averages define a trend, but shorter-term MAs can signal its shift faster. That's why many traders watch moving averages with different timeframes at once. If a short-term MA crosses your longer-term MA, it can signal your trend is ending - and time to pare back your position.

Stochastics

Stochastic studies, or oscillators, help monitor a trend's sustainability and signal reversals in prices. Stochastics come in two types, %K and %D, measured on a scale from 0 to 100. %K is the "fast", more sensitive indicator, while %D is "slow" and takes more time to turn.

Stochastic studies aren't useful in choppy, sideways markets. In these conditions %K and %D lines might cross too frequently to signal anything.

Relative Strength Index (RSI)

Like stochastics, RSI measures momentum of price movements on a scale of 0 to 100.

Always confirm RSI signals with other indicators. RSI can remain at lofty or sunken levels for a long time, without prices reversing course. All that means is that a market is quite strong or weak - and likely to stay so for a while.

Adjust your RSI to the right timeframe for you. A short-term RSI will be very sensitive and give out many signals, not all of them sustainable; a longer-term RSI will be less choppy. Try to match your RSI timeframe to your own trading style: short-term for day traders, longer-term for position traders.

Divergences between prices and RSI may suggest a trend reversal. Of course, make sure you confirm your signals before acting.

Bollinger Bands

Bollinger Bands are volatility curves used to identify extreme highs or lows in price. Bollinger Bands establish "bands" around a currency's moving average, using a set number of standard deviations around the moving average. Creator Jon Bollinger recommends the following:

Touching a high or low band doesn't necessarily mean an immediate trend reversal. Bollinger Bands adjust dynamically as volatility changes, so touching the band just means prices are extremely volatile. Use Bollinger Bands with other indicators to determine the trend's strength.

MACD - Moving Average Convergence Divergence

Developed by Gerald Appel, MACD (pronounced "Mac-Dee") plots the difference between 26-day and 12-day exponential MAs.

A 9-day MA serves as a trigger line: when MACD crosses below the trigger, it's a bearish signal; when MACD crosses above the trigger, it's a bullish signal.

If MACD turns positive and makes higher lows while prices are still tanking, this could be a strong buy signal. Conversely, if MACD makes lower highs while prices are making new highs, this could be a strong bearish divergence and a sell signal.

Fibonacci Retracements

Fibonacci retracement levels are a sequence of numbers discovered by the noted mathematician Leonardo da Pisa in the 12th century. These numbers describe cycles found throughout nature; technical analysts use them to find pullbacks in the currency market.

After a significant price move, up or down, prices often "retrace" most or all of the original move. As prices retrace, support and resistance levels often occur at or near the Fibonacci Retracement levels. For currencies, that means retracements usually happen at 23.6%, 38.2%, 50% or 61.8% of the previous move.

Next: Trading Short-Term Trends

What is Technical Analysis?

2008-06-24T09:30:00.000-07:00

Technical analysis attempts to forecast future price movements by examining past market data.

Most traders use technical analysis to get a "big picture" on an investment's price history. Even fundamental traders will glance at a chart to see if they're buying at a fair price, selling at a cyclical top or entering a choppy, sideways market.

Technical analysts make a few key assumptions:

* All market fundamentals are reflected in price data. Moods, differing opinions, and other market fundamentals need not be studied.

* History repeats itself in regular, fairly predictable patterns. These patterns, generated by price movements, are called signals. A technical analyst's goal is to uncover a current market's signals by examining past market signals.

* Prices move in trends. Technical analysts believe price fluctuations are not random and unpredictable. Once an up, down or sideways trend has been established, it usually will continue for a period.

Get in and get out - at the right time

Traders rely on price charts, volume charts and other mathematical representations of market data (called studies) to find the ideal entry and exit points for a trade. Some studies help identify a trend, while others help determine the strength and sustainability of that trend over time.

Technical analysis can add discipline and minimize emotion in your trading plan. It can be hard to screen out fundamental impressions and stick with your entry and exit points as planned. While no system is perfect, technical analysis helps you see your trading plan through more objectively and dispassionately.

Price chart types

Bar charts
The most common type of chart showing price action. Each bar represents a period of time - a "period" as short as 1 minute or as long as several years. Over time, bar charts show distinct price patterns.

Candlestick charts
Instead of a simple bar, each candlestick shows the high, low, opening and closing price for that period of time it represents. Candlestick patterns provide greater visual detail as they develop.

Point & figure charts
Point & figure patterns resemble bar chart patterns, except Xs and Os are used to mark changes in price direction. Point & figure charts make no use of time scale to associate a certain day with a certain price action.

Technical indicator types

Trend
Trend indicators smooth price data out, so that a persistent up, down or sideways trend can be easily seen. (Examples: moving averages, trend lines)

Strength
Strength indicators describe the intensity of market opinion on a certain price by examining the market positions taken by various market participants. Volume or open interest are the basic ingredients of strength indicators.

Volatility
"Volatility" refers to the magnitude of day-to-day price fluctuations, whatever their directional trend. Changes in volatility tend to anticipate changes in prices. (Example: Bollinger Bands)

Cycle
Cycle indicators indicate repeating market patterns from recurrent events such as seasons or elections. Cycle indicators determine the timing of a particular market pattern. (Example: Elliott Wave)

Support/resistance
Support and resistance describes the price levels where markets repeatedly rise or fall and then reverse. This phenomenon is attributed to basic supply and demand. (Example: Trend Lines)

Momentum
Momentum indicators determine the strength or weakness of a trend as it progresses over time. Momentum is highest when a trend starts and lowest when the trend changes.

When price and momentum diverge, it suggests weakness. If price extremes occur with weak momentum, it signals an end of movement in that direction. If momentum is trending strongly and prices are flat, it signals a potential change in price direction. (Example: Stochastic, MACD, RSI)

Next: Using Technical Indicators

Strategy: Low-risk, High-return Forex Trading

2008-06-24T09:13:00.000-07:00

A bear chased two hikers.
One hiker, while being chased,
stopped to put on running shoes.

As he was changing out of his hiking boots, his companion looked at him in horror and exclaimed, “What in the world are you doing? You’ll never outrun the bear if you stop now!”

Calmly, the other hiker said, “I don’t have to outrun the bear. I just have to out run you.”

The forex market offers more opportunity for fast financial success – and financial ruin – than almost any other market. The get-rich crowd has always been attracted to it. This crowd includes speculators, trading novices, retirees, and professionals looking for a way to get out of debt, increase the excitement in their lives, or simply get rich really fast.

These are the people who you will be taking money away from. These are the people who will be eaten by the bear. You don’t have to outrun the bear (the entire market). In fact, that’s impossible. You can’t beat the entire market. Those of you who try will learn fast that the market has no mercy, can outrun anyone, and shows no mercy.

I want to teach you how to run faster than the other traders.

The information contained in this document, although highly entertaining and quite instructive, might lead you to believe that tomorrow you’re going to be a millionaire. You are not going to be a millionaire tomorrow. Well…that’s technically not correct. Because you could be a millionaire already, in which case tomorrow you’re guaranteed to be one.

Strategy: Low-risk, High-return Forex Trading

The Four Groups

The Basics

Pips

Greed

Revenge

A Different Strategy

10 Principles

The Daily Routine

The Four Groups

2008-06-24T09:06:00.000-07:00

There are four groups in the forex market. There are the novice traders – the greenies, the ones who try to outrun the bear and lose every time.

In addition to the novice traders, there are three other levels of participation in the forex market: the dealers, the institutional traders, and the advanced traders.

The dealers are the most powerful and they make the market, setting prices and putting together deals.

The institutional traders work in banks, wire firms, or government agencies. They trade huge amounts of money at a time, and the size of their trades gives them enormous power.

Next, there are the advanced traders. This group is comprised of people from all across the world, sitting in smaller investment firms, offices, or even their homes. You can be a part of this group. In some cases, the advanced traders are the smartes group – trade for trade – than any other group.

Because they don’t move a lot of money on each trade, they don’t have as much power as the institutional players. Because their trades are brokered by the dealers, they’ll never have absolute trading power. But, because there are so many novice traders – the advanced traders have plenty of people that they can outrun. Your goal as a forex investor is to aggressively take money out of the pockets of the novice traders.

Don’t feel bad about that. Someone’s going to take your money along the way, and it’s going to teach you, very quickly, lessons that can only be learned through failure. So, every time you take money from a novice trader, just remember: you’re teaching him a valuable lesson. After a while, you might even enjoy watching your hiking companion being eaten by the bear.

Strategy: Low-risk, High-return Forex Trading

The Four Groups

The Basics

Pips

Greed

Revenge

A Different Strategy

10 Principles

The Daily Routine