Forex Online Trading Tips

Trading at Foreign Exchange

2008-11-08T23:36:00.000-08:00

How does low margins profit from the exchange as compared with other markets of fixed income that was navigated? Under the economic foreign exchange status, a collision of simple strategies at hitting targets lie on the economical trading status of one source to the other. Tendencies propagates that by striking one system that does react on a chain conditions similar as having a business. In the marketing of foreign exchange, one currency must have to adhere to its focus in order to collaborate with other currencies. And thus it will just imply a basic strategy of certainty in transactions and party involvements.

There is no unified or centrally cleared market for the majority of Foreign exchange trades. Trading does indeed portray a basic rule of interconnected market places. It hits the global forex and lives itself in its markets that propagate trading characteristics and concepts.

The main trading center is London, but New York, Tokyo, Hong Kong and Singapore are all considered as important centers as well. Banks throughout the world participates, making an emulated wave of marking together the importance of trading and interconnectivity. Due to the OTC or the over-the-counter nature of currency markets, there are rather a number of interconnected market places where different currencies and instruments are traded.

This merely implies that there is not a "single" exchange rate but rather a number of different prices.

A bank or market maker is trading, and it depends upon the point of stability of the root-cause and matter. And by the traders that substantially makes use of the currency balance and unity of resources, a factorial position constant involvement of market exchange and collision seize to exist. The system can be routinary. And in practice the rates are often very close. Otherwise, the rates could be exploited by spontaneous attempts of instant arbitrageurs. Due to London's dominance, the market exchange particularly quotes the currency's price and usually happens under London's market price. Under the trading companionships, it usually happens continuously throughout the day; as the Asian trading session ends, the European session begins, followed by the North American session and then back to the Asian session, excluding weekends and this was called the market clearing mechanism. In practice, the foreign exchange markets ventures in joint processes over market spaces. And by its opening year in 2007, it aspires the prevalent role of clearing central markets.

Nevertheless, in the trading characteristics of market exchanging implies the union of all markets connected. Embarking on straight trading and balancing strategies over the years. Needless to say, central places for foreign exchange heeds to stabilize and portrays equilibrium in terms of power and superiority while investors have played an increasingly important role in financial markets and generally partakes in foreign exchange successions. In addition, funds have grown markedly over the 2001-2004 period in terms of both number and over-all size.

By information that has been gathered, the top inter-bank market accounts for 53% of all transactions. After that there are usually smaller investments.

Foreign Exchange in Market Participants

2008-10-18T21:52:00.000-07:00

The currency affects greatly in the rising and falling of the economic status of a society. It does pertain to a subsequent strive for growth and progress in the assurance of market stability and strength of proprietors.

The foreign exchange market refers to the market for currencies. Transactions in this market typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another. It is the largest and liquified financial market in the world and includes trading between large banks, central banks, currency speculators, corporations, governments and other institutions. The foreign exchange market can be uniquelt distinguished because of its trading volumes, extreme liquidity and has a large number and variety in market traders. Its geographical dispersion is substantial and uses market leverages for the developmental superiority of the flow.

Unlike a stock market, all participants have access to the same prices, the forex market is divided into levels of access. At the top is the interbank market, made up of the largest investment banking firms. Within the inter-bank market spreads, there are difference between the bid and ask prices. Razor sharp and usually unavailable, players are not known outside the inner circle. Descending to the levels of access, the difference between the bid and ask prices widens. This is due to volume. If a trader can guarantee large numbers of transactions for large amounts, they can have the right for demanding smaller difference between bid and ask prices.
In these market participants, investors play a huge and important role. it is in their power the source of shape in the liquidity flows and be in consent with the unified growth and demands of rates between the local and international fields of market.

Movers Out For Profits

2008-09-26T19:16:00.000-07:00

The foreign exchange market refers to the currencies. Transactions in this market typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another. The FX market is the largest and most liquefied financial market in the world and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global forex and related markets is continuously growing and was last reported to be in trillions in April 2007 by the Bank for International Settlement.

When talking about the liquidity and market size of the currency, it lies unique with its trading volumes and has the large variety of traders in the market. Along with its geographical dispersion, it works 24 hours a say except on weekends. The low margins of profit of fixed income can be higher due to very large trading volumes. Not withstanding market manipulation by central banks, it has been referred to as the market closest to an ideal competitor. Exchange-traded forex contracts were introduced in 1972 at the Chicago Mercantile Exchange and are actively traded relative to most other future contracts. Because foreign exchange market is a market where brokers/dealers negotiate directly with one another, there is no considerable thought for central exchange or clearing. When foreign exchange markets come to a sequential point of view, needless to say that it adheres and promulgates the stock influences and rates upon nation at one another.

Murray Devine Company - Financial Assistance

2008-09-07T23:41:00.000-07:00

When you need for your company for a financial valuation, it is important that you have to see if the firm that you entrust your company to do that valuation provides good service, a reputable company that you can rely on. When you need financial assistance, opinions and advise for strategic planning, it is good to go to a company that they are committed to integrity and provision of good service for you.

They can highly express their financial opinion to you like the Murray Devine & Company wherein they have 2 offices located in New York and Philadelphia. They can help giving solvency opinions for you, which is one of the services they can render, this is an independent third-party analysis that is delivered to the board of directors of buyers and sellers. More services from them are Intangible Assets, Fairness opinions, Business valuations, Portfolio valuations, equipment appraisals, litigation support, corporate advisory and more.

They are well dedicated to their business, their reputation has been built in through the years meeting their client’s needs and a comprehensive support and understanding their client’s business itself.

Position Trading

2008-06-16T13:00:00.000-07:00

It offers some good opportunities when you position trading offer for current market conditions. When stock market is dominated by short-term traders, the position trade is often forgotten in favor of the better known daytrading, swing, and option trading techniques. This is unfortunate because position trading offers some excellent opportunities for prevailing current market conditions. The stock market sees long period of sideways action followed by sudden bursts of price action, both momentum patterns and gap series sequences. This kind of market action, it turns out, is ideal for position trading.

ADVANTAGES FOR OPTION TRADERS

If you learn to position trade, you will develop the skills necessary to determine when a stock is poised to move, how much it is likely to move, and how long the move will take. This is useful if you want to trade options. Time decay is an ever-present risk for buyers of calls and puts. Knowing when, how much, and how long are essential technical skills needed for higher profitability and fewer losses. For writers of calls or puts, being able to accurately determine whether a stock will remain in a tight consolidation or neutral position lowers the risk of being executed and increases your likelihood of success.

ADVANTAGES FOR NOVICE TRADERS

The underlying security price action affects option trades, with significant differences in profitability of loss. So if you want to trade options you not only need to know the option market, you must also have in-depth knowledge of stock trading and have experience in short-term stock trading. There is an inherent complexity to options that novices do not understand until they have had several losses, and if you're just starting out, this can be overwhelming. If you have a small capital base, don't believe that options is the only way to trade. It can more quickly make you poor.

Position trades are ideal for novices and traders with less capital because they offer lower risk and are relatively easy to learn; position trading is also the most forgiving of all the styhles of trading. Trading and flying have something in common. When you're flying on an airplane, the most dangerous times are at takeoff and landing. The same is true for trading. The entry (the takeoff) and the exit (the landing) are where any mistakes that traders make are the most dangerous. Sometimes these mistakes are simply mathematical, while other times they are due to poor charting skills. In addition, some mistakes are due to emotions triggering panic or greed.
The position trade is safer than day - swing, and option trading. Daytrading requires highly developed skills, a lot of capital, and a keen sense of timing. Swing trading requires a strongly trending market and good entry and exit techniques. Options require not only that you understand the secondary market of option trading, options, chains, Greeks, options calculations, and so on, it also demands that you have strong charting skills for selecting stocks that are poised to move.

Position trades are safer than other types of short-term trading, mainly because you have time on your side. That doesn't mean that if a trade goes against you that you can stay in the trade hoping it will move in your favor at some point. It never may, so you still need to have an exit plan. However, if you get into a trade too early in the sideways pattern, you can simply wait it out until the stock pops or gaps and runs up.

You don't have this luxury with option trading because if you enter too early, time decay eats away at your profit and you end up with an option contract that expires worthless. The goal in all trading is to minimize losses. The value of time in a position trade is one of the significant benefits of buying a low-priced stock that is basing sideways and then riding it up. Once you understand position trading, you may be in a position to attempt trading options.

SOMETHING FOR EVERYONE

The position trade offers flexibility to all types of traders. Many position trade setups can be found in bottoming stocks, and usually they are lower risk due to the strong support levels of the platform that forms for position trade entries. This trade requires less time, it's easier to learn, and it is more forgiving for the new trader who is jst learning about short-term stock trading.

by Martha Stokes, senior technical analyst, co-author and codeveloper of the TechniTrader Stock Market Training Courses.

Follow that Trend

2008-04-19T03:32:00.000-07:00

Even if you are a trend-follower, you still have to be a systematic trader. here's why you still have to manage drawdowns when the market is not trending.

As so often happens, it's not the answer that is wrong, but the question.

People ask me how long trend-following trading will last. Well, there is no reason trend-following should ever stop. Only if markets were to go sideways forever would trends cease to exist and therefore trend-following cease to work.

Trend-following traders respond to what is happening in the market rather than anticipating what will happen. They are aggressively reactive in that they avoid forecasting and prediction at all costs. They base their trading decisions on one piece of core information: the market price.

Most traders, on the other hand, want news. They want CNBC, The Wall Street Journal, crop reports, OPEC rumors, and daily doses of Mad Money with Jim Cramer, Why? Because they believe deep down that all of the “stories” and “data” will heolp them make profitable trading decisions.

For trend-followers, all (and we do mean all) fundamental data is like white noise. It doesn’t matter if the market goes up or down because trend-followers only care about price action.

Think about it: What else can you really believe in besides the market price? Or, to quote famed trader John w. Henry; “The greatest action, the wisest, the best action that you can take in almost any situation is to stay with what is, instead of jumping to conclusions or trying to come up with conclusions. Just pay attention to what is.”

TREND-FOLLOWING VS. SYSTEMS TRADING

Debate over what is and what might be doesn’t stop there. Confusion over trend-following and systems trading never seems to end. Most trend-followers are systematic, but their decision to systematically trade comes only after making the decision to trade as a trend-follower. Trend-following trading is a style. It is a method based on a philosophy. “Systems trading,” on the other hand, means nothing in the abstract unless you define what kind of system it is.

STARTING OUT

Successful trading is not simply about entries and exits. Most traders spend countless hours working on detailed and specific entry criteria for all the different markets they track. For many of them the entry signal itself is the holy grail. If you examine a sampling of the most profitable trading systems, you’ll find that many simply advocate their own combinations of entry and exit techniques. In the real world, life (and trading) is much more difficult.

If you have spent any time in the market you know how hard it is to consistently make money. In reality, drawdown period from trendless markets, unexpected news releases, and unforeseen events push markets up and down, often violently. Trend-following trader or not, your mental discipline is taxed daily. On top of that, keep in mind that no one can guarantee your profits, whether you start trading with $5,000, $500,000 or $5 million!

Another wrong question is, “What is the right amount of starting capital?” No dollar amount – too little or too big – allows you to sit back and assume your starting capital alone is the pivotal key to success. Rather than focusing on starting capital, we suggest you decide how you are going to trade. This decision requires answering what we believe to be the right questions, and here are five of them:

How do you determine what market to buy or sell at any time?
How much of a market do you buy or swell at any time?
How do you determine when to buy or sell a market?
How do you determine when to get out of a losing position?
How do you determine when to get out of a winning position?

Most traders only answer the third question. Those traders try to find a method to determine when to buy or sell a market (entry and exit). They leave the other four questions unanswered.

Gold offers profit potential. Is Gold a great invesment?

2008-03-19T08:59:00.000-07:00

We come to the most important part of the research -- making a profit. As the continuation of last article about the gold a hedge against a falling dollar. Can gold investing be profitable? Well, in the last previous years, gold has more than doubled in price. And that yes, gold can be a very profitable investment vehicle, if your timing is right. But hos does it compare to a more typical investment?

for the sake of comparison. The total return of the Dow Jones Industrial Average (DJIA) as it compared to the one, three, five and 10-years returns of the spot gold price. The results were extremely interesting. None of the periods showed that gold beat the DJIA more often than 40.6% of the time. Although there were times where gold profits were quite large, over the longer term, gold fell short.

In both of the previous research results between the inflation and the dollar hedge, we saw that gold has glittered in the longest researched time period and fallen short in all other time frames. In this case, investing in gold for the very long term has been very disappointing.

So I gold a great investment? There are three claims on this research, the first two claims is that "gold is a hedge against inflation" and "gold is a hedge against a falling dollar" are debatably true. But as far as profits are concerned. Investing in equities is by far more profitable than investing in the gold market.

Is Gold a hedge against a Falling Dollar?

2008-03-07T23:36:00.000-08:00

Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. This is to better prepare the retail trader to participate in the currency market.

Is gold the great investment it's said to be?

SPOT GOLD VS. INFLATION

First, we decided to investigate the claim that gold is a hedge against inflation. A hedge can be considered to be something that protects you against a financial loss. Simply stated, this means that gold will increase at or above the rate of inflation, thus protecting the buying power of your investment.

We decided the best way to present the results of this research would be to copy the way mutual funds present their historical results: one-year, three-year, five-year, 10-years results and since inception. We decided to go one step further and show not just one static date but rolling period.

SPOT GOLD VS. THE FALLING DOLLAR

In our studies, we claim that "gold is hedge against a falling dollar." This claim has baffled us -- not the possibility that gold would protect against the falling dollar, but why is that of great importance to those of us who live in the US.

Almost all of the business we do is in dollars -- mortgage, insurance, food, health care, and so forth. None of these would be affected by a change in the international value of the dollar against other currencies, so under normal circumstances the change in the value of the dollar would be normal!

We performed a similar analysis with the spot gold (GC) price vs. the US Dollar Index (DX). The US Dollar Index began trading on the New York Board of Trade in 1986, and is considered the barometer of the value of the US dollar against the currencies of the G-10 nations. In each graph, you can see there are times when the price of spot gold protects against the changing value of the dollar. But in none of the time frames we studied did gold protect any better than 50% of the time!

As in the previous research on gold vs. inflation, there is one instance in which gold really does hedge against a falling dollar. When the DX began trading in 1986 the price of gold was $368.24 and the dollar index stood at 103.59. As of August 31, 2006, the price of spot gold was $623.50 (a 69.3% increase in value) and the DX was at 85.02 (a 17.9% decrease in value).

So is gold really a hedge against a falling dollar? From the research, it appears that for most of the time studied the opposite was true -- gold actually trended the same as the value of the dollar. But again in the long term , gold did a great job of hedging against the falling dollar!

Dangerous Secrets for Automatic FOREX Profits

2008-03-01T02:43:00.000-08:00

Your chance to really turn $10,000 into a Million in less than 10 years!!

The Forex of the FX market can be traded from anywhere in the world from a laptop, from a standard pc, from an internet cafe, etc; hundreds of thousands trade from home everyday and some make an INCREDIBLE living from trading. This is possible because the FX market is truly an incredible market on a part or full time basis. But... there are serious caveats....

Some of you reading this article have traded for a long time. Possibly some stocks, futures -- usually Eminis or regular commodities like beans, corn or wheat. Others of you have probably traded the financials, bonds, eurodollars, and currencies on the futures exchanges. Or like me, for years have traded any market that can be bought or sold profitably -- including Forex. Some of you who are still researching the business haven't yet started trading anything yet... and you are the lucky ones!

You are going to be presented with an unprecedented trading advantage that I couldn't have imagined 30 years ago when I started. Opportunities exist which can permanently change your life for the better, if you proceed correctly.

Primarily in the last five years, there has been a growing revolution of small players trading the bank Forex instruments. There is tremendous hype played out on late night television about how it is so easy to make thousands of dollars just following some green or red arrows on a screen. "I quit my job. It's the best thing I've ever done. There's nothing to it!" claims one fetching lady on TV. Type FOREX into Google and you will find over 44,000,000 results. Type in Soybeans, you only get 7,400,000 results.

It could be very easy to think this Forex investment option is just some more sucker bait or simply a lateral blip in our increasingly electronic trading way of life. It could easily be that for some, but the majority of serious traders might want to get more involved. Why? Some of the best risk/reward opportunities on the planet are only available on the Forex market.

Forex Market Promotion
There is no need for me to make a large production about all the details of Forex.

There are tons of free books filled with clear details. There are also many reliable sources of information on the web which help with this. One typical example is Investopedia.com.

Investopedia Says: “The foreign exchange (also known as “forex” or “FX”) market is the place where currencies are traded. The overall forex market is the largest, most liquid market in the world with an average traded value that exceeds $1.9 trillion per day and includes all of the currencies in the world.

There is no central marketplace for currency exchange, rather, trade is conducted over-the-counter. The forex market is open 24 hours a day, five days a week, with currencies being traded worldwide among the major financial centers of London, New York, Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris, and Sydney – spanning most time zones.

The forex is the largest market in the world in terms of the total cash value traded, and any person, firm, or country may participate in this market.”

Then, this free service goes on in detail to help individuals create a Medium-Term Forex Trading System which they claim should require less capital to trade than either a short term system or a long term system. According to them, short term system require large capital due to the high leverage needed to profit from small movements, while long term systems require large capital to cover market volatility against open positions.

This is just one example of the rampant advertising of ways and methods to make money in Foex. It seems everyone knows how to profit in this “new” market. Hundreds of auctions a day on Ebay advertise “Holy Grails” for operating in Forex.

Choose wisely when trading forex

2008-02-23T00:47:00.000-08:00

You will be facing some pitfalls when you are trading Forex if you are poorly educated and using the incorrect tools. The smartest thing that a person can do is begin small so that you can see if trading Forex is something that you will be good at and want to continue doing on a larger scale. Traders are able to open mini Forex accounts with just $50 and if they should find that this is not for them they are able to easily exit and only be out the initial $50 investment.

Choosing to trade Forex can be a very risky endeavor even if you think you have the perfect strategy in place. You need to be well educated on how to correctly use the knowledge and tools that can easily improve your chances of making some nice money. So basically if you are not well informed before you begin trading you are setting yourself up for a fall. Here is where online Forex trading can be beneficial.

Being highly accessible is an enormous benefit of trading forex online. You are able to make trades no matter what time of day it might be. All online Forex transactions can be seamlessly conducted from the comfort of your own home.

Almost everyone will agree that another huge benefit to trading Forex online is that zero fees are taken from your transactions. So trading online can really improve your potential profit margin. You as a trader can conduct a transaction with any seller at any time of the day no matter where either of you happen to reside.

When you are looking to enter the world of Forex trading you need to locate the platform that will provide you with the best spread. Money from all over the world is very often traded in pairs and the various forex trading platforms are making from the different spreads so your best shot at turning a great profit is finding a platform with a super competitive spread.

Before you get overly excited about looking for a competitive spread on a forex platform you should also know that this can increase your trading expenses as well. You want to educate yourself before you begin trading and select a trading platform that you are going to be comfortable doing business on.

Forex Scams: How to Spot Them a Mile Away

2008-01-28T05:59:00.000-08:00

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 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 plan 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 prospective 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 opportunities foreign currency trading has to offer.

How can you learn Trading?

2007-12-07T00:26:00.000-08:00

My own bias, as long-time readers are no doubt aware, is that learning how to trade is not a matter of finding the ideal indicator or trading pattern. Rather, trading is a performance skill, not unlike chess or baseball. That means that trading consists of component skills that must be practiced and refined over time. No amount of self-help psychology or trading seminars can substitute for screen time and the cultivation of skills related to pattern recognition, execution, and risk management.

Here are a few thoughts regarding ways of initiating this learning process:

1) Start With a Framework - At the mentorship program I developed for a Chicago prop firm, we used Market Profile as a framework for understanding bids, offers, the market auction, trends, consolidation areas, how markets establish value, and the interplay of time, price, and volume in the establishment of value. That isn't to say that there aren't other possible, valuable frameworks out there, but I find Jim Dalton's introduction to the markets to be user friendly and highly practical. It's a way to think about markets. Too often new traders try to start by learning technical patterns and setups, without really understanding how markets operate.

2) Start With Observation - I say this so often traders must get tired of hearing it. But protect your capital and protect your psyche during the learning process! Jumping into markets and trading against the pros without proper preparation is the way to learn bad trading and emotional habits. When I began my own learning process, I printed out charts every day of the ES, NQ, and ER2 markets; volume; and NYSE TICK. To this day, those charts fill several drawers of a filing cabinet in my office. Reviewing them every single day helped me *see* ranges and breakouts and patterns of confirmation and non-confirmation in market moves. Train your eye before you risk your capital. Learn one or two patterns well and build on those. Trading blogs and books are good sources for patterns that you might want to start with. Don't be too much in a hurry to "trade for a living". That's more performance pressure than most people can bear.

3) Start With Simulation - Yes, yes, I'm very aware that simulated trading (paper trading) is not the same as the real thing. But there's a reason basketball and football players engage in scrimmage games, and there's a reason chess champions practice their game outside of tournaments. Simulation enables you to make your mistakes and learn from them *before* you risk losing in the real performance. It's also helpful to first practice skills without the pressure of making money. If you can't make money in simulated trading, you certainly are not going to succeed going live. Simulation is the bridge between learning and doing; it's an important skills-builder. Check out programs, such as Ninja Trader, that offer free simulation versions. They help you practice, but also help you keep score and track your progress.

4) Start Thinking Like a Trader - That means knowing what traders look at when they assess markets, the economy, news events, etc. I subscribe to the Wall St. Journal, Financial Times, and The Economist for U.S. and global perspective among print publications. I also follow the linkfests of several of the best financial blogs, including The Kirk Report, The Big Picture, Trader Mike, Abnormal Returns, and Seeking Alpha. They do a great job of sifting through the news and current events. If you're learning stock picking, avail yourself of the excellent resources out there, such as Kirk's Screen Machine and the StockPickr site. Consider joining a community of traders that shares trading ideas, such as StockTickr. If you're learning market timing, consider tools such as Market Delta and Trade Ideas/Odds Maker. To see how other traders are doing it and learn from their examples, check out the VesTopia and Covestor websites and such online trading rooms as Woodie's CCI Club. (Please note that I have no financial affiliation with any of these sites or services).

If I were starting out as a trader now, I would keep it very simple. Along the lines of my recent post, I'd learn to identify ranges in markets and ways of determining when markets are likely to remain range bound vs. break out and trend. I'd practice just those two setups: breakout trades and "mean reversion" trades that move from one end of a range toward the other. I'd start very small, and I'd learn to set stops and target levels based upon repeated experience with these patterns.

If you were to aspire to join the PGA tour and compete against the best golfing pros, you'd undergo a lengthy process of preparation and practice. The stock market is the PGA tour of trading professionals and no less spade work is needed for success. You're most likely to succeed if you have a curriculum, a way to practice skills, and a way to learn from your successes and shortcomings. I've been trading since the late 1970s, and I still feel like a student of the markets. You're always learning, you're always developing. The successful traders are the ones that sustain this learning curve by embracing it.

How to manage money and do Forex Trading

2007-10-27T06:50:00.000-07:00

Money management is a bit like sex, we all do it but we don’t talk about it much yet, if you don’t employ proper money management you won’t win. Let’s look at some basics to do with money management.

Money management is the difference between making stellar gains or wiping your account out. Here are some important points to keep in mind when adding it to your forex trading strategy.

Risk & Reward

Risk goes with reward this is common knowledge yet, many traders try to restrict risk so much they actually create it and ensure they lose.

For example day traders think their taking small risks as their stops are close but their 100% guaranteed to lose over time because all short term volatility is random.

The risk looks small but the odds are stacked against them.

Another example of trying to restrict risk to much is trailing a stop to close and getting stopped out by normal volatility and sees the trader get stopped out to soon.

These traders need to make a study of standard deviation of price part of their forex education.

Betting to Win

Just like the successful card player you need to load up your bets on high odd hands and fold losers quickly. When you have a high odds trade denoted by your forex trading system up your bet size.

You here many traders bang on about risking 2% per trade but this is ridiculous for most traders.

For example on $10,000 account that’s $200! How close would your stop have to be?

To close and guarantee your stopped out by volatility.

If you want to win bet 10 – 20% on your high odds trades.

Stop placement

In forex trading most traders like to trade with stops behind support and resistance and you will notice on many occasions how many times a price spikes through the stop in the day and then closes below it.

If you can always use a “stop close” this will prevent from daily volatility hitting your stop in the day session or if you cant keep an eye on the market use “at or in the money options”

Trailing a stop

If you are long term trend following you need to give the market plenty of room to breathe and keep your stop back. Don’t jack it up after a day or so like most traders do - leave it alone. When you have good profits move it behind key support say at 40 day moving average penetrated on a close basis which works well.

If you want to follow long term trends, you are going to have to accept that you will give a lot back at the turning point - but if you get 60% of the major trends you will do well.

Targets

I find stop trailing hard and like to work with a target and get out when its hit.

If the move carries on so what? I am happy, as I got what I want.

In shorter term swing trading, targets are essential as these smaller profits can disappear quickly.

Finally Remember This:

How you deal with risk, will be the difference between you losing or winning at forex trading. Try and restrict risk to much and you will guarantee you lose, but take meaningful risks at the RIGHT time, with courage and conviction and you could enjoy fantastic currency trading success.

Remember the old gamblers saying:

“There’s a time to hold them, a time to fold them and a time to get out of town fast”

Its very applicable to forex trading and money management!

How Can I learn Trading?

2007-10-24T09:46:00.000-07:00

A blog reader recently asked me this simple, but not-so-simple question. My book Enhancing Trader Performance an attempt to describe the process by which traders (and professionals in other fields) develop expertise, and I know of quite a few traders who are using ideas from the book to guide their own development.

It's difficult to know where to start, however. There are many mentoring services out there, but many are quite pricey. That's a real problem for beginning traders who may be flush with ambitions, but not necessarily with cash.

My own bias, as long-time readers are no doubt aware, is that learning how to trade is not a matter of finding the ideal indicator or trading pattern. Rather, trading is a performance skill, not unlike chess or baseball. That means that trading consists of component skills that must be practiced and refined over time. No amount of self-help psychology or trading seminars can substitute for screen time and the cultivation of skills related to pattern recognition, execution, and risk management.

Here are a few thoughts regarding ways of initiating this learning process:

1) Start With a Framework - At the mentorship program I developed for a Chicago prop firm, we used Market Profile as a framework for understanding bids, offers, the market auction, trends, consolidation areas, how markets establish value, and the interplay of time, price, and volume in the establishment of value. That isn't to say that there aren't other possible, valuable frameworks out there, but I find Jim Dalton's Introduction to the markets to be user friendly and highly practical. It's a way to think about markets. Too often new traders try to start by learning technical patterns and setups, without really understanding how markets operate.

2) Start With Observation - I say this so often traders must get tired of hearing it. But protect your capital and protect your psyche during the learning process! Jumping into markets and trading against the pros without proper preparation is the way to learn bad trading and emotional habits. When I began my own learning process, I printed out charts every day of the ES, NQ, and ER2 markets; volume; and NYSE TICK. To this day, those charts fill several drawers of a filing cabinet in my office. Reviewing them every single day helped me *see* ranges and breakouts and patterns of confirmation and non-confirmation in market moves. Train your eye before you risk your capital. Learn one or two patterns well and build on those. Trading blogs and books are good sources for patterns that you might want to start with. Don't be too much in a hurry to "trade for a living". That's more performance pressure than most people can bear.

3) Start With Simulation - Yes, yes, I'm very aware that simulated trading (paper trading) is not the same as the real thing. But there's a reason basketball and football players engage in scrimmage games, and there's a reason chess champions practice their game outside of tournaments. Simulation enables you to make your mistakes and learn from them *before* you risk losing in the real performance. It's also helpful to first practice skills without the pressure of making money. If you can't make money in simulated trading, you certainly are not going to succeed going live. Simulation is the bridge between learning and doing; it's an important skills-builder. Check out programs, such as Ninja Trader, that offer free simulation versions. They help you practice, but also help you keep score and track your progress.

4) Start Thinking Like a Trader - That means knowing what traders look at when they assess markets, the economy, news events, etc. I subscribe to the Wall St. Journal, Financial Times, and The Economist for U.S. and global perspective among print publications. I also follow the linkfests of several of the best financial blogs, including The Kirk Report, The Big Picture, Trader Mike, Abnormal Returns and Seeking Alpha. They do a great job of sifting through the news and current events. If you're learning stock picking, avail yourself of the excellent resources out there, such as Kirk's Screen Machine and the StockPickr site. Consider joining a community of traders that shares trading ideas, such as StockTickr. If you're learning market timing, consider tools such as Market Delta and Trade Ideas/Odds Maker. To see how other traders are doing it and learn from their examples, check out the VesTopia and Covestor websites and such online trading rooms as Woodie's CCl Club (Please note that I have no financial affiliation with any of these sites or services).

If I were starting out as a trader now, I would keep it very simple. Along the lines of my recent post, I'd learn to identify ranges in markets and ways of determining when markets are likely to remain range bound vs. break out and trend. I'd practice just those two setups: breakout trades and "mean reversion" trades that move from one end of a range toward the other. I'd start very small, and I'd learn to set stops and target levels based upon repeated experience with these patterns.

If you were to aspire to join the PGA tour and compete against the best golfing pros, you'd undergo a lengthy process of preparation and practice. The stock market is the PGA tour of trading professionals and no less spade work is needed for success. You're most likely to succeed if you have a curriculum, a way to practice skills, and a way to learn from your successes and shortcomings. I've been trading since the late 1970s, and I still feel like a student of the markets. You're always learning, you're always developing. The successful traders are the ones that sustain this learning curve by embracing it.

Brett N. Steenbarger, Ph.D. is Associate Professor of Psychiatry and Behavioral Sciences at SUNY Upstate Medical University. Dr. Steenbarger is an active trader and author of The Psychology of Trading (Wiley, 2002). He writes feature columns for the MSN Money website (www.moneycentral.com) and several trading publications, including Stocks Futures and Options Magazine (www.sfomag.com). These articles and a daily trading weblog are linked at Greatspeculations.com.

First 20 Ways to Avoid Losing Money Trading FOREX

2007-10-23T17:38:00.000-07:00

1) Knowledge Deficiency – Mostly, the new Forex traders does not take time to learn what drives the currency rates at all (usually learning the primary fundamentals) but then when there are news or there are statements that is due out, they must have to close out their positions and sit out the best on trading opportunities. They are only taught to trade after the market calms down. In essential to this, they miss the whole move and then they trade random noise that only follows a fundamental price move. Just think about this for a moment, about technically trading the aftermath of a price move; there really is no potential at all.

2) Overtrading - When one trades often with tight stops and tiny profit targets, that will only make the broker rich. Ones desire to "just" make a few hundred dollars a day by locking in tiny profits whenever possible is losing some strategies.

3) Over leveraged - When we say Leverage - it is a two way street. The brokers would want you to use high leverage because that would mean more spread in income because your position size, it determines the amount of spread income;the bigger the position the more spread income the broker earns.

4) Relying on Others – Real traders do play a lone hand; they are the ones making their own decisions and they do not rely on others to make their own trading decisions for them; there is definitely no halfway; either you trade for yourself or have someone else do the trading for you.

5) Stop Losses – When putting tight stop losses with retail brokers, it means as a recipe for disaster. Once you put on a trade commit to a reasonable stop loss limit that allows your trade a fair chance to develop.

6) Demo Accounts – Broker demo accounts are a shill game of sorts; they are not as time sensitive as the known real accounts are, and therefore it rather gives the impression that time sensitive trading systems, such as short-term moving average crossovers can be rather consistently profitably traded; Once you get to deal starting with a real money, reality sets in.

7) Trading During Off Hours – Bank Fx traders, option traders, and hedge funds is known to have a huge advantage during off hours; they can push the currencies around when there is no volume that is going through and the end game is that new traders got fleeced trying to trade signals. There is only one signal during the off hours - better stay out.

8) Trading a Currency, Not a Pair – When you get to being right about a currency is half a trade; success of failure is defined upon being right about the second currency that makes up the pair.

9) No Trading Plan - Making money is not a trading plan. A trading plan is a blue print for trading success; it is spelled out on what you see your edge as being; if you do not have an edge, and then you don't have a plan, then most likely you will wind up a statistic (part of the 95% of new traders that lose and quit).

10) Trading Against Prevailing Trend – There is a huge difference between buying cheaply on the way down and just simply by buying cheaply. What was a low price before would quickly becomes a high price when you are trading against the trend.

11) Exiting Trades Poorly – If you have put on a trade and you have seen that it is not working, make sure that you just exit properly; do not compound the damage. If you are in a winning trade, then do not talk yourself out of the position because you are bored or that you want to relieve your stress; being stressed is just a natural part of trading so better get used to it.

12) Trading Too Short-term – If you are having a profit target the is less than 20 points then you better do not do the trade; the spread you pay to enter the trade only makes the odds way against you when you go for these tiny profits.

13) Picking Tops and Bottoms - When you look for bargains, it works really well at the supermarket but don't even try on trading foreign exchange; try to trade in the direction the price is going and the results will definitely improve.

14) Being Too Smart – Usually the most successful traders are known to be high school graduates. They tend to keep it simple and just don't even sometimes bother to look beyond the obvious; so their results? are simply excellent!

15) Not Trading Around News Time – Most of the big moves occur around news time. The volume is usually high and the moves are real; there is no better time to trade fundamentally or technically other than when news is released; this is when the real money adjusts their positions and as a result the prices changes reflect serious currency flow (when being compared to quiet times when Bank traders rle the market with their customer order flow).

16) Ignore Technical Condition – When you determine whether the market is over-extended long or over-extended short is a key determinant of a near time price action. Spike moves only often ocrrus when the market is all in one way.

17) Emotional Trading – When you are not doing some pre-plan your trades essentially it is a thought and not an idea; thoughts are emotions and it is considered as a very poor basis for doing trades. Do people generally say intelligent things when they are upset and emotional? hmm.. I don't think so!

18) Lack of Confidence – Confidence only comes from successful trading. If you got to lose money early in your trading career, it is indeed very hard to gain your true confidence; the trick to this is that you don't go off half-cooked; learn the business first before you do trading.

19) Lack of Courage to Take a Loss – There is nothing gutsy about riding a loss, it is just mere stupidy and cowardice. It takes a lot of guts to accept your losses and wait for tomorrow to try again. Getting married to a bad position only ruins lots of traders. The thing that one must have to remember is that the market does crazy things often so don't get married to any one trade; it is just simply a trade. One good trade will not make your trading a known success; instead it is rather its monthly and annual performance that defines a good trader.

20) Not Focusing on the Trade at Hand – There is naturally no room for fantasizing in successful trading. Counting up and mentally spending profits you have not made yet is mental masturbation and does you no good at all. It is the same with worrying about a loss that has not happened yet. Instead, focus on your position and have a reasonable stop loss in place at the time you actually do the trade. Then be like an astronaut - in a sense where you have to just sit back and enjoy the ride; no sense in worrying because you have no real control; the market will do what it simply wants to do.

US Dollar: 90% Chance for October Rate Cut!

2007-10-20T22:15:00.001-07:00

US Dollar: 90% Chance for October Rate Cut!

G7 Meeting: Clearest Trend is Yen Strength
Canadian Dollar Hits 33 Year High, RBNZ Rate Decision Next Week

US Dollar: 90% Chance for October Rate Cut!

The price action in the financial markets this week is a testament to how quickly expectations and sentiment can change. We started the week with nearly everyone in the market agreeing that the Federal Reserve will not cut interest rates at the end of the month and now implied Fed Fund futures are pricing in a 90 percent chance of an October cut. Taking a step back, aside from US consumer prices, the data released this week the US was mostly second tier, which means that they should not have been all that market moving. So what caused the dramatic change in interest rate expectations? Continued weakness in the housing market, disappointing earnings in the banking sector and a 550 point drop in the Dow (Monday to Friday). With HSBC downgraded, Bank of America reporting a 32 percent decline in earnings and Wachovia reporting a 10 percent drop, the 20th Anniversary Week of Black Monday 1987 has proven to be as brutal on a point basis as many of the October crashes that we have seen in the past. The rise in oil prices creates additional risk for an already vulnerable US economy and calls for a recession are returning. More immediately however, we need to turn our focus to today's G7 meeting. The communiqué should be released this evening. According to Dow Jones, the draft of the statement indicates that finance ministers will be calling for the Chinese Yuan to increase more quickly in value. The Euro, US dollar, Japanese Yen and the Dow will probably not be mentioned in the official statement. The biggest currency to be impacted will therefore be the Japanese Yen. Next week, we have more housing market data from the US as well as durable goods due for release. The market's primary focus will be on the following Wednesday's October 31st FOMC meeting but don't write off the potential for a continuation move in the equity and currency market if there are any additional surprises in the official G7 communiqué.

4 Simple Steps of a Professional Forex Trader

2007-10-20T22:11:00.000-07:00

Becoming a professional forex trader is the dream of many and for most it remains just that - but if you follow the simple tips enclosed, you could change your financial future forever and be making big consistent gains, in just an hour or so a day.

FACT:

95% of traders lose all their money, yet everything about forex trading can be learned, it’s just the majority of traders don’t get the right forex education, or have the wrong mindset to apply what they have learned.

Anyone one can become a successful forex trader from home however you need to do the opposite of the majority, it’s not hard to do and do your homework.

1. Adopt the Mindset For Success

Most traders are lazy or naive or both.

They read about how easy it is to make money and think someone else can give them success.

Most of the information sold on the net is junk and wont help you win and even if you do find some good education, you cant follow it blindly, you need to understand it.

If you don’t understand how and why your system works, you wont have confidence to apply it with discipline and you will lose.

Keep in mind if you don’t have the confidence and discipline to follow your system you don’t have one!

If you like to blame others and don’t like responsibility don’t trade forex, it’s as simple as that.

2. Work Smart Not Hard

You don’t need to work hard you need to work smart and this means only learning what is relevant.

Many traders think the more knowledge they have the better but you don’t get rewarded for effort in forex trading, you only get rewarded for being right.

In 1983 legendary trader Richard Dennis proved this point in spectacular fashion. He took a group of people who had never traded before and taught them to trade in 14 days – the result?

They made him a $100 million dollars and went on to become some of the most successful traders of all time.

Working smart means working on a forex trading strategy that will get the odds on your side and that’s what we will look at next.

3. A Forex Trading System for Success

I am amazed at how many traders simply base their systems on logic that doesn’t work, for example:

Most novice traders try day trading yet all short term volatility is random so they can’t win, yet they don’t stop to think how dumb day trading is.

They believe in scientific theories that tell them they can predict the market in advance and don’t stop to think that predicting is impossible.

If it were possible, we would all know the price in advance and their would be no market!

The best you can do is trade with the odds on your side.

Of course, you will lose but your profits should be bigger than your losses and you can pile up big gains over time.

You can build your own forex trading system easily, just educate yourself on.

- Support and resistance and breakouts
- Time your trades with momentum oscillators
- Keep it simple trend lines and 2 -3 confirming indicators max

If you build a system based upon the above it will be simple to understand, simple to apply and will be robust.

Don’t try and be too clever and cram too much into your system. If you do, it will have too many elements and break in the real world of trading.

If you do the above, you will have a simple robust system that you can apply in an hour a day or less.

One other point, I constantly read writers tell you to educate yourself all the time, study your profits and losses etc– Rubbish! If you have a system you believe in leave it alone.

You will have winners and losers but if it’s soundly based then you simply should just apply it.

4. Building Long Term Gains

What is a realistic amount to aim for?

If you made 100% per annum you will be up there with the top traders in the world and you don’t need to do many trades – keep your trading focused on high odds trades only.

So there you have it, a simple plan to live the dream of becoming a professional forex trader from home.

It’s a challenge but one anyone can take up and anyone can win – if they want to.

Are you up for the challenge?

If so, welcome to the worlds most exciting and lucrative business

Forex Training: A quick guide to learning Forex Trade

2007-10-20T01:20:00.001-07:00

In this Forex course we will review some steps you need to take care before you venture into your trading journey. Most traders venture into the Forex market with little or no experience in the Forex market. This results in painful experiences like loosing most of the risk capital, frustration because it seemed so easy to make money, etc.

The first thing you need to realize is that, it is not easy to make money. As every other endeavor in life, where important rewards are to come after mastering it, you need to work hard. You need to get very well educated and experienced before having the possibility to receive important rewards on it. The key on mastering the Forex market relies on commitment, patience and discipline.

Ok, you have decided you are going to trade the Forex market, you have seen several advertisings featuring how easy is to make money in the Forex market. You might think this is your opportunity to reach your financial freedom, right away, time is money, why waiting any longer if you have the opportunity to make money now. I know, I've been there, but you have a chance now, I didn't, no body told me what I am going to tell you.

We, Forex traders, make transactions based on a set of rules. These sets of rules are what we call a Trading System. Our systems tell us the exact time where we need to get in the market and out the market in order to make a profit (i.e. buy low sell high.)

Creating a system is the first big step you need to take care first. Why is this so important? Because you need to build a system that suits your personality, otherwise you are going to find hard to follow it, thus hard to profit from. A system can be based on technical indicators or what we called a mechanical system or based on experience and intuition or what we call discretionary systems. I highly recommend using and trying first a mechanical system, because discretionary systems are dangerous during the early stages of a Forex trader (can lead to indiscipline.) With experience, on later stages, you will find out which signals work better and which ones to avoid.

The next step in this Forex course is to try your system on a demo account. Most Forex brokers offer a demo account, an account with virtual money. This is an excellent choice to test your trading system as there is no money at risk. In this step you will figure out if the strategy works for you. If you feel comfortable trading it, then it is most likely to produce good results. How much time should you stay in this step? It varies, but you shouldn't go one step further until your system gets consistent profitable results over a period of time. It can take many months, but remember, you need to be patient.

You must be honest to yourself; you need to take every single signal generated by your system, not only the signals you thought were going to work, otherwise, you are going to have problems in the next two steps.

Ok, by know you had consistent profitable results on your demo account. You might think its time to go full. Nope, nope, nope. There is a big difference between trading a demo and a real account. The most important difference lies on emotions (fear, greed, anger, etc.) These are psychological barriers that affect every single decision made by traders regardless of what he/she is trading (stocks, bonds, Forex, futures, grains, etc.) These emotional factors, in my opinion, are the most determinant factor that separates profitable traders from the others.

The next step in this Forex course is specially designed to deal with emotions and to confirm the results obtained in the prior step (consistent results in a demo account.) At this step you need to trade in a real account with limited funds. Some brokers offer fractional lot trading. Meaning you are able to trade any desired amount (even cents.) The important thing here is that these emotions we've been talking about are present only when there is real money at risk. At this stage, you are going to see if you are really comfortable trading your system and if you are able to trade with such system, remember different systems produce different emotions. If you are able to produce similar results than those obtained in a demo account, then ready for the next step. If you didn't, then you might need to create another system, there is chance your system never fit you. If you created consistent profitable results on this stage, you have a chance to produce similar results in the next one, on the other hand, if you didn't produce good results in this stage, you will not be able to make on the next stage. Remember, you need to do things right, and be honest to yourself.

The last stage is trading in a real account with sufficient funds. If you are at this stage, and have passed successfully every prior stage, then you have a chance to make it, go ahead and try it, you need to be confident in yourself and in your system, your strategy have already produced consistent profitable results, there are reasons to believe you are going to make it. Very few traders fail at this stage (if passed successfully prior stages.)

Trading successfully is no easy task, it requires a lot of work, patience, discipline, and education. By completing the steps outlined in this Forex course, you have a chance to produce profitable results. I repeat it again, you need to be honest to yourself about the results obtained in every stage. Some times you might need expert guidance regarding your system development strategies.

Things You Should Know About Forex Trading

2007-10-20T00:21:00.000-07:00

Do you know how hard is it to make money trading the Forex Market? I think you all ready know that. How much time does it take to actually be able to make a living when you trade on the Forex Market? These and there are some other important aspects of trading that are important that is to be discussed now.

Trading the Forex market has got a lot of benefits over other financial markets, and among these most important facts are: superior liquidity, better execution, 24 hours market and others. Traders and investors see the Forex market as a new speculation or diversifying opportunity because of these benefits. Does it mean that it is to make money when you try and trade the Forex Market? No, not at all.

Forex brokers agree that 90% of traders end up losing money, only 5% of traders end up at break even and only 5% of them achieve consistent profitable results. With these statistics shown, this is not considered as an easy task at all. But then, is it hard to master any other endeavor? Not everything when you get to consider the writers, musicians and other types of businesses, the success rates are about the same, there a whole bunch of them who never get to the top.

Now the we know that it is not that easy to achieve a consistent and profitable results, a must question would be, Why is it that some traders succeed while others fail to trade successfully in the Forex market? There is no hard answer to this question nor a recipe to follow to achieve consistent profitable results. What we do know is that traders that reach the top think different. That's right, they do not follow the crowd, they are an independent part of the crowd.

A few things that separate the top traders from the rest are:

Education: They are very well educated in the matter; they have chosen to learn every single and important aspect of trading. The best traders know that every trade is a learning experience. They approach the Forex market with humility, otherwise the market will prove them wrong.

Forex Profits Book and Video Program!! Click Here!

Forex Trading Strategy - They Say a Trade is a Two Step Process

2007-10-20T00:02:00.000-07:00

We may have seen some new traders that have such great winning results even in just a short period of time but then, it is often found that they will lose those gains just as quickly at the same time. These traders don't do anything different and will come to us for even some sort of an insight. The reason behind this is that usually the same in that they tend to forget to first identify the mood of the market before even finding their own trade, or just make a research out of it.

What it meant is that to identify first the direction of the trend on the daily chart and then start finding your own trade. If you found that the daily trend is up, then you only have to look for buys and if the daily trend is down, then only look for sells. However, if the daily chart shows a range bound market, then you have to look to buy above support and sell below the resistance. If you are not sure of the trend that is shown, then the play is to move onto another currency paid where the trend seems obvious.

We can see many traders that are buying the pullbacks on a currency paid that is in a strong uptrend and the do enjoy such tremendous success. Then when the trend stalls out or changes, they tend to continue to buy and may lose all of the gains. Being on the right side of a trending move can even results in some great trades while grading against the trend can result to many quick losses.

So A good way to finding this is to see if this may be one of your problems is to run a reports on your FX Trading Station to see all of the trades you have made. Then take a look at the daily chart and take a note where you entered into the trade. So after that, you have to now ask yourself this, how your results would have been if you had only traded in the markets where you could confidently identify the trend. You may find that adding this simple first step of identifying and trading with the daily trend increases your chance of success.