Forex autotrading is a trading strategy where forex buy and sell orders are placed automatically based on an underlying system or program. The buy or sell orders are sent out to be executed in the market when a certain set of criteria is met.
Autotrading - and systems, or programs to form buy and sell signals -, are used typically by active traders who enter and exit positions at a much higher rate than the average investor. There are also a wide range of systems that differ on the set of criteria used to generate the buy or sell signals. Typically, the criteria used are more technical in format - in that they focus on price movement and technical indicators[1].
History
Forex autotrading originates at the emergence of online retail trading, since about 1996 when internet-based companies created retail forex platforms that provide a quick way for individuals to buy and sell on the forex spot market. Nevertheless, larger retail traders could autotrade Forex contracts at the Chicago Mercantile Exchange as early as in the 1970s.
Types
Today, there are two major types of Forex autotrading:
Fully automated or robotic Forex trading: This way of autotrading is very similar to algorithmic or black-box trading, where a computer algorithm, or Expert Advisor (EA), decides on aspects of the order such as the timing, price, or quantity or initiation of the order without human intervention. Users can only interfere by tweaking the technical parameters of the program; all other control is handed over to the program. Examples of such robotic EA’s are, Fapturbo, PipZu etc.
Signal-based Forex autotrading: This autotrading mode is based on the concept of auditing traders all over the world and making their strategies available to anyone interested in the form of signals. Then traders have the ability to automatically convert any of these signals to real trades in their broker accounts. Human interference here is augmented; signals come from live traders while users can actively select to follow a Signal Provider whose strategy fits their risk profile. Examples of such platforms are: ZuluTrade, Rent a Signal etc.
Advantages
An automated trading environment generates fewer trades per market than a human trader can handle, it can of course replicate its actions across multiple markets and timeframes. Furthermore, it is far less restricted in the number of intermarket opportunities it can observe and act upon. An automated system is also unaffected by the psychological swings that human traders are prey to. This is particularly relevant when trading with a mechanical model, which is typically developed on the assumption that all the trade entries flagged will actually be taken in real time trading
Signal Provider based models have the advantage that they offer traders the opportunity to follow previously successful signal providers or strategy with the hope that the advice they offer will continue to be accurate and lead to profitable future trades. An added advantage is the accessibility offered by these programs as traders do not need to have expert knowledge on Forex but only have to select a system, making Forex trading possible to anyone.
Forex autotrading services can be offered for free, on a spread basis (ZuluTrade) or on a one time fee basis (Fapturbo).
Regulation
As an unregulated and highly profitable market, the Forex market is extremely attractive to scammers. Forex autotrading, as it brings Forex trading to the masses makes even more people susceptible to frauds. Bodies such as the NFA and the SEC issue warnings and rules to avoid fraudulent Forex trading behavior on the web
Tuesday, October 27, 2009
Monday, October 26, 2009
Forex trading strategy #4 (Simple 1-2-3 swings)
And here we are again talking about the strategy that withstood the test of time. This Forex trading method is based on the same study of defining support and resistance levels and trading upon the fact of their violation.
A trading setup requires only an open chart and no restrictions for the currency or timing preferences.
Entry rules: Once the price makes it through the “pivot Line” - dotted white line on the figure below (drawn using the latest price peak) - and closes above (for uptrend) or below (for downtrend) the line buy/sell accordingly.
Exit rules: not set. However, exit can be found using Fibonacci method; or traders can measure the distance between point 2 and point 3 and project it on the chart for exit.
Additions: as an additional tool traders can use MACD (12, 26, 9). The rules for entry then will be next - let’s take a SELL order:
When MACD lines cross downwards, you look for 1-2-3 set-up to form. When the price starts “attacking” the “pivot Line” you check that MACD is still in SELL mode (two lines are heading down). Once the price closes below the “pivot Line” – place Sell order.
Same chart: MACD (12, 26, 9) is added.
A trading setup requires only an open chart and no restrictions for the currency or timing preferences.
Entry rules: Once the price makes it through the “pivot Line” - dotted white line on the figure below (drawn using the latest price peak) - and closes above (for uptrend) or below (for downtrend) the line buy/sell accordingly.
Exit rules: not set. However, exit can be found using Fibonacci method; or traders can measure the distance between point 2 and point 3 and project it on the chart for exit.
Additions: as an additional tool traders can use MACD (12, 26, 9). The rules for entry then will be next - let’s take a SELL order:
When MACD lines cross downwards, you look for 1-2-3 set-up to form. When the price starts “attacking” the “pivot Line” you check that MACD is still in SELL mode (two lines are heading down). Once the price closes below the “pivot Line” – place Sell order.
Same chart: MACD (12, 26, 9) is added.
5 minutes profitable gbpjpy system
5 minutes profitable gbpjpy system
First , i hope you can try it out and give me the result that you can catch.
this system only suitable for GBPJPY only and i have back test it and
i get 90% of winning trade and forward test and i get 22 winning trade
out of 25 trade but due to i cannot adjust my emotion so i lose it.so
here it is important to control your emotion if you want to use this
system because in a whole day it can be 5 trade!!!!
TIME FRAME : 5 minutes
Currency pairs: GBPJPY
SETTING: EMA 10 AND EMA 26
BUY: When 10EMA crosses the 26EMA upwards and the EMA difference is 8
pips or greater.
SELL: When the 10EMA crosses the 26EMA downwards and the EMA
difference is 8 pips or greater.
CONDITION ONE : when there is a buy trade is emerged (I call it as
signal bar,when the price between the two EMA was separate is at least
and cross up ,YOU NEED TO WAIT THE PRICE RETRACE AT LEAST 5 PIPS OR
MORE OR EMA 10.you only can enter the trade when there have a retrace
!!!
For sell trade also same as above but opposite ah!!
THAT ALL.
TAKE PROFIT : IN ASSIAN TIME YOU SHOULD TP 20 PIPS
IN OTHER TIME SESSION TP 30 PIPS
YOU CAN GRAB MORE PIPS WHEN YOU MASTER THIS SYSTEM .TRY IT UNTILL YOU WIN.
STOP LOSS : 40 PIPS
ADDITIONAL NOTE : sometime you need to learn how to close early to
reduce the stop loss level.
when you enter a trade and the price after retrace to EMA 26 within 8
candles i say RETRACE TO EMA 26 WITHIN 8 CANDLES.
Adjust your stop loss to 15 to 20 pips and try to break even.
sometime also when a price stop at a price three time you also need
to close it early
Don't try to enter a trade near a new announment .
Don't try more than 5% of your capital
don't try to enter two trade in a row except the price stall for 2
hours or more and separate again that is ok
First , i hope you can try it out and give me the result that you can catch.
this system only suitable for GBPJPY only and i have back test it and
i get 90% of winning trade and forward test and i get 22 winning trade
out of 25 trade but due to i cannot adjust my emotion so i lose it.so
here it is important to control your emotion if you want to use this
system because in a whole day it can be 5 trade!!!!
TIME FRAME : 5 minutes
Currency pairs: GBPJPY
SETTING: EMA 10 AND EMA 26
BUY: When 10EMA crosses the 26EMA upwards and the EMA difference is 8
pips or greater.
SELL: When the 10EMA crosses the 26EMA downwards and the EMA
difference is 8 pips or greater.
CONDITION ONE : when there is a buy trade is emerged (I call it as
signal bar,when the price between the two EMA was separate is at least
and cross up ,YOU NEED TO WAIT THE PRICE RETRACE AT LEAST 5 PIPS OR
MORE OR EMA 10.you only can enter the trade when there have a retrace
!!!
For sell trade also same as above but opposite ah!!
THAT ALL.
TAKE PROFIT : IN ASSIAN TIME YOU SHOULD TP 20 PIPS
IN OTHER TIME SESSION TP 30 PIPS
YOU CAN GRAB MORE PIPS WHEN YOU MASTER THIS SYSTEM .TRY IT UNTILL YOU WIN.
STOP LOSS : 40 PIPS
ADDITIONAL NOTE : sometime you need to learn how to close early to
reduce the stop loss level.
when you enter a trade and the price after retrace to EMA 26 within 8
candles i say RETRACE TO EMA 26 WITHIN 8 CANDLES.
Adjust your stop loss to 15 to 20 pips and try to break even.
sometime also when a price stop at a price three time you also need
to close it early
Don't try to enter a trade near a new announment .
Don't try more than 5% of your capital
don't try to enter two trade in a row except the price stall for 2
hours or more and separate again that is ok
GBPUSD Daily Forecast: October 26
GBPUSD Forecast:
A big surprise in UK GDP data on Friday hurt Sterling badly. The pair bottomed at 1.6298 and closed at 1.6303. Technically on daily chart below, it was a false breakout which usually trigger significant bearish momentum as price now back in the bearish channel area. The upper line of the bearish channel now became a resistance again, a good place to place a short position with only tight stop loss above it. The bias is bearish in nearest term targeting 1.6113 area. Immediate resistance at 1.6370.
USDJPY Daily Forecast: October 26
USDJPY Forecast:
As I had expected, the USDJPY had a bullish momentum on Friday. Like I said, a double top scenario failure tend to produce a bullish continuation scenario. The bias is bullish but we have to be careful at this phase. As you can see in my daily chart below, 92.50 area is very important and should be a strong resistance area. So I will stop place long position for now until we have a new phase of bullish scenario once we have consistent move above 92.50. Immediate support at 91.80. Break below that area should be seen as potential threat to the bullish scenario and lead us back towards 91.40 area.
USDCHF Daily Forecast: October 26
USDCHF Forecast
The USDCHF made a moderate bullish correction on Friday. Technically we might have significant movement here, as you can see in my h4 chart below, price is now challenging my trendline resistance. Note that we have 2 false breakout (circled) before, so if we have another false breakout this time, we can expect further bearish momentum. However, I think the current situation a different now as this time we are faced with a psychological level, 1.0000. A rejection to move below that area could trigger a significant bullish momentum and set up a bullish reversal scenario or at least, significant bullish correction. Immediate resistance at 1.0120 followed by 1.0166.
A big surprise in UK GDP data on Friday hurt Sterling badly. The pair bottomed at 1.6298 and closed at 1.6303. Technically on daily chart below, it was a false breakout which usually trigger significant bearish momentum as price now back in the bearish channel area. The upper line of the bearish channel now became a resistance again, a good place to place a short position with only tight stop loss above it. The bias is bearish in nearest term targeting 1.6113 area. Immediate resistance at 1.6370.
USDJPY Daily Forecast: October 26
USDJPY Forecast:
As I had expected, the USDJPY had a bullish momentum on Friday. Like I said, a double top scenario failure tend to produce a bullish continuation scenario. The bias is bullish but we have to be careful at this phase. As you can see in my daily chart below, 92.50 area is very important and should be a strong resistance area. So I will stop place long position for now until we have a new phase of bullish scenario once we have consistent move above 92.50. Immediate support at 91.80. Break below that area should be seen as potential threat to the bullish scenario and lead us back towards 91.40 area.
USDCHF Daily Forecast: October 26
USDCHF Forecast
The USDCHF made a moderate bullish correction on Friday. Technically we might have significant movement here, as you can see in my h4 chart below, price is now challenging my trendline resistance. Note that we have 2 false breakout (circled) before, so if we have another false breakout this time, we can expect further bearish momentum. However, I think the current situation a different now as this time we are faced with a psychological level, 1.0000. A rejection to move below that area could trigger a significant bullish momentum and set up a bullish reversal scenario or at least, significant bullish correction. Immediate resistance at 1.0120 followed by 1.0166.
Daily Forecast for Crosses: October 26
GBPJPY Forecast
The GBPJPY hit my long target at 153.20 on Friday, but whipsawed to the downside and closed significantly lower at 150.05. On my h4 chart below, we can see that 153.20 area is a very important resistance level and now you can see why that level became my target area during a bullish momentum The bias is bearish now targeting 147.03 but we seem to have a good support at 149.40 area. I think it’s a good idea to wait until we have a consistent move below that area before place a short position. Immediate resistance at 150.60 area. Break above that area could trigger further bullish momentum re-testing 153.20 area.
AUDUSD Forecast
The AUDUSD so far able to move outside the bullish channel with the lower line now become a resistance. Technically, this fact opens the door for further bearish correction scenario testing 0.9090 support area but short position is not recommended at this phase and I think I will stay out from the market for now. Key resistance level remains at 0.9270. Break above that area should continue bullish momentum targeting 0.9350 area before aim for 0.9500.
The GBPJPY hit my long target at 153.20 on Friday, but whipsawed to the downside and closed significantly lower at 150.05. On my h4 chart below, we can see that 153.20 area is a very important resistance level and now you can see why that level became my target area during a bullish momentum The bias is bearish now targeting 147.03 but we seem to have a good support at 149.40 area. I think it’s a good idea to wait until we have a consistent move below that area before place a short position. Immediate resistance at 150.60 area. Break above that area could trigger further bullish momentum re-testing 153.20 area.
AUDUSD Forecast
The AUDUSD so far able to move outside the bullish channel with the lower line now become a resistance. Technically, this fact opens the door for further bearish correction scenario testing 0.9090 support area but short position is not recommended at this phase and I think I will stay out from the market for now. Key resistance level remains at 0.9270. Break above that area should continue bullish momentum targeting 0.9350 area before aim for 0.9500.
Daily Forecast for Crosses: October 26
EURJPY Forecast
The EURJPY continued it’s bullish momentum on Friday, topped at 138.34 and closed at 138.12. The bullish scenario should remains intact but I think we are now in transition phase so we need to wait for further development. As you can see on my daily chart below, the pair is actually still move in a rectangle area with 138.68 level as the upper line, which should be a very important and strong resistance. CCI in overbought area and heading down suggesting potential downside correction. The bias is neutral in nearest term. Immediate support at 137.50. Break below that area should be seen as potential threat to the bullish outlook. Break above 138.68 area should trigger further bullish momentum and lead us into a new phase of bullish scenario.
The EURJPY continued it’s bullish momentum on Friday, topped at 138.34 and closed at 138.12. The bullish scenario should remains intact but I think we are now in transition phase so we need to wait for further development. As you can see on my daily chart below, the pair is actually still move in a rectangle area with 138.68 level as the upper line, which should be a very important and strong resistance. CCI in overbought area and heading down suggesting potential downside correction. The bias is neutral in nearest term. Immediate support at 137.50. Break below that area should be seen as potential threat to the bullish outlook. Break above 138.68 area should trigger further bullish momentum and lead us into a new phase of bullish scenario.
EURUSD Daily Forecast: October 26
EURUSD Forecast:
The EURUSD bullish momentum was paused on Friday. This may caused by a profit-taking activity on the weekend but some people, including me, start to worry about potential downside correction or even a bearish reversal. Like I said in my weekly summary on Saturday, beside the pair can not really move above 1.5000 area consistently, we also have a CCI bearish divergence on daily chart which potentially trigger bearish momentum.
However, technically the bullish scenario is still intact. As long as the bullish channel on my h4 chart below still valid, the bullish scenario should remains strong. We seem to have a downside pressure as price now testing the lower line of the bullish channel which has been a good support so far. Although not automatically set up a bearish reversal scenario since false breakout/down do happen, a violation to the downside of the bullish channel could be a serious threat to my bullish outlook testing 1.4920 even key support level 1.4850 area. Immediate resistance at 1.5050. Break above that area should trigger further bullish continuation targeting 1.5140 and 1.5300 area.
The EURUSD bullish momentum was paused on Friday. This may caused by a profit-taking activity on the weekend but some people, including me, start to worry about potential downside correction or even a bearish reversal. Like I said in my weekly summary on Saturday, beside the pair can not really move above 1.5000 area consistently, we also have a CCI bearish divergence on daily chart which potentially trigger bearish momentum.
However, technically the bullish scenario is still intact. As long as the bullish channel on my h4 chart below still valid, the bullish scenario should remains strong. We seem to have a downside pressure as price now testing the lower line of the bullish channel which has been a good support so far. Although not automatically set up a bearish reversal scenario since false breakout/down do happen, a violation to the downside of the bullish channel could be a serious threat to my bullish outlook testing 1.4920 even key support level 1.4850 area. Immediate resistance at 1.5050. Break above that area should trigger further bullish continuation targeting 1.5140 and 1.5300 area.
Tuesday, October 13, 2009
New account, first deposit Bonuses from Forex brokers
BONUSES
The hottest bonus offers from Forex brokers for opening new trading accounts
and making first deposits.
ALPARI UK
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Between now and 30th October, the net deposits in your live account could get you up to 20% extra funds to trade with.
Details at ALPARI UK Live account bonus
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Earn up to 20% bonus on your net deposit between September 1, 2009 and October 30, 2009.
The credit bonus is variable and based on the net deposits.
>Net Deposit Value (USD) >Credit Bonus (%)
First 5,000 (0 – 5,000) >7.5
>Second 5,000 (5,001 – 10,000) >10
>Third 5,000 (10,001 – 15,000) >12.5
>Fourth 5,000 >15
>Net deposit in excess of 20,000 >20
In order to withdraw the credit bonus you have make the required number of standard lot round turn transactions.
Details at Alpari US Live account bonus
AVA FX
New account Promotions
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Details at AVA FX Live account bonuses
BTRADER
New clients who make their first deposit of minimum $100 receive an instant bonus of $50.
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Details at BTrader deposit bonus
DELTASTOCK
From 1 October until 31 December 2009 you can earn an extra 20% for opening an account with Deltastock. Simply open an account and fund it within this period, and you will receive 20% bonus on the initial deposit you have made.
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Details at Deltastock 10K EUR Bonus Promotion
EASY-FOREX
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Details at EMPFX First deposit bonus
ETORO
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Deposit Receive -Bonus
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Details at eToro first deposit bonus
FINEXO
Liberty Reserve and Moneybookers bonus
Open a $25 account or larger and receive 10% (up to $500) as bonus, which will be added to your live account.
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Bonus example:
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FOREXYARD
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Open and deposit funds worth $1000 or more and automatically receive 10% (up to $1000) cashback bonus, which will be added to your account immediately.
Promotion bonus offer can be used only once by any individual client.
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FXCLEARING
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Details at FXClearing Live account bonus
FXCH
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Details at FxCompany Live account bonus
FXDD
From August 1st through August 8th, 2009
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Details at FXDD Live accounts bonuses
FXOPEN
Open new Standard account and receive 25$ as a bonus after initial deposit.
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Details at FXOPEN Live accounts bonuses
INSTAFOREX
Receive a Welcome bonus by opening an account/making a deposit:
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Details at InstaForex First deposit bonus
INSTAFOREX
The Campaign is held among all clients who replenish their accounts with the sum not less than 3000.00 USD. Period of the Campaign holding - from June 1, 2009 till August 9, 2009. The grand prize is 1000 USD every week.
Details at InstaForex First deposit bonus
INVESTTECHFX
Silver Account
Start $5,000 - From 1 PIP + Bonus 5%
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RETAILFX
Make your first deposit and receive a bonus up to $1000 instantly.
Deposit Receive Bonus
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Details at RetailFX First deposit bonus
SWISSDEALING
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Details at SwissDealing Live account bonus
QUESTRADE
Open a forex account with an initial deposit of $2,500 - $4,999 and get a $50 cash bonus.
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Details at UWC Live account bonus
XFOREX
Make a live account deposit and receive up to 20% bonus.
ACCOUNT TYPE FIRST DEPOSIT AMOUNT MINIMUM BONUS ON INITIAL DEPOSIT
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*First deposit bonus will not exceed $2000
Details at XForex Live account bonus
The hottest bonus offers from Forex brokers for opening new trading accounts
and making first deposits.
ALPARI UK
Get up to 20% credit bonus on your deposits.
Between now and 30th October, the net deposits in your live account could get you up to 20% extra funds to trade with.
Details at ALPARI UK Live account bonus
ALPARI US
Earn up to 20% bonus on your net deposit between September 1, 2009 and October 30, 2009.
The credit bonus is variable and based on the net deposits.
>Net Deposit Value (USD) >Credit Bonus (%)
First 5,000 (0 – 5,000) >7.5
>Second 5,000 (5,001 – 10,000) >10
>Third 5,000 (10,001 – 15,000) >12.5
>Fourth 5,000 >15
>Net deposit in excess of 20,000 >20
In order to withdraw the credit bonus you have make the required number of standard lot round turn transactions.
Details at Alpari US Live account bonus
AVA FX
New account Promotions
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Ava Premium $50,000 Call for special VIP
benefits & tailor-made accounts
Details at AVA FX Live account bonuses
BTRADER
New clients who make their first deposit of minimum $100 receive an instant bonus of $50.
The bonus is awarded only for the purpose of trading Forex, funds cannot be withdrawn without conducting trades first.
Details at BTrader deposit bonus
DELTASTOCK
From 1 October until 31 December 2009 you can earn an extra 20% for opening an account with Deltastock. Simply open an account and fund it within this period, and you will receive 20% bonus on the initial deposit you have made.
The maximum amount that clients can receive under this promotion is 10 000 EUR or its equivalent in another currency!
The bonus amount will be added to your live trading account. This will increase your margin allowing you to trade higher volumes and to manage your risk better. In addition, for every 20 000 EUR of realized turnover, you can withdraw 1 EUR from the bonus amount.
Details at Deltastock 10K EUR Bonus Promotion
EASY-FOREX
Rebate is available for registered members who deposit before 31 December 2009.
Rebate is for trading purposes only and cannot be withdrawn from a trading account.
1st Deposit $200 $500 $1000 $2,500 V.I.P
Rebate $50 $100 $200 $500 Call in
V.I.P. accounts are tailor-made to suit individual trading preferences.
EMPFX
In order to withdraw your free cash, it is required to execute a minimum trading volume of 1 Lot for every $1 Free Cash.
Details at EMPFX First deposit bonus
ETORO
Make first deposit and receive an instant bonus up to $1000. Applied to first deposits only.
Deposit Receive -Bonus
$100-$399 $25
$400-$999 $200
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$20,000-more Call for special offers
Details at eToro first deposit bonus
FINEXO
Liberty Reserve and Moneybookers bonus
Open a $25 account or larger and receive 10% (up to $500) as bonus, which will be added to your live account.
Promotion bonus offer can be used only once per customer.
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FOREX TRADING EDGE
Open a Live Account and find out how to qualify to receive up to a $1000 bonus.
Bonus example:
$100 = 40 full lot closed trades in the first 60 days of the account approval.
FOREXYARD
Cashback
Open and deposit funds worth $1000 or more and automatically receive 10% (up to $1000) cashback bonus, which will be added to your account immediately.
Promotion bonus offer can be used only once by any individual client.
Details at FOREXYARD Live account cashback bonus
FXCLEARING
Get 5% bonus when you deposit $300 or more to a new Micro-cents Account.
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Details at FXClearing Live account bonus
FXCH
New Accounts promotion: $200 Bonus for New Traders
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FXCOMPANY
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Details at FxCompany Live account bonus
FXDD
From August 1st through August 8th, 2009
8% deposit bonus is for customers with new or existing live accounts. Minimum deposit of $250 USD. Maximum $8,000 USD bonus money per account.
You can keep any profits earned with your bonus money and even withdraw it after a certain number of positions are traded.
Details at FXDD Live accounts bonuses
FXOPEN
Open new Standard account and receive 25$ as a bonus after initial deposit.
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Details at FXOPEN Live accounts bonuses
INSTAFOREX
Receive a Welcome bonus by opening an account/making a deposit:
30 USD bonus – deposit not less than 100 USD;
200 USD bonus – deposit not less than 800 USD;
1000 USD bonus – deposit not less than 5000 USD;
5000 USD bonus – deposit not less than 50000 USD.
Details at InstaForex First deposit bonus
INSTAFOREX
The Campaign is held among all clients who replenish their accounts with the sum not less than 3000.00 USD. Period of the Campaign holding - from June 1, 2009 till August 9, 2009. The grand prize is 1000 USD every week.
Details at InstaForex First deposit bonus
INVESTTECHFX
Silver Account
Start $5,000 - From 1 PIP + Bonus 5%
Gold Account
Start $10,000 - From 1 PIP + Bonus 10%
MARKETIVA
With no requirements for the size of initial deposit, when you open an account you get $5 bonus.
RETAILFX
Make your first deposit and receive a bonus up to $1000 instantly.
Deposit Receive Bonus
$100-$400 $25
$400-$999 $100
$1,000-$4,999 $200 and get a Silver account
$5,000-$9,999 $500 and get a Gold account
$10,000-$19,999 $1,000 and get a Gold account
$20,000-more Call for special offers and get a VIP account
Details at RetailFX First deposit bonus
SWISSDEALING
SwissDealing is the first and only FOREX broker that does not require/accept money deposits. To start trading, every new client receives a bonus of $100. This money cannot be withdrawn by the client, and can only be used as a trading margin.
Details at SwissDealing Live account bonus
QUESTRADE
Open a forex account with an initial deposit of $2,500 - $4,999 and get a $50 cash bonus.
Increase your deposit to $5,000 - $9,999 and your bonus jumps to $100.
Maximize your cash bonus by funding your account with $50,000 or more – you get $1000! The cash bonus is deposited directly into your forex account within five business days, ready for you to use for trading.
UNITED WORLD CAPITAL
From January 15, and throughout 2009, United World Capital will carry out an unparalleled campaign. The next 4100 clients to open a real trading account during the campaign will receive a bonus up to $5,000!
The Company will give a $50 bonus to the next 3000 clients to open a real MINIForex trading account. The next 1000 clients to open a real 100KForex trading account with United World Capital will get a $500 bonus. And finally, the next 100 clients to open a real REALForex trading account with United World Capital will get a $5000 bonus.
Details at UWC Live account bonus
XFOREX
Make a live account deposit and receive up to 20% bonus.
ACCOUNT TYPE FIRST DEPOSIT AMOUNT MINIMUM BONUS ON INITIAL DEPOSIT
MINI $100 10%
STANDARD $1,000 15%
V.I.P $10,000 20%*
*First deposit bonus will not exceed $2000
Details at XForex Live account bonus
Monday, October 12, 2009
Defining A Great Trader
Defining A Great Trader
Great traders that we have had the pleasure to know and to be around, on exchange floors and on trade desks, had certain repeatable traits that all level traders can learn, or take something from;
Empathy and the ability to listen.
Faith in their own ability to get things done, if life and in work.
Humility, and a willingness to accept defeat as graciously as accepting success.
Desire to work towards, and not to just expect, having more success than defeat.
They listened more than they spoke. They had two ears and one mouth and had learned to use them in the right proportion. The ability to listen, either to a mentor, to your inner self, or to the market, is critical for success.
They had an undying faith and belief in their own ability, and accepted that most things that went wrong were probably outside of their control, because they planned their work. Their brutal honesty with themselves and with others allowed them to develop a faith in their own ability that was beyond the norm.
They were humble, and understood that they were not smarter, stronger, nor wiser than others; they just knew that there were few others that had more faith in their own ability to follow something through and to achieve their goals.
They had faith that they could get it done, and humility to accept defeat; that is what defined them, and usually defines any great trader. The great ones in life, and on the floors, are the ones who are not susceptible to the negative influence of others, they have a goal, they have a plan, and they will get there. It may take time, they may fail along the way, but they just will not let things overwhelm them as they plot their course.
Successful traders have a plan that they refine, develop and test, and debrief on a daily basis. They share their plan as a work in motion, and not as the Holy Grail. A successful trader accepts that there is always something new to learn, and however good the plan is today, there will be the chance to improve it tomorrow.
Zig Ziegler says; "You are working with no plan? Why? Working without a plan is about as difficult as trying to come back from somewhere that you have never been". You will become profitable if you achieve success, but success rarely comes without a plan.
Success is not counted in cash; success starts with an inner faith, the ability to listen, and in having a plan. However, financial freedom only comes by following the plan.
Great traders that we have had the pleasure to know and to be around, on exchange floors and on trade desks, had certain repeatable traits that all level traders can learn, or take something from;
Empathy and the ability to listen.
Faith in their own ability to get things done, if life and in work.
Humility, and a willingness to accept defeat as graciously as accepting success.
Desire to work towards, and not to just expect, having more success than defeat.
They listened more than they spoke. They had two ears and one mouth and had learned to use them in the right proportion. The ability to listen, either to a mentor, to your inner self, or to the market, is critical for success.
They had an undying faith and belief in their own ability, and accepted that most things that went wrong were probably outside of their control, because they planned their work. Their brutal honesty with themselves and with others allowed them to develop a faith in their own ability that was beyond the norm.
They were humble, and understood that they were not smarter, stronger, nor wiser than others; they just knew that there were few others that had more faith in their own ability to follow something through and to achieve their goals.
They had faith that they could get it done, and humility to accept defeat; that is what defined them, and usually defines any great trader. The great ones in life, and on the floors, are the ones who are not susceptible to the negative influence of others, they have a goal, they have a plan, and they will get there. It may take time, they may fail along the way, but they just will not let things overwhelm them as they plot their course.
Successful traders have a plan that they refine, develop and test, and debrief on a daily basis. They share their plan as a work in motion, and not as the Holy Grail. A successful trader accepts that there is always something new to learn, and however good the plan is today, there will be the chance to improve it tomorrow.
Zig Ziegler says; "You are working with no plan? Why? Working without a plan is about as difficult as trying to come back from somewhere that you have never been". You will become profitable if you achieve success, but success rarely comes without a plan.
Success is not counted in cash; success starts with an inner faith, the ability to listen, and in having a plan. However, financial freedom only comes by following the plan.
The Four Letter R-Word
The Four Letter R-Word
Forex traders hear a lot about Risk; whether the markets are tolerant, averse, or neutral. It is a headline that is bandied about on a regular basis. Quantifying the value of risk, and its forex impact, may be so much harder to do in the trading arena, than reporting each day on whether the herd was charging towards, or away from risk.
In its natural state the financial market has three major attitudes towards risk that models its behavior and actions throughout each of the global trading session. The three are; risk aversion, risk tolerance and risk-neutral. Headlines overplay the four letter Risk word, it should be used sparingly as daily risk levels do not reflect the big picture of fair value on global risk, and its forex implications.
Aversion Phase:
Risk-aversion is characterized by investors selling assets in times of global contraction that are considered risky, and swapping them for the safety of the bond market, mainly U.S. Treasuries. Risk-aversion can be seen relatively easily; commodities decline (global commodities are priced in Usd values, and as such create a short commodity/Long dollar move), as investors consider that consumption will slow, while S&P futures also head lower at a sustainable pace.
In the currency market, risk-aversion strengthens the dollar, as investor sell foreign denominated assets to buy U.S. Treasuries. In this period, higher yielding currencies (those with a higher overnight, or ten year note rate) are the ones being sold the most as the Usd is bought.
Tolerant Phase:
The risk-tolerance phase is seen when Treasuries and bonds are sold as investors look for higher yields in a long-term play that reflects a confidence that the global economy is expanding. In periods of relative calm and positive macroeconomic reports, traders dilute holdings in the safety of the bond market and invest their capital in stocks, commodities and higher yielding foreign currencies. Usually, bull markets are characterized by risk-tolerant phases and in this period S&P futures and global commodities head higher. Therefore in this period the dollar is sold.
Neutral Phase:
In most cases, risk-neutrality happens when the financial market moves side-ways, unable to push to test support or resistance, and when global fair value on risk is accepted. At this stage the global economy will be hitting its peak, or hitting its trough, in the business cycle phase. This will be characterized by a re-distribution period, as investors shift their assets between the various financial instruments in preparation for the next leg of fair value on risk.
The main difference in the Neutral phase being that the shifts are not only session-by-session, they literally happen hour-by-hour as big players try to make their automated moves without detection. Sentiment is seen to change from one to the other, empowered by the relentless flow of global market trades that trigger as a contingency play, as each individual market accepts risk neutrality, or not.
The sideways moving market tends to be the more volatile as the channels are traded, and fair value sought at each regional market open and close. June through August has been risk tolerant enough to move prices in equities. However, the regional market activity has not been strong enough to attract increasing volume levels to be able to make a stance on risk for the next phase of trade to be confidently called, and therefore the currency markets continue to spin their wheels each day as dollar values are fought over.
Transition Phase:
Looking towards the next three months of trade, tenured forex traders understand that fair value on the Usd, and on risk, will be all about the phase that global business cycle are entering. The stages are; Trough> Expansion> Growth> Peak> Contraction. The five cycles take 10-15 years on average to work through and complete. The U.S. economy however has been completing the cycle in half that time, and that is making Usd long-term valuations harder to reliably plan.
Therefore when in Trough-to-Expansion, or Peak-to-Contraction phases, the market runs on risk neutrality and stocks dominate reads on fair value. This leads to a very high correlation (averaging 90%) between equity trade and Usd movement; stocks go up and Usd goes down.
When we get into the Expansion or Contraction, phase, and either one is in full flow (lasting a 5-8 year period globally, or 2-3 years in the US) risk tolerance takes over, interest rate differentials dominate the valuation of currencies, and stock market correlations reduce (averaging 60%). Fair value on risk and on the Usd becomes all about growth and interest rates.
Fed Fund Phase:
In times of Growth the Usd will increase against those currencies not showing inflation, and/or, higher interest rate outlooks. As and when the Federal Reserve raise overnight interest rates, it will be because of an inflation fear coming from economic expansion, and it will very likely be in a drip-fed manner of slow and steady increments as the attempt to keep the speculative interest on the long side of the Usd at bay.
However, the Usd will then be challenged by regional growth that does not carry the weight of massive debt and current account/trade imbalances. The Usd may never get back to 90.00 on the dollar index if global regions expand at the same pace as America. As in 1972 under President Nixon, it looks as though the U.S. in 2009 has set up Usd devaluation with an over-commitment to Treasury debt that now looks challenging, to say the least.
Weak Dollar Phase:
Coming out of a time of global Contraction and into a period of global Growth (possibly) a strong currency is not what is required, by any region. However, the U.S. looks to be the one region that literally cannot afford a stronger dollar. The insurmountable look to the U.S. Treasury debt numbers leave many to believe that the only way forward with sustainable growth, that has any chance at all of creating expansion numbers over and above the forward obligation to pay interest on the debt mountain, is with a lower value dollar.
Forex traders will be looking again at whether the global economy is prepared to welcome a slimmed down version of the greenback, something that seems a ‘must-have’ for the Federal Reserve. That however can only happen in the current environment with an increasing global equity market, and a boisterous oil market arena that maintains a high level of long speculative interest.
We have to go back to the rule book set in 1972-73 when the last major forex rule was torn up and re-set, to a time that the dollar index was born if we are to gauge the potential in a ever-decreasing Usd value Traders and investors may have to accept that going forward the Usd/Risk link may become eroded as the debt mountain surpasses equity direction as the thing that helps or impedes daily Usd valuations.
Percentage Risk Phase:
If volume hits this market in September, and following the laws of probability the month has a good chance of being negative (Shwartz Stock Market Handbook has it as historically being the worst performing equity month of the year), forex trader eyes will be all about whether the Usd gets bought in the same number as previously seen in the recent Risk Averse periods of trade. If stocks pull back and the Usd does not get bought at a 90% correlated rate, we will have a signal of two things;
Firstly that the market is valuing risk on forward Growth and interest rate differentials. Secondly, that the equity pull-back may be a technical signal that it will find support before making the next leg higher, rather than being the start of an equity collapse.
Risk Tolerance and Interest Rates will be affected by the global business cycle. Whatever the headlines roar about this session being tolerant on risk, or not, we now fully understand that at this pivotal a time, risk will be seen in the percentage correlation between equities and the Usd changing from the current 90% rate.
Forex Trader Phase:
Forex traders will be looking to see that Usd/Chf is moving hard when they place their trades, if not they will be questioning the moves because swissy has become correlated to dollar index moves holding, or not. They will also be looking for oil and S&P futures markets to stay aligned, because in any play in forex, whatever the pair being traded, the Usd does affect the momentum flow.
The Usd affects every major traded cross pair, for example; Eur/Usd x Usd/Jpy = Eur/Jpy. Also, Eur/Usd ÷ Gbp/Usd = Eur/Gbp. The synthetic pairs (no Usd on one side or the other) can only move as a percentage of the change in the major pair moves against the Usd; knowing what the drivers of the Usd are doing allows for targets to be realistically set, and lot size accordingly adjusted.
Getting secondary confirmation from inter-related markets is a must-do for any level forex trader, especially when fair value on risk is so hard to find as global markets transition from Trough to Growth. TheLFB trade team will guide forex traders with updates issued regionally, trade plans that absorb the noise and create stability, signals that track inter-related movements, daily videos that put words into pictures and with constant analysis of sentiment and momentum in the global market.
Forex traders hear a lot about Risk; whether the markets are tolerant, averse, or neutral. It is a headline that is bandied about on a regular basis. Quantifying the value of risk, and its forex impact, may be so much harder to do in the trading arena, than reporting each day on whether the herd was charging towards, or away from risk.
In its natural state the financial market has three major attitudes towards risk that models its behavior and actions throughout each of the global trading session. The three are; risk aversion, risk tolerance and risk-neutral. Headlines overplay the four letter Risk word, it should be used sparingly as daily risk levels do not reflect the big picture of fair value on global risk, and its forex implications.
Aversion Phase:
Risk-aversion is characterized by investors selling assets in times of global contraction that are considered risky, and swapping them for the safety of the bond market, mainly U.S. Treasuries. Risk-aversion can be seen relatively easily; commodities decline (global commodities are priced in Usd values, and as such create a short commodity/Long dollar move), as investors consider that consumption will slow, while S&P futures also head lower at a sustainable pace.
In the currency market, risk-aversion strengthens the dollar, as investor sell foreign denominated assets to buy U.S. Treasuries. In this period, higher yielding currencies (those with a higher overnight, or ten year note rate) are the ones being sold the most as the Usd is bought.
Tolerant Phase:
The risk-tolerance phase is seen when Treasuries and bonds are sold as investors look for higher yields in a long-term play that reflects a confidence that the global economy is expanding. In periods of relative calm and positive macroeconomic reports, traders dilute holdings in the safety of the bond market and invest their capital in stocks, commodities and higher yielding foreign currencies. Usually, bull markets are characterized by risk-tolerant phases and in this period S&P futures and global commodities head higher. Therefore in this period the dollar is sold.
Neutral Phase:
In most cases, risk-neutrality happens when the financial market moves side-ways, unable to push to test support or resistance, and when global fair value on risk is accepted. At this stage the global economy will be hitting its peak, or hitting its trough, in the business cycle phase. This will be characterized by a re-distribution period, as investors shift their assets between the various financial instruments in preparation for the next leg of fair value on risk.
The main difference in the Neutral phase being that the shifts are not only session-by-session, they literally happen hour-by-hour as big players try to make their automated moves without detection. Sentiment is seen to change from one to the other, empowered by the relentless flow of global market trades that trigger as a contingency play, as each individual market accepts risk neutrality, or not.
The sideways moving market tends to be the more volatile as the channels are traded, and fair value sought at each regional market open and close. June through August has been risk tolerant enough to move prices in equities. However, the regional market activity has not been strong enough to attract increasing volume levels to be able to make a stance on risk for the next phase of trade to be confidently called, and therefore the currency markets continue to spin their wheels each day as dollar values are fought over.
Transition Phase:
Looking towards the next three months of trade, tenured forex traders understand that fair value on the Usd, and on risk, will be all about the phase that global business cycle are entering. The stages are; Trough> Expansion> Growth> Peak> Contraction. The five cycles take 10-15 years on average to work through and complete. The U.S. economy however has been completing the cycle in half that time, and that is making Usd long-term valuations harder to reliably plan.
Therefore when in Trough-to-Expansion, or Peak-to-Contraction phases, the market runs on risk neutrality and stocks dominate reads on fair value. This leads to a very high correlation (averaging 90%) between equity trade and Usd movement; stocks go up and Usd goes down.
When we get into the Expansion or Contraction, phase, and either one is in full flow (lasting a 5-8 year period globally, or 2-3 years in the US) risk tolerance takes over, interest rate differentials dominate the valuation of currencies, and stock market correlations reduce (averaging 60%). Fair value on risk and on the Usd becomes all about growth and interest rates.
Fed Fund Phase:
In times of Growth the Usd will increase against those currencies not showing inflation, and/or, higher interest rate outlooks. As and when the Federal Reserve raise overnight interest rates, it will be because of an inflation fear coming from economic expansion, and it will very likely be in a drip-fed manner of slow and steady increments as the attempt to keep the speculative interest on the long side of the Usd at bay.
However, the Usd will then be challenged by regional growth that does not carry the weight of massive debt and current account/trade imbalances. The Usd may never get back to 90.00 on the dollar index if global regions expand at the same pace as America. As in 1972 under President Nixon, it looks as though the U.S. in 2009 has set up Usd devaluation with an over-commitment to Treasury debt that now looks challenging, to say the least.
Weak Dollar Phase:
Coming out of a time of global Contraction and into a period of global Growth (possibly) a strong currency is not what is required, by any region. However, the U.S. looks to be the one region that literally cannot afford a stronger dollar. The insurmountable look to the U.S. Treasury debt numbers leave many to believe that the only way forward with sustainable growth, that has any chance at all of creating expansion numbers over and above the forward obligation to pay interest on the debt mountain, is with a lower value dollar.
Forex traders will be looking again at whether the global economy is prepared to welcome a slimmed down version of the greenback, something that seems a ‘must-have’ for the Federal Reserve. That however can only happen in the current environment with an increasing global equity market, and a boisterous oil market arena that maintains a high level of long speculative interest.
We have to go back to the rule book set in 1972-73 when the last major forex rule was torn up and re-set, to a time that the dollar index was born if we are to gauge the potential in a ever-decreasing Usd value Traders and investors may have to accept that going forward the Usd/Risk link may become eroded as the debt mountain surpasses equity direction as the thing that helps or impedes daily Usd valuations.
Percentage Risk Phase:
If volume hits this market in September, and following the laws of probability the month has a good chance of being negative (Shwartz Stock Market Handbook has it as historically being the worst performing equity month of the year), forex trader eyes will be all about whether the Usd gets bought in the same number as previously seen in the recent Risk Averse periods of trade. If stocks pull back and the Usd does not get bought at a 90% correlated rate, we will have a signal of two things;
Firstly that the market is valuing risk on forward Growth and interest rate differentials. Secondly, that the equity pull-back may be a technical signal that it will find support before making the next leg higher, rather than being the start of an equity collapse.
Risk Tolerance and Interest Rates will be affected by the global business cycle. Whatever the headlines roar about this session being tolerant on risk, or not, we now fully understand that at this pivotal a time, risk will be seen in the percentage correlation between equities and the Usd changing from the current 90% rate.
Forex Trader Phase:
Forex traders will be looking to see that Usd/Chf is moving hard when they place their trades, if not they will be questioning the moves because swissy has become correlated to dollar index moves holding, or not. They will also be looking for oil and S&P futures markets to stay aligned, because in any play in forex, whatever the pair being traded, the Usd does affect the momentum flow.
The Usd affects every major traded cross pair, for example; Eur/Usd x Usd/Jpy = Eur/Jpy. Also, Eur/Usd ÷ Gbp/Usd = Eur/Gbp. The synthetic pairs (no Usd on one side or the other) can only move as a percentage of the change in the major pair moves against the Usd; knowing what the drivers of the Usd are doing allows for targets to be realistically set, and lot size accordingly adjusted.
Getting secondary confirmation from inter-related markets is a must-do for any level forex trader, especially when fair value on risk is so hard to find as global markets transition from Trough to Growth. TheLFB trade team will guide forex traders with updates issued regionally, trade plans that absorb the noise and create stability, signals that track inter-related movements, daily videos that put words into pictures and with constant analysis of sentiment and momentum in the global market.
Risk and Reward
Risk and Reward
How do you determine proper risk and reward in trading? I don't think anyone can ever provide a definitive answer to that question because its is akin to asking how many layers do you need to walk outside of my apartment in New York City in the winter. Right now as the thermometer reads a balmy 8 degrees Fahrenheit as I type this at 3 in the morning, you need about four layers just to make it to the coffee shop across the street. But just last week you could have made the same journey in a T shirt without feeling a chill.
Trading, like the addled, globally warmed weather of my great metropolis is an imprecise and a highly volatile proposition. Therefore the question of risk and reward always changes with the circumstances of the moment. The traditional view on risk and reward is to set the ration to at least 2:1 - risking half the amount of pips as you are trying to make, so that if your profit target was 100 then your stop would be 50.
In theory this sounds like a terrific plan. You only need to be correct 4 out of 10 times to make money. However, I've never met a real life trader who actually put this principle into practice. I've received plenty of such advice on this matter from analysts, strategists, trading coaches and a whole host of others who have never wagered so much as their breakfast money on a trade, but I have never seen the 2:1 ratio employed by anyone who actually makes their living from the market.
Why?
The primary reason is that most people who never trade, do not realize that there is no such thing as reward in the market. There is only risk. Markets are not like factories that manufacture profits to your order. In fact, markets do everything possible to frustrate your goals. Imagine a trade where you risk 100 points with a profit target of 200. Initially the trade goes your way and the floating p/l quickly rises until it reaches +199. Disciplined in your 2:1 strategy you wait for the profit target to hit so you can book another good trade. But guess what? The market suddenly stalls and then reverses. You watch in horror as the positive trade quickly turns negative and then drops through your stop. What was you loss? On paper you lost 100 points, but in actuality you lost -299 points ( 100 points on your stop and -199 you did not book). Welcome to real life trading where the “theoretical” 2:1 risk reward is far more elusive than you think.
The fact of the matter is that profits cannot be forecast in the market. The only thing you can control is risk. That's why we always trade with two units. That's why we always take short first targets and that's why we assiduously control risk by trailing our stops. It may not be glamorous, but its the only way we know how deal with risk and reward at BKT
How do you determine proper risk and reward in trading? I don't think anyone can ever provide a definitive answer to that question because its is akin to asking how many layers do you need to walk outside of my apartment in New York City in the winter. Right now as the thermometer reads a balmy 8 degrees Fahrenheit as I type this at 3 in the morning, you need about four layers just to make it to the coffee shop across the street. But just last week you could have made the same journey in a T shirt without feeling a chill.
Trading, like the addled, globally warmed weather of my great metropolis is an imprecise and a highly volatile proposition. Therefore the question of risk and reward always changes with the circumstances of the moment. The traditional view on risk and reward is to set the ration to at least 2:1 - risking half the amount of pips as you are trying to make, so that if your profit target was 100 then your stop would be 50.
In theory this sounds like a terrific plan. You only need to be correct 4 out of 10 times to make money. However, I've never met a real life trader who actually put this principle into practice. I've received plenty of such advice on this matter from analysts, strategists, trading coaches and a whole host of others who have never wagered so much as their breakfast money on a trade, but I have never seen the 2:1 ratio employed by anyone who actually makes their living from the market.
Why?
The primary reason is that most people who never trade, do not realize that there is no such thing as reward in the market. There is only risk. Markets are not like factories that manufacture profits to your order. In fact, markets do everything possible to frustrate your goals. Imagine a trade where you risk 100 points with a profit target of 200. Initially the trade goes your way and the floating p/l quickly rises until it reaches +199. Disciplined in your 2:1 strategy you wait for the profit target to hit so you can book another good trade. But guess what? The market suddenly stalls and then reverses. You watch in horror as the positive trade quickly turns negative and then drops through your stop. What was you loss? On paper you lost 100 points, but in actuality you lost -299 points ( 100 points on your stop and -199 you did not book). Welcome to real life trading where the “theoretical” 2:1 risk reward is far more elusive than you think.
The fact of the matter is that profits cannot be forecast in the market. The only thing you can control is risk. That's why we always trade with two units. That's why we always take short first targets and that's why we assiduously control risk by trailing our stops. It may not be glamorous, but its the only way we know how deal with risk and reward at BKT
Three Simple Rules Of Winning Traders
Three Simple Rules Of Winning Traders
About two weeks I went on CNBC and predicted that range will rule the currency markets for the foreseeable future. The price of EURUSD at the time of broadcast? 1.2630. The price of EURUSD at close of trade today? 1.2590. So range reigns in the currency market as every rally fails and every decline proves false breaking the hearts of both bulls and bears and that dynamic will probably last for the rest of this year. Thus with little new to say and holiday shortened week ahead of us I thought we'd change the format this week and skips the price action review concentrating instead understanding the basic building blocks of successful trading.
This past week in Kuwait I gave a presentation titled "3 M's that Drive the Currency Market". It showcased a simple analytical framework created by K and I to explain most of the price movement in currencies. The 3 M's stand for Macro - broad economic and political themes, Micro - day to day economic releases and Monetary - for monetary policy of the G-10 nations. The 3M's model, though relatively straightforward, does a very good job of encapsulating virtually all of the catalysts in the FX market.
As I was flying back to US, my thoughts drifted to the 3M idea and I realized that trading itself can also be summarized in a 3 variable model - a model I call the Three Simple Rules Of Winning Traders.
Rule 1 - Develop an opinion.
Whenever I hear traders tell me, "I don't have any opinion, I just trade price action." I always smile ruefully and think to myself that the trader is both an idiot and a liar. The fact of the matter is that every time you enter the market you are implicitly rendering an opinion on the future movement of price. The difference between those traders who do so implicitly versus those who put forth an explicit reason for their trade is that the former have no clue of what they are doing while the later at least try to figure out the story behind the trade.
It goes without saying that I have little respect for traders who mechanically follow price action like mindless robots. In trading you get paid not for what is happening now, but for what will happen in the future and if you cannot figure out what is likely to drive price towards your target you are just a lemming in the market. Right or wrong, developing an opinion is the cornerstone of a winning strategy.
Rule 2 - Let Price Confirm Your Thesis
To politely paraphrase a very crude Wall Street saying, opinions are like faces - everyone has one. Developing an opinion even one that is ultimately correct is utterly worthless if the market happens to disagree with your assessment. The history if trading is littered with brilliant analysts who were absolutely correct on their calls and yet were bankrupted by the vagaries of price action before they were ever proven right. Your opinion may be dead on, but as traders it is price movement, not opinion that we are trading. Until and unless price corroborates your opinion you have no entry signal for your trade.
Rule 3 - Manage Your Trade
More than anything else great traders are good money managers. I've always believed that you can put two great traders on the opposite side of a position and often both of them will wind up making money. On the other hand put two novices in the same spot and they will more than likely both lose. Trading above all the art of managing the unknown. Let's say you own a sandwich shop in some strip mall in Nebraska. Most likely you would know to within 10 or 20 sandwiches how many customers you will have every single day of the year. Now imagine that sandwich shop was the FX market. The day to day variance would drive most sandwich shop owners insane. Some days you may sell 500 sandwiches, other days you may have to dump all your food supplies into the garbage as no business came through your door. That's why trading at its core is always about managing risk. Every time you trade the operating principle is - Hope for the Best Prepare for the Worst.
The only way we've been able to control risk and at the same time participate in the market is by always cutting our position in half once a short profit target is met. No matter what anyone tell you, there is simply no way to know a priori if any given trade will be successful. At BKT we really believe that half a loaf is better than none. Success in trading is contingent not only on your analysis but on your ability to properly manage your position. That is why the game is hard. To be a winning trader you must be both - a good analyst and an an excellent risk manager..
About two weeks I went on CNBC and predicted that range will rule the currency markets for the foreseeable future. The price of EURUSD at the time of broadcast? 1.2630. The price of EURUSD at close of trade today? 1.2590. So range reigns in the currency market as every rally fails and every decline proves false breaking the hearts of both bulls and bears and that dynamic will probably last for the rest of this year. Thus with little new to say and holiday shortened week ahead of us I thought we'd change the format this week and skips the price action review concentrating instead understanding the basic building blocks of successful trading.
This past week in Kuwait I gave a presentation titled "3 M's that Drive the Currency Market". It showcased a simple analytical framework created by K and I to explain most of the price movement in currencies. The 3 M's stand for Macro - broad economic and political themes, Micro - day to day economic releases and Monetary - for monetary policy of the G-10 nations. The 3M's model, though relatively straightforward, does a very good job of encapsulating virtually all of the catalysts in the FX market.
As I was flying back to US, my thoughts drifted to the 3M idea and I realized that trading itself can also be summarized in a 3 variable model - a model I call the Three Simple Rules Of Winning Traders.
Rule 1 - Develop an opinion.
Whenever I hear traders tell me, "I don't have any opinion, I just trade price action." I always smile ruefully and think to myself that the trader is both an idiot and a liar. The fact of the matter is that every time you enter the market you are implicitly rendering an opinion on the future movement of price. The difference between those traders who do so implicitly versus those who put forth an explicit reason for their trade is that the former have no clue of what they are doing while the later at least try to figure out the story behind the trade.
It goes without saying that I have little respect for traders who mechanically follow price action like mindless robots. In trading you get paid not for what is happening now, but for what will happen in the future and if you cannot figure out what is likely to drive price towards your target you are just a lemming in the market. Right or wrong, developing an opinion is the cornerstone of a winning strategy.
Rule 2 - Let Price Confirm Your Thesis
To politely paraphrase a very crude Wall Street saying, opinions are like faces - everyone has one. Developing an opinion even one that is ultimately correct is utterly worthless if the market happens to disagree with your assessment. The history if trading is littered with brilliant analysts who were absolutely correct on their calls and yet were bankrupted by the vagaries of price action before they were ever proven right. Your opinion may be dead on, but as traders it is price movement, not opinion that we are trading. Until and unless price corroborates your opinion you have no entry signal for your trade.
Rule 3 - Manage Your Trade
More than anything else great traders are good money managers. I've always believed that you can put two great traders on the opposite side of a position and often both of them will wind up making money. On the other hand put two novices in the same spot and they will more than likely both lose. Trading above all the art of managing the unknown. Let's say you own a sandwich shop in some strip mall in Nebraska. Most likely you would know to within 10 or 20 sandwiches how many customers you will have every single day of the year. Now imagine that sandwich shop was the FX market. The day to day variance would drive most sandwich shop owners insane. Some days you may sell 500 sandwiches, other days you may have to dump all your food supplies into the garbage as no business came through your door. That's why trading at its core is always about managing risk. Every time you trade the operating principle is - Hope for the Best Prepare for the Worst.
The only way we've been able to control risk and at the same time participate in the market is by always cutting our position in half once a short profit target is met. No matter what anyone tell you, there is simply no way to know a priori if any given trade will be successful. At BKT we really believe that half a loaf is better than none. Success in trading is contingent not only on your analysis but on your ability to properly manage your position. That is why the game is hard. To be a winning trader you must be both - a good analyst and an an excellent risk manager..
5 Tips for Trading During Volatile Markets
5 Tips for Trading During Volatile Markets
Increased volatility leads many traders to seeing an increase in trading opportunities. The huge market swings trigger thoughts of monumental upside, but also for potential loss especially if traders do not take the necessary precautions. During times of volatility, traders need to adjust their strategy to compensate for erratic market. When trading during these market conditions, traders should follow the rules below.
1. Be More Selective Before Placing Trades
Wanting to take advantage of all the trading opportunities that present themselves in volatile markets, traders are tempted to place an increase number of trades. This temptation should be avoided. It is important to remember that in volatile times, losses are likely to be big. Before placing a trading, assess risk tolerance levels. Determine the level of risk that is acceptable for the trader both psychologically and financially before placing any trades.
2. Use Less Leverage
During high market volatility, losses can be traumatic. With the average trading range increased in volatile times traders should be considering how leverage will affect trades. At a one percent or even a half percent margin, investors should be mindful of how much leverage or even the size position being traded can affect their portfolio. In normal market conditions, placing a 2 lot position is fine when you are looking to make about 50-100 pips. During a more volatile time, when the potential loss is 100-200 pips, it stops being an effective risk to reward ratio. To compensate traders should look to taking on smaller trading positions, in this case only one lot as opposed to the average 2 lot position.
3. Trade with More Discipline
Traders should always follow their predetermined trading strategy regardless of market condition. During volatile markets, this is even more important to use that same level of restraint. Traders must adhere to any set stops, contingency plans or risk management benchmarks without hesitation. This will help to define how much risk is taken should price action be uncontrollable. Without this level of discipline and self control losses can be great.
4. Tighten Stops
Many traders are hesitant to use tighter stops in volatile markets because they see the large swings increasing the likelihood that the position will be taken out. Having tighter stops can also provide great risk managers in times of extreme volatility. For example, on a EURUSD trade, rather than setting an 80 pip stop to protect your position, consider placing a 50-60 pip stop. This will insure the protection of your currency position and if the stop is broken, there is a high likelihood that the trend will continue lower and the stop took you out before you could potentially lose more money.
The width of the stop being set does depend on the currency pair being trading as some pairs have wider ranges. In a Yen cross like the GBPJPY or AUDJPY, traders may be more likely to have wider stops as their average daily range is 50% more than that of the EUR/USD. With that said, stops during volatile market conditions should not as wide as before. Instead of a stop 100 pips below entry, traders may consider a 25 pip reduction and have a 75 pip stop. Below is a chart showing the EURUSD and the GBPJPY on the same very volatile day in the forex market. The EURUSD had an impressive range of nearly 600 pips! The GBPJPY far dominated though with nearly a 2000 pip trading range.
5. Be Prepared
It also helps a trader to know what is causing the current spate of volatility in the markets in order to be prepared for the unexpected. As such, an investor can accommodate their strategy to the market environment and not just the currency pair being traded. The first of these considerations is accounting for emotions in a market: is fear currently driving the market lower? Or is it buyer's mania that is keeping the bullish tone alive? Traders' overreaction and emotion tend to push markets to overextended targets. This fact alone creates volatility through simple supply and demand.
Volatility can also, and more than likely will, be sparked by economic events. In this instance, market participants may interpret fundamental data differently and not as cut and dry as the more novice trader. A perfect example of this is usually monthly manufacturing reports that are released in pretty much all industrial economies. The classic scenario has the market honed in on a particular number for the month. However, traders young and old will sometimes wonder why the market sold off if manufacturing showed positive growth. The answer is simple. The market had a different interpretation and positions were violently reshaped and shifted. These tend to create great opportunities for some and horrible memories for others. Below is an hourly chart of the EUR/USD during ISM Manufacturing for October 1, 2008. Here we can see the huge price gap that occurred due to market volatility as well as the resulting trend.
Panic and erratic momentum can additionally be found in certain market environments. Not to be confused with fear or greed, panic selling and buying can create very choppy and relatively untradeable markets. These conditions will lead some to flip flop their positions while leaving others gaping at the fact that the position was right, only to be stopped out prematurely. These two common examples will create further panic and volatility as traders abandon their own individual strategy for the possibility of instant profits or stoppage revenge. As a result, a vicious cycle of volatility ensues until a definitive market direction can be established.
The simple rules above, and a task of getting to know the current trading environment, can empower every trader through the ranks. Although some relate volatility with difficult and untouchable markets, opportunities continue to remain abound in these less than attractive conditions to those focused and fortunate.
By following these five simple steps, trading in volatile market conditions should be a little simpler. Don't forget to adjust leverage based on volatility, follow your trading plan, tighten your stops and know why you are getting into a trade before you place it.
Increased volatility leads many traders to seeing an increase in trading opportunities. The huge market swings trigger thoughts of monumental upside, but also for potential loss especially if traders do not take the necessary precautions. During times of volatility, traders need to adjust their strategy to compensate for erratic market. When trading during these market conditions, traders should follow the rules below.
1. Be More Selective Before Placing Trades
Wanting to take advantage of all the trading opportunities that present themselves in volatile markets, traders are tempted to place an increase number of trades. This temptation should be avoided. It is important to remember that in volatile times, losses are likely to be big. Before placing a trading, assess risk tolerance levels. Determine the level of risk that is acceptable for the trader both psychologically and financially before placing any trades.
2. Use Less Leverage
During high market volatility, losses can be traumatic. With the average trading range increased in volatile times traders should be considering how leverage will affect trades. At a one percent or even a half percent margin, investors should be mindful of how much leverage or even the size position being traded can affect their portfolio. In normal market conditions, placing a 2 lot position is fine when you are looking to make about 50-100 pips. During a more volatile time, when the potential loss is 100-200 pips, it stops being an effective risk to reward ratio. To compensate traders should look to taking on smaller trading positions, in this case only one lot as opposed to the average 2 lot position.
3. Trade with More Discipline
Traders should always follow their predetermined trading strategy regardless of market condition. During volatile markets, this is even more important to use that same level of restraint. Traders must adhere to any set stops, contingency plans or risk management benchmarks without hesitation. This will help to define how much risk is taken should price action be uncontrollable. Without this level of discipline and self control losses can be great.
4. Tighten Stops
Many traders are hesitant to use tighter stops in volatile markets because they see the large swings increasing the likelihood that the position will be taken out. Having tighter stops can also provide great risk managers in times of extreme volatility. For example, on a EURUSD trade, rather than setting an 80 pip stop to protect your position, consider placing a 50-60 pip stop. This will insure the protection of your currency position and if the stop is broken, there is a high likelihood that the trend will continue lower and the stop took you out before you could potentially lose more money.
The width of the stop being set does depend on the currency pair being trading as some pairs have wider ranges. In a Yen cross like the GBPJPY or AUDJPY, traders may be more likely to have wider stops as their average daily range is 50% more than that of the EUR/USD. With that said, stops during volatile market conditions should not as wide as before. Instead of a stop 100 pips below entry, traders may consider a 25 pip reduction and have a 75 pip stop. Below is a chart showing the EURUSD and the GBPJPY on the same very volatile day in the forex market. The EURUSD had an impressive range of nearly 600 pips! The GBPJPY far dominated though with nearly a 2000 pip trading range.
5. Be Prepared
It also helps a trader to know what is causing the current spate of volatility in the markets in order to be prepared for the unexpected. As such, an investor can accommodate their strategy to the market environment and not just the currency pair being traded. The first of these considerations is accounting for emotions in a market: is fear currently driving the market lower? Or is it buyer's mania that is keeping the bullish tone alive? Traders' overreaction and emotion tend to push markets to overextended targets. This fact alone creates volatility through simple supply and demand.
Volatility can also, and more than likely will, be sparked by economic events. In this instance, market participants may interpret fundamental data differently and not as cut and dry as the more novice trader. A perfect example of this is usually monthly manufacturing reports that are released in pretty much all industrial economies. The classic scenario has the market honed in on a particular number for the month. However, traders young and old will sometimes wonder why the market sold off if manufacturing showed positive growth. The answer is simple. The market had a different interpretation and positions were violently reshaped and shifted. These tend to create great opportunities for some and horrible memories for others. Below is an hourly chart of the EUR/USD during ISM Manufacturing for October 1, 2008. Here we can see the huge price gap that occurred due to market volatility as well as the resulting trend.
Panic and erratic momentum can additionally be found in certain market environments. Not to be confused with fear or greed, panic selling and buying can create very choppy and relatively untradeable markets. These conditions will lead some to flip flop their positions while leaving others gaping at the fact that the position was right, only to be stopped out prematurely. These two common examples will create further panic and volatility as traders abandon their own individual strategy for the possibility of instant profits or stoppage revenge. As a result, a vicious cycle of volatility ensues until a definitive market direction can be established.
The simple rules above, and a task of getting to know the current trading environment, can empower every trader through the ranks. Although some relate volatility with difficult and untouchable markets, opportunities continue to remain abound in these less than attractive conditions to those focused and fortunate.
By following these five simple steps, trading in volatile market conditions should be a little simpler. Don't forget to adjust leverage based on volatility, follow your trading plan, tighten your stops and know why you are getting into a trade before you place it.
How To Trust Your Setup
How To Trust Your Setup
One of the great ironies of life is that as traders we often trust ourselves least of all. Most traders (myself included) approach the whole enterprise with deadly combination of overweening sense of arrogance in our ability and underwhelming sense of confidence in our trade setups. When it comes trading no one can second guess or sabotage us better than ourselves.
All it takes is one or two stop outs in a row and suddenly the setup that we worked on for months, goes out the window. Impulsive trading takes over as we "try to get it back from the market" and the account soon plunges into a deep drawdown.
The most maddening thing about trading is that even if you are doing everything right you will be wrong continuously. In no other profession (except perhaps meteorology) does such a high rate of failure seem acceptable. Take dentistry. Once you know how to fill a cavity, you can repeat the process hundreds, thousands of times without ever making an error. In trading, especially in rapid day trading you will likely make an error at least once or twice each day.
So how we learn to trust our setups? Practice, practice, practice. Trading is contact sport and can only be mastered through endless repetition. One of the biggest mistakes that many traders make is to learn on a demo account. Demo trading in my opinion is less that useless. It creates a false sense of control and overblown sense of importance especially if you trade with "millions' of demo dollars. Demo trading is good for only one thing - getting to know the trading software. Once that's done you need to trade with real money. Why? Because you can never replicate the psychological pressures of real trading unless you have skin the game.
The great benefit of many retail FX trading platforms is that you can configure your size down to a 10 cent pip so you can still trade with real money but not have to pay much for your education. The more you trade your setup, the more you will learn its intricacies under real market conditions. The more patient you will become. The more you will start to trust your setup and the more you will start to trust yourself.
One of the great ironies of life is that as traders we often trust ourselves least of all. Most traders (myself included) approach the whole enterprise with deadly combination of overweening sense of arrogance in our ability and underwhelming sense of confidence in our trade setups. When it comes trading no one can second guess or sabotage us better than ourselves.
All it takes is one or two stop outs in a row and suddenly the setup that we worked on for months, goes out the window. Impulsive trading takes over as we "try to get it back from the market" and the account soon plunges into a deep drawdown.
The most maddening thing about trading is that even if you are doing everything right you will be wrong continuously. In no other profession (except perhaps meteorology) does such a high rate of failure seem acceptable. Take dentistry. Once you know how to fill a cavity, you can repeat the process hundreds, thousands of times without ever making an error. In trading, especially in rapid day trading you will likely make an error at least once or twice each day.
So how we learn to trust our setups? Practice, practice, practice. Trading is contact sport and can only be mastered through endless repetition. One of the biggest mistakes that many traders make is to learn on a demo account. Demo trading in my opinion is less that useless. It creates a false sense of control and overblown sense of importance especially if you trade with "millions' of demo dollars. Demo trading is good for only one thing - getting to know the trading software. Once that's done you need to trade with real money. Why? Because you can never replicate the psychological pressures of real trading unless you have skin the game.
The great benefit of many retail FX trading platforms is that you can configure your size down to a 10 cent pip so you can still trade with real money but not have to pay much for your education. The more you trade your setup, the more you will learn its intricacies under real market conditions. The more patient you will become. The more you will start to trust your setup and the more you will start to trust yourself.
A Trade or a Gamble?
A Trade or a Gamble?
I love to trade a lot - which is of course a euphemistic way of saying I love to gamble. Although I have been to Vegas more than a dozen times I never laid down so much as a dollar bet in any casino. I have absolutely no interest in backjack, craps, slot machines or any other games of chance and I look down with disdain at the excited masses crowding the cavernous Vegas gambling halls. But deep down, if I am honest with myself, I have to admit that whenever I trade a lot I am just as much of a sucker as every hopeless loser that gives up his hard earned money to Steve Wynn or Sheldon Adelson
If you are constantly trading just for the sake of trading, just for the rush of being “in the game”, just for the momentarily thrill of being right you are gambling. You are trading without an edge, without any solid information and are therefore completely vulnerable to the random vagaries of price.
Towards the end of last year I decided to do something about my toxic addiction and created two separate accounts - one for trades that would only follow my trading plan - the other for all my trading/gambling impulses. But before I share my experience with you allow me to define the difference between a trade and a gamble. The key distinction is information. The less information you posses the more likely the chances are that your trade is gamble.
A techincal trader who only looks at the five minute chart to gauge his support and resistance points is just gambling. On the other hand a trader who looks through the hourly, daily, weekly and monthly support points, carefully calculates Fib retracement positions and only acts when multiple time frames confirm his analysis has a much greater chance of success. Similarly a fundamental trader who mindlessly reacts to the latest economic release without understanding the prior market expectations, the current price flow and and countervailing information on the other currency in the pair is also just gambling.
Notice the unifying theme? Like everything else in life success in trading requires hard work and homework. There is no magic formula, no simple 5 minutes per day method to make you money. In trading, working hard is no guarantee of winning, but not working hard is an assurance of losing, because trading at its core is a game of information and you must always be up to date on what' s gong on in the market or become the sucker at the table.
Now back to my experiment. I subdivided my trading into two accounts - one where I traded only calendar risk on a reactive basis with very disciplined entries and exit rules and strict adherence to money management. The other account was just for my whims and impulses. An interesting thing occurred. My “trading plan” account which I traded far rarely and more carefully became much more profitable and incurred much lower drawdowns. Meanwhile the equity in my gambling account bounced up and down like a hopped up rubber ball. Suddenly the thrill of “being in the game” wasn't so much fun. Like a reformed smoker who appreciates the smell of fresh air, I was no longer drawn to making impulsive trades. That's not completely true. I still dabbled in my gambling account (who amongst us can completely give up our vices?) but my need to trade constantly has been reduced substantially. The less you gamble, the more you realize how stupid it is and that has been the most valuable lesson learned so far.
I love to trade a lot - which is of course a euphemistic way of saying I love to gamble. Although I have been to Vegas more than a dozen times I never laid down so much as a dollar bet in any casino. I have absolutely no interest in backjack, craps, slot machines or any other games of chance and I look down with disdain at the excited masses crowding the cavernous Vegas gambling halls. But deep down, if I am honest with myself, I have to admit that whenever I trade a lot I am just as much of a sucker as every hopeless loser that gives up his hard earned money to Steve Wynn or Sheldon Adelson
If you are constantly trading just for the sake of trading, just for the rush of being “in the game”, just for the momentarily thrill of being right you are gambling. You are trading without an edge, without any solid information and are therefore completely vulnerable to the random vagaries of price.
Towards the end of last year I decided to do something about my toxic addiction and created two separate accounts - one for trades that would only follow my trading plan - the other for all my trading/gambling impulses. But before I share my experience with you allow me to define the difference between a trade and a gamble. The key distinction is information. The less information you posses the more likely the chances are that your trade is gamble.
A techincal trader who only looks at the five minute chart to gauge his support and resistance points is just gambling. On the other hand a trader who looks through the hourly, daily, weekly and monthly support points, carefully calculates Fib retracement positions and only acts when multiple time frames confirm his analysis has a much greater chance of success. Similarly a fundamental trader who mindlessly reacts to the latest economic release without understanding the prior market expectations, the current price flow and and countervailing information on the other currency in the pair is also just gambling.
Notice the unifying theme? Like everything else in life success in trading requires hard work and homework. There is no magic formula, no simple 5 minutes per day method to make you money. In trading, working hard is no guarantee of winning, but not working hard is an assurance of losing, because trading at its core is a game of information and you must always be up to date on what' s gong on in the market or become the sucker at the table.
Now back to my experiment. I subdivided my trading into two accounts - one where I traded only calendar risk on a reactive basis with very disciplined entries and exit rules and strict adherence to money management. The other account was just for my whims and impulses. An interesting thing occurred. My “trading plan” account which I traded far rarely and more carefully became much more profitable and incurred much lower drawdowns. Meanwhile the equity in my gambling account bounced up and down like a hopped up rubber ball. Suddenly the thrill of “being in the game” wasn't so much fun. Like a reformed smoker who appreciates the smell of fresh air, I was no longer drawn to making impulsive trades. That's not completely true. I still dabbled in my gambling account (who amongst us can completely give up our vices?) but my need to trade constantly has been reduced substantially. The less you gamble, the more you realize how stupid it is and that has been the most valuable lesson learned so far.
How to Learn Forex Trading?
To trade successfully on Forex market you have to learn the theory of Forex trading and gain practical knowledge while trading on demo account. There is some essential Forex education which is required for everyone who wants his trades to be profitable. But self-education shouldn’t end on these basic learning, one should continue to study new Forex techniques whenever he has time to learn, because knowledge and practice are the cornerstones of the successful Forex trading.
There are many Forex e-books available in the Internet, but I don’t recommend buying any of them, because the best e-books about Forex trading are available for free and can be accessed by anyone. Here is the list of the best books recommended for everyone who wishes to learn Forex trading:
Introduction to Forex — is a basic Forex e-book by 1st Forex Trading Academy. It will introduce all basic concepts of Forex trading to you and will teach you the fundamentals of Forex market. It is a must-read book if you are beginner in Forex.
The Law of Charts — introduces the basics of Forex charts, shows the important chart formations. You will learn how to recognize real trading patterns and false chart figures.
Trade Your Way to Financial Freedom — a Forex book by Van K. Tharp that explains almost every aspect of the financial trading. You can find a lot of information about trading, which will enable you to earn a sustainable income.
The Original Turtle Trading Rules — this book literally tells you the rules of successful Forex trading. You will find out about possible pitfalls before falling in them yourself. It is always good to learn from someone experienced.
Further learning can include practicing your skills on your Forex broker’s demo account — you’ll get essential experience in using techniques from the e-books you have read or your own developed trading strategies. Demo account makes it easy, because you don’t lose any money and you are free to try anything you want. Professional Forex traders test their trading systems on demo accounts first before using them on real money accounts.
If you experience a problem understanding the basic aspects of Forex trading you can find some of the answers to the most popular and asked questions in the FAQ presented by ForexNigeria.org.
There are many Forex informational resources in the Internet, browsing through them can help you to learn more about Forex market. You can find such resources in the Useful Forex Resources section of this site.
There are many Forex e-books available in the Internet, but I don’t recommend buying any of them, because the best e-books about Forex trading are available for free and can be accessed by anyone. Here is the list of the best books recommended for everyone who wishes to learn Forex trading:
Introduction to Forex — is a basic Forex e-book by 1st Forex Trading Academy. It will introduce all basic concepts of Forex trading to you and will teach you the fundamentals of Forex market. It is a must-read book if you are beginner in Forex.
The Law of Charts — introduces the basics of Forex charts, shows the important chart formations. You will learn how to recognize real trading patterns and false chart figures.
Trade Your Way to Financial Freedom — a Forex book by Van K. Tharp that explains almost every aspect of the financial trading. You can find a lot of information about trading, which will enable you to earn a sustainable income.
The Original Turtle Trading Rules — this book literally tells you the rules of successful Forex trading. You will find out about possible pitfalls before falling in them yourself. It is always good to learn from someone experienced.
Further learning can include practicing your skills on your Forex broker’s demo account — you’ll get essential experience in using techniques from the e-books you have read or your own developed trading strategies. Demo account makes it easy, because you don’t lose any money and you are free to try anything you want. Professional Forex traders test their trading systems on demo accounts first before using them on real money accounts.
If you experience a problem understanding the basic aspects of Forex trading you can find some of the answers to the most popular and asked questions in the FAQ presented by ForexNigeria.org.
There are many Forex informational resources in the Internet, browsing through them can help you to learn more about Forex market. You can find such resources in the Useful Forex Resources section of this site.
Sunday, October 11, 2009
How to Start Forex Trading?
To start trading on the Forex market you need a computer with the access to the Internet (preferably fast, but any connection will work if you won’t be scalping). On the Internet you’ll have to join one of the on-line Forex brokers. There are many such brokers available nowadays; chose the one that is more comfortable for you. A good on-line Forex broker should:
Allow small accounts and deposits, so you can try it with a little money before starting a serious trading.
Offer a variety of payment methods for depositing and withdrawing funds, especially WebMoney, e-gold or PayPal.
Provide the convenient ways for trading — either a newbie friendly trading platform or powerful MetaTrader platform.
Be a reputable and trustworthy on-line company, to which you could trust your trading account’s security.
Have a fast order execution and funds transaction processing.
Offer a dedicated on-line and on-phone support.
As it was mentioned before, there are many Forex brokers available, but here presented is the list of the most prominent representatives of the on-line Forex brokerage market:
FXOpen — the broker that supports MetaTrader 4 trading platform; deposits/withdrawals via WebMoney, e-gold, Wire Transfer, CashU, e-Bullion and Liberty Reserve; micro accounts from 1$, mini accounts from $100; free $25 bonus; regular trading contests; it operates for more than 1 year already and has a professional multilingual support team.
InstaForex — a rather new Forex broker that can boast a wide range of deposit/withdrawal options, one of the best conditions on the market, MetaTrader 4 trading platform and the 6% interest rate for non-Muslim trading accounts. InstaForex specializes itself on traders from Nigeria.
FXcast — this Forex broker introduced a 1 pip spread trading with its revolutionary FXcast Swing platform for small accounts. It offers MetaTrader 4 platform for $10 and larger accounts. FXcast offers almost every possible method to deposit and withdraw funds from the trading account.
LiteForex — a Forex broker with a very large member base and a long history, it offers MetaTrader 4 platform; WebMoney, e-gold and WireTransfer as payment methods; excellent support service and a guaranteed stability of one of the most trusted Forex brokers. Cent accounts are allowed.
Marketiva — the pioneer of the newbie-friendly Forex trading, Marketiva offers a very easy-to-use trading platform with a lot of functionality, as well as support chat and advisors’ chat; options for funds deposit/withdraw are WebMoney, e-gold, Wire Transfer, e-Bullion and E-Dinar. Cent accounts are allowed.
Forex-Metal — an independent online Forex and CFD broker. It has very competitive trading conditions: $0 commission on Forex trading, 1:500 leverage, Instant execution of orders, ability to trade all instruments from a single account. Professional team with years of experience to assist you with trading. Free demo accounts. State-of-the-art MetaTrader 4 trading platform. Daily FX news, charts and analysis. Over 40 FX pairs. Some major pairs with only 2 pips spread. Sign up bonuses for new accounts available.
After you open a trading account with some Forex broker, you will have to download its trading platform, deposit the required amount of initial funds to your account and start trading.
But to trade successfully you have to educate yourself about Forex,
Allow small accounts and deposits, so you can try it with a little money before starting a serious trading.
Offer a variety of payment methods for depositing and withdrawing funds, especially WebMoney, e-gold or PayPal.
Provide the convenient ways for trading — either a newbie friendly trading platform or powerful MetaTrader platform.
Be a reputable and trustworthy on-line company, to which you could trust your trading account’s security.
Have a fast order execution and funds transaction processing.
Offer a dedicated on-line and on-phone support.
As it was mentioned before, there are many Forex brokers available, but here presented is the list of the most prominent representatives of the on-line Forex brokerage market:
FXOpen — the broker that supports MetaTrader 4 trading platform; deposits/withdrawals via WebMoney, e-gold, Wire Transfer, CashU, e-Bullion and Liberty Reserve; micro accounts from 1$, mini accounts from $100; free $25 bonus; regular trading contests; it operates for more than 1 year already and has a professional multilingual support team.
InstaForex — a rather new Forex broker that can boast a wide range of deposit/withdrawal options, one of the best conditions on the market, MetaTrader 4 trading platform and the 6% interest rate for non-Muslim trading accounts. InstaForex specializes itself on traders from Nigeria.
FXcast — this Forex broker introduced a 1 pip spread trading with its revolutionary FXcast Swing platform for small accounts. It offers MetaTrader 4 platform for $10 and larger accounts. FXcast offers almost every possible method to deposit and withdraw funds from the trading account.
LiteForex — a Forex broker with a very large member base and a long history, it offers MetaTrader 4 platform; WebMoney, e-gold and WireTransfer as payment methods; excellent support service and a guaranteed stability of one of the most trusted Forex brokers. Cent accounts are allowed.
Marketiva — the pioneer of the newbie-friendly Forex trading, Marketiva offers a very easy-to-use trading platform with a lot of functionality, as well as support chat and advisors’ chat; options for funds deposit/withdraw are WebMoney, e-gold, Wire Transfer, e-Bullion and E-Dinar. Cent accounts are allowed.
Forex-Metal — an independent online Forex and CFD broker. It has very competitive trading conditions: $0 commission on Forex trading, 1:500 leverage, Instant execution of orders, ability to trade all instruments from a single account. Professional team with years of experience to assist you with trading. Free demo accounts. State-of-the-art MetaTrader 4 trading platform. Daily FX news, charts and analysis. Over 40 FX pairs. Some major pairs with only 2 pips spread. Sign up bonuses for new accounts available.
After you open a trading account with some Forex broker, you will have to download its trading platform, deposit the required amount of initial funds to your account and start trading.
But to trade successfully you have to educate yourself about Forex,
Friday, October 9, 2009
Learn About Forex For Beginners
In this economy, more and more individuals are looking for ways to earn money online from home. People may be looking for away to supplement the income from another job, or they may be looking to find a source of all the income they need. Currency trading or forex for beginners is a way for people to earn money online. Individuals that have never had any experience in the market are even trying it out these days.
For those who are interested in forex for beginners, Forex is an abbreviation for the words foreign exchange.This type of trading consists of making money by trading different currencies from different countries. An important piece of information for all those who are interested in this type of trading is that there is no single market that currently exists for the forex traders. There are also no regulations in effect regarding crossing borders, so the market floats from region to region daily. This results in a varying amount of exchange rates.
If you are a novice to the market, there are some things that you should know. Before actually investing in a trading account, gather some information about forex for beginners. It is important to learn some basic trading terms as well as to able to read and comprehend the different currency rates from different countries. It is essential that you are aware of the value of the rates because this type of trading is done in pairs. If you buy a currency, then you also sell one. The key is to figure out how to buy one that is going to be worth more in value than the one that you are selling.
Forex for beginners should include some knowledge about economics and currency fluctuations. It is important to realize that the value of currency can increase and decrease consistently. For example, London is the prevailing market due to the strength of the currency there. So, paper traders should be aware to likely base the majority of market assumptions and prices on the London market. This knowledge can help the trader figure out about how market trades are performed and in which direction they tend to go.
Learning about forex for beginners can take some time. The best thing to do is acquaint yourself with some basic knowledge about this type of trading market. Then, try to invest in lower risk trades as you gain practical experience.
Also pay close attention below...
Starting off with FOREX trading can be a hassle. However, if you are looking for quick profits there are a couple of software programs that trade on autopilot for you and all you have to do is press one button and see the profits rolling in.
For those who are interested in forex for beginners, Forex is an abbreviation for the words foreign exchange.This type of trading consists of making money by trading different currencies from different countries. An important piece of information for all those who are interested in this type of trading is that there is no single market that currently exists for the forex traders. There are also no regulations in effect regarding crossing borders, so the market floats from region to region daily. This results in a varying amount of exchange rates.
If you are a novice to the market, there are some things that you should know. Before actually investing in a trading account, gather some information about forex for beginners. It is important to learn some basic trading terms as well as to able to read and comprehend the different currency rates from different countries. It is essential that you are aware of the value of the rates because this type of trading is done in pairs. If you buy a currency, then you also sell one. The key is to figure out how to buy one that is going to be worth more in value than the one that you are selling.
Forex for beginners should include some knowledge about economics and currency fluctuations. It is important to realize that the value of currency can increase and decrease consistently. For example, London is the prevailing market due to the strength of the currency there. So, paper traders should be aware to likely base the majority of market assumptions and prices on the London market. This knowledge can help the trader figure out about how market trades are performed and in which direction they tend to go.
Learning about forex for beginners can take some time. The best thing to do is acquaint yourself with some basic knowledge about this type of trading market. Then, try to invest in lower risk trades as you gain practical experience.
Also pay close attention below...
Starting off with FOREX trading can be a hassle. However, if you are looking for quick profits there are a couple of software programs that trade on autopilot for you and all you have to do is press one button and see the profits rolling in.
Forex Trading Strategy - A Beginner's Guide to Forex Trading Strategy
As anybody knows anything about trading on the Forex markets realizes, Forex is a high risk market that presents endless opportunities to people who are prepared to exploit them. Here are some of the things that it takes to be successful in these markets:
- a patient long-term approach which focuses on incremental accumulation of profits instead of going for the big deal
- The willingness to lose money some of the time, because you can never be 100% right
- The ability to manage your money and your downside to limit your losses
- The determination to trade in a disciplined fashion to keep your emotions separate from your business decisions
What all this really means, especially for a beginner is that a long-term strategy needs to be carefully worked out and faithfully implemented. It is also working out the strategy, you also need to be familiar with the concepts of stop loss and take profit. Paradoxically, the key to making money in the markets is firstly to determine what you are prepared to lose on each position. This is called a stop loss and when you stop loss limit is reached, you should close out your position immediately. Emotionally, you may be tempted to hang on to a losing position in the hope that the market return. But you are really exposing yourself to an open-ended and unquantifiable loss. Trading discipline demands that you set a stop loss for each position you take and honor the stop loss scrupulously. Take profit is the reverse when you set a spread that you would like to earn on a particular position instead of giving way to greed.
The Forex robot is a software package that follows the markets and trades on your behalf 24/7. It saves you from the drudgery of watching your computer screens continuously not shows that positions are open and close with the best possible time. I would recommend that you find a robot that suits your particular trading style, and let it execute your strategy. While you watch and fine-tune. This would ensure that your strategy and your trading are executed with the discipline necessary to be successful in the Forex markets.
- a patient long-term approach which focuses on incremental accumulation of profits instead of going for the big deal
- The willingness to lose money some of the time, because you can never be 100% right
- The ability to manage your money and your downside to limit your losses
- The determination to trade in a disciplined fashion to keep your emotions separate from your business decisions
What all this really means, especially for a beginner is that a long-term strategy needs to be carefully worked out and faithfully implemented. It is also working out the strategy, you also need to be familiar with the concepts of stop loss and take profit. Paradoxically, the key to making money in the markets is firstly to determine what you are prepared to lose on each position. This is called a stop loss and when you stop loss limit is reached, you should close out your position immediately. Emotionally, you may be tempted to hang on to a losing position in the hope that the market return. But you are really exposing yourself to an open-ended and unquantifiable loss. Trading discipline demands that you set a stop loss for each position you take and honor the stop loss scrupulously. Take profit is the reverse when you set a spread that you would like to earn on a particular position instead of giving way to greed.
The Forex robot is a software package that follows the markets and trades on your behalf 24/7. It saves you from the drudgery of watching your computer screens continuously not shows that positions are open and close with the best possible time. I would recommend that you find a robot that suits your particular trading style, and let it execute your strategy. While you watch and fine-tune. This would ensure that your strategy and your trading are executed with the discipline necessary to be successful in the Forex markets.
Forex Trading Strategy - Simple Steps to Create a Workable Forex Trading Strategy
There is good reason to believe that the vast majority of people who trade in the Forex markets lose money consistently and only a handful of traders are able to show profits on a regular basis. What distinguishes the men from the boys is their ability to create a sensible plan and a workable strategy for its implementation.
In the first place, you have to accept that you are not going to buy success by paying a vendor a few hundred dollars, whether it is for software, instruction, or anything else. You have to work hard for your own success and this means being prepared to learn the right things and right methods. You are rewarded for using your knowledge to read and predict the markets accurately.
You have to be comfortable with risk, and how to manage it. If you are uncomfortable with the high risk involved with the Forex markets save your money and do not attempt to trade in these markets. To obtain a high return, you need to actually seek out risk and to manage it so that your profits are maximized and your losses are controlled. Risk management involves setting stop loss and take profit limits on every position that you take and observing this discipline scrupulously. It is important to discipline your trading so that your heart does not overrule your head. Be judicious in the use of your equity remembering that leverage is a two edged sword.
Choose your methodology to suit your trading style, and use it sensibly. Make out a simple plan, the simpler the better, and you use your methodology and your strategy to implement the plan. Depending on your preference, you could choose to use either fundamentals or technicals. Broadly speaking, technicals are good for short-term trading and fundamentals for long-term trading.
Your best investment in strategy implementation is a good forex robot. The best robots will actively assisting you in analysis and prediction, as well as in carrying out the trades in accordance with the settings that you have tweaked. They will save you a great deal of drudgery in following the markets and will execute your strategy with precision and timing.
In the first place, you have to accept that you are not going to buy success by paying a vendor a few hundred dollars, whether it is for software, instruction, or anything else. You have to work hard for your own success and this means being prepared to learn the right things and right methods. You are rewarded for using your knowledge to read and predict the markets accurately.
You have to be comfortable with risk, and how to manage it. If you are uncomfortable with the high risk involved with the Forex markets save your money and do not attempt to trade in these markets. To obtain a high return, you need to actually seek out risk and to manage it so that your profits are maximized and your losses are controlled. Risk management involves setting stop loss and take profit limits on every position that you take and observing this discipline scrupulously. It is important to discipline your trading so that your heart does not overrule your head. Be judicious in the use of your equity remembering that leverage is a two edged sword.
Choose your methodology to suit your trading style, and use it sensibly. Make out a simple plan, the simpler the better, and you use your methodology and your strategy to implement the plan. Depending on your preference, you could choose to use either fundamentals or technicals. Broadly speaking, technicals are good for short-term trading and fundamentals for long-term trading.
Your best investment in strategy implementation is a good forex robot. The best robots will actively assisting you in analysis and prediction, as well as in carrying out the trades in accordance with the settings that you have tweaked. They will save you a great deal of drudgery in following the markets and will execute your strategy with precision and timing.
Forex Trading Strategy - Common Mistakes in Formulating Forex Trading Strategy
In any business endeavor, an activity undertaken without a proper plan is doomed to failure. A proper plan will have two parts: the first called objective is what you a're trying to achieve and a second called strategy is how you are going to achieve your objective. Similarly in Forex trading, unless you have an objective and a strategy, you are probably going to end up losing money.
A good starting point is to examine what you should not be doing and to learn from the mistakes that other people will make. First is to have dreams of getting rich quick all becoming a millionaire overnight. Forex trading is not a lottery or a horse race where you ride your luck. Only a long-term commitment and an objective of early realistically turns, where the gains outweigh the losses can be a good basis for planning.
This has to be reinforced by diligent homework to keep abreast of the financial and economic news that will affect the currencies that you are going to trade. Good information, when combined with technical analysis can provide useful pointers on which way prices are going to tend.
The second mistake that people often make is to let emotions interfere with the execution of a sound strategy. It is easy to get carried away by your feelings has become emotionally attached to the positions that should have been closed out quickly. This is the surest way to taking unsustainable losses. The very purpose of a plan is to foresee eventualities and prepare for them to protect yourself. For instance when you set a stop loss on a particular position, you have logically determined how much you can afford to lose on that particular deal. Trading discipline therefore demands that if this limit is reached, you close your position immediately, regardless of your feelings.
If you have prepared a proper plan implementation becomes critical and your best bet is to get a Forex robot that you feel comfortable with. The robot will watch and analyze the markets for you and execute your stop loss and take profit settings with perfect timing and precision.
A good starting point is to examine what you should not be doing and to learn from the mistakes that other people will make. First is to have dreams of getting rich quick all becoming a millionaire overnight. Forex trading is not a lottery or a horse race where you ride your luck. Only a long-term commitment and an objective of early realistically turns, where the gains outweigh the losses can be a good basis for planning.
This has to be reinforced by diligent homework to keep abreast of the financial and economic news that will affect the currencies that you are going to trade. Good information, when combined with technical analysis can provide useful pointers on which way prices are going to tend.
The second mistake that people often make is to let emotions interfere with the execution of a sound strategy. It is easy to get carried away by your feelings has become emotionally attached to the positions that should have been closed out quickly. This is the surest way to taking unsustainable losses. The very purpose of a plan is to foresee eventualities and prepare for them to protect yourself. For instance when you set a stop loss on a particular position, you have logically determined how much you can afford to lose on that particular deal. Trading discipline therefore demands that if this limit is reached, you close your position immediately, regardless of your feelings.
If you have prepared a proper plan implementation becomes critical and your best bet is to get a Forex robot that you feel comfortable with. The robot will watch and analyze the markets for you and execute your stop loss and take profit settings with perfect timing and precision.
Forex Trading Strategy - Factors That Determine a Good Forex Trading Strategy
What distinguishes a successful trader in the Forex market is his ability to prepare a proper plan and device and appropriate strategy to execute it. He will set themselves realistic targets for returns, and look for strategy that will maximize his profit, while minimizing his risk. He will also be prepared to be patient and to occasionally take a loss while concentrating on coming out ahead in the long-term. Some of the factors that go into a successful plan are as follows:
- determining the appropriate level of leverage. Forex trading is a leverage game because it enables you to multiply your money by up to 200 times in placing bets on the market and. Leverage is however a double-edged sword and the downside is as large as the upside. You will need to find a level of leverage that you are comfortable with, especially in estimating what you are prepared to lose.
- having estimated what you are prepared to lose on each position you then set a stop loss that is sacrosanct. If the price hits your stop loss, regardless of your feelings, close your position and square off.
- In the same way, also set a take profit limit for each position. Here again, if the price hits your profit level, you will close out your position.
This discipline prevents greed getting the better of you and your hanging on to an unsustainable position.
Let us for instance examine how scalping works, and how a very successful Forex robot called FAP Turbo operates. Scalping refers to short term trading looking for small spreads in your favor and accumulating the profit instead of looking for the large perfect deal. In its scalping mode, FAP Turbo looks for small favorable spreads in the six to 15 pips range and locks onto the profit the moment this spread is achieved. It then repeats the deal as and when conditions are favorable trading up to six times a day. This is an excellent example of conservative trading that maximizes profit, while minimizing risk.
You may have the best possible strategy in the world but without good execution, the strategy is worthless. You seriously need to consider putting yourself a good forex robot, which will execute the strategy that to plan with great precision.
- determining the appropriate level of leverage. Forex trading is a leverage game because it enables you to multiply your money by up to 200 times in placing bets on the market and. Leverage is however a double-edged sword and the downside is as large as the upside. You will need to find a level of leverage that you are comfortable with, especially in estimating what you are prepared to lose.
- having estimated what you are prepared to lose on each position you then set a stop loss that is sacrosanct. If the price hits your stop loss, regardless of your feelings, close your position and square off.
- In the same way, also set a take profit limit for each position. Here again, if the price hits your profit level, you will close out your position.
This discipline prevents greed getting the better of you and your hanging on to an unsustainable position.
Let us for instance examine how scalping works, and how a very successful Forex robot called FAP Turbo operates. Scalping refers to short term trading looking for small spreads in your favor and accumulating the profit instead of looking for the large perfect deal. In its scalping mode, FAP Turbo looks for small favorable spreads in the six to 15 pips range and locks onto the profit the moment this spread is achieved. It then repeats the deal as and when conditions are favorable trading up to six times a day. This is an excellent example of conservative trading that maximizes profit, while minimizing risk.
You may have the best possible strategy in the world but without good execution, the strategy is worthless. You seriously need to consider putting yourself a good forex robot, which will execute the strategy that to plan with great precision.
Free Forex Trading Signal - The Pro Traders Use This One and You Can to For Bigger Long Term Profits
There are lots of people selling Forex trading signals and you have numerous robots and software you can buy but why pay when this signal works and piles up huge gains - Everything about it is enclosed, lets take a look at it.
The signal has been used for nearly 30 years and is the one the savvy pro traders use, sure you can buy robots and expert advisors, for a couple of hundred bucks or less but they don't even work, because they have never been traded, there just back tests on historical data! Check the disclaimer and it says simulated, well that's not real money.
The signal we will look at here has been traded by numerous professional traders in real time, made millions, lets look at the logic its based on first then the signal rule.
Look at a chart and you will see currency pairs, trend for long periods of time and every major trend, starts by breaking to new highs, in a bull trend and new lows in a bear trend; the signal we will look at is simply based upon this timeless fact. It was devised by a true trading legend - Richard Donchian and the signal was simple and only has one rule which gives it it's name - "The Four Week Rule" The rule states:
Buy a break to a new 4 week high and hold onto the position until a new 4 week low is made and then go short, keep reversing the position as each new 4 week high or low is hit and always keep an open position in the market.
That's the rule, it works and yes, it is simple but simple systems always work best in Forex as they are more robust than complex ones - Forex trading is simple and most traders forget this fact.
The signal works very well long term and while you have short term periods of drawdown when markets are not trending, long term it makes money. You can apply it in 5 minutes a day per currency pair and you don't even need a computer to do the calculation.
Test the 4 week rule and you have your own Forex Expert Advisor for free and if you use it, you will be in good company, even trading legends like Richard Dennis, were admirers of its simplicity and long term profitability so if it's good enough for super traders like him, it's good enough for me and you.
You don't get much in life that's free, that makes money and while Richard Donchian has passed away, he has left a great Forex trading which you can use to increase your Forex profits
The signal has been used for nearly 30 years and is the one the savvy pro traders use, sure you can buy robots and expert advisors, for a couple of hundred bucks or less but they don't even work, because they have never been traded, there just back tests on historical data! Check the disclaimer and it says simulated, well that's not real money.
The signal we will look at here has been traded by numerous professional traders in real time, made millions, lets look at the logic its based on first then the signal rule.
Look at a chart and you will see currency pairs, trend for long periods of time and every major trend, starts by breaking to new highs, in a bull trend and new lows in a bear trend; the signal we will look at is simply based upon this timeless fact. It was devised by a true trading legend - Richard Donchian and the signal was simple and only has one rule which gives it it's name - "The Four Week Rule" The rule states:
Buy a break to a new 4 week high and hold onto the position until a new 4 week low is made and then go short, keep reversing the position as each new 4 week high or low is hit and always keep an open position in the market.
That's the rule, it works and yes, it is simple but simple systems always work best in Forex as they are more robust than complex ones - Forex trading is simple and most traders forget this fact.
The signal works very well long term and while you have short term periods of drawdown when markets are not trending, long term it makes money. You can apply it in 5 minutes a day per currency pair and you don't even need a computer to do the calculation.
Test the 4 week rule and you have your own Forex Expert Advisor for free and if you use it, you will be in good company, even trading legends like Richard Dennis, were admirers of its simplicity and long term profitability so if it's good enough for super traders like him, it's good enough for me and you.
You don't get much in life that's free, that makes money and while Richard Donchian has passed away, he has left a great Forex trading which you can use to increase your Forex profits
How Can I Make Money Trading Forex Online? A Great Way For Beginners to Cash In!
If you have recently learned about forex trading and the money it offers, you are in all likelihood roused with the thought to make some extra revenue. As more everyday people learn about the great earnings potential of forex trading, the forex markets continue to grow.
Currency trading, just like other types of financial trading, involves buying low and dumping high. In this case, as you know, you are trading in currencies and not company stocks. And just like shares, currency rates rise and depreciate in price each day. If you acquire an inexpensive currency - let's say at 48 cents for every currency unit - and afterwards get rid of it once the prices increases, you'll earn profits. That's how forex trading operates.
Even though this looks uncomplicated in principle, there are many details you must think about before you jump into the game. You have to keep in mind that there are so many currencies - it's next to impossible to monitor each currency. Most traders will pay attention to just a small number. Plus, even if you are able to focus on a couple interesting currencies to observe, how will you realize when it's the correct time to purchase or sell?
Thankfully, a quality currency analyzing program will help max out your profits. The software program takes the toughness of supervising the markets out of currency trading by using a specially designed algorithm to analyze the markets.. These computer programs will notice when is the appropriate time to purchase and sell, along with what currency pairs to put money into.
Thankfully, there's no need to be a technical expert to use a forex program. Most of these programs were programmed so that it's easy for anyone to use. They will typically feature a "practice" mode that guides you along the features as you're learning the program. This is a useful feature and one that I encourage you to search for.
You can test out the program risk free, since reputable companies will offer a moneyback guarantee. This way you can try out the program and learn if it is as user-friendly as it promises. And of course, you will can also find out whether the program gives you the extra cash you're hoping to make in the forex markets.
Obviously it's normal to be a bit shy to dive into forex trading if you are brand new. Fortunately, with a forex trading software program, you don't have to be intimidated. Particularly in the beginning, new forex traders will get a huge boost from relying on the strong findings of the software to make money generating transactions.
As your knowledge of the currency markets increases, you will likely end up making trades coming from your own ideas and also on what the software gives you. Still, a forex trading program is really the smartest way to get started with currency trading. Using a trading program will generate for you extra money, but it will also help in giving you knowledge on the currency markets.
Currency trading, just like other types of financial trading, involves buying low and dumping high. In this case, as you know, you are trading in currencies and not company stocks. And just like shares, currency rates rise and depreciate in price each day. If you acquire an inexpensive currency - let's say at 48 cents for every currency unit - and afterwards get rid of it once the prices increases, you'll earn profits. That's how forex trading operates.
Even though this looks uncomplicated in principle, there are many details you must think about before you jump into the game. You have to keep in mind that there are so many currencies - it's next to impossible to monitor each currency. Most traders will pay attention to just a small number. Plus, even if you are able to focus on a couple interesting currencies to observe, how will you realize when it's the correct time to purchase or sell?
Thankfully, a quality currency analyzing program will help max out your profits. The software program takes the toughness of supervising the markets out of currency trading by using a specially designed algorithm to analyze the markets.. These computer programs will notice when is the appropriate time to purchase and sell, along with what currency pairs to put money into.
Thankfully, there's no need to be a technical expert to use a forex program. Most of these programs were programmed so that it's easy for anyone to use. They will typically feature a "practice" mode that guides you along the features as you're learning the program. This is a useful feature and one that I encourage you to search for.
You can test out the program risk free, since reputable companies will offer a moneyback guarantee. This way you can try out the program and learn if it is as user-friendly as it promises. And of course, you will can also find out whether the program gives you the extra cash you're hoping to make in the forex markets.
Obviously it's normal to be a bit shy to dive into forex trading if you are brand new. Fortunately, with a forex trading software program, you don't have to be intimidated. Particularly in the beginning, new forex traders will get a huge boost from relying on the strong findings of the software to make money generating transactions.
As your knowledge of the currency markets increases, you will likely end up making trades coming from your own ideas and also on what the software gives you. Still, a forex trading program is really the smartest way to get started with currency trading. Using a trading program will generate for you extra money, but it will also help in giving you knowledge on the currency markets.
Forex Lesson - How Ordinary Traders Became Millionaire Traders in Just 2 Weeks!
This is a lesson any trader who wants to be successful should read and involves ordinary people, being taught to trade and make millions in two weeks, by trading legend Richard Dennis. There is much you can learn from this experiment, so let's look at it...
Take a female auditor, a boy just out of school, a couple of professional card players, a security guard to name but a few and teach them to trade when they know nothing to start.
Richard Dennis took up the challenge and his aim was simple - to show that anyone regardless of age, sex or educational achievement could be taught to trade successfully.
Dennis taught them a simple long term trend following system, based on breakouts and some money management rules. He knew however that the real challenge was not learning the system - but learning the mindset to apply it.
You only need a simple system to win and this has always been true, make your system to complicated and it will have too many elements to break and that is a lesson any traders should learn.
What most traders don't learn and Dennis placed great importance on is having the mindset to apply the system with discipline and keep going through a losing period, until you hit profits again.
Of course if you don't have the discipline to apply a system, you don't have one.
Dennis didn't just tell his pupils to follow the system blindly, he taught them how and why it worked, so they would have the inner belief and confidence to trade it properly.
Most traders' think that losing periods don't last long - but they can last for many weeks, this happens even to the best traders and you need to learn to take them cheerfully and keep them small.
In interviews with the traders over the years they al made the comment that it was the discipline to apply the system which was hard not learning the system itself and if you think trading discipline is easy, think again its not. The market will wrong foot you and give you loss after loss, for long periods and that's hard to take.
Trading success is based on not just the system but the inner belief that it will succeed long term. A trader needs to learn that you can't get success from anyone else, it comes from within. You need to have the right knowledge, which gives you confidence, which transmits into discipline.
This lesson shows that anyone can win and OK, you may not be as successful as the group above - but the opportunity is there for all to become successful traders.
Always remember, the market doesn't beat the trader the trader beats himself due to his own failings. If you want success and you understand the message of this article, you can get it and enjoy great Forex trading profits.
Take a female auditor, a boy just out of school, a couple of professional card players, a security guard to name but a few and teach them to trade when they know nothing to start.
Richard Dennis took up the challenge and his aim was simple - to show that anyone regardless of age, sex or educational achievement could be taught to trade successfully.
Dennis taught them a simple long term trend following system, based on breakouts and some money management rules. He knew however that the real challenge was not learning the system - but learning the mindset to apply it.
You only need a simple system to win and this has always been true, make your system to complicated and it will have too many elements to break and that is a lesson any traders should learn.
What most traders don't learn and Dennis placed great importance on is having the mindset to apply the system with discipline and keep going through a losing period, until you hit profits again.
Of course if you don't have the discipline to apply a system, you don't have one.
Dennis didn't just tell his pupils to follow the system blindly, he taught them how and why it worked, so they would have the inner belief and confidence to trade it properly.
Most traders' think that losing periods don't last long - but they can last for many weeks, this happens even to the best traders and you need to learn to take them cheerfully and keep them small.
In interviews with the traders over the years they al made the comment that it was the discipline to apply the system which was hard not learning the system itself and if you think trading discipline is easy, think again its not. The market will wrong foot you and give you loss after loss, for long periods and that's hard to take.
Trading success is based on not just the system but the inner belief that it will succeed long term. A trader needs to learn that you can't get success from anyone else, it comes from within. You need to have the right knowledge, which gives you confidence, which transmits into discipline.
This lesson shows that anyone can win and OK, you may not be as successful as the group above - but the opportunity is there for all to become successful traders.
Always remember, the market doesn't beat the trader the trader beats himself due to his own failings. If you want success and you understand the message of this article, you can get it and enjoy great Forex trading profits.
Forex Lesson - How Ordinary Traders Became Millionaire Traders in Just 2 Weeks!
This is a lesson any trader who wants to be successful should read and involves ordinary people, being taught to trade and make millions in two weeks, by trading legend Richard Dennis. There is much you can learn from this experiment, so let's look at it...
Take a female auditor, a boy just out of school, a couple of professional card players, a security guard to name but a few and teach them to trade when they know nothing to start.
Richard Dennis took up the challenge and his aim was simple - to show that anyone regardless of age, sex or educational achievement could be taught to trade successfully.
Dennis taught them a simple long term trend following system, based on breakouts and some money management rules. He knew however that the real challenge was not learning the system - but learning the mindset to apply it.
You only need a simple system to win and this has always been true, make your system to complicated and it will have too many elements to break and that is a lesson any traders should learn.
What most traders don't learn and Dennis placed great importance on is having the mindset to apply the system with discipline and keep going through a losing period, until you hit profits again.
Of course if you don't have the discipline to apply a system, you don't have one.
Dennis didn't just tell his pupils to follow the system blindly, he taught them how and why it worked, so they would have the inner belief and confidence to trade it properly.
Most traders' think that losing periods don't last long - but they can last for many weeks, this happens even to the best traders and you need to learn to take them cheerfully and keep them small.
In interviews with the traders over the years they al made the comment that it was the discipline to apply the system which was hard not learning the system itself and if you think trading discipline is easy, think again its not. The market will wrong foot you and give you loss after loss, for long periods and that's hard to take.
Trading success is based on not just the system but the inner belief that it will succeed long term. A trader needs to learn that you can't get success from anyone else, it comes from within. You need to have the right knowledge, which gives you confidence, which transmits into discipline.
This lesson shows that anyone can win and OK, you may not be as successful as the group above - but the opportunity is there for all to become successful traders.
Always remember, the market doesn't beat the trader the trader beats himself due to his own failings. If you want success and you understand the message of this article, you can get it and enjoy great Forex trading profits.
Take a female auditor, a boy just out of school, a couple of professional card players, a security guard to name but a few and teach them to trade when they know nothing to start.
Richard Dennis took up the challenge and his aim was simple - to show that anyone regardless of age, sex or educational achievement could be taught to trade successfully.
Dennis taught them a simple long term trend following system, based on breakouts and some money management rules. He knew however that the real challenge was not learning the system - but learning the mindset to apply it.
You only need a simple system to win and this has always been true, make your system to complicated and it will have too many elements to break and that is a lesson any traders should learn.
What most traders don't learn and Dennis placed great importance on is having the mindset to apply the system with discipline and keep going through a losing period, until you hit profits again.
Of course if you don't have the discipline to apply a system, you don't have one.
Dennis didn't just tell his pupils to follow the system blindly, he taught them how and why it worked, so they would have the inner belief and confidence to trade it properly.
Most traders' think that losing periods don't last long - but they can last for many weeks, this happens even to the best traders and you need to learn to take them cheerfully and keep them small.
In interviews with the traders over the years they al made the comment that it was the discipline to apply the system which was hard not learning the system itself and if you think trading discipline is easy, think again its not. The market will wrong foot you and give you loss after loss, for long periods and that's hard to take.
Trading success is based on not just the system but the inner belief that it will succeed long term. A trader needs to learn that you can't get success from anyone else, it comes from within. You need to have the right knowledge, which gives you confidence, which transmits into discipline.
This lesson shows that anyone can win and OK, you may not be as successful as the group above - but the opportunity is there for all to become successful traders.
Always remember, the market doesn't beat the trader the trader beats himself due to his own failings. If you want success and you understand the message of this article, you can get it and enjoy great Forex trading profits.
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