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Mini Forex

2009-07-05T16:29:00.000-07:00

Forex dealing is the best method to earn money by currency dealing on the Internet. With more than sixty currencies and international market for people to deal there has not been a simple method to earn currency online.

Foreign Exchange dealing until just was kept for large financial institutes and banks but appreciates to the authority of the online and Internet currency dealing, FX has currently become practicable for regular persons. Foreign exchange market is the greatest dealing market in all over the world and daily, there are expected earnings of more than $1.5 trillion dollars. Another added bonus is that forex dealing is available for 5 days in each week for complete day. However, other markets are activated for eight-hours in a day.

There are different two kinds of forex trading such as regular forex trading and mini forex dealing. Mini FX dealing is the best method for small depositors to participate in forex dealing. This is a good way to experience forex dealing and study the actions and talents required to do well without leaving to huge expenditures. With any FX brokers providing a leverage of 100:1, this kind of dealing will enable people to manage about $10,000 currency points with a set down of just $100.

So, this becomes potential for small and new depositors to begin currency dealing. These depositors do not contain the large capital that a company or a Multinational Corporation has. So, small depositors provide an alternative of opening a Mini Forex.

Brokers for Mini forex enable depositors to open their accounts in foreign exchange market through critical remark, a somewhat minor deposit. About $100,000 is the least requirement for real FX dealing. Brokers for Mini Forex may agree to agreements as little as $10,000. In additional, the margin in actual forex dealing is about one percent where mini forex accounts are activated at about 0.5 percent.

Mini forex broker provides the depositor a low-cost and quick method to deal from the ease of home day and night.

Forex brokers frequently show their consumers concerning the best trading alternatives that can earn the most income. The main elements to suppose while selecting a mini forex broker are advice from other dealers about the broker, if the Forex broker has assured his consumer’s finances and the sum of fees charged.

An achievement of a dealer in forex dealing depends on the information they have. Mini Forex Brokers should contain the information about the market fluctuations which assists them to get utmost benefit of the foreign exchange market.

FOREX Scalping

2009-07-05T16:25:00.000-07:00

FOREX scalping is an exchanging policy that the dealer attempts to create small revenues along with the slight change in the prices. In the present world, FOREX scalping is in great demand. The FOREX market is always in search for the skilled FOREX scalpers.

Correct FOREX scalping includes opening and finishing a point in just few seconds or minutes. FOREX scalping includes utilizing of leverage and higher influence refers to greater risk. If the FOREX scalper engages for the short time period in a deal, it reduces the risk that is natural in investing or trading because of the investment at the FOREX market. If this act is performed accurately, FOREX scalping offers this extra level of risk control that is not allowed in day dealing.

Why Don’t Most Brokerage Firms Like FOREX Scalpers?

Several traders make their FOREX trading in opposition to their customers with the help of the trading counters. This does not influence the normal brokers that remain in a deal for days or hours and FOREX scalpers are other type of broker. The prosperity of FOREX scalping currencies can be considerably decreased if the right dealing firm is not utilized.

The little proportion of victorious scalpers is generally quit by one FOREX dealer after other FOREX trader. If one has utilized a FOREX scalping policy effectively in the past, one can trades the foreign currency efficiently in the FOREX market.

FOREX Scalping Platforms

FOREX scalpers utilize all types of platforms to trade the currencies but the most general type is MetaTrader 4. It is built by a Russian company and has become the type of the ‘de facto standard’ between several FOREX brokers. This FOREX scalping platform is being utilized in trading the FOREX market without any restrictions, a multi-liquidity provider feed like HotSpotFxi or Currenex or an ECN-type feed should be utilized. Presently, there are very little firms that are operating on such schemes to be able to hold great FOREX scalping or trading.

FOREX Scalping Risk

It is a very lucrative process while trading the movements of the prices but the increase one pays when one open a deal creates the risk-reward more dangerous as compared to the long term dealing. Another risk faced by the FOREX scalpers is that one big loss can remove several little profits that the broker acquires. Therefore, the traders require an excellent policy to reduce their risks.

FOREX Scalping System Trading or Manual Execution

Several FOREX scalpers deal physically and with the developments in the trading platforms and the computer knowledge give rise to other type of FOREX scalper such as automated scalper or the system trader. Most of the FOREX scalpers generate trading algorithms or FOREX robots that are partially or completely computerized, rising implementation efficiency and accessible exchanging chances.

FOREX Analysis

2009-07-05T16:15:00.000-07:00

How do FOREX broker intended their policies? On what they depend for creating their exchanging plans? The answer is Analysis. It includes both Fundamental and TechnicalAnalysis. Fundamental Analysis is an investigation of the political and economic conditions that are common and can have the negative or positive effect on the prices of the currency. It is done for various reasons such as the inflation rate, economic policies and the growth rate.

The brokers make use of the fundamental analysis merely to design their exit and entry positions into the market. This can be done effectively if they have a wide indication of the situations that influence that specific currency. The forces of the demand and supply will have a great effect on the prices of the currency and are also influenced by the economic atmosphere surrounding them.

The power of the economy is an indication of the GDP, amount of foreign investment and the trade balance. Interest rates and the international trade are also other indicators of the fundamental analysis. In case of international trade, there is a short of balance which indicates excess of imports over exports. This refers to that more amount of money is departing out as compared to approaching in and this will have a negative effect on the price of the currency.

The technical analysis is also other type of FOREX analysis. It is a process of forecasting the movements of the price and trends of the future market by examining what has happened in the past with the help of the charts. FOREX market performs this analysis to pursue the tendencies which is considered to be a beneficial activity.

Technical analysis is related with what has really occurred in the market in place of what should occur and keeps in mind the volume of trading and the cost of instruments and makes charts by utilizing that information as a main tool. The main benefit of technical analysis is that qualified forecasters can follow several market devices at the same time.

Technical analysis is developed on three important rules such as:-

Prices shift in trends
Market action discounts
History replicates itself

Advantages of Technical Analysis

This analysis concentrates on what is occurred in opposition to what has earlier occurred and thus is legitimate at any level of price.
This is utilized to develop the activities of any asset accessible for dealing in the capital market.
The technical advance focuses on the rates which deactivates exterior factors.

Disadvantages of Technical Analysis

Analysis created in the short time breaks may be showed to ‘noise’ and may lead to a misconception of market information.
Some of the opponents allege that the Dow advance is very frail whereas the current prices do not essentially venture the prices of the future.

Conclusion

In this way, FOREX analysis is done by utilizing fundamental and technical analysis.

Market cycles and currency trading

2009-06-20T22:50:00.002-07:00

In this article we will discuss the relationship between market cycles and forex through a dialogue between a beginner and a successful trader. The successful trader is ST, while the beginner is B:
B: What is the business cycle and how can I use it trade forex?
ST: Business cycle is the name given to the growth and contraction phases of economic life. It is one of the most important determinants of economic trends; no trader can be called a trader without understanding the inevitable nature of cycles. Since it is one of the major drivers of all trends and economic events on global scale, it plays a very important role in determining currency prices and their trends.
B: How does the cycle determine forex trends?
ST: On the most basic level, the cycle is the most important driver of money supply growth. Since money supply is closely related to currency values (the more there is of a currency, the less its value will be) forex trends also respond to cyclical developments. But this is just a tiny portion of the power of the business cycle. The nature of the cycle also defines such variables as unemployment, consumer demand, industrial production, availability of credit, and these variables in turn lead international capital to shun or favor a currency.
B: And how does that happen?
ST: When a nation is going through the boom phase of the cycle, international capital will flow there in search of better returns on investment, through channels like foreign direct investment, or international loans. Those will create inflows of capital, and cause the nation’s currency to appreciate. Conversely, when a nation is going through the bust phase of the cycle, international capital will shun it, dry up forex flows, and cause the currency to depreciate. As with Newton’s First Law, these developments will keep going on until they’re exhausted through market developments, or are contradicted by government action.
B: How can I benefit from this knowledge?
ST: You can short the currencies of nations that are going through the bust period, and long the currencies of those that are just entering the boom period, with the caveat that those nations that are net-creditors (external assets are more than liabilities) will see their currencies appreciate, regardless of the their domestic economies.
B: Is there a way to anticipate the beginning of these periods?
ST: The boom and bust phase of the cycle can be initiated by any sector of the economy. When the problems begin among financial sector firms, these will contract credit to overcome their own problems. When the troubles arise in another sector of the economy, the banking sector will contract credit in anticipation of defaults and bankruptcies. In either case, the result is contracting credit, and this can be observed, usually before the crisis begins, in Central Bank statistics, corporate loan rates, and news reports that speak about layoffs and bankruptcies. Of course if the phase is a boom, the developments will be in the opposite direction, with expansion replacing contraction, but the process is similar. The boom and bust both develop through contagion; as the dynamism, or rot in one sector spreads to others, general economic activity is buoyed or suppressed, and the boom or bust is underway.
B: All that theory is good, but where do I actually look to see the beginning or end of these phases?
ST: There are two types of indicators for that purpose, lagging, and leading. Unemployment numbers, central bank policy actions, bankruptcies are all lagging indicators for a bust, and cannot be used to predict anything. The best leading indicator is supplied by careful analysis of the economy and identification of the areas where the greatest imbalances accumulate. I know that this will be difficult for you, so you’re invited to seek your leading indicators in the loan surverys of the central banks, as we had discussed before, and delinquency statistics. These are not exactly leading indicators (since they also respond to some already existing malaise in the economy) but they are close to being such, because banks are one of the earliest actors in any economy in feeling the pain of impending recessions. They are the first to hear of loan delinquencies, and loan delinquencies lead to credit contraction, which leads to contagion, as we discussed, and a deepening crisis.
Another important indicator for anticipating a recession is the status of inventories. GDP growth that is mostly created through inventory accumulation is one of the safest signs of an impending recession. Firms have to liquidate inventories, and if they find out that they cannot do so through patience, they will simply begin to reduce capacity and eventually eliminate jobs.
For predicting the boom phase, most of the above data can be useful, but for a healthy and long lasting boom all of them must eventually be pointing in the same direction. For instance, first the central bank rates must come down, then unemployment growth must level off, industrial production must begin to strengthen, and so forth. Usually, central bank rate reductions, followed by easier credit conditions, are some of the more reliable indicators for predicting a boom, but a financial crisis may make these indicators irrelevant. In such a case, the trader must focus on the real economy, and unemployment, to get an idea on the stage of the economical development.
B: So you say that I keep my eyes on the financial sector always, and on inventory statistics for detecting a bust, and for a boom I wait for a number of areas of the economy to find vigor and strength.
ST: Yes. This is not the best way of anticipating the circles, but at least you will never be in denial when a recession strikes.
B: How does globalization impact the nature of cycles, and what is the implications of this for currency trading?
ST: Globalization causes the booms and busts to be synchronized across economies which results in the phases of the cycle both being stronger and deeper than it was in the past. Before the end of the cold war, for example, a large part of the world would be relatively immune to the effects of speculative bubbles in the western world due the nature of socialist economies. Before that era, regional and national economic activity was always somewhat isolated from the world at large as national authorities sought to maintain a degree of economic independence. As globalization brought all these phenomena to an end, we now have global booms and busts. What this means for the forex market is that while volatility dissipates to extremely low levels during the boom phase, it rapidly skyrockets during the bust, and makes leverage an even more sharper sword than it usually is. So in that sense, in a globalized economy the currency trader can increase leverage during the boom phase, while lowering it significantly during the bust.
B: So if booms and busts are correlated on a global scale, how can I find abnormalities in the market to exploit?
ST: This is not difficult, because the cycle is driven through the accumulation of imbalances at the micro-level, such as that between a bank and a mortgage borrower, right up to those at the macro-level where some nations run forex surpluses, while others suffer from deficits. Thus, at the end of a bust phase nations with sound and conservative economic policies will have absorbed too much capital, which then flows to risky assets in the boom phase. Conversely, towards the end of a boom phase, too much risk taking will have caused nations with weaker fundamentals to possess either a swollen real sector, or an artificially expensive currency, which are then normalized in the bust. The cycle readjusts these imbalances, and the trade opportunity lies in the exploitation of this correction.
B: You mean that during the bust you sell the currencies with high deficits and non-conservative policies, and during the boom you sell the sounder ones which cannot create enough activity to satisfy the risk appetite of investors and speculators.
ST: Booms and busts are correlated across the globe, but that doesn’t mean that all currencies behave in the same way. Currencies of capital importers behave in the opposite direction to those of capital exporters during both the boom and the bust phases of the cycle. The trader can exploit this divergence for profits, for example by selling the Euro (current account balance, prudent fiscal policies), and buying the Turkish Lira (real estate bubble, external dependency, large deficits )during a boom, and doing the opposite during the bust.
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6. Compare the results, execute the trade

2009-06-20T22:50:00.001-07:00

After examining the various scenarios presented by the charts, and determining on which of them are actionable, the trader will compare them in terms of credibility and profit potential (for example, how extreme are the indicator values, how much profit or loss will be generated in case a take- profit or stop-loss order is realized?) Once that is done, he will pick the trade that offers the highest returns with the lowest risk on the basis of the technical scenario that is the most contrarian.
What the above implies is that, when a trend follower trades, he will wait for the corrections, acting on a contrarian basis to the short term movement, while conforming to the main trend. When he desires to bet against the trend, he will await the most extreme valuations generated by the trend, and when the momentum is highest, he will make a contrarian bet at the first credible reversal.

A forex trading strategy is created by using many different types of price phenomena that are manifested on many different kinds of indicators. We will examine strategies later, but at this stage let us examine the signal types that are used to create them.

5. Perform the analysis

2009-06-20T22:49:00.000-07:00

After deciding on the signals and their meaning, we will perform our analysis by identifying actionable signals, and deciding on capital allocation in light of proper money management techniques. When analyzing the data we must make our utmost exertion to ensure that we focus on signals relevant to our selected period and trading plan. This stage of analysis will involve the separation of wheat from chaff, and data from noise.

4. Seek the signals

2009-06-20T22:48:00.002-07:00

Once the technical tools are setup, we must now seek the signals that will show us the trade opportunities created by investor sentiment and temporary imbalances in the supply and demand for a currency pair. The signals that we seek are the ones created by the interaction between a number of indicators, such as that between moving averages, various oscillators, or between the price and the indicator. Our purpose is to confirm our ideas with various aspects of technical analysis. If there’s an oversold or overbough level, we will confirm it with a divergence/convergence. If there’s a breakout, we will seek to ascertain it with studies of crossovers.
We will examine the signals in greater detail a bit later, but in summary they are channels, crossovers, divergence or convergences, breakouts, consolidation patterns, the various price patterns like triangles, flags, and head and shoulders. We will keep our indicators simple, but we will make sure that the signals generated by them are examined and exploited to the full, allowing us to draw a complete picture of the price action.

3. Refine the periods, and other inputs

2009-06-20T22:48:00.001-07:00

Upon deciding on the technical tools, the analyst must decide on the periods, and ranges for which values must be supplied to the software. Today’s traders have many advantages over those in the past, but diligence and patience may not be one of those. As we’re so used to having everything automated and performed by the computer with no questions asked, many don’t even bother to tinker with the minutiae that can in fact be all the difference between success and failure for the trader’s analysis.
Thus, before going any further, the trader must check which periods, which values provide the pattern that is most fitting for the price action on the chart. For example, for the RSI, will we pick a period of 14, 10, or 7 for the chart we examine? Or what will be the periods of the moving averages that constitute the MACD indicator? These can only be answered through trial and error, and for each price pattern, a different value may be necessary.

2. Picking the technical tools

2009-06-20T22:47:00.002-07:00

On the basis of the criteria discussed in the previous item, we must pick the appropriate technical tools for the chart we examine. If the market is trending, there’s little point to using the RSI. If it’s ranging, the moving averages are unlikely to be of much use. If the underlying currency pair is strongly cyclical (for example, if the currency is issued by a commodity exporting nation) the commodity channel index could be a good choice. If it is highly volatile, smoothing out the fluctuations with moving average crossovers could be very beneficial for identifying the trend.
Of course the list can be extended. The trader must refine his approach to trade over time by deciding on the kind of indicators which he understands best, and then combining them later to form a simple and concise method.

1. Identify the type of the market and the type of the trade..

2009-06-20T22:47:00.001-07:00

Needless to say, the first step in technical analysis must be the identification of the market with which the trader is interacting. After that he must determine the time period of the trade he will enter. What kind of charts will the trader use for his trade? Will it be a monthly trade, or an hourly one? If it’s a monthly trade, there’s no need to worry about the hourly changes in the price, provided that the strategy regards the present value as an acceptable monthly entry or exit point. Conversely, if the trade is for the short term, the trader may desire to examine charts of longer periods to gain an understanding of the bigger picture which may guide him with respect to his stop loss or take profit orders.
The trader will use trend lines, oscillators, and visual identification to determine the type of market that the price action is presenting. Strategies in a flat, ranging, or trending market are bound to contrast strongly with each other, and it is not possible to identify a useful strategy without first filtering the tools on the basis of the market’s character. Once this is done, and the time frame of the trade is determined, the second stage is -

How to create a forex strategy based on technical analysis?

2009-06-20T22:45:00.002-07:00

Technical strategies aim to predict future prices on the basis of past developments. All that the technical analyst is interested in is the price, and news, or data have no bearing on his decisions. In this article we will examine some of the basic concepts behind technical strategies, and will attempt to summarize the main tools used by technical traders in braking down price patterns.

As we noted technical analysis chooses to ignore everything except the price in its decisions. A technical strategy will usually involve several phases, each clarifying some aspect of the price action, until a credible entry or exit point is determined. The phases for this are.

Conclusion

2009-06-20T22:45:00.001-07:00

The best choice for the beginner is the equity stop. During the learning process, the trader can concentrate on bettering his understanding of the markets without worrying about excessive losses. Once the trader gains a good understanding of market dynamics, and is able to form and implement his trading plans, the equity stop will quickly lose its attractiveness.
The best method for using the non-price stop orders is combining them with a wide equity stop which will serve as a final safety precaution in case the price action becomes too dangerous. For instance, a trader can long the EUR/JPY pair and hold it indefinitely until the VIX registers a value above 35, where a v9olatility stop would be placed. At the same time he will protect himself from extreme, and unexpected swings by placing an equity stop at 5-7 percent of total equity. Thus, unless a very large price swing completely overruns the main criterion for the stop loss order, and triggers the equity stop, the trade would be maintained indefinitely.
Needless to say, every trader will have his own choices on stop loss orders. And we would like to conclude this section by noting that the key to a successful stop-loss order is a disciplined risk management strategy, and everything else is just detail.
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Event Stop

2009-06-20T22:44:00.000-07:00

Fundamental analysts do make use of technical tools, if only for determining the trigger points for a trade. Take profit, and stop loss orders are used by almost every trader in the world, and its is unthinkable that a serious analyst will not have a condition, at least in mind, for closing an open position, however convinced he may be of its ultimate validity.
But fundamental analysts are not limited to technical tools and the price action for determining when to exit a trade. The event stop that we would like to discuss here is a tool that the trader can use to determine a trade’s exit point.
When using the event stop, the trader will ignore the price action for the most part (and will use low leverage), and will only close a position in the red when the scenario he had pictured in his mind becomes contradicted by events. For instance, a trader is anticipating that Bank A will be nationalized by the authorities of Nation X, and he expects that this will lead to X’s currency depreciating against its counterparts. In consequence, he shorts it. He will refuse to close the position until authorities confirm and clarify, in a solid and unmistakable fashion, that they will refuse to nationalize Bank A. In the meantime, he will be willing to put up with all the rumors, extreme swings, and short term fluctuations in the market without worrying about the unrealized profit or loss in his account.
As we mentioned at the beginning, the event stop is for those traders who know what they do, and who possess the track record, the intellectual background, and the confidence to use it. But do not take our word in order to evaluate your own skills; you should know yourself better than anybody else, and if you believe that you understand the economic dynamics of the era, and can defend your claim in your trading activities, you will be perfectly capable of using the event stop

Margin Stop

2009-06-20T22:43:00.002-07:00

The margin stop is not really a stop loss order, but the absence of it. In this case the trader will let his account absorb the unrealized losses until a margin call is triggered, and a large part of the account is gone. The margin stop is a sign of indiscipline and lack of insight, because a diligent trader will always predetermine the conditions that will lead to the closing and liquidation of a position. Since not even the brightest analyst is capable of predicting the future with any certainty, lack of a stop loss order is an indefensible practice.
Notwithstanding the previous, the margin stop is a popular choice among many traders who are unable to remain calm in the face of the great emotional pressures of trading. It is only viable under really low leverage such as 2:1, and even then a margin stop would not be the best choice. At much higher leverage, the margin stop is completely indefensible, and should be avoided altogether

Volume Stop

2009-06-20T22:43:00.001-07:00

When the trader expects an ongoing trend to be reversed or invalidated subsequent to a change in volume, a volume stop maybe appropriate. While volume statistics are not available for the forex market, positioning as depicted by the COT report can be used for establishing this type of stop. For utilizing the order, the trader determines a percentage value on futures positioning above or below which the position must be liquidated, depending on market conditions and the nature of the order. In the same context, other types of data can also be used to generate a stop loss trigger point. A particular put/call ratio, or option risk reversal value may all be chosen to provide the equivalent of a volume stop in the stock market.
In example, let’s consider a trader who opens a short position in a carry trader pair, confirming his trade by developments in the stock market. His expectation is that the recent rise in the stock market indexes (and the corresponding rise in the carry pairs) occurred on low volume, and will soon be reversed in the absence of new money flows. Consequently, he places his stop-loss at a volume level which, if reached in a rising market, will invalidate the starting premise, and cause the position to be liquidated. When this occurs, and volume rises above the preconceived level, the trader will close his short position in the carry trade pair

Volatility Stop

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A volatility stop depends on volatility indicators, such as the VIX for determining the exit point for the trade. As such, market panics and shocks will cause the order to be executed, but mere price fluctuations in the currency market which lack their counterpart in other asset classes will be ignored for the most part. The trader who utilizes a volatility stop expresses the opinion that unless a major, unexpected shock hits the market, his position should be held regardless of the behavior of the markets. This is a more risky strategy than the equity stop, but can be profitable and valid depending on market conditions and the economic environment. In general, it is doubtful that a volatility stop can be very useful in a very nervous and volatile market. But it could be very helpful in maintaining a long-term position where risk perception is low.
The volatility stop is sensitive to prices, but only in an indirect manner, and its nature is similar to the chart stop. It is useful for eliminating very short term distortions from our analysis, and allows us greater resilience in the face of noise in the data.
Volatility may fail to react to market swings. Sometimes a large fall in the market has no equivalent rise in the various volatility gauges. Similarly, volatility can at times rise without any obvious corresponding price action. Consequently, a volatility stop (and similar stops based on non-price data) can be triggered even before a trade is in the red. All these must be kept in mind if the trader decides to use this type of stop order. a

Chart Stop

2009-06-20T22:41:00.000-07:00

In a chart stop, the trader will place the stop loss order not at a price point, but at a chart point which may be static or dynamic. For instance, a stop loss order may be placed at a fibonacci level, which would be a static value. On the other hand, the trader may use an API (an automated trading system), or mentally prepare himself to close the position if a technical event, such as a crossover, a breakout, or divergence occurs, which would constitute a dynamic stop-loss point. In all these cases, technical analysis generates the triggers and determines the price where the position must be closed.
The chart stop is more flexible and reliable than a direct equity stop, because it adjusts to price action and volatility, and is therefore somewhat independent of the random movements of the price. The problem with the chart stop is twofold. First, the technical indicator used to generate the signals may fail to capture the change of the market trend, resulting in large losses. The other, and obvious problem is related to the indirect character of the stop-loss mechanism. Because the order is independent of the price, it may not be able to cut losses as effectively as a direct equity stop, and larger than expected losses may materialize as a result

Equity Stop

2009-06-20T22:40:00.000-07:00

An equity stop is one where the position will be closed in case the total equity in an account falls below a certain value. A stop loss at 2 percent of total equity is generally regarded as a conservative strategy, while the maximum is 5 percent for most money management methods. Thus, to give an example, a 1000 USD account would have the stop loss for an open position at the point where to the total equity would fall below 980 USD.
Both the disadvantage, and the advantage of the equity stop is its inflexibility. The equity stop provides a very solid criterion for deciding on the success or failure of a single trade, as there’s no way of being mistaken about an account in the red. On the other hand, the same inflexibility may prevent the trade from functioning as expected. The markets are volatile, and a trade that has a perfectly valid cause behind it may yet be invalidated by the random fluctuations that are not predictable.
Another important problem with the equity stop is its inability to prevent a string of losses. For instance, when the trader closes a position at a two percent loss, there’s nothing that will prevent him from opening another position in the same direction (buy or sell) a short while later, if the causes that justified the first trade are still in place. For instance, if the trader enters a sell order when the RSI is above 80, and consequently the stop loss is triggered, and the position closed, there’s little that will prevent the same events from being repeated if the price action repeats the same movements. In order to avoid this pitfall, the trader can tie the stop loss point to a non-price factor, and the rest of this article discusses such scenarios.

What kind of stop-loss order should a trader use?

2009-06-20T22:39:00.000-07:00

In this article we will discuss the various ways to implement a stop loss order. Every trader who has had dealings in any of the financial markets is familiar with placing and executing a stop loss order, but many are mistaken that a stop loss order is always numerical. On the contrary, there are many traders (even professional hedge fund managers) who use what is colloquially termed a “mental stop” which stop is a stop loss point determined by factors other than the price, such as events, volatility, volume, option positioning, or any other comparable data. Such a stop is no less valid than a numerical one, and certainly no less effective, but one does need a lot more discipline to execute it successfully.

The great advantage of a non-numerical stop-loss order is its partial immunity to price swings. If the trader has confidence in his analysis, and is satisfied that standing firm in the face of market volatility is sensible and acceptable given the major dynamics and currents in the market, maintaining positions with non-numerical stop loss orders can be advisable and lucrative. In order to manage the inevitable large swings in account value, professional managers will implement hedging strategies in addition to money management methods, to control and minimize the volatility of the portfolio. Thus, even if the mental stop triggers a large drawndown in our position, we can minimize the effect on the portfolio through diversifying and distributing the risk among various currency pairs.

Let us examine the various ways of implementing a stop-loss order now.

Gambler’s conceit

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That high leverage is dangerous is well-known to most people, but it is not unusual to make spectacular profits with a highly leveraged account, just as it is not unusual throw three heads in a row during a coin-tossing competition. The sad fact is that even those spectacular profits are highly likely to be wiped out if the trader continues to make bets utilizing high leverage, as we examined in the previous articles on gambling strategies in forex. The inability of the trader to get rid of high leverage after a bout of successful trades is related to a concept called the “gambler’s conceit”. The gambler’s conceit is not caused by high leverage only, but we will limit our discussion of this subject to high leverage since it’s so common among traders.
Many of us have that genie beside our ears who whispers to us all the time that risking too much is not a problem because we are wise enough to exit a risky bet while still running profits. High leverage may be wrong, undercapitalization may be dangerous, but our trades have so far been profitable, and as soon as the profits diminish or losses are being registered, we will close our positions, and exit the game, be it gambling with cards or gambling with forex.
It's very convincing. After all, why would one want to risk losing the profits of such a risky practice as high leverage? What is the point of continuing to practice a losing strategy even after your profits have been halved by a string of losses?
Many beginning traders who make a lot of money randomly in the forex market in a short period of time are convinced that it is their method, style, attitude that makes those large profits possible. On the other hand, the experience and knowledge possessed by a trader at the start of his career is insufficient for practicing self-control or employing money management methods successfully. Thus, in many cases (but not always), the doubling, or tripling of the account of a new trader is just a chance event, regardless of the rationalizations which the trader uses to explain his situation. What is more, even in the case of a highly successful, highly disciplined trader, the occasional very large profits are not at all a sign of increased efficiency or better understanding: There’s nothing extraordinary about the occasional extremes in a trader’s career. Instead of emphasizing them too much, and thinking about what he did right or wrong to deserve such large profits or losses, the seasoned trader will evaluate them for what they are: statistical anomalies on which neither a career, nor a trading strategy can be based.
The Gambler’s conceit prevents such a rational explanation. Instead of understanding the gains after highly-leveraged bets as random developments, the trader ties these results to his own exceptional luck, skill, or insight in evaluating the market action, or to his superior trading strategy, and convinces himself that he will be able to terminate his trading activity due to his controlling power over his trading results. With such false confidence, when the inevitable large losses occur he will ponder on what went wrong with his trade, which indicator, which scheme he needs to revise and refine, instead of accepting and understanding that gains on highly leveraged bets are illusory, and unlikely to remain with him permanently. When a peer confronts him about the unusually high leverage of his trades, and his irrational expectation that he can keep profiting with such high risks, he will protest by mentioning his past successes.
In fact, gains on a highly leveraged account have the potential to be even more destructive than losses. Losses will teach the trader to be humble, and will lead him to revise his methods. Gains, on the other hand, will addict him to his errors. Sadly, such an addiction can only be broken by the pain of a totally wiped-out account sometimes. Fortunately for you, we’re here to warn you about the dangers associated with this risky practice.
The best remedy of the gambler’s conceit is avoidance of the addiction entirely. Instead of consoling yourself that you will give up the practice once the profits are gone, convince yourself to never begin the unhealthy game. Do not aim at exceptional results; aim at consistency. But if you find that you’re already deep into the game of high leverage and risky practices, our advise to you is to cut it off right now, without waiting for the losses to show up. Just close the chapter, quit trading for a while, and a few weeks later, or maybe a month, restart your career by practicing sane and sensible strategies this time. Not only will you find intellectual satisfaction at having overcome a dangerous addiction, you will also have a profitable path before yourself as you improve your skills, recognize your errors.
To repeat, brief periods of enormous profits is never the purpose of a successful trader. Such periods are always temporary, and the false confidence that becomes instilled your psyche is often destructive to your career as a trader: aim at consistent profits, do not aim at high very high profits.

Moving Average Crossovers

2009-06-20T22:37:00.000-07:00

Moving average crossovers occur when a faster moving average rises above or false below a slower one. For example, when a 13-day SMA (simple moving average) rises above a 100-day SMA, or when an 14-day EMA falls below a 50-day SMA, we will be studying a moving average crossover. In this type of crossover, the signal line is not static, and must be provided by the trader manually. This flexibility makes MA crossovers much more adaptable to changing market conditions, and in trending markets, MA’s can be greatly useful for our trading choices.
MA crossovers can be useful for both range trading, and trend following, but since moving averages generate smoother and more reliable signals in trending markets with relatively low volatility, the most successful use of the MA crossover is also in a trending market. Many traders choose to use a simple moving average for the slower MA, and an exponential moving average for the fast component. But this is not a necessity. Depending on the preference of the trader with regard to indicator sensitivity to price action, an EMA can be used or discarded altogether.
In this section we will examine five different strategies based on MA crossovers.
Moving Average crossovers with a breakout scenario
In this hourly chart of the GBP/CHF pair, we see an approximately three-day long range pattern developing between 1.5851 and 1.6041 price levels, with the 13 hour MA depicted in red remaining consistently below the yellow 100-hour MA for the entire duration of this period. The price fluctuates between the temporary support and resistance lines (shown as red lines on the graph), and the faster 13-hour moving average settles to a very quiet consolidating pattern in the same period. Neither the MA not the price action gives any meaningful signal with respect to the future, until the eventual breakout occurs.
At around 5 am on the 12th March, we see a sudden spike in the price action, which quickly causes the more sensitive 13-hour simple moving average to spike up also and eventually to rise above the yellow 100-hour simple moving average, and a crossover occurs, and after the price keeps rallying powerfully, reaching riught up to 1.68 eventually. In this scenario, the significance of the crossover is amplified by the long duration of the preceding consolidation pattern, and the quiet and subdued price action. Since markets rarely remain so quiet for a protracted period of time, the eventual crossover creates a very reliable signal for the violent upswing of the price.

Technical strategies based on crossovers

2009-06-20T22:36:00.000-07:00

n this article we will study the various kinds of crossovers and how to exploit, interpret and confirm them based on the interaction of indicators with the price and each other. The crossover strategy is popular and easy to use and identify, but it can also be troublesome because of its tendency to generate conflicting and false signals unless it is confirmed by other types of data.

Crossovers are thought to signal momentum change in the markets. When the main indicator crosses a predefined signal line, the trader will interpret this as a warning sign that something is changing with respect to either momentum of the price action, or its direction. But as we mentioned, crossovers are relatively common, and a strategy based on them alone is unlikely to work well in the absence of confirmation from other sources.

The signals generated by a crossover can be useful in a ranging or trending market, but in a trending market, a crossover is a less significant development than in a ranging market.

Let us examine the various basic crossover strategies

The bond market and currency prices

2009-06-20T22:34:00.001-07:00

Currencies are the basic building blocks of all economic activity. A grocery, a military contractor, a mortgage borrower, and even gangsters evaluate their economic plans in terms of currencies. Consequently, the forex universe encompasses all the other fields of financial activity including the bond, commodity and stock markets.
Most traders possess at least a basic conception of the relationship between forex and the stock markets. As large amounts of money is injected into the stock market, the resulting currency flows cause the value of currency pairs to fluctuate simultaneously. Similarly, commodity market trends have an easily demonstrable impact on the short term fluctuations of commodity currencies, and a slightly less clear impact on those of others. The same dynamics that cause these markets to influence currency quotes also ensure that fluctuations in the bond market affect the short and long term dynamics of the forex market powerfully, but there are also certain aspects peculiar to the bond market which we’ll try to examine in this article.
The bond market is very large, with the US treasury market reaching a size of about 10.7 trillion dollars as of December 2008. Needless to say, bonds are not issued by government entities alone, as townships, corporates, and many other types of institutions regularly issue their own papers to benefit from this vast and liquid market. Actors in the US treasury and corporate bond markets range from small individual savers to foreign governments with gigantic amounts to spend, and the impact of all kinds of economic developments is felt in the bond market on a daily basis.
What is the use of the bond market? For buyers of corporate bonds, the purpose is benefiting from the various yield options available while controlling risk exposure through bond ratings, and the maturity term of the paper bought. As bond investors are always higher in the payment structure in case of default or bankruptcy, many investors and traders choose to purchase bonds in place of stocks in order to achieve a favorable balance between risk and yield. Purchasing the bond of a corporation allows us to benefit from the growth of the firm while taking minimal risk, but at the same time minimizes our control over the capital lent, since bond investors have no say in how the management of a firm uses the borrowed funds. The significance of the corporate bond market is more limited for the retail forex trader than that of the treasury market. On the other hand, as corporate bond rates are powerful indicators of risk perception in the markets in general, the forex trader is well-advised to adjust his leverage in response to spikes in the rates of speculative, or low level investment grade corporate bonds. If sustained, such spikes would have long-lasting and deeper consequences for the economy at large, and recessions are often preceded by turmoil in the corporate bond market.
The role of the government bond market is different in a number of ways. First of all, we must keep in mind that, as long as a government possesses the legal right to create money, it is in no danger of defaulting on its obligations. Consequently, if there is anywhere a risk-free investment, it is clear that a government bond is the most credible candidate. Secondly, since government bonds are almost certain to be paid in time, they serve as a general benchmark against which all other kinds investments are measured. The success or failure of a professional money manager, for instance, is not measured in the absolute value of dollar gains or losses, but in comparison to the yield on the treasury bond of a comparable term. This method is useful because it allows us to evaluate the risk/reward ratio of an investment in a much more constructive way: if by holding a three-month government bond we can achieve greater returns than that offered by our forex manager, what is the point of investing anyway? Thirdly, the government bond market finances the spending of governments. Thus, fluctuations in this market have far greater significance for the value of a currency, since the changes directly influence the credibility of the government’s policies, and the sustainability of its deficits. And finally, since bond yields are strongly dependent on inflation, and inflation is closely related to growth, the term-yield structure of the government bond market provides a very powerful early warning system for predicting periods of boom and bust.
Forex traders with some experience will be quick to recognize the intra-day relationship between treasury bond yield, stock prices, and currency values. This is not surprising, since in many cases, the fluctuations in the value of a currency represents the movements of foreign investors between bonds and stocks as the events of the day progress. In addition, the strong relationship between inflation expectations and bond yields makes government bond yields a very useful indicator for evaluating the financial world’s opinion on the success or failure of US Federal Reserve in controlling inflation. As inflation is a significant component of the equation that decides currency values, the importance of the data provided by the treasury market is evident. But beyond all the short term sound and fury, developments in the bond market have important long term implication for currency trends too. As an important component of the financial account, external flows into bonds have a direct role in establishing long-term currency trends. The fact that the US dollar still has not collapsed in spite of the massive spending and borrowing of the US government is in part explained by the continued health, at least on surface, of the US Treasury market. We hope to return back to this subject in future articles, and examine the bond market in greater detail.
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The bond market and currency prices

2009-06-20T22:34:00.000-07:00

Interest Rates and Volatility — correlation between interest rate gaps and volatility

2009-06-20T22:33:00.000-07:00

Volatility in the currency markets is influenced by a number of factors foremost among which is the risk perception of financial actors. Risk, of course, can be defined in terms of many different variables including politics, natural disasters, in addition to the usual economic factors that always go into the calculation. But among those factors, arguably nothing is as important as interest rates in determining the level of long–term volatility in the forex market. Of course, this is not a one way relationship. Interest rates are themselves influenced by volatility, since the fluctuations caused by ongoing and long-term volatility strongly influence the decisions of central banks. Here we will take a look at the causes of the relationship between interest rates and volatility, and will attempt to determine its role in our choice of leverage and margin.
Volatility is a reflection of uncertainty. In a market where there’s no new information, volatility itself would be low or non-existent, but it is clear that the mere existence of a large number of market participants by itself creates volatility. Thus, there probably exists a state of minimal volatility below which no market activity would be possible. In other words, ordinary transactions necessary for the conduct of business and minimal economic activity would itself necessitate a minimal level of volatility in even the calmest markets. The question that we want to discuss here is about the impact of interest rates on the trade decisions of speculative actors and the bearing of their decisions on market volatility.

A brief look at recent history

2009-06-20T22:32:00.000-07:00

At first sight, it is clear that interest rate differentials increase the number of transactions in the market. Clearly, gaps between the interest rates of different central banks create opportunities which are exploited vigorously by speculative actors of all kinds. But at the same time, we know from experience that the widening gap between emerging market and developed market interest rates was coupled with a decrease in forex volatility, as part of the so-called and by now disproven Great Moderation discussed by some economists. This is partly due to the fact that rising liquidity causes lower volatility. But the relationship between increasing liquidity, and a widening gap between interest rates is not that well understood. First of all, since interest rates and risk perception are closely related to each other, it is counter-intuitive that a rising interest rate gap between nations would result in lower volatility, and lower risk perception among market participants. We can illustrate this better by making an analogy with the interest rate gap between bonds of investment grade firms and speculative grade junk bonds. When this spread widens, it is coupled to increasing volatility in the bond market. During the same period when the widening gaps in interest rates among nations led to reduced forex volatility, reduced volatility in the corporate bond market was coupled with a contracting gap between the bonds of speculative and investment grade firms. Clearly, there is some discrepancy here.
A way of explaining this is by separating the period between 2000 and 2007 into two phases. The first phase was dominated by falling interest rates around the world, initiated by Alan Greenspan’s choice to bring the rates down to 1 percent and keeping them there until they were raised by Ben Bernanke four years later. During this period, volatility came down from higher levels as dormant money found its way to stock markets and other kinds of investments around the world. During the second part of this era, again initiated by the US Fed, interest rate gaps actually widened, but there was no corresponding rise in longer term forex volatility, apart from a few blips that occurred, for example, in February 2007. Was it then a sign of the coming turmoil in 2008 that these widening gaps between emerging markets and developed economies were not reflected in the forex market? We would argue that it was. For one, the rise of inflation has almost always been coupled to a subsequent cooldown period, or even recessions in all economies. No economy can afford to run at full speed in an inflationary environment. And since many emerging markets were raising rates to fight inflation in this period, historical experience strongly suggested that a period of slowdown was likely which would have necessitated a rise in volatility, as it often happens. But market participants refused to adjust themselves in accordance with this fact, driving the currencies of emerging markets higher, being content with lower risk premiums, until volatility returned with a vengeance in a series of events that all of us are familiar today culminating with the Lehman bankruptcy, and its aftermath.

Forex Strategy

2009-06-20T22:30:00.000-07:00

The common paradigm suggests that widening gaps in interest rates should be coupled to rising volatility. However, as with all fundamental changes, it may take a long time before market participants recognize the changing risk profile, adjust their positioning in accordance, reconsider their leverage ratios and margin arrangements, which all lead to a contraction in liquidity and the consequent rise in volatility. Sometimes there’s no gradual arrangement at all. Instead, market shocks and related events create dynamics which force traders to reconsider everything in panic, creating massive volatility in a very short term, followed by periods of calm. Eventually, the pattern of rising and falling volatility creates the familiar zigzagging pattern we’re used to seeing in shallow markets where swings are sharp and deep.
The relationship between the interest rate gap and volatility is not very difficult to explain. Of course, the gap that we here speak about is a general measure of the gap between the weighted average of developed nations’ central bank interest rates, and that of developing nations. Low interest rates in a single group of nations is not enough to draw down volatility, for the simple reason that low risk in developed countries, that is, low risk in financing, does not translate into low volatility in forex unless it is coupled to low investment risk, as measured by developing nation rates. To illustrate this further, we can consider the example of the investor who borrows at very cheap rates in Japan, and invests the funds in a commodity project in Russia, where interest rates are high due to many possible reasons. Although the risk perception in Japan is low due to the (past) fundamental strength of the economy, and consequently, the risk on the financing side is small, the high rates in Russia would suggest that the investment in Russia has an unfavorable risk profile. Since these relationships are bilateral, the gap among interest rates, rather than the rates one nation, or a group of them is what determines risk perception and volatility.
Another aspect of wide interest gaps that causes volatility to rise in the long term is the carry trade. While carry trades are most active towards the end of a low volatility environment where the gaps are widening, by definition, the highest amount of activity in this field is coupled to the greatest risk. In other words, the low volatility environment under which the carry trade thrives is irreconcilable with the widening of the interest rates, which also means that the higher the profitability of this trade, the higher its risk, and the greater the imbalances created by it. Indeed, the carry trade itself is perhaps the greatest driver of all economic activity in a low interest rate gap, low volatility environment wher money flows easily. When it is considered as the sum of all investments that are made in search of high yield (and not just high yield in the form of interest rates, but including FDI, cross-border acquisitions, and everything that is driven by a low perception of investment risk), the carry trade is clearly the major driver of activity in a low volatility environment. The paradox created by the irrationality of those taking part in it is one of the most important causes of the eventual spike in currency market volatility and similar sharp changes in market trends and dynamics that announce the end of interest rate rises.
Interest rates and traders: how to anticipate volatility
All of the above discussion would lead its logical consequence that ties volatility to gaps in interest rates. It is rare to have high volatility in a situation where interest rate gaps are closing. Conversely, it is infrequent that a widening interest gap among nations results in a low volatility environment. But it must be born in mind that markets can remain irrational, and refuse to recognize facts for periods longer than what would be required by analysis. Thus, although volatility and interest rates are closely related, the momentum of trading and economic activity can distort this picture greatly, creating periods where the relationship seems to break down. This was clearly the case, for instance, during most of the 2005-2007 period. As of the writing of this text, it seems that we’re going through a similar phase where decreasing interest rate gaps are coupled to higher volatility. It is unlikely that this situation will be long-lasting.
How should traders use this information for trading choices? First, for long term traders, here lies another indicator that can be utilized to identify imbalances in the market which can then be used for profit. Small positions opened against the market as soon as the disparity between the actual rise or fall in volatility and what would be demanded by theory can be maintained until the eventual realignment occurs, and the market moves in the direction anticipated. After that, increased leverage, and greater positions may allow the exploitation of the new situation. For short term traders, the alignment between fundamental analysis(theory) and market conditions can be used as a gauge for determining the best trade. In short, the trader would open a position that would be suitable to a low volatility environment (such as the carry trade) when interest rate gaps are closing (which often happens in an environment of falling rates), and vice versa.
Conclusion
Of course, in this discussion we are neglecting the impact of velocity of money on the dynamics created by interest rates. The impact of the interest rate gap is greatly influenced by the velocity of money, but the factor is even more important when interest rates are falling. The impact of the falling gap can be negated if falling velocity of money results in reduced liquidity finding its way into the markets. In that case, volatility may not fall much, as the availability of credit doesn’t become reflected in an increasing number of transactions which could fuel increased activity in the forex market. Our discussion in this text presupposes only a moderate fall in the velocity of money, that is, banks reduce lending, but only moderately during the period that leads to the lowering of gaps between central bank interest rates. If the reduction in velocity were severe, the outcome would be serious enough to invalidate our scenario.
The relationship between higher volatility and money management is evident. High leverage and high volatility is an explosive cocktail that can easily wipe out a large number of accounts in a short time, but increasing leverage in an environment of lower volatility is not an extreme decision. Understanding the relationship between interest rates and currency market volatility can be helpful in adjusting our portfolio accordingly.

Trading Robot - Is it a Scam?

2009-06-09T14:31:00.000-07:00

Many people when being told that they are able to earn over a $1000 dollars in a day or as much as $10,000 or more in a week would automatically scream scam (unless of course they knew what day trading was all about). I know I would. So, obviously upon running into the website for Trading robot, this was the very thing that ran through my mind. Then something happened. I watched the video on the homepage and learned exactly how it worked and how it made people this type of money.

What exactly is the Day trading robot?

Well, actually it is a piece of software that costs over $112,000 for a 1 year license. Now before you go screaming, yeah right, I am here to tell you that you are not being offered this software, so don't worry, you don't have to come up with that large sum of money to benefit from the Trading robot. Instead, you are being offered a Newsletter that provides you with penny stock picks selected from this piece of software that costs so much at a much affordable price which is less than $100.

If you go on the website and watch the video on the performance of this software, you will understand why you would want this robot picking your day trading stocks for you. That's because this robot has repeatedly picked stocks that have gone up 300% in a single day. If this seems unreal to you, well that's understandable, but that is exactly what you see happening in the video.

Now is this to say that everyday is going to be a 300% day? Probably not, but it really doesn't take too many of these days to become wealthy now does it? Some other benefits the Trading robot newsletter offers people in day trading is it saves you a great deal of research time so you do less work and make more money. Also, it has a very high success rate so you know you will be making money and lots of it.

There is also no risk to using this newsletter either because it comes with a 100% satisfaction guarantee. You have a full 8 weeks to try it and see the amazing results for yourself and for any reason you are not happy with it, you get a full no questions asked refund of your money.

What does this mean? This means you get to try out these Trading robot stock picks for 8 weeks to see how effective this newsletter is. If you are afraid of losing money, then simply test the picks out without investing any of your money to see how accurate the picks are. Now, any person who is experienced in day trading will tell you that this is quite the deal.

Trading Robot - Does it Work?

2009-06-09T14:30:00.000-07:00

If you are asking yourself this question, why not ask yourself another question. How does earning thousands daily with the Trading Robot sound to you? No doubt there is a bit of skepticism running through you right now, but you are urged to read on.

If you have heard of this software, I'm sure you have heard of the big price tag that goes with it. ($112,000 for a 1-year license). Don't let this get you down, because in reality, you don't need this. What you need is the newsletter, which right now is a big hit. Why is it? Because it is making a lot of people a lot of money.

So exactly what does this newsletter cover anyway? Basically, the Trading Robot newsletter is all about stock trading. The author of this newsletter is Jason Kelly, a computer programmer who worked with James Holt (one of the most successful day traders to date).

This newsletter provides penny stock picks selected by the computer robot that are about to go up within 24 hours. James created videos of 23 techniques that he uses everyday to make thousands per day. These videos are created from the actual "Trading Robot" that only 7 people have access to (due to its price obviously), however, this is where the picks come from that are included in this newsletter which is far less expensive than the software running less than $100 for a lifetime subscription). In reality, why bother with the software anyway, it's the picks that you are looking for, and these are what you get in the newsletter.

What are the other benefits of Trading Robot newsletter?

Well seeing how the picks are generated from this $112,000 piece of software, the picks are usually right on the money. This newsletter also saves you research time saving you hours and hours. It also has a high success rate and offers less work to make more money.

So, does the Trading Robot work to help people make big money in stock trading? You bet it does. If you have seen the amazing video of this piece of software at work, and how precise the picks coming from it are, you would have no doubt in your mind. This is not to say that every pick you get is going to make you thousands. It also is determined on how good of a stock trader you are, although this software takes the need for advanced skills right away.

You Never Know What You Will Benefit from in Forex Forecasts

2009-06-09T14:29:00.002-07:00

Possible risks and profits to be made can always be predicted if traders would only have more accurate forex forecast to base their trade and decisions upon. Forex forecasts are only one way of keeping up with the volatile forex market. Success will depend the most in knowing what and who will affect the rate changes.

The forex market has already been through a lot of ups and downs that even fortune tellers would have difficulty guessing what will be its next movement. Making a forex forecast can be helpful but can also be too risky. Besides, doing it is not that easy also.

In forex forecasts, nothing specific is given. The traders are not made to hope high and expect more. If you have seen or heard a forex forecast, be sure to check on some projected rate fluctuations whenever and wherever possible so you would have an idea it the forex forecast shows a likely possibility to be true or not.

Staying in touch and up-to-date with the latest news and happenings around the globe and information about the forex currency can help traders determine when is the best time to buy, sell and stay away from a particular market. All these things are important in the performance of your trade. Take note of some forex forecasts if only to serve as guide whenever you are in a situation that you find hard to make a decision upon.

How can one benefit from forex forecasts?

There are some companies that are offering forex forecast information as a subscription that traders can avail of. For those who do not have enough patience and browse for information in the internet, this forex forecast information would be their alternative.

No one said that there is a 100% accuracy in these forex forecasts. And no one told traders that they should also believe them 100%. If you want to have more degree of accuracy in the forex forecast, you could always find one with the most accurate percentage rate.

You could look for something or someone that offers free information or a trail period for you to test the degree of their ability to give accurate forecast about the forex market. There are also some sites that send out forex forecast to emails that you may want to try out just so you will choice to choose from if you decide to avail the services of some of them.

Relying only on one forex forecast is not the thing to do. You should at least have some more choices in the process of making an investment decision. Try to get more forex forecast from sources that are rampant online and offline so you would not stick to just one.

The thing to remember is that your investments are your future and you have already worked too hard to just let it all down the drain. Do not put the future of your forex trade into the hands of only person. Try to get several forex forecast and choose the best one that you think has great ounces of accuracy up their sleeves.

Before putting the future of your investments into the hands of those offering forex forecasts, make it a point to check out the latest that is happening in the forex trading and see if the trend is likely to go with what the predictions are telling about.

If you think more about it, people doing forex forecasts would not be out there giving bad forecasts because their reputation is the one at stake there. They surely would not want to ruin the image they have by giving false predictions about things that they know people will listen to, would they?

Like they say, traders should not believe all that is written in forex forecasts. Some but not all. There are still decisions to be made that will be based upon the trader itself and no amount or accuracy of forex forecasts can make that decision for them.

Just to be on the right side of things, always make sure and do your own research that will back up the forex forecast you actually think is going to work. You never know what it will lead to…

Why You Should Be Using a Day Trading Future System to Double Your Investments

2009-06-09T14:29:00.001-07:00

A day trading future system is a great weapon to have on your side if you're interested in stock trading. This is a stock picker which makes use of algorithms and past market data to piece together upcoming trends, enabling you to get in and out at peaks in the market, easily maximizing your investments, even if you don't know the first thing about this market. Here is what you should know.

I briefly talked about how a day trading future system works, but here is a quick, more specific explanation. This is a system which makes use of algorithms to build and maintain databases made up of the trends and factors which led to those trends of the distant and recent past.

These algorithms then apply this information to current, real time market data to look for similarities to further investigate. Eventually, once the program has found what it deems as being a high probability trading opportunity, it notifies you so that you can trade in accordance with its projections.

Critics and experts alike laud the use of a day trading future system because of the emphasis placed on clear headed, algorithmically crunched market data rather than allowing emotions, guesswork, or anything of the like the play into your trades on any level. Every bit of the hard work of milling over tons and tons of market data has since been done for you, so all you've got to do is enact the recommended trade simply using an online trading account. Consequently new and casual traders can still make a good living for themselves in the market without having to know much about that market or have the time to devote to it which they'd need otherwise.

To learn more about this technology as well as find an in depth review on the leading system option today to get a better idea of what this is all about, click on this link for day trading future system to see how easy it is to realize your financial independence immediately.

Make Money - Day Trading As a Full Time Job?

2009-06-09T14:27:00.000-07:00

What would you do if you can make money from home? A lot of home based businesses are based on simple activities that keep the owners active, progressive, and engaged in opportunities available. Day trading as a full time job is more than an opportunity; it's a possibility to extend your earning potential beyond any career available today. Although this career is based on risks, it's an active approach to mastering one's financial stability by the click of a button.

Make a Plan for the Job

If you consider day trading a full time job, you must create a job description to remain focused for 40-hours a day. This may sound like a piece of cake right now, but you must established discipline in order to make money while remaining home and active. Some full-time day traders earn a pretty good income for their lifestyles while exploring the markets until close. If you have a plan, you can make the best decisions regarding the opportunities available in day trading as a full-time adventure.

Create a Work Schedule

Work schedules are important for full-time day traders just like any other professional. A lot of people consider working from home as an excuse to slack in administrative duties, research, and other well-known factors that contribute to a successful career. You have to use a work schedule to keep a distance between family, work, and social time available as you work from home. With a work schedule, you can open the doors to make money in day trading without sacrificing the lifestyle you currently have.

Get Ready for Risks

s:Day trading can give you a headache, break your heart, give you a heartache (because of the profits), and make your day the best that ever happened. Consider implementing a software to make your work day a bit flexible and promising instead of waking up unsure of what the day will bring.

Day trading can give you a headache, break your heart, give you a heartache (because of the profits), and make your day the best that ever happened. Consider implementing a software to make your work day a bit flexible and promising instead of waking up unsure of what the day will bring. A smart, innovative day trading robot software can manage the first penny picks of the day while you search for more mature stocks. As an active trader, the thrill lies in finding the next best opportunity and winning the edge over the competition.

If you're looking for a way to supplement your income, why not try your hand in the stock market? Get the most accurate stock picking robot in history: Day Trading Robot. It is completely risk free for 60 days.

Forex Day Trading Tips You Need to Know

2009-06-09T14:24:00.000-07:00

The popularity of forex currency trading system continues to grow as more and more people have realized the potential income that they can earn from forex trading.

With a massive daily profit of $1.5 trillion, forex trading has definitely surpassed the combined profits of bond market and global stock market. This is probably the main reason why many people were enticed to try forex trading.

Along with the massive growth of forex trading comes the forex day trading. As its name implies, forex day trading mainly refers to the actual selling and buying of various foreign exchange currencies all throughout the day. Its main purpose is to come up with no net variation in place at the last part of the day. In other words, for every forex currency bought, there should be one currency sold.

In order to see the profit or the deficit, one must look into the discrepancy between the current values of the currency being sold to the purchase amount. The main incentive of this method of trading is to lessen the burden of maintaining a position during the night.

Normally, the “open price” may have considerably altered from the earlier day’s final currency value. Hence, forex trading that involves traders who are dependent on the currency’s performance during the day is known as forex day trading.

In essence, forex day trading is not as dangerous as the other types of forex trading activities. But then again, the usual employment of margin purchases such as utilizing funds on loan increases the deficits and profits. So to speak, the potential shortfall and returns may happen in very little time.

For this reason, experts say that it is normal to expect that nearly 90% of forex day traders will lose profit. Hence, it would be more enjoyable on the part of forex day traders to gamble their money that is not important to them.

The main point here is that even if forex day trading aims to provide you with the right amount of money that you need to gain, it should still be separated from the psychosomatic point of examination and trading activities.

To know more about forex day trading, here are some tips that you need to know, or you can read about forex futures trading.

1. You should know that forex day trading is course oriented

This means that forex day trading is focused more on the development. Forex day traders are expected to identify what comprises the “winning trade.” By the time you have already identified the outline, you will have more confidence in taking the trade.

This means that you will easily make good decisions without feeling regretful. In addition, at the end of each transaction, you will be able to feel good about your decision.

2. You are bound to lose before you can gain something

Forex experts say that every successful forex traders has definitely lost some hefty amount of money before they were able to achieve something. In fact, they say that this is the primary factor needed in order to gain success in forex day trading.

However, it does not necessarily mean that because you are bound to lose money at one point or another, you should expect loses all throughout. It is still important to remember that as a forex day trader, you must do everything just to win the game.

This can be done by speculating positively at all cost, taking risks without uncertainties. Of course, losing is part of the game. But remember that losing is not a major issue in one’s success.

Fail if you must; that is, if you will think that losing is inevitable. Yet, one should also keep in mind that these loses are relatively small and will only take few minutes of your time to make those errors.

And lastly, it is important that you know what you are doing. Do your homework and find out more about forex day trading. In this way, you will learn the basic safety measures of forex day trading. You will also learn the important steps you have to make if ever the unforeseen circumstances take place.

So the next time you want to start a career in forex day trading, it is important that you start on the insides first. Know what the client wants. From there you can already make a fresh start in trading.

Forex in One, Two, Three and Four Easy Steps

2009-06-09T14:22:00.000-07:00

Number 1. CONCEPT. Forex traders should know by now that the forex trading market is about trying to make big out of something small. This is in terms of earning big profits through smaller risks. Nobody is forex can control how this giant market is moving. Besides they would not start to understand it in the first place because the forex market is really really complicated and ever-changing.

People remain in the forex trading industry because they thought that the probability of making profit is bigger than the probability of getting losses. This thinking would have proven effective if the trader is aware that they need to execute stop lost in this concept. Really understanding this point in the course of the transaction and relying on the forex traders’ own initiative rules and discipline will surely prevent losses from happening.

Number 2. STOP LOSS AND TAKE PROFIT POINT. Many of the forex traders not using these two factors effectively and efficiently does not really make any money in forex trading. the traders usually buy a currency they think will rise, but eventually fell. In the anticipation that it will begin rising soon, the forex trader do not use stop loss. The loss then becomes larger and larger and the trader still waiting and hoping.

The common result when the foreign currency starts rising is there are more losses acquired to make up for the profits. Another result would be getting the currency out of the market so fast that the best opportunities are missed in the process. Forex traders often makes these mistakes over and over again especially if they do not consider these two important points.

Number 3. MARGIN ALLOCATION AND PROPORTIONAL DISTRIBUTION LAW. Combined forex orders are allowed only at a specific margin. But it cannot be used all in one shot. So if forex traders buy up but the trend fall out of the expectation, the trader will find himself in a passive condition.

It is still best to stop loss after buying a position once there is a sudden shift in the forex market. For markets with consistent movement, there will be more profits to utilize to supplement the margin. The profit has a tendency to continue to rise too.

Number 4. CHOOSING THE PROPER TIME TO BEST EXECUTE THE ORDER. Fundamental analysis of the forex market is the key. Even technical analysts prefer this method. Forex traders must use fundamental analysis to determine when is the best time to enter the forex market and trading.

Forex traders must also use their own preferred forex views and charts to be able to execute an order. It is important to note that every forex trader has to formulate their own regulations and source of information that they can check upon whenever the need for it arise. It is also important to note that these things may affect how the trade will result to.

Another way is to try and analyze the market by looking at the movement of the forex currency. Analyze the rising and falling of the currency and see, even guess the probability of things that might happen next. When there are forecasts of good things to come, the forex trader should grab that opportunity to choose the right currency to invest on.

These are the four forex strategy that is used by many traders nowadays. These four important points have been proven to bring in more positive results in forex trading. There have already been lots of other advices that are also effective but these are the newly developed ones that can cater to the changes that the forex market is going through.

It is important to note that these forex points and strategies should not be the only ones a forex trader can use in their trade. there are still many of the old and the new ones that forex trades can use in their trading. All in all, the final decision would still depend upon the say of the trader.

There is also these other factors called luck and fortune. Sometimes they do tend to play some joke in the forex trading community and can bring down even the best of the best traders to their knees.

Kevin Anderson is the owner and operator of http://www.forextradingcenter.info a site developed to give users the most updated information on how to trade Forex properly to make a profit.

Reasons Why Currency Forex Trading Remains A Secret

2009-06-09T14:18:00.000-07:00

Forex currency trading can easily be found nowadays over the internet. If you search the net, there are numerous web sites offering hundreds of investment programs like currency forex trading, real estate, stock trading and many others.

If you ask some of the currency forex traders why they choose this trade from among the many options, the likely answer they would give is that currency forex trading is an easy way to earn money. Very safe too if done on the internet.

Currency forex trading is the most profitable internet income opportunity because you can do it at home, in the office and from any country in the world.

In currency forex trading online, you do not need to do any marketing, selling or promotion to succeed. You do not have to have hundreds of dollars to be able to open an account. And you would not be spending much also in the course of your currency trading career.

All that is needed to be done is open an account from any of the brokers with as little as $300-$2000. then all you have to do is follow the instructions given on how to go about buying and selling your currency forex trade.

When the price of the forex currency is low, start buying. If the price suddenly goes up, sell your currency and make instant and easy money. All this is done in a day. You can easily go from buying to selling your currency forex within the span of those short hours.

After having done your trade for the day, you can log off the internet and just come back on to check on what is happening to your currency forex trade and the forex market itself. No harm in checking once in a while and seeing if you need to have some actions done.

The good part about doing currency forex trading online is that you can already enter all the buy trades and their specified prices. Whenever the value of the currency forex rose and reached your desired selling price, the currency will be automatically sold for you. You just made some money and you do not know it yet. The nest time you log on to your account, you will see that you are some cash richer.

Another good thing about currency forex trading online is that you can have a permanent job and still do your currency forex work in your spare time or whenever you are available to see what has been happening.

Currency forex trading is trading the easy way. This is how the system works.

Before putting real money to open your own currency forex trade, you first have to avail of the free trial account and practice there for some time. The main purpose is to better understand how the currency forex works and to acquire the proper skills needed.

In currency forex trading, you can choose how much money you wish to invest, how much money to make and when to make it. Your computer would be your “ATM” machine that tells you the amount of money you now have available. You are the boss in the currency forex trading. You can do as you please and decide what steps to take in your every action.

Currency forex trading is the fastest and easiest way to make money online compared to other investment programs. The forex market is a daily business worth billions of dollars that is much larger than all the stock in the world combined together.

There are only some of the reasons why people choose currency forex trading over other trading and businesses that are rampant everywhere nowadays especially on the internet.

Maybe this is also why many people are not aware of currency forex trading yet. By reading more about this kind of trading, people would get to know the secret behind one of the greatest wealth on earth. Perhaps they would also know why currency forex is little known to many people and why it is kept hidden until now.

Not everybody is given the opportunity to try and enter into the currency forex trading and avail of its advantages. So currency forex traders should be glad and take the best care of their currency forex accounts.

Forex Options Market Overview

2009-05-31T01:47:00.004-07:00

The forex options market started as an over-the-counter (OTC) financial vehicle for large banks, financial institutions and large international corporations to hedge against foreign currency exposure. Like the forex spot market, the forex options market is considered an "interbank" market. However, with the plethora of real-time financial data and forex option trading software available to most investors through the internet, today's forex option market now includes an increasingly large number of individuals and corporations who are speculating and/or hedging foreign currency exposure via telephone or online forex trading platforms.
Forex option trading has emerged as an alternative investment vehicle for many traders and investors. As an investment tool, forex option trading provides both large and small investors with greater flexibility when determining the appropriate forex trading and hedging strategies to implement.
Most forex options trading is conducted via telephone as there are only a few forex brokers offering online forex option trading platforms.
Forex Option Defined - A forex option is a financial currency contract giving the forex option buyer the right, but not the obligation, to purchase or sell a specific forex spot contract (the underlying) at a specific price (the strike price) on or before a specific date (the expiration date). The amount the forex option buyer pays to the forex option seller for the forex option contract rights is called the forex option "premium."
The Forex Option Buyer - The buyer, or holder, of a foreign currency option has the choice to either sell the foreign currency option contract prior to expiration, or he or she can choose to hold the foreign currency options contract until expiration and exercise his or her right to take a position in the underlying spot foreign currency. The act of exercising the foreign currency option and taking the subsequent underlying position in the foreign currency spot market is known as "assignment" or being "assigned" a spot position.
The only initial financial obligation of the foreign currency option buyer is to pay the premium to the seller up front when the foreign currency option is initially purchased. Once the premium is paid, the foreign currency option holder has no other financial obligation (no margin is required) until the foreign currency option is either offset or expires.
On the expiration date, the call buyer can exercise his or her right to buy the underlying foreign currency spot position at the foreign currency option's strike price, and a put holder can exercise his or her right to sell the underlying foreign currency spot position at the foreign currency option's strike price. Most foreign currency options are not exercised by the buyer, but instead are offset in the market before expiration.
Foreign currency options expires worthless if, at the time the foreign currency option expires, the strike price is "out-of-the-money." In simplest terms, a foreign currency option is "out-of-the-money" if the underlying foreign currency spot price is lower than a foreign currency call option's strike price, or the underlying foreign currency spot price is higher than a put option's strike price. Once a foreign currency option has expired worthless, the foreign currency option contract itself expires and neither the buyer nor the seller have any further obligation to the other party.
The Forex Option Seller - The foreign currency option seller may also be called the "writer" or "grantor" of a foreign currency option contract. The seller of a foreign currency option is contractually obligated to take the opposite underlying foreign currency spot position if the buyer exercises his right. In return for the premium paid by the buyer, the seller assumes the risk of taking a possible adverse position at a later point in time in the foreign currency spot market.
Initially, the foreign currency option seller collects the premium paid by the foreign currency option buyer (the buyer's funds will immediately be transferred into the seller's foreign currency trading account). The foreign currency option seller must have the funds in his or her account to cover the initial margin requirement. If the markets move in a favorable direction for the seller, the seller will not have to post any more funds for his foreign currency options other than the initial margin requirement. However, if the markets move in an unfavorable direction for the foreign currency options seller, the seller may have to post additional funds to his or her foreign currency trading account to keep the balance in the foreign currency trading account above the maintenance margin requirement.
Just like the buyer, the foreign currency option seller has the choice to either offset (buy back) the foreign currency option contract in the options market prior to expiration, or the seller can choose to hold the foreign currency option contract until expiration. If the foreign currency options seller holds the contract until expiration, one of two scenarios will occur: (1) the seller will take the opposite underlying foreign currency spot position if the buyer exercises the option or (2) the seller will simply let the foreign currency option expire worthless (keeping the entire premium) if the strike price is out-of-the-money.
Please note that "puts" and "calls" are separate foreign currency options contracts and are NOT the opposite side of the same transaction. For every put buyer there is a put seller, and for every call buyer there is a call seller. The foreign currency options buyer pays a premium to the foreign currency options seller in every option transaction.
Forex Call Option - A foreign exchange call option gives the foreign exchange options buyer the right, but not the obligation, to purchase a specific foreign exchange spot contract (the underlying) at a specific price (the strike price) on or before a specific date (the expiration date). The amount the foreign exchange option buyer pays to the foreign exchange option seller for the foreign exchange option contract rights is called the option "premium."
Please note that "puts" and "calls" are separate foreign exchange options contracts and are NOT the opposite side of the same transaction. For every foreign exchange put buyer there is a foreign exchange put seller, and for every foreign exchange call buyer there is a foreign exchange call seller. The foreign exchange options buyer pays a premium to the foreign exchange options seller in every option transaction.
The Forex Put Option - A foreign exchange put option gives the foreign exchange options buyer the right, but not the obligation, to sell a specific foreign exchange spot contract (the underlying) at a specific price (the strike price) on or before a specific date (the expiration date). The amount the foreign exchange option buyer pays to the foreign exchange option seller for the foreign exchange option contract rights is called the option "premium."
Please note that "puts" and "calls" are separate foreign exchange options contracts and are NOT the opposite side of the same transaction. For every foreign exchange put buyer there is a foreign exchange put seller, and for every foreign exchange call buyer there is a foreign exchange call seller. The foreign exchange options buyer pays a premium to the foreign exchange options seller in every option transaction.
Plain Vanilla Forex Options - Plain vanilla options generally refer to standard put and call option contracts traded through an exchange (however, in the case of forex option trading, plain vanilla options would refer to the standard, generic forex option contracts that are traded through an over-the-counter (OTC) forex options dealer or clearinghouse). In simplest terms, vanilla forex options would be defined as the buying or selling of a standard forex call option contract or a forex put option contract.
Exotic Forex Options - To understand what makes an exotic forex option "exotic," you must first understand what makes a forex option "non-vanilla." Plain vanilla forex options have a definitive expiration structure, payout structure and payout amount. Exotic forex option contracts may have a change in one or all of the above features of a vanilla forex option. It is important to note that exotic options, since they are often tailored to a specific's investor's needs by an exotic forex options broker, are generally not very liquid, if at all.
Intrinsic & Extrinsic Value - The price of an FX option is calculated into two separate parts, the intrinsic value and the extrinsic (time) value.
The intrinsic value of an FX option is defined as the difference between the strike price and the underlying FX spot contract rate (American Style Options) or the FX forward rate (European Style Options). The intrinsic value represents the actual value of the FX option if exercised. Please note that the intrinsic value must be zero (0) or above - if an FX option has no intrinsic value, then the FX option is simply referred to as having no (or zero) intrinsic value (the intrinsic value is never represented as a negative number). An FX option with no intrinsic value is considered "out-of-the-money," an FX option having intrinsic value is considered "in-the-money," and an FX option with a strike price at, or very close to, the underlying FX spot rate is considered "at-the-money."
The extrinsic value of an FX option is commonly referred to as the "time" value and is defined as the value of an FX option beyond the intrinsic value. A number of factors contribute to the calculation of the extrinsic value including, but not limited to, the volatility of the two spot currencies involved, the time left until expiration, the riskless interest rate of both currencies, the spot price of both currencies and the strike price of the FX option. It is important to note that the extrinsic value of FX options erodes as its expiration nears. An FX option with 60 days left to expiration will be worth more than the same FX option that has only 30 days left to expiration. Because there is more time for the underlying FX spot price to possibly move in a favorable direction, FX options sellers demand (and FX options buyers are willing to pay) a larger premium for the extra amount of time.
Volatility - Volatility is considered the most important factor when pricing forex options and it measures movements in the price of the underlying. High volatility increases the probability that the forex option could expire in-the-money and increases the risk to the forex option seller who, in turn, can demand a larger premium. An increase in volatility causes an increase in the price of both call and put options.
Delta - The delta of a forex option is defined as the change in price of a forex option relative to a change in the underlying forex spot rate. A change in a forex option's delta can be influenced by a change in the underlying forex spot rate, a change in volatility, a change in the riskless interest rate of the underlying spot currencies or simply by the passage of time (nearing of the expiration date).
The delta must always be calculated in a range of zero to one (0-1.0). Generally, the delta of a deep out-of-the-money forex option will be closer to zero, the delta of an at-the-money forex option will be near .5 (the probability of exercise is near 50%) and the delta of deep in-the-money forex options will be closer to 1.0. In simplest terms, the closer a forex option's strike price is relative to the underlying spot forex rate, the higher the delta because it is more sensitive to a change in the underlying rate.

2009-05-31T01:47:00.003-07:00

Forex Market Overview

"FX" is an abbreviation of "forex" or "foreign exchange." Foreign exchange is the largest and most liquid market in the world trading approximately $2 trillion every day (that's over 30 times the daily volume of NASDAQ and NYSE combined). The forex market is a cash interbank/interdealer market. In simplest terms, this means the foreign currencies traded in the forex market are traded directly between banks, foreign currency dealers and forex investors wishing either to diversify, speculate or to hedge foreign currency risk. The forex market is not a "market" in the traditional sense due to the fact that there is no centralized location for fx trading activity and, therefore, trades placed in the forex market are considered over-the-counter (OTC). Forex trading between parties occurs through computer terminals, exchanges and over telephones at thousands of locations worldwide. CFOS/FX clients can trade through online forex trading platforms and/or over the telephone directly with a forex broker on our trading desk.
Until recently the forex market has not been available to the small speculator. The large minimum foreign currency transaction sizes and financial requirements left this market in the hands of banks, major foreign currency dealers and the occasional large fx speculator. Now, with the ability to leverage large positions with a relatively small amount of capital (margin), the forex market is now more liquid than ever and available to most investors.
Five major currencies dominate trading in the foreign exchange markets: the U.S. Dollar, Eurocurrency, Japanese Yen, Swiss Franc and British Pound. The foreign currencies are traded in pairs, also known as crosses, in the forex spot market. For example, purchasing the EUR/USD in the forex spot market simply means the purchaser is buying the Eurocurrency and selling the U.S. Dollar in anticipation of the Eurocurrency gaining value in relation to the U.S. Dollar. Similarly, the seller of a EUR/USD contract would be selling the Eurocurrency against the U.S. Dollar. Official figures show the U.S. Dollar is on one side of 83% of all spot foreign exchange transactions. The "spot" market simply refers to a currency contract with a prompt valuation date requiring settlement within two business days.
Over the past several decades, an increase in international trade and foreign investment has made the economies of the world more interrelated. New opportunities for investors have also been created with the fall of communism and the dramatic growth of the Asian and Latin American economies. Today, supply and demand for a particular currency is the driving factor in determining exchange rates. Many factors such as regularly reported economic figures and unexpected news reports, such as disasters or political instabilities, could also alter the desirability of holding a particular currency, thus influencing international supply and demand for that currency. It should come as no surprise that many shrewd investors have already taken advantage of the fluctuation in exchange rates to profit handsomely

2009-05-31T01:47:00.001-07:00

Why Do You Want to Become a Online Trader?

Motivational guru Tony Robbins teaches that the reason for doing something rates much higher than the methods you use to get the job done. In order to make your goal REAL, you need to attach severe, horrifying, intense and profound fear to failure.
Open up a notepad either on a desk or on your computer in a quite place and write a 50-page letter to yourself surrounding this question:
-- What is going to happen to me 20 years from now if I do not learn the successful skills I need to know in order to become a brilliant or the best on line trader?
Write your answers in detailed pictured thoughts. I have found that writing in length brings out the hidden agenda into realms of things that are too painful to face. This pain aids you to move into a different direction.
Now do the same exercise for this question:
-- Ask yourself – Why do you want to become the best trader online?-- What kind of trader do I want to become? Good proposal examples: online stock trader, online forex trader etc.-- What trader market research would I like to pursue? The most popular illustrations: online daytrader, online swing trader etc.-- What systems would I like to learn as a trader? A good example might be as an online fibonacci trader.
See, if you have a strong enough WHY that answers the following questions pertaining to trading – then you will find a way, no matter how difficult the pain, to get the job done. Here are some ideas for your 50-page letter.
-- Do you want to create a stream of passive income? -- Do you want to create a sense of security for yourself about where your next check will come from?-- Do you want to earn income that will act as an extra supplement source cash so that you can afford some of the finer things in life instead of living paycheck to paycheck?
In his “Rich Dad, Poor Dad” series of books, Robert Kyosaki advises against anyone securing a part time job. Instead, Kyosaki suggests starting a part time business.
In my opinion, profitable trading is the perfect business and the best home based business opportunity. It is capitalism's best kept secret that will allow you to work at home. The market makes no distinction about your wealth, educational level, ethnic background or any other aspect of your identity. There is no room for office politics, difficult bosses or tricky employees in this arena. You can trade from anywhere. Follow a few simple rules, and you can run your business as you see fit.
That said; if trading successfully were easy, everyone would reap the profits. The truth is most people that trade will lose money. This is an unpleasant fact for a number of reasons. Nevertheless, the primary cause of why so many people lose money trading is that they simply do not know how to trade.
If you do not know how to trade, that does not mean that you are not smart. On the contrary, many highly intelligent people lose millions of dollars in the market.
If you do not know how to trade, the conclusion is simple – you do not have a:
+ Coach / Mentor and or a + System
Most people never master trading because it seems difficult to win and they seldom have access to an experienced, successful trader or trading methodology that actually works. They usually go it alone or attend countless seminars and read even more books. Not that reading books are bad, but in most cases, nearly but not everyone ever reaps excellent results. How do I know this? Because I have actually been there…
Trading successfully is difficult if you do not know what you are doing. Let me show you how to achieve trading success and shortcut your learning curve dramatically. If you have a strong desire to succeed, put in a little work and after a bit of practice, it will become easy.
-=-=-==-=-=-=-==-=-=-=-=-=-=-=-=-=-=-=- David Jenyns is recognized as the leading expert when it comes to designing profitable trading systems.

Why Forex Traders Plan To Fail Before They Even Place Their First Trade

2009-05-31T01:47:00.000-07:00

Have you heard the wise saying that a trader who fails to plan, plans to fail? I have, and I was once that trader! However, did you know that even though traders who have constructed a plan, which incorporates their trading stategy (their "edge"), they have a plan that is likely to fail?
If we look at all traders who participate in the market: we have one group that fails to plan and therefore plans to fail; another group whose plan is failed; and a third group who properly plans and therefore does not fail.
Is it any wonder that the success rate for forex traders is so slim?
Well it doesn't have to be.
Here's a list of reasons why those whose plan is destined for failure fail:
1. They become emotionally attached to their ideas about how the market should be with minimal or inadequate testing;
2. They fall in love with their back-tested net profit results without fully understanding other key statistical data;
3. They don't admit they're plan is wrong.
Let's explore each point in a little more detail.
1. Becoming emotionally attached to your ideas without adequate results
Most new traders when they realize the importance of obtaining a trading plan and sticking to that plan immediately begin to use the knowledge they have been taught and haphazardly throw it all together into what they deem their "trading plan".
When they are questioned on whether they have a trading plan most of these traders answer with an unequivocal "Yes!".
Most of these traders are destined for failure because their strategy is untested. They rely on blind faith to guide them through the trading jungle to make their untold millions. Would you walk from one length of the Amazon jungle to the other blind-folded? Of course not! You'll have to watch out for all the snakes, tarantulas, and other creepy things that go bump in the night, so why would you approach trading in the same fashion? I mean all you're really doing is placing the blind-fold on your capital!
Why do traders do this?
Because it's easy. That's right... it's easy. They don't need to learn a computer language to type their system into some piece of software that will take them the better part of 6 months to a year to learn, and they don't have to spend any money on buying historical data. Therefore it's easy and it's cheap and it also conserves time!
So does success meet lazy people like this?
Not many! However I will admit that it does meet a fortunate few - only those lucky enough to start their trading during roaring markets where even a monkey can make money! To repeat again: don't wear the blind-fold. Your success may be great at the start, but given time and trades, you'll be the one out of the game - having depleted all your capital.
So what do you do if you KNOW that your method is untested?
If you have the time, the money and the learning capacity I would strongly encourage you to purchase some back-testing software (such as Wealth-Lab Developer), acquire some forex data, ask heaps of questions on the Wealth-Lab forum on how to code your ideas and within 3-6 months you'll be safely coding your own forex system and testing adequately.
If you do not have the time, the money nor the learning capacity I would strongly suggest that you manually write down your system into clearly defined steps that you MUST follow. Then, after opening a DEMO forex account you would trade your system according to the rules you have set out. Trading your rules until about 20 trades have been completed.
After traders obtain their results from their testing period they unfortunately look at only one figure and make a rash conclusion about the system based on that one performance figure, namely, the net profit. This then leads us into the next problem of why traders plans are failed prior to placing their first live trade...
2. They fall in love with the net profit result and no longer question it any further!
The net profit is only one statistic among thousands, however, to keep things simple we will look at the top 3 results that you need to make sure you fully understand.
Here are the other statistical pieces of data that you should look at when your system has completed its testing period:
I. How many trades did it have? If you have made a nice profit, but have only had 3 trades during the testing period you do not have a sufficient sample space to arrive at any safe conclusions. Can you imagine what would happen to Neil Armstrong if NASA had only done 3 computations on how they would arrive on the moon??!! If it's not good for NASA then it's probably not good for you either, however, as NASA do zillions of computations you would only need to conduct about 20 trades as the bare minimum before you can arrive at any safe conclusions;
II. What was your money management procedure during the testing phase? This is by far the most important point, however, you need to make sure your system is properly working prior to even embarking on this difficult area (hence the reason why it is a CLOSE second to the above point). Be sure you fully understand what I am about to explain (read it several times to absorb it if need be)... If you test a method whereby you rely on a percentage amount of capital on a trade you can be biasing your results!
How?
Let us look at the following comparison sheet where we plot 21 trades with their pip return (we'll assume that each pip = US$1), and compare the returns against using 10 contracts per trade, 10% capital per trade, or 2% risk per trade...

2009-05-14T04:48:00.000-07:00

Finding the Best Forex Trading Course For You

With a whole host of systems and strategies available, picking the best forex trading course couldn't be more important. After all it is your money you're putting on the line. Before you go and put several thousand into your forex trading account, make sure you have the adequate support, systems and controls in place. The professional forex trader will always think about what they can lose before they picture what they can win.

Pick the level of support that best suits your needs and matches your lifestyle.

Forex Membership Sites
At the top end of the spectrum you have fully fledged membership sites that offer full online training and support. The best forex trading course of this kind will look to offer daily updates and reports on the markets, an interactive approach that lets you watch lives set-ups and ask questions in addition to a long list of tools and software to make trading as easy as possible.

Whilst these courses can be expensive, they offer the support many new traders need to keep focused on the result especially when trades go the wrong way. These are the best forex trading course in many people's eyes because of the support through the tough times and markets are being a little jittery.

Automatic Forex Trading Software
For those not interested in spending time trading you have the forex trading robot, an automatic forex trading software that does the hardwork, while you get on with your life. Once you have installed the forex robot, you just switch it on and leave it to trade 24 hours a day, monitoring the markets and placing trades on your behalf. Quietly depositing the money in your account while you sleep. It doesn't get better than this and if you lack the time to roll up your sleeves, this could be the best forex trading course for you.

Many of these robots have been tested over years to make sure that they can survive different market conditions and have money management systems in place to safe guard your capital (as best you can). Say hello to a passive income!

Is a proven strategy the best forex trading course?
And finally, my personal favourite, learning the market. Yes it take longer however the more you put in, the more you will get out and as you build your experience you will identify bigger, more profitable trades quicker. Start by using a simple, proven trading course on a demo account until you start to build your confidence and then it is simply a case of putting you system into place and going live.

Second only to the a forex membership, these are a good compromise between your money and time commitment. A forex membership site can leave you swamped in daily reports that you have to digest where as a simple forex strategy that allows you to position trade can let you fit in some charting in between your work and family commitments.

You can see how the best forex trading course really is an individually choice based on the level of support you need and the time you have to trade.

2009-05-14T04:46:00.000-07:00

Forex Education Can Help You Swim

You can't just jump into the deep, vast ocean if you don't know how to swim. That is the best analogy for somebody who is too eager to dive into forex trading without much know-how about the business yet. Forex education is necessary for those who want to enter the forex trading scene and succeed.

The appeal of the forex trading business is that it is highly liquid. Its greatest advantage is the huge potential for profits. For people who want to earn big money and think that forex trading is an easy way - they have to think again. In order to become successful in this business, you need a solid forex education to back you up.

Reading a few websites about forex or watching the news as they deliver the forex-related information are not enough. You need to know the terminologies, the processes, the tools conditions and methodologies. Many of those who have been successful have spent a great deal of time studying the market over the years. They have undergone tutorial sessions on forex. They plan their investments based on trends they have established watching the market. The best traders have learned over time how to see disaster and how to respond accordingly. These learned investors know how to profit big time, and how to minimize losses.

Forex education is key in making the soundest of decisions when it comes to forex trading. The market is open 24 hours a day, 5 days a week so there really is a lot of room for making money and a bigger room for losing it - unless you're already a smart investor.

The first step is always to know about the ABCs and 123s. Forex education is the foundation for every transaction you will make. When you lose some, you gain some experience and additional knowledge. Stock this information for future reference, so you would know better next time the same blow comes your way.

Most sessions involved in forex education are programmed to provide beginners and even the more experienced ones with all the tools necessary in buying and selling currencies. Charts, trending, analysis, and interpretation of data are also critical in making it through a forex market day.

Aside from the training sessions, you have to continuously update yourself by digging deeper into what you hear from the news, and what you read from the papers and books about forex. If you read up you will understand what's happening and what the factors that affect the prices are. Economic issues are the main catalysts in forex trading but there are other issues like political events, countrywide sentiments, new laws, natural disasters, and cyclical process in the finance market that affect a countries currency.

A person with a firm foundation on forex education is the likely candidate to reap substantial benefits. But, aside from his intellectual and logical take on things, he should also be emotionally balanced in all his forex investments. He should be able to use his forex education while checking and balancing it with his emotions. A good combination will certainly make one very successful and rich forex investor.

2009-05-14T04:42:00.000-07:00

Knowledge Means Profits in Forex Trading

Fundamental data is the key to understanding why the forex market moves the way that it moves. Yes, technical analysis is just as important in trading but if you don't understand what news moves the market and what is happening in the current economic climate than you are trading blind and ignorant. Ignorance is not an excuse, if traders are ignorant the markets don't care. You will just lose your money and blow your account and then you become another forex statistic.

Fundamental data helps to bring profits to the trader because it gives them information as to how a currency may perform. The foreign currency exchange is a global market and because of the large size of the market there is a lot of news to digest and sort through. So this article is to help you to find what type of global news is important and moves the currency. There are many key economic indicators that the major players in the forex market such as governments, banks and institutional investors are watching. They use those indicators to guide them in how they are going to trade the currency.

One of the most important indicators that give clues as to the health of the economy is the unemployment report. That particular report is watched by many traders and when that information comes traders make decisions based on those numbers. If you want to learn to be a trader it pays off to learn what these numbers mean for an economy and how they impact each particular currency. The unemployment report is a leading indicator and if job losses are increasing that indicates that the economic health of the country is deteriorating and if job losses are decreasing that means that the economy is improving.

A good way to get reliable information about economic indicators is from your forex broker. Many brokers are helping traders by giving them reliable economic news and how to interpret the reports that are coming out. Most traders don't have the time or resources to dig through all the economic data on their own. The wise trader will take advantage of a good broker and the resources that their broker offers. It is also a good idea to find a broker that puts out a good reliable source of economic indicators.

Other important indicators to look at are: housing, unemployment, inflation, budget deficits, The Gross Domestic Product, retail sales reports, and consumer price index.

There are many indicators to look at but with time and practice you will understand what is impacting the market and the currencies. Using fundamental economic data along with technical analysis and a trading plan you can do well trading in the forex market.

2009-05-14T04:40:00.001-07:00

Trading Currencies - Forex Breakout Strategy

The Breakout Strategy is one of the most commonly used by professional and successful traders. Even though it is used by professionals, it is really simple to implement using regularly updated technical charts which are readily available online.

Breakouts in the forex market occur anytime that a price breaks above or below a resistance or support point. These points are determined by technical analysis and anyone can find what the technical points are on charts online. Sometimes I use the free technical charts available to all at fxstreet.com. However, I highly recommend the technical analysis charts and other resources inside the members area at plus.dailyfx.com.

For those of you who are very new to forex trading or who have never studied the breakout strategy, I will explain the definition of support and resistance points. A support point is a low point which has shown support for the particular currency pair (meaning the last time the pair touched that level it did not fall further). And a resistance point is a high point that the pair has tested but has not been able to break above. So, for example, let's say most recent technical chart on the the EUR/USD gives the following information: S1: 1.3609 S2: 1.3584 S3: 1.3560, and R1: 1.3657 R2: 1.3682 and R3: 1.3706. This means that S1 is the current first level of support for the EUR/USD and the last time the EUR/USD tested S1, enough buying occured that it did not fall any further. If the EUR/USD falls through S1, then S2 is the next level of support, and finally S3 is the third level of support. Likewise, R1 would indicate the first level of resistance through which it may be unlikely for the EUR/USD to be able to break above. If EUR/USD does break above R1, then R2 is the next level of resistance, and R3 is the third level.

Now that you fully understand the basics and the simplicity of reviewing the technical chart. It is easy to spot a breakout trading opportunity. When the price of a currency pair breaks below a support point or breaks above a resistance point, a high probability trade in the continued direction of the breakout may be executed. (If the currency pair breaks through a support point, then go short/place a sell order on that pair. If the currency pair breaks above a resistance point, then go long/place a buy order on that pair.)

The trick here is to enter the trade as soon as you possibly can after the breakout occurs. If you wait too long, you could miss the major move and actually enter too late, possibly even so late that the trade reverses for a loss. If you enter the trade and set a reasonable stop profit, you will minimize your loss potential while setting yourself up to collect the big pip movements that are often associated with currency pair breakouts.

Now obviously, a full breakout does not occur every time a currency pair breaks above or below a technical point. Sometimes it leaps above or below the technical point briefly and then pulls back. Such incidents are often referred to as "false breakouts."

However, catching the trend on a true breakout is worth losing some pips on all the false breaks the trader has to take when using this strategy. Hundreds of pips can be gained when a trader enters a trade at the beginning of a true breakout. So by setting your stops correctly, you should not lose too many pips on false breaks, and you may even be able to grab a small profit even on a false breakout.

When you catch a true breakout, however, you could very well gain hundreds and maybe even 2 hundred pips. When this happens you can set a trailing stop and let the trade continue to run at no risk with your profits "locked in." The first time a trader catches a true breakout with great momentum behind it, the trader will definitely recognize the power and simplicity of the breakout startegy and will realize that all of the small losses on false breaks were well worth it!

2009-05-14T04:38:00.000-07:00

Millions of Online Currency Traders Can't Be Wrong - Forex Trading Can Be Downright Vicious

If you are scraping pennies together, you already know that Currency trading is brutal. It's clear to even the most unsophisticated investor that Forex has risk. It's even riskier for an untrained trader. In fact, it may have the highest volatility of any investment market.

One can easily lose their hard earned cash in currency trading if they are not well trained.

It is downright imperative that you don't go into the trading market "glossy-eyed". In advance of investing think over these tips:

1. Do not invest money into a real Currency account until you practice on a free Global currency trading account. The practice will greatly help with discipline and avoiding any investing errors.

Allow at least 30 days of practice before you even think about getting into the live market. Consider the following statistic - 90% of newbie's walk away broke in the real world. The primary reason for the loss is lack of awareness, practice and instruction. Those remaining 10% of leading global currency traders have been fine tuning their skills on free trading accounts for several years in advance of entering the real market.

Don't think for a minute that you can compete without practice.

2. Never risk more than 2-3% of the trading account. Go on placing as many trades as doable, or letting stock trading robots churn & burn your portfolio.

One important difference between a successful and an unsuccessful trader is that the first is able to bounce back under dreary conditions on the market, while a "broke" forex trader will blow up his account after 5-10 fruitless trades in a row. If you are untrained will take a real beating in this market. Just like me, you probably started out "glossy eyed". You may have envisioned yourself living the good life while the dollars rolled in, and you sat back sipping champagne. Eventually, reality hits and you realize that trading is a little complex. Recently, I asked myself if it was just me, or had Forex investing had become more brutal. I also wanted to determine if the Forex market was still the choice place to invest in these leery times. Of course the market is neither bullish nor bearish, but it does take on its own personality. Having asked myself the best investment options handy, I concluded that trading in the Forex currency market was still the choice option, because you may open a small account, to determine the reality of this business.

If the account performs in a way that you feel comfortable, you can add more your money. Of course the bottom-line is that this kind of account returns wonderfully, 5% to 12% per month. Now, don't misunderstand what I am saying, Forex investments carry substantial risk and are certainly not suitable for everyone. Past performance is no guarantee of future outcome. There are plenty of Day currency traders that lose money, and if you invest in a managed account the following statistic can happen to you. If makes you are sincere about becoming a Giant in this market, it is mandatory that you acquire training and education. So what should the newbie's do? Should they try their luck trading forex and lose their money. If done without education and training, the chances of it happening is exponentially increased. So prior to investing real money, you want to learn what candlestick charts are? What are pips? How you place a buy and sell and on and on. The beneficial thing is that most of the following statistical information is now readily available on the internet. You can download online free eBooks on the foreign exchange market.

There are a desirable number of OTC trading platforms online that give you the opportunity to practice global forex investing using virtual money. Most importantly, you can practice the foreign exchange market without the risk of losing your hard earned cash. With a little bit of practice and education you can start trading in a few short weeks, but take advantage of the 30 day offer. Remember, too that there are now many advantageous global forex investing robots that get made the process of OTC trading automatic. People are making desirable cash from home each and every day trading OTC on autopilot. This is an opportunity that you should not miss if you want monetary freedom and to live the life of your dreams. It is conceivable to reduce your risk additionally by looking for a reputable broker. You would be surprised at how many there are out there.

Currency investing is big business for them too! Remember, some currency trading brokers make a fortune by skimming off the top from traders, in addition to getting their commission percentage. A new investor who is lured by the suggestive allure of lavishness that is to be had in the business would be advised not to trust anybody without sound credentials. Approaching a seasoned broker with a recommendable reputation when you start off would be the perfect thing to do. Remember, FX trading is can be wicked. People spend countless hours learning the ins-and-outs of the market. It's an easy way to lose your hat big time if you don't obtain a little practical knowledge. As an investor, you want to be psychologically strong to be a profitable.

However, I believe that with the right training, guidance, and tools you can become a successful forex currency trader.

Remember, the following:
1. Get a free practice account
2. If, you still find yourself overwhelmed, seek advise
3. Never risk more than 2-3% of the trading account
4. Read, study, and practice every single day

2009-05-14T04:36:00.000-07:00

A Guaranteed Way to Making Some Foreign Forex Money Even If You've Never Traded Before

Nowadays, it's never been easier to break into the forex market. As opposed to the past, these days all you need is your own computer, a steady internet connection, and a bit of start up capital. You don't even need to risk any real money to learn as you can do it within the safe confines of a practice account online anytime you want. But if you want to make some real foreign forex money right away, there is one tool for trading which you must not overlook.

Roughly 30% of all traders are currently using some form of automated forex trade software to bring in a steady and reliable income from this market. This is software which you run on your own computer which does just that, it automatically trades currency for you. The ultimate goal is to keep you on the winning sides of your trades as often as possible to keep you earning foreign forex money in this market from trends and to minimize your losses around the clock.

Automated forex trade software is adept at doing this and can react to changes in the market faster than any other form of trading around today for the simple fact that it remains constantly connected to and analyzing real time market data, so that when a change occurs it is sophisticated enough to recognize that you'll lose money on this new pattern or not, and trade accordingly when necessary.

I mentioned that nearly a third of all traders are currently using automated forex trade software to secure some automated foreign forex money, this is up from the 17% roughly who were doing it just 5 years ago to show that this is quickly becoming the norm amongst traders. This begs the question, why is it so popular?

Not only does automated forex trade software keep some of the major campaign killers such as human emotions and error from factoring into your campaign because all trading which the program carries out is in direct correlation with how the market reacts and nothing more.

Also, because it's entirely automated, you don't need to tend to it ever or know a thing about the market to enjoy and see something come back out of it. Consequently beginners and casual traders looking to earn some quick and reliable income as well as experienced traders who are looking to supplement their existing trading income have been known to take advantage of it.

2009-05-14T04:33:00.000-07:00

Forex Secrets - Delusion No 2 - Who Prompts Forex Quotation To Traders

The delusion conceptually propounds that traders operate at a spontaneous FOREX market (as stipulated by B. Williams, A. Elder, E. Nayman, etc.). But it is not the case. Traders do their job inside a well-organized and controlled currency exchange market, governed by the Consortium of the world’s largest banks.

Hence, who is pushing the currencies up and down, who defines trends, corrective actions and flats?
And, who, ultimately, places a trend at a point, where the majority of traders are happy to think they have saddled the wave and are about to win an enormous profit! Now! Not to be scared! Not to close the position! Not to be satisfied with a minor profit! Later on we will discuss that sort of stupidity. Thus, one persists to continue long in spite of more and more degrading profit. Shortly, the loss starts growing with light velocity! Are you familiar with the situation?

Well, who has reversed the rate?

And who generally tugs currency rates?

Tugging is surely centralized. Compare on-line quotes of several Dealers or banks to find out that they are per second coincident. Do each bank’s traders act in such synchronism, that even not seeing each other, they place identical orders so that quotation is in 100% agreement? NOTHING IS A MIRACLE HERE!

But prior to further explanation, we will listen to Bill Williams, the FOREX scholar (Trading Chaos, Ch. 6): “…let us trace a trend formation process. Earlier, the market and the market trading venue did constitute a single physical space. Majority of large grain traders were concentrated on the “floor”. Their orders involved amounts, sufficient to move the market; they enjoyed better control over the market than at present. During the latest 20 years markets have grown worldwide. Now, not only “Purina Ralstone”, “Kellog” and other prominent commercial associations seek hedging their cash assets transactions. So do millions of the world’s minor profiteers and farmers, competing with them in anticipation of perspective grain price fluctuations? This fact also implies strong potential for traders with nowadays, trends not being constructed on the floor. The latter mainly ensures the market liquidity by way of tackling “outer orders”.

The fact, that today’s trends are formed rather “outside the floor” than “on the floor”, as before, enables one to trace further market tendencies with trade volume being the key thereto. Our only on-line information is restricted to tick volume, time and price. Tick volume constitutes a number of price changes per a certain time period. It is not at all a number of traded contracts. Multiple researches revealed no significant difference between actual and tick volume. Using a tick volume, we may suppose, that it represents actual volume. It is a real-time volume, thus being our key to what’s going on in “trading pits”.

Two basic elements are organic to FOREX trading: brokers on the floor and remote traders. Local brokers constitute staff, executing orders, thus earning their salaries and/or commissions. They don’t possess money to be at their disposal. They are order executors. Their prospects are not burdened by prices, they getting for the orders management.

Remote traders use their own money. They have to pay the price out of their own pockets, unless they are getting a good one. Traders have to be much superior in skill to brokers since they independently take their own decisions, while the broker’s job is to follow the others’ orders.
Remote traders are supposed to support the market by way of taking its opposite side. As a rule, they are not at all crazy about any long-term transactions. Quite a few remote traders have been participants to our private training programs, and it is to be admitted that a 10-minute long transaction may seem quite a long-term one for some of them.

Think back to the fact that trends are built up of orders, delivered to the floor from outside, but not of long-term positions entered by remote traders. Since the traders’ job is to take the side opposite to the orders arriving from outside, they have no prospects of trading in between themselves. They follow your money. We are emphasizing again, that tick volume is our key to understanding what’s going on in the Forex Market. Remote traders do not contribute any significant volume to trading, which might result from dealing with similar traders on the floor. Trends emerge from incoming orders. That is why we are to be certain about when and in what amount the outer order is supplied to the floor. It is presented via a tick volume change”.

So, we, traders, turn out to be price locomotives, don’t we? And brokers on the floor just allocate and execute order, incoming from us, don’t they? And on April, 1, 2005 they all (meaning: we all) together decided to swivel the trend and to stay short against all the rules, news and common sense… I wonder if the scholar ashamed or not?

As regards the above quotation, I have chanced to hear a single argument in favor of Bill Williams (I guess you understood for what sake I’ve cited it in detail): it all pertains to the futures markets; we neither read nor use the above at Forex. Strange enough, these are the arguments of Williams’s advocates, but not of Williams himself.

This book is actually intended for both: futures markets and Forex Market. That’s why pictures taken from both the markets are so mixed up and the author never differentiates between the Technical Analysis methods thereof. Thus, either the author does not trace any difference between the two markets, or he is not eager to reveal it to the reader.
And neither in the foreword, nor in the remarks did Williams and his publishers refer to the fact that something of “Trading Chaos” is inapplicable to FOREX, and thus should not be made use of by a trader at FOREX.

I have repeatedly come through this peculiarity of Williams (correct specific case method definition being extended to a wider coordinates scale) and it actually induced me to write this book. In all and all, the methods and advice, absolutely true and correct for a PART of Forex Market are claimed by Williams to be universal for the WHOLE of Forex Market without being demonstrated where the above is effective and where it isn’t.

The same is being done by Williams’s opponents and advocates, who visualize the portion of Forex where his methods are operable only. As different from analysts and Williams’s bibliographers, TRADERS require much stronger to realize a demarcation with pro-Williams trading to the one side thereof and with counter-Williams trading to the other one.
Logically there comes a question: what might be added to Williams’s indicators in order to turn them effective at the point where they are presently ineffective (see details in chapter on the Williams Alligator).

And now we are getting back to the issue of who supplies traders with FOREX rates quotation, bearing in mind that it’s us, traders, who exercise rates movement in accordance with Williams’s standpoint. Millions of traders have actually been studying FOREX by virtue of the “Trading House” and it is really worth studying. This is one of the most interesting and instructive editions whose repeated reading each time brings about something new and useful.

However, in some passages it smells being custom tailored. Is Williams ignorant of the fact that there is no single FOREX exchange and there’s no single trading venue or floor? And that Pacific, Asian, European and American session classification is arbitrary?

Did You see currency rates move, while there’s a day off in the USA with the banks closed? So did I. So, who has made up his mind in the USA to trade on the floor on a day off?
Then, who prompts rates, who formulates trends and turns them with no objective reason for the rate to swivel and to rush in a direction, not being requisite at all?

Here is the answer, as provided by No. 11, 2002 “FOREX Profiteer” magazine’s article by Nadezhda Larina “Electronic Broker Systems at FOREX market”, http://www.ifin.ru/publications/read/351.stm), reading: ”… an FOREX dealing “Electronic Broking Service (EBS)” enjoys wide popularity with the extra-exchange inter-bank FOREX market. It has been developed by the Consortium of largest FOREX trading participant banks in association with “Quotron” informatics expert company and launched in 1993. Presently EBS incorporates 13 world’s largest market-maker banks, viz,: BN AMRO Bank, Bank of America, Barclays Capital, Citibank, Commerzbank, Credit Suisse First Boston, HSBC Bank PLC, J.P. Morgan Chase and Co.Lehman Brothers, Royal Bank of Scotland, S-E Banken, UBS AG along with Japanese Minex Corp., established by a Consortium of Japanese Banks in a joint manner with KDD Japanese telecommunications company and Dow Jones Telerate.
EBS offers a completely integrated range of dealing services for the professional inter-bank market, being a leading anonymous inter-bank FOREX trading electronic dealer. It is currently used by over 2500 dealers in 850 world banks and yields a trade turnover of about USD80 billion daily.
See there also: “Three greatest FOREX dealers - Citibank, J.P. Morgan Chase and Deutsche Bank, together with Reuters Group PLC) have started Atriax system in June, 2001.The latter terminated the operations in spring, 2002 after having failed to stand the competition.

Can you imagine a monster machine, capable of forcing three world’s largest banks - Citibank, J.P. Morgan Chase and Deutsche Bank to abandon their business plans! Or capable of reversing the EURUSD from 1.3660 to 1.1865 and thus instantaneously executing orders of all the world’s traders, going and standing short! And thus within, April-June, 2005, buying the EUR from traders at USD1.36, 1.29, 1.20, 1.19, etc.

Do you see the loss? Watching the EUR slip 1700 pts after having bought it at 1.36… But, possibly, there is no loss at all?

All of Larina’s basic provisions have actually found confirmation 2 years later in the UK “Financial Times” article by Jennifer Hughes: “A PC occupying trading floor” (see it on Financial Times 2004).
It underlines that during the precedent 2 years the Consortiums turnover has grown by extra daily USD20 billion thus currently stretching to USD100 billion, whereas the most prominent internet-based trading platforms ensure the average of USD15-20 billion daily turnover.
So, let’s jump to some conclusions:

1. The FOREX market is not the same as it used to be earlier, say 11 years ago.

2. There is in fact “a price fluctuation relative uniformity”, otherwise, practical quotations similarity with all the world’s brokers and traders.

3. The reason for the above uniformity has been honestly disclosed from technological standpoint, being the “flourish of electronic exchange technologies”.

4. There is no mention of other reasons for similar rates at absolutely different FOREX trading platforms the world over what links together the above platform and FOREX rates at them from financial, organizational, contractual viewpoints, etc).

5. The great interest is the remark from “Financial Times” reiterating the changes at FOREX during the latest years as narrated by an anonymous ex-dealer (?) who compares the FOREX market as of those 11 years ago: “It used to be a hell noisy and a hell splendid!”

In his opinion the market has lost a significant portion of its individuality with rise of technology. A very interesting phrase: “It used to be a hell splendid”. I would add:” It used to be a hell volatile”, with reference to the fact that the daily rates travel went as far 400 to 500 pips. And there’s nothing of the kind now.

6. Now, why has “The Financial Times” only interviewed the EBS Consortium official?
J. Jeffrey and the currency transactions department director, Fabian Shey Why wasn’t it desirous to interview the Reuters representatives (UK)? What’s the reason for such kind of disrespect to the compatriots?

Or were they hard to be contacted in London, where The Financial Times and Reuters HQs are located, moreover after maintaining that presently both, EBS Consortium and Reuters are dominant at the inter-bank market? Or The Financial Times possesses enough information on compatriots from Reuters to hold that the EBS Consortium official’s interview is sufficient without any Reuters?

7. Please, pay attention to the following from The Financial Times: “Anyway, other opinions are available. According to Justin Trenner, the current volume of on-line trading is turnover amounts to USD100 billion daily with the steep growth observed”. The Financial Times thus turns out to recognize its complete inability to trace not only FOREX cash flows, but even the trading volumes at those platforms.

The principal difference between stocks and FOREX is, by the way, readily apparent from the above. Those, writing about similar Fundamental and Technical Analysis methods for both the markets, are either ignorant as to fundamental difference of these markets, or they are deliberately swindling millions of traders.

When pointing out, that, besides the above Banks Consortium, there exist other electronic dealing facilities (e.g. Electronic Broker Service, Reuters Dealing 2000-2, etc.), N. Larina has overlooked their interrelations aspect. And there are a lot of questions: how and why there is coincidence of trends, corrections, historical highs and lows in the course of a single day, etc.

And what is the way to reconcile the statement on shunt operation of EBS and Reuters Dealing facilities with the information that Citibank, J.P. Morgan Chase and Deutsche Bank together with Reuters Group Plc have failed to stand the competition? Is it attributable to the fact that the Consortium has actually acquired Reuters, maintaining its formal sovereignty in order to support traders’ opinion that FOREX market is free and independent? If affirmative, then it’s fairly clear why the Consortium was not scared to buy the EUR on its dip from 1.36 to 1.1860, since there nothing to be afraid of with one’s knowledge of the point, below which one will not drop the rate as well as the point to stage the EUR rally to in several months with no one to interfere with Your so doing.

Hopefully, it’s now understandable who swivels trends at FOREX! The world’s largest banks Consortium does have power to reverse rates, whenever desirous, overthrowing fundamental laws, news releases, trends and common sense, just the way we witnessed on 01.04.2005 charts. But it’s not at all, traders, as claimed by Williams.

That’s why there is obvious ineffectiveness of the Williams’s Market Facilitation Index (MFI) based on fluctuations of traded volumes; to be more precise, sometimes the indicator tells the truth, whereas sometimes it lies in a barefaced manner.

The reasons are stated above: the banks Consortium pushes rates to where it needs, but not to where traders going into deals, thus accumulating the volumes, indicated on the screen. That’s why traders turn losers when making use of the Williams’s MFI indicator.

If you wish to be trained on Trading System Masterforex-V - one of new and most effective techniques of trade on Forex in the world visit http://www.masterforex-v.su/

Professional Trader from 2000 year.
President of Masterforex-V Trading Academy.

Author of Books:

1. Trade secrets by a professional trader or what B. Williams, A. Elder and J. Schwager not told about Forex to traders.

2009-05-01T23:20:00.000-07:00

Forex Fundamental Analysis

The two primary approaches of analyzing Forex markets are technical analysis and fundamental analysis. Fundamental analysis comprises the examination of economic indicators, asset markets and political considerations when evaluating a nation’s currency in terms of another. The focus of fundamental analysis lies on the economic, social and political forces that drive supply and demand. There is no single set of beliefs that guide forex fundamental analysis, yet most fundamental analysts look at various macroeconomic indicators such as economic growth rates, interest rates, inflation, and unemployment.

Here we look at some of the major Forex fundamental factors that play a role in the movement of a currency:

Economic Indicators

Economic indicators are reports released by the government or a private organization that detail a country’s economic performance. These economic indicators can be released on a weekly basis, but the more common report is monthly. Indicators are based around a number of economical situations, of which the two primary factors are that of International trade and Interest. Subsidiary factors also include Consumer Price Index (CPI), Purchasing Managers Index (PMI), Durable goods orders, retail sales and Producer Price Index (PPI).

Currency’s Interest Rates

One of the major indicator factors, Interest rates, are a key economic function of any nation. Generally, when a country raises its interest rates, the country’s currency will strengthen in relation to other currencies as assets are shifted to gain a higher return. Interest rates hikes, however, are usually not good news for stock markets. This is due to the fact that many investors will withdraw money from a country’s stock market when there is a hike of interest rates.

International Trade

The trade balance portrays the net difference (over a period of time) between the imports and exports of a nation. A trade deficit can be an economic disaster for a government and a currency. A deficit may appear when a country is importing more than it is exporting, meaning that more money is leaving and less is coming in. In some ways, however, a trade deficit in and of itself is not necessarily a bad thing. A deficit is only negative if the deficit is greater than market expectations and therefore will trigger a negative price movement.

Futures Spread Trading

How professional traders optimize profits

Futures spread trading is probably the most profitable, yet safest way to trade futures. Almost every professional trader uses spreads to optimize his profits. Trading spreads offers many advantages which make it the perfect trading instrument, especially for beginners and traders with small accounts (less than $10,000).

The following example of a Soybean-Spread shows the advantages of futures spread trading:

Example: Long May Soybeans (SK3) and Short November Soybeans (SX3)

Four Advantages of Futures Spread Trading

Advantage 1: Easy to trade

Do you see how nicely this spread starts trending in mid February? Whether you are a beginner or an experienced trader, whether you use chart formations or indicators, the existence of a trend is obvious. (If you are looking for a concept of how to identify a trend, we strongly recommend visiting http://www.tradingeducators.com/?source=Tradejuicetrading_philosophy.htm). Spreads tend to trend much more dramatically than outright futures contracts. They trend without the interference and noise caused by computerized trading, scalpers, and market movers.

Advantage 2: Low Margin requirements

Many spreads have reduced margin requirements, which means that you can afford to put on more positions. While the margin on an outright futures position in corn is $540, a spread trade in corn requires only $135 — 25% as much. That’s a great advantage for traders with a small account. With a $10,000 trading account risking 8% of your account, you can enter 6 corn spreads, instead of only 1-2 outright corn futures trade. How’s that for leverage?

Advantage 3: Higher return on margin

Each point in the spread carries the same value ($50) as each point in the outright futures ($50). That means that on a 3 point favorable move in corn futures or a 3 point favorable move in the spread, you would earn $150. However, the difference in return on margin is extraordinary:
Corn futures - $150/$540 = 27.8% return
Corn spread - $150/$135 = 111% return
And keep in mind that you can trade 6 times as many spread contracts as you can outright futures contracts. In our example you would achieve a 24 times higher return on you margin.

Advantage 4: Low time requirements

You don’t have to watch a spread all day long. You do not need real-time data. The most effective way to trade spreads is using end-of-day data. Therefore, spread trading is the best way to trade if you do not want to watch or cannot watch your computer all day long (i.e. because you have a daytime job). And you can save all the money you would have had to spend for real-time data systems (up to $600 per month).
So where is the catch?
If futures spread trading is so fantastic, why does it seems that hardly anybody trades spreads? Well, it is not true that hardly anybody trades spreads: the professional traders do, every day. But either by accident or design, the whole truth of spread trading has been hidden from the public over the years.
The purpose of this website is to inform you about futures spread trading. In the following we will answer the four frequently asked questions:

What is a spread?
Why trade spreads?
What can you expect when trading spreads?

What Is a Spread?

A spread is defined as the sale of one or more futures contracts and the purchase of one or more offsetting futures contracts. You can turn that around to state that a spread is the purchase of one or more futures contracts and the sale of one or more offsetting futures contracts. A spread is also created when a trader owns (is long) the physical vehicle and offsets by selling (going short) futures. Furthermore, a spread is defined as the purchase and sale of one or more offsetting futures contracts normally recognized as a spread by the fact that the two sides of the spread are actually related in some way. This explicitly excludes those exotic spreads put forth by some vendors, which are nothing more than computer generated coincidences which are not in any way related. Such exotic spreads as Long Bond futures and Short Bean Oil futures may show up as reliable computer generated spreads, but bean oil and bonds are not really related. Such spreads fall into the same category as believing the annual performance of the U.S. stock market is somehow related to the outcome of the Super Bowl sporting event. In any case, for tactical reasons in carrying out a particular strategy, you want to end up with:

simultaneously long futures of one kind in one month, and short futures of the same kind in another month. (Intramarket Calendar Spread)
simultaneously long futures of one kind, and short futures of another kind. (Intermarket Spread)
long futures at one exchange, and short a related futures at another exchange. (Inter-exchange Spread)
long an underlying physical commodity, and short a futures contract. (Hedge)
long an underlying equity position, and short a futures contract. (Hedge)
long financial instruments, and short financial futures. (Hedge)
long a single stock futures and short a sector index.

The primary ways in which this can be accomplished are:

Via an Intramarket spread.
Via an Intermarket spread.
Via an Inter-exchange spread.
By ownership of the underlying and offsetting with a futures contract.

Intramarket Spreads

Officially, Intramarket spreads are created only as calendar spreads. You are long and short futures in the same market, but in different months. An example of an Intramarket spread is that you are Long July Corn and simultaneously Short December Corn.

Intermarket Spreads

An Intermarket spread can be accomplished by going long futures in one market, and short futures of the same month in another market. For example: Short May Wheat and Long May Soybeans.
Intermarket spreads can become calendar spreads by using long and short futures in different markets and in different months.

Inter-Exchange Spreads

A less commonly known method of creating spreads is via the use of contracts in similar markets, but on different exchanges. These spreads can be calendar spreads using different months, or they can be spreads in which the same month is used. Although the markets are similar, because the contracts occur on different exchanges they are able to be spread. An example of an Inter-exchange calendar spread would be simultaneously Long July Chicago Board of Trade (CBOT) Wheat, and Short an equal amount of May Kansas City Board of Trade (KCBOT) Wheat. An example of using the same month might be Long December CBOT Wheat and Short December KCBOT Wheat.

Why Spreads?

The rationale behind spread trading is one of the best-kept secrets of the insiders of the futures markets. While spreading is commonly done by the market "insiders," much effort is made to conceal this technique and all of its benefits from "outsiders," you and me. After all, why would the insiders want to give away their edge? By keeping us from knowing about spreading, they retain a distinct advantage.
Spreading is one of the most conservative forms of trading. It is much safer than the trading of outright (naked) futures contracts. Let’s take a quick look at some of the benefits of using spreads:

Intramarket, and some Intermarket, spreads require considerably less margin, typically around 25% - 75% of the margin needed for outright futures positions.
Intramarket, and some Intermarket, spreads offer a far greater return on investment than is possible with outright futures positions. Why? Because you are posting less margin for the same amount of possible return.
Spreads, in general, trend more often than do outright futures.
Spreads often trend when outright futures are flat.
Spreads can be filtered by virtue of seasonality, backwardation, and carrying charge differentials, in addition to any other filters you might be using in your trading.
Spreads can be used to create partial futures positions. In fact, virtually anything that can be done with options on futures can be accomplished via spread trading.
Spreads allow you to take less risk than is available with outright futures positions. The amount of risk between two Intramarket futures positions is usually less than the risk in an outright futures position. The risk between owning the underlying and holding a futures contract involves the least risk of all. Spreads make it possible to hedge any position you might have in the market. Whether you are hedging between physical ownership and futures, or between two futures positions, the risk is lower than that of outright futures. In that sense, every spread is a hedge.
Spread order entry enables you to enter or exit a trade using an actual spread order, or by independently entering each side of the spread (legging in/out).
Spreads are one of the few ways to obtain decent fills by legging in/out during the market Closing.
Live data is not needed for spread trading, saving you $$ in exchange fees.
You will not be the victim of stop running when using Intramarket spreads.

What Can You Expect?

Here is an example of what you can expect from Intramarket spread trading. We think you may be pleasantly surprised!!

This spread was entered not only on the basis of seasonality, but also by virtue of the formation known as a Ross hook (Rh). The spread moved from -69.0 to -7.5 = $3,075 per contract. The margin required to put on this spread was only $608, thus the return on margin is more than 500%.

Here is an example of an Intermarket spread. Look at the the following chart: Would you want to have been long live cattle from December until February?

But, what about a spread between Live Cattle and Feeder Cattle?

The spread moved from -10,200 to -7,200 = $3,000 per contract. The margin required to put on this spread was only $540. The return on margin is more than 550%.

Lastly, we show you another intermarket spread. This one was made between Euro and British Pound. Although you might have made money on a Euro trade, you would have suffered from serious whipsaw during the entire length of the trade.

What about a spread between the Euro and the British Pound?

You didn’t have to be in this spread for very long in order to take some fat profits: During February the spread moved from $32,500 to $36,187.50 = $3,687.50 per contract.

How do I start trading spreads?

We can barely scratch the surface of what is available in the almost lost art of spread trading. There are times when seasonal spreads, coupled with chart formations, make a lot of sense. Backwardation in any market often provides an excellent signal for entry into a spread.

2009-05-01T23:17:00.000-07:00

Risk Management In Forex Trading

Forex trading is classified as investments that are high risk. This means that the forex trading has classified high risk. One of the highest among other financial investment instruments. The risk factor that you need to know before the start of forex trading: Possible loss of funds 100% Flow of funds very quickly (very liquid) No method of trading that can guarantee you 100% sure destiny. There are many methods of trading is good but there is no one who can Needless to ensure 100% certainty. Forex trading is not a "quick rich scheme" that can make you suddenly rich without working hard. There is no success without work hard. Working hard is part of their experienced financial success in life. Including their successful through forex trading. Needed to work hard to learn the behavior of market analysis and so we can guess the direction of price movements accurately. Likewise needed mental extra trading when the results are not in accordance with our expect. Ask traders on the trading-success that you know whether they had experienced a fall in the wake of trading them. And the answer is almost certainly "yes". The success is only provided for those who would try to learn and continuously improve themselves. I related to the risk that must be faced if we want to start investment in forex, required special tips to decrease, or even to reverse our position that was minus a positive return and benefit.

Money Can’t Buy Success

2009-05-01T23:16:00.000-07:00

Money Can’t Buy Success

By now maybe you already spend few hundred or even thousand of dollars trying to hunt some holy grail of Trading, a perfect system that always win never loss through some secret e-Book, ultimate system or whatever that guys trying to sell you methods that will make rich. Most of these guys have never traded in their lives and rely on hyped exaggerated copy to sell their systems !

In fact you can’t buy success, success come from experience, blood, tears and pain. You know that old volks say about 95% of traders who lose are true because they believe that they can can predict the market and they wrong! This is a common myth and the bulk of novice traders think they have to predict where prices are going to succeed. In forex trading if you predict you are relying on hope or making a gambling decission, guess and the market will kill you. Never predict!
Don’t believe the scientific methods sold on the net because they simply don’t work, why they sell it if that a working system instead of using themself? If markets were mathematical scientific, we would all know the answer in advance and there would be no market. Trading to much also an element of fail, many traders simply think if their not trading their missing something but is not true. If you spend 10 hours a day or ten minutes, it doesn’t matter so long as your trading system are accurate.

The other common mistake of newbie trader was they believe that More Indicators equal with More Profits. The best forex trading systems are simple and robust, where a complicated trading system has more elements to break and it will fail. Keep in mind all the best forex trading system are simple, NOT Complicated

2009-04-30T21:49:00.001-07:00

Rich is Trading Forex Again

So after yet another hiatus from trading forex, I just recently had my first trade in months. It was a successful one also. But the question I want to answer is, “Is this blog dead?” The answer is no. I’ve made a living over the past 3 years ducking in and out of here depending on what’s going on in my life. Sometimes I’m just too swamped at my real job, other times I just don’t feel like writing, but I always come back. The great thing is I’ve built up a lot of content over the years so a lot of it applies to the type of forex trader you’re trying to become.

So where do I go from here? I’m in the mood to start trading forex again so that’s what I’m going to do. I’m also going to talk a little about stocks. I’ve had a lot of success, believe it or not, trading the stock market in the last couple of months and I think I’ve learned some things that I could apply to trading forex. So you’ll hear me talk about some of these things also.

2009-04-30T21:48:00.000-07:00

Access To High Leverage Does Not Mean You Have To Use It

May 13, 2008 by Trader Rich

The May issue of Currency Trader Magazine is out. Highlights include:
• Forex Margin - You have access to extremely high leverage in the forex market, but that doesn’t mean you have to use it.
• Can anything stop the Euro?
• Time the Euro using short-term momentum.
• Currencies and stock markets.
• The latest on the Aussie and kiwi dollars.
• Bank of Japan get a new chief.

Places To Get a Great Forex Trading System
September 7, 2008 by Trader Rich
It’s very important that if you’re exploring forex trading or already trading that you have a trading system. One aspect of that trading system are the actual setup rules which usually contain entry and exit techniques. Traders put a lot of time and effort in developing these setup rules too often neglecting other aspects such as position sizing or relative size of your profits compared to losses. Therefore it’s important to find a comprehensive forex trading system.
Where can you find a comprehensive forex trading system? Throughout the last three years, I’ve been through many trading systems obtained mostly from books, forums, or other websites. I’ve found that almost every time, I’ll mold that system into something totally different than the original incarnation, something that fits my personality and style of trading. Many times, the original system will also need to be expanded to include things that were neglected or forgotten. Those of you searching for the perfect system may find this method of modifying existing forex trading systems desirable. There are places where you can find the whole package without any need for modification.
This brings me to the question, "where did you get your forex trading system?" I think there are four main ways of getting a trading system.
1. Buy it. There are tons for sale out there on the net but heed caution. Many were just copied from forums, books, or other websites. Sometimes when you buy forex education, part of the package will include a trading system. For instance, Rob Booker provides his Arizona rules as part of his mentoring program.
2. Get a free one. There are many free systems that can be found in books, forums, or other websites. I guess one can question whether a system found is a book is free since you paid for the book.
3. Create an original system yourself. My main trading system is an original creation. There may be other systems out there that are similar to it since it’s a culmination of years of exposure to other systems and experiences.
4. Modify someone else’s system and make it your own. As I stated above, I have done this many times.
I’ve created a poll that asks you this question here

2009-04-30T21:47:00.000-07:00

forex Traffic

I got a couple of comments about the top 200+ forex website rankings; mostly how they weren't accurate. The rankings before were dependent on how Alexa sorted the sites in their category listings. I was pulling data in the order in which they gave it to me. As some of you noticed, some sites were listed ahead of others even though their Alexa Rank wasn't higher. The one website that got shafted the most in the rankings was Oanda which had the highest Alexa traffic rank but was listed as #19 in the rankings. I fixed this tonight and now the rankings are based on traffic rank. You can see that Oanda benefited greatly from this change.

In addition, every forex websites Alexa traffic rank is also listed. More enhancements coming soon.

2009-04-30T21:46:00.000-07:00

How Many Times Have You Exited a Position Early?

Do you have a problem with exiting your positions too early? I always have. It’s one aspect of my trading that concerns me because I’m never sure if closing it early was the smart thing to do. Let me give you an example which just happened to occur today. I went long on the EUR/CAD before the European session open. I went to bed and woke up to see the position up 80 pips. I had a 100 pip stop loss and a 200 pip target. I was a bit surprised to see it up this much so quickly. I thought about it for a minute and decided to close the position and take the profit. Why violate my pip target? Based on my experience with the ebb and flow of the currency market, I figured there was a good chance that the price will not continue in my direction and retrace, wiping out any profit I had. I’ve seen this happen so many times. Today, this didn’t happen. The EUR/CAD continued going up and would have easily hit my 200 pip profit target. This frustrates me more than losing. Here are a couple of ways I’ve handled a position that goes in my favor by a substantial amount:

In scenario #1, I feel good about the trade if I close it out and then it does exactly what I thought it would, turn against me. I don’t feel so good if the pair continues in my favor after I’ve closed it and would have hit my target.

My feelings in scenario #2 and very similar to those in scenario #1.

In scenario #3, I feel great about the results of the trade.

So which is better, any of the three scenarios or flat out losing money on a trade? I think not losing money is best but the first two scenarios can sometimes lead to losing money. If I’m not getting a decent reward/risk because I’m exiting a position too early, when I do hit that losing streak (trust me, it will happen), my losses could be much greater than my gains. How many times have you closed a position early when it at a negative and not going in your favor? I can count the times on one hand.

I’d love some feedback on what your experiences are and if you can relate to my possible problem. It hasn’t affected my profit the last month and a half though. I’m up over 13% this month alone but like I said, this could be short-lived if I don’t address

this now.

2009-04-29T14:26:00.000-07:00

The Secrets Of A Successful Stock Or Forex Investment Club

If the investment club strikes you as an ideal answer to your needs and requirements, there here are some points to consider.

Do not attempt to form a club until you have investigated its status under Federal, state, and local laws. The Association of Stock Exchange Firms is attempting to win passage for a model statute that will simplify and clarify the status of investment clubs and in some states is has already been enacted.

In most states, however, a variety of laws govern the formation and operation of a club and its status as a partnership, corporation, joint venture, or whatever. The difficulties are rarely insurmountable, but complications can be avoided if your club will check with an attorney before becoming involved financially.

Along the same lines, your club can avoid awkward misunderstandings if the ground rules are clearly established from the start. Provisions should be made for the death or departure of a member. Each investor should be able to withdraw his share of the club's assets at any time.

The position of newcomers or replacements for members who have dropped out or moved away should be defined. Does the new member participate on an equal basis in the accumulated assets of the club upon payment of his first $10? Or should he be expected to match the total investment of his predecessor?

Run your meetings briskly. Expect to give the business at hand your full and earnest attention for two hours; investment is too serious to be brushed over in less. On the other hand, be organized. Don't let meetings drag on or founder in confusion. Members will start resigning out of boredom.

Insist that your investigation committees do their homework. And that they stay on the point. These are elements of good reporting in any field, and are not hard to learn. Clarity and precision will not only make reports more interesting, but help you to make your decisions confidently.

Absenteeism plagues almost every organization, and you will have to find your own way to lick it. As noted, the proxy at least assures a vote by the whole membership, but it has its disadvantages. The Williston club has instituted an automatic $5 fine for missing a meeting, regardless of the excuse. Some clubs interpret a certain number of absences as evidence of disinterest and as grounds for dismissal.

As for the club's performance as an investment group, it will, at first, leave something to be desired. There is something heady about the manipulation of money and the challenge of out-guessing the market. You will find, as you start out, that it is easy to be overly enthusiastic about one stock or another, or, because your fund is relatively small, to concentrate on low-priced issues. The enthusiasm may be warranted, and your low-priced issue may be solid, but try not to let judgment be colored by passion, and never choose price over quality.

Make your committee reports as realistic as possible. In the first flush of enthusiasm, it is possible to be swayed by the mass of beautifully printed material available about this company or that. Set up your standards in advance: know what you are looking for in terms of price and dividend trend, in terms of products, in terms of capital structure and management.

Note: Changes in corporate management are not automatically good. Very often a new slate of officers, or some retirements, will bring in fresh blood, but there is no way of knowing immediately whether the new men are as capable as the ones they replaced.

There is nothing wrong with over-the-counter stocks as such. But many clubs have found that the fluidity of the market on the big exchanges, and the certainty of daily reporting of stock prices, makes investment in Big Board issues considerably more satisfactory.

It is easy to decide that you've got a natural bent for investment if your first purchase begins behaving nicely. Don't be fooled. A great many stocks have been behaving nicely for some years now. In many ways it's difficult to pick one that doesn't. Enjoy your success, but keep studying and keep learning.

Fight the tendency to make too many switches in your portfolio, particularly in the early stages. Remember that the commissions on getting in and out are going to eat into your gains. Furthermore, impatience is likely to boost you out of a stock before it has a chance to show its worth. Remember, too, that from the tax angle, you'll be paying on gains as straight income unless you've held the stocks for six months or more.

Finally, stay friendly. Money can get people quite excited. Money can come between friends. You'll have a better chance of success if your members are friendly on grounds other than investment, if everyone understands clearly that there are hazards as well as profits, and if everyone does his best to become knowledgeable in the field as soon as is reasonably possible.

It is the mistakes of ignorance that cause trouble. Many clubs have had some hot times because a member couldn't understand why the group sold short of the top or why, with the good old Northern & Southern Railway running right through town, everyone insisted on buying Gulf Oil.

Stay in close touch with your broker. He can help spell out some of the fundamental ABC's until you can paddle on your own. He also should have, or be able to get, information bearing on the problems and experience of other investment clubs, which can aid you in steering around pitfalls..

2009-04-29T14:22:00.000-07:00

My Forex experience and some Forex related information

those Darn Market Makers And Better Trades

"those Darn Market Makers" And Better Trades

I just finished a training session on the internet and I answered a question that I have answered 100 times before or more. It got me a bit worked up because there is far too much mythology out there about the market and how it works and who does what to whom. I am going to attack one of the straw men of trading myths.

It is widely thought among beginners and sadly many veterans alike that there is a boogey man in the closet; a little man behind the green curtain that pulls strings and levers and takes my trade away from me. This misperception was generated in the early days of the NASDAQ electronic trading platform. In the early days when electronic (versus open outcry face to face) trading was just getting started there were instances of market makers adjusting order flows to stretch spreads. They would delay market orders so they filled at higher or lower prices when the prices were moving fast. There were also some instances of prices being manipulated to hit pockets of stop loss orders that were visible on the screens. A number of lawsuits and firings and license revocations stopped that very quickly, but myths prevail and it seems that people need to have demons to explain calamities and excuse their shortcomings. The calamity is that trading skills often do not match the market conditions. When that happens please have the sense not to blame the mean nasty conniving market maker.

Fact: The market maker does not know or care much about you, at least not in a negative way. A market maker wants you to be there because with out you they are out of business. But you are not a target to abuse. You are a number, you are a single trade in a day of hundreds it not thousands of trades and the five to thirty cents your trade makes will not be more than a drop in a bucket to them. They want your trade and will compete with other market makers to get your business. When you place an order in the spread the market makers may debate whether to meet your request, and if it is reasonable some hungry market maker will take it even if the others don t want to. You represent their livelihood but you are not FOOD!

Fact: Except in a few extraordinary cases, prices have to move incrementally. That means the idea of market makers jumping up or down to grab your stop bogus. It is illegal and would get picked up by the regulatory process. The exceptions are as follows; a gap in over night trading can give the market maker a right to gap prices. A Fast Market (wild irregular trading) condition gives some leeway for market makers to catch up. Market makers can in certain cases also move prices with out corresponding price action. If volatility changes in the market and there are no active orders on the book they can adjust option prices. In that case they can adjust prices to actual changing conditions. Otherwise they can not just move prices around to look for your stop. They can push a price up or down by manipulating the bid and ask but generally there has to be stock movement and or volatility movement before prices can be adjusted.

Fact: Your stop is not visible to the market maker. Even if it is an actual order, if it is away from the price it is invisible to them. Until the price action approaches your stop (close to the money) they can not see it. Once it is close to the money it is visible but the above rules apply.

Fact: A market maker can not skip your order either. They are required to trade 100 shares or one contract before moving a price so if you place an order of 100 shares or 10 contracts and you don t get filled they did not skip you and if you had only one or two contracts fill it would be perfectly legal. If your 10 contract order was an All or Nothing and you got nothing, they they were not obligated to fill it for you. However if no orders had yet been traded at that price and it was not an All or Nothing , they would be obligated to take part of your order because they can not back away from a trade. At least 100 shares or one contract must be traded before prices can be moved if there are legitimate orders in line. So, if there is a Bid and Ask showing and you place an order here is what can happen

1. You get filled (probably there is some volume and you are part of it)
2. You get partial fill and the price moves (they are reading volume and momentum and decide to move the price; orders can be partially filled and market orders can be spilt up and filled at the next price)
3. You get no fills and the price goes up (one hundred shares had already been traded before your order showed up and your order prompted them to raise the price)
4. No trades go through but the price goes up and you do not get filled (you offered in the spread and they have no obligation to bargain- they can move it and hope you come after it).

Games:
There is definitely an element of gamesmanship that is legal. Generally the market maker will have more experience and will be better at it than you. That is not illegal but definitely painful to the rookie who may feel cheated, but if a rookie takes on the pros and loses it is not because of cheating.

Fishing:
Option trading is where most fishing goes on. Slow volume means orders come through one at a time and so there can be an electronic face off between you and the market maker. They are not trying to cheat or hurt you and generally it is the trader that pushed the button that starts the game. As stated earlier, if you hit the Bid or Ask, your order will almost always go through but, if you offer in the spread and there is light volume, it can be like poking a wasp s nest with a stick. It s like offering some one ten dollars for their twenty dollar chair. You started it. So you send in the order and it is not filled and the price goes up. Whoa, you think Cool. It s moving my way, I ll try again but I still want to get a discount, so you offer in the spread again. Same thing happens so you quickly raise your price to the Ask and buy before it gets away from you. Now the price settles back down and you are frustrated. If you were to check out the volume you would find that you were the only order and you were played. If you had offered at the Ask the first time it would have probably been filled but, your offer allowed them to move the bait which you hungrily chased. At the other end, a market maker smiles, nods their head and is thankful you came to play at their house today.

Taking out stops:
This is classic misrepresentation. First of all, as stated above, price movement is controlled. Secondly, they are invisible especially if you use contingent stops which technically don t even exist. Thirdly if you are doing card tricks with three year olds, you don t have to hide the cards really well. Look, market makers learn from experience that people are basically la

2009-04-29T14:21:00.000-07:00

What's Forex?

"Forex" stands for foreign exchange; it's also known as FX. In a forex trade, you buy one currency while simultaneously selling another - that is, you're exchanging the sold currency for the one you're buying. The foreign exchange market is an over-the-counter market.

Currencies trade in pairs, like the Euro-US Dollar (EUR/USD) or US Dollar / Japanese Yen (USD/JPY). Unlike stocks or futures, there's no centralized exchange for forex. All transactions happen via phone or electronic network.

Who trades currencies, and why?

Daily turnover in the world's currencies comes from two sources:
• Foreign trade (5%). Companies buy and sell products in foreign countries, plus convert profits from foreign sales into domestic currency.
• Speculation for profit (95%).
Most traders focus on the biggest, most liquid currency pairs. "The Majors" include US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar. In fact, more than 85% of daily forex trading happens in the major currency pairs.

The world's most traded market, trading 24 hours a day

With average daily turnover of US$3.2 trillion, forex is the most traded market in the world.
A true 24-hour market from Sunday 5 PM ET to Friday 5 PM ET, forex trading begins in Sydney, and moves around the globe as the business day begins, first to Tokyo, London, and New York.

Unlike other financial markets, investors can respond immediately to currency fluctuations, whenever they occur - day or night.

2009-04-23T19:24:00.001-07:00

Forex exchange rate is the value of two different currencies and how they relate to each other. It is used by corporations, tax authorities, auditing firms, and financial institutions and is calculated on the basis of information supplied by leading market data contributors. Forex exchange rate says how much of one currency is needed to buy a unit of another. The exchange

rate is essentially a price, which can be analyzed the same way as other market prices. So when we speak of an A to B exchange rate of C, it means that if we pay 1 unit of A, we get C units of B in return.

You may find several Internet sites that instantly offer exchange rates of various currencies. What all you have to do is to select the currency pairs and with a click of the mouse you get the forex exchange rates. Additionally
you can convert a specific amount against the specified currency. You can also convert using the historic rate for a particular date.

The exchange rates are therefore prices for different currencies. So on a specific day, if the U.S. to Japan exchange rate is 115 yen, it means you can purchase 115 Japanese yen in exchange for 1 U.S. dollar. With a simple formula, you can find out how many U.S. dollars you can get for 1 Japanese yen.

Japan to U.S. exchange rate = 1 / U.S. to Japan exchange rate

Japan to U.S. exchange rate = 1 / 115 = .00869

Therefore one Japanese yen is equal to 0.00869 U.S. dollars.

Knowing the basics regarding the Forex exchange will help you to get started in understanding the forex trading. The majority of the currencies are raded against the US dollar (USD). The four next most-traded currencies are the euro (EUR), the Japanese yen (JPY), British pound sterling (GBP), and the Swiss franc (CHF). These five currencies are called the "the Majors". Some also include the Australian dollar (AUD) in this group.

The forex exchange rates are always quoted in pairs. The first currency is referred as the base currency and the second as the counter or quote currency. The counter currency is therefore the numerator in the ratio, and the base currency is the denominator. The value of the base currency
is always 1. Therefore, the forex exchange rate tells a buyer how much of the counter currency must be paid to get one unit of the base currency.
On the other hand, the forex exchange rate tells the seller how much he is going to receive in the counter currency while selling the base currency.

This ratio in the forex exchange rate is also known as 'cross rates'. This term is used when it does not involve US dollars and involves any other two foreign currencies. The concept of pip is also very important in forex exchange rates. The forex exchange rate is determined independently. The buyers and sellers and the supply and demand of certain currencies determine the forex exchange rates.

By: Paul Bryan

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

To find out more about making money from trading Forex online please visit Forex Exchange Rates
Forex Currency Trading
Forex Currency Trading

It is possible to buy and sell money from different countries on the foreign exchange market called Forex. Forex currency traders can profit by taking advantage of the dips and swells in the foreign currency market. Capturing these differentials is easier in Forex currency trading than in other trading because the Forex market is open twenty-four hours a day, except for weekends, and it is global, so there are always buyers and sellers available. The traders can be diverse. They can be traders looking for short-term gains, such as day traders or slightly longer investment periods, or they can be foreign investors who are looking to hedge their investments with long term Forex trades.
Forex currency trading is done in amounts of currency called lots, that are usually $100,000 each, and can be purchased on margin. Forex currency trading strategies can be based on technical analysis of the history of the currency price or it can be based on analysis of a particular country s political climate, tax policy, jobless rate, inflation rate, and other factors of the country. There are many different systems of Forex currency trading.
Forex currency trading is a huge market. Daily trading is estimated at between $1 trillion and $1.9 trillion dollars. Because the amount of money is so huge, it s hard to imagine that the market can be manipulated the way a smaller market can be. Forex currency trading is also not overseen by one central agency like the Security Exchange Commission, and each country oversees the Forex currency trading activity within it s own country.
Forex Signal, Forex Signals Advice
Forex Signal, Forex Signals Advice

There are lot's of Forex signals providers out there. New Forex traders might be thinking of looking for a reliable Forex signals provider. Is there any reliable Forex signals providers available?
Personally, I will say do not pay for Forex signals. Think about it - if a Forex signals provider sells Forex signals for living, you can doubt their Forex trading skills? Or else if they are pretty good in Forex trading and making lot's of profit, I am wondering why do they still bother to sell Forex signals for money. Thus, what would be the value of such Forex signals providers? The answer is ZERO.
There are Forex traders who have been relying on Forex signals arguing those Forex signals providers really help them making money in Forex trading. These Forex traders can even show their Forex trading logs as evidence. After some though, I came out with the assumption that assuming I am the owner of a Forex signals provider, in order for my business to be in black, obviously I need some satisfying customers.
A Comprehensive Forex Broker Register
A Comprehensive Forex Broker Register

A comprehensive forex broker list includes investment banks with dealing rooms, commercial banks with treasury operations, and online brokerages that serve a larger market. The investment banks with forex trading capabilities include Morgan Stanley, Merrill Lynch, Goldman Sachs, Salomon Smith Barney, Lehman Brothers, Credit Suisse First Boston, Deutsche Bank, JP Morgan, Prudential Securities and Bear Sterns.
Some of the brokerage services are not directly accessible for all customers. For example, inter-bank market dealers and treasury operations in commercial banks handle large customer orders themselves.
The top commercial banks in the Forex Broker List, having inter-bank and treasury operations, are JP Morgan Chase Bank, Bank of America, CitiBank, Wachovia Bank, Wells Fargo Bank, Fleet Bank, US Bank, HSBC Bank, Sun Trust Bank, Bank of New York, State Street, Chase Manhattan Bank, Key Bank, Branch Bank, PNC Bank, Lasalle Bank, South Trust Bank, MBNA America Bank, Fifth Third Bank.
The online forex broker list of smaller forex accounts sees new entrants almost on a daily basis.
The online forex broker list includes Forex Capital Markets, MG Financial Group, CMS Forex, Global Forex Trading, GCI Forex Direct, Forex.com, GAIN Capital, Real time Forex SA (Geneva), Global Forex, Commerce Bank and Trust, FX Solutions, Forex MHV, swissDirekt (Swiss), Goetz Financial Forex, NY Broker Borsentermin AG, Act Forex, Online Trader, Shield FX Online Currency Trading, Forex Trade Signals, CMC Group PLC, Foreign Currency Direct Limited (UK), FX Advantage, FXCM, Forex Millenium, ACM REFCO, REFCO Spot, Easy Forex, Online Forex Trading Inc., Lincoln Corporation, Global Trade Waves, Ltd., and CIBC FX Web Dealing.
Forex Broker
Forex Broker

A broker is any person or firm that charges a fee in exchange for executing trades for a trader. A Forex broker does not charge a commission for placing a buy or a sell order the way a real estate broker would charge a percentage fee of the total price of a sale. A Forex broker is paid according to the spread or the difference between the trader s bid for a currency, and the seller s asking price for that currency. Usually this spread is less than 0.1% or ten pips. (Pips are the smallest movement a currency can make on the Forex. Pips are commonly called referred to as points.) The lower the spread, the less a trader pays a Forex broker for a trade.
The Forex market is global and does not have one central regulatory agency like the Security Exchange Commission. Each country is responsible for the actions of trades in it s own country. A Forex broker in America must register with the Commodities Futures Trading Commission (CFTC). While traders are not regulated, Forex brokers are. A Forex broker must be registered as a Futures Commercial Merchant (FCM) before that Forex broker is allowed to accept a deposit for an account from a trader. Once registered, a Forex broker is given an identification number so that a trader can check the status of a Forex broker before hiring that Forex broker. There are such people known as introducing brokers who may solicit traders for a registered Forex broker, but the introducing broker cannot accept a deposit for a trader s account. It is a good idea for any trader hiring a Forex broker to check the status of the Forex broker with the authorities.
Forex - Funding Your Trading Account
You have refined your trading strategy after diligently rehearsing the steps of trading in the foreign exchange (FOREX) market through your demo account. Now, you would like to open a live account for trading real money. You have identified a source for your risk capital, but are unsure of what to do next. This article will guide you through that process.
Choosing A Broker
First, you must decide on which broker you will use for your live account. This may or may not be the same broker which hosted your demo account. Ideally, you will have tried several brokers' demo platform so as to familiarize yourself with the pros and cons of each. Just because a platform may be user friendly does not mean that the sponsoring broker is the overall best for parking your living account. Has the broker been around for a while? Is the broker financially strong? Does the broker have a reputation for honesty and fairness? Are your orders likely to get filled to your satisfaction, including times of volatility? Are the spreads reasonable in comparison to others? Does the broker take positions opposite yours, creating possible conflicts of interest? Is the broker responsive to problems and complaints? Is there good technical support for the platform?

2009-04-23T19:23:00.002-07:00

s after Nonfarm Payrolls Report

February 6th, 2009

EUR/USD currency pair posted an unexpected growth today as the U.S. economy reported an even faster decline in the nonfarm jobs and the unemployment rate exceeded the pessimistic forecasts. EUR/USD is now trading near 1.2941.

Nonfarm payrolls fell by 598k in January after falling by 577k in December (revised down from the decline by 524k). The decline in the nonfarm payrolls was expected to be near 540k. The unemployment rate rose from 7.2% to 7.6% in January; the analysts forecast the rate at 7.5%.

Consumer credit dropped by $6.6 billion in December after falling by as much as $11 billion through the month of November (revised downwardly from $7.9 drop). The median forecast for the current report’s decline in the consumer credit was at $3.5 billion.

Tags: consumer credit, nonfarm payrolls
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Dollar Trades Almost Without Change against Euro

February 5th, 2009

Despite the large drops in the employment and the factory orders in the United States, the U.S. dollar stood still against the euro today. Although, there were medium intraday spikes in both directions, the EUR/USD is currently trading close to its opening level — near 1.2856.

Initial jobless claims were at 626k last week — up from 591k a week earlier and above the consensus forecast of 580k.

Nonfarm business productivity rose by 3.2% in the fourth quarter of 2008 or 2.8% in a year-to-year comparison. The growth follows 1.4% advance of the nonfarm business productivity in 2007.

Factory orders were down by 3.9% in December, following 4.6% drop in November. They still declined faster than the traders have expected (3.2%).

Tags: factory orders, initial jobless claims, productivity
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EUR/USD Declines on Some Mixed News from U.S.

February 4th, 2009

EUR/USD fell today as some bad and some good news regarding the state of the economy were released in the United States. EUR/USD is currently trading near

2009-04-23T19:23:00.001-07:00

5/13/62 Forex Trading Strategy by Rob Booker

February 3rd, 2009

The short Forex ebook that was uploaded on my site today is 5/13/62 strategy description written by one of the most famous Forex gurus of our time — Rob Booker. The strategy is based on the three EMAs (exponential moving averages) with periods — 5, 13 and 62. The first half of the book is dedicated to the self-disciple and Rob states that its the basement of the offered strategy — without the safe-discipline no trading system will work for a anyone. All explanations in the book are very basic and are probably intended for the Forex newbies. As for me, I didn’t learn much from this strategy description and I don’t think that any experienced Forex trader will enjoy reading it. But if you are new to Forex or searching for a new strategy (and never used any triple-EMA strategy before), or a fan of Rob Booker, then you’ll probably like this short ebook.

2009-04-23T19:22:00.002-07:00

18 Trading Champions Share Their Keys to Top Trading Profits
February 1st, 2009
New ebook was added to the trader’s library on my site today — it’s 18 Trading Champions Share Their Keys to Top Trading Profits by FWN (Financial World News). The book offers 18 success stories of the famous professional traders of the 20th century. The list of the eighteen includes such well known-traders as Tom DeMark, Cynthia Kase, Linda Bradford Raschke and Larry Williams. Each of the success stories is concluded with an advice to the beginning traders. The ebooks is rather small — only 20 pages of which only 18 contain the real text — so each of the «trading champions» receives only one page. You won’t find any specific strategies or a «holly grail»-worth advice in this book, but it will certainly make your entry into the world of Forex much easier.

2009-04-23T19:22:00.001-07:00

EUR/USD Rises as Manufacturing ISM Grows

February 2nd, 2009

EUR/USD advanced today after the weekly opening gap and even rose above the Friday’s close level. Some of the fundamental reports in U.S. were slightly better than the traders have expected, so the currency markets reacted with the growing high-yielders. EUR/USD is currently trading near 1.2838.

Personal income decreased by 0.2% in December after falling by 0.4% in November. Personal spending declined by 1% in December following 0.8% drop in November. The forecasts for the today’s report were at 0.4% and 0.9% drops respectively.

Construction spending fell by 1.4% in December compared to the month of November after decreasing by 1.2% a month before (revised down from 0.6% decline).

Manufacturing ISM index (PMI) rose from 32.9% (revised up from 32.4%) to 35.6% in January. The analysts expected it to decline to 32.0% last month.

2009-04-23T19:21:00.002-07:00

Broker Forex Trading Five General Guidelines When Choosing A Forex Broker

It is truly incredible how times change. Eight years ago finding a good and efficient online broker forex trading was as hard as it gets. Today the forex brokerage industry has evolved to fit the needs of the individual forex trader. An increase in demand for online forex trading has generated an incredible competition between brokers. As a result, the private trader has benefited in terms of service and cost of trading. There are five general guidelines you should to know when choosing your forex broker.

1. Spread This is your cost of trading the forex spot market. It s the difference between the ask price and the bid price. Every currency quote will have these two numbers displayed so trader know at what price they can sell and at what price they can buy. This difference between the bid and the ask price is how forex broker make their money. Forex broker either offer a fixed or a variable spread. Fixed spread is guaranteed to remain the same regardless of market liquidity. Variable spreads change according to market conditions. They are tighter when liquidity is high but become larger when liquidity dries up. It is hard to come up with clear answer of weather to choose a fixed or variable spread broker. But it depends on your style.

2009-04-23T19:21:00.001-07:00

Forex - Risk, Losses And Education

Commodity Forex Online Trading

In commodity online trading, you must be kept in mind for few things. If you want to be a good trader you need to know what are you doing and have a very good education. Its very important, that you will take the time to research your commodity trading ideas deeply. Then, you will understand how your forex trading will working for you.

You are going to understand applications and technology which stick to commodity forex online trading. You will need to come up with goals and find out how achieve them by trading on the market. To become successful trader, you must know those basic things for start:

Risk
Its important thing. You need to remember, that in commodity forex online trading is risk. Forex is not type of trading where you can involve in if you want to make money in order to buy things you want, rent a house or whatever. You will need to take some risk if you want to earn good cash in forex, but it could not be done with money, that you can't afford to loose. Also, if you will lose your first deposit in market, you may end up with emotional decision, that you will only lose more money if you will keep trading. Thats bad type of thinking.

Losses - how to deal with them
You need to keep your losses to a minimum in commodity online trading. Anyway, you will probably have some small losses. If you want to have your losses as small as it is possible. then you will need to come up with an amount of maximum loss you will take in one day. This will make you sure, that your money is manages good, and that you get out before you will deal with huge losses.

Education
When dealing with commodity online trading, education is most important thing. You have to take time for learning forex to make sure, that you are educated enough before trading. Good education will become you successful. Without proper learning, you could find yourself in bad financial point.

2009-04-23T19:20:00.002-07:00

Online Forex Trading Education

Online Forex Trading Education

There are many people who are interested in forex trading. But before you start trading in forex, getting a good online forex trading education is important. The forex market is largely a technical market with its own forex terms and processes so it is important you grasp the fundamentals with an online forex trading education.

Why Online Forex Trading Education?

Most people who want to try forex trading are often busy with other aspects of life to take care of. They probably do not have the time to attend a course on forex trading. Therefore, an online forex trading education is more suited.

Since it s online, you can take your time to read and digest the information at your own pace. Also most of the basics of forex trading can be found online for free. There are tons of websites that provide free forex trading courses and tutorials.

There are also free forex trading seminars online available plus advanced forex trading courses online such as the forexmentor program. While it s usually not free, the costs are pretty cheap compared to attending a forex trading course in a classroom.

Another important part of an online forex trading education is practice. I believe no matter how well you understand forex trading or if you score an A in a forex trading course, the real deal comes when you actually start trading.

Most forex trading sites provides a demo account for new beginners to forex trading to learn how to manage their forex trading account. There is no monetary risk, so it is a very good way to learn the ropes.

Once you feel you have sufficient experience, you can open a regular forex trading account or a mini forex account. I would highly recommend you open a mini forex account and start trading in smaller amounts. It has all the features of a regular forex accounts yet you can start one usually with about US $100.

It s important you do not rush through your online forex trading education. Take your time to understand and start trading in small amounts to practice. As the saying goes, practice make perfect.

2009-04-23T19:20:00.001-07:00

Forex Broker

A broker is any person or firm that charges a fee in exchange for executing trades for a trader. A Forex broker does not charge a commission for placing a buy or a sell order the way a real estate broker would charge a percentage fee of the total price of a sale. A Forex broker is paid according to the spread or the difference between the trader s bid for a currency, and the seller s asking price for that currency. Usually this spread is less than 0.1% or ten pips. (Pips are the smallest movement a currency can make on the Forex. Pips are commonly called referred to as points.) The lower the spread, the less a trader pays a Forex broker for a trade.

The Forex market is global and does not have one central regulatory agency like the Security Exchange Commission. Each country is responsible for the actions of trades in it s own country. A Forex broker in America must register with the Commodities Futures Trading Commission (CFTC). While traders are not regulated, Forex brokers are. A Forex broker must be registered as a Futures Commercial Merchant (FCM) before that Forex broker is allowed to accept a deposit for an account from a trader. Once registered, a Forex broker is given an identification number so that a trader can check the status of a Forex broker before hiring that Forex broker. There are such people known as introducing brokers who may solicit traders for a registered Forex broker, but the introducing broker cannot accept a deposit for a trader s account. It is a good idea for any trader hiring a Forex broker to check the status of the Forex broker with the authorities

2009-04-23T19:19:00.001-07:00

Forex Signal, Forex Signals Advice

There are lot's of Forex signals providers out there. New Forex traders might be thinking of looking for a reliable Forex signals provider. Is there any reliable Forex signals providers available?

Personally, I will say do not pay for Forex signals. Think about it - if a Forex signals provider sells Forex signals for living, you can doubt their Forex trading skills? Or else if they are pretty good in Forex trading and making lot's of profit, I am wondering why do they still bother to sell Forex signals for money. Thus, what would be the value of such Forex signals providers? The answer is ZERO.

There are Forex traders who have been relying on Forex signals arguing those Forex signals providers really help them making money in Forex trading. These Forex traders can even show their Forex trading logs as evidence. After some though, I came out with the assumption that assuming I am the owner of a Forex signals provider, in order for my business to be in black, obviously I need some satisfying customers.

2009-04-23T19:18:00.000-07:00

Forex Currency Trading

It is possible to buy and sell money from different countries on the foreign exchange market called Forex. Forex currency traders can profit by taking advantage of the dips and swells in the foreign currency market. Capturing these differentials is easier in Forex currency trading than in other trading because the Forex market is open twenty-four hours a day, except for weekends, and it is global, so there are always buyers and sellers available. The traders can be diverse. They can be traders looking for short-term gains, such as day traders or slightly longer investment periods, or they can be foreign investors who are looking to hedge their investments with long term Forex trades.

Forex currency trading is done in amounts of currency called lots, that are usually $100,000 each, and can be purchased on margin. Forex currency trading strategies can be based on technical analysis of the history of the currency price or it can be based on analysis of a particular country s political climate, tax policy, jobless rate, inflation rate, and other factors of the country. There are many different systems of Forex currency trading.

Forex currency trading is a huge market. Daily trading is estimated at between $1 trillion and $1.9 trillion dollars. Because the amount of money is so huge, it s hard to imagine that the market can be manipulated the way a smaller market can be. Forex currency trading is also not overseen by one central agency like the Security Exchange Commission, and each country oversees the Forex currency trading activity within it s own country.

2009-04-23T19:17:00.002-07:00

Forex Exchange Rates

Forex Exchange Rates

Forex exchange rate is the value of two different currencies and how they relate to each other. It is used by corporations, tax authorities, auditing firms, and financial institutions and is calculated on the basis of information supplied by leading market data contributors. Forex exchange rate says how much of one currency is needed to buy a unit of another. The exchange

rate is essentially a price, which can be analyzed the same way as other market prices. So when we speak of an A to B exchange rate of C, it means that if we pay 1 unit of A, we get C units of B in return.

You may find several Internet sites that instantly offer exchange rates of various currencies. What all you have to do is to select the currency pairs and with a click of the mouse you get the forex exchange rates. Additionally
you can convert a specific amount against the specified currency. You can also convert using the historic rate for a particular date.

The exchange rates are therefore prices for different currencies. So on a specific day, if the U.S. to Japan exchange rate is 115 yen, it means you can purchase 115 Japanese yen in exchange for 1 U.S. dollar. With a simple formula, you can find out how many U.S. dollars you can get for 1 Japanese yen.

Japan to U.S. exchange rate = 1 / U.S. to Japan exchange rate

Japan to U.S. exchange rate = 1 / 115 = .00869

Therefore one Japanese yen is equal to 0.00869 U.S. dollars.

Knowing the basics regarding the Forex exchange will help you to get started in understanding the forex trading. The majority of the currencies are raded against the US dollar (USD). The four next most-traded currencies are the euro (EUR), the Japanese yen (JPY), British pound sterling (GBP), and the Swiss franc (CHF). These five currencies are called the "the Majors". Some also include the Australian dollar (AUD) in this group.

The forex exchange rates are always quoted in pairs. The first currency is referred as the base currency and the second as the counter or quote currency. The counter currency is therefore the numerator in the ratio, and the base currency is the denominator. The value of the base currency
is always 1. Therefore, the forex exchange rate tells a buyer how much of the counter currency must be paid to get one unit of the base currency.
On the other hand, the forex exchange rate tells the seller how much he is going to receive in the counter currency while selling the base currency.

This ratio in the forex exchange rate is also known as 'cross rates'. This term is used when it does not involve US dollars and involves any other two foreign currencies. The concept of pip is also very important in forex exchange rates. The forex exchange rate is determined independently. The buyers and sellers and the supply and demand of certain currencies determine the forex exchange rates.

By: Paul Bryan

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

To find out more about making money from trading Forex online please visit Forex Exchange Rates

2009-04-23T19:17:00.001-07:00

Start at the top and work your way down.

By Tom Long | March 31, 2008

One of the important points we teach in the FXCM Power Courses is to trade in the direction of the trend on the daily chart. We recommend only trading the strongest trends as that is where you are likely to find the best trading opportunities. After having identified a strong trend on the daily chart, we then recommend moving down to an hourly or 4-hour chart to find your entry and exit, but only in the direction of the daily trend. Too often though, new traders lose their way and start with the short-term charts to find a trade and then move up to the daily chart to justify their choice. But this approach is not as effective as starting with the daily charts to find the strongest trends. These new traders want action and seem to be able to squeeze a trade out of the market even if there are few solid opportunities. This of course lowers the win percentage and profitability of your approach. We must start with the daily chart first and stick with the most obvious trends. Then if you move down to the intraday charts of those strongest trending markets and no trades are setting up, you must exercise discipline and patience to stay out of the market and not force a trade. Being okay with staying out of the market is key to long-term success. The idea is to trade the strongest setups instead of always being in a trade. So make sure your goals are prioritized to increase your chance of success and only trade when you have the best chance of winning.

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