Forex Education

Psychological Pitfalls

2009-01-16T09:21:00.001-08:00

Here are some additional psychological pitfalls to avoid. Be wary of
depending on others for your success. Most of the people you are
likely to trust are probably not effective traders. For instance:
brokers, gurus, advisors, friends. There are exceptions, but not
many. Depend on others only for clerical help or to support your
own decision-making process.
You may acquire trading methods or systems from others or from
books, but be sure to test them carefully yourself before trading.
Good systems that you can buy come with computer software that
allows comprehensive historical testing.
Don't blame others for your failures. This is an easy trap to fall into.
No matter what happens, you put yourself into the situation.
Therefore, you are responsible for the ultimate result. Until you
accept responsibility for everything, you will not be able to change
your incorrect behaviors.
Stay long-term oriented. Don't adjust your approach based solely on
short-term performance. Through luck, any horrible system can look
great, even for relatively long periods of time. Conversely, the best
systems have frequent losing periods. If you judge a system by

short-term performance, you are likely to reject the best systems
that exist.
Most traders have such an ego investment in their trading that they
cannot handle losses. Several losses in a row are devastating. This
causes them to evaluate trading methods and systems based on
very-short-term performance. Don't start trading a system based on
only a few trades, and don't lose confidence in one after only a few
losses. Evaluate performance based on many trades and multi-year
results.
Don't underestimate the psychological difficulty of successful
trading. Robert Rotella describes the trauma in The Elements of
Successful Trading: "Trading is one of the most stressful endeavors
imaginable. Taking losses day after day with a strategy that, just a
short while ago was working well, can be a terrible experience.
Trading performance can be consistently volatile with good and bad
times highly magnified. The market can batter your psyche and
gnaw at your soul. These bad experiences will never end as long as
you trade. The more successful you are as a trader, the more
money you will lose."
Keep trading in correct perspective and as part of a balanced life.
Trading is emotionally intensive no matter whether you are doing
well or going in the tank. It is easy to let the emotions of the moment
lead you into strategic and tactical blunders.
Don't become too elated during successful periods. One of the
biggest mistakes traders make is to increase their trading after an
especially successful period. This is the worst thing you can do
because good periods are invariably followed by awful periods. If
you increase your trading just before the awful periods, you will lose
money twice as fast as you made it.
Knowing how to increase trading in a growing account is perhaps
the most difficult problem for successful traders. Be cautious in
adding to your trading. The best times to add are after losses or
equity drawdowns.
Don't become too depressed during drawdowns. Trading is a lot like
golf. All golfers, regardless of their ability, have cycles of good play
and poor play. When a golfer is playing well, he assumes he has
found some secret in his swing and will never play poorly again.
When he is hitting the ball sideways, he despairs that he will never
come out of his slump.

Trading is much the same. When you are making money, you are
thinking about how wonderful trading is and how to expand your
trading to achieve immense wealth. When you are losing, you often
think about giving up trading completely. With a little practice, you
can control both emotional extremes. You'll probably never control
them completely, but at least don't let elation and despair cause you
to make unwarranted changes in your approach.
Other common themes of good traders are self-understanding,
balance and self-control. If you can master yourself, you can master
the futures markets.

Elements of a Successful Trading Plan--Manage Risk

2009-01-16T09:20:00.000-08:00

The final cardinal principle of trading overlays all the rest. It is
Manage Risk. This is as crucial as the others because it is by
managing risk that you limit losses and preserve your capital.
The most important element of managing risk is keeping losses
small, which is already part of your trading plan. Never give in to
fear or hope when it comes to keeping losses small. Preventing
large individual losses is one of the easiest things a trader can do to
maximize his chance of long-term success.
Another element of risk is the market you trade. Some markets are
more volatile and more risky than others. Some markets are
comparatively tame. If you have a small account, don't trade big-
money, wild-swinging contracts like the S&P 500 stock index. Don't
be above using the smaller-sized Mid-America contracts to keep
risk in proportion to your capital. Don't feel you have to trade any

market that might make a move. Emphasize risk control over
achieving big profits.
The biggest risks to commodity traders come from surprise events
that move the markets too quickly to exit at their pre-determined
give-up point. While you can never eliminate these risks entirely,
you can guard against them by advance planning. Pay attention to
the risk of surprise events such as crop reports, freezes, floods,
currency interventions and wars. Most of the time there is some
manifestation of the potential. Don't overtrade in markets where
these kinds of events are possible.
Trade in correct proportion to your capital. Have realistic
expectations. Don't overtrade your account. One of the most
pernicious roadblocks to success is greed. Commodity trading is
attractive precisely because it is possible to make big money in a
short period of time. Paradoxically, the more you try to fulfill that
expectation, the less likely you are to achieve anything.
The pervasive hype that permeates the industry leads people to
believe that they can achieve spectacular returns if only they try
hard enough. However, risk is always commensurate with reward.
The bigger the return you pursue, the bigger the risk you must take.
Even assuming you are using a method that gives you a statistical
edge, which almost nobody is, you must still suffer through
agonizing equity drawdowns on your way to eventual success.
It is better to shoot for smaller returns to begin with until you get the
hang of staying with your system through the tough periods that
everyone encounters. Professional money managers are generally
satisfied with consistent annual returns of twenty percent. If talented
professionals should be satisfied with that, what should you be
satisfied with? Surprisingly, disciplined individuals can do better. It is
realistic for a good mechanical system diversified in the best
markets to expect annual returns in the twenty-five to fifty percent
range.
One last thing about creating a trading plan. Don't be enticed into
trading options as a less risky alternative to futures. While the dollar
risk of buying puts and calls may appear lower and more certain, the
probability of long-term success is remote.
Experienced professional traders, such as Larry Williams, agree:
"Options are a very difficult game because you have to do two
things: You have to beat the market and beat the clock. Perhaps
some sophisticated people can trade options. I've been trading

stocks and commodities successfully for over thirty years, but I don't
trade options because it's too tough."
The best way to trade options is to sell them to small speculators.
That's what options professionals do. However, selling options has
more risk and is more difficult than trading futures. Unless you are
well-capitalized and committed to a full-time career as a
professional options player, stick to futures.
Although the commodity markets appear complex from the outside,
making money trading is quite simple. You use an historically
proven plan that trades with the trend, cuts losses short and lets
profits run. You trade your system in a carefully-selected group of
markets. You start with sufficient capital and pay close attention to
managing risk. Richard Dennis made his $200 million following
precisely this kind of trading approach.

Elements of a Successful Trading Plan--The Markets You Trade

2009-01-16T09:19:00.002-08:00

Another trading plan consideration is the markets you trade. There
are about forty futures markets with sufficient liquidity to allow
prudent speculation. However, it is important to select a good
universe of markets that are appropriate for your account size, risk
level and trading style.
It also important that your market universe be diversified. There are
always a number of big market moves every year, but no one knows
in advance where they will be. If you trade a diversified portfolio,
there is a greater chance that you will catch some of the truly big
moves that make for successful trading.
Another consideration in choosing a market to trade is its historical
propensity to have more big trending moves. Since the trend is your
edge in trading, you can maximize your edge by selecting the most
trendy markets. The following are some of the best trending markets
in various trading sectors.
The currencies are the best trending sector. The currencies to trade
are the Swiss Franc, the German Mark, the Japanese Yen and the
British Pound.
Interest rate futures are also good trending markets. T-Bonds
represent long-term interest rates and Eurodollars are for short-term
interest rates.
In the energy complex, Crude Oil, Heating Oil and Natural Gas are
good trading vehicles.

In the food sector, Coffee, Orange Juice and Sugar are
recommended.
In metals, you can trade Gold, Silver and Copper.
In agriculturals, Corn, Oats, Soybeans and Cotton are the best.
Now you have the outline of an overall plan to trade commodities.
The key to success is to test whatever strategy you intend to apply
before you trade with it. Remember that the conventional wisdom
that you read in books is mostly ineffective. When applied
consistently, most trading methods don't work.
You can't test your plan unless it is specific. The rules must be
precise and objective. Having a thoroughly tested plan is crucial to
maintaining the confidence necessary to keep trading the plan
through the inevitable losing periods that every good system and
every good trader must endure.
The reliability of non-computerized testing is highly suspect. Using
computer software that tests a particular approach or a variety of
approaches is preferred. You must learn the correct way to test and
evaluate trading approaches.

Elements of a Successful Trading Plan--Let Profits Run

2009-01-16T09:19:00.001-08:00

The next part of the plan involves a more pleasant alternative: when
to exit a trade that is profitable. The cardinal principle involved is Let
Profits Run. In other words, stay with your profitable trades as long
as possible because the trend is likely to continue and make your
profits even larger.
Again, this is easy to understand but not so easy to do when real
money is involved. The difficulty is that although your profit may
become much larger if you stay with a trade, it may also decrease
and even disappear. Human nature is such that it values a sure
profit much more highly than the probability of a much higher profit.
Thus, traders are inclined to take their profits too soon. This can be
fatal to long-term success because big profits are necessary to
overcome the inevitable collection of small losses.
There is a good way to let profits run while still guarding against the
possibility that prices will turn around and take away much of your

accumulated profits before the trend actually reverses. It is called a
trailing stop. You include in your plan a method for moving an exit
point along some distance behind your trade. As long as the trend
keeps moving in your favor, you stay in the trade. If the market
reverses direction by the amount of your trailing stop, you exit the
trade at that point. You would also offset your trade and reverse
position if the trend reversed.
One way to set a trailing stop is to protect a certain percentage of
the accumulated profit. That will always insure that you keep some
profit on a good trade.

Elements of a Successful Trading Plan--Cut Losses Short

2009-01-16T09:18:00.002-08:00

If you are following market trends rather than trying to anticipate
them, the next important part of the plan is how to exit trades that
don't work out. Here is where the second cardinal principle comes
in. It is Cut Losses Short.
This is another sensible-sounding concept that is much easier to
acknowledge than actually to execute when real money is on the
line. No one wants to exit a trade with a loss. They don't want to
lose money. More importantly, they don't want to admit they were
wrong. You can always think of many reasons to hold on to a losing
trade. You can hope that the market will suddenly turn around and
give you a profit instead of a loss.
This is another example where successful traders have learned to
do the hard thing. If there is one thing consistent in the stories of
how good traders turned themselves around from being bad traders,
it is their attitude about losses. Professional traders accept that
losses are part of the game. Since the markets are mostly random,
the best trading methods will always have numerous losses.
Professionals do not equate losses with being wrong.
It is precisely because correct trading methods invariably generate
many losses that it is important to keep the individual losses small in
relation to the overall size of the account. In order to keep trading,
you must preserve your capital. If you can keep trading in the
direction of the trend, the big profits will come. However, if you take
too many large losses, your capital will be wiped out before you can
enjoy the big profitable trades.
The laws of probability insure that regardless of your approach, you
will inevitably suffer some long strings of consecutive losses. If you

are risking too high a percentage of your account on each trade,
before long one of these unavoidable losing streaks will blow you
away. Keeping losses to about one percent of your account size is
optimal. With smaller accounts, the percentage will have to be
larger. Five percent on one trade is probably the highest prudent
level of risk.
Because of the randomness in commodity price action, you must
allow the market a certain amount of leeway before giving up on a
trade. In general, you must be willing to risk between $500 and
$1,000 to trade most markets. For smaller accounts, the Mid
America Exchange offers trading with smaller sized contracts that
allow you to trade with lower risk.
While there are more sophisticated ways to decide when to exit a
losing trade, getting out after a loss of a predetermined dollar
amount is as good a way as any. The important thing is to respect
your plan. You can place a stop-loss order with your broker that
instructs him in advance to exit a trade if the market hits your loss
limit. You should always do this to guard against inattention or
changing your mind at the crucial moment.

Elements of a Successful Trading Plan--Trade With The Trend

2009-01-16T09:18:00.001-08:00

Trading with the trend is hard to do because a logical give-up exit
point will be farther away, potentially causing a larger loss if you are
wrong. This is a good example of why so few traders are successful.
They can't bring themselves to trade in a psychologically difficult
way.
You can define the concept of trend only in relation to a particular
time frame. When you determine the trend, it must be, for example,
the two-week trend or the six-month trend or the hourly trend. So an
important part of a trading plan is deciding what time frame to use
for making these decisions.
Do you want to be a long-term trader, also called a position trader?
They hold positions for weeks or months. Do you want to be a short-
term trader who holds positions only for a few days? There are even
very short-term traders called day traders. They watch the markets
during the day and always enter and exit their positions on the same
day.
While it is perhaps easier psychologically to keep the time frame
short, the best results come from longer-term trading. The longer
you hold a trade, the greater your profit can be.
Day trading has great attraction because you can start each day
fresh and sleep comfortably every night with no open positions.
However, it is the most difficult kind of trading there is. Here's how
legendary trader Larry Williams describes it: "Day trading is so
stressful. You're going to end up frying your brain. All the day
traders I talk with are losing money. Besides, it's really hard to come
up with profitable day trading systems."
For the greatest chance of success, your time frame to measure
trends should be at least four weeks. Thus, you should only enter
trades in the direction of the price trend for the last four weeks or
more. A good example of a trend-following entry rule would be to
buy whenever today's closing price is higher than the closing price

of 25 market days ago, and sell whenever today's closing price is
lower than the closing price of 25 market days ago.
When you trade in the direction of this long a trend, you are truly
following the markets rather than predicting them. Most
unsuccessful traders spend their entire careers looking for better
ways to predict the markets.

Elements of a Successful Trading Plan--Getting Started

2009-01-16T09:17:00.002-08:00

The first element of any trading plan is the amount of capital you
intend to invest. This is up to you, but you should understand that
there is a direct relationship between the amount of capital you
commit and your probability of success. The more you invest, the
greater is the likelihood that you will make money.
What is the minimum advisable amount to start with? Most
professionals agree that it takes a minimum of $10,000. If you try to
trade with anything less, what happens to you will be luck. You won't
have the capital necessary to apply proper risk management
principles.
An important thing to keep in mind when deciding how much to
commit initially to commodity trading is that the amount you invest
must be "risk capital." Risk capital is defined as money you can
afford to lose without affecting your standard of living. It should also
be money that you feel comfortable risking. Think of your commodity
account as an investment in a business. Many businesses fail.
That's life. Make sure you won't be so afraid of losing money that it
will affect your ability to make correct trading decisions.
The next part of your trading plan involves how you will make your
actual buying and selling decisions. Under what conditions will you
enter trades? When will you exit your trades? What markets will you
trade?
There are four cardinal principles which should be part of every
trading strategy. They are: 1) Trade with the trend, 2) Cut losses
short, 3) Let profits run, and 4) Manage risk. These building blocks
are so basic and important that I have written a whole book about

them. You should make sure your strategy includes each of these
requirements for success.

Learning To Trade Correctly

2009-01-16T09:17:00.001-08:00

One way to learn how to trade correctly is to find a successful trader
and have him or her teach you exactly how they do it. However,
even if you could find such a person and even if they would be
willing to spend the time with you, it would not necessarily make you
a successful trader. You might not have the capital necessary to
trade the way they do. You would definitely not have the years of
experience they had developing their successful approach. You
might not have the personality profile necessary to execute their
style of trading.
Another way to learn is by trial and error. This is the method of
choice for most people although they probably don't realize it. The
trouble with trial and error in futures trading is that you don't always
take a loss when you trade incorrectly and you don't always make a
profit when you trade correctly. Some of the best methods generate
losses more than half the time. You can take many losses in row
applying a very effective system. On the other hand, if you are
lucky, you can makes tons of money trading quite stupidly.
Psychologists call this random reinforcement, and it makes good
trading impossible to learn through trial and error.
The most obvious and practical way to learn how to trade correctly
is to read books. Find the best books by the most respected authors
and the best traders and learn from them. While this may work in
other areas of life, it is more problematic in commodity trading.
One of the few real secrets in commodity trading is that most of
what you read in books about how to trade does not work in the real
world. Even books by respected authors are full of trading methods
that lose money when put to the test. You may find this shocking,
but almost no commodity authors demonstrate the effectiveness of
the methods they advocate. The best you can hope for are some
well-chosen examples or a few cursory tests.
Learning to trade is a combination of being exposed to ideas plus
practical experience watching the markets on a day-to-day basis.
This is not something that can happen in only a few weeks. On the
other hand, you can become a great trader even with only average
intelligence. Professional trader and money manager Russell Sands
describes the makeup of a successful trader: "Intelligence alone
does not make a great trader. Success is equal parts of intellect,

applied psychology, practice, discipline, bankroll, self-understanding
and emotional control."
Furthermore, to be successful you don't have to invent some
complex approach that only a nuclear physicist could understand. In
fact, successful trading plans tend to be simple. They follow the
general principles of correct trading in a more or less unique way.

Separating the Winners and Losers

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A very high percentage of those who try commodity trading
eventually lose money. The ratio of losers could be as high as
ninety-five percent. However, this does not necessarily mean that
your chance of failure is that high. If, before you begin, you identify
correctly the reasons most people lose, you can improve your odds
significantly.
There is a small percentage of full-time professionals and highly
skilled part-time traders who have learned how to trade correctly
and generate consistent profits year after year. It is not impossible
to determine what separates these people from the crowd.
Because trading well is not easy, you must approach the task very
seriously. This is not something to treat as a hobby. Perhaps, first
and foremost, this is what separates professionals from amateurs.
Professionals look at their trading as a business. There are
substantial profits to be made, and they will not just fall into your lap.

Another crucial difference between successful and unsuccessful
traders is that the successful ones have a plan and they follow it.
Considering the amount of money involved and the potential risks, it
is remarkable how few traders actually have any kind of plan for
their trading. They go from trade to trade applying various ideas
they have learned without any consistency and without any testing.
They make decisions based on hot tips, something they read,
today's news. They are acting from emotion rather than using a
proven methodology. While they may not want to admit it, they are
really gambling in the futures markets rather than trading
intelligently.
Trading by emotion in an unstructured way certainly adds fun and
entertainment to the enterprise. Taking positions on instinct is
exciting, especially when they work out . . . as they often do. But in
the end, this kind of trading will lose money.
Good trading is boring because you've thought out your strategy
and tactics in advance. You trade according to a carefully tested
system or method, not from what moves you emotionally that day.
Two psychological traits that separate winners from losers are
patience and discipline. It is not enough to have a carefully tested
trading plan. You must also be able to follow it religiously. This is
not as easy as you may think.
Every experienced trader knows how great the temptation is to stray
from the plan. There is always what seems to be a good reason.
The true professional can resist this temptation and stick to his plan.
He has the patience to wait for his method to signal a trade and not
take trades he may be emotionally attracted to that are outside his
plan. He has the discipline to follow his plan and take all the trades
that it signals even when there appear to be strong reasons to make
an exception.
This may sound easy, but when real money is on the line--your
money--nothing is more difficult. The kind of trading that really works
is emotionally demanding.
It is hard work to create a winning trading plan. It is hard
psychologically to follow the plan after you create it. This is why so
many people fail. Perhaps you have what it takes to be an
exception.

The Truth About the Commodity Markets

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In order to be a successful trader, you must understand the true
realities of the markets. You must learn how the professionals make
money and what is possible. Most traders come into commodity
trading, lose a substantial portion of their capital and then leave
trading without ever having a correct perception of what good
trading is all about.
For many years college professors have argued that the markets
are both random and highly efficient. If this were true, it would be
impossible to gain an edge on other investors by having superior
knowledge or a superior approach.
Professional traders, who make their living trading rather than
studying the markets from afar, have always laughed at these ivory
tower theories. A good example is George Soros, who has made
billions of dollars from trading and is perhaps the greatest trader of
all time. Here is how he responds to these ivory tower academics:
"The [random walk] theory is manifestly false--I have disproved it by
consistently outperforming the averages over a period of twelve
years. Institutions may be well advised to invest in index funds
rather than making specific investment decisions, but the reason is
to be found in their substandard performance, not in the
impossibility of outperforming the averages."
Mathematicians have conclusively shown the financial markets to be
what are called non-linear, dynamic systems. Chaos theory is the
mathematics of analyzing such non-linear, dynamic systems. The
commodity markets are chaotic systems. Such systems can
produce random-looking results that are not truly random. Chaos
research has proved that the markets are not efficient, and they are
not forecastable. Commodity market price movement is highly
random with a small trend component.
Most beginning traders assume that the way to make money is to
learn how to predict where market prices are going next. As chaos
theory suggests, the truth is that the markets are not predictable
except in the most general way.

In his book, Methods of a Wall Street Master, famous trader Vic
Sperandeo, whose nickname is "Trader Vic," warns: "Many people
make the mistake of thinking that market behavior is truly
predictable. Nonsense. Trading in the markets is an odds game,
and the object is always keep the odds in your favor."
Luckily, as Trader Vic suggests, successful trading does not require
effective prediction mechanisms. Good trading involves following
trends in a time frame where you can be profitable.
The trend is your edge. If you follow trends with proper risk
management methods and good market selection, you will make
money in the long run. Good market selection refers to trading in
good trending markets generally rather than selecting a particular
situation likely to result in an immediate trend.
There are three related hurdles for traders. The first is finding a
trading method that actually has a statistical edge. Second is
following it with consistency. Third is consistently following the
method long enough for the edge to manifest itself on the bottom
line.
This statistical edge is what separates speculating from gambling. In
fact, effective trading is actually like the gambling casino rather than
the gambling customer. Professional trader Peter Brandt explains
successful trading in just this way: "A successful commodity trading
program must be based on the simple premise that no one really
knows what the markets are going to do. We can guess, but we
don't know. The best a commodity trader can hope for is an
approach which provides a slight edge. Like a gambling casino, the
trader must earn his profits by exploiting that edge over an extended
series of trades. But on any given trade, like an individual casino
bet, the edge is pretty meaningless."
Unsuccessful and frustrated commodity traders want to believe
there is an order to the markets. They think prices move in
systematic ways that are highly disguised. They hope they can
somehow acquire the "secret" to the price system that will give them
an advantage. They think successful trading will result from highly
effective methods of predicting future price direction. These deluded
souls have been falling for crackpot methods and systems since the
markets started trading.
Prolific futures trading author Jake Bernstein describes how these
desperate traders are victimized: "Futures trading is ultimately very
simple. Any attempt to make trading complex is a smokescreen. Yet

for self-serving reasons an army of greed-motivated promoters try to
make things complicated. Too many market professionals consider
it their mission in life to obfuscate. Why? Because in so doing they
give the appearance that their efforts are scholarly and important.
They create a need for more information, and then they fill it!"
Books on how to trade commodities are famous for showing a few
well-chosen examples where a described prediction method
previously worked. They never show what would have happened if
you had applied the method religiously for many years in numerous
markets. Those who have tested these methods have found that in
the long run almost all of them don't work. Be wary of any trading
method unless you see a detailed demonstration showing that it has
worked for at least five to ten years in a variety of different markets
using exactly the same rules.
The job of the person who wants to trade commodities rationally and
prudently is to ignore the promises of those promoting pie-in-the-sky
prediction mechanisms and concentrate on finding and
implementing a proven, integrated methodology that follows market
trends.

Making A Trade

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Assuming the trader has consulted his price charts, applied his
trading plan's decision-making criteria and decided to make a trade,
how does this actually take place? He will have a trading account
open with a broker. Believing, for example, that the price of Silver
will be going up in the near future, he calls his broker's trading desk,
and the following conversation might occur.

"XYZ Discount Brokerage.
"This is Bruce Babcock. For account number 22656,
buy one December Silver at the market."
"Buying one December Silver at the market. Please hold."
The broker may enter the order into a computer or she may call the
exchange floor directly. In either case, the order goes to the
exchange trading floor in New York City. Once at the broker's desk
on the edge of the trading floor, a runner may take the order to the
trading pit to be filled or a clerk may transmit it to the pit by hand
signals. In the trading pit, a floor broker executes the order with his
fellow floor traders by a combination of shouting and hand signals.
The process is then reversed as the trade price is communicated
back to the customer.
"Hello. You bought one December Silver at 550."
"I would like to enter my stop order. Good 'til cancelled,
sell one December Silver at 540 stop."
“For account number 22656, selling one December Silver
at 540 stop. Good 'til cancelled."
"Thank you."
The second sell order was an instruction to the broker to
automatically offset the trade if Silver declined in price by $500. This
was a prudent step to limit the loss in case price did not go up as
the trader expected. Placing the order with the broker means that
the trader will not have to monitor the market constantly to be sure
the loss does not get too big if price goes down instead of up. The
trader is not guaranteed to limit his loss to exactly $500, but he will
usually be able offset his position fairly close to the requested price.
The trader can offset his position any time before the Silver contract
expires in December. To the extent Silver's price is more than $5.50
an ounce when he offsets, the trader will profit by $50 for each cent.
To the extent Silver's price is less than $5.50 when he offsets, the
trader will lose $50 for each cent.
To do the same trade with less dollar risk, the trader could have
instructed the broker to place the orders at the Mid America
Exchange, where the Silver futures contract is only one-fifth the size
of the regular New York contract. That would have yielded profits
and losses of $10 for each cent rather than $50.

The Trading Process

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Here are some typical steps in the process of making a commodity
trade including the trader's decision-making process and the
procedures involved in actually placing the trade.
In order to make decisions about when to trade commodity futures,
you must have a source of price data. Many daily newspapers carry
some commodity prices in their financial sections. The Wall Street
Journal has comprehensive commodity price listings. Investor's
Business Daily has both price tables and numerous price charts
All experienced commodity traders prefer to look at price activity on
a chart rather than trying to interpret tables of numbers. In financial
analysis, charts are indispensable for quickly grasping the essence
of historical and recent price action.
The typical commodity chart depicts daily price action as a thin
vertical bar which indicates the day's high and low by the top and
bottom of the bar. The opening and closing prices are shown as tiny
dots attached to the left and right side of the bar. A typical daily
price chart can show up to six months of price action this way.
It is easy to change the bar's time frame from days to weeks or
months and thus show from two to twenty years of historical price
action in the same format. For short-term trading you can change
the bar's time frame to hours or even minutes.
Looking at such bar charts enables a trader to see the recent trend
of prices--whether up, down or sideways--in whatever time frame he
chooses. Following the current trend of prices is a cornerstone of
successful trading.
There are a number of ways to obtain the price charts a trader
needs to analyze the markets. You can make your own using graph
paper. This sounds rather primitive, but some experts recommend it
as a good way to put yourself in close touch with price activity and
monitor risk.

Another source of charts is the printed chart service. There are
about half a dozen of these. They typically mail a booklet of
numerous charts covering all the tradeable markets after the
markets close on Friday. There is space on the charts to update
them daily during the following week until next chart book arrives.
These printed chart books normally have a number of indicators
plotted along with the price action and contain a wealth of additional
information.
For computer owners there are many software programs that create
fancy charts on the computer screen. You can input the price data
manually or, via telephone modem, download comprehensive data
after the markets close for the day. Those with larger budgets can
install a small satellite dish and watch price changes in all the
markets nearly instantaneously as they occur. The software creates
charts dynamically on the computer screen as each trade takes
place on the exchanges. You can put many different charts on the
screen and thus watch numerous markets all around the world in
real time. The cost can range from a few hundred to $1,000 a month
depending on the software and the number of exchanges you
subscribe to.
It is easy to believe that computers can make a big difference in
trading success. Vendors of expensive software will tell you that
since other traders, who are your competition, have expensive
computer setups, you need one too. This isn't really true.
Those who can't trade profitably without a computer probably won't
be helped too much by using a computer. It may actually be
detrimental by causing an increase in trading frequency. While a
computer will not make a bad trader into good one, they are fun to
use, and they do make a trader's life easier.
There are two primary analytic methods for deciding when to take a
futures position: fundamental analysis and technical analysis.
Fundamental analysis involves using economic data relating to
supply and demand to forecast likely future price action. Technical
analysis involves analyzing past price action of the market itself to
forecast the likely future price action.
While there are differences of opinion about the relative merits of
the two approaches, almost all successful traders emphasize
technical analysis. There are a number of reasons for this. First and
foremost is the difficulty of obtaining accurate fundamental data.
While various governments and private companies publish statistics
concerning crop sizes and demand levels, these numbers are gross

estimates at best. With the current global marketplace, even if you
could obtain accurate current information, it would still be impossible
to predict future supply and demand with enough accuracy to make
commodity trading decisions.
Technical analysts argue that since the most knowledgeable
commercial participants are actively trading in the markets, the
current price trend is the most accurate assessment of future supply
and demand. If someone is correct that for fundamental reasons,
prices will likely move up strongly in the future, the commercial
participants who have the greatest knowledge and influence on the
markets should certainly be moving the price upward right now. If
price instead is moving down, a lot of very knowledgeable people
must think price in the future will likely be down, not up.
For this reason, almost all successful speculators learn to follow
price action and not try futilely to predict turning points in advance.
They seek to trade in tune with the large participants who move the
markets.
In his classic book, Technical Analysis of the Futures Markets,
famous analyst John Murphy summarizes the rationale for technical
analysis: "The technician believes that anything that can possibly
affect the market price of a commodity futures contract--
fundamental, political, psychological or otherwise--is actually
reflected in the price of that commodity. It follows, therefore, that a
study of price action is all that is required. By studying price charts
and supporting technical indicators, the technician lets the market
tell him which way it is most likely to go. The chartist knows there
are reasons why markets go up and down. He just doesn't believe
that knowing what those reasons are is necessary."

The History of Trading

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Although the first recorded instance of futures trading occurred with
rice in 17th Century Japan, there is some evidence that there may
also have been rice futures traded in China as long as 6,000 years
ago.
Futures trading is a natural outgrowth of the problems of
maintaining a year-round supply of seasonal products like
agricultural crops. In Japan, merchants stored rice in warehouses
for future use. In order to raise cash, warehouse holders sold
receipts against the stored rice. These were known as "rice tickets."
Eventually, such rice tickets became accepted as a kind of general
commercial currency. Rules came into being to standardize the
trading in rice tickets. These rules were similar to the current rules
of American futures trading.
In the United States, futures trading started in the grain markets in
the middleof the 19th Century. The Chicago Board of Trade was
established in 1848. In the 1870s and 1880s the New York Coffee,
Cotton and Produce Exchanges were born. Today there are ten
commodity exchanges in the United States. The largest are the
Chicago Board of Trade, The Chicago Mercantile Exchange, the
New York Mercantile Exchange, the New York Commodity
Exchange and the New York Coffee, Sugar and Cocoa Exchange.
Worldwide there are major futures trading exchanges in over twenty
countries including Canada, England, France, Singapore, Japan,
Australia and New Zealand. The products traded range from
agricultural staples like Corn and Wheat to Red Beans and Rubber
traded in Japan.
The biggest increase in futures trading activity occurred in the
1970s when futures on financial instruments started trading in
Chicago. Foreign currencies such as the Swiss Franc and the
Japanese Yen were first. Also popular were interest rate
instruments such as United States Treasury Bonds and T-Bills. In
the 1980s futures began trading on stock market indexes such as
the S&P 500.
The various exchanges are constantly looking for new products on
which to trade futures. Very few of the new markets they try survive
and grow into viable trading vehicles. Some examples of less than
successful markets attempted in recent years are Tiger Shrimp and
Cheddar Cheese.
Futures trading is regulated by an agency of the Department of
Agriculture called the Commodity Futures Trading Commission. It

regulates the futures exchanges, brokerage firms, money managers
and commodity advisors.

The Risks of Trading

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Before becoming too excited about the substantial returns possible

from commodity trading, it is a good idea to take a long, sober look

at the risks. Reward and risk are always related. It is unrealistic to

expect to be able to earn above-average investment returns without

taking above-average risks as well.

Most people are naturally risk averse. They don't like to take big

risks, especially financial risks. Perhaps you can relate to the point

of view of humorist Will Rogers: "I am not as concerned about the

return on my money as I am about the return of my money."

Commodity trading has the reputation of being a highly risky

endeavor. It is true that a high percentage of traders eventually lose

money. Many people have lost substantial sums. There is a famous

old line about the best way to make a small fortune trading

commodities . . . start with a big one.

However, commodity trading's reputation as a highly risky activity is

somewhat undeserved. Think of yourself walking into a gambling

casino in Las Vegas or Atlantic City. You decide to play roulette.

The table has a $5 minimum bet and a $5,000 limit, which happens

to be your total bankroll. If you place a $5,000 bet on red, you

should not be surprised if you immediately lost your $5,000. On the

other hand, if you made only $5 bets, you could play for a long time

and probably not lose very much at all.

Commodity trading is the same in the sense that the individual is the

one who decides how he wants to operate. He can make large bets

or small ones. One can trade commodities carefully and risk as little

as $100 or $200 on a trade. You could trade a long time this way

and only lose a few thousand dollars. However, most people are not

that patient. The unfortunates who lose big are those who can't

control themselves. They take big risks in an attempt to get rich

quick. Another way to lose big is blindly to turn your money over to

others to trade such as brokers or money managers.

One of my favorite quotes about trading comes from trading

psychology expert Mark Douglas. As he points out, most of us are

not as willing to take financial risks as we think: "Most people like to

think of themselves as risk takers, but what they really want is a

guaranteed outcome with some momentary suspense to make them

feel as if the outcome had been in doubt. The momentary suspense

adds the thrill factor necessary to keep our lives from getting too

boring."

Anyone who is going to try speculation should be fully aware of and

be comfortable with the risks involved. Managing the risks of trading

is a very important part of any trader's success. Although the risks

can be managed, they can never be eliminated. Remember that the

high returns successful speculators can earn are available only

because the speculator is being paid to take risk away from others.

When a commodity trader buys a futures contract, he will lose if the

price declines. His risk is theoretically limited only by the price of the

commodity going to zero. If he sells, he will lose if the price goes up.

The risk is theoretically unlimited because there is no absolute

ceiling on how high the price of the commodity can go.

In practice, however, the trader can offset his position when the

trade is going against him to limit his loss. While a prudent trader

always has a plan to limit his losses when trades don't work, it is not

possible to guarantee a particular loss limit amount. As a practical

matter, however, you can usually limit losses to within a few

hundred dollars of an intended amount. Very often losses are within

$100 of the amount you project. Only when very unusual things

happen suddenly can losses balloon to thousands of dollars more

than you expected.

A good example of this was what happened to many traders in stock

index futures just before the Gulf War started in 1991. In The New

Market Wizards by Jack Schwager, respected money manager

Monroe Trout describes his ordeal: "January 9, 1991 was the day

that Secretary of State James Baker met with the Iraqi ambassador

in an effort to avert the Gulf War. At the time there was a

reasonable degree of optimism going in to the meeting. Addressing

the press after the meeting, Baker began his statement with the

word 'Regrettably.' A wave of selling hit the stock and bond markets.

I lost about $9,500,000, most of it in about ten seconds." Trout was

holding 700 S&P futures contracts at the time.

One of the trading systems I was using during that period was a day

trading system for the S&P. Although on most days that system

didn't trade at all, it was unlucky enough to be in a long position that

morning. I remember watching Baker's news conference and the

S&P price action at the same time in my office. Even though I had a

$500 stop-loss in the market, my system lost $5,500 per contract on

that day's trade because the market's liquidity evaporated so

rapidly.

The S&P stock index is the most expensive market to trade, and

those with accounts less than $25,000 should probably not be

trading it at all. Therefore, this once in-a-decade event would have

cost about twenty percent or less of a reasonably capitalized

account.

Other kinds of surprise situations that can cause unpredicted losses

are freezes, floods, droughts, government currency interventions

and crop reports. With attention and foresight a trader can sidestep

these risky situations. The best way to control unpredictable risks is

to trade conservatively so larger-than-expected losses are still only

a small percentage of the total account.

Another thing to understand about risk in trading is that you cannot

avoid losses by careful planning or brilliant strategy. Numerous

losses are part of the process. In The Elements of Successful

Trading, Robert Rotella puts it this way: "Trading is a business of

making and losing money. Any trade, no matter how well thought

out, has a chance of becoming a loser. Many people think the best

traders don't lose any money and have only winning trades. This is

absolutely not true. The best traders lose a lot of money, but they

eventually make even more over time."

There is no point trading commodities if you cannot handle the

psychological discomfort of making losing trades. While people tend

to take losses personally as a sign of failure, good traders shrug

them off. The best trading plans result in many losses. Because of

the amount of randomness in market price action, such losses are

inevitable.

If I haven't scared you away so far, let's take a closer look at what

successful commodity trading is all about.

Commodity Trading As An Investment Vehicle

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There are many inherent advantages of commodity futures as an

investment vehicle over other investment alternatives such as

savings accounts, stocks, bonds, options, real estate and

collectibles.

The primary attraction, of course, is the potential for large profits in

a short period of time. The reason that futures trading can be so

profitable isleverage.

For instance, if you had a $10,000 futures trading account, you

could trade one S&P 500 stock index futures contract. If you were

going to buy the equivalent amount of common stocks, you would

currently need about $350,000, thirty-five times as much.

Let's say you decided that the stock market was going to go up. You

could invest $350,000 and buy individual stocks equivalent to the

S&P index, or you could buy one S&P futures contract. Buying a

futures contract is the same as betting that the S&P index will go up.

If you had made your move on the first trading day of September,

1996 and held your position for two weeks, your common stock

position would have been worth about $20,000 more than when you

bought it, a gain of about six percent. Not bad for only two weeks. If

you had taken the futures route, however, you would have made the

same $20,000, which would have been a 200 percent gain on the

$10,000 margin required in your futures trading account.

That is an actual example of the tremendous returns you can earn

in a short period of time trading futures. Of course, you can lose

money just as fast if you trade in the wrong direction. Suppose you

had thought the stock market was about to go down and you had

sold a futures contract instead of buying one. If you had valiantly

held it for two weeks, you would have lost $20,000. That's a good

example of why you must exit your trades quickly if they start to

move against you.

Another advantage of futures trading is much lower relative

commissions. Your commission on that $20,000 futures trading

profit would have been only about $30 to $50. Commissions on

individual stocks are typically as much as one percent for both

buying and selling. That could have been $7,000 to buy and sell a

basket of stocks worth $350,000.

While profits can be large in commodity trading, it is not easy to

make consistently correct decisions about what and when to buy

and sell.

Commodity speculation offers an important advantage over such

illiquid vehicles as real estate and collectibles. The balance in your

account is always available. If you maintain sufficient margin, you

can even spend your current profit on a trade without closing out the

position. With stocks, bonds and real estate, you can't spend your

gains until you actually sell the investment.

As you will see, commodity trading is not particularly complicated.

Unlike the stock market where there are over ten thousand potential

stocks and mutual funds, there are only about forty viable futures

markets to trade. Those markets cover the gamut of market sectors,

however, so you can diversify throughout all important segments of

the world economy.

In futures trading, it is as easy to sell (also referred to as going

short) as it is to buy (also referred to as going long). By choosing

correctly, you can make money whether prices go up or down.

Therefore, trading a diversified portfolio of futures markets offers the

opportunity to profit from any potential economic scenario.

Regardless of whether we have inflation or deflation, boom or

depression, hurricanes, droughts, famines or freezes, there is

always the potential for profit trading commodities.

There are even tax advantages to making your money from futures

trading. Regardless of the actual holding period, commodity profits

are automatically taxed as sixty percent long-term capital gains and

forty percent short-term capital gains. The current maximum capital

gains rate is thirty-three percent, somewhat less than the maximum

rate for ordinary income. To the extent that capital gains tax rates

are reduced in the future, commodity traders will benefit. If a

distinction is re-established so that taxes on long-term gains are

lower than on short-term gains, commodity traders will benefit.

Significant Facts About Forex Currency Pairs

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n the instance of the Euro which is the initial currency it is recognized as the base currency whereas the second currency or the dollar is regarded as the counter or quote currency. What it actually means is in case of these two forex currency pairs, if you want to purchase the currency pair, then you have to buy the Euro currency and sell US dollars at the same time.

Complete Comprehension

Hence, to have success when trading in forex currency pairs, you need to have a full and comprehensive understanding about currency pairs especially when going into a forex trade, you must know what currency you are selling or buying. For success in forex currency pairs, you should have a very complete knowledge about the major currencies such as the US Dollar, Euro, German deutshe mark and so on.

For a very long time, the US dollar has been the major currency throughout the world. It was used as a primary currency to assess other currencies that were being traded on forex and because of this all the currencies needed to be quoted in terms of the how it related to the US dollar.

Because all Forex trading deals in foreign currencies and the full extent of such trade is stupendous and ultimately amounts to well over a trillion dollars, to become a success at trading in them requires a full understanding of forex currencies pairs.

Simultaneous Transactions

As elaborated on, traders purchase and sell currencies by exchanging one type of currency to another and in the hopes of turning a profit from doing in the process. The market quotations as far as Forex is concerned, is specified as forex currency pairs which is denoted as the base currency which is then followed by the quote currency.

Amongst the most usual types of currency pairs are the GBP/USD (British pound vs. US dollar), EUR/USD (Euro vs. US dollar) USD/JPY (US dollar vs. Japanese Yen) and USD/CHF or US dollar vs. Swiss franc.

As far as forex currency pairs go, it is common to have the base currency listed first which is then followed by the quote currency or counter. Moreover, the base currency is a single energetic monetary unit, for instance 1 EUR, 1 USD or 1 GBP, and is implied and not shown necessarily.

Forex Trading System: How to Read a Forex Quote

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Forex is an abbreviated name for "foreign exchange." The Forex market is a non-stop cash market where the currencies of nations are bought and sold, typically via brokers. For example, you buy Euros, paying with U.S. Dollars, or you sell Euros for Japanese Yen.

The value of your Forex investment increases or decreases because of changes in the currency exchange rate or Forex rate. These changes often result from economic and political factors, such as the price of oil or political unrest. To better understand how the exchange rate can affect the value of your Forex investment, this article shows you how to read a Forex quote.

Forex quotes are always expressed in pairs. In the following example, your "pair" of currencies are the U.S. Dollar (USD) and the Euro (EUR). The Forex quote, USD/EUR = 265.50, means that one U.S. dollar is equal to 265.50 Euros. The currency to the left of the / (USD in this case) is referred to as base currency and its value is always 1. The currency to the right of the / (EUR in this case) is referred to as the counter currency. In this example, one USD can buy 265.50 EUR, since it is the stronger of the two currencies.

Because the U.S. dollar is regarded as the central currency of the Forex market, it is always treated as the base currency in any Forex quote where it is one of the pairs. Incidentally, the U.S. Dollar is involved in nearly 90% of all Forex transactions.

In this example, your "pair" of currencies are the Japanese Yen (JPY) and the Euro (EUR). The Forex quote, JPY/EUR= 175.10, means that one Japanese Yen is equal to 175.10 Euros. The currency to the left of the / (JPY in this case) is referred to as base currency and its value is 1. The currency to the right of the / (EUR in this case) is referred to as the counter currency. In this example, one JPY can buy 175.10 EUR, since it is the stronger of the two currencies.

The goal of any Forex trading system is to profit from foreign currency movements. This requires adequate training in basic Forex principles, such as performing a Technical Analysis, using Forex charts and Stop/Loss tools, and keeping up-to-date with economic and political events. In a sense, Forex training never ends.

Forex Trading: Currency Exchange Tutorial

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The currency trading tutorial you're about to receive here will give you a basic idea of how things works. However, you must keep in mind that this tutorial is only scratching the surface. The Forex market is complex, fast-paced and requires serious further study if you wish to trade successfully.

Now that we have that disclaimer out of the way, let's begin by looking at the fundamental unit involved in every trade: the 'currency pair'.

What are currency pairs?

Currency pairs are units of 2 currencies involved in a foreign exchange trade. For example, if you want to sell U.S. dollars to buy Euros, you would look at the exchange rate quoted for the EUR/USD currency pair. Or, if you wanted to sell Euros to buy U.S. dollars, you would look at the exchange rate quoted for the USD/EUR currency pair.

You might thinking: “Aren't they the same thing?” Well, they almost are, but you must look at the correct pair, in the correct order, based on the currency being purchased.

There are two reasons for doing this:

First, it is easier to calculate the results of your exchange in terms of how much of the base currency you can purchase with your 'quote' currency. Your base currency is the currency you intend to buy, and the quote currency is the currency you intend to sell in exchange for the base.

When quoting an exchange rate, your broker will list the base currency first in the pair, and the quote currency second.

This means that when you see a pair like EUR/USD, you are seeing the cost of 1 Euro in U.S. Dollars. An exchange rate quote of EUR/USD = 1.4436 means that 1 Euro costs $1.4436 in U.S. Dollars.

Likewise, the USD/EUR pair indicates the cost of 1 U.S. Dollar in terms of Euros. An exchange rate of USD/EUR = 0.6834 would mean that 1 U.S Dollar costs 0.6834 Euro.

The second reason for looking at the correct buy/sell ordered pair is that you'll want to know the difference between the 'bid price' (exchange rate) and the 'ask price' (what the market makers want for the currency).

The difference between bid price and ask price make up what is known as 'the spread'. Forex traders are subject to spreads when opening or closing trades in the buying position.

A Guide to Desiphering Forex Quotes

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Learning to read forex quotes can be a challenge. They present different information than the standard common stock quotes with which most folks are familiar. Should you determine, after spending plenty of time building a forex trading strategy, that you are ready to enter the forex trading market, then you need to make sure that you know how to properly read the foreign exchange trading quotes.

The first part of the quote lets the forex trader know which currency is involved. The nation listed first is referred to as the base currency. This means the trader currently holds that currency and he is using it to buy the quote currency, sometimes called the trade currency. For example, a quote that reads USD/JPY means that the forex trader currently holds United States Dollars and wants to trade them for Japanese Yen. Forex quotes always begin this way, with the two currencies involved forming what's called the cross.

Quick fact : The Forex market is by far the largest financial market in the world, and includes trading between large banks,central banks, currency speculators,multinational corporations, governments, and other financial markets and institutions.

The second part of forex quotes that a person needs to pay attention to is the pricing portion of the quote. To continue the example from above, if the quote reads USD/JPY=117.57, then the trader knows that for every $1 (USD) he trades, he will get 117.57 Japanese Yen (JPY) in return. While that may seem really simple, there are a few more details of these quotes that a forex trader needs to take note of before making the trade.

Did you know that the average daily trade in the global forex markets currently exceeds US$ 2-2.5 trillion !

Following the initial line of the quote, which contains the two currencies that form the cross and the exchange rate, is another line of information. This is probably more familiar to common stock traders. Bid prices and ask prices, which make up an integral part of forex quotes, function in forex much the same way. The bid price is the price at which a trader can sell the currency or in other words, that is the price that people are willing to pay for it. The buy price is what a trader will have to pay if he wants to buy the currency. There is usually a difference between the bid and the buy numbers, but it is seldom substantial.

Things to Know to Deal With Foreign Currency Exchange

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The main purpose of the foreign currency exchange market is to make money but it is different from other equity markets. There are various technical terminologies and strategies a trader must know to deal with currency exchange. This article will give an insight into the normal operations in the foreign currency exchange market.

In the Currency Exchange market the commodity that is traded is the foreign currency. These foreign currencies are always priced in pairs. The value of one unit of a foreign currency is always expressed in terms of another foreign currency. Thus all trades incorporate the purchase and sale of two foreign currencies at the same time. You have to buy a currency only when you expect the value of that currency to increase in the future. When it increases in value, you have to purchase the currencies you have bought to make your profit. When you buy or sell a currency then the trade is called open trade or in open position and can be closed only when you sell or buy an equivalent amount of currency.

You must also understand how the currencies are quoted in the currency exchange market. They are always quoted in pairs as USD/JPY. The first currency is the base currency and the second one is the quote currency. The quote value depends on the currency conversion rates between the two currencies under consideration. Mostly the USD will be used as based currency but sometimes euro, pound sterling is also used.

The profit of the broker depends on the bid and the ask price. The bid is the price the broker is ready to pay to buy base currency for exchanging the quote currency. The ask is the price the broker is ready to sell the base currency for exchanging the quote currency. The difference between these two prices is called the spread which determines the profit or loss of the trade.

The bid and ask prices are quoted in five figures. The spread is measured in pip which is defined as the smallest change in price based on the current conversion rates of the currencies under consideration. For USD/JPY if the bid price is 136.50 and ask price is 136.55 then spread is 5 pips and you have to recover the five pips from your profit.

Margin used in the foreign currency exchange terminology refers to the deposit that a trader makes to his account to cover any losses expected in the future. A high degree of leverage is supplied by the brokers to traders for currency exchange. The ratio is 100:1 normally. The brokerage system will calculate the funds required for the current trade and will check for the availability of margin before executing any trade.

Making Sense of Forex Quotes and Pips

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Forex quotes are always listed in pairs, these quotes reflect the exchange rates of the currencies. These pairs look like this: GBP/USD = 1.9714. The currency listed first is known as the base currency (being the base of the trade), the second is called the counter, or quote currency.

All well and good, but what do these numbers mean? The value of the pair is a ratio of one unit of the base currency to it's equivalent in the quote currency. Supposing that you expect the value of the base to rise against the quote, buy the base currency and sell the quote currency, and vice versa. As an illustration, say that the value of the Euro (EUR) is expected to rise against that of the US Dollar (USD). In this case, buying Euros and selling US Dollars at the same time is what you would normally do. This is called going long.

Further, take the Forex quote CHF/USD = 0.8944 as an example. Say that the Swiss Franc (CHF) is expected to fall as compared to the US Dollar (USD). You would sell US Dollars and buy Swiss Francs - this would be going short.

Now, in an actual Forex trading situation, the exchange quotes will be listed at two slightly differing prices, for instance: EUR/USD = 1.7420/1.7425. The left quote is the Bid price, the right is the Asking price. The difference between these is call a Bid/Ask spread, or just Spread for short. The Bid price is the price you can sell your currency for, while the Ask price is the price at which you can purchase the currency.

This spread means that if you were to buy a great deal of currency, then sell it before there had been any change in the relative values of the two currencies, you would lose money on the trade, but the dealer would make money from the trade. A Forex dealer makes their money from the Ask/Bid Spread. They are in a good position, as they stand to make money whether or not you do well with your trade.

Forex quotes are typically quoted to four decimal places - for example:

USD/EUR = 0.6793
EUR/GBP = 0.7468
GBP/CHF = 2.2041
CHF/AUD = 1.0095

The exception to this rule, at least among the major currencies, is the Japanese Yen (JPY) . If the Yen is being quoted, then the Forex quotes are just to two decimal places, as in these examples:

USD/JPY = 109.32
EUR/JPY = 160.95

This is due to the value of the Japanese Yen being only about one hundredth of the value of one U.S. dollar.

A change of 1 in the last decimal place in a quote is named a Pip. this is the smallest amount by which the relative values of two currencies will change. Normally, a Forex brokers commission (the Ask/Bid Spread) will be somewhere between 2 and 5 Pips.

A movement of 20 to 50 Pips is a typical shift in the value of a quoted pair on any given day of Forex trading. The market can sometimes experience greater volatility though, with much larger movements being seen. In November 2007, there were some bigger shifts in the relative values of the US Dollar (USD) and the UK Pound (GBP), when the change in relative value of the two currencies was as much as 200 Pips on some days.

Usually, the daily changes in the Forex market are very small - so trading with very large amounts of money is the way to go if you are to make a sizable profit.

Let's say that the Euro (EUR) is expected to rise against the U.S. Dollar (USD). Based on this, you buy 100 Euros at a quote of EUR/USD = 1.4720/1.4725. A hundred Euros would cost you $147.25. If the Euro rises fifty Pips against the dollar the quote is now EUR/USD = 1.4770/1.4775.

Currency Exchange Agencies in the UK

2008-11-21T00:51:00.003-08:00

Traditionally it was the High Street Bank that was used to transfer currency abroad. Their reputation was second to none and generation after generation used them to Transfer Money Abroad. However in our competitive world we have seen Building Societies command more of the banking market by issuing 'bank accounts'; and also Currency Brokers who originally were formed to transfer large amounts of currency in moments for the Forex Trade Market, have now engulfed the transfer of large funds by being able to beat the processing costs of High Street Banks.

Currency Brokers as do High Street Banks buy their Foreign Currency at wholesale prices. But the one redeeming factor in the brokers favour is the percentage of profit added to each deal. The banks tend to add between 3% to 4%; whereas the Currency Broker will add up to 1%.

For the unsuspecting client this can be all confusing. When the High Street Banks are offering 0% commission why aren't they the best option? There isn't a simple explanation other than saying that over the past 4 decades a commission payment for the transfer of currency has been the normal process. The High Street Banks play heavily on this factor; as I may say do some Currency Brokers.

But ... What we need to establish is what will our money get us when transferred? Forget the 0% commission or any other special offer ... it is the bottom line that counts. If we have £100,000 what will we get?

For those who read this article and have their reservations about using a currency broker allow me to give you a few examples:

Currency Exchange Case Study - In September 2007 Jason and Helen wanted to buy an Apline ski home in Austria. The property was valued at £295,000. They hadn't gone to the bank as they had both heard that the banks weren't always the best choice. A broker will be fully aware of what the banks charge at what rates they work with: Barclays on this day was working with an exchange rate of ¬1.35 / £1; the broker on the other hand could get ¬1.38 / £1. Using Barclays, Jason and Helen would have received ¬398,250; whereas the broker actually secured him ¬407,100 which has a difference of ¬8,850 (£6,400).

Currency Exchange Case Study - In August 2007 there was Ellie from Southampton, she was buying a property in Almeria, Spain. Her transfer was for a villa at £325,000; a superb 5 bedroom villa with sea views. Her bank had frightened her with the exchange rate, so she decided to look elsewhere; fortunately she came to a Currency Broker's website. She was offered an exchange rate of ¬1.39 / £1; we were able to offer ¬1.41 / £1. This meant had she continued with the bank Ellie would have realized ¬451,750 - however fortunately the broker service could manage ¬458,250; saving Jayne ¬6,500 (£4,600)

Currency Exchange Case Study - Paul and Debbie from Bootle in Cheshire had taken 9 months to purchase a villa in Pescara in the Abruzzo region of Italy for ¬650,000; January 2008. Sadly when a house purchase takes so long there can be fluctuations in the currency rate, and on this occasion it wasn't in Paul and Debbie's favour. So it became even more important to save on the currency exchange. Had they gone to a bank they would have paid ¬8,100 more than what they paid a Currency Broker. They successfully managed to save them £6,090.

I hope that showing these examples have helped in your understanding. Do not be afraid to get a quote from an Online Currency Broker; they can provide testimonials should you be concerned.

Each and every step of the process is done through a traditional bank; and account is setup for each transaction and such transaction history can be supplied should you need it.

Forex Secrets. Delusion No1. Forex Currency Rate and Economic Factors Impact on Exchange Rate

2008-11-21T00:51:00.001-08:00

The delusion conceptually propounds that intraweek and intraday FOREX currency quotes movement is governed by either improvement or by deterioration of the state’s economic situation. But in reality, even in case the actual Forex news are superior to the estimated one, the FOREX quotes up/down movement is of 50/50 probability.

This statement is thoroughly important. Once the job of Forex trader is gambling on FOREX exchange rates differential (FOREX pairs up/down movement), the following is to be realized to obtain faultless profit:

FOREX pairs pricing mechanism (say at point X where you are completing the market analysis)

Factors imparting growth/decline to FOREX rates (up/down from point X).

Thus, having understood the FOREX ratesfactors effective at the extra-exchange (book-maker) FOREX market and the given currency motive factors, a trader must possess distinct knowledge of whether to buy or to sell the given currency pair.

So, what are these factors?

FOREX student suggest unambiguous interpretation of factors responsible for the price formation and the fluctuations there of:

Forex rate constitutes a demand-supply balance for a given goods (currency).

Any violation of this balance, (for instance, in case where the estimated news is in disagreement with the issued official one), results in the FOREX rates reciprocation in chase of a new demand-supply balance. Poor demand brings about decline in a certain currency rate, with a high demand leading to the growth of the latter. The situation continues as long as the currency buy/sell demand comes to balance at another level or at another point.

Referring to the B. Williams (“Trading Chaos 2” Chapter 1 “The market is what you are thinking of it”):

Each world market is dedicated to distribute or share limited amount of something… among those desirous to obtain it most of all. The market affects it by way of finding out and identifying the exact price? Underlying the buyer’/sellers’ power absolute equilibrium point.

The above point is readily established by stock, futures, bonds, FOREX and options markets, be it either via an open auction or by virtue of a computerized facility. Markets spot this point prior to any misbalance being detectable by You or by me or even by traders at the exchange floor.

With this scenario holding true – and it really does – we are in position to jump at certain simple yet important conclusions as regards the information being circulated through the market and enjoying doubtless acceptance”.

Thomas Demark was more laconic in “Technical analysis - an emerging science”:

“Price movement is governed by demand and supply. Should demand exceed supply, there’s a price rally and if visa versa, there’s a price decline. All economists do share these underlying principles”.

Hence, the role of fundamental analysis for FOREX market is readily apparent.

In scholar fiction one will discover roughly the following explanation, persistently wandering from book to book, from site to site and suggesting attaining successful trading at FOREX market by way of scrutinizing the country’s economic fundamental data, viz. by tracking the factors reflective of the country’s economy condition as below:

State economy condition dynamics indicators (GDP, trade & payments balance, current account, industrial production, etc. It is knowledge, that the higher the above indicators – the faster the economic and the currency price growth);

Stock indices, via average arithmetic index of the country’s securities market condition and dynamics. E.g.: 0.3% daily DJI growth in the USA means that this certain day the shares of 30 leading US companies, being pictured by DJU, went 0.3% more expensive. By similarity, DAX30 is the major German index, incorporating the price of shares of the country’s 30 leading companies.

The country’s interest rate, since the higher the rate, the greater number of investors is eager to invest into the country’s economy and hence into national currency strength.

Rate of inflation (the higher the rate, the quicker the National Bank will hike the interest rate). With this assumption, the CPI constitutes a key factor.

Money supply growth in domestic market, which fact brings about the inflation, leading to the interest rate hike.

The country’s gold and currency reserve assets.

Variation dynamics correlation of: balances of payment, trade balance, state budget, gross domestic product (GDP), etc.

Trade and industry dynamics (industrial production, industrial orders, DGO, capacity utilization, retail sales, etc.)

Construction statistics (construction spending, new home sales, housing under construction, building permits, etc.)

Labor statistics (unemployment rate, new jobs, etc.)

Society investigations (consumer confidence, consumer sentiment, purchase managers and service managers sentiment, etc.)

To be considered additionally are the country’s political stability and tranquility (clearly, any political, natural and other cataclysms are sure to turn investors nervous making them withdraw the investments from the country, thus weakening its national currency). And with the currency being the national economy derivative, changes in economic data will inevitably result in the above currency rate movement.

Conclusions:

Progress in economy results in the currency exchange rate rally.

Decrease in economic indicators leads to the national currency rate decline.

To sum it up, critical economic and political news (whose calendar is issued in advance and is familiar to any trader) constitute a standing factor giving rise to misbalance and causing the currency rate fluctuations.

In anticipation of important economic and political news FOREX pair crawl to the rates as inspired by the estimates (“rumored trade”), whereas upon actual news there occurs a pulse motion of FOREX pairs in accordance with the scheme below;

Forex rate grows if actual news are better than the estimated one;

Forex rate declines if actual news are worse than the estimated one.

The Burgeoning Foreign Currency Exchange Market

2008-11-21T00:50:00.002-08:00

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

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

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

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

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

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

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

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

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

The Trillion Dollar Currency Exchange Market

2008-11-21T00:50:00.001-08:00

Ciphering the Forex Quotes

2008-11-21T00:49:00.000-08:00

Decided to invest in the stock market and confused about the forex quotes. It really seems difficult to understand the forex quotes at first step but a foreign exchange quote is not as difficult as it appears to be. It’s mandatory to understand the forex quotes before you are going to make your first investment in the currency trading. To conquer the currency trading there are two important things to remember about the forex quotes:

• The first currency listed first is the base currency and
• The value of the base currency is always 1.

While trading forex, two-sided quotes come across, which consists of a bid and an Ask

Bid: Bid is the price at which one can sell the base currency

Ask: Ask is the price at which one can buy the base currency and at the same time selling the counter currency.

Foreign Exchange Trading Quotes Tips

• US dollar is considered as the 'base' currency for quotes. It includes USD/JPY, USD/CHF and USD/CAD in the majors.
• Combination of two currencies involved in trade is known as “cross”. USD/JPY means that the forex quote is valid for someone who wants to use United States Dollars to buy Japanese Yen.
• Quotes are generally expressed as a unit of $1 USD per the second currency quoted in pair. A quote of USD/JPY 120.01 means that one U.S. dollar is equal to 120.01 Japanese yen.
• When a currency quote goes up, it means that dollar has appreciated in value and the other currency has gone down.
• If the USD/JPY quote increases to 123.01, the dollar is stronger because it will now buy more Yen than before. British pound (GBP), the Australian dollar (AUD) and the Euro (EUR) are the three exceptions to the above mentioned rule. If a quote is GBP/USD 1.436 it means that one British pound equals 1.4366 U.S. dollars. In these three currency pairs, where the U.S. dollar is not the base rate, a rising quote means a weakening dollar, as it now takes more U.S. dollars to equal one pound, euro or Australian dollar.

Currency Quote

2008-11-21T00:42:00.000-08:00

ADVERSE CURRENCY FLUCTUATIONS

Don't run the risk of fluctuations! Currency Brokers, can, by fixing a rate for your currency requirements today for a purchase in the future (up to 6 months).

Currency Example... The Pound against the Euro... 16 months ago was ¬1.48/ £1.00; 6 months later it was ¬1.32/ £1.00. On a £100,000 transfer the difference in those 6 months is £12,000

Currency Example... Again the Pound against the Euro... in February 2008 the exchange rate was ¬1.32/ £1.00; in July 2008 it is ¬1.26/ £1.00. On a transfer of £200,000 the difference in those 6 months have been ¬8,000 (approx £6,000)

When getting a currency quote the Currency Broker can give you a quote by using a fixed rate that is valid for 6 months. Using the Euro against the pound is, and has been a good example of two currencies on the move with fluctuations daily

Trading Currencies and Buying Property Abroad are the two major reasons for changing currency. A close third is when regular payments are made to a different country and subsequent different currency. However a casual approach which is taken by many when buying property abroad can be the single most expensive part of buying abroad.

Getting a 'Currency Quote' when buying property abroad is obviously an important process, but more importantly is getting at least two quotes, possibly three. At the end of the day it is a competitive market and we should compare quotes.

To conclude; where I started about currency fluctuations... When buying property abroad, remember this process... When you first have an offer accepted it is wise to get a currency quote and ask about getting a fixed rate quote which will be valid for 6 months. Plus get the advice of the currency broker as they deal within currencies 24/7. Many experts have suggested the Euro has hit its peak against the Pound and perhaps over the next 6 months the pound may gain some ground lost over the last year.

Forex Robots - 6 X Facts That Cause Most to Lose Equity

2008-08-28T11:37:00.001-07:00

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If you want to buy a forex robot, you should consider the facts enclosed because if you understand them you can avoid the losing majority of automated forex trading software and find the small minority that win...

Here are your forex robot facts - make sure you understand all of them before buying one.

Fact 1: Most Do Not Have Real Track Records

They claim to have made money but a quick look at the disclaimer shows they are simply paper simulations going backwards and you see the words in hindsight and simulated in the disclaimer. See this and pass it by, it probably won't make you any money for the next reason.

Fact 2: Most Robots are Curve Fitted

This means when the simulation is done, the rules are simply bent until they fit the data segment being tested shows a profit and this is pointless. Why?

Because the same price history will never repeat itself again exactly as before and you cant bend the rules going forward!

Fact 3: You Can't Win on 100 investment

The fact that anyone says you can is relying on you being very, very lucky, or knows nothing about forex trading.

The minimum you should consider is a $1,000 and preferably $3,000, to ride out any drawdown periods.

Fact 4: Any Trading System will have Long Losing Periods

Forget the statement you can make a regular income - you can't.

Even the best traders have losing periods that can last for many weeks or months. This doesn't mean you can't win long term you can but beware, you will face long periods of losses.

Fact 5: Most Vendors are NOT Successful forex traders

If they were, they wouldn't be selling you a forex robot for $100 and claiming it makes $100,000, they would be to busy making money to bother you.

Ever wonder why everyone in the world isn't trading?

Well the answer is - only the naïve or greedy trader buys a forex robot thinking he can get rich for $100.00 or so.

Fact 6: The Minority that Win

Have real track records and cost a few thousand dollars but they are a great investment and can make the investment in them back many times over but be aware, even the best ones have periods of losses ( normally 20 - 50%) and these can last for weeks, so you need discipline to trade them.

You can win with a forex robot but it's a fact that most sold will simply destroy your equity and do it quickly. So cut through the hype, be realistic and go for one which has at least been proven in the real world of trading and is not just made up in hindsight!

Forex Trading Software - Use The Best For Successful Trades by JON ARNOLD

2008-08-28T11:36:00.001-07:00

You have heard about the vast sums of money that can be made with smart forex trades, but what forex trading software is best and gives you the greatest advantage? If you have been searching for some forex trading software for any amount of time, you probably already realize that there are many of them out there, and it seems like the claims of one are only superseded by the claims of the next one.

To determine which one is best, you first need to get some understanding of what the forex market is, since any software that devotes its time to teaching you what forex actually is will probably have lesser capabilities in other areas, like doing a very thorough analysis of the vast amounts of data that needs to be considered when making a trade decision.

Forex is also known as foreign exchange or foreign currency exchange. This is the task of exchanging one country's currency for another country's currency and then re-selling it again, perhaps in the same country or another country to make a profit based on the constantly changing currency exchange rates. The total forex market is probably the largest market on the planet, doing more than $3.8 trillion (USD) a day when considering it from a worldwide perspective.

It is difficult to determine which forex trading software is best so one of the first things you need to do is determine what you need the software to do for you. And in order to do that, you need to gain some understanding of the forex market so that you can determine which aspects of forex trading can be done by software, and which parts really should be left to you for the final trading decisions.

One of the problems of just going to a search engine like Google and entering search times for the software package and the word "review" is that those can be toyed with. The author of a software package might have a dozen blogs or web pages setup that provide a favorable review of his software, but they were all created by him, so the person looking for a review of that forex trading software would find a high number of favorable reviews.

Look for what kind of support the software offers. Do they have a phone number to call? Probably not, since forex trading happens 24x7 worldwide, and having a support center open 24x7 is an expensive proposition. Do they have an online forum where members can post questions and get answers from either the author or other members? Can you email questions and get answers in a reasonable amount of time? There are very few things worse than owning a piece of software and being stuck with something you don't know how to do, knowing that while you are spinning your wheels, successful forex trades are going on all around you.

Look for a money back guarantee. If the author is willing to back up his clams with this kind of guarantee, then you should feel a lot better about giving that forex trading software a try and putting it through its paces. One of the best forex trading software programs is shown at our web site.

Developing A Successful Forex Market Strategy

2008-08-28T11:35:00.002-07:00

Forex is probably the largest market on the planet and it is always changing, worldwide, 24x7. This aspect is one of the things that makes forex so exciting. With that kind of activity, it is not always accurately predictable, but you need to understand the market so that you can jump on profitable trades and minimize your losses in losing trades, which is all based on the strategy that you utilize.

Nobody in their right mind would just jump into the forex market blindly. That would be even worse than attempting to pilot a 747 jet if you have never had flying lessons. Jumping in without a good understanding of the forex market is reckless at best, and you would save yourself a lot of time by simply lighting a match under your money. the ins and outs of forex currency trading, and the various factors that go into making an informed and intelligent trade decision.

You must understand that forex trading is a gamble, and like the advice offered to those who enter a typical Vegas hotel, never play with money you cannot afford to lose. There are no guarantees in the forex market, which means that you need to utilize all the tools at your disposal to ensure you have considered all factors that will impact a currency's value, both now and in the future. The forex strategy that you use needs to allow for the possibility that you will make losing trades. Every forex trader on the planet makes an occasional losing trade, this is part and parcel of this market, but your strategy needs to protect your assets in that way to minimize your losses and maximize your wins.

Many forex traders simply follow other forex traders. While this could be a strategy, can you see how and why it is not a good one? Other traders are not likely to share with you what they intend to do until after they have done it, and with the rapidly changing market, it is unlikely you could get in at the same forex rate that they did, which will minimize your income. The much bigger money is in doing the analysis and making your own trades, not by following others who have no incentive to tell you what they are going to do anyway.

Take the time to learn the forex market, since the financial rewards are huge, but make sure you also protect yourself by allowing for a potential loss. For more insights and additional information about a Forex Market Strategy as well as reviewing one of the best forex software systems available anywhere, please visit our web site at http://www.forexcurrencysystems.com

One component of any good forex trading strategy is to avoid putting all of your investments in one currency. Do you remember the old saying about not putting all your eggs in one basket? This is the same thing and there is a lot of wisdom there. If you spread out your investment amongst many different currencies, it is far less likely that your investment would be wiped out in a single unsuccessful transaction.

There are many moving parts involved with successful forex trading, as well as a virtual mountain of data that needs to be analyzed, interpreted, and forecast as to how that will affect a particular currency that you may want to trade. The most successful traders use a forex trading software package that can help them do the required analysis. Such software would do the lower level work of doing the intensive and gut-wrenching analysis. Based on the number of elements that should be considered that can affect a currency's value, trying to do work manually yourself is going to almost definitely be a losing proposition.

Forex Trading Advice -

2008-08-28T11:35:00.001-07:00

If you want forex trading advice and want to win at forex trading, you can get all the advice you need to build a forex trading strategy for big profits for free and here we will show you how to find it...

Most of the so called experts online are anything but and in most cases there not even traders. They sell dubious forex robots and sure fire predictive systems with paper simulations and look for naïve or greedy traders to buy them and plenty of traders do.

In forex trading you need to learn and understand what you do, so you can trade with confidence and you can do that for free.

Before we look at good advice, let's look at avoiding the bad and here are some prime examples.

Forex trading forums

If you want to find a bunch of losers, there are plenty in forex forums.

The guys here who spout forex advice, are normally traders who can't make money, so it makes them feel better to give you their wisdom or vendors, looking for people to buy their product.

I don't know any successful traders who hang around forums, so avoid them.

Broker Advice

Lots of brokers give research and advice but if brokers were good traders they wouldn't be brokers! Most are market makers and make money when you lose, so it is a conflict of interest too.

Forex News

CNBC, CNN etc great reporting but it won't help you trade and all the experts you see tell good stories but that's all they are stories and normally news reflects the herd and keep in mind, the herd losses.

Never trade news or expert opinion from it. If it were that easy to make money a lot more people would be successful!

Good Advice and Where to Find it

Let's stress some basics First.

The best way to win at forex trading is to use forex charts and technical analysis and lock into forex trends. There is free information online that gives you everything you need to know about technical analysis and lots of free chart services as well.

These are the keywords you should really understand and study

Support and Resistance.

You need to of course know everything about this.

Breakout Methodology

If there is one method you should start with is trading breakouts so look them up.

It's a fact that if you trade breakouts, you will be in on every major move as most big trends start from new market highs or lows.

Momentum Oscillators

If you want to trade breakouts you need to confirm them and a through understanding of momentum indicators is needed, as they can confirm the move.

If you look up the above you will have the basics of a simple system you can use to trade breakouts and have a sound simple forex trading strategy.

The Key to Trading Success

You should then look up and study everything you can on money management, volatility and standard deviation and the important trait of trading discipline.

You can get it all for free you can get the knowledge and confidence you need to trade your system.

Does that sound too simple?

Well forex trading is based around a simple strategy, you understand and can have confidence in and can execute with discipline.

Forex Trading -These Ordinary People Made Millions After 2 Weeks Training How? by KELLY PRICE

2008-08-28T11:34:00.000-07:00

In one of the most famous trading experiments of all time a group of people who had just 2 weeks training went on to make hundreds of millions of dollars. What did they do to achieve such stunning success?

This story motivated me to trade and I hope it does the same for you and concerned a bet. The bet was between Richard Dennis and his partner and the bet was based on:

Could traders be made or were they born.

Dennis thought they were made and set out to prove his point.

He got a group of ordinary people together including - an actor, a security guard, a boy just out of school and a female auditor, to name just a few and they only had one thing in common:

They knew nothing about trading but Dennis was about to change that in spectacular fashion.

Dennis set about his task and taught them to trade in a couple of weeks and the rest is history. They became legends and made hundreds of millions of dollars, Dennis had proved his point.

So why did this group do so well while it's common knowledge, that 95% of traders burn their equity quickly?

Well what you can learn from the experiment is:

Anyone can learn to trade - but success is determined as much by mindset as by method.

Let's look at this in more detail.

Dennis taught them a simple trading system (basically a long term breakout method) and combined it with strict money management.

Dennis knew that most traders fail due to lack of discipline - they simply cannot trade through drawdown periods and take losses and keep on track, until they hit a home run.

So he didn't just tell them to follow the system - but to know everything about it including, how and why it worked and how it could lead them to success.

In short he taught them the method and made them understand that they were responsible for their success.

Compare this to most traders today, who think they can get rich with no effort.

Most traders today, want to followers but this is doomed to failure, because success comes from within.

Trading requires discipline above all else and you need iron discipline to win.

This is hard for even veteran traders at times when the market continues to hand you losses and you look stupid. Don't believe the rubbish you read on the net about consistent income - you will take losses for weeks or months at a time and you need to stay on track, until you hit a home run.

It's a motivating story and this group called "the turtles" showed that anyone can achieve success, with the right mindset and education. Sure you might not make as much money as them however the opportunity is there and even if you don't you can enjoy currency trading success and make a great income for the effort you put in.

Read more of their story and I hope it gives you the confidence to trade, as it did for me 25 years ago and got me started in the world's most exciting investment!

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International Currency Trading - 95% OF Traders Lose Could You Win? by KELLY PRICE

2008-08-28T11:33:00.000-07:00

International Currency Trading is an exciting investment but is not for everyone and you should think carefully before trading keep in mind 95% of traders lose. So consider the points below and they will give you an insight on what it takes to win...

Most traders' think they can shoot from the hip and win trade the news or trade their gut felling but they lose and so do the sheep who follow gurus, mentors or forex robots and don't know what there doing.

These traders don't get the point of what currency trading online is all about.

In international currency trading the first thing to understand is:

You need to understand what you are doing and that means educating yourself on how and why markets move, so you have the confidence and discipline, to trade your system and execute your trading signals through losing periods ( all traders have them) until you hit a home run and hit the big profits.

If you don't have the discipline to follow your system, you don't have one! Many traders could win but throw in the towel and quit to early, when if they would have stayed on course and had the courage of their conviction, they would have been rewarded.

Most traders simply cannot accept the following points:

- Success depends on you and you cant blame anyone else

- You don't get rewarded for effort you get rewarded for results only

- Trying to be clever wont help you, forex success is based on simplicity

- The market price is always right and only you can be wrong, so your ego is the enemy!

- You need to make and live by your own rules to survive

- You need to isolate Yourself from majority opinion and rely on yourself

A World of Opportunity

For the trader prepared to accept responsibility however, you can see that international currency trading, offers some fantastic advantages to build wealth.

- You don't need to work hard just work smart

- You can use a simple forex trading system and win

- Your not after perfection just a profit

- You like relying on yourself and know only you can give yourself success

- Anyone can learn to win - trading is a learned skill

- International currency trading gives you the vehicle for big gains.

It's NOT Easy but You Can Win

The main point we are trying to stress in this article on international currency trading is, while it is not easy to win, currency trading success is within reach of anyone, if they have the right mindset and can apply themselves. You can develop a forex trading strategy for success in a few weeks and then be making big consistent profits in around 30 minutes a day and that's a fact.

Understanding How A Forex Rate Works

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so then you would swap back again and realize a handsome profit because now the British pound is worth more than you paid to acquire it.

To be successful with your forex trades, you will be looking at forex rates constantly during the day. One of your tasks is to thoroughly examine the various trends in the countries and predict how these factors will impact the value of the country's currency. For example, if all the factors you are watching, including the rate, seem to indicate that the British pound is beginning to increase in value compared to the Euro, you might want to consider swapping your Euros for British pounds. But it does not stop there, because as you continue to watch the rates, even on the same day, it may show that the British pound has become strong again, The forex rate is the most critical thing to be considered for a forex trader because he needs to determine how that rate will change amongst the various world currencies. If you have the desire and motivation to be involved with forex trading, learning about forex rates is critical to your success.

Many of the most successful traders in the forex market use some type of forex software package to help them with all this analysis. The software will not make the trades for you automatically without you having to indicate that you do want to do a trade, but simply based on the sheer volume of data that needs to be evaluated, there is some very good forex trade software out there. Our web site outlines one of the best forex software packages available anywhere that has an outstanding track record.

The factors that influence the forex rates are just about any social, economic, or political event that is occurring in that country at a given time. Is this a lot of data to consider? It absolutely is, but at the same time, it is imperative that as many of these variables be taken into account so you can make the best trade decisions possible.

Forex Trading System - A Requirement For The Serious Forex Trader

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If you're new to the world of Forex trading, you're going to need a Forex trading system to help you in your endeavors. Number one, you're going to need to sign up with a Forex broker so that you can engage in trades, and number two, you're going to need to develop your own Forex trading system so that you know what you're doing and know your way around Forex trading. This will help you be successful as a Forex trader.

Learning your way around Forex trading is challenging but rewarding. It's going to require a learning curve, so you're going to need to learn some things about Forex trading before you start to trade with your own money. If done properly, though, you can become successful as a Forex trader.

First, understand that Forex trading is not like trading in the stock market. With Forex trading, you trade in currencies. Your particular Forex trading system is going to have to be developed on the idea that one currency in a particular currency pair (both of which you pick) is going to do better than the other. For this, you need to learn about two different types of analysis.

The first, fundamental analysis, studies the political, social and economic forces in those currencies' countries. If one country, for example, is particularly stable in its politics, government, economy or social structure, its currency is likely to do better than the currency of a country that is unstable in those same areas.

Technical analysis, on the other hand, has you studying and analyzing a particular currency's patterns and trends. This means that you'll need to learn to read charts and make predictions based upon what those charts say. As one example, if a particular currency is doing very well and has been rising steadily, it's probably going to continue to do so for at least the time being. You're still going to have to keep an eye out for any changes that occur and make adjustments based on those changes, of course.

Your Forex trading system is also going to teach you how to learn how to execute the different types of orders so that you can buy, hold or sell trades so as to maximize your success and profits. One note about learning your way around the Forex market and your own system is that you should sign up for a demo account with the particular Forex broker you choose. Demo accounts allow you to "trade" in practice mode just as though you are executing real trades, but without spending any money. In this way, you're going to learn your way around Forex trading without having to risk any money of your own until you're truly ready.

Demo or practice trades are important for another reason, and that is that they teach you how to lose money on a trade as well. This is important, because you're going to have to learn to lose money and to win money properly in order to succeed. What do I mean by that? I mean that you can't let losing a trade devastate you; every single Forex trader, including those who are very successful, will lose on a trade every now and again. In addition, if you're winning on a trade, you're going to have to know when to get out if your data says you should, even if the trade itself is still succeeding. This means that you have to have the psychological makeup and fortitude to manage your trades with detachment, and without becoming emotionally involved.

Finally, when you do begin to trade, trade small. This lets you learn how to trade with real money as your next step, but without risking a lot until you're truly experienced. Most Forex brokers will let you trade with as little as $10. In the beginning, yes, your gains are going to be small, but so will your losses.

As you start to get more familiar with Forex trading, one of the things you will undoubtedly discover is that the more familiar you are with the various conditions and factors in each country whose currency you are trading, the more accurate you can be in predicting which way their currency will move. This involves a detailed analysis of virtual truckloads of data. You may want to consider allowing technology to help you with this part of it, with one big recommendation being the software shown at our web site, which is one of the most popular and one of the most successful package available anywhere.

Forex Currency Trading

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The forex currency trading is the foreign exchange or currency exchange market. The values of different currencies rise and fall in relationship to other countries monetary units. That change is what Forex traders hope to monopolize and capitalize on. There is normal daily fluctuation in exchange rates, even multiple times daily. If you’ve ever traveled outside the country, for example, even to Canada or Mexico, you notice that the currency exchange varies from morning to afternoon and daily. This fluctuation is what forex currency traders try to capture.

In the forex trade, there are two different types of currency used. Even though you may be American, the money in your account may be yen and you want to exchange it for Euros. You don’t have to stay within your own country, you just need a second form of monetary exchange. Quotes show in pairs also. EUR/USD shows two currencies. The first is the base currency with the second the counter currency. If you choose a buy for the combination, you trade USD (United States dollars) for Euros. You believe the Euro is growing faster than the dollar, or the dollar is dropping in relationship to the Euro.

Forex currency trading used to be isolated to the very rich, governments, multinational corporations and central banks. Today more and more individuals and private investors trade currency. The average daily trade of US currency is over 4 trillion dollars and growing daily.

Although forex currency trading is different in many ways from stock trading, they do have some of the same characteristics. For instance, the way brokers are paid is similar to the NASDAQ. The spread is used. The spread is a price differential on both buy and sell transactions.

Unlike exchanges on the stock exchange, both sides of the position must close before the currency is available to make another trade. There is no actual delivery like the stock exchange but conversion takes place through banks and specific exchange organizations.

You also can buy on margin, just like in the stock market. The difference is the amount that the account needs to hold. Margin purchases in the stock market require 50 per cent of the account balance. Instead, it more closely resembles the margin of the commodities, which is between 1-10 percent. The margin in a forex account is 1 per cent. This is the actual amount that you deposit to make trades. If you put $1,000 into the account, you’d have $100,000 worth of buying power in the account.

There are the normal charting tools to use for forex currency trading. The biggest difference is that you need to know about both types of currencies, as opposed to just the stock of one company. Daily events and news from the different countries change the values of the currency. This is similar what happens to stock, except, you’re not talking about just one company, where, unless some outrageous scandal happens or earnings announcements occur, there’s seldom news. Every day countries have news stories that have the potential to raise or reduce the value of the currency.

A Mint Via The Forex Forecast

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There are various techniques to make a forex forecast. If you’re involved in forex trading, you already understand that it is the exchange of two different types of currency. You sell one to buy the other. Each trade is really two different trades. The successful forex trader takes advantage of the exchange rates and tries to find trends in the money market that allows them to monopolize and maximize their return.

If your account is in USD (United State dollars) and you believe the Euro is going to go up in relationship to the dollar, you want to sell the dollar and buy the Euro. The way you write the exchange is EUR/USD buy. The Euro is the base and the USD is the counter currency. If your instructions were buy, you’d buy the Euro and sell the USD. The instructions are always describing the base currency with the counter having the opposite type of exchange. If you ordered a sell then you’d sell the Euro and buy USD.

Forex forecast consists of two different methods. You can use the technical analysis or fundamental analysis. Fundamental analysis forecast with events and how they should affect the market. The technical forex forecast puts its primary focus on what already occurred within the market. It uses chart to help predict what happens next according to the price movement.

Technical analysis takes the price, the volume and sometimes also interest to create charts. It uses the movement of the past to predict the movement in the future. Much like stock charting, it takes the data to create instruments to use as tools and often follows and adjusts the charts in real time. Even though you may know that the market should drop because the country, for example, had a massive hurricane, if the movement of the currency doesn’t indicate that movement, then all the fundamental information in the world doesn’t count.

Technical analysis also looks at the trends or patterns of the currency and anticipates the past will predict the future. Many different patterns are repetitive and forex forecasting uses the charts to find that information. The trends and patterns repeat often with little deviations. This makes the tracking easier.

Technical analysis uses five basic categories that involve the price. They use indicators, the number theory, waves, gaps (between the high and low) and trends (also known as the moving average.) Many who trade stock will find these terms quite familiar. Fundamental analysis forecasts the future movement of the currency price from political, economic, social, and even seasonal factors. The fundamental analysis for a forex forecast correlates to looking at a company’s financials and news to forecast stock movement. Understanding the country’s supply and demand, seasonal cycles, weather and governmental policies, both monetary and otherwise, help predict where the price should land.

Most successful traders use a combination of both forms of forex forecast to make their decisions to buy and sell the various currencies. Knowing the countries and their historic patterns of value in relationship to events can only tell so much, watching the technical patterns helps to fill in the gaps and adjust for attitude changes or inaccurate information. For more insights and additional information about how a Forex Forecast as well as a review of one of the foremost forex software programs available anywhere for the serious forex trader, please visit our web site at http://www.forexcurrencysystems.com

Forex Charts – Simple Tips for Bigger Fx Profits

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This article is all about using technical analysis the RIGHT way - and using Forex charts to make big consistent profits.

Here we are going to look at some proven ways of analyzing forex charts and some great indicators.

You can then use them to generate trading signals, to zero in on the low risk high profit opportunities all traders want.

1. Trend Lines

You need to start and learn to draw basic trend lines to spot opportunities, it may sound old fashioned but it’s the best way to spot trends.

2. Support and Resistance

The basis of most of the top trading systems.

Support and resistance is simply defined as levels where prices move to and then reverse.

In a rising market prices rise to resistance levels and fall while the exact opposite occurs in a bear market.

When prices break above or below significant support or resistance, a good trending move could be on the way - especially if the resistance or support is valid.

So how do you know if support or resistance is valid?

Look for lots tests - and look for how many different time periods tests have occurred in - by looking back at your Forex charts and also the distance in time between them.

3. Breakouts

If prices break through important support or resistance, then the odds are that the supply and demand position is changing and a new trend will develop.
Trading with breakouts, and trading in the direction of the break is profitable but most traders can’t do it.

Why?

Because most traders like to buy low and sell high.

They wait for a pullback to buy at a better price - and it doesn’t come and the move is missed.

Most major currency trends start from new market highs - NOT market lows.

To catch the trend you need to go with the break and forget about buying low, however not every breakout will work but how do you spot the ones that do?

You need to watch price changes in terms of momentum and volatility.

Volatility Changes

Volatility is a term used to describe the magnitude, or size, of day-to-day price fluctuations - regardless of their direction.

Generally, changes in volatility give clues to changes in price. A breakout that is accompanied by high volatility, is the ideal set up.

An indicator you should look at to determine volatility is the Bollinger band.
Bollinger bands can also help you identify support, resistance and targets for the move and are an essential indicator.

Price Momentum

Momentum is a general term used to describe the speed at which prices move over given time-periods. Momentum indicators can therefore determine the strength or weakness of a trend by looking at shifts in price momentum.

If price momentum increases on a break, then the odds are that the break will continue and a new trend will develop.

There are two good indicators for looking at changes in momentum:

The Stochastic and Relative Strength Index (RSI).

There is not enough room here to go into how they work simply see our other articles or look them up on the net, both give a highly visual picture of changes in price momentum and are easy to use.

Finally

If you can draw trend lines, spot breakouts and use volatility and momentum indicators that we have outlined above you could soon be on your way to making big consistent profits with your forex charts.

Winning Strategies With Forex Charts

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As you read forex charts, remember that the two fundamental approaches for online forex trading: fundamental analysis and technical analysis.

Fundamental analysis doesn't rely on forex charts. It scrutinizes political and economic indicators to determine trades. Charts here are deployed as used as a secondary reference.

Technical analysis on the other hand, attempts to predict price swings by analysis of historical price activity. Those who use technical analysis study the relationship between price and time.

The most actively traded pair of currencies is the Euro and the US dollar, so we will use them in our example. The dollar is on the right hand side of the chart and the Euro is on the left hand side. The currencies are expressed in relationship to each other in pairing. Forex charges will always display how much of the currency on the right hand side is necessary to buy a unit of the currency on the left side. Looking at the typical EU-USD, chart you will notice the last price displayed per given date. This number is always emphasized. The time is tabbed horizontally across the bottom of a chart and the price scale is displayed vertically along the right hand edge of the chart. The time and the price are set in all caps to help the trader remember that technical analysis rests upon the relationship between time and price.

The trader observes the price and time movement on a chart. These include bars, lines, point and figure, and Japanese candle sticks-- the most favored method. With the candlestick method there is a large, red section that is the body of the candlestick. Lines protrude from the top and bottom and they are the upper and lower wicks. When you look at all the candles on a chart it is apparent that bodies come by difference sizes. Sometimes no body exists at all.

The same is true with wicks. Candle wicks come by many difference sizes; there may be no wick at all. The length of the body and the length of the wick are determined by the price range for the candle. Longer candles will have had more price movement during the time that they were open. The top of a candle wick is the highest price for that currency while the wick's bottom is the lowest price. A currency is bullish when the close of the candle is higher than the open. In simple terms this means that there were more buyers than there were sales during the opening time period. Sometimes the candles will not have wicks. The price opened and it dropped off until it closed.

Forex charts don't offer bullet proof trading hints, but they can help a trader. Past trends do have their place in forex trading as most traders will admit, and using the charts to track historical trends can assist a trader in making a snap decision.

The online investor typically joins a service that provides realtime charts that updates on currency activity. Charts can be checked on a minute to minute basis. For those who primarily do their trading based on historical accuracy this can ease the burden of prediction.

Most forex traders however use a combination of fundamental and technical analysis. They may chart historical trends, but they will also pay close attention to political, cultural and economic indicators within a region. They might use charts and other techniques to check correlation between political climate and currency fluctuations. But even the most sophisticated technical analysis software or tool has its limitations. A trader must be prepared to take risks... and invest money that is not needed for the immediate future.

Forex Charts - This Equation is Critical for Forex Trading Success

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The equation in this article is the equation that makes market price move and if you don't understand its significance you are 100% guaranteed to lose and join the 95% of traders who lose their money, so here it is:

Fundamentals (Supply and demand news) + Investor Perception (the sum total of opinions = Price

IT MAY BE SIMPLE BUT:

Let's looks at how people don't stop to digest its significance when implementing their forex strategy.

We all have the facts - there for all to see but we all make subjective judgements based upon what we see (and we all see things differently) and the total mass of humans observing the facts is the price.

So what is the best way to trade?

Well first let's look at what won't work and a huge number of traders make the following mistakes and burn their equity.

- Any Method That Tries To Predict

If you try and predict you're hoping and guessing and you can't guess what a huge mass of traders is going to do in advance - you should only react to the price as it is.

Think of how many people try and predict by buying a dip to support and hoping it will hold - well if you rely on hope you lose.

- Any Method that Applies Science

Human nature is constant so markets so you can use scientific theories to accurately predict market movement - Wrong

Stand up anyone who follows Gann, Elliot wave or Fibonacci - they all claim they have scientific theories -but by definition a scientific theory should work all the time and none of the above do.

There is no scientific theory of market behaviour, because if the markets were scientific, we would all know the price in advance and there would be no market.

This is common sense! But many traders who show it in everyday life forget it when trading forex.

- Day Trading

So you can predict what millions of traders are going to do in the short space of a few hours - Really? Try it and lose, all short term volatility is random and you can't win.

- Trade Breaking News

Sure you get it in a split second but so to does everyone else and the fundamentals are instantly discounted by the price, so it is impossible to trade.

SO HOW DO YOU MAKE MONEY?

The first point to keep in mind is that forex trading is a game of odds - NOT a game of certainties but if you play the odds you can make a lot of money.

The best way for a novice trader is to ignore the fundamentals (these facts discounted instantly) and simply follow their affect by looking at the reality of price on a forex chart.

A forex chart however gives you something more - it shows you how ALL The participants view the facts, so by following and trading price trends you can profit.

What you need to look for are trends and execute trading signals in line with price momentum to keep the odds in your favour.

For example, you see prices dip to support (which you expect to hold) but you don't trade until you see prices turn away from support supported by price momentum

You then execute your trading signal based upon the reality of price.

Your not going to win every trade (remember were trading odds not certainties) but if you do it correctly you will win more trades than you lose and enjoy currency trading success.

A simple forex trading system is all you need.

Check support and resistance, execute on the reality of price momentum and use sound money management.

It may sound simple and it is - but you need to do your homework and be prepared to take losses as well as profits - but if you trade the odds you will enjoy long term currency trading success.

Forex Charts - 5 Essential Technical Indicators for Bigger Profits

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If you are using forex charts then you need to know about the indicators we are about to discuss if you use forex charts and these great indicators you will enhance your profitability – so here they are.

Here are your 5 indicators for bigger profits.

1. Relative Strength Index RSI

The RSI, measures the relative strength of price currently compared to the past:

The formula usually uses a 14-period input.

As an oscillator, above 70 is considered overbought and below 30 is considered oversold.

Watching prices turn down from overbought levels and up from oversold levels, can help you spot contrary trades and you can also use it to define the strength of the overall trend when trend following.

2. Stochastic

Is a momentum oscillator that can warn of strength or weakness in the market, often well ahead of time and allow you to initiate trades.

Is based upon the fact that when a financial instrument is trending strongly it tends close, closer to the high than when it is falling, where it will tend to close near its lows.

The best use of the stochastic is as a timing tool and taking crosses with bullish or bearish divergence to indicate trend changes.

If you combine it with RSI It is the ultimate combination for timing trade entries – a fantastic but neglected trading tool.

3. Bollinger Bands

Bollinger bands give you an idea of volatility and standard deviation of price from the norm.

Bollinger Bands are based upon a simple moving average and standard deviation levels are plotted above and below a moving average.

Bollinger Bands are a technical tool used to determine whether a currency pair is high or low relative to its history.

Great for helping you pick areas of high volatility to buy and sell – they should be used to spot the opportunity then use other tools to time entry.

You can also in strong markets use the middle band as value area to get into existing trends.

4. Average Directional Movement

The ADX is a momentum indicator which tries to determine if the market is trending, or is trading sideways.

As you should always trade with the trend this is a great indicator for picking the strong trend.

Apart from determining the trend, it can be useful for taking profits – look for a rise above 40 and a turn down, to alert you to a trend change.

5. Moving Averages

Moving averages identify trends over specific periods smoothing out the day-to-day price fluctuations that are simply caused by market volatility and can be used to great effect with support and resistance to identify areas of entry to a trend.

The equation is:

The closing price is added up and divided by the period of the moving average.

Moving averages as a trend identification tool are great but you must use a period that is longer term.

40 or 200 day averages are great to use to identify areas of support and resistance then you can use momentum indicators to time your entry.

Don’t ever use them on there own or in to short a time frame use them for longer term trend identification only.

These are 5 of the best indicators you can learn and study and if you do so correctly with support and resistance levels you will catch more profits from them, spot turning points and time your entries with greater accuracy, for bigger profits.

If you use forex charts then make sure you study and use these tools.

Forex Charts - 4 Deadly Mistakes Made by Traders

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Using technical analysis and forex charts is an excellent way to make money in forex trading. The problem is there are a number of myths that traders fall victim to and lose. The mistakes are easy to avoid and enclosed.

1. Trying To be to Complicated

Many traders see all the indicators that are available to them and think they have to use them, after all 10 indicators are better than 2 - Wrong.

The best forex trading systems are simple and this means they are more robust in the hard world of real trading with fewer elements to break, than a complicated trading system.

Less really is more in forex technical analysis! All the best forex trading strategies used by successful traders are relatively simple and yours should be too.

2. Predicting Prices

If you try and predict forex prices your predictions will be as accurate as your horoscope and you will lose. Predicting is another word for hoping or guessing and that won't get you far in life or forex trading.

What you need to do is to simply act on the reality of price change.

Sure you miss the exact change but you can't predict that anyway.

Your aim is to make money not strive for perfection!

3. Scientific Methods

Leads on from the above and currency prices unfortunately don't move to a scientific theory. This is of course obvious because if they did, we would all know the price in advance and there would be no market.

A forex market moves because we don't and never will know what happens next.

So forget prediction and forget science, they won't help you your trading the odds but if you trade them successfully you will make a lot of money.

4. Invalid Data

The biggest mistake novice traders make is to believe the myth of forex day trading and scalping.

Forex day traders never make money and never will - why?

Because the data is invalid and all volatility in short term time frames is random.

As volatility is random, you can't get the odds in your favour and you will lose. You need to trade longer term time frames where you can get the odds in your favour and this means long term trend following or swing trading.

The above are the 4 biggest mistakes traders make with forex charts and there easy to avoid.

If you want to learn currency trading the right way, then you need to understand forex charts can help you achieve currency trading success only if you use them in the correct manner.

Forex Charts - Exhaustion Gaps a Hugely Profitable Chart Formation

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If you use forex charts trading exhaustion gaps can be hugely profitable. There one of the most reliable chart patterns to trade if you know how to take advantage of them. They don't come around often in forex trading but when they do, there a great formation and you can get some great profits.

What is a gap?

A gap in a chart is exactly as it sounds:

An empty space between one trading period and the previous trading period.

They usually form because of an important an event or in a market that is dominated by greed and fear. They tend to be highly reliable, because they reflect a highly reliable trait in human nature.
Short term price spikes never last for long and prices tend to return to areas of more realistic value.
The above reflects human nature pushing prices too far (as they always do) away from fair value and prices return after greed and fear has run its course.
Exhaustion gaps are marked by high volume, and can offer tremendous fade trade opportunities, with excellent profit potential as the tide turns and momentum shifts quickly.
Fact:
In most cases exhaustion gaps are filled soon after they are formed.
These emotional price gaps caused by panic and fear provide some excellent trading opportunities when looking for a reversal. The question now is how do you trade them?

There are several options open to you:

One of the best is to look for over bought oversold indicators and look for extremes - like the stochastic or the Relative Strength Index and hit a downturn from extremes.

You can wait for the gap to be filled (checking of course momentum supports your view) but another way is to top and bottom pick with options.

While forex options are not as popular as they once were, they can be an excellent risk control vehicle, offering you unlimited profit potential combined with limited risk.

All you have to do is trade in the money from the price you buy your option.

So hit it at the money and buy 3 months to expiry and get time on your side and you can ride out any short term volatility - you don't have to be to fussy about timing your trading signal, so long as you are confident the price spike will fade.

Exhaustion gaps are one of the best if not best chart formation to trade, as they reflect extreme emotions that normally fade within a very short period of time.

You don't get to many exhaustion gaps in forex, because it's a 24 hour market and they really only come over the weekend on the open of Far East trading after the weekend.

A Chart Formation for Big Profits

Human nature never changes and short term price spikes will continue to reoccur as greed fear, drive prices. They never last long and if you use gaps and exhaustion gaps in particular, you will have one of the most reliable chart formations to trade.

Forex Charting in Stock Market Exchange

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Forex charting is popular. These charts provide investors with readings from the stock market progresses. Investors' odds in stocks improve, since the readings show them the changes in the high/low. The investors use these results to know when the best time is to bet/ask, trade/sell, etc.

You have a selection of Forex charts, which may include the Web and Java charts. With the Web charts, it supplies the investors with specs. Often they receive details from various stock markets streaming from different banks around the globe. These banks have a big institutional bank, which is located in New York. London banks, Irish banks, Hong Kong and other banks link to the headquarters in Stock or Forex marketing.

Charts will supply the investors with valuable tools. This technology arranged software programs would give accurate readings. Some of the programs will read out rate of changes, stochastic, (Random probabilities), Bollinger Bands, Common Deviations, and so on.

Some of the readings, such as Bollinger's are an indicator. This indicator enables the investors to evaluate volatility and prices on a timeline. Indicators make up bands that rotate, moving toward averages in the stock exchange to the center of Forex Charts. The bands at the crown of the charts deviate, the stands (SMA) to sum up, while the low bands will subtract these stock deviations. Clearly, investors must know how to read instabilities in the stock as well as learn how to read pricing. This will help investors at the buy/sell, trade, ask/bid, etc stages.

Change rates permit the investors to track all percentages. Sometimes the oscillator moves back and forward, fluctuating. This means that at the time the market reaches "subzero" additional changes may occur. At this time Forex, stock investors can read the results to see positive/negative results. Each result will display high/lows in the stock market and will show divergences within Forex. When the lines cross over the subzero mark, signals are sent that indicate to the investors when to bid.

You want to learn about these changes, charts and more when considering this stock market. Most starters must invest $10,000 to enter into the Forex market exchange. If you are new to this stock market, then be sure that you become well informed before opening an account.

The advantage that Forex stocks provide that stock market exchange do not is that when the markets are low you still have a chance at winning. This is because you are betting on currencies amidst countries, which these currencies may change at any given moment. Currencies pair, which may include EUR/USD, or JYP/USD, USD/JYP, and so on, which you need to has an understanding of these currencies to know when to bid/ask, trade/sell etc in Forex stock exchange.

Forex Charting in Stock Market Exchange

2008-07-17T10:40:00.000-07:00

Forex Charting in Stock Market Exchange
Author: Martin Lukac Author Ranking Gold Featured Author | Posted: 09-04-2007 | Comments: 0 | Views: 25 | Rating: (50) Article Popularity - Green (?) Got a Question? Ask.
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Forex charting is popular. These charts provide investors with readings from the stock market progresses. Investors' odds in stocks improve, since the readings show them the changes in the high/low. The investors use these results to know when the best time is to bet/ask, trade/sell, etc.

You have a selection of Forex charts, which may include the Web and Java charts. With the Web charts, it supplies the investors with specs. Often they receive details from various stock markets streaming from different banks around the globe. These banks have a big institutional bank, which is located in New York. London banks, Irish banks, Hong Kong and other banks link to the headquarters in Stock or Forex marketing.

Charts will supply the investors with valuable tools. This technology arranged software programs would give accurate readings. Some of the programs will read out rate of changes, stochastic, (Random probabilities), Bollinger Bands, Common Deviations, and so on.

Some of the readings, such as Bollinger's are an indicator. This indicator enables the investors to evaluate volatility and prices on a timeline. Indicators make up bands that rotate, moving toward averages in the stock exchange to the center of Forex Charts. The bands at the crown of the charts deviate, the stands (SMA) to sum up, while the low bands will subtract these stock deviations. Clearly, investors must know how to read instabilities in the stock as well as learn how to read pricing. This will help investors at the buy/sell, trade, ask/bid, etc stages.

Change rates permit the investors to track all percentages. Sometimes the oscillator moves back and forward, fluctuating. This means that at the time the market reaches "subzero" additional changes may occur. At this time Forex, stock investors can read the results to see positive/negative results. Each result will display high/lows in the stock market and will show divergences within Forex. When the lines cross over the subzero mark, signals are sent that indicate to the investors when to bid.

You want to learn about these changes, charts and more when considering this stock market. Most starters must invest $10,000 to enter into the Forex market exchange. If you are new to this stock market, then be sure that you become well informed before opening an account.

The advantage that Forex stocks provide that stock market exchange do not is that when the markets are low you still have a chance at winning. This is because you are betting on currencies amidst countries, which these currencies may change at any given moment. Currencies pair, which may include EUR/USD, or JYP/USD, USD/JYP, and so on, which you need to has an understanding of these currencies to know when to bid/ask, trade/sell etc in Forex stock exchange.

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Martin Lukac, represents http://www.RateEmpire.com, an internet consumer banking and mortgage marketplace, is a destination site of personal finance, investing, taxes and mortgage rates. Rate Empire provides mortgage guides and financial rates and information. Rate Empire also operates a financial portal http://www.1ahl.com and http://www.1AmericanFinancial.com

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2008-07-17T10:38:00.001-07:00

Many forex traders think technical analysis is akin to some kind of science where prices move to some mysterious theory but they don't, they are a direct result of human nature. If you understand the formula enclosed and its significance, you could soon be making some big forex profits.

Prices move to this equation:

Fundamentals (supply and demand facts) + Trader perception of = Price

The news and supply and demand factors are important but it is human perception of them that makes the price. We all have the same facts to look at - but you, me and millions of other traders all have our own views and this mass view, equals the price.

Human nature is constant - we are not creatures of logic though, we are creatures governed by emotions. The emotions that dominate in forex trading and can be seen on a chart are: Hope, greed and fear.

Forex charts are not a science as many technical traders would have you believe, humans don't conform to a scientific theory - but we do as a mass create high odds chart formations, as a direct consequence of our emotions. Our trading psychology repeats and will continue to repeat, as human nature NEVER changes.

Trends tend to reflect the long term supply and demand for the currency and can last for weeks, months or years and are easy to spot on a forex chart. Of course, any currency reflects the underlying health of the economy and economic trends last a long time.

As humans though, we have a tendency to push prices too far (both up and down) and these price spikes are pure emotion. Prices always return to fair value from these spikes and the fact there temporary means - They can be spttted and traded for profit.

Fact:

Markets collapse when they are most bullish and rally when they are most bearish - this is human nature at work.

Price spikes can be traded for profit and they don't just occur in long term time frames, they also occur in shorter periods within the main trend and traders will try and swing trade these overbought/ oversold scenarios.

Forex charts are a great way to trade because, you see the reality as it is - the fundamentals are taken into account and more importantly, all trader's perception of them.

A technical analyst doesn't care how or why prices move, he just wants to make profits when they do!

Charting as we have said is an odds game not a game of certainties - its an art and you have to learn the right formations and how to time your trading signals; this comes with practice and anyone can learn to use them. Furthermore, when using charts you only need a simple system based upon support and resistance and a few timing indicators and that's it. In forex trading, simple trading systems work best, as they are robust and have fewer elements to break than complicated ones.

So if you want a great way to trade forex markets get your charts out and start practicing your art, it could make you big profits and bring you currency trading success!

Forex Charts - Deadly Errors You Need to Avoid to Win Big

2008-07-17T10:36:00.000-07:00

If you want to win at forex trading then using forex charts and technical analysis is a great way to do it. Forex charting is easy, time efficient and works yet; traders still make basic errors that cause them to lose.

Let's look at the errors made and why you need to avoid them.

1. Forex Charts Predict

A common mistake, traders think they need to predict to win - but of course this is simply hoping or guessing and is destined to see you lose.

If you use charts the correct way, you trade on the reality of price change and trade it, you don't predict.

There is a big industry in forex trading that says prices move to a scientific theory and you know what will happen next - but of course if prices did move to science, we would all know the price in advance and there would be no market.

Don't believe any of the prediction nonsense - trade the reality of price change i.e if a price comes to support, don't predict support will hold, wait for it to move the other way and trade the fact it has held.

Another great way to trade is to trade now breakouts to new highs or lows - it's a proven fact that most big moves start from these breaks, so make breakouts part of your forex trading strategy.

2. The More Inputs the Better

5 or 6 indicators must be better than 1 or 2 - totally wrong!

The more inputs the more chances are the system will break.

Simple forex trading systems work best and always have.

All you need is support and resistance and a few indicators and your all set.

3. Using Invalid Data

You need to use technical analysis on valid data, where you can get the odds in your favour.

Do not try and use forex day trading or scalping systems the data is to short to be traded. All volatility is random and you can't use it, so don't - Either forex swing trade or trend follow.

4. Using Indicators in the Wrong Way

Many traders do this.

They use lagging indicators such as moving averages to enter price, or Bollinger bands are stops. This is not what they were intended to do!

Use an indicator for what it was intended and understand its limitations.

5. Curve Fitting

To succeed with forex charts we have said you need to keep your system simple and if you do, you will avoid another common mistake curve fitting.

Today with powerful software packages, it's tempting to back test and bend the rules to fit the data to make a profit - this is also known as curve fitting.

If you do this, the system will collapse in real time trading, as no two segments of data repeat themselves in the same way again.

To avoid curve fitting - keep it simple and make sure the rules you use to execute your trading signal are the same for all currencies and all market conditions.

A Simple Route to Profits

Forex charting is essentially simple - You need to use support and resistance and a few confirming indicators and to trade the reality of price change either, with breakouts or shifts in price momentum near support and resistance tests.

If you do the above, you can build your own forex trading system in about a week and you could soon be making profits, big ones, in less than 30 minutes a day.

Pricing for Profit in Your Small Business

2008-07-17T10:35:00.000-07:00

Most businesses operate with the idea that profitability is a natural occurrence or that the challenge of developing profitable products or services is so simple that there is never a need to review pricing processes.

Often times I hear business owners, CEOs and even CFOs touting their business success due to profitable performing products and services where I often wonder what their true understanding of pricing is as it relates to profitability.

Sure all business wants to be profitable and all business believes they are actually profitable, but there is a large percentage of businesses out there that do not understand the concept of profitable products or services.

A truly profitable product or service must at least breakeven in preparation for profitability. Understand that the most common definition of breakeven is the point at which a product or service does not win or lose.

In other words, a product or service that has the ability to breakeven actually has no loss or gain either way. We need to understand how to add the percentage of profitability onto the known breakeven number which is where we will really get our profit.

The term of breakeven is also often used in production and fabrication where one can determine the number required to be produced to breakeven.

For example, if I were a manufacturer of joist hangers, I would want to know how many joist hangers I need to produce to cover my raw materials costs otherwise known as breakeven, where all the joist hangers I produce after that known number would be profit.

Contractors are a good example here where most contractors will factor in all of the raw materials costs of each project and add what they believe is an acceptable percentage of profit.

The error here is that contractors mistakenly factor in their labor costs into what they believe is their profit margin when at the end of a project they really don't profit what they think they should because the project took too much time to complete via labor expenses.

Unfortunately for most contractors and most businesses, that perceived percentage of profit that is added to the raw material figure is in fact just a perception of what they believe to be profit.

Smaller contractors and smaller businesses that operate as sole proprietors and are in fact truly operated by one person, really don't have to worry about the actual calculation of breakeven and proper pricing as much as the other businesses.

The key to proper pricing for profit is to capture three important parts of the pricing equation. The first being direct costs. Those are costs that you pay for in order to sell what you sell.

For example, if I am a cabinet maker I will have to buy the wood, the screws, the nails, the wood glue etc in order to produce a cabinet. Those are my direct costs. Some might define this as plain old inventory.

Next I will have to factor what is known as indirect costs such as other expenses that directly relate to the production and sales of those cabinets. I can also take into consideration those expenses that I also incur as a result of delivery and installation of the finished product such as labor, fuel, parking fees, etc.

In large scale manufacturing some businesses incorporate what is known as Activity Based Costing (ABC), where every aspect of production that is involved in the production of a product is taken into account and recuperated in the price of the product.

As a small business, I do not recommend trying to recuperate every aspect of your costs where sometimes we may price our product out of range of our consumers. This process of recovering costs in the price of our product is dangerous if not managed properly.

There are only certain expenses you can recover in the price of your product without making the price of the product so high and out of reach that no one will buy your product.

For example, as the cabinet maker we do want to recover the cost of installation via labor on each cabinet installation where we cannot recover the advertising expenses that got us that client in the first place. Advertising is a normal expense of business.

If we go back to the example of producing joist hangers, we will want to recover the cost of the sheet metal along with the cost of each employee that actually works on the production of joist hanger. This is another example of Activity Based Costing.

Remember that there is a difference between direct cost and indirect costs. Direct costs are those raw materials costs and indirect costs are those expenses we spend to make the products we make.

Direct costs and indirect costs now only gives us two of the three parts needed to properly calculate pricing. Next we need to figure out our overhead costs, or our overhead percentage rate.

This part is simple where all we need to do is divide our indirect costs into our direct costs which will give us a percentage. The trick here is to capture the appropriate amount of indirect costs. Remember, indirect costs are those additional expenses that allows us to produce the products or service we offer.

Based on previous articles I have published, we should be familiar with our income statement which will give us the number we are looking for when we try to find our indirect costs. As mentioned earlier, our indirect costs are those expenses that we incur to produce our product or service.

Increase Profits by Marketing to Existing Customers

2008-07-17T10:34:00.000-07:00

Business owners want more leads, more customers, more sales. It sounds logical: attract more customers and more sales will follow, leading to increased profits. But is this the best way to maximize profits? Sometimes it’s difficult to see the forest for the trees.

What about the customers your business already has?

It can cost up to seven times more to acquire a new customer than it can to sell more to an existing customer. Yes, generating leads is important, and attracting many new customers may lead to fast profits. But looking after your existing customers, providing quality service and developing a long term relationship will allow you to tap into an ongoing profit source.

Marketing is the most powerful tool for attracting customers, and search marketing techniques can pinpoint the preferences of your target market using data from search engines. Knowing what your market is thinking is the key to generating fat profits. Online strategies are vital to uncovering the potential of your business. Once you have found your niche and have a sophisticated marketing strategy in place, you need to systematize your business to achieve automation. Profit will come with satisfied customers and having the proper systems in place will ensure that customers are satisfied, employees are productive and your business is generally running on autopilot. Profit is more or less guaranteed once this is the case.

Increased profits are achieved through a step by step process where marketing and customer satisfaction are at the core of the business. While there are methods to quickly generate leads and achieve fast profits, a certain level dedication is required to create a truly successful business. There is no quick fix solution to achieve the profit and success you want.

Profitable Trend Forex System Review — Following the Trend to Profits!

2008-07-17T10:33:00.002-07:00

by virtue of the immense volume of trades made during a trading day in the foreign exchange market, there are on any given day a number of opportunities from which traders may profit. Identifying the trend and riding it through to a profitable exit point forms the basis of John Chen's Profitable Trend Forex System. And this review will endeavor to address how successfully his system is theoretically able to accomplish this.

While there are many forex trading systems that use this same premise for trading, few are structured to give the trader the minute-by-minute trend information needed in order to profit consistently from this market. While some forex trading systems try to forecast future market movements, others concentrate on analyzing the up-to-the-moment data in order to provide traders with a profitable exit point. This is what John Chen's Profitable Trend Forex System intends to do for its users. John's system utilizes the MetaTrader4 charting software, which can be downloaded free; all the given indicators are taken from this software.

Chen has been successfully trading the forex market now for several years. He has made the claim to have never had a single losing month using his system. One fact that he discloses which may make this claim credible is that he admits his system is only 70-75% accurate. And that what he attempts to accomplish is more higher-profit winning trades while limiting his losing trades to lower amounts. In other words, he endeavors to abandon a trade promptly once it indicates that it's headed in the opposite direction of a profit in order to cut his loses. On average, he states, he's been able to accomplish this using his Profitable Trend Forex System.

Chen's forex trading system concentrates on giving the trader two very crucial pieces of information vital to any successful trade: it endeavors to identify the trend, and to join the trend with precise timing. In addition, two other important factors are also given high priority consideration: these are "stop loss" and "take profit." A stop loss is an order to cease trading when the currency reaches a certain point. The take profit mode is a conservative approach to a market upswing which results in guaranteeing a profit while at the same time limiting the downside risk of a quick collapse.

By following the precise entry and exit rules, the trader is given the two information keys to either a profitable trade or a timely exit from a potential losing trade. Money management also plays a key roll in the Profitable Trend System, and disciplined money management rules are heavily stressed. One user of the system reports that "so far it's making me money consistently." Another user exclaims that: "For me, it's a flexible and profitable system that really improved my trading."

How to Achieve What 95% of Traders are Unable to Profitable Success

2008-07-17T10:33:00.001-07:00

Now come back to my tips how to trade Forex market:

I use 5 steps to trade Forex:

1. Identify potential new trades.

2. Provide you with proprietary bullish and bearish trend outlook for the current market.

3. Provide levels for entering a trade, closing a trade and booking profits at the end of a trade.

4. Include the Pyramiding Trading technique to help you extract maximum profits from any trended move.

5. Protect your trading capital with sound money management and stop loss mechanism.

I guest you already know about those steps. This time I will not discuss every steps in detail; except the Pyramiding trading technique, which has been the core of my trading system.

- What is Pyramiding technique ?

Pyramiding trading is the process of using profit generated from an existing position to acquire additional positions. This results in a "doubling" of your position during each pyramid iteration to rapidly achieve exponential gains. Pyramiding trading technique help you extract maximum profits from any trended move.

Some said "Pyramiding: A Risky Strategy"

Let me explain more about this one: Pyramiding is adding to positions as price moves in the desired trend direction. Pyramiding is a highly aggressive trading strategy suitable for professional traders who know how to control risks and have the discipline to execute a tested plan consistently.

Reward/risk tradeoffs quickly turn against the pyramid trader when the price trend reverses. Because adding to positions changes the total cost of the entire position on a per-unit basis toward the last price, a quick reversal to the original entry price can result in a significant loss.

Pyramiding should be executed only according a predetermined and tested method which includes an effective stop loss or hedging technique.

- What is a hedging technique?

Hedging is a strategy designed to minimize exposure to an unwanted financial risk, while still allowing the assets involved to profit
from their investment activity. PointBreak trading system use strong hedging strategy. It means PointBreak will hedge using the same currency (100% correlation and every 1 long position will be hedge by 1 short position). This hedge aims to minimize the risk from moves with the currency pair used, thus allowing profits to be accrued from the daily movement.

Although pyramiding increases profits if the trend continues as hoped, pyramiding also increases losses if the trend reverses, so
Risk Control is key.

In PointBreak EA, risk contol is our main concern, we never overtrade our pyramiding techinique. This will ensure that PointBreak trading strategy will go smooth, giving you profit month after month.

********************************************
PointBreak EA that used Pyramiding strategy since the beginning continue to deliver very consistent profit both on our Live account
and Demo account.

Our Very Aggressive Account has profit 135% (It's 47,187.67 now - the account start at $20,000 ~ Oct 01, 2007).

Our Trial account (Very Conservative Setting) has profit more than 20% (It's 29,854.66 now, start at $25,000 ~ Dec 04 2007)

You can even login to our account & password using to check everything is correct, through this link below:
Pointbreak EA Trading Report

You can also download our LIVE account reports (using REAL money) at our performance page below:
Pointbreak EA Performance

********************************************

- When to Pyramid ?

There are just ways of pyramiding. One is to buy more or sell more just as soon as the market breaks into new territory or makes a new
high or a new low. In a fast running market, you can continue to buy or sell every few points the market moves in your favor, all depending on the stock or your method o pyramiding. A pyramiding
should always be followed up with proper and strict stop loss orders or special hedging technique above.

When you do a pyramid trade, the signal to add to positions may be triggered at predetermined price points that confirm the trend direction. Such price points might be based on volatility bands,
moving averages, a variety of trendlines, logical chart points, penetration of resistance levels, and so on.

No matter what method is used, because your profits must in all case be protected. The more profits are there on the table, the more room you can give the market to fluctuate or have its reverse moves or reactions, that is you can place your loss order further away from the market so that a natural reaction will not disturb
your pyramid. PointBreak EA divide its pyramid trade into multiple cycle to protect the profits and to minimize the risk.

For Example:
You have followed and added up on a EUR/USD market that is 100 points gain in your favor now. If the market has had a previous reaction of 20 points, it could again react 20 points without
changing the main trend, therefore your stop loss order could be 20 points under the market, because if it was caught, you would not be
losing part of your capital but only a fraction of your paper profits, while in early stages of your pyramid your stop loss order would have to be closer in order to protect you original capital.

- Pyramiding Trading Type

1. The Standard Pyramid, which is also known as the scaled-down pyramid or upright pyramid, starts with a large initial position and is followed by predetermined additions that decrease systematically in size as price moves in the indicated trend direction. For example, if the initial entry was for 10 lots, then as price moves to the next predetermined level add 5 more lots, then 3 more at the next level, then 2 more, for a total of 20 lots.

2. The Inverted Pyramid, which is also known as the equal amounts pyramid, adds to an initial position in equal share-size increments. For example, if the initial entry was for 10 lots, then as price moves to the next predetermined level add 10 lots more, then if the price continues 10 lots more, then 10 lots more, for a
total of 40 lots. Here, however, the average cost per share is much higher, such that a smaller price reversal eliminates all profit.

The inverted pyramid offers greater potential reward at the cost of much greater risk, as compared to the standard, scaled-down
pyramid.

3. The Reflecting Pyramid systematically adds to a position up to a predetermined price level, then it reduces the position systematically as the trend continues, so the reflecting pyramid is
not a pure trend following method. If the price does have a major move in the indicated trend direction, the reflecting pyramid would
result in less profit than both the standard and inverted pyramids.

4. The Maximum-leverage Pyramid keeps on adding maximum size up to the limits of accumulated profits and margin requirements. This is the
most aggressive strategy possible, and it offers the maximum potential reward, the maximum potential risk, and the worst reward/risk ratios. This pyramid must be combined with tight exit
rules, or else it is a formula for near-certain ruin.

Learn Currency Trading - How Did These Traders Make Millions After Two Weeks Training

2008-07-17T10:29:00.001-07:00

If you want to learn currency trading and what it takes to win then you should make this story part of your essential for ex trading education. In just 14 days ordinary people with no experience learned to trade and make hundreds of millions of dollars. How did they do it?

In the nineteen eighties trading legend Richard Dennis decided to prove that anyone could learn to trade, with the right forex trading system and mindset.

He therefore gathered a group of people together who had no trading experience, who were of all ages, both sexes and of all educational standards. The group was diverse consisting of a security guard, to an actor.

He then taught them to trade forex and after 14 days gave them trading accounts.

This group made $100 million dollars in 4 years and went on to become legends.

So how did they do it -after all 95% of traders lose what made them different?

Dennis knew that the problem with traders is not so much method but mindset - they simply cannot stick to a plan and keep going when they incur losses. So although he taught them a simple method, he didn't tell them blindly to follow it, he taught them to learn it and have confidence in it.

You cannot have discipline without confidence.

Even when your confident, its hard to keep trading when the market hands you loss after loss and makes you look a fool.

It's a fact that anyone can learn to trade yet, few succeed and the reason is they either get the wrong information or simply cannot stay disciplined.

Most traders are simply unprepared for the fact that they must execute rules and stay on course when they lose trade after trade and don't believe all the rubbish you read online, about regular income and 90% accuracy - that's not the real world.

You can win at forex trading but you must be able to take losses to win longer term.

Most traders simply don't have the discipline to do this.

We don't have time to explain all the aspects of trading discipline here but it's hard to achieve but that's why traders who can trade with discipline are so successful - Dennis proved it.

The forex trading system used was simple ( essentially a long term breakout strategy) but it was the mindset he taught the traders - to stand on their own two feet, be confident and take short term losses, to seek longer term gains which was so important.

If you can learn a simple forex trading strategy, get confidence in it and apply it with discipline, you can win.

Sure its not easy, but you wouldn't expect it to be with the rewards on offer.

So if you want to learn currency trading the right way get a simple forex trading strategy and focus on your discipline and remember if you can't trade a system with discipline you don't have one!

There are big rewards to be made but your on your own and must have courage, confidence and conviction in what your doing - do that and you can enjoy spectacular currency trading success.

Currency Trading Courses - Getting One for Currency Trading Success

2008-07-17T10:27:00.000-07:00

Many traders want to learn currency trading and the obvious place to start is with a currency trading course and there are many that are sold online - but how do you choose one? Here are some important points to consider.

1. Are The Vendors Traders?

I would say most the currency trading courses sold online are not traders and are simply marketing companies. Ignore any course that promotes itself in the following way:

- You can earn a living forex trading with no effort

- You can make a regular income

- Forex day trading or scalping works

- They will reveal secrets that no one else knows

All the above is simply hype used to sell a course and none of it has any basis in reality.

2. Track Records

The next point to look at is the track record.

If your currency trading course does present one then look for the following disclaimer if you see it - don't buy it! Here it is:

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

Well if you have read that you will see a vendor can make up anything he likes in hindsight to make his currency trading course more attractive - don't be fooled its not real.

2. Guarantee

Do not ever buy a currency trading course without a guarantee of what you are getting most reputable currency courses will give you your money back if they don't deliver what they say, so make sure you have the comfort of one before buying.

3. Be Realistic and Remember

A currency trading course should not be seen as someone giving you profits but someone giving you the tools you need to apply for profits.

Vendor can only give you the tools and show you how to use them the rest is up to you and you must accept responsibility for your actions - ONLY you can give yourself success.

It's a bit like teaching someone to do anything, there will always be those that fail, those that achieve success and those that achieve massive success. The good news is - everything about learning currency trading can be specifically learned and applied, by those with the desire to succeed and a willingness to learn.

You are not restricted by body or mind only certain people can become successful sprinters and rocket scientists but currency trading is different. You don't need to be fit and you don't need intelligence - currency trading is essentially simple and does not rely on an innate gift from god.

You are going to say if that's true why 95% of currency traders fail do.

International Currency Trading - an Opportunity for Wealth for Wealth for All

2008-07-17T10:26:00.000-07:00

Could you make money at international currency trading? The answer is yes - but you need to understand a few key points as, it's a well known fact that 95% of traders fail. So let's look at the advantages and how to avoid the pitfalls and enjoy currency trading success...

Anyone can trade - but most fail and first you need to learn currency trading the right way and get yourself a solid forex trading education.

First avoid the myths and there are plenty of them, so here are some common ones to avoid.

- Day trading and forex scalping makes money

- Following a forex trading robot with simulated track record will see you win

- You can trade news stories

- You can predict forex prices

- You can earn a regular monthly income with little or no drawdown

All of the above assumptions are wrong so avoid the myths. Forex trading is NOT easy and as the potential for profit is so high, you wouldn't expect it to be easy. The good news is anyone can build a forex trading strategy for success.

Here are some points to put you in the right direction with your forex trading system

- Keep it simple as simple systems work best and have fewer elements to break.

- Learn the system don't try and follow anyone else. You need to know what your doing to have confidence

- Base your strategy on forex charts and use the reality of changes in price to execute your trading signals

- Do NOT trade news events, these are discounted immediately and your playing catch up

- De leverage sure you can get 200:1 but 10:1 is plenty for most traders - Over leverage destroys equity quickly as your stop has to be to close

- Base your trading strategy on breakouts to start. We have written on this frequently and it's a high odds way of trading

- Be patient! Only trade sparingly, the big high odds trades don't come around often so wait for them.

Currency Trading Basics

2008-07-17T09:58:00.000-07:00

Here we are going to look at some currency trading basics and focus on why anyone has the potential to win but why so few people do. If you understand the points enclosed you can join the elite 5% who win big.

Let me start with a rather inspiring story...

Back in the eighties, trading legend Richard Dennis believed that anyone could learn to trade with the right mindset and his partner disagreed - so Dennis conducted an experiment:

He took 14 people from diverse backgrounds, who had never traded before and taught them to trade in just 14 days - the result?

They made him $100 million in 4 years and became legends.

These were not college guys or all clever they included a security guard, a kid fresh from school and an actor so just ordinary Joe's.

So what did he focus on to make them so successful?

The first point to keep in mind in this introduction to currency trading basics is - The system he taught them was simple. If you are learning currency trading then keep this point firmly in mind - simple systems work best because there are fewer elements to break in the brutal world of trading.

Now so far so good you're saying I can do that!

Yes you can but here is the reason why Dennis succeeded, while most traders fail is this:

Most traders don't have confidence and because of this don't have discipline.

Dennis didn't just teach his students to follow him. He made them learn the system backwards and how and why it would work and gave them confidence in it, enabling them to trade with discipline.

Discipline is the one trait most traders simply cannot acquire.

They cannot execute their trading signals with discipline when there losing and stick with their system - they throw in the towel and lose.

Don't think it's easy to keep executing your trading system when it loses time after time (and it happens to all traders) it's hard very hard - but you can do it, if you have confidence, discipline and the right mindset.

Today most traders cant think for themselves, they buy worthless trading systems off the net with simulated track records, try and follow guru's or news stories and get wiped out.

You must take responsibility for your actions and know what your doing know one else can lead you to success.

Most traders fail to do this. It's not getting a currency trading system which is hard - that's easy but executing it with discipline, standing alone and trusting your judgement is the hard part.

Of course you can do it - but you must get the right forex education and adopt the mindset. Sounds easy?

In theory yes - It's hard in practice though, the good news is - anyone can learn to trade and anyone can acquire discipline, if they really want to.

If you take note of the currency trading basics enclosed, you can be a winner and put yourself on the way to maybe even a life changing income.

5 Risks The Novice Forex Trader Needs To Be Aware Of

2008-03-18T00:01:00.004-07:00

Forex trading, just like most other forms of trading, carries risks and the novice Forex trader needs to be aware of these before dipping a toe into the foreign exchange pond. Here we will consider the 5 most common risks of foreign currency trading.

1. Forex scams. In recent years the industry has done a great deal to put its house in order and today Forex scams are certainly far less common than they used to be. They do however still exist.

It is fairly easy to open a Forex trading account, especially online, and a Forex scam in its simplest form is a case of a crook setting up a website posing as a broker, inviting you to open an account and deposit money into it and then disappearing without trace.

To ensure that you do not get caught out check out any broker carefully before opening an account. Choose a broker who is associated with a major financial institution (for example, a bank or insurance company) and who is also registered as a broker. In the United States brokers will be registered with the Commodities Futures Trading Commission (CFTC) or will be a member of the National Futures Association (NFA).

2. Exchange Rates. One of the attractions of the foreign exchange market is that it can be extremely volatile with currencies moving significantly against each other in very short periods of time giving rise to fast and substantial gains. The other side of this coin however is that the market can also produce substantial and rapid losses.

Fortunately there are tools available to the trader to limit this risk, such as stop loss orders, and novice traders need to familiarize themselves with these tools and to ensure that they make full use of them whenever they enter a trade.

3. Credit Risk. Because there are two parties (a seller and a buyer) involved in every transaction there is a possibility that one party will fail to honor his or her commitment once a deal is closed. This usually happens where a bank or financial institution declares insolvency.

You can reduce any credit risk considerably by trading only on regulated exchanges which require members to be monitored to ensure their credit worthiness.

4. Interest Rates. When trading any pair of currencies traders need to watch for discrepancies between the underlying interest rates in the two countries in question, as any discrepancy can result in a difference between the profit predicted and that which is actually received.

5. Country Risk. Occasionally a government will intervene in the foreign currency exchange markets to limit the flow of its country’s currency. It is unlikely that this will happen in the case of a major world currency but could occur in the case of minor and less frequently traded currencies.

These of course are just some of the risks involved in Forex trading and novice traders will need to familiarize themselves with the others as they go along. However, a good understanding of the 5 risks detailed here is essential before you enter the trading arena.

You Must Have A Forex Trading Strategy Before You Start Foreign Currency Trading

2008-03-18T00:01:00.003-07:00

If you are new to the world of Forex trading then, before you even think about making your first trade, you need to sit down and draw up a Forex trading strategy. The foreign currency market is one of the most exciting and lucrative markets in the world, but it is also extremely fast moving and volatile and, while you can make tremendous profits, you can also make substantial losses if you don not have a very clearly defined game plan.

There are a number of different strategies which you can adopt for trading in the currency markets and you will need to come up with a strategy that suits you. At the end of the day exactly what strategy you decide to adopt is largely immaterial but, what is important, is that have you a strategy before you start to trade.

Many traders today choose to base their strategy on a technical approach to trading while others prefer to follow a fundamental approach. Both approaches are fine but the truly successful traders will tell you that the real secret lies in not selecting one or the other but in combining the two.

Technical analysis holds that prices follow trends and that markets possess clearly identifiable patterns which can be recognized if you know what you are looking for. Both knowledge and experience play an important role in technical analysis but here it is a case of knowledge and experience of not just the patterns in the market but of working with the barrage of tools which are know available to the technical analyst.

Within technical analysis many traders like to work with what are called support and resistance levels. In this case a support price is a low price to which a currency repeatedly returns, effectively representing the bottom of the market or the price at which it supports the market. By contrast, a resistance price is the high price which a currency reaches from time to time but above which it tends to resist rising.

The importance of these two levels is that once a currency price drops below its support level it will commonly continue to fall and, similarly, once the price exceeds its resistance level it will continue to climb.

It is also common for technical analysts to make use of moving averages which show the average price of a currency over a given period of time within a longer period. This is extremely useful for eliminating short term fluctuations in a currency price and producing a clearer picture of the movement of a currency over time.

These of course are just two of the many tools available to Forex traders who are following a technical approach and there is a wide range of far more complex and powerful tools available today.

In addition to technical analysis, many traders also believe strongly in fundamental analysis which holds that currencies move in response to a wide range of factors including political events, changes in trade agreements and trading patterns, economic numbers, interest rates, employment figures and much more.

Forex Information For More Educated Trading Decisions

2008-03-18T00:01:00.001-07:00

The concepts of Globalization have changed the forex trading dramatically over the past several years. New investment strategies and instant electronic trading now ensures high returns for the investors. Therefore it has become quite important for the traders to have authentic forex information. Internet and other electronic sources like CDs, DVDs, etc., are fast replacing the conventional resources like books, magazines, etc.
The advantages of these electronic sources are there ‘interactive’ modules and ease of navigation, which make them faster and more effective for even beginners to comprehend the information. Dynamic features like search or graphical representation of live data with two or three dimensional charts, graphs, and ‘easy to learn’ e books are presented quite attractively to help the readers in understanding the subject.
You can have online forex information on:

* Forex definitions and terms including glossary

* Market background information and the developmental stages of the trading

* Trading strategy and decision making

* Different methods of Technical and Fundamental analysis

* Controlling the risk

Forex trading has long been recognized as a superior investment opportunity and the market is expanding to the individual small or medium traders than ever before. If you are powered by the knowledge and keep yourself informed, you have huge potential for earning from the market. Internet sites offer you wide ranges of e books which are classified in different groups like: forex books for beginners, books on market in general, on market profile basics, money management, trader's psychology, strategy and even books for advanced traders for supplementing their knowledge.
Forex information in the form of articles is again an exhaustive resource. One single site may present 2000 featured articles from which you can read any depending on your needs. These articles can be on brokerage, technical and fundamental analysis, money management, general tips or strategy building etc.
There are vendors or market professionals who offer forex tips and signals, which you can have by subscribing to their services. You can have information on forex market analysis, charts and technical analysis, trading platforms, facility to open demo account, etc. Different forex forums and groups are again a very useful resource for authentic information. You may find your queries being answered by veteran forex traders and the best thing is, most of the time, these tips are free. These traders very often share useful strategies and tips that proves to be extremely helpful.
Other than these electronic resources, you can always authenticate the forex information from books and magazines. Crash courses and short term seminars organized by different universities also prove to be helpful for those who are comfortable with the conventional class room mode of learning. Another advantage of these seminars is you get your doubts cleared by the experts directly. So the buzzword is to get informed and educated before you tread into the trade.

Forex Charts - Using The ADX Indicator For Bigger Profits

2008-03-18T00:00:00.004-07:00

If you're using charts, then you want to trade the strong trends - and the Average Directional Movement Index Indicator, or ADX, enables you to do this.

Wells Wilder developed the ADX, and outlined it in his classic book “New Concepts in Technical Trading Systems”.

Let’s look at this essential indicator in more detail - and see how to apply it on your forex charts, to give you greater accuracy when generating your trading signals.

Determining the Strength of the Trend

The ADX is a momentum indicator, which aims to measure the strength of the trend - and attempts to determine if the market is trending, or is trading sideways.

The Advantages of the ADX

A core belief of technical analysis is that a strong trend in motion is more likely to continue, than reverse. Therefore, you always want to be trading strong trends - as your odds of success are higher. The Average Directional Movement is a good indictor – and you should consider using it as part of your currency trading system.

The Technical Bit

For the boffin’s out there, here’s the technical bit – don’t worry if you don’t understand the calculation, its easy to use when visually plotted. The ADX is based on the comparison of two other directional indicators, both of which were also developed by Wilder, and they are:

Positive Directional Indicator (+DI) and the Negative Directional Indicator (-DI) to produce ADX as showed in the following formula:

ADX = SUM[(+DI-(-DI))/(+DI+(-DI)), N]/N

Where:

N: Refers to the period of calculation. The formula above produces the ADX line, which oscillates between 0 to 100 values. The +DI and -DI are both present and can be seen to make up the indicator.

You don’t need to understand the above calculation to use the indicator – you only need to accept that the indicator works.

The indicator is easy to use when it’s visually plotted - and you’ll find it included, with most of the good forex chart services.

How to Trade using the ADX Indicator

The ADX it’s not a bullish, bearish trading signal generator - and should never be used as such.

The ADX indicator simply indicates the strength of the trend - and other indicators should be used to enter, and exit trades.

Although the ADX fluctuates from 0 to 100, it rarely moves above 60.

Use the ADX in the following way:

Readings above 40 indicate the strength of the trend.

Readings below 20 indicate range trading and flat periods of consolidation.

You can use the crossing of +DI and -DI to determine the trend direction; when +DI crosses -DI upward, it’s a bullish signal, on the other hand, when +DI crosses -DI downward it’s a bearish signal.

The ADX line is a great momentum indicator and like the RSI (also developed by Wells Wilder), the ADX it will help you trade the strongest trends - and give you advance warning of changes in momentum.

The Bottom Line

If you want currency trading success, you can’t just trade support and resistance levels, and hope they hold or break. You need confirmation of momentum to get the odds on your side - and the ADX indicator will assist you.

Final Words

New Concepts in Technical Trading Systems was published in 1978, and was one of the first trading books I ever bought. Every trader should make this book a part of his or her forex education. If you want to learn forex trading the right way, get the book, and use the ADX indicator to increase your chances of making big FX Profits.

Forex Technical Analysis – 6 Simple Tips For Bigger Profits

2008-03-18T00:00:00.003-07:00

Using forex technical analysis can and does help traders make big profits however you have to know how to use it correctly, to achieve currency trading success and that’s what this article is all about.

Let’s look at six tips to make your forex technical analysis successful.

1. Trade Valid Data

Using technical analysis on forex charts is designed to get the odds in your favour and to trade the odds you need meaningful data. Do NOT day trade – day traders never win as all short term volatility is random.

Either swing trade look for trades that last a week or long term trend follow.

2. Use Weekly and daily charts

Don’t just use daily charts - use the weekly chart as well to spot the major trends – remember in currency trading currency trends follow economic cycles and these can last for several years and they are apparent on the weekly chart.

You can then use the daily chart to time your trading signals and entry and exit points.

3. Understand Support and Resistance

All successful forex traders need to understand support and resistance and you want to look for valid levels – These are levels that have been tested several times ( at least 3 ) and preferably in two different time frames.

Try and trade these valid levels and again start with the weekly chart first and see if they line up with the daily levels – these are the very best set ups.

4. Understand Breakout Methodology

While support and resistance can hold they can obviously break as well and it’s a fact that many of the major trends in forex trading take place form new market highs NOT market lows.

Many forex traders hate buying new highs as they feel they have missed a bit of the move – while this is true these trends simply accelerate away and you should grit your teeth and enter.

5. Use Momentum to your advantage

So will support or resistance break or hold? You don’t know and you should never predict or hope you should use momentum indicators.

Whenever you enter a trade your view should always be supported by price momentum. Two of the best indicators are the stochastic and Relative Strength Index. They will help you time your trades better get the odds on your side and help you make bigger profits.

Never make the major mistake that most traders do in forex technical analysis of trying to trade without momentum if you do you will lose.

6. Keep it simple

Your system should be simple – simple systems work best as they have less elements to break and are more robust in real time trading.

You can trade successfully and make a lot of money just basing your system on the tools we have outlined above.

6. Be Patient and be disciplined

Be patient don’t trade for the sake of trading.

Only execute treading signals that your forex technical analysis system generates and don’t lose discipline and chase losses or try and hurry profits.

When you have entered a trade maintain discipline and make sure you place a stop and have a realistic target.

Our view of forex technical analysis may strike you as simplistic and it is but after trading for 25 years and trying just about every method out there we have found the above works and makes us money and maybe it can help you to.

Treat Trading Less Like a Hobby and More Like a Business

2008-03-18T00:00:00.001-07:00

At Emerald Passport they have a video that educates you regarding the pitfalls of FOREX trading. I suggest you go to Emerald Passport and watch the video before proceeding with this article.

When Emerald Passport-educated traders, or any day traders, consider securing a new trading system for stock market trading, they stereotypically do not mull over the expenditure of ownership. But, there are numerous considerations that new Emerald Passport traders should consider when purchasing a modern piece of software, like the price tag of keeping up the software and the expense of the facts and figures the program will need to function.

The outlay for owning a trading system or charting bundle for trading the stock market can be very prohibitive. Several factors come into play when looking at the overall cost, like the type of market you trade and whether or not you plan to use end-of-day or real-time statistics. The format of the information can make a difference too. A package that requires a detailed data structure can be more costly to own. Two common formats of facts and figures for trading software are Metastock and ASCII.

There are pros and cons of using both. But since these are among the industry standards for statistics organization, and make data sellers more abundant, there is more rivalry. Evidently, it is this competition that keys the amount down. When the Emerald Passport trader mulls over a real-time service, they can end up paying much more. However, the cost may be right depending on how regularly the trader trades and the type of market he or she trades.

A trader who trades in markets such as futures, can incur a good deal of volatility and, therefore, they may want to have a real-time package where they can see the instability of instability that occur during the day in the plans of their trading. An alternate to real-time is a delayed service. A provision that delivers delayed quotes can cut the cost of the facts and figures by as much as 80% from the real-time counterpart. This can make a vast difference for traders who are just starting out and may want to use the money to trade rather than pay for real-time data.

The expense of buying a trading system can be pretty frightening for beginners and professionals alike, regardless of whether or not you are interested in stock market trading or some other market. When considering purchasing a firsthand system, should take the cost of their statistics feed into account. This sets their foot firmly on the path of treating FOREX trading less like a hobby and more like a business.

HYIP Owner Does Not Want You To Read This Easy Tactics

2008-03-17T23:59:00.000-07:00

HYIPs bring me $8289.68 in this month. How did I get this money without work? Answer is simple: I followed my golden rules of HYIP investing. I have compiled a short list of some of the things you can do before investing into a program to make sure you get the most for your money:

#1 - Look at the main HYIP monitoring sites such as theHYIPs.net. Main aspect that you should check it is status of program. If program has status PROBLEM most likely this HYIP will be closed in next 2 days. Look at votes and comments. If it looks like a program has been cheating the ratings by voting for themselves, or it looks like they may have hired a paid voter, then stay away. Check the voters IP, maybe the cheaters were not careful and didn't use a proxy

#2 - Search all HYIP forums for the name of the HYIP. Maybe, somebody created topic about program which you want. . Look for people's opinions. Often those who have been investing in HYIPs for some time are the ones with the best insite. If you see that somebody are spamming it is sign of short HYIP. Most importantly, look for complaints of people who have not been paid.

#3 - Do a search on google. Copy small parts (1-2 sentences) of the text from both the homepage and the page with information on how they make their returns. Paste it into the google search bar with quotes around it, and see if anything comes up. A good amount of the time, google will return results that are an exact match, usually a professional traders website. Also, do the same thing with any images of people that are shown to look as though they are the admin of the program. Simply get the name of the file that the image is uploaded as by viewing the properties of it. Then paste this into the google image search. You will be amazed that a lot of the time you will see that the image is a direct copy from another site. This proves that the admin is lying.

#4 Ask the Admin for as much personal information as possible. Also, check out all the information he/she provides. If he/she gives a phone number, then give them a call. If an address is given, then check it out for authenticity by looking at online phonebooks, and other databases. The more information that is available, the less likely it is that the admin will take the chance of scamming hundreds of people out of their investments. It makes sense to email the admin and ask some questions such as: where are you located, how long have you been around, and how do you make your returns. Then compare this information with found one. The common answers you will receive are United States, 2 Years, and Forex trading. Usually if these are the answers the admin is lying to you. About 75% of all new HYIPs claim that they have been paying members offline for over a year. 99.9999% of the time this is a lie. If an investing firm is able to deal with members offline for 2 years, there usually is no need to go online with their business.

All in all, if you follow these steps you will likely be saving yourself a descent amount of money in the long run. They improve your chances of walking away with profits. This tips are not complete list. Full one of golden HYIP rules collected on http://thehyips.net/lessons/.

Proper Analysis Of The Forex Chart

2008-03-17T23:57:00.000-07:00

In all media references, you may have heard about Foreign Exchange. Still, a lot of people have little idea when it comes to forex trading, especially reading the forex chart. People seldom realize its importance because they probably have not participated in it.

But it is actually quite easy to understand the forex chart, as long as you know what to look for. There are essentially two basic approaches for buying and selling currencies and this is where the understanding of a forex chart comes in.

First off is the Fundamental Analysis approach. This approach doesn? depend on forex charts at all. Instead, it uses economic and political factors to establish trades. Charts are essentially used just for reference regarding exiting and entering trades. The other approach is the Technical Analysis approach. This approach, meanwhile, tries to forecast the direction of prices by studying historical price movement on a particular chart. Technical analysts observe the relation between price and time.

To know how currencies are related to one another is very important. A forex chart always shows to your RIGHT, the value of the currency so one can buy a unit of the currency found to the LEFT. Recorded horizontally, time will be found somewhere at the chart? bottom alongside the price scale to the right. Price scale always stands for the currency to the east in the forward slash.

The most popular way of observing price or time movement on a forex chart is by means of the Japanese candle sticks. In order to watch price movement, one must pay attention to Japanese candle sticks. In case you don? know, a lot of traders depend on these sticks in making decisions in trading. A Japanese candle stick provides a way to examine price movement for a currency pair over a given timeframe. How much "time" each candle represents depends on the timeframe of the chart. If the chart below were a one-hour chart, each red and blue candle on it would represent the price activity for the currency pair over the course of one hour. If the chart were a daily chart, each candle would represent price activity for one day. It does not really matter what the timeframe is. You just have to remember that a candle represents price activity for the timeframe of whatever chart you are viewing.

The following are the basic parts and whatnot of a typical forex chart. The fat red section is the body of that candlestick. The lines protruding from the top and bottom are the upper and lower wicks. The bodies of the candles can be of varying sizes in a forex chart. There may also be times when there are no bodies in the chart at all. This is not something out of the ordinary. The same goes for the wicks. The wicks can be of varying sizes, or there just might not be any wicks at all. The length of the body and the wick is determined by the price range for that candle. Longer candles had more price movement during the time they were open. The very top of a candle? wick is the highest price for the currency pair, while the wick? bottom represents. When a candle is considered "bullish", this means there were more buyers than sellers during the time the candle was open.

Forex Charts - Novice Trading Mistakes

2008-03-17T23:56:00.001-07:00

Using Forex charts is like being a ships captain at sea: Your charts can help you navigate successfully to port or you can hit the rocks and drown - the choice is yours.

It’s the same with forex charts 95% of users drown – Let’s look at common errors that novice traders make and how to avoid them.

1. Predicting Price

No one can predict price movement and if you do - you are simply hoping levels will hold.

Do this and you will be wiped out quickly the market wont reward you for hoping or guessing.

If you want to win, act on the reality and that means - trading with price momentum AFTER a test of the level you are looking at.

Trade with momentum on your side and you are trading a fact and your odds of success are increased dramatically.

If you don’t use momentum indicators in your forex technical analysis learn what they are quickly.

2. Indicators Chosen and Misuse Of Them

A common error is to use lagging indicators to enter trades such as moving averages – This really leads on from the above: A

Always use momentum indicators to enter trades and only use lagging indicators to determine levels of support and resistance.

Many indicators traders use are useless good examples are:

Fibonacci levels and cycles - they again involve prediction and simply help wipe out equity.

3. Trading Invalid Data

Day traders are the worst offenders here. They are picking a short time frame where volatility is random they can’t calculate the odds - so they lose.

4. Systems that are to complicated

Some people devise very clever systems and lose.

Fact is - in forex trading you get your reward for being right – NOT Being clever.

Simple systems are best - as they are more robust and have fewer elements to break.

5. Not understanding volatility

Do you know what standard deviation of price is? If you don’t learn it backwards as this will help you determine everything from stop levels to targets for your trades and help you stay in winning trades longer and get better money management.

6. Your edge

Ask yourself this question:

What is your trading edge which will see you win when 95% of traders lose?

If you don’t know what it is – then find out or do more work on your forex trading strategy!

If you don’t know what your edge is kiss goodbye to your equity.

7. Following a method

Many traders have perfectly good methods but simply don’t have the discipline to follow them – if you dont have discipline you have no method in the first place.

If you want to enjoy currency trading success don’t make the mistakes above or you will lose.

Finally, there are a lot of vendors on the net promising you untold riches from their currency trading systems, for just a few hundred dollars – its not that easy so don’t buy them.

Trading is hard, but for the forex trader prepared to put in the work, the rewards can be immense.

Do your homework, be realistic and you could soon be making big returns from forex charts and executing some great trading signals for big profits.

Forex Trading – Experiencing low Gains? Simple Tips to Get Triple Digit Gains

2008-03-17T23:55:00.004-07:00

In forex trading the bulk of traders experience mediocre gains or lose - this applies to 95% of traders. However many traders are closer than they think to achieving bigger gains and the simple tips below can be incorporated in any forex trading strategy to increase returns – lets look at them.

1. Trade Less

One of the major problems that traders have is they equate trading a lot with getting more profits and they simply trade too much.

There is NO correlation between how often you trade and how much you are going to make - so the first point is cut your trading back to high odds trades only.

This means hitting the long term trends and turning points that yield the really big profits. The big trades only occur a few times each month in a currency so focus on these.

Forget day trading and scalping - the odds are not in your favour and you are guaranteed to lose so don’t try – Hit the big trends and milk them for all you can.

2. Risk More

If your trading a small account don’t diversify ( this is another word for diluting potential gains ) so risk more per trade.

If the odds are in your favour you need to increase your bet size.

You will hear a lot of traders saying you should risk 2% per trade! Well if you don’t risk much you won’t gain much – risk 10 – 20% per trade and more if you have a total conviction the odds are in your favour.

The enemy of successful forex trading is volatility and you need to have your stop far enough back that you are NOT clipped out by it and trail your stop slowly.

With reward goes risk and that’s a fact.

Most traders are so afraid of risk they create it, by having stops to close and losing.

They think they have a low risk but they may as well have not bothered trading in the first place!

3. Use Momentum

The biggest error traders make is trying to predict – If you do you will lose.

Why?

If you predict you are hoping a level will hold and the market is not going to reward you for hope.

You need to make sure that whenever you trade price momentum is on your side. This means missing a bit of the move – but as you can’t predict it’s the best you can do and it will still mean you can make a lot of money as:

You are trading the reality and always trading with the trend.

If you get 70% of the major trends you will make a lot of money.

Trading The Odds For Bigger Gains

If you like the action and the buzz of trading the above is not for you but if you are interested in increasing profits from your forex trading strategy then you will find the above is logical common sense.

You will be trading the best odds trades, risking amounts that can give you big rewards and timing your entries for maximum profit to lowest risk and this over time means big profits.

Automated Trading Systems for Financial Markets and Recommendations for Their Usage

2008-03-17T23:55:00.003-07:00

1. Introduction. Today using information and trading platforms has become a de facto requirement for successful trading in the financial markets. Their advantages as compared to conventional trading schemes include, for example, an unprecedented speed of processing and delivery of information to end users, the level of integration with data providers, and a wide array of built-in technical analysis instruments. At the same time, an investor opening an account with a brokerage firm simply cannot simultaneously manage the real-time analysis and trade in more than 4-6 financial instruments in several markets 24 hours 7 days a week. This brings about the need to employ automatic trading systems in the form of runtime environment with client and server parts and the programs to control these systems (scripts).

2. Comparative Analysis of the Problem Area. Various software components embrace the entire target sector of the market-from analytics and forecasting to complex trade and administration. The components of a trading platform provide its clients-brokers, dealers, traders, financial analysts and advisors-just the service they need at the very moment they need it, from immediate round-the-clock access to information of concern by means of mobile devices, to multi-move trading operations in the major client terminal. The software market offers a great many of information and trading platforms that differ, first of all, in the functionality of the client and server parts, and the list of services provided by the financial company once an account has been opened. However, only a relatively small number of software solutions include the components that automate trading.

2.1. MetaTrader4-based Solutions. One of the world's most widely used trade platform products is apparently MetaTrader4, developed by MetaQuotes Software Corporation for Forex market trading. The platform includes an integrated development environment (IDE) MetaEditor, intended for writing scripts in a programming language called MetaQuotes Language, or MQL4 for short. The language's syntax is based on the classic C language syntax, and the flow logic has not been significantly changed since the previous version of the platform that used MQL II as the programming language. The new automated trade framework is, undoubtedly, an evolution of the previous one. Both languages feature good functionality, with an optimum set of built-in trading and utility functions which is quite sufficient to implement the basic operations, and a facility to define custom functions to help implement non-standard ideas. From the programming point of view, MQL4 is much more convenient that its predecessor; this language is more oriented at professional programmers, while MQL II, in my opinion, will rather suit financial experts wishing to build trading programs (or trading advisors, in the MetaQuotes terminology) of their own.

2.2. Omega Research-based Solutions. In the New World, the vast majority of companies use the Omega Research platform developed by TradeStation Securities, Inc. This platform has long ago proven its worth at the worldwide market, and to date experts consider it to be the best system for technical analysis. The provided IDE called Omega Research PowerEditor is intended to create control programs in EasyLanguage (EL). The language's major advantage that strikes the eye is the easiness (hence is the name) of placing opening and closing orders. The corresponding program instructions can be written such as if we were formulating an order to our broker in the plain human language. In MQL4, for example, placing an order to open a position would involve specifying about a dozen of various parameters. In EasyLanguage, the same can be expressed in a short statement using a few words. Working with technical indicators is about that simple, too. But don't fall under an illusion: when creating these simple commands, language developers sacrificed the functionality and limited the possible ways of using a particular function, therefore effectively depriving the IDE users of the opportunity to accurately implement their own algorithms. TradeStation decided not to create extensive libraries of built-in trading and utility functions but to limit to only an essential set. As the platform advanced, the number of functions written by both in-house and third-party developers grew, and TradeStation simply included them as user-defined functions into the repository of its scripts. As a result, the functionality offered to users is not in the least scarcer than that of MetaQuotes product. PowerEditor provides a built-in dictionary that lets user search and get help on the available functions. Another handy tool worth mentioning is the strategy builder. Using the strategy builder, the user can easily create a basic algorithm for his or her trading program, and then modify and adjust it as necessary. EasyLanguage is an old-timer and pioneer in the field of creating automated trading systems for the stock market. It was the basis for the development of MQL II. EasyLanguage will be a good choice for programmers, but still a better one for financial experts more oriented at analyzing the market than trading.

2.3. ProTrader-based Solutions. Professional financial experts can choose the ProTrader2 or ProTraderFX platform as their working tool, depending on the type of the financial market-stock or Forex, respectively. The two platforms are developed and supported by PFSoft LLC. While featuring the specially developed ProTrader Language (PTL), the provided IDE named PTL Builder offers also the opportunity to create scripts in MQLII, MQL4 and EasyLanguage. For this, the text of the program is translated to a language-independent code. Therefore, at runtime it does not matter in which language the script was written. This technology does not only enable creating new scripts, but makes it possible to use freely the entire accumulated collection of scripts that many experienced traders possess. The main idea put into the new scripting language was to ensure maximum reliability and predictability of the scripts being run. The PTL language is built so as to minimize the possibility of making a mistake in the text of a user's script-the potentially dangerous points will be detected even before the script is tested or launched. Regardless of the programming language chosen, the platform works with verified managed code while running the script. This Microsoft-developed technology enables proper handling of errors that cannot be detected before the script is run. This means the program will not fail and will not perform any unwanted operations that might be due to critical errors or damage caused by another program, for which the account holder would eventually have to pay. The PTL Builder IDE will serve well both financial experts and programmers thanks to its support of different programming languages and provided tools such as tester and debugger.

3. Approaches for Creating Automated Trading Systems and Recommendations for Using Them. It hardly needs mentioning that choosing an information and trading platform should be taken with all seriousness. For those who plan to use an automated trading system in their business, below are some points I would recommend considering, based on my personal experience.

Choosing a Working Environment First of all, define the type of tasks the automated trading system is to perform. These could be:

Actual trading: opening and closing positions in selected instrument(s). Secondary support-type functions. These could include placing protective orders, creating and sending out reports of notifications. Analyzing the market with different technical analysis tools using your own algorithm. Now, after you have studied user comments on the Internet and perhaps consulted your broker, proceed to getting the feel of the products offered. I strongly encourage you not to just have a cursory look, but to test the system for a day of two, thankfully, most of the large companies will let you sign up for a demo account for testing. Pay attention to both the convenience of the IDE and the tools that go with it, and to reliability and security of the control programs created with the IDE.

4. Conclusion. In this article, I neither discuss any programming rules for creating the advisors, nor the specifics of writing scripts in a particular language. On these subjects, there are whole books written as well as a number of articles. My aim was to present several points which I think to be quite important but which have not been sufficiently covered in existing publications. So, are automated trading systems your ally or enemy? When used carefully and without hasty judgments, an automated trading system can facilitate the financial expert's work and bring in certain profits. But when used incorrectly, incompletely tested, or having settings changed frequently, the automated trading system can lose the money you entrust to it. Remember that an automated trading system is not going to do your job for you without any effort on your part. Use it to solve your existing problems and not add new ones.

Incorporating Price Action Into a Forex Trading System

2008-03-17T23:55:00.001-07:00

For the past couple of years Forex market has become very famous. It is a common question that how many dealers make it in the Forex trading. Sadly only fiver percent are able to make it. One point can be that Forex dealers are not aware of the right area to concentrate their focus, in which direction and what decisions have to be taken. Price factor plays an important factor which is not given much importance by the Forex dealers.

Technical indicators comprises of the majority of the Forex trading methods such as moving average, overbought/oversold state in an oscillator, crossover etc. The question arises that what are indicators? They are just a sequence of data points that are planned in a chart and these points are obtained from mathematical methods which are used for the price for any currency. In simple terms it is a chart of price planned in a such a way that we are also introduced to other price also.

As a matter of fact that the majority of the readings acquired are totally derived from the price action. For example a long MA crossover signal the price has increased considerably to make the shorter period MA cross the long period MA producing a major signal. It is generally believed that MA crossover is the reason behind the increased price which is not a genuine reason as MA crossover signal appeared as the price rise. What I am trying to say is that eventually it is the price factor that will decide the functioning of the indicator and the outcome can be decided on any decision trading.

If we try to figure out the trading outcome derived from technical indicators without including the price factor then you cannot get positive effects. For instance, a long signal produced by the MA crosses with the advancement of the market reaches to its resistance stage. There is no point of making use of the signal where the price all of a sudden makes a comeback from that important stage. The price factor justifies that the market is not yet ready to experience an increase. In this situation the market will definitely crash down ignoring MA crossover.

Technical indicators are very essential feature of the trading. These assist us to see all those state those are sometimes difficult by only watching price factor. The involvement of the price factor in the Forex trading methods certainly will turn the difficulties in our support and will assist in increasing the trade.

The question is how to prepare an accurate Forex trading method?

First and foremost, it is very important to choose a trading system that matches your individuality so that you can easily follow it. The requirements and objectives are different for every trader and no system is complete in itself. It is you who have to take the decision of which style and technical indicators to adopt till the time you find the appropriate one. It is very important to know about what technical indicator you are using.

The second step is to add in the price factor to the system that you have adopted. It is beneficial for you as it will guide you to take the long signals if the price factor informs that if the market it going to rise or not and taking short signals just in case the market is decreasing. Thirdly it is very essential to follow the method religiously you have selected for your Forex trading. It is recommended to try out first on a demo account then moving to the small accounts and in the end when you are comfortable in using and operating then shift it to the real account.

Swing Trading With Elliot Wave For Bigger Forex Profits

2008-03-17T23:54:00.002-07:00

Elliot wave is one of the most popular methods of trading and although originally devised for the stock market swing trading with Elliot wave is very popular with forex traders.

Let’s look at swing trading with Elliot Wave in more detail

Elliott Wave theory is named after Ralph Nelson Elliott, who concluded that the markets moved in a repetitive pattern of waves and was a reflection of human nature.

He attributed this action to the mass psychology of the market which never changes and can therefore be predicted with scientific accuracy.

Elliott Wave patterns follow a specific pattern that the markets move up in a series of 3 waves and then down in a series of 2 waves in a bull market. The 3 wave impulse and 2 wave corrective sequences form the basis of his method of a 5 Wave impulse pattern, with the reverse occurring in a bear market.

In Elliot wave theory there is also a use of the Fibonacci number sequence which is specific retracement levels to help calculate the waves.

So by trading these waves, a forex trader can look at his forex charts and swing trade with Elliot Wave and make consistent profits from his forex technical analysis.

It’s a scientific way of making profits according to Elliot waves and his disciples – so does it work?

The answer is it has to be one the biggest myths of forex trading that Elliot Wave Theory can lead you to currency trading success (lets ignore the fact that there is no hard evidence that Elliot made any money from his own theory) and look at why the theory is flawed.

1. If it’s a scientific theory:

It should be objective!

If human psychology can be predicted with scientific accuracy it should tell you exactly what to do, but of course it doesn’t – it leaves everything to your subjective judgment, so it can’t be a scientific theory – it’s a total contradiction in terms.

You have to look at the waves and decide what happens next - does that sound scientific to you?

2. Human Psychology is not scientific!

Of course it isn’t and neither are currency markets.

If there was a scientific theory that allowed people to predict prices in advance there would be no market- as we would all know the price beforehand.

Forex markets move on differences of opinions and these cannot be measured scientifically – This is common sense.

3. The Fibonacci Number sequence

This number sequence is loved by the far out investment community and was developed in the 12th century by Leonardo Fibonacci. It was NOT developed for the purposes of trading forex markets though - but was developed to solve a problem posed by the copulation of rabbits!

In fact I am sure if Leonardo Fibonacci was around today, he would be bemused by the way his theory is used by the believers of Elliot Wave.

So there you have it:

A scientific theory that is not scientific at all and is totally illogical.

Forex Trading – These Traders Made Millions after Just 14 Days Studying The Markets

2008-03-17T23:54:00.001-07:00

The turtle story is perhaps one of the most inspiring trading stories ever and if you want to learn forex trading, then you should study how they did it.

Let’s look at it in more detail.

The Experiment

Legendary trader Richard Dennis set out to prove over 20 years ago, that successful trading could be learned by anyone and set out to prove his point.

He took 23 people all with no trading experience:

Male, female, young, old and from a variety of jobs - many of them blue collar and set out to teach these people a method they could use to make big profits.

The result?

These traders went on to be some of the most successful and famous traders of all time and made him over $100 million dollars.

How did they do it and how did he teach them so quickly?

Let’s take a look.

Dennis set out to teach them a simple method; they could have confidence in and apply it with discipline and then added a set of money management rules to preserve equity.

There was no filler - he just taught them the knowledge they needed to win.

It’s a fact that trading is relatively simple, yet few succeed - and they fail for two main reasons:

- They do not have sufficient confidence in their method to follow it with discipline And:

- They cannot run profits and cut losses.

Dennis focused on these two areas taught them how to overcome these obstacles and the group succeeded.

Is it really that easy to learn forex trading?

The answer is yes and no.

It’s a fact that forex trading can be learned by anyone, yet most traders don’t succeed but this is down to them – the opportunity is there for everyone.

Trading is hard (as any venture is in life where there is big money to be made) but there is a big difference between something being hard and not being achievable.

You can succeed but just like the turtles, you must get the RIGHT forex education and learn the right mindset for success.

Trading success in forex is a combination of the right mindset and the right knowledge.

Most traders simply learn the wrong information or are lazy and expect some guru or mentor, to give them success and lose.

Unfortunately most of the systems and e-books sold on the net are not from traders but from marketing companies who never trade the system!

They make their money making claims that have no substantiation and the gullible novice traders fall for it.

The challenge

If you have a burning desire to succeed and are prepared to apply yourself to trading in the right way, by learn the right knowledge, then you can enjoy currency trading success. The question is:

Are you up for the challenge?

If you are, forex trading can offer you the opportunity to make big consistent gains and brighten your financial future – the opportunity is there now, are you have to take it?

Good luck!

The Tao Of The Wealthy Currency Trader

2008-03-17T23:50:00.000-07:00

The word 'tao' literally means 'way,' so what we will talk about in this article is the way of the wealthy currency trader.

For clarification, the market to which I am referring is the foreign exchange (forex) or currency market, which is the highest volume market in the world.

(Throughout, I will also be using the pronoun 'he,' but ladies this information applies equally to you as well!)

The single most important thing that a wealthy and successful currency trader needs is his confidence. It is this intuitive confidence that will allow him to continually and reliably reap great rewards from the forex markets.

The way that I use the word 'confidence' above is different than the way the word is used in everyday conversation. For the currency trader, I mean that he is always calm and collected, he has completely divorced any and all emotion from his trading activity, he feels good about every trade he makes and he is supremely confident in his decision-making abilities.

The ability to divorce his emotions from his trading is of the utmost importance, and this is a learned skill that comes from experience trading demo and live accounts over time.

The wealthy currency trader has a highly developed intuitive sense; in terms of his trading, this means that in his mind he is able to visualize and conceptualize the value of different world currencies in his mind, and he can see how his trades should play out before he enters them.

The major world currencies that he is concerned with are:

United States Dollar - USD, British Pound - GBP, Swiss Franc - CHF, Euro - EUR, Canadian Dollar - CAD, Australian Dollar - AUD, New Zealand Dollar - NZD

By examining certain important economic indicators for a specific country's currency, he uses his intuitive sense to create an instinctual or gut feeling of what the value of that currency should be.

He relies much more on his mind and his instinctual feelings rather than on overly complicated charts or indicators.

The wealthy currency trader does not like to lose money, though he does realize that losing trades are to be expected because of the inherent risk of the forex market, and when he does lose money he does not get emotional about it.

Because he does not like to lose money, he is not a fan of pure technical analysis probability trading. The idea behind a purely technical based strategy is that you will have lots of winning and losing trades, but over time there will be a greater volume of winning trades than losing ones.

This does not work for the wealthy currency trader, because he would much rather have winning trades all the time. It is for this reason that he uses much trepidation in his decisions about when to place a trade, and he knows that the best times to place sure-fire winning trades is around the time of economic indicator releases.

The wealthy currency trader knows that there are around 30-50 economic indicators released every month that have a significant impact on the exchange rates of major world currencies. He also knows that immediately prior to the release of this indicator, the market has already factored in the estimated value that the indicator SHOULD be released at. This means that if the figure of the indicator differs significantly from expectations, this is a potential trading opportunity and will usually play out to be a winning trade.

Increase Your Forex Pips When The Market is Down

2008-03-07T21:20:00.002-08:00

The 14 week ATR (Average True Rate) for the Euro has hit an all time low in the last 21 years. This clearly indicates that the trading ranges between currencies especially Euro and USD have shrunk considerably and this does not augur well for the forex trading market at all. However, the investors should not lose heart as this current situation is just temporary and, I’m pretty sure that things will look up after some time. After all, this is just a part and parcel of online forex trading and the investors have to be a bit patient till the currency trading market sees through this period.

I’d like to advice the investors to be a bit more watchful and defensive in their approach this time around because of such low daily movements. However, they should remember that this volatility is somewhat cyclical and this could also go up in the near future. In the same breath, I would say that the possibility of a U-turn in the existing forex trading signals can not be ruled out either. In fact, if there were no movements in the FX trading market, then it would be quite difficult for the investors to make profits, right?

However, now the major question that could be playing in your mind is whether and for how long the weakness of the USD against the Euro will linger. The dollar once again has registered a record low and this has set off a lot of questions in the minds of the currency trading investors. This has largely been the reasons why the volatility has gone down drastically in the currency market this time around.

Though this quite sounds like blowing my own trumpet, I would say that the investors using my online forex trading broker system are in the safe zone even during this bleak phase. The forex trading system developed by me offers precise, clear and accurate forex day trading signals to the investors enabling them to make right moves. Let me tell you why it has been so successful in the currency trading market. My forex trading system has been developed after exhaustive technical research, rigorous testing and years of live trading for major currencies in the market. Many subscribers of my system were quite novice about forex trading when they started off trading, but most of them have already improved their forex pips ever since they began using my system. But, I would rather you visit my site (www.forex618.net) and hear from some of my satisfied clients before taking my words for granted. Remember - they say seeing is believing!

Forex Converters - Trading Currencies in the FOREX Market

2008-03-07T21:20:00.001-08:00

Forex trading is becomes more popular with traders as time goes by. In the simplest terms, Forex trading is the buying of one currency and the selling of another. Forex brokerages offer a convenient gateway to the foreign exchange trading by giving access to the biggest financial market in the world. Forex trading is always done in currency pairs, and Forex brokers around the world access money indices via currency converters and online platforms with rates given in real time. Forex brokers usually have relationships with a large network of worldwide banks and international money services. In the market of currency exchange, the value of major currencies change continually, with investors hoping to make a profit from the purchase of stronger currencies. Forex has a superior liquidity when compared to other markets, and any dealings can be readily converted into accessible cash.

Trading in Forex has an increased risk when the trader uses too much leverage. Trading between two non-dollar currencies occurs first by trading one against the US Dollar and then trading the US Dollar against the second non-dollar currency. Trading Forex on margin carries a high level of risk and is not recommended for all investors. Trading with an on-line platform carries additional risks.

While online currency trading is not gambling, you need to know what kind of investment it is and how it works before you consider trading. With the interest rate and conversion rate amount changing hourly, brokers have the ability to enter the exchange market at just the right moment to achieve the best exchange rate for any type of currency.

Exchange rates are usually given as one unit of one currency to units of another currency. Exchange rates give the relative prices of different currencies, with rate movements relying solely on macroeconomic factors. Exchange rate forecast services can help you in plan for the future by giving their expected rate predictions, an important consideration when making international investment decisions. Exchange rates fluctuate when the relative supply and demand schedules do not balance, and have become necessary because currencies have different values relative to one another.

Currency exchange rates are among the first thing that concerns people as they consider an international-oriented business plan. Currency exchange rates are constantly changing, meaning you can receive more or less of a foreign currency depending on when you transact a money exchange. Currency exchange rates, available at banks and published daily in the press, are set by the buyers and sellers of currency. If currency exchange rates are favorable for the US Dollar, they are also favorable to countries that are pegged to the dollar.

The Forex Trading Course That Beginners Should look Out For

2008-03-07T21:19:00.002-08:00

The professionals or experts those who were already into this trade are the best people to provide guidance to follow the various aspects of Forex trading. There are professionals those who started earning more as compared to what they were earning through their routine jobs by Forex trading. Prior to joining any Forex training routine it is recommended to check the credibility and those who have gained success.

No doubt Forex trading has its own benefits and the outcome is very attractive for the investors. But with the success there are also risks involved in it. No doubt that investing in the Forex market is beneficiary but the risks those are involved with it cannot be ignored.

It is essential that if you are planning to invest in the Forex trading you have the complete knowledge of the working of it, otherwise the investors will be facing losses. Forex market is highly competitive market and you should bear a significant amount of knowledge and proficiency in the process of maximizing the chances of profits and minimizing the chances of losses.

Those who had been successful traders in the Forex market had followed Forex trading course for gaining the proficiency required to be successful in the highly competitive market of Forex. With the Forex trading course you will be come to know when and what to purchase and sell, simultaneously getting familiarized with various Forex market.

Through the Forex trading course you will come to know when to make a purchase and sell, be aware of the latest market trends, and how you can put into use different platforms that are present in the Forex market. If you have the basic knowledge of the working of the Forex market, that will be of great assistance in capital building.

As an investor there is a vast selection from which you can choose and decide whatever suits you well. There are online courses available with a shorter time period where you will be made familiarized with every aspect of the Forex trading with the help of internet. There are also full time classes with factual classrooms and live professors teaching.

There is an option that you can become a trainee. As a trainee if you want to know Forex trading in and out then you must have a Forex professional who can guide and share you the important information about the Forex trading. Before joining a Forex trading course following things has to be there: - All leading currencies. - Kinds of orders - Margins - Influences

An efficient Forex trading course also lets you know about the basics and technical evaluating of the charts. If you are a dealer you should possess the proficiency to evaluate the charts. The Forex trading course that you are pursuing, you should assure that it covers the basics and technical evaluation part. The Forex dealers are always in a stress and it is very important how to handle the stressful conditions. And Forex trading course should also teach how to handle stress with great efficiency.

A Forex trading course where you can practice real trading systems with real capital will give them more exposure to the Forex market environment or the provision for the fake accounts. This will be benefiting to a greater extent. The Forex trading course should provide with live trading and transactions as it is been said that if you want to learn anything it is always better to first practice it.

It will be better if the Forex trading course that you are pursuing covers all the mentioned points to be familiarized with the Forex market. If you successfully build up proficiency in this field then you will be definitely make a rewarding career as a Forex dealer

Forex Swing Trading – 3 Simple Steps To Big Long Term Gains

2008-03-07T21:19:00.001-08:00

Forex swing trading aims to take profits from movements within the major trends and the good news is - it's easy to learn, easy to apply, fun and can be very profitable and perfect for novice traders.

Here we are going to show you how to swing trade successfully in 3 simple steps.

Swing trading by its very nature is easier than long term trend following and is perfect for the novice trader.

For the impatient trader you get a lot of trades and you get to know whether your right or wrong quickly, so it’s a lot easier to stay disciplined.

Its fast and its fun, so lets look at how to make profits forex swing trading.

Step 1 – Spot Support and Resistance

You need to use good old trend lines and see areas of support or resistance to trade into and look for at least 3 tests.

Now you have spotted the opportunity, you need to time your entry and correct timing is crucial!

Step 2 - Trade With Price Momentum

Many traders simply like to go short into resistance or long into support as its tested but this is a huge mistake!

You are guessing or relying on hope and the market will not reward you for this – it will kill your equity and wipe you out.

You need to get the odds in your favour and trade with confirmation of price momentum on your side.

You need to wait for a test and then see the market to turn away from support or resistance and THEN trade.

You are trading with price momentum and this will ensure the odds are in your favour.

What indicators should you use?

Try these two: The stochastic and the RSI When you get both in synch and then execute your trading signal.

We don’t have enough time to explain them in detail here – simply check our other articles.

Once you are in the trend and its moving, its time to look to take profits.

3. Step 3 Take Profits To Soon

In forex swing trading your profits can disappear quickly, so take your profits early.

This is BEFORE they test the next level of support and resistance - this will enable you to bank a profit in quickly, before the odds turn against you.

Sure, the trade could run on a bit, but chances are if it comes back quickly you will soon be in a loss - so keep the odds on your side by banking early.

Other points

When swing trading place your stop as soon as you enter your trade on stop close basis behind support or resistance and only trade liquid currencies such as:

Euro, British Pound, Japanese Yen, Swiss Franc and Canadian dollar - don’t try it in minor currencies.

A Simple Way To Make Big Profits!

You can use other tools to trade but we have found that trend lines combined with stochastics and the Relative Strength Index, are all you need to have a simple, robust trading method that’s:

Fun, can give plenty of action, put the odds in your favour and make big profits longer term.

Pros and Cons of Mental Stop and Hard Physical Stops

2008-03-07T21:18:00.002-08:00

When a trader starts his new venture into trading or investing, he finds out many things that need to be learned, understood and used as part of his tools to become successful. One of the useful tools in many trading software is the use of stop loss orders. Although this a standard tool, not many use them. Some use them in different ways to try to achieve one goal: profitability. However, some use mental stop, a method in which a trader determines a stop loss (either in dollar amount, percentage or point system) in his mind but not physically place it in the trading platform. Whereas the physical stop order is placed in the platform on the broker's server or directly on the exchange. What is the difference between the two and what are the advantages and disadvantages of using either?

Advantages and disadvantages of using physical stops:

1. Placing physical stops remove the stress that normally accompanies the trade. Once it's placed, there is usually a sense of relief that the risk is known and cannot be changed. This advantage is due to the removal from having to think and guess what to do next during the trade.

2. Mental stops give the trader greater flexibility that may fit his trading style where adjustments can be made according to changing market conditions. This requires thorough understanding of price action to be able to use this flexibility.

3. Mental stops are difficult to implement for those who lack discipline and concentration. Discipline is the biggest obstacle for a trader to execute his planned mental stops during the trade. Many cannot cope with the fast action of the market, handling a losing situation, or cannot even stay focused with the trading plan before the trade. This cause the wish-washy decision-making that inhibit the trader from sticking to his original mental stop. Many times, the final stop loss ends up very far off the original stop planned, thus a larger loss than planned or expected.

4. Physical stops can be a disadvantage in markets that are prone to stop-hunting, a method used by floor traders, market makers, or highly capitalized traders to move market to prices where high concentration of stop loss orders are placed. Be they in stocks, futures or commodities and forex markets, all markets are vulnerable to them, especially where liquidity is low. This is especially true in stocks during lunch hour where volume is thin or stocks that have low daily average volume.

5. Physical stops protect traders from unexpected disasters and mishaps they routinely suffer. When the stop loss order is placed, it is parked at the broker's server or at the exchange, depending on the instrument and the exchange in which the trade is made. Having this order placed away from the trader's computer, this will protect from outages, internet connectivity problems, trading software problems, or even the trader must attend to other priorities away from the trading desk.

6. Using mental stops can keep the trader's focus in the trade and not be distracted with anything else. Physical stops are in place will cause the trader to be less attentive to the trade and market at hand, causing him to tend to other things besides trading. Concentration and focus may suffer. If the trader must stay focused for the subsequent trades, concentration is a must; else he may miss important information that goes between trades.

It is always recommended that the novice traders use physical stops entirely and unconditionally until he can control his emotions and discipline. In additional, he needs better understand the market before he can make rapid and objective decisions in real time in order to be flexible in using mental stops. The trader may not like the idea of being stopped out just before the market goes his way, leaving him out of the market. Each type of stops has advantages and disadvantages, but stops must be seen as insurance to keep his capital from major harm. It's a difficult decision to make and only through trial and error and assessing personal qualities or weakness will the trader can determine which is best for him.

Facilities Offered In Forex Market

2008-03-07T21:18:00.001-08:00

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Forex trading market is the huge market where, huge number of financial transaction takes place for different kinds of foreign currencies. Forex market enables the customers of the foreign currencies to know about the foreign currency exchange rates. Since more number of financial transaction takes place in foreign exchange market, the buyers and sellers of foreign exchange market. Forex market is nothing but, exchanging of foreign currency for a foreign exchange rates. Foreign trading system should be known to the customers of the forex trading market in a defined manner. Forex rates are not fixed and it finds to be fluctuating always.

Forex trading market comes up with wide opportunities to the traders and they provide FX market data in a comprised and efficient manner. Foreign exchange trading can be made effectively way of FX market data provided by the forex market. With regards to the FX market data or information provided by the forex trading market, foreign currency exchange market can be made effective and competent. Generally, huge number of financial transaction takes place in the forex exchange market and the buyer and seller of the foreign currency exchange should be known regarding the FX market data and foreign currency exchange rate.

To avail the customer with information regarding foreign exchange market, forex news, forex rates, forex book, forex ebook, forex trade signal, forex option prices and forex strategy have been offered to the customers. With regards to the forex news, forex books, forex charts and forex rates, the buyer and seller can go for further financial transaction of foreign currency exchange in the forex trading market. Forex guides are also offered to the buyers and sellers of financial transaction of forex trading market. Forex data provider provides forex data to the customer regarding various updating and current affairs of foreign exchange market.

Online forex trading system or online forex trading course have been offered along with online forex rate in online forex chart. Forex trading market provides more facilities to the customers and also enables the customer to come up with effective and efficient forex platform. Best forex training is also offered to the customers along with best forex software. Currency trading comprises more uncertainties and fluctuations. Currency exchange chart will be updated every now and then in currency exchange online. More facilities are offered in forex trading market to enable more number of buyers and sellers to avail the services provided.

Win at Forex With a Master Mind

2008-03-07T20:57:00.002-08:00

As a professional Forex money manager I have the unique opportunity to converse with investors from all walks of life, and in the process I've noticed a common question amongst the majority of individuals. Time and time again I'm asked what the chances are of becoming a true success trading the currencies market.

If I answered this question by stating: "On average 80% of today's Forex traders will succeed" you might be justified in calling me crazy, however some 15 years ago one might be inclined to answer with such bold figures. Certainly it would not be uncommon for at least 50 to 60% of the chosen few Forex traders to achieve success in those days. Trading Forex was new and profits were there for the taking. Daily price movements were somewhat more predictable and the competition was not nearly as aggressive as it is today.

As time moved on from the late 80s, early to mid 90s and on up to our Present day the success rate dropped drastically as the Forex market progressively became saturated with day traders; this in turn made for a more unpredictable trading environment. The "white noise" we experience intra-day is in part the efforts of the masses, each trader grabbing at what they can to secure their daily profits. It's unfortunate to take note that less than 10% of the investors currently trading the Forex market come out on top.

Let's take a closer look at the real ratio of winners to losers. You see, it's important to understand that this isn't a luck of the draw situation. When you look at figures like 1-in-10 there is certainly much more than meets the eye beneath these numbers. Let's explore this thought further.

Take 10 traders asking the question "What are my chances at succeeding in Forex" and try to find out which of them has the mind of a champion. The answer is rather disappointing, as those who think big do not ask small questions like this. Thus you will not end up with 1 winner and 9 losers. It doesn't matter how many people you tested this theory on, be it 10 or 500+. But how can this be the case if the odds of success are 1-in-10? That is a very good question as within the answer lies one of the keys to your trading success regardless of which system, method or school of thought you subscribe to.

From those who are winning constantly we notice a pattern. Specifically the pattern of positive questions, they tend to stay away from a losing attitude by not asking self defeating questions such as: "Why do I keep losing trades, am I any good at all?" but unfortunately the vast majority of those who are not making steady growth have no option but confusion as they wonder why they aren't on the winning end of things; constantly asking: "Why do I keep losing in Forex?" and inevitably receiving rather discouraging and uninformative answers. You might find yourself saying "I just don't try hard enough" which doesn't help encourage you in any way nor does it point you in the right direction. It only leaves you looking down on yourself in guilt. Not a very winning attitude at all and it definitely won't help you take hold of your financial destiny. If you don't want to be left in the dark without a lamp then it's time to take control of your mind and give yourself the psychological edge you need and deserve.

Forex Trading - Proven Methods For Generating Consistent Profits

2008-03-07T20:57:00.001-08:00

When I see so many people with powerful dreams and desires for their lives looking to the Forex market I really feel for them. I remember when I first started investigating Forex trading and started to get an understanding of what it can do, I could hardly sleep at night because of all the wheels that kept turning in my mind. I kept asking the people I knew who were already involved in Forex trading, "You mean I can now live anywhere in the world or travel as long as I have a laptop and wireless internet?" Yes! "You mean I can start with a very small amount of money and within a year be making more money than I could have after 5 years of real estate investing? Yes! The more I thought about it the more excited I got.

Once I got started learning to trade, however, I started to see that it just wasn't as easy as what the brokers and training salesmen tried to make it out to be. In fact, after visiting some of the forex forums out there and listening to all the negative discussion I began to wonder if anyone really made money in the trading world. I watched many people join various training programs, get discouraged and eventually give up. Fortunately I knew that success was possible and continued to work on my trading while studying every training program I could find. I started to meet people personally who were credible ordinary people who had gotten through the struggling period and actually multiplied their accounts just like the trading plan formulas show. Rather than put 100% faith in a particular program I gathered information from every source I could. During this time I was privileged to have a series of breakthroughs and insights some of which most traders never see. While others would follow a particular trading program like a religion then give it up and "convert" to another guru's system, I continued to take the best of all that I found and put it all together in the testing ground of my own experience.

After a couple of years I was still trading and finally started to see the results I was looking for. The potential results in Forex trading are so amazing and exciting that once you experience it there is nothing else that compares. The first thing I did was quit my previous business and move to Santa Fe to enjoy the sunny climate, artistic community, the beautiful Rocky Mountains and surrounding desert. Next year I may move to Aspen or to Fiji or Switzerland. Now I am only doing what is most fulfilling in my life. I can finally live by T Harv Eker's wealth statement, "I work because I choose to, not because I have to." There are many things I love being involved in and I don't do them for money because the money department is taken care of.

When some of my associates started asking me to show them how I trade the thought of being involved in forex trading training kind of defeated my purpose for trading. I really don't want another job and training is a job. Plus, I never really cared much for "public speaking" if you know what I mean. Well, after some coaxing I realized that with today's web conferencing technology I can show people exactly what I am doing while sitting in my adobe courtyard watching another incredible Santa Fe sunset. Or from the alpine European style lodge where I vacation in Aspen. Plus I do enjoy helping others succeed and that fits in well with my chosen mission in life. So, here we go!

Understand Your Currencies

2008-03-07T20:56:00.000-08:00

In the forex markets, it is important to understand the nature of the currencies you are trading. It is worth knowing the characteristics of the currency pairs, since each of them exhibit distinct identities. There is a fact that most of the currencies might exhibit similar movement patterns, which can help a trader confirm price movements. Trader can look at two pairs of currencies that have almost similar or completely opposite price movement patterns to get better predictions. Let take an example of the close relation between the EUR/USD & USD/CHF.

The price movements of these two currency pairs are absolute mirror images. In short, they have an inverse relationship. If EUR/USD is rallying, then USD/CHF should have downward movement, and vice-versa.

How can traders take advantage of this? The most obvious fact is that one must not trade both the currencies at the same time. If one is long the EUR/USD, logically one should not be long the USD/CHF at the same time, since the USD/CHF would have a downward movement.

Neither is it wise to take opposing trades on these two pairs, because if the trade goes wrong, then the trader would incur losses in both the trades (although the trader also might have double profit if the trade goes right, but anyway, in forex trading, we focus on how to not get loss first).

Ideally, one should trade either of the two pairs. The best way to take advantage of this fact is to cross-check a trade by looking for confirmation factors on the other pair. If a trader is planning to take a long position in the EUR/USD, he can look for a similar short setup on the USD/CHF. If such an opposite setup is present in the USD/CHF, it only adds further credence to his long EUR/USD trade. It is just a check.

There are other currency pairs also which exhibit a close relation. This fact serves as a good rule of thumb to estimate the movement of the particular currency. Thus it is worth studying these relationships to gain a higher edge in the market. As you know, sometimes a basic knowledge can also serve as a turning point between failure and success.

Forecasting in the Forex Trading Market

2008-03-07T20:52:00.000-08:00

Forex, also known as the foreign exchange market is the busiest financial market that boasts of over $1.5 trillion worth dealings in a day. Although this market has no physical location, it operates efficiently through an extensive network of banks and corporations. The Forex market is far more volatile than the traditional market and relies heavily on speculation. Forex currency trading can be very lucrative for those who understand the importance of "timing a trade" and are willing to stake long hours in research and market study. As a Forex trader, you should be able to forecast Forex trends for successful trading. Forecasting is one of the most crucial aspects of Forex trading and if you are able to predict market trends well, you can save yourself from financial disasters. For forecasting Forex trends successfully, you need to look into various details such as historical trends, past performances, and market movements.

Financial experts depend on technical and fundamental analysis to study current trends and predict future trends. Existing data and facts can be used to forecast the movement of the economy and the stock market and how this would impact individual securities. Financial analysts apply several methods to forecast the foreign currency market that include the most popular methods namely, technical analysis and fundamental analysis. These methods are commonly used to understand how the foreign currency exchange market operates and how even the slightest fluctuations influence currency rates and subsequently the whole currency trade. Both these methods are entirely different from one another but serve one common purpose – Forecasting Forex trade. As you understand how technical and fundamental analysis can help in forecasting, you will be able to combine the two for better forecast and more lucrative trade.

Technical analysis relies on past performances that are indicated through charts and graphs compiled on the basis of past Forex market movements. These movements are nothing but major events that occurred in the past and how they affected the currency rates. Experienced Forex traders and brokers greatly depend on technical analysis, as it is drawn from actual figures and trends in the Forex market. For effective technical analysis, you need to understand how past performances, current events, and changing currency prices influence the market action and therefore need to take into account the supply and demand as well. Financial experts believe that the price movements generally repeat in a particular pattern over a period of time. As a Forex trader, you need to study and understand these patterns well in order to forecast successfully. When looking at the past performances for technical analysis, you must divide your study into five main categories namely; number theory, indicators, gaps, waves, and trends.

Fundamental analysis is another important method for forecasting in the Forex market and forecast is based on events that have not yet occurred. You can forecast price movements by taking into account number of factors that include environmental factors, political changes and natural disasters. These factors greatly affect supply and demand in the market and eventually influence price of currency. Although the fundamental approach is quite effective, it cannot rely on it alone to predict in the Forex market. Experts combine this analysis with technical analysis to predict accurately and expect changes in the currency exchange trade.

If you are keen on investing your money in the Forex market, a basic understanding of how the Forex currency trading system functions is crucial. This will help you to predict which direction the currency trends will move and how you can use this information to maximize profits. If you are not familiar with the way the Forex market operates, you may consult with an expert Forex broker who can take off the burden and advise you about Forex trading and planning entries and exits effectively.

The Best Forex Trading Platforms

2008-02-28T21:40:00.002-08:00

Forex trading platforms are software through which online brokers and investors can perform daily forex trading from anywhere around the world.

New age forex trading platforms offer you advanced, unique features that can actually change the way one used to perceive online trading. The best forex trading platform presents the blend of functional usage combined with ease of use.

The best forex trading platform will be designed to help the investor in executing the trading most effectively by employing strategies to maximize the return. Most of the forex trading platforms are powered with unique analysis and strategy-testing features to test all buy and sell rules.

With a click of your mouse you can access strategy performance reports with simulated results like profit versus loss, annual rate of return, etc. Based on them you can modify your trading strategies without incurring losses.

The best forex trading platform always comes with fully automated real-time online streaming data from the market to take the advantage of the liquidity of the market. The best forex trading platform connects your monitor to the markets.

This also ensures that you get the execution prices on every order type available without any slippage. The best forex trading platform should provide the robust backbone to handle transaction of heavy data and information traffic.

The best forex trading platform must offer more than one type of account like standard, institutional or mini. The platform should come with different operating packages like Flash, Java, or WAP. These software provide firewall protection to maintain the security and integrity of your trading.

You can perform your trading from home, office, laptop on the go or even from an internet café with equal ease. The best forex trading platform will facilitate you to use the system without downloading any program, which presents perfect mobility to the traders or investors.

The best forex trading platform should offer:

Tight spread on all major currency pairs with cutting-edge trading technology
Quick execution with unlimited transaction amount
No slippages and no requites
Constant margin requirements in all volatile market condition
Multiple real-time charts and other technical analysis based predictions with maximum visual representation
Flexibility of placing complex orders including contingency orders
Real time margin and position monitoring.
Technical analysis for all demo and live accounts
Authentic market news and economic calendar
Performance, Security, Simplicity and Transparency
Trading history and print out any reports

With advanced mobile forex trading platforms, you can operate when you are away from your computer. Therefore the best forex-trading platform with facilities of mobile trading enables you access and trade your forex account from anywhere with your mobile phone.

These platforms come with easy to use interface, where you can easily move from one screen to the next. You can place market and contingent orders with simple steps and can have full reports including execution and open order.

Which is the right Forex trading strategy?

2008-02-28T21:40:00.001-08:00

Learning Forex trading is not a simple task, but in no way it is difficult either. Forex trading is all about regulation, willpower and determination. Leveraging your strength could be extravagant by organizing the apt Forex trading strategy. You may find hundreds and thousands of Forex trading strategies out there. Logic would tell us that there is a foreign currency strategy out there which leverages our strengths. All forex trading strategies use a variety of indicators and combinations. These indicators and studies are just calculating support and resistance and trend in the Forex trading market.

Which forex trading strategy actually works?

First, we should know who we are as forex traders. Does our character fit the pip sniper mode or does our nature draw us more towards swing forex trading. Finding your trading character would simply mean studying and practicing the different time frames and related with Forex trading strategies. Over time you might also notice a higher level of achievement and/or ease trading one style over others. You need to pay attention! The forex market is uttering you where your cleverness is more competent of extract reliable profits for the market. This is why journaling is so imperative to your every day forex trading.

Secondly, if in case you are using some body else’s forex strategy, a most of us are, organize this strategy with no change until you fully and totally recognize all aspect of the strategy through back-testing and as well with some real life experience. Don’t fall into entrap of jumping from one strategy to strategy or mixing different strategies when the one you are using does not lead to instant success. This is only a guideline for disaster.

Take the time to actually understand the forex trading strategy. Study the components independently so a deeper understanding of the strategic mechanisms would be mastered. If you recognize the components, internalize its use, and make consistent profits into your forex trading account, then you have your own Forex trading strategy. It does not really matter what the professionals say, your account balance is the final judge and judges for your Forex trading strategy.

Living the Dream – Facts on Becoming A Pro Forex Trader From Home

2008-02-28T21:39:00.001-08:00

It’s the dream of all Forex traders to set up a business they can make huge profits from and do it from home. No boss, any long hours - just big profits! Is it possible?

Yes it is but you need to keep the following facts firmly in mind.

Fact: Anyone can learn to trade

It’s a fact that anyone can learn to trade and everything about trading can be specifically learned by those traders prepared to put in the time and effort to do so and this was clearly demonstrated by the following:

In 1983 in a famous experiment legendary trader Richard Dennis taught a group of people with no previous experience to trade in 14 days.

The result?

They went on to make Dennis $100 million and become some of the most famous traders of all time.

Fact: While Anyone can learn to trade correctly few do!

The fact is that 95% of novice traders quickly lose their money and lose!

So if it’s possible for anyone to learn why do they not do so?

The reason lies in the fact that many traders learn the wrong knowledge and also fall victim to their emotions. You need to work smart and learn the right knowledge – this is totally different to working hard and the rewards if you focus on the RIGHT information are huge.

Fact: Obtaining trading discipline is the hard part.

Most traders can learn a method, but applying it with discipline is the hard part.

keep in mind if you don’t have the discipline to execute your method with discipline you have no method in the first place!

Fact: Trading success comes from within

To get discipline in your forex trading, you need to have confidence in what your doing and most traders don’t take the time and trouble to learn the basics to do this and fail.

They continually believe mentors, who tell them by following them they can achieve success by simply following them. Well the fact is only you can give yourself confidence by learning the basics, by doing so you will give yourself confidence and from confidence in what your doing - comes discipline.

Fact: Most Traders can’t handle risk

They are so afraid of risk they actually create it.

They let losses run, snatching profits early - giving them no chance of success.

They effectively try and restrict risk so much they actually create it and guarantee that they will lose.

If you don’t like risk don’t trade, it’s as simple as that.

Successful forex trading is all about taking risks at the right time and executing trading signals with confidence and discipline.

Fact: Most Traders Predict and lose

If you want to trade successfully you must forget about predicting, as this is simply another word for hope and if you hope in any venture in life, you will lose.

They buy into levels of support and hope they hold – well that’s a great way to lose - Or they believe in ridiculous theories such as Elliot wave and Fibonacci, which say you can predict market movement and reduce trading to a scientific method.