Buying and selling of different currencies of the world is known as forex trading. Forex or foreign exchange market is the largest trading market in the world. Forex trading market deals with more than US$2 trillion everyday. It has become favorite option for currency traders. Foreign exchange market is extremely different from stock exchange market. Currency trading is always done in pairs like USD/EUR or USD/GBP etc. Forex trading market works 24 hours a day.
Several investors and traders are joining forex trading every day. First time investors should keep in mind that forex trading works on certain principles. They should remember that it is an investment not an income. Currency can fluctuate at any time so right time investment is the best investment in forex trading. You should have another source of income while dealing in forex trading. If you are a first time investor don't believe in demo trading because it can be dangerous in long run. After getting all information about broker's system you can start forex trading with small amounts. You should always invest that amount for which you can bear profit or loss.
Sometimes forex trading is a risky business but the trader can reduce the risk by following best trading strategy. Trader should know the right time to enter and exit the market. Forex trading is an easy and simple trading business. You can do forex trading while sitting in your home. It requires a PC with Internet connection and a bit of time. You can perform all the transactions online with a small fee and the best thing of forex trading is that you don't have to pay large amounts to professional. Forex trading market offers a large number of online options for currency trading. Before joining it you've to search for the best option to achieve your goals.
Beginners can use forex trading software programs to track and analyze market conditions. These programs will help you in finding the best investment opportunities. Forex trading software enables you to make right decisions about investments. Beginners shouldn't try to predict the forex trading markets because currency fluctuation may occur anytime. You can handle forex trading by using trading system and money management strategy.
Don't be emotional in forex trading. You should behave like a businessman that can efficiently test the market data. Testing system and best money management strategy lets you to invest your capital in the best way. While paying minor attention to the ups and downs of the forex trading market you can easily maximize your profits. You can make profitable trades by focusing on the hours when market generally makes their biggest moves.
With some research, a lot of skill and a bit of luck you can enjoy forex-trading market completely. You've to be smart at the time of making choices and taking risks. The trading process is so simple and can be done with a small amount. You don't have to wait for the opening and closing of stock market because it works for twenty-four hours. Several trading companies are providing free information online. You can search for required information before making any decisions. Some companies also offer free trail periods; you can also check it out.
By: Gagandeep Dhaliwal
Sunday, December 4, 2011
5 Things You Must Do If You Want To Attain Financial Freedom Through Forex Trading
With the amazing growth of the forex market, you are going to see an astounding amount of traders lose all their money. Unfortunately, they haven't followed the simple steps I have laid out for you. Go through these steps and give yourself the greatest opportunity to achieve your goals.
1. Have Faith In Yourself
To reach the level of elite forex trader, you must trust in yourself and your forex trading education. You must be willing to make all your trading decisions, instead of relying on someone else's thoughts or ability (or lack of). Of course, you will prepare yourself fully before every risking any money.
2. Accept Your Learning Curve
Unless you are a veteran trader, you will lose money trading the Forex market. This is a near certainty. I don't say this to talk you out of trading. In fact, quite the opposite. You will be trading against others that fall to this reality day in and day out. You, however, will not risk a dime until you have learned the skills you need to make money trading the forex.
3. Decide What Type of Trader You Are
There are many ways to trade the forex. They range from very active to very patient. You must decide which style suits you best. The best time to learn this about yourself is while you are trading a demo account. There is no need to allow your learning curve to cost you money.
4. Get Educated
Education is the shortest path to elite forex trading. Regardless of your ultimate goals, you will reach them quicker with a great forex trading education. Take some time to review different options before deciding on who to trust with your forex trading education needs. A forex seminar will help shorten your learning curve drastically.
5. Continue to Get Educated
In order to achieve and retain elite forex trading skills, you must constantly be adding to you knowledge base. Your education should never end. In fact, one of the key points to look for in an elite forex trading course is ongoing education. It's nice to have an ongoing relationship with the person/people helping you to achieve your goals.
What separates an elite forex trader from all others is their desire and ability to be independent. Many traders are willing to follow signals, systems, strategies, or anything else you may call them. By taking this approach, however, these traders are only as good as the people they follow.
An elite forex trader will lead. Their decisions will be calculated and analyzed to near perfection. They will make decisions with no hesitation, and handle the growth of their account in a predetermined, intelligent fashion. Take your trading to their level and you will never look back.
By: Eddie Yakubovich
1. Have Faith In Yourself
To reach the level of elite forex trader, you must trust in yourself and your forex trading education. You must be willing to make all your trading decisions, instead of relying on someone else's thoughts or ability (or lack of). Of course, you will prepare yourself fully before every risking any money.
2. Accept Your Learning Curve
Unless you are a veteran trader, you will lose money trading the Forex market. This is a near certainty. I don't say this to talk you out of trading. In fact, quite the opposite. You will be trading against others that fall to this reality day in and day out. You, however, will not risk a dime until you have learned the skills you need to make money trading the forex.
3. Decide What Type of Trader You Are
There are many ways to trade the forex. They range from very active to very patient. You must decide which style suits you best. The best time to learn this about yourself is while you are trading a demo account. There is no need to allow your learning curve to cost you money.
4. Get Educated
Education is the shortest path to elite forex trading. Regardless of your ultimate goals, you will reach them quicker with a great forex trading education. Take some time to review different options before deciding on who to trust with your forex trading education needs. A forex seminar will help shorten your learning curve drastically.
5. Continue to Get Educated
In order to achieve and retain elite forex trading skills, you must constantly be adding to you knowledge base. Your education should never end. In fact, one of the key points to look for in an elite forex trading course is ongoing education. It's nice to have an ongoing relationship with the person/people helping you to achieve your goals.
What separates an elite forex trader from all others is their desire and ability to be independent. Many traders are willing to follow signals, systems, strategies, or anything else you may call them. By taking this approach, however, these traders are only as good as the people they follow.
An elite forex trader will lead. Their decisions will be calculated and analyzed to near perfection. They will make decisions with no hesitation, and handle the growth of their account in a predetermined, intelligent fashion. Take your trading to their level and you will never look back.
By: Eddie Yakubovich
Sunday, November 6, 2011
Revealed — Million Dollar Forex Investing Mistakes
Anytime that you are investing in the Forex market, you are going into the Market blind. You don't know what point of the investing trend you are entering in at. You might be investing in a Forex stock just before the trend changes. Smart investing means you need to protect your trading float and set up a stop loss. This needs to be done before you enter a trade, so that there is no room for error, or last minute indecision. A stop loss is simply a predefined point at which you exit the stock.
Effectively, it's like drawing a line in the sand underneath the share price, saying, "If the share price falls below this line, then the stock hasn't done what I thought it was going to do, and I'll exit the position."
This allows you to protect your investing trading plan, because it cuts your losses short, and guards against an all too human tendency to want to believe you must be right.
95% of investing in an entry Forex position means you are expecting to profit from the trade. If, however, the share-investing price goes against you, you might feel the need to justify why you bought the stock by holding onto it until it turns a profit. You might have heard the idea that all big investing losses once started as small losses. Well, while the share price continues to go in the wrong direction, those losses grow in lockstep. This is why you need to have a stop loss in place — it's like having an ejector seat that tells you when to abort the mission.
One of the most common question I'm asked when traders are introduced to a stop loss is "How wide should I set my stop?"
In other words, how much room should I give the stock to move? There are no definitive answers to this question because it depends on what time frame you're investing in. If you're a shorter-term investing trader, you're going to have a stop loss that's set closer to the share price. If you're a longer-term investing trader, you'll give the share price a little bit more room to move and set your stop loss lower.
Once you've identified what time frame you're looking at trading, you need to be able to remove the normal market noise (volatility) in that particular time frame. You don't want to have to close out of an investing position just because a share price moved a little bit due to its normal trading volatility.
In fact, there are some serious drawbacks to setting tight stops.
First, you'll decrease the reliability of your system because you get stopped out more often.
Second, and probably a little bit more importantly, you dramatically increase your transaction costs, because you're trading transaction costs make up a major proportion of your business expenses.
To give yourself a fighting chance, you want to trade a system that doesn't chew through excessive brokerage fees. This is one of the major reasons I steer my clients into developing a trading system that runs over a slightly longer time frame. With the correct system in place, and your investing risk minimized, you are well positioned to maximize your trading profits.
By David Jenyns
Effectively, it's like drawing a line in the sand underneath the share price, saying, "If the share price falls below this line, then the stock hasn't done what I thought it was going to do, and I'll exit the position."
This allows you to protect your investing trading plan, because it cuts your losses short, and guards against an all too human tendency to want to believe you must be right.
95% of investing in an entry Forex position means you are expecting to profit from the trade. If, however, the share-investing price goes against you, you might feel the need to justify why you bought the stock by holding onto it until it turns a profit. You might have heard the idea that all big investing losses once started as small losses. Well, while the share price continues to go in the wrong direction, those losses grow in lockstep. This is why you need to have a stop loss in place — it's like having an ejector seat that tells you when to abort the mission.
One of the most common question I'm asked when traders are introduced to a stop loss is "How wide should I set my stop?"
In other words, how much room should I give the stock to move? There are no definitive answers to this question because it depends on what time frame you're investing in. If you're a shorter-term investing trader, you're going to have a stop loss that's set closer to the share price. If you're a longer-term investing trader, you'll give the share price a little bit more room to move and set your stop loss lower.
Once you've identified what time frame you're looking at trading, you need to be able to remove the normal market noise (volatility) in that particular time frame. You don't want to have to close out of an investing position just because a share price moved a little bit due to its normal trading volatility.
In fact, there are some serious drawbacks to setting tight stops.
First, you'll decrease the reliability of your system because you get stopped out more often.
Second, and probably a little bit more importantly, you dramatically increase your transaction costs, because you're trading transaction costs make up a major proportion of your business expenses.
To give yourself a fighting chance, you want to trade a system that doesn't chew through excessive brokerage fees. This is one of the major reasons I steer my clients into developing a trading system that runs over a slightly longer time frame. With the correct system in place, and your investing risk minimized, you are well positioned to maximize your trading profits.
By David Jenyns
The Trading Teacher
When I studied the principles of investing in university, I was taught that the price of a share reflected the value of the company. With fundamental analysis, there are many methods on how one can analyse the financial statements of companies to find out whether a share is a good or a bad investment. You can conduct horizontal and vertical analyses on standardised financial statements, which are just fancy terms for comparing numbers. You can calculate certain financial ratios to get a better understanding of a company's liquidity, working capital management, its ability to remain in business over the long term, and its profitability.
I applied these concepts when I started trading the stock market. Soon I found that if I wanted to trade shares in a timeframe of less than three months, decisions based on these analyses were not useful. I did not want to buy shares only to receive dividends. I wanted to trade for capital gains.
I was dissatisfied with my knowledge, the tools and the methods that I had to trade the markets. With my desire to trade a timeframe shorter than three months and my strengthening belief that emotions greatly impact on trading, I began to search for different approaches to buying and selling shares.
I went back to one of my textbooks in university. I wanted to know how else I could analyse the markets. From the passage I read, I learned that one can analyse the markets in one of two ways: fundamental analysis and technical analysis.
I bumped into a newspaper ad one day for a trading seminar. While reading through the ad I saw the words: technical analysis. An expert trader was going to speak on the exact topic I was interested in learning. It was a free seminar and everybody was welcome to come along. So I called a friend of mine and I asked if he would be interested in attending this trading seminar. He was.
The seminar was organised by a business selling trading courses: courses to instruct people on how to trade the share market. When we arrived, we were led into a small room. There were about thirty people. The spokesman was apparently a veteran trader who wrote two books on trading. Let's call him Bauer for the purpose of this article. Bauer had a very strong presence. He was a huge, tall man with a clean-shaven head.
I was on the front row seat trying to listen and understand every word this man said. It was his teachings that planted the seeds of how I eventually grew as a trader over the years. Many times, I heard his voice in my head, reminding me of the lessons I learnt from his books and the lessons I learnt from him that day. I will try to enumerate the lessons I learnt from this man to help you the way they helped me.
This man had my attention from the very beginning. "The share market is a game where people try to steal money from other people. That is the objective of the game and it is legal", he began. I wondered what the professionals in Wall Street would have thought about that statement if they heard it. I smiled. I liked him already.
He continued: "If you are going to join this game, you are essentially given permission to steal money from other people and in exchange, you are okay with them stealing your money also. Some of the brightest people in the world will be playing with you. Therefore, if you are going to war and fight an army with real weapons, you better make sure you do not go there with a plastic gun."
He said that people rush to the markets to lose their money. It sounded laughable but I guess it was the only conclusion one can draw from the fact that most people begin trading without sufficiently preparing and educating themselves. Of course, most of us do not put on a trade with the hope of losing our money; however, that is what we are effectively doing when we trade without adequate preparation.
"They just cannot wait to lose their money. They do not bother learning about the market first. They think it is easy. Most people know that they need training before they can fly a plane or perform surgery, but I do not know why they think it is easy to make money trading", he exclaimed. He was quite emotional about it.
"Trading is hard", he declared. Only about 5% of people know how to trade profitably. And so the probability of finding someone else who knows what they are doing is very, very small. "Do not rely solely on the advice of your brokers, your fund managers or whoever else. Your best hope for success is to educate yourself. The sooner you do that, the better off you'll be."
"When it comes to buying and selling shares, there is no such thing as investing. What people normally refer to as investing means long-term trading to me". When people hold on to their investments for five or more years with the intention to sell later, then all they are effectively doing is trading:just with a longer time frame.
"Do not buy shares solely for the dividend payments. They offer you measly rewards", he said. "Do trade only with the purpose of making money from capital gains. Buy low, sell high and that's how you should make your profit."
At the time, I was juggling between the concepts of short-term trading or investing for the long-term. I did not know whether I was taking the right approach by attempting to make short-term profits. He made his stance on the matter strongly.
He asked us if we knew what drove prices up or down. Remembering what my lecturer said in university, I responded, "the price moves up and down close to the intrinsic value of the share".
He turned his attention to me and asked, "What share are you trading?"
"XYZ (I changed the name for the purpose of this article)", I replied quite happily. Perhaps I could squeeze a tip or two from him about the stock.
"Do you know what the intrinsic value of XYZ Company is", he asked.
I nodded my head sideways and muttered, "no".
"I'll tell you what the value of XYZ is: it is zero!" He barked.
I was taken aback by his response. Zero? Then what are we paying money for when we buy a share? I thought. Then he clarified himself.
"Price is only a perception — it is people's perception of what they think the value of the share price is".
"The key to success in trading is psychology", he continued. Psychology? I thought. How did psychology get involved in this? "The stock market is like an opinion poll. It is a measure of what people think is going to happen. If they think the price will go up, you will see an upward movement on the chart because there are more buyers so the sellers increase their price because some of these buyers are willing to buy at higher prices", he explained.
He then used an example to explain a typical trader's behaviour when he trades without a system. As he explained it, I recognised my own behaviour in his demonstration.
This was all a revelation for me. When I was buying and selling shares I wondered what type of people were on the other side of the trade because collectively, they were pretty smart. Now I know. It was people like Bauer who were on the other side of those transactions, doing the exact opposite of what I was doing, using similar methods like the ones he was using. They were looking at the share market with a philosophy and an approach that were completely alien to me. Traders like him were making all the money and traders like me were losing.
I shook my head in disbelief that other people saw things the way they did. I felt excited knowing that there was another alternative, another approach in analysing the markets.
"What you need, is to develop your own trading system." He exclaimed to everybody in the entire room. "Without a trading system, you will fail. I guarantee you. This trading system must be something that is suited for you and you only. Even if I give you my trading system I am certain that you will fail to make money, because my system is not designed for you. It is designed for me. That is why you need to learn how to use the tools and acquire the skills needed to be a trader".
I accepted his advice without fully understanding this concept of matching a trading system to suit the trader's own personality. It lingered in my mind for a long time. The wisdom of his advice became apparent to me as I slowly learnt more about the nature of trading.
Bauer diverted our attention to the charts on the screen projected from his laptop. All I saw were lines, curves, rectangular boxes and more squiggly lines. The tools of a professional trader: I thought. I was being shown the tools that my market 'adversaries' have been using to 'clobber' me with all this time. My heart was beating faster than usual. I was in awe. I wanted those tools.
I asked Bauer what program he used to analyse the markets. He told me. I also asked him how many indicators he used. I had read enough about technical analysis by that time to know that technical analysts use indicators to analyse share prices. There are many indicators to choose from so I wanted to know how many of those are used by professional traders. He started counting his fingers. 'Seven', he said.
I think many people there had not really read up on technical analysis but I had done my homework and by that time, I was pretty much the only person in dialog with him, asking him questions. I wanted to gain as much knowledge and wisdom he was willing to give me.
Then I heard one of the most important lessons I've learnt which minimised my losses during my early years of trading: "Trade so small that it is almost a waste of your time. Assume the next trade is going to be the first out of a thousand trades you are going to be making in your life. Even though your profits are smaller, your losses are smaller too. There is no need to rush. Do not worry about getting rich too quickly."
He was suggesting that novices like me should trade using small position sizes. That means to buy small number of shares at the start. I was intrigued. I did not know a person should trade that 'small'.
Eventually, the seminar ended. I grabbed the booklets and brochures given out by some of the staff. In one of these brochures was the name of the program he uses. They were selling the software with the courses they were offering. I could not afford the entire package but I knew I had to buy the same charting software Bauer used. I decided to learn as much as I could about how to use charts and graphs to analyse the market. I needed to develop my own trading system.
As for my friend, he said he had a car loan to take care of first. He would look into trading shares later when he had a little more money to set aside.
A couple of days later, I got a call from the organiser of the seminar, telling me that based from the questions I had been asking that night, I was the type of person that would most benefit from their education package. Bauer was asked to demonstrate the need for trading education because he traded the markets. In the process, he was selling the courses well. Bauer seemed knowledgeable and experienced. He has enlightened me and probably several other people in that room about how much there was to learn. I was sold. I just could not afford the courses at the time but I wanted them so badly that I asked the sales person on the other end of the line if I could work for them in exchange for the course.
I did not get to do the course but I bought the software from a different distributor at a cheaper price. I also bought the two books Bauer wrote. I figured that I could acquire the skills and wisdom through self-education. I learnt a lot from those two books and from using the software. Having that opportunity to attend that seminar was a 'gift from the heavens', as far as I was concerned. Wherever you are, Bauer, I thank you. You — and others like you -- have made me recognize the value of passing on knowledge and experience for others to follow.
By:Marquez Comelab
I applied these concepts when I started trading the stock market. Soon I found that if I wanted to trade shares in a timeframe of less than three months, decisions based on these analyses were not useful. I did not want to buy shares only to receive dividends. I wanted to trade for capital gains.
I was dissatisfied with my knowledge, the tools and the methods that I had to trade the markets. With my desire to trade a timeframe shorter than three months and my strengthening belief that emotions greatly impact on trading, I began to search for different approaches to buying and selling shares.
I went back to one of my textbooks in university. I wanted to know how else I could analyse the markets. From the passage I read, I learned that one can analyse the markets in one of two ways: fundamental analysis and technical analysis.
I bumped into a newspaper ad one day for a trading seminar. While reading through the ad I saw the words: technical analysis. An expert trader was going to speak on the exact topic I was interested in learning. It was a free seminar and everybody was welcome to come along. So I called a friend of mine and I asked if he would be interested in attending this trading seminar. He was.
The seminar was organised by a business selling trading courses: courses to instruct people on how to trade the share market. When we arrived, we were led into a small room. There were about thirty people. The spokesman was apparently a veteran trader who wrote two books on trading. Let's call him Bauer for the purpose of this article. Bauer had a very strong presence. He was a huge, tall man with a clean-shaven head.
I was on the front row seat trying to listen and understand every word this man said. It was his teachings that planted the seeds of how I eventually grew as a trader over the years. Many times, I heard his voice in my head, reminding me of the lessons I learnt from his books and the lessons I learnt from him that day. I will try to enumerate the lessons I learnt from this man to help you the way they helped me.
This man had my attention from the very beginning. "The share market is a game where people try to steal money from other people. That is the objective of the game and it is legal", he began. I wondered what the professionals in Wall Street would have thought about that statement if they heard it. I smiled. I liked him already.
He continued: "If you are going to join this game, you are essentially given permission to steal money from other people and in exchange, you are okay with them stealing your money also. Some of the brightest people in the world will be playing with you. Therefore, if you are going to war and fight an army with real weapons, you better make sure you do not go there with a plastic gun."
He said that people rush to the markets to lose their money. It sounded laughable but I guess it was the only conclusion one can draw from the fact that most people begin trading without sufficiently preparing and educating themselves. Of course, most of us do not put on a trade with the hope of losing our money; however, that is what we are effectively doing when we trade without adequate preparation.
"They just cannot wait to lose their money. They do not bother learning about the market first. They think it is easy. Most people know that they need training before they can fly a plane or perform surgery, but I do not know why they think it is easy to make money trading", he exclaimed. He was quite emotional about it.
"Trading is hard", he declared. Only about 5% of people know how to trade profitably. And so the probability of finding someone else who knows what they are doing is very, very small. "Do not rely solely on the advice of your brokers, your fund managers or whoever else. Your best hope for success is to educate yourself. The sooner you do that, the better off you'll be."
"When it comes to buying and selling shares, there is no such thing as investing. What people normally refer to as investing means long-term trading to me". When people hold on to their investments for five or more years with the intention to sell later, then all they are effectively doing is trading:just with a longer time frame.
"Do not buy shares solely for the dividend payments. They offer you measly rewards", he said. "Do trade only with the purpose of making money from capital gains. Buy low, sell high and that's how you should make your profit."
At the time, I was juggling between the concepts of short-term trading or investing for the long-term. I did not know whether I was taking the right approach by attempting to make short-term profits. He made his stance on the matter strongly.
He asked us if we knew what drove prices up or down. Remembering what my lecturer said in university, I responded, "the price moves up and down close to the intrinsic value of the share".
He turned his attention to me and asked, "What share are you trading?"
"XYZ (I changed the name for the purpose of this article)", I replied quite happily. Perhaps I could squeeze a tip or two from him about the stock.
"Do you know what the intrinsic value of XYZ Company is", he asked.
I nodded my head sideways and muttered, "no".
"I'll tell you what the value of XYZ is: it is zero!" He barked.
I was taken aback by his response. Zero? Then what are we paying money for when we buy a share? I thought. Then he clarified himself.
"Price is only a perception — it is people's perception of what they think the value of the share price is".
"The key to success in trading is psychology", he continued. Psychology? I thought. How did psychology get involved in this? "The stock market is like an opinion poll. It is a measure of what people think is going to happen. If they think the price will go up, you will see an upward movement on the chart because there are more buyers so the sellers increase their price because some of these buyers are willing to buy at higher prices", he explained.
He then used an example to explain a typical trader's behaviour when he trades without a system. As he explained it, I recognised my own behaviour in his demonstration.
This was all a revelation for me. When I was buying and selling shares I wondered what type of people were on the other side of the trade because collectively, they were pretty smart. Now I know. It was people like Bauer who were on the other side of those transactions, doing the exact opposite of what I was doing, using similar methods like the ones he was using. They were looking at the share market with a philosophy and an approach that were completely alien to me. Traders like him were making all the money and traders like me were losing.
I shook my head in disbelief that other people saw things the way they did. I felt excited knowing that there was another alternative, another approach in analysing the markets.
"What you need, is to develop your own trading system." He exclaimed to everybody in the entire room. "Without a trading system, you will fail. I guarantee you. This trading system must be something that is suited for you and you only. Even if I give you my trading system I am certain that you will fail to make money, because my system is not designed for you. It is designed for me. That is why you need to learn how to use the tools and acquire the skills needed to be a trader".
I accepted his advice without fully understanding this concept of matching a trading system to suit the trader's own personality. It lingered in my mind for a long time. The wisdom of his advice became apparent to me as I slowly learnt more about the nature of trading.
Bauer diverted our attention to the charts on the screen projected from his laptop. All I saw were lines, curves, rectangular boxes and more squiggly lines. The tools of a professional trader: I thought. I was being shown the tools that my market 'adversaries' have been using to 'clobber' me with all this time. My heart was beating faster than usual. I was in awe. I wanted those tools.
I asked Bauer what program he used to analyse the markets. He told me. I also asked him how many indicators he used. I had read enough about technical analysis by that time to know that technical analysts use indicators to analyse share prices. There are many indicators to choose from so I wanted to know how many of those are used by professional traders. He started counting his fingers. 'Seven', he said.
I think many people there had not really read up on technical analysis but I had done my homework and by that time, I was pretty much the only person in dialog with him, asking him questions. I wanted to gain as much knowledge and wisdom he was willing to give me.
Then I heard one of the most important lessons I've learnt which minimised my losses during my early years of trading: "Trade so small that it is almost a waste of your time. Assume the next trade is going to be the first out of a thousand trades you are going to be making in your life. Even though your profits are smaller, your losses are smaller too. There is no need to rush. Do not worry about getting rich too quickly."
He was suggesting that novices like me should trade using small position sizes. That means to buy small number of shares at the start. I was intrigued. I did not know a person should trade that 'small'.
Eventually, the seminar ended. I grabbed the booklets and brochures given out by some of the staff. In one of these brochures was the name of the program he uses. They were selling the software with the courses they were offering. I could not afford the entire package but I knew I had to buy the same charting software Bauer used. I decided to learn as much as I could about how to use charts and graphs to analyse the market. I needed to develop my own trading system.
As for my friend, he said he had a car loan to take care of first. He would look into trading shares later when he had a little more money to set aside.
A couple of days later, I got a call from the organiser of the seminar, telling me that based from the questions I had been asking that night, I was the type of person that would most benefit from their education package. Bauer was asked to demonstrate the need for trading education because he traded the markets. In the process, he was selling the courses well. Bauer seemed knowledgeable and experienced. He has enlightened me and probably several other people in that room about how much there was to learn. I was sold. I just could not afford the courses at the time but I wanted them so badly that I asked the sales person on the other end of the line if I could work for them in exchange for the course.
I did not get to do the course but I bought the software from a different distributor at a cheaper price. I also bought the two books Bauer wrote. I figured that I could acquire the skills and wisdom through self-education. I learnt a lot from those two books and from using the software. Having that opportunity to attend that seminar was a 'gift from the heavens', as far as I was concerned. Wherever you are, Bauer, I thank you. You — and others like you -- have made me recognize the value of passing on knowledge and experience for others to follow.
By:Marquez Comelab
Forex Profits
Forex, FX and the Forex market are some common abbreviations for the Foreign Exchange market. Actually it is the largest financial market in the world, where money is sold and bought freely. In its present condition the Forex market was launched in the seventies, when free exchange rates were introduced, and only the participants of the market determine the price of one currency against the other proceeding from demand and supply. As far as the freedom from any external control and free competition are concerned, the Forex market is a perfect market.
With a daily turnover of over trillions of dollars, the Foreign Exchange market conducts more than three times the aggregate amount volume of the United States Equity and Treasury markets combined. The Forex market is an over-the-counter market where buyers and sellers conduct foreign exchange business using different means of communication.
Unlike other financial markets, the Forex market has no physical location or central exchange. Since the Forex market lacks a physical exchange, the market trades continuously on a 24-hour basis, moving from one time zone to the next, across each of the world's major financial centers every day. Trillions of dollars of foreign exchange activity takes place every day. From 1997 to the end of 2000, daily forex trading volume surged approximately from US$5 billion to US$1.5 trillion and more (according to various recent studies it has touched $1.7 trillion per day and dwarfs all other markets for trading in size and volume). It is really difficult, if not impossible; to determine an absolutely exact number because trading is not centralized on an exchange. But one thing is for sure that the Forex market continues to grow at a phenomenal rate.
Before the advent of Internet and ecommerce, only big corporations, multinational banks and wealthy individuals could trade currencies in the Forex market through the use of the proprietary trading systems of banks. These systems required as much as US$1 million to open an account. Thanks to advancements in online technology, today investors with only a few thousand dollars can have access to the Forex market 24 hours a day and around 5 ? days of a week.
The Forex market is a nonstop cash market where currencies of nations are traded, typically via brokers called forex brokers. Foreign currencies are constantly and simultaneously bought and sold across local and global markets while traders increase or decrease value of an investment upon currency movements. Foreign exchange market conditions can change at any time in response to real-time events so it is also considered to be a highly volatile and fragile market too. Conditions of the Forex market never remain the same they changes every second.
The foreign exchange market dwarfs the combined operations of the New York, London, and Tokyo futures and stock exchanges. According to its size and scope it is many times larger than all other markets. Stats shows that spot transactions and forward outright Forex trading take place in the inter-bank market. 51% of the market is in spot Forex transactions, followed by 32% in currency swap transactions. Forward outright Forex transactions represent another 5% of this daily turnover, with options on 'interbank' Forex transactions making up another 8%. Therefore the inter-bank market accounts for 96% of the global foreign exchange market, with the remaining 4% being divided among all the global futures exchanges.
For traders, Forex trading provides an alternative to stock market trading. While there are thousands of stocks to choose from, there are only a few major currencies to trade (the Dollar, Yen, British Pound, Swiss Franc, and the Euro are the most popular). Forex trading also provides a lot more leverage than stock trading, and the minimum investment to get started is a lot lower. Add to that the ability to choose flexible trading hours (forex trading goes on 24 hours a day) and you have the reason why so many stock traders have flocked to day trade currencies.
By Anthony Trister
With a daily turnover of over trillions of dollars, the Foreign Exchange market conducts more than three times the aggregate amount volume of the United States Equity and Treasury markets combined. The Forex market is an over-the-counter market where buyers and sellers conduct foreign exchange business using different means of communication.
Unlike other financial markets, the Forex market has no physical location or central exchange. Since the Forex market lacks a physical exchange, the market trades continuously on a 24-hour basis, moving from one time zone to the next, across each of the world's major financial centers every day. Trillions of dollars of foreign exchange activity takes place every day. From 1997 to the end of 2000, daily forex trading volume surged approximately from US$5 billion to US$1.5 trillion and more (according to various recent studies it has touched $1.7 trillion per day and dwarfs all other markets for trading in size and volume). It is really difficult, if not impossible; to determine an absolutely exact number because trading is not centralized on an exchange. But one thing is for sure that the Forex market continues to grow at a phenomenal rate.
Before the advent of Internet and ecommerce, only big corporations, multinational banks and wealthy individuals could trade currencies in the Forex market through the use of the proprietary trading systems of banks. These systems required as much as US$1 million to open an account. Thanks to advancements in online technology, today investors with only a few thousand dollars can have access to the Forex market 24 hours a day and around 5 ? days of a week.
The Forex market is a nonstop cash market where currencies of nations are traded, typically via brokers called forex brokers. Foreign currencies are constantly and simultaneously bought and sold across local and global markets while traders increase or decrease value of an investment upon currency movements. Foreign exchange market conditions can change at any time in response to real-time events so it is also considered to be a highly volatile and fragile market too. Conditions of the Forex market never remain the same they changes every second.
The foreign exchange market dwarfs the combined operations of the New York, London, and Tokyo futures and stock exchanges. According to its size and scope it is many times larger than all other markets. Stats shows that spot transactions and forward outright Forex trading take place in the inter-bank market. 51% of the market is in spot Forex transactions, followed by 32% in currency swap transactions. Forward outright Forex transactions represent another 5% of this daily turnover, with options on 'interbank' Forex transactions making up another 8%. Therefore the inter-bank market accounts for 96% of the global foreign exchange market, with the remaining 4% being divided among all the global futures exchanges.
For traders, Forex trading provides an alternative to stock market trading. While there are thousands of stocks to choose from, there are only a few major currencies to trade (the Dollar, Yen, British Pound, Swiss Franc, and the Euro are the most popular). Forex trading also provides a lot more leverage than stock trading, and the minimum investment to get started is a lot lower. Add to that the ability to choose flexible trading hours (forex trading goes on 24 hours a day) and you have the reason why so many stock traders have flocked to day trade currencies.
By Anthony Trister
Day Trading Forex Market Behaviour
Technology advances like the internet have spawned a new craze, where anyone with a secure internet connection prepared to undertake a small amount of training can engage in trading foreign exchange on the forex market.
Just as a day trader will closely track stock price movements on the Dow Jones Industrial Average, all over the world forex traders monitor currency fluctuations in a similar fashion.
Forex traders have the aim of using the smallest amount of one currency, say the US dollar, to purchase another currency like the British Pound. If supply of the pound lessens in a busy market, it will cost more dollars to buy pounds, and the forex trader hopes to sell their pounds at a higher than their purchase price. In many respects, this type of trading behaviour is very similar to trading in stocks, where the aim of nearly all traders is to buy low and sell high.
The trading process works under a bid/ask system. In the above example, a forex trader might bid 10 dollars in return for 5.7 British pounds, and the seller of the pounds could be asking 11 dollars for the same amount of pounds. If the seller accepts the bid, the trader then hopes the pound continues to increase in price, so that when time comes to sell, they can get in excess of the 10 dollars initially paid.
As only registered traders have access to this auction process, most online speculators will trade through a bank or broking house. Such brokerages charge a commission for facilitating the trades, and forex traders should consider these transaction costs when calculating their selling offer when time comes to exit their position, as this will influence their profit margin.
The global foreign exchange market can trade in excess of a trillion dollars a day. Sheer market size means there is considerable money to be made, and lost, through miscalculation. It is neither a guaranteed, nor easy path to riches, so traders should be educated in how to play the market. Instructional packages are available, and should be carefully reviewed as they can easily range in quality and price.
By Jay Moncliff
Just as a day trader will closely track stock price movements on the Dow Jones Industrial Average, all over the world forex traders monitor currency fluctuations in a similar fashion.
Forex traders have the aim of using the smallest amount of one currency, say the US dollar, to purchase another currency like the British Pound. If supply of the pound lessens in a busy market, it will cost more dollars to buy pounds, and the forex trader hopes to sell their pounds at a higher than their purchase price. In many respects, this type of trading behaviour is very similar to trading in stocks, where the aim of nearly all traders is to buy low and sell high.
The trading process works under a bid/ask system. In the above example, a forex trader might bid 10 dollars in return for 5.7 British pounds, and the seller of the pounds could be asking 11 dollars for the same amount of pounds. If the seller accepts the bid, the trader then hopes the pound continues to increase in price, so that when time comes to sell, they can get in excess of the 10 dollars initially paid.
As only registered traders have access to this auction process, most online speculators will trade through a bank or broking house. Such brokerages charge a commission for facilitating the trades, and forex traders should consider these transaction costs when calculating their selling offer when time comes to exit their position, as this will influence their profit margin.
The global foreign exchange market can trade in excess of a trillion dollars a day. Sheer market size means there is considerable money to be made, and lost, through miscalculation. It is neither a guaranteed, nor easy path to riches, so traders should be educated in how to play the market. Instructional packages are available, and should be carefully reviewed as they can easily range in quality and price.
By Jay Moncliff
5 Things You Must Do If You Want To Attain Financial Freedom Through Forex Trading
With the amazing growth of the forex market, you are going to see an astounding amount of traders lose all their money. Unfortunately, they haven't followed the simple steps I have laid out for you. Go through these steps and give yourself the greatest opportunity to achieve your goals.
1. Have Faith In Yourself
To reach the level of elite forex trader, you must trust in yourself and your forex trading education. You must be willing to make all your trading decisions, instead of relying on someone else's thoughts or ability (or lack of). Of course, you will prepare yourself fully before every risking any money.
2. Accept Your Learning Curve
Unless you are a veteran trader, you will lose money trading the Forex market. This is a near certainty. I don't say this to talk you out of trading. In fact, quite the opposite. You will be trading against others that fall to this reality day in and day out. You, however, will not risk a dime until you have learned the skills you need to make money trading the forex.
3. Decide What Type of Trader You Are
There are many ways to trade the forex. They range from very active to very patient. You must decide which style suits you best. The best time to learn this about yourself is while you are trading a demo account. There is no need to allow your learning curve to cost you money.
4. Get Educated
Education is the shortest path to elite forex trading. Regardless of your ultimate goals, you will reach them quicker with a great forex trading education. Take some time to review different options before deciding on who to trust with your forex trading education needs. A forex seminar will help shorten your learning curve drastically.
5. Continue to Get Educated
In order to achieve and retain elite forex trading skills, you must constantly be adding to you knowledge base. Your education should never end. In fact, one of the key points to look for in an elite forex trading course is ongoing education. It's nice to have an ongoing relationship with the person/people helping you to achieve your goals.
What separates an elite forex trader from all others is their desire and ability to be independent. Many traders are willing to follow signals, systems, strategies, or anything else you may call them. By taking this approach, however, these traders are only as good as the people they follow.
An elite forex trader will lead. Their decisions will be calculated and analyzed to near perfection. They will make decisions with no hesitation, and handle the growth of their account in a predetermined, intelligent fashion. Take your trading to their level and you will never look back.
By Eddie Yakubovich
1. Have Faith In Yourself
To reach the level of elite forex trader, you must trust in yourself and your forex trading education. You must be willing to make all your trading decisions, instead of relying on someone else's thoughts or ability (or lack of). Of course, you will prepare yourself fully before every risking any money.
2. Accept Your Learning Curve
Unless you are a veteran trader, you will lose money trading the Forex market. This is a near certainty. I don't say this to talk you out of trading. In fact, quite the opposite. You will be trading against others that fall to this reality day in and day out. You, however, will not risk a dime until you have learned the skills you need to make money trading the forex.
3. Decide What Type of Trader You Are
There are many ways to trade the forex. They range from very active to very patient. You must decide which style suits you best. The best time to learn this about yourself is while you are trading a demo account. There is no need to allow your learning curve to cost you money.
4. Get Educated
Education is the shortest path to elite forex trading. Regardless of your ultimate goals, you will reach them quicker with a great forex trading education. Take some time to review different options before deciding on who to trust with your forex trading education needs. A forex seminar will help shorten your learning curve drastically.
5. Continue to Get Educated
In order to achieve and retain elite forex trading skills, you must constantly be adding to you knowledge base. Your education should never end. In fact, one of the key points to look for in an elite forex trading course is ongoing education. It's nice to have an ongoing relationship with the person/people helping you to achieve your goals.
What separates an elite forex trader from all others is their desire and ability to be independent. Many traders are willing to follow signals, systems, strategies, or anything else you may call them. By taking this approach, however, these traders are only as good as the people they follow.
An elite forex trader will lead. Their decisions will be calculated and analyzed to near perfection. They will make decisions with no hesitation, and handle the growth of their account in a predetermined, intelligent fashion. Take your trading to their level and you will never look back.
By Eddie Yakubovich
Saturday, October 1, 2011
Trading Psychology: Mistakes in a Trading Environment
When it comes to trading, one of the most neglected subjects are those dealing with trading psychology. Most traders spend days, months and even years trying to find the right system. But having a system is just part of the game. Don't get us wrong, it is very important to have a system that perfectly suits the trader, but it is as important as having a money management plan, or to understand all psychology barriers that may affect the trader decisions and other issues. In order to succeed in this business, there must be equilibrium between all important aspects of trading.
In the trading environment, when you lose a trade, what is the first idea that pops up in your mind? It would probably be, "There must be something wrong with my system", or "I knew it, I shouldn't have taken this trade" (even when your system signaled it). But sometimes we need to dig a little deeper in order to see the nature of our mistake, and then work on it accordingly.
When it comes to trading the Forexa market as well as other markets, only 5% of traders achieve the ultimate goal: to be consistent in profits. What is interesting though is that there is just a tiny difference between this 5% of traders and the rest of them. The top 5% grow from mistakes; mistakes are a learning experience, they learn an invaluable lesson on every single mistake made. Deep in their minds, a mistake is one more chance to try it harder and do it better the next time, because they know they might not get a chance the next time. And at the end, this tiny difference becomes THE big difference.
Mistakes in the trading environment
Most of us relate a trading mistake to the outcome (in terms of money) of any given trade. The truth is, a mistake has nothing to do with it, mistakes are made when certain guidelines are not followed. When the rules you trade by are violated. Take for instance the following scenarios:
First scenario: The system signals a trade.
1. Signal taken and trade turns out to be a profitable trade. Outcome of the trade: Positive, made money. Experience gained: Its good to follow the system, if I do this consistently the odds will turn in my favor. Confidence is gained in both the trader and the system. Mistake made: None.
2. Signal taken and trade turns out to be a loosing trade. Outcome of the trade: Negative, lost money. Experience gained: It is impossible to win every single trade, a loosing trade is just part of the business; our raw material, we know we can't get them all right. Even with this lost trade, the trader is proud about himself for following the system. Confidence in the trader is gained. Mistake made: None.
3. Signal not taken and trade turns out to be a profitable trade. Outcome of the trade: Neutral. Experience gained: Frustration, the trader always seems to get in trades that turned out to be loosing trades and let the profitable trades go away. Confidence is lost in the trader self. Mistake made: Not taking a trade when the system signaled it.
4. Signal not taken and trade turns out to be a loosing trade. Outcome of the trade: Neutral. Experience gained: The trader will start to think "hey, I'm better than my system". Even if the trader doesn't think on it consciously, the trader will rationalize on every signal given by the system because deep in his or her mind, his or her "feeling" is more intelligent than the system itself. From this point on, the trader will try to outguess the system. This mistake has catastrophic effects on our confidence to the system. The confidence on the trader turns into overconfidence. Mistake made: Not taking a trade when system signaled it
Second Scenario: System does not signal a trade.
1. No trade is taken Outcome of the trade: Neutral Experience gained: Good discipline, we only need to take trades when the odds are in our favor, just when the system signals it. Confidence gained in both the trader self and the system. Mistake made: None
2. A trade is taken, turns out to be a profitable trade. Outcome of the trade: Positive, made money. Experience gained: This mistake has the most catastrophic effects in the trader self, the system and most importantly in the trader's trading career. You will start to think you need no system, you know better from them all. From this point on, you will start to trade based on what you think. Confidence in the system is totally lost. Confidence in the trader self turns into overconfidence. Mistake made: Take a trade when there was no signal from the system.
3. A trade is taken, turned out to be a loosing trade. Outcome of the trade: negative, lost money. Experience gained: The trader will rethink his strategy. The next time, the trader will think it twice before getting in a trade when the system does not signal it. The trader will go "Ok, it is better to get in the market when my system signals it, only those trade have a higher probability of success". Confidence is gained in the system. Mistake made: Take a trade when there was no signal from the system
As you can see, there is absolutely no correlation between the outcome of the trade and a mistake. The most catastrophic mistake even has a positive trade outcome, made money, but this could be the beginning of the end of the trader's career. As we have already stated, mistakes must only be related to the violation of rules a trader trades by.
All these mistakes were directly related to the signals given by a system, but the same is applied when getting out of a trade. There are also mistakes related to following a trading plan. For example, risking more money on a given trade than the amount the trader should have risked and many more.
Most mistakes can be avoided by first having a trading plan. A trading plan includes the system: the criteria we use to get in and out the market, the money management plan: how much we will risk on any given trade, and many other points. Secondly, and most important, we need to have the discipline to follow strictly our plan. We created our plan when no trade was placed on, thus no psychology barriers were up front. So, the only thing we are certain about is that if we follow our plan, the decision taken is on our best interests, and in the long run, these decisions will help us have better results. We don't have to worry about isolated events, or trades that could had give us better results at first, but then they could have catastrophic results in our trading career.
How to deal with mistakes
There are many possible ways to properly manage mistakes. We will suggest the one that works better for us.
Step one: Belief change. Every mistake is a learning experience. They all have something valuable to offer. Try to counteract the natural tendency of feeling frustrated and approach mistakes in a positive manner. Instead of yelling to everyone around and feeling disappointed, say to yourself "ok, I did something wrong, what happened? What is it?
Step two: Identify the mistake made. Define the mistake, find out what caused the mistake, and try as hard as you can to effectively see the nature of that mistake. Finding the mistake nature will prevent you from making the same mistake again. More than often you will find the answer where you less expected. Take for instance a trader that doesn't follow the system. The reason behind this could be that the trader is afraid of loosing. But then, why is he or she afraid? It could be that the trader is using a system that does not fit him or her, and finds difficult to follow every signal. In this case, as you can see, the nature of the mistake is not in the surface. You need to try as hard as you can to find the real reason of the given mistake.
Step three: Measure the consequences of the mistake. List the consequences of making that particular mistake, both good and bad. Good consequences are those that make us better traders after dealing with the mistake. Think on all possible reasons you can learn from what happened. For the same example above, what are the consequences of making that mistake? Well, if you don't follow the system, you will gradually loose confidence in it, and this at the end will put you into trades you don't really want to be, and out of trades you should be in.
Step four: Take action. Taking proper action is the last and most important step. In order to learn, you need to change your behavior. Make sure that whatever you do, you become "this-mistake-proof". By taking action we turn every single mistake into a small part of success in our trading career. Continuing with the same example, redefining the system would be the trader's final step. The trader would put a system that perfectly fits him or her, so the trader doesn't find any trouble following it in future signals.
Understanding the fact that the outcome of any trade has nothing to do with a mistake will open your mind to other possibilities, where you will be able to understand the nature of every mistake made. This at the same time will open the doors for your trading career as you work and take proper action on every mistake made.
The process of success is slow, and plenty of times it is attributed to repeated mistakes made and the constant struggle to get past these mistakes, working on them accordingly. How we deal with them will shape our future as a trader, and most importantly as a person.
by Raul Lopez
In the trading environment, when you lose a trade, what is the first idea that pops up in your mind? It would probably be, "There must be something wrong with my system", or "I knew it, I shouldn't have taken this trade" (even when your system signaled it). But sometimes we need to dig a little deeper in order to see the nature of our mistake, and then work on it accordingly.
When it comes to trading the Forexa market as well as other markets, only 5% of traders achieve the ultimate goal: to be consistent in profits. What is interesting though is that there is just a tiny difference between this 5% of traders and the rest of them. The top 5% grow from mistakes; mistakes are a learning experience, they learn an invaluable lesson on every single mistake made. Deep in their minds, a mistake is one more chance to try it harder and do it better the next time, because they know they might not get a chance the next time. And at the end, this tiny difference becomes THE big difference.
Mistakes in the trading environment
Most of us relate a trading mistake to the outcome (in terms of money) of any given trade. The truth is, a mistake has nothing to do with it, mistakes are made when certain guidelines are not followed. When the rules you trade by are violated. Take for instance the following scenarios:
First scenario: The system signals a trade.
1. Signal taken and trade turns out to be a profitable trade. Outcome of the trade: Positive, made money. Experience gained: Its good to follow the system, if I do this consistently the odds will turn in my favor. Confidence is gained in both the trader and the system. Mistake made: None.
2. Signal taken and trade turns out to be a loosing trade. Outcome of the trade: Negative, lost money. Experience gained: It is impossible to win every single trade, a loosing trade is just part of the business; our raw material, we know we can't get them all right. Even with this lost trade, the trader is proud about himself for following the system. Confidence in the trader is gained. Mistake made: None.
3. Signal not taken and trade turns out to be a profitable trade. Outcome of the trade: Neutral. Experience gained: Frustration, the trader always seems to get in trades that turned out to be loosing trades and let the profitable trades go away. Confidence is lost in the trader self. Mistake made: Not taking a trade when the system signaled it.
4. Signal not taken and trade turns out to be a loosing trade. Outcome of the trade: Neutral. Experience gained: The trader will start to think "hey, I'm better than my system". Even if the trader doesn't think on it consciously, the trader will rationalize on every signal given by the system because deep in his or her mind, his or her "feeling" is more intelligent than the system itself. From this point on, the trader will try to outguess the system. This mistake has catastrophic effects on our confidence to the system. The confidence on the trader turns into overconfidence. Mistake made: Not taking a trade when system signaled it
Second Scenario: System does not signal a trade.
1. No trade is taken Outcome of the trade: Neutral Experience gained: Good discipline, we only need to take trades when the odds are in our favor, just when the system signals it. Confidence gained in both the trader self and the system. Mistake made: None
2. A trade is taken, turns out to be a profitable trade. Outcome of the trade: Positive, made money. Experience gained: This mistake has the most catastrophic effects in the trader self, the system and most importantly in the trader's trading career. You will start to think you need no system, you know better from them all. From this point on, you will start to trade based on what you think. Confidence in the system is totally lost. Confidence in the trader self turns into overconfidence. Mistake made: Take a trade when there was no signal from the system.
3. A trade is taken, turned out to be a loosing trade. Outcome of the trade: negative, lost money. Experience gained: The trader will rethink his strategy. The next time, the trader will think it twice before getting in a trade when the system does not signal it. The trader will go "Ok, it is better to get in the market when my system signals it, only those trade have a higher probability of success". Confidence is gained in the system. Mistake made: Take a trade when there was no signal from the system
As you can see, there is absolutely no correlation between the outcome of the trade and a mistake. The most catastrophic mistake even has a positive trade outcome, made money, but this could be the beginning of the end of the trader's career. As we have already stated, mistakes must only be related to the violation of rules a trader trades by.
All these mistakes were directly related to the signals given by a system, but the same is applied when getting out of a trade. There are also mistakes related to following a trading plan. For example, risking more money on a given trade than the amount the trader should have risked and many more.
Most mistakes can be avoided by first having a trading plan. A trading plan includes the system: the criteria we use to get in and out the market, the money management plan: how much we will risk on any given trade, and many other points. Secondly, and most important, we need to have the discipline to follow strictly our plan. We created our plan when no trade was placed on, thus no psychology barriers were up front. So, the only thing we are certain about is that if we follow our plan, the decision taken is on our best interests, and in the long run, these decisions will help us have better results. We don't have to worry about isolated events, or trades that could had give us better results at first, but then they could have catastrophic results in our trading career.
How to deal with mistakes
There are many possible ways to properly manage mistakes. We will suggest the one that works better for us.
Step one: Belief change. Every mistake is a learning experience. They all have something valuable to offer. Try to counteract the natural tendency of feeling frustrated and approach mistakes in a positive manner. Instead of yelling to everyone around and feeling disappointed, say to yourself "ok, I did something wrong, what happened? What is it?
Step two: Identify the mistake made. Define the mistake, find out what caused the mistake, and try as hard as you can to effectively see the nature of that mistake. Finding the mistake nature will prevent you from making the same mistake again. More than often you will find the answer where you less expected. Take for instance a trader that doesn't follow the system. The reason behind this could be that the trader is afraid of loosing. But then, why is he or she afraid? It could be that the trader is using a system that does not fit him or her, and finds difficult to follow every signal. In this case, as you can see, the nature of the mistake is not in the surface. You need to try as hard as you can to find the real reason of the given mistake.
Step three: Measure the consequences of the mistake. List the consequences of making that particular mistake, both good and bad. Good consequences are those that make us better traders after dealing with the mistake. Think on all possible reasons you can learn from what happened. For the same example above, what are the consequences of making that mistake? Well, if you don't follow the system, you will gradually loose confidence in it, and this at the end will put you into trades you don't really want to be, and out of trades you should be in.
Step four: Take action. Taking proper action is the last and most important step. In order to learn, you need to change your behavior. Make sure that whatever you do, you become "this-mistake-proof". By taking action we turn every single mistake into a small part of success in our trading career. Continuing with the same example, redefining the system would be the trader's final step. The trader would put a system that perfectly fits him or her, so the trader doesn't find any trouble following it in future signals.
Understanding the fact that the outcome of any trade has nothing to do with a mistake will open your mind to other possibilities, where you will be able to understand the nature of every mistake made. This at the same time will open the doors for your trading career as you work and take proper action on every mistake made.
The process of success is slow, and plenty of times it is attributed to repeated mistakes made and the constant struggle to get past these mistakes, working on them accordingly. How we deal with them will shape our future as a trader, and most importantly as a person.
by Raul Lopez
Forex: No psychological limitations
Back when I first started learning about investing, I decided to start from the beginning and read basic books on personal finance as well as "guides" for understanding all of the investment world in a nut shell. Most of these authors were very knowledgeable and informative, but their investment advice was far too conservative for my taste. They would literally write chapter after chapter talking about the differences between conservative investing, which according to them generally yields somewhere around 5% PA, as opposed to "risky" investing which usually meant a diversified stock/mutual fund portfolio yielding (in my mind) only slightly higher averages. What kind of returns can you expect in the stock market? Well they say the market has gone up an average of 10% a year since Adam and Eve. Popular indexes like the DOW and the now more popular S&P500 have always, like real estate, "gone up over time."
Now, these market averages are almost worshiped like golden calves. Repeatedly drilled into my brain was the concept that there were hundreds (if not thousands) of fund managers and other "professionals" out there with Harvard degrees, decades of experience, millions of dollars under management, and they were all spending 15 hours a day consuming every single bit of market information in the hopes of beating these golden calves by a few points.
What chance did I have? If Dr. Fund Guru Jr. who eats, sleeps, breathes the markets and has more credentials than I have individual hairs on my body can't consistently make 20% a year...well...forget it kid...your chances are slim to none. I guess I'll buy some shares of XYZ fund and accept the scraps off the table from the stock gurus.
NOT!
The foreign exchange market offers many benefits that the stock market does not have. Most of these have been beaten to death on various forums, blogs, articles, e-books, etc. However, it's always good to reiterate the positive (my own personal reason is last): — Forex offers unprecedented liquidity. With over two trillion dollars transacted per day on the market, it makes filling any buy/sell order virtually instant. That equates to less slippage and more profitability. "Paper trading" stocks vs actually trading stocks is very different, because orders may not be filled in a timely manner. The difference between trading a forex demo account and an actual account is virtually nill. — Forex is available 24 hours a day 5.5 days a week, as opposed to the daylight trading hours of the stock exchanges. — Forex is uncontrollable by large entities. Large net worth individuals, banks and fund managers who throw their weight around in the stock market can often have huge effects on price action. Because of the immense volume of foreign currency traded per day, the market is unmoved by "heavy hitters." Not even central banks can control the Forex market. — Forex offers up to 200:1 leverage as opposed to 2:1 stock leverage. — Forex has no restrictions for selling short, as opposed to the stock market's "uptick" rule — Forex can actually be traded INSIDE of an IRA or Roth IRA account. — Forex gains are taxed at the preferred 60/40 rate, no matter what trading style you use (intra-day, swing, position) as opposed to the tax penalties for holding stocks for short periods of time.
The list does go on, but for me the biggest advantage is a psychological one. I know it probably sounds silly, but fear and intimidation can sometimes subconsciously defeat us before we even begin. I don't like the idea of having to live up to, and in a way, compete with "professional managers" who have more knowledge of the fundamentals of the markets than I ever will. It's almost as if Forex, in some way, levels the playing field. I don't have to psychologically compete against anyone's idea of what kind of returns are "acceptable and realistic" and what kind of returns are "pure fantasy." I only have to trade until I can find an acceptable reward to risk ratio, and consistent profitability thereof. The only one I compete against is myself.
by Joshua White
Now, these market averages are almost worshiped like golden calves. Repeatedly drilled into my brain was the concept that there were hundreds (if not thousands) of fund managers and other "professionals" out there with Harvard degrees, decades of experience, millions of dollars under management, and they were all spending 15 hours a day consuming every single bit of market information in the hopes of beating these golden calves by a few points.
What chance did I have? If Dr. Fund Guru Jr. who eats, sleeps, breathes the markets and has more credentials than I have individual hairs on my body can't consistently make 20% a year...well...forget it kid...your chances are slim to none. I guess I'll buy some shares of XYZ fund and accept the scraps off the table from the stock gurus.
NOT!
The foreign exchange market offers many benefits that the stock market does not have. Most of these have been beaten to death on various forums, blogs, articles, e-books, etc. However, it's always good to reiterate the positive (my own personal reason is last): — Forex offers unprecedented liquidity. With over two trillion dollars transacted per day on the market, it makes filling any buy/sell order virtually instant. That equates to less slippage and more profitability. "Paper trading" stocks vs actually trading stocks is very different, because orders may not be filled in a timely manner. The difference between trading a forex demo account and an actual account is virtually nill. — Forex is available 24 hours a day 5.5 days a week, as opposed to the daylight trading hours of the stock exchanges. — Forex is uncontrollable by large entities. Large net worth individuals, banks and fund managers who throw their weight around in the stock market can often have huge effects on price action. Because of the immense volume of foreign currency traded per day, the market is unmoved by "heavy hitters." Not even central banks can control the Forex market. — Forex offers up to 200:1 leverage as opposed to 2:1 stock leverage. — Forex has no restrictions for selling short, as opposed to the stock market's "uptick" rule — Forex can actually be traded INSIDE of an IRA or Roth IRA account. — Forex gains are taxed at the preferred 60/40 rate, no matter what trading style you use (intra-day, swing, position) as opposed to the tax penalties for holding stocks for short periods of time.
The list does go on, but for me the biggest advantage is a psychological one. I know it probably sounds silly, but fear and intimidation can sometimes subconsciously defeat us before we even begin. I don't like the idea of having to live up to, and in a way, compete with "professional managers" who have more knowledge of the fundamentals of the markets than I ever will. It's almost as if Forex, in some way, levels the playing field. I don't have to psychologically compete against anyone's idea of what kind of returns are "acceptable and realistic" and what kind of returns are "pure fantasy." I only have to trade until I can find an acceptable reward to risk ratio, and consistent profitability thereof. The only one I compete against is myself.
by Joshua White
Forex Market Trading And The Mind Games
First, what is Forex: The FOREX or Foreign Exchange market is the largest financial market in the world, with an volume of more than $1.5 trillion daily, dealing in currencies. Unlike other financial markets, the Forex market has no physical location, no central exchange. It operates through an electronic network of banks, corporations and individuals trading one currency for another.
Mind Games defined: Mind Games are a kind of social interaction where participants try to screw with one anothers' heads. The concept is most often used colloquially to refer to deceitful, confusing or Machiavellian situations. However some mind games are described by the psychology of transactional analysis.
When it comes to trading on the Forex market, winning is a matter of the mind rather than mind over matter. Any trader who's been in the game for any length of time will tell you that psychology has a lot to do with both your own performance on the trading floor and with the way that the market is moving. Playing a winning hand depends on knowing your own mind — and understanding the way that psychology moves the market.
Studying the psychology of the market is nothing new. It doesn't take a genius to understand that any arena that rides and falls on decisions made by people is going to be heavily influenced by the minds of people. Few people take into account all the various levels of mind games that motivate the market, though. If you keep your eye on the way that psychology influences others — including the mass psychology of the people that use the currency on a daily basis — but neglect to know what moves you, you're going to end up hurting your own position. The best Forex coaches will tell you that before you can really become a successful trader, you have to know yourself and the triggers that influence you. Knowing those will help you overcome them or use them. Are you saying 'Huh?" about now? Believe me, I understand. I felt the same way the first time that someone tried to explain how the mind games we play with ourselves influence the trades and decisions that we make. Let me break it down into more manageable pieces for you.
Anything involving winning or losing large sums of money becomes emotionally charged. All right. You've heard that playing the market is a mathematical game. Plug in the right numbers, make the right calculations and you'll come out ahead. So why is it that so many traders end up on the losing end of the market? After all, everyone has access to the same numbers, the same data, the same info — if it's math, there's only one right answer, right?
The answer lies in interpretation. The numbers don't lie, but your mind does. Your hopes and fears can make you see things that just aren't there. When you invest in a currency, you're investing more than just money — you make an emotional investment. Being 'right' becomes important. Being 'wrong' doesn't just cost you money when you let yourself be ruled by your emotions — it costs you pride. Why else would you let a loser ride in the hope that it will bounce back? It's that little thing inside your head that says, "I KNOW I'm right on this, dammit!"
To most people, being right is more important than making money. Here's the deal. The way to make real money in the forex market is to cut your losses short and let your winners ride. In order to do that, you have GOT to accept that some of your trades are going to lose, cut them loose and move on to another trade. You've got to accept that picking a loser is NOT an indication of your self-worth, it's not a reflection on who you are. It's simply a loss, and the best way to deal with it is to stop losing money by moving on — and really move on. Moving on means you don't keep a running total of how many losses you've had — that's the way to paralyze yourself. This brings us to the next point:
Losing traders see loss as failure. Winning traders see loss as learning. Not too long ago, my twelve year old son told me that before Thomas Edison invented a working light bulb, he invented 100 light bulbs that didn't work. But he didn't give up — because he knew that creating a source of light from electricity was possible. He believed in his overall theory — so when one design didn't work, he simply knew that he'd eliminated one possibility. Keep eliminating possibilities long enough, and you'll eventually find the possibility that works.
Winning traders see loss in the same way. They haven't failed — they've learned something new about the way that they and the market work. Winning traders can look at the big picture while playing in the small arena.
Suppose I told you that last year, I made 75 trades that lost money, and 25 that made money. In the eyes of most people, that would make me a pretty poor trader. I'm wrong 75% of the time. But what if I told you that my average loss was $1000, but my average profit on a winning trade was $10,000? That means that I lost $75,000 on trades — but I made $250,000, making my overall profit $175,000. It's a pretty clear numbers game — but how do you keep on trading when you're losing in trade after trade? Simple — just remember that one trade does not make or break a trader. Focus on the trade at hand, follow the triggers that you've set up — but define yourself by what really matters — the overall record.
Bottom line: You can't keep emotions out of the picture, but you can learn not to let them control your decisions. Keep it all in perspective and realise that there are a lot of big boys playing this game and playing it to win...
by David Mclauchlan
Mind Games defined: Mind Games are a kind of social interaction where participants try to screw with one anothers' heads. The concept is most often used colloquially to refer to deceitful, confusing or Machiavellian situations. However some mind games are described by the psychology of transactional analysis.
When it comes to trading on the Forex market, winning is a matter of the mind rather than mind over matter. Any trader who's been in the game for any length of time will tell you that psychology has a lot to do with both your own performance on the trading floor and with the way that the market is moving. Playing a winning hand depends on knowing your own mind — and understanding the way that psychology moves the market.
Studying the psychology of the market is nothing new. It doesn't take a genius to understand that any arena that rides and falls on decisions made by people is going to be heavily influenced by the minds of people. Few people take into account all the various levels of mind games that motivate the market, though. If you keep your eye on the way that psychology influences others — including the mass psychology of the people that use the currency on a daily basis — but neglect to know what moves you, you're going to end up hurting your own position. The best Forex coaches will tell you that before you can really become a successful trader, you have to know yourself and the triggers that influence you. Knowing those will help you overcome them or use them. Are you saying 'Huh?" about now? Believe me, I understand. I felt the same way the first time that someone tried to explain how the mind games we play with ourselves influence the trades and decisions that we make. Let me break it down into more manageable pieces for you.
Anything involving winning or losing large sums of money becomes emotionally charged. All right. You've heard that playing the market is a mathematical game. Plug in the right numbers, make the right calculations and you'll come out ahead. So why is it that so many traders end up on the losing end of the market? After all, everyone has access to the same numbers, the same data, the same info — if it's math, there's only one right answer, right?
The answer lies in interpretation. The numbers don't lie, but your mind does. Your hopes and fears can make you see things that just aren't there. When you invest in a currency, you're investing more than just money — you make an emotional investment. Being 'right' becomes important. Being 'wrong' doesn't just cost you money when you let yourself be ruled by your emotions — it costs you pride. Why else would you let a loser ride in the hope that it will bounce back? It's that little thing inside your head that says, "I KNOW I'm right on this, dammit!"
To most people, being right is more important than making money. Here's the deal. The way to make real money in the forex market is to cut your losses short and let your winners ride. In order to do that, you have GOT to accept that some of your trades are going to lose, cut them loose and move on to another trade. You've got to accept that picking a loser is NOT an indication of your self-worth, it's not a reflection on who you are. It's simply a loss, and the best way to deal with it is to stop losing money by moving on — and really move on. Moving on means you don't keep a running total of how many losses you've had — that's the way to paralyze yourself. This brings us to the next point:
Losing traders see loss as failure. Winning traders see loss as learning. Not too long ago, my twelve year old son told me that before Thomas Edison invented a working light bulb, he invented 100 light bulbs that didn't work. But he didn't give up — because he knew that creating a source of light from electricity was possible. He believed in his overall theory — so when one design didn't work, he simply knew that he'd eliminated one possibility. Keep eliminating possibilities long enough, and you'll eventually find the possibility that works.
Winning traders see loss in the same way. They haven't failed — they've learned something new about the way that they and the market work. Winning traders can look at the big picture while playing in the small arena.
Suppose I told you that last year, I made 75 trades that lost money, and 25 that made money. In the eyes of most people, that would make me a pretty poor trader. I'm wrong 75% of the time. But what if I told you that my average loss was $1000, but my average profit on a winning trade was $10,000? That means that I lost $75,000 on trades — but I made $250,000, making my overall profit $175,000. It's a pretty clear numbers game — but how do you keep on trading when you're losing in trade after trade? Simple — just remember that one trade does not make or break a trader. Focus on the trade at hand, follow the triggers that you've set up — but define yourself by what really matters — the overall record.
Bottom line: You can't keep emotions out of the picture, but you can learn not to let them control your decisions. Keep it all in perspective and realise that there are a lot of big boys playing this game and playing it to win...
by David Mclauchlan
Emotions And Forex Trading Don't Mix
The key to making money in the currency exchange market is to avoid emotional decisions and to follow a carefully thought out strategy that takes the current market and history into account. Going with your gut is not the way to go in the Forex market. Going with your gut could cost you money. Forex trading is a highly volatile market where emotions tend to run high. Emotions can influence your trading decisions, unless you have a strategy planned in advance, and stick to it, no matter what you think you're seeing at the moment. The keys to success in Forex are system, analysis and perseverance.
Most experienced traders tell novice traders that they need to develop a system — and stick to it no matter what. Letting your emotions rule your decisions can hurt your trading in a number of ways. The system tells you when to buy, what to buy, when to trade and what to trade for. By sticking to your system you'll maximize your profits. A system based on technical analysis of historical market trends is one of the most potent tools that you can utilize if you're just getting started in Forex trading. Many traders, with years of experience, continue to use this system to keep the profits rolling in. Many traders will tell you that when their gut instinct and their system collide, the system is almost always right.
Using a mechanical system takes the emotion out of your trading, eliminating one of the reasons people fail. Your system doesn't sway with emotions. It sticks to a tried and true course. To be effective, your system — whether you develop your own or adopt one created by someone else — should identify the entry and exit point of your trade, mitigating factors, and an exit strategy. In general terms this is as follows:
Under what conditions should I acquire a currency?
For instance, you may have a buy order for when a particular currency drops more than 5 pips because your analysis tells you that that's likely to be as low as it goes.
When should I trade one currency for another and for which one?
There are two reasons to exit — to maximize your profit, or minimize your loss. That means you have a set stop-loss order and a set take-profit order at which point you cash out your trade.
What factors will I allow to change that decision?
While the money market moves in predictable patterns, there are always individual variations of a trend within those patterns. If you've taken those variations into account, it will be far easier to decide when a factor really does make a difference, and when it's just wishful thinking. If you're not careful however this is where emotion could come into play and sour deals for you.
How will I trade out of a currency?
Your exit strategy may be as simple as a stop-loss order when my loss hits 5% or a take-profit order when I make 40% profit'.
Another key is perseverance. Analysis of trends in the market will show you that the market moves in dips and spurts within overall patterns that are predictable. No trend moves smoothly in an up or down line — there are inevitable periods of time when values suddenly spiral up or down based on some outside factor. These are the times when emotion can hurt your portfolio. When a currency that you're holding takes a sudden dip south, it's tempting to succumb to panic trading, cut your losses and run even if your system tells you to hold on. On the other hand, it's easy to catch the rising excitement as a trade starts increasing in value and scramble to buy more of the same. These are exactly the times to rely most heavily on your trading system. It will tell you exactly when to trade for maximum profit.
If you control your emotions and stick to the system you'll maximize your profits andall should be smooth sailing.
by David Mclauchlan
Most experienced traders tell novice traders that they need to develop a system — and stick to it no matter what. Letting your emotions rule your decisions can hurt your trading in a number of ways. The system tells you when to buy, what to buy, when to trade and what to trade for. By sticking to your system you'll maximize your profits. A system based on technical analysis of historical market trends is one of the most potent tools that you can utilize if you're just getting started in Forex trading. Many traders, with years of experience, continue to use this system to keep the profits rolling in. Many traders will tell you that when their gut instinct and their system collide, the system is almost always right.
Using a mechanical system takes the emotion out of your trading, eliminating one of the reasons people fail. Your system doesn't sway with emotions. It sticks to a tried and true course. To be effective, your system — whether you develop your own or adopt one created by someone else — should identify the entry and exit point of your trade, mitigating factors, and an exit strategy. In general terms this is as follows:
Under what conditions should I acquire a currency?
For instance, you may have a buy order for when a particular currency drops more than 5 pips because your analysis tells you that that's likely to be as low as it goes.
When should I trade one currency for another and for which one?
There are two reasons to exit — to maximize your profit, or minimize your loss. That means you have a set stop-loss order and a set take-profit order at which point you cash out your trade.
What factors will I allow to change that decision?
While the money market moves in predictable patterns, there are always individual variations of a trend within those patterns. If you've taken those variations into account, it will be far easier to decide when a factor really does make a difference, and when it's just wishful thinking. If you're not careful however this is where emotion could come into play and sour deals for you.
How will I trade out of a currency?
Your exit strategy may be as simple as a stop-loss order when my loss hits 5% or a take-profit order when I make 40% profit'.
Another key is perseverance. Analysis of trends in the market will show you that the market moves in dips and spurts within overall patterns that are predictable. No trend moves smoothly in an up or down line — there are inevitable periods of time when values suddenly spiral up or down based on some outside factor. These are the times when emotion can hurt your portfolio. When a currency that you're holding takes a sudden dip south, it's tempting to succumb to panic trading, cut your losses and run even if your system tells you to hold on. On the other hand, it's easy to catch the rising excitement as a trade starts increasing in value and scramble to buy more of the same. These are exactly the times to rely most heavily on your trading system. It will tell you exactly when to trade for maximum profit.
If you control your emotions and stick to the system you'll maximize your profits andall should be smooth sailing.
by David Mclauchlan
Forex: Why Psychiatrists Make Better Traders Than Expert Economists?
It should be noted that millionaire traders, Elder, Williams and some others are in fact professional psychiatrists. And it is not accidental that not the economists are the leaders and most successful traders, but professional psychiatrists and psychotherapists. Think about it. You will become a successful trader when you understand why it happens with Forex. You will understand what your Forex mistakes are, and why you are making them. And when you correct these mistakes you will become a trader who has no psychological barriers and obstacles on his way to better earnings in the Forex market.
So, why do the psychiatrists make better traders than economists who, as one would think, have the Forex market at their finger tips?
The economists are confused by:
— the fact that exchange rates are not always related directly to the economic circumstances in the countries. Well, do you know any economist who would be bidding for low fx rates when the economic situation is getting better and better? Or the one who admits that technical analysis of currency pairs is more important for Forex trading than the fundamental one? Any economist is confident that this can never happen because he knows all the economic dogmas. But it happens in the Forex. After all, how can a trader lose with the currencies moving up and down by the economic rules? The currency will surely react to the economic changes in the country, but who knows when and how? Here is a tip: there is the Elliott fifth way to teach a lesson to the ones who believe that fundamental knowledge is enough (before the trend turns, the currency spurts absurdly by the old trend), to confuse and draw the newbies into the game, while the experts wait for the trend to turn back.
— the lack of psychological knowledge that helps to understand the behavior of the crowd. And that is self-evident.
Are there any methods to overcome this fear?
It seems that every Forex book, every article offers efficient solutions for psychological difficulties experienced by the traders.
IN FACT NEITHER OF THESE BOOKS CONTAINS METHODS TO OVERCOME THE FEAR EXPERIENCED BY A FOREX TRADER!
But what do these books offer instead?
Almost every book of this kind consists of two unequal parts:
— the bigger part of the book narrates about traders' problem that interfere with their Forex work and make it unsuccessful (nervousness, doubts, worries, fear, sleep deprivation, etc.). As if the traders do not know their own problems.
— the considerably lesser part contains conclusions and recommendations to the traders who are to solve their problems and overcome their fears to become successful.
The conclusions are disappointing:
Many psychiatrists realize that the new field opens before their eyes — now they may treat traders whose number amounts to millions all over the world and is growing with every day. And since most traders have a dream to become as successful as George Soros and other famous traders, this new field promises to be rather lucrative.
One thing is bad though: the overwhelming majority of these new-sprung trader brain specialists do not even know what the Forex is all about.
by Alexander Brin
So, why do the psychiatrists make better traders than economists who, as one would think, have the Forex market at their finger tips?
The economists are confused by:
— the fact that exchange rates are not always related directly to the economic circumstances in the countries. Well, do you know any economist who would be bidding for low fx rates when the economic situation is getting better and better? Or the one who admits that technical analysis of currency pairs is more important for Forex trading than the fundamental one? Any economist is confident that this can never happen because he knows all the economic dogmas. But it happens in the Forex. After all, how can a trader lose with the currencies moving up and down by the economic rules? The currency will surely react to the economic changes in the country, but who knows when and how? Here is a tip: there is the Elliott fifth way to teach a lesson to the ones who believe that fundamental knowledge is enough (before the trend turns, the currency spurts absurdly by the old trend), to confuse and draw the newbies into the game, while the experts wait for the trend to turn back.
— the lack of psychological knowledge that helps to understand the behavior of the crowd. And that is self-evident.
Are there any methods to overcome this fear?
It seems that every Forex book, every article offers efficient solutions for psychological difficulties experienced by the traders.
IN FACT NEITHER OF THESE BOOKS CONTAINS METHODS TO OVERCOME THE FEAR EXPERIENCED BY A FOREX TRADER!
But what do these books offer instead?
Almost every book of this kind consists of two unequal parts:
— the bigger part of the book narrates about traders' problem that interfere with their Forex work and make it unsuccessful (nervousness, doubts, worries, fear, sleep deprivation, etc.). As if the traders do not know their own problems.
— the considerably lesser part contains conclusions and recommendations to the traders who are to solve their problems and overcome their fears to become successful.
The conclusions are disappointing:
Many psychiatrists realize that the new field opens before their eyes — now they may treat traders whose number amounts to millions all over the world and is growing with every day. And since most traders have a dream to become as successful as George Soros and other famous traders, this new field promises to be rather lucrative.
One thing is bad though: the overwhelming majority of these new-sprung trader brain specialists do not even know what the Forex is all about.
by Alexander Brin
Saturday, September 10, 2011
Forex Money Management: Leverage and Margin Basics
Two very important concepts of forex money management are leverage and margin. Leverage allows forex traders to invest much more into currency trading than is available in their trading accounts. Thus, forex traders can operate larger funds. Margin is the real funds that are required to be held in the trading account as a collateral to cover any possible losses.
Forex Money Management: Leverage
Profits and losses in the forex market tend to be higher than what you would experience in the stock market even though the actual price of currencies may not fluctuate wildly. Most brokers allow a 100:1 leverage. This means you can buy or sell €100,000 worth of currencies, even though you have only €1,000 in your trading account. Some brokers offer leverage as high as 400:1.
Leverage can also work against you in forex trading. For example, if a currency moves against your expectations, the leverage would multiply your loss by the same factor as it would multiply the gain. Many people starting forex trading do not completely understand the concepts of leverage and margin. Leverage appears to be an amazing service provided by brokers. However, one must remember that even a 1% fluctuation of currency prices could wipe out your entire capital, depending on the amount of leverage offered by the forex broker. Using a smaller leverage could help you prevent losing too much too fast. So, you need to find the perfect balance.
Forex Money Management: Margin
In the example stated above, when you buy €100,000 worth of currencies, you are in fact borrowing €99,000 for your purchases. The €1,000 that is used to cover your losses is the margin.
A trader may choose the highest leverage (200:1), with the margin being only 0.5%. However, sound money management principles say that the trader should never trade huge lots. This would prevent leverage from hurting the trader.
Therefore, it is essential to understand how much leverage your forex broker offers and what the margin requirements are. If you are new to trading, you should compare the leverage and margin specifications of different brokers.
By Kitz S
Forex Money Management: Leverage
Profits and losses in the forex market tend to be higher than what you would experience in the stock market even though the actual price of currencies may not fluctuate wildly. Most brokers allow a 100:1 leverage. This means you can buy or sell €100,000 worth of currencies, even though you have only €1,000 in your trading account. Some brokers offer leverage as high as 400:1.
Leverage can also work against you in forex trading. For example, if a currency moves against your expectations, the leverage would multiply your loss by the same factor as it would multiply the gain. Many people starting forex trading do not completely understand the concepts of leverage and margin. Leverage appears to be an amazing service provided by brokers. However, one must remember that even a 1% fluctuation of currency prices could wipe out your entire capital, depending on the amount of leverage offered by the forex broker. Using a smaller leverage could help you prevent losing too much too fast. So, you need to find the perfect balance.
Forex Money Management: Margin
In the example stated above, when you buy €100,000 worth of currencies, you are in fact borrowing €99,000 for your purchases. The €1,000 that is used to cover your losses is the margin.
| Leverage | Margin Required | Amount Traded | Required Margin |
| 20:1 | 5% | €100,000 | €5,000 |
| 50:1 | 2% | €100,000 | €2,000 |
| 100:1 | 1% | €100,000 | €1,000 |
| 200:1 | 0.5% | €100,000 | €500 |
A trader may choose the highest leverage (200:1), with the margin being only 0.5%. However, sound money management principles say that the trader should never trade huge lots. This would prevent leverage from hurting the trader.
Therefore, it is essential to understand how much leverage your forex broker offers and what the margin requirements are. If you are new to trading, you should compare the leverage and margin specifications of different brokers.
By Kitz S
Why You Should Treat Forex Trading as a Business
If you trade the forex market you will undoubtedly be aware that it is a high risk venture. Most traders who trade currencies end up losing money. Unfortunately, some traders end up losing a substantial part of their net worth.
Many traders, especially new traders are attracted to forex because they see brokers offering �200 to 1 leverage� and in some cases even higher amounts. It is a common belief amongst new traders that they can use this leverage to generate a substantial amount of wealth. This belief nearly always ends in tears.
To be a successful forex trader, it is imperative that you treat trading like a business. It is unlikely that you could put $50 in to a business and turn it into $20,000 in a short frame of time. Granted, there are exceptions, but they are EXTREMELY few and far between.
You need to apply this same theory to forex trading. One of the biggest reasons traders lose money is having an account size that is too small.
One of the major advantages is forex is that you can effectively borrow as much money as you like from your broker. However, it is important to remember that borrowing money to trade will increase your profits, but it will also increase your losses.
There are no universal rules to state how much you should borrow. Many new traders should start off borrowing very little, if anything. Of course, it does depend on the type of strategy that you use.
If you have a $10,000 trading account, most brokers would allow you to open positions to the value of at least $500,000. If you bought a USD pair, this would be 50:1 leverage. The position size is 50 times the size of your account.
It would not take much of a price movement in the wrong direction to cause a significant loss to your account.
Many new traders start with a small account balance. The same principle can be applied to a $100 account trading a $5,000 position.
The smallest position allowed by many brokers is often $10,000, yet they may still allow you to open an account with $100.
The brokers don't mind, they know that 99% of the clients who do this will blow their account.
The point I am trying to get across is the one of being realistic. Treat trading as if it is a business. Aim for realistic returns. Think about the stock market or mutual funds. They often earn less than 10% per year on average. If you can make 30% per year trading forex, that is significantly higher!
Don't expect to make $1,000 a month from your $100 account. It almost certainly will NOT happen.
By Eric Martin.
Many traders, especially new traders are attracted to forex because they see brokers offering �200 to 1 leverage� and in some cases even higher amounts. It is a common belief amongst new traders that they can use this leverage to generate a substantial amount of wealth. This belief nearly always ends in tears.
To be a successful forex trader, it is imperative that you treat trading like a business. It is unlikely that you could put $50 in to a business and turn it into $20,000 in a short frame of time. Granted, there are exceptions, but they are EXTREMELY few and far between.
You need to apply this same theory to forex trading. One of the biggest reasons traders lose money is having an account size that is too small.
One of the major advantages is forex is that you can effectively borrow as much money as you like from your broker. However, it is important to remember that borrowing money to trade will increase your profits, but it will also increase your losses.
There are no universal rules to state how much you should borrow. Many new traders should start off borrowing very little, if anything. Of course, it does depend on the type of strategy that you use.
If you have a $10,000 trading account, most brokers would allow you to open positions to the value of at least $500,000. If you bought a USD pair, this would be 50:1 leverage. The position size is 50 times the size of your account.
It would not take much of a price movement in the wrong direction to cause a significant loss to your account.
Many new traders start with a small account balance. The same principle can be applied to a $100 account trading a $5,000 position.
The smallest position allowed by many brokers is often $10,000, yet they may still allow you to open an account with $100.
The brokers don't mind, they know that 99% of the clients who do this will blow their account.
The point I am trying to get across is the one of being realistic. Treat trading as if it is a business. Aim for realistic returns. Think about the stock market or mutual funds. They often earn less than 10% per year on average. If you can make 30% per year trading forex, that is significantly higher!
Don't expect to make $1,000 a month from your $100 account. It almost certainly will NOT happen.
By Eric Martin.
The Costs Of Trading
You may have relatives or friends who trade the markets. They could be trading shares, futures, options or forex. You may have heard of their exciting trading stories and perhaps this aroused your curiosity and you wondered whether you should trade too. One of the first questions you ask before you trade would be: what are the costs of trading.
The costs of trading depend on several factors, including the instrument and market you are trading. Most of the costs you pay are to your brokerage firm. They need to make a living in exchange for the services they provide.
Generally, you would expect to incur the following costs:
Commissions
Slippage
Spread
Platform Fees
Expenses
Commissions
These costs are charged by brokers. The commission you pay is usually calculated as a percentage of the size of your trade. For example, if you are buying or selling $10,000 worth of shares, your broker may charge you 1% of that. They may also charge in tiers: for example, if you are buying or selling shares with a total market value of less than $10,000 then your broker may charge you $30. If it is under $20,000, they may charge you $50. Therefore, if you bought $5,000 worth of shares, you would still pay $30 commission. And if you bought $12,000 worth of shares you would still pay $50 commission.
Slippage
The price of a commodity is always moving as long as the market is open. Therefore, if the price of a share is quoted at $10 now, it does not mean that when you decide to buy, you will buy those shares at $10 each. When you put in your order and it gets filled, the market price may have already changed. If your order to buy the shares was filled at a price of $10.25, and you bought 100 shares, then your total slippage cost is: $25 (that is 100 shares * $0.25). If you had the same slippage when you sell, then the entire slippage costs for you getting in and out of the market would be $50 (that is $25 * 2 trades).
Spread
The spread is the difference between the bid to buy and offer to sell for the commodity. If the most eager buyer is willing to buy US Dollars for 0.7500 Australian Dollars each, but the most eager seller is only willing to sell them for 0.7510 Australian Dollars each, then there is a spread of 10 pips. These 10 pips are referred to as the spread. If you bought 100,000 USDs, the spread would cost you 100 Australian Dollars. (Pips are discussed further in the book: The Part-Time Currency Trader .)
Platform Fees
Some brokers charge you monthly for using their trading platforms.
Expenses
These costs include those associated to your trading education like buying books, trading software, data subscription and so forth.
Some people may 'brush' these costs aside as negligible costs of having fun, much like the coins they put in poker machines. However, if you want to look at trading as a business, you have to minimize them and make sure you are getting the most for every dollar you spend to ensure your long-term survival.
By Marquez Comelab.
The costs of trading depend on several factors, including the instrument and market you are trading. Most of the costs you pay are to your brokerage firm. They need to make a living in exchange for the services they provide.
Generally, you would expect to incur the following costs:
Commissions
Slippage
Spread
Platform Fees
Expenses
Commissions
These costs are charged by brokers. The commission you pay is usually calculated as a percentage of the size of your trade. For example, if you are buying or selling $10,000 worth of shares, your broker may charge you 1% of that. They may also charge in tiers: for example, if you are buying or selling shares with a total market value of less than $10,000 then your broker may charge you $30. If it is under $20,000, they may charge you $50. Therefore, if you bought $5,000 worth of shares, you would still pay $30 commission. And if you bought $12,000 worth of shares you would still pay $50 commission.
Slippage
The price of a commodity is always moving as long as the market is open. Therefore, if the price of a share is quoted at $10 now, it does not mean that when you decide to buy, you will buy those shares at $10 each. When you put in your order and it gets filled, the market price may have already changed. If your order to buy the shares was filled at a price of $10.25, and you bought 100 shares, then your total slippage cost is: $25 (that is 100 shares * $0.25). If you had the same slippage when you sell, then the entire slippage costs for you getting in and out of the market would be $50 (that is $25 * 2 trades).
Spread
The spread is the difference between the bid to buy and offer to sell for the commodity. If the most eager buyer is willing to buy US Dollars for 0.7500 Australian Dollars each, but the most eager seller is only willing to sell them for 0.7510 Australian Dollars each, then there is a spread of 10 pips. These 10 pips are referred to as the spread. If you bought 100,000 USDs, the spread would cost you 100 Australian Dollars. (Pips are discussed further in the book: The Part-Time Currency Trader .)
Platform Fees
Some brokers charge you monthly for using their trading platforms.
Expenses
These costs include those associated to your trading education like buying books, trading software, data subscription and so forth.
Some people may 'brush' these costs aside as negligible costs of having fun, much like the coins they put in poker machines. However, if you want to look at trading as a business, you have to minimize them and make sure you are getting the most for every dollar you spend to ensure your long-term survival.
By Marquez Comelab.
Money Management Tips For Trading On The Forex
What is Money Management: describes strategies or methods a player uses to avoid losing their bankroll.
Money management in the foreign exchange currency market requires educating yourself in a variety of financial areas. First, a definition of the foreign exchange currency or forex market is called for. The forex market is simply the exchange of the currency of one country for the currency of another. The relative values of various currencies in the world change on a regular basis. Factors such as the stability of the economy of a country, the gross national product, the gross domestic product, inflation, interest rates, and such obvious factors as domestic security and foreign relations come into play. For instance, if a country has an unstable government, is expecting a military takeover, or is about to become involved in a war, then the country's currency may go down in relative value compared to the currency of other countries.
The Forex, or foreign currency exchange, is all about money. Money from all over the world is bought, sold and traded. On the Forex, anyone can buy and sell currency and with possibly come out ahead in the end. When dealing with the foreign currency exchange, it is possible to buy the currency of one country, sell it and make a profit. For example, a broker might buy a Japanese yen when the yen to dollar ratio increases, then sell the yens and buy back American dollars for a profit.
There are five major forex exchange markets in the world, New York, London, Frankfurt, Paris, Tokyo and Zurich. Forex trading occurs around the clock in various markets, Asian, European, and American. With different time zones, when Asian trading stops, European trading opens, and conversely when European trading stops, American trading opens, and when American trading stops, then it is time for Asian trading to begin again.
Most of the trading in the world occurs in the forex markets; smaller markets for trade in individual countries. Simply put forex trading is the simultaneous buying of one currency and selling of another. Over $1.4 trillion dollars, US of forex trading occurs daily and sometimes fortunes are made or lost in this market. The billionaire George Soros has made most of his money in forex trading. Successfully managing your money in forex trading requires an understanding of the bid/ask spread.
Simply put the bid ask spread is the difference between the price at which something is offered for sale and the price that it is actually purchased for. For instance, if the ask price is 100 dollars, and the bid is 102 dollars then the difference is two dollars, the spread. Many forex traders trade on margin. Trading on margin is buying and selling assets that are worth more than the money in your account. Since currency exchange rates on any given day are usually less than two percent, forex trading is done with a small margin. To use an example, with a one percent margin a trader can trade up to $250,000 even if he only has $5,000 in his account. This means the trade has leverage of 50 to one. This amount of leverage allows a trader to make good profits very quickly. Of course, with the chance of high profits also comes high risk.
Like many other speculative investments, a key part of money management for the forex trader is only using money that can be put at risk. It is wise to set aside a portion of your net worth and make that the only money you use in forex trading. While the chances of good profits are there, if you should have a problem and get wiped out, you'll only have a limited amount of money placed at risk. Also remember that the market is n constant motion. There are always trading opportunities. If a currency is becoming stronger or weaker in relation to other currencies there is always a chance for profit. For instance, if you believe that the Euro is gong to become weak compared to the US dollar then selling Euros is a good bet. If you believe that the dollar is going to become weaker than the yen, or the pound sterling, then selling dollars is wise. Staying current on the news and current events in the countries whose currency you hold is a smart move. Many people reach points where they can predict currency changes based on political or economic news in a given country. Remember though that forex trading is speculation, so be careful when managing your funds and only invest what you can afford to risk.
Please always make sure you check with the pros when dealing in this market unless you are doing this as a hobby and don't have a lot at stake in it. There are a lot of big boys playing here and they won't lose much sleep if you and thousands others lose their shirts...
By David Mclauchlan.
Money management in the foreign exchange currency market requires educating yourself in a variety of financial areas. First, a definition of the foreign exchange currency or forex market is called for. The forex market is simply the exchange of the currency of one country for the currency of another. The relative values of various currencies in the world change on a regular basis. Factors such as the stability of the economy of a country, the gross national product, the gross domestic product, inflation, interest rates, and such obvious factors as domestic security and foreign relations come into play. For instance, if a country has an unstable government, is expecting a military takeover, or is about to become involved in a war, then the country's currency may go down in relative value compared to the currency of other countries.
The Forex, or foreign currency exchange, is all about money. Money from all over the world is bought, sold and traded. On the Forex, anyone can buy and sell currency and with possibly come out ahead in the end. When dealing with the foreign currency exchange, it is possible to buy the currency of one country, sell it and make a profit. For example, a broker might buy a Japanese yen when the yen to dollar ratio increases, then sell the yens and buy back American dollars for a profit.
There are five major forex exchange markets in the world, New York, London, Frankfurt, Paris, Tokyo and Zurich. Forex trading occurs around the clock in various markets, Asian, European, and American. With different time zones, when Asian trading stops, European trading opens, and conversely when European trading stops, American trading opens, and when American trading stops, then it is time for Asian trading to begin again.
Most of the trading in the world occurs in the forex markets; smaller markets for trade in individual countries. Simply put forex trading is the simultaneous buying of one currency and selling of another. Over $1.4 trillion dollars, US of forex trading occurs daily and sometimes fortunes are made or lost in this market. The billionaire George Soros has made most of his money in forex trading. Successfully managing your money in forex trading requires an understanding of the bid/ask spread.
Simply put the bid ask spread is the difference between the price at which something is offered for sale and the price that it is actually purchased for. For instance, if the ask price is 100 dollars, and the bid is 102 dollars then the difference is two dollars, the spread. Many forex traders trade on margin. Trading on margin is buying and selling assets that are worth more than the money in your account. Since currency exchange rates on any given day are usually less than two percent, forex trading is done with a small margin. To use an example, with a one percent margin a trader can trade up to $250,000 even if he only has $5,000 in his account. This means the trade has leverage of 50 to one. This amount of leverage allows a trader to make good profits very quickly. Of course, with the chance of high profits also comes high risk.
Like many other speculative investments, a key part of money management for the forex trader is only using money that can be put at risk. It is wise to set aside a portion of your net worth and make that the only money you use in forex trading. While the chances of good profits are there, if you should have a problem and get wiped out, you'll only have a limited amount of money placed at risk. Also remember that the market is n constant motion. There are always trading opportunities. If a currency is becoming stronger or weaker in relation to other currencies there is always a chance for profit. For instance, if you believe that the Euro is gong to become weak compared to the US dollar then selling Euros is a good bet. If you believe that the dollar is going to become weaker than the yen, or the pound sterling, then selling dollars is wise. Staying current on the news and current events in the countries whose currency you hold is a smart move. Many people reach points where they can predict currency changes based on political or economic news in a given country. Remember though that forex trading is speculation, so be careful when managing your funds and only invest what you can afford to risk.
Please always make sure you check with the pros when dealing in this market unless you are doing this as a hobby and don't have a lot at stake in it. There are a lot of big boys playing here and they won't lose much sleep if you and thousands others lose their shirts...
By David Mclauchlan.
Sunday, August 21, 2011
Currencies - an option to work from home
Many people are looking for an opportunity to make money from home. With the current economic situation, many people are worried about their future in the "world of work" and want to make money for themselves, without having to depend on an employer.
There are many scams that prey on those people online. Offer job-seekers, ridiculous amounts of money for little work. Unfortunately, many people fall for these scams, losing hundreds or even thousands of dollars in the process.
The fact is that there are very few jobs at home there. Instead, most people who work at home working for themselves, running his own business. Unfortunately, this usually requires a large investment, and often takes years to turn a profit. It is very difficult for an average person to live on their own as they build their business.
Fortunately, there is an option of family business that allows immediate gains, with appropriate training. Forex trading is a business of billions of dollars, and can be easily done from the Home Office. Many people looking for a job opportunity in shy House of currency; It sounds too complicated and risky. But the fact is that with proper training, Forex is one of the most lucrative opportunities for family business around.
The general idea of the Forex market is very simple: on any given day, change the value of the currency of a country compared to another. It is likely that you heard the news that "the dollar is a" or "The Euro is down" without knowing what that means. Well, basically, they are talking about currency. When you say that "the dollar is up", means that investors who bought $ made a profit.
Now, at this point, you may be thinking that this sounds too complicated. It is where the training. A proper training program takes the complicated Forex market and makes it easier to understand. With proper Forex trading, you can do a lot of money simply looking at a couple of graphics! It takes a little while to complete this training course, but once you have done so, will be on their way to make a full-time income while working in his Office at home.
It is the best part of all, there are now training Forex options available payments. Runners really give money to deal with while you learn. This means that you can start to make a profit without risk of his own money. For the new operator, it is excellent news, and means that the success of currency are now easy access for all!
Why Trade Forex? And can make money trading Forex at home?
Forex trading can also be described as speculating on the orientation of one currency against another. Benefits when the market moves in your favor and is lost if the market moves against you. Forex trading can be very risky but rewarding. The difference between the purchase price and the selling price of the currency is called the spread. Forex trading can add needed diversity to a portfolio. Currency traders need education, patience and discipline.
This can be exciting and profitable, but with so many different trading platforms available today, how to find the best suits their needs.? This can become a life. A life of luxury that has always dreamed of, but never thought could become a reality, or just a comfortable life without having to worry about money. Forex trading can take you to where you want to go in life. You only have to find a system. Most systems out there, everything you need to do is follow the step by step. With Forex has the opportunity to change your life, but we must be careful as nothing there is a risk to manage it. This is called "Administration".
Remember, FOREX Trading is not a form of "Get rich quickly" and execution of foreign currency with this goal in mind will surely result in ruin and financial difficulties. Regardless of the expert performance claims results past are not indicative of future returns. Forex trading is serious. A strategy that will help you to effective forex trading is needed. It can be frustrating and rewarding all at the same instant. Do not allow that its losses are greater than their earnings because not get the discount you deserve.
Saturday, August 20, 2011
Increase their income from currency - how it works?
And commerce have always been mechanisms by which human beings have addressed and made gains. The change is not different at all. You should be familiar with the system of Exchange that existed where people bought things through the exchange of other things that were with them. A similar principle is followed here, with the exception that trade occurs with different currencies in the world.
If you want to make extra money and they are willing to make that extra effort, i.e. its sphere as everything needed is a calm mind and strategies. Be sure not to go over and all you have to invest in this. Much study and dedication of its side is necessary. It is advisable to first understand the procedure and learn things occur in this area, and then begin to invest. In this way they accumulate skills and be able to manage the quantity on hand very well.
To increase profits of Forex, the first thing that needs to be taken into account is to be thrifty. Make sure you know what you're doing. We must remember that if you want to trade be sure to obtain a marginal one hundred points at least to go beyond. This will reduce the loss of his hand and learn how to go the right way.
There is much material to guide you through this process of increasing their foreign exchange earnings. It is not possible to sit glued to the computer trying to figure out how the trade will be your normal routine to care. That is why you must have available software support. In this way can go about your normal routine and some time between you can devote time to the statistics that have been gathered. Based on this you can make vital decisions.
It's OK to make mistakes. But it makes no sense in brooding on what has happened, instead you should learn what went wrong and try to correct it and thus increase foreign exchange earnings. We wish you a happy bargaining ahead.
Work from home Trading shares, currency and future - Guide for beginners
Are you tired of your boss? Are you tired of not spending time with his family? Tired of switching to a boring job that co-workers are more intent on ruining the day helps to flourish? Tired of seeing some immature and mediocre co-worker to get promoted to a position of Manager that he does not know such as well are you? I know I was. It was then when I decided to take control of my future, financially and personally. If you are interested in working from home, go ahead. Change your career to something better, where you can apply those skills got drive hard and intelligence. Although there are many methods of working from home one can explore on the internet, the most viable and profitable (and always has been) are stock trading, Forex and futures.
In Forex trading, future or stock trading is to start, unlike many internet gurus claim, a fairly easy company. Fundamentally, all a merchant needs is a good platform and software of a good research to identify historical trends in the stock market. There are many shopping areas and many programs on the market of the research. Many of these training programmes Forex, programs of formation of stock or future training programmes do not offer high quality information and do not have adequate customer support and training.
The critical importance of good research or training software is that it allows trader to analyze the movements of currency exchange (when it comes to currency), up and down trends (when stock trading) or speculations of the future (when future trading). This is how all millionaire traders established his fortune: by being informed. Most of the data relating to internet trends is probably outdated or unreliable. I cannot address the incredible importance of acquiring software research when working with all types of quote (stock, foreign exchange and Futures).
We are going to take foreign currency for example: these research software, allows that the merchant analyze Forex signals that provide the merchant with the necessary information. Currency is speculation about future trends. A trader who knows these trends will make profits and good investments. A Forex signal provider will give to the trader on Forex good offers. Forex signals providers and research software, allows informed traders stay on top of the pyramid. The best way to find success in foreign exchange or trading stocks or futures training is to be informed.
It is the best way to be informed by investing in good research tools. We have explored the specific example of Forex training and how a Forex signal software can provide the merchant with profitable investment that yearns for the merchant. This concept of Forex signals is the same for trading stocks and futures. If you want to work from home, take on the trade. Start today to open an account with a platform for trade and for the purchase of a software research.
Currency trading, quit his job and work from home
Do you want out of your work? Work from home? Then make yourself a favour and currency trading. I'll show you how can trade for a few hours a day and earn enough money to create a life for you and your family.
In this article you will see a piece of software called an expert Advisor (EA). This EA offers you, opening and closing operations. If you want to earn money by the end of today, it is possible. It's not about whether you can make money, you make money.
Fund
You've lost money in the last year or by the stock market. In January, I found this automated trading robot which trades in the Forex market and that has never looked back. You may already have heard, is called FAP Turbo and was developed by three tech geeks. The software also known as a robot, trades loading himself into a graphic into a platform called Metatrader 4. Your broker will provide free of charge this package.
My experience
I began operations on January 5, 2009 and have recently withdrawn the initial deposit of £ $900 1300 us my account. It had benefited above £ 740 $ 1050 us all in 2 months, thanks to the FAP Turbo. I would simply not be able to trade without it. Once you are familiar with the EA and confidence, you can use to help trade also manually. There are many tips and tricks.
Insight
Trade is generally considered high risk by what this form of income is not for everyone. However it only has a small capital to start with, for example, $200-$300. There will be a millionaire overnight with this type of home, but in a few months it will easily double your money and that's just the beginning. If its capital is near $3000 +, I am positive that it could create a lifestyle for himself.
Conclusion
This review has introduced you to FAP Turbo an exciting expert advisor for Metatrader 4 platform. I hope that he has inspired you. With the economy in the way that is, you never know when may need a little extra money or simply an alternative income.
Automated Forex trade and Software - it makes it really work?
Any new merchant or one put Exchange probably has sought an automated system or a system that will do the thinking for them. It is easy to do a simple search and find numerous automated forex systems, however it is not the difficult part to find them but the identification of those who actually work.
Automated forex systems and software can come in many different ways, some have a set of indicators to follow, others use what is known as an expert consultant to automatically an account that when the trade and some have a simple set of rules and guidelines to follow. Regardless of what rules, indicators of a given system or software contains, we want to find one that turns a profit at the end of the day.
Here are three components to identify a profitable Forex System
1.? Ask yourself, there are other people with the system and be successful? It is easy to visit a Web site and read the testimonials and more importantly, want to pay attention to the video testimonials. There is nothing like seeing and hearing the views of the people. See not only the video testimonials, but read all the testimonies of text as well, this will give you a real idea of how it is working the system and what others really have to say about certain software or system.
2.? Has it proven return system? Back is when we take historical data and later it implemented a system to see what the results would have produced roll. Most profitable forex systems have a track record of success when tested correctly again. Even better, search for videos on the page that shows the system live in action.
3 The system of implementing and using sound money management? This is probably one of the most difficult to identify. Although the system can be profitable, what you really want to look at is what could be our greatest reduction in any month. A good system could make thousands per month in multiple occupations, however this is of no use to us if a trade loses everything. Be sure to find the proper money management strategies and make sure that you apply. It is used even a system that is just 30% of time may leave both as management of sound money above.
Not all forex systems will have three components, but when we can identify one adjustment shoe, it is more than likely that a sound system. Make sure of educate it and use sound money management when the Forex trade market as it can be very risky, however, the rewards can also be substantial.
A cost-effective strategy for Forex - Forex Robots and systems
These days many people are looking for a strategy of profitable Forex and sincerely that there is, however, that are difficult to get to some of the reasons. Number one, a person can have a strategy of profitable Forex but without proper discipline to execute the effective strategy or number two, they can have all the characteristics of a great merchant, but his system is deficient and given poor trading signals.
How to create profitable Forex strategies?
Automated Forex use of robots. Forex automated robot, or also known as expert advisors operate on a set of parameters on a mathematical formula. When the conditions within the formula takes a trade and the robot automatically sets the target of proper stop profit and loss. The benefits of having a robot that trade is that the robot does not have any emotion. The robot simply acts on a set of rules and never deviates from the rules. Secondly, a Forex robot can trade around the clock 24 hours a day, never missing a trade in a specific currency.
Most Forex robots are compatible with MetaTrader, a free graphics software package and can be easily installed on the platform. Once correctly installed the Forex robot, then you can apply to any agent foreign exchange. Generally recommended to first test the robot in a demo account before actually entering a direct trade. First test the robot will help to identify values suitable for different market conditions. A slight configuration adjustment can produce the results that one is looking for and of course will help with lateral and market trends.
There are many Forex robots to choose online and of course not all were equal either. When looking for a quality or robot Forex expert advisor, it is important to analyze the back tested data. Ask yourself, is how the robot made in the past? Most commercial robots have a very good business record and the best that can be traded in almost 90% accuracy. To obtain this 90% accuracy your Forex robot will have to be tested properly and perhaps even adjusted a bit, but it is very possible.
Finally, when the search for a profitable Forex trading system, always find testimonies from other people on the site and what has been your experience with this system in particular. Video testimonials tend to have more weight in comparison with testimonies of text.
Friday, August 19, 2011
Best courses for Forex trading strategies and Robots
Many people want to find the best strategies for forex and trade courses to help with their offices. One of the most leading-edge solutions is buy a forex trading robot. A forex trading robot is a software program that works directly with the trading platform to buy, sell or hold positions. It takes human emotion of the equations and is based on the predictive value of the market trends. The robot tries to make offices more positive than negative, and therefore, increase the value of the account at the end of the day.
Work only with numeric data, the robot manages the offices from beginning to end. This can reduce the amount of time and effort the retailer has to devote to your account in days of active trade. The program makes decisions based on actual data has been gathered on the markets.
Human emotion is almost incuantificables. The robot aims to eliminate the process. Transactions are made on the basis of the data, not intuition, hunches, or feelings. This also reduces the likelihood that you can place a trade based on a mistake in understanding of the data, which can potentially happen to anyone.
The software creates projections based on trends of short, medium or long term of certain currencies. Stop loss is command to sell if market trends reverse unexpectedly. This limits the amount of risk that a trader must incur to maintain an active position and the amount of money that can be lost at any time.
When there are discernible patterns in data, robots buy or sell positions. This eliminates the possibility of a person to panic or freeze when there are changes in the market without warning. This also removed the speculative element.
Therefore, you can learn more about forex online training robots. They may be the best strategies for forex and commercial courses for you now. Withdrawn today. I personally am doing more than 10% - 20% a month constantly using an automatic Forex system that I found online that can find more information about in my next link of Commerce Web site.
Forex Software - Forex - best automatic strategies and commercial courses
Why are there so many ads in exchange for automatic software? Work at home? What is everything? This article can help you understand a little more.
Foreign Exchange (forex) currency trading has existed for a long time. These traders and money managers have come with their own programs and want to sell this product or service to you. It is not really a bad thing.
The difference on the trade of foreign exchange is that people don't need to work in an Office or get a job to earn money. You can get money legally as a Forex trader. But there's a catch here. You can not make money without money. Start with a small amount if trade is going well, earn a little more and this can be 20% more than what you started with. For some, who do not earn. Losing that small amount and end up with 0%. This is called risk.
To start this business, you need to have a computer, a broadband Internet access and an account with a Forex trading company. You must be computer literate and that means knowing how to use software programs. Currency trading software must be installed on the computer and when you know how to use it, you can begin to operate.
But first of all, define the parameters of risk. What will be the software is taking their level of risk and make automatic trade on your behalf with your account with the currency trading company.? It is not necessary to put in their offices one by one. This makes it easier to work.
Automatic software for Exchange can be stressful for some because it deals with their money. There is no guarantee. This company is only recommended if you want to be a forex trader.
Forex Guide: things that all beginner traders must know before they start trading in Forex
It is a fact that currency became a method of highly preferable investment over the last decade. Combined with the internet as a global forex 24/7 network is accessible to everyone. I'll not give on the explanation of forex trading in this article. I am sure that I don't have to say is what currency. People that family or they have an interest in an investment already know forex. Is it not?
Currencies are basically just an investment
Like any other investment, there are always benefits and more foreign currency risks. Many people and the Organization, particularly forex brokers, affiliates and those who earn their income by offering some foreign exchange related services says that forex trading has many advantages in comparison with other investments; Forex is easy, with its market of 24-hour non-stop, adjustable range influence, its automated trading platform, your best chance offered resources of income and many more - name as you want...
Blinded by his "imagination beautiful dream", many merchants of small or staff, especially for new them forgot that forex trading is basically still an investment programme. Traders should not have a thought which currencies is a resource of income.
Common scenario of beginner traders
Forex for beginners traders tend to follow the trend to negotiate without preparation and giving them self a proper understanding of what is foreign exchange currencies. Their common scenarios are:
1 Learn about Forex
2 They have an interest in foreign currency
3 Looking for an easy and profitable forex services
(Normally by the search for some services with lower margin, higher utilization, automated trading platform and less risk?-that is too good to be true)
4 Start the game with his offices
5. No benefits such as what can be achieved his imagination
6 Repeat stages 3, 4 and 5
7 Repeat stages 3, 4 and 5 again... and again...
8. Aware that are losing too much or that his imagination these days, weeks or months is wrong (I doubt it would be years)
9 Give up and abandon their trade for good.
Where do poorly in above scenario? Is it that evil always looking for a better service to support our trade? In my view, there is no any error in this case at all. But only incomplete, and that is the most dangerous mistakes made by most novice traders.
How to overcome mistakes traders and start to make some gains in Forex
The facts are that there are only 5% of traders of currencies than with their commercial success. To be as they are, we we must insert step 2.5 in the previous stage. This step will simplify on stage by removing the fourth and eighth and ninth step changing became traders achieved goal.
2.5 Preparing yourself with a solid basic knowledge of Forex
-Learn about the key exchange
-Learn about why and how is really market forex
-Train yourself to get familiar with the technical analysis in forex trading
-Learn how psychological factor affecting trade and define best personality of trade
-Be aware of our risk and money management
-Develop more efficient single trading knowledge-based system.
We must bear in mind deeply that forex trading is an investment. It is not possible that we could be a teacher in some investments that we only dive in days or weeks. We have to do it the right way and do not forget to remove the fever in the achievement of the goal. Surely you will find the best system that suits you trade, I can assure you. But that would cost time for the system of trial and error tests while developing his experience in foreign currency.
Using an analog approach as a team, forex broker is the application and operating system programs. We need to make sure of that fact, we all need it served and executed correctly. But the good thing is the speed of execution of informatization and its performance depends on the specification of the core team, analogically as.
How to get yourself completely prepared Forex
Learning and education materials are widely world spreading around us.
1. The first and the highest value added is a resource of currency through the reading of the book. Forex and investment classified books are available in countless numbers in many library and online bookshop. Some of them must choose to educate you with valuable insight into the theory beyond currency.
2 Try to reach some forum for merchants to find out more about currencies and markets. Forex Forum a place to give information to predict the psychological factor of the crowd to predict the movement of the price of the currency by examining how other traders also react in some financial forex related to global events.
3 Get a forex course. An expert forex or forex broker dealers are offering this type of educational method of forex. The course are generally about the basics of forex, use of the technical analysis technique and its tools, expert trade advice or how develop a particular proven forex trading that profitable system (if supported by your basic knowledge of forex and well done).
4 Forex magazine subscription. Some forex magazines are published weekly, monthly and others may be annual. These materials are often give information about the behavior of the market summary updated forex and analysis that can be used to introduce the fundamental analysis of their currencies.
What their options in how A Forex options brokers?
Forex option brokers generally can be divided into two distinct categories: forex brokers offering business platforms for the option of online Forex and corridors of currency that only negotiate currency option phone trades placed through a desk dealing and brokerage. Some Forex option brokers offer both forex online trading option so that trafficking/brokerage desk for investors who prefer to place orders through a live forex option broker.
Commercial account minimums required by different Forex option brokers vary from a few thousand dollars to more than fifty thousand dollars. Also, forex option brokers may require investors to trade in contracts of options of currencies whose theoretical minimum values (contract sizes) of up to $500,000. Last but not least, certain types of forex option contracts can be entered in and out at any time while other types of blockade until the expiration or liquidation forex option contracts. Depending on the type of option contract of forex when you enter would stay stuck with an option contract that may not trade in the wrong way. Before trading, investors should consult with their initial option forex brokers trading account minimums, it requires minimum size contract and contract of liquidity.
There are a number of option to Exchange different products offered to the investor forex option trading brokers. We believe that it is extremely important for investors to understand the different risk characteristics of each of the option of forex trade in products referred to below are offered by companies which forex broker options.
Plain Vanilla Forex options Broker - Plain vanilla options generally refer to standard put and call option contracts traded through an Exchange (However, in the case of commercial vanilla options, plain relate to standard option contracts generic that they are marketed through an over-the-counter (OTC) forex dealer or clearinghouse of the forex option). In simpler terms, vanilla forex options would define as the purchase or sale of a standard forex or forex call option contract put option contract.
There are only a few brokers/agents option forex offering options from plain vanilla forex online with transfer rates in real time 24 hours a day. Most banks and forex option brokers only negotiate forex options via telephone. Major currencies vanilla forex options have good liquidity and easily you can enter the market long or short, or exit the market any time day or night.
Vanilla forex option contracts can be used in combination with each other or with contracts in forex spot to form a basic strategy such as writing a covered call or forex much more complex trading strategies such as butterflies, strangles, share lists, synthetic, etc. Also, plain vanilla options tend to be based on the choice of forex known as exotic options trading strategies.
Exotic Forex - first options broker, it is important to take into account that there are a couple of currency different definitions of "exotic" and does not want that nobody get confused. The first definition of an "exotic" forex refers to any individual currency less widely quoted in the major currencies. The second definition of "exotic" forex is that we are talking about on this Web site, an option contract for forex (trade strategy) that is derived from a standard vanilla forex option contract.
To understand what makes an exotic forex option "exotic", first you must understand what makes a Forex option "not Vanilla". Plain vanilla forex options have a definitive expiration structure, the structure of payments and the amount of profits. Exotic forex option contracts may have a change in one or all the previous features of a vanilla forex option. It is important to note that exotic options, since they often adapt to the needs of the investor in a specific by exotic forex options broker, generally are not very liquid, if at all.
Exotic forex options are generally quoted by commercial and institutional investors rather than retail Forex traders, so not spent much time forex brokers covering exotic options. Examples of forex options include exotic Asian options (options average price or "apo"), barrier options (depends on payment or not the underlying reaches a certain level of price or not), baskets (payment depends on more than one currency or a "basket" of currencies), binary options (profits are effective or anything if underlying reaches strike price), lookback options (payment is based on the maximum or minimum price reached during the term of the contract), composed of options (options in options with several strikes and dates), spread options, Chooser options, packages and so on. Exotic options are tailored to the specific needs of the merchant, therefore, exotic options types contract change and evolve over time to changing needs.
Already exotic forex options contracts are usually specifically tailored to an individual investor, most of the exotic options of business transactions over the phone through the forex option brokers. However, there are a handful of runners choice forex offer "If you touch" foreign exchange or forex options "pay only" options contracts online, according to which an investor can specify an amount you're willing to risk in exchange for a specified payment amount if the underlying price breaches a specified price strike (price level). These transactions offered by legitimate online Forex brokers can be considered a type of option "exotic". However, we have observed that the premiums for these types of contracts may be greater than the simple option of vanilla contracts with similar strike prices and you can not sell out of the position option once you have purchased this type of option - only can try to compensate for the position with an independent risk management strategy. As a balance to get to choose the dollar amount for which you want to receive earnings and risk, you will pay a premium and sacrifice liquidity. We urge investors to compare the premiums before investing in these types of options and also make sure that the brokerage firm is reputed.
Once again, it is quite easy and liquid to enter exotic forex option contract, but it is important to bear in mind that depending on the type of exotic option contract, may be little or no liquidity to all if he wanted to get the position.
Firms offering Forex option "Bet" – a number of start-ups have appeared last year offering forex "betting". Although some may be legitimate, a number of these companies is either off-shore entities or any other remote location. Generally we do not consider to be foreign exchange brokerage companies. Many do not seem to be regulated by any government agency and we suggest investors perform due diligence before investing with any forex betting companies. Invest at your own risk with these companies.
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