The home based business I am going to outline here can be learned in a couple of weeks, only costs a few hundred dollars to fund and has the potential to make huge profits. You don't need a college education just a desire to succeed and a willingness to learn.
The business is becoming an online currency trader from home - HANG ON!
I Couldn't do that, you may say but the fact is you could - just check out these advantages many of which you may never have considered
- You can learn currency trading in around two weeks.
- You only need a few hundred dollars to get started.
- You then need just an internet connection and PC.
- You can run the business in 30 minutes a day or less.
- There is never a recession in currencies as one rises another must fall.
- There are profit opportunities every day.
- You can leverage your deposit up to 400 times!
This means $500 can control $200,000 and that's why this business can be so lucrative.
So how easy is it to learn? Let me tell you a story ...
In 1983 trading legend Richard Dennis set out to prove trading was a skill anyone could learn.
He decided to conduct an experiment in which he took 14 people who had never traded before and taught them to trade in just 14 days. They were of varying ages, both sexes and of varying levels of intelligence.
He then set them up with trading accounts - the result?
They went on to make $100 million in just 4 years and become trading legends.
The experiment showed that anyone could learn if they had the desire to succeed and did their homework and you could learn trading to.
The best way to learn is to spot repetitive price patterns on charts that can be traded for profit. The idea then is to lock in and hold the longer term trends, use leverage to make money fast and cut losing trades quickly.
Human nature is constant and this is reflected in repetitive price patterns that when you trade them you will have the odds in your favour. You wont win every trade of course and will have losses - but if you can get just 30% of your trades right when following long term trends, you can make a lot of money.
While trading can be learned its does require not only that you learn a method but you have the discipline to follow it, through losing periods.
Trading is a combination of both.
Most traders do not trade in a disciplined fashion and let their losses mount - this is why discipline is so important. If you look after the losses and keep them small, you will soon be able to cover them with the bigger trending moves.
Trading is the final frontier of the free market economy and is one of the few areas where you can start with small stakes and build wealth quickly.
Sure, it's a challenge but what other business allows you to make such huge gains quickly and can be learned by anyone.
If you have a desire to succeed then your almost there...
You can set about getting the right education for trading success and a potentially life changing income.
Live The Dream
Become A Professional Forex Trader From Home!
Author: Kelly Price
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Many traders like to follow currency trading forecasts from news wires and brokerage houses. Here we are going to give you some tips on spotting the ones that are good and also how to do it yourself.
Today we live in an age of instant communications and information overload and there are numerous people involved in currency trading forecasts: Banks, brokers, vendors and TV analysts and most of them are dead wrong.
Why?
Because they either forecast to far ahead - or they base their view simply on the supply and demand fundamentals.
There are problems with both methods.
You will often see annual reports telling you where such and such a currency will end up in a year - How on earth can you do that?
We live in a world where events change constantly and you simply cannot look too far into the future as world events will simply make the forecast redundant.
Supply and demand fundamentals don't move prices - human opinion of them does.
Humans are not logical and we base our trading views not on logic but on the emotions of greed and fear. The facts are there for all to see but we all draw different conclusions from the facts presented to us.
Markets tend to collapse when the fundamentals are most bullish and rally when their most bearish - this is investor psychology at work.
Humans push prices to far from fair value and these price spikes don't in many instances reflect the supply and demand facts, they reflect greed and fear.
So how do you forecast correctly?
The answer is never to look to far ahead and simply back up your opinion with the reality of price change - this is obvious from forex charts.
Forex charts not only give you the advantage of seeing the fundamentals reflected in price action, they also tell you how humans perceive the fundamentals.
In conclusion you get a complete picture to look at.
By using a forex chart you are trading reality of price change and can act upon it.
You're trading the facts and truth you see - not speculating into the future, so the next time you see a currency trading forecast that sounds convincing, check your forex charts for confirmation.
Trade the facts as they are and the truth of price movement.
Author: Kelly Price
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Many forex traders what to use for ex news to generate buy and sell signals for profit and here we are going to give you a simple powerful tip, you can use to catch the really big moves and big profits.
There is an old quote that says: "If you can hold your head around you while everyone else is losing theirs you probably haven't heard the news"
This is the basis of the tip we are going to explain here. It works in currencies or any financial markets.
You are looking for news that has moved the market already and an extreme in investor sentiment, where the news is discounted and prices have moved to far from fair value and no longer reflect the facts.
You are effectively looking for news that is discounted and an emotional spike in price to far away from fair value.
Live Trades and $20,000 In Potential Profits
Let's start with an example in one of the most sentiment driven markets of all ( before we look at currencies), crude oil.
Regular readers of my articles will know that I am a crude oil bear, crude is simply overpriced. There is plenty of it about and world demand is dropping.
The true value is about 80.00 a barrel.
Every time sentiment has pushed it up toward the psychological $100.00 we have sold it - look at our other articles. If you would sold on the last two pops to this level, you will have seen the decline is $20,000 based upon 1 contract.
Its only sentiment that drove prices up - greed and fear drove the market NOT Supply and demand.
A CURRENCY TRADE EXAMPLE
Now let's look at a currency that is overbought and a huge profit to be made.
The euro against the dollar is the trade.
Regular readers again will know that 1.50 is the psychological number that traders want to target.
1.50 is too high just like $100 in crude is. This is simply sentiment driving prices near these levels and the euro will not trade above this level in our view and today its started falling.
The last time it got up we sold (see our other articles) and said it would target 1.46 it did and that's a tidy 600 pips profit.
It's up testing the highs again - but the bad news for the dollar is discounted in the price and its now only greed and fear driving the euro.
All the arguments you here for dollar weakness are discounted:
A 50 bps rate cut, a housing market in trouble, sluggish growth etc and there is no more bad news that's not known.
Now throw into the equation that the euro zone has problems of its own (which traders seem not to bothered about) and you could see a break in the dollars favour.
How far?
We expect the dollar to trade back to 1.46 and if this level gives way target 1.40
The majority don't agree with us (they didn't in crude either) but we won't let that bother us, were sticking with our euro short view to give us another thumping profit.
When looking for extreme bullish or bearish news to break a price always get confirmation of weakening momentum on your forex charts, so you are trading the reality and not getting in to soon.
Will Rogers once said:
"I only believe what I read in the papers"
He was joking but many traders simply take it as gospel when a news story says the dollar is going to fall into oblivion.
Hold your head, look at the facts and if prices gone too far to soon, get ready to trade against the losing herd.
Can you do the above?
Of course you can - it simply means standing back, examining the facts and then looking for trading signals on your forex charts.
This article was written at 8AM Eastern time 15th January by Kelly Price
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One of the most difficult aspects of trading and investing is selecting appropriate technical indicators and whilst all technical indicators will work some of the time none will work all of the time. With over 150 to choose from, and more joining the market every day, it's not surprising that traders and investors can feel both confused and overwhelmed. However, understanding and knowing which indicator to select and apply to a particular market and time frame will be the difference between success and failure. It is my belief that the best way to approach the use of indicators is as follows:
First, understand that the most important technical indicator is the price on a chart, what lies behind it, where is it likely to go (up, down or sideways) in the short, medium and long term. For the purposes of this article whenever price is mentioned it is based on the use of Japanese candlesticks although there are other formats such as, point and figure, Renko etc.
Step one is therefore to start with a chart. Next is to select the time frame best suited to your own personal trading and investing strategy. As a long term currency trader my own time frames are monthly, weekly and daily. Minute by minute movements in currency pairs are of little or no use at all. Similarly equity investors would look at end of day data through to yearly charts in order to see how the price has been moving. On the other hand as day and swing traders are only interested in making a profit as fast as possible they will use anything from minute to hourly charts. All this is self evident yet why do so many fail in the financial markets?
The next stage is possibly where it all goes wrong when perhaps too many inappropriate or conflicting indicators are added to the price movement and time frame. Avoiding these mistakes is actually quite straightforward and the key is it to keep it simple. For novice traders I would suggest starting with the simplest indicators of all, namely volume and simple moving averages. Volume will give you an idea of how many traders are joining in the move, either up or down, and all charts now include this within their packages. Look for anomalies in the volume such as very large volume spikes which stand out from the average, and conversely very small volume, where you might expect average volume to appear. These signals will indicate that perhaps something is happening in the market and we need to pay attention.
Simple moving averages, as their name suggests are moving averages are simply an average of previous price movements. They are excellent for identifying turning points, where we are looking for crossover points, with one crossing over another. Personally I set these up using a 20, 50 and 200 period MA. Here I look for the 200 crossing the 50 for a possible trend reversal downwards, and the opposite for an uptrend. In addition I look for prices to bounce off the 50 SMA as this indicates strength in the upward trend. Simple moving averages are very easy to set up and again all trading packages will include them as standard.
Other indicators can then be added to this basic setup and here I would suggest adding one at a time and testing its effectiveness under different market conditions. It will be a case of trial and error and keeping things as simple as possible which is at odds with the powerful trading packages and black box systems so readily available. However, the analogy I would use here is a mobile phone, yes it can take pictures, play music and surf the net but actually when you have broken down in your car and you need help all you want is to be able to make a phone call for help!
Anna Coulling
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ETFs offer exceptionally low expenses, outstanding performance, and unparalleled transparency. But, the number and variety of choices can be overwhelming. Now, one of the field's leading experts cuts through the ETF hype, offering a start-to-finish plan for choosing the right ETFs and using them to beat the market, year after year.
Dr. Marvin Appel explains exactly how ETFs work, what they can and cannot do, and why they’re not all equally attractive. Then, drawing on objective data and proven, back-tested strategies, he shows you how you can quickly move into the right ETFs at the right time, consistently staying on the winning side of major market trends.
Appel illuminates every facet of ETF investing: quantifying potential risk and reward, using ETFs to improve diversification, implementing simple ”active strategies,” deciding when to move into cash, and more. He also presents a full chapter on international ETF investing, as well as a discussion on how ETF investing can reduce your taxes.
From start to finish, this book candidly assesses risks, costs, and rewards, helping you become an informed ETF consumer and a powerfully effective ETF investor.
Forex education and training can provide you with the confidence to control your financial future. We must look past the hype in the marketplace and focus on what it really takes to personally achieve in the Forex market or any endeavor for that matter.
I'm not going to lie to you, trading Forex is not easy. But not for the reasons you may think. In the end we are the ones that will ultimately decide to become successful or not. The separator is not IQ, but rather emotional discipline or Self-Mastery. Where's this obtained?
Your Forex Education is the key!
Learning yourself will increase your bottom line more than any other single aspect. Let me just preview what emotional elements must be in place for you to succeed in Forex. You will notice that there is no mention of strategy, moving averages or pivot points!
1. Have A Strong Enough "Why" Statement
Why do you want to get your Forex education and trade the currency market? Is it to save for retirement? Is it to supplement your current income? Is it to replace your current job? Are you trying to accelerate your college fund? The answer to this question must be strong and full of passion! This will be the one element that will get you through the dark times all traders face.
Also, having this statement transferred to your Forex education mission statement will allow for the thoughts and actions of successful traders.
2. You Must Create Momentum
When you begin learning to trade Forex it is exciting and new, but like everything there is a finite honeymoon period and the effort begins to wade and life takes you away from your Forex education. You must create momentum - pick a time in your schedule and dedicate this to study and trading and continue to focus on the process of trading. Making money should be a secondary thought to placing sound trades.
Imagine where you are going to be six months from now with a solid commitment. Hold on to that thought and never let it go. Work, kids, friends and family - we all go 'em . Don't let excuses creep in and steal your dream.
3. Overcome Any Obstacle
Listen, nobody is exempt from having to climb the learning curve to achieving in Forex. There are no short cuts. Forex education is the best path. I came across a system the other day that is being marketed as a system that "you don't have to learn" to begin trading in your live account immediately. Just watch a video for 10 minutes and you are good to go! Warning!! The sad thing is that the system appeared to build on sound principals, but no system is fool-proof and without your Forex education your risk is 100% if you do not understand when that system can fail!
Create a vision board of pictures that represent your "Why" statement. Put it within eyesight of your trading area. If you come to work in your car - stop listening to the radio and listen to a audio book, if you do not have the money to fund your live trading account continue trading your demo account until you can fund a live account - you will be in better position than 99.9% of the traders who fund an account right away. This why having a coach is so important.
4. Don't Play The Blame Game
You must from this second forward begin to take full responsibility for all your actions. If a trade didn't work out, don't blame the market or the strategy. Look at each situation as a learning experience. I always say that in life there are no failures only feedback! I always ask one simple question after both a losing trade and a wining trade:
"What lesson do I need to learn from this to become a better trader?"
5. Don't Quit On Yourself
It is your dream and I want to fight for it with you, because I know what a mistake it would be to just give up and quit. If you quit you will ultimately learn nothing and would've missed an opportunity to turn your "Why" into your reality!
Building the proper foundation and investing in your Forex education will build confidence which naturally leads to results.
You get over it, that’s what you do! Regret over a bad trade will eat your account from the inside out. Regret is a more powerful emotion than most traders recognize. It is like the unwanted guest that keeps living off of your bank account until there is no more left. It takes most traders into a tailspin that they will never recover. It can lead to dangerous psychological results such as failure to pull the trigger over even worse, paralysis by analysis.
“Yeah, but…” (I will save the disempowerment of this statement for another day)
It’s not easy putting those emotions aside when your money is on the line. That’s why they called it trading, folks. In Forex someone is on the other side of the trade controlling their emotions and eventually controlling your account balance. If you want to find consistency you must never let regret live in your trading experience.
Here’s what I do to combat this debilitating emotion … I get over it! How do I do this? I simply perform a post mortem of my bad trades (I still have them every now and then) and keep a detailed journal. Over time I began to recognize my personal triggers and simply tweaked my trade plan to be a more proactive currency trader and avoid the situations that led to the bad trade in the first place, in my instance over-trading or being tired.
What trader do I model my approach after? The answer may surprise you!
The answer is Tiger Woods.
I play golf, so you could imagine I am a huge fan of Tiger Woods. There are a lot of similarities between golf and trading. Both venues offer a look at who we are as a person, raw and uncensored. Both live in the world of risk and reward.
I admire Tiger Woods skill as a golfer, but even more so his mental toughness. Next time you watch Tiger Wood hit a bad shot follow his reaction. His immediate reaction is to get upset, really upset. Then count 5 seconds. His expressions and demeanor will have returned to one of focus and concentration.
And the funny thing is that is doesn’t matter what kind of prize money is online. He takes the same approach to every golf shot, in every tournament.
Let’s translate that to trading. Do you give yourself 5 seconds to get over a bad trade? Do you take the same approach to every trade?
Stop living in the world of regret and only think about the possibilities of wining trades and you will find your experiences trading the Forex market one filled with achievement and success.
-- Collected --
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How many pips do you need to be wealthy? The answer may surprise you.
A very common thought and question among us forex traders. Of course this is variable in desires; however it is a good idea to put things into perspective. In reality, the following is what separates the gamblers from the traders.
About 2 years ago I sent out a similar letter that changed the outlook and the lives of many traders. While most at the time were mini-traders a simple 25 pip gain equated to a mere $25.00. "How can I live off of that?" I was repeatedly asked. It didn't take long to put this into perspective.
Determining Percent Return
Profits are one thing, percent return is another. Monthly profits may add up to look nice or not so nice, but what is the actual return? I am sure we have all heard traders say, "I made 1,000 pips last month." OK.. what was your percent return? Not only for one month, but for the life of your trading.
Return Calculation
The simple return calculation is used to determine your return on an investment after you sold it. Or in this case, the profits after closing trades over a period of time.
Here is the formula:
Net Proceeds /Cost Basis - 1 x 100
Let's run through a simple example.
Suppose you traded one standard forex contract for a profit of 200 pips. This would be a raw profit of $2,000. The cost in this case was the spread and the margin needed to secure the contract; the most common margin is 100:1. Thus it cost a temporary, $1,000 to secure this contract. We say temporary because we all know we would not trade without a stop loss, most likely the stop would have been worth about $250.
Calculation:
Net Proceeds = $2000
Cost Basis = $20 (spread) + $1,000 margin
($2,000 /$1,020 - 1) x 100 = 96% (Just under 100% in a single 30 days)
So, if you are trading with a 100:1 margin and averaging around 200 pips per month, you are close to a 100% return per month.
What about per year?
Try it, you will be amazed. Hint: Don't forget to compound.
Take Home Message
Trade conservatively, a few 25 pip trades per week (300 pips per month) on a single lot can give you a return of just under 200% a month. Build your account slowly, trade with the same level of caution, just add more lots. This is the best method, the most realistic method and the lowest stress method of enjoying the rewards of forex.
John Keister
ForexInterBank
http://www.forexinterbank.com
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"Successful trading is imply a business of not making mistakes."
That has become such a cornerstone to my trading that I actually framed that saying and put it on my wall over my trading flat screens.
One of the most productive things you can do to become a profitable trader is to make a list of your most common mistakes.
Awareness is the first step.
Then watch your behavior and don't allow yourself to make those mistakes any more.
Each of us has her or his own challenges, so you must make your own list.
But to get you started, I'll expose my sins and share with you what have been my most common mistakes over the years. This is the official list of my own 7 most common mistakes. Perhaps you'll find it helpful:
1. Missing trades. When my setup occurs I need to make sure I'm aware of it and haven't been distracted by chat rooms, email, phone calls or lulled into boredom by a consolidating market.
I also need to make sure I don't hesitate to pull the trigger when I do see my setups.
2. Trading reversals that are not in extended trends and during which the internal market energy has not reversed.
3. Trading only 1 time frame without the confirmation of a longer term chart.
4. Trading while tired.
5. Over trading. Never try to make up for losses or missed trades. Never trade out of boredom. Never take any trade that doesn't match my rules 100%.
6. Not taking profits on my first exit soon enough. This is critical to adjust my cost position in the trade and therefore keep losses small.
7. Exiting my entire position too soon. I must keep at least part of my position alive until the energy of the trade has shifted so that I can ride the big moves.
Well, that's my confession.
Now you know my sins, but I imagine they're not so different than yours.
Have you committed these trading sins ... or your own unique ones?
The only solution is to REPENT!
That doesn't simply mean to say you're sorry.
It means to change your behavior.
Many people treat trading as:
an intellectual exercise.
a mathematical challenge.
or a research project.
Actually it's more about managing your behavior than anything else ... of course that's often the most difficult thing of all!
-- Collected --
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Scalping is a trading style specializing in taking profits on small price changes, generally soon after a trade has been entered and has become profitable. It requires a trader to have a strict exit strategy because one large loss could eliminate the many small gains that the trader has worked to obtain. Having the right tools such as a live feed, a direct-access broker and the stamina to place many trades is required for this strategy to be successful.
Scalping is based on an assumption that most stocks will complete the first stage of a movement (a stock will move in the desired direction for a brief time but where it goes from there is uncertain); some of the stocks will cease to advance and others will continue. A scalper intends to take as many small profits as possible, not allowing them to evaporate. Such an approach is the opposite of the "let your profits run" mindset, which attempts to optimize positive trading results by increasing the size of winning trades while letting others reverse. Scalping achieves results by increasing the number of winners and sacrificing the size of the wins. It's not uncommon for a trader of a longer time frame to achieve positive results by winning only half or even less of his or her trades - it's just that the wins are much bigger than the losses. A successful scalper, however, will have a much higher ratio of winning trades versus losing ones while keeping profits roughly equal or slightly bigger than losses.
The main premises of scalping are:
* Lessened exposure limits risk - A brief exposure to the market diminishes the probability of running into an adverse event.
* Smaller moves are easier to obtain - A bigger imbalance of supply and demand is needed to warrant bigger price changes. It is easier for a stock to make a 10 cent move than it is to make a $1 move.
* Smaller moves are more frequent than larger ones - Even during relatively quiet markets there are many small movements that a scalper can exploit.
Scalping can be adopted as a primary or supplementary style of trading.
Primary Style
A pure scalper will make a number of trades a day, between five and 10 to hundreds. A scalper will mostly utilize one-minute charts since the time frame is small and he or she needs to see the setups as they shape up as close to real time as possible. Quote systems Nasdaq Level II, TotalView and/or Times and Sales are essential tools for this type of trading. Automatic instant execution of orders is crucial to a scalper, so a direct-access broker is the favored weapon of choice.
Supplementary Style
Traders of other time frames can use scalping as a supplementary approach in several ways. The most obvious way is to use it when the market is choppy or locked in a narrow range. When there are no trends in a longer time frame, going to a shorter time frame can reveal visible and exploitable trends, which can lead a trader to scalp.
Another way to add scalping to longer time-frame trades is through the so-called "umbrella" concept. This approach allows a trader to improve his or her cost basis and maximize a profit. Umbrella trades are done in the following way:
* A trader initiates a position for a longer time-frame trade.
* While the main trade develops, a trader identifies new setups in a shorter time frame in the direction of the main trade, entering and exiting them by the principles of scalping.
Practically any trading system, based on particular setups, can be used for the purposes of scalping. In this regard, scalping can be seen as a kind of method of risk management. Basically any trade can be turned into a scalp by taking a profit near the 1:1 risk/reward ratio. This means that the size of profit taken equals the size of a stop dictated by the setup. If, for instance, a trader enters his or her position for a scalp trade at $20 with an initial stop at $19.90, then the risk is 10 cents; this means a 1:1 risk/reward ratio will be reached at $20.10.
Scalp trades can be executed on both long and short sides. They can be done on breakouts or in range-bound trading. Many traditional chart formations, such as a cup and handle or triangle, can be used for scalping. The same can be said about technical indicators if a trader bases decisions on them.
Three Types of Scalping
The first type of scalping is referred as "market making", whereby a scalper tries to capitalize on the spread by simultaneously posting a bid and an offer for a specific stock. Obviously, this strategy can succeed only on mostly immobile stocks that trade big volume without any real price change. This kind of scalping is immensely hard to do successfully as a trader must compete with market makers for the shares on both bids and offers. Also, the profit is so small that any stock's movement against the trader's position warrants a loss exceeding his or her original profit target.
The other two styles are based on a more traditional approach and require a moving stock where prices change rapidly. These two styles also require a sound strategy and method of reading the movement.
The second type of scalping is done by purchasing a large number of shares that are sold for a gain on a very small price movement. A trader of this style will enter into positions for several thousand shares and wait for a small move, which is usually measured in cents. Such an approach requires highly liquid stock to allow for entering and exiting 3,000 to 10,000 shares easily.
The third type of scalping is the closest to traditional methods of trading. A trader enters an amount of shares on any setup or signal from his or her system, and closes the position as soon as the first exit signal is generated near the 1:1 risk/reward ratio, calculated as described earlier.
Scalping can be very profitable for traders who decide to use it as a primary strategy or even those who use it to supplement other types of trading. Adhering to the strict exit strategy is the key to making small profits compound into large gains. The brief amount of market exposure and the frequency of small moves are key attributes that are the reasons why this strategy is popular among many types of traders.
-- Collected --
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Opportunities in a rising or falling market
Dissimilar from trading in the equity market, forex does not have any restrictions on short selling. No matter which way the market is moving or whether a trader is short or long, profit potential (and risk) exists in the forex market. Because currency trading involves the buying and selling of currency pairs, traders have an equal potential to profit (or lose) in a falling or rising market.
Unparalleled liquidity
In the forex market, over $3.2 trillion worth of trades are traded daily, which makes the currency trading market the most liquid market in the world – trading in 1 day what Wall St. trades in 1 month. No matter what time of the day or night it is, the forex market is always moving, and around the world active traders are buying and selling currencies.
200 times more leverage than trading stocks
With stocks, the maximum leverage is 2:1. But when you trade Forex with CMS Forex, you can use up to 400:1 leverage. For example, if you invest $1,000 in stocks, with 2:1 leverage you may buy up to $2,000 worth of shares. However, if you invest $1,000 margin on a foreign currency trade, at 400:1 leverage, you can control up to $400,000 in currencies. Leverage is one of the most appealing factors of the forex market. Traders should note that trading using leverage may increase potential gains as well as losses on any given trade.
Scratch-out the middleman
Spot currency trading bypasses expensive middlemen that are always associated with trading stocks. With forex, clients are able to interact directly with the currency market, and can buy and sell at the simple click of a mouse. No mess. No hassle. No middleman.
Commission-free*
With CMS Forex, you are never charged a commission. No clearing fees. No exchange fees. No Software fees. No brokerage fees.
*CMS charges no commission on your trades; we are compensated through the Bid and Ask prices or spread of a given currency pair. We may charge a fee for fund withdrawals. Please see Withdrawal of Funds for more information. Please be aware that the bank you deal with may be charging fees on your deposits or withdrawals. CMS has no control over any applicable bank fees.
Forex and the technical trader
Because currencies typically develop strong trending patterns, a technical currency trader may potentially identify new trends, breakouts, and opportunities to enter and exit positions.
Measuring the currency market
Currency prices are reflected in the balance of supply and demand for currencies. When it comes to currencies, there are two primary factors that affect supply and demand and they are interest rates and the strength of the originating country’s economy as a whole. Fundamental indicators, such as foreign investment, PPI, CPI, GDP, and the trade balance, echo the overall health of the economy, and alter the supply and demand for that currency. Expert commentaries and data on interest rates, International trade, and currencies are release on a regular basis.
Trade forex 24-hours a day
When you are looking at your forex platform, you are actually looking at a window display of the world’s economy. Currency trading is available twenty-four hours a day, starting on Sunday at 5P.M. EST with the opening of the market in
6 major currency pairs vs. over 8000 stocks
There are approximately 8,000 publicly traded companies, deciding which one to trade can become downright tedious and confusing. How do you determine which needle to pull out of the haystack? With Forex, there are currently 6 major currency pairs to choose from, and about 34 second-tier currencies.
Close to 95% of all Forex traders will lose money. We're not just talking about novices, either. Whether you trade Forex for a living, as a hobby or just for fun, odds are against your success. That's a simply astonishing fact. However, the remaining 5% of Forex traders somehow manage to break even and there are those lucky few that actually make money in the currency market – consistently!
Like the TV show says … “How’d they do that, anyway?”
That's the million dollar questions, isn’t it? Countless books, seminars and expos have been hosted to answer this very question. That sad fact is that thousands of books have been written and countless seminars and interviews have been conducted in an attempt to answer the magic questions. The reality of the situation is that there is no magic formula; no one single Holy Grail of Forex trading.
So what do the successful traders do that the rest of us have simple not comprehended. They have mastered a process of winning where they combine and customize several factor to produce consistent results. They have mastered the Process of Trading.
The Process of Trading is:
Strategy > Money Management > Self-Mastery
Here are some simple Forex Education tips to help you master the process of forex trading:
Forex Success Tip #1 – You’ve Got To Have a Plan
You must have a written business plan that will detail all aspects of your trading. When are you going to trade, how much to risk, strategies for entries and exits are just o name a few. To become a consistent (profitable) Forex trader you have to plan your trade sand trade your plan.
Simplicity rules! Don’t make this plan too complicated. One sheet of paper for you mission statement and another for your trading plan should suffice. Anything more is probably too complicated.
Forex Success Tip #2 – Focus on Your Personal Psychology
Knowing yourself will allow you to master the discipline necessary to execute high quality trades with solid money management techniques. Lack of discipline is fatal in Forex trading. Go on a personal journey to identify you attitudes towards risk and money. Get intimate with your strengths and weaknesses as a trader and build in to your trading plan strategies to minimize those weaknesses and maximize your strengths.
Different personalities lend to different trading styles. Get familiar with all the different styles and over time you will begin to gravitate towards one particular style. Don’t fight the urge like I did. I insisted I was a day trader, but had only limited results. I found my winning percentages were much higher when I entered swing trades. Guess what’s my bread and butter strategy now!
Forex Success Tip #3 – Be Realistic About Your Expectations
This is a hard one, I know! I am on the internet every day and the amount of advertising is staggering. Brokers are offering free education (fox in the hen house if you ask me), forums of all different trading styles and points of view. Gurus pushing their system as “the one” that will make you the big bucks. How do you get through all that noise?
Let me tell you loud and clear right now – everyone is right and everyone is wrong. You have to make a personal commitment to become a successful trader, find a trading style that works for you and expect a slow and steady approach to wealth building through Forex.
What works for me may not work for you. Expect to go through an exploratory period where you are learning and at the same time exploring yourself as a trader. Keep an open mind and don’t pay attention to all the noise out there.
Forex Success Tip #4 – Be Patient
Rome was not built in a day and neither will your trading account. In fact, I tell all of my students that while they are studying to become successful Forex traders they should not look solely at their account balance as an indication of success or failure.
By tracking and increasing your percentage of high quality trades you execute is a far better barometer of your progress than your account balance. Cause and effect rule here. Over time when you increase your probabilities through the execution of high quality trades your account balance will respond accordingly.
Keep the focus on the process and with time your results will blow your mind.
Success Tip #5 - Money Management Is Top Priority
I would rather have a shaky strategy and excellent money management techniques than the other way around. This topic warrants its own blog post to do it justice. Limited your exposure (read “risk”) allows for you to stay in the game and allow the laws of probability to work.
Let’s take a casino for an example. They need gamblers to frequent their slot machines to make money. Why? They have a game that has a greater than 50% chance of making money for the house. The more people that play the slots, the greater the casino’s profits.
The casino controls risk by payout tables (always favoring the house!) and increases their probabilities by keeping gamblers at the slot machines (read “free drinks”). As a trader you must limit your risk by committing only 1% - 3% of available capital to a single trade. When you execute enough trades with a high probability strategy you too can clean up like the casinos – but only by staying in the game long term.
In conclusion, Forex trading is not easy. It’s hard work and will test the limits of your patience and perseverance. If anyone tells you otherwise .., buyers beware! It can be a very rewarding and profitable venture if done correctly. In the end it is a profession that requires a learning curve and practical experience, no different than an airline pilot or engineer. Understanding how to approach and learn this game will allow you to reap all the benefits advertised.
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The technical trader is concerned with studying patterns of price movement on the chart in order to predict the direction of current and future trends in the Forex market. The decision to buy, sell, or hedge a current position – or to stay out of the market entirely – is made upon this analysis. Identify recurring patterns and make educated assessments to guide your decisions; should you initiate a trade at the current price, or set your system to open a position at a future price? The goal of the technical analyst is simple: to make profitable Forex trades by identifying past patterns that have historically led to a predictable outcome. However, the potential risk should always be considered. A recurring pattern is not precise and does not guarantee a desirable or expected price movement.
Tools of the Technical Trader
Using various chart types and technical indicators, more accurate predictions can be made from better analysis of the Forex market. Technical indicators use price, volume, volatility, and other factors to create measures of how the market crowd is behaving. Technical indicators can be utilized to help decipher underlying currents that are behind price action. Trend lines, support and resistance levels, reversals, and numerous patterns can also be used to track and identify trends. Once a pattern is recognized (not all are apparent), the Forex trader can decide whether to place a trade, or wait and monitor the price to see if the predictions were accurate.
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