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Tuesday, October 20, 2009
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Monday, October 12, 2009
Forex Trading System Course - An Introduction
.So, anybody who owns a computer with an internet connection opens an active forex account and indulges in forex trading. Forex trading is buying and selling foreign currency and making gains out of it.
However, what most people don’t realize is that there are at least seventy percent of the people who lose money while they are involved in forex trading. To avoid this people can take up forex trading system course that will throw good light on the processes and principles of forex trading and also advise on the basics of how we can make good money in forex trading. Forex trading system course can also go a long way in explaining the actual process involved in forex trading like the simple fact that forex trading always happens in pairs. That is buying and selling go hand in hand in any forex trade. Forex trading is done all around the clock and can be done from the comfort of one’s home. The forex trade is the most happening trade in the world and needless to say the amount of pressure that is seen in the market. So the best of the lot are the ones who make the money and forex trading system course go a long way in helping the individuals become experts in forex trading.
It is always advisable that somebody takes this up as a hobby or a part time job opportunity and try their hands at it first, and as they become more and more comfortable and more adept at these business tactics, they can pursue this as a full time business opportunity. Since the financial markets are all very dynamic, it is very essential to have good background knowledge of the tricks of the forex trade and forex trading system course goes a long way in this.
Investing In the Currency Market
The currency market is one of the most pervasive markets in the world, with trillions of dollars traded on a daily basis. Investing in the currency market can be a great thing for investors. Large banks make up the largest percentage of market investors in the currency market. Smaller banks, large corporations, hedge funds, and other conglomerates and international trading concerns follow this. After those come small, private traders, who are estimated to handle 2% of the market volume on a daily basis. To make money within the currency market, people exchange an amount of one nation’s currency for the currency of a different nation. The difference in the worth of these two currencies is where the profits come in. Usually, the profits are infinitesimally small and it requires many, many trades of a very large nature to make money. You can make a great deal of money in the currency market, though it requires a large amount of money up front. Private traders make money by pooling the money that individuals have given them and then dividing the profits between their investors.
Forex Brokers - How to Choose the Right One
Forex trading is one of the most lucrative segments in the business industry. It is not a wonder why people swarm to do commerce in forex market. One of the essential steps to take by potential traders is choosing their forex brokers. Broker can act on your behalf to carry out trading transactions however in certain cases there will limitations according to what has been agreed during your application.
It is important to choose the right forex brokers as they carry the potential risk of your investment while it incurs cost to your trading expense. There are few helpful criteria to consider in choosing your forex brokers.
In the past, some traders were victims of non-refunded accounts when many forex brokers went unsuccessful with their business operation. Hence, they started to implement strict laws in US and UK that governs the forex brokers. It is important to note that your preferred forex brokers should be regulated either by the CFTC or NFA in the US and FSA in the UK. These will ensure that you are dealing with legitimate brokers.
Know the trading platforms of the forex brokers. A recommended trading platform should show actual prices that you are able to trade. Avoid platforms that offer only indicative prices. As this will also contribute to your trade execution, it is therefore necessary to opt for platforms that you are comfortable to use with. Always prefer a platform that matches your particular needs.
There is a term commonly used in the forex arena known as spread. It refers to the difference between the amount you buy or sell a certain currencies at a specific point of time. As there is not central exchange market in forex, the spread will proportionally vary depending on your preferred forex brokers. Spread can be stretched into two amounts which is dependent if either it is daytime or nighttime. Spread can also vary accordingly to the level of trade. Ideal forex brokers should have a fixed spread.
It is important to choose the right forex brokers as they carry the potential risk of your investment while it incurs cost to your trading expense. There are few helpful criteria to consider in choosing your forex brokers.
In the past, some traders were victims of non-refunded accounts when many forex brokers went unsuccessful with their business operation. Hence, they started to implement strict laws in US and UK that governs the forex brokers. It is important to note that your preferred forex brokers should be regulated either by the CFTC or NFA in the US and FSA in the UK. These will ensure that you are dealing with legitimate brokers. Know the trading platforms of the forex brokers. A recommended trading platform should show actual prices that you are able to trade. Avoid platforms that offer only indicative prices. As this will also contribute to your trade execution, it is therefore necessary to opt for platforms that you are comfortable to use with. Always prefer a platform that matches your particular needs.
There is a term commonly used in the forex arena known as spread. It refers to the difference between the amount you buy or sell a certain currencies at a specific point of time. As there is not central exchange market in forex, the spread will proportionally vary depending on your preferred forex brokers. Spread can be stretched into two amounts which is dependent if either it is daytime or nighttime. Spread can also vary accordingly to the level of trade. Ideal forex brokers should have a fixed spread.
Forex Trading Strategies
1. Use Breakouts
This is an excellent way to generate trading signals and works on the simple fact that Forex markets trend for long periods and most of these trends, start from breaks of support or resistance and continue from them. When you trade breakouts, you don’t have to predict, hope or guess you simply trade the price break when it comes and because you are trading the reality of price change you will have the odds on your side and that’s what successful Forex trading is all about. 2. Buying Dips in Existing Trends
We all know that greed and fear, will spike prices to overbought and oversold levels and the way to get in on long term Forex trends is to look to buy breaks back to a key moving average. The 20 day MA is a good one to use, to get in on existing trends and you can also use the average used at the centre of a Bollinger Band. 3. Catching new Trends – Contrary Trading
You can catch the start of a trend by trading contrary to the herd; market tops occur when the market is most bullish and important market bottoms occur, when the market is at it’s most bearish. At these turning points, a good indicator to use is the Net Traders positions realized by the CFTC. This report shows the breakdown of small specs, large specs and commercials on CME currencies. The group you are most interested in here is the commercials; they are only hedging and not motivated by greed or fear and if you have them opposite to the herd, i.e. small and large speculators, you will often see a price break in favor of the smart money commercials; it’s a simple easy to use tool and its free.
4. Timing the Move
When you spot a potential trading set up, you should always make sure that you check if price momentum supports your trading signal before entering a trade and two good indicators to use for this are, the RSI and the Stochastic. Both are visual indicators and will only take you an hour or so to learn but by making them part of your essential Forex education, you can get the odds on you side and make bigger Forex profits.
Money Management
The foundation upon which any successful Forex trading strategy is built is strong money management. You need to play strong defense first and protect what you have above all else when using leverage and even a good Forex trading system will lose if money management isn’t tight and solid.
In terms of money management always do the following
In terms of money management always do the following
- Do not over leverage positions – this wipes out more trading accounts than any other single reason.
- Never place mental stops, place them as soon as you placed your trade, so you are not tempted to run losses.
- All trades are equal and never make the mistake of calculating your risk reward as your target minus your stop, it’s simply an assumption. Always assume the worst first and things can only get better! In terms of risk all trades are equal.
- When placing stops, make sure you fully understand the implications of standard deviation of price and volatility and place your stop outside of random volatility. The subject of volatility should be an essential part of any traders Forex education.
- Don’t trail stops to quickly or to closely, you need to take open equity dips to make big gains. Most traders try and restrict risk so much they create it and never hold long term trends. You need to accept open equity dips short term to make big profits long term.
- Don’t just manage individual trades, manage your overall account equity and make sure you adjust risk reward, in terms of how you are doing overall on account equity growth.
Forex Secrets
You will read a lot about Forex secrets online and most of the so called secrets, are sold by vendors selling sure fire trading systems. The real secret of Forex investing is outlined below and when you read it, you will see it's common sense but learn it and it can lead you to success.
Most Vendors who sell secrets, will tell you tell you that by knowing their secret, you can get a short cut to success make a guaranteed income etc but the secret of Forex trading success is the same as its always been and its a combination of the following:
A simple Forex trading system, combined with the discipline to apply it exactly as per its rules – sounds simple?
The above has been true since trading began and always will be. It's a fact, that anyone can learn Forex trading but 95% of traders fail to make money. Its not because these traders can't learn to trade, anyone can but its a fact that most people do not understand the importance of a disciplined mindset.
Disciplined application of a trading system is the secret of trading success but its a fact, that most traders simply cannot acquire this key trait – so why is it so difficult?
The reason its so difficult to acquire is we are emotional beings and we all have egos, this means we don't like being wrong and we are also subject to the emotions of hope, greed and fear. When these emotions get involved in trading, discipline goes out the window and losses follow.
All Forex traders will lose at some point and a losing streak can last for weeks, it happens to the best traders and it will happen to you. How you deal with losing periods, will determine if your Forex trading strategy will be successful or not. There is nothing wrong with taking losses, so long as you keep them small. If you let your emotions get involved and get angry or frustrated, you will let losses run, change strategies or quit. Of course, if you can't follow your Forex trading strategy with discipline - you don't have one!
When you trade Forex, you have to decide if you want to be right all the time or make money, because the market won't let you do both.
If you want to win, you need to learn to lose and leave your ego behind. You need to take your losses, keep them small and then, run your profits when you get them and if you do this, you can make a lot of money.
Most Vendors who sell secrets, will tell you tell you that by knowing their secret, you can get a short cut to success make a guaranteed income etc but the secret of Forex trading success is the same as its always been and its a combination of the following:
A simple Forex trading system, combined with the discipline to apply it exactly as per its rules – sounds simple?
The above has been true since trading began and always will be. It's a fact, that anyone can learn Forex trading but 95% of traders fail to make money. Its not because these traders can't learn to trade, anyone can but its a fact that most people do not understand the importance of a disciplined mindset.
Disciplined application of a trading system is the secret of trading success but its a fact, that most traders simply cannot acquire this key trait – so why is it so difficult?
The reason its so difficult to acquire is we are emotional beings and we all have egos, this means we don't like being wrong and we are also subject to the emotions of hope, greed and fear. When these emotions get involved in trading, discipline goes out the window and losses follow.
All Forex traders will lose at some point and a losing streak can last for weeks, it happens to the best traders and it will happen to you. How you deal with losing periods, will determine if your Forex trading strategy will be successful or not. There is nothing wrong with taking losses, so long as you keep them small. If you let your emotions get involved and get angry or frustrated, you will let losses run, change strategies or quit. Of course, if you can't follow your Forex trading strategy with discipline - you don't have one!
When you trade Forex, you have to decide if you want to be right all the time or make money, because the market won't let you do both.
If you want to win, you need to learn to lose and leave your ego behind. You need to take your losses, keep them small and then, run your profits when you get them and if you do this, you can make a lot of money.
Forex Trading Techniques
If you are looking at Forex trading techniques and which are the best to make profits then there are actually quite a few different ways of making money but before we look at some proven Forex techniques, lets look at one technique in terms of making profits, ALL good Forex trading strategies have and that’s sound Forex money management.
Any strategy which doesn’t protect equity and deal with leverage correctly is destined to lose and you need to have through understanding of it to win. Like any great football team, success is built on sound defence first. If you keep your equity intact, you will get opportunities to get into some big profitable trades. Forex trading is first and foremost all about taking your losses with discipline and keeping them small. Now what strategies should you use to make money?
As a general rule, the big profits come from trend following and hitting and holding these big trends. The best Forex trading technique to use for doing this is to trade breakouts; simply buy breaks to new chart highs and sell breaks to new chart lows. It’s a simple, timeless, strategy which works and will continue to work, as long as markets trend.
You can also trade overbought and oversold levels and Forex swing trading can be very profitable. This method is ideal for novices, as it’s exciting, fun, profitable and doesn’t require as much discipline as long term trend following.
There are of course many Forex trading techniques you can use to make profits and the ones outlined are some of the best so get some Forex education and learn them, get confidence and trade with discipline and you could soon be making some great profits in global Forex markets.
Any strategy which doesn’t protect equity and deal with leverage correctly is destined to lose and you need to have through understanding of it to win. Like any great football team, success is built on sound defence first. If you keep your equity intact, you will get opportunities to get into some big profitable trades. Forex trading is first and foremost all about taking your losses with discipline and keeping them small. Now what strategies should you use to make money?
As a general rule, the big profits come from trend following and hitting and holding these big trends. The best Forex trading technique to use for doing this is to trade breakouts; simply buy breaks to new chart highs and sell breaks to new chart lows. It’s a simple, timeless, strategy which works and will continue to work, as long as markets trend.
You can also trade overbought and oversold levels and Forex swing trading can be very profitable. This method is ideal for novices, as it’s exciting, fun, profitable and doesn’t require as much discipline as long term trend following.
There are of course many Forex trading techniques you can use to make profits and the ones outlined are some of the best so get some Forex education and learn them, get confidence and trade with discipline and you could soon be making some great profits in global Forex markets.
Forex Trading Indicators
You can use a variety of Forex trading indicators with your Forex charts and here are some tips on how to use them to increase the profitability of YOUR Forex trading strategy.
The first point to keep in mind is not to use too many, if you do you will complicate your trading system and it will break, less is more in Forex trading as your system will be more robust. If you want a perfect example of this, look at the free trading system we have on this site in the free info section.
When using Forex trading indicators, its best to use them in conjunction with simple bar charts on a Forex chart. While it may seem old fashioned, the chart itself confirms the reality of price change and shows you important value points in terms of support and resistance. So use your bar charts to see areas of value and use indicators as back up.
All markets move to sentiment and while we all have the same facts to look at, we will all draw different conclusions from what we see and it’s a fact that humans will spike prices to far from fair value, as greed and fear come into play. No short term price spike lasts long and prices will return to an average or fair value. Markets have high volatility when emotions come into play and then become less volatile as greed and fear subside.
An essential indicator to measure volatility is the Bollinger Band and you use it to measure volatility, it’s not a leading indicator but it’s a great one to gauge the volatility of the market.
As prices will normally return to an average price, you need to look at simple moving averages and two great ones are the 20 and 40 day moving average. If you look at any Forex trend, notice how to the 20 day moving average acts as an area of value. You will often see prices move away from this average, in both up and down trends and then return to it, so you can buy into it in an up trend and sell into it in a downtrend. They will sometimes go further to the 40 day MA, which very often acts as the last defence of the trend.
You can’t however just simply look to buy or sell into a moving average you need some momentum indicators to time your move. Two of the best are the stochastic and the Relative Strength Index (RSI); these indicators will only take you an hour or so to learn and are great indicators for timing your trading signals.
There are numerous other indicators out there, but the above 4 we think are the best Forex trading indicators for any novice to start with.
The first point to keep in mind is not to use too many, if you do you will complicate your trading system and it will break, less is more in Forex trading as your system will be more robust. If you want a perfect example of this, look at the free trading system we have on this site in the free info section.
When using Forex trading indicators, its best to use them in conjunction with simple bar charts on a Forex chart. While it may seem old fashioned, the chart itself confirms the reality of price change and shows you important value points in terms of support and resistance. So use your bar charts to see areas of value and use indicators as back up.
All markets move to sentiment and while we all have the same facts to look at, we will all draw different conclusions from what we see and it’s a fact that humans will spike prices to far from fair value, as greed and fear come into play. No short term price spike lasts long and prices will return to an average or fair value. Markets have high volatility when emotions come into play and then become less volatile as greed and fear subside.
An essential indicator to measure volatility is the Bollinger Band and you use it to measure volatility, it’s not a leading indicator but it’s a great one to gauge the volatility of the market.
As prices will normally return to an average price, you need to look at simple moving averages and two great ones are the 20 and 40 day moving average. If you look at any Forex trend, notice how to the 20 day moving average acts as an area of value. You will often see prices move away from this average, in both up and down trends and then return to it, so you can buy into it in an up trend and sell into it in a downtrend. They will sometimes go further to the 40 day MA, which very often acts as the last defence of the trend.
You can’t however just simply look to buy or sell into a moving average you need some momentum indicators to time your move. Two of the best are the stochastic and the Relative Strength Index (RSI); these indicators will only take you an hour or so to learn and are great indicators for timing your trading signals.
There are numerous other indicators out there, but the above 4 we think are the best Forex trading indicators for any novice to start with.
USD Gains vs. Euro on Positive Income & Spending
EUR/USD dropped today, going below the yesterday’s positive trading session’s open level. The traders probably react on the improved personal income and spending growth report, betting for the faster U.S. economy’s recovery. On the other hand, a growth of the dollar may be a result of the bad jobless claims report. Currently EUR/USD is trading near 1.4554, it also reached it’s lowest level since September 14th today — 1.4518.
Personal income rose by 0.2% in August in United States. Personal spending increased by 1.3% in that month. Income growth remained the same as in July, while the spending growth accelerated from 0.3%. Forecast for personal income gain was at 0.1% and the forecast for spending was at 1.1%.
Initial jobless claims went up from 534k to 551k last week. That was an unexpected gain as only 535k claims were forecasted for today’s report.
ISM PMI fell from 52.9% to 52.6% in September. This is a signal of stagnation for the U.S. manufacturing industry, but while it’s still above 50% it’s a good signal overall. Traders expected a gain to 54.0% from this report.
Pending home sales index rose by 6.4% in August, following 3.2% gain in July. The market analysts predicted a growth by 1%. At 103.8 pending home sales index is now above the average level of 2001.
Construction spending in U.S. rose by 0.8% in August compared to July. This growth followed 1.1% drop in July. Forecasted change was at -0.1%.
Personal income rose by 0.2% in August in United States. Personal spending increased by 1.3% in that month. Income growth remained the same as in July, while the spending growth accelerated from 0.3%. Forecast for personal income gain was at 0.1% and the forecast for spending was at 1.1%.
Initial jobless claims went up from 534k to 551k last week. That was an unexpected gain as only 535k claims were forecasted for today’s report.
ISM PMI fell from 52.9% to 52.6% in September. This is a signal of stagnation for the U.S. manufacturing industry, but while it’s still above 50% it’s a good signal overall. Traders expected a gain to 54.0% from this report.
Pending home sales index rose by 6.4% in August, following 3.2% gain in July. The market analysts predicted a growth by 1%. At 103.8 pending home sales index is now above the average level of 2001.
Construction spending in U.S. rose by 0.8% in August compared to July. This growth followed 1.1% drop in July. Forecasted change was at -0.1%.
Russian Forex Broker with CFD and Futures
EXNESS is a Russian Forex broker that has only recently gone on-line with its website and is offering trading services in the traditional currency pairs and also in CFDs for many global stock markets, as well as in the futures contracts for commodity and index exchanges. Overall it’s a good broker to start with (only $100 minimum and 1:200 leverage), if you aren’t very paranoid about the broker’s regulation because currently there is no institution in Russia that would regulate on-line Forex trading specifically. Other interesting features of this Forex broker are:
- MetaTrader 4 platform
- 11 ways to fund your trading account
- 2 pips average variable spread on EUR/USD
- Trade in gold and crude oil
Do You Use Forex Trading Strategy?
According to many Forex guides, tutorials and manuals, the trading strategy is the backbone of the successful trading behavior. The most obvious reason to have a well-defined Forex strategy is to stop relying on bare luck and move from the Forex gambling to the actual Forex trading. With a strategy it’s much easier to analyze the trading performance, its rights and wrongs. It also becomes easier to keep a Forex trading journal if you use some system for entering and exiting the market. Unfortunately, it’s not very easy to follow a strategy, especially if it allows some losing periods. Some traders (including me) are prone to the constant changing of a strategy, which is not always upgrading it but often degrades the strategy. And how about you? Is it more simple to trade with a Forex strategy for you?
EUR/USD Met Its Resistance Level
The euro went up against the U.S. dollar today on the Forex market but the latest trading results show that the EUR/USD pair has met its resistance point near 1.4800. The fundamental factors that affect the U.S. dollar look positive, as the macroeconomical statistics from United States is rather good today, while the ECB decision to leave the interest rate unchanged at 1% is quite neutral. EUR/USD is now trading near 1.4733.
Initial jobless claims were reported at 521k for the last week — that’s 33k less than the previous week’s figure. Traders expected a decline to 541k jobless claims.
Wholesale inventories decreased by 1.3% in August, following 1.6% drop in July. According to the analysts’ forecast the inventories should have gone down by 1%. Declining inventories of the wholesalers indicate an elevated consumer demand.
Other important U.S. fundamental releases went out earlier this week:
ISM services index went up from 48.4% to 50.9% in September, which was a bit better than the expected 50% value.
U.S. crude oil inventories decreased by 1 million barrels last week, while the motor gasoline inventories went up 2.9 million barrels.
Consumer credit in United States decreased by $12 billion in August after falling by $19 billion in July. The estimated credit change value for the August was at $10 billion.
Initial jobless claims were reported at 521k for the last week — that’s 33k less than the previous week’s figure. Traders expected a decline to 541k jobless claims.
Wholesale inventories decreased by 1.3% in August, following 1.6% drop in July. According to the analysts’ forecast the inventories should have gone down by 1%. Declining inventories of the wholesalers indicate an elevated consumer demand.
Other important U.S. fundamental releases went out earlier this week:
ISM services index went up from 48.4% to 50.9% in September, which was a bit better than the expected 50% value.
U.S. crude oil inventories decreased by 1 million barrels last week, while the motor gasoline inventories went up 2.9 million barrels.
Consumer credit in United States decreased by $12 billion in August after falling by $19 billion in July. The estimated credit change value for the August was at $10 billion.
Forex Strategies Section
I’ve finally added a Forex strategies section to my site today. Currently it only lists only 9 strategies (very simple ones) — that isn’t a lot, but that list can help newbie traders to find their first strategy or to get a model for creating their own trading system. The presented strategies are basically divided into three categories according to their main principle of the entry conditions: strategies based on the technical indicators, strategies based on the bare charts or price action and strategies based on the fundamental indicators. If you know some good interesting Forex strategies and want to share them with other traders, you can send the strategy to me and I will certainly add it to the list on the site. You will even get credited for the strategy, getting a mention on its page.
Forex Broker with Simple Trading Platform
10Pips is a new Forex broker that was added to the list on my site today. Its main stated advantage is the simplicity of the trading platform and the overall process of starting Forex trading even for the complete newbies. I don’t know why did they give their broker such a name but, in my opinion, 10 pips is too much for a spread and too low for a profit :-). Of course, their spreads are quite below 10 pips (EUR/USD spread is only 2 pips, which is the current industry’s average). It should also be said that they are not a purely Forex broker since they offer CFD, stocks, commodities and index trading as well. Other features of 10Pips include:
- Multilingual traders’ support
- Real account bonuses
- Deposit via WebMoney, wire transfer or credit cards
- $100 to start trading
- Leverage — up to 1:200
Types of Forex Charts
There are several types of the Forex charts that are used by the currency market traders. Perhaps, the most popular among them is the Japanese candlestick chart, which offers a lot of information about the price, which, at the same time, is easily understandable and can be used to analyze the chart patterns. Other chart types include: OHLC bars (which aren’t too different from the candlesticks but aren’t so visually informative), chart lines and point-and-figure charts. Here are the examples of all the four types:
| Japanese Candlestick | OHLC Bar | Line | Point-and-Figure |