Every one has his days when no matter how well he has planned out his trades, he may find some of his trades not performing to what is planned. It is only natural for one to feel upset, but for the follower of a forex trading system, making money or losing money from that trade is not the paramount objective.
Why is this so?
For the trader who employs a forex trading system, he can still face the losing trade with a smile, because he has had followed through the trading signals in a disciplined way, and it is only when a trader follows a system, he can be sure of keeping his losses small and to live to trade again another day.
By using a forex trading system, the trader can have a cool head, and can face his trades rather unemotionally. He can execute his trades following pre-determined price levels of initial stop loss, trailing loss and computed and projected price profit.
He knows his tolerable level of loss, his threshold of pain - and of course, his risk to reward ratio even before he trades.
Now when a trader has a trading system and follows through the trading plan, making profits is a natural result when he makes a correct trade. But when his trade is wrong, his forex trading system will very quickly show him that the direction of his trade is wrong, so that he is out of the game fairly quickly.
I am often flabbergasted at some very broad claims of some traders who condemn day trading systems and relegate them to the garbage bin. When you look at forex trading systems, review them quickly by peer recommendation whenever possible. By peer recommendation, I mean you can ask existing traders their experience on the trading system, and how they are doing with it. Posting to the numerous reliable trading forums will allow you to receive some independent reviews fairly quickly. At the same time, my personal experience, and that of many other professional traders is that day trading can be profitable, though it is never easy to day trade. Otherwise, how is it that so many day traders are able to earn their income day trading the short swings of the market daily for a living? So it is important for you to have a broad view of forex trading systems if you are contemplating of learning or purchasing any trading system that relates to day trading.
If you ever wish to trade successfully, whether you day trade or swing trade, it is important that you have a trading system that will allow you to approach trading in a disciplined manner. It is only when you are a disciplined trader that you can see consistent large gains and small losses.
Source: www.forexarticlecollection.com
Sunday, August 23, 2009
The opportunities of trading the Forex hedged grid system
I have seen the hedged grid system been used successfully (and highly unsuccessfully) over the last few years. Unfortunately the failures tend to discourage traders from taking advantage of this great system. I have found that the failures are mainly due to ignorance, impatience and greed (common reasons for trading failure).
In a nutshell the grid system uses the following methodology. You start by buying and selling a currency. When the price moves a predetermined distance (grid leg) you cash in the positive leg, leave the negative leg and buy and sell again. Sooner or later the system goes positive and you would then cash in when it is positive.
This is a brief summary of the content of our free hedged grid trading course available on expert-4x.com. Please refer to this course for more details of how money is made. The attraction is that the system is reasonably mechanical, can be programmed and does not take much supervision as exclusively entry orders are used.
Money is made when the price retraces 100%, 50%, 33% at various levels. This starts looking like a strategy that supports the Fibonacci concept. The grid system is also based on the nature of the market to trade sideways 80% of the time and to trend 20% of the time.
The dangers are that what if the price does not retrace and continues to trend. The Grid system can not make money in a trending market – full stop. One has to realize that. You therefore need Strategies to minimize damage during these periods:-
Firstly I have found that the biggest mistake made by traders is that they select a very small grid leg sizes e.g. 20 to 30 pips. This is a recipe for disaster. The trick is to use big leg sizes between 150 and 300 pips. What this does is that it sometimes turns a trending phase into movement in a sideways market. I would typically use 300 pips for the GBPJPY and 150 pips for the EURUSD for instance.
Secondly there is no rule that says that the legs have to be the same size. So I change my leg sizes in trending markets to be even bigger. If I started with 150 for the 1st leg I would go to 200 for the 2nd leg and 250 for the 3rd leg etc. This makes sure that I am carrying less loss making transactions in a trend.
Thirdly – sometimes it is wise to increase the number of lots with the trend compared to the numbers against the trend in a good trend. However be aware of having the same number of sell and buy transactions. All you will have done was lock in your current status in a 100% hedge.
Fourthly – This is the biggest change and most important one that I personally have made in my grid trading strategy. Always cash in all your transactions when your system is positive and when the price reaches the end of one of your grid legs. By cashing in you are reducing the risk of carrying negative lots in a trending market. This also gives you an opportunity to re-assess the market conditions.
Fifthly:- Cash in a start again is always an option. One of my strategies is to cash in all my open positions when the 3rd leg of my grid is reached and start again. Experience has taught me that this is a short term pain that goes away very quickly and is soon forgotten.
People that have traded the grid system will immediately see how the above approaches will reduce the risks of exponential losses building up in a strongly trending market. Please feel free to contact Mary McArthur at marymcarthur@expert4x.com for clarification on any items discussed above. She has numerous examples of successful applications of grid trading
This article is part of a series and many more will follow on Grid trading, money management and Forex Trading Strategies.
Source: www.forexarticlecollection.com
In a nutshell the grid system uses the following methodology. You start by buying and selling a currency. When the price moves a predetermined distance (grid leg) you cash in the positive leg, leave the negative leg and buy and sell again. Sooner or later the system goes positive and you would then cash in when it is positive.
This is a brief summary of the content of our free hedged grid trading course available on expert-4x.com. Please refer to this course for more details of how money is made. The attraction is that the system is reasonably mechanical, can be programmed and does not take much supervision as exclusively entry orders are used.
Money is made when the price retraces 100%, 50%, 33% at various levels. This starts looking like a strategy that supports the Fibonacci concept. The grid system is also based on the nature of the market to trade sideways 80% of the time and to trend 20% of the time.
The dangers are that what if the price does not retrace and continues to trend. The Grid system can not make money in a trending market – full stop. One has to realize that. You therefore need Strategies to minimize damage during these periods:-
Firstly I have found that the biggest mistake made by traders is that they select a very small grid leg sizes e.g. 20 to 30 pips. This is a recipe for disaster. The trick is to use big leg sizes between 150 and 300 pips. What this does is that it sometimes turns a trending phase into movement in a sideways market. I would typically use 300 pips for the GBPJPY and 150 pips for the EURUSD for instance.
Secondly there is no rule that says that the legs have to be the same size. So I change my leg sizes in trending markets to be even bigger. If I started with 150 for the 1st leg I would go to 200 for the 2nd leg and 250 for the 3rd leg etc. This makes sure that I am carrying less loss making transactions in a trend.
Thirdly – sometimes it is wise to increase the number of lots with the trend compared to the numbers against the trend in a good trend. However be aware of having the same number of sell and buy transactions. All you will have done was lock in your current status in a 100% hedge.
Fourthly – This is the biggest change and most important one that I personally have made in my grid trading strategy. Always cash in all your transactions when your system is positive and when the price reaches the end of one of your grid legs. By cashing in you are reducing the risk of carrying negative lots in a trending market. This also gives you an opportunity to re-assess the market conditions.
Fifthly:- Cash in a start again is always an option. One of my strategies is to cash in all my open positions when the 3rd leg of my grid is reached and start again. Experience has taught me that this is a short term pain that goes away very quickly and is soon forgotten.
People that have traded the grid system will immediately see how the above approaches will reduce the risks of exponential losses building up in a strongly trending market. Please feel free to contact Mary McArthur at marymcarthur@expert4x.com for clarification on any items discussed above. She has numerous examples of successful applications of grid trading
This article is part of a series and many more will follow on Grid trading, money management and Forex Trading Strategies.
Source: www.forexarticlecollection.com
Wednesday, August 19, 2009
Learn the Simple Forex Market
Forex trading is a market which is both complex and simple. How to make money is the simple part, but the implementation of the process to learn forex market can be a little difficult. Forex education can prove to be a boon for all those who are willing to try their luck in forex trading. Therefore it is very important for them to understand the ways and methods of forex trading before actually getting into it. Even if one is well experienced in trading, there is always a room for improvement even for the experts.
The forex market is surely not a game for a fresher in this field and they need to improve their skills before getting their hands wet. The fact is that many individuals who make money online keep losing money in the forex market and very few are earning millions annually. This major difference is caused by two main reasons, namely, forex trading skills and the trading system being used.
Forex trading gives a whole new option to the beginners to succeed financially. To learn Forex market and list Forex trading into one of your financial plans is a must. When an investor adapts the right trading skills, the limit to earn profits is left far behind. In other words there is no such limit defined to earn profits if the trading skills are absolutely apt. There are many trading systems that provide you with the facility of making money online. But what is required by us is to identify and understand that which one will suit the best to our requirement.
1. Note the values of the currencies
2. Know the trend ending time
3. Affect of current economy
4. Use of long term trading strategies
To succeed at currency trading, one needs to learn the right forex trading strategy which can be possible if and only if the traders follow these winning tips and to move ahead and reap huge benefits or profits.
Source: www.forexarticlecollection.com
The forex market is surely not a game for a fresher in this field and they need to improve their skills before getting their hands wet. The fact is that many individuals who make money online keep losing money in the forex market and very few are earning millions annually. This major difference is caused by two main reasons, namely, forex trading skills and the trading system being used.
Forex trading gives a whole new option to the beginners to succeed financially. To learn Forex market and list Forex trading into one of your financial plans is a must. When an investor adapts the right trading skills, the limit to earn profits is left far behind. In other words there is no such limit defined to earn profits if the trading skills are absolutely apt. There are many trading systems that provide you with the facility of making money online. But what is required by us is to identify and understand that which one will suit the best to our requirement.
1. Note the values of the currencies
2. Know the trend ending time
3. Affect of current economy
4. Use of long term trading strategies
To succeed at currency trading, one needs to learn the right forex trading strategy which can be possible if and only if the traders follow these winning tips and to move ahead and reap huge benefits or profits.
Source: www.forexarticlecollection.com
Techniques for Advanced Forex Trading
Forex is a potential platform for earning substantial profit. In fact it is one of the largest trading markets of the world. Featuring an average daily trade of US$ 2 trillion and above, this market is best known for its high scale trading volume and intense liquidity. Adding to this, today with the advancement of technology it can be done from anywhere of the world. Backed up by world-wide web, you can easily trade in the forex market at the comfort of your own home. However, it is important to understand that fx trading is based hugely on speculation. You must be smart enough to guess exactly when the rate of a certain currency pair will rise and go down, and then buy or sell based on that. Indeed it is said that if you learn to study the speculation of this market, you will have a better chance of getting profit.
Today, it is more advanced and turned into an active investment arena, where only a factual understanding of the intricacies and complexities can make your capital grow every day. Moreover, like any other business, it also involves some amount of risks. There is no shot fx trading technique for success in the currency trading market, but there are some well-known techniques that can assist you formulate a good advanced foreign exchange trading strategy. Here are few essential techniques that can help you cut your losses and increases profits:
Forex Scalping: It is a latest technique of trading where profits are taken after relatively small moves in the forex market. It is a technique where trading is done over small time frames, and smaller profits are taken more frequently. As the position exposed to the market is shorter, it automatically reduces the risk of adverse market events causing the price to go against the trade. It is a different approach to most other forex strategies, but still requires you to analyze the market to ensure that the set up for a trade is present. This type of trading greatly appeals to day traders and those who look to reduce the risk involved in trading currencies.
Forex Hedging: It is a technique that helps in reducing some of the risk involved in holding an open forex position. It decreases the risk by taking both sides of a trade at once. If your broker allows it, a simple way to hedge is just to initiate a long and a short position on the same pair. Advanced traders sometimes use two different pairs to make one hedge, but that can get very complicated.
It is important to understand that much of the risk involved in holding any forex position is market risk; i.e. if the market falls sharply, your losses may escalate dramatically. So if you have an open Forex position with fine projection but you think the currency pair may reverse against you, it is advised to hedge your position.
Forex Position Trading: Forex position trading approach is yet another trouble-free technique to boost your position size without increasing your risk. This trading tactic is very effective with mini lots. The major highlight with this technique is that - with forex position trading your exposure to the market is less and so therefore is no need to monitor the market continuously. Moreover, you may even earn profit with negligible loss that can further boost your trading confidence. For Example- you might make a short trade on EUR/USD at 1.40. If the pair is ultimately trending lower, but happens to retrace up, and you take another short at say 1.42, your average position would be 1.41. Once the EUR/USD drops back below 1.41, you will be back in overall profit.
Today forex trading is all about watching your options when you make a trade. Aside from using effective risk management and extreme vigilance, advanced trading can be an alternate way to make profits and control losses. Nevertheless, these above mentioned advanced trading techniques are more about using the market behavior to your advantage. Utilizing these advanced techniques can give you the edge from other average trader.
Source: www.forexarticlecollection.com
Today, it is more advanced and turned into an active investment arena, where only a factual understanding of the intricacies and complexities can make your capital grow every day. Moreover, like any other business, it also involves some amount of risks. There is no shot fx trading technique for success in the currency trading market, but there are some well-known techniques that can assist you formulate a good advanced foreign exchange trading strategy. Here are few essential techniques that can help you cut your losses and increases profits:
Forex Scalping: It is a latest technique of trading where profits are taken after relatively small moves in the forex market. It is a technique where trading is done over small time frames, and smaller profits are taken more frequently. As the position exposed to the market is shorter, it automatically reduces the risk of adverse market events causing the price to go against the trade. It is a different approach to most other forex strategies, but still requires you to analyze the market to ensure that the set up for a trade is present. This type of trading greatly appeals to day traders and those who look to reduce the risk involved in trading currencies.
Forex Hedging: It is a technique that helps in reducing some of the risk involved in holding an open forex position. It decreases the risk by taking both sides of a trade at once. If your broker allows it, a simple way to hedge is just to initiate a long and a short position on the same pair. Advanced traders sometimes use two different pairs to make one hedge, but that can get very complicated.
It is important to understand that much of the risk involved in holding any forex position is market risk; i.e. if the market falls sharply, your losses may escalate dramatically. So if you have an open Forex position with fine projection but you think the currency pair may reverse against you, it is advised to hedge your position.
Forex Position Trading: Forex position trading approach is yet another trouble-free technique to boost your position size without increasing your risk. This trading tactic is very effective with mini lots. The major highlight with this technique is that - with forex position trading your exposure to the market is less and so therefore is no need to monitor the market continuously. Moreover, you may even earn profit with negligible loss that can further boost your trading confidence. For Example- you might make a short trade on EUR/USD at 1.40. If the pair is ultimately trending lower, but happens to retrace up, and you take another short at say 1.42, your average position would be 1.41. Once the EUR/USD drops back below 1.41, you will be back in overall profit.
Today forex trading is all about watching your options when you make a trade. Aside from using effective risk management and extreme vigilance, advanced trading can be an alternate way to make profits and control losses. Nevertheless, these above mentioned advanced trading techniques are more about using the market behavior to your advantage. Utilizing these advanced techniques can give you the edge from other average trader.
Source: www.forexarticlecollection.com
Simple Successful FOREX Technical Analysis Basics
What are the most simple things you studied or knew in technical analysis that you can use in FOREX trading?, of course most will answer this without even thinking about it, trend lines, resistance and support points and moving averages. The more professional traders will think more about it and would answer Yes, trend lines, resistance and support points and moving averages but who can use them alone successfully in trading FOREX?". Here it is my turn to answer, trend lines, resistance and support points and moving averages are the best simplest ways to achieve success trading FOREX and keep in the positive area always. Just to make it simple we need first to state the definition of these tools and later to know how to use and apply them to our chart in order to succeed and build a real FOREX fortune. 1. Trend Line : Trend line is the line that we can draw between two or more price tops or bottoms on a chart whatever was the type of the chart linear, bars or candlesticks", this line itself which could be an uptrend line which is being drawn between bottoms in a bullish market and it becomes a good support if the price goes south again or a downtrend line which is being drawn between price tops on the chart when market is down and it considered as a resistance when the price turns to up direction. Note: The line which touches more tops or bottoms is more stronger and the signal produced by it is more reliable. 2. Trend Channel : A trend channel is the space between two lines, the trend line and a parallel line to it which is always drawn on the opposite side of the trend line so it is drawn between tops in an up trend direction or through bottoms in a bearish price movement. The trend channel requires some conditions to give an accurate signal, the most important are: to be a wide channel, more wider more reliable and to last more longer. 3. Moving Average : Moving average is a mathematical average of set of prices we can say that a simple moving average (SMA) with value of 5 and applied to close is the sum of close prices for 5 moving bars on the chart divided to 5 (eg. the average of Friday is the sum of the previous 5 days week" on a daily chart divided to 5, while Thursday's average is the sum of the 5 days before divided to 5 and so, the moving average is the line which passes through these averages points", the most important condition for its reliability is its value, more greater value more reliable moving average. Note: I suggest using more than one moving average, 2 or 3 are acceptable. 4. Support And Resistance Points : Support points are the price points were tested more than two times when price was going south and it could not pass it, support points are completely the opposite. These points are being used to measure the probability of price turning at mean points, these points can be decided by using pivot points, fibonacci rates....etc." Note : The more times price touches a point and turn its direction the more stronger it is. How can we apply this to chart and get money, I'll summarize this in the following chart image, it explains itself, it's a chart for GBP/JPY, signal return was 1000+ pips in 2 days: Three moving averages were going south, trend line was broken price in green circle" a good support point 23.6% fibonacci was nearly broken", strong signal, yes? For the chart please visit MoneyTec The best resource for FOREX trading is MoneyTec, - Active Traders Community Forum, Chat. MoneyTec is an online trading community that promotes mature, intelligent & respectful discussion in a positive & safe environment for everyone.
Source: www.forexarticlecollection.com
Source: www.forexarticlecollection.com
Stock Market Trading- 3 Strategies to Make you a Millionaire
Stock Market Trading- Are you ready to become a millionaire. Here are 3 proven strategies to make you become a more successful trader and increase your wealth. They can be used if you are forex trader, stock market trader.
If you want to catch the serious profit in Forex Trading you need to trend watch Forex trends which are worse term. here we are going to give you a 3 step simple method which if you use it correctly, will help you catch every superior Forex trend and lead you to long-term term currency dealing success. This will add more money to your bottom line than most other strategies.
For you to become a successful Forex Trader, you must set rules and then follow them. Successful Forex Traders have discpline.
Most beginner Forex traders don't bother trying to trend following Forex lengthier term - instead they try Forex scalping or day trading. These methods focus the trader on small moves and they hope to catch small profit however as most short term moves are random, this leads to equity eliminate.
The other alternatives are swing trading and long term Forex trend following and this article is all about the latter method. If you look at any Forex chart, you will see long-term term trends that last for months or years. These moves can and do yield serious profit - present we will outline a simple method to get them.
Breakouts
By far the best way of catching the serious moves is to use a Forex Trading strategy based around breakouts. A breakout is simply a move on a Forex chart where a new high or low is made and resistance or support is broken.
It's a fact that most leading moves start from new highs or lows.
While it might appear that you are not buying or selling at the greatest level, you are in terms of the odds of the trend continuing. Most Forex traders make the mistake of waiting for the breakout to come back and get in at a better price but these traders never get on board. The grounds are if a breakout occurs, then you have a new strong trend and a pullback is not very likely to occur.
Most traders don't buy or sell breakouts and that's exactly why it's such a powerful method.
The only point to keep in mind is a support or resistance which is ruined, should be valid and that means at least 3 points in at least 2 different times frames. The more tests and the greater the spacing between the tests the more valid the level is.
Confirmation: Make sure it is confirmed
Of course not every breakout keeps and some reverse, these are false and can cause losses. You therefore need to confirm each move. All you need to do to achieve this is to put a few momentum indicators in your Forex trading system to confirm your dealing signal.
These indicators give you an estimation of the strength and velocity of price and there are many to choose from. We don't have time to discuss them here (simply look up our other articles) but two of the greatest are - the stochastic and Relative Strength Index RSI
Stops and Targets
Stop points are easy with breakouts - Simply behind the breakout point.
If you have a serious trend then you need to be careful you can milk it, so don't move your stop to soon and keep it outside of normal volatility. If it is a huge move, trailing stops should be held a long-term way back and the 40 day moving average is a good level to use.
You have to keep in mind that when the trend does eventually turn you are going to give some profit back. You don't know when the trend is going to end, so don't predict.
It's ok to give a serious back, as that's the nature of trading Forex. Keep in mind if you got 50% of all leading trend you would be very rich. When you are long-term term trend following you have accept giving a bit back and taking dips in open equity as the trend develops - this is noise and does not affect the long term trend.
The above is a simple way to trend watch Forex and catch the high odds moves that yield the serious profit. If you are learning Forex dealing and want a simple method that is robust and will help you get every major move, then you should base your dealing on the above method.
Now that you have all the winning strategies, you now need to have a winning broker, recently the CFD FX REPORT has reviewed these brokers and have come up with Best Forex Broker to find out this visit the website.
Source: www.forexarticlecollection.com
If you want to catch the serious profit in Forex Trading you need to trend watch Forex trends which are worse term. here we are going to give you a 3 step simple method which if you use it correctly, will help you catch every superior Forex trend and lead you to long-term term currency dealing success. This will add more money to your bottom line than most other strategies.
For you to become a successful Forex Trader, you must set rules and then follow them. Successful Forex Traders have discpline.
Most beginner Forex traders don't bother trying to trend following Forex lengthier term - instead they try Forex scalping or day trading. These methods focus the trader on small moves and they hope to catch small profit however as most short term moves are random, this leads to equity eliminate.
The other alternatives are swing trading and long term Forex trend following and this article is all about the latter method. If you look at any Forex chart, you will see long-term term trends that last for months or years. These moves can and do yield serious profit - present we will outline a simple method to get them.
Breakouts
By far the best way of catching the serious moves is to use a Forex Trading strategy based around breakouts. A breakout is simply a move on a Forex chart where a new high or low is made and resistance or support is broken.
It's a fact that most leading moves start from new highs or lows.
While it might appear that you are not buying or selling at the greatest level, you are in terms of the odds of the trend continuing. Most Forex traders make the mistake of waiting for the breakout to come back and get in at a better price but these traders never get on board. The grounds are if a breakout occurs, then you have a new strong trend and a pullback is not very likely to occur.
Most traders don't buy or sell breakouts and that's exactly why it's such a powerful method.
The only point to keep in mind is a support or resistance which is ruined, should be valid and that means at least 3 points in at least 2 different times frames. The more tests and the greater the spacing between the tests the more valid the level is.
Confirmation: Make sure it is confirmed
Of course not every breakout keeps and some reverse, these are false and can cause losses. You therefore need to confirm each move. All you need to do to achieve this is to put a few momentum indicators in your Forex trading system to confirm your dealing signal.
These indicators give you an estimation of the strength and velocity of price and there are many to choose from. We don't have time to discuss them here (simply look up our other articles) but two of the greatest are - the stochastic and Relative Strength Index RSI
Stops and Targets
Stop points are easy with breakouts - Simply behind the breakout point.
If you have a serious trend then you need to be careful you can milk it, so don't move your stop to soon and keep it outside of normal volatility. If it is a huge move, trailing stops should be held a long-term way back and the 40 day moving average is a good level to use.
You have to keep in mind that when the trend does eventually turn you are going to give some profit back. You don't know when the trend is going to end, so don't predict.
It's ok to give a serious back, as that's the nature of trading Forex. Keep in mind if you got 50% of all leading trend you would be very rich. When you are long-term term trend following you have accept giving a bit back and taking dips in open equity as the trend develops - this is noise and does not affect the long term trend.
The above is a simple way to trend watch Forex and catch the high odds moves that yield the serious profit. If you are learning Forex dealing and want a simple method that is robust and will help you get every major move, then you should base your dealing on the above method.
Now that you have all the winning strategies, you now need to have a winning broker, recently the CFD FX REPORT has reviewed these brokers and have come up with Best Forex Broker to find out this visit the website.
Source: www.forexarticlecollection.com
Forex Trading System - A Key To Successful Forex Trading And Trading For A Living
Every one has his days when no matter how well he has planned out his trades, he may find some of his trades not performing to what is planned. It is only natural for one to feel upset, but for the follower of a forex trading system, making money or losing money from that trade is not the paramount objective.
Why is this so?
For the trader who employs a forex trading system, he can still face the losing trade with a smile, because he has had followed through the trading signals in a disciplined way, and it is only when a trader follows a system, he can be sure of keeping his losses small and to live to trade again another day.
By using a forex trading system, the trader can have a cool head, and can face his trades rather unemotionally. He can execute his trades following pre-determined price levels of initial stop loss, trailing loss and computed and projected price profit.
He knows his tolerable level of loss, his threshold of pain - and of course, his risk to reward ratio even before he trades.
Now when a trader has a trading system and follows through the trading plan, making profits is a natural result when he makes a correct trade. But when his trade is wrong, his forex trading system will very quickly show him that the direction of his trade is wrong, so that he is out of the game fairly quickly.
I am often flabbergasted at some very broad claims of some traders who condemn day trading systems and relegate them to the garbage bin. When you look at forex trading systems, review them quickly by peer recommendation whenever possible. By peer recommendation, I mean you can ask existing traders their experience on the trading system, and how they are doing with it. Posting to the numerous reliable trading forums will allow you to receive some independent reviews fairly quickly. At the same time, my personal experience, and that of many other professional traders is that day trading can be profitable, though it is never easy to day trade. Otherwise, how is it that so many day traders are able to earn their income day trading the short swings of the market daily for a living? So it is important for you to have a broad view of forex trading systems if you are contemplating of learning or purchasing any trading system that relates to day trading.
If you ever wish to trade successfully, whether you day trade or swing trade, it is important that you have a trading system that will allow you to approach trading in a disciplined manner. It is only when you are a disciplined trader that you can see consistent large gains and small losses.
Source: www.forexarticlecollection.com
Why is this so?
For the trader who employs a forex trading system, he can still face the losing trade with a smile, because he has had followed through the trading signals in a disciplined way, and it is only when a trader follows a system, he can be sure of keeping his losses small and to live to trade again another day.
By using a forex trading system, the trader can have a cool head, and can face his trades rather unemotionally. He can execute his trades following pre-determined price levels of initial stop loss, trailing loss and computed and projected price profit.
He knows his tolerable level of loss, his threshold of pain - and of course, his risk to reward ratio even before he trades.
Now when a trader has a trading system and follows through the trading plan, making profits is a natural result when he makes a correct trade. But when his trade is wrong, his forex trading system will very quickly show him that the direction of his trade is wrong, so that he is out of the game fairly quickly.
I am often flabbergasted at some very broad claims of some traders who condemn day trading systems and relegate them to the garbage bin. When you look at forex trading systems, review them quickly by peer recommendation whenever possible. By peer recommendation, I mean you can ask existing traders their experience on the trading system, and how they are doing with it. Posting to the numerous reliable trading forums will allow you to receive some independent reviews fairly quickly. At the same time, my personal experience, and that of many other professional traders is that day trading can be profitable, though it is never easy to day trade. Otherwise, how is it that so many day traders are able to earn their income day trading the short swings of the market daily for a living? So it is important for you to have a broad view of forex trading systems if you are contemplating of learning or purchasing any trading system that relates to day trading.
If you ever wish to trade successfully, whether you day trade or swing trade, it is important that you have a trading system that will allow you to approach trading in a disciplined manner. It is only when you are a disciplined trader that you can see consistent large gains and small losses.
Source: www.forexarticlecollection.com
Forex Charts - Make Bigger Profits by Following These Key Points
Forex charts are a great, time efficient and proven way to make bigger profits but most traders don't use them correctly and here we will give you some key points to help you make bigger profits...
Let's look at some key points for more profitable technical analysis with forex charts.
If you look at any forex chart you will see big trends that can last for many months and trend following these can be very profitable and if you want to make money out of them you must understand this key fact:
Most big trends start and continue from breakouts to new highs and lows on the chart and you must go with these breaks - most traders don't. They want to wait for the pullback and of course it never comes and they are left behind. While it appears like you have missed the first part of the move, the odds of continuation are high so go with them.
Always be patient when using forex charts. You don't get rewarded for your efforts or how many times you trade but being right with your trading signal. I know traders who trade just a few times a month yet make triple digit gains - so wait for the right opportunities.
When you have a trend you want to hit always check price momentum is on your side and make sure that you use momentum indicators that show price acceleration in the direction you wish to trade. Two great ones, you can learn, in about 30 minutes are - the stochastic and RSI. These two combined will increase your odds of success by getting the odds more on your side.
Never believe anyone who tells you there is a mathematical formula for market movement - there isn't. If of course there was, we would all know the price in advance and there would be no market. So forget trying to predict and only trade the reality of price.
Its probabilities that you need to understand and like a successful poker player, you won't win every hand - but if you keep trading the odds, you will win long term. When using forex charts, the simpler your forex trading method the better, as simple systems tend to be very robust and have fewer elements to break, than complicated ones.
I have used a simple breakout method which uses trend lines, RSI and the stochastic and made money with it for over 20 years sure, it's simple but it works. Forex charts give you the reality of price before your eyes and you can spot areas of over valuation and under valuation. Humans create trends and they also (due to their emotions) push trends to far up or down in either direction.
You can of course ride trends - but you will also see big price spikes and history tells you they don't last long and taking trades contrary to the majority can be very profitable. Charting is an art not a science and you need to practice your art. The successful captain of a ship uses charts to navigate safely, but he also knows that use them wrongly and he will drown and it's a very similar situation in forex.
The Good News
You can learn forex charting in around 2 weeks and soon be piling up big profits in around 30 minutes a day spotting and hitting high odds trades and enjoying great profits. The good news is forex trading and using technical analysis is a learned skill and one you can master with a little practice.
Source: www.forexarticlecollection.com
Let's look at some key points for more profitable technical analysis with forex charts.
If you look at any forex chart you will see big trends that can last for many months and trend following these can be very profitable and if you want to make money out of them you must understand this key fact:
Most big trends start and continue from breakouts to new highs and lows on the chart and you must go with these breaks - most traders don't. They want to wait for the pullback and of course it never comes and they are left behind. While it appears like you have missed the first part of the move, the odds of continuation are high so go with them.
Always be patient when using forex charts. You don't get rewarded for your efforts or how many times you trade but being right with your trading signal. I know traders who trade just a few times a month yet make triple digit gains - so wait for the right opportunities.
When you have a trend you want to hit always check price momentum is on your side and make sure that you use momentum indicators that show price acceleration in the direction you wish to trade. Two great ones, you can learn, in about 30 minutes are - the stochastic and RSI. These two combined will increase your odds of success by getting the odds more on your side.
Never believe anyone who tells you there is a mathematical formula for market movement - there isn't. If of course there was, we would all know the price in advance and there would be no market. So forget trying to predict and only trade the reality of price.
Its probabilities that you need to understand and like a successful poker player, you won't win every hand - but if you keep trading the odds, you will win long term. When using forex charts, the simpler your forex trading method the better, as simple systems tend to be very robust and have fewer elements to break, than complicated ones.
I have used a simple breakout method which uses trend lines, RSI and the stochastic and made money with it for over 20 years sure, it's simple but it works. Forex charts give you the reality of price before your eyes and you can spot areas of over valuation and under valuation. Humans create trends and they also (due to their emotions) push trends to far up or down in either direction.
You can of course ride trends - but you will also see big price spikes and history tells you they don't last long and taking trades contrary to the majority can be very profitable. Charting is an art not a science and you need to practice your art. The successful captain of a ship uses charts to navigate safely, but he also knows that use them wrongly and he will drown and it's a very similar situation in forex.
The Good News
You can learn forex charting in around 2 weeks and soon be piling up big profits in around 30 minutes a day spotting and hitting high odds trades and enjoying great profits. The good news is forex trading and using technical analysis is a learned skill and one you can master with a little practice.
Source: www.forexarticlecollection.com
Technical Indicators In Forex Trading - Understanding Their Limitations
Forex traders often look at indicators such as Bollinger Bands, Pivot Points, MACD, Moving Averages and the such to help them determine where to enter or exit trades. Using technical indicators is fine, however many traders overemphasize their importance or just plain misunderstand them.
Many forex traders think that they can simply download an indicator and then mechanically apply it into their trading and do so profitably. This is just a plain illusion. Successful traders realize that there is a lot more to using indicators than just asking them to generate buy/sell signals or pin-point exact entry points. Technical indicators for them represent just one part of their trading strategy.
Let¡¯s take a look at some of the reasons why you should not put all your faith into those sometimes confusing little indicators.
Take Moving Averages (MA¡¯s) for example. They are "supposed" to show the direction of the trend. The most common and often used are the simple 200day MA, 100day MA, 50day MA, 35day MA and the 21day MA but they are only valid on daily graphs. Some forex day traders say that a good signal is when the 50day MA is crossed by the 13day MA and that when this occurs you should trade in the direction of the cross.
The problem with this (apart from the fact that it only works on daily graphs) is that these types of ¡°crosses¡± do not occur often enough for traders to exploit them. This can often lead to a situation where traders are seeing what they thought was a cross now reverse and uncross. Even worse, it can lead to a situation where day traders are "chasing" and trying to anticipate a cross. If you are doing this, you are distancing yourself from the market which you are trying to trade. Not only are you trying to guess what the price is going to do next but you are guessing what the indicator, based on the prices, is going to do next.
Other problems with technical indicators involve issues with the quotes and prices given to you by your broker. Forex brokers are market makers and as such different brokers will give you different quotes and prices at a specific point in time. Naturally, a different price could lead to a situation where different traders, trading the same market have the same indicators giving them different responses. That¡¯s how arbitrary technical indicators can be.
Finally, a lot of these technical indicators were developed by people trading the stock market. With the growth of computers and software packages that incorporate these indicators, technical analysis has become very popular and spread to other markets such as the forex market. What currency traders should be aware of however, is that as these indicators were developed in a time where real time information did not exist. As such, the limitations of technical analysis becomes even more exaggerated in forex trading ¨C not only is technical analysis an interpretation of historical events but it becomes even more so in the forex market, a market moved by real time events.
Conclusion:
Successful forex traders understand the limitations of technical indicators and realize that technical analysis should incorporate just one part of their trading strategy. In a recent international Forex market event visited by the major banks and institutions - the main players that influence the foreign currency market ¨C a survey was done to better understand what analysis they use. The results might be surprising to some tarders. The survey showed that a mere 26% use technical analysis and indicators compared to 41% who said they use fundamental analysis.
Source: www.forexarticlecollection.com
Many forex traders think that they can simply download an indicator and then mechanically apply it into their trading and do so profitably. This is just a plain illusion. Successful traders realize that there is a lot more to using indicators than just asking them to generate buy/sell signals or pin-point exact entry points. Technical indicators for them represent just one part of their trading strategy.
Let¡¯s take a look at some of the reasons why you should not put all your faith into those sometimes confusing little indicators.
Take Moving Averages (MA¡¯s) for example. They are "supposed" to show the direction of the trend. The most common and often used are the simple 200day MA, 100day MA, 50day MA, 35day MA and the 21day MA but they are only valid on daily graphs. Some forex day traders say that a good signal is when the 50day MA is crossed by the 13day MA and that when this occurs you should trade in the direction of the cross.
The problem with this (apart from the fact that it only works on daily graphs) is that these types of ¡°crosses¡± do not occur often enough for traders to exploit them. This can often lead to a situation where traders are seeing what they thought was a cross now reverse and uncross. Even worse, it can lead to a situation where day traders are "chasing" and trying to anticipate a cross. If you are doing this, you are distancing yourself from the market which you are trying to trade. Not only are you trying to guess what the price is going to do next but you are guessing what the indicator, based on the prices, is going to do next.
Other problems with technical indicators involve issues with the quotes and prices given to you by your broker. Forex brokers are market makers and as such different brokers will give you different quotes and prices at a specific point in time. Naturally, a different price could lead to a situation where different traders, trading the same market have the same indicators giving them different responses. That¡¯s how arbitrary technical indicators can be.
Finally, a lot of these technical indicators were developed by people trading the stock market. With the growth of computers and software packages that incorporate these indicators, technical analysis has become very popular and spread to other markets such as the forex market. What currency traders should be aware of however, is that as these indicators were developed in a time where real time information did not exist. As such, the limitations of technical analysis becomes even more exaggerated in forex trading ¨C not only is technical analysis an interpretation of historical events but it becomes even more so in the forex market, a market moved by real time events.
Conclusion:
Successful forex traders understand the limitations of technical indicators and realize that technical analysis should incorporate just one part of their trading strategy. In a recent international Forex market event visited by the major banks and institutions - the main players that influence the foreign currency market ¨C a survey was done to better understand what analysis they use. The results might be surprising to some tarders. The survey showed that a mere 26% use technical analysis and indicators compared to 41% who said they use fundamental analysis.
Source: www.forexarticlecollection.com
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