Wise Forex Trader

Forex Trading Analysis

2012-01-19T10:09:00.000-08:00

Forex Trading is a great way for any individual or company interested in making more money online. It offers unique possibilities and an available stable way to increase the income in a very short time. It provides the ability to invest in the largest financial market in the world from the comfort of a home computer or from anywhere where there is an internet connection and a computer. It is worth at least the attention of anyone who is interested in greater financial success. The Forex Analysis process is not nearly as complicated as it can tend to sound. You will need for sure an online currency convertor calculator to start with.

Forex trading involves worldwide currencies and trading them in order to increase financial gains. This is done by moving with current world prices of currency and buying into the right ones at the right time. It also involves working with such factors as world oil rates, gold rates, silver rates, and other precious commodity rates and currencies in order to trade them at the right time to reach financial gain. This simply stated is the Forex analysis process in a nutshell.
There are many tips and tricks to using the Forex analysis process right and well. The first would logically be signing up for a course for a given time to be able to learn the basics of Forex strategies. Simple tips are provided through this course that would get you to furthering your financial abilities. Working with a training course also offers you a way to actually gain experience investing in the market without a chance of actual physical capital loss in any way. This system will give you the confidence to begin and take you off of the ground in the Forex trading market.

A key tip to beginning to work with the Forex analysis process is learning the simple principle that Forex is not a get-rich-quick scheme. It is a system via which you can, through constancy, grow and learn that there is no key ingredient or particular secret that will take you to a point where you will simple just cash out.
Another tip to using the Forex analysis process is learning the art of mental and physical discipline. This means that in all reality the more time and effort you put into learning Forex, the more you will physically get out of it. This principle is much stated by Forex trading expert

Another key factor that helps any beginner in the Forex market is the sheer liquidity of the system. Learning that you can pull in and out of particular deals is an extremely helpful factor for any beginner in the system. Mastering the use of this equals that you can lower your risk profile by a huge amount and give yourself the chance to gain money in smaller chunks at a time. This enables you as a beginner to work more easily with the Forex market.

Choosing a Forex Broker

2011-08-25T01:43:00.000-07:00

Choosing the right Forex Broker it is an important task for any Forex Trader and it can be difficult to decide what Broker to choose.

There are many Forex Brokers from different country with different features, regulated or not regulated by reliable authorities.

You should always find out more about the company behind a Forex broker to check if it is regulated by an authority such as National Futures Association (NFA), Commodity Futures Trading Commission (CFTC)etc...

There is a big risk of loosing your money if you choose some unregulated offshore broker to trade foreign exchange.

You should also make a comparation between the Spread of different Forex Brokers and the Leverage offered to see what brokerage company is more attractive for you.

The minimum deposit accepted by a Forex broker is also important. If you are new in forex trading you shouldstart by trading microlots and choose abroker with a small minimum deposit ($100-$500).

Trading Point Forex Broker

2011-08-01T08:22:00.000-07:00

Trading Point was founded back in 2009 and it's headquartered in Cyprus. This Forex Broker has a minimum deposit of just $5 so it is accessible for small investors too.

For the main currency pairs Trading Point has a spread of 1 to 3 pips. Trading Point has a leverage of 500:1 which is quite enough for any trader.

Trading Point is regulated by CySEC and FSA and it accepts different payment methods such as Bank Wire, Credit Card,PayPal, Moneybookers and Neteller.

Trading Point uses the well known MetaTrader 4 forex trading platform which can be used with Forex Expert Advisors.

Rover North Forex System

2011-05-09T05:31:00.000-07:00

A great Forex Trading System could make you some huge profits from trading foreign exchange.

The Rover North Forex System is a winner of the competition called Surefire Trading Challenge and it could double or triple your profits in just several months.

An individual with the nickname Rover North traded for two months in this competition with everyone watching and proofs of his trades are on the Rover North Forex System website.

The Rover North Forex System is developed by a real Forex Trader and it was tested on a real forex trading account.

Access with investor passwords is available for those who want to check who the Rover North Forex System is performing on a real trading account.

Rover North Forex System is becoming the most popular Foreign Exchange Trading System and soon it might not be available to be purchased by the general public.

View the videos from the Rover North Forex System website and you will find the proof that this Forex System really works.

You can read here another article about this system.

Automated Forex Trading

2010-12-16T10:26:00.000-08:00

I wish to inform you about the automated forex trading system from Avafx. has a Forex autotrading service is called Avafx Auto Trader and it is a forex trading platform that allows its clients to choose from various trading signals providers and have those signals traded automatically in their live foreign exchange trading trading account.

Avafx accepts different payment methods for deposits and withdrawals includiong online payment systemns such as Paypal.

Avafx offers support by email or by phone in 30 languages.

You may request a c all back at any time from any country and you will receive a call from Avafx.

Avafx offers up to $1200 BONUSES for new clients!

With a free 30-day demo, decent web-based platform and comprehensive signals performance, the Avafx Auto Trader is a very good broker-based service to look at when comparing autotrading providers. This service does come highly recommended for traders looking to add autotrading to their Forex portfolio.

Firstly, the Avafx Auto Trader platform is fairly easy to navigate and start up its 30-day demo. The demo allots an account of $100,000 to trade with. Avafx Auto Trader allows trading on 23 different currency pairs. The performance page is very comprehensive to compare and choose from the hundreds of expert trading signal providers: you can filter the trade signal providers by profit($), max draw down, profit factor, date started, average pip profit, winning percentage, and currency pair.

You can also set your maximum number of trades that you wish to be open for your trading account, your lot sizes per signal provider, or maximum stop losses per trade provider. Right away you can pick up to 10 different signal providers, choose pairs and lot sizes, and have the platform take over from there, automatically trading your account with your selected trading signals. Your computer does not need to be on for the signals to be traded in your account, as this service uses a remote server.

Now, to go live with a live autotraded account there are a few rules. Your trading account minimum investment is $1000. Also, Avafx Auto Trader charges you 1 pip commission on each round trip trade on top of their normal spread to use their autotrade system.

Seem unfair? Not really. Comparing ZuluTrade to Avafx Auto Trader, Avafx actually comes out on top. Yes, ZuluTrade does not charge a commission, however comparing the best signal providers, Avafx appears to have the best performing signals.

With Avafx you can have the possibility to practice on a Demo Account of $100000 before trading with a real account.

Avafx’s performance comparison is actually much more user-friendly than ZuluTrade’s performance page: you can quickly compare important trading system factors like risk adjustment rate (RAR) and profit factor which cannot even be determined on ZuluTrade.

Both do provide maximum drawdown for each signal provider, which is one of the most important. But when looking at the RAR, total pips accumulated divided by max draw down, the Avafx providers have a much better RAR than the ZuluTrade signals providers. Is that worth the 1 pip commission per trade?

Absolutely. Now, if your trading account is $50,000 or more, you are then a VIP level account which means you will not be charged the 1 pip commission and you will get a better deal on the spreads as well.

Another thing to note: Avafx is an approved broker for ZuluTrade. So, if you try out Avafx Auto Trader signals and are not impressed, then it will be very easy to set up a ZuluTrade account using Avafx as your broker.

On the negative side, the Help section and Support Center are not very helpful regarding the Auto Trader. However, the Live chat help was very responsive and they answered most of my questions quickly. There was one question that remains with Auto Trader: there is a very large disclaimer at the bottom of the trading platform about “Hypothetical trading results and performance data”.

It is unclear if Avafx Auto Trader signals providers are using live trading accounts or DEMO accounts for their trading performance data. I would think that DEMO trading is likely to be less accurate than live trading performance data. Avafx support did not answer this question directly.

Also the Avafx Auto Trader does not have the Margin-call-ometer that ZuluTrade does, which is a very nice feature that explains and guards against account margin calls. However, Avafx’s platform does have some decent features to help clients remain positive and not margin call their accounts.

Avafx offers a professional Forex Education to its clients including webinars, forex tutorials, ebooks, real time charts, forex indicators, technichal analysis, economic calendar, market review and more.

I can say that Avafx Auto Trader comes highly recommended and you would not be sorry to try it.

Forex BulletProof

2010-09-30T03:09:00.000-07:00

The Forex BulletProof EA (Expert Advisor) is a Forex Robot developed by a professional team that includes Steve C. the one who participated at the creatioj of other successful robots such as FAP Turbo, Forex Killer etc.

Forex BulletProof is focus on long term growth more than short term growth and this is one of its advantages compared to other Expert Advisors.

Forex BulletProof includes the High Voltage Add On, an Expert Advisor that has one of the most aggressive trading system around the market. It will keep finding and taking those trades for you.

With the compounding feature on, your deposits can double easily within days.

You are strongly advise to withdraw your profits every 3-5 days to minimize the risk.

As with every compounding system, the winning run is bound to end.

At the end of the day, it is about how good you keep those profits.

Forex BulletProof membership area is very well-organized and fully equipped.

You will find comprehensive installation and trading manuals and videos. It will be easy for anyone to start trading immediately.

You can read here another article about this forex trading system.

Get Paid To Click Ads

2010-09-07T23:58:00.000-07:00

An easy way to make money online is to get paid to click ads. WorldLinx is one of the oldest PTC (Paid To Click), it was launched in 2003.

WordLinks accepts Paypal so you will get your earnings paid very fast.

The minimum cashout is $10 which is large compared to other PTC but WordLinks has over 234 000 members so you will be a part of the largest PTC.

You can be paid $0.005-$0.01 per click and you can buy referrals to click for you.

Bought referral price per 1 referral is $0.65 and your income from referrals: will be 5% of their earnings.

Education in Forex Trading

2010-06-25T03:15:00.000-07:00

Education is very important in Foreign Exchange Trading; you must constantly learn to improve yourself and your skills as a trader. Straight Forex offers a FREE Foreign Exchange Trading Course for beginners and Quality Forex Training for traders who want to become professionals.

Forex or Foreign Exchange is the most liquid and the largest financial market in the world. Unlike other financial market, the Forex market doesn’t have a centralized location. Exchanges are done through electronic network and the whole world participates in the trade.

Forex trading involves buying and selling of different currencies. As with most trades, to make a profit in Forex, you need to buy low and sell high. Forex isn’t really complicated. However, there are things that you need to consider in order to successfully make some profit out of this very liquid financial market.

Forex trading can really give you a chance to earn large amounts of money. In fact, people who traded in Forex became instant millionaires almost overnight. However, you need to realize the fact that aside from the earning potential you can get when trading Forex, there are also risks involved and many people suffered huge financial losses trading in Forex.

This is why it is important for you to get an education on Forex trading. You have to get a proper education and not just a crash-course-read-articles kind of education.

In most business schools in the United States, there are courses that specialize in trading in the financial market such as Forex. These schools can really give you that proper skills and knowledge you need in order for you to successfully trade in the Forex market. Not only that. Getting a proper education from good business schools about Forex prepare you when you enter the Forex market to trade.

A good Forex trading school will educate you on how to read charts effectively and how to spot trends. Since knowing how to read the Forex market charts can give you an idea on where a particular currency is heading, you will have an idea on which currency you want to buy and sell. Knowing how to read the charts is one of the most important skills you need to have when you enter the Forex market. This skill will substantially minimize the risk of losing money and maximize the chances of earning.

As much as possible, you should look for a school that offer real-time trading with dummy accounts and real accounts. Since the best teacher is experience, schools should require you, as their students, to set up dummy accounts for practice and also real funded accounts to trade currencies in the actual Forex market. However, the real funded accounts should be in mini Forex accounts to avoid risking and losing a lot of money in case you made a mistake in the trades.

Another benefit that you can gain if you trade in real or dummy accounts for practice is experience. Once you enter the Forex market, you will have a better idea on how Forex markets work. The school should also have different trading systems to allow you to choose which trading system you are most comfortable with. Also, you will get a first hand feel on how to use these systems and avoid making mistakes in the real world.

Since trading Forex today is widely available for all kinds of people with a computer and an active internet connection. Most people don’t realize that Forex requires you to have skills and considerably, a high amount of money to invest. Forex doesn’t guarantee that everyone will win; you should know that Forex is a very risky financial market to invest in and having the proper knowledge and skills is essential for your success in trading in the Forex market.

You should know about the risks involved in Forex and you should also know that many people have suffered financially because they entered the Forex market without having the knowledge and skills required to be successful. Therefore, it is very important for you to get the proper education first before you enter the Forex market.

Always remember, with the proper knowledge about trading Forex, the better your chances will be to profit in this financial market.

AvaFX

2010-06-14T08:25:00.000-07:00

I like to use Paypal for shopping online but also for trading foreign exchange. Paypal is a secure online payment system and it is very easy to use and to withdraw your money.

Ava FX is a forex broker that accepts Paypal as deposit and withdrawal method.

Ava FX is incorporated in Ireland, and its operations revolve around its unique software, Metatrader 4. Although Ava FX is small when compared to many other foreign exchange market brokers, its reputation is enhanced by the fact that it is backed by a major financial institution. That financial institution has been given an “A+” rating by an S & P-affiliated rating agency.

Ava FX doesn’t boast a large number of branches spread across the globe. Instead, it is made up of two basic entities: the Ava Group and Ava Capital Markets Ltd. Of course, location is not of primary concern when it comes to trading on the foreign exchange market online, and Ava FX makes up for its small size by offering a high level of customer service and support.

Unlike many of the top forex brokers doing business today, Ava FX does not appear to have a large number of key registrations. Instead, it is listed as “compliant” with the Markets in Financial Instruments Directive, or MiFiD, and is regulated by the Irish Financial Regulator.

If you opt to sign up with Ava FX to conduct your forex trading, you will need to keep all of its pertinent contact information handy. That way, if an issue arises you will be able to quickly and easily get the help that you need. Basic contact information for Ava FX is as follows:

Toll-Free Phone Number: 1 (888) 541-3720
Local Phone Number: 1 (212) 941-9609
Fax Number: 1 (646) 335-0333
Trading Desk: trading@avafx.com
Email Support: customer@avafx.com
Online Support/Live Chat: www.avafx.com/support/Online

Trading on Ava FX centers around its custom trading platform, AvaTrader. Like many other online foreign exchange programs, Ava FX’s AvaTrader features a user-friendly interface and is free for current Ava FX customers to download and use. Live streaming prices allow traders to quickly and easily make the moves they need to make. Multiple worksheets can be opened at once, increasing the ease-of-use and flexibility of the AvaTrader program. One-click trading, easy-to-read charts, simple lists for open positions and orders, user-friendly dealing rates tables – and many other great features – are all available on the AvaTrader platform.

Ava FX also offers mobile trading to those who wish to manage their foreign exchange trades via their cell phone or other mobile device.

There’s more to Ava FX than its software, which is why we take a closer look at several key characteristics of the service below.

At $100, Ava FX has one of the higher minimum deposit amounts among top foreign exchange market brokers. Still, it is more than enough to get the ball rolling and those funds will be used in short order to engage in foreign exchange trading.

By applying online, you can set up an account with Ava FX in a relatively short amount of time. The application itself typically only takes three to five minutes to complete. From there, it takes another few days to have your application approved. An email is sent when your account is all set and ready to go; an initial deposit is, of course, required.

For up to 21 days, you can sign up for a free practice account with Ava FX. With your free account, you will be given a balance of $100,000 in fake currency so that you can get a real sense for how AvaFX and the AvaTrader software works. For best results, traders are advised to use their practice accounts for the full trial period in order to see how fluctuations and other events affect their positions.

There is no express or implied guarantees or promises made by Ava FX regarding dealing desks and trading against its customers. For that reason, traders are advised to participate at their own risk. However, this advice holds true for all foreign exchange market brokers and in no way suggests that Ava FX is inferior.

Leverage limits of up to 200:1, or up to 200 times the current equity value, are par for the course with Ava FX. With a $500 deposit, then, you could open trades of up to $100,000 with this broker.

Ava FX does support the use of trailing stops, and they are easy to set up using AvaTrader. On an existing trade, traders simply need to edit the trailing stops option within the “Open Positions” window. Otherwise, you just need to enter a stop order, click on the “Trailing Stop” option and specify the number of pips from high or low that you desire.

During normal market conditions, Ava FX offers spreads of three to four pips on major currency combinations. For example, the spread for EUR/USD is typically three pips; the spread for USD/CAD is typically five pips.

Despite its modest size, Ava FX brings plenty of benefits and features to the table for traders who choose to sign up. However, the lack of guarantees regarding trading against its customers and its lack of accreditation with major regulatory bodies may raise concerns for many traders. Ultimately, Ava FX may prove to be a wise choice for those just getting into forex trading, but may not be as attractive to more seasoned traders.

Forex Mentor

2009-12-27T09:41:00.000-08:00

This is my review for the Forex Mentor training course by Peter Bains.

We all need a helping hand now and again, when you first got in to a car youneeded someone to teach you how to drive it. Trading Forex online is no different, before you can 'drive' the Forex market for substantial profits you need a helping hand to get you started in the right direction.

That is where a course like Peter Bains Forex Mentor comes in. The problem all Forex traders face when choosing a course is knowing which one really is the best. Every Forex training course claims to be able to make you rich quick, every Forex course claims to be better than the rest.

Do these courses really live up to their promises? Most do not that is why it is important to read up on other people opinions of courses before you take the plunge.

Peter Bains Forex Mentor is one of the most respected currency exchange courses anywhere. It is so popular that Peter holds his own live seminars all over the World, from the US to the UK to Australia and thousands of people pay to learn from the man who many people consider to be the holy grail of profitable Forex trading.

The question is, why does Peter have such an amazing following? Can he really teach so many people to be better traders? Let me put it this way, a following of this kind does not come from passing on weak, inaccurate information.

So lets have a look at the widely respected online Forex Mentor course that Peter runs. After all, whilst live seminars are great for meeting new people and learning together, nothing beats the convenience and ease of being taught from home.

Firstly I must comment on just how in-depth Peters course is. Many training courses will only give you a set amount of information and leave you to it. Forex Mentor not only provides you with hours and hours of DVD quality footage but you also get access to new lessons, trading reviews, and pivot analysis on a daily basis as part of your membership. This is on top of the massive 20+ hours of video tuition!

This is absolutely crucial since learning is an ongoing thing - you can never know too much about foreign exchange trading! The benefit you will get from this constant stream of educational material is that you will always be ahead of the game and you will never need to buy another Forex training course ever again, saving you both time and money whilst also making you a far more profitable Forex trader than you ever imagined.

Lets summarize exactly what you will get when you join Forex Mentor:

* 250 Page Interactive Forex Technical Manual
* 20+ Interactive Video Tutorials
* 100 Page Forex Core Principles Manual
* 2 Exclusive DVDs Containing Over 3 Hours of Live Instruction
* 6 Months Unlimited Access to Peters VIP Members Area
* 3 Amazing Bonuses Worth Over $450!
* 30 Day Money Back Guarantee

This is the kind of offer that you almost feel bad accepting, you are getting an incredible amount of information for your money. When you think that the knowledge you will gain can help you become a massively profitable trader, you know that you will recoup the cost of the course many times over in a matter of months.

It is this massive earning potential that makes this course a no-brainer for anyone serious about making money from online Forex trading. It will give you confidence to take on those trades that you have always shied away from and then realized you made a big mistake and missed out on a massive profit opportunity.

Ok so, you know you are getting amazing value for money and more knowledge than many people who have been trading for years but what about the actual quality and ease of use?

Forex Mentor can make you far more money then you ever thought possible!

What you will learn from this video forex course:

* Why the Forex is the perfect trading market
* How to implement the Pivot system used by floor traders
* How to gauge price action with powerful filters
* Learn how the Euro puts $700 on the table daily
* How to use MACD to confirm price action
* How to use the system to trade with up to 70% accuracy
* How to use futures data to predict Forex trends
* How to hedge your trade
* How to recognize "iron-clad" signals and profit big time!
* How to avoid the pitfalls of "dumb money"
* How to implement stop loss strategies to protect your money
* How to use winning chart patterns in conjunction with pivots.
* Supports and Resistances: how to trade them in the Forex
* How to follow daily steps for success
* How to recognize false buy/sell signals
* You will gain a trading edge!

Forex Mentor course can change your life and when you think Peter is only charging $495 for a course that is better than most courses costing $2,000+ (trust us, we found out the hard way!) this is an amazing opportunity that cannot be turned down unless you are happy to carry on making minimal profit from online Forex.

Remember every Forex Mentor purchase is covered by a 30 day money back guarantee so you can buy with no risk.

I am not sure how much longer Peter will carry on accepting new members on to his Forex Mentor course, I know that most courses like this only accept a certain number of members before closing the doors to the general public.

This is simply because most genius traders do not want to let too many in on their trading secrets otherwise they have less time to actually trade as they get bogged down with too much paperwork.

Therefore my advice to you is that if you really are serious about making a living from trading Forex then you must act today and join Forex Mentor while you still have the chance. You can make the cost of the course back extremely quickly and so you should view this as a free education in becoming a professional currency trader.

Click here to sign up to Forex Mentor today before it's too late!

Small Consecutive Profitable Transactions Add Up To A Huge Profit

2009-10-15T03:03:00.000-07:00

You should remember this article whenever you trade forex. Trading is not (and will never be) about making a lot of money in a short period of time. It takes time for an account to grow.

Most traders starting out have this notion that Forex trading is about making money quickly. WRONG! And trust me on this, either understand that concept well or don't trade at all.

Many people are impatient - they want to see great results and fast. Well, you have the casino for that... no need to waste your time in the Forex market.

Do you know what the traders BIGGEST enemy is?
The anser is: GREED

I learned that the hard way (as probably 1000's of other traders have). Don't be greedy. Be smarter than 99% of those out there. Don't go over the top. Trade a good system, place small bets and be PATIENT. It will pay off.

Learn to control your greed - it is one of THE most important characteristics for achieving huge wealth. Take controlled risks, never let your greed take over your decision process.

You must understand that every Forex Trader has bad times and good times. Be ready to treat the bad times just as you would treat the good times.

A losing trade will happen at some point in time. Be it tomorrow, next week, next month, next year or 8 years from now. It doesn't matter, it will come.

Your job as a trader is to treat that loss with the same respect you treated the winners. Your job as a trader is to be able to manage your money properly so that when that inevitable loss does come, you will stay in the game and recuperate... not jump around to find another “solution” so to speak.

And talking about money management: If There Exists One Holy Grail In Trading, It Is
Money Management.

No matter how you look at it, from whichever angle, with whichever glasses... the KEY to long term wealth building is incorporating correct money management rules into your trading.

The markets are unpredictable, that’s a fact. We can never ever know what will happen tomorrow. We can only know what has happened in the past and base our future decisions accordingly. But that is in no way foolproof - I probably don't even have to mention it but I did just in case this is a new concept to you.

The bottom line in trading is to be able to grow your account, little by little, but constantly. Yes, you will get losers on the way at some point, but if the trading strategy you are using is accurate enough, those losers will be recovered.

IvyBot

2009-09-16T07:15:00.000-07:00

Today I will recommend you a much awaited forex robot: IvyBot. It was released in the market on 28th July, 2009. Until now, this automated forex trading software was only available to selected few and now after doing all the tests the IvyBot is the best FX robot. Now, regular traders like you and me are able to buy ivybot online.

In this IvyBot review we will look into the key features of this forex trading robot and find out if it really works or is it just another scam. So what is special about this currency trading software in comparison with other forex Expert Advisors? One of the key features of IvyBot is that it has four different robots for four different currency pairs. This is not available in any other trading robots. Most of the auto trading software are primarily created for EUR/USD pair and though they can be used for trading other currency pairs the results might not be good. Ivy Bot eliminates this problem by developing separate forex robots for specifically for each forex currency pair.

Based on Ivybot results achieved by testers and their feedback, Ivy Bot seems to be performing exceptionally well. Also Ivybot is the only automated forex system which offers 4 custom made forex bots specifically made for each currency pair and they offer free upgrade for life time. Ivy Bot was developed by a Team of 5 professionals led by Byron. Other members of the Ivybot team are John & Todd, who are considered as mathematics geniuses and Sam and Max; two brilliant software programmers who created this complex software for MT4 platform.

Ivybot is an automated currency trading robot which is aimed at hands off trading. You install the robot and let the Ivybot software to do all the trading for you.
Following are the main features of Ivy Bot Robot.

Automated Trading Robot - Completely Hands free
Profitable trading system
Automated Risk Scaling
Active Trading
High Spread Protection System
Easy Installation. Ivy Bot is very easy to install.
Trades multiple currencies
Four unique trading robots for 4 currency pairs.
Ivybot got Build in Loss Prevention
Extremely low Drawdown
Profits with real money.

Ivy Bot Package includes:
4 Ivybot Forex Robots for four currency pairs
25 Page Installation guide with detailed instructions.
3 step by step Ivbot Installation Videos
Free Scalper settings for Ivybot robots. Ivy Bot offers high accuracy scalping system.
Life time Free updates.

Download IvyBot and get the following Bonus

You will get the following Ivy Bot bonus products if you buy Ivybot now.

Market Watch custom indicator. (Exclusive product worth $500)
Session Profile forex indicator
$500 credit trading bonus in your account

Know Yourself, Know Your Trade

2009-08-19T13:45:00.001-07:00

In trading, knowing yourself is more important than any particular trading strategy that you may choose. Your personality needs to be in sync with your methodology, otherwise you will not be able to follow the rules of the setup. Knowing your strengths as well as your limitations is rule one of becoming a successful trader. As Rob Booker points out in an interview:

I am a 50- to 100-pip-a-week trader. Meaning I have pretty much decided that that’s about the limits of my human capacity and over 50 to 100, I start getting a little bit crazy. I become a little bit less disciplined and a little bit more euphoric to put it mildly. So, I have not generally done a lot to increase that pip target over time, even though systems that I build might produce bigger gains.

If you have a short attention span and seek instant gratification, long-term swing trading strategies will not work well for you, no matter how robust they may be because you will not have the patience to successfully see them through. Conversely, forcing oneself to become a scalper is sheer suicide for a trader who may be much more analytically, rather than instinctually, inclined.

Therefore, it is imperative that you know what type of trader you are and trade within your comfort zone. There are many ways to succeed in trading but they must be aligned with your personality.

Note: This article was sent by Forex Blog for publishing.

The GOAL and MISSION of a Forex Trader

2009-06-23T23:40:00.000-07:00

In order to become a successful forex trader you must understand your goal in foreign exchange trading. It is the mission of the trader to become a financially successful long-term trader. This
can be achieved when the trader adopts and accepts the rules of Successful Trading. The
trader must commit to live by the three disciplines that create the successful trader.

The trader must believe in The 10 Keys to Successful Trading and merge them into
his personality. His success is dependent on creating a trading plan, and maintaining the
discipline to TRADE THE PLAN!
The trader must commit himself to continued education and learn as much as he can
about technical analysis and the psychology of successful trading. He must use logic, and
not his emotions, in trading. The trader must learn to trade in control, not out of control!
The trader must map out a sound plan of equity management to insure a return on
his investment. A successful plan is to trade no more than 20% of a margin account and
risk no more than 5 to 10% of that account on any single trade.

Levels Of A Trader

LEVEL ONE: Beginner Trader - To study and paper trade for a minimum of one month with imaginary money, gaining the experience required to establish a track record of
profitable performance.
LEVEL TWO: Advanced Beginner - To trade one or two lots with real money, working
through emotions and establishing a track record of making money.
LEVEL THREE: Competent Trader - To trade in control with equity management,
achieving a financial return.
LEVEL FOUR: Proficient Trader - To trade based on my belief, education, and
experience and achieves a financial return.
LEVEL FIVE: Expert Trader - To mechanically execute profitable trades with no emotion.

If you are new in Forex Trading I recommend you an interesting article called: Foreign Exchange Trading.

I also found a FREE Forex Book and you can download it here. Now, this is just a short guide, if you want a more professional guide with forex videos included then I recommend you Fast Forex Cash.

Don't forget to come back on this blog to see new interesting articles about forex trading.

About Foreign Exchange Technical Analysis

2009-06-02T03:41:00.001-07:00

I will try to give you some interesting information about the Technical Analysis used in Foreign Exchange Trading.

First of all, this technique is about the price movements and finding the prevailing trend will help you become aware of the overall market direction and offer you better visibility, especially when shorter-term movements tend to give you wrong information about how market will evolve.

Technical analysis is being used for the prediction of market movements (meaning alterations in currencies prices, volumes and open interests) outgoing from the information obtained for the past and the main instruments of the technical analysis are different kinds of charts, which represent currencies price change during a certain time preceding exchange deals, as well as technical indicators.

Weekly and monthly charts are most ideally suited for identifying that longer-term trend. Once you have found the overall trend, you could select the trend of the time horizon in which you wish to trade. Thus, you could effectively buy on the dips during rising trends, and sell the rallies during downward trends.

Probably the most successful and most utilized means of making decisions and analyzing ForEx and commodities markets is Technical Analysis.

The difference between ForEx technical and ForEx fundamental analyses is that ForEx technical analysis ignores fundamental factors and is applied only to the price action of the market. In that fundamental data can often only provide a long-term forecast of exchange rate movements, ForEx technical analysis has become the primary tool to successfully analyze and trade shorter-term price movements, as well as to set profit targets and stop loss.

The latter are being obtained as a result of the mathematical processing of averaged and other characteristics of price movements.

The instruments of the technical analysis are universal and applicable to any ForEx sector, any currency and any time span.

Technical analysis is easy to compute what is important while the technical services are becoming increasingly sophisticated and reasonably priced. They are available to all the ForEx Traders independent on their trade plans, strategies applied and the time of position continuance.
Under contemporary conditions it is executed by means of computers, which is important to account that means of the electronic support become more and more sophisticated.

ForEx technical analysis primarily consists of a variety of ForEx technical studies, each of which can be interpreted to predict market direction or to generate buy and sell signals.

FOREX OR FUTURES - WHICH IS RIGHT FOR YOU?

2009-05-30T08:01:00.000-07:00

The Foreign Exchange (FX) is one of the fastest-growing investment arenas today. Large institutional investors and hedge funds are big players in the forex market; and in the past three years, the Foreign Exchange market had an estimated 50 percent increase in volume. Some had credited this increase to the large activity created by the online currency trading for the retail
investor. The forex market is an over-the-counter market, which means that there is no main exchange or clearinghouse. This is contrary to the futures markets which offer futures trading in “open outcry” and electronic access; which is transparent pricing through a trading platform.

Trading the forex offers leverage, leverage that the individual controls. Through the use of margin, an individual investor has the choice to increase or decrease leverage through various means. Most currency firms offer 100 times leverage on a regular size account; compare this leverage to the leverage offered to the average equity investor, and you can see why many traders are more attracted to trading the forex. As mentioned previously, leverage in the forex market can also be customized to the individual trader, which means that a trader can choose to lower or eliminate leverage while trading foreign currencies.

Money Management

2009-05-24T10:36:00.000-07:00

In a sense, every successful trader employs money management principles in the course of forex trading, even if only unconsciously.

The goal of this article is to facilitate a more conscious and rigorous adoption of these principles in everyday trading.

For many forex traders, the forex market is a game of balancing fear, greed and hope. When a trader is out of balance, he likely will lose money, and if he is out of control, he will lose balance. Well-designed money management concepts can help to keep the trader in control at all times.

Trading FOREX involves three interrelated, yet somewhat separate operations:

1. Analysis of when and at what price level a market will top and bottom.
2. Market Entry and Exit – the actual buying and selling (or trading) once the decision has been made.
3. Money Management, perhaps most aptly called the art of survival.

Most forex traders spend 99% of their time on analysis and the buying and selling of currency pairs. Many of these traders ultimately join the legions of ex-forex traders because they ignored the most important aspect of speculation – money management.

You can be a good analyst and lose money trading due to poor money management. But, if you have sound, market-proven money management concepts, and the discipline to follow them, you will never lose all of your money.

There is no guarantee that you will make money using these money management rules, but you will never lose the farm.

Before entering the market, determine a stop/loss as a profit objective Many traders often enter the market with a price objective, but without a clearly defined protective stop. When the market moves against them they are often forced out of the size of their margin call. They lose control, and the results are often disastrous. What should have been a relatively small loss becomes an extremely large loss.

With a pre-determined price objective and a pre-determined stop/loss, you know where you will get out if you are wrong and where you will get out if you are right. You have control.

The stop/loss must be in the market, not in your mind.

If you have been stopped out only to have the market make the move without you, the problem was how you determined where to place your stop, not whether to use stops.

Never risk more than 10% of equity on any single trade. If possible, risk 5% or less. Never risk more than 20% in any one complex.

If you are like most traders, you always figure how much you could make. The question of how much you could lose if you are wrong is never quantified.

You are out of control.

The most important question in trading leveraged markets is – How much of your equity is at risk? On any given day, for any given trade you must know how much you will lose if the market goes against you. You can maintain control by never risking more than 10% in any one trade, and by adjusting stops so you are never risking more than a maximum of 20% of open equity at any time.

Forex Yard

2009-05-15T11:30:00.000-07:00

The Forex Yard is a great platform to start with investment for a beginner or an expert. The minimum deposit for Forex yard is as low as $100; the pip spread value is as low as 4-5. Forex Yard is a reliable and competitive agent that does provide with user friendly trading software that can be exclusively used for Forex.

Forex Yard provides with a reasonably good leverage, low pip spreads, explicit client support, and user friendly software. The highlight of Forex Yard is the loss protection feature.
With regards to the account package Forex Yard does offer need appropriate solutions:
They offer a free practice account for the beginner. Regular $100 investors will benefit from the mini account. Experienced investors that are working with Forex Yard with receive a pro account package. The deposit options for Forex Yard is pretty liberal in that you can invest even with your credit card or online Paypal account. In addition to all this, the investor gets a guaranteed fixed spread, which makes the deal pretty much reliable.

The flexibility in deposits, the account packages, and the guaranteed spread limits offered to the investors is the major reason for the current growth of Forex Yard. The most attractive marketing strategy of Forex Yard is that they also operate on a negative balance security.

In cases where you are going to have your funds run to a bare minimum, then all your investments and trades will be closed mechanically. This option limits your risk process by not letting you to risk more than the balance you have in your account. Even if you lose, you will be losing within your existing balance limit and not beyond. Forex Yard review given by the existing users has marked it as one of their best Forex agents. Most of the Forex Yard Review highlights the point that the pips and spreads are pretty competitive and the 200:1 leverage is also pretty generous.

Top rated Forex Yard review from most users has the recommendation for fresh investors to sign up for the demo account and work with it until they are comfortable with the process. The next famous Forex Yard review from most users has the opinion that the users should subscribe to the news reviews and signal information and get used to making their decisions based on it and then slowly they have to graduate to pro accounts, because demo account is not the place where one can make money.

Our Forex Yard Findings:
The first thing that we discovered about this platform is the fact that it is not only user friendly for those who are just starting out trading in Forex, it is also excellent for those who are already doing it and have been doing so for quite some time.

As a matter of fact, it had all the tutorials that were needed in order for us to walk step-by-step through the entire process of trading and in our independent testing, we were able to do so successfully.

It is also a platform that will grow with you nicely, especially considering the fact that it has some advanced tools that will keep you working, long after you have left the beginner stage.

Getting Started with Forex Yard

Getting started with Forex Yard is also an easy thing, especially with the number of different ways that you have of making your initial deposit. Not only that, the initial deposit requirement is rather small and you can start out with a test account in order to make sure that everything is working well for you. This is one of the criteria that we always look for whenever we are testing out a new platform, the fact that it allows a person to test whether they are going to be successful with it or not. It’s a good idea for you to make sure these things before you put your hard-earned money on the line.
For those of you that are impatient and would like to get started right away, you can begin trading immediately upon making your deposit. Of course, if you use a bank check you’re going to need to wait for the check to clear but as long as you are using a credit card to fund your account, those funds will be immediately available. Since they also have a bank wire option available, many people find it convenient to use this in order to fund their account on a regular basis.

Forex Yard - Excellent Customer Service

One of our favorite things about our account at Forex Yard is the fact that the customer service really seems to be on the ball. Since trading in Forex is a 24 hour a day possibility, you don’t want to be left out in the middle of the night because of limited support hours.

They are available via e-mail, online chat and you can even pick up the phone and talk to somebody if necessary.

Whenever you are making your choice for which platform you are going to use to trade on the Forex market, we suggest you take a long, hard look at Forex Yard.
They are one of our platforms of choice and one of the highest rated platforms
on our website.

FREE Money Maker

2008-08-28T13:19:00.000-07:00

You can make a lot of money online from affiliate marketing and I recommend you FREE Money Maker for learning all the inside secrets.First you must know that FREE Money Maker advertising methods has nothing to do with any of the following:- Co-Registration- Blackhat seo- Banners- FFAs- Email Marketing- Cloaking- Pay Per Click- Any Type Of Page Generation Software- MLM- Safelists- Traffic Exchanges- writing articles- press releases- reciprocal linking- creating blogs GET Your FREE Money maker

Forex Training Videos

2007-11-04T02:54:00.001-08:00

“Discover That With Just 3 Hours Per Day You Can Learn How To Suck Out Money From The Forex Market Like A Vaccum Cleaner On Steroids With These Forex Training Videos, Ongoing Email Support & Daily Pro Analysts FX Strategies…Then You Can Go Out And Play A Round Of Golf Or Do Whatever You Love Doing Knowing You’ve Banked Money….”
Completing a few hours of the following intensive online home study course in forex training will take you from where you are at now to being a well-trained, motivated intraday forex trader with the skills to make on average days a conservative target of 20 points (or $200) . This can increase over time depending on the size of your deposit and shouldn’t take more than 3 hours in front of your charts.
The following testimonials are authentic and written by genuine people who once were lost but found this strategy. Some of them now have the potential to make any financial dream they have a reality in as short a time as they’d like.
Here is an email from FastTrackForex member, Cliff Bennett:“Hi,
I would like to thank you for all your help. I can say that since I have been trading and learning the forex market, which has been 6 months now. I am more then pleased with your service and program.
I will repeat it again, for the money this program is second to none and I have tried at least a half of dozen, which only give you one program and one way to trade.
Today alone in a choppy market I have made 33 pips on the gbp/usd using one of your indicators, ok well make that 43. I just closed out another trade at 10 pips.
Not only do you build your account but you build confidence in yourself and the program to later capture those 50 to 100 pip moves. Once again if you are new to forex or not this program is worth the time, effort and investment……… Sam is a great mentor.”
Cliff Bennett, CA, USA.
All members of this program receive email support whereby you may ask any question and expect a reply within 48 hours. Here is a summary of what you receive as a member of this program, the fees for which are taken on a quarterly basis.
Click Here For Video
As a VIP member, you will be able to view background videos educating you about forex so that you understand who is in the market, what your role is in the market and how to make money using online forex trading software and a deposit with our recommended brokering firm.
You will get full support in funding your account for the first time, but more importantly, in month one before you go live, you will learn to trade profitably using our sought after strategies that would cost you thousands of dollars in seminar fees just to get started - and that’s not to mention hidden costs such as hiring out the strategy and software.
In summary:
There are no hidden costs with this program.
You get our “Crown & Glory” forex trading strategy which you can use to trade. We help you get fully setup and ready to trade live.
Each day, new bank-quality analytics are uploaded and you can glean ideas to combine with your on-chart strategy.
You also receive unlimited email support and coaching as mentioned above.
In addition, we will give you further strategies to hone your skills, full charting package and setup, including how to recognise signals & utilise powerful indicators.
To join this membership and start trading like a professional, click below. You will be glad you did, so go ahead and click the secure order link below.
Here is a real testimonial from genuine FastTrackForex member, Caroline Leo:“Hi,
The last 2 months on your coaching program has indeed been an eye-opener for me, a totally newbie.
Certainly very impressed with the amount of support given such as news times, one to one emails etc
Before I could even fully digest all the 12 training videos compiled, there is yet another exciting strategy for me to use ie the “CROWN & GLORY” and the latest one “One Chart Wonder” (which u even provide handouts) and even more new videos added.
This coaching program has certainly provided me with more than enough info to work on my trades, the daily instigations are also getting more detailed and informative.
I really appreciate on you getting back so quickly to my every email.
I believe I cant get any more value than this program should I search else where.
Caroline Leo, Singapore
Click here to view more testimonials
Membership: $1800
One time payment, you will not be rebilled.
Disclaimer. I can’t promise you will make anything with Forex trading. In fact, you could lose everything you invest. That’s the way Forex and many other kinds of investments work. I can say that if you don’t buy this course and put it into action, that you won’t earn a dime from Forex. That’s a fact!

Forex Training

2007-10-14T19:00:00.001-07:00

"Discover That With Just 3 Hours Per Day You Can Learn How To Suck Out Money From The Forex Market Like A Vaccum Cleaner On Steroids With These Forex Training Videos, Ongoing Email Support & Daily Pro Analysts FX Strategies...Then You Can Go Out And Play A Round Of Golf Or Do Whatever You Love Doing Knowing You've Banked Money...."

Completing a few hours of the following intensive online home study course in forex training will take you from where you are at now to being a well-trained, motivated intraday forex trader with the skills to make on average days a conservative target of 20 points (or $200) . This can increase over time depending on the size of your deposit and shouldn't take more than 3 hours in front of your charts.

The following testimonials are authentic and written by genuine people who once were lost but found this strategy. Some of them now have the potential to make any financial dream they have a reality in as short a time as they'd like.

Click Here to read more about how can you make money with ForEx.

Basic Concepts of Forex

2007-10-05T13:09:00.000-07:00

How is foreign exchange traded?

Currencies are quoted in pairs, such as EUR/USD or USD/JPY. The first listed currency is known as the base currency, while the second currency is called the counter or quote currency. The base currency is the "basis" for the Ask or the Bid. For example, if you Ask EUR/USD you have bought Euros (and simultaneously sold dollars). You would do so in expectation that the Euro will appreciate (go up) relative to the US dollar. FX is traded in lots, which represent 100,000 units of the base currency. If the EUR/USD is quoted at 1.2253, that means that one Euro is currently worth just over $1.22. If the market moves from 1.2253 up to 1.2254 that represents a move of one pip. A pip is the smallest increment a currency pair can move and in the case of the EUR/USD currency pair a pip is worth $10 in a 100K account and is $1 in a mini account.

An FX Trade Example

If you think that the Euro will rise relative to the U.S. Dollar you would Ask one lot of the EUR/USD currency pair.

The EUR/USD is trading at 1.2553 when you Ask it.

The EUR/USD is trading at 1.2674 when you Bid it.

You bought at 1.2553 and sold at 1.2674 for a profit of .0121 or 121 pips.

Each pip is worth $10 in the 100K account.

121 pips x $10 = $1,210 profit

In FX, you also have the opportunity to short (Bid first) a currency pair if you think it will fall in price.

If you think that the Euro will fall relative to the U.S. Dollar you would Bid one lot of the EUR/USD currency pair.

The EUR/USD is trading at 1.2659 when you Bid it.

The EUR/USD is trading at 1.2523 when you Ask it.

You bought at 1.2523 and sold at 1.2659 for a profit of .0136 or 136 pips.

Each pip is worth $10 in a 100K account.

136 pips x $10 = $1,360 profit

While these are profitable examples, remember that ending up on the wrong side of a trade can cost you a lot of money.

Currency Pairs

What is the significance of currency pairs?

A currency pair represents the exchange rate between the two currencies. For example, the rate at which the EUR/USD is trading that represents the number of US Dollars one Euro can purchase. The first currency is called the base currency and the second currency is called the counter currency.

An example of how currency pairs trade is if a trader believes the Bank of Japan will intervene to cause a decrease in the Yen against the US Dollar, then the trader would Ask USD/JPY (Ask the US Dollar/Bid the Yen). However, if the trader believes that Japanese investors are losing faith in the United States' economy and are pulling money out of the US into Japan, then the trader would Bid USD/JPY (Bid the US Dollar/Ask the Yen).

This is an example of how currency pairs are listed on trading stations.

The currency pairs are listed on the left side of the column. The Bid price is the level at which a trader can Bid the currency pair and the Ask price is the level at which a trader can Ask the currency pair.

The Concept of Leverage –

What is leverage?

Leverage allows traders to borrow money and use that money to invest in the foreign exchange market. Because of leverage, clients without a huge amount of capital are able to make large investments, whereas in other markets such as the equities market, clients would have to pay 50% of the full amount for each share of stock they were investing in. Most market makers allow positions to be leveraged up to 100:1. This means that if a trader wanted to Ask a “lot” worth $100,000, with 100:1 leverage the trader only has to put up $1,000.

Leverage is about risk. Increasing your leverage increases both your opportunity to take bigger profits AND rack up bigger losses.

It's easy to see in this graph that the amount of margin required in taking positions in the currencies market is much less than in the equities and futures markets.

What is margin?

Margin is a performance bond, or good faith deposit, to ensure against trading losses. The margin requirement allows traders to hold a position much larger than the account value.
In the event that funds in the account fall below margin requirements, your broker will close some or all open positions. This prevents clients' accounts from falling into a negative balance, even in a highly volatile, fast moving market.

For example, let's say you have an account with $10,000. That means you have $10,000 of usable margin. If you use $7,000 to Ask 7 lots of USD/JPY, you now have $3,000 of usable margin left, meaning that you are allowed to lose $3,000 before you are under the margin requirement. The account equity remains at $10,000 until you begin to make or lose money on the position. Now, if the USD/JPY decreases to the point that you end up losing the $3,000 which is left in your account, then the broker will close all of your positions to ensure that you do not lose more than you have in your account.

How are leverage and margin related?

Leverage and margin are related in the way mentioned above – the amount of leverage a market maker gives to a client defines the amount of margin that the client will have to commit in order to take a position in the market. For example, when leverage is 100:1, the “1” in the leverage ratio signifies the amount of capital the customer has invested of his own money, which is also known as the margin.

Trading Costs

How much does it cost for a trader to make a trade?

Traders do not take positions on a currency pair at the exact rate at which the currencies are trading. Instead, there are two rates for the currency pair: the bid rate and the ask rate.

• The bid rate is the price at which traders can Bid the pair.

• The ask rate is the price at which traders can Ask the pair.

This is an example of a currency pair. The ask (Ask) rate is higher than the bid (Bid) rate and the spread is 3 pips, meaning that if a trader Asks this pair, then the Bid rate of this pair will have to go up 3 pips in order for the trader to break even.

The ask rate will always be higher than the bid rate. The difference between the bid rate and the ask rate is the spread. The spread is an automatic cost that the trader incurs when making the trade. Because of this spread, traders will take a position they started with a small loss and will need to gain some profit in order to break even.

For example, if a trader Asks into a position at the ask rate, and then immediately closes the position at the bid rate, the trader will incur a cost equal to the spread.
These spreads are seen in every kind of market. However, because of the broker-based system in the equities and futures market, it can sometimes be difficult to identify where and how much the spread cost is.

Fundamental Analysis

What influences prices in the forex market?

Prices in the currencies market are affected by macroeconomic factors, such as inflation, unemployment, and industrial production. Information on events such as these is easy to find and are based on their analysis of economic data, which traders take positions on the market to make profit.

There are three main macroeconomic factors a trader should focus on when analyzing foreign exchange rates:

Interest Rates: Each currency has an overnight lending rate attached to which is determined by that country’s central bank. Lower interest rates usually lead to depreciation in the value of the country's currency.

This is largely due to traders who execute carry-trades. A carry-trade is a trade where a currency with a low interest rate is sold and a currency with a high interest is bought. This is based on the idea that currencies with higher interest rates will generally rise in value, and will rollover and allow trades to earn interest on a daily basis.

Employment: The unemployment rate is a key indicator of its economic strength. If a country has a high unemployment rate, it means its economy is not strong enough to provide people with jobs, and thus, leads to a decline in the currency value.

Geopolitical Events: Key international political events that affect not only the foreign exchange market, but all other markets as well.

Fundamental Analysis Techniques

How does fundamental analysis explain long term trends?

Fundamental analysis is very useful for determining long-term trends within a currency pair. By focusing on long term economic factors that affect countries, fundamental analysis predicts long term trends.

Currency Pair Relations

EUR/USD

When the dollar weakens the EUR/USD will rise and if the USD recovers then a strong foreign demand will send EUR/USD lower If you think the U.S. economy will become weaker and hurt the US Dollar, you can ASK, which means that you are Asking Euros and expecting them to go up against the US Dollar.If you think that there will be increased foreign demand for US financial instruments such as equities and treasuries, and that benefit the US Dollar, click on BID, which means that you are Asking U.S. Dollars, expecting them to climb in value against the Euro.

USD/JPY
Japanese government intervention to weaken their currency sends USD/JPY higher and gains in Nikkei and demand for Japanese assets drive USD/JPY down. For example, you think that the Japanese government will continue to weaken the yen in order to help its export industry, you would click on ASK, expecting the U.S. dollar to increase in value against the yen. If you think that Japanese investors are pulling money out of U.S. financial markets and repatriating funds back into the Japanese asset markets, such as the Nikkei, you would click on BID. This means that you expect the Yen to strengthen against the U.S. Dollar as Japanese investors Bid their assets and convert their Dollars back into Yen.

GBP/USD
High Yield and attractive growth in the UK drives GBP/USD higher speculation about UK adopting the euro will send the GBP/USD lower. For example, you think the British economy will continue to benefit from its high yield and attractive growth, thus buoying the Pound, you would click ASK, which means that you expect the British Pound to strengthen against the U.S. Dollar. If you believe the British are about to commit themselves to adopting the Euro, you would click BID, expecting the Pound to weaken against the Dollar as the British devalue their currency in anticipation of merging with the euro.

USD/CHF
Global stability and global recovery will send USD/CHF higher USD/CHF rallies on geopolitical instability. For example, you think that the market is headed towards a period of global stability and economic recovery, meaning that investors no longer need to park their money in the safe haven currency such as the Swiss Franc, you would click ASK, expecting the U.S. Dollar to strengthen against the Swiss Franc. If you believe that due to instability in the Middle East and in U.S. financial markets, the dollar will continue to weaken, you would click BID, expecting the Swiss Franc to strengthen against the dollar.

EUR/CHF
Swiss government uses verbal intervention to weaken the Franc, sending EUR/CHF higher. For example if inflation took off in Germany and France it could drive EUR/CHF lower.
Thus for example if you think the Swiss government wishes to devalue the currency to help exports in Europe, you would click ASK, expecting the Euro to increase in value against the Swiss Franc. If inflation started taking off in Germany and France, you would click BID expecting the Swiss Franc to increase in value against a devalued Euro.

AUD/USD
Rising commodity prices sends AUD/USD higher Droughts hurt Australian economy and AUD/USD. For example, you think that commodity prices are going to rise dramatically, thus benefiting the Australian Dollar, you would click ASK, expecting the Aussie to strengthen against the U.S. Dollar due to Australia's status as one of the world's leading commodity exporters. If you believe that Australia will face another drought, hurting the domestic economy, you would click BID, expecting the U.S. Dollar to strengthen against the Australian Dollar.

USD/CAD
Canadian economic underperformance against US sends USD/CAD higher

Higher interest rates and rebounding labor market in Canada will help to drive USD/CAD lower

If, for example, you think that the U.S. economy is going to rebound while the Canadian economy goes into recession, you would click ASK, expecting the U.S. Dollar to strengthen against the Canadian Dollar. If you believe that the higher yields and rebounding labor market in Canada warrants a higher valuation for the Canadian Dollar against the U.S. dollar, you would click BID, expecting the Canadian Dollar to decline against the U.S. dollar.

NZD/USD
Bad weather in US increases demand for foreign wheat sending NZD/USD higher

New Zealand Interest rates expected to decrease sending NZD/USD lower

If, for example, you think that Hurricane damage in the US will lead to an increase for wheat imports from foreign nations such as New Zealand, you would click ASK, expecting the New Zealand Dollar to strengthen in value against the U.S. dollar. If you felt that interest rates in New Zealand would fall in the future while interest rates in the US will continue to rise, you would click BID expecting the New Zealand to drop in value against the U.S. Dollar.

Technical Analysis

What is so great about technical analysis?

Once a trader masters technical analysis, it is easy to apply it to any currency or time frame, and thus allowing a relatively short time to figure out where trends are going. Because of the short time, technicians can follow numerous currencies at the same time, whereas fundamentalists usually focus on one or two pairs of currencies, because there is so much information in the market to analyze.

Traders using fundamental analysis can run into trouble because there are so many different ways to analyze market information. This causes controversy and can lead to misdirection, misunderstanding and ultimately, loss of money. On the other hand, technical analysis can be much more straightforward. Many traders even consider it to be a self-fulfilling prophecy, meaning that it works well because so many traders use it. This is an important aspect of technical analysis because if many traders are basing their decisions on technical indicators, then the indicators must be watched since they reflect the sentiment of the market and the majority of the traders.

Why is the foreign exchange market the best market to use technical analysis?

The foundation behind using technical analysis is to find trends when they first develop, which allows the trader to ride the trend until it ends. The foreign exchange market is typically composed of trends and is, therefore, a place where technical analysis can be effective. Traders are able to speculate on both up and down trends in the foreign exchange market because it is possible to Ask a currency and Bid against another currency. This aspect of currency trading works well with technical analysis, because technical analysis helps determine where the trends are and which way they are going, thus giving the trader a chance of profiting from the market, regardless of its direction.

In comparison to the equities and futures markets, technical analysis is much more common and popular within the foreign exchange markets, which causes the traders to pay attention. The market partly moves because of all the technical analysis performed. For example, according to technical analysis, if a currency pair decrease, then the majority of traders will Bid the pair, causing it to drop further.

Support and Resistance

At the core of all technical analysis theory are two very simple concepts: support and resistance. Support can be defined as a “floor” through which the currency pair has trouble falling below. There is no scientific formula for calculating support; it is something that is typically “eyeballed” by traders, and hence involves somewhat of a subjective element.

Resistance, on the other hand, is simply the opposite: it is the upper boundary through which a currency pair has trouble breaking. Similar to support, resistance levels are somewhat subjective. Generally, if the market reaches a certain number of times and cannot sustain a break above that level; it can be identified as resistance.
The reason why price has trouble breaking these levels is the presence of actual orders around these levels. A support level is simply a price area where Ask orders tend to be, and so it takes more than normal Biding pressure to break that level. Similarly, a resistance level is a price area where Bid orders tend to be, and so it takes more than normal Asking pressure to break that level.

Support and Resistance in a Range- Trading Markets

One simple way to use support and resistance in trading is to simply trade the range: in other words, traders can simply Ask at support level, and Bid at resistance level. A key advantage of this is that the FX market is range-bound a majority of the time, making it an attractive strategy for many market conditions.

The two disadvantages of range - trading:

Trading in a range generally does not result in substantial gains on a per-trade basis.

When the market breaks out of the range, generally it will make big moves. As a result, traders trading with range strategies can suffer big losses when the market breaks out of the range.

Support and Resistance in Momentum Markets

Another way to use support and resistance is to trade outside of the range; in other words, to anticipate a breakout. This involves placing orders to Ask above resistance and to Bid below support. The rationale is that the market will gain momentum once it breaks out of the range, and thus by placing orders just below or above of support or resistance, traders may be able to profit if the market continues to move out of the range and they are on the right side of the market. Momentum trading is a bit counter-intuitive, as it involves Asking at a higher price and Biding at a lower price.

Oscillators
Oscillators are a class of mechanical trading tools that offer indications of when a currency pair is overbought or oversold. A popular oscillator is the Relative Strength Index.

Relative Strength Index

The relative strength index (RSI) is a momentum indicator that measures a currency pair's strength relative to its won recent past performance. As the indicator is front-weighted (more importance is given to the most recent data), it typically provides a better velocity reading than other oscillators. RSI is less affected by sharp movements, and filters out a lot of "noise" in the Forex market. Many traders also use this indicator as a substitute for volume confirmation, since the over-the-counter structure of the FX market does not allow for real-time volume reporting.

RSI's levels are between 0 and 100. Most traders use 30 as an oversold condition and 70 and as overbought condition, although some traders may use 20 and 80. When choosing the settings for RSI, traders should typically use the default time period of 14, since that is what the market as whole tends to look at.

In general RSI is used in five different ways:

Top and Bottoms - Overbought and Oversold conditions are usually signaled at 30 and 70.

Divergences - When a pair makes new highs (lows) but RSI does not, this usually indicates that a reversal in price is coming.

Support and Resistance - RSI may show levels of support and resistance, sometimes more clearly than the price chart itself

Chart Formations - Patterns such as double tops and head and shoulder may be more visible on RSI rather than on the price charts

Failure Swings - When RSI breaks out (surpasses previous high or low), this may indicate that a breakout in price is coming.

RSI was useful in detecting this USD/JPY short after a crossover of the 70 "overbought" level materialized on the daily. Following the clear Bid signals, the pair moved down 450 pips over the next 30 days.

Risk Management

There are three basic questions that every trader should answer BEFORE entering a trade.

How much do I believe the market will move and where do I want to take my profit?
Limit Orders allow traders to exit the market at profit targets. If you are short (sold) the system will only allow you to place a Limit Order below the current market price because this is the profit zone. Similarly, if you are long (bought) the system will only allow you to place a limit order above the current market price. Limit orders help create a disciplined trading methodology and enables traders to walk away from the computer without constantly monitoring the market.

How much am I willing to lose before I exit the position?

A stop/Loss order allows traders to set an exit point for a losing trade. If you are short a

currency pair the stop loss order should be placed above the current market price. If you are long the currency pair the stop loss order should be placed below the current market price. Stop/Loss orders help traders control risk by capping losses. Stop/Loss orders are counter-intuitive because you do not want them to be hit; however, you will be happy that you placed them! When logic dictates, you can control greed.

Where should I place my stop and limit orders?

As a general rule of thumb traders should set Stop Orders closer to the opening price than limit orders. If this rule is followed, a trader needs to be right less than 50% of the time to be profitable. For example, a trader that uses a 30 pip Stop/Loss and 100 pip limit orders needs only to be right 1/3 of the time to make a profit. Where the trader places the stop and limit it will depend on how risk-adverse he/she is. Stop/Loss orders should not be so tight that normal market volatility knocks the position out. Similarly, Limit Orders should reflect realistic expectation of gains given the markets trading activity and the length of time one wants to hold the position.

Psychology of the Trader

What should the psychology of the trader be?

Before placing trades, traders must sufficiently analyze the position they are about to take. However, many do not thoroughly plan out their actions, and instead make trades based on guesses and hunches. This psychological viewpoint can result in traders losing a
lot of money very fast. How can this be avoided? Through careful planning and analyses, including where to place stop and limit orders, a trader can keep losses to a minimum while allowing profits to run.

Make sure to have a plan that utilizes stop and limit levels before making the trade in order to minimize losses and lock in on profits.

One huge psychological error that many traders make is going against their original plan and either closing positions to take a profit before they reach the profit target or not closing a losing position in the hopes that the market will come back in their favor. Another psychological error traders make is to believe that every trade should be profitable. If there is an instance where a stop is hit and then the market goes back in favor of the position the trader had held, this belief can cause the trader to remove stops from their trades.

What is often forgotten is that stops are there to keep them from losing more money than they would like, not to be some sort of roadblock against profit. It is okay to hit stops and lose the pre-determined amount of money because when a trader is lets profitable trades run, the loss will be made up for and more. Do not try to improvise. Stick with the original plan and precautions made before the trade.

Another psychological error traders make is becoming too committed to a trade and unwilling to let it go. A trader must keep his original analysis in mind when seeing the result of a trade, and be objective about what is happening to his position and what he should do about it. However, many traders attempt to analyze the position differently from the original analysis so that the analysis will favor their original position. They intentionally distort their analysis for one of two reasons: they do not want to close the position with a loss or they are hoping that the position will become more profitable than it already is.

This psychological viewpoint causes many traders to lose the profit that they had made or lose more than they originally would have lost. Just because leverage is provided does not mean it is okay to trade large portions of the account at a time or too frequently. A prevalent mistake made by many traders is overtrading, meaning that they trade much larger amounts of their account than is reasonable or trade too frequently. Although leverage allows traders to trade one lot of currency with only $1,000 as a margin deposit, it does not mean that traders should trade their entire available margin in one or two trades.

The psychological mistake they are making is that they are thinking of their trade as a $1,000 investment, when in actuality it is a $100,000 investment. Although most traders perform adequate analysis of currencies before placing trades, they sometimes use too much of their margin and are later forced to exit the position at the wrong time. A general rule that traders try to follow in order to keep themselves from getting over-leveraged is never using more than 20% of the account at any given time.

About

2007-05-13T14:54:00.000-07:00

This is my first post on this blog and I want to salute you!

Yes, I am a Forex Trader and on my blog you will see some interesting posts about how to trade foreign exchange or reviews about different Forex Brokers, Robots, Expert Advisors.

I will also write about different opportunities to make money online.