Day Trading Indicators and Indicator Trading
Did You Begin Day Trading As An Indicator Only Trader?Did you start day trading after buying a book on technical analysis, and getting a charting program - probably a free one that you found online - in order to save money? While reading your book you learned about trading indicators which could ’predict’ price movement, and what do you know, the ’best’ indicators were actually included in your free charting program - let the games begin.Now that you have all the day trading tools that are necessary, the book for education AND the free charting program with those ’best’ day trading indicators, you now need a day trading plan so you can decide which ones of those ’magic’ day trading indicators you are supposed to use. This really is a great book, besides telling you how to day trade using indicators to ’predict’ price - it also said that you need a trading plan to day trade.So what should this plan be? The book told you about trend following using an indicator called macd, and it also told you how it was possible to pick the top or bottoms using an indicator called stochastic; my guess is that you picked the stochastic indicator to start your day trading - this must be the ’best of the best’ since this indicator was going to ensure you of entering your trades with the ’best’ price. Amazing, simply amazing how easy this day trading stuff really is. In fact, why even bother taking the trades, each time your indicators give a signal - just call up your broker and tell him to stick $100 in your account.My book was Technical Analysis of the Futures Markets. My charting program was TradeStation with an eSignal fm receiver; that was the one that if you hung the antennae wires just right, and you put enough foil on the tips, you might even get quotes. I had sold a business before I started trading so I did have some capital - isn’t that how everyone gets into trading, you either sell a business or you lose your job? My indicator was the macd as I had decided that I was going to be a ’trend follower’ instead of a ’top-bottom picker’. I also decided that I was going to be ’extra’ clever, if one indicator was good than two indicators must be better, so I added a 20 period moving average. My first trade was a winner, then after many months of extensive therapy, I was finally able to forget the next twelve months - ahhh the memories ƒ؛Learning To Day Trading - The Learning ProgressionBeginning to day trade, or learning to day trade, as an indicator trader is very typical. This is also logical when you consider - HOW are you supposed to initially learn how to trade? Trading indicators are available to anyone who has a charting program, and simply using line crosses, or histogram color changes, provide ’easy’ signals to understand. If you will also take the time to learn the arithmetic behind your indicators, as well as learning what each indicator is specifically intended to do, not only is this a logical way to begin, it is also a good ’step’ in your learning progression - understanding the WHAT you are doing, instead of attempting to create ’canned’ indicator only trading systems, without any regard as to WHY you are trading this way.This does become one of the ’sticking’ points in your learning progression, as you come to find out that you are unable to profitably trade indicators as signals only - now what? Now what - you ’can’t’ develop your own indicators, so you start doing google searches for day trading indicators and start buying your ’collection’ - they don’t ’work’ either. Now what - you buy a mechanical trading system - what does hypothetical results may not be indicative of real trading or future results mean? Now what - you start subscribing to signal services OR you start joining the ’latest and greatest’ chat room - am I really the only person using the signals who isn’t profitable?Now what - you never learn how to trade.I began trading as an indicator trader, and I did try to learn everything that I could about the various indicators, as well as trying to combine indicators that were consistent with how I wanted to trade - I just could never develop a mechanical day trading system from what was available to me. I read a couple more books that didn’t really help me, so I then started looking for someone who could teach me. From what I now know about gurus -vs- teachers, I am very lucky that I got involved with a money manager-trader who taught me a tremendous amount, but I still couldn’t get profitable, in part because there was also ’pressure’ to learn how to trade using real money. As well, any discussions or thoughts about trading psychology and the issues involved, especially to beginning traders, was non-existent.Now what - learning but losing - I stopped trading. Learning to trading using real money, and ’scoffing’ at trading psychology as simply individual weakness, really was something that I now regard as misinformation. I always mention this as I now feel that this cost me as much as a year of time, and was very close to costing me my trading future, as stopped trading was VERY close to quitting trading. How can’t trading psychology be real to a beginner, when you consider that you are risking losing money at a very fast pace as a day trader, and when you further consider that you are also doing this when you really don’t know what you are doing - this is NOT by definition being weak. And if trading psychology is real, how are you going to learn to make ’good’ trading habits with real money while you are fighting the implications?Now what - not trading and not ready [quite] to quit - still studying and searching.Probably the single most important ’thing’ that got me to a next step in learning how to trade, was the concept of a trading setup, and that a setup and a signal were not the same. This was extremely meaningful to me, as it also led to an understanding of how to better use trading indicators for the information that they can provide, but not to use them as trading signals - in essence I began learning about trading method where discretion could be consistently applied -vs- trading system that was mechanical and arithmetic rules.Traders who are indicator only traders, are also what I refer to right side only traders, that is they are always looking at the right side of their charts for an indicator signal. BUT what about the left side of the chart, what about price and patterns, what about market conditions - WHAT about the relevant ’things’ that are ’moving’ price, instead of indicators only as an arithmetic derivative of price, and thus, one that is dependant on the time frame that you have chosen to trade from? These ’thoughts’, along with the concept of trade setup, became instrumental in the development of a trading method, and how I came to turning my trading around.When I think about the steps in my learning progression - I would list them as follows:2/95 - 6/96 indicators only teaching service that included signals learning to trading with real money and trading psychology issues stop trading6/96 - 3/97 understanding of trading psychology issues learning about trading setups concept trading method -vs- trading system trade setup - trade trigger are not the same method development understand the importance of the left side of the chart and what is happening ’across’ the chart related trading setups and how/when they triggered indicators + pattern indicators + pattern + price indicators + pattern + price + market conditions3/97 - 11/97 able to paper trade profitably able to real money trade profitably able to trade for a livingIndicator Only Day Trader - Setup Including Indicators Method Day TraderI have attempted to discuss the way I started day trading, and the way I think many-most traders typically begin. Along with this, I have pointed various issues and problems that I had - those regarding how to learn to trade, and then progressing into a profitable trader. My experiences have been both personal, as well as those of many traders that I have worked with over the last 8-9 years through Tactical Trading - that a very large number of these problems are due to day trading only with indicators, the specific indicators used, along with trying to turn these indicators into a mechanical trading system. This is not to say that this can’t be done - I simply couldn’t do it. However, I would strongly suggest that anyone who is in the early stages of day trading, or struggling with their day trading, consider these things that have been discussed.This discussion, along with chart examples of various trading indicators and trade setups, is continued at http://www.tacticaltradingmethod.com/indicator-trading.html Copyright © 2006 Tactical Trading, LLC. All rights reserved.Reproduction in whole or in part without permission is prohibited
Forex Fundamental Analysis
The two primary approaches of analyzing Forex markets are technical analysis and fundamental analysis. Fundamental analysis comprises the examination of economic indicators, asset markets and political considerations when evaluating a nation’s currency in terms of another. The focus of fundamental analysis lies on the economic, social and political forces that drive supply and demand. There is no single set of beliefs that guide forex fundamental analysis, yet most fundamental analysts look at various macroeconomic indicators such as economic growth rates, interest rates, inflation, and unemployment.Here we look at some of the major Forex fundamental factors that play a role in the movement of a currency:Economic IndicatorsEconomic indicators are reports released by the government or a private organization that detail a country’s economic performance. These economic indicators can be released on a weekly basis, but the more common report is monthly. Indicators are based around a number of economical situations, of which the two primary factors are that of International trade and Interest. Subsidiary factors also include Consumer Price Index (CPI), Purchasing Managers Index (PMI), Durable goods orders, retail sales and Producer Price Index (PPI).Currency’s Interest RatesOne of the major indicator factors, Interest rates, are a key economic function of any nation. Generally, when a country raises its interest rates, the country’s currency will strengthen in relation to other currencies as assets are shifted to gain a higher return. Interest rates hikes, however, are usually not good news for stock markets. This is due to the fact that many investors will withdraw money from a country’s stock market when there is a hike of interest rates.International TradeThe trade balance portrays the net difference (over a period of time) between the imports and exports of a nation. A trade deficit can be an economic disaster for a government and a currency. A deficit may appear when a country is importing more than it is exporting, meaning that more money is leaving and less is coming in. In some ways, however, a trade deficit in and of itself is not necessarily a bad thing. A deficit is only negative if the deficit is greater than market expectations and therefore will trigger a negative price movement
Forex Software - Choosing the Best
When it comes to forex trading the forex software you choose is essential. There are so many forex trading companies all competing for your business that choosing the right forex software can be quite a difficult task. Most of the forex software products available offers live online forex trading platforms but what other components are vital when it comes to your forex software.Key Elements For Your Forex SoftwareBefore purchasing any forex software there are a few essential items that should be included. The most important is security and your online forex trading software should include a 128 bit SSL encryption which will prevent hackers from accessing any of your personal details and information such as your account balance, transaction history, etc.Providing the best security for your forex trading will include a company that provides 24 hour technical server support for your forex software, 24 hour maintenance should anything go wrong, daily backups of all information, and a security system that has been designed to prevent any unauthorized access. Along with these security protocols there are also some forex trading companies that use smart cards and fingerprint scanners to ensure that only their employees can have access to their servers.Another important factor when it comes to choosing your forex software is to check what the company’s downtime is like. When it comes to trading forex and particularly your online forex trading you need to ensure that the forex software you choose is reliable and available 24 hours a day. The forex software you choose for your forex trading should also have technical support available at all times should your session be cut short.Ensuring that all the above features are listed in the forex software you choose will help to ensure your forex trading success
When it comes to forex trading the forex software
The difference between forex technical and forex fundamental analysis is that forex technical analysis ignores fundamental factors and is applied only to the price action of the market. 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. The technical analysis works by correlating the results and moves of current markets to create a short-term outlook for currencies. The rolling data that is produced throughout the trading day creates the interest in the markets and informs traders of the strong markets to back.The Trend is Your FriendForex technical analysis is largely based around forex market movement trends, thus creating the widely used phrase ’the trend is your friend’ amongst traders. Buying and selling at the right time is the key in maintaining good levels of profits, following a trend is also about knowing where to entry a trade and more importantly where to exit.Support and ResistanceSupport and resistance is the basic of forex technical analysis. Support and resistance levels are points where a chart experiences recurring upward or downward pressure. A support level is usually the low point in any chart pattern (hourly, weekly or annually), whereas a resistance level is the high or the peak point of the pattern. Buying and selling at the support and resistance points makes a greater profit margin as long as they remain unbroken.History Tends To Repeat ItselfAnother important idea in technical analysis is that history tends to repeat itself, mainly in terms of price movement. The repetitive nature of price movements is attributed to market psychology; in other words, market participants tend to provide a consistent reaction to similar market stimuli over time. Forex technical analysis uses chart patterns to analyze forex market movements and understand trends. Although many of these charts have been used for more than 30 years, they are still believed to be relevant because they illustrate patterns in price movements that often repeat themselves
When it comes to forex trading the forex software
The difference between forex technical and forex fundamental analysis is that forex technical analysis ignores fundamental factors and is applied only to the price action of the market. 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. The technical analysis works by correlating the results and moves of current markets to create a short-term outlook for currencies. The rolling data that is produced throughout the trading day creates the interest in the markets and informs traders of the strong markets to back.The Trend is Your FriendForex technical analysis is largely based around forex market movement trends, thus creating the widely used phrase ’the trend is your friend’ amongst traders. Buying and selling at the right time is the key in maintaining good levels of profits, following a trend is also about knowing where to entry a trade and more importantly where to exit.Support and ResistanceSupport and resistance is the basic of forex technical analysis. Support and resistance levels are points where a chart experiences recurring upward or downward pressure. A support level is usually the low point in any chart pattern (hourly, weekly or annually), whereas a resistance level is the high or the peak point of the pattern. Buying and selling at the support and resistance points makes a greater profit margin as long as they remain unbroken.History Tends To Repeat ItselfAnother important idea in technical analysis is that history tends to repeat itself, mainly in terms of price movement. The repetitive nature of price movements is attributed to market psychology; in other words, market participants tend to provide a consistent reaction to similar market stimuli over time. Forex technical analysis uses chart patterns to analyze forex market movements and understand trends. Although many of these charts have been used for more than 30 years, they are still believed to be relevant because they illustrate patterns in price movements that often repeat themselves
How to choose a Forex Broker?
Forex brokers need to be associated with a large financial institution such as a bank in order to provide the funds necessary for margin trading. In the United States a broker should be registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) as protection against fraud and abusive trade practices.Before trading Forex you need to set up an account with a Forex broker. You may feel overwhelmed by the number of forex brokers who offer their services online. Deciding on a broker requires lots of research on your part. There are several areas to examine before you sign on the dotted line with any broker. Here are some things that you need to look for in making your choice:Safety of FundsIs the broker regulated? Are client funds insured?Order executionHow fast is the broker’s order execution? Will they place you on manual execution?Do they offer automatic execution?How much can you trade before having to request a quote? Do they offset all clients orders? Do they trade against their clients?SpreadIs it fixed or variable?How tight is the spread? Is it larger for mini accounts?SlippageHow much slippage can be expected in normal and fast moving market conditions?Margin requirementsWhat are the margin requirements and how are they calculated? Does the margin change with currency traded? Is it the same for mini accounts and standard accounts?Forex Trading PlatformIs it reliable during fast moving markets and news announcements?How many different currency pairs can you trade? Do they offer an Application Programming Interface (API) for automated systems trading? What other features does it offer? (One click trading from the chart, trailing stops, mobile trading etc.)Account SizeWhat is the minimum account balance? Can you trade mini accounts? Do you earn interest on the unused equity in your account? Can you adjust the standard lot size traded
How To Get Started In FOREX Trading
Forex brokers need to be associated with a large financial institution such as a bank in order to provide the funds necessary for margin trading. In the United States a broker should be registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) as protection against fraud and abusive trade practices.Before trading Forex you need to set up an account with a Forex broker. You may feel overwhelmed by the number of forex brokers who offer their services online. Deciding on a broker requires lots of research on your part. There are several areas to examine before you sign on the dotted line with any broker. Here are some things that you need to look for in making your choice:Safety of FundsIs the broker regulated? Are client funds insured?Order executionHow fast is the broker’s order execution? Will they place you on manual execution?Do they offer automatic execution?How much can you trade before having to request a quote? Do they offset all clients orders? Do they trade against their clients?SpreadIs it fixed or variable?How tight is the spread? Is it larger for mini accounts?SlippageHow much slippage can be expected in normal and fast moving market conditions?Margin requirementsWhat are the margin requirements and how are they calculated? Does the margin change with currency traded? Is it the same for mini accounts and standard accounts?Forex Trading PlatformIs it reliable during fast moving markets and news announcements?How many different currency pairs can you trade? Do they offer an Application Programming Interface (API) for automated systems trading? What other features does it offer? (One click trading from the chart, trailing stops, mobile trading etc.)Account SizeWhat is the minimum account balance? Can you trade mini accounts? Do you earn interest on the unused equity in your account? Can you adjust the standard lot size traded?
Trading Should You Invest
Forex trading is all about putting your money into other currencies, so you can gain the interest for the night, for time period or the difference in trading money all around. Forex trading does involve other assets along with money, but because you are investing in other countries and in other businesses that are dealing in other currencies the basis for the money you make or lose will be based on the trading of money.Constant trading is done in the forex markets as time zones will vary and the markets will open in one country while another is near closing.
Trading Foreign Currency
FOREX trading is about trading foreign currency, stocks, and similar type of products. The currency of one country is weighed against the currency of another country to determine value. The value of that foreign currency is taken into consideration when trading stocks on the FOREX markets. Most countries seem to have control over the value of that countries currency, or money.Those who are often involved in the FOREX markets include banks, large businesses, governments, and financial institutions.
Trading What The Hype Is All About
Forex trading is all about making big money. Some investors have found it quite easy to make a large amount of money as the forex market changes daily. Forex, is the foreign exchange market. Online and offline you will find references to the forex market as FX as well. Forex trading takes place through a broker or a financial institution often where you are able to purchase other types of stocks, bonds and investments.When you are thinking about getting involved in the forex markets you should know you are sending money to be invested with other countries.
World Wide Forex Market
Forex is a trading 'method' also known as FX or and foreign market exchange. Those involved in the foreign exchange markets are some of the largest companies and banks from around the world, trading in currencies from various countries to create a balance as some are going to gain money and others are going to lose money. The basics of forex are similar to that of the stock market found in any country, but on a much larger, grand scale, that involves people, currencies and trades from around the world, in just about any country.
Trading Where Do Customers Go
Forex trading uses currency and stock markets from a variety of countries to create a trading market where millions and millions are traded and exchanged daily. This market is similar to the stock market, as people buy and sell, but the market and the over all results are much much larger. Those involved in the forex trading markets include the Deutsche bank, UBS, Citigroup, and others such as HSBC, Braclays, Merrill Lynch, JP Morgan Chase, and still others such as Goldman Sachs, ABN Amro, Morgan Stanley, and so on.
How To Make Money With Forex
FOREX trading is about trading foreign currency, stocks, and similar type of products. The currency of one country is weighed against the currency of another country to determine value. The value of that foreign currency is taken into consideration when trading stocks on the FOREX markets. Most countries seem to have control over the value of that countries currency, or money. Those who are often involved in the FOREX markets include banks, large businesses, governments, and financial institutions. What makes the FOREX market different from the stock market?
The Basics of Forex Business
* FOREX=FOReign EXchange* You can trade 24 hours a day* The FOREX is larger than all other finincial markets COMBINEDThe Foreign Exchange (FOREX) market is a cash (or "spot") interbank marketestablished in 1971 when floating exchange rates begain to materialize. This market is the arena in which the currency of one country is exchanged for those of another and where settlements for international business are made.The FOREX is a group of approximately 4500 currency trading institutions, including international banks, government central banks and commercial companies. payments for export and imports flow through the Foreign Exchange Market, as well as payments for purchase and sales of assets. This is called the "consumer" foreign exhange market. There is also a "speculator" segment in the FOREX companies, which have large financial exposures to overseas economics participate in the FOREX to offset the risk of international investing.Historically, the FOREX interbrain market was not available for small speculators. With a previous minimum transaction size an often-stringent financial requirements, the small trader was excluded from participation in this market. but today market maker brokers are allowed to break down the large interbank units and offer small traders the opportunity to buy or sell any number of these smaller units (lots).Commercial banks play two roles in the FOREX market:1. They facilitate transactions between two parties, such as companies wishing to exchange currencies (consumers), and2. They speculate by buying and selling currencies. The banks take positions in certain currencies because they believe they will be worth more (if "buying long") or less (if "selling sort") in the future. It has been estimated that international banks genrate up to 70% of their reevenue from currency speculation. Other speculators include many of the worlds' most successful traders, such as George Soros.3. The third category of the FOREX include various countries' central banks, like the U.S. Federal Reserve. They participate in the FOREX to serve the financial interests of their country. When a central bank buys and sells its or a foreign currency the purpose is to stabilize their own currency's value.The FOREX is so large and si composed of so many participants, that no one player, even the government central banks, can control the market. In comparision to the daily trading volume average of the $300 billion in the U.S. Treasury Bond market and approximately $100 billion exchanged in the U.S. stock markets, the FOREX is huge and has grown in excess of $1.5 trillion daily.The word "market" is a slight misnomer in describing FOREX trading. There is no centralized location for trading activity ("pit") a there is in the currency features( and msny other) markets. Trading occurs over the phone and through the computer terminals at hiundereds of locations worldwide. The bulk of the trading is between approximately 300 large international banks, which process transactions for large companies, governments and for their own acounts. These banks are continually providing prices("bid" to buy and "ask" to sell) for each other and the broader market. The most recent quotation from one of these banks is concidered the market's current price for that currency. Various private data reporting services provide this "live" price information via the internet.There are numerous advantages for parties wishing to trade in the FOREX.They include:* Liquidity: In the FOREX market there is always a buyer and a seller! The FOREX absorbs tradign volumes ad per trade sizes which dwarfs the capacity of any other market. On the simplest level, liquidity is a powerful attraction to any invester as it suggests the freedom to open or close a position at will 24 hours a day. Once purchased, many other high-return investments are difficult to sell at will.FOREX traders never have to worry about being "suck" in a position due to lack of market interest. In the 1.5 trillion U.S. dollar per day market, major international banks a "bid" (buying) and "ask" (selling) price.* Access: The FOREX is open 24 hours daily from about 6:00 P.M. Sunday to about 4:00 P.M. Friday. An individual trader can react to news when it breaks, rather than waiting for the opening bell of other markets when everyone else-has the same information. This allows traders to take position before the nes details are fully factored into the exchange rates. High liquidity and 24 hour trading permit marked participants to take position or exit regardless of the hour. There are FOREX dealers in every time zone, United States, etc.) willing to continually quote by and sell precises. Since no money is left on the market "table" this is what is referred to as "ero Sum Game" or "Zero-Sum Gain". Providing the trader pics the right side money can always be made.* Two-way Markets: Currencies are traded in pairs, for example doller/yen, or dollar/swiss franc. Every position involves the selling of one currency and the buying of another. If a trader believes the Swiss franc will appreciate against the Dollar, the trader can sell dollars and buy francs("selling short!"). If one holds the opposite belief, that trader can buy dollars and sell Swiss francs("buying long"). The potential for profit exists because there is always movement in the exchange rates(Prices).* FOREX trading permits profit taking from both rising and falling currency values in relation to the dollar. In every currency trading transaction, one of the sides of the pair is always gaining and the other side losing.
Three Major Participants in Forex Trading
There are three major participants in the Forex market: customers, banks and brokers.CustomersCustomers can further be divided into individuals, small business and larger corporate type businesses.Corporate Businesses often need to make cross boarder transactions in order to trade their goods or services.Many companies have to import or exports goods to different countries all around the world. Payment for these goods and services may be made and received in different currencies.Many billions of dollars are exchanged daily to facilitate trade. The timing of those transactions can dramatically affect a company's balance sheet.Although you may not think it, all of us play a part in today's FX world. Every time someone goes on holiday overseas he or she normally needs to purchase that country's currency and again change it back into his/her own currency once he/she returns. Unwittingly he or she is in fact trading forex.He or she may also purchase goods and services whilst overseas and their credit card company has to convert those sales back into his base currency in order to charge him.If you think of just how many tourists are traveling at any given time, then you can imagine just how much this can add up.BanksUnder the heading bank we could also include the larger of the funds who are also deposit taking institutions. As a forex speculator you are actually taking the place of a bank for the duration of a trade, if you think about you are holding large amounts of foreign exchange just as a bank would.Policies that are implemented by governments and central banks can play a major roll in the FX market. Central banks can play an important part in controlling the country's money supply to insure financial stability.Large banks can literally trade billions of dollars daily. This can take the form of a service to their customers, trades executed on behalf of large clients or they themselves can speculate on the FX market.Because of the size of some transactions banks may be unable to deal directly with other banks and will state the price they are prepared to accept for a currency or pay for a currency. This is called market making.They will quote the buying or selling rates they are prepared to pay for pairs of currencies e.g. the Dollar to Japanese Yen or Pound to Dollar.The market maker (in this case the bank) makes its profit from the difference between the buying and selling rate (spread).Hedge FundsAs we know the FX market can be extremely liquid, which is why it can be desirable to trade. Hedge Funds have increasingly allocated portions of their portfolios to speculate on the FX market.Another advantage for Hedge Funds is that they can utilize a much higher degree of leverage than would typically be found in the equity markets.BrokersThe broker’s main function is to facilitate trade between two parties.They normally have links to other brokers, banks and institutions and often become mini market makers themselves.Because of the varied source of clients who use brokers it is quite common to find the best rates through a broker as opposed to a bank.With a broker you can shop for the best rates in order to transact your business.The broker makes his commission from either the difference between the buying and selling rate or as a flat fee per transactionAll of the three main groups will also speculate in the market, which is why the market has so much volume and liquidity.
BUYING AND SELLING TIPS IN FOREX
Order Basics :* Sellers are asking for a high price.* Buyers are Bidding at a lower price.* Trading is an auction.* Slippage occurs with most Market Orders.* The diffrence between the ASK and the BID price is the spread.A trader must understand what each order is, what it and what part it plays in capturing profit.A FOREX Trader must use three types of orders: a Market Order, a Limit Order, and a Stop Order.The two primary orders used for entering and exciting the market are a Limit Orders, and a Stop Orders. Once an order is placed your order to enter the market, there are two critical procedures: One-Cancels-the-Other( OCO ) and Cancel-and-Replace. Properly exectuing orders and understanding these procedures are a vital step to profitables trading.IMP : all good carpenters carry a toolbox. The sharper the tools and the more skilled he is at using them, the more effective he is. The sharper you become as a trader the more effcient and lucrative you will be.What orders do : A clear understanding of what each order does is essential before exectuing orders.
Forex Broker - Must Read this post before you Pick the Best Forex Broker
In order to trade Forex, you need to first find a Forex broker. Forex is still a relatively unregulated market and as a result there are many Forex brokers available each with different levels of service and reliability. Perhaps the best thing a Forex trader can do is to make sure they pick the right Forex broker for them.Honest & ReliableBefore picking any broker, make sure you examine their company and background as thoroughly as you possibly can. Some good signs of a reliable Forex broker are the length of the time they have been in operation and if they are a member of any financial regulating bodies found in various countries that currently try to regulate the Forex market. You need to find a broker that you are comfortable with and not need to worry about them closing up shop without warning.LeverageOne of the attractions of trading Forex is that traders can use leverage. Leverage allows a trader to trade with more money than they may physically have in their trading account. This allows traders to gain enormous profits with just a small amount of capital. Just how much leverage brokers offer varies.Leverage can range from 1:1, where there is no leverage, to 1:400, where you can trade with up to 400 times the amount of capital you may physically have. To make the most of your trading, be sure to pick a broker that offers the amount of leverage you require.Spend some time researching brokers before you make the final decision to open a live account and begin trading Forex. Doing so may pay off in the long run.
Ways to earn Serious Money from Forex Business
Forex trading, like any other form of trading, is about planning your strategy in advance. In other words, you must know exactly how are you going to profit from the stock market before you even think about putting money at stake.There are many ways to achieve the goal of having a trading strategy:1. You can device one yourself.2. You can take a Forex course and learn from an expert.3. You can use a signal service and simply execute a strategy provided by a third party; or4. You can use an EA or Forex software with the ability to manage your trading account automatically.Any of these options will be a good one, although I you will be better off if you have a little bit of everything.What I mean by this is that even if you have the best Forex software in your trading platform, or you use the best Forex signals service, having an understanding of the Forex market will always be a plus.Therefore, if you want to actually make money Forex trading, you must always keep your arsenal of trading tools and resources growing, along with your knowledge of the Forex market.Also, once you have a strategy in place (whether it is via Forex courses, services or software) always put that strategy to the test on paper money for at least two months, because as they say: only practice makes perfect, and even if you are using signals or a software, you have to make sure your are doing everything by the book
Simple 6 steps process to Create Your a Profitable Forex Trading System
When it comes to money, success is never guaranteed. And since money is extremely important in our society, risking it can involve some serious hazards. Forex trading, as with any other business, brings risks, so you will need a strategy or system for meeting those risks and dealing with them. Below are 6 simple tips that, over time, will help you develop your own Forex trading system.What Is a Forex Trading System?A Forex trading system is a set of strategies used to forecast how a currency is likely to behave in the market. Forex trading newbies - beginners - should never start right in investing until they have learned some kind of trading system to guide them. And preferably, the system should have been designed by one or more experienced traders, based on their understanding of currency data and signals. Such systems are often programmed into complex computer software and can guide you in making your buy and sell decisions.1. Get an Automated Forex Trading SystemWhen you first start out, you won't be very sure of what you're doing in Forex trading, so it's a very good idea to start with an automated Forex trading program. You can use it like you would use training wheels on a bicycle, or a paint-by-the-numbers canvas. The system will guide you while you're learning the basics and putting together your own understanding of what works best.2. Start Training Your IntuitionAt the beginning, your intuition has no experience to work from, but after a while you'll develop a feel for Forex trading. Once you've made a number of profitable trades (and also had some losses along the way), you'll start to grasp how it all works, not just with regard to the numbers, but also how certain events and trends interact to coincide with the rising and falling of the currencies. Pay careful attention to the news. Start trying to see if you can predict which events might cause a rise or a fall in a country's economy. Cautiously apply your developing intuition in light of the information you have, and you'll start to gain sharper insights into how you can make profits the next time you see the same situation shaping up.3. Study, Study, StudyForex trading is a very complex subject, although the hype-masters will try to hide that "unpleasant" fact from you. Spend time with high quality information and gain some mastery of it before you start betting your own money. Use one or more practice accounts - they're available at most brokers' websites. Learning is an ongoing process, so never assume you know it all.4. Never Gamble Money You Can't Afford to LoseMoney is another aspect of life where, if you can't afford to lose, you shouldn't be playing. Period. Losses are a normal part of Forex trading, and you need to learn strategies that will minimize your losses. More importantly, you should minimize any damage that losses could do by trading only with discretionary money. When you bet money but you don't know exactly why, that's gambling. When you do know why, that's investing. Losses can still occur, but with knowledge you minimize their likelihood.5. Trade Only in Popular Currency PairsDon't try to be a lone wolf. Stay with the crowds... in this case it's the safe thing to do. When you're not sure what you're doing, ask for advice and, even better, stay with the safest options. By trading only popular currency pairs, you'll keep yourself in a zone where it's relatively safer to learn what you're doing. The five most popular currency pairs are:* USD/EUR - US Dollar/Euro,* USD/JPY - US Dollar/Japanese Yen,* USD/GBP - US Dollar/Great Britain Pound,* USD/CHF - US Dollar/Swiss Franc, and* EUR/JPY - Euro/Japanese Yen.6. Plan to Stay with Trading for the Long-TermIf you only think of your Forex trading system as a gimmick, a get-rich-quick trick, so that you can snag a big bundle, so you can go off sailing... you're doomed to failure. Major world events can trigger currency markets to change hour by hour, sometimes with massive highs and lows that sweep away the reckless, while at other times things can level out and seem to be peacefully resting. Every different situation requires a different strategy or approach. If you consider your Forex trading as a long-term career, you're more likely to develop insights into how things work in a variety of situations and degrees of volatility.These six simple tips have proven over the years to be the most dependable "secrets" for safe, sure investing.Forex trading requires a healthy amount of focus and attention, the ability to handle details, a steadily growing understanding of how currency markets work, and much patience. You'll also need a plan to guide your moves. Just as you wouldn't head out to sea without a compass, never try to tackle currency trading without a good, well tested Forex trading system.
Reduse Loss - Work Sensible - 7 Top Tips
Here are 7 sensible things you can do to cut your losses in Forex trading before they happen.Tip 1. Lose Your Fear of Experiencing LossesLosses are simply part of the ups and downs of any market, and it's important to accept this idea so that you can begin to factor it into your planning and your trading strategy. Reckless Forex traders who deny this reality tend to have more losses than profitsTip 2. Never Hang on to a Losing PositionAs soon as it's clear you're in a losing position, get out and move on. Never let your failing trades die a slow death, and never try to bring them back to life with "just a little more money." Kill 'em off quick. Then treat each one as a learning experience by reviewing what went wrong and decide how to avoid a repeat.Tip 3. Have Your Broker Close Losing PositionsIssue standard instructions to your broker that all losing positions must be closed. There is never a good reason to let losses waste perfectly good money. A reliable broker will make the margin calls necessary to stop your losses, thus protecting your account from being drained.What is a margin call?When you open a trading position, you can designate part of your deposit as a collateral deposit - your margin - which will be set aside to be protected. On a $3,000 account, for example, your margin might be set at $750. You will use the $2,250 to trade, and if your losses ever reach that level, the broker will close your position, thus protecting you from losing the remaining balance. This prevents your account from going into negative figures, which you would be required to repay.Tip 4. Caution Is Just Good SenseEspecially when you're just beginning, trade only with the market trends. Newbie traders don't yet have the experience or the judgment to predict how prices will move. Even veteran traders experience more losses when trying to predict trends. Try to find the wave of an upward trend and ride it when it's already underway, then exit trading when it begins to turn negative. That may sound boring, but it's much, much safer.Tip 5. Loyalty Is a Bad Thing in Forex TradingWhen it comes to trades, a loser is a loser is a loser. Loyalty to a particular trade, or falling in love with it, is very unwise. No trade you ever make will be loyal to you, and it's important to understand this at the gut level. Forex trading is a volatile and fickle environment, with positions shifting constantly. What brings you success one day might drop you cold the next. In fact, it has been said that Forex trading is the world's worst place for emotions because they cloud your judgment. It's simple, dump the failures and ride your successes - and only your successes.Tip 6. This Is Not the Place to Get Rich QuickIgnore stories of overnight millionaires. They're usually apocryphal. Success in Forex trading requires you to minimize any loss that occurs and to behave as you would with any business. Plan on being in business long term, and discard stories of making it big overnight (somebody's usually trying to sell you something when you hear one of those stories). Jumping into Forex trading like a gung-ho warrior is setting yourself up to lose big and fast. The real, consistent winners are the ones who use common sense, patience and a businesslike attitude.Tip 7. You're the Only One ResponsibleIf you try to rely on advice from strangers (and possible sharks), it's not their responsibility when you lose. It's yours, and yours alone. Invest the time necessary to learn what's needed to keep your losses in Forex trading as small as possible. Use every trade, whether loss or gain, to increase your knowledge.This also means, of course, that it's your responsibility - and only yours - both when things go wrong and when they go right. Since you're going to end up with both the blame and the credit for results, it's a good idea to work toward more good trades, more profits and more security. Once you accept all responsibility, you're no longer a victim. When the market doesn't go your way, you never need to look for somebody to blame. You simply dust yourself off, learn something from the situation, make adjustments, and go try it again.There is no profit in dwelling on your losses, but there is a great deal of profit in learning from them. Losses happen and that's that. But you can cut losses in Forex trading. Learn what you can from them, understand what happened, then move on. Remember, the more quickly you move on, the more quickly you'll have a chance to recover those losses and move firmly into profit.
TOP 6 Tips to Avoid Forex Swindles Frauds
1. Be informed and stay awareSince it's your money, it's your responsibility to know the ins and outs of Forex trading, including the most common scams now going the rounds. You wouldn't blindly hand over your money to someone who walks up to you in the street and says he's going to make you rich... would you? No, you'd instantly have all sorts of alarm bells going off in your brain. You'd at the very least ask for ID, references and qualifications. So keep your antenna out and your awareness up.2. Remember what Grandma told youDidn't she say: "If it seems too good to be true, then it probably is." This has always been a good first rule of thumb for gauging "offers" that come seeking you out. And it will be a good rule for many years to come, so use it. Don't let some sweet talker con you into handing over your hard-earned money. Sometimes a broker may try to convince you he's going to help you turn your money into an enormous bundle almost overnight by using their services. A good question to ask is "Really? Why? And why me?"3. Listen to your gut feelingsIf you get a sneaking hunch that someone may be trying to take advantage of you, then don't hand over your money. Period. Always run checks on anyone you're thinking of dealing with. Simply contact the consumer affairs authorities in your country or get in touch with the registry for brokers and dealers in your own currency exchange market. Be sure you know which company the person works for and contact them to double check what you've been told.It's your money, and it's your responsibility to keep it safe, no matter what a nice guy that salesman seems.4. Don't allow yourself to be pressuredThere's no rush. Never, never forget that the "deal of a lifetime" comes along about once every two weeks, so never let yourself be hurried into leaping now. The faster a broker wants to part you from your money, the more risk there is that he's got an ulterior motive - your money. Don't listen to stories about 'the next big thing' in Forex trading. If he starts telling you that this is an opportunity to make huge profits but that you've absolutely got to act now or you'll lose it forever, just slow down. Another good deal will come along in a couple of weeks - count on it. Refuse to go along with any time frame that would throw you in over your head. You'll soon see if the broker is applying unnecessary pressure or if he is willing to wait for you to be comfortable.5. Companies that guarantee no risk ARE a riskIt's a fact: You'll run into risk in any kind of investments, whether stocks or bonds or real estate, and this includes Forex trading. Keep a healthy distance from any company that claims:* "We promise to restore any losses for you."* "You can't lose; your investment is always secure."* "Even with a $5,000 deposit, you won't ever lose more than $200 per day."No company can guarantee such things. Never, ever deal with one that waves unrealistic promises around. Such claims mark them as either fools or con artists. Either way, it's a good idea to keep your distance.6. Stay away from anybody that guarantees big profitsDon't be tempted by anyone who claims they'll guarantee you huge profits. You'll find them making statements such as:* "Make $5,000 per week or more, every week."* "Our company always offers the most successful Forex trading on the market."* "You will receive a guaranteed minimum 30% return within your first two months."Now just stop and think about it for a second. Are these statements likely to be true? More likely they're opportunities to sharpen your judgment and avoid Forex scams; otherwise, you could easily lose your shirt - and your money - extra fast
Who can do FOREX Business???
Consumers and BusinessConsumers typically come into contact with currency exchange when they travel or purchase items from foreign vendors.Travelers must go to a bank or currency exchange bureau to convert one currency (typically, their "home currency") into another (i.e., the currency of the country they intend to travel to) so they can pay for goods and services in the foreign country.Consumers may purchase goods in a foreign country or via the Internet with their credit card, in which case they will find that the amount they paid in the foreign currency will have been converted to their home currency on their credit card statement.Although each consumer currency exchange is a relatively small transaction, the aggregate of all such transactions is significant.BusinessesBusinesses typically need to convert currencies when they conduct business outside their home country. For example, if they export goods to another country and receive payment in the currency of that foreign country, then the payment must typically be converted back to the home currency. Similarly, if they have to import goods or services, then businesses will often have to pay in a foreign currency, requiring them to first convert their home currency into the foreign currency.Large companies convert huge amounts of currency; for example, a company such as General Electric (GE) converts tens of billions of dollars each year. The timing of when they convert can have a large affect on their balance sheet and "bottom line, and many businesses use hedging strategies to ensure they do not incur losses over time due to currency market volatility.Investors and SpeculatorsInvestors and speculators require currency exchange whenever they trade in any foreign investment, be it equities, bonds, bank deposits, or real estate. For example, when a Swedish investor buys shares in Sun Microsystems on the NASDAQ, she will have to pay for the shares in U.S. Dollars and likely have to convert Swedish Krona to U.S. Dollars. Similarly, a Japanese real estate investor who sells a New York property may want to convert the proceeds of the sale in U.S. Dollars to Japanese Yen.Investors and speculators also trade currencies directly in order to benefit from movements in the currency exchange markets. For example, if an American investor believes that the Japanese economy is strengthening and as a result expects the Japanese Yen to appreciate in value (i.e., go up relative to other currencies), then she may want to buy Japanese Yen and take what is referred to as a long position. Similarly, if an American investor believes that the Euro will go down over time, then she may want to sell Euro to take a short position. Interestingly, investors and speculators can profit equally from currencies becoming stronger (by taking a long position) or from currencies becoming weaker (by taking a short position).Speculators are often day traders, trying to take advantage of market movements in very short time periods; buying a currency and then selling it again within hours or even minutes. They are attracted to currency trading for numerous reasons, including (i) the size and daily volatility of the market, which provides some individuals with an unparalleled level of excitement, (ii) the almost perfect liquidity of the currency exchange market, (iii) the fact that the currency exchange market is "open" 24 hours a day, and (vi) the fact that currencies can be traded with no brokerage charges.Commercial and Investment BanksCommercial and investment banks trade currencies as a service for their commercial banking, deposit and lending customers. These institutions also generally participate in the currency market for hedging and proprietary trading purposes.Governments and Central BanksGovernments and central banks trade currencies to improve trading conditions or to intervene in an attempt to adjust economic or financial imbalances. Although they do not trade for speculative reasons—they are non-profit organizations—they often tend to be profitable, since they generally trade on a long-term basis
What is FOREX???? An Introduction
FOREX (Foreign Exchange) is the place where a nation's currency is exchanged for that one of the another. FOREX (Foreign Exchange) market is the largest financial market in the world, unlike other financial markets, the Forex market has no physical location and no central exchange. It operates through a global network of banks, corporations and individuals trading one currency for another
