Thursday, October 29, 2009

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Tuesday, October 6, 2009

Forex Trading Beginner Should Never Rely on Luck

Every Forex trading beginner should never rely on luck. There is no such thing as a beginner's luck at the Forex market. When you trade currencies, your decisions should be based on concrete analysis of technical indicators as well as current global news that can affect the movements of currencies.

So before you dip your foot at the Forex market, make sure that you already have a basic understanding of how the market works. Most especially, you have to know the basics of how to spot favorable positions, how to open a trade and how to close it when your position becomes precarious.

It is also best to know the right currencies that you are going to trade. Which currencies are strong are which are weaker. These are important questions that can only be answered if you will study the market first before you risk your capital.

There are lots of Forex trading beginner courses that you can take. Some of them are free and you can easily download the Forex tutorials from the website of your broker. However, if you want to take advantage of more in-depth analysis of the market, it is very important for you to attend a formal trading course or webinar provided by online Forex schools.

Knowledge is the key to your success at the currency market. Always remember that a good Forex trading beginner never relies on wishful thinking and pure luck. Trading is a skill you need to learn so you can have more winning trades and enjoy huge profits from the money market.

Timothy Stevens is a Forex Trader who owns http://www.ExpertAdvisorShop.com - He has helped hundreds of people on Forex Trading & Options Trading.

He has recently developed a Free forex review site showing you the fastest process for choosing your Forex Expert Advisor easier. To learn how to start Forex Trading without wasting your time and losing more money, visit http://www.ExpertAdvisorShop.com

Thursday, September 3, 2009

Learn How to Scalp the Markets

Scalping: The Fastest Way to Profits!

More specifically, scalping is the purchasing or selling of a security and then immediately buying it back or selling it back to the market for a quick profit. Scalping is also known as high volume trading because of the technique it employs, which is that of getting in and out of the market quickly, and doing this multiple times throughout the trading day. If you do decide to try scalping as a trading method, it is important to have a well funded account along with a lightning fast computer and broadband internet connection at least. The reason you will want a well funded account is because scalpers, in the true sense of the word, will make anywhere's from 5 to 100 trades in a day, and your account has to have the buying power to make that many trades. You will also want the best computer you can get as well as the fastest internet connection, because many scalpers will go for just a few ticks before closing the trade, so your entry price is crucial; it can be the difference between profits and losses.

Scalping, in my opinion is a great trading technique, no matter what you're trading. Although this is a relatively new trading technique, there are many pro's that come with it. For starters, scalp trading implies much less overall exposure to the market and its swings. This is because of the speed at which you execute the trades, giving you less overall risk to your account, compared to holding a position for a long time and having to deal with the ups and downs of the market as well as your account balance. Smaller moves in price also occur more often and they are easier to obtain, instead of waiting for longer price movements to occur in the market. Many traders use larger volume when scalping because they are going for such small fluctuations in price, and these profits can add up depending on how many trades they make. Other positives that come with scalping include:

• Helping traders keep focused more on the market, because they have to pay close attention to price movements.

• Having the flexibility to trade nearly any market in the world, as well as any kind of market, from trending to sideways.

Although scalping can be a great trading style, it does have its negatives as well. Liquidity for one thing is extremely important; if you try to scalp a market with low liquidity then you risk the possibility of getting bad fills on your position due to the low volume in the market. So, if you wish to scalp, you will need to trade only the markets with the most liquidity (many traders involved), like:

• Index futures such as: the Dax, DJ Eurostoxx 50, E-mini S&P; commodity futures like Crude Oil, Gold; currency futures like the Euro, as well as the forex market.

Another aspect to consider about scalping is the more trades you take the more you will pay in commissions. These commissions add up and take away from your profits big time! Also, depending on the success rate of your scalping technique, you can easily destroy your account by taking many small losses without enough winning trades to counter balance it. And unfortunately scalping is not meant for undisciplined traders, scalpers have to follow strict rules and follow them at all times, if this doesn't sound like something you could do, I would highly suggest just looking into the many other ways of successfully trading.

Although scalping is a specific style or technique of trading, there are also many different techniques/types of scalping. Here are just a few ways of scalping the markets:

• Systematic: Scalping with the use of automated systems (also known as expert advisors).Many scalping techniques are performed by unique computer algorithms that can place multiple trades in a matter of seconds. The positive side of having a computer trade for you is there are no emotions involved, but this is a double-edged sword because at times a humans can react to price movement before a computer would, at times resulting in less losses.

• Discretionary: This is where a trader makes decisions in real-time; yes there are more emotions involved, but a truly disciplined trader will follow their rules, especially when applying a scalping technique. Discretionary traders can also use a number of tools to help them trade, a few of my favorite are:
o The Time & Sales window- also known as - TAPE
o Technical analysis- analyzing price movements and volume.

• Spread scalping- many traders scalp the spread, or the difference in price between the Bid/Ask. The way this is done is they buy the Bid and sell at the ask price to profit from the difference, this process can be performed within a matter of seconds, depending on the technique.

*A note to all first time scalpers, in my opinion, you should always use a trading simulator, I prefer Ninja Trader personally, to get your trading system down and fix any beginner mistakes you might make while perfecting your scalping techniques.

As always, best of luck in your scalping and always follow those rules!

Joseph James is a Professional Day Trader and an extremely hard worker. Joseph is the founder of the James Wave Trading System which has been proven to work in any liquid market. His website, http://www.schooloftrade.com offers great methodology that eventually sculpts his members into great traders. Josephs free trial and beginner's course is jam packed with tips and techniques for day trading enthusiast. Subscribe to a FREE trial by visiting the homepage at http://www.schooloftrade.com/trial.

Saturday, August 29, 2009

The Best Way to Trade Forex From an Old-School Point of View

There has to be tons of people out there, who are trying to find the best way to trade forex. Well, here is my old-school opinion on the subject: Stop paying extra money for all the bells and whistles.

I'm sure you know what I am talking about. I'm talking about those magical indicators that put "up" arrows and "down" arrows on charts, supposedly telling you when to buy and sell, as if they had any idea where the price was headed. I'm talking about not spending $500 on an automated forex system, that will supposedly make you a millionaire while you're out shopping for groceries.

Think Less Is More

From my perspective, (and I learned this the hard way) the best way to trade forex is to simply take the time to understand it. Trust me, I wish it was as simple as just pushing a button, and everything is done for you. But that's just not reality.

You want to learn how to trade, YOU have to do it. This means wiping clean of every single indicator that's on your charts, and learning how to trade just based on market movement. There is no indicator in the world that can give you as much information than a simple bar chart.

The "Bare Bones" Way Of Trading

I know what some of you maybe saying" "But I need my indicators!?!?!" No you don't. I felt the same exact way when I first started trading. But later on, it just dawned on me that this wasn't helping me in any way. I was just using these indicators as a crutch, even though I could already walk.

Think about how long, technical traders have been successful in the markets without using any kind of indicators. The used pure and simple price action. The concept is as old as the stock market itself, and the amazing thing, is that its more relevant today, than it ever was.

Learn What Real Support And Resistance Area

To give you an example of what I'm talking about, have you ever seen those generic S&R indicators that people put on there charts? They are just basically a formula that's supposedly works during all market conditions.

Folks, that's just not how support and resistance works. Support and resistance is completely dependent on market conditions. Depending on whether it is ranging market or a trending market, support and resistance will vary greatly. A formula just isn't going to cut it.

Think old-school and learn the best way to trade forex without all the fancy bells and whistles.

Thursday, August 20, 2009

HOW TO AVOID MARGIN CALLS FOR LIFE

HOW TO AVOID MARGIN CALLS FOR LIFE

HOW TO AVOID MARGIN CALLS FOR LIFE
I have noticed that most forex traders fail not because of the trades they take but often because they have not developed the traits required to make a success out of what they do. It looks like what most of us do is wake up in the morning, say a few prayers, rush to the computer, open our platforms, put up some indicators, place trades and start hoping that the market move in our direction.
Sometimes the market moves to our favor 10 pips…we start wishing it moves some more…then it moves 20 pips ….and we then conclude it will move more….then it moves 30….we still refuse to take it out because we are now over confident that it will move 40, 50,60 or even more.
But all of a sudden before we drink a cup of water the market has reversed all the profits and we are now in minus 40…Wow! What happened? Was there any news? We check to see if there was any news. There was no news. What happened? Maybe it’s the broker manipulation.
Ok we start hoping it will reverse and come back to give us profits. But to our greatest surprise it doesn’t. Instead the losses keep escalating. Eventually we have no other option than to close the trade at a minus…huge drawdown.
I know this picture aptly describes most of us who say we are trading forex. The problem is that this keeps repeating itself over and over until we get a margin call.
Without developing winning forex skills you will end up only wiring money to your brokers over and over without making withdrawals. There are four important skills necessary to make you succeed trading.
1. Having a trading plan
2. having a trading system
3. having a winning psychology
4. being a good risk manager
TRADING PLAN
Answer these questions. It will give you a picture of what I mean by a trading plan
• Why are you trading forex…that is what is your overall goal for trading forex.
• In the next one year what is your goal in forex. How much do you want to make
• What is your monthly target that will eventually add up to actualize your yearly goal
• Now how much do you need to make daily to get to your goals
My suggestions are set a realistic goal. Some people say they want to make 5000$ every month and there start up capital is just under 2000$. That’s not a realistic goal. Some say they want to make 100 pips daily. That’s not a realistic goal. A good idea is to begin with a small target of say 10 pips daily. Then progress to 20 pips daily
Some days will give you more. They will be ones that will make up for your losing days. This means when you take a trade and see 20 pips profit you lock it in and let the trade run so that at worse you will end up only with 20 pips for that day. This also means you will not place trades unnecessarily unless you see very, very, very good setups.
TRADING SYSTEM.
A trading system is a set of rules that make you take a decision either to buy or sell. Yes in this site and several hundred others you will read about several winning systems. But you must not follow anyone blindly. Your job is to study as much as you can. Test them and if possible use your own settings and Tfs and make it your own invention.
One thing that you must know is that each and every individual trader thinks differently. What works perfectly for me may not for you at all. So when you read about any system take out time to re-work it out to your personal style.
Make out your own Entry, Exit, Stoploss, and Take Profit levels to suit your own person.
A WINNING PSYCHOLOGY
Without taking much space let me just give you a list of what I consider components of a winning psychology
1. believe you will succeed as a trader
2. avoid over trading
3. don’t be greedy
4. protect your profits
PROPER RISK MANAGEMENT
This is so important that I will have to dedicate a different post to talk about it
Have a great day.
PRINCE ADEWALE
prindumy@yahoo.com

Thursday, May 21, 2009

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Tuesday, May 19, 2009

Forex Trading Strategy

If you are a newcomer to the world of foreign currency trading then, before you open your first trade, you must draw up a strategy. The Forex market is one of the world’s most lucrative and exciting markets, but it is also extremely fast moving and, while you can make tremendous profits, you can also make large if you do not have a very well defined plan of action.

There are various different foreign currency trading strategies which you can adopt and you will need to develop a strategy which suits you. At the end of the day, exactly what strategy you pick is largely immaterial but, what is important, is that you choose a strategy before you start trading.

Nowadays, many traders choose to base their strategy on a technical approach to trading while others prefer to follow a fundamental approach. Either approach is fine but the successful traders will tell you that the true secret lies in not selecting either method but in combining the two.

The principle behind technical analysis is that prices follow trends and markets possess clearly identifiable patterns which you can recognize if you know what to look for. Knowledge and experience play a key role in technical analysis but here it is a case of knowledge and experience of not simply the patterns in the market but of working with the large number of tools that are now available to the technical analyst.

Within technical analysis many traders like to work with what are referred to as support and resistance levels. In this case a support price is a low price to which a currency repeatedly returns, in effect marking the bottom of the market or the price at which it supports the market. By contrast, a resistance price is the high price which a currency reaches at times but beyond which it resists rising.

These two levels are seen as important because once the price of a currency drops below its support level it will frequently continue to drop and, similarly, once the price exceeds its resistance level it will continue to rise.

It is also common for traders to use moving averages which depict average currency prices over a specific period of time within a longer time period. This is particularly useful for getting rid of short term price fluctuations and producing a clearer view of currency price movements over time.

Of course these are simply two of the many tools available to Forex traders who are following a technical approach and there is a wide range of far more powerful and complex tools available nawdays.

As well as technical analysis, a lot of traders also have a string belief in fundamental analysis which says that currency prices move in response to a wide range of factors including political events, changes in trade agreements and trading patterns, economic numbers, employment figures, interest rates and much more.

Fundamental analysis is a complex area which requires a great deal of experience and knowledge to master, which is probably one reason why many novice traders are drawn towards technical analysis and only tend to make use of fundamental analysis to a very limited degree at first while they acquire the knowledge and skills needed to put it to work successfully.

Fundamental and technical analyses of course are not by themselves trading strategies but are the foundation on which you must build your strategy. Your starting point has to be to decide upon the foundation on which you want to analyze the market and therefore make your trading decisions. Having done this you must then look carefully at the mechanics of your trading and it is detailing precisely how you intend to trade which forms your Forex trading strategy.

Finally, do not forget that developing your strategy is something which needs to be done at the beginning of your trading career and that you have to make full use of the ability to operate a simulated Forex trading account and a Forex mini trading account to develop your strategy.

Tuesday, April 14, 2009

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ECCURRENCY TRADING SECRETS EXPOSED

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Wednesday, April 8, 2009

RULES TO FOLLOW WHEN TRADING FOREX

Rule to follow when Trading Forex

I don't think that there is something that can hurt me more than losing the money I invested in the forex market. But trading in the forex market is not always easy and you must lose if you want to win. Getting the basic skills to be able to trade in the forex market can be easy but even if you have the right skills to trade you can make mistakes and lose, the game is hard but if you learn how to play it that you can be in a safe playground.
After 2 years of trading in the forex market I got a very important conclusion that having the right alerts when the market changes are a crucial thing. However mastering the market changes is very hard mission. This is the reason that most of the people drop the forex trading very fast they want to make millions of dollars over night and they don't understand that they have to learn how to find the right forex news alerts in the right time so they can earn dollars.
There are people who rush to spend their money in the forex market and lose it instead of learning the old and good tactics that made people hundreds of thousands of dollars. It is very important to learn the basics of trading the forex market online before you start to invest your money in it, just follow the methods that made people money and you're on the right track to make some decent amounts of money.
As you probably know the forex market is flooded with money that you can earn with just a few clicks of a mouse you can make 1000 of dollars and that's the beauty of it but you need to have patience to wait for the right moment and not rush to do things that will leave you with an empty pockets.
Remember the difference from a successful trader to the unsuccessful trader is a state of mind and a self control to wait for the right moment!
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