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    • Is FOREX trading Right For You?

    FOREX is the abbreviated termed used to describe the world’s largest foreign currency exchange market where of 1.5 Trillion pounds is traded on a daily basis. This more than 100 times the trading volume that occurs on the NYSE, and is fast becoming the hot spot for individual investors. A market that was once only accessible to large corporations and government entities is now available to individual investors with online trading accounts. Despite the hype and excitement around this market, is it right for you?

    ACCESSIBILITY. Unlike most investment markets that open and close with the ring of a bell, the FOREX market is open 24 hours a day, six days a week. Trades can be made anytime the market is open from your home computer through the major trading centers located Sydney, Tokyo, London, Frankfurt and New York. Because of this you can act instantly upon news that may affect the market.

    LIQUIDITY. Because of the high volumes that are being traded in this worldwide marketplace, there will always be a buyer or seller available for your trade. The trades occur in the “spot” market so your position closes immediately, avoiding the risks sudden market swings. The liquidity also helps insure price stability and lower spreads.

    VOLATILITY. The FOREX market is always moving. Because of the liquidity of the market, you can make money when the market is moving up, down or even sideways. Volatility in other markets is oftentimes equated to risk or loss, but in the FOREX market volatility equates to profit potential.

    MARGIN. Trading on margin means that you can buy or sell assets greater than the value of your account. You may be able to trade on margin in other investment accounts, but nothing like you can do in the FOREX market. Because currency exchange rates generally only fluctuate 1-2% daily, you can leverage your investment pound for greater returns. The most common margin is 50:1, but you can find some trading accounts that will up to 200:1 margin. For example, if your risk capital is 10,000, you could control 500,000 to 1,000,000 in currency contracts. This type of leverage gives you the potential to make profits very quickly, but you can also lose your money just as fast. It is recommended to have a disciplined investment plan that does not put all of your capital at risk and is followed by stop losses to protect your returns.

    PROFIT POTENTIAL. You do not need a large amount of investment capital to get started in this market. However, it is suggested that whatever capital you begin with is money that you can afford to lose. With FOREX mini-accounts, you can get started for as little as 300. With some discipline and a proven trading plan, you could realistically turn your 300 investment into thousands of pounds within a few weeks or few months. Without a trading plan, you could be out of the market within days.

    PAPER TRADING. Most investment companies will set you up with a free paper trading account so you can practice your trading plan for 60 to 90 days before you begin actual trading. It is much better to lose money on paper that it is suffer a real loss to your own pocketbook. Once you have proven your trading plan you can open up a margin account and begin actual trading. FOREX is often traded without commissions (the profits are in the spread), making it an attractive investment opportunity for those who want to trade on a more frequent basis.

    As you can see, the risks or disadvantages perceived in other markets actually become the profits and advantages of the FOREX market. As always, with any investment, one should proceed with caution, having an established trading plan and risking only money that they can afford to lose.

    by admin  /  December 28, 2010  /  Posted in: Forex

    Interesting Facts About FOREX.

    Most experienced traders consider that the best and most profitable of the capital markets is the FOREX market. During many years FOREX trading had been the sole domain of major banks, large financial institutions and countries central banks; for example the U.S. Federal Reserve Bank. But these days, thanks to the internet the market has been opened to everyone willing to learn the best techniques in forex trading and with the intention of making substantial profits as the before mentioned institutions that annually and consistently make pretty high profits from trading in the Foreign Exchange market.

    Forex is a market that is continually oscillating and in consequence with good trading opportunities during the whole trading day; this behavior is in part due to the increase in global trade and foreign investments during the last two decades that has made the economics of all countries more dependent upon one another. This means that as a country’s currency fluctuates as a result of economic activity it affects the currency of other countries. For example; economic factors usually affect a currency by altering the interest rate structure and these will either appreciate or devalue the currency of that particular country and reflect the monetary health of its economy.

    It is known that some banks allocate as much as 20-30% of their funds into the FOREX market, making 40-60% of all their profits trading currencies. In fact there are experts that consider that banks will cease their loan transactional business in a few years, and better focus on currency trading as their primary revenue source.

    The forex market has five major currencies: US pound, Japanese Yen, British Pound, Euro and the Swiss Franc. It is due to their great popularity in world’s commerce transactions and its high activity that these five currencies account for over 70% of North American trading. Of course there are other tradable currencies; they include the Canadian, Australian and New Zealand pounds. These minor currencies account for 4% – 7% of the total market volume. Together, all this five majors and minors currencies constitute the backbone of the FOREX market.

    by admin  /  December 21, 2010  /  Posted in: Forex

    How to Win the Forex Battle

    Every trading activity is in fact participating in a battle. Winning the battle is a matter of knowledge, skill and experience. If you miss any of those you are going to join the long line of losers. Some says that 95 to 99 percent of the traders are lining up on the losers side.

    How to win the battle in the currency market? It is easy to answer that question, based on the above approach prepare yourself for the battle. If you treat currency market activity as a hobby youll ultimately lose all investments there. If you treat it as a business you still may loose everything.

    The correct approach is: consider each pressing of the BuySell button as entering a battlefield. If you enter it without having a knowledge, skill and experience on how to win, you are destined to fail. You may have some lucky trades in the beginning, though. That, by the way, is the worst case scenario for the rookie in trading.

    The earlier you get your bad lessons, the better for your overall experience. No mater how good you consider yourself prepared, after demo trading lessons, you have no idea of the forces ruling on the real market.

    In fact the worst enemy you are going to face in the very beginning is not hiding behind the walls of the global currency trading centers. Your most dangerous foe is hiding deep inside of you. That enemy is so powerful that you will be amazed how quickly it will wash away all your carefully considered decision.

    No one has been able to evade the force of that destructive power. No one can understand or realize that force unless it has been confronted face to face. Start trading with real money and youll face it too. Fear, Greed or Hope are some of the names of that power.

    Fear forces you to sell near the bottom and buy near the top. Greed forces you to get out of the market prematurely. Hope will keep in the trade until you loose everything. Fear may save you but hope may wreck you completely. Greed will never make you rich.

    It is easy to give advice to trade without emotions and use the logic, only. How you can achieve that if you never have been there. You need to go through that turmoil, pick up your loses due to your emotional decisions and than analyze.

    Study all your bad trades, because they are the most precious gifts on the way to proficiency in trading. Growing as an experienced trader is possible only after getting your losses in the beginning. Then sit down and carefully study the lessons they brought to you.

    One thing traders never want to do is to admit of being wrong. The market is a constantly changing and it demands flexibility in taking decision. That implies monitoring and constantly adjusting, changing your decision and action. When your logical analyzes suggest that you are wrong get out, quickly.

    Once you overcome the emotions, concentrate on developing your signature way of trading. You can start with following different advisors and system and picking from them the things you like. Demo trade and test your ideas until you find the trade system which is matching completely your personality.

    Now, you have to go back to emotion in a controlled way. Every time your system suggests a trade look inside you and see how you feel about this trade. You feel bad discard it. If you feel good keep it.

    Here comes the final step: Looking for the final approval sign before submitting the trade. Here is the time, where the mastership shows up. Your weapon is loaded, the target is clearly seen on the visor and the finger is on the trigger. You have to make that final exhale, get the target over the cross point and shoot it.

    How much knowledge, skill, experience and patience you need to build within in order to reach that very final stage of trading proficiency? Only youll know that and only you can do it. The rest is just numbers in your bank account.

    Building a fortune by trading currency is not a mirage in the desert of live. There are hundreds of traders who are making living of that business and you can do it too. Study all you can find on the net and follow the steps of the best if you want to win that battle.

    by admin  /  December 14, 2010  /  Posted in: Forex

    Helpful Forex strategies to become a successful investor

    As currency trading has become one of the most recent ways of earning money, a large chunk of people take this option just as a hobby. This type of trading is performed by exchanging currency of one country with that of another. Currency trading, Forex trading signal, Forex trading strategy, and Forex alerts have made this industry the largest one if one is to consider its trading volume. To understand it better, let us take an example of an inter-bank trading. Bank X will take the quote from Bank Y of its currency, and Bank Y will provide the present rate of its currency. A deal will be finalized if Bank X will like the rate of Bank Y. and if the currency of Bank X rises against the currency of Bank Y, the former will enjoy the difference as its gain. Likewise individuals deal in the exchange of currencies in the Forex market and act according to the market position.

    The Foreign Exchange market is popularly known as Forex, which has become the largest and frequently rising market in the whole world. It is also called as the transnational market as any person from any part of the world can enter into this market through the use of World Wide Web. Forex trading signal, Forex trading strategy and Forex alerts are carried out in the faith that the prices of the currency will change over a period of time, and the Forex traders will earn a profit if there is a rise in the value of bought currency and that of the selling currency.

    There are various Forex trading strategies that should be followed by every Forex trader in order to gain a large number of profits. This Forex strategy system includes:

    Ability to read or know the Forex trading strategies
    Adopting reliable and effective Forex trading strategies
    Implementing Forex trading strategies without involving costly software
    Taking the option of simple moving
    Deriving resistance and support levels

    The Forex traders should not indulge themselves in adopting complex strategies but should focus on easy and simple strategies in order to implement them as soon as possible and enjoy the results. Moreover, there are various companies that offer the services of working on behalf of the traders and providing them with simple Forex trading strategy. Online Forex alerts are also a helpful for people trading in the Currency trading market as up-to-date position of the market is revealed.

    Consistent and efficient strategies should be employed so that even if the market is facing small changes, it should not hit or affect the plan of the Forex strategy system. The best part about entering this field is that this profession can be taken by any person regardless of his or her educational background. But while Forex trading strategy proves to be a successful profession, it carries high level risks as well. So, while entering the field of currency trading, it is advisable that the traders should consider their objectives with great care so as to eliminate the possibility of facing losses. Also, one should take advice regarding the risks involved in the Forex trading strategy from financial advisors to gain heavy profits.

    For more information on Forex, Forex signal, Forex strategy system, Forex trading signal, Forex trading strategy, Forex alerts and Currency trading, log on to www.Connection2forex.com

    Tags: forex, forex signal, forex strategy system, forex trading signal, forex trading strategy, forex alerts, currency trading.

    by admin  /  December 7, 2010  /  Posted in: Forex

    Getting Started in the FOREX (Foreign Exchange) Market

    I was first introduced to the FOREX (4X) market, the cash market for currencies, at a “4X Made Easy” seminar. The speakers made it sound easy to profit in the market using their trading systems and software, but I was discouraged by the high cost (several thousand pounds) to get started and the recurring monthly fees to continue using their systems and software, so I began to do some research of my own. With a little bit of searching, I found resources that were of little or no cost to get started. It took a little more time and effort, but I was able to gain the knowledge and information necessary to feel comfortable investing in the FOREX market. The purpose of this article is to share with you the resources I found so you can begin investigating this lucrative financial market as soon as possible.

    I began my quest with an internet search using such key words as FOREX, FX market, FOREX trading systems, charts etc. This search pulled up a multitude of resources, many requiring and additional investment to access their knowledge, but many free resources were also revealed. One of my favorite sites that I frequent often is fxstreet.com. This site is mostly free giving one access to free live and delayed streaming quotes, free access to real-time charts, free education and training and links to many other sites that can help as well. They are also linked to many of the preferred trading sites that you can actually use to get your trading business started as well.

    Before investing real pounds into this market, I would suggest doing two things first: 1) develop a trading system and plan that will allow you to get in and out of the market with the least amount of risk or loss possible; and 2) paper-trade the market to test drive your systems before you invest real pounds into the market. Unfortunately, most of the free information regarding trading systems is basic and introductory; you will have to invest in some training and courses to get started, but you do not have to spend thousands of pounds to get the information. The 4X Profit Professor is one site that is dedicated to on-going 4X education at a fraction of the price other sites are charging. Many of the trading sites will provide you with free access to a paper trading account as an incentive to register with their site. I won’t make a specific recommendation here, but browse through several of the links on fxstreet.com and find one you are comfortable with. Realistically, you should plan on paper-trading for three to six months before ever investing any real money into the market.

    Many people ask, “Why would I want to invest in the FOREX market anyway?” To conclude, I would like to share with you some of the reasons I think the FOREX market is one of the best investment opportunities around today. 1) Easy of entry into the market. You can get started for as little as three-hundred pounds, where most other markets require an opening balance of five thousand or more to get started.

    2) You can big money just working a few hours a week from you computer. You don’t have to wait weeks and months for the investment to grow and give you a positive return.

    3) The FOREX market is highly liquid with 1.8 trillion pounds exchanging hands daily, you can get in an out of a position at a fair price and have access to the market daily, 24×7, because there are markets open around the world, which you can easily access with an internet connection from you computer.

    4) Because of the liquidity of this market, you can leverage your account 100:1 allowing you to invest smaller amounts (compared to stocks 1:1; commodities 15:1) and have higher returns quicker.

    5) You can paper-trade the market first, without risking any of your own money, so you can develop the trading systems and plans that will work best for you. Technical analysis works very well in this market and you can make money whether the market is moving up or down, or not moving at all.

    6) Finally, once you have a proven trading system down, you can supplement or replace your income, increase your savings and retirement accounts and retire from your regular job much sooner than you ever thought possible.

    Take a serious look at the FOREX market. It is real. People are making a ton of money and so can you.

    Sincerely,
    Steve Scoresby

    by admin  /  November 23, 2010  /  Posted in: Forex

    ForexTester – professional forex training software.

    Recently new forex software, which could be useful for many traders, was released.

    ForexTester – is a professional forex trading simulator. It reproduces fluctuations of currency exchange rates for any chosen period of time with regulated speed of quotes updating. A user can make trading decisions on historical data, develop and test trading strategies.

    This software – is an excellent tool for quick and convenient study of trading, for gaining and improving trading skills without risking real money.

    The main purpose of this forex software is to provide a trader with opportunity to develop individual discretionary methods of market analysis and making corresponding trading decisions. Such trading strategies usually are very difficult to be realized as mechanical trading systems, but they are of high potential to be ignored.

    Generally, for achieving stable positive results in trading, it is necessary to have a confluence of several important factors: method of analysis, system of making decisions for openingclosing positions, risk- and moneymanagement, discipline in implementing of worked out rules.

    Forex trading, as a profession, demands possessing professional knowledge and professional skills. That is why it is naive to expext stable positive results after practicing on demo-accounts, provided by forex-brokers, reading news feed or useless articles on fundamental analysis.

    There are hundreds of books written on the theme of technical analysis methods, but just a few programs, which provide the opportunity for full studying the efficiency of these methods and working-out concrete rules of making corresponding trading decisions.

    It is difficult to study the technical analysis methods objectively because of two reasons. First, particular features of human psyche in subjective perception and interpretation of graphical information, and second, psychology of decision making.

    When a person studies charts with historical data in retrospective, he presumes himself of being able to analyze the situation and make the best possible trading decision. He tries to look at things with optimism and overestimates information sufficiency. But in real-time conditions a trader confronts with uncertainty and suddenly recognizes insufficiency of information, which can drive to doubtfulness and increasing of mistakes at decision making.

    It is necessary to posess special way of thinking, precision and unambiguity in judgements, to eliminate emotions out of trading process. This task is not for one day. Only through deliberateness of actions, striving for objectivity and by systematical training such tasks can be realized.

    Development of technical analysis methods and making corresponding trading decisions often implies thorough studying of price patterns and indicator signals. Subsequently, there are systematization of observations and then the determination of clear and unambiguous rules, which heshe can apply to eventually become professionally qualified and profitable trader.

    Would you like to study how to correctly use Andrew’s Pitchfork, fibonacci retracements, trendlines, Bill Williams’ set of indicators (including Alligator, fractals, Awesome oscillator) from Trading Chaos, Regression Channels or simple signals, such as moving averages crossover, ForexTester (www.forextester.com) could help you. Ability of convenient using of graphical studies and option to add custom indicators via open interface, contribute to comfortable and flexible environment for gaining knowledge and skills, which are necessary to a professional forex trader.

    by admin  /  November 16, 2010  /  Posted in: Forex

    Forex Training: Deadly Forex Mistakes That Assure Failure

    Before venturing into your trading journey there are some things you need to be aware of, otherwise you could succeed on your trading adventure, and we don’t want that to happen, do we? This Forex training guide will help you track the most costly mistakes Forex traders do.

    First of all, make sure you don’t have a trading system. Having a trading system might increase the odds of your success. If you have a system, you will have an objective way to get in and out the market. When traders create their trading systems they think objectively since there is no position to be taken at the moment. If there is no position to be taken, there is also no money at risk, if there is no money at risk, we do think objectively and are open to every possibility, thus we are able to find low risk trading opportunities. So make sure you don’t have a system and trade based on a randomly approach.

    If you have already created your system, then don’t follow it, be undisciplined. If you follow your system, there is a possibility that you can profit from the Forex market based on the trading opportunities you have found. If you want to fail on your trading, be sure to be undisciplined.

    Don’t get educated. Most successful traders are very well educated in the market they trade (stocks, Forex, futures, etc.) If you get educated, you might acquire the knowledge and experience you require to master the Forex market. Don’t read about the Forex market, don’t enroll into Forex training programs and don’t even look at historical charts.

    Don’t use any money management technique. The purpose of money management is to avoid the risk of ruin, but at the same time it helps you boost your profits, allowing them to grow geometrically. For instance, by using no money management techniques, there is a possibility that in loosing 10 trades in a row you could empty your trading account. On the other hand, by applying simple money management techniques you can avoid it. So make sure, if you want to fail, don’t even consider money management.

    Forget about psychological issues. You need to get every trade to win. Successful traders know that they don’t need to win every trade in order to profit from the market. This is one characteristic that is hard to understand and really apply. Why? Because we are taught, since kids, that any number below 70% is a bad number. In the Forex trading environment, this is not true.

    Don’t even consider using a Risk-reward (RR) ratio greater than 1-1. If you use a RR ratio of 1-2 (willing to make twice the amount risked in one trade) then you only need a system that is right around 50% to make money. If you use a RR ratio of 1-3 (willing to make three times the amount risked in one trade) then you will need a system that is right around 40% of the time to make money. So make sure to use a RR ratio below 1-1.

    By applying every point outlined in this Forex training guide, you will almost assure your failure in your Forex trading journey. Do the opposite, and you will have the possibility to achieve what every trader is looking for: consistent profitable results.

    by admin  /  November 9, 2010  /  Posted in: Forex

    Forex Trading System: Discretionary vs. Mechanical Systems

    There are basically two types of Forex trading systems, mechanical and discretionary systems. The trading signals that come out of mechanical systems are mainly based off technical analysis applied in a systematic way. On the other hand, discretionary systems use experience, intuition or judgment on entries and exits. But which one produces better results? Or more importantly, which one fits better your trading style? These are the answers we will try to answer on this article.

    We will first analyze the pros and cons about each system approach.

    Mechanical systems

    Advantages
    This kind of system can be automated and backtested efficiently.
    It has very rigid rules. Either, there is a trade or there isnt.
    Mechanical traders are less susceptible to emotions than discretionary traders.

    Disadvantages
    Most traders backtest Forex trading systems incorrectly. In order to produce accurate results you need tick data.
    The Forex market is always changing. The Forex market (and all markets) has a random component. The market conditions may look similar, but they are never the same.
    A system that worked successfully the past year doesnt necessary mean it will work this year.

    Discretionary systems

    Advantages
    Discretionary systems are easily adaptable to new market conditions.
    Trading decisions are based on experience. Traders learn to see which trading signals have higher probability of success.

    Disadvantages
    They cannot be backtested or automated, since there is always a thought decision to be made.
    It takes time to develop the experience required to trade successfully and track trades in a discretionary way. At early stages this can be dangerous.

    Now, which approach is better for Forex traders? The one that fits better your personality. For instance, if you are a trader that finds it hard to follow your trading signals, then you are better off using a mechanical system, where your judgment wont play an important role in your system. You only take the trades that your system signals.

    If the psychological barriers that affect every trader (fear, greed, anger, etc.) puts you in unwanted scenarios, you are also better off trading mechanical systems, because you only need to follow what your system is telling you, go short, go long, close a trade. No other decision has to be made.

    On the other hand, if you are a disciplined trader, then you are better off using a discretionary system, because discretionary systems adapt to the market conditions and you are able to change your trading conditions as the market changes. For instance, you have a target of 60 pips on a long trade. But the market suddenly starts trending up pretty strongly, then you could move your target to say 100 pips.

    Does it mean that trading a discretionary system has no rules? This is absolutely incorrect. Trading discretionary systems means that once a trader finds hisher setup, the trader then decides what to do. But every trader still needs certain rules that need to be followed, such as the size of the position, conditions that have to be met before thinking to get in the market, and so on.

    I am a discretionary trader. The main reason I chose a discretionary system is that my trades are based on price behavior, and as you already know, the price behaves similar to the past, but it is never identical, therefore the outcome of every trade is unknown. However, I do have rigid rules on my system, certain conditions have to be met before I even think in getting in a trade. This keeps me out of trouble, once my setup is present and in accordance with the rules I have set, then I closely watch the price behavior and finally decide whether it is a good opportunity or not.

    Whether you choose to be a discretionary or a mechanical trader there are some important points you should take in consideration:

    1.You need to make sure the Forex trading system you are using totally fits your personality. Otherwise you will find yourself outguessing your system.
    2.You also need to have some rules and most importantly have the discipline to follow them.
    3.Take your time to build the perfect system for you. Its not easy and requires time and hard work, but at the end, if done correctly, it will give you consistent profitable results.
    4.Before going live, try it on a demo account or even on a small account (I will go for the second option, since psychological barriers will be present.)

    by admin  /  November 2, 2010  /  Posted in: Forex
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