Don’t Overtrade

If you are experiencing a run of wins, don't get getting carried away in the flush of success. You don't want to give it all back. Over Trading is the greatest single cause for losses in the markets. Whether you are winning now or losing now, ninety-five or more percent of all traders trade too often.

Even a daytrader trading a five minute chart has no need to trade every day nor to trade all day long. You should be filtering your trades so that you take only the best of the best.

Overtrading was a problem that took me a long time to overcome because I did not know what I was looking for. Overtrading is a very serious problem, and veteran traders learn to avoid it. In fact, one way to know if a trader is a mature professional is to know if that trader conquered the problem of overtrading.

The biggest problem with overtrading is that you don't even know you're doing it. You can overtrade by trading too many contracts (too much size), trading too often, attempting too many positions or sitting and staring at the screen all day.

One trader I met, who was following a system in twenty markets, received entry signals in fourteen of the twenty. The entry prices were such that probably only two or three of them had any chance of being filled. Yet this trader boldly called in to enter all fourteen orders. After the first six, his broker refused to take any more orders. Had they all been filled, the trader would have been several thousand dollars over margin.

Good traders immediately cut back on size when they are losing or have an equity draw-down.

The total commitment you make on any entry should be relative to a reasonable expectation of the profit potential for that trade. Each trade is different and must be weighed on its merits.

How do you know how many contracts to trade? Certainly you are in a pickle if you always have to trade in single lots. That is not to say that there are never times when a single lot is the right thing to do. It’s okay when you’re scalping , or trading options . However, wherever possible try to trade a least two contracts. You need one to cover costs, and the other to give you a profit.

If it's late in the day and you are a daytrader who normally does a five lot, perhaps you should use a smaller size due to the fact that the trade hasn't as much time to develop as one made earlier in the day.

FOREX Trading Profits – 4 Tools to Help You Catch the Biggest Trends

Here we are going to look at the art of contrary trading, which if you can trade contrary to the majority at important market turning points, which can give you massive profits but also low risk.

These FOREX trading profits only come a few times a year, but if you simply concentrated on them and caught them, you could enjoy triple digit profits.

Let’s look at how to catch them.

A good place to start is:

Exaggerated moves with a general consensus that the move will go on for ever in the media and from so called experts and gurus.

When you have a move like this start watching your charts.

It’s a fact that strong bull and bear moves collapse when the news is at its most bullish and bearish respectively – human nature has pushed prices too far from fair value and a change is likely.

These moves are easy to spot, if you use the following tools:

Relative strength index

A great contrary indicator.

Look for RSI To be over bought or oversold and watch for a turn up in a bear market and down in a bull market.

% Bullish

Another great contrary indicator when % bullish is above 80% in FOREX markets prices are overbought and when their below 20% their oversold.

Keep an eye on this indicator with the RSI, to spot potential trade set ups.

Looking for entry levels

When you start to see a these indicators indicating a top or bottom; its time to look for an entry in the opposite direction – i.e. a contrary trade.

Do this by watching for support or resistance to form and hold.

Timing your entry

Use the stochastic momentum to indicate price momentum going the other way to the prevailing trend.

Ideally, you want a cross of stochastic momentum to downside (bearish divergence) in a strong bull market, or the opposite set up in a bear market.

The majority will not agree with you!

Not many people will agree with your point of view, but that should not worry you – keep in mind the vast majority are wrong at important market turning points, so its good they don’t!

Great contrary trades don’t come up everyday.

You will probably only see a few of these trades a year, where all the elements come together, but when they do, you will trade with very low risk and huge profit potential.

These are the trades that make the big profits.

If you use the above indicators and don’t mind everyone telling you you’re wrong you can bank some triple digit gains.

Learn to become a contrary trader and have patience and the big profits will come.

6 Simplest Steps to Successful Portfolio Management

Portfolio management is challenging, but it's also exciting. Some people prefer to have their portfolios managed by a professional. However, it's not impossible to manage your own portfolio. It just takes time and a basic understanding of the process.

Portfolio management involves 6 steps in an ongoing process.
1. Determine Objectives/Constraints
2. Formulate a Strategy
3. Design an Investment Policy
4. Implement Asset Allocation
5. Monitor Performance
6. Evaluate Performance

As an ongoing process, it is the responsibility of the portfolio manager (whether that's you or a professional) to go through the process (beginning at "Determine Objectives and Constraints") and upon reaching the "Evaluate Performance" stage, start again.

Why is it an ongoing process? Because life is not static. People move, they change jobs, they get married, they get divorced, they get remarried, they have children, they make large purchases, they make wise decisions, they make unwise decisions, they are faced with windfalls and tragedies. Each of those (and many, many other) events will affect how they manage their portfolio.

Every individual has different needs and wants. The first step to successfully manage your investment needs is to identify them by drafting an investment plan. This plan should state your goals. It is simply a mission statement of what you endeavor to achieve. Be as specific as you can, so that you can determine what to invest in, and how your portfolio will be structured to realise your dream.

Knowing yourself is critical to creating and managing a portfolio that will do what you want it to do. This knowledge will help you set realistic future financial goals and will help you to decide how much risk to include in your investment strategy

There are several constraints that may work against your desire to build up a healthy nest egg. These are all challenges of having money. Unfortunately, many of them are unavoidable… but that doesn't mean that they're not manageable. The best thing to do is know that they exist and develop strategies to help you over come them. Some of the considerations include evaluating your Risk & Return Profile, Investment Time Horizon, Liquidity Requirement, Legal and Taxation Structure, etc.

And also, do you remember the popular saying, "Don't put all your eggs in one basket" ? The reason why you should achieve diversification in your portfolio is that the value of different asset classes tends to behave and perform very differently. Some assets move in tandem or in a similar direction with each other, while others move in opposite directions. What may surprise you is that for the same rate of return, you can actually combine different asset classes to achieve this expected return. Thus the secret to successful portfolio management is to create a portfolio by investing in different types of asset classes, that generate the lowest risk factor to achieve your investment objectives.

As you manage your portfolio, different factors will have an effect on its performance. The economy, for example, may go up or down and cause the value of your holdings to rise or fall. Perhaps you followed some advice from a friend on a "can't lose" stock and ended up losing. Whatever the case may be, it is crucial to monitor the performance of your portfolio at all times so that you can react if something happens.

We will review the 6 steps in our upcoming series of articles and I really hope you will benefit from it.

Create a Forex Strategy That Will Provide Massive Returns

Forex is a foreign-exchange currency market, where investors from all over the world buy and sell different currency pairs. The development of the Internet and computer programs have made it possible for people from all over the world to enter this multi-billion dollar market. But, most of them get caught up by the system. Start-ups with as much as $250 in their account are highly-likely to fail. If you want to invest in this market, you need a strategy. The goal behind a Forex trading strategy is to provide profit for the investor. The whole scheme is based on the idea of buying a given currency when it's undervalued and exchange it for another currency of normal or higher value. The difference will be your profit. This is a very simple strategy, but brings out the main idea of FX strategies.

No matter what type of strategy you apply, always remember that the chances of loosing are as real as the chances of winning. Be prepared to loose those money, but at the same time, do your best to be on the receiving end. Your strategy must be based on accurate and thorough studies of the market, up-to-date financial tools and information.

The big corporations that deal on the Forex market are able to make constant profits, because their strategies are made by professionals that have extensively researched the market, have special education and years of experience. Watch what large traders do and try to get some advices from them regarding the strategies available to you.

A Forex trading strategy must be influenced by the current economical and political news, situations and factors. You must follow the government issued reports, political news from all around the world, and economic trends in order to forecast the moves of the different currencies. Other strategies can be based on mathematical analysis of the forex charts for a given currency pair. The best idea is to combine both methods but no matter how good a given strategy is, unexpected events will always occur at one moment or another. Remember that it’s not the events the drive the market, but the anticipation of those events.

This is a two-sided market, as there are always two currencies that are involved, two different countries. It’s the news about those countries that make the difference. The goal when investing in currency is to be holding a currency that increases in value relative to another currency.

The Five Secrets of Successful Forex Trading

I think I had better start off by clarifying that there really are no “secrets” to trading in the forex market, but there are certain things that successful traders do that unsuccessful traders do not do – and vice versa.It seems to be a well established fact that 95% of all the people that trade the forex lose some or all of their investment while a small percentage of traders make a very handsome return. Why is this?

If we were able to make a detailed study of every successful trader, we would find that there is a common thread that runs through these people. The details that we could take from this thread could be considered to be the five secrets of successful forex trading.So here is the first “secret”. Successful Forex Traders love to trade. They love everything about trading. They love the studying, the planning, the scheming, the waiting, the anticipation, the execution, the result, the atmosphere and of course they love making lots of money.

These traders talk, eat, sleep and dream trading. It is not a job. It is a way of life. They DO NOT do it just for the money!In my forex trading business, one very common question that I am asked is “how do you overcome the boredom of being stuck in front of your PC all day?”.The answer is of course that I do not find it boring. I love trading and if I didn’t, I would find a different way to make a living.

The next “secret” is emotional control. Successful traders have learned the ability to trade without emotion. This does not mean that they do not care about the outcome of their trade, quite the opposite. Successful traders always trade to win, but they do not let their emotions play a part in the process. They just look at the cold hard facts and then either trade or wait. Successful traders also accept that there will be both winning and losing trades and they treat both with the same lack of emotion.The next “secret” is to have a system. Now it really does not matter what system you use so long as it produces more and bigger winning trades than losing ones. This is referred to in trading circles as “an edge”. If you do not have an edge, then I highly recommend that you consider the trading system that I co-developed called The Amazing Stealth Forex Trading System. It is available from the website: www.stealthforex.com

The penultimate “secret” is to be disciplined. This means having the self discipline to STICK TO THE PLAN. There is a great maxim in trading. Plan the trade and trade the plan. If you have a winning system, make sure that you have the discipline to stick to the rules exactly.

The final “secret” is to have enough money to trade safely. In many ways this should be RULE NUMBER ONE. More people fail to make money when trading on the forex through insufficient trading capital than for any other single reason.

When trading it is vital to adhere to strict money management and capital conservation techniques. Money management must be an integral part of any good trading system, and of course you should never trade with money that if lost would cause you or your family financial difficulty.If you can take onboard and learn these not so secret “secrets”, there is no reason why you should not be able to join the ranks of successful forex traders.

Backtesting System

How long should you backtest a system?

I am frequently asked how long one should backtest a trading system. Though there's no easy answer, I will provide you with some guidelines. There are a few factors that you need to consider when determining the period for backtesting your trading system:

• Trade frequency
  How many trades per day does your trading system generate? It’s not important how long you backtest a trading system; it’s important that you receive enough trades to make statistically valid assumptions*: If your trading system generates three trades per day, i.e. 600 trades per year, then a year of testing gives you enough data to make reliable assumptions*. But if your trading system generates only three trades per month, i.e. 36 trades per year, then you should backtest a couple of years to receive reliable data.

• Underlying contract
  You must consider the characteristics of the underlying contract. The chart below shows the average daily volume of the e-mini S&P:
  
  
  
  It doesn’t make sense to backtest a trading system for the e-mini S&P before 1999, because the contract simply didn't exist! In my opnion it doesn't make sense to backtest an e-mini trading system before 2002 because at that time the market was completely different; less liquidity and different market participants. I believe that a reliable testing period for the e-mini S&P are the years 2002 – 2004.

* What is "statistically valid"?

Recently I received an article from a Ph.D in statiscs. He explained the correlation between the sample size and the "margin of error" in the table below. The bigger the sample the smaller the margin of error, but usually a sample date of 200 trades should be sufficent. If your trading system generates enough trades, then you should use 500 - 600 trades.

E-currency Exchange Home Business

If you are reading this article you are probably one of the many people who have spent countless hours searching for unique ways to make money on the internet. Very few people have gone on to succeed and most have failed miserably time and time again.

So how are some people succeeding? The answer is quite simple; they are finding a business that works with their specific strengths and needs. The majority of people today trying to get into the home-based business industry are not salesmen and genius marketers. People fiddle around looking in all the wrong places wasting loads of money on advertising that isn’t working and E-books that promise wealth.

It took me five years to find a business that did not involving selling, building a down-line or that required me to recruit more people. That is when I stumbled across e-currency exchange, the fastest growing online opportunity today.

So what is it then? E-currency exchange allows everyday people just like you and I to build a financial portfolio through a complex system of thousands of people exchanging funds from dollars to electronic currency. There are two sides to the trading system, the portfolio side and the console side.

Initially you create a portfolio that receives 1.5% to 4.0% gains per day on the amount of money in the portfolio. For example, if you put in $1,000 and received gains at a rate of .35%, your profits for one day would be $3.50. This money is compounded daily and grows continuously over time. It is not uncommon for people who initially invest $100 to grow their portfolio value to $1000 in 1 month. It is easy to see that over the course of time you can make substantial gains.

Once you have been in e-currency exchange program for 90 days and your portfolio has grown to a value of $5000, you are able to apply for a console. With a console you can now process requests from people that wish to take their money from e-currency and convert it back to the dollar. As a console holder you receive a percentage of the amount being exchanged as profit. There are literally people lined up in a queue that need these exchanges processed daily. There is such a high demand right now for exchangers that it is a very profitable business for those who are able to console.

The only down-side is learning how to navigate through this e-currency network which is extremely difficult without assistance. Most people try it out for a few days, become frustrated and quit because they simply do not know what they are doing. That is why we have developed a guide that will walk you through everything you need to know! We have everything from personal phone support, to forums, to live chat rooms. There is no selling or recruiting and that is what makes this the perfect business!

Learn A Profitable Forex Breakout Strategy You Can Use Right Now

Breakouts have always fascinated me and although at first they did not prove to be profitable I believed there must be an easy way to trade them, and there is.

There is a key to breakouts, that key is that they must be seen by enough traders and institutions to create volume so the breakout will be strong. How does this relate to us? It's quite simple. For example if we had a nice strong up trend on a chart and asked 10 different traders to draw a trend line that they believed if broken would result in a breakout you would more than likely end up with 10 different trend lines.

However if we asked the same 10 traders to identify a level of support/resistance with horizontal lines that if broken would result in a breakout all 10 traders would generally agree on the same area.

In my trading I found it to be far more reliable to plot key support/resistance areas using horizontal lines. As I said earlier these areas are watched by far more traders and result in less false breakouts.

If you want to succeed trading breakouts forget grand ideas of gaining 100's of pips on each trade, you need to come down to earth. Look to grab 5-10 pips and then finish for the day. You do not need any more than that to grow your account and eventually become exceedingly wealthy.

Breakouts are low risk trades to grab some quick pips, if it remotely looks like the trade is moving against you then close the trade. Remember your stop loss is there in case you can not close the trade, do not let your trades go that far into loss.

The Role of Trading Signals

For the purposes of this article, we're going to assume you already have a basic understanding of the Forex market and are looking for additional information to make your Forex trading as successful as possible. When to buy and sell, triggered by observing trading signals, can provide you with one of the keys to making successful Forex trades. And that's what we're going to examine today.

What exactly are trading signals?

Trading signals are indicators of Forex market trends, generally based on a trading system, that tell the trader the best time to buy or sell a currency. These trends can include everything from currency pairs near moving averages, to support and resistance levels, to Fibonacci levels. Different trading systems can require different signals and trends for their recommendations. Some systems can include as many 26 indicators in their development of trading signals.

Why are trading signals important?

The Forex market is one of the volatile markets in the world. Currency shifts can occur for a wide variety of reasons, including economic conditions, political shifts, government spending, consumer spending, even weather conditions. These influences can trigger changes in the currency, which are reflected in nearly instantaneous shifts in the market. Trading signals, based on technical analysis of market conditions, allow traders to anticipate these shifts to their advantage.

As a Forex trader, you can utilize a charting service to study the trends and track the signals for yourself. Or you can use a Forex signal service. In addition, some brokers may offer a signal service which integrates into their trading software. In either case, the services monitor and analyze the market for you. When specific signals show themselves, the service will send you a notice via your computer, by email, or even SMS on your cell phone or pager.

Most services offer signals on EUR/USD, USD/JPY, GBP/USD, USD/CHF currency pairs, but specialized services may offer other currency pairs. In addition, some services even offer auto-trading, which allows you to auto-execute their signals direct into your broker account. In such instances, you will have already established a number of options, such as lot size, in advance.

Technical signals are based on technical indicators, which are precise mathematical formulas applied to market prices within a given period of time. Traders are always on the look out for easy and clear technical signals that indicate the right time to enter or exit a particular segment of the market. This is sometimes missed by beginning traders. It's equally as important to know when to exit a trade as it is to know when to enter one. This is where limit exits, trailing stops, and fixed stops can play a vital role in your trading.

Forex trading signals are a personal decision. However, once that decision is made, you need to be committed to it (at least long enough to know if it's working for you). Most signal systems do work. Traders can learn to anticipate the market movements and conditions before making their trading decision. The problems arise when emotions are allowed to take over and the system is ignored. Don't let this happen to you.

What is Technical Analysis?

Simply put, technical analysis means that one studies price movement. You can use price charts in order to keep track of price movement history. By doing so, you can try to figure out which way prices will go, up or down, in future trends.

Most online forex brokers give you many different tools that will help you figure out what it is that will assist you in technical analysis. Some of these include the following:

Bollinger Bands

Bollinger Bands measure market volatility. They use three lines of data: an average that changes in the middle; an upper line, which keeps track of the changing average and then adds two standard deviations; and a lower line, which keeps track of the changing average, and subtracts two standard deviations.

If the market is particularly volatile, the bands appear further apart. If volatility is not so great, the bands appear closer together.

One phenomenon known as the "Bollinger Bounce" means that the middle band is "controlled" by the two outer bands. When the middle band nears either of the two outer bands, it is "bounced" back towards the middle. This helps you visually keep track of the market, and it's useful because if the middle band does approach either the upper or lower band, you know it's likely that it will be pushed back towards the middle. It's best to use this as a strategy if prices are changing rapidly but you see no clear trends from your data.

Another way to spot a general trend is what is called the "Bollinger Squeeze." When the bands squeeze close together, it might mean that a breakout is going to happen pretty soon. If the middle band "breaks through" or exceeds either the upper or lower band, it's likely that the market will continue to trend in that direction.

Another indicator is called the "Parabolic SAR," or "Parabolic Stop and Reversal." This indicator spots trend reversals. It is perhaps the easiest indicator to read. Points or dots are placed in the chart in positions that are either above or below the "candles." (There is thea formula used that regulates where the points appear on the chart, but it's too in depth to describe here.) If points appear above the candles, traders should sell. If points appear below the candles, traders should buy.

Parabolic SAR works best if there are clear downward or upward trends. However, it does not work very well when price movement is minimal.

Another indicator is called "stochastics." Stochastics measures conditions that have been overbought or oversold in the market. The scale ranges from 0 to 100. If stochastics' lines are above 80, this means that the market has been overbought and a downward trend may soon be coming. If stochastics lines go below 20, it may mean that the market has been oversold and an upward trend is about to occur.

Stochastics can help you if you want to determine when you should lock in profits or when you should place an order to buy or sell. However, don't just rely on one of these indicators. Use several of them and adjust your trading strategy according to what you see.

Forex - The Psychology of Trading

Psychology plays an important role in any trading program, and this is equally true for Forex trading. For instance, we all have our own level of risk before we panic. The key to successful Forex trading, however, requires that we develop the ability to distance ourselves from our emotions and instead solely rely on our knowledge and the Forex system we're using.

Easier said than done.

If you've ever done any day trading or gambling or even overeating, you know that there's a psychological component that can sometimes be difficult to control. For many people, if a trade is going well (of in the case of gambling, if the betting's succeeding, or in the case of overeating if food isn't currently an issue) they feel completely in control. This makes it much easier to do the things they know they should be doing. Logic prevails over emotion.

However, when a trade has turned bad (and it happens to even the best Forex traders, no matter how much knowledge they have or how long they've been trading), suddenly logic moves to the back and emotion steps forward.

Like the amateur gambler, there's a shift in thinking. It'll turn around, becomes your mantra. Instead of following pre-determined stops, you let your trade dip below your exit strategy with the hope (emotional) that the trade will turn around and you'll not only recoup your losses but you'll come out ahead.

Or as in the case of the overeater, there's almost a masochistic resignation. The thinking goes something like this: well, the damage is done now (I've eaten that slice of cake that was forbidden), the trade's turned bad, it's lost, I might as well ride it all the way and see what happens, because there's nothing else to lose at this point. Again, a clear indication that your emotions have taken over.

All the Forex training in the world, all the knowledge and skills, charts and strategies are worthless if you disregard them when a trade has taken a turn for the worse.

So what's your psychological foundation? Do you turn to your emotions when situations become difficult or work against you? Do you double your bets as a gambler? Do you get a pint of Ben & Jerry's out of the freezer as a dieter? You're the only one who knows how your psychology works. And you're the only one who knows if you have the ability to control yourself or not.

Just remember this: success as a Forex trader is not the result of how you react when your trades are going well. It's the result of how you react when your trades are going bad.

Forex Indicator Definitions

Simple Moving Average (SMA) - The average price of a given time period, (5 minutes, 10 minutes, 1 day, etc.) where each of the chosen periods carries the same weight for the average. Example using the closing prices of the USD/JPY currency pair: Day 1 close = 124.00, Day 2 close = 126.00, Day 3 close = 124.00, Day 4 close = 126.00; The 4-day SMA is 125.00 (the average of the prior four closes).

Exponential Moving Average (EMA) - Here, the averages are calculated with the recent forex rates carrying more weight in the overall average; for example: In a 10-day exponential moving average, the last 5 days will have more effect on the average than the first 5 days. The idea is to use the most recent data as a better indication of trend direction

Bollinger Bands - The basic interpretation of Bollinger Bands is that prices tend to stay within the upper and lower bands. The distinctive characteristic of Bollinger Bands is that the spacing between the bands varies based on the volatility of the prices. During periods of extreme currency price changes (i.e., high volatility), the bands widen to become more forgiving. During periods of low volatility, the bands narrow to contain currency prices. The bands are plotted two standard deviations above and below a simple moving average. They indicate a "sell" when above the moving average (or close to the upper band) and a "buy" when below it (or close to the lower band). The bands are used by some forex traders in conjunction with other analyses, including RSI, MACD, CCI, and Rate of Change.

Parabolic SAR - The Parabolic SAR (stop-and-reversal) is a time/price trend following system used to set trailing price stops. The Parabolic SAR provides excellent exit points. Forex traders using this technical indicator should close long positions when the price falls below the SAR and close short positions when the price rises above the SAR. If you are long (i.e., the price is above the SAR), the SAR will move up every day, regardless of the direction the price is moving. The amount the SAR moves up depends on the amount that currency rates move.

Rate of Change - The oldest closing price divided into the most recent one.

RSI (Relative Strength Index) - The RSI is a price-following oscillator that ranges between 0 and 100. A popular method of analyzing the RSI is to look for a divergence in which the currency price is making a new high, but the RSI is failing to surpass its previous high. This divergence is an indication of an impending reversal. When the RSI then turns down and falls below its most recent trough, it is said to have completed a "failure swing." The failure swing is considered a confirmation of the impending reversal in the price of the currency.

Stochastics - Stochastic studies are based on the premise that as prices rise, closing prices tend to be near the high value. Conversely, as prices fall, closing prices are near the low for the period. Stochastic studies are made of two lines, %D and %K, that move between a scale of 0 and 100. The %D line is the moving average over a specified period of time of the %K line. The %K line measures where the closing price of a currency is compared to the price range for a given number of periods.

Momentum - Designed to measure the rate of price change, not the actual price level. Consists of the net difference between the current closing price and the oldest closing price from a predetermined period. The Momentum indicator can be used as either a trend-following oscillator similar to the MACD or as a leading indicator.

MACD - Moving Average Convergence/Divergence - Consists of two exponential moving averages that are plotted against the zero line. The zero line represents the times the values of the two moving averages are identical. The MACD is calculated by subtracting a 26-day moving average of a currency's price from a 12-day moving average of its price. The result is an indicator that oscillates above and below zero. When the MACD is above zero, it means the 12-day moving average is higher than the 26-day moving average. This is bullish as it shows that current expectations (i.e., the 12-day moving average) are more bullish than previous expectations (i.e., the 26-day average). This implies a bullish, or upward, shift in the forex rate. When the MACD falls below zero, it means that the 12-day moving average is less than the 26-day moving average, implying a bearish shift in the currency.

ADX - Measures the strength of a prevailing currency trend and whether or not there is direction in the currency market. Plotted from zero on up, usually a reading above 25 can be considered directional.

William's %R - A momentum indicator that measures overbought/oversold levels in the price of a currency. The interpretation of Williams' %R is very similar to that of the Stochastic Oscillator, except that %R is plotted upside-down and the Stochastic Oscillator has internal smoothing. Readings in the range of 80 to 100% indicate oversold, while readings in the 0 to 20% range suggest overbought.

Volatility - Measures the overall volatility of a currency in a given time period.

Learn To Trade Forex Profitably In 1 Weekend Or Less!

We have all herd the forex buzz in the past few years, thousands of beginner currency traders come into the market every month with the sure opinion that they will master the market and make millions. We all know how that ends up.

Forex Currency Trading For The Beginer does not have to be complicated at all in fact you will probably be shocked when I tell you what some traders I know are doing to make millions!

The first thing you need to get started is an online forex broker account you can easily and quickly make your trades from where ever you are in the world. Don't just settle for the first broker you come across check each one out and weigh up the pros and cons of each before making a decision. Most brokers now will allow you to trade in micro lots which is perfect for beginners, you can fund your account with as little as $100 to get started. Your account will have at least 100% margin which means you can control $10,000 with the $100 in your account.

All brokers have there own charting platform, don't get caught up in all the fancy indicators they will only confuse you. Remember we want to keep this simple!

Setting up your trading account should take 2-3 days in the mean time you need to start thinking about your trading system.

A trading system is simply a set of rules to get you in and out of trades. I am now going to outline a simple system which I know to be very profitable and perfect for a beginner who is new to currency trading.

First you will need to pick on currency pair, mine is the EURUSD you are only going to trade one pair. Get to know that pair and how it moves (this comes in time).

You will be using a 4 hour chart. The first thing you need to do is see what the trend is so zoom out a little until you can see at least 2 months of data now if the chart starts in the bottom corner and finishes in the top it is a up trend and if it starts at the top and finishes at the bottom it is a down trend.

We are only taking trades with the trend. Look at the current move is it with the trend if so wait for a retracement. Use the 50% retracement level and look for a support/resistance level that is in confluence with it.

Take your trade at this level with a 50 pip trailing stop never risking more than 3% of your account on each trade.

Here is the part that is really important to your success! When you have 100pips profit add to your position by half the amount of your original position. Keep looking for retracements to add to your position every 50 pips as it increases in profit. Never cut a winning position off until you have a good reason to believe it is over. You will not get good runs over a 100 pips all the time but they do happen at least once a month and when they do you will see the power of this simple system. During the time when you don't have huge moves your 50 pip trailing stop will usually take you out with a small profit.

That is all there is to it. Simple but it works very well and is perfect for the forex currency trading beginner.

Profits from Forex

As a trading advisor in the markets for almost half a decade, I have come to realize a few things about taking the profits. The first thing is to find a low risk trading opportunity then make sure your risk is lower than your potential gain and executing the trade with discipline. In the beginning the best thing is to do this on a demo account or on a single contract basis.

The good thing is that the most of the Commodity Trading Advisors say that you only need one type of strategy or pattern to trade the markets successfully. Become an expert in your form of market pattern or strategy. By this what I mean is that your form of entry and exit has to be low risk and high yielding. Ask yourself the following questions while developing a trading system. What do I want from the markets? How much is my risk when I am entering the trade?

What is my potential gain (make sure that it is bigger than your potential loss) and then trade this whole game with discipline. I have been teaching traders for a few years and the only one's who succeed have patience and discipline to trade my strategies on a demo account till they are comfortable without paying any money to the markets while gaining experience. I call it free experience! and then starting small accounts. Once you memorize the game, it is much easier to play. Happy trading and a prosperous life.

Two Most Important Questions You Must Answer Before You Trade Forex

As a young graduate who was earning a good starting income many, many years back,I was attracted to trading stocks and shares as a traditional way of investing my hard earned money to try to create personal wealth. Since then, I often meet people who would tell me that right now, opportunities to make money from investing in the stocks and futures market, the forex and commodities markets are much lesser. To them, the golden years of investing are all but over.

But is this really so?

I have gone a long way since my beginning years as a novice trader and investor. Experience has taught me that the markets do not move in a straight line. The market by itself is what is termed " a sum of its parts'. For example, in the stock market, there are stocks that move in cycles that repeatedly manifest their movements in easily trackable cycles, and waves that we term "Elliot waves". Thus, we find a lot of traders utilizing a well known method of trading in the footsteps of the legendary trader WD Gann, who had an uncanny ability to discover the cycles of the market and to forecast the "squaring of time and price".

Experience has also taught me that there are stocks that are non-cyclical as well. So at any one time, there are many stocks and shares that are moving up or trending up, and there are stocks that are in various phases of trending down. Some stocks are cycling up, while others are cycling down and some just are trading within a tight range. With these various movements, there are open opportunities for a trader or investor to put his money into stocks and shares, commodities and forex at any time - because each trading vehicle displays its own price movements in its own particular way. This means, you can invest and trade the markets at any time, in season or out of season!

The second most common question that I encounter as a trader is this :" Just what would be a good way to trade the markets?"

Instead of jumping straight into methods of trading, what is important even before you ever start to learn to trade, is a personal evaluation of your own risk profile. You have to discover your tolerance for risk, which boils down to the amount of capital you are going to employ in your trades, and how much pain you are able to tolerate in the event the trade goes against you and you are in a drawdown, and when you will want to quit the trade in the light of the loss. If you are a conservative trader, then day trading is NOT for you and you may wish to look at long term position trading.

If you are an aggressive trader and like action, day trading and perhaps swing trading may be suitable. It is easy to be blinded by sheer greed at this time, because you can set yourself an unrealistic objective of making a million dollars in trading income when your capital is merely $10,000 and you do not have leverage such as a margin account.Such an objective will likely see you losing all your money because you will need to assume the highest risk....which will be unreasonable risk, and will ensure the rapid depletion of your capital.

Once you have sorted out your own risk profile and understand your self- your ability to take risk against the expectation of profits and gains, then you are poised to take the next step which is to discover the best trading method that is suited to your personal trading profile.

Today, August 10 2007

INTRA-DAY EUR/USD OUTLOOK - 1.3680

Although euro has retreated after meeting renew
ed selling at 1.3712/15, a breach of 1.3654 sup is
needed to confirm decline fm 1.3840 has resumed n
extend marginal weakness to 1.3635/40 but loss of
nr term momentum shud limit downside to 1.3609.

Wud be prudent to take profit on present fall n
look to sell again on subsequent recovery...

Rate: 1.3680
Strategy: Exit short
Position: Short at 1.3710
Objective:
Stop-Loss:
Resistance: 1.3721/1.3753/1.3785
Support: 1.3654/1.3609/1.3568

INTRA-DAY USD/JPY OUTLOOK - +118.35+

Although dlr has recovered after intra-day
cross-inspired selloff to 118.23, as long as 118.80
/85 holds, bearish-ness remains for the decline fm
y'day's 119.84 high to resume soon for re-test of
said sup, then twds 117.97.

Hold short with stop as indicated n abv wud
prolong choppy trading n risk 119.20/25...

Rate: +118.35+
Strategy: +Target met+
Position: Short at 118.70
Objective: 118.35
Stop-Loss:
Resistance: 118.86/119.10/119.35
Support: 118.23/117.97/117.19

WEEKLY EUR/YEN CROSS OUTLOOK - +162.00+

Last wk's rebound fm 160.47 to 163.75 suggests
major fall fm 169.05 top to retrace MT upmove has
made a temp. low there n consolidation is in store,
however, upside wud be ltd to 164.75/80 n yield an-
other decline, below said sup wud extend to 159.50
but loss of momentum wud bring recovery later.

Sell at 164.75 for 162.00 or if euro drops to
159.50 1st, venture long for 163.00 but 165.75/80
wud cap upside...

Rate: +162.00+
Strategy: +Target met+
Position: +Short at 164.75+
Objective: +162.00+
Stop-Loss:
Resistance: 164.68/165.40/166.35
Support: 162.21/161.57/160.47

Currency: EURNZD

Trade Objective: Trend Follower

Chart: Daily

Trade volatility: medium to high

Trade duration once triggered: min 03mn, max 04days.

Spread Consideration: Set the trade as it is below in its exact form

Long 18434 Target 12Pips Exact @ 18446

***************************************
INTRA-DAY AUD/USD OUTLOOK - 0.8472

Update Time: 10 Aug 2007 00:28 GMT

Although A$ has remained under pressure after
breaking y'day's 0.8485 low n decline fm 0.8663 is
likely to bring a re-test of 0.8446, loss of near
term downward momentum wud limit downside to 0.8420
/25 n yield rebound later but 0.8547 shud hold.

Venture long on dips n exit on rise, stop as in
dicated, break wud risk 0.8385/90...

Range Forecast
0.8450 / 0.8480

Resistance/Support
R: 0.8510/0.8547/0.8578
S: 0.8446/0.8400/0.8351

***************************************

GBPUSD New Signal

If you are running a bad position and the market is still going against your trades, providing the open position details and we would be more than glad to help you out.





Aug 09 Spot Trade:



Currency: GBPUSD

Trade Objective: Resilient-Trend Follower

Chart: Daily

Trade volatility: medium

Trade duration once triggered: min 02mn, max 07 days.

Spread Consideration: Set the trade as it is below in its exact form



Long 20400 Target 10 pips Exact @ 20410

Enjoy Pound trade.

Aug 08 Spot Trade:

***************************************
INTRA-DAY AUD/USD OUTLOOK - 0.8563

Update Time: 08 Aug 2007 01:17 GMT

Despite intra-day rise to 0.8578, lack of upside
follow through n current retreat suggest consolida-
tion wud be seen n weakness to 0.8540/45 cannot be
ruled out, however, y'day's 0.8514 low shud remain
intact n yield further choppy trading.

Exit long n stand aside for now. Abv said res
wud extend gain twds 0.8600/04...

Range Forecast
0.8550 / 0.8575

Resistance/Support
R: 0.8604/0.8616/0.8645
S: 0.8514/0.8492/0.8446
***************************************

Currency: AUDNZD
Trade Objective: Resilient-Trend Follower
Chart: Daily
Trade volatility: medium to high
Trade duration once triggered: min 05mn, max 07 days.
Spread Consideration: Set the trade as it is below in its exact form

Long 11350 Target 10 pips Exact @ 11360

Enjoy Aud trade.

GBP/USD Today

Pivot 2.0399
R1 2.0446
R2 2.0475
R3 2.0522
S1 2.0352
S2 2.0323
S3 2.0276

Buy Stop 2.0445
Sell stop 2.0379

Buy/Sell Signals for Ranging Markets

Why the Forex Market Changed Through the 1980s and 1990s, and even into the new century, the distinctive characteristic of the foreign exchange market was its volatility—a volatility that was a reflection of major imbalances between national economies. When a country over-spent or over-borrowed, or when its external trade went wildly out of balance, its interest rates were forced up and its economic growth slowed down. In the forex market, the country's currency also paid the price—usually by sudden and sometimes drastic devaluation. In short, economic imbalance generated currency volatility. Increasing globalization has changed all that. In today's world of tightening economic interdependency, it is in every country's interest to maintain economic and financial stability—even if it costs. And trade surplus countries (in particular China) now effectively underwrite trade deficit countries (in particular the US) in the name of stability and an orderly market. As one result, interest rate differences are compressed. As another, currency volatility is minimized. The New Range-Bound Forex Market The forex market has undergone a profound change. In past years, a trade imbalance or an interest rate shift could suddenly move a currency price hundreds of pips. For that reason, success in the forex market followed a traditional formula: Cut your losses short, but let your profits run. Traders took small losses quickly, but rode big trends for big wins. A volatile forex market rewarded breakout traders. Using that formula, professional traders were disciplined enough (or their black boxes were disciplined enough) to absorb several small losing trades, because their one, very large win more than made up for them. Using a breakout trading system, only 30% of the trades had to be winners, because the payoff on a breakout trade could be six times the total of the losses. The risk/reward ratio and the mathematical probabilities were in their favor. How to Trade in the New Forex Market—With the New Math Recently, however, traders have been searching in vain for that kind of explosive breakout market. Thanks to the new interconnected, stability-first world, the formula, the market—and the mathematics—have all changed. Forex is no longer a market in which the trader can exploit volatility. (Our best estimate is that volatility in the major currency pairs has fallen over 50% in the last three years.) Unfortunately, too many traders—even professionals with years of experience—have been slow to adjust, and have paid the price. Accumulating a half-years' worth of small losses (by continually being stopped out), they can no longer make up those losses, because the huge breakout they need is not there. Instead, in a market where the price moves inside a support-resistance tunnel, it can be possible for the trader to profit by overwhelming one major losing trade with several small ones. The new math says that by trading in a range, 90% of the trades can be winners offsetting losing trades, and that a 200-pip loss can be more than offset by a collection of 30-pip wins, taken by harvesting tops and bottoms as the price oscillates inside its price tunnel. No matter which way the currency price travels, its natural tendency is to move back and forth inside defined price channels. The trader takes small profits quickly, sets up generous 200-pip holds to avoid being stopped out, and waits for the price to retrace.* *Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Using Buy/Sell Signals to Exploit the New Forex Market The Buy/Sell Signals system is the only trading tool designed specifically for today's range-bound forex market. In constructing the system, the FXCM Research Group incorporated those technical indicators that have demonstrated the highest reliability in pinpointing currencies with a natural tendency to move back and forth inside price channels for weeks and sometimes months at a time. A computer-generated automatic signal system, Buy-Sell Signals alert you as to which currency pair is in ranging mode, with Clear, unambiguous trade ideas—for short, medium and long-term strategies; Real-time entry and exit points to aid you in buying at support and selling at resistance; Precise stop/limit levels. Another advantage of a range-bound trading strategy is that it offers more trading opportunities for any trading schedule. Almost always one or another currency pair is in a ranging market. And since Buy-Sell Signals are updated continually around the clock, you can find trade ideas on your own time schedule, and remote control your trading with built-in stops and limits.

US Dollar, Fed Rate Hike Expectations Hinge on FOMC Statement

AUG 7 FOMC Rate Decision (14:15 EST; 18:15 GMT)
Expected: 5.25%
Previous: 5.25%

How Will The Markets React?

There is little doubt that the Federal Open Market Committee will leave rates steady at 5.25 percent on Tuesday at 14:15 EST, as Federal Reserve Chairman Ben Bernanke told Congress in mid-July that the central bank is not convinced that the improvements made in lowering inflation can be maintained. However, traders will still anxiously await the concurrent release of the Fed’s policy statement, as massive turbulence throughout the financial markets could lead to some re-wording, and these semantics tend to be highly market moving. Focus on the statement will first move to the Fed’s inflation stance and whether the bank still views it as their “predominant concern,” as anything less will be considered to be dovish. Meanwhile, the Fed will also have a chance to pay heed to the surge in risk aversion and credit spreads, along with the subsequent plunge in the equity markets. If this is accompanied by downgrades to growth forecasts, markets may start to believe that the Fed is mulling over a rate cut in the future, especially as the November fed funds contract shows a 100 percent chance of a 25bp cut to 5 percent by its October 31st meeting. On the other hand, if the Fed notes the recent plunge in equities and rally in Treasuries, but brushes off their impact, fixed income, forex, and stock market traders may do the same.

Bonds – 10-Year Treasury Note Futures

Intraday charts showed the 10-year Treasury note futures gapped higher on Monday’s open and then slipped into the close, leaving a bearish candlestick pattern that may signal that the market may have seen a near-term top. A close tomorrow below the daily swing point support at 107-21 will provide bearish confirmation, and the move could be sparked by the FOMC policy statement, as consistent concerns regarding inflation could lead traders to believe that the chance of a rate cut by the Fed are being overestimated. On the other hand, a move to a noticeably less hawkish bias could push contracts to test 108-00 once again, with bullish sights set on 108-16.

10-Year Treasury Note Futures (Daily Chart)


FX – EUR/USD

EUR/USD made a run for the July 24th high of 1.3851 on Monday following a bout of widespread dollar weakness on Friday, which was perpetuated by worse-than-expected labor market and services sector data. However, the release of the FOMC’s policy statement on Tuesday could prove to be an even bigger market mover, as any phrase changes could lead traders to ramp up speculation of a rate cut in the near-term. Forex traders will be most concerned with references to inflation, especially if the Fed deletes the line noting that “the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected” and replaces it with more neutral or dovish commentary. As a result of such a shift, the US dollar could plummet and push EUR/USD to retest the record highs, and perhaps even make a break for 1.3900. However, EUR/USD remains vastly oversold and gains could be short-lived. On the flip side, if the Fed continues to cite inflation risks and brushes off recent turbulence in the financial markets, the greenback could rally and send EUR/USD towards 1.3608, as fed fund futures are likely overestimating the probability of a rate cut by the central bank this year.

EUR/USD (Daily Chart)

Equities – S&P 500 Index

On Monday, the S&P 500 recovered most of Friday’s losses as a broad rally in US equities prevailed for much of the day. However, substantial event risk looms for the S&P 500 as the FOMC rate decision will be announced on Tuesday, along with the release of a policy statement. With the Fed widely expected to leave rates steady, it will be the statement that will garner the most attention and equity traders will be looking to gauge whether the central bank drops its inflation bias. If the FOMC maintains that inflation remains the bank’s predominant concern, US equities could turn lower as the Fed will be more likely to leave rates on hold. On the other hand, a more neutral or dovish tone may help push the S&P up towards the 1,500 level once again.

S&P 500 Index (Daily Chart)

USD Falls on Softer-than-expected US Data

• The dollar dropped against major currencies on Friday after reports showed slowdowns in payrolls growth and services industries. Today’s softer-than-expected US data led to declines in the US stock market and exacerbated the dollar’s sell-off.

• Sterling had a weekly gain against the yen and dollar as carry trades resumed and on expectations the Bank of England will raise interest rates at least once more from 5.75% by yearend. The pound rose versus the dollar at 2.0420 in NY trading at 3:49 pm. We stopped out.

Financial and Economic News and Comments

US & Canada
• US nonfarm payrolls rose a less-than-forecast 92,000 in July, down from 126,000 in June and 188,000 in May, the Labor Department said. Previous reports showed job growth of 132,000 in June and 190,000 in May. Monthly job growth has averaged 136,000 so far this year.

• The July unemployment rate unexpectedly rose to 4.6%, the first increase since April, from 4.5% in June, indicating the labor market is cooling. The yellow shaded areas in the chart represent recessions. Unemployment usually rose before a recession. The US unemployment rate, while not having significantly risen, has stopped falling. That could be a warning sign.

• Wages gained 3.9% from a year earlier. Average weekly hours worked by production workers declined to 33.8 from 33.9. Average weekly earnings rose to $589.81 from $589.52. Overall the July job reports suggest the US economy started Q3 on a softer note after robust growth in Q2.

• Growth in US service industries slowed more than expected in July. The ISM non-manufacturing business index fell to 55.8 in July, the biggest decline in almost 2 years, from 60.7 in June, the Institute for Supply Management reported. A reading above 50 indicates growth.

• Canadian building permits slipping only 0.4% in June from a peak in May to the second-highest level on record, Statistics Canada said.

Europe
• Europe’s services growth unexpectedly held at the fastest pace in a year in July. Royal Bank of Scotland Group Plc said its services index stayed at a higher-than-estimated 58.3 in July, the highest since June last year. A reading above 50 indicates expansion.

• The UK services sector in July saw its weakest increase in activity since September last year. The headline activity index fell more than forecast to 57.0 in July from 57.7 in June, the Chartered Institute of Purchasing and Supply and Royal Bank of Scotland Group Plc said.

• The services growth index for Germany fell to 58.5 in July from 58.9 in June, according to NTC/BME.

• Eurozone retail sales rose a less-than-expected 0.4% in June, Eurostat reported.

• Eurozone inflation is low for now but looking ahead there are several price risks looming that must be countered by monetary authorities, European Central Bank Executive Board member Lorenzo Bini Smaghi said.

Asia-Pacific
• Australia and Japan have agreed to adopt a new income tax treaty that will boost investment in the nations’ equity markets, Treasurer Peter Costello and Finance Minister Koji Omi said.

• Currency flexibility is required to reduce global economic imbalances, Asia-Pacific finance ministers said. “The orderly reduction in global imbalances remains a priority,” the ministers said in their statement from the Asia Pacific Economic Cooperation (APEC) meeting in Coolum, Australia.

• Excessive yen carry trades threaten global financial markets and the yen’s weakness is not in line with the strength of the Japanese economy, South Korea’s Finance Minister Kwon Okyu said.

Forex Market Outlook on Minors/Crosses

***************************************
INTRA-DAY AUD/USD OUTLOOK - 0.8547

Update Time: 05 Aug 2007 23:29 GMT

Although aussie has rebounded after intra-day
fall to 0.8521, abv 0.8580/85 is needed to signal
the retreat fm 0.8604 has ended, otherwise, further
choppy consolidation is in store n marginal fall to
0.8510/15 cannot be ruled out.

Incline to buy on next decline with stop as in-
dicated. Abv 0.8585 wud bring re-test of 0.8604...

Range Forecast
0.8525 / 0.8555

Resistance/Support
R: 0.8604/0.8616/0.8666
S: 0.8521/0.8492/0.8446
***************************************

Developing Your Forex Trading Style

Forex trading style comprises of a set of formalized rules, which directs the process of your trading. Without a pre-designed trading style, your trading is like a ship without a destination. A fully formulated forex trading style turns your trade into a profitable business. In general, forex trading styles are based on two main fields of studies: technical analysis and fundamental analysis. You must know the basic differences between these two trading styles as both of them have their own characteristics.

To be a good Forex trader you have to find out the advantages and disadvantages of both these trading styles. From the study and research, you will have to decide which of these two trading styles matches with your method of trading and will help you in maximizing your profit and more importantly, will have some inherent factors of risk management.

When developing your own forex trading style based on some technical analysis, the best will be to develop a hybrid method comprising more than one technical indicator. For example if your forex trading style is based on the Candlesticks, you must watch out for a hammer, doji, head and shoulders pattern, 1-2-3 formation, double top or bottom etc.

Trend lines across the highs in a downtrend or lows in an uptrend prove to be extremely helpful for formulating a full proof trading style. On a forex trading style based on MACD, watch for a difference between the highs and lows of MACD and the price. When there is divergence, watch closely for the right entry point, once price has shifted in the direction of the divergence.

200 EMA is an all time favorite for traders who love to formulate their own tailor made forex trading style. On higher time frames, for example, 1 hour, 4 hour, daily, they take a note whether price is above or below the 200 EMA to decide on their price direction.

Pivot points, which take note of previous support and resistance lines or the Fibonacci, are few other methods of technical analysis which blends trading styles and risk management features within them.

The other style of forex trading, which is based on fundamental analysis involves key economic data, political condition, sudden situation of emergencies, natural calamities etc. So your forex trading style must help you in identifying these conditions when the market responds to them dynamically.

You can search websites for e-books, forums, online newsletters, to have more knowledge of different forex trading styles. In some forums, veteran traders and investors share their trading style, which you can adopt for developing a style of your own. Perform frequent back testing of your forex trading styles. Always pay attention to your win/loss ratios, and bring changes to suite specific conditions. So what are you waiting for? Choose your trading style today and fulfill your dream!

Power Lift Your Trading

Successful trading requires having a firm understanding of the risk and reward picture before taking a trade. It requires having a good idea as to the trend direction of the market within a time frame that is higher than the one used to trade from.

For instance, if a trader usually takes trades that do not last more than one day, then it is likely that intraday charts are used in making trading decisions. These may be charts ranging in time-frames of 1 minute up to a few hours. For this type of trader, it is beneficial to know the daily trend, which is the next higher time-frame from intra day charting.

The trader who places trades based on a daily chart would be wise to determine what the weekly trend happens to be, the next time frame above daily. And for those who trade long-term and base trades from weekly charts, knowing the monthly trend would be expected.

As simple as this happens to be, it is quite common for traders to excuse this important step in the analysis. However, for the trader who seeks to have the power of the markets behind the move, the higher time frame should be consulted to determine whether to be a seller or buyer.

Take for example the trader who prefers to place trades based off a daily chart. Such a trader is likely interested in staying in the trade for at least a day or two, even longer. In such a case, the trader should consult the weekly chart, which is the next higher time frame, and note the likely trend.

So with the weekly chart, suppose the pattern is one of higher weekly swing bottoms and higher weekly swing tops. This is a typical pattern for a bull trend.

Acknowledging that the weekly trend is bullish, the daily time frame trader would then only consider taking trades that are designed for bullish markets. This may be long positions in the futures, buying Calls or selling Puts in options, or perhaps a spread strategy that favors the bull move.

Once the direction of the trade has been decided based on the higher time frame trend, it is important to know 'when' such trades are best taken.

For example, just because the weekly trend is bullish does not necessary mean a long position off the daily time frame will meet with favorable results. For even when a trend is bullish, it will have bearish corrections along the way. Therefore, to get the power lift from the higher time frame, it is best to get on board when those trend corrections at the higher time frame had ended.

In the case of our weekly bull trend example, the best time to buy off the daily chart is when the weekly chart is putting in a higher weekly swing bottom. These higher weekly swing bottoms occur usually at the end of a bull trend correction. Just like the best place to enter a daily chart is off a daily trend correction that is ending, the best time to do this is when the higher time frame is also ending a trend correction.

Once the trader becomes wise to this simple but important fact, all that is left is to learn the simple techniques that help determine what the trend happens to be on any given time frame. Simple methods include looking for the obvious higher swing tops/bottoms for a bull or lower swing tops/bottoms for a bear trend, noting correction ratios such as 50% pullbacks or the commonly used Fibonacci and Gann ratios, and whether a correction appears oversold or overbought based on indicators designed for this purpose (Stochastic, MACD, COT, etc.).

As a market cycle analyst, my preference to determining when trend corrections are likely ending is by calculating whether a market turn is highly probable due to dynamic cycles, such as is forecasted using my FDate algorithm amazingaccuracy.com. Along with this, I will also employ a powerful technique for figuring out trend overbought/oversold parameters to further support my findings.

However you decide to calculate the likely end of a trend correction, remember to use the trend of the higher time frame, and wait for the end of a correction to that trend, to assist your timing and trade direction on the lower time frame. By doing this, you will allow the market to 'power lift' many of your trades.

Forex Myths 10 That Cause 95% of Traders to Lose

I have been a trader for over 25 years and the myths below are common ones and if you make anyone you will lose your equity and join the 95% of traders who lose. Let’s look at these forex myths and why they will guarantee you lose.

1. You Can Predict The Market
This is a common myth and the bulk of novice traders think they have to predict where prices are going to succeed – wrong. In forex trading if you predict you are relying on hope or making an educated guess and the market will kill you. Never predict! Always look for price confirmation. If for example you think a level of support will hold, wait for price momentum to turn up above the level and confirm it has held – then trade. Also don’t believe the scientific methods sold on the net they don’t work. If markets were scientific, we would all know the answer in advance and there would be no market!

2. You Can Make Regular Income Day Trading
You can’t make money day trading full stop – yet more new forex traders fall for this myth than any other. All volatility in short time frames is random and support and resistance levels are meaningless, so you can never win If you don’t believe me, ask a forex day trader for a real time track record over the longer term and you won’t get one – period.

3. You Can Buy Success
Forget all the vendors trying to sell you methods that will make rich (all for a few hundred dollars!) most of these guys have never traded in their lives and rely on hyped exaggerated copy to sell their systems. To succeed you need to have confidence and discipline and that comes from within no one else can give you success – it comes from within and your own understanding.

4. You Should Keep Stops Close To Reduce Risk
All you will do is get stopped out by normal volatility and the same goes if you try to trail a stop to close. To make money you need to take a risk. Most forex traders want to restrict risk so much they guarantee they will lose.

5. You Should Diversify To Reduce Risk
If you are trading over 100k maybe, but if you are a small trader diversification will simply mean you dilute profit potential – To win you have to bet meaningful amounts. I see vendors saying you should only risk 2% per trade well on $5,000 that’s $100! If you risk that you won’t have much profit potential. If you have confidence in your forex trading strategy risk 25% or more and have the courage of your conviction.

6. You can Listen and Act On The News
There is a lot of news you can get and it won’t help you. It’s better today than it ever was, but the ratio of winners to losers remains the same. If you try and trade off news stories, you’re chasing the market. News is discounted in a split second and is discounted instantly by forex markets which are then looking to the future. The arguments are convincing in telling you why things happen but not what is going to happen – ignore them.

7. More Indicators = More Profits
After all 10 indicators are better than 2 or 3 – Dead wrong. The best forex trading systems are simple and robust, whereas a complicated trading system has more elements to break and will fail. Keep in mind all the best forex trading systems are simple, NOT Complicated.

8. If you Work Hard Your Chances of Success Increase
You get rewarded for being right about market direction – nothing else. If you spend 10 hours a day or ten minutes, it doesn’t matter so long as your trading signals are accurate.

9. Trading To Much
Many traders simply think if their not trading their missing something but the opposite is true – they end up trying to force trades or take trades with bad odds and get wiped out. Only execute trading signals when the conditions are right and be patient.

10. Not Learning the RIGHT knowledge
This is really a combination of the above points. Successful forex trading means: Working smart rather than hard and learning just the right information and discounting everything else.

Contrary to popular belief, all the information you need is available free on the internet and if you study it, build your own system you have can have confidence in you can achieve currency trading success.

Become A Professional Forex Trader - Living The Dream In 3 Simple Steps

Everything about forex trading can be learned yet 95% of traders lose however if you follow the 3 simple tips enclosed you could enter the elite 5% who achieve currency trading success. Let's look at 3 tips for forex trading success.

Forex trading is one of the few areas you can build wealth quickly and the opportunity is open to all - but to make your forex trading successful you need to have the right approach.

1. Adopt The Right Mindset

Forex trading can be learned buy anyone but that doesn’t mean making money is easy – it never is.

This doesn’t mean you can’t do it though you can.

Firstly, when learning forex trading you MUST understand that you cannot rely on anyone else to give you success - it comes from within.

You need to create a system you can have confidence in and follow with discipline.

E-book sellers promising you un told riches on the net wont help you, for the cost of a few hundred dollars - if they were successful at currency trading, they wouldn’t tell or need you – they would be to busy making money for themselves.

Once you realize it’s up to you - you’re ready to move to the next step.

2. Get The Right Forex Education

This means only focusing on the important points and skipping the bulk of forex education that will ensure you lose.

You should base your system on forex technical analysis and use forex charts to spot trading opportunities - that put the odds in your favour.

Don’t try predicting or following a scientific system – they don’t work.

The best you can do is get the odds in your favour however that doesn’t mean you can’t make a lot of money – you can.

2. Base Your Forex Trading Strategy On

A looking at support and resistance levels on your forex charts then calculating the odds of them breaking or holding and here is the key:

Don’t simply buy into support or resistance like most losing forex traders – get confirmation of changes in price momentum, to confirm your view is correct before trading.

If you simply buy into support you are predicting and hoping and the forex markets will wipe your equity quickly.

Don’t rely on hope get some momentum indicators to help you - there covered in more detail in our other articles so look them up.

Above all keep your system simple.

Simple systems work best as they are more robust than complicated forex trading systems that have more elements to break.

3. Be patient and Be Realistic

Only execute trading signals in line with signals from your forex charts and adopt a long term approach.

The big trends in currencies last for months or years and catching them should be the basis of your forex trading strategy not trying to trade the daily noise which will see you wiped out.

You don’t get rewarded for effort in forex trading or how often you trade - you get rewarded for being right and that’s it.

Have realistic aims Rome wasn’t built in a day and a forex trader doesn’t become successful over night either - it takes time to get experience, confidence and discipline and spot the big profitable trades.

If you made 100% per annum you would be up there with the best traders in the world - so aim for this level and you could do this trading just 2 or 3 times a year have patience and realism and you will give yourself a great chance of achieving success.

The Dream and The Reality

Is being able to sit at home and make big profits in around an hour a day, with just a computer and some small seed capital.

The dream can become reality, it’s not easy but that’s totally different from being not possible – it is.

If you have a burning desire to succeed, a willingness to learn and confidence in your own ability, maybe you can become one of the minority who make big consistent profits. The question is:

Are you up for the challenge?

Forex Day Trading - Want to Try It? Then Get Ready To Lose

One of the biggest myths in forex is that day traders make money longer term - they don't and if you don't believe me then consider these two facts:

Fact 1 – No Valid Data to Work With

Trillions of dollars are traded daily by millions of different participants and to believe that you can work out where prices may go in a day is laughable.

The data is to short in time span and support and resistance levels are meaningless and cannot be traded.

Volatility is random in short time spans, prices can and do go anywhere and day traders lose over time.

Fact 2 the Evidence

You may not believe the above is true and to be fair, there is a lot of information on the net about how you can scalp profits each day, make a monthly income and predict daily support and resistance with scientific accuracy – but this is just hyped advertising copy and there is nothing to back it up.

Of course, you do get a hypothetical track record (done in hindsight knowing the closing prices) well my 12 year old daughter could make a profit! The problem is you need to trade going forward and you don’t have the luxury of knowing the closing prices.

Ask this question of any vendor selling a forex day trading system:

Can I see your track record of real profits over 2 years or more?

See if you get one and let me know if you do – won’t hold my breath though.

Fact is the vendors tell a good story and appeal to the greed of buyers and make a guaranteed profit selling them the system and the forex trader who trades it makes a guaranteed loss.

I have been a trader for 25 years and NEVER known a day trader win longer term and am surprised people buy courses and systems without looking for a track record.

Vnedors offer you in many instances your money back if the course doesn't work for you but that's not much consolation when your trading capital gets wiped out!

Avoid day trading and look at longer time spans – forex trading is an odds game and to trade the odds you must have data that can put the odds in your favor and forex day trading wont do that – period.

Forex - Currency Traders Marriage Survival Tips

Trading in the foreign exchange (FOREX) market can be a lonely experience for both you, the trader, as well as your spouse. As a currency trader, you can become so engrossed in your investment activities that you forget to take time for the basics of life such as marriage, family and everyday fun. Consequently, unnecessary tensions develop in the home. If your marriage is in danger of being rocked by excessive trading, follow these easy tips.

Recognize Your Spouse
Now, this sounds simple and easy enough, but surprisingly, many traders fall into the trap of being glued to the computer and trading platform that they are totally oblivious to their surroundings, including other people. Few things are more insulting than to be ignored by the one you love and have dedicated your life to. Don’t leave bright lights on while your spouse is trying to get a good night of sleep while you trade. If you get up early to trade before your spouse awakes, take the time to say good morning with a hug and a kiss before you send the spouse out for your daily Starbucks brew. Better yet, spend a few minutes talking about the plans for the day, including a get-together later on towards the end of the day.

Share Your Trading Experiences
While your spouse may not be well-versed in FOREX trading, most people understand the concept of making and losing money. Certainly, if you are regularly trading in the FOREX market, you are doing one or the other. Sharing the results of your activities with your spouse may give them a better understanding and, perhaps, a greater tolerance of what you are doing. After all, you will need someone to help you spend all those big bucks you are making, so be sure to include your significant other in the loop. Taking the time to discuss your trading activities can also give you some easy credit toward valuable communication necessary to nurture and grow a relationship. Just make sure you are equally conversant about other topics also. Talk with your spouse about your trading can also help to put a sizeable dent in the famed 10,000 and 5,000 words-per-day quota attributable to women and men, respectively.

Do Not Trade Rent Money
As a matter of basic caution, you should never trade currency using money other than risk capital. The FOREX is a high-risk market. Losing precious money intended for basic necessities such as food, rent, diapers and utilities can send a marriage into a tail-spin quicker than Paris H. left jail. If you have not yet amassed enough risk capital for trading purposes, then stick with paper trading until you can afford to trade real money.

Be Honest About Your Losses
Once you have attained the admirable quality of communicating with your spouse about your trading activities, you have a further obligation to do so with honesty. Embarrassment or shame over a financial loss can make you try to hide the fact of the loss from your spouse. But remember, relationships are not just about sharing your victories, but also your defeats. Sensing your need for support, your spouse can be a powerful force in helping you to emotionally and psychologically cope with your losses. Incidentally, a spouse may also motivate you to exercise better judgment where you may have become to close to the problem to be completely objective. Remember, stronger marriages often emerge where the couple has weathered the dark storm together and held on until morning’s light.

Forex Charts - Novice Trading Mistakes

Using Forex charts is like being a ships captain at sea: Your charts can help you navigate successfully to port or you can hit the rocks and drown - the choice is yours. It’s the same with forex charts 95% of users drown – Let’s look at common errors that novice traders make and how to avoid them.

1. Predicting Price
No one can predict price movement and if you do - you are simply hoping levels will hold. Do this and you will be wiped out quickly the market wont reward you for hoping or guessing. If you want to win, act on the reality and that means - trading with price momentum AFTER a test of the level you are looking at. Trade with momentum on your side and you are trading a fact and your odds of success are increased dramatically. If you don’t use momentum indicators in your forex technical analysis learn what they are quickly.

2. Indicators Chosen and Misuse Of Them
A common error is to use lagging indicators to enter trades such as moving averages – This really leads on from the above: A Always use momentum indicators to enter trades and only use lagging indicators to determine levels of support and resistance. Many indicators traders use are useless good examples are: Fibonacci levels and cycles - they again involve prediction and simply help wipe out equity.

3. Trading Invalid Data
Day traders are the worst offenders here. They are picking a short time frame where volatility is random they can’t calculate the odds - so they lose.

4. Systems that are to complicated
Some people devise very clever systems and lose. Fact is - in forex trading you get your reward for being right – NOT Being clever. Simple systems are best - as they are more robust and have fewer elements to break.

5. Not understanding volatility
Do you know what standard deviation of price is? If you don’t learn it backwards as this will help you determine everything from stop levels to targets for your trades and help you stay in winning trades longer and get better money management.

6. Your edge
Ask yourself this question: What is your trading edge which will see you win when 95% of traders lose? If you don’t know what it is – then find out or do more work on your forex trading strategy! If you don’t know what your edge is kiss goodbye to your equity.

7. Following a method
Many traders have perfectly good methods but simply don’t have the discipline to follow them – if you dont have discipline you have no method in the first place. If you want to enjoy currency trading success don’t make the mistakes above or you will lose.

Finally, there are a lot of vendors on the net promising you untold riches from their currency trading systems, for just a few hundred dollars – its not that easy so don’t buy them. Trading is hard, but for the forex trader prepared to put in the work, the rewards can be immense.

Do your homework, be realistic and you could soon be making big returns from forex charts and executing some great trading signals for big profits. Good luck!

Trading Forex - Outside The Dollar

Almost all newcomers to the currency trading start their journey with the so called “majors”. And not surprisingly so. These instruments are the most popular, most liquid, and most prominent. They are also all dollar based.

What are the “majors”? While there is no formal definition for that term, “majors” are the USD denominated currency pairs. Virtually every time you enter a forex broker’s site, you will see a rates table. This table will always contain quotes for following pairs : EUR-USD, USD-JPY, GBP-USD and USD-CHF. These are the “majors”, followed closely by a smaller group of so called “commodity pairs”: USD-CAD, AUD-USD and NZD-USD.

USD dominance in Forex trading should come as no surprise to anybody. After all, United States is the world’s single largest economy, most commodities are priced in USD and international trade in goods and services is mostly quoted in green back. To top it all off, dollar is also the core of foreign reserves held by central banks of most nations.

Times are slowly changing, however, and anybody who trades Forex should take a closer look at some of the other instruments available in foreign exchange arena. Those are commonly referred as “crosses”, which could be any combination currencies mentioned above. Bear in mind, that not all brokers offer a full spectrum of “crosses”, but generally they offer enough to make it a worthwhile pursuit.

Some of the most popular combinations of late include JPY, due to the much vaunted “carry” trade. Especially currencies with relatively high interest rates, like NZD and AUD, have enjoyed a massive rise in volume in their respective JPY crosses. Another one of very popular Yen crosses is EUR-JPY. This one has bigger daily ranges then USD-JPY and, depending on the trading platform, comparable spread, a very compelling factor.

Other very popular and important crosses involve EUR, the European currency. EUR-CHF, for example, is, in fact, more active at times then USD-CHF. Currently, Euro is regarded as world second most imported currency, so it can be traded against virtually any currency in existence, just like the dollar.

Let’s not forget GBP, the speculators favorite. Due to large daily moves , GBP-JPY and GBP-CHF have long been attractive to traders seeking a lot of action and fast moves. It’s not unusual to see a daily range of 300-400 pips in GBP-JPY. A lot of money can be made or lost in a day on moves like that. As a matter of fact, all GBP crosses can experience truly dramatic daily moves. While the spreads here are not as attractive, they have come down over last few years, no doubt because of increased interest in cross trading.

There is a wide selection of other crosses available for trading, but that is different from broker to broker. Some offer more, some less and the terms of trading vary widely. Those include CAD, NZD, AUD and, frankly, a myriad of other combinations. Not all of them are necessarily suitable for everybody but they are available. We’ll leave that for some other time.

We just scratched a surface of Forex landscape here, but as you can see currencies trading is not limited to a handful of majors. There is a lot more going on outside the dollar. Take a look, do some homework and explore. A world of opportunities awaits.