Are you kidding me? Forex trading isn't easy, it's about as risky a financial endeavor as you can legally participate in.Wait, let me rephrase that... foreign exchange trading is easy, success isn't. Yeah, that's right, that's my tag line. It's true.If you are looking for the easy button, here are some platitudes for you:Buy low and sell high.Have inside access to national economic reports.Witness a major international incident prior to the news reports.If you are willing to work hard, be patient, and work to preserve your capital, then here are some more helpful suggestions:Wait for a buying opportunity before entering a market.Manage your risk via position size and stop loss orders.Learn to recognize when you should not be trading.
Here the most important reasons why Forex is so popular nowadays:• Liquidity. Forex is the largest financial market in the world, with the equivalent of over 3-4 trillion changing hands daily when the volume on the stock markets is only 500 billions of dollars. • Flexibility. Because of 24-hour trading participants of the foreign change market would not wait to react on some events, as this happens on other markets (for example: stock markets). On other markets you simply can be late if you have to wait till morning to show your reaction, as in the morning the event will be already in the price, greatly differ from the desired level.• Lower transaction costs. Traditionally the Forex market has no commissions, except spread, the difference between ask and bid prices.• Price stability. High liquidity helps ensure price stability, when unlimited contract size can be executed at a fair price. It helps to avoid the problem of instability, as it happens in the stock market and other exchange-traded markets because of the lower trade volume, where at one price only limited number of contracts can be executed.• Margin. Margin size for trading on Forex is defined in the contract entered between a client and a bank or a brokerage company, which gives the opportunity to enter the market for the individuals and usually it is 1:100. So, the collateral of 1000 US dollars allows a trader to make deals on $100.000. Such high leverage combining with the rapid rates fluctuation make this market profitable but at the same time extremely risky.
It is a sad fact that 90% of traders fail, and many very quickly give up. Why? When I went through a phase of losing trades I treated it as a temporary setback and went back to the drawing board. I analysed the reasons of my failure and I sought the guidance of Top Traders, Mentors and Coaches to put me back on the path of success and profitability.In my opinion the high rate of failure for a new trader can be related to the six major obstacles that a trader faces, which are summarised as follows –Poor SkillsLack of adequate capitalSetting unrealistic targets and goalsLack of PatienceLack of disciplineHigh risk aversion.If we look at the list, it becomes apparent that the failure is as a result of trading without having in place a proper Trading System and a Trading Plan– One that includes mind training, quality Forex education and strategies and sound money management rules.
Take a coin and toss it into the air. As the coin spins in the air you have no idea and cannot predict which way it is going to fall. Yet over many tosses the outcome can reasonably be predicted. Just as we can predict the tosses of a coin with probability, so too can we use probabilities to predict market direction. When you trade you need to trade with the probabilities and odds in your favor.In recent years many academics have scoffed at the idea that markets can be predicted and they point to the theory of Random Walk. The theory is based on the assumption that markets are efficient. The market is one where a large number of equally well informed people actively compete to try and maximize profits.
You are a Forex Currency Trader. But how can you avoid the risk of losing money if you are a newbie? Do you wish to have an advisor who could help, and offer you a strategy of trading? Forex Trading System can do this for you. It interprets data from the marketplace, and helps you minimize risks and make a profit.
Forex Tip -Always trade with a stop order, not because you expect to lose, but to prevent a large loss from an unexpected news event like a currency devaluation, terrorist attack, tsunami, or whatever. Nobody can predict tomorrow.Initial stops for slower moving pairs (NZD/USD, AUD/USD, EUR/USD, USD/CHF, EUR/CHF, EUR/GBP, USD/CAD) should be in the range of 20-25 pips. Just verify where the pair was trading the last few hours before the current movement started using a conventional chart found on most brokerage platforms. You can also look at the “lows” and “highs” on the smaller regression channels found in each plan to check these values against the pricing over the last few hours, they always match up well. Initial stops for buys should be placed below the recent lows for the last few hours of trading, initial stops for sells should be placed above the recent highs. These instructions are simple don’t overcomplicate it, remember stops are disaster protection you are trading with the trend. For more volatile pairs add some pips to your initial stop.
Every one has his days when no matter how well he has planned out his trades, he may find some of his trades not performing to what is planned. It is only natural for one to feel upset, but for the follower of a forex trading system, making money or losing money from that trade is not the paramount objective.Why is this so?For the trader who employs a forex trading system, he can still face the losing trade with a smile, because he has had followed through the trading signals in a disciplined way, and it is only when a trader follows a system, he can be sure of keeping his losses small and to live to trade again anotherday.By using a forex trading system, the trader can have a cool head, and can face his trades rather unemotionally. He can execute his trades following pre-determined price levels of initial stop loss, trailing loss and computed and projected price profit.
Foreign exchange trading is generally conducted in a decentralized manner,with the exceptions of currency futures and options. Foreign exchange has experienced spectacular growth in volume ever since currencies were allowed to float freely against each other. While the daily turnover in 1977 was U.S. $5billion, it increased to U.S. $600 billion in 1987, reached the U.S. $1 trillion marking September 1992, and stabilized at around $1,5 trillion by the year 2000.Main factors influence on this spectacular growth in volume are indicated below.For foreign exchange, currency volatility is a prime factor in the growth of volume. In fact, volatility is a sine qua non condition for trading. The only instruments that may be profitable under conditions of low volatility are currency options.
Once you've identified a trading opportunity, the next step is to decide EXACTLY when to buy - and this is where many traders go wrong.Here we explain how to incorporate better market timing into your FOREX strategy - so that you can make bigger profits.Most traders time their entry levels incorrectly, so here's the right way to do it:Using Support and Resistance Correctly A basic wisdom of market timing is buy low, sell high well, the reality is, if you try this in FOREX trading, you'll end up losing money. First, let's define what support and resistance means.A support level is a historical price that traders come in, and buy to it support the market and the more times it's tested, the more valid the support will be.
Well, that's true, but not.Apparently the markets are closed from Friday at 4:00pm EST until Sunday at 5:00pm EST. I don't know about you, but that sounds like a 48 hour closure to me. Sure, there is only one day that trading does not occur, but that is semantics.A 48 hour closure means that you can trade 24 hours a day for a period of five days straight.A minor point, but I'm sitting here in an open position and I'm going to have to watch world news and events for two entire days!
Forex Day Trading System - How much is the importance of candlesticks.Candlestick patterns are important and very important. When you look at a daily chart, the candlestick formations are very reliable..They point to hammer, hanging man, morning star, evening star and other formations very accurately.
FOREX Re thinkThough I've been trading the AUDJPY on a 15m chart quite a bit, and with reasonable success, I am thinking about moving to a larger time frame. Well, to be accurate, it's not so much that I plan to use a different chart. What I really want to do is accumulate positions over a longer period of time.Do you know why?Because, if I can accumulate a bunch of positions that are at some level of profit, I can make incredible gains during a longer term market move. For example, if you have an appropriate part of your account at risk, plus you have multiple in-profit positions protected by a stop loss, all of them will bring returns during an extended upswing.
A successful performance of a product or service overseas may be pulled down from the profit point of view by adverse foreign exchange conditions adviceversa. An accurate handling of the foreign exchange may enhance the overall international performance of a product or service. Proper handling of foreign exchange generally adds substantially to the rate of return. Therefore, interest in foreign exchange has increased in the past decade. Many corporations are using currencies not only for hedging, but also for capitalizing on opportunities that exist solely in the currency markets.
Nowadays Foreign Exchange Market (FOREX) is the most profitable sector for your investments. Unlike other financial markets the Forex market has no physical location, like stock exchange, for example. It operates through the electronic network of banks, computer terminals or just by phone. The lack of physical exchange enables the Forex market to operate on a 24-hour basis, spanning from one zone to another across the major financial centers (Sydney, Tokyo, Hong Kong, Frankfurt, London, New York etc). In every financial center there are a lot of dealers, who buy and sell currencies 24 hours a day during the whole business week .
Trading with EUR, GBP - The popular currency pairs.Ever thought which are the most popular currency pairs to trade? Yes, EUR/USD is the popular of all and generally has tightest of spreads which is 2-3 pips depending on the broker.The next is GBP/USD - the highly volatile and has spread of 4-5 pips. What follows is USD/CHF and USD/JPY. Generally have 4-5 pips spread.Remember the high the volatile the currency pairr is, the more it will honour technical analysis and corresponding indicators such as EMA, fibonacci levels, MACD, RSI etc. etc.The exception being USD/CAD and USD/JPY which I have noticed is highly fundamental announcements and news impacted. Such as Oil price drives USD/CAD very heavily.