Advantages of Floor Traders - and How to Get Them

Traders who make their living on the floor of an exchange have some things that I think are advantages. You see floor traders can draw from their senses. What I mean by this is they can use sight, sound, and speech. These are advantages that they add to their arsenal when trading. The pit on a trading floor looks very chaotic but there is a simplistic ebb and flow to what is going on there. I will explain how this is an advantage.

When you trade on a computer you are only watching the price movements on a chart and you base your trading decisions accordingly. On the floor the action of people moving around can often tip traders to which markets are about to go higher. Just like all people, traders will gravitate to where the action is happening.

Trading on a computer does not allow for the noise of the action to influence you. Traders who are on the floor can hear the crowd noise rise and fall. This is much like a football game. If you were busy and not watching the game you could still have an idea of how it is going by listening to others in the crowd who are cheering or not according to the action on the field. This is particularly an advantage if you are in a position and looking for a good place to exit. You can judge momentum of the current market direction and get a feel for when to exit.

The advantage of speech is obvious. You are spending your day surrounded by others that make a living in the same business. Information and strategy can be discussed with peers and better understood. When breaking news hits you will hear first hand what other market movers think about it.

These are a few of the advantages that I feel the floor trader has on his side. some of these can be replicated and taken advantage of by traders based at home

Why Do Most Traders Fail To Make Money Currency Trading?

Based on reliable statistics, it is thought that approximately 90% of retail traders fail to make money currency trading. This is a scary thought for someone wanting to start out as a forex trader. Yet new people are attracted to forex trading every day and it’s obvious as to the reasons why.

Forex trading offers leverage benefits whereby a small margin deposit can control a much larger total contract. These days getting started in currency trading doesn't cost much either. Some Forex firms now offer 'mini' trading accounts with a minimum account deposit of only $200 with no commission trading, making forex trading much more accessible to the average individual. Forex trading offers the ability to make money trading currency pairs either 'up' or 'down', so a trader can profit either by going long or short, therefore there is never really a bear market in forex: the ultimate recession proof business.

Yet statistics tell us that things aren’t quite so easy. The main reason why traders fail to make money is that they lose early on and then struggle to turn it around. They trade without a system or without a plan. Even worse, they neglect rules of money management. People attracted to forex trading are generally very intelligent and bright people yet they make basic mistakes, trade on emotion and quite often even though they realize their mistakes, by the time they do it is often too late, they lose interest or give up.

If your forex trading strategy is based on a well thought out business system and strategy, you will make money currency trading in the long-term. Forex trading, more than any other business venture is about being professional. If you want to make money currency trading, you must realise that as an individual, you are competing against institutions which specialize in forex trading. They have armies of analysts and economists and traders who do fundamental analysis, technical analysis and quantitative analysis for them. They have risk analysts, risk managers, portfolio supervisors - all contributing to their efforts and their profits. You, as an individual trader do not have this luxury.

In the forex market information is money. Good information and good online forex trading systems are important. Good trading systems are the ones which focus on risk management; are suited to the individual; serve ultimately the purpose of helping you develop your own trading system and finally are simple to understand thus making them easier to follow & implement with discipline.

What Is Forex Market?

Forex market is the largest financial market in the world, with a volume over $1.95 trillion a day. "Forex" comes from words "Foreign Exchange". Forex is also referred to as "FX" or "Spot FX" market. I'm sure you know what foreign exchange means. If not, well, in foreign exchange offices you can change currencies (if you're going on a trip abroad, you need foreign currencies, right?).

Forex trading is the simultaneous buying of one currency and selling of another. Currencies are traded through a broker or dealer and are traded in pairs; for example the European euro and the US dollar (EUR/USD) or the British pound and the Japanese Yen (GBP/JPY).

So how do you make money with changing currencies? Let's say you see that EUR/USD current price is $1.2600. This means that you have to pay exactly $1.2600 to buy 1 EUR.

Let's then make a deal and buy some euros, at the same time selling dollars. If you bought some euros, you expect their price to raise, so you could sell them with a higher price than you bought them. As expecting the euro price to raise against the dollar, you're also expecting the dollar to go cheaper against the euro.

This means you have to give more and more dollars to get 1 euro. If the dollar goes cheaper, euro goes more valued. So now the EUR/USD price is $1.2650. You then sell euros, at the same time buying dollars. Since you bought cheaper euros and now you're selling more expensive euros, you'll get a profit from that.

Unlike other financial markets like the New York Stock Exchange, the Forex spot market has neither a physical location nor a central exchange. The Forex market is considered an Over-the-Counter (OTC) or 'Interbank' market, due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period.

A properly trained Forex trader can potentially earn BIG PROFITS in every single month, week, or day! (Of course a poorly trained Forex trader can suffer big losses as well.)

All you need to get started is a computer, a high-speed Internet connection (Why? the currencies' prices are changing constantly and you need to keep up with them) and a trading software.

A good website for a beginner is BabyPips.com. BabyPips.com was created to introduce beginning traders to all the essential aspects of foreign exchange in a fun and easy-to-understand manner. Have fun!

Forex Fortunes - Use The News

In my time as a trader, I have never seen the benefit of announcements as being that great for off-the-floor traders. Generally anything you hear in the news is old information in the trading game, because the floor traders have access to it before everyone else.

Often the traders on the floor have already established the correct positions, before the announcement is made. This puts the public trader at a disadvantage.

The forex market has come along and changed that, because there is no trading floor, so everyone receives the information at the same time. This creates an even playing field for everyone.

There are several announcements that are made each month, that forex traders can use to their advantage. Since everyone gets the info. at the same time, its like being on the floor yourself. Some of the announcements that are beneficial to traders, are unemployment, interest rates, inflation, GDP, and the consumer price index.

There are others, and you have to also consider announcements by other countries. Using these announcements can be very beneficial to the part-time trader.

Often part-time traders do not have time to study the markets, but they can take advantage of the reactions to these announcements if they know how

Traders Are Flocking To The Forex

The forex, or Foreign Currency Exchange is vast and growing everyday. The forex market is larger than all other markets combined. Literally trillions of dollars are traded daily on the exchange.

The forex does not have an actual trading floor. It is made up of a network of banks, they use telecommunication systems, including the internet to conduct all transactions. Because of the accessibility of this market on the internet, it has exploded in recent years.

In the past the forex was only for banks to use to monitor the values of various currencies around the world. Back then only the richest people in the world were allowed on this playground, and they made fortunes. With the advent of the Internet, many of the financial markets were opening up more to the public.

Soon the banks that operate the forex saw that this could be a major benefit to them also. Thus the forex as we know it was born.

The forex is also a 24 hour per day market which makes it perfect for those who want ot trade part time. The sheer size of the forex is the attraction for many traders.

The forex is large enough to accommodate any size trade position with ease. Execution of trades are instantaneous and there is no slippage. Another big difference is there is no commissions on the trades.

All profit by the banking systems are generated by the spread. The spread is the difference in price between the seller and buyer.

These factors make the forex irresistible to traders. Because of the attraction of this market it is expected to continue to grow rapidly in the future.

There are several trading strategies that fit in well with the forex market. As I mentioned earlier this market is made for those who want to trade part time

How You Can Be Sabotaging Your Trading - And Not Even Know It!

Whilst trading routinely involves decision making, there are no more important decisions you have to make than when to close positions. Quite a few traders often overlook this part of trading or underestimate how important that it is. It is selling that impacts directly on whether or not you make any money trading. Buying shares is simply a means of putting yourself in a position to make money from trading.

There is a typical experiment which is conducted in Economic and similar classes, which relates well to selling shares. It involves dividing a room of people into two groups. Everybody in the first group is handed an imaginary coffee mug. People in the second group receive nothing.

Everybody in the first group is asked to write down on a piece of paper how much they would be prepared to sell their coffee mug for. Everybody in the second group is asked to write down on a piece of paper how much they would be prepared to buy the coffee mug for.

The amounts from all people within each group are compiled and an average calculated for each group. Generally speaking the average amount from the owners of the coffee mugs is double that of the average amount from the potential buyers of the coffee mugs. This observation supports the Endowment Theory.

The Endowment Theory suggests that people who own something place a greater value on it than those who do not have it. This is applicable in the sharemarket, and can affect your decision making when deciding to sell shares that you should be selling. Often you will find yourself owning shares and believing that they are worth more than what the present share price is. The only unfortunate thing about that is the real price is what it is presently trading for on the market and not what you think they should be worth.

This can affect you by convincing you not to sell shares when you may be best advised to sell them to stop any further potential loss. You may have bought shares for $4.00 and set a stop loss at $3.50 for example. A week later the shares are trading at $3.50 and you have received your cue to sell them. Thoughts enter you mind about how it was only a week ago that you paid $4.00 for them and how you think they are still worth that especially when you consider the report they released last week concerning future growth, for example.

These thoughts can paralyse you to take no action and not cut your losses and consequently have you breaking one of the most important time tested rules you can follow.

Are You This Trader?

Have you ever heard the Kenny Rogers song The Gambler. During the chorus there is a line that says;

You've got to know when to hold 'em, and know when to fold 'em

I want to cover the fold 'em part. This is usually the one that knocks the feet out from under the newbies.

So you have studied the manuals and all the course material. Incessantly, you have read every word, as quickly as possible. You have wired your $1,500.00 to the broker, you would have sent $2,500.00 but, you need to pay the mortgage. You have opened your self-directed account, opting for no broker advice. Who needs advice, you have a secret weapon...your trading manual that came with the course. Besides the broker doesn't realize that you are about to funnel money right out of the market, and into your bank account.

It's Monday morning, you called in sick so you could kick off your trading career. Of course, considering the lack of sleep last night, working today would have been hard anyway. You glance through your course material one more time a few minutes before opening bell. you are planning to trade the E-mini today. The bell rings, and you are off. You are looking to trade the opening gap, That's on page 12.

The market gaps up on the open just as planned, you go short. In 10 minutes the gap is closed and you exit. $75.00 richer for your trouble, well $60.25. Slippage and commissions got some of it. Feeling pretty good about your skill you wait for the next set up.

At about 11:00 A.M. you spot your next victim. It looks like a reversal off of support, You've seen 3 hits at that price level. You quickly double check the book to make sure. The chapter on support and resistance was toward the back, you were a little sleepy when you got to that part. Just as you thought, this is a support pattern. You quickly enter the buy order, you need a stop loss, but the market is moving and you don't have time. You decide to ride it out. You will watch every tick anyway.

After 30 tense minutes you exit with another $60.25 in your pocket. You relax and get some lunch. You think about how you are a quick study, trading is pretty easy.

12:30 time to get back to work. Immediately you you spot a pattern, the pattern started during lunch. This time, you take the time to order a stop loss. You enter the trade and a few ticks go in your favor. Then it reverses, now you're down, down again, and again. A couple of minutes and your stop is hit. Your stop was set at 6 ticks, you wanted to have some breathing room. Down $89.25 on that one. After a couple minutes of feeling sorry for yourself, you notice that the price is coming back. You knew it, you were right all along. That stop is what cost you that money.

The manual said something about confirmation signals. Now that the move is confirmed, you will take your money right back.

You enter on a market order, no stop. You will just watch the ticks like before. The market goes back and forth for several minutes, slowly trending down. Nothing to be alarmed about, it will come back. Then several ticks go against you, then a pause. You think about exiting, but you be down for the day. The next instant the live quote ticker seems to spin, and turns red. You notice that your is heart keeping pace with it. You think, surely it will stop and come back. At that moment it does.

Now you are down several points, at this point you realize that you cannot recover all of it. You are hoping for just a few ticks in your favor before you exit. You wait, then the prices ticks back and forth. After a minute you can't take the pressure of seeing another spinning ticker, you exit the trade down several points. All told you have lost $432.00, almost 1/3 of your account. You decide to study the manual a little more.

Later that evening, you call in sick again. Of course, considering the lack of sleep you'll have tonight, working tomorrow would be kind of hard anyway.

This was a humorous look at this issue, but holding on to losing trades happens to traders everyday. No matter what system you use you have to understand the mathematics of trading your system. Ensure that your system is mathematically viable, and then you must adhere to the system 100%. It is of most importance to maintain psychological and emotional control in all your trades. Always trade with stop loss orders

Successful Online Forex Trading With A Mini Forex Account

Forex trading is one of the most highly considered occupations for many persons looking for an income generating activity that will allow them to set their own hours and live where they please. This thanks to its great advantages over other income generating occupations and its high profitability potential; among these advantages you will find that forex is extremely easy to access thanks to the internet; and also you will notice that forex has a high liquidity along with a high leverage.

Additionally there exists a great feature in Forex trading for those that are just starting and learning the ropes of this activity. There is something called, a Mini Account, and it uses a different leverage calculation than a regular account. This is, instead of trading full-size currency lots (100,000 units), you'll trade small lots that are just 1/10 the size (10,000 currency units), which will greatly reduces your risk. Pips in a Mini Account are worth, on average, $1 instead of the $10 value they regularly worth in a regular account. The Mini Forex account offers up to 200:1 leverage, this means that just a $50 margin deposit will allow you to trade lots worth roughly $10,000 , but the smaller lot sizes, with correspondingly smaller pip values, means that you'll be assuming less total risk.

In short these are the characteristics of a Mini Forex account:

- Minimum required account deposit = $300
- Recommended required account deposit = $2,000
- Traded in 10,000-unit currency lots
- Default Margin: set at 0.5% ($50 per mini-lot)
- Leverage = 200:1

Thought you’ll be trading a mini account, you will be still enjoying all the benefits that full-size forex account holders enjoy; including, same state-of-the art trading software, charts, resources, etc. As mentioned earlier, these mini accounts are ideal for new Forex traders because they will be able to develop a disciplined, rational forex trading strategy without excessively focusing on profits and losses.

Also there is no maximum trade volume when you use a mini account. Although the standard trade size is 10,000 units, you are not limited to trading one lot. You can trade many lots at once. For instance, you can trade 10,000 units, 50,000 units or 200,000 units. So, if you want to start Forex the right way you should seriously consider opening a Mini Forex account first and start building your Forex trader career from there.

An Introduction To FX Currency Trading

FX currency trading may be a new concept to some, but, there are plenty of people who find it a lucrative and worthwhile endeavor. Forex trading is done on the Global Foreign Exchange Market (often abbreviated to “FX”).

FX currency trading is the practice of buying and selling foreign currencies to turn a profit, and there are many different benefits and advantages to this kind of trading. Perhaps your portfolio is largely filled with stocks, mutual funds and bonds, but not currencies, in which case expanding to include foreign currencies is a great way to have your money in different aspects of the financial market.

Understanding FX Currency Trading

FX currency trading is done on the Global Foreign Exchange and is a 24 hour operation. The trading day begins in Sydney when their exchange opens for the day, and from there it moves around the globe as different markets throughout the world begin to open. The last major market to open is New York.

Yes, there are many different currencies throughout the world, but the majority of Forex trading is done with what are known as “the majors”. These are the major currencies of the world that are relatively economically stable, thus making them a good bet for FX currency trading. They include the Euro, British Pound, American, Canadian, and Australian Dollars, the Swiss Franc, and Japanese Yen.

FX currency trading may seem like an odd concept to some, so why would you want to buy and sell currencies? We are used to using currency to purchase material items so maybe buying currency seems a little strange.

Well, consider this – put simply, you stand a good chance of turning a profit when trading currencies. For example, if you see that the Euro price dropped considerably, that would be a good time to purchase some Euros. The next day, if it rises again, you can sell it and turn a profit on the difference.

Forex Trading Online

You can use the internet to do your FX currency trading, and there are plenty of software programs available that give you alerts concerning prices, market condition, whether you should buy or sell, etc. They also allow you instant access into the world of the Foreign Exchange market by being able to read current data.

Things to Consider

If you’ve decided to start FX currency trading, keep in mind that a good place to begin is by doing some research. Learn as much as possible in an effort to minimize your learning curve. Learning curves can be expensive, and one wrong decision can cost you a lot of money. Yes, Forex trading can be lucrative, but it can also be expensive, and the effects of poor judgment can be minimized if you simply allow yourself the proper time to understand the process.

Forex Trading Is Not Complicated Anymore!

Nowadays, we can almost do anything using internet, such as downloading music, buying and selling products, and that includes forex trading as well. In fact, Forex is one of the important term used for the trading of the world's many currencies.

The amount of Forex trading has reached $2 trillion daily. That amount is 100 times much bigger than the amount traded in the New York Stock Exchange which is the biggest market in the world. The most attractive things regarding the forex market is there are huge amount of buyers and sellers willing to trade frequently. Another thing is that forex trading can be done without any commission. Therefore, the investors will not be charged alot through pesky commissions even though they trade always.

Forex trading maybe a difficult concept to manage, with many different terms to understand at first. Understanding the terms is different from actually making a profit on the market. Fortunately, there are many guides you can search online so that you can understand the ways of forex trading more. Some of them may be a little bit costly, so it is important to do research whatever you buy. Many people try to sell general information, that can be found online free, in the form of e-books. However, even if you read and learn all the related information, you still can not become a master over night, or in a short period. It takes time, practice and patience.

Forex trading can be quite profitable, but also risky as well. You need to make sure that you really understand the margin trading and some special pitfalls, before trading extensively. When you trade, you should know that you are dealing with two different currencies, but not just one. It is all your own decision about which currencies you want to trad. You can either focus on the US dollar and the Euro, or you can even expand and deal with multiple currencies such as (USD/JPY= US dollar/Japanese Yen).

In short, it is important that you fully understand this is a very liquid market. You can easily make thousands, or even lose thousands. All the things will depend on the natural swing of the market. You will learn a lot once you read and experience the up and down in the market. There are a number of websites provide a little bit of a sample, in which they will provide you some fake money and try the market by yourself. So if you want to make money with Forex trading, work hard and try to do some research and you will find out more about the forex market.

Commodity Trading Courses

Many traders believe that, for those who wish to acquire or enhance their knowledge of day commodity trading skills, the best educational option is to attend a day trading course at an on-location site run by a reputable day trading firm. However, for many aspiring day traders, this option may not be feasible for a number of reasons. Another option is to take a day trading course in a "virtual classroom," by signing up at one of several online sites that offer such courses. Before signing up for an online course, make sure that it covers the most important day trading topic areas. At a minimum, a course should cover the following subject areas:

Trading terminologies that find and identify suitable stocks for day trading. Other topics should cover how to use trading software, the types of orders for trade execution, common trading mistakes and how to avoid them, Information should also show you how to interpret Nasdaq Level II screens, risk management strategies, technical chart analysis, the role of market makers and direct access trading, etc.

The following provides brief descriptions of four popular sites that offer online day trading courses or seminars: Daytrading University offers an online course aimed at those wishing to develop skills in day trading of Nasdaq stocks. The course content is organized into eight modules, each having over 15 separate lessons. The lessons include chart screen shots, other illustrations and offer a number of day trading tips and techniques.

Pristine.com offers a series of online seminars on various day trading techniques and strategies presented by way of streaming video and dynamic slide presentations. Online attendees have the ability to see and hear instructors teach each lesson.

Choosing A Forex Trading System - Part 1

There are many different kind kinds of Forex trading systems.

Of course, the most important Forex trading system is the one that is right for you.

As you search the web for Forex trading systems suitable to you there will be many seemingly appealing offers many promising to be so much better than the rest.

It can be difficult to compare some Forex trading systems due to the lack of performance information. You want to have enough information available to you for you to be able to make an intelligent decision. You need this valuable information prior to committing to purchase or lease a Forex trading system and before committing to the money necessary to properly fund a trading account.

Here are a few quick tips to help you hack your way through the jungle of available Forex trading systems:

1) Ignore the testimonials.

Your first job is to ignore the typically glowing testimonials telling you how great a certain Forex trading system is. Remember that these are most likely not typical results obtained with the trading system.

Now I’m not suggesting that you ignore all testimonials about all products. I’m simply suggesting that when it comes to testimonials about money making strategies that we all need to be more objective.

Don’t forget that a testimonial about a vacuum cleaner is a lot different that a testimonial about a trading system. For one thing everyone knows how a vacuum cleaner works and what it is supposed to do. Not everyone knows what a Forex trading system is and how it is supposed to work.

Not looking at the testimonials will allow you to be more objective in your evaluation. Also keep in mind that it is highly unlikely that you will buy your own private island based the few great trades you see in the testimonials.

Introduction to Stock Trading Software

What do you know about trading software? You purchase software, it trades for you and you'll become rich? Follow this article to learn something about trading software & systems.

How works a Trading Software

Before using trading software, you should have enough experience on investing in the stock market. Then you define your rules for software and it scans to finds what stocks are matched to your rules and makes sell or buy signals.

After software makes trading signals, brokers execute orders. Placing orders can be done by software or manually, it depends how you've programmed the software.

So, the process is:

1. You write your rules for software.

2. Software finds matched stocks to your rules and makes trading signals (sell or buy.)

3. Orders executed by broker.

Enough experience is Needed

As I said you should have enough trading experience in the market, in other words the ingredient for using software is experience plus a good understanding of technical analysis.

But, if I have enough experience, why I need software?

Advantages of using Software

1. Saving Time

There are so many stocks for investing; software scanning tools scan many stocks in a little time for investment opportunities based on your strategy.

2. Avoiding of Emotions

One of the most important reasons that cause investors loose is emotions. Investors always decide to avoid emotions but, they fall to this trap again. With using software you can control your emotions.

3. Managing your Portfolio

You can monitor your stocks and control your investment risk.

How to use Trading Software

1. Necessary for short term Investors

Software is necessary for day traders, swing traders and option traders. In general software is suitable for short term investors. If you are a long term investor, it may not necessary for you.

2. Choose software that fits your Needs

There are different kinds of software with various prices. Find what is suitable for your needs. Trading software packages can be divided into semi and fully automatic.

Fully automatic software can be programmed to buy and sell stocks automatically but, in semi automatic one you yourself place orders to brokers.

Before purchasing stock trading software, try their free trial version or buy a 100% money-back guarantee.

Some of famous software packages are: MetaStock, Tradestation, Interactive Brokers, Wealth Lab, AmiBroker and Tradecision.