FOREX Trading - 10 Mistakes Novice Traders Make

Enclosed are 10 mistakes novice traders make and they help over 90% of novice traders lose all their money. Make any of them in forex trading and odds are you will lose to.

Here are 10 mistakes you must avoid to win in online forex trading:

1. Day Trade

Simply the best way to lose in Forex trading.

The logic doesn’t work.

This should be obvious to a child, let alone grown adults!

Yet, more novice traders than ever try this dumb way of trading.

We have written numerous articles on this, if you still want to day trade read them.

2. Consult a guru

There are some people who sell advice that is good, but 90% of it is not worth the money.

If you do buy advice make sure you understand the logic and can follow it with discipline.

There are very few gurus that can help you and the best way is to do it on your own.

Success comes from within.

3. Get a broker assisted account

If brokers were good at trading they wouldn’t be brokers, they would be making money for themselves.

Sure, they can give you convincing stories, but stories don’t make money.

Getting market direction right does and the odds of your broker doing this are slim.

4. I can trade a Demo account so now I can make money

So you can make money paper trading with no money and place orders?

Big deal.

Fact is, paper trading is easy there is no pressure, as there is no money on the line.

Trading is an emotional ride and when money comes into the equation paper trader’s crumble as easily as traders who have not used a demo account.

5. Trade to frequently

Many traders think if their not in the market they will miss a move.

They trade for the sake of it and don’t have the odds on their side.

Only trade high odds trades, they cannot be hurried.

Be patient.

6. Mix fundamentals and technical inputs

A great way to lose.

You are either one or the other you cannot combine the two.

7. Chase your tail

Many traders constantly chop and change systems.

They have a perfectly good system they could have stayed with but get bored and swap and then they do the same with the next system.

Get a system and stick with it.

8. Over leverage

They over leverage on trades and get wiped out.

To win at online forex trading you need to play great defense, as well as great offense.

Protect what you have above all else.

All trades are equal, don’t fall in love with a trade.

In fact, the ones that look best and are the most comfortable to trade, often turn out to be losers.

9. Avoiding risk and creating it

Traders are so obsessed with avoiding risk they create it, by having stops to close and trailing them to quickly.

By trying to restrict risk they create it, by guaranteeing they will be stopped out and never riding a big profitable trade.

Forex trading is all about taking risk – calculated risks, when the odds are in your favor and making sure you don’t get stopped out by normal market volatility.

Learn about volatility and standard deviation, if you want to know why this is so important.

10. Try and have to many inputs

Many traders look for the perfect system and the more complicated it is the more likely it is to succeed.

After all 10 indicators are better than 2.

Not so, in fact the more inputs you have the less likely the system is to succeed.

There are more elements of the system to break it.

In forex trading simple systems beat more complicated ones and most of the world’s top traders only use very few inputs.

Don’t try and be clever and complicated, or you will lose.

Final words

Above you have 10 common errors forex traders make.

If you make any of them your chances of losing will be increased dramatically.

Online FOREX Trading – Is Simple but the Majority of Traders Lose - Why?

Most traders lose however online forex trading is simple to learn. Traders lose because they follow conventional wisdom (a lot of which is wrong) never acquire the right knowledge and then cannot apply it.

Here we will give you pointers on getting the right knowledge and mindset to win.

Let’s look at why traders lose

1. They Won’t Learn The Basics

Many traders imply want to pay $100 or so for an e-book from a guru and hope that the guru will make them money.

Their too lazy to learn the basics themselves and think they can buy success from someone else.

What happens?

You guessed it they lose, not just because in most cases the material doesn’t work (if it did why is the person selling it?) but there is a deeper reason.

2. Self knowledge is the key to success

Even if you are lucky enough to find a system that works, its difficult to follow something you don’t have ultimate confidence in.

If you follow someone else’s method, chances are you won’t achieve total, confidence in the method.

If this occurs then you will not be able to follow the method with discipline and you will end up having no method at all.

For a method to work you must have the ultimate confidence to apply it with discipline through inevitable losing periods.

3. Work Smart Not Hard

You get other traders who think the more work they put in the more they get out.

Not so, in online forex trading.

The amount of effort you put in has no correlation to how much money you make.

Many people get involved in information overload, but devising a method to trade is very simple (it should only take a few weeks) then you just need to execute your signals - that’s less than an hour a day.

Don’t work hard – Work smart.

4. Leave Your Ego Behind

The worst traders are the ones with big egos.

They think they can beat the market with complicated strategies and their superior knowledge, however in online forex trading this won’t help you.

I have seen all the complicated systems:

Ones using artificial, intelligence, neural networks and all sorts of systems, with equations so complicated you need a degree in mathematics to understand them.

They don’t work though!

Trading is simple and the more complicated the method the more likely it is to fail.

To Win In Online FOREX Trading

Learn the basics yourself, don’t buy stupid e-books on the net with ridiculous claims, do it on your own.

Build a method (that’s simple with just a few indicators) that you have ultimate confidence in and can trade it with discipline.

This should take under a month to learn the method.

Then, you can trade in under an hour a day.

That Is all you need to do and you could make some big long term profits in online forex trading.

Remember:

Work smart not hard and do it on your own!

Forex Trading

Forex trading, or foreign exchange current exchange trading, is a global phenomenon. This is the single largest market in the world. There are many different market sectors that are involved with Forex trading. These include, but are not limited to;

" Banks

" Corporations

" Governments

" Individuals


What is Forex trading you ask? At its simplest, Forex trading is currency being traded for another currency. However, Forex trading is anything but simple. The market has massive trade volume and is very fluid. Not to mention the hundreds of different currencies being traded and their ever changing value.


Forex trading is a very focused area of trading, but the amount of time and

energy most people and companies spend getting trained and educated on Forex trading and its inner workings and pitfalls, is at least as much time as it takes to learn the stock market.


Because of the complexity, Forex Trading is not your typical overnight success operation. There are many large corporations, such as GCI Financial which is a market leader in this space.


Forex trading is unique in that everyone does not have access to all of the same information and prices at the same time, as they do with the stock market. I won't get into specifics here, but basically there is a tiered level whereby different levels of access are given to the Forex traders and Forex firms.


The other main thing to remember about Forex trading is, until such time that the world adopts a single currency, Forex Trading will be around for a very long time.

Small Investor Dilemma - Forex Or Stocks?

If you had a limited amount of capital to invest, would you invest it in the foreign exchange (FOREX) or the stock market? This is a question that is, undoubtedly, pondered daily by small potential investors worldwide. In the ideal world, there should be a well-balanced portfolio including stocks, FOREX and other types of asset holdings. However, due to limited capital and the real need to start somewhere, the investor may not be able to immediately diversify. Incidentally, the investor could seek out some sort of diversified mutual fund, leaving all the ultimate control and decision-making to a fund manager. Nevertheless, for the small investor who wants to maintain full control and decision-making capacity over trading decisions, both the FOREX and the stock market offer such opportunity.

How does one decide which avenue to pursue, FOREX or stocks? Naturally, some sort of meaningful analysis needs to precede any decision on the matter. One approach would be to weigh the advantages and disadvantages of each. Let’s first look at the advantages and disadvantages of the stock market.

Advantages:
1. It is a regulated market; traders have more protection, generally speaking;
2. Some brokers have in-house researchers to help with trade recommendations;
3. A company would have to be virtually defunct for the stock to be totally worthless;
4. The retail market is well-established and has been around a long time; and,
5. The stock market has a greater abundance of books written about it; and,
6. Stocks may (or may not) pay out dividends, according to the vote of the Board;
Disadvantages:
1. Does not offer great leverage, comparatively speaking;
2. Not as volatile as FOREX, and, thus, lacks better potential for short-term profits;
3. There are thousands of stocks to be researched before deciding on the right stock;
4. Generally requires more capital due to the relatively high per share cost; and,
5. Margin calls may occur more frequently due to lower leverage; and,
6. Limited trading hours, compared to the FOREX.

By comparison, the advantages and disadvantages of FOREX trading are as follows:

Advantages:
1. High leverage is possible, in some cases up to an incredible 400:1;
2. There is a low barrier to entry, with some brokers allowing margin as low as $1.00;
3. Extreme volatility in FOREX makes for great short-term profits;
4. Only few dozen currency pairs are available for trading, making choosing easier;
5. Largest market size of any financial market, moving almost $2.0 trillion daily;
6. It offers 24/7 trading, closing only from 4:00 p.m. Friday to 4:00 p.m. Sunday; and,
7. Pays above-bank interest on margin funds, even when no trading is being done.
Disadvantages:
1 High leverage can result in substantial losses, if leverage is not used properly;
2 Because it is an unregulated market, some brokers may take advantage of traders;
3 The retail side is relatively new, so there are not as many well-written resource materials.
4. There is substantial risk involved and one can literally lose all of their investment in one trade.

After viewing the advantages and disadvantages highlighted above, this writer is of the opinion that the FOREX offers the best opportunities for profitability both long and short term. Of course, the underlying assumption here is that a profitable trader, prior to getting involved, will obtain the necessary education and learn strategies for properly managing risks while achieving profitability. To do otherwise would be courting financial disaster.

Starting with a relatively small amount of risk capital, such as $300, a trader in the FOREX, using proper money management techniques, can theoretically build a substantial nest egg by compounding the profits consistently over a period of time. Albert Einstein once commented that compounding is the greatest force in the universe. Whether or not that is true, it is readily apparent through mathematical computation that compounding can lead to the amassing of large amounts over a rather short period of time. Test this conclusion for yourself on paper by starting with $200 and compounding returns of 10% per month for 24 months. The results may astound you.

In conclusion, it would take substantially longer to accomplish the same financial results in the stock market as it would in the FOREX under the same economic circumstances and with the same amount of limited capital. Such likelihood would seem to favor investing in the FOREX, given a choice. As would any prudent investor, diversify your portfolio as soon as you are in a position to do so.

Day Trading Systems – Consider This Question Before You Buy One!

You will see day trading systems all over the net promising you huge gains but consider this key question before you buy one:

If the system makes such great gains, why does the vendor sell it for a few hundred dollars?

Of course, the answer is:

Because it doesn’t make money and the vendor is not stupid enough to trade it, when he can sell it to novice traders who are taken in by hyped up sales copy.

Day trading systems DONT work longer term and its one of the stupidest ways to trade online forex markets.

Don’t believe me?

Then ask any vendor selling a day trading system for a real time track record and see if you get one (let me know if you do)

What you will get is a hypothetical track record of great gains, but what use is this?

Hypothetical means it was done by the vendor knowing the closing prices, not risking real money!

Now if we al know tomorrows closing price today we would all be millionaires, but that’s not the reality of trading.

So why doesn’t day trading work?

1. Volatility in any daily or hourly period is random.

The period is to short and support and resistance levels are meaningless, so you cant trade of them – You may as well flip a coin.

So what happens?

Day traders constantly get stopped out and accumulate small losses as volatility can take prices anywhere in a daily period.

Do day traders ever win?

Occasionally they get lucky and win.

When they do they get obsessed with scalping a few points profit, or getting out at the end of the day, so they can never run profits to cover their huge amount of losses.

What happens – they get wiped out longer term.

There is no better way to lose your money than day trading! Most day trading system vendors are:

Failed brokers, writers or salesmen and make their money from selling systems.

Of course they don’t trade themselves, as they don’t trust their systems to make money and would rather have the guaranteed income from selling the system it’s a lot less risky than trading it!

Day trading is a mugs game don’t fall for the hype look at the facts.

Online Forex Trading – To Make Huge Gains You Must Master 1 Key Problem

Online forex trading looks easy yet few succeed and the bulk of novice traders over 90% wipe out their equity quickly.

Whilst there are many reasons novice traders lose this is the one that wipes out most.

If you don’t overcome this problem you will get wiped out too.

The major problem is:

Dealing with volatility

Many novice traders are more often than not right about market direction, but get stopped out constantly and lose as they cant deal with volatility.

You must find a way to deal with volatility to win at online forex trading.

Make sure that you take calculated risks that mean you can keep losses small when they occur and stay in the trends.

This is much more difficult than most traders think, so lets give some advice on how to deal with it.

1. Don’t day trade

One of the biggest myths of online forex trading is that day trading works – It doesn’t!

Why?

Because daily volatility is totally random and you are trading off support and resistance levels that mean nothing.

There are many day trading systems sold but they don’t make money – ask for the real time track record of profits and you are met with a deafening silence.

Day trading is a mugs game and a guaranteed way to lose, don’t fall for the hype or you will lose your money.

2. Use breakouts

Perhaps the best way to trade is using breakouts of significant resistance or support.

When the breakout occurs go with it – its that simple and place your stop below the breakout point.

Most traders cannot do this.

Why?

Because they want to “buy low and sell high” they wait for the pullback to get in at a better price and of course it never comes.

The fact is that most major moves start from new market highs NOT market lows.

While the stop might have to be a bit wider on a breakout the odds of success are very high.

3. Trailing stops

Most traders are obsessed with locking in some profit and move their stop up as quickly as possible, but this is a guaranteed way to get stopped out.

Then they sit and watch the trade they were in make $10,000 or more and their not in.

Fact is if you want to stay with the big trends don’t trail stops up to quickly

Forex trading involves taking a risk. If you become obsessed with having stops to close or trailing them you will create risk and guarantee you will get stopped out.

4. Trade with momentum

Another error traders make is not trading with momentum indicators they simply enter above support or below resistance and “hope” it holds.

They think that as its close to resistance or support their stop can be close – Yes it can but odds of being stopped out are high.

This goes totally against trading with the trend.

To trade properly you need to get some evidence of a reversal in price and then trade.

Sure, your stop has to be a bit wider but the odds are more in your favour.

Final words

Novice traders try so hard to avoid risk they create it for themselves.

To trade online forex you need to take calculated risks on trades that have high odds of going the way you predict.

This means placing your stop further away and not trailing it to quick.

On paper you have wider stops and more risk – In reality you are trading the odds and have far more chance of making big profits.

Hidden Secrets Of Forex

1. There is always a risk in Forex. That's the truth. There's a risk in anything.

Gambles go to casinos & Forex traders go towards online trading. Anybody that tells you, it’s a 100% Guarantee, is lying! Before you begin trading, make sure you put in some time and effort into studying the market + careful analysis. Any gamble is fun, except when you lose.

2. DON’T & I repeat DON’T ever put real money into a Forex account before trading on a demo account.

The reason over 85% of newbie’s fail in the Forex market is due to quickly investing in a get rich quick Forex scheme. Make sure you get a demo account, play around with it, and perfect your skills upon it. Remember, it doesn’t cost you anything. So why not give it a try first? I guarantee you’ll be better off if you go with a demo account first

3. Never ever risk over 3% of the total trading account size. Ever!

Remember the guy that said never say never… he was wrong. I can confidently say, Never ever risk over 3% of the total trading account size. This is a key in separating the Successful traders from the unsuccessful ones. I know its fun to put in more money, try to make more; become rich… everyone loves that stuff. It’s not worth it. You may win a few trades here and there. But overall, you WILL lose.

Forex Trading And Its Tactics

Trading the Online Forex market has many advantages over other fiscal markets, among the most significant are: better liquidity, 24hrs online market, superior execution, and many others. Traders and investor see the Forex market as a fresh speculation or expanding chances because of above mentioned benefits. Does this mean that it is quite simple to earn money trading the Forex Market? Not at all…!

The précising the forex market incoming/quitting time all based on technological an analysis that is specific for very short-term life of such forex analyses. It is resolute by days, hours, and some times even by minutes, but not by weeks or months. In all the above cases, the same technological tools are used. Having successful forex trading system carries the following tactics.

Tactics for Price Breaks

There are three different trader’s actions at price breaks:

To take a place in advance, predicting the break;
To open a place when the break is actually in progress;
To wait for the predictable rollback after break

When you work with several lots, you as a trader could open one position at every of the three stages. One could open a small place before the predicted break, and then purchase some more straight away after the break, and then lastly open extra place at an unimportant price fall during correction, which follows the break. If one trades with small place, two questions would have force on one's decisions first of all.

Gaps - Price gaps that are created on bar charts could also be used to select a proper flash to open or close forex trading positions. For example, gaps created during price development frequently become support levels. That is why, at a forex up-trend, it is sensible to open extended positions when prices actually fall to the upper border of the gap or even sometimes a bit below it. A stop order could even be placed below the gap. At a down-trend, an open place needs to be opened when prices arrive at the lower border of the gap or even at bit above it. The defensive stop order is placed above the gap, in this above case.

Averaging - Averaging is a forex trading strategy used when one has made an error or simply made a trade (the first thing that comes to one's mind) and the price has moved beside, and one makes a fresh forex operation of the same kind but at a more money-making price. The most significant drawback of averaging is that one cannot know to what price the market would go beside the trader.

The averaging looks for investing a double amount of money when compared to that invested before. Trading productively is no simple task; it is a procedure and could take years to attain the preferred results. There are a few things though every forex trader needs to take in thought that could go faster the process: having a trading system, using money management, education, being conscious of psychological things, discipline to follow your forex trading system and your forex trading plan, and others.

Automatic Forex Trading Systems - 7 Ways To Benefit From Them

I don't know about you, but I'll bet that you'll want to learn about ways to automate your forex trading, so that you can benefit from the returns that forex gives you, without the need to trade yourself!

Is this where the future of forex is heading? Both for the forex trader who doesn't mind trading, to enable him to trade a second or third system, as well as for the trader who's actually not that interested in trading on a daily basis?

Well, it seems to me that automatic forex trading systems are on the rise, and more and more systems are becoming available over time.

By the time you finish this article, you'll have a very good idea of the benefits that automatic forex can give you, and how to look further into this new trend.

Automatic forex trading may be classed into two types:

The first type, is automatic forex trading through managed forex.

That is, a forex trading company that uses automatic trading through a trading robot to ensure that their system is traded exactly as intended. In fact many systems designed for robots can only be practically traded by robots rather than a human team, as you'll see.

The second type of automatic forex is the use of a forex trading program with an ability to automatically place trades, such as with WealthLab.

To do this, you'll need someone with programming skills to program the system into WealthLab or other software, and a connection to a forex platform that accepts automatic order placements by the trading program.

With either method (though the first method is the one that doesn't require programming skills) these are the benefits to automatic forex system trading:

1. You don't have to trade yourself, which frees up your time. This is one of the main benefits. For a trader who actually likes trading, this means that he can continue to trade one system, and at the same time trade a second or third through automatic forex. For those who are not really interested in actually trading on a daily basis, they're able to profit from forex, and concentrate their efforts on their other businesses.

2. The trades are able to be taken at anytime of the day or night. The performance of a system may rely on the fact that you actually take the trades generated by the system. Depending on the time zone and the time available by the trader, it may be impossible to take the trades that we're supposed to trade and hence compromise the profitability of the system significantly. Automatic trading by its nature, is able to overcome this problem.

3. You're able to trade multiple forex systems and strategies. You can trade multiple systems with the same automatic forex provider, or do so by choosing more than one provider. And because their systems are likely to rely on different indicators, trade different currency pairs, and also trade different time frames, you're diversifying your risk. The reasons why you want to diversify risk is that you want to smoothen out your equity curve and reduce drawdown.

4. There are no longer any issues with trading psychology. Trader discretion, if not based on proper practice and alertness, can causes a system's performance to decrease significantly, and this is not an issue with automatic forex trading. Of course your skill now comes in choosing a good automatic system to invest in.

5. You can trade systems that may be impossible for a human to trade. A human can only watch and trade a certain number of currency pairs at a time. With automatic forex, there are systems for example that has a high frequency of trades, traded on tick data. Therefore trading is no longer limited by how easy it is for a person to physically trade it.

6. You also leverage your time because you don't have to spend time learning how to trade a particular system. Learning a particular system takes time and effort, so there's a lag time between deciding on a particular system, to getting to the point where you know the system rules, and then actually paper trading then live trading that particular system. You could have been making profits in forex in the meantime.

7. Finally, you don't need to spend any time, or have any skill in designing or backtesting a trading system, as it already has been done for you. In fact with the different automatic forex providers around, you're taking advantage of many types of forex systems that are available.

Make no mistake about it. Passive trading (and other passive forms of investments) will get more popular, as it frees up your time to enable you to focus on other income generating business, or to do whatever else you need to do with your time.

So it's important to choose a good automatic forex trading system, so that you'll benefit as much as you can from automatic forex system trading!

Forex Trading – Swing Trading In 3 Simple Steps For Big Profits

Swing trading can be highly effective in forex markets enabling you to trade with low risk and high rewards.

Swing trading is however misunderstood by many traders and they lose.

Here we will look at a specific method to swing trade that will give you low risk and high reward.

Swing trading

Takes advantage of corrections in value sideways or strongly trending markets and a typical trade will last 2 – 5 days.

Many traders think they can swing trade on a daily basis but this will just see you lose your equity quickly.

Day trading no matter what system you use is a mugs game, as volatility within a day is totally random and levels have no significance.

If you want proof then ask a day trader for a real time track record of profits and you won’t get one.

Now let’s get started on a simple 3 point method to swing trade.

1. Establish valid support and resistance

You are looking for support or resistance that has been tested and held on several occasions preferably at new chart highs or lows.

2. Watch Momentum

Watch prices move strongly toward the support or resistance and look for confirmation that price momentum is going to turn.

This is the critical point!

You need CONFIRMATION that price momentum is waning, a turn is likely and the odds favour a swing trade.

You want some evidence that price momentum is not strong enough to take out support or resistance.

The best indicator for this is the stochastic indicator – It’s the ultimate indicator to time a swing trade and if you don’t know how it works learn about it from our other articles.

The stochastic is a visual indicator and here we will simply look at the visual set up you need.

When the market is for example trending up to resistance, the stochastic lines will both normally point up. When the market is moving down the opposite set up will apply.

The signal you are looking for is:

For the stochastic lines to cross each other and point either up (bullish divergence) to show support has held or cross and point down (bearish divergence) to show resistance has held - This is your signal to take the trade.

You can see this set up on any free chart service and one of the best is futuresource.com.

3. Target

When you have entered a trade you need a target.

Next pull up the Bollinger band.

If you have had a quick volatile move to test support or resistance, prices will be normally at the top or bottom of the band.

Look for prices to return to the middle band and make this your target.

Don’t hang around and trail stops.

As soon as you hit this band or near it take profit.

Other points

1. Only trade sharp volatile moves into valid and significant support and resistance.

2. Always wait for a stochastic crossover to enter don’t predict.

3. Set a target and get out.

A typical swing trade will last for around 2 – 4 trading days.

If you look for set ups that meet the above criteria you can get some low risk high reward trades that will build significant profits over time.

Tips On How to Start Trading Forex

If you've decided to jump in and check out the Forex, or foreign currency market, there are a number of things you should keep in mind as a beginning trader. Your experience with Forex can be a long and profitable one, and it is essential to be prepared at the onset so you can start leveraging your tools and resources at once, and start building experience.

To get started, once you've located a brokerage you would like to work with, you should open up a demo account, so you can start making practice trades. When you are ready to open a real account, its a good idea to also keep your demo account open. You will be able to test alternative trades with your demo account, which gives you the ability to keep learning and testing strategies. You will also be able to see if you are being too liberal or conservative in your real account, by testing out different trade amounts in your demo account and comparing the outcomes.

To become more successful with Forex, research is the name of the game. If you tend to jump in first and ask questions later, you may want to be a little more deliberate, and start by understanding the basics of how the market works, such as the trading terms and terminology that are used in Forex. There are many tutorials available on the Internet, and much of the basic information can be accessed at no cost.

You should also stay informed with current events, such as political, social and economic factors that can effect a country's currency rates. While you don't want to feel overwhelmed by a barrage of information, Forex trading is fluid, and these external factors play a part in currency fluctuations that impact your trading.

Probably the most important piece of advice is to have a money management plan in place. You should only use money you can afford to lose when you invest in the Forex market, and have only a set amount of money at risk. There are no guarantees in Forex trading, and you don't want to get wiped out. In addition, you should be especially careful when trading on margin, which is borrowed money to trade with. Margin money is not free money, and if you can accumulate bigger losses if you are trading on too much.

Forex trading can be fun and profitable, but it does carry a number of risks and uncertainties. By doing your research, practicing and shadowing with a demo account, and carefully managing your money, you can minimize your risks and increase your success with Forex.

Swing Trading - A Simple 4 Point Method For Big Profits

Swing trading within the primary trend can be highly profitable and offer low risk. Here we are going to look at a simple 4 point system for swing trading that any forex trader can use novice or pro. Its simple effective and can be highly profitable. You can look and test this method on any free chart service on the web and a good one is futuresource.com

You need to know the logic of support, resistance, Bollinger bands and stochastics and that’s it. If you don’t simply check our other articles. Most swing trades done using this method last just a few days, but you will find you can bank some fantastic profits.

Step 1

Look for important points of resistance within the trend. This can be done by simply looking at support or resistance points on both the daily and weekly charts.

Step 2

Look for a sharp move toward these levels, with price volatility high and with the top of the Bollinger band near the highs or lows. Now you have spotted the opportunity, it’s time to look for entry levels.

You Need Confirmation

As we all know trading into support or resistance can be successful. Of course in many instances support and resistance give way, so you need a method to time your entry. Look for price momentum that is carrying price action toward to support and resistance to falter or reverse

Step 3

There is no better timing indicator than the stochastic – which measures short-term price strength or weakness. When prices approach support or resistance the stochastic lines should be pointing in up (into resistance) or (down into support) wait until you see the following: The stochastic lines to cross and show short-term momentum has changed. With a test of resistance they will cross with bearish divergence and with a test of support they will cross to upside with bullish divergence. This is the key to take your position confirming that price momentum has run out of steam and that resistance or support will hold.

Step 4

You need a target to take profits and this can be provided by the middle of the Bollinger band and or support or resistance levels.

Note

1. Only trade this method into significant support or resistance.

2. Look for a quick high volatility move

3. Never trade without getting the confirmation of the stochastic

4. Target – Your better to liquidate your trade as soon as target is hit, do not trail stops.

That’s it.

It sounds simple but I have been using this method for 25 years and it is one of the most effective ways of isolating high return and low risk trades.

Foreign Exchange Swaps - Calculating Interest On Forex Trades

One of the beauties of Forex trading lies in the ability to trade using leverage, which is often as high as 1,000 times your capital. In other words, you can effectively borrow up to 1,000 times your capital in order to trade. But borrowing money to trade is no different to borrowing money for any other purpose and you will be charged interest.

However, because every transaction involves both buying and selling currency, interest payments payable on money borrowed to fund a transaction can be offset by interest earned on the currency held. If this seems a little confusing we'll look at an example in a moment, but first it is worth just taking a moment to examine the subject of interest rates in general to see the wider picture as it affects the Forex market.

Interest rates are established by central banks and are used to regulate a currency in order to meet a country's monetary policy. Interest rates directly affect the cost of a currency with high interest rates making it expensive to buy a currency and low interest rates making a currency more affordable.

As a tool of monetary policy the government of a country facing high inflation, with the price of goods and services rising rapidly, might choose to raise interest rates. This would have the effect of raising the cost of currency so that borrowing becomes more expensive and both demand and consumption fall. Following the normal laws of supply and demand, as demand falls, so the rate at which prices rise will also fall and inflation will come down.

By the same token, a country facing recession might well choose to lower interest rates in an effort to stimulate the economy into growth. As the cost of the currency falls, so too will the cost of borrowing and investors, companies and individuals will be encouraged to borrow and thus spend more, so increasing demand and stimulating supply to meet that demand.

Interest rates established by central banks determine the rate at which commercial banks can borrow from the government and thus the rate at which they will lend to their customers, including Forex traders.

So just how do interest rates impact individual Forex trades?

Suppose a trader buys GBP/USD at 1.9430. In this case he is borrowing US Dollars to buy UK Pounds and is thus paying interest on the US Dollars he has borrowed and is earning interest on the UK Pounds which he holds.

If the Bank of England has set a higher rate of interest for the UK Pound than the Federal Reserve has set for the US Dollar then the trader has the opportunity to earn more in interest on the UK Pounds that he is holding than on the US Dollars he had borrowed.

However, unless interest rates are particularly high on one currency and the differential between the two interest rates is significant, any net gain or loss is likely to be small. It should also be borne in mind that interest rates are set at an annual rate and that most currency trades are conducted over short, or extremely short, timeframes. This again will reduce any interest gained or paid considerably.

Forex Trading - Getting Rich Trading Forex (part 2)

In the first part of this report we looked the first way to get rich trading forex. That involved spending five years becoming a winning trader and then starting a hedge fund.

Funny thing, several people voted on that article and gave me a very low rating on the article. Where you people looking for some way to get rich quick? Guess what, it doesn't exist!

Stop living in fairy land. Yes, I'm going to tell you the other way to get rich in forex trading. This way is even slower than the first . . .

. . . but it works!

Here's the thing. If you learn to trade successfully, you've mastered step one. If you take more money out of the market than you put in, then you have gotten passed the first hurdle.

Now educate yourself about system design. You want to learn all about building trading systems. You see, you're going to go on a quest for a great system. You're going to work on building a system that has low draw-downs, and makes bunches of money!

So, why not just start with step 2 in the first place? Let me ask you a question. Why not put the cart in front of the horse?

Because it doesn't work.

First learn to trade profitably, then build a system that really rakes it in, then add as much money as you can to that. And continually add to it. Of course it will keep growing on it's own as well.

Don't skimp on the tools to build you're killer system. You will need to purchase some several thousand dollar testing engine. Use some of the profits from your current trading to fund it.

This is the second way to get rich trading forex.

Trading Psychology - Emotions and Behaviors

Emotions and behaviors must be owned and controlled by a disciplined trader. Otherwise, trading may very well take on a life of its own. Trading taking on a life of its own is not necessarily a good thing, primarily due to the highly likely outcomes of financial disaster for the trader. At its best, each trade should be methodical, systematic, organized, and strategic per the trader’s carefully planned execution of the trade. In addition, the trader should know and be comfortable with the potential outcomes of each and every trade.

Successful trading requires the individual to have more than a certain amount of control over emotions and behaviors. Emotions may include, but not be limited to, the following items: 1. Anger, anxiety, confusion, depression, disappointment, exhilaration, frustration, insecurity, passion, satisfaction, etc. Behaviors may include, but not be limited to, the following items: 2. Arrogant, consistent, controlling, denial, following through, [im]patient, [ir]rational, letting go, perseverance, stubbornness, tenacity, etc. Having control over these and other emotions and behaviors will allow for the trader to execute trades objectively, and more importantly, according to a strategic plan.

Sounds easy enough, does it not? “Execute trades objectively, and more importantly, according to a strategic plan.” Being that traders are human, it is not such an easy task to accomplish. It is not easy to be objective and diligent about sticking to a strategic plan day after day after day – especially with the constant volatility and erratic dynamics of the market tempting and enticing you at every turn to take actions that are NOT necessarily objective and NOT necessarily part of the strategic plan.

In the coming weeks, the ways in which various emotions and behaviors may help or hinder your trading success will be discussed. While there is a plethora of information available to address this topic, Trading Everyday will address it from the perspective of basic, fundamental, human nature relevant to attitudes (emotions) and habits (behaviors).

The question to be mindful of throughout your trading days is, “Do I own the trade or does the trade own me?”

Good vs. Bad Behaviors Let’s start with behaviors. Obviously, there are both good behaviors that add value and bad ones that don’t.

Who among us has identified good habits that already exist in your life? For example, do you have the perseverance to finish everything you start (e.g., a book, a garden, a DIY home project, etc.), or do you start something and get bored after a few days or weeks and move on to something else?

It is important to recognize that you have good habits that are already in place, but it is just as important to know that you can always improve on them. Initially, Trading EveryDay will focus on bad habits that need to be identified and then addressed.

Who among us does not have bad habits that need changing? For example, do you focus on the past and/or hang on to things in your life for too long, things that you should let go of (e.g., bad relationship, an addiction, unsatisfying job, etc.) and impact your ability to move forward?

Analogy - Letting Go and Moving On A great tennis player doesn’t become great without training and practicing to develop the technical skills and fitness (both physically and mentally) necessary to play at the world class level. Additionally, the player must make sure that his tools and equipment (rackets, strings, towels, extra shirts, water, tape, etc.) are available and in good working order to be in the best possible position to win.

As soon as the ball is in play, the player will focus and strategize on only that rally, one point at a time. Sometimes he will win the point, other times he will lose it. Whatever the case, as soon as the next rally is in play, the player has to let go and move on to focus on the next point. He cannot dwell on what just happened, good or bad, because that is in the past and the point at hand – the present - is what is important.

The opponent is hitting the balls back, moving the player all over the court. The player remains in the moment, strategizing each return shot. The tennis player is using all the experience, knowledge, and tools to hit it back or – even better – hit a winner and win the point, and perhaps the game, set, and match.

Applying Analogy to Trading The same is true in trading. The trader must train and practice to develop the technical skills and physical and mental fitness to perform well. He will also need to make sure that the necessary tools and equipment are available and in proper working order to be in the best possible position to perform well and win.

No matter what the circumstances – good, bad, profit, loss, – a great trader will adopt the behavior of letting go and moving on to the next trade. A good trader will not allow himself to hold on to the lingering effects of any trade knowing that once it’s done, it’s done. The intention and desirable behavior should always be to move on and do better next time, even if it was a good, profitable trade because the game is never really over for a trader.

By establishing and sticking to a strategy, making the trade, letting it go, and moving on to the next trade, the trader remains in control of his behavior and owns the trade rather than the trade owning him.

Day Trading Systems – Spotting Price Direction and Daily Ranges

The aim of day trading systems is to spot price movements within a short time frame normally by using support and resistance and pivot points.

There are numerous e-books, gurus and systems that tell you this can be done and you can make big profits with low risk but can you? Lets find out.

The Market

In any single daily trading session trillions of dollars are traded by millions of participants all with different aims and objectives.

To calculate what will happen in a few hours or a day is literally impossible.

No one can accurately predict what will happen, so while support resistance and pivot points can be drawn and used they are of no use to you in making money.

Ever seen a real time day trading track record?

I haven’t and neither will you find one.

The logic day trading is based upon simply doesn’t work.

Vendors of day trading systems always use hypothetical track records that make great gains but there done in hindsight knowing the prices!

Anyone can do that.

Fact is, day trading is one of the dumbest ways of trading forex.

Volatility is random

Volatility is random in a day session and day traders constantly get stopped out, as support, resistance and pivot points they feel are important give way and hand them losses.

Who pays attention to daily support and resistance apart from day traders?

Any trader who is trying to make money from forex trading knows that you need to have accurate data to get the odds in your favour and daily data is of no use.

The bulk of people trading forex pay no attention to daily levels as they know there not important.

The reality is day trading systems dont make money

So next time you see a vendor trying to sell you a system that can accurately predict daily support resistance and pivot points ask them for:

A real time long term track record to support their claims.

Odds are you simply wont get one.

Vendors selling day trading systems are not stupid enough to trade their own system!

They will leave that to you and make money selling you the system.

They win, you lose its as simple as that.

The Role Of Commercial Banks In Trading Currencies Around The World

The process of trading currencies around the world is no longer simply a matter of banks exchanging currencies amongst themselves and today involves a very large number of different players with a wide variety of reasons for wishing to trade in currencies. Some for example will need to exchange currencies for the traditional purpose of buying goods and services overseas, but others will be participating in the market simply to earn short term profits from movements in the market or to influence exchange rates.

Whatever the reason for a player's participation in the market, this diverse group affects the supply and demand within the market, and thus the exchange rates at any given moment in time, and so it is important to understand just who the key players are. Here, we look at the most important players - the commercial banks.

The commercial banks account for by far the largest proportion of all trading of both a commercial and speculative nature and operate within what is known as the interbank market. This is essentially a market composed solely of commercial and investments which buy and sell currencies from each other. Strict trading relationships exist between the member banks and lines of credit are established between these banks before they are permitted to trade.

Commercial and investment banks are a fundamental part of the foreign exchange market as they not only trade on their own behalf and for their customers, but also provide the channel through which all other participants must trade. They are in essence the principal sellers within the Forex market.

One important thing to remember is that commercial and investment banks do not only trade on behalf of their customers, but also trade on their own behalf through proprietary desks, whose sole purpose is to make a profit for the bank. It should always be remembered that commercial and investment banks have exceptional knowledge of the marketplace and the ability to monitor the activities of other participants such as the central banks, investment funds and hedge funds.

Of course the commercial banks have been at the center of the Forex market for many years now and their role has remained basically the same throughout this time. However, the arrival of the first electronic brokering systems (Reuter's 'Monitor Dealing Service' in the early 1980s and Reuter's 'Dealing 2000-1' in 1989) started to change the face of the market. It was however the arrival of Reuter's 'Dealing 2000-3' system in 1992, quickly followed by the launch of 'Electronic Brokering Services (EBS)' in 1993 with the ability to automatically match buy and sell quotes from dealers that changed the face of the Forex market and the very nature of the market.

Electronic trading systems now allow dealers to conduct a number of trades simultaneously and to trade with much tighter spreads, greater efficiency, lower costs and, most importantly, far greater transparency than was provided by the old telephone dealing system.

The advantages of electronic dealing are clear for all to see, but it is the accessibility of the system and that fact that much greater access has been granted to it that has allowed many more players to enter the market alongside the commercial and investment banks.

E-Currency Trading - The Online Profits Machine

E-Currency Trading, or E-Currency Exchanging as its sometimes known, has grown out of the need for companies and individuals who transact on the Internet to have a common currency to trade with. Any world currency can be exchanged into e-currency through the many exchange companies around the world operating via the Internet, for a small fee of course.

Profits in this business are made by purchasing ‘shares’ which are offered by these exchange companies, and thereby providing currency liquidity for the exchange. Of course, world currency exchange rates fluctuate daily, so the e-currency, or shares that you are buying in these companies will also fluctuate. However, because you are simply lending them your funds and they are using those funds to facilitate the exchanging process and charging a fee, those fees are simply passed on to you and added to your account. So no matter what, you make some money each and every day you hold your shares. The amount obviously varies depending on the currency fluctuations you are dealing in.

That is why I’ve called this business a profits machine. It just seems to churn out profits daily without very much input from you at all. In fact, on average, you can expect to earn between 0.50% and 5% per day on your funds that are invested.

What’s the catch? Well, like any industry, it has its own unique set of protocols, language and systems that you need to be familiar with to get yourself up and running, let alone learning a strategy to succeed. It would be wise to invest some of your startup capital in some training and guidance from someone who is already working in this type of business and succeeding. That way, you can avoid all the costly mistakes and get straight to making those profits. Isn't that why we’re all in business.

Jeremy Gard is a Futures and CFD trader who also runs an Internet business helping people to create wealth and achieve financial freedom. He lives and works from his home in Brisbane Australia.

Forex Demo Account - What Are They Really

Forex practice accounts allow you to trade the forex market while not putting your hard earned capital at risk. These accounts are often also called forex demo accounts, these accounts should be free - so if a forex broker is trying to charge you for one – just say no thank you and look for another broker.

Most forex practice accounts will work for approximately 30 days, some are longer and some are shorter it all depends based on the broker that you choose to open your practice account with. We have found many forex brokers even let you continue to use the account for longer than the time period that they say it the account is for. However, other brokers will discontinue the account as soon as the time frame is expired.

Forex brokers offer forex practice accounts to people as a way to get other people interested in their forex trading tools and use their forex broker services. As a result - they will collect some basic contact information from you when you create your forex practice account. Depending on the broker, they may call you and see how you are doing with the account and see if they can help you get started in a live account. Remember brokers get paid a commission only when you are making trades in a live forex account not the forex practice account.

Our advice is to use a forex practice account until you have tested your forex trading strategy and are comfortable trading the foreign currency market. There is nothing worse than making a mistake in a live account, especially when its something that you should have learned not to do in your practice account. If you aren’t sure yet of how you are going to trade the foreign currency market and you are looking for a simple and easy to use system that will take about 15 minutes to use - you should check out Freedom Rocks - it is an effective and simple to use forex trading system.

We have learned a lot using forex practice accounts to test out different strategies and test new theories. Often times we will be running anywhere from 3 to 5 practice accounts at the same time just to try out different forex theories. Some brokers make it easy to have multiple accounts and other brokers make it hard. The broker we use allows us to create new practice accounts in just a few mouse clicks and they don’t care how many practice accounts you have – as a result – it makes it a lot easier to test theories on their software as opposed to other forex brokers.

Even after you have been trading the forex market for a many years you will want to experiment and try out new methods of trading and that is what forex practice accounts are great for. Test your new forex method without putting any money at risk in a practice account.

Global Forex Traders Come In All Shapes And Sizes

Despite the fact that there is no centralized market for foreign exchange trading and that Forex trading involves a variety of market makers rather than just a few specialists, there in nonetheless a structure and a hierarchy to the market.

At the top of the market is the interbank market which sees the highest volume of trading and principally trades in the currencies of the G8 nations, which together represent some 65 percent of the world economy. Here the major banks trade with each other on lines of credit which are established between individual banks and the rates at which trading takes place are clearly visible to all of the participants. Trading is conducted through interbank brokers, electronic brokerage systems or Reuters.

Below this 'top level' market other participants, such as smaller banks and corporations, must trade through commercial banks. Unlike the interbank market however here there are rarely established lines of credit and this means that traders below the interbank market often trade at less competitive rates and are tied to using just one bank for their foreign exchange dealings.

A few years ago the Forex market was very much dominated by the big banks and was very much an 'old boys club' which it was very difficult to get into. Today however technology has changed the market dramatically and even small investors can now access the market as global Forex traders and take advantage of the opportunities previously only available to the big boys.

Access to the market has also been helped considerably in recent years by the changing nature of the market itself. Foreign exchange dealing was formerly very much an activity associated with the international trade in goods and services and was essentially seen as servicing import and export markets. Today however investment plays a major role in the market with capital flowing between countries through participants such as insurance companies, institutional investors, mutual funds and others.

The size and diversity of today's market, combined with the ease of trading as a result of advances in technology, brings not only extremely high liquidity to the market, but also considerably price stability. Unlike equity markets, the Forex market always has an abundance of both buyers and sellers available and this also creates a very orderly market.

I Am Happy With My System - What's Next?

So, you now have a trading system. You devised it, you tested it and you are already using it to trade the market. You may have automated it or you may still have to put your buy and sell orders manually, but for the moment, you really have nothing much to do apart from following your system with ironclad self-discipline. The question is: Now what do you do?

If you are one of those traders who reached this stage, the chances are you may have spent your last few months or years arriving at your system and now that you have it, you have spare time. With this spare time, you may find yourself watching the market day in and day out.

The danger with doing this is that you create opportunities to feel emotional about every single one of your trades and this may lead to undoing the results of your hard work. You begin to feel elated when you are making money and you might start breaking your rules. Conversely, you may feel down when you are losing money and you start doubting your system and thus, begin disobeying your trading rules. The problem might be that you have a good system and you are simply not giving it enough time for it to work.

If you think this is happening to you, consider that it might be best that you only watch the market when your trading system requires you to. You should also consider other ways in which you can best fill your spare time to serve your need to work, create and create a meaningful life. You must have other interests and ambitions.

Personally, I have always wanted to create a business that would serve the planet and millions of people so I can leave behind a legacy when I die. I know this sounds very grandiose but I know that you, the reader, also have similar aspirations deep inside. I know this because we are both human beings and human beings have the need for self-actualization and self-transcendence (spiritual needs).

As a disciplined trader, you have many skills you can apply to business. You create systems, you are analytical, you are creative, you solve problems and you are results-oriented. These are all strengths that you can apply in the world of business. There are many opportunities out there for you to apply yourself and the lessons you learn from trading the financial markets.

Learn Forex Trading - The 4 Fundamentals Of A Good Trading Market

Whether you are trading stocks, bonds, futures, foreign exchange or just about anything else you care to mention the conditions that make a market suitable as a trading ground for the investor remain the same. In essence, there are four characteristics which are always present in a good investment market - liquidity, transparency, low trading costs and the existence of trends in the market.

Liquidity

All trading consists of two elements, a purchase and a sale, and liquidity in its simplest form refers to the ease with which traders can buy and sell. I say 'in its simplest form' because for a market to be truly liquid traders must also be able to buy and sell in substantial volume without any marked effect on prices.

The problem with a market that is not liquid is that traders will often find that there are delays in filling orders to buy, resulting in often substantial differences between the price at the time the order is placed and when it is actually executed. In addition, it can often be difficult to sell in a market that lacks liquidity.

The Forex market is an extremely liquid market with a huge number of trades being conducted daily and with a trading volume that is second to none.

Transparency

The transparency of a market is best defined as the ability of traders to access accurate information at all stages of the trading process.

Information is the key to most things in life and this is certainly true in many of the world markets. Indeed there are many examples, especially across the world stock markets, of companies and individuals running into difficulty because all of the parties involved in a trade did not have access to accurate information, or were given inaccurate information.

The Forex market is without doubt the most transparent of all of the world trading markets and this is especially true when it comes to pricing.

Low Trading Costs

All markets carry trading costs and the higher these costs the lower the trader's profit or the greater his loss. Any market therefore that can keep its trading costs low will be attractive to traders and will encourage greater trading volume.

The lack of commission and similar trading costs and the tight spread of prices in foreign exchange trading mean that trading costs in the Forex market are kept very low compared to other markets.

Trends in the market

One of the most difficult things in many markets is knowing just when to enter the market, or buy, and when to exit the market, or sell. For this reason it is important to have some mechanism which traders can use to assess the current state of the market and to predict its future course.

In the case of the Forex market this essentially means employing various different forms of technical analysis which rely on studying the past performance of the market and identifying trends which can then be used to predict the future.

Most markets will display some form of trend, but some markets have far more clearly defined and marked trends than others, making it far easier for traders to enter and exit trading positions. Fortunately, the Forex market is one market with a particularly strong trending characteristic.

Day Trading Systems - Why Do You Never Get a Real Track Record?

Day trading system are all over the net offering you fantastic opportunities to become yet, the odd fact is you never see any proof they work!

Why?

Because day trading simply doesn’t work!

Firstly, when we talk about a track record lets be clear about what we mean:

We mean a real ( THAT’S REAL DOLLARS ) made in the market over a long period of time say 2 or 3 years.

Not A hypothetical back tested one.

If we know the price data already it’s not hard to make a profit!

It’s funny how you never see a losing hypothetical track record – Wonder why?

The other trick is testimonials to support the system.

Their simply someone who has a lucky trade or a friend or relative of the vendor.

The real acid test is real money, made in the market over a long period of time.

So why don’t day trading systems work?

1. Price movement in a day is random

The fact is trillions of dollars are traded by millions of traders all with different aims and guess what?

The vast bulk have no interest in daily ranges.

The day trader takes his position and gets stopped out by random volatility, as support, resistance and daily pivot points don’t hold.

2. A rule of trading that always gets broken

Is to keep losses small and run profits to exceed losses.

Day traders certainly keep losses small and they take a lot of them, but that’s no problem - if you can run profits that are far bigger to compensate.

Of course, the day trader can’t do that, he is looking to scalp a few points and is generally happy with any profit.

So you have large number of losses, profits that are to small and this leads to an erosion and then a wipe out of equity.

Sorry forgot:

You need to add in higher than normal transaction costs, to add to losses and subtract from profits as well

Still not convinced?

Then ask for a day trader’s long term track record of real profits.

Day trading is one of the dumbest ways to trade – period.

Forex Trading - Tips On Buying Courses & Systems

Many traders are daunted by the thought of forex trading so they decide to get help from an expert mentor or guru.

Let’s look at some tips on how to choose one.

Firstly, the vast majority of advice sold on the net is either available free anyway, or simply does not work.

Think about it:

If you do trades with 70% accuracy, you would be to busy trading your way to millionaire status than bothering to crow about how good you are on the net, for $100 or so.

The Day trading myth

You have seen them guys promising you 10 – 100 pips a day in profit, or systems that are so accurate and consistent they can’t possibly be true.

Day trading is where the bulk of the courses are sold.

The myth is you can make money consistently and long term – Absolute rubbish.

Day trading is done in short time spans and all short term moves are random, so kiss goodbye to your equity.

Ask for a track record and see if you get one.

I never have! And by track record I mean a real not hypothetical one.

And don't fall for the testimonial from a friend, or guy with lucky trade.

The More Expensive advice is the better it is.

Some advice costs a lot more than $100 or so, you can pay thousands for it.

The novice trader thinks it must be good as its expensive - not so.

Judge A vendor simply by if they have made money – that’s the only criteria that counts.

Then decide if you understand the logic (if you don’t you wont be able to follow it with discipline) and without discipline you have no method in the first place.

Really want to succeed?

Go to your local bookstore and pick up some classic trading books, by traders who have walked the walk rather than are all talk.

Get these three great books

Market Wizards & The New Market Wizards – Jack Schwager

These are interviews with some of the top traders of all time and are great insight into what makes a great trader.

Trader Vic – Vic Sperandeo

This is a fantastic book - giving you everything you need to help you trade from money management to ideas on systems.

The above will cost you around $50.00 and will be money well spent.

There are other books but these are my favorites.

And if you read them:

They make clear that for success you rely on yourself and no one else.

Devise your own system (we have done loads of articles on this ) keep it simple, trade with discipline, show patience and perseverance and you can make it all on your own.

If you must buy advice get a track record and find one you understand and have confidence in but the best way to make money ( or the only way) is to do it on your own.

Forex Trading - Getting Rich Trading Forex

If you've read much of what I've written, you know that I solidly refute the idea that you can start trading with a couple thousand dollars and turn it into a million in 18 months or some other short amount of time.

That's true, and I stand by it.

However, you can get rich trading forex. There are two ways that I know of. Both require serious work, but I'm going to lay it down for you.

First, you could start your own hedge fund. There are companies that will help you set up your own hedge fund. With a hedge fund, you make money based off of how much you made for your clients.

Just for the sake of illustration, let's say that you have $20 million under management (a rather small amount). Let's say that you earned a 10% return that year on the $20 million. Your take is 20% of the profits (remember you don't take anything unless you make profits). You would make $400,000. How's that for an annual salary? Not bad.

And all the numbers I gave you above are conservative.

So how do you become a hedge fund manager? You need a track record. I'm not talking about a 2 year track record. You need at least 5 years of profitable trading under your belt.

The other thing you really need to consider if you're thinking about this at all is volatility. Nothing gives a high net worth individual ulcers quicker than an account balance of several million that is moving rapidly up and down. So steady gains are what they want.

Work on achieving consistency in your trading. Slow things down. After you have a number of profitable years of this kind of trading, have your trading record audited by some professional financial firm.

Congrats, you are now ready to start finding clients.

(As I said about, there are two ways to get rich with forex. The second way will be in part two...)

Do you want to learn more about how I trade? I have just completed my brand new guide, "Forex Trading - What Finally Worked For Me".

Forex Trading - Getting In On Long Term Trends a Live Example

When a trend has started how do you get in? There are always plenty of opportunities as trends can last for months or years.

Here we will outline a simple method on a live example.

Let’s look at it

If you read our recent article you will know that we wanted to get into US Dollar and Canadian Dollar and this set up has just come to fruition.

Here it is:

You can see it on any many chart services but the one we are using here is futuresource.com and were writing this on 06 03 PM CET.

Pull up the weekly chart and you will see the long term trend in US Dollar is down and you want to be in on the longer term trend

Now pull up the daily chart.

You will see the US Dollar is having a counter trend rally.

Last week we said that resistance and nearby highs would probably hold.

Check out the strong resistance and the top of the Bollinger band.

This is the line the US Dollar had to cross and it hasn’t and is faltering just below this level.

Get Confirmation

Rather than just jump in and trade, we look for a test and a fall off in near term price momentum.

If you want to time trade entries the stochastic momentum indicator is simply one of the best timing tools you will find.

It measures short term velocity of price and is a great timing tool and confirms weakening momentum.

The key here is to watch resistance and then wait for prices momentum to the upside to stall.

All you do is simply watch for the stochastic lines to cross and point downwards with bearish divergence which has just occurred.

It really is that simple.

Identify strong resistance look for a strong rally into it and WAIT for confirmation of weakening of momentum. Don’t jump too soon

The real key is to get confirmation of weakening momentum in the counter trend rally and that’s where the stochastic is so useful.

Many traders simply jump in near resistance and expect it to hold but this means you reduce the odds of being successful and support and resistance levels are broken all the time.

Right or wrong

This is a trade with low risk and good rewards and you can run it or simply wait for a quick blast to the middle of the Bollinger band.

Look it up on the net or read our other articles, its an under rated yet very useful tool

Become A Profitable Forex Trader Following The Trend

Forex trading can be a hard world when you are just starting your trading career and you are in the beginning of the learning curve that will guide you to the goal of becoming a profitable forex trader; someone with the ability to make all the money needed to have a comfortable lifestyle just with the help of the currency markets.

Many forex traders tend to think that in order to become a good forex trader they must use many technical indicators so they can foresee what will happen in the currency markets and then act accordingly to enter the appropriate trade and make a good profit from their ability to read the indicators.

Technical indicators are good and will greatly improve your profitability, but there other ways to approach the world of forex trading that can be more simple but not without great profitable results, and this despite the use of fewer indicators. It’s a fact that forex trading systems that are based on logical, scientifically sound, and well-tested forex trading concepts have been performing extremely well and will continue to do so for many years to come. So you must aim to base your trading career on these kind of systems that on the long run will greatly outperform other kind of systems.

To be successful in forex trading, you only need to do two things: Identify the trend (or have someone or something to identify it for you) & join the trend with the precise timing. That’s really all profitable forex trading is about.

Forex Trading - The Beginning Trader's Action Plan (Step-by-Step)

Step 1 - Stop thinking you're going to be rich trading forex in the next 18 months. This is the most dangerous thing that kills most traders. Why is it that it is important that you get that idea out of your head? It will cause you to blow up mini account after mini account.

Don't believe me?

Come back later (several accounts later) . . . you'll believe me then. I guarantee it.

Most small traders start with ideas of getting rich starting with a little stake and turning it into some large number in short order (1 to 2 years). Unfortunately, it doesn't work that way. The experienced market players will take your money.

Step 2 - Now that you've cooled your blood a little, you need to get a good trading method. I'm talking about something old and reliable. You know, along the lines of Fibonacci or trading pullbacks.

You need something simple and proven. There is no need to spend $997 on the latest, whiz-bang system. It's not necessary.

You don't need to be trading something that no one else is trading. After all, think about it. What causes the price of a currency to go up? Buying pressure.

More buyers than sellers. More demand than supply.

Let me ask another question. When you buy do you want the price to go up? Obviously, yes. So you want to buy when others are buying. Since that's the case, why wouldn't you want to trade in a way that others are trading and be caught up in their upward move?

See?

Find an old reliable method. Don't be worried that everyone else is trading it so it won't work anymore. Of course it will, if it was a sound system to begin with.

Step 3 - Practice. To quote a cliché, "Practice makes perfect." You gotta work at it. There is no free lunch.

Do you want to learn more about how I trade? I have just completed my brand new guide, "Forex Trading - What Finally Worked For Me".

Forex Trading - Spotting the Big Trends For Big Profits Part 2

In part 1 we looked at how human psychology pushes prices away from fair value.

When there are extreme moves away from fair value you can make a contrary trade to the majority and pile up big profits with low risk.

So what tools do you need? Lets take a look.

As a general rule these tools will work in any market not just forex markets.

What sets ups do you look for?

Generally you want a set up that is the news where there is “no end in sight” to a spike move.

This generally indicates that greed and fear have taken hold and the market being looked at is emotionally driven and away from fair value.

This happens all the time:

The recent spike in crude oil, the 87 stock market crash and many others including in the forex market.

First place to start

Is the chart look for huge price spikes in short time spaces accompanied by “experts” and the news telling you there is no end in sight.

Now delve a bit deeper to see the true picture.

Useful technical tools are:

RSI, Sochastics and Bollinger bands

Then add in these sentiment tools to the mix.

% Bullish

This indictor is a poll of people, expert’s, brokers etc that have a view or interest in the market.

When this poll indicates above 70% are bullish the market is in overbought territory and when below 30% is in oversold territory.

In the currency markets we like to look for even more extreme readings of below 20% and above 80%

Commitment of Traders Net - Traders Position Report

This is a tool used for years by futures traders and shows the breakdown of open interest among three main participants.

We will explain what it means in a minute buy here is its definition of the groups.

Hedgers – The smart money commercial traders

Large speculators – These are normally large funds with reportable positions

Small speculators everyone else.

The commercials are long term traders and are close to the fundamentals and move very slowly – they are hedging not speculating and not influenced by greed or far and are the “smart money”.

Speculators on the other hand, both funds and small speculators, are driven by greed and fear

If you see a set up where commercials start to move the opposite way to speculators at a market top or bottom and hold an opposite extreme, then prices have moved to far from fair value.

With the commercials taking and building the opposite position to speculators in a rampant bull or bear market you know prices are probably due to re bound.

You must only use extremes with this tool and this normally means 8 months to 2 years.

Breaking it down

Study chart first, look for experts telling you there is no end in sight to the move, then look at % bullish and then net trader report.

Finally, use the technical indicators to confirm the move.

These moves do not happen often.

Maybe a few times a year.

But when they do

You can zero in on a contrary trade that not only offers huge profit potential but offer low risk.

Currency Forex Trading System - When To Abort A Trade

When the world markets, including the stock markets started to slide a few days ago, many experienced traders would only smile. Not that they were not affected, but they were smiling because they knew markets do go up and come down. It is only at what point in time is it necessary for a trader to quit a trade that has gone wrong- and these experienced traders could smile because they knew when to quit the markets, irrespective whether it is the currency markets, the stock market or the futures and commodities market.

Whether it is a smile or a smirk, these experienced traders have a good reason to do so.

Because when you quit at the appropriate moment, before a market collapse, you would make a lot of money getting out of the markets before the big drop. Those who quit immediately on the confirmation of the drop would not have done much worse, because they would also salvage a large part of their gains that have been obtained over the many months the markets have gone up. It is only those that hold on to their stocks, or shares or financial instruments they are investing in, that will feel the pain as the values of their holdings start to erode... and fall further, and further.

So the big question to ask today is"When exactly is the time to abort a trade?"

Many adopt stop losses, or make a certain cut off point to get out of their stocks.

So let us have some instruction today on the effective way to get out, or the correct timing to abort a trade.

There are two main ways to abort a trade.

The first way is to fix a time determinant to get out of a trade.

For example, for the day trader, if he or she has a basic understanding of a chart pattern leading to a trade, and believed that the chart pattern will work, and has entered a trade based on that chart pattern, but the conditions for that pattern to perform is no longer present, then he must immediately quit the trade, especially if a set number of trading bars have occurred.

For example, if you identify a break out pattern of an ascending triangle has occurred, and you have opened a trade by buying, but soon after you have purchased, your expected outbreak pattern has not occurred after 3 bars, then you may wish to abort that trade when 3 bars have occurred and yet the outbreak has not occurred.

When the time determinant as signified by the 3 bars have passed, it is easy to recognise the conditions for the trade have not occurred and you must then terminate or abort the trade.

The second way to know when to abort a trade is to do so when there is a pattern failure. Again, using the breakout of an ascending triangle as an example, if the price has broken out of the triangle, but then has fallen back into the triangle, signifying a failed pattern, then the conditions for the expected pattern have changed and it is no longer feasible to hold on to the projection of an ascending triangle. In other words the pattern has simply failed and it is the best time to abort the trade immediately.

Any delay is going to hurt you financially. It is wisest to quit a trade when the expected conditions are not fulfilled. Markets have a way to hurt the trader who procrastinates and wastes the earlier chances to get away with a profit, no matter how small.

Trading Opportunities - In The US Dollar Shaping Up Right Now

Here we are going to look at two trading opportunities last week we banked a great profit in the British Pound. This week we are going to look at the US Dollar V British Pound and Japanese Yen.

Lets look at these two set ups and simple method to profit from them.

For charts we are using the free service futuresource.com. We are using Cash charts, although same logic applies to futures and this is being written Monday AM CET 05 March

British Pound

If you saw our previous report you will see we banked a great short profit in the Pound and now were looking at it from the long side in line with the longer term trend, with the same method.

Daily chart shows short term weakness and prices are moving to the 19000 level.

The fall has been quite strong and the above is key short term resistance to key off.

Bollinger band has been penetrated, RSI is becoming oversold (30.76) stochastic momentum is weak and oversold.

It’s a simple trade.

Look at 19000 level to hold and upside momentum to re assert itself.

The trick for entry is to watch the stochastic momentum and watch a cross to the upside with bullish divergence to indicate strength in the Pound.

Japanese Yen

We have clearly defined nearby support in the dollar at the 11400 level

Prices are rapidly closing in on this level of support.

We have bottom Bollinger band taken out, RSI oversold (28.8) and stochastic momentum weak but not oversold.

Again it’s the same set up:

Dollar strength and resumption of up trend would be indicated by a cross of the stochastic with bullish divergence. A close below 114000 means all bets are off.

Right or wrong keep in mind the following:

These trades look good from a risk reward point of view and have clearly defined levels where the above trading scenario would be negated.

In trading it’s all about risk reward keeping losses small and targeting bigger profits with high probability set ups.

The British Pound trade we were correct with and made nice profit, but even if we were wrong the set up fitted the above criteria, as do these two trading set ups.

Take a look at the scenarios for yourself and see what you think.

Reflections of a Trader

I must admit I love trading. I have loved it all my life. When I was about 8 years old I learned what the stock market was, I don't remember how I first learned of it. I do remember asking my Uncle about it all the time. I suppose he may have introduced it to me. He showed me how to interpret the stock prices, that were published in the newspaper daily. No internet back then.

Apparently, I must have made an impression on him, because for my ninth birthday he bought me one share of Mead Paper Company. My first share of stock, he explained to me, that this meant that I owned a small piece of the company. That was it, a fire was lit in me that burns to this day.

My Uncle passed away in 1988, at the young age of 37. By this time I was 18, I had not talked to him in a few years about the markets. He moved around alot, and he was in failing health the last three years of his life. Back then, I thought his knowledge of the stock market was boundless. Looking back today, I realize that wasn't the case. He he did have dreams, and those dreams still live today through me. I am grateful that he took the time to pass them on.

Today, I trade E-minis and Currencies. I truly think that for some folks, this is the best job on the planet. I know it is for myself. I have'nt become Peter Lynch or Warren Buffet, heck I'm probably closer to Jimmy Buffett. One thing is still true, I am as passionate about trading today as I was 30 Years ago.

One thing has changed now though, I feel stronger about introducing others to trading, than I do about actually trading for myself. Looking back, that may have been my Uncles' passion also. Not the trading, but the sharing.

A Guide to FOREX Trading

The foreign exchange (FOREX) market is the purchase or sale of a currency against sale or purchase of another. The object in Forex is to exchange one currency for another in the expectation that the price will change so that the currency you bought will increase in value compared to the one you sold. Through Forex education and training it is possible to speculate the direction of the market and receive a good return on your investment.

The major participants in the FOREX include commercial and investment banks and central banks. Other participants include corporations, hedge funds, and millions of speculation traders like you. Some of the top banks in the world such as Bank of American, Credit Suisse, and Morgan Stanley are major players when it comes to the FOREX. In order to make money within this realm, you will be competing against all of the major banks as well as individual traders.

When beginning in the FOREX, it’s important to select a reputable broker. After all, the broker is going to be the one paying you when it’s time to cash out. A broker acts as a middle man between you and the FOREX. When you place a trade in the FOREX, your position is filled by the broker and the broker sends the order off to the banks. When it’s time to be paid, your money is with the broker and they need to be able to cover your positions in the market. Most brokers offer a 3 to 5 pip spread on all the major currencies pairs, such as the ERU/USD, GBP/USD and the USD/JPY. A 3 to 5 pip spread basically means that the FOREX must move 3 to 5 pips before your trade is in profit. One pip can be worth any amount, depending on how much money you’re willing to risk per trade.

There are two types of traders, fundamentalist and technical traders. Fundamentalist study the cause of market movement, whereas technicians study the effect. Most traders identify themselves as both a technician and fundamentalist. Most fundamentalist will have knowledge of charts, indicators and chart analysis. Similarly most technicians are aware of the fundamentals. However, the problem is that the charts and fundamentals are often in conflict one another. It’s usually a wise decision to have a bit of training in both fundamentals and technical analysis.

One of the most important factors in the FOREX is learning to manage your money. Traders will experience losses in the FOREX; therefore it is essential that a trader utilizes proper money management. In many cases money management is a simple concept, yet to practice money management consistently is very challenging. Generally speaking money management is knowing when to cut your losses. For each trade, a trader should be looking to make three times the amount they plan to lose. This way a trader only has to be right 33% of the time in order to be in profit.

Pivot Point Prophet

Pivot points have been used by floor traders for years, they are a commonly used indicator of support and resistance areas. A few years back I began to experiment with pivot points. After I got comfortable with them, I began to really like trading with them as an additional indicator.

Now pivot points are not your run of the mill indicator for market price action. This is one of the few indicators that is also used as a stand alone trading system, there are traders who have made entire careers by only trading this indicator. I do not and will not ever endorse using any one indicator as your sole indicator.

I use pivot points, along with other indicators to find areas which present low risk trades. If I am watching to make a trade on a crossover of the 5 and 10 period moving averages. I will watch for cross over just after the moving averages have moved past a pivot point. I definitely do not take a trade that has a pivot point that the price may reverse off of. I have seen plenty of trades be whipsawed (A sudden reversal of price direction) by making this error in judgement.

By using the pivot points to keep you out of whipsaw zones you can improve your odds by about 9-12% to have a profitable trade.

Their are several ways people figure the pivot points for any given day, I personally get mine from another online trader, his pivot points are the most accurate I have seen. Pivot points are a great tool for traders, I use them everyday but always remember the most important part of trading is your money management.

What is Forex?

The first forex firm appeared in 1927, in Stockholm, in a barber shop. Since then it is developed and the IT techniques are making it a global market.

In 1927, a Swedish firm has begun its activity as a currency exchange service for travelers. The society’s siege was at the Central Station in Stockholm. According to the legend, the owner of Gyllenspet’s Barber Shop in Stockholm observed that his some of his clients were tourists in need of currency for their excursions. He has the idea to save major currencies and keep it on hand.

The firm was acquired by the Swedish Railways, and then it was sold to Rolf Friberg in 1965. This firm had a unique status, being the only licensed to conduct currency exchange, apart the banks.

The family Friberg still owns the company, expanded in Denmark, Norway and Finland, having over 50 shops. Like at begin, the shops are located in train stations and airports.

The Euro apparition led to an important decrease of Forex business, and the firm opened new directions, like applying for banking license or realizing regular transactions, similar to the postal service.

The firm has a very attractive slogan: make more money for your money! What more attractive for anybody than the word money?!

The main firm’s concept is still the same: to offer travelers from all over the world the appropriate currencies at the best rates, at the lowest service charges, at any hours and from well situated locations.

Forex still have many locations all over the world, with a turnover in 2004 of more than 22 billion SEK from the branch offices in Sweden, Norway, Finland, and Denmark. It is the world’s biggest foreign exchange bureaus. The main firm’s plan is to open more subsidiaries in new locations and develop the existing ones.

Forex is also the name often used for foreign exchange; all over the world, foreign currencies is bought and sold. The currency traders are making a profit from buying and selling currencies as their value is fluctuating. This fluctuation is based on daily variability in the global market, the supply and demand in international commerce and domestic stocks.

The exchange rate between two currencies is how much one currency is worth in terms of other currency; it is called also forex rate. There is not a bigger market in the world than the foreign exchange market.

There are two currency types: direct quotation (home currency – foreign currency) and indirect quotation (foreign currency – home currency). Every one of us is daily updated with the direct and indirect quotations; if a unit currency is strengthening (appreciation, the currency becomes more valuable) or inverse (depreciation).

Usually, investors are speculating on daily currency fluctuations and this is a constant profit source; this forex business profit mechanism. There are some online forex trading, having real time prices, dealing in currencies and global equity prices. The software is allowing evaluating the exchange process and realizing it online.

The firms working online are usually commission free, with the industry’s margin requirements. The acquire the customers confidence, the online forex trading firms is offering some advantages never founded in banks: 24x7 forex trading, room services with limit order deals and day trading.

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.