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.