Being new to trading in Forex markets can be a little intimidating. Although many people desire to learn about trading in the Forex, those who begin learning about the trading system find the rules and strategy tactics to be overwhelming at times. While there are rules that you will simply learn along the way, such as price limits and such, there are a few steadfast rules you should know before you make your first move in the Forex market. Use these three rules to help you get started and successfully maneuver throughout the foreign exchange market.
Don’t Over Leverage Your Portfolio
When you are just starting out in the Forex, it can be really easy to get caught up in the leverage of the market. The great thing about leverage is that someone who is not investing as much as other larger traders can play with the “big boys” and potentially makes a good profit. An investor can expect to only need to back their investment up to 4% in most cases. This can get some people in trouble however. When you choose to abuse this system, you can end up with a lot of debt. You should never over leverage your portfolio. Be responsible when trading and remember that you are trading larger amounts that you probably have in your portfolio. Keeping yourself grounded is the best way to make sure you use the Forex market to your best potential.
Know When to Quit
Another simple rule for trading in the Forex market is to know when to quit. In turn, this can also mean knowing when to let things stay as they are. There are no way around having occasional trades that have a negative impact on your finances. Not every trade you make will be a hugely successful one. If life were fair, this may not be true, but in the foreign exchange market, where things change by the minute, there is no way to guarantee every trade will reap rewards. Keep in mind that even the most seasoned foreign exchange market traders have bad trades. Your ultimate goal in trading in the Forex should be to try to come out with more wins than losses.
To make it easier to come out ahead at the end of the day, you should always know when to fold on a deal. Never let deals that you know are losing simply happen because you are praying something will change or to save your pride. Be sure to get out losing the least amount of money as possible. This is a strategy every great trader uses. Watch your trades closely so you can get out when you should. If you have researched the trade before, you will know what the breaking points likely are and be able to make this decision easily. Knowing when to leave well enough alone, alone, is another thing you must learn. Learn to be patient with your trades, especially if they are not in a negative position.
Research Trades
Researching trades beforehand can seem very boring. However, you should never make an order in the Forex market without knowing exactly what you expect to happen. You can look at trends and the history in order to get a better idea of what to expect. If you simply go out into the market with no background on the issues, you will likely lose a lot of money. So, take the time to do a little research before you begin.
Place Stop Loss Orders
You should always be familiar with a stop loss order before you begin trading in the Forex market. The stop loss order is something that should be places right along with your entry order. This type of order protects you from a potential loss getting out of hand. If the market takes a dive, you will be protected with the stop loss order. You must figure out however, before placing the order, at what point you would want to cut your losses. You should always do this way before placing an order. Although you may find that many traders do not utilize the stop loss order process, you will find that the more successful traders use it often.
Forex Trading Robot - Forex Maestro
Showing posts with label Forex Trading Robot - Forex Maestro. Show all posts
Showing posts with label Forex Trading Robot - Forex Maestro. Show all posts
Friday
This Could Be You...
Picture waking up, not to some irritating alarm clock, but because you have had enough sleep and rest and now you are ready for your day.
Then allow yourself to imagine grabbing the paper, a cup of coffee, and sitting down to chill out a little, all the while, people in the outside world are scurrying to their jobs and their daily grind.
Finally, you decide it's time to start "work" and you get up and stroll a full 30 feet to your home office.
You power up your brand new high end computer, open up your Forex brokerage accounts, and you smile as you realize you are thousands of dollars richer than you were just a few short days back.
So, you decide that is enough 'work' for the day, grab a shower, get changed and head out for a day of fooling around, simply because you can.
This could very well become a reality for you -- but first you have to take action and let the Forex Trading Robot known as Forex Maestro, start making profitable trades for you.
Forex Trading Robot - Forex Maestro
Then allow yourself to imagine grabbing the paper, a cup of coffee, and sitting down to chill out a little, all the while, people in the outside world are scurrying to their jobs and their daily grind.
Finally, you decide it's time to start "work" and you get up and stroll a full 30 feet to your home office.
You power up your brand new high end computer, open up your Forex brokerage accounts, and you smile as you realize you are thousands of dollars richer than you were just a few short days back.
So, you decide that is enough 'work' for the day, grab a shower, get changed and head out for a day of fooling around, simply because you can.
This could very well become a reality for you -- but first you have to take action and let the Forex Trading Robot known as Forex Maestro, start making profitable trades for you.
Forex Trading Robot - Forex Maestro
Forex Brokers - How to Choose a Forex Broker
When choosing a forex broker there are many factors to take into account.
Trust
Experience
References from past clients
Level of success
Amount of advice to be given
Convenience
Amount of margin offered
Speed
All of the above are of course important. In any financial transaction it is important to trust the broker you work with. This trust is garnered by the experience level the broker has. Of course there are some new brokers starting out who are quite trustworthy, but most people would rather work with an experienced broker. For that reason most new brokers attach themselves to a firm where they can be mentored and gain experience.
References from past clients are important. If your broker has helped someone else is successful in the past and that person is willing to speak up for him that says a lot. You can gage the level of success your broker has had by speaking with past clients and seeing how well they did working with this broker. Next, take a look at the amount of advice your broker is willing to give you. Of course, you make your own decisions and will never take another person’s word for everything, but it is good to have knowledge to work with, and advice from an experienced broker is key information to factor in. Convenience is also impotent. If you live in California, then an Ohio broker might not be the best choice. But in the age of the internet that factor has become less relevant. With fax and email where you and your broker live has become less important.
The amount of margin offered is important. Margin is used to leverage your money. A broker who gives you a 50 to one margin is more valuable than one who gives you 20 to one. And of course speed. Is your broker quick? Does he return phone calls and emails promptly? If so, perhaps you can work with him.
Your broker will b a trusted advisor and someone that you may be working with for years to come so choose the relationship carefully. Ask friends and acquaintances who are active in forex trading what broker they use and how they met. It is quite possible that you can get a referral from a friend or acquaintance you trust and acquire a good forex broker that way.
Another good way to find a forex broker is to go online. There are message forums, chat rooms, and email groups through portals like Yahoo, Google and MSN that contain a wealth of information. Getting onto one of these online communities and asking other people for advice is the way that many people found their broker. If a broker has several clients in an online community who are happy with what he has accomplished for them, then that is a good indication that you might be happy with him as well. Take advantage of the number of people who are on the internet and join some of these online communities. Ask question and you’ll probably learn a great deal from the experiences that other people have had. Also find trade journals, magazines and ezines to subscribe to. Read as much as you can about the subject of forex trading before going into it. Become a smart shopper and smarter trader.
Finding a good forex broker is a job in itself. When you visit with a forex broker you are in essence conducting an employment interview to determine if this is the broker you wish to handle your financial affairs, so be thorough. Ask plenty of questions. Ask for references. Don’t be shy. Also check with other people in the office of the broker and see if you would trust them to fill in for your broker if he were not available. And, see if the broker is willing to offer you a demo account to use to get in some practice before you actually make an investment. If the broker is able to do so and encourages you then it means that the broker wants educated clients and is not just out for the quick buck. See what kind of training and tutoring the broker is willing to offer. A good broker will offer to answer your questions and help you through the learning process.
10 Minute Forex Wealth Builder
Forex Trading Robot - Forex Maestro
Trust
Experience
References from past clients
Level of success
Amount of advice to be given
Convenience
Amount of margin offered
Speed
All of the above are of course important. In any financial transaction it is important to trust the broker you work with. This trust is garnered by the experience level the broker has. Of course there are some new brokers starting out who are quite trustworthy, but most people would rather work with an experienced broker. For that reason most new brokers attach themselves to a firm where they can be mentored and gain experience.
References from past clients are important. If your broker has helped someone else is successful in the past and that person is willing to speak up for him that says a lot. You can gage the level of success your broker has had by speaking with past clients and seeing how well they did working with this broker. Next, take a look at the amount of advice your broker is willing to give you. Of course, you make your own decisions and will never take another person’s word for everything, but it is good to have knowledge to work with, and advice from an experienced broker is key information to factor in. Convenience is also impotent. If you live in California, then an Ohio broker might not be the best choice. But in the age of the internet that factor has become less relevant. With fax and email where you and your broker live has become less important.
The amount of margin offered is important. Margin is used to leverage your money. A broker who gives you a 50 to one margin is more valuable than one who gives you 20 to one. And of course speed. Is your broker quick? Does he return phone calls and emails promptly? If so, perhaps you can work with him.
Your broker will b a trusted advisor and someone that you may be working with for years to come so choose the relationship carefully. Ask friends and acquaintances who are active in forex trading what broker they use and how they met. It is quite possible that you can get a referral from a friend or acquaintance you trust and acquire a good forex broker that way.
Another good way to find a forex broker is to go online. There are message forums, chat rooms, and email groups through portals like Yahoo, Google and MSN that contain a wealth of information. Getting onto one of these online communities and asking other people for advice is the way that many people found their broker. If a broker has several clients in an online community who are happy with what he has accomplished for them, then that is a good indication that you might be happy with him as well. Take advantage of the number of people who are on the internet and join some of these online communities. Ask question and you’ll probably learn a great deal from the experiences that other people have had. Also find trade journals, magazines and ezines to subscribe to. Read as much as you can about the subject of forex trading before going into it. Become a smart shopper and smarter trader.
Finding a good forex broker is a job in itself. When you visit with a forex broker you are in essence conducting an employment interview to determine if this is the broker you wish to handle your financial affairs, so be thorough. Ask plenty of questions. Ask for references. Don’t be shy. Also check with other people in the office of the broker and see if you would trust them to fill in for your broker if he were not available. And, see if the broker is willing to offer you a demo account to use to get in some practice before you actually make an investment. If the broker is able to do so and encourages you then it means that the broker wants educated clients and is not just out for the quick buck. See what kind of training and tutoring the broker is willing to offer. A good broker will offer to answer your questions and help you through the learning process.
10 Minute Forex Wealth Builder
Forex Trading Robot - Forex Maestro
Thursday
Economic Indicators - What Economic Indicators Drive Forex Trading?
There are many factors that affect the Forex trading. When learning to trade on the Forex, it is important to know and understand the various factors that cause the Forex to fluctuate from day to day. The foreign exchange market will change depending on the several economic factors that play a role in the movement of currency.
When looking at the Forex, economic factors and indicators are released by the government or by private organizations that can look in depth at economic performances. The economic performances from any country can be analyzed by these indicators. The economic reports measure a country’s economic health, in addition to government policies and current events.
Most of the time, a reputable broker can look at economic indicators and can give advice on which trades will be the best. Reports on these indicators are released at scheduled times and can tell if a certain country is experiencing improvement in the economy or if it is on the decline. When the prices fluctuate, a great deal one way or the other, the price can be affected.
One of the top economic indicators used when analyzing the Forex is current events and the state of the economy in any given nation. Factors such as unemployment numbers, housing statistics and the current state of a country’s government can all affect the changes in the Forex. When a country is feeling good about the current state of affairs in their country, the prices of the Forex will reflect this. When a nation experiences political unrest, large amounts of unemployed workers and inflation, the rate of the currency will also be reflected. Sometimes, this indicator tends to be overlooked, but can serve as an important gauge in the fluctuations of the Forex.
Another economic indicator that is used when looking at the foreign exchange market is the gross domestic product, also called the GDP. This is normally considered the widest and broadest measure of the economy in a country. The gross domestic product represents the total market value of all goods and services that are normally produced within any given country. This is usually measured in the time frame of a year, and not in weeks or months. Using a larger time period gives good statistics on the products and services that are produced in the country. This indicator is not used alone when forecasting the Forex. Usually the gross domestic product is considered a lagging indicator, meaning that it is a measurable factor that changes after the economy has already began to follow a certain trend.
The third economic factor that is often used in analyzing the Forex is the retail sales reports. This is the total receipt of all retail stores in any country. Usually, this measurement is not every single retail sale, but is a sample of diverse retail stores throughout the country. This is considered a very reliable and important economic indicator because of the consumer spending patterns that are expected throughout the year. This factor is usually more important than lagging indicators and gives a clear picture of the state of the economy in any country.
The industrial production report is another reliable economic indicator in the foreign exchange market. This shows the fluctuation in productions in industries such as factories, minds, and utilities. The report looks at what is actually produced in relation to what the production capacity can be over a period of time. When a country is producing at a maximum capacity in this way, it can positively affect the Forex and is considered ideal conditions for traders.
The last important economic factor in analyzing the Forex is the consumer price index or the CPI. The consumer price index is the measure of the change in the prices of consumer goods in 200 categories. This report can tell whether or not a country is making or losing money on their products and services. The exports that a country has are very important when looking at this indicator because the amount of exports can reflect a currency’s weakness or its strength.
The Forex is affected by many factors. These factors usually follow a certain trend so it is important to understand how each factor works in forecasting the Forex. Some are good indicators alone while others should be used together for accurate Forex predications.
10 Minute Forex Wealth Builder
Forex Trading Robot - Forex Maestro
When looking at the Forex, economic factors and indicators are released by the government or by private organizations that can look in depth at economic performances. The economic performances from any country can be analyzed by these indicators. The economic reports measure a country’s economic health, in addition to government policies and current events.
Most of the time, a reputable broker can look at economic indicators and can give advice on which trades will be the best. Reports on these indicators are released at scheduled times and can tell if a certain country is experiencing improvement in the economy or if it is on the decline. When the prices fluctuate, a great deal one way or the other, the price can be affected.
One of the top economic indicators used when analyzing the Forex is current events and the state of the economy in any given nation. Factors such as unemployment numbers, housing statistics and the current state of a country’s government can all affect the changes in the Forex. When a country is feeling good about the current state of affairs in their country, the prices of the Forex will reflect this. When a nation experiences political unrest, large amounts of unemployed workers and inflation, the rate of the currency will also be reflected. Sometimes, this indicator tends to be overlooked, but can serve as an important gauge in the fluctuations of the Forex.
Another economic indicator that is used when looking at the foreign exchange market is the gross domestic product, also called the GDP. This is normally considered the widest and broadest measure of the economy in a country. The gross domestic product represents the total market value of all goods and services that are normally produced within any given country. This is usually measured in the time frame of a year, and not in weeks or months. Using a larger time period gives good statistics on the products and services that are produced in the country. This indicator is not used alone when forecasting the Forex. Usually the gross domestic product is considered a lagging indicator, meaning that it is a measurable factor that changes after the economy has already began to follow a certain trend.
The third economic factor that is often used in analyzing the Forex is the retail sales reports. This is the total receipt of all retail stores in any country. Usually, this measurement is not every single retail sale, but is a sample of diverse retail stores throughout the country. This is considered a very reliable and important economic indicator because of the consumer spending patterns that are expected throughout the year. This factor is usually more important than lagging indicators and gives a clear picture of the state of the economy in any country.
The industrial production report is another reliable economic indicator in the foreign exchange market. This shows the fluctuation in productions in industries such as factories, minds, and utilities. The report looks at what is actually produced in relation to what the production capacity can be over a period of time. When a country is producing at a maximum capacity in this way, it can positively affect the Forex and is considered ideal conditions for traders.
The last important economic factor in analyzing the Forex is the consumer price index or the CPI. The consumer price index is the measure of the change in the prices of consumer goods in 200 categories. This report can tell whether or not a country is making or losing money on their products and services. The exports that a country has are very important when looking at this indicator because the amount of exports can reflect a currency’s weakness or its strength.
The Forex is affected by many factors. These factors usually follow a certain trend so it is important to understand how each factor works in forecasting the Forex. Some are good indicators alone while others should be used together for accurate Forex predications.
10 Minute Forex Wealth Builder
Forex Trading Robot - Forex Maestro
Wednesday
Forex Trading Tips - Trading Tips for the Forex Newbie
For those of you who are new to the forex market, or even for those of you who are considering becoming a forex market trader, this article is for you. Welcome to forex 101, where you will learn exactly what forex is and what it does. Also for the forex newbie’s, you will find a list of six trading tips that will help you in your transactions.
For those of you who are new to the forex trading market, first you will need to know the meaning of the term “forex” which stands for FOReign EXchange market. This pertains to the international foreign currency exchange market where currencies of all kinds are bought and sold. The forex market got its start back in the early 1970's when floating currencies and free exchange rates were first introduced. At that time, the forex market traders were the only players on the market to decide upon the value of one type of currency against another, all solely based upon a particular currency’s supply and demand.
The forex market is very unique for a number of reasons. First of all, this is one of the few markets that require very little trading qualifications and is free from any external control and can not be manipulated in any way. As the largest financial market, with trades reaching up to 1.5 trillion U.S. dollars, or USD, the money moves so fast, it’s impossible for a single investor to substantially affect the price of any major foreign currency. In addition, unlike any stock that is rarely traded, forex traders are able to open and close any positions within seconds, because there are always a number of willing buyers and sellers.
1. To open a forex account, all you have to do is simply fill out an application and provide all the necessary identification. The application will include a margin agreement will state if the broker will be allowed to intervene with any trade when it appears too risky. This agreement is made to protect the interests of the broker because most trades are done by using the broker’s money. However, once you have established an account, you can fund it and begin trading in the forex market.
2. In order to become a successful trader, you will need to adapt your own trading strategy. There is no one strategy that will work for all the traders, each individual trader will need to develop their own approach to the market. While some traders may relay solely on technical analysis, others may prefer a more fundamental approach, while the more successful traders use a combination of both. Each individual trader will need to learn the best approach for themselves in order to gain a more comprehensive overview of the forex market in order to prepare for any entry and exit points.
3. Understand that prices move by trends. Forex has a popular saying, “The trend is your friend.” there are certain movements that have been studied over many years in order to identify a pattern in the trend. These trends need to be understood in order to understand a good trading strategy. For small accounts that are $25,000 and under, trading with a trend may help improve your odds when compared to bi-directional trading. Most newbie’s will look to trade in any direction, when they should be trading with a trend.
4. Before you take any position, look over the top five currencies to make sure you’re not missing something. The top five foreign in forex are: USD/Yen, Swiss franc/USD, Euro/Yen, Euro/USD and Pound/USD.
5. For newbie’s, it would be safest to have two accounts because you learn as you play the trading game. Keep one real account, one that you will actually use to trade real money; and the second account should be a demo, one that you can use to test alternative moves in the trading game. You can easily use your demo account to shadow the trades in your real account so you can widen your stops to see if you are being too conservative or not.
6. Always examine the one hour, four hour and daily charts that concern your trades. Although you can trade at 15 and 30 minute time intervals, doing so requires a handful of dexterity.
10 Minute Forex Wealth Builder
Forex Trading Robot - Forex Maestro
For those of you who are new to the forex trading market, first you will need to know the meaning of the term “forex” which stands for FOReign EXchange market. This pertains to the international foreign currency exchange market where currencies of all kinds are bought and sold. The forex market got its start back in the early 1970's when floating currencies and free exchange rates were first introduced. At that time, the forex market traders were the only players on the market to decide upon the value of one type of currency against another, all solely based upon a particular currency’s supply and demand.
The forex market is very unique for a number of reasons. First of all, this is one of the few markets that require very little trading qualifications and is free from any external control and can not be manipulated in any way. As the largest financial market, with trades reaching up to 1.5 trillion U.S. dollars, or USD, the money moves so fast, it’s impossible for a single investor to substantially affect the price of any major foreign currency. In addition, unlike any stock that is rarely traded, forex traders are able to open and close any positions within seconds, because there are always a number of willing buyers and sellers.
1. To open a forex account, all you have to do is simply fill out an application and provide all the necessary identification. The application will include a margin agreement will state if the broker will be allowed to intervene with any trade when it appears too risky. This agreement is made to protect the interests of the broker because most trades are done by using the broker’s money. However, once you have established an account, you can fund it and begin trading in the forex market.
2. In order to become a successful trader, you will need to adapt your own trading strategy. There is no one strategy that will work for all the traders, each individual trader will need to develop their own approach to the market. While some traders may relay solely on technical analysis, others may prefer a more fundamental approach, while the more successful traders use a combination of both. Each individual trader will need to learn the best approach for themselves in order to gain a more comprehensive overview of the forex market in order to prepare for any entry and exit points.
3. Understand that prices move by trends. Forex has a popular saying, “The trend is your friend.” there are certain movements that have been studied over many years in order to identify a pattern in the trend. These trends need to be understood in order to understand a good trading strategy. For small accounts that are $25,000 and under, trading with a trend may help improve your odds when compared to bi-directional trading. Most newbie’s will look to trade in any direction, when they should be trading with a trend.
4. Before you take any position, look over the top five currencies to make sure you’re not missing something. The top five foreign in forex are: USD/Yen, Swiss franc/USD, Euro/Yen, Euro/USD and Pound/USD.
5. For newbie’s, it would be safest to have two accounts because you learn as you play the trading game. Keep one real account, one that you will actually use to trade real money; and the second account should be a demo, one that you can use to test alternative moves in the trading game. You can easily use your demo account to shadow the trades in your real account so you can widen your stops to see if you are being too conservative or not.
6. Always examine the one hour, four hour and daily charts that concern your trades. Although you can trade at 15 and 30 minute time intervals, doing so requires a handful of dexterity.
10 Minute Forex Wealth Builder
Forex Trading Robot - Forex Maestro
Tuesday
Forex Intervention – Ways Intervention Moves the Forex Market
When trading on the foreign currency exchange market or the Forex using trading and intervention techniques can offer traders benefits. When traders look to intervention as a means of seeing where the Forex is heading, it can indicate that some currencies should be higher or lower depending on what is going on in that country.
Intervention of the Forex is not unusual. When there is a large tragedy or debt in a country, the value of that nation’s currency will drop. There was a time when the budget deficit of the United States caused the value of the dollar to decline very rapidly in relation to the Japanese yen. This caused the Japanese yen to rise very quickly. When this happens, brokers and Forex traders can forecast, or speculate that an intervention is likely. Intervention makes the value of a currency either rise or fall depending on how the government wants it to move, even if it is short term.
Experienced brokers and Forex traders understand when intervention is likely, it creates the opportunity for the trader to profit by acting quickly. Using intervention as a means of trading on the Forex means that a trader must be up to date on current events from around the world and must be able to act upon the trends very quickly. In addition, it can be very risky to trade on intervention trends and there is the potential for the trader to lose a large amount of capital in a very short amount of time.
In order to completely understand the foreign exchange market and the way currency moves, it is necessary to understand economics from around the world. The Forex solely revolves around currency and their value in relation to each other. The value of the currency plays a huge role in both domestic and global economics.
Intervention is also directly related to the value of the currency and to the central banks. Currency obtains the value by supply and demand and by the government, or the central bank. When a currency is subjected to being valued it is called floating. When a government sets the rates of the currency, it is called fixing. This means that a country’s currency is compared against another major currency, usually the U. S. dollar.
Intervention in the Forex usually happens during times of economic instability. Since currencies are always traded in pairs, then a large and significant movement of the rates in one direction or the other will directly impact the other. Any time a nation experiences instability due to inflation, speculation, disasters or growing national debt, the other country will feel the affects as well. Most of the time, the results of this are not felt immediately, but over a long period of time. This times lapse allows the government or central banks to act accordingly and gives them time to intervene if necessary.
When looking at charts of the way the foreign currency market performs, interventions are usually noticeable on graphs and charts. The intervention may not be made public, but an experience trader can look at these graphs over a period of time and tell when a government has chosen to intervene with the currency rates.
Knowing when an intervention is going to occur is not always easy. It may be very difficult for the untrained trader to know when this is going to happen. However, for those who have experience trading on the Forex, predicting an intervention can be as easy as looking at certain indicators. Usually, interventions occur when the same price levels occur as previous interventions. This is not always true since some central banks choose not to intervene, but it a good indicator most of the time. Another indicator of when the Forex undergoes intervention is when there are verbal clues. A government might talk about intervening, but it might not happen for a long time. Other times, interventions will happen with no warning.
When trading on the Forex, it is a good idea to make decisions that are informed and will benefit you. If you are inexperienced with trading on the foreign currency exchange, look for a good broker that is backed by a well-known financial institution.
10 Minute Forex Wealth Builder
Forex Trading Robot - Forex Maestro
Intervention of the Forex is not unusual. When there is a large tragedy or debt in a country, the value of that nation’s currency will drop. There was a time when the budget deficit of the United States caused the value of the dollar to decline very rapidly in relation to the Japanese yen. This caused the Japanese yen to rise very quickly. When this happens, brokers and Forex traders can forecast, or speculate that an intervention is likely. Intervention makes the value of a currency either rise or fall depending on how the government wants it to move, even if it is short term.
Experienced brokers and Forex traders understand when intervention is likely, it creates the opportunity for the trader to profit by acting quickly. Using intervention as a means of trading on the Forex means that a trader must be up to date on current events from around the world and must be able to act upon the trends very quickly. In addition, it can be very risky to trade on intervention trends and there is the potential for the trader to lose a large amount of capital in a very short amount of time.
In order to completely understand the foreign exchange market and the way currency moves, it is necessary to understand economics from around the world. The Forex solely revolves around currency and their value in relation to each other. The value of the currency plays a huge role in both domestic and global economics.
Intervention is also directly related to the value of the currency and to the central banks. Currency obtains the value by supply and demand and by the government, or the central bank. When a currency is subjected to being valued it is called floating. When a government sets the rates of the currency, it is called fixing. This means that a country’s currency is compared against another major currency, usually the U. S. dollar.
Intervention in the Forex usually happens during times of economic instability. Since currencies are always traded in pairs, then a large and significant movement of the rates in one direction or the other will directly impact the other. Any time a nation experiences instability due to inflation, speculation, disasters or growing national debt, the other country will feel the affects as well. Most of the time, the results of this are not felt immediately, but over a long period of time. This times lapse allows the government or central banks to act accordingly and gives them time to intervene if necessary.
When looking at charts of the way the foreign currency market performs, interventions are usually noticeable on graphs and charts. The intervention may not be made public, but an experience trader can look at these graphs over a period of time and tell when a government has chosen to intervene with the currency rates.
Knowing when an intervention is going to occur is not always easy. It may be very difficult for the untrained trader to know when this is going to happen. However, for those who have experience trading on the Forex, predicting an intervention can be as easy as looking at certain indicators. Usually, interventions occur when the same price levels occur as previous interventions. This is not always true since some central banks choose not to intervene, but it a good indicator most of the time. Another indicator of when the Forex undergoes intervention is when there are verbal clues. A government might talk about intervening, but it might not happen for a long time. Other times, interventions will happen with no warning.
When trading on the Forex, it is a good idea to make decisions that are informed and will benefit you. If you are inexperienced with trading on the foreign currency exchange, look for a good broker that is backed by a well-known financial institution.
10 Minute Forex Wealth Builder
Forex Trading Robot - Forex Maestro
Monday
Day Trading - What is Forex Day Trading?
Day trading – no, it’s not something that Bill Murray wished he had in Groundhog Day. It’s a style of trading on the foreign currency exchange market in which a trader completes all his trades within a single day. In other words, he may make a few dozen – or more – trades in a day with the objective of buying and selling quickly and making a profit from the fluctuations in a currency exchange rate over the course of the day.
Sound complicated? Depending on the method or system that you use to pick your trades it can be. The idea behind day trading is that currency exchange rates are subject to fluctuations over the course of the day – they go up and down depending on who’s buying, who’s selling and what rumors are floating around. In fact, day trading in the foreign currency market is probably the single segment of any type of stocks, currency or futures trading market most affected by rumors and real-time, real-world happenings. A savvy trader who is quick on his feet can roll up the profits by paying attention to what the current news is doing to the currency exchange rates.
The currency market, commonly referred to as the forex (short for Foreign Exchange), is the most liquid market in the world. The latest statistics say that daily trading on forex is in excess of $1.3 trillion U.S. dollars. That makes forex the world’s largest, most efficient market. A major part of the reason for the liquidity and volume of trade is the practice of day trading. The difference between day trading and other types of trading is in how long you hold your stocks (or in this case, your currency). In day trading, you hold nothing beyond the close of the day’s market. Think of it as a game in which the object is to keep trading cards back and forth, increasing the value of your cards – but have no cards in your hand at the end of the day.
Of course, since the currency market is a 24 hour market, there really IS no market closing – so the rules change slightly. The currency market is open from Sunday afternoon to Friday afternoon, with trading going on all the time, so you can pick your times to trade rather than being locked into the Stock Exchange timetable.
How You Make Money in Day Trading
People will tell you that the difference between a day trader and an investor is the length of time that each holds onto their stocks. That’s a superficial difference. The real difference is in the mindset of short-term vs. long-term and liquidity. An investor buys something that he believes will steadily increase in value, and holds onto it for the long haul. A day trader rides the minute fluctuations in the currency market minute by minute the way a surfer rides a wave. Because you’re trading in lots of 100,000, a tiny fluctuation can mean a big profit – or a huge loss.
Limiting Loss in Day Trading
One of the hardest concepts for new traders to grasp is that of limiting loss. Let’s say you make a trade for a currency that is heading down because you believe that it’s near its support point – the point where it will rebound and start heading back up. Instead, it breaks the point and keeps heading down – you’re losing money instead of making it. You have two choices – hold onto it because you KNOW it will start heading back up soon, or get rid of it and limit the amount of money you’re going to lose. In day trading, the name of the game is limiting your losses and maximizing your wins – decide ahead of time just how much you’ll allow each trade to lose before you sell it, and then STICK TO YOUR LIMIT. By the same token, decide how much profit you want to make, set a sell order for when the currency reaches that point – and sell when it hits the mark.
Know what you’re doing
Day trading on the forex is like any other business. The people who make money are the ones who take the time to learn the market and understand the ins and outs of the trades that they make. Those who jump in feet first without learning the terms, rules and trends of the forex market are priming themselves to lose – and lose big. Remember, there’s no such thing as high profit potential without equivalent risk. Before you jump in, take a course in trading, or read read read all that you can.
10 Minute Forex Wealth Builder
Forex Trading Robot - Forex Maestro
Sound complicated? Depending on the method or system that you use to pick your trades it can be. The idea behind day trading is that currency exchange rates are subject to fluctuations over the course of the day – they go up and down depending on who’s buying, who’s selling and what rumors are floating around. In fact, day trading in the foreign currency market is probably the single segment of any type of stocks, currency or futures trading market most affected by rumors and real-time, real-world happenings. A savvy trader who is quick on his feet can roll up the profits by paying attention to what the current news is doing to the currency exchange rates.
The currency market, commonly referred to as the forex (short for Foreign Exchange), is the most liquid market in the world. The latest statistics say that daily trading on forex is in excess of $1.3 trillion U.S. dollars. That makes forex the world’s largest, most efficient market. A major part of the reason for the liquidity and volume of trade is the practice of day trading. The difference between day trading and other types of trading is in how long you hold your stocks (or in this case, your currency). In day trading, you hold nothing beyond the close of the day’s market. Think of it as a game in which the object is to keep trading cards back and forth, increasing the value of your cards – but have no cards in your hand at the end of the day.
Of course, since the currency market is a 24 hour market, there really IS no market closing – so the rules change slightly. The currency market is open from Sunday afternoon to Friday afternoon, with trading going on all the time, so you can pick your times to trade rather than being locked into the Stock Exchange timetable.
How You Make Money in Day Trading
People will tell you that the difference between a day trader and an investor is the length of time that each holds onto their stocks. That’s a superficial difference. The real difference is in the mindset of short-term vs. long-term and liquidity. An investor buys something that he believes will steadily increase in value, and holds onto it for the long haul. A day trader rides the minute fluctuations in the currency market minute by minute the way a surfer rides a wave. Because you’re trading in lots of 100,000, a tiny fluctuation can mean a big profit – or a huge loss.
Limiting Loss in Day Trading
One of the hardest concepts for new traders to grasp is that of limiting loss. Let’s say you make a trade for a currency that is heading down because you believe that it’s near its support point – the point where it will rebound and start heading back up. Instead, it breaks the point and keeps heading down – you’re losing money instead of making it. You have two choices – hold onto it because you KNOW it will start heading back up soon, or get rid of it and limit the amount of money you’re going to lose. In day trading, the name of the game is limiting your losses and maximizing your wins – decide ahead of time just how much you’ll allow each trade to lose before you sell it, and then STICK TO YOUR LIMIT. By the same token, decide how much profit you want to make, set a sell order for when the currency reaches that point – and sell when it hits the mark.
Know what you’re doing
Day trading on the forex is like any other business. The people who make money are the ones who take the time to learn the market and understand the ins and outs of the trades that they make. Those who jump in feet first without learning the terms, rules and trends of the forex market are priming themselves to lose – and lose big. Remember, there’s no such thing as high profit potential without equivalent risk. Before you jump in, take a course in trading, or read read read all that you can.
10 Minute Forex Wealth Builder
Forex Trading Robot - Forex Maestro
Sunday
How To Become a Successful Forex Market Trader
Forex trading on the internet is the quickest way to use your investment capital to its maximum. The foreign exchange markets can offer certain advantages to the smaller and larger traders, thus making the foreign exchange currency trading more preferable than the other markets such as stocks, options and all of the traditional futures. Here are some of the top reasons why you will want to use the forex trading on the internet, in order to become a more successful forex market trader.
1. Forex is the largest market, trading at a volume of almost two billion, giving forex traders virtually unlimited flexibility and liquidity. That’s over three times larger than the equity market and over five times larger than futures.
2. Forex trading can fit into anyone’s schedule because it is available on the internet 24 hours a day, 7 days a week. There is no waiting for markets to open; they are always open day in and day out. This flexible schedule makes the forex market extremely attractive to those professional and potential traders and investors.
3. Forex trading on the internet encompasses buying one currency while simultaneously selling another currency; therefore you have an equal opportunity to make a profit no matter what direction the currencies are heading. Another great advantage to consider is that there are currently only fourteen pairs of currencies to trade. Compare those fourteen currencies to the thousands of stocks, options and futures when you’re considering the pros and cons of delving into the trading game.
4. Investors and traders are flocking to the forex internet trading as a way to gain a higher leverage to their investments. Some brokers even offer margin ratios of 200/1 in open forex trading accounts. There are also those mini-forex accounts that can be opened for a minimum of $200, offering a margin of 0.5%, where $50 in trading capital will control a ten thousand unit currency position.
The Forex prices are often predictable, allowing the currency prices to create trends that can be followed to allow the technically trained forex trader to able to spot, and even take advantage of, the many entry and exit points. One of the best parts about forex trading on the internet is that there is no charges for commissions, any exchange fees or any other hidden fees. The forex market is a very easy market to research the countries and currencies involved. The only fees come from the forex brokers, who only make a very small percentage of what the bid/ask price is. Plus, there is no need to calculate any commissions or fees when completing a trade and your transactions are made a confirmed within seconds. Also because this is all done electronically, with no people involved, there is not much that can slow you down.
For the newbie’s in the forex trading game, you will need to know the forex terminology. Here is a list of some basic terms and concepts you will need to know in forex trading:
Spot Market- The market for buying and selling currencies that are usually for settlement within 2 business days, also known as the value date. For example: USD/CAD = 1 day.
Exchange Rate- This is when the value of one currency is expressed in the terms of another. For instance, the EUR/USD has an exchange rate of 1.3200, and then 1 Euro is worth 1.3200 USD.
Currency Pair- All currencies must be sold in pairs. There are two currency’s that make up an exchange rate, so when one currency is bought, the other is simultaneously sold and vise versa.
Base Currency- This is the first currency in a pair.
Counter Currency- This is the second currency used in a pair. The counter currency can also be known as the “terms” currency.
Broker- This is a firm that will match a buyer to a seller for a small fee or commission.
Sell Quote- This quote is normally displayed on the left side and represents the price that you can sell the base currency for. The sell quote is also referred to as the “bid” price. For instance: EUR/USD quotes 1.3200/03, and then you can sell one Euro for 1.3203 USD.
Buy Quote- This quote is normally displayed on the right side and represents the price that you can buy the base currency for. The buy quote is also referred to as the “ask” or “offer” price. For instance, EUR/USD quotes 1.3200/03, and then you can buy one Euro for 1.3203 USD.
10 Minute Forex Wealth Builder
Forex Trading Robot - Forex Maestro
1. Forex is the largest market, trading at a volume of almost two billion, giving forex traders virtually unlimited flexibility and liquidity. That’s over three times larger than the equity market and over five times larger than futures.
2. Forex trading can fit into anyone’s schedule because it is available on the internet 24 hours a day, 7 days a week. There is no waiting for markets to open; they are always open day in and day out. This flexible schedule makes the forex market extremely attractive to those professional and potential traders and investors.
3. Forex trading on the internet encompasses buying one currency while simultaneously selling another currency; therefore you have an equal opportunity to make a profit no matter what direction the currencies are heading. Another great advantage to consider is that there are currently only fourteen pairs of currencies to trade. Compare those fourteen currencies to the thousands of stocks, options and futures when you’re considering the pros and cons of delving into the trading game.
4. Investors and traders are flocking to the forex internet trading as a way to gain a higher leverage to their investments. Some brokers even offer margin ratios of 200/1 in open forex trading accounts. There are also those mini-forex accounts that can be opened for a minimum of $200, offering a margin of 0.5%, where $50 in trading capital will control a ten thousand unit currency position.
The Forex prices are often predictable, allowing the currency prices to create trends that can be followed to allow the technically trained forex trader to able to spot, and even take advantage of, the many entry and exit points. One of the best parts about forex trading on the internet is that there is no charges for commissions, any exchange fees or any other hidden fees. The forex market is a very easy market to research the countries and currencies involved. The only fees come from the forex brokers, who only make a very small percentage of what the bid/ask price is. Plus, there is no need to calculate any commissions or fees when completing a trade and your transactions are made a confirmed within seconds. Also because this is all done electronically, with no people involved, there is not much that can slow you down.
For the newbie’s in the forex trading game, you will need to know the forex terminology. Here is a list of some basic terms and concepts you will need to know in forex trading:
Spot Market- The market for buying and selling currencies that are usually for settlement within 2 business days, also known as the value date. For example: USD/CAD = 1 day.
Exchange Rate- This is when the value of one currency is expressed in the terms of another. For instance, the EUR/USD has an exchange rate of 1.3200, and then 1 Euro is worth 1.3200 USD.
Currency Pair- All currencies must be sold in pairs. There are two currency’s that make up an exchange rate, so when one currency is bought, the other is simultaneously sold and vise versa.
Base Currency- This is the first currency in a pair.
Counter Currency- This is the second currency used in a pair. The counter currency can also be known as the “terms” currency.
Broker- This is a firm that will match a buyer to a seller for a small fee or commission.
Sell Quote- This quote is normally displayed on the left side and represents the price that you can sell the base currency for. The sell quote is also referred to as the “bid” price. For instance: EUR/USD quotes 1.3200/03, and then you can sell one Euro for 1.3203 USD.
Buy Quote- This quote is normally displayed on the right side and represents the price that you can buy the base currency for. The buy quote is also referred to as the “ask” or “offer” price. For instance, EUR/USD quotes 1.3200/03, and then you can buy one Euro for 1.3203 USD.
10 Minute Forex Wealth Builder
Forex Trading Robot - Forex Maestro
Saturday
Forex Scams - How to Avoid Forex Scams
Whenever there is an opportunity to make large amounts of money, there will be people who are eager to jump right in and start making money. And where there are people who are eager to get rich quick with a minimum of effort on their part, there are fraudsters waiting to take their money. Experienced traders are wise enough to avoid the frauds – it’s the new traders who are most vulnerable to the forex scams that are slipping into the currency exchange market.
The U.S. CFTC (Commodity Futures Trading Commission), which regulates futures and commodities trading, warns new investors to be wary of frauds and scams that promise huge profits from your investments, in and out of the Forex market. The CFTC has issued several Consumer Fraud Alerts in connection with foreign currency trading. They offer the following tips to help you avoid being scammed.
Be skeptical of high-profit-low-risk come-ons.
“I made $1900 in one minute!” touts one sidebar ad for a Forex trading company. Ads that promise high returns on small investments with little or no risk to you are tempting bait. The fact is that while there are certainly big profits to be made in forex, there are correspondingly large losses. And most novice traders drop out of active trading by the end of their first year because they can’t afford the risk.
Be suspicious. Period.
Before you part with a penny, thoroughly check out the company or trader you’re planning to do business with. Check the CFTC’s consumer fraud alert page. Check to see if the company is registered with the CFTC, or is a member of the National Futures Association. Check to see if there’s any disciplinary action against the firm or company. Get even more basic. Get a valid address and telephone number, and verify that it belongs to the company. Check to be sure the person you’re dealing with actually works for the company. Especially if you’re doing business on the Internet, it’s very easy for a scammer to fake credentials.
Be wary of sending money over the Internet.
The Internet has made it incredibly easy for scammers to operate. It only costs $6.95 a month to have a professional looking web site hosted – that’s pennies a day to reach millions of potential marks. Before you part with credit card numbers, bank account transfer permissions or wire transfers, be sure to check out the company with all the authorities listed above.
Beware high pressure sales tactics.
Legitimate dealers don’t need to contact you with unsolicited email, or pressure you into doing business with them. If someone is pushing you to invest right now, tonight, this moment, it should set off huge warning signals in your head. A real dealer is more concerned with keeping you as a customer for the long haul. He’ll be patient while you check out his credentials and reputation. A phony dealer can’t afford that luxury – he needs to get you on the hook right now, or risk losing his score.
Be cautious of companies that tell you they’ll trade for you on the ‘interbank’ market.
The interbank market is a term for a loose network of currency traders that include banks, financial institutions and large corporations. Fraudulent currency trading firms often tell customers that they’ll trade for them on the interbank market where the prices are better. It should be a warning signal to you to stay away.
While technically not ‘scams’, you should also be wary of paying good money for training courses that promise you systems that are ‘guaranteed’ to earn you high profits. If the course advertises that their system will earn you huge profits with minimal risk, or guarantee you 40% return on your money in six weeks, take the promises with a huge grain of salt. Experienced traders understand that the forex market is a time market – while it’s possible to make large amounts of money in short-term trades, finding those profitable trades is a matter of being in the right place at the right time… which means putting in the time and the effort to be there.
They also understand that they’ll lose more often than they win – the trick is to keep your losses short and your profits long. Any company that guarantees that you’ll make a profit on all or most of your profits is coloring their advertising. Stick with trusted companies whose credentials you can verify and whose background you can check.
10 Minute Forex Wealth Builder
Forex Trading Robot - Forex Maestro
The U.S. CFTC (Commodity Futures Trading Commission), which regulates futures and commodities trading, warns new investors to be wary of frauds and scams that promise huge profits from your investments, in and out of the Forex market. The CFTC has issued several Consumer Fraud Alerts in connection with foreign currency trading. They offer the following tips to help you avoid being scammed.
Be skeptical of high-profit-low-risk come-ons.
“I made $1900 in one minute!” touts one sidebar ad for a Forex trading company. Ads that promise high returns on small investments with little or no risk to you are tempting bait. The fact is that while there are certainly big profits to be made in forex, there are correspondingly large losses. And most novice traders drop out of active trading by the end of their first year because they can’t afford the risk.
Be suspicious. Period.
Before you part with a penny, thoroughly check out the company or trader you’re planning to do business with. Check the CFTC’s consumer fraud alert page. Check to see if the company is registered with the CFTC, or is a member of the National Futures Association. Check to see if there’s any disciplinary action against the firm or company. Get even more basic. Get a valid address and telephone number, and verify that it belongs to the company. Check to be sure the person you’re dealing with actually works for the company. Especially if you’re doing business on the Internet, it’s very easy for a scammer to fake credentials.
Be wary of sending money over the Internet.
The Internet has made it incredibly easy for scammers to operate. It only costs $6.95 a month to have a professional looking web site hosted – that’s pennies a day to reach millions of potential marks. Before you part with credit card numbers, bank account transfer permissions or wire transfers, be sure to check out the company with all the authorities listed above.
Beware high pressure sales tactics.
Legitimate dealers don’t need to contact you with unsolicited email, or pressure you into doing business with them. If someone is pushing you to invest right now, tonight, this moment, it should set off huge warning signals in your head. A real dealer is more concerned with keeping you as a customer for the long haul. He’ll be patient while you check out his credentials and reputation. A phony dealer can’t afford that luxury – he needs to get you on the hook right now, or risk losing his score.
Be cautious of companies that tell you they’ll trade for you on the ‘interbank’ market.
The interbank market is a term for a loose network of currency traders that include banks, financial institutions and large corporations. Fraudulent currency trading firms often tell customers that they’ll trade for them on the interbank market where the prices are better. It should be a warning signal to you to stay away.
While technically not ‘scams’, you should also be wary of paying good money for training courses that promise you systems that are ‘guaranteed’ to earn you high profits. If the course advertises that their system will earn you huge profits with minimal risk, or guarantee you 40% return on your money in six weeks, take the promises with a huge grain of salt. Experienced traders understand that the forex market is a time market – while it’s possible to make large amounts of money in short-term trades, finding those profitable trades is a matter of being in the right place at the right time… which means putting in the time and the effort to be there.
They also understand that they’ll lose more often than they win – the trick is to keep your losses short and your profits long. Any company that guarantees that you’ll make a profit on all or most of your profits is coloring their advertising. Stick with trusted companies whose credentials you can verify and whose background you can check.
10 Minute Forex Wealth Builder
Forex Trading Robot - Forex Maestro
Friday
Forex Patterns - How Do You Recognize Patterns in Forex Trading?
Forex works by making transactions in foreign currencies that are not centered on an exchange like the New York Stock Exchange (NYSE) instead; they take place world wide through telecommunications. The forex trade is open 24 hours a day beginning on Sundays in the afternoon until Friday afternoon. There are dealers to quote all the major currencies in nearly every time zone through out the world. After the investor decides on what currency to purchase, the transaction is made through one of those dealers. Some of these dealers can even be found online. It’s very common for investors to speculate currency prices by obtaining a credit line, as small as $500, to greatly increase the potential profits and losses. The term for this is “marginal trading.”
The term marginal trading is used for trading with a borrowed capital. Many traders find marginal trading appealing because forex investments can be made without using a real money supply. This method allows investors to invest more money with fewer costs for transfer and to open a bigger position with a small capital.
When trading in the forex market, it’s best to develop a pattern of recognition in order to become a successful trader. The forex markets often display a specific pattern that repeats over time across assorted time scales. Forex traders can develop an expertise by acquiring the information around the patterns and then discovering how to recognize these patterns for what they are.
Let’s use an analogy of a medical student who is learning how to diagnose a disease, for instance, pneumonia. Every disease is defined by a distinct set of symptoms. By running the right tests and making ethical observations of the patient in question, the medical student will be able to collect all the information needed to recognize that the disease is indeed pneumonia. A medical student can never become an expert doctor until he has seen a number of patients, thus gaining practice in putting the pieces of the puzzle together rapidly and correctly.
The brightest illustration of gaining the trading expertise is through pattern recognition and the large literature on technical analysis. Many of the technical analysis books look like the books that are carried around by medical students. They attempt to combine market symptoms into identifiable patterns that are aimed to help the trader diagnose the market. Some of these patterns may be chart patterns, while others may be based on identifying cycles and configurations, and so on. Like the medical student turned doctor, each technical analyst must cultivate a level of expertise by recognizing the various markets and by learning how to identify the patterns.
Notice how the pattern recognition and research answers lead to very dissimilar approaches to the training of forex market traders. The traders tend to learn how to improve their trading by doing their research by learning how to use more sophisticated tools, collect more data, expose the best predictors, and so on. However, from a pattern recognition advantage point, being successful at trading will not come from conducting more research. Instead, gaining the knowledge directly from the experts and through a great deal of practice will lead to the solid development of competence. The research viewpoint fundamentally treats trading as a type of science. Like scientists, we gain our knowledge by unveiling new observations and pattern recognition through a perspective that treats trading as a functioning activity. We gain our expertise through our mentors and by constantly practicing the trades.
It would seem that this type of expertise could be acquired by learning pattern recognition from other experienced traders and then attaining the experience well enough to identify them on your own. Traditionally, this is how it’s done, but because pattern recognition normally entails a dependable measure of judgment, it makes it very hard to establish outside efficacy once it leaves the hands of the experts. Simply put, an expert trader may be able to utilize more information in trading than he can actually verbalize. Expert traders often describe their work in terms of monetary value and unpredictability patterns, but it may be the way that the patterns are used that makes all the difference between novice and expertise. Although the experts may be able to distinguish patterns in their work, it remains unclear if their greatness lies in the patterns themselves.
10 Minute Forex Wealth Builder
Forex Trading Robot - Forex Maestro
The term marginal trading is used for trading with a borrowed capital. Many traders find marginal trading appealing because forex investments can be made without using a real money supply. This method allows investors to invest more money with fewer costs for transfer and to open a bigger position with a small capital.
When trading in the forex market, it’s best to develop a pattern of recognition in order to become a successful trader. The forex markets often display a specific pattern that repeats over time across assorted time scales. Forex traders can develop an expertise by acquiring the information around the patterns and then discovering how to recognize these patterns for what they are.
Let’s use an analogy of a medical student who is learning how to diagnose a disease, for instance, pneumonia. Every disease is defined by a distinct set of symptoms. By running the right tests and making ethical observations of the patient in question, the medical student will be able to collect all the information needed to recognize that the disease is indeed pneumonia. A medical student can never become an expert doctor until he has seen a number of patients, thus gaining practice in putting the pieces of the puzzle together rapidly and correctly.
The brightest illustration of gaining the trading expertise is through pattern recognition and the large literature on technical analysis. Many of the technical analysis books look like the books that are carried around by medical students. They attempt to combine market symptoms into identifiable patterns that are aimed to help the trader diagnose the market. Some of these patterns may be chart patterns, while others may be based on identifying cycles and configurations, and so on. Like the medical student turned doctor, each technical analyst must cultivate a level of expertise by recognizing the various markets and by learning how to identify the patterns.
Notice how the pattern recognition and research answers lead to very dissimilar approaches to the training of forex market traders. The traders tend to learn how to improve their trading by doing their research by learning how to use more sophisticated tools, collect more data, expose the best predictors, and so on. However, from a pattern recognition advantage point, being successful at trading will not come from conducting more research. Instead, gaining the knowledge directly from the experts and through a great deal of practice will lead to the solid development of competence. The research viewpoint fundamentally treats trading as a type of science. Like scientists, we gain our knowledge by unveiling new observations and pattern recognition through a perspective that treats trading as a functioning activity. We gain our expertise through our mentors and by constantly practicing the trades.
It would seem that this type of expertise could be acquired by learning pattern recognition from other experienced traders and then attaining the experience well enough to identify them on your own. Traditionally, this is how it’s done, but because pattern recognition normally entails a dependable measure of judgment, it makes it very hard to establish outside efficacy once it leaves the hands of the experts. Simply put, an expert trader may be able to utilize more information in trading than he can actually verbalize. Expert traders often describe their work in terms of monetary value and unpredictability patterns, but it may be the way that the patterns are used that makes all the difference between novice and expertise. Although the experts may be able to distinguish patterns in their work, it remains unclear if their greatness lies in the patterns themselves.
10 Minute Forex Wealth Builder
Forex Trading Robot - Forex Maestro
Thursday
Emotions = Trouble in Forex Trading
“Go with your gut.”
When it comes to forex trading, that’s a trading strategy that is bound to lose you money – unless your gut is highly trained and impervious to emotion. The trick to making money in the currency exchange market is to avoid making emotional decisions and follow a carefully thought out strategy that takes the current market and history into account.
Forex trading is a highly volatile market. Emotions tend to run high – and low – and either of those extremes can influence your trading decisions, unless you have a strategy planned in advance, and stick to it, no matter what you THINK you’re seeing at the moment. The keys to success in Forex are system, analysis and perseverance. Note that emotion is not one of them. Going with your gut is a losing proposition in forex trading.
Letting your emotions rule your decisions can hurt your trading in several different ways. It’s the reason that most experienced traders tell novice traders that they need to develop a system – and stick to it no matter what. The system tells you when to buy, what to buy, when to trade and what to trade for. By sticking to your system even when you want to fly in the face of accumulated data, you’ll maximize your profits.
A system based on technical analysis of historical market trends is one of the most potent tools that you can utilize if you’re just getting started in forex trading – and many traders with years of experience continue to use their system to keep the profits rolling in. In fact, many will tell you that when their ‘gut instinct’ and their system collide, the system is almost always right.
The third key is perseverance. Analysis of trends in the market will show you that the market moves in dips and spurts within overall patterns that are predictable. No trend moves smoothly in an up or down line – there are inevitable periods of time when values suddenly spiral up or down based on some outside factor. These are the times when emotion can hurt your portfolio. When a currency that you’re holding takes a sudden dip south, it’s tempting to succumb to panic trading, cut your losses and run even if your system tells you to hold on. On the other hand, it’s easy to catch the rising excitement as a trade starts increasing in value and scramble to buy more of the same. These are exactly the times to rely most heavily on your trading system. It will tell you exactly when to trade for maximum profit.
Using a mechanical system takes the emotion out of your trading, eliminating one of the key factors that people fail. Your system doesn’t get stubborn about proving a theory. It isn’t swayed by bad news, or elated by good news. It doesn’t hold onto a bad trade hoping against hope that if it just holds on long enough, the trend will turn around and become a moneymaker.
To be effective, your system – whether you develop your own or adopt one created by someone else – should identify the entry point of your trade, the exit point of your trade, mitigating factors, and an exit strategy. In laymen’s terms that means:
- Under what conditions should I acquire a currency?
For instance, you may have a buy order for when a particular currency drops more than 5 pips because your analysis tells you that that’s likely to be as low as it goes.
- Under what conditions should I trade that currency for another – and which one?
There are two reasons to exit – to maximize your profit, or minimize your loss. That means you have a set stop-loss order and a set take-profit order at which point to cash out your trade.
- What factors will I allow to change that decision?
If you’re not careful, this is where emotion will sour deals for you. While the money market moves in predictable patterns, there are always individual variations of a trend within those patterns. If you’ve taken those variations into account, it will be far easier to decide when a factor really does make a difference, and when it’s just wishful thinking.
- How will I trade out of a currency?
Your exit strategy may be as simple as ‘a stop-loss order when my loss hits 5% or a take-profit order when I’ll make 40% profit’.
By employing a system to tell you when to get in, out or stick, you’ll minimize the impact of your emotions on your trading and maximize your proft.
10 Minute Forex Wealth Builder
Forex Trading Robot - Forex Maestro
When it comes to forex trading, that’s a trading strategy that is bound to lose you money – unless your gut is highly trained and impervious to emotion. The trick to making money in the currency exchange market is to avoid making emotional decisions and follow a carefully thought out strategy that takes the current market and history into account.
Forex trading is a highly volatile market. Emotions tend to run high – and low – and either of those extremes can influence your trading decisions, unless you have a strategy planned in advance, and stick to it, no matter what you THINK you’re seeing at the moment. The keys to success in Forex are system, analysis and perseverance. Note that emotion is not one of them. Going with your gut is a losing proposition in forex trading.
Letting your emotions rule your decisions can hurt your trading in several different ways. It’s the reason that most experienced traders tell novice traders that they need to develop a system – and stick to it no matter what. The system tells you when to buy, what to buy, when to trade and what to trade for. By sticking to your system even when you want to fly in the face of accumulated data, you’ll maximize your profits.
A system based on technical analysis of historical market trends is one of the most potent tools that you can utilize if you’re just getting started in forex trading – and many traders with years of experience continue to use their system to keep the profits rolling in. In fact, many will tell you that when their ‘gut instinct’ and their system collide, the system is almost always right.
The third key is perseverance. Analysis of trends in the market will show you that the market moves in dips and spurts within overall patterns that are predictable. No trend moves smoothly in an up or down line – there are inevitable periods of time when values suddenly spiral up or down based on some outside factor. These are the times when emotion can hurt your portfolio. When a currency that you’re holding takes a sudden dip south, it’s tempting to succumb to panic trading, cut your losses and run even if your system tells you to hold on. On the other hand, it’s easy to catch the rising excitement as a trade starts increasing in value and scramble to buy more of the same. These are exactly the times to rely most heavily on your trading system. It will tell you exactly when to trade for maximum profit.
Using a mechanical system takes the emotion out of your trading, eliminating one of the key factors that people fail. Your system doesn’t get stubborn about proving a theory. It isn’t swayed by bad news, or elated by good news. It doesn’t hold onto a bad trade hoping against hope that if it just holds on long enough, the trend will turn around and become a moneymaker.
To be effective, your system – whether you develop your own or adopt one created by someone else – should identify the entry point of your trade, the exit point of your trade, mitigating factors, and an exit strategy. In laymen’s terms that means:
- Under what conditions should I acquire a currency?
For instance, you may have a buy order for when a particular currency drops more than 5 pips because your analysis tells you that that’s likely to be as low as it goes.
- Under what conditions should I trade that currency for another – and which one?
There are two reasons to exit – to maximize your profit, or minimize your loss. That means you have a set stop-loss order and a set take-profit order at which point to cash out your trade.
- What factors will I allow to change that decision?
If you’re not careful, this is where emotion will sour deals for you. While the money market moves in predictable patterns, there are always individual variations of a trend within those patterns. If you’ve taken those variations into account, it will be far easier to decide when a factor really does make a difference, and when it’s just wishful thinking.
- How will I trade out of a currency?
Your exit strategy may be as simple as ‘a stop-loss order when my loss hits 5% or a take-profit order when I’ll make 40% profit’.
By employing a system to tell you when to get in, out or stick, you’ll minimize the impact of your emotions on your trading and maximize your proft.
10 Minute Forex Wealth Builder
Forex Trading Robot - Forex Maestro
Subscribe to:
Posts (Atom)