A thorough Forex trading education must include an understanding of the effect market timings can have on trading and liquidity.
One of the most active periods of the day is from the time the London market opens. Often around that time good trading opportunities will appear.
As part of your Forex trading education, learn to analyze market conditions around London open and begin to recognize good setups.
The following questionnaire and checklist will help.
London Open Preparation
About 15 to 30 minutes before London open check the answers to these questions:
- Are the MACD indicators on the 4 hour and 1 hour charts in agreement? If they are not going in the same direction be very careful!
- Is there MACD divergence on the 4 hour, 1 hour, or 15 minute chart? Look for other clues to confirm that price may go in the direction of MACD divergence.
- On the 4 hour chart what is the overall trend?
- Do a Fibonacci calculation on the last swing high and low and see if price is pulling back to an optimum retracement level or whether it is reaching a key extension level.
- Note price in relation to the 200 EMA (Exponential Moving Average) on the 4 hour, 1 hour and 15 minute charts. Is price bucking the trend? In other words, is price above the 200 EMA on the 4 hour and 1 hour chart but below it on the 15 minute? Then be prepared for price to go long at some stage. (Draw the opposite conclusion if price is below the 200 EMA on the 4 hour and 1 hour chart but above it on the 15 minute chart.)
- Are any Economic Reports imminent?
- As the candle closes on the 15 minute chart at London open, do you see any distinctive candle patterns such as tweezers, or doji's or hammers indicating price exhaustion?
- If I entered a trade right now in a particular direction, what would be the risk and where would I place my stop?
Within a few minutes of London open, if you see a number of factors converging from the analysis above, make a decision one way or the other:
- trade
- wait for clearer signals or a better entry point
Carrying out an analysis in this way each day at London open will do much to increase your Forex trading education.
It will make you aware of what is happening on the charts and in the marketplace and help you to arrive at conclusions.
There is no magic formula involved with Forex trading education. Put simply, successful Forex trading is the result of years of hard work, study, practice, and experience often gained through painful trading scenarios.
Eventually the newer trader learns mental discipline, and how to control the emotions - probably the biggest part of a Forex trading education.
Practice a procedure like the one above day after day and begin to see some progress as you get nearer the time you make profits consistently from currency trading.
Here are some of the most common terms used in FOREX trading.
Ask Price ¨C Sometimes called the Offer Price, this is the market price for traders to buy currencies. Ask Prices are shown on the right side of a quote ¨C e.g. EUR/USD 1.1965 / 68 ¨C means that one euro can be bought for 1.1968 UD dollars.
Bar Chart ¨C A type of chart used in Technical Analysis. Each time division on the chart is displayed as a vertical bar which show the following information ¨C the top of the bar is the high price, the bottom of the bar is the low price, the horizontal line on the left of the bar shows the opening price and the horizontal line on the right of bar shows the closing price.
Base Currency ¨C is the first currency in a currency pair. A quote shows how much the base currency is worth in the quote (second) currency. For example, in the quote - USD/JPY 112.13 ¨C US dollars are the base currency, with 1 US dollar being worth 112.13 Japanese yen.
Bid Price ¨C is the price a trader can sell currencies. The Bid Price is shown on the left side of a quote - e.g. EUR/USD 1.1965 / 68 ¨C means that one euro can be sold for 1.1965 UD dollars.
Bid/Ask Spread ¨C is the difference between the bid price and the ask price in any currency quotation. The spread represents the broker's fee, and varies from broker to broker.
Broker ¨C the intermediary between buyer and seller. Most FOREX brokers are associated with large financial institutions and earn money by setting a spread between bid and ask prices.
Candlestick Chart - A type of chart used in Technical Analysis. Each time division on the chart is displayed as a candlestick ¨C a red or green vertical bar with extensions above and below the candlestick body. The top of the extension shows the highest price for the chart division and the bottom of the extension shows the lowest price. Red candlesticks indicate a lower closing price than opening price, and green candlesticks indicate the price is rising.
Cross Currency ¨C A currency pair that does not include US dollars ¨C e.g. EUR/GBP.
Currency Pair ¨C Two currencies involved in a FOREX transaction ¨C e.g. EUR/USD.
Economic Indicator ¨C A statistical report issued by governments or academic institutions indicating economic conditions within a country.
First In First Out (FIFO) ¨C refers to the order open orders are liquidated. The first orders to be liquidated are the first that were opened.
Foreign Exchange (FOREX, FX) ¨C Simultaneously buying one currency and selling another.
Fundamental Analysis ¨C Analysis of political and economic conditions that can affect currency prices.
Leverage or Margin ¨C The ratio of the value of a transaction to the required deposit. A common margin for FOREX trading is 100:1 ¨C you can trade currency worth 100 times the amount of your deposit.
Limit Order ¨C An order to buy or sell when the price reaches a specified level.
Lot ¨C The size of a FOREX transaction. Standard lots are worth about 100,000 US dollars.
Major Currency ¨C The euro, German mark, Swiss franc, British pound, and the Japanese yen are the major currencies.
Minor Currency ¨C The Canadian dollar, the Australian dollar, and the New Zealand dollar are the minor currencies.
One Cancels the Other (OCO) ¨C Two orders placed simultaneously with instructions to cancel the second order on execution of the first.
Open Position ¨C An active trade that has not been closed.
Pips or Points ¨C The smallest unit a currency can be traded in.
Quote Currency ¨C The second currency in a currency pair. In the currency pair USD/EUR the euro is the quote currency.
Rollover ¨C Extending the settlement time of spot deals to the current delivery date. The cost of rollover is calculated using swap points based on interest rate differentials.
Technical Analysis ¨C Analysis of historical market data to predict future movements in the market.
Tick ¨C The minimum change in price.
Transaction Cost ¨C The cost of a FOREX transaction ¨C typically the spread between bid and ask prices.
Volatility ¨C A statistical measure indicating the tendency of sharp price movements within a period of time.
Kinds of prices and time units. Charts for the technical analysis are being constructed in coordinates price (the vertical axis) time (the horizontal axis). The following kinds of currency prices represented on charts are being distinguished on Forex:
* open - a price at the beginning of a trade period (year, month, day, week, hour, minute or a certain amount of one from these units);
* close - a price at the end of a trade period;
* high - the highest from prices observed during a trade period;
* low - the lowest from prices observed during a trade period.
Providing the technical analysis one uses charts for different time units پ from 1 year or more till 1 minute. The bigger is a time unit applied for the chart plotting the bigger is a time span to analyze price movements and to determine the major trend by means of the chart. For the short trading charts for less time units are more suitable.
Line chart. The line chart is plotted connecting single prices for a selected time period. The most popular line chart is the daily chart. Although any point in the day can be plotted, most traders focus on the closing price, which they perceive as the most important. But an immediate problem with the daily line chart is the fact that it is impossible to see the price activity for the balance of the period as well as gaps پ breakups in prices at joints of trade periods. Nevertheless, line charts are easier to visualize. Also, technical analysis goes well beyond chart formation; in order to execute certain models and techniques, line charts are better suited than any of the other charts.
Bar chart. The bar chart consists from separate histograms. To plot a histogram in coordinates price پ time the points responding to high, low, open and close prices for a time period analyzed should be marked on the one vertical bar. The opening price usually is marked with a little horizontal line to the left of the bar; and the closing price is marked with a little horizontal line to the right of the bar. Bar charts have the obvious advantage of displaying the currency range for the period selected. An advantage of this chart is that, unlike line charts, the bar chart is able to plot price gaps. Hence, it is impossible to see on a bar chart absolutely all price movements during the period.
Candlestick chart. The candlestick chart is closely related to the bar chart. It also consists of four major prices: high, low, open, and close. In addition to the common readings, the candlestick chart has a set of particular interpretations. The latter is possible thanks to the convenient visual observation of that chart.
The opening and closing prices form the body (jittai) of the candlestick. To indicate that the opening was lower than the closing, the body of the bar is left blank. Current standard electronic displays allow you to keep it blank or select a color of your choice. If the currency closes below its opening, the body is filled. In its original form, the body was colored black, but the electronic displays allow you to keep it filled or to select a color of your choice. The intraday (or weekly) direction on a candlestick chart can be traced by means of two "shadows": the upper shadow (uwakage) and the lower shadow (shitakage). Just as with a bar chart, the candlestick chart is unable to trace every price movement during a period's activity.
The Forex is essentially risk-bearing. By the evaluation of the grade of a possible risk accounted should be the following kinds of it: exchange rate risk, interest rate risk, and credit risk, country risk.
Exchange rate risk. Exchange rate risk is the effect of the continuous shift in the worldwide market supply and demand balance on an outstanding foreign exchange position. For the period it is outstanding, the position will be subject to all the price changes. The most popular measures to cut losses short and ride profitable positions that losses should be kept within manageable limits are the position limit and the loss limit. By the position limitation a maximum amount of a certain currency a trader is allowed to carry at any single time during the regular trading hours is to be established. The loss limit is a measure designed to avoid unsustainable losses made by traders by means of stop-loss levels setting.
Interest rate risk. Interest rate risk refers to the profit and loss generated by fluctuations in the forward spreads, along with forward amount mismatches and maturity gaps among transactions in the foreign exchange book. This risk is pertinent to currency swaps, forward outright, futures, and options (See below). To minimize interest rate risk, one sets limits on the total size of mismatches. A common approach is to separate the mismatches, based on their maturity dates, into up to six months and past six months. All the transactions are entered in computerized systems in order to calculate the positions for all the dates of the delivery, gains and losses. Continuous analysis of the interest rate environment is necessary to forecast any changes that may impact on the outstanding gaps.
Credit risk. Credit risk refers to the possibility that an outstanding currency position may not be repaid as agreed, due to a voluntary or involuntary action by a counter party. In these cases, trading occurs on regulated exchanges, such as the clearinghouse of Chicago. The following forms of credit risk are known:
1. Replacement risk occurs when counterparties of the failed bank find their books are subjected to the danger not to get refunds from the bank, where appropriate accounts became unbalanced.
2. Settlement risk occurs because of the time zones on different continents. Consequently, currencies may be traded at the different price at different times during the trading day. Australian and New Zealand dollars are credited first, then Japanese yen, followed by the European currencies and ending with the U.S. dollar. Therefore, payment may be made to a party that will declare insolvency (or be declared insolvent) immediately after, but prior to executing its own payments.
Therefore in assessing the credit risk, end users must consider not only the market value of their currency portfolios, but also the potential exposure of these portfolios. The potential exposure may be determined through probability analysis over the time to maturity of the outstanding position. The computerized systems currently available are very useful in implementing credit risk policies. Credit lines are easily monitored. In addition, the matching systems introduced in foreign exchange since April 1993 are used by traders for credit policy implementation as well. Traders input the total line of credit for a specific counterparty. During the trading session, the line of credit is automatically adjusted. If the line is fully used, the system will prevent the trader from further dealing with that counterparty. After maturity, the credit line reverts to its original level.
Dictatorship risk. Dictatorship (sovereign) risk refers to the government's interference in the Forex activity. Although theoretically present in all foreign exchange instruments, currency futures are, for all practical purposes, excepted from country risk, because the major currency futures markets are located in the USA. Hence, traders have to realize that kind of the risk and be in state to account possible administrative restrictions.
Currency trading has a long history and can be traced back to the ancient Middle East and Middle Ages when foreign exchange started to take shape after the international merchant bankers devised bills of exchange, which were transferable third-party payments that allowed flexibility and growth in foreign exchange dealings.
The modern foreign exchange market characterized by periods of high volatility (that is a frequency and an amplitude of a price alteration) and relative stability formed itself in the twentieth century. By the mid-1930s the British capital London became to be the leading center for foreign exchange and the British pound served as the currency to trade and to keep as a reserve currency. Because in the old times foreign exchange was traded on the telex machines, or cable, the pound has generally the nickname “cable”.
After the World War II, where the British economy was destroyed and the United States was the only country unscarred by war, U.S. dollar, in accordance with the Breton Woods Accord between the USA, Great Britain and France (1944) became the reserve currency for all the capitalist countries and all currencies were pegged to the American dollar (through the constitution of currencies ranges maintained by central banks of relevant countries by means of the interventions or currency purchases). In turn, the U.S. dollar was pegged to gold at $35 per ounce. Thus, the U.S. dollar became the world's reserve currency. In accordance with the same agreement was organized the International Monetary Fund (IMF) rendering now a significant financial support to the developing and former socialist countries effecting economical transformation.
To execute these goals the IMF uses such instruments as Reserve trenches, which allows a member to draw on its own reserve asset quota at the time of payment, Credit trenches drawings and stand-by arrangements. The letters are the standard form of IMF loans unlike of those as the compensatory financing facility extends financial help to countries with temporary problems generated by reductions in export revenues, the buffer stock financing facility which is geared toward assisting the stocking up on primary commodities in order to ensure price stability in a specific commodity and the extended facility designed to assist members with financial problems in amounts or for periods exceeding the scope of the other facilities.
At the end of the 70-s the free-floating of currencies was officially mandated that became the most important landmark in the history of financial markets in the XX century lead to the formation of Forex in the contemporary understanding. That is the currency may be traded by anybody and its value is a function of the current supply and demand forces in the market, and there are no specific intervention points that have to be observed. Foreign exchange has experienced spectacular growth in volume ever since currencies were allowed to float freely against each other. While the daily turnover in 1977 was U.S. $5 billion, it increased to U.S. $600 billion in 1987, reached the U.S. $1 trillion mark in September 1992, and stabilized at around $1.5 trillion by the year 2000.
Main factors influences on this spectacular growth in volume are mentioned below. A significant role belonged to the increased volatility of currencies rates, growing mutual influence of different economies on bank-rates established by central banks, which affect essentially currencies exchange rates, more intense competition on goods markets and, at the same time, amalgamation of the corporations of different countries, technological revolution in the sphere of the currencies trading. The latter exposed in the development of automated dealing systems and the transition to the currency trading by means of the Internet. In addition to the dealing systems, matching systems simultaneously connect all traders around the world, electronically duplicating the brokers' market.
Advances in technology, computer software, and telecommunications and increased experience have increased the level of traders' sophistication, their ability to both generate profits and properly handle the exchange risks. Therefore, trading sophistication led toward volume increase.
The international currency market Forex is a special kind of the world financial market. Trader’s purpose on the Forex to get profit as the result of foreign currencies purchase and sale. The exchange rates of all currencies being in the market turnover are permanently changing under the action of the demand and supply alteration. The latter is a strong subject to the influence of any important for the human society event in the sphere of economy, politics and nature. Consequently current prices of foreign currencies evaluated for instance in the US dollars fluctuate towards its higher and lower meanings. Using these fluctuations in accordance with a known principle “buy cheaper – sell higher” traders obtain gains. Forex is different in compare to all other sectors of the world financial system thanks to his heightened sensibility to a large and continuously changing number of factors, accessibility to all individual and corporative traders, exclusively high trade turnover which creates an ensured liquidity of traded currencies and the round - the clock business hours which enable traders to deal after normal hours or during national holidays in their country finding markets abroad open.
Just as on any other market the trading on Forex, along with an exclusively high potential profitability, is essentially risk - bearing one. It is possible to gain a success on it only after a certain training including a familiarization with the structure and kinds of Forex, the principles of currencies price formation, the factors affecting prices alterations and trading risks levels, sources of the information necessary to account all those factors, techniques of the analysis and prediction of the market movements as well as with the trading tools and rules. An important role in the process of the preparation for the trading on Forex belongs to the demotrading (that is to trade using a demo-account with some virtual money), which allows to testify all the theoretical knowledge and to obtain a required minimum of the trade experience not being subjected to a material damage.
When the going gets tough, the tough get going. This adage often brings back the memories of my past days when I was trading initially in the currency exchange market. Indeed, there's nothing more hurtful than losing your invested money in the FX market. But, online currency trading is like life where you're got to learn from your wrong moves and keep moving on. Learning the basic skills of online forex trading could be easy but, practically, one needs to acquire the advanced skills to play safe through thick and thin of FX trading.
I have traded in forex for many years and, if you count on me, I must tell you that the secret of successful trading lies largely on the hunch and intuition of an trader. Technically expressed, you should have the accurate forex alerts and forex signals to be able to make the right moves in the currency market. However, this is easier said than done as the skills of the Currency Trading Signal takes a long time to master. This is why while a few people are able to boost their forex pips in a short span of time, the others take a long time to achieve the same or maybe, some of them get frustrated and just give it up! The reality is that not many people are ready to be entirely devoted to the perilous process of online forex trading.
Having said this, I still wonder why some people choose to be a dare-devil and risk their money instead of simply following an established and renowned Account Forex Online Trading. I began trading in 1997 and there is one important thing I have learnt in my trading career so far, i.e., you have to got to be patient to learn the tricks of making right moves at the right times and profit from your trading.
Since I have led quite a successful career in forex trading, I have been sharing the tips and tricks of online currency trading with many traders around the world through my G7 Forex Trading System which as you know has remained pretty successful for many traders so far. My G7 Forex Trading System is an easy-to-follow, step-by-step trading manual offering in-depth online forex trading review.
If you visit my site (www.forex-science.com) you will find many of my existing customers are pretty satisfied with the performance of their investments and in fact, most of them have been able to increase their forex pips drastically. You would be surprised to know quite a few of them haven't traded for a long time! Now, this is what we call success in the forex trading, eh?
The Foreign Exchange market (also referred to as the Forex or FX market) is the largest financial market in the world, with over $1.5 trillion changing hands every day.
That is larger than all US equity and Treasury markets combined!
Unlike other financial markets that operate at a centralized location (i.e. stock exchange), the worldwide Forex market has no central location. It is a global electronic network of banks, financial institutions and individual traders, all involved in the buying and selling of national currencies. Another major feature of the Forex market is that it operates 24 hours a day, corresponding to the opening and closing of financial centers in countries all across the world, starting each day in Sydney, then Tokyo, London and New York. At any time, in any location, there are buyers and sellers, making the Forex market the most liquid market in the world.
Traditionally, access to the Forex market has been made available only to banks and other large financial institutions. With advances in technology over the years, however, the Forex market is now available to everybody, from banks to money managers to individual traders trading retail accounts. The time to get involved in this exciting, global market has never been better than now. Open an account and become an active player in the largest market on the planet.
The Forex Market is very different than trading currencies on the futures market, and a lot easier, than trading stocks or commodities.
The FOREX plays a vital role in the world economy and there will always be a tremendous need for the exchange of currencies. International trade increases as technology and communication increases. As long as there is international trade, there will be a FOREX market. The FX market has to exist so a country like Germany can sell products in the United States and be able to receive Euros in exchange for US Dollar.
So you know how it is financially rewarding if you traded successfully in the forex market every single day. Whether a bad economy or not, it has made millions taking advantage of the flactuations in the market. And the good thing is that trading is now available to all of us, having internet access and right knowledge creates wealth.
Ok, ok , i got your point, how do I start trading in forex?
Well, forex is like any other investment or business, it has signifitcant amount of loss sometime.But it is better than having a job because you can work for so little time, yet earn so much more. There is a career waiting for people who are willing to exert their effor, time and mind to learning and benefiting from the Currency Market.
It is important for traders to have consistent learning in the market, and not just giving that role of trading to their brokers. The good thing is there are many learning modules out there available through the online universe. But not all guarantees 100% success on trading. Of course no person or product can be dumb enough to guarantee your success. It also demands effort on your part. A factor you should find when purchasing or looking for information is its reputation and quality.
Poor learning = higher risks and losses
Quality learning = happy trader
One highly credited Stock and Forex Investor, Bill Poulos has made some home study courses that has helped made millions of successful traders around the world. And in one of his courses, Forex Profit Accelerator, is not more of a study home course, it is more of a learning system.
Be it new in trading or experienced, constant learning is what makes wealth, at times today, " the more you know, the more money you make". And a learning system like the Forex Profit Accelerator can surely give you all the support you need to be successful in Currency trading.
Foreign Exchange Market is a market where traders buy and sell currencies with the hope of making a profit when the values of the currencies change in their favor.
In other words, buy low, sell high.
Forex Market is no doubt a big income potential, if you know how to trade and make it work in your favor. With the growth of the Forex market, it has a big potential for everyone, ranging from large corporate firms to people like you.
It is a very exciting trade with a huge money-making potential. before it wasn't even available for small accounts for individuals, but everything changes, right? Grasp the power of forex, and even in few minutes a day you can build tremendous wealth rather than being stuck in a job making someone else rich and working long hours.
Truly a very rewarding path to take.
What makes it different from stocks and other trading fields?
1. You can start very small with forex, because you control your money, you only work with what you can afford.
2. The Forex markets are always open. You can trade any time of YOUR day, as long as you have a pc/laptop and internet connection, you can.
3. The funds that you invest are liquid; you can cash them anytime you want. No waiting for days to get your stocks converted into hard cash.
4. The value of the Forex Trading market is huge: it is 30 times larger than all of the US equity markets combined. It is the largest market in the world with daily reported volume of 1.5 to 2.0 trillion dollars. This massive value makes it a lucrative and desirable trade to invest in.
5. It is highly stable than other markets. As long as there are people and money, they are always going to need currency. Even it is moving up and down, the rise and fall are not as dramatic as stock prices and generally follow a predictable trend.
Have the proper education with forex, guaranteed you can be wealthy before you even know it.
6. You do not have to worry about commissions, exchange fees nor any hidden charges when you trade Forex. Forex brokers make only a small percentage of the bid and there are very respectable and free brokers available as well. Is that not wonderful for you?
7. Whether the market is moving up or down, you will still profit. You will not worry about a falling currency value if you know what to do with it and make good gains.
8. Forex is a very transparent market. It is not biased and everybody is equal in trading forex. you can make you trading decisions and base it from international news.
9. Forex market is really fast! All is done electronically, online and in Real Time.
10. The last one is that you do not need any degree in order to trade with forex, as long as you have the following things to get started:
a. Quality education - home online courses are now available for any one who is serious in forex. One well known home study course is Bill Poulos' Forex Profit Accelerator. you can benefit all in all because :
- Quality Education from Bill Poulos, a 30 year veteran
- Easy to understand concepts, making you profitably trade for 20 minutes and go ahead enjoy life.
- Constant support upto a year and beyond. great people who you can ask and be there for you to make sure you build your wealth.
- *added new concepts such as Money and Risk Management, which make it stand out the rest.
b. Constant Practice on a demo account - after the quality education , you need to practice , practice , practice until you are profitable before diving in the real market. Easy Forex offers a great demo account and more for you.
c. Getting a trusted forex trading Platform, and the best to date is Easy Forex, basing on its name, they make it easy for you. it has all the support you need to keep you updated and constantly educated.
Forex trading online may be the fastest path to financial freedom if you have the combination of the tools mentioned above. Compared to the hypey home based business online, Forex markets are legit and proven wealth makers. Start your future now.
Learn. Earn. Enjoy life.
Being three times larger than stocks and futures markets combined, the popularity of trading Forex market has been appealing to anyone who would like to earn more money.
It is not biased towards anyone or any institution because it operates 24 hours a day and has no physical address or location.
There is such great potential in the Forex Market because of the fluctuations or changes in exchange rates. There is always the need for currency and it is always traded in pairs. In any economic status, there will always be an opportunity for a Forex Trader to earn profits.
Before, Forex Trading is not accessible to any individual. But due to the internet and the modernization, Everybody can learn Forex and does not have to possess of any degree or qualifications. But I must emphasize of learning the craft diligently before trading. Education in Forex is very important that without any proper information and training, there is no chance that you can earn a fortune from Forex like you want to. Anyone who is serious about the trade should get good practice in a demo account.
The good thing in trading is that you can start small, and you can not lose more than what you have traded ( called "margin" ). Because of leveraging, Forex is turning to be more favorable than Stocks to other investors.
There are no hidden fees and transaction costs in Forex, meaning it is more favorable for you. You save yourself from operation fees, and taxes with Forex.
Because of the internet, Forex has been the greatest possibility of work from home for people who would like stop working or preparing to retire soon. As long as you have internet, proper training and a computer, Forex wealth is not hard to achieve.
Truly a wonderful wealth-building opportunity, the proper preparation in education and training is the key to make a lot of money with Forex.
As a beginner, should a forex trader get in a Forex Study course?
Definitely yes, not all beginner traders go to this process, they just get themselves familiar and just jump right in. In the end, the pain and the tears. You have probably heard that 5% of the Forex Traders get profits consistently.
The root of most people's failures in the goldmine of the Forex Market is the lack of education. A Course or training could guarantee any success, nothing will but the trader himself. Constantly learning through a Forex Course, however, can put you on the right track to succeed.
There are many programs available online, but there are some reminders you need before purchasing any of the Forex Courses. Because not all are for the trader in you.
The very first thing you might want to look for in a Forex Course is the content of the material. Yes there are many courses that will say that they have great content, you will want to be looking for quality content. A great veteran in the trade who make content based on his experiences are great resources. Most of the courses out there are too focused on the very basic concepts, which will not make you profit consistently.
These below are the least you want to find in a course or training program:
-Forex trading basics- Without too much focus on this, it is sufficient to give you a good review on the basic concepts until you have a full grasp in it.
-Failures and Mistakes- If from a great author/s, this should give you a good grasp on the ways that won't cut it in the Forex Trading industry. This should give you a great heads up so you would avoid history repeat itself.
-Aspects of Trading-
If you know how to properly apply fundamentals and technical aspects of trading, you are on your way to consistent profits.
-Trading system growth-
A system that suits you and grows as you learn is the key to consistent great results. Having this will avoid you from not following your system, making your account burst like a bubble. It should be easy to use.
-Money and Risk management-
Most important aspects in Trading. This will help you increase your money exponentially while limiting too much losses.
-Trading psychology-
Most traders neglect this, well, you are not most traders, learning the right mindset in Trading will keep you from making decisions based on your emotions. The course should help you develop habits that will be a great factor in your trading.
The Course should also make your growth towards to being an elite trader.
Trader Support
You should be able to share your ideas, opinions and suggestions to your instructor and colleagues through Forums and One-on-One Consultation.
Trader Convenience
Materials you use should work around your lifestyle, one of which is it should be available online.
Trading the Forex Market is no walk in the park. A good trader invest time and money to a high quality online course that will bring you to the right track in earning profitably and consistently.
Learning the foreign exchange basics is one of the most important things you need to consider if you wanted to delve into the world of currency trading. At its most general sense, it is important to get into forex with the right mindset and skills in place. Having a natural affinity for conducting business is important because once you have this it will be a lot easier for you to figure out how you will play the field.
To help you decide about the ins and outs of forex currency trading, here are some of the most important tips you need to know:
1. Learn to maximize your profits - Do not be too complacent with just one trading method. It would be best to try your hand at the various forex trading methods so you will also become more familiar with how others in the business probably conduct their business. Know how to boost your profits by being more in the know. Scan the market for possible trades. Focus not just on individuals but try to get the market share of big businesses as well because these financial institutions are the ones which mostly need a continuous flow of currencies.
2. Become a smart trader - It's safe to say that this tip is the most important when it comes to learning the foreign exchange trading basics. No matter how much you know the technicalities that come with trading currencies, it will never be enough once you get to stay in the industry for a longer period of time and start to deal with different personalities. You should also be able to understand when it is okay to take a risk and when would it be best to just let it pass you by. Values and rates in the foreign exchange trade are always changing and in a matter of minutes prices may fluctuate so you need to keep your business instincts on alert.
3. Instill discipline in trading - You must have a system which you follow throughout the duration of your trading. You need a system so that you can figure out your weaknesses and strengths so you will be able to change them accordingly. You should also allot a specific time for trading. Make sure that when you are trading, you are not doing anything that is unrelated to that because you will need to be focused on the market. You should also trade according to the set rules and regulations. Keep your word should you opt to do business with fellow traders on a set date or on pre-agreed rates.
4. Keep learning - The foreign exchange trading basics still develops and gets harnessed through time. So have an open mind and consider the fact that you will need to constantly educate yourself regarding the trade. Keep yourself abreast of the latest technologies and methods being used. Make time to research about foreign currency trading and read up related news on this industry. There are lots of free learning materials that you can conveniently obtain online.
If you want to get around some real foreign exchange trading for starters, knowing the trade methods themselves is your best bet. Foreign currency trading is not just a mere gesture of giving out currencies as the other party needs it. Methods are necessary to control the success of the business flow. There are different types of transaction processes which you can use according to your level of comfort.
1. Spot Currency Trading - This accounts for most of the exchanges happening in the foreign currency trading business. Spot currency trading usually involves two currency traders. What happens here is that the buyer ends up calling the seller. But at the beginning of the transaction, the buyer will not yet reveal his intention to purchase any currencies offered by the seller. The seller will proceed to entertain the inquiries of the buyer and in the process informs the currency rates. Should the buyer feel comfortable with the said rates, both parties may reach a decision to transact business with each other.
2. Forward Trading - This method involves a more long term investment. The essence of forward trading is that the agreement to make the trade is finalized days or even years before the actual day of exchange. So in here, both parties (the buyer and the seller) would agree to exchange their currencies for a specified date in the future regardless of the rates that their currencies may have by then. This type of trading is often done between big companies. It also has two different types:
* Swap - This is the most common type of forward trading. In here, both the buyer and the seller agree to make currency exchanges for a specified period of time. Then their roles will eventually swap after the said period of initial exchange.
* Future - This is the forward trading used by most big companies. In future trading, a contract is drafted for the exchange with emphasis on the maturity rates.
3. Option Trading - This type of method is perhaps a flexible tool considered in our foreign exchange trading for starters. This is because option trading is the extended version of forward trading. Forward trading sort of binds involved parties to make the specified transaction. But with option trading, the involved parties only obtain the rights to buy the currency at the agreed upon date or during the duration that lapses. In here, the strike price is what's crucial as this is the rate agreed upon in terms of buying and selling.
Although these methods of foreign exchange trading for starters may be promising, it is still important to note that all of them come with their own particular risks. After all, foreign currency trading is a volatile and dynamic type of business. These methods come with their own brand of advantages and disadvantages so it is imperative that when you use them, you fully understand their capacity first. Currency trading is a very fluid business and these methods may also provide different risks for different transactions.
The forex market is filled with scam offers and pie in the sky promises. On the other hand, it is the largest, most liquid market that trades twenty four hours a day. So how to find your way through the maze of offers that are out there, well here are four steps to becoming a successful trader.
Becoming a successful Forex trader basically comes down to four things:
1) Learning about the markets and your appitite for risk
How the markets work, what moves them, etc is a simple matter as these markets are not that complicated. Determining how well you are suited to trading is a difficult process however. Finding out how you react to stress and perform when real money is on the line can be a life long process
2) Finding and learning a system that fits your personality and life style
There are as many different systems as there are traders, many have been proven over time, so really the only question is which one suits me.I know many will dispute this point, however it really is not as complicated as some try to make it. Most of those making it hard are really just trying to sell you something. There are many free systems that once learned and traded can make you wealthy
3) Testing that system until you have an edge.
Testing is the heart of becoming a good trader. Most people don't do this. If you test something until you can prove and edge, no matter how small it may seem, you just need to trade it over and over to make money.
4) Trading that system exactly how you tested it, until you are wealthy.
Many traders are always looking for that magic system that will make money fast. The secret to wealth is to stick to the system you have tested and proved and do it until you acumulate wealth. Not chase the latest trading software or system.
When you are ready to trade this market, keep these four simple steps in mind and then do not let anything stand in your way of becoming the trader you want to be.
If you are new to Forex trading you understand need to understand that 95% of trades lose. If you want to win you can but you need to follow these essential trading tips.
Here are your ten tips and there in no particular order of importance, there all important!
1. Don't Use a cheap Forex Robot or Expert Advisor
If you think you are going to get rich by paying out two hundred dollars or less for a cheap software package think again you won't, all these systems lose money. If Forex trading were as simple as paying a few hundred dollars for a lifelong income, 95% of traders wouldn't lose money.
2. Accept Responsibility
Leading on from the above point, it should be pretty obvious that you need to accept responsibility for your actions, learn skills and get a decent Forex education.
3. Work Smart Not Hard
You don't need to work hard just get the right Forex information and that should only take you a couple of weeks at most and your all set.
4. Keep Your Strategy Simple
Simple trading strategies work best as they are more robust than complex ones, with fewer elements to break, so keep your system simple.
5. Use Technical analysis
This is simply the most time efficient way to trade and all you need to do is learn the right chart formations, to spot profitable chart set ups and that's a learned skill.
6. Be Patient
Don't trade to often, once or twice a month is enough to make big gains and is the best way to trade, as you will be focusing on the high odds trades which offer the biggest profits.
7. Use tight Money Management
You are going to get losses, so make sure you keep them small and always place a stop before you start to trade, so you are not tempted to run losses and hope they turn around - most times they don't!
8. Use Sensible Leverage
You can get 200: 1 leverage with any Forex broker online but this is far too much and you will eventually destroy your account. 10- 20:1 is plenty for most traders.
9. Learn Discipline
You will here this word a lot and it's the key to Forex trading success. You must follow your system with discipline and keep your losses small. If you can't follow your system with discipline you don't have one!
10. Be Realistic
Don't be afraid to make mistakes or take losses, all traders do and you will too. Forget perfection and focus on making money; if you can make 50 - 100% in your first year of trading you are up there with the best and can be very proud of yourself.
These are 10 very simple tips for novice Forex traders and if you follow them you could be on the road to Forex trading success and a great second or even life changing income.
IGNORANT OF NEWS EVENTS
Most ignorant technical traders often have there trading account badly damaged if not wiped out during news event releases. I therefore recommend that you get familiar with economic calendars even if you do not like trading them.
OVER TRADING.
Most ignorant traders often over trade in any of the following ways: opening more positions than they should, not knowing when they have exceeded there trading limits. I recommend trading only one position at a time as a beginner.
NO TRADING SYSTEM
One of the worst things that can happen to a trader is to chase after pips or dollars without a proven system. To succeed in trading you need a proven and tested decent trading system.
NO TRADING PLAN
A plan gives you the road map to your destination. When you have no plan, you will surely not know when you miss the way.
NOT KNOWING WHERE TO PLACE STOP LOSS ORDER And have high probability for profits
It is one thing to place stop loss orders, it is another thing to know where to place them in order to avoid being stopped out before price resumes in your analyzed irend and entry direction.
NOT KNOWING HOW TO MONITOR MARGIN ACCOUNT.
If you do not know when your account is running into margin call, certainly you will not know when to cut your losses..
NOT KNOWING HOW TO IDENTIFY A TREND AND RIDE WITH IT.
You trading system should be able to identify new market trends and , trend corrections and trend reversal.
ALLOWING MAXIMUM DRAW DOWN ON AN ACCOUNT
When your account is drawn down by say 50% in one trade, you should know that it will not take you a profit of 50% to return to your previous balance. It will rather take you 100% profit in your remaining balance before the account was drawn down.
The above 8 mistakes put together can result in a margin call.
Stochastics are amongst the most popular technical indicators when it comes to Forex Trading. Unfortunately most traders use them incorrectly. In this article we will review the correct way to use this popular technical indicator.
George Lane developed this indicator in the late 1950s. Stochastics measure the current close relative to the range (high/low) over a set of periods.
Stochastics consist of two lines:
%K - Is the main line and is usually displayed as a solid line
%D - Is simply a moving average of the %K and is usually displayed as a dotted line
There are three types of Stochastics: Full, fast and slow stochastics. Slow stochastics are simply a smother version of the fast stochastics, and full stochastics are even a smother version of the slow stochastics.
Interpretation:
Buy when %K falls below the oversold level (below 20) and rises back above the same level.
Sell when %K rises above de overbought level (above 80) and falls back below the same level.
The interpretation above is how most traders and investors use them; however, it only works when the market is trendless or ranging. When the market is trending, a reading above the overbought territory isn't necessary a bearish signal, while a reading below de oversold territory isn't necessary bullish signal.
Trending market
When the market is trending is necessary to adapt the oscillator to the same conditions: When the market is trending up, then the signals with the higher probability of success are those in direction of the trend "Buy signals", on the other hand when the market is trending down, selling signals offer the lowest risk opportunities.
Thus when the market is trending up, we will only look for oversold conditions (when the stochastics fall below the oversold level [below 20] and rises back above the same level) to get ready to trade, and in the same way, when the market is trending down we will only look for overbought conditions (when the stochastics rise above de overbought level [above 80] and falls back below the same level.
Taking all overbought/oversold signals during a trending market will lead us to many whipsaws. If you are not comfortable with the number of signals given, try expanding your trading to other currency pairs.
Trend-less market
During a ranging market we could use the interpretation explained above to trade off stochastics.
Divergence
Divergence trades are amongst the most reliable trading signals in the Forex market. A divergence occurs either when the indicator reaches new highs/lows and the market fails to do it or the market reaches new highs/lows and the indicator fails to do it. Both conditions mean that the market isn't as strong as it used to be giving us opportunities to profit from the market.
Stochastics can also be used to trade off divergences.
Price behavior
A price behavior can be incorporated into any kind of system or Forex strategy. When using divergences or overbought/oversold condition with a price behavior approach, the probability of success of our signals increases enormously. Why? Because price dictates at the end, how all indicators will behave, it also gives us a lot of information about the probable direction it will take in the future.
I hope this article helps you become a better trader.
95% of traders lose but they don't lose because they can't learn to win, they can they just make errors that are totally avoidable and if you avoid these errors and pay careful attention to the points enclosed, you can achieve currency trading success.
The first point to keep firmly in mind is you don't get success without learning skills and the vendors who tell that you can make a fortune without making any effort are lying. If Forex trading were that easy 95% of traders wouldn't lose.
You need to learn the basics and then follow the key points below and if you do, you can enjoy big Forex profits
1. You only need a Simple System
If you make a system to complicated it will have too many elements to break so keep it very simple just a few rules or parameters are all you need, to get a system which can be successful in the face of brutal market conditions.
2. Don't Over Leverage and Pay attention to Money Management
Your broker will give you a minimum of 200:1 leverage but just because you have access to it doesn't mean you should use it 10:1 is plenty for most traders. Over leveraging of accounts wipes out more accounts than any other single reason. Money management is the key to success, always place a stop and never run a loss, if you don't have strong, disciplined money management in place you will never win long term at Forex trading.
3. Run Profits and Understand Volatility
Most traders can't run profits, they try to restrict risk so much, they actually create it. They always move stops to close and get stopped out to soon and never catch the big trends, don't make this mistake.
4. Be Patient
Most traders think the more they trade the more gains they will make and they over trade. The savvy trader knows that to win at Forex trading, you should only trade high odds set ups. Many traders make triple digit profits, trading just a few times a month and you can too.
5. Forex Trading Success Depends on You!
You need confidence and discipline to win at Forex trading and you need to keep your emotions out of trading, most traders can't do this and that's why they lose. They can't accept their not perfect and their egos get hurt when they lose and they deviate from their trading plan and lose.
Forex trading success is open to all and it's not actually the market that beats the trader it's actually the trader who beats himself. Learn the key points above and they can lead you to Forex trading success
The forex market is filled with scam offers and pie in the sky promises. On the other hand, it is the largest, most liquid market that trades twenty four hours a day. So how to find your way through the maze of offers that are out there, well here are four steps to becoming a successful trader.
Becoming a successful Forex trader basically comes down to four things:
1) Learning about the markets and your appitite for risk
How the markets work, what moves them, etc is a simple matter as these markets are not that complicated. Determining how well you are suited to trading is a difficult process however. Finding out how you react to stress and perform when real money is on the line can be a life long process
2) Finding and learning a system that fits your personality and life style
There are as many different systems as there are traders, many have been proven over time, so really the only question is which one suits me.I know many will dispute this point, however it really is not as complicated as some try to make it. Most of those making it hard are really just trying to sell you something. There are many free systems that once learned and traded can make you wealthy
3) Testing that system until you have an edge.
Testing is the heart of becoming a good trader. Most people don't do this. If you test something until you can prove and edge, no matter how small it may seem, you just need to trade it over and over to make money.
4) Trading that system exactly how you tested it, until you are wealthy.
Many traders are always looking for that magic system that will make money fast. The secret to wealth is to stick to the system you have tested and proved and do it until you acumulate wealth. Not chase the latest trading software or system.
When you are ready to trade this market, keep these four simple steps in mind and then do not let anything stand in your way of becoming the trader you want to be.
Making money in forex market became no longer difficult as it was few years ago. with the all new trading techniques and high speed internet connections and the appearance of the so many brokers who give the opportunities to every one to participate in the forex trading market regardless his capital volume.
Forex trading signals are the by-product for all technical and fundamental analysis methods and strategies, every forex trader need to get the basic analysis knowledge in order to generate winning forex signals. This requires him or here to learn a lot about technical analysis strategies and create his or here own forex trading system in order to be able to pick the available trading opportunities all the time.
For novice traders starting their first steps in the forex market, automated forex signals are a good training to start with. This should be the starting point of all your dealings as every trade relies on the types of signals it transmits to traders. The use of these signals represents the entire movement and behavior of the forex market.
Fortunately, the chance to make profit in the forex market is still available to many straggling traders, there are many signals providers which can be employed through a monthly subscription and provide a high quality entry signals. Also you can create your own signals using a software program. This does need any monthly fees for you to purchase it given a one time payment term.
How you can benefit from forex signals:
Many novice traders who try some of the forex signals providers and end with losses in their first few trades so they believe that this signal providers is unreliable service and start seeking another alternate service. The secret to success with such business is the consistency, in order to make a fair judgment on any service, you should try it for several weeks. In forex market there are no thing predictable 100%, and there always will be a percent of losses. So in order to succeed with such systems you should create your own money management rules to work along with the trading signals and make your calculations at the end of the testing period to check whether you made total profits or total losses.
Regardless how good the generated forex signals are, you should never depend on only one service to decide when and how you trade. You should look at several exit and entry strategies along with developing your own system for trading. Putting all of these together in a harmony can produce a profitable forex trading system which can make you a lot of money on the long term.
