Forex Trading is quickly becoming the hottest niche in the trading world. The regular market has become so tumultuous that the best traders in the industry are walking around scratching their head on a regular basis. If you were ever going to get involved in forex trading, now is the time. However, you are going to have to find the right forex trading software to be successful.
If you have familiar with the regular market, you are quite aware of how quickly the market changes. This is even more so true in forex trading, but the patterns of the changes tend to be much more recognizable as you are dealing in currency.
Now while currency has a reputation of being extremely volatile, it also follows patterns over times that you can spot. The challenge is in being able to spot the trend in time to be able to take advantage of it. While there are still a few horses around that have the gift, few people can pick up trends like software can.
Unless you are able to stand at the computer 24 hours a day, it is unlikely that you are going to be able to be successful trading currency unless you have software that can do your tracking for you. While you are sleeping, the software is busy crunching numbers and evaluating trends for you. When a good trend shows up, you can have the program send you an alert that will allow you to verify the trend and take advantage of the trade.
Of course, even the best program is going to put up a dud every now and again. Sometimes there are false trends that even the computer will misread. The goal of course is to find the right software that will allow you to win on more trades than you lose. If you can do this, the odds are in your favor to make a nice profit over the long run.
Something else to keep in mind as you follow this market is to make sure that you wait for the trend to be verified before you jump on it. You do this so you don't get caught up in one of those false trends. By taking that little extra time, you are protecting yourself and your investment.
The big knock on doing this is that you are not going to be able to take advantage of the lowest support level if you are going long or the best resistance price if you are going short. In the end, you have to look at if the risk is worth the reward. By trading in this manner, you may not make the maximum profit on the deal, but you are much more assured of actually making a profit every time you do a deal.
Friday, October 2, 2009
Thursday, October 1, 2009
Forex Trading Tips
There are many Forex day trading training tips that will help Forex day traders of any level secure more winning trades and more Forex profits. This article will discuss some Forex day trading training tips that the professional Forex traders use to generate more Forex winning trades than losses. Keep reading to get access to a $100,000.00 simulated trading account.
Forex Day Trading Training Tip 1: Don't second guess your indicators. You must believe in them and what they are telling you at all times. Be brave enough to listen to them and analyze the clues that they are giving you.
Forex Day Trading Training Tip 2: Don't listen to anyone else about Forex day trading unless they are proven to be successful Forex day traders. The bottom line is it's your money, not anyone else's. You have no obligation to listen to anyone else.
Forex Day Trading Training Tip 3: Stay positive at all times and focus on your Forex day trading success whenever you trade. Understand right now that you will make mistakes, I guarantee it. Everyone has and everyone will and anyone who tells you they've never made a mistake is lying! The important thing is always to accept you've made a mistake, analyze it and immediately move on from it and learn from it.
Forex Day Trading Training Tip 4: Remember at all times that generally speaking, currencies always trade well. Always look for clues, for VERY convincing evidence that price has made up its mind and follow its lead.
Forex Day Trading Training Tip 5: As the saying goes, practice makes perfect and nowhere is that more obvious than on the Forex trading platform. Practice, practice, practice, and continue your Forex trading education constantly forever. You can never know too much.
Forex Day Trading Training Tip 6: Never ever take trades in between pivot points. That area is dead man's land and MUST be avoided at all costs. There's no need to ever go there. There are enough clues and signals to avoid the area indefinitely.
Forex Day Trading Training Tip 7: Don't be scared away from the Forex market because you think it's too risky. The Forex market is the most financial liquid market in the world - how does $1.5 TRILLION every day in the US sound?
Forex Day Trading Training Tip 8: Always keep a look out for combinations of patterns as well as obvious price patterns.
Forex Day Trading Training Tip 9: You must always follow the price's lead as it always determines which set of pivot points it will work with.
Forex Day Trading Training Tip 1: Don't second guess your indicators. You must believe in them and what they are telling you at all times. Be brave enough to listen to them and analyze the clues that they are giving you.
Forex Day Trading Training Tip 2: Don't listen to anyone else about Forex day trading unless they are proven to be successful Forex day traders. The bottom line is it's your money, not anyone else's. You have no obligation to listen to anyone else.
Forex Day Trading Training Tip 3: Stay positive at all times and focus on your Forex day trading success whenever you trade. Understand right now that you will make mistakes, I guarantee it. Everyone has and everyone will and anyone who tells you they've never made a mistake is lying! The important thing is always to accept you've made a mistake, analyze it and immediately move on from it and learn from it.
Forex Day Trading Training Tip 4: Remember at all times that generally speaking, currencies always trade well. Always look for clues, for VERY convincing evidence that price has made up its mind and follow its lead.
Forex Day Trading Training Tip 5: As the saying goes, practice makes perfect and nowhere is that more obvious than on the Forex trading platform. Practice, practice, practice, and continue your Forex trading education constantly forever. You can never know too much.
Forex Day Trading Training Tip 6: Never ever take trades in between pivot points. That area is dead man's land and MUST be avoided at all costs. There's no need to ever go there. There are enough clues and signals to avoid the area indefinitely.
Forex Day Trading Training Tip 7: Don't be scared away from the Forex market because you think it's too risky. The Forex market is the most financial liquid market in the world - how does $1.5 TRILLION every day in the US sound?
Forex Day Trading Training Tip 8: Always keep a look out for combinations of patterns as well as obvious price patterns.
Forex Day Trading Training Tip 9: You must always follow the price's lead as it always determines which set of pivot points it will work with.
Wednesday, September 30, 2009
Forex Trading Secret
This delusion globally entails identical aftermaths: 90-95% of traders turn steady to loose their deposits having studied books by Bill Williams, Alexander Elder, Thomas Demark, J. Schwager, et al.
Following the burn down of their first deposit trader’s plunge themselves again into scrutinizing Forex scholars, in this manner suffering losses of the second, the third and subsequent deposit. I will hereinafter try to elucidate where from the above regularity grows, so that no trader repeats his forerunners’ mistakes.
This statistics is common knowledge: 90% of traders constitute Forex losers… But the figure has always been giving rise to a leviathan of my doubts. It isn’t because of somewhat different 95%-5% loser-to-winner ratio quoted in the Van Tarp and Brian June “Intraday trading: secrets of mastership”. With 90% quoted universally, there naturally emerges the question, as to whether there is someone capable to check, to specify or to disprove the above figure.
NO ONE IS, besides the directors of largest Western banks providing streamline Forex quotes, but having never raised the issue.
WHY? Because should this statistics be published, there will be sharp and ultimate decline in number of those chasing easy profits from the world Forex market. Otherwise banks would not keep mum in advertising purposes. Neither would they be silent if losers constituted at least by few points less than 90%. In any advertising, customer attraction is ensured by quoting beneficial maxima and non-lucrative minima. This has always been, is being and will always be a universal practice.
As a conclusion, 10% Forex winners is a maximum result among traders. It’s them, who have understood Forex market absolutely simple truisms and who attained steady daily earnings in amounts being gained by others within years or even the whole of life.
Certainly, those are to be recollected, who in late 80s were the first in the ex-USSR to grasp laws of commerce and who began accumulating their initial stock. The rules used to be so simple that presently any schoolboy or a first-year student can show the way the capital might have been easily scraped up and augmented on the USSR debris and in the course of market relations being established in the post-Soviet space.
I do exactly allow for the fact that through the years a new generation will be laughing at the way we are now incapable to comprehend the laws, where under currency rates either spike up or fall down, all of a sudden.
With this provision, those seeking fast money at Forex have a much greater time limit than the ones engaged in capital building in the post-Soviet space (Forex market is incommensurably greater than that in the ex-USSR), but not to the extent thought by many.
By now trends are thoroughly less numerous than they used to be 10-20 years ago. By way of taking a glance the charts history You are in the position to understand the way traders used to earn under 20- 40 pts spread, commission and slippage. A trend was followed by a trend at that epoch.
AND WHAT’S NOW? Nowadays many of traders are impotent to gain under 3 pts spread without commission and slippage.
Thus, this book is intended for those willing to perceive Forex market laws.
In order to get understanding of the way 5-10% of successful traders obtain profits, let’s at the outset analyze the reasons and the way the outstanding 90% of traders suffer losses. The 90%-figure looks scaring, to say nothing of 95% or 98%. It occurs despite the amount of literature on the issue equals to hundreds of fundamental books, written by authors, having gained capitals expressed by means of more than 7-digit figures (G. Soros, B. Williams, A. Elder, T. Demark).
Thus, the above minimum of 90% of smart, well-read, broad-knowledged people:
- scrutinize the really great traders’ heritage;
- open accounts with Forex Broker's and banks, start trading and…
- loose funds up to complete rout!
AND WHERE’S THE LOGIC? The answer springs to mind by itself... There’s something wrong in the literature (by the way, recognized throughout the world, where the deposit-killing statistics is as disappointing as it is in our country) so long as its studying yields such oppressive results.
STRANGE? No, rather natural, than strange on account of the following:
1. Being a great trader is not indicative of everyone being a great teacher.
2. Multitude of rules elaborated by scholars 10-40 years ago, has grown obsolete, since the Forex market is changing.
3. The scholars HAVE NOT revealed ALL the secrets even WITHIN THE FRAMEWORK OF THE THEN
FOREX, therefore by now their advice and recommendation turn out either obsolete or naïve.
Thus, once one’s advice and recommendations bring every 9 of 10 market participants to loose their money in each country, where one’s books have used to be published and have enjoyed all sorts of hosanna in the press, THEN ONE IS NONE OF A TEACHER.
Naturally, no trader will reveal his professional secrets to the full. But when studying Forex literature one gets astonished by a negligible extent the above secrets are “confided” at all, with a book on Forex containing 99% of common truth and 1% only of useful novelties. But should one train up even several thousands perspective traders, one will in no way burden oneself with competitors, due to the Forex market huge sale nature. Beyond a shadow of a doubt the above traders are really great. You may agree or not, but anyone, having earned USD1 bn or more, deserves being named “great”. So, one’s books should be published as memoirs. I am not attaching any irony hereto, since these persons have acquired gains by virtue of their minds and labor, as opposite to Rockfellers, who inherited their fortunes or to Russian oligarchs, who either stole or got their capitals dirt-cheap from state authorities.
Hopefully, understandable is the difference between such editions and manuals for beginners.
G. Kasparov, say, is far from writing manuals for chess beginners, since the job can be better completed by others with this fact not at all undermining Kasparov’s being a great chess player. And his advice and recommendation is sure to be of interest rather to a close circle of grand masters, than to those having touched the chess for the first time.
Actually Kasparov is but to be respected for not being tempted by the lust for fast money, by virtue of his name in the chess world and by way of cooking up manuals for beginners.
At Forex, by contrast, and for some reason, everyone deems oneself a teacher, which fact results in millions educated people worldwide leaving stock market being disappointed, angry with an inferiority complex life-time pursuit.
And hence, the unanswered question for them: is that all a fraud or not, since gains are midget, whereas losses are titanic?
I am recalling the book titled “The Alchemy of Finance” by G. Soros (the one I’ve read in early 90-s). I admit, it’s interesting, instructive…, but it is all narrated in so an inarticulate and tangled manner. As indicated in the foreword by an American investor, the theory has hardly been understood by few only.
So what’s the use of writing in such a manner? A theory may generally be complicated to any extent, BUT IT MUST BE wrapped in a simple, clear and understandable wording.
You are welcome to attempt to read the above book once You have time to. Shortly, the Soros reflexivity theory of the countries’ cyclic development may easily bear a couple-sentence confinement:
1. Following liberation from totalitarian yoke, a country is granted credits, then, there is a rapid growth and flourish of economy.
2. As soon as the above credits are to be paid back, a country’s economy faces a natural recession.
Is it as difficult? The question may be addressed to a schoolboy (to say nothing of an American investor): when should those countries’ companies’ shares be purchased and when they are to be advantageously sold in order to acquire maximum profit? What’s going to happen in case one is too late to sell the shares, shortly exhibiting an impetuous growth in price?
Propounded long before, the Soros theory has been entirely corroborated in August, 98 by the dismal practice established in Asian and Pacific countries and later in Russia.
There still is another question: how inarticulate should Soros have been to enable his theory to be grasped by few only?
The second part of the book is not worth retelling. Reading its original is sure to be much more instructive with my annotation leaving no conundrums therein.
The theory is permeated by Soros’s strategy: enter long on what’s shortly going to enjoy price growth with a 100% probability and “pull out” Your money along with profits before the companies enter crisis, thus facilitating bankruptcies thereof.
This is the way I clearly lecture my students on Forex-related complexities, thus conveying my logics to them. Despite its own complexities (news, TA, corrective actions, etc.), Forex is essentially reduced to a very simple truth: at a certain moment one should not be late with going long or short on a currency with “tertium non datum”.
And when asked if the Williams Alligator needs something to be added thereto, the majority of my students reply ”Yes!”, indicating what exactly is to be added.
I’ll present a detailed vivisection of the issue in a separate chapter by way of proving that the Williams Alligator is but 50% effective.
Fig. 4. H1 EUR chart as of April 12, 2005. (See Note below)
The Alligator’s jaws display upward opening with a fractal formed at 1.3006. According to Williams, one should enter long one point higher, i.e. at 1.3007. Upward motion continues extra 11 points. Then the rate sharply swivels to fall down by 170 pts.
Another example.
Fig. 5. H1 EUR chart as of April 22, 2005. (See Note below)
Please, figure out 1.3094, 16 pts above the previous fractal, following the Alligator upward opening. Thereafter, a sharp down swivel covering 140 pts.
Hundreds of similar examples may be drawn. But what are the implications?
With the Alligator’s mouth opened, 50% of entries should be pro-Williams while the outstanding 50% - counter-Williams (i.e. vectored opposite to the Alligator mouth opening). When embarking on Forex, You must possess clear knowledge of the difference between either of the above 50%-portions. Otherwise…, You are doomed to loose even if You follow Williams’s technique, let alone other ones.
Even my students are in the position to advise what is to be added to Alligator in order to realize proper entry vectoring. Least of all would I want this example to be taken as a personal criticism of Bill Williams, whose contribution to the Forex theory is a significant one. And the majority of traders, like me, used to begin earning after studying HIS books. But not to go astray…, even without any addenda Williams managed to make a tremendous fortune, since a skilled trader (moreover being the Alligator’s father) is capable to differentiate between a steady travel and a pullback, or, say, a flat, or, visa versa, a trend low for the entry to be vectored oppositely. It is all fairly understandable for an experienced trader. But what about beginners as regards their interpretation of a flat, a recovery or a trend change?
These folks are sure to require assistance, especially, in information not presented in literature on Forex.
Without this knowledge a trader will never perceive the ABCs of stable daily earnings. But why the Forex scholars do not clear out the issue? This query is to be addressed to them, not to me. While reading these opuses, I am getting horrified at the fact that we are being foisted expensive high-sounding titled books, which are not going to ever teach a trader how to attain profits at the market.
Let’s open one of them (E. Nayman’s “Trader’s Minor Encyclopedia” and “Master-trading: Secret Files”) to get the understanding of the way almost all the books on Forex are written and supposed to have the price of USD20-100.
You may agree or not, but the name looks very beautiful and pretentious: “Master-trading: Secret Files”, 320 pages of sheer secrets…
HOWEVER, I HAVEN’T FOUND ANY SECRETS THERE! You are welcome to discuss an argue Yourself:
1. “The interrelation between fundamental factors and exchange rate dynamics” being a detailed story of how a country’s macroeconomic growing, benign rumors trading and political stability promote the exchange rate growth.
A “valuable” secret to be practically encountered in any Forex edition. But below is a real FA secret (not paid any attention to by Nayman): why does currency use to reverse against its country’s economic news? A whole chapter here will be dedicated to the issue.
2. “Construction of two moving averages on a single chart and twin combinations thereof”. The author furnishes a “wise” recommendation: entries should be made in the direction the MAs diverge (adding secretly that the most effective MA combination is 21, 55, 89, etc., as per Fibonacci).
The pseudo-secret nature of the above recommendation underlies the fact that any MA combination (should it be 21+55, as the author’s; 10+20 as in many Western trading systems; 5+8+13 as per B. Williams or 1+21 as used by numerous traders) yields the same results.
Ok. It all looks great. However, E. Nayman et al., seem to have circumvented the MA intersection chief secret, through which traders suffer constant losses: a “lighter” MA has crossed a “heavier” one, say, upwards, but… thereafter there is sharp downturn resulting in the MAs intersection again.
Fig. 6. GBPUSD H1 chart as of April, 21-26, 2005. (See Note below)
A fivefold reciprocating crossing of MA 21 and 55. You are welcome to calculate traders’ losses.
Now, let’s call it a day with examples. The MA intersection technique operates perfectly in certain circumstances, while turning out impotent in others, thus inflicting losses upon traders. No criteria have ever been stipulated by Forex scholars as to entries to be effected pro- or counter-divergence of moving averages.
3. MACD construction and analysis. What sort of secret may one expect from the following statement of Nayman’s: “a subsequent high being lower than the preceding one suggests a bullish trend depletion or even its changing with the same being visa versa under minimum MACD values”. Much of a secret, isn’t it? I thought it were the MACD operation principle, familiar to any Forex novice. The secret-fancier B. Williams hasn’t even taken effort to advise to perform inputs change from 9, 12, 26 into 5, 34, 5 to provide for a lag killer.
Assuming the above, authentic MACD secrets are not paid any attention to by scholar, which fact inflicts losses upon traders. The situation comes into effect, when upon a divergence formation, no trend change is observed with another same-trend wave taking place instead.
Fig. 7. GBPUSD H1 chart as of April, 2005, where MA21 crosses MA55 with slight rise and sharp downturn. (See Note below)
Another example:
Fig. 8. GBPUSD H1 chart as of May, 2005: a divergence with MA10 upward crossing MA21; a brief nudge up to 1.8916 and a sharp downturn. (See Note below)
As different from Nayman and other Forex scholars, we’ll touch in detail upon the ways to detect when MACD is trustworthy as a trend reversal attribute and when it is not.
4. TA classical patterns. One can not help smiling at the author sharing a secret of “head’n’shoulders” and “double bottom” patterns, being studied by beginners at the earliest lectures on Forex.
And here goes a real key secret: in what cases the patterns are indeed indicative of a reversal but in what cases brokers trap TA pattern-fanciers? Is there someone doubting the fact that patterns are known not only to traders, but as well to brokers with their mouths watering to make a rod for the backs of lovers and connoisseurs of the above patterns, just like on the sample chart below:
Fig. 9. GBPUSD H1 chart as of May, 09-11, 2005, a classical “inverted H&S” (See Note below)
At 1.8871 there’s an impetuous upward breakthrough, the Alligator rotating upwards, MACD above zero, MA8 having intersected MA21 upwards, the Williams vaunted Awesome Oscillator signaling long entry, the Accelerator Oscillator pointing up… nevertheless, the rate reaches as far as 1.8916 and slips down to 1.8481 by 450 pts.
To be noted: much worth scrutinizing is the phenomenon of Nayman’s “Trader’s Minor Encyclopedia” and “Master-trading: secret files” purported at understanding why over 90% of traders turn losers after reading the books.
The solution, to my mind, is that the above opuses are but good “ABCs OF FOREX” thus giving birth to all Nayman’s merits and demerits.
The guy is primarily awardable for having spared beginners’ paying USD50-200 to various Forex training courses or academies. Instead, one can download and study Nayman’s books, whose extracts are, by the way, quoted to trainees during their studies.
Nayman is generally to be expressed gratitude to, because of his having laid out the Forex basic course in a competent, popular and accessible way.
This is the point, I elucidate to every beginner, being introduced to me: first one should scrutinize Nayman’s books, then only it’s worth discussing hooks and crooks of earning at Forex instead of loosing.
Nevertheless, there is a chief Nayman’s self-delusion about his folios really being in no way secret files with no one being able to find anything new to enable oneself to improve one’s Forex earnings. These books containing neither unique techniques nor non-standard solutions are famous for the generalization and systematization of what has been the Forex knowledge prior to Nayman.
But this fact is not realized by majority gripped by the “Master-trading: Secret Files” fascination, who open live accounts and turn losers inevitably.
Shortly upon their pre-mature success on demo accounts these folks hastened to open live accounts and faced losses. But since the Dealers’ staff managed to convince them in the incidental nature of the above losses, the folks ventured to go live again and did again turn to be deposit killers.
With these facts being proclaimed, I don’t hold it appropriate to call any statistics science for help. Any sensible man is to get the understanding of the above losses as not being of an incidental nature.
There could be NO OTHER WAY about it.
The next trader training level comprises books by B. Williams: “Trading Chaos” and “New aspects of exchange trading”, where the author propounds his own Forex trading methods along with advertising the other ones’, viz. Elliott’s.
My book, “Secrets Of Craftsmanship Narrated By Professional Trader Or What B. Williams and E. Nayman Have Concealed From Traders” is purported at developing of THAT particular school of training traders to practical operation at Forex.
Hardly will anyone object to the fact that B. Williams will disclose his Forex intimacies free of charge. Neither will he furnish their 100% disclosure after being paid to.
In all his splendor, Williams possessed sufficient knowledge to;
- to share A PORTION of his secrets in his “Trading Chaos”;
- to share A PORTION of his secrets as a paid training;
- not to share A PORTION of his secrets in the least.
My book, “Secrets Of Craftsmanship Narrated By Professional Trader Or What B. Williams and E. Nayman Have Concealed From Traders” is also dedicated to teaching how the Williams secret methods are to be decoded properly to ensure successful Forex trading capabilities.
Each of my book’s 20 chapters is permeated with a common logic aimed at finding relevant discrepancies in literature on Forex and at presenting my personal technique of Forex trading.
B. Williams declares being capable of analyzing tens of currency pairs (of 140-bar history each) that within tens of minutes, but in no way does he explain how to, whereas, I explain, that it’s feasible for any wide-screen trader, provided my computer monitor being 3-currency capable only (see: “Ally and adversary currencies”).
B. Williams sings about his magic Alligator, while I disclose and eliminate its pitfalls by, say, adding a MA233 thereto. This arrangement visualizes the whole of the 4 potential currency travel options: up/down above MA233; up/down under MA233.
B. Williams lists a stop-loss to be a “safety cushion”, whereas I disclose and eliminate its shortcomings by way of alternatively using my own pending orders.
B. Williams hold trades volume to be authentic resistance breakthrough criterion, while I quote reasons by which trades volume turns to be deceptive on Metatrader platforms (thanks to the banks Consortium) and I introduce my own levels true/false breach criteria.
Now, regarding trading on news, I demonstrate the way one can turn a loser if trade like all the others and I offer my own on-news trading style.
Following the burn down of their first deposit trader’s plunge themselves again into scrutinizing Forex scholars, in this manner suffering losses of the second, the third and subsequent deposit. I will hereinafter try to elucidate where from the above regularity grows, so that no trader repeats his forerunners’ mistakes.
This statistics is common knowledge: 90% of traders constitute Forex losers… But the figure has always been giving rise to a leviathan of my doubts. It isn’t because of somewhat different 95%-5% loser-to-winner ratio quoted in the Van Tarp and Brian June “Intraday trading: secrets of mastership”. With 90% quoted universally, there naturally emerges the question, as to whether there is someone capable to check, to specify or to disprove the above figure.
NO ONE IS, besides the directors of largest Western banks providing streamline Forex quotes, but having never raised the issue.
WHY? Because should this statistics be published, there will be sharp and ultimate decline in number of those chasing easy profits from the world Forex market. Otherwise banks would not keep mum in advertising purposes. Neither would they be silent if losers constituted at least by few points less than 90%. In any advertising, customer attraction is ensured by quoting beneficial maxima and non-lucrative minima. This has always been, is being and will always be a universal practice.
As a conclusion, 10% Forex winners is a maximum result among traders. It’s them, who have understood Forex market absolutely simple truisms and who attained steady daily earnings in amounts being gained by others within years or even the whole of life.
Certainly, those are to be recollected, who in late 80s were the first in the ex-USSR to grasp laws of commerce and who began accumulating their initial stock. The rules used to be so simple that presently any schoolboy or a first-year student can show the way the capital might have been easily scraped up and augmented on the USSR debris and in the course of market relations being established in the post-Soviet space.
I do exactly allow for the fact that through the years a new generation will be laughing at the way we are now incapable to comprehend the laws, where under currency rates either spike up or fall down, all of a sudden.
With this provision, those seeking fast money at Forex have a much greater time limit than the ones engaged in capital building in the post-Soviet space (Forex market is incommensurably greater than that in the ex-USSR), but not to the extent thought by many.
By now trends are thoroughly less numerous than they used to be 10-20 years ago. By way of taking a glance the charts history You are in the position to understand the way traders used to earn under 20- 40 pts spread, commission and slippage. A trend was followed by a trend at that epoch.
AND WHAT’S NOW? Nowadays many of traders are impotent to gain under 3 pts spread without commission and slippage.
Thus, this book is intended for those willing to perceive Forex market laws.
In order to get understanding of the way 5-10% of successful traders obtain profits, let’s at the outset analyze the reasons and the way the outstanding 90% of traders suffer losses. The 90%-figure looks scaring, to say nothing of 95% or 98%. It occurs despite the amount of literature on the issue equals to hundreds of fundamental books, written by authors, having gained capitals expressed by means of more than 7-digit figures (G. Soros, B. Williams, A. Elder, T. Demark).
Thus, the above minimum of 90% of smart, well-read, broad-knowledged people:
- scrutinize the really great traders’ heritage;
- open accounts with Forex Broker's and banks, start trading and…
- loose funds up to complete rout!
AND WHERE’S THE LOGIC? The answer springs to mind by itself... There’s something wrong in the literature (by the way, recognized throughout the world, where the deposit-killing statistics is as disappointing as it is in our country) so long as its studying yields such oppressive results.
STRANGE? No, rather natural, than strange on account of the following:
1. Being a great trader is not indicative of everyone being a great teacher.
2. Multitude of rules elaborated by scholars 10-40 years ago, has grown obsolete, since the Forex market is changing.
3. The scholars HAVE NOT revealed ALL the secrets even WITHIN THE FRAMEWORK OF THE THEN
FOREX, therefore by now their advice and recommendation turn out either obsolete or naïve.
Thus, once one’s advice and recommendations bring every 9 of 10 market participants to loose their money in each country, where one’s books have used to be published and have enjoyed all sorts of hosanna in the press, THEN ONE IS NONE OF A TEACHER.
Naturally, no trader will reveal his professional secrets to the full. But when studying Forex literature one gets astonished by a negligible extent the above secrets are “confided” at all, with a book on Forex containing 99% of common truth and 1% only of useful novelties. But should one train up even several thousands perspective traders, one will in no way burden oneself with competitors, due to the Forex market huge sale nature. Beyond a shadow of a doubt the above traders are really great. You may agree or not, but anyone, having earned USD1 bn or more, deserves being named “great”. So, one’s books should be published as memoirs. I am not attaching any irony hereto, since these persons have acquired gains by virtue of their minds and labor, as opposite to Rockfellers, who inherited their fortunes or to Russian oligarchs, who either stole or got their capitals dirt-cheap from state authorities.
Hopefully, understandable is the difference between such editions and manuals for beginners.
G. Kasparov, say, is far from writing manuals for chess beginners, since the job can be better completed by others with this fact not at all undermining Kasparov’s being a great chess player. And his advice and recommendation is sure to be of interest rather to a close circle of grand masters, than to those having touched the chess for the first time.
Actually Kasparov is but to be respected for not being tempted by the lust for fast money, by virtue of his name in the chess world and by way of cooking up manuals for beginners.
At Forex, by contrast, and for some reason, everyone deems oneself a teacher, which fact results in millions educated people worldwide leaving stock market being disappointed, angry with an inferiority complex life-time pursuit.
And hence, the unanswered question for them: is that all a fraud or not, since gains are midget, whereas losses are titanic?
I am recalling the book titled “The Alchemy of Finance” by G. Soros (the one I’ve read in early 90-s). I admit, it’s interesting, instructive…, but it is all narrated in so an inarticulate and tangled manner. As indicated in the foreword by an American investor, the theory has hardly been understood by few only.
So what’s the use of writing in such a manner? A theory may generally be complicated to any extent, BUT IT MUST BE wrapped in a simple, clear and understandable wording.
You are welcome to attempt to read the above book once You have time to. Shortly, the Soros reflexivity theory of the countries’ cyclic development may easily bear a couple-sentence confinement:
1. Following liberation from totalitarian yoke, a country is granted credits, then, there is a rapid growth and flourish of economy.
2. As soon as the above credits are to be paid back, a country’s economy faces a natural recession.
Is it as difficult? The question may be addressed to a schoolboy (to say nothing of an American investor): when should those countries’ companies’ shares be purchased and when they are to be advantageously sold in order to acquire maximum profit? What’s going to happen in case one is too late to sell the shares, shortly exhibiting an impetuous growth in price?
Propounded long before, the Soros theory has been entirely corroborated in August, 98 by the dismal practice established in Asian and Pacific countries and later in Russia.
There still is another question: how inarticulate should Soros have been to enable his theory to be grasped by few only?
The second part of the book is not worth retelling. Reading its original is sure to be much more instructive with my annotation leaving no conundrums therein.
The theory is permeated by Soros’s strategy: enter long on what’s shortly going to enjoy price growth with a 100% probability and “pull out” Your money along with profits before the companies enter crisis, thus facilitating bankruptcies thereof.
This is the way I clearly lecture my students on Forex-related complexities, thus conveying my logics to them. Despite its own complexities (news, TA, corrective actions, etc.), Forex is essentially reduced to a very simple truth: at a certain moment one should not be late with going long or short on a currency with “tertium non datum”.
And when asked if the Williams Alligator needs something to be added thereto, the majority of my students reply ”Yes!”, indicating what exactly is to be added.
I’ll present a detailed vivisection of the issue in a separate chapter by way of proving that the Williams Alligator is but 50% effective.
Fig. 4. H1 EUR chart as of April 12, 2005. (See Note below)
The Alligator’s jaws display upward opening with a fractal formed at 1.3006. According to Williams, one should enter long one point higher, i.e. at 1.3007. Upward motion continues extra 11 points. Then the rate sharply swivels to fall down by 170 pts.
Another example.
Fig. 5. H1 EUR chart as of April 22, 2005. (See Note below)
Please, figure out 1.3094, 16 pts above the previous fractal, following the Alligator upward opening. Thereafter, a sharp down swivel covering 140 pts.
Hundreds of similar examples may be drawn. But what are the implications?
With the Alligator’s mouth opened, 50% of entries should be pro-Williams while the outstanding 50% - counter-Williams (i.e. vectored opposite to the Alligator mouth opening). When embarking on Forex, You must possess clear knowledge of the difference between either of the above 50%-portions. Otherwise…, You are doomed to loose even if You follow Williams’s technique, let alone other ones.
Even my students are in the position to advise what is to be added to Alligator in order to realize proper entry vectoring. Least of all would I want this example to be taken as a personal criticism of Bill Williams, whose contribution to the Forex theory is a significant one. And the majority of traders, like me, used to begin earning after studying HIS books. But not to go astray…, even without any addenda Williams managed to make a tremendous fortune, since a skilled trader (moreover being the Alligator’s father) is capable to differentiate between a steady travel and a pullback, or, say, a flat, or, visa versa, a trend low for the entry to be vectored oppositely. It is all fairly understandable for an experienced trader. But what about beginners as regards their interpretation of a flat, a recovery or a trend change?
These folks are sure to require assistance, especially, in information not presented in literature on Forex.
Without this knowledge a trader will never perceive the ABCs of stable daily earnings. But why the Forex scholars do not clear out the issue? This query is to be addressed to them, not to me. While reading these opuses, I am getting horrified at the fact that we are being foisted expensive high-sounding titled books, which are not going to ever teach a trader how to attain profits at the market.
Let’s open one of them (E. Nayman’s “Trader’s Minor Encyclopedia” and “Master-trading: Secret Files”) to get the understanding of the way almost all the books on Forex are written and supposed to have the price of USD20-100.
You may agree or not, but the name looks very beautiful and pretentious: “Master-trading: Secret Files”, 320 pages of sheer secrets…
HOWEVER, I HAVEN’T FOUND ANY SECRETS THERE! You are welcome to discuss an argue Yourself:
1. “The interrelation between fundamental factors and exchange rate dynamics” being a detailed story of how a country’s macroeconomic growing, benign rumors trading and political stability promote the exchange rate growth.
A “valuable” secret to be practically encountered in any Forex edition. But below is a real FA secret (not paid any attention to by Nayman): why does currency use to reverse against its country’s economic news? A whole chapter here will be dedicated to the issue.
2. “Construction of two moving averages on a single chart and twin combinations thereof”. The author furnishes a “wise” recommendation: entries should be made in the direction the MAs diverge (adding secretly that the most effective MA combination is 21, 55, 89, etc., as per Fibonacci).
The pseudo-secret nature of the above recommendation underlies the fact that any MA combination (should it be 21+55, as the author’s; 10+20 as in many Western trading systems; 5+8+13 as per B. Williams or 1+21 as used by numerous traders) yields the same results.
Ok. It all looks great. However, E. Nayman et al., seem to have circumvented the MA intersection chief secret, through which traders suffer constant losses: a “lighter” MA has crossed a “heavier” one, say, upwards, but… thereafter there is sharp downturn resulting in the MAs intersection again.
Fig. 6. GBPUSD H1 chart as of April, 21-26, 2005. (See Note below)
A fivefold reciprocating crossing of MA 21 and 55. You are welcome to calculate traders’ losses.
Now, let’s call it a day with examples. The MA intersection technique operates perfectly in certain circumstances, while turning out impotent in others, thus inflicting losses upon traders. No criteria have ever been stipulated by Forex scholars as to entries to be effected pro- or counter-divergence of moving averages.
3. MACD construction and analysis. What sort of secret may one expect from the following statement of Nayman’s: “a subsequent high being lower than the preceding one suggests a bullish trend depletion or even its changing with the same being visa versa under minimum MACD values”. Much of a secret, isn’t it? I thought it were the MACD operation principle, familiar to any Forex novice. The secret-fancier B. Williams hasn’t even taken effort to advise to perform inputs change from 9, 12, 26 into 5, 34, 5 to provide for a lag killer.
Assuming the above, authentic MACD secrets are not paid any attention to by scholar, which fact inflicts losses upon traders. The situation comes into effect, when upon a divergence formation, no trend change is observed with another same-trend wave taking place instead.
Fig. 7. GBPUSD H1 chart as of April, 2005, where MA21 crosses MA55 with slight rise and sharp downturn. (See Note below)
Another example:
Fig. 8. GBPUSD H1 chart as of May, 2005: a divergence with MA10 upward crossing MA21; a brief nudge up to 1.8916 and a sharp downturn. (See Note below)
As different from Nayman and other Forex scholars, we’ll touch in detail upon the ways to detect when MACD is trustworthy as a trend reversal attribute and when it is not.
4. TA classical patterns. One can not help smiling at the author sharing a secret of “head’n’shoulders” and “double bottom” patterns, being studied by beginners at the earliest lectures on Forex.
And here goes a real key secret: in what cases the patterns are indeed indicative of a reversal but in what cases brokers trap TA pattern-fanciers? Is there someone doubting the fact that patterns are known not only to traders, but as well to brokers with their mouths watering to make a rod for the backs of lovers and connoisseurs of the above patterns, just like on the sample chart below:
Fig. 9. GBPUSD H1 chart as of May, 09-11, 2005, a classical “inverted H&S” (See Note below)
At 1.8871 there’s an impetuous upward breakthrough, the Alligator rotating upwards, MACD above zero, MA8 having intersected MA21 upwards, the Williams vaunted Awesome Oscillator signaling long entry, the Accelerator Oscillator pointing up… nevertheless, the rate reaches as far as 1.8916 and slips down to 1.8481 by 450 pts.
To be noted: much worth scrutinizing is the phenomenon of Nayman’s “Trader’s Minor Encyclopedia” and “Master-trading: secret files” purported at understanding why over 90% of traders turn losers after reading the books.
The solution, to my mind, is that the above opuses are but good “ABCs OF FOREX” thus giving birth to all Nayman’s merits and demerits.
The guy is primarily awardable for having spared beginners’ paying USD50-200 to various Forex training courses or academies. Instead, one can download and study Nayman’s books, whose extracts are, by the way, quoted to trainees during their studies.
Nayman is generally to be expressed gratitude to, because of his having laid out the Forex basic course in a competent, popular and accessible way.
This is the point, I elucidate to every beginner, being introduced to me: first one should scrutinize Nayman’s books, then only it’s worth discussing hooks and crooks of earning at Forex instead of loosing.
Nevertheless, there is a chief Nayman’s self-delusion about his folios really being in no way secret files with no one being able to find anything new to enable oneself to improve one’s Forex earnings. These books containing neither unique techniques nor non-standard solutions are famous for the generalization and systematization of what has been the Forex knowledge prior to Nayman.
But this fact is not realized by majority gripped by the “Master-trading: Secret Files” fascination, who open live accounts and turn losers inevitably.
Shortly upon their pre-mature success on demo accounts these folks hastened to open live accounts and faced losses. But since the Dealers’ staff managed to convince them in the incidental nature of the above losses, the folks ventured to go live again and did again turn to be deposit killers.
With these facts being proclaimed, I don’t hold it appropriate to call any statistics science for help. Any sensible man is to get the understanding of the above losses as not being of an incidental nature.
There could be NO OTHER WAY about it.
The next trader training level comprises books by B. Williams: “Trading Chaos” and “New aspects of exchange trading”, where the author propounds his own Forex trading methods along with advertising the other ones’, viz. Elliott’s.
My book, “Secrets Of Craftsmanship Narrated By Professional Trader Or What B. Williams and E. Nayman Have Concealed From Traders” is purported at developing of THAT particular school of training traders to practical operation at Forex.
Hardly will anyone object to the fact that B. Williams will disclose his Forex intimacies free of charge. Neither will he furnish their 100% disclosure after being paid to.
In all his splendor, Williams possessed sufficient knowledge to;
- to share A PORTION of his secrets in his “Trading Chaos”;
- to share A PORTION of his secrets as a paid training;
- not to share A PORTION of his secrets in the least.
My book, “Secrets Of Craftsmanship Narrated By Professional Trader Or What B. Williams and E. Nayman Have Concealed From Traders” is also dedicated to teaching how the Williams secret methods are to be decoded properly to ensure successful Forex trading capabilities.
Each of my book’s 20 chapters is permeated with a common logic aimed at finding relevant discrepancies in literature on Forex and at presenting my personal technique of Forex trading.
B. Williams declares being capable of analyzing tens of currency pairs (of 140-bar history each) that within tens of minutes, but in no way does he explain how to, whereas, I explain, that it’s feasible for any wide-screen trader, provided my computer monitor being 3-currency capable only (see: “Ally and adversary currencies”).
B. Williams sings about his magic Alligator, while I disclose and eliminate its pitfalls by, say, adding a MA233 thereto. This arrangement visualizes the whole of the 4 potential currency travel options: up/down above MA233; up/down under MA233.
B. Williams lists a stop-loss to be a “safety cushion”, whereas I disclose and eliminate its shortcomings by way of alternatively using my own pending orders.
B. Williams hold trades volume to be authentic resistance breakthrough criterion, while I quote reasons by which trades volume turns to be deceptive on Metatrader platforms (thanks to the banks Consortium) and I introduce my own levels true/false breach criteria.
Now, regarding trading on news, I demonstrate the way one can turn a loser if trade like all the others and I offer my own on-news trading style.
Tuesday, September 29, 2009
How to Start Forex Trading
Can you really make a profit with Forex Trading? The short answer... yes you can, and it's one of the surest ways to earn impressive money. Of course, you'll need to know how, when, and what to trade, but if you take the time to learn what you're doing, you can realistically expect some very large profits. It's absolutely true that many who trade in the currency market build huge successes, but don't expect it to happen overnight
As a trader, you're looking forward to seizing the opportunity to earn big money and - of course - start a trading career in Forex. The Forex market is the largest and the most liquid financial market in the world. Whereas the stock market and other financial markets have centralized locations, the Forex market does not, being diffused throughout the world. On the plus side, it operates 24 hours a day at many different locations. Trading in the currency market is done through the worldwide communication network - the Internet.
The Forex (Foreign Exchange market) didn't come into existence until the US went off the gold standard and the many currencies of the world began drifting up and down in relation to the value of other currencies.
And until faster and more efficient communication networks were developed, the Forex was limited to the largest multinationals and financial institutions because of the high financial requirements. However, with more advanced communications technology came the high speed Internet, and in the nineties smaller, more agile investors began dipping their toes into the Forex market. Now virtually anyone who is interested in trading can enter this market.
Forex trading is simply the act of buying and selling different world currencies. This may seem simple on the surface, but it's important to bear in mind that, simple or not, many inexperienced traders - and some experienced ones - have suffered very large financial losses because they dropped their guard and stopped respecting the power of the Forex.
So, whether you are a beginner or not, this matter of respect is one way you can put yourself on equal footing with even the most seasoned veteran trader. Always remember that the Forex market can give you great gains, but it can also wipe those gains out in a flash if you begin taking it for granted. Therefore, even before you enter this market, you must be aware at all times of a few crucial things you'll need for making a success of this investment venture.
We're talking about the most liquid market in the world, but before starting, you must first actually know how to trade currencies. To begin trading, all you need is access to a computer (preferably your own, for security reasons) that has an active Internet connection, a Forex account with funds in it, and a Forex trading system or strategy to guide your buying and selling. Many websites offer Forex trading.
When you're ready to start trading, you'll need to start an account with the broker (trading service) of your choice, and fund it (pay an initial amount of money into it). Then you're ready to begin trading.
One important point - you will definitely need a fast Internet connection if you hope to keep up with the constant updates and rapid price movements, and to prevent slippages (a lag between your buy or sell order and its execution).
Another crucial point - look for a Forex broker's website that offers dummy accounts so that you can practice and build up your skills with before you ever risk real money.
Now that you know how to trade in the Forex market, the next thing you need to know is what to trade. The Forex market involves buying and selling various currencies from all around the world. These currencies are traded in pairs, such as the ones in this list.
EUR/USD
USD/JPY
GBP/USD
USD/CHF
AUD/USD
USD/CAD
NZD/USD
EUR/GBP
EUR/JPY
GBP/JPY
CHF/JPY
GBP/CHF
EUR/AUD
These currency pairs are the ones most commonly traded in the Forex market. To guide your investment decisions, you'll be watching market trends as well as world news, and with experience you'll learn to predict how events may affect these world currency pairs. As you build up your skill levels, you can begin earning a very substantial income.
As mentioned, the Forex market is highly liquid, meaning you can get in or out at any time, 24 hours a day. The most important question will always be whether profits will result from each of your decisions.
Although most Forex traders are speculators who attempt to predict which currencies will go up and which will go down, that does not mean they are all gamblers. This is where a system (or strategy) becomes vitally important. Traders who go only by "gut instinct" are seldom consistent winners, leaving the real profits to those who are guided by careful and methodical decision making rather than by the excitement or "juice."
Now that you know the basic outline of trading in the Forex market, you can begin checking out trading websites for a service that fits your situation and goals.
As a trader, you're looking forward to seizing the opportunity to earn big money and - of course - start a trading career in Forex. The Forex market is the largest and the most liquid financial market in the world. Whereas the stock market and other financial markets have centralized locations, the Forex market does not, being diffused throughout the world. On the plus side, it operates 24 hours a day at many different locations. Trading in the currency market is done through the worldwide communication network - the Internet.
The Forex (Foreign Exchange market) didn't come into existence until the US went off the gold standard and the many currencies of the world began drifting up and down in relation to the value of other currencies.
And until faster and more efficient communication networks were developed, the Forex was limited to the largest multinationals and financial institutions because of the high financial requirements. However, with more advanced communications technology came the high speed Internet, and in the nineties smaller, more agile investors began dipping their toes into the Forex market. Now virtually anyone who is interested in trading can enter this market.
Forex trading is simply the act of buying and selling different world currencies. This may seem simple on the surface, but it's important to bear in mind that, simple or not, many inexperienced traders - and some experienced ones - have suffered very large financial losses because they dropped their guard and stopped respecting the power of the Forex.
So, whether you are a beginner or not, this matter of respect is one way you can put yourself on equal footing with even the most seasoned veteran trader. Always remember that the Forex market can give you great gains, but it can also wipe those gains out in a flash if you begin taking it for granted. Therefore, even before you enter this market, you must be aware at all times of a few crucial things you'll need for making a success of this investment venture.
We're talking about the most liquid market in the world, but before starting, you must first actually know how to trade currencies. To begin trading, all you need is access to a computer (preferably your own, for security reasons) that has an active Internet connection, a Forex account with funds in it, and a Forex trading system or strategy to guide your buying and selling. Many websites offer Forex trading.
When you're ready to start trading, you'll need to start an account with the broker (trading service) of your choice, and fund it (pay an initial amount of money into it). Then you're ready to begin trading.
One important point - you will definitely need a fast Internet connection if you hope to keep up with the constant updates and rapid price movements, and to prevent slippages (a lag between your buy or sell order and its execution).
Another crucial point - look for a Forex broker's website that offers dummy accounts so that you can practice and build up your skills with before you ever risk real money.
Now that you know how to trade in the Forex market, the next thing you need to know is what to trade. The Forex market involves buying and selling various currencies from all around the world. These currencies are traded in pairs, such as the ones in this list.
EUR/USD
USD/JPY
GBP/USD
USD/CHF
AUD/USD
USD/CAD
NZD/USD
EUR/GBP
EUR/JPY
GBP/JPY
CHF/JPY
GBP/CHF
EUR/AUD
These currency pairs are the ones most commonly traded in the Forex market. To guide your investment decisions, you'll be watching market trends as well as world news, and with experience you'll learn to predict how events may affect these world currency pairs. As you build up your skill levels, you can begin earning a very substantial income.
As mentioned, the Forex market is highly liquid, meaning you can get in or out at any time, 24 hours a day. The most important question will always be whether profits will result from each of your decisions.
Although most Forex traders are speculators who attempt to predict which currencies will go up and which will go down, that does not mean they are all gamblers. This is where a system (or strategy) becomes vitally important. Traders who go only by "gut instinct" are seldom consistent winners, leaving the real profits to those who are guided by careful and methodical decision making rather than by the excitement or "juice."
Now that you know the basic outline of trading in the Forex market, you can begin checking out trading websites for a service that fits your situation and goals.
Forex Secrets
It is horrible to imagine what could happen to USD rate at the spontaneous market in this case. At the controllable market of Forex USD rate would fall down just by 1-2%.
I hope that my opponents, who deny the existence of a system controlling Forex market, do remember the elementary economical laws. The spontaneous market is a barometer that establishes the real price of goods on the basis of the demand and supply (in the given case, it is the real rate of exchange of any national currency).
The Episode #2 . The hurricane “Katrina” and the flood in USA on September 7, 2005. USD rate stably increases. Chronicle of events.
As the result of the dam (dike) debacle, several states in USA become submerged. The industry, agriculture and transport network were destroyed. There started panic not only among common inhabitants but among officials of various ranks as well. Hundreds and thousands of people perished. There were cases of looting. Many looters (and, maybe, just desperately hungry and thirsty people) were shot by soldiers of USA army. The government of USA declared this hurricane to be a disaster on a national scale. For the first time a new plan of civic defense was introduced (see “BBC. The total chronicle of events”).
“Katrina” was bringing USA to ruin. Senators from Louisiana asked $250 milliards from the federal budget for getting over “Katrina” after-effects.
Thus, it is an illustrative example of the greatest natural cataclysms in USA in the last decades. Even the poorest country in the world – Haiti – provided the financial help for USA ($ 36 thousands). The help of Ukraine made 1 million of hrivnias , etc.
What did happen to USD rate at the controllable Forex market? Notwithstanding all economical laws and even against the common sense, USD rate increased!
Chart 8.7. EURO/USD pair movement (For view picture see notes in end of article)
Chart 8.8. GBP/USD pair movement (For view picture see notes in end of article)
Brief conclusions for traders .
As I think, the thesis that Forex has turned from the spontaneous market to the controllable one does not need further proofs. Hence, traders must introduce amendments into strategy and tactic of their work at Forex.
What are the conclusions, significant for traders, logically follow from these facts?
Under the new conditions of the controllable market, a trader must not follow the “crowd” (flock). As B. Williams, A. Elder and many other authors have fairly emphasized, the “crowd” pushes the price at any spontaneous market. On the contrary, at the organized Forex market orders must be opened in advance of Consortium’s interests!
I try to find the core of a good sense in each technique of the successful work at Forex . Is it necessary to rediscover the well-known principles? There are many prosperous traders who openly and honestly present their methods of gaining profits at Forex . If their techniques are successful, it means that these authors have a thorough grasp of the problem in its essence.
However, in practice, each of the techniques sometimes brings profits, whereas in other cases it is disadvantageous. And it does not matter, whether this technique is developed by B. Williams or by a not celebrated but a successful trader.
Conclusion #1. It is necessary to clearly delineate the domains where a given technique does work and where it fails (as well as the corresponding reasons). In such a way we can clearly understand what of the method by a given trader is worthwhile to be used – as well as how and when to make advantage of it for our work at Forex .
Conclusion #2 . Your trading system must not be just a mixture (farrago) of various techniques. This rule is especially important for the beginners. After reading heaps of books on Forex , all of them make complaints about “such a mess in their heads instead of enlightenment”.
Conclusion #3. A trader must develop his own trading system. In order to gain profit, the following steps must be taken:
a. you choose just any technique developed by any author-trader (e.g., mine or B. Williams’s, or somebody’s else);
b. you must get used to work with the demo account according to this technique to such extent of automatism that you “sense’ it as your own initial (original) trading system of the work at Forex
c. Only after this you should start to study additional literature. You must clearly see what pointes, “borrowed” from other authors, can help you personally to work at Forex , to improve your trading system for getting extra profits.
Objectiveness of Forex turning from the spontaneous market into the controllable one. The pattern of this process
Any profitable business transits from the spontaneous to the controllable one. It is an objective stage in the evolution of business undertakings.
In each branch of a big and super profitable business the initial stage of the chaotic competitive straggle is already has been passed through (petroleum, gas, ferrous and non-ferrous metallurgy, precious metals, arms traffic, etc.). At present all these areas are definitely divided between the principal participants. That is, there exist certain financially-industrial groupings, well-controllable and protected from intrusion of a concurrent.
The same concerns the biggest and most conservative area of business – i.e., its financial branch, the world market of currency exchange included. Can it be otherwise? Can “Chaos” rule the market where the turnover exceeds $1 trillion per day? Can the biggest banks and governments depend on “Chaos” – i.e., be dependable of the “off-floor” traders – such as me and you? Can these organizations be worried about the direction in which we (traders) could turn the trend of all national currencies at this or that second? It is ridiculous to imagine!
To realize the power of the grouping that has organized the “game” of Forex all over the world, we should refer to the thesis from the journal “Speculator”. In June, 2001 the three biggest dealers at Forex market - Citibank, J.P. Morgan Chase ? Deutsche Bank – together with Reuters Group PLC had started up the system Atriax . However, the latter did not meet competition and stopped operations in spring, 2002. The author of the paper just hinted that even the alliance of the 3 biggest world banks could not make any serious competition to Organizer of the “game” at Forex (to Consortium or somebody else).
In this connection, how one can take on trust the principal thesis by B. Williams concerning “Trading chaos” that rules Forex? What’s important, all methods of this author issue from this postulate. The following conclusion by B. Williams’s also raises doubts. He states that trends are created by traders, whereas brokers just realize these trends and place traders’ orders. According to B. Williams, the fact that now trends are made rather “off-floor” than “on floor” (as it was earlier) permits detecting what next will happen at the market (see “Trading Chaos”, Chapter 6).
So, to what extent can B. Williams’s techniques be correct if their basis is principally erroneous? Let us enumerate the fundamental mistakes made in “Trading Chaos”. It is necessary to facilitate understanding of the techniques and practical recommendations given by B. Williams concerning the work at Forex .
1. B. Williams sees Forex as a spontaneous market, uncontrollable by anybody. According to this author, it is chaos but not an organized system that would have its own strategy, tactic, techniques, goals, methods of fraud, etc.
2. B. Williams mentions the pair “trader + broker”. However, unconsciously or deliberately, he has omitted the third participant of this very process. This is banks and the world financial system in general. Surely, this organization will not just take a detached view of the traders’ arbitrary “game” with the basic world currencies (USD, EURO, GBP, CHF, etc.).
Let us now evolve B. Williams’s idea by ourselves. Our aim is to demonstrate absurdity of his “chaos theory” applied to the up-to-date market of Forex.
· How brokers and banks market-makers can pay off profits from traders’ deposits if the traders’ total earnings would be bigger than the market-maker’s profit in this period?
· Being in shoes of market-makers, National Banks, governments of leading countries of the world, etc., how will you conduct yourself on the eve of the news issue? For instance, after the publication of Michigan University Index, USD can “go up” by 150-200 points with respect to all national currencies. That is, in several hours dozens of milliards of USD will be redistributed. Somebody will earn the money, whereas somebody will lose it because of the difference in rates of exchange (quotations).
What will you do in the place of the biggest financial groupings? Would you just be sitting and taking sedative pills? Would you just be trying to guess what steps will be taken by professors of a Michigan University? Will 0.3% be added to the index previous value (91.4) or subtracted from it? What’s important, this “difference” makes milliards of USD – for somebody! Possessing such capitals, would you just be sitting idly and waiting for God knows what? More probably, you will try to make this process controllable and predictable. Rather you will do your best to gain profit with the help of such indices and news. I think you will try to let the others lose their money.
· What does the theory of “chaos” at Forex represent by itself if Organizer of the “game” has trained all traders to act according to the stereotype?
a). To place stop-losses and postponed orders at the same places.
b). If the issued news are better than the prognostication, one must stake on “buy”. Otherwise (if the news are worse than the prognostication), it is necessary to stake on “sell”.
c). If a quicker moving average crosses the slower one upwards, the order must be opened on “buy”. In the case of the downward crossover, the order must be opened on “sell”.
d). In the case of divergence, one must try to work against the trend. B. Williams and other “classics” at least had to mention that it was basically absurd to work like this at the beginning of the trend and in the middle of it.
This is why the given chapter is named “Anti-trading chaos” – to be more precise, it is the anti-trading system.
Further I’ll not dwell on absurdity of the chaos theory by B. Williams when applied to Forex . I hope it is quite clear. Any trader can find a lot of evidences of the fact that Forex is a controllable market. There are also many examples that prove fallacy of B. Williams’s conclusion that traders form a trend and "push" it.
As I get it, the “game” of Forex and its rules in their essence are the following.
1. There is Organizer of the financial game (the Alligator) and participants (victims).
2. Organizer always tries to demonstrate: a). objectivity and honesty of the rules established by himself; b). simplicity of the analysis, predictability of the situations and the possibility of earning money easily and regularly by one of the numerous methods of the analysis (FA, TA, etc.).
3. All participants of the “game” are subjected to the same psychological treatment by Brokers, authors of numerical “classical” works on Forex and analysts via their sites and prognoses. That is, such specialists teach every trader to work as all others in the world do.
As the result, Organizer beforehand knows the traders’ line of conduct in these or those situations. The percentage of “players”-losers is stable – about 90%.
4. A rapid growth in the number of fraudulent machinations developed by Brokers has become a logical continuation of the above-enumerated rules of the given game. Economists from Brokers have quickly grasped that the number 90% of traders-loses is very close to the figure 100%. What for will they send clients’ transactions to the foreign market (the market-maker bank)? In fact, traders will lose all the same! Besides, it is possible to slightly “help” traders in their losing by “knocking down” stop-losses - all traders keep their stop-losses approximately at the same place. In addition, the following tricks can be done as well: the “slippage” (opening of transactions at a price much worse than the price at which the trader wanted to open the deal); computer “pending” at the beginning of the heavy movement in currency pairs. One can give many analogous examples – up to the undisguised fraudulent nonpayment of earned profits to traders.
These centers are also protected from the viewpoint of finances. If in flats the sums of orders of the traders who open transactions on “buy” and “sell” are approximately equal, Brokers can always hedge the difference between “buy” and “sell” with a market-maker under the condition of a heavy trend.
The only thing that cheats from Brokers are afraid of is the unmasking of methods of their work. Really, this will put an end to the afflux of new “victims”!
There are several sure signs of a fraudulent Brokers. In my educational course I enumerate some of such indications. However, here I give only one characteristic (traders should think about it well). If Brokers has one point of spread, you should calculate expenses on the marginal trade, in detail described in all “classical” manuals of Forex . For instance, let it be thought that you open the order for one lot. Forex Brokers supposedly buys EURO to the sum of $ 100 thousands for you. When you close the order, Forex Brokers supposedly transfer EURO to USD again. Thus, if you open 10 deals with EURO/USD pair during a day, your Forex Brokers is supposed to send money abroad and get it back 10 times, buying EURO for USD and v.v. All these transactions must be made exceptionally for you! Is it realistic?
In a next-door bank you should ask the conditions for the transfer of $100 thousands abroad and back. You will learn the cost of the commission for such services and the time required for this transaction (in half a day, the next day, etc.). Here I do not mention the papers that must be prepared for each transfer. I also say nothing about the time required for collecting all signatures.
I wonder, during this period of time what changes will occur in EURO/USD rate as the latter is altering every second?
5. To earn regularly at Forex, you have to master yourself. That is, a trading scheme must be developed. According to this scheme you will work against “generally accepted” rules. As it is already mentioned, these rules are popularized by Organizer of the game at Forex . Sticking to these rules, more than 90% of traders all over the world lose their money.
6. Developing my trading system, I have made use of numerous generally-recognized techniques of the work at Forex (by B. Williams, etc.). Surely, there is a kernel of good sense in any technique that enables earning money – even if in 50% of cases. Therefore, the trader’s task is to differentiate the conditions, under which a given technique can provide profit. It is also necessary to understand where, when and why this technique yields a loss to the trader. Naturally, a trader must use only this first part of the system, where one can gain profit.
7. For the development of your own trading system, you must do your best to organically integrate different techniques, profitable at Forex. Various methods of giving analysis to Forex from different viewpoints do help us to more thoroughly and profoundly understand this market and, consequently, to gain profit regularly.
8. The game of Forex is widely spread all over the world. In addition to speculators, there are other participants in Forex – e.g., individuals who need to exchange currency for their business. All these factors provide an objective opportunity to gain profits bigger (and more regularly) than in any other financial game of the world.
9. Therefore, Forex gives a real opportunity to get into the principally new financial market and to become a really independent. Anybody can be engaged in trading at any point in the world. For sure, a State, much as it would want it, cannot deprive a trader of his production facilities because in this area gaining of profit depends just on one’s techniques and skill.
10. Forex gives you just a chance to earn money. However, not everybody can learn how to gain real profit. Even after having mastered the fundamentals of making money at Forex , a trader needs to learn a lot of additional factors in order to transform his potential abilities into real money. In this connection the following aspects are very important.
a). the psychological stability (the absence of fear and hazard, the ability to work automatically at the subconscious level, etc);
b). a reliable broker (the trader’s profits, being virtual, materialize only if you can convert it into real money at any second);
c). self-perfection via mastering new techniques of gaining profit, learning from an experienced instructor and due to exchanging opinions with other traders;
d). the possibility of obtaining money from the investor for the asset management. This gives the opportunity to proceed from the level of one’s own deposit of several hundreds or thousands of USD to the principally new level of the work at Forex. In this way one can simultaneously reinvest a part of one’s profits into the deposit and to spend money on heightening of one’s own well-being. There is a simple example. At mini- Forex , many traders do not earn a lot of money: even if a trader has doubled his deposit in a month, his profit is small (e. g., by making $100 out of $50). Besides, a part of it he must take off from the deposit for the daily needs. I’ll not give examples of large deposits because the tactics of work with them are principally different – as well as the percentage of profit.
11. Not everybody can cover a distance from the chance (the dream) to its realization – i.e., to making real money at Forex . As a trader, here you work against Organizer of this game, who is the professional. That is, to earn money regularly by taking it away from Organizer, one must become the professional himself. Do not hurry to open a real account at least till the time when you will learn to do the following:
a). As B. Williams himself, in several minutes to clearly see two possible alternatives of currency pair movement at the beginning of each session. Correspondingly, you must develop two business plans, where points of input into the market and output from it must be clearly designated.
b). To work out one’s own tactic of the work with the demo account at Forex to perfection. The aim is to augment the demo account at least 2.5-3 times in a month.
c). To develop the long-term and intermediate strategies (not less than a month and a week, respectively) - as well as the short-term tactic (the intra-day trading session). Acquisition of this knowledge will help you to gain profit.
d). After opening of the real account, at the beginning you must work only with trends (under the conditions of flats you must deal with demo accounts). It is necessary to clearly distinguish one from another at the beginning of trading.
e). You must choose two ally currency pairs and work with them continuously, accumulating experience.
12. There can be reasons why your demo account does not augment regularly (in particular, maybe you are too busy at your main job). In this case, you better forget about Forex ! You must not open a real account there. It means that Forex is not intended for you.
I hope that my opponents, who deny the existence of a system controlling Forex market, do remember the elementary economical laws. The spontaneous market is a barometer that establishes the real price of goods on the basis of the demand and supply (in the given case, it is the real rate of exchange of any national currency).
The Episode #2 . The hurricane “Katrina” and the flood in USA on September 7, 2005. USD rate stably increases. Chronicle of events.
As the result of the dam (dike) debacle, several states in USA become submerged. The industry, agriculture and transport network were destroyed. There started panic not only among common inhabitants but among officials of various ranks as well. Hundreds and thousands of people perished. There were cases of looting. Many looters (and, maybe, just desperately hungry and thirsty people) were shot by soldiers of USA army. The government of USA declared this hurricane to be a disaster on a national scale. For the first time a new plan of civic defense was introduced (see “BBC. The total chronicle of events”).
“Katrina” was bringing USA to ruin. Senators from Louisiana asked $250 milliards from the federal budget for getting over “Katrina” after-effects.
Thus, it is an illustrative example of the greatest natural cataclysms in USA in the last decades. Even the poorest country in the world – Haiti – provided the financial help for USA ($ 36 thousands). The help of Ukraine made 1 million of hrivnias , etc.
What did happen to USD rate at the controllable Forex market? Notwithstanding all economical laws and even against the common sense, USD rate increased!
Chart 8.7. EURO/USD pair movement (For view picture see notes in end of article)
Chart 8.8. GBP/USD pair movement (For view picture see notes in end of article)
Brief conclusions for traders .
As I think, the thesis that Forex has turned from the spontaneous market to the controllable one does not need further proofs. Hence, traders must introduce amendments into strategy and tactic of their work at Forex.
What are the conclusions, significant for traders, logically follow from these facts?
Under the new conditions of the controllable market, a trader must not follow the “crowd” (flock). As B. Williams, A. Elder and many other authors have fairly emphasized, the “crowd” pushes the price at any spontaneous market. On the contrary, at the organized Forex market orders must be opened in advance of Consortium’s interests!
I try to find the core of a good sense in each technique of the successful work at Forex . Is it necessary to rediscover the well-known principles? There are many prosperous traders who openly and honestly present their methods of gaining profits at Forex . If their techniques are successful, it means that these authors have a thorough grasp of the problem in its essence.
However, in practice, each of the techniques sometimes brings profits, whereas in other cases it is disadvantageous. And it does not matter, whether this technique is developed by B. Williams or by a not celebrated but a successful trader.
Conclusion #1. It is necessary to clearly delineate the domains where a given technique does work and where it fails (as well as the corresponding reasons). In such a way we can clearly understand what of the method by a given trader is worthwhile to be used – as well as how and when to make advantage of it for our work at Forex .
Conclusion #2 . Your trading system must not be just a mixture (farrago) of various techniques. This rule is especially important for the beginners. After reading heaps of books on Forex , all of them make complaints about “such a mess in their heads instead of enlightenment”.
Conclusion #3. A trader must develop his own trading system. In order to gain profit, the following steps must be taken:
a. you choose just any technique developed by any author-trader (e.g., mine or B. Williams’s, or somebody’s else);
b. you must get used to work with the demo account according to this technique to such extent of automatism that you “sense’ it as your own initial (original) trading system of the work at Forex
c. Only after this you should start to study additional literature. You must clearly see what pointes, “borrowed” from other authors, can help you personally to work at Forex , to improve your trading system for getting extra profits.
Objectiveness of Forex turning from the spontaneous market into the controllable one. The pattern of this process
Any profitable business transits from the spontaneous to the controllable one. It is an objective stage in the evolution of business undertakings.
In each branch of a big and super profitable business the initial stage of the chaotic competitive straggle is already has been passed through (petroleum, gas, ferrous and non-ferrous metallurgy, precious metals, arms traffic, etc.). At present all these areas are definitely divided between the principal participants. That is, there exist certain financially-industrial groupings, well-controllable and protected from intrusion of a concurrent.
The same concerns the biggest and most conservative area of business – i.e., its financial branch, the world market of currency exchange included. Can it be otherwise? Can “Chaos” rule the market where the turnover exceeds $1 trillion per day? Can the biggest banks and governments depend on “Chaos” – i.e., be dependable of the “off-floor” traders – such as me and you? Can these organizations be worried about the direction in which we (traders) could turn the trend of all national currencies at this or that second? It is ridiculous to imagine!
To realize the power of the grouping that has organized the “game” of Forex all over the world, we should refer to the thesis from the journal “Speculator”. In June, 2001 the three biggest dealers at Forex market - Citibank, J.P. Morgan Chase ? Deutsche Bank – together with Reuters Group PLC had started up the system Atriax . However, the latter did not meet competition and stopped operations in spring, 2002. The author of the paper just hinted that even the alliance of the 3 biggest world banks could not make any serious competition to Organizer of the “game” at Forex (to Consortium or somebody else).
In this connection, how one can take on trust the principal thesis by B. Williams concerning “Trading chaos” that rules Forex? What’s important, all methods of this author issue from this postulate. The following conclusion by B. Williams’s also raises doubts. He states that trends are created by traders, whereas brokers just realize these trends and place traders’ orders. According to B. Williams, the fact that now trends are made rather “off-floor” than “on floor” (as it was earlier) permits detecting what next will happen at the market (see “Trading Chaos”, Chapter 6).
So, to what extent can B. Williams’s techniques be correct if their basis is principally erroneous? Let us enumerate the fundamental mistakes made in “Trading Chaos”. It is necessary to facilitate understanding of the techniques and practical recommendations given by B. Williams concerning the work at Forex .
1. B. Williams sees Forex as a spontaneous market, uncontrollable by anybody. According to this author, it is chaos but not an organized system that would have its own strategy, tactic, techniques, goals, methods of fraud, etc.
2. B. Williams mentions the pair “trader + broker”. However, unconsciously or deliberately, he has omitted the third participant of this very process. This is banks and the world financial system in general. Surely, this organization will not just take a detached view of the traders’ arbitrary “game” with the basic world currencies (USD, EURO, GBP, CHF, etc.).
Let us now evolve B. Williams’s idea by ourselves. Our aim is to demonstrate absurdity of his “chaos theory” applied to the up-to-date market of Forex.
· How brokers and banks market-makers can pay off profits from traders’ deposits if the traders’ total earnings would be bigger than the market-maker’s profit in this period?
· Being in shoes of market-makers, National Banks, governments of leading countries of the world, etc., how will you conduct yourself on the eve of the news issue? For instance, after the publication of Michigan University Index, USD can “go up” by 150-200 points with respect to all national currencies. That is, in several hours dozens of milliards of USD will be redistributed. Somebody will earn the money, whereas somebody will lose it because of the difference in rates of exchange (quotations).
What will you do in the place of the biggest financial groupings? Would you just be sitting and taking sedative pills? Would you just be trying to guess what steps will be taken by professors of a Michigan University? Will 0.3% be added to the index previous value (91.4) or subtracted from it? What’s important, this “difference” makes milliards of USD – for somebody! Possessing such capitals, would you just be sitting idly and waiting for God knows what? More probably, you will try to make this process controllable and predictable. Rather you will do your best to gain profit with the help of such indices and news. I think you will try to let the others lose their money.
· What does the theory of “chaos” at Forex represent by itself if Organizer of the “game” has trained all traders to act according to the stereotype?
a). To place stop-losses and postponed orders at the same places.
b). If the issued news are better than the prognostication, one must stake on “buy”. Otherwise (if the news are worse than the prognostication), it is necessary to stake on “sell”.
c). If a quicker moving average crosses the slower one upwards, the order must be opened on “buy”. In the case of the downward crossover, the order must be opened on “sell”.
d). In the case of divergence, one must try to work against the trend. B. Williams and other “classics” at least had to mention that it was basically absurd to work like this at the beginning of the trend and in the middle of it.
This is why the given chapter is named “Anti-trading chaos” – to be more precise, it is the anti-trading system.
Further I’ll not dwell on absurdity of the chaos theory by B. Williams when applied to Forex . I hope it is quite clear. Any trader can find a lot of evidences of the fact that Forex is a controllable market. There are also many examples that prove fallacy of B. Williams’s conclusion that traders form a trend and "push" it.
As I get it, the “game” of Forex and its rules in their essence are the following.
1. There is Organizer of the financial game (the Alligator) and participants (victims).
2. Organizer always tries to demonstrate: a). objectivity and honesty of the rules established by himself; b). simplicity of the analysis, predictability of the situations and the possibility of earning money easily and regularly by one of the numerous methods of the analysis (FA, TA, etc.).
3. All participants of the “game” are subjected to the same psychological treatment by Brokers, authors of numerical “classical” works on Forex and analysts via their sites and prognoses. That is, such specialists teach every trader to work as all others in the world do.
As the result, Organizer beforehand knows the traders’ line of conduct in these or those situations. The percentage of “players”-losers is stable – about 90%.
4. A rapid growth in the number of fraudulent machinations developed by Brokers has become a logical continuation of the above-enumerated rules of the given game. Economists from Brokers have quickly grasped that the number 90% of traders-loses is very close to the figure 100%. What for will they send clients’ transactions to the foreign market (the market-maker bank)? In fact, traders will lose all the same! Besides, it is possible to slightly “help” traders in their losing by “knocking down” stop-losses - all traders keep their stop-losses approximately at the same place. In addition, the following tricks can be done as well: the “slippage” (opening of transactions at a price much worse than the price at which the trader wanted to open the deal); computer “pending” at the beginning of the heavy movement in currency pairs. One can give many analogous examples – up to the undisguised fraudulent nonpayment of earned profits to traders.
These centers are also protected from the viewpoint of finances. If in flats the sums of orders of the traders who open transactions on “buy” and “sell” are approximately equal, Brokers can always hedge the difference between “buy” and “sell” with a market-maker under the condition of a heavy trend.
The only thing that cheats from Brokers are afraid of is the unmasking of methods of their work. Really, this will put an end to the afflux of new “victims”!
There are several sure signs of a fraudulent Brokers. In my educational course I enumerate some of such indications. However, here I give only one characteristic (traders should think about it well). If Brokers has one point of spread, you should calculate expenses on the marginal trade, in detail described in all “classical” manuals of Forex . For instance, let it be thought that you open the order for one lot. Forex Brokers supposedly buys EURO to the sum of $ 100 thousands for you. When you close the order, Forex Brokers supposedly transfer EURO to USD again. Thus, if you open 10 deals with EURO/USD pair during a day, your Forex Brokers is supposed to send money abroad and get it back 10 times, buying EURO for USD and v.v. All these transactions must be made exceptionally for you! Is it realistic?
In a next-door bank you should ask the conditions for the transfer of $100 thousands abroad and back. You will learn the cost of the commission for such services and the time required for this transaction (in half a day, the next day, etc.). Here I do not mention the papers that must be prepared for each transfer. I also say nothing about the time required for collecting all signatures.
I wonder, during this period of time what changes will occur in EURO/USD rate as the latter is altering every second?
5. To earn regularly at Forex, you have to master yourself. That is, a trading scheme must be developed. According to this scheme you will work against “generally accepted” rules. As it is already mentioned, these rules are popularized by Organizer of the game at Forex . Sticking to these rules, more than 90% of traders all over the world lose their money.
6. Developing my trading system, I have made use of numerous generally-recognized techniques of the work at Forex (by B. Williams, etc.). Surely, there is a kernel of good sense in any technique that enables earning money – even if in 50% of cases. Therefore, the trader’s task is to differentiate the conditions, under which a given technique can provide profit. It is also necessary to understand where, when and why this technique yields a loss to the trader. Naturally, a trader must use only this first part of the system, where one can gain profit.
7. For the development of your own trading system, you must do your best to organically integrate different techniques, profitable at Forex. Various methods of giving analysis to Forex from different viewpoints do help us to more thoroughly and profoundly understand this market and, consequently, to gain profit regularly.
8. The game of Forex is widely spread all over the world. In addition to speculators, there are other participants in Forex – e.g., individuals who need to exchange currency for their business. All these factors provide an objective opportunity to gain profits bigger (and more regularly) than in any other financial game of the world.
9. Therefore, Forex gives a real opportunity to get into the principally new financial market and to become a really independent. Anybody can be engaged in trading at any point in the world. For sure, a State, much as it would want it, cannot deprive a trader of his production facilities because in this area gaining of profit depends just on one’s techniques and skill.
10. Forex gives you just a chance to earn money. However, not everybody can learn how to gain real profit. Even after having mastered the fundamentals of making money at Forex , a trader needs to learn a lot of additional factors in order to transform his potential abilities into real money. In this connection the following aspects are very important.
a). the psychological stability (the absence of fear and hazard, the ability to work automatically at the subconscious level, etc);
b). a reliable broker (the trader’s profits, being virtual, materialize only if you can convert it into real money at any second);
c). self-perfection via mastering new techniques of gaining profit, learning from an experienced instructor and due to exchanging opinions with other traders;
d). the possibility of obtaining money from the investor for the asset management. This gives the opportunity to proceed from the level of one’s own deposit of several hundreds or thousands of USD to the principally new level of the work at Forex. In this way one can simultaneously reinvest a part of one’s profits into the deposit and to spend money on heightening of one’s own well-being. There is a simple example. At mini- Forex , many traders do not earn a lot of money: even if a trader has doubled his deposit in a month, his profit is small (e. g., by making $100 out of $50). Besides, a part of it he must take off from the deposit for the daily needs. I’ll not give examples of large deposits because the tactics of work with them are principally different – as well as the percentage of profit.
11. Not everybody can cover a distance from the chance (the dream) to its realization – i.e., to making real money at Forex . As a trader, here you work against Organizer of this game, who is the professional. That is, to earn money regularly by taking it away from Organizer, one must become the professional himself. Do not hurry to open a real account at least till the time when you will learn to do the following:
a). As B. Williams himself, in several minutes to clearly see two possible alternatives of currency pair movement at the beginning of each session. Correspondingly, you must develop two business plans, where points of input into the market and output from it must be clearly designated.
b). To work out one’s own tactic of the work with the demo account at Forex to perfection. The aim is to augment the demo account at least 2.5-3 times in a month.
c). To develop the long-term and intermediate strategies (not less than a month and a week, respectively) - as well as the short-term tactic (the intra-day trading session). Acquisition of this knowledge will help you to gain profit.
d). After opening of the real account, at the beginning you must work only with trends (under the conditions of flats you must deal with demo accounts). It is necessary to clearly distinguish one from another at the beginning of trading.
e). You must choose two ally currency pairs and work with them continuously, accumulating experience.
12. There can be reasons why your demo account does not augment regularly (in particular, maybe you are too busy at your main job). In this case, you better forget about Forex ! You must not open a real account there. It means that Forex is not intended for you.
Forex Mentor Course
I began my first forex trade three years ago, at this time, information sources of trading available were very limited, I could not get the the suitable information on online forex course for free trading to allow me to begin a live forex trading successfully, all my sources of information and trading strategies were obtained from forex forums posts and the trial and errors of former forex traders and their trading strategies, which were evolved to suit their needs and their potential financial capabilities.
I had a long time with a forex demo account for several months, I did not dare to enter into a real live forex trading, because my capital was very limited, and there were no free online forex courses which I can get to help me in my trading. But one day I landed on a website which sell a forex training course package, this website claimed that the its strategy results in a profit rate around 80% in all cases, I read more on this course enough to to be motivated to buy it, especially its price was very suitable to me ($99 total for the 5 ebooks). Once I got the ebooks, I began reading every single word in them with voracity, and - for honesty - it was the first time for me to read in details about forex money management and risk management and their vital rule in forex trading, but this was all I had gotten from this course, nothing otherwise.
I tried to contact the author of the forex course to query him about several points regarding his training program, and guess what? I did not get any response from him, I contacted him up to 10 times, however I did not hear one word.
This was the lesson #1 I learned: It is not about the training program, it's about the AUTHOR of this program, is he alive man? is he a real forex trader OR: he's just a teacher of theoretical lectures in forex trading!
The lesson #2 I learnt was: What is degree of the technical support provided after purchasing his forex training program? shall I find him when I need him?
After a whole year, I would have left almost forex trading and preoccupied by other businesses, but one day while surfing on the internet, I found by accident the Forex Mentor website, and once landed on the main page, at the first sight I cynically laughed and said to myself: "Another Scam!!"
However, I started reading all the information on his training program and the main idea behind it: Pivot Points. I began once again thinking seriously to return to forex trading, and decided to purchase this program of Peter Bain, but for the first glance, I was disappointed for its high price ($495 for a hard copy on CDs, or $349 of the digital copy). After a short time of deep thinking and trying to decide whether I'll buy or not, I said to myself, I lost in the forex trading in the past several thousand of dollars, let them be several thousand PLUS $495!!
I read every word on the Forex Mentor Website, I collected every information available about the Author (Peter Bain) and his history in the forex and stocks market, I read many indpendent reviews about this course. Despite of that, The most important factores encouraged me to buy forex mentor course were as the follows:
The Concept of Forex Mentor Trading System
1- The Program Author: Peter Bain, I read a lot more about him on the internet and on his long experience in the area of trading in stocks, currencies, and the large number of successful traders who trained by him who achieved good trading results with the favor of his forex trading advises.
Peater Bain has developed a very successful trading strategy based on Pivot Points, which depends primarily on the concept of support and resistance: When you see price violate a pivot point convincingly, there are automated trading systems out there that automatically kick in and buy or sell, depending upon where price is going. So, in essence, these two factors alone account for why other indicators are left breathing dust. Bar patterns, MACD divergence, different time frame readings, and trendlines are definite precursors to price changing direction but, in the final analysis, where price is in relation to its nearest pivot point, is the big clue. Tie all these indications together, and you are sure to out-fox price's next move.
2- This coach always exists whenever you need him, he provides One-on-one feedback, he believes that every forex trader trainee has different needs and requires special attention, this feature adds high value to his forex training program.
3- Members only forum, where members can talk just about everything related to the Forex market and the Forex training program. This is the most important characteristic of this program, getting in touch with other forex traders add to your learning experiences.
4- Free membership for 6 months ($ 199 value) membership alone equal times the value of this course, after the period of six months, you will be deducting $100 for renewal, through this membership you will receive on a daily basis the following material:
Daily Video Questions and Answers - That's right! I will personally answer your email trading questions via live streaming video. You probably think we've gone off the deep end! But again, we are fully committed to your success!
Daily Trading Examples and Reviews - Success by repetition! Everyday, I will illustrate successful forex trading techniques using the most recent trading markets. These videos streamed to your PC put you right in front of the action! No more reading static charts and text. You can watch these videos any time for as many times as you like.
Daily Pivot Data for the 6 Major Pairs - We calculate the daily pivots for all the major currency pairs & make them available to you. So you don't have to do the work!
Forex Online Pivot Calculator - Fine-tune your forex trading by calculating your own pivot points. Trade other markets using these same pivot point principles.
Meet Local forex traders in your area through one of our dozens of local user groups all over the world.
Member Discussion Forum - Discuss forex trading strategies and tips with thousands of other like-minded traders from around the world in our member discussion forex forum.
I had a long time with a forex demo account for several months, I did not dare to enter into a real live forex trading, because my capital was very limited, and there were no free online forex courses which I can get to help me in my trading. But one day I landed on a website which sell a forex training course package, this website claimed that the its strategy results in a profit rate around 80% in all cases, I read more on this course enough to to be motivated to buy it, especially its price was very suitable to me ($99 total for the 5 ebooks). Once I got the ebooks, I began reading every single word in them with voracity, and - for honesty - it was the first time for me to read in details about forex money management and risk management and their vital rule in forex trading, but this was all I had gotten from this course, nothing otherwise.
I tried to contact the author of the forex course to query him about several points regarding his training program, and guess what? I did not get any response from him, I contacted him up to 10 times, however I did not hear one word.
This was the lesson #1 I learned: It is not about the training program, it's about the AUTHOR of this program, is he alive man? is he a real forex trader OR: he's just a teacher of theoretical lectures in forex trading!
The lesson #2 I learnt was: What is degree of the technical support provided after purchasing his forex training program? shall I find him when I need him?
After a whole year, I would have left almost forex trading and preoccupied by other businesses, but one day while surfing on the internet, I found by accident the Forex Mentor website, and once landed on the main page, at the first sight I cynically laughed and said to myself: "Another Scam!!"
However, I started reading all the information on his training program and the main idea behind it: Pivot Points. I began once again thinking seriously to return to forex trading, and decided to purchase this program of Peter Bain, but for the first glance, I was disappointed for its high price ($495 for a hard copy on CDs, or $349 of the digital copy). After a short time of deep thinking and trying to decide whether I'll buy or not, I said to myself, I lost in the forex trading in the past several thousand of dollars, let them be several thousand PLUS $495!!
I read every word on the Forex Mentor Website, I collected every information available about the Author (Peter Bain) and his history in the forex and stocks market, I read many indpendent reviews about this course. Despite of that, The most important factores encouraged me to buy forex mentor course were as the follows:
The Concept of Forex Mentor Trading System
1- The Program Author: Peter Bain, I read a lot more about him on the internet and on his long experience in the area of trading in stocks, currencies, and the large number of successful traders who trained by him who achieved good trading results with the favor of his forex trading advises.
Peater Bain has developed a very successful trading strategy based on Pivot Points, which depends primarily on the concept of support and resistance: When you see price violate a pivot point convincingly, there are automated trading systems out there that automatically kick in and buy or sell, depending upon where price is going. So, in essence, these two factors alone account for why other indicators are left breathing dust. Bar patterns, MACD divergence, different time frame readings, and trendlines are definite precursors to price changing direction but, in the final analysis, where price is in relation to its nearest pivot point, is the big clue. Tie all these indications together, and you are sure to out-fox price's next move.
2- This coach always exists whenever you need him, he provides One-on-one feedback, he believes that every forex trader trainee has different needs and requires special attention, this feature adds high value to his forex training program.
3- Members only forum, where members can talk just about everything related to the Forex market and the Forex training program. This is the most important characteristic of this program, getting in touch with other forex traders add to your learning experiences.
4- Free membership for 6 months ($ 199 value) membership alone equal times the value of this course, after the period of six months, you will be deducting $100 for renewal, through this membership you will receive on a daily basis the following material:
Daily Video Questions and Answers - That's right! I will personally answer your email trading questions via live streaming video. You probably think we've gone off the deep end! But again, we are fully committed to your success!
Daily Trading Examples and Reviews - Success by repetition! Everyday, I will illustrate successful forex trading techniques using the most recent trading markets. These videos streamed to your PC put you right in front of the action! No more reading static charts and text. You can watch these videos any time for as many times as you like.
Daily Pivot Data for the 6 Major Pairs - We calculate the daily pivots for all the major currency pairs & make them available to you. So you don't have to do the work!
Forex Online Pivot Calculator - Fine-tune your forex trading by calculating your own pivot points. Trade other markets using these same pivot point principles.
Meet Local forex traders in your area through one of our dozens of local user groups all over the world.
Member Discussion Forum - Discuss forex trading strategies and tips with thousands of other like-minded traders from around the world in our member discussion forex forum.
Monday, September 28, 2009
Forex Option Market View
The forex options market started as an over-the-counter (OTC) financial vehicle for large banks, financial institutions and large international corporations to hedge against foreign currency exposure. Like the forex spot market, the forex options market is considered an "interbank" market. However, with the plethora of real-time financial data and forex option trading software available to most investors through the internet, today's forex option market now includes an increasingly large number of individuals and corporations who are speculating and/or hedging foreign currency exposure via telephone or online forex trading platforms.
Forex option trading has emerged as an alternative investment vehicle for many traders and investors. As an investment tool, forex option trading provides both large and small investors with greater flexibility when determining the appropriate forex trading and hedging strategies to implement.
Most forex options trading is conducted via telephone as there are only a few forex brokers offering online forex option trading platforms.
Forex Option Defined - A forex option is a financial currency contract giving the forex option buyer the right, but not the obligation, to purchase or sell a specific forex spot contract (the underlying) at a specific price (the strike price) on or before a specific date (the expiration date). The amount the forex option buyer pays to the forex option seller for the forex option contract rights is called the forex option "premium."
The Forex Option Buyer - The buyer, or holder, of a foreign currency option has the choice to either sell the foreign currency option contract prior to expiration, or he or she can choose to hold the foreign currency options contract until expiration and exercise his or her right to take a position in the underlying spot foreign currency. The act of exercising the foreign currency option and taking the subsequent underlying position in the foreign currency spot market is known as "assignment" or being "assigned" a spot position.
The only initial financial obligation of the foreign currency option buyer is to pay the premium to the seller up front when the foreign currency option is initially purchased. Once the premium is paid, the foreign currency option holder has no other financial obligation (no margin is required) until the foreign currency option is either offset or expires.
On the expiration date, the call buyer can exercise his or her right to buy the underlying foreign currency spot position at the foreign currency option's strike price, and a put holder can exercise his or her right to sell the underlying foreign currency spot position at the foreign currency option's strike price. Most foreign currency options are not exercised by the buyer, but instead are offset in the market before expiration.
Foreign currency options expires worthless if, at the time the foreign currency option expires, the strike price is "out-of-the-money." In simplest terms, a foreign currency option is "out-of-the-money" if the underlying foreign currency spot price is lower than a foreign currency call option's strike price, or the underlying foreign currency spot price is higher than a put option's strike price. Once a foreign currency option has expired worthless, the foreign currency option contract itself expires and neither the buyer nor the seller have any further obligation to the other party.
The Forex Option Seller - The foreign currency option seller may also be called the "writer" or "grantor" of a foreign currency option contract. The seller of a foreign currency option is contractually obligated to take the opposite underlying foreign currency spot position if the buyer exercises his right. In return for the premium paid by the buyer, the seller assumes the risk of taking a possible adverse position at a later point in time in the foreign currency spot market.
Initially, the foreign currency option seller collects the premium paid by the foreign currency option buyer (the buyer's funds will immediately be transferred into the seller's foreign currency trading account). The foreign currency option seller must have the funds in his or her account to cover the initial margin requirement. If the markets move in a favorable direction for the seller, the seller will not have to post any more funds for his foreign currency options other than the initial margin requirement. However, if the markets move in an unfavorable direction for the foreign currency options seller, the seller may have to post additional funds to his or her foreign currency trading account to keep the balance in the foreign currency trading account above the maintenance margin requirement.
Just like the buyer, the foreign currency option seller has the choice to either offset (buy back) the foreign currency option contract in the options market prior to expiration, or the seller can choose to hold the foreign currency option contract until expiration. If the foreign currency options seller holds the contract until expiration, one of two scenarios will occur: (1) the seller will take the opposite underlying foreign currency spot position if the buyer exercises the option or (2) the seller will simply let the foreign currency option expire worthless (keeping the entire premium) if the strike price is out-of-the-money.
Please note that "puts" and "calls" are separate foreign currency options contracts and are NOT the opposite side of the same transaction. For every put buyer there is a put seller, and for every call buyer there is a call seller. The foreign currency options buyer pays a premium to the foreign currency options seller in every option transaction.
Forex Call Option - A foreign exchange call option gives the foreign exchange options buyer the right, but not the obligation, to purchase a specific foreign exchange spot contract (the underlying) at a specific price (the strike price) on or before a specific date (the expiration date). The amount the foreign exchange option buyer pays to the foreign exchange option seller for the foreign exchange option contract rights is called the option "premium."
Please note that "puts" and "calls" are separate foreign exchange options contracts and are NOT the opposite side of the same transaction. For every foreign exchange put buyer there is a foreign exchange put seller, and for every foreign exchange call buyer there is a foreign exchange call seller. The foreign exchange options buyer pays a premium to the foreign exchange options seller in every option transaction.
The Forex Put Option - A foreign exchange put option gives the foreign exchange options buyer the right, but not the obligation, to sell a specific foreign exchange spot contract (the underlying) at a specific price (the strike price) on or before a specific date (the expiration date). The amount the foreign exchange option buyer pays to the foreign exchange option seller for the foreign exchange option contract rights is called the option "premium."
Please note that "puts" and "calls" are separate foreign exchange options contracts and are NOT the opposite side of the same transaction. For every foreign exchange put buyer there is a foreign exchange put seller, and for every foreign exchange call buyer there is a foreign exchange call seller. The foreign exchange options buyer pays a premium to the foreign exchange options seller in every option transaction.
Plain Vanilla Forex Options - Plain vanilla options generally refer to standard put and call option contracts traded through an exchange (however, in the case of forex option trading, plain vanilla options would refer to the standard, generic forex option contracts that are traded through an over-the-counter (OTC) forex options dealer or clearinghouse). In simplest terms, vanilla forex options would be defined as the buying or selling of a standard forex call option contract or a forex put option contract.
Exotic Forex Options - To understand what makes an exotic forex option "exotic," you must first understand what makes a forex option "non-vanilla." Plain vanilla forex options have a definitive expiration structure, payout structure and payout amount. Exotic forex option contracts may have a change in one or all of the above features of a vanilla forex option. It is important to note that exotic options, since they are often tailored to a specific's investor's needs by an exotic forex options broker, are generally not very liquid, if at all.
Intrinsic & Extrinsic Value - The price of an FX option is calculated into two separate parts, the intrinsic value and the extrinsic (time) value.
The intrinsic value of an FX option is defined as the difference between the strike price and the underlying FX spot contract rate (American Style Options) or the FX forward rate (European Style Options). The intrinsic value represents the actual value of the FX option if exercised. Please note that the intrinsic value must be zero (0) or above - if an FX option has no intrinsic value, then the FX option is simply referred to as having no (or zero) intrinsic value (the intrinsic value is never represented as a negative number). An FX option with no intrinsic value is considered "out-of-the-money," an FX option having intrinsic value is considered "in-the-money," and an FX option with a strike price at, or very close to, the underlying FX spot rate is considered "at-the-money."
The extrinsic value of an FX option is commonly referred to as the "time" value and is defined as the value of an FX option beyond the intrinsic value. A number of factors contribute to the calculation of the extrinsic value including, but not limited to, the volatility of the two spot currencies involved, the time left until expiration, the riskless interest rate of both currencies, the spot price of both currencies and the strike price of the FX option. It is important to note that the extrinsic value of FX options erodes as its expiration nears. An FX option with 60 days left to expiration will be worth more than the same FX option that has only 30 days left to expiration. Because there is more time for the underlying FX spot price to possibly move in a favorable direction, FX options sellers demand (and FX options buyers are willing to pay) a larger premium for the extra amount of time.
Volatility - Volatility is considered the most important factor when pricing forex options and it measures movements in the price of the underlying. High volatility increases the probability that the forex option could expire in-the-money and increases the risk to the forex option seller who, in turn, can demand a larger premium. An increase in volatility causes an increase in the price of both call and put options.
Forex option trading has emerged as an alternative investment vehicle for many traders and investors. As an investment tool, forex option trading provides both large and small investors with greater flexibility when determining the appropriate forex trading and hedging strategies to implement.
Most forex options trading is conducted via telephone as there are only a few forex brokers offering online forex option trading platforms.
Forex Option Defined - A forex option is a financial currency contract giving the forex option buyer the right, but not the obligation, to purchase or sell a specific forex spot contract (the underlying) at a specific price (the strike price) on or before a specific date (the expiration date). The amount the forex option buyer pays to the forex option seller for the forex option contract rights is called the forex option "premium."
The Forex Option Buyer - The buyer, or holder, of a foreign currency option has the choice to either sell the foreign currency option contract prior to expiration, or he or she can choose to hold the foreign currency options contract until expiration and exercise his or her right to take a position in the underlying spot foreign currency. The act of exercising the foreign currency option and taking the subsequent underlying position in the foreign currency spot market is known as "assignment" or being "assigned" a spot position.
The only initial financial obligation of the foreign currency option buyer is to pay the premium to the seller up front when the foreign currency option is initially purchased. Once the premium is paid, the foreign currency option holder has no other financial obligation (no margin is required) until the foreign currency option is either offset or expires.
On the expiration date, the call buyer can exercise his or her right to buy the underlying foreign currency spot position at the foreign currency option's strike price, and a put holder can exercise his or her right to sell the underlying foreign currency spot position at the foreign currency option's strike price. Most foreign currency options are not exercised by the buyer, but instead are offset in the market before expiration.
Foreign currency options expires worthless if, at the time the foreign currency option expires, the strike price is "out-of-the-money." In simplest terms, a foreign currency option is "out-of-the-money" if the underlying foreign currency spot price is lower than a foreign currency call option's strike price, or the underlying foreign currency spot price is higher than a put option's strike price. Once a foreign currency option has expired worthless, the foreign currency option contract itself expires and neither the buyer nor the seller have any further obligation to the other party.
The Forex Option Seller - The foreign currency option seller may also be called the "writer" or "grantor" of a foreign currency option contract. The seller of a foreign currency option is contractually obligated to take the opposite underlying foreign currency spot position if the buyer exercises his right. In return for the premium paid by the buyer, the seller assumes the risk of taking a possible adverse position at a later point in time in the foreign currency spot market.
Initially, the foreign currency option seller collects the premium paid by the foreign currency option buyer (the buyer's funds will immediately be transferred into the seller's foreign currency trading account). The foreign currency option seller must have the funds in his or her account to cover the initial margin requirement. If the markets move in a favorable direction for the seller, the seller will not have to post any more funds for his foreign currency options other than the initial margin requirement. However, if the markets move in an unfavorable direction for the foreign currency options seller, the seller may have to post additional funds to his or her foreign currency trading account to keep the balance in the foreign currency trading account above the maintenance margin requirement.
Just like the buyer, the foreign currency option seller has the choice to either offset (buy back) the foreign currency option contract in the options market prior to expiration, or the seller can choose to hold the foreign currency option contract until expiration. If the foreign currency options seller holds the contract until expiration, one of two scenarios will occur: (1) the seller will take the opposite underlying foreign currency spot position if the buyer exercises the option or (2) the seller will simply let the foreign currency option expire worthless (keeping the entire premium) if the strike price is out-of-the-money.
Please note that "puts" and "calls" are separate foreign currency options contracts and are NOT the opposite side of the same transaction. For every put buyer there is a put seller, and for every call buyer there is a call seller. The foreign currency options buyer pays a premium to the foreign currency options seller in every option transaction.
Forex Call Option - A foreign exchange call option gives the foreign exchange options buyer the right, but not the obligation, to purchase a specific foreign exchange spot contract (the underlying) at a specific price (the strike price) on or before a specific date (the expiration date). The amount the foreign exchange option buyer pays to the foreign exchange option seller for the foreign exchange option contract rights is called the option "premium."
Please note that "puts" and "calls" are separate foreign exchange options contracts and are NOT the opposite side of the same transaction. For every foreign exchange put buyer there is a foreign exchange put seller, and for every foreign exchange call buyer there is a foreign exchange call seller. The foreign exchange options buyer pays a premium to the foreign exchange options seller in every option transaction.
The Forex Put Option - A foreign exchange put option gives the foreign exchange options buyer the right, but not the obligation, to sell a specific foreign exchange spot contract (the underlying) at a specific price (the strike price) on or before a specific date (the expiration date). The amount the foreign exchange option buyer pays to the foreign exchange option seller for the foreign exchange option contract rights is called the option "premium."
Please note that "puts" and "calls" are separate foreign exchange options contracts and are NOT the opposite side of the same transaction. For every foreign exchange put buyer there is a foreign exchange put seller, and for every foreign exchange call buyer there is a foreign exchange call seller. The foreign exchange options buyer pays a premium to the foreign exchange options seller in every option transaction.
Plain Vanilla Forex Options - Plain vanilla options generally refer to standard put and call option contracts traded through an exchange (however, in the case of forex option trading, plain vanilla options would refer to the standard, generic forex option contracts that are traded through an over-the-counter (OTC) forex options dealer or clearinghouse). In simplest terms, vanilla forex options would be defined as the buying or selling of a standard forex call option contract or a forex put option contract.
Exotic Forex Options - To understand what makes an exotic forex option "exotic," you must first understand what makes a forex option "non-vanilla." Plain vanilla forex options have a definitive expiration structure, payout structure and payout amount. Exotic forex option contracts may have a change in one or all of the above features of a vanilla forex option. It is important to note that exotic options, since they are often tailored to a specific's investor's needs by an exotic forex options broker, are generally not very liquid, if at all.
Intrinsic & Extrinsic Value - The price of an FX option is calculated into two separate parts, the intrinsic value and the extrinsic (time) value.
The intrinsic value of an FX option is defined as the difference between the strike price and the underlying FX spot contract rate (American Style Options) or the FX forward rate (European Style Options). The intrinsic value represents the actual value of the FX option if exercised. Please note that the intrinsic value must be zero (0) or above - if an FX option has no intrinsic value, then the FX option is simply referred to as having no (or zero) intrinsic value (the intrinsic value is never represented as a negative number). An FX option with no intrinsic value is considered "out-of-the-money," an FX option having intrinsic value is considered "in-the-money," and an FX option with a strike price at, or very close to, the underlying FX spot rate is considered "at-the-money."
The extrinsic value of an FX option is commonly referred to as the "time" value and is defined as the value of an FX option beyond the intrinsic value. A number of factors contribute to the calculation of the extrinsic value including, but not limited to, the volatility of the two spot currencies involved, the time left until expiration, the riskless interest rate of both currencies, the spot price of both currencies and the strike price of the FX option. It is important to note that the extrinsic value of FX options erodes as its expiration nears. An FX option with 60 days left to expiration will be worth more than the same FX option that has only 30 days left to expiration. Because there is more time for the underlying FX spot price to possibly move in a favorable direction, FX options sellers demand (and FX options buyers are willing to pay) a larger premium for the extra amount of time.
Volatility - Volatility is considered the most important factor when pricing forex options and it measures movements in the price of the underlying. High volatility increases the probability that the forex option could expire in-the-money and increases the risk to the forex option seller who, in turn, can demand a larger premium. An increase in volatility causes an increase in the price of both call and put options.
Forex Trading
Forex Trading - is this your ticket to financial freedom or abundant personal wealth? Can you become very rich trading in forex? Is forex trading made out to be more difficult than it is in real life?
But first, what is forex trading?
The investor's goal in Forex trading is to profit from foreign currency movements. Forex trading is a form of investing in currencies on the international markets.
Day by day, forex trading is becoming an increasingly popular income source. The forex trading is one of the most excited and lucrative business you can be involved during your lifetime because you can do it from home or office and from any country in the world and you do not need a big capital to start off with. Forex trading is not bound to any one floor but done electronically between a network of banks continuously over a 24 hour period. With newer forex products, including mini forex products, the entry level for a newbie to forex trading has been made much lower than in the past.
Is forex trading easy?
Forex trading is made easy by not designating it as a pure game of chance or luck- there are time proven strategies that you can adopt to secure your income for life by trading in forex. Forex trading is, however, a serious job and requires a lot of commitment. Forex trading is all about disipline, once you choose your trading system stick with it. The ability to cut your losses when they are small and to allow your profits to soar when the going is good is very important to you as a forex trader. This is, in fact, the secret behind profitable forex trading. This may be the most important tip in becoming a successful forex trader, and to gain your personal wealth.
While forex trading may be an exciting proposition, it is not without reasonable risks.
Forex trading is by nature a speculative occupation. As forex trading is never paused, which ensures true 24 hour trading, there is market volatility. Coupled with the ability to trade during virtually any important event, such trades can induce substantial market volatility leading to risks.
This has led to many treating forex trading as a market for day traders, because by getting in and out of trades within a very short period, you reduce the risks involved. You can also adopt time proven strategies including swing trading and position trading for forex, though forex trading has been largely made out to be a predominantly day trading market. In other words, by adopting established trading methods,whether day trading or swing trading the forex market, you can reduce your risk substantially while improving the chances of making money through established trading setups, trading strategies, trading systems and using the best trading platforms.
With the advent of cutting edge technology, delivering real time information and currency prices to your desktop via the internet, forex trading is now made available to the individual investor at very low cost, and sometimes for free.
But first, what is forex trading?
The investor's goal in Forex trading is to profit from foreign currency movements. Forex trading is a form of investing in currencies on the international markets.
Day by day, forex trading is becoming an increasingly popular income source. The forex trading is one of the most excited and lucrative business you can be involved during your lifetime because you can do it from home or office and from any country in the world and you do not need a big capital to start off with. Forex trading is not bound to any one floor but done electronically between a network of banks continuously over a 24 hour period. With newer forex products, including mini forex products, the entry level for a newbie to forex trading has been made much lower than in the past.
Is forex trading easy?
Forex trading is made easy by not designating it as a pure game of chance or luck- there are time proven strategies that you can adopt to secure your income for life by trading in forex. Forex trading is, however, a serious job and requires a lot of commitment. Forex trading is all about disipline, once you choose your trading system stick with it. The ability to cut your losses when they are small and to allow your profits to soar when the going is good is very important to you as a forex trader. This is, in fact, the secret behind profitable forex trading. This may be the most important tip in becoming a successful forex trader, and to gain your personal wealth.
While forex trading may be an exciting proposition, it is not without reasonable risks.
Forex trading is by nature a speculative occupation. As forex trading is never paused, which ensures true 24 hour trading, there is market volatility. Coupled with the ability to trade during virtually any important event, such trades can induce substantial market volatility leading to risks.
This has led to many treating forex trading as a market for day traders, because by getting in and out of trades within a very short period, you reduce the risks involved. You can also adopt time proven strategies including swing trading and position trading for forex, though forex trading has been largely made out to be a predominantly day trading market. In other words, by adopting established trading methods,whether day trading or swing trading the forex market, you can reduce your risk substantially while improving the chances of making money through established trading setups, trading strategies, trading systems and using the best trading platforms.
With the advent of cutting edge technology, delivering real time information and currency prices to your desktop via the internet, forex trading is now made available to the individual investor at very low cost, and sometimes for free.
Forex Secret
This delusion globally entails identical aftermaths: 90-95% of traders turn steady to loose their deposits having studied books by Bill Williams, Alexander Elder, Thomas Demark, J. Schwager, et al.
Following the burn down of their first deposit trader’s plunge themselves again into scrutinizing Forex scholars, in this manner suffering losses of the second, the third and subsequent deposit. I will hereinafter try to elucidate where from the above regularity grows, so that no trader repeats his forerunners’ mistakes.
This statistics is common knowledge: 90% of traders constitute Forex losers… But the figure has always been giving rise to a leviathan of my doubts. It isn’t because of somewhat different 95%-5% loser-to-winner ratio quoted in the Van Tarp and Brian June “Intraday trading: secrets of mastership”. With 90% quoted universally, there naturally emerges the question, as to whether there is someone capable to check, to specify or to disprove the above figure.
NO ONE IS, besides the directors of largest Western banks providing streamline Forex quotes, but having never raised the issue.
WHY? Because should this statistics be published, there will be sharp and ultimate decline in number of those chasing easy profits from the world Forex market. Otherwise banks would not keep mum in advertising purposes. Neither would they be silent if losers constituted at least by few points less than 90%. In any advertising, customer attraction is ensured by quoting beneficial maxima and non-lucrative minima. This has always been, is being and will always be a universal practice.
As a conclusion, 10% Forex winners is a maximum result among traders. It’s them, who have understood Forex market absolutely simple truisms and who attained steady daily earnings in amounts being gained by others within years or even the whole of life.
Certainly, those are to be recollected, who in late 80s were the first in the ex-USSR to grasp laws of commerce and who began accumulating their initial stock. The rules used to be so simple that presently any schoolboy or a first-year student can show the way the capital might have been easily scraped up and augmented on the USSR debris and in the course of market relations being established in the post-Soviet space.
I do exactly allow for the fact that through the years a new generation will be laughing at the way we are now incapable to comprehend the laws, where under currency rates either spike up or fall down, all of a sudden.
Following the burn down of their first deposit trader’s plunge themselves again into scrutinizing Forex scholars, in this manner suffering losses of the second, the third and subsequent deposit. I will hereinafter try to elucidate where from the above regularity grows, so that no trader repeats his forerunners’ mistakes.
This statistics is common knowledge: 90% of traders constitute Forex losers… But the figure has always been giving rise to a leviathan of my doubts. It isn’t because of somewhat different 95%-5% loser-to-winner ratio quoted in the Van Tarp and Brian June “Intraday trading: secrets of mastership”. With 90% quoted universally, there naturally emerges the question, as to whether there is someone capable to check, to specify or to disprove the above figure.
NO ONE IS, besides the directors of largest Western banks providing streamline Forex quotes, but having never raised the issue.
WHY? Because should this statistics be published, there will be sharp and ultimate decline in number of those chasing easy profits from the world Forex market. Otherwise banks would not keep mum in advertising purposes. Neither would they be silent if losers constituted at least by few points less than 90%. In any advertising, customer attraction is ensured by quoting beneficial maxima and non-lucrative minima. This has always been, is being and will always be a universal practice.
As a conclusion, 10% Forex winners is a maximum result among traders. It’s them, who have understood Forex market absolutely simple truisms and who attained steady daily earnings in amounts being gained by others within years or even the whole of life.
Certainly, those are to be recollected, who in late 80s were the first in the ex-USSR to grasp laws of commerce and who began accumulating their initial stock. The rules used to be so simple that presently any schoolboy or a first-year student can show the way the capital might have been easily scraped up and augmented on the USSR debris and in the course of market relations being established in the post-Soviet space.
I do exactly allow for the fact that through the years a new generation will be laughing at the way we are now incapable to comprehend the laws, where under currency rates either spike up or fall down, all of a sudden.
Sunday, September 27, 2009
3 Power Strategies of Forex Trading
If you want to catch the serious profit in forex dealing you need to trend watch forex trends which are worse term. here we are going to give you a 3 step simple method which if you use it correctly, will help you catch every superior forex trend and lead you to long-term term currency dealing success.
Most beginner traders don't bother trying to trend following forex lengthier term - instead they try forex scalping or day trading. These methods focus the trader on small moves and they hope to catch small profit however as most short term moves are random, this leads to equity eliminate.
The other alternatives are swing trading and long term forex trend following and this article is all about the latter method. If you look at any forex chart, you will see long-term term trends that last for months or years. These moves can and do yield serious profit - present we will outline a simple method to get them.
Breakouts
By far the best way of catching the serious moves is to use a forex dealing strategy based around breakouts. A breakout is simply a move on a forex chart where a new high or low is made and resistance or support is broken.
It's a fact that most leading moves start from new highs or lows.
While it might appear that you are not buying or selling at the greatest level, you are in terms of the odds of the trend continuing. Most forex traders make the mistake of waiting for the breakout to come back and get in at a better price but these traders never get on board. The grounds for this is if a breakout occurs, then you have a new strong trend and a pullback is not very likely to occur.
Most traders don't buy or sell breakouts and that's exactly why it's such a powerful method.
The only point to keep in mind is a support or resistance which is ruined, should be valid and that means at least 3 points in at least 2 different times frames. The more tests and the greater the spacing between the tests the more valid the level is.
Confirmation
Of course not every breakout keeps and some reverse, these are false and can cause losses. You therefore need to confirm each move. All you need to do to achieve this is to put a few momentum indicators in your forex trading system to confirm your dealing signal.
These indicators give you an estimation of the strength and velocity of price and there are many to choose from. We don't have time to discuss them here (simply look up our other articles) but two of the greatest are - the stochastic and Relative Strength Index RSI
Stops and Targets
Stop points are easy with breakouts - Simply behind the breakout point.
If you have a serious trend then you need to be careful you can milk it, so don't move your stop to soon and keep it outside of normal volatility. If it is a huge move, trailing stops should be held a long-term way back and the 40 day moving average is a good level to use.
You have to keep in mind that when the trend does eventually turn you are going to give some profit back. You don't know when the trend is going to end, so don't predict.
It's ok to give a serious back, as that's the nature of trading forex. Keep in mind if you got 50% of all leading trend you would be very rich. When you are long-term term trend following you have accept giving a bit back and taking dips in open equity as the trend develops - this is noise and does not affect the long term trend.
Most beginner traders don't bother trying to trend following forex lengthier term - instead they try forex scalping or day trading. These methods focus the trader on small moves and they hope to catch small profit however as most short term moves are random, this leads to equity eliminate.
The other alternatives are swing trading and long term forex trend following and this article is all about the latter method. If you look at any forex chart, you will see long-term term trends that last for months or years. These moves can and do yield serious profit - present we will outline a simple method to get them.
Breakouts
By far the best way of catching the serious moves is to use a forex dealing strategy based around breakouts. A breakout is simply a move on a forex chart where a new high or low is made and resistance or support is broken.
It's a fact that most leading moves start from new highs or lows.
While it might appear that you are not buying or selling at the greatest level, you are in terms of the odds of the trend continuing. Most forex traders make the mistake of waiting for the breakout to come back and get in at a better price but these traders never get on board. The grounds for this is if a breakout occurs, then you have a new strong trend and a pullback is not very likely to occur.
Most traders don't buy or sell breakouts and that's exactly why it's such a powerful method.
The only point to keep in mind is a support or resistance which is ruined, should be valid and that means at least 3 points in at least 2 different times frames. The more tests and the greater the spacing between the tests the more valid the level is.
Confirmation
Of course not every breakout keeps and some reverse, these are false and can cause losses. You therefore need to confirm each move. All you need to do to achieve this is to put a few momentum indicators in your forex trading system to confirm your dealing signal.
These indicators give you an estimation of the strength and velocity of price and there are many to choose from. We don't have time to discuss them here (simply look up our other articles) but two of the greatest are - the stochastic and Relative Strength Index RSI
Stops and Targets
Stop points are easy with breakouts - Simply behind the breakout point.
If you have a serious trend then you need to be careful you can milk it, so don't move your stop to soon and keep it outside of normal volatility. If it is a huge move, trailing stops should be held a long-term way back and the 40 day moving average is a good level to use.
You have to keep in mind that when the trend does eventually turn you are going to give some profit back. You don't know when the trend is going to end, so don't predict.
It's ok to give a serious back, as that's the nature of trading forex. Keep in mind if you got 50% of all leading trend you would be very rich. When you are long-term term trend following you have accept giving a bit back and taking dips in open equity as the trend develops - this is noise and does not affect the long term trend.
Intro of Currency Exchange
There are numerous reasons to get involved in FOREX trading – high leverage rates, liquidity of traders capital, truly 24 hours trading environment, convenience of trading online, and the list goes on and on. FOREX trading is one of the latest hypes in the trading world. With more than trillions of average daily turnover, FOREX market stands as the largest trading market. Seven of the world currencies, United States dollars, Australian Dollars, Japanese Yens, British Pounds, Swiss Francs, Canadian Dollars, and the Euro Dollars, are massively traded everyday worldwide. It is simply a world market as there are no centralize trade location available for FOREX traders. Everyday FOREX trade begins in Sydney, and moves around the globe to Tokyo, London, and then New York. Unlike any other financial market, investors can respond to money-value fluctuations caused by economic, social and political events at the time they occur - day or night.
There are a few reasons why you should learn about FOREX trading, these includes the great leverage rates available in FOREX market, commissions free trading, instant and convenient online trade, and most of all, you can make money regardless to the bull/bear market condition.
For the new comers, FOREX means foreign exchange, or more details, foreign currency exchange. It involves buying and selling currencies concurrently. Every time a FOREX trader makes a deal, he or she spend different country currency to buy in the other country currency. The trade might looks funny to you at first as FOREX traders are both buying and selling money in the same time.
For the beginners, reading FOREX quotes might be confusing. Some common quotes that you might be seeing are like: USD/JPY 110.2, EUR/USD 1.2385/1.2390, and GBP/USD 1.7360/65. Now these figures might looks complicated but the concept is relatively simple. Currency quoted in pairs simply means the relative value compare to the other. In our given example, USD/JPY 110.2 means a dollar of United States Dollar is equal to 109.2 Japanese Yen. USD in our case is known as the base currency; while Japanese Yen here is the counter currency.
Banks and currency dealers are the major traders in the FOREX market. Large international banks such as HSBC, Barclays, J. P. Morgan Chase, and Deutsche Bank are those who are actively trade in currency exchange. According to Bank for International Settlements (BIS) market surveys, more than half of the foreign exchange transactions are done between financial organizations—either they are strictly between banks, or it involves banks and other non-banking financial institutions.
FOREX trading involves a lot of risks. Thus, analytical approach is always necessary to manage and minimize such risks. Similar to any other investments, FOREX traders apply two kinds of approaches to manage their risk: the fundamental, and the technical analysis.
Fundamental analysis basically means studies of surrounding events that affect the market trends. For example FOREX market, fundamental traders will consider events and situations that will affect the value of a country currency value. These factors include the local bank policies, political states, country growth rates, natural disasters, market speculator’s mood, terrorism attacks, and wars.
Instead of reviewing
There are a few reasons why you should learn about FOREX trading, these includes the great leverage rates available in FOREX market, commissions free trading, instant and convenient online trade, and most of all, you can make money regardless to the bull/bear market condition.
For the new comers, FOREX means foreign exchange, or more details, foreign currency exchange. It involves buying and selling currencies concurrently. Every time a FOREX trader makes a deal, he or she spend different country currency to buy in the other country currency. The trade might looks funny to you at first as FOREX traders are both buying and selling money in the same time.
For the beginners, reading FOREX quotes might be confusing. Some common quotes that you might be seeing are like: USD/JPY 110.2, EUR/USD 1.2385/1.2390, and GBP/USD 1.7360/65. Now these figures might looks complicated but the concept is relatively simple. Currency quoted in pairs simply means the relative value compare to the other. In our given example, USD/JPY 110.2 means a dollar of United States Dollar is equal to 109.2 Japanese Yen. USD in our case is known as the base currency; while Japanese Yen here is the counter currency.
Banks and currency dealers are the major traders in the FOREX market. Large international banks such as HSBC, Barclays, J. P. Morgan Chase, and Deutsche Bank are those who are actively trade in currency exchange. According to Bank for International Settlements (BIS) market surveys, more than half of the foreign exchange transactions are done between financial organizations—either they are strictly between banks, or it involves banks and other non-banking financial institutions.
FOREX trading involves a lot of risks. Thus, analytical approach is always necessary to manage and minimize such risks. Similar to any other investments, FOREX traders apply two kinds of approaches to manage their risk: the fundamental, and the technical analysis.
Fundamental analysis basically means studies of surrounding events that affect the market trends. For example FOREX market, fundamental traders will consider events and situations that will affect the value of a country currency value. These factors include the local bank policies, political states, country growth rates, natural disasters, market speculator’s mood, terrorism attacks, and wars.
Instead of reviewing
Leap Right in Forex Trading Game
"A day of worry is more exhausting than a week of work."
-a forex trader
The forex, or foreign money exchange, is all about currency. Money from all over the globe is bought, sold and traded. On the forex, anyone can buy and transfer currency and could maybe come out ahead in the end. When dealing with the foreign currency exchange, it is conceivable to buy the currency of one state, sell it and make a gain. For instance, a broker might buy a Japanese yen when the yen to dollar ratio increases, hitherto trade the yens and buy invest in American dollars for a yield.
The forex and the stock market possess varied similarities, in that it involves buying and trading to make a gain, but there are some differences. Unlike the stock market, the forex has a much high liquidity. This means, much more money is shifting hands day-to-day. Another key distinction when comparing the forex to the stock market is that the forex has no place where it is exchanged and it never closes. The forex involved trading between banks and brokers all over the world and provides twenty-four hour admittance during the business week.
Other variation between the stock market and the forex is that forex transaction has much higher leverage that the stock market. When some person decides to put in in the forex, they can anticipate much higher yield when they are competent and recognize how it works. There can also be the possibility for bleeding much more money as well.
For those who are just getting started in the forex, myriad brokers supply the utility of exchange using the mini-forex system. This has a paltry minimum deposit, customarily $100. This makes it easier for those learning how to trade on the forex to suffer less of a fate of bleeding a lot of savings and to discover how the system goes.
There is a lot of jargon when dealing with the forex. Learning to exchange on the forex can be fairly daedalian for the apprentice trader. When anticipating at the names utilized in the forex, a symbol is composed of two parts. The first one that is used is one It is important to learn what currency symbols imply when mastering about the forex. There are many books and websites dedicated on teaching traders about using the forex.
For those using the forex, a stockbroker is normally a commendable idea. Brokers are professionals when it comes to trading on the forex and their familiarity is priceless, markedly to the new dealer. When it is time to find a broker, there are some factors to ruminate. One thing to scrutinize for when choosing a forex broker is to go with some person that offers low spreads. The spread is designed in pips, or the variation between the valuation at which currency can be purchased and the appraisal it can be sold at any set time. Because forex brokers do not charge a fee, they will make their money off of the spreads, or the difference. When picking a broker, look at this info and refer that with different brokers.
Furthermore, when looking at a forex broker, pay attention for one that is backed by a well known financial organization. forex bankers are generally attached with big banks or other types of financial institutions. If a broker is not with a big bank, keep searching. In addition, look for a broker that is registered with the Futures Commission Merchant (FCM) and that is regulated by the Commodity Futures Trading Commission (CFTC). Making sure that the broker is properly registered and backed by a large bank or institution ensures that you are getting a reliable broker that is experienced in trading on the forex.
-a forex trader
The forex, or foreign money exchange, is all about currency. Money from all over the globe is bought, sold and traded. On the forex, anyone can buy and transfer currency and could maybe come out ahead in the end. When dealing with the foreign currency exchange, it is conceivable to buy the currency of one state, sell it and make a gain. For instance, a broker might buy a Japanese yen when the yen to dollar ratio increases, hitherto trade the yens and buy invest in American dollars for a yield.
The forex and the stock market possess varied similarities, in that it involves buying and trading to make a gain, but there are some differences. Unlike the stock market, the forex has a much high liquidity. This means, much more money is shifting hands day-to-day. Another key distinction when comparing the forex to the stock market is that the forex has no place where it is exchanged and it never closes. The forex involved trading between banks and brokers all over the world and provides twenty-four hour admittance during the business week.
Other variation between the stock market and the forex is that forex transaction has much higher leverage that the stock market. When some person decides to put in in the forex, they can anticipate much higher yield when they are competent and recognize how it works. There can also be the possibility for bleeding much more money as well.
For those who are just getting started in the forex, myriad brokers supply the utility of exchange using the mini-forex system. This has a paltry minimum deposit, customarily $100. This makes it easier for those learning how to trade on the forex to suffer less of a fate of bleeding a lot of savings and to discover how the system goes.
There is a lot of jargon when dealing with the forex. Learning to exchange on the forex can be fairly daedalian for the apprentice trader. When anticipating at the names utilized in the forex, a symbol is composed of two parts. The first one that is used is one It is important to learn what currency symbols imply when mastering about the forex. There are many books and websites dedicated on teaching traders about using the forex.
For those using the forex, a stockbroker is normally a commendable idea. Brokers are professionals when it comes to trading on the forex and their familiarity is priceless, markedly to the new dealer. When it is time to find a broker, there are some factors to ruminate. One thing to scrutinize for when choosing a forex broker is to go with some person that offers low spreads. The spread is designed in pips, or the variation between the valuation at which currency can be purchased and the appraisal it can be sold at any set time. Because forex brokers do not charge a fee, they will make their money off of the spreads, or the difference. When picking a broker, look at this info and refer that with different brokers.
Furthermore, when looking at a forex broker, pay attention for one that is backed by a well known financial organization. forex bankers are generally attached with big banks or other types of financial institutions. If a broker is not with a big bank, keep searching. In addition, look for a broker that is registered with the Futures Commission Merchant (FCM) and that is regulated by the Commodity Futures Trading Commission (CFTC). Making sure that the broker is properly registered and backed by a large bank or institution ensures that you are getting a reliable broker that is experienced in trading on the forex.
Saturday, September 26, 2009
Trend of Forex Market
Forex is actually the foreign exchange and deals in the goods, services and currency trading. Forex trading has gained prominence with the passage of time and more and more people have started chasing the trend. This concept of forex is purely based upon investment whether they are small, or big one.
Forex is also considered the economic indicator of economy and help to ascertain the financial picture of the nation. Also, forex market is the biggest financial and economical market of the world. Its money capacity is considered even larger than the equity and treasury markets.
Currency trading is the chief work undertaken in this market and thus, great risk factors are involved with them. It is also said that it reflects the true financial and economic condition of the country in a defined way. Moreover, currency trading also highlights the factors connected with the assets that country store.
It is generally said that forex is a very volatile market and prices fluctuate very quickly in fraction of seconds. So, while trading meticulous concentration should be paid so that you do not miss out any prominent moment where price has gone steeply upwards. This is considered as the most important forex trading strategy which can bring you huge sums of profits.
As per the different forex trading signals, emphasis must be paid upon the mediums through which you can get instant information. Thus, internet and mobile phones can serve the purpose in the most appropriate way. These different forex trading signals can get you access to the forex alerts all 24/7. This makes them highly convenient and hassle free service mediums.
Forex strategy system works on the economic driving force of demand and supply concept. Once the demand f any product increases steeply, it directly influences the supply side. On the overall picture of the forex trading system, it highlights the profitability of the forex market.
Forex alerts are also needed for the awareness about the changes that take place in the financial market of forex forex signals so that economic feasibility of that country can be determined accordingly. This in turn helps the economists for analyzing the different trends that influence the market. They after bring the new theories of economics that can help in understanding the forex strategy system in a better way.
Currency trading also help in exchanging the most used currency in which most of the trades of the country can be undertaken. In case, company wants to trade with any other country, at that time it requires its currency so that it can further undertake the business. Also, currency trading forms a vital part of investment that can help to earn profits.
Forex is also considered the economic indicator of economy and help to ascertain the financial picture of the nation. Also, forex market is the biggest financial and economical market of the world. Its money capacity is considered even larger than the equity and treasury markets.
Currency trading is the chief work undertaken in this market and thus, great risk factors are involved with them. It is also said that it reflects the true financial and economic condition of the country in a defined way. Moreover, currency trading also highlights the factors connected with the assets that country store.
It is generally said that forex is a very volatile market and prices fluctuate very quickly in fraction of seconds. So, while trading meticulous concentration should be paid so that you do not miss out any prominent moment where price has gone steeply upwards. This is considered as the most important forex trading strategy which can bring you huge sums of profits.
As per the different forex trading signals, emphasis must be paid upon the mediums through which you can get instant information. Thus, internet and mobile phones can serve the purpose in the most appropriate way. These different forex trading signals can get you access to the forex alerts all 24/7. This makes them highly convenient and hassle free service mediums.
Forex strategy system works on the economic driving force of demand and supply concept. Once the demand f any product increases steeply, it directly influences the supply side. On the overall picture of the forex trading system, it highlights the profitability of the forex market.
Forex alerts are also needed for the awareness about the changes that take place in the financial market of forex forex signals so that economic feasibility of that country can be determined accordingly. This in turn helps the economists for analyzing the different trends that influence the market. They after bring the new theories of economics that can help in understanding the forex strategy system in a better way.
Currency trading also help in exchanging the most used currency in which most of the trades of the country can be undertaken. In case, company wants to trade with any other country, at that time it requires its currency so that it can further undertake the business. Also, currency trading forms a vital part of investment that can help to earn profits.
Quailty of Forex Education
Forex education is available for those interested in learning to trade foreign currencies. An individual can learn forex trading on select forex websites and from downloadable software. Books, CDs and traditional software packages are available on the subject of forex trading education.
The following is a brief and by no means complete list of sources. To see our personal recommendations, visit our website.
Forex Trading for Maximum Profit: the Best Kept Secret off Wall Street, a book and CD-Rom by Raghee Horner offers forex education for those who are just beginning to learn forex trading trend lines and the differences between major and minor trends. The book also explains the process of placing orders and tries to prepare the reader for the ups and downs of forex trading. The CD-Rom included with the book illustrates trading techniques and the author’s successful trading systems. Raghee Horner is referred to as a master teacher of forex education.
The Ultimate Professional Trader Plus CD library is a product by Online Trading Academy which attempts to be the ultimate forex trading education package, with not one, but 24 CDs. This package strives to explain everything from the fundamentals of forex, to advice for those seeking to learn forex trading as a business.
There are numerous websites that offer demo accounts designed to help the individual learn forex trading. One particular site, Hawaii forex, offers not only free demo accounts, but also free “webinars”. This site also sells a basic forex trading educational package and a “power course” to learn forex trading indicators.
Another company that will soon offer live forex education on the web is forex Trading USA. This company recommends mentoring as the key to effective forex trading education that will lead to eventual success at trading currencies.
The following is a brief and by no means complete list of sources. To see our personal recommendations, visit our website.
Forex Trading for Maximum Profit: the Best Kept Secret off Wall Street, a book and CD-Rom by Raghee Horner offers forex education for those who are just beginning to learn forex trading trend lines and the differences between major and minor trends. The book also explains the process of placing orders and tries to prepare the reader for the ups and downs of forex trading. The CD-Rom included with the book illustrates trading techniques and the author’s successful trading systems. Raghee Horner is referred to as a master teacher of forex education.
The Ultimate Professional Trader Plus CD library is a product by Online Trading Academy which attempts to be the ultimate forex trading education package, with not one, but 24 CDs. This package strives to explain everything from the fundamentals of forex, to advice for those seeking to learn forex trading as a business.
There are numerous websites that offer demo accounts designed to help the individual learn forex trading. One particular site, Hawaii forex, offers not only free demo accounts, but also free “webinars”. This site also sells a basic forex trading educational package and a “power course” to learn forex trading indicators.
Another company that will soon offer live forex education on the web is forex Trading USA. This company recommends mentoring as the key to effective forex trading education that will lead to eventual success at trading currencies.
Friday, September 25, 2009
Make Money And Minimize Your Losses Trading On The Forex Market
If you are interested in trading on the Forex one of the first things you will need to do is find a broker. All Forex trading is conducted through a broker who will provide the trading platform and cover the leverage you choose. Your Forex broker will collect a small commission on your trades but you trade the currency anyway you want. Choosing a broker is an important decision; you will be trading your money through this broker so you need to make sure they are legitimate. The broker you choose should understand your needs as a trader and do their best to help you make money.
Ultimately how you trade is your choice so it is good to set up some trading rules to minimize your losses and maximize your profits. First of all setting up a stop loss is very important. The stop loss is a point where you will get out no matter what. For beginners to Forex trading, this can be difficult because there is always the hope that the market will turn around at the last minute and lots of money will be made. This is an important rule to stick with though because it can save you from losing it all. This is where the discipline in Forex trading comes in; you should trade with your head not your emotions.
The next rule is to develop a clear point at which you will take your profits. Some Forex traders go by a straight percentage of profit and some use technical market analysis as their guide. You should set the profit you are going to take before claiming a position. If you wait it is too easy to convince yourself to stay in waiting for another percentage point before getting out. This is also a difficult thing to do, but it must be done if you plan to increase your wealth consistently trading in the Forex market. Most experienced Forex traders agree that when you stick to your trading rules this will eventually yield a profitable currency trading system.
The Forex is a very liquid market; money is made in seconds and lost in just as little time. The Forex operates twenty four hours a day, five days a week. If you are wanting to buy or sell there is always someone to trade with. Different from other financial markets, the Forex market doesn't have a physical location or a central exchange. The Forex operates through a worldwide network of banks, individuals, and corporations trading one country's currency for another. Currencies which are widely traded include the US Dollar, the Euro, British Pound, Japanese Yen, Swiss Franc, Canadian Dollar, and the Australian Dollar. Four currency pairs of this group are normally traded for investment purposes: US dollar against Swiss franc, Euro against US dollar, US dollar against Japanese yen, and the British pound against the US dollar.
Ultimately how you trade is your choice so it is good to set up some trading rules to minimize your losses and maximize your profits. First of all setting up a stop loss is very important. The stop loss is a point where you will get out no matter what. For beginners to Forex trading, this can be difficult because there is always the hope that the market will turn around at the last minute and lots of money will be made. This is an important rule to stick with though because it can save you from losing it all. This is where the discipline in Forex trading comes in; you should trade with your head not your emotions.
The next rule is to develop a clear point at which you will take your profits. Some Forex traders go by a straight percentage of profit and some use technical market analysis as their guide. You should set the profit you are going to take before claiming a position. If you wait it is too easy to convince yourself to stay in waiting for another percentage point before getting out. This is also a difficult thing to do, but it must be done if you plan to increase your wealth consistently trading in the Forex market. Most experienced Forex traders agree that when you stick to your trading rules this will eventually yield a profitable currency trading system.
The Forex is a very liquid market; money is made in seconds and lost in just as little time. The Forex operates twenty four hours a day, five days a week. If you are wanting to buy or sell there is always someone to trade with. Different from other financial markets, the Forex market doesn't have a physical location or a central exchange. The Forex operates through a worldwide network of banks, individuals, and corporations trading one country's currency for another. Currencies which are widely traded include the US Dollar, the Euro, British Pound, Japanese Yen, Swiss Franc, Canadian Dollar, and the Australian Dollar. Four currency pairs of this group are normally traded for investment purposes: US dollar against Swiss franc, Euro against US dollar, US dollar against Japanese yen, and the British pound against the US dollar.
Learn to Trade Forex
Forex trading, or trading foreign currency, is an exciting money making and wealth creating opportunity. Unfortunately, as with any great money making opportunity, there are a lot of options as to how to get started. Not every option will be right for you. This article will help you decide which Forex learning method is right for you, your goals and your personality.
Keep in mind, when learning to trade Forex, each of these learning methods can lead to success. At some point, you might want to use all 3 methods of learning to trade Forex, especially when you experience how profitable it can be for yourselves. As you read this article, see which Forex learning method jumps out at you. That is the one you should most likely pursue. (To see which method I picked, check the end of the article.)
Learning To Trade Forex: Learn It Yourself
You might want to learn to trade Forex yourself. There is a lot of training material and people out there dedicated to teaching Forex Trading. If you are the type of person who likes to do everything themselves, this might be the right method for you.
Just keep in mind, there is a learning curve. Just like any new skill you learn, you can't expect to learn everything you need to know overnight. If you go this route, find excellent training materials and then dedicate yourself to learning over a period of months. Don't get frustrated if you don't understand everything right away.
Here is one thing about learning Forex this way I want to bring to your attention. Don't get so caught up in learning to trade Forex that you never apply what you learn. After all, the ultimate goal is to PROFIT from the Forex Market, not just understand it, right? There are a lot of people who know a lot about Forex Trading, that don't apply what they know or make any money. Don't be one of them.
Learning To Trade Forex: Hire An Expert
If you are planning to invest a lot of money in the Forex Market, you might want to hire an expert. For a fee, there are Forex Traders that will be happy to trade your money for you. Some of you reading this just might feel more comfortable letting someone else do all the trading for you.
While you can hire someone else to trade currency for you, you still want to learn something about Forex Trading. While you don't need to become an expert (that's what you are paying for), you still need to know enough to choose the right trader. The more you know personally about Forex Trading, the easier it is to identify the right professional for your needs and goals.
Learning To Trade Forex: Use An EA (Expert Advisor) Robot
Believe it or not, there are Automatic Forex Robots designed to do the trading for you. You'll definitely want to know something about Forex Trading for your own peace of mind, but the Forex robot basically takes care of all the currency trading for you. This is one of the fastest ways to get into Forex Trading,a nd can be one of the most profitable as well.
Instead of having to figure everything out for yourselves, these robots are programmed by professionals to react to certain market indicators. How well they do depends on how well they are programmed, and how well they react to developments in the currency trading market. While even a robot can't be perfect all the time, some Forex Robots can be surprisingly accurate.
One of the good things about going this route is eliminating emotion from your currency trading. As with other forms of investment, don't let human emotions like fear and greed be the deciding factors in how you trade. And using a pre-programmed robot can keep you from making costly mistakes. Plus, it is just a whole lot easier to set up and run while you are doing other things in life.
You've made an important discovery in the Forex Market. Currency Trading is a tremendous opportunity. The next step is just as important... how to make it work for you. Base the way you use to learn Forex Trading based on your personal goals and personality.
Which method did I pick?
Well, I never set out to become a "Forex Guru" or invest large sums of money in the beginning. I didn't feel I had the time or skills to learn everything and implement Forex Trading by myself. Plus, I wasn't ready to invest a lot of money to make hiring a professional worth while. I didn't want to pass up on the chance to make money in the Forex market for myself, so I researches and chose the best Automated Forex Robot I could find.
If you've realized what a great opportunity Forex Trading is you need to do what I did. Identify which method of learning to Forex Trade is right for you, and then get started immediately. This is one of those rare opportunities that can change your life and your future, and I wish you great success.
Keep in mind, when learning to trade Forex, each of these learning methods can lead to success. At some point, you might want to use all 3 methods of learning to trade Forex, especially when you experience how profitable it can be for yourselves. As you read this article, see which Forex learning method jumps out at you. That is the one you should most likely pursue. (To see which method I picked, check the end of the article.)
Learning To Trade Forex: Learn It Yourself
You might want to learn to trade Forex yourself. There is a lot of training material and people out there dedicated to teaching Forex Trading. If you are the type of person who likes to do everything themselves, this might be the right method for you.
Just keep in mind, there is a learning curve. Just like any new skill you learn, you can't expect to learn everything you need to know overnight. If you go this route, find excellent training materials and then dedicate yourself to learning over a period of months. Don't get frustrated if you don't understand everything right away.
Here is one thing about learning Forex this way I want to bring to your attention. Don't get so caught up in learning to trade Forex that you never apply what you learn. After all, the ultimate goal is to PROFIT from the Forex Market, not just understand it, right? There are a lot of people who know a lot about Forex Trading, that don't apply what they know or make any money. Don't be one of them.
Learning To Trade Forex: Hire An Expert
If you are planning to invest a lot of money in the Forex Market, you might want to hire an expert. For a fee, there are Forex Traders that will be happy to trade your money for you. Some of you reading this just might feel more comfortable letting someone else do all the trading for you.
While you can hire someone else to trade currency for you, you still want to learn something about Forex Trading. While you don't need to become an expert (that's what you are paying for), you still need to know enough to choose the right trader. The more you know personally about Forex Trading, the easier it is to identify the right professional for your needs and goals.
Learning To Trade Forex: Use An EA (Expert Advisor) Robot
Believe it or not, there are Automatic Forex Robots designed to do the trading for you. You'll definitely want to know something about Forex Trading for your own peace of mind, but the Forex robot basically takes care of all the currency trading for you. This is one of the fastest ways to get into Forex Trading,a nd can be one of the most profitable as well.
Instead of having to figure everything out for yourselves, these robots are programmed by professionals to react to certain market indicators. How well they do depends on how well they are programmed, and how well they react to developments in the currency trading market. While even a robot can't be perfect all the time, some Forex Robots can be surprisingly accurate.
One of the good things about going this route is eliminating emotion from your currency trading. As with other forms of investment, don't let human emotions like fear and greed be the deciding factors in how you trade. And using a pre-programmed robot can keep you from making costly mistakes. Plus, it is just a whole lot easier to set up and run while you are doing other things in life.
You've made an important discovery in the Forex Market. Currency Trading is a tremendous opportunity. The next step is just as important... how to make it work for you. Base the way you use to learn Forex Trading based on your personal goals and personality.
Which method did I pick?
Well, I never set out to become a "Forex Guru" or invest large sums of money in the beginning. I didn't feel I had the time or skills to learn everything and implement Forex Trading by myself. Plus, I wasn't ready to invest a lot of money to make hiring a professional worth while. I didn't want to pass up on the chance to make money in the Forex market for myself, so I researches and chose the best Automated Forex Robot I could find.
If you've realized what a great opportunity Forex Trading is you need to do what I did. Identify which method of learning to Forex Trade is right for you, and then get started immediately. This is one of those rare opportunities that can change your life and your future, and I wish you great success.
Learn Forex Trading
Unlike some people, I'm not going to pretend to denounce Forex Nitty Gritty as a scam, then try and tell you to buy it. Frankly, it really doesn't matter to me if you buy it or not. I'm just here to give you my opinion.
Forex Nitty Gritty is a new Forex trading course released by Bill Poulos. This is the same 30+ year trader and mentor that has produced trading courses such as Forex Profit Accelerator (which I've been using and loving for about 8 months or so now), and Forex Income Engine (which in my opinion was a complete flop until he recently re-released it as Forex Income Engine 2.0).
However, Forex Nitty Gritty is different than Forex Profit Accelerator and Forex Income Engine in many ways. First, Forex Nitty Gritty was designed and developed for the beginner Forex traders. His previous courses, and many others I've seen, are generally developed for more experienced and advanced traders. Then beginning traders get it, don't have any idea what to do with it, don't ask for support from his great support staff, and return it, frustrated. But Forex Nitty Gritty, being designed for the beginner, leaves that all behind.
Another way it is different, is that it has great support specifically to help the Forex trader beginner learn and understand how to trade Forex. All too often, I see trading systems and methods, Forex robots and automated trading systems, aimed at taking money from unsuspecting people and providing nothing of value. Forex Nitty Gritty has redefined customer support by providing a LOT of ways for the beginning forex trader to learn.
And Forex Nitty Gritty is priced for beginners too. It doesn't cost thousands of dollars like many other great courses. As a matter of fact, it costs less than almost all of the forex courses, robots, automated trading systems and other such things. It doesn't cost much more than those junky 20 page ebooks that people sell to unsuspecting beginners. And Forex Nitty Gritty is MUCH MORE than that. As a matter of fact, here is only SOME of the things you'll learn with Forex Nitty Gritty:
The Overview Module covers topics such as (but not limited to) What Forex is, who trades Forex, explaining the forex markets, forex pairs and forex trading requirements.
Module 2 starts teaching the mechanics of forex, such as what the major pairs are, the most active hours traded, how to read price quotes, leverage and margin, how to calculate profit and loss, order types, buying and selling, forex software, bar and candlestick charts, and timeframes.
Trading mechanics are continued in Module 3, teaching investing vs. trading, fundamental and technical analysis, indicators and technical tools, common price patterns, and even talks a bit about Forex Robots, Automated Trading Systems, and "Black Box" systems.
And Forex Nitty Gritty comes with another 4 modules to provide amazing learning potential for beginner forex traders!
So to all those people that try and pass off Forex Nitty Gritty as a scam, I say shame on you. You either believe in a product, or you don't. Do I think it will work for everybody? Nope. I think that it is the perfect course for a beginning forex trader, IF you want to put forth a little time and effort to actually learn how to trade forex profitably. No, this isn't the golden egg laying goose either. But for less than a hundred bucks, it provides you with SO MUCH incredible information about how to trade forex, it would be silly to pass up on it, if you truly want to learn.
Forex Nitty Gritty is a new Forex trading course released by Bill Poulos. This is the same 30+ year trader and mentor that has produced trading courses such as Forex Profit Accelerator (which I've been using and loving for about 8 months or so now), and Forex Income Engine (which in my opinion was a complete flop until he recently re-released it as Forex Income Engine 2.0).
However, Forex Nitty Gritty is different than Forex Profit Accelerator and Forex Income Engine in many ways. First, Forex Nitty Gritty was designed and developed for the beginner Forex traders. His previous courses, and many others I've seen, are generally developed for more experienced and advanced traders. Then beginning traders get it, don't have any idea what to do with it, don't ask for support from his great support staff, and return it, frustrated. But Forex Nitty Gritty, being designed for the beginner, leaves that all behind.
Another way it is different, is that it has great support specifically to help the Forex trader beginner learn and understand how to trade Forex. All too often, I see trading systems and methods, Forex robots and automated trading systems, aimed at taking money from unsuspecting people and providing nothing of value. Forex Nitty Gritty has redefined customer support by providing a LOT of ways for the beginning forex trader to learn.
And Forex Nitty Gritty is priced for beginners too. It doesn't cost thousands of dollars like many other great courses. As a matter of fact, it costs less than almost all of the forex courses, robots, automated trading systems and other such things. It doesn't cost much more than those junky 20 page ebooks that people sell to unsuspecting beginners. And Forex Nitty Gritty is MUCH MORE than that. As a matter of fact, here is only SOME of the things you'll learn with Forex Nitty Gritty:
The Overview Module covers topics such as (but not limited to) What Forex is, who trades Forex, explaining the forex markets, forex pairs and forex trading requirements.
Module 2 starts teaching the mechanics of forex, such as what the major pairs are, the most active hours traded, how to read price quotes, leverage and margin, how to calculate profit and loss, order types, buying and selling, forex software, bar and candlestick charts, and timeframes.
Trading mechanics are continued in Module 3, teaching investing vs. trading, fundamental and technical analysis, indicators and technical tools, common price patterns, and even talks a bit about Forex Robots, Automated Trading Systems, and "Black Box" systems.
And Forex Nitty Gritty comes with another 4 modules to provide amazing learning potential for beginner forex traders!
So to all those people that try and pass off Forex Nitty Gritty as a scam, I say shame on you. You either believe in a product, or you don't. Do I think it will work for everybody? Nope. I think that it is the perfect course for a beginning forex trader, IF you want to put forth a little time and effort to actually learn how to trade forex profitably. No, this isn't the golden egg laying goose either. But for less than a hundred bucks, it provides you with SO MUCH incredible information about how to trade forex, it would be silly to pass up on it, if you truly want to learn.
Subscribe to:
Posts (Atom)
