Global Forex Trading Online

Social Security Money Trading online

2009-11-15T04:00:00.002-08:00

According to "Money on CNN Money.com" by Walter Updegrave "What you need to know about Social Security", some interesting issues are addressed and some are more encouraging than the scuttlebutt we have been hearing from our uniformed highly opinionated sources.
Many of us worry about our 401ks and IRAs but what do you know about Social Security. It is the foundation for your retirement plans! In fact Social Security Money provides 50% of the income for more than half of retired couples and 20% for high income earners.
It is probably the only source of income that you will have able to offset inflation and be guaranteed to last the duration of your life.
(1) Can I count on Social Security to be there when I retire? According to "What You Need to Know about Social Security", you can depend on it to be there for you! How many times have we heard that it will go broke before we are old enough to qualify for benefits?
Payments for all retirees will be covered by payroll taxes until 2016 even if no changes are made to the program. After that the Social Security Administration can cover full benefits until 2037 by cashing in Treasury Bonds from the SS Trust Fund. And when the bonds run out, the income from payroll taxes can pay for at least 75% of all retirees for decades!
The Obama Administration is looking for ways to provide longevity to the system. They have considered imposing Social Security payroll taxes on incomes over $200,000. Perhaps raising the retirement age, or increasing payroll taxes or diminishing benefits in some way.
According to Bruce Schobel, who worked on the commission headed by Alan Greenspan to fixed the system back then, anyone 55 or older is likely to see no change or a perhaps only minimal changes to the system. Even younger workers can be assured that large cuts are unlikely.
(2) How much will I get every month? The formula for Social Security can be complex, but your benefits are based on your average lifetime earnings-more specifically over the highest 35 years of your working years.
Social Security checks are automatically adjusted for inflation. In 2009 payments were increased by 5.8%. Conversely the Congressional Budget Office estimates that there may not be an increase for inflation in the next several years due to lack of inflation.
(3) At what age should I begin collecting Social Security? Even though it pays to wait, most people take benefits before full retirement age. If you have an average or better life expectancy you might be well advised to wait a bit longer to collect. You will not collect quite as long but you will collect more at a time when you are unable to work to supplement your income.
You can increase the size of your SS checks by waiting until you are "full retirement age" or even later to collect. For instance, age 66 would yield full retirement benefits for most people, and waiting until age 67-68 will raise benefits to 110%, and waiting till age 69-70 can result in 120%-130% of full retirement benefits respectively. But your betting against your longevity if you wait longer.
(4) If I work, will I lose benefits? If you retire early and work your benefits are likely to be reduced but if you want to work after you have reached full retirement age, then there is not effect on your Social Security benefits according to the source quoted at the beginning of this article. In fact they say that if you work after full retirement Social Security will begin compensating you with a larger check for the benefits withheld and you'll receive higher payments for the rest of your life.
(5)Will my SS benefits be taxed? Although that is a question best reserved for your tax person, about one third of retirees currently pay tax on a portion of their benefits, as working during your Golden Years will raise your taxable income for those years.
According to "What You Need to Know about Social Security" by Walter Updegrave, "one of the best ways to lessen the tax bite is to wait at least until "full retirement" before receiving benefits."
"Another way is to take money out of a Roth IRA instead of your 401k because Roth withdrawals don't count as income when figuring if your benefits are taxable. So if you don't already have money in a Roth, you may want to fund one or convert some of your traditional IRA to a Roth."
Most of us would be well advised to not put all our eggs in one basket. If you can combine a pension with Social Security and even start a small business for your retirement years such as an online business, your retirement would more likely become "Golden Years".

Finding the Best Online currency Savings Account

2009-11-15T04:00:00.000-08:00

The best online savings account is the account that gives you the highest return on your money, has excellent service, and is insured by the government. There are many online accounts, but only one can be the best. With the right terms and knowing what you need and want, you can find the best account for you.
The Best Online Savings Account Interest Rate
If you are looking for an online savings account that has the highest interest rate, you have to do some looking around. The honest truth is that the interest rates of the savings accounts are changing constantly. They go up in a good economy and down in a bad economy. Generally, you're going to get close to the same interest rate for the top banks. If one is slightly better than the next, you can almost be sure that the other one will go up soon, too.
The Best Online Savings Account Service
Service is very important for any kind of bank or business. You want to make sure to get the best service from your service provider. Online banks are going to give you less service. They do not like it when you call them constantly and cause problems because you are costing them money. When you cost them money, the interest rate goes down. That is why you need to make sure the bank is excellent to begin with so that you do not have any problems.
Make Sure It Is Insured
It is very important that the account you choose is insured by the government. It should be FDIC insured. This means that if the bank you are with goes under, the government will give you your money. Make sure your money is safe and secure. When your money is safe, you can have better peace of mind that your cash is safe.

Do You Need an Offshore Safe Deposit Box?

2009-11-15T03:59:00.001-08:00

Are you thinking of buying and storing physical gold bullion in a secure offshore location? Are you looking for a secure storage solution for confidential documents? In either case, and many others, a secure offshore safe deposit facility is a useful asset to any freedom-oriented individual.
The good news is that most Austrian offshore banks or Swiss banks will be happy to rent you a safe deposit box, regardless of your passport. The bad news is that you need your passport! The famed Austrian and Swiss anonymous numbered bank accounts now only exist in the movies. Swiss banks usually want you to have an account from which they will deduct the annual box rental fee. Costs start at around 65 euro ($90) per year for a small box.
Just about every bank in Austria or Switzerland also sells gold bullion coins. Purchases up to around CHF 25,000 do not require ID in Swiss banks. Consider buying gold coins like the Austrian 'Philharmonic' a one ounce Austrian gold coin, similar to the American Eagle, Krugerrand or Maple Leaf.
Austrian and Swiss law prohibits banks from opening your safe deposit box unless they are sure you are dead! Austria is one of the only countries in the world with this protection. I have been in Safety Deposit vaults in France and the USA where it seems half the boxes have stick-on government seals on them due to tax investigations, lawsuits, or creditor claims. Those seals mean that the owner can't get into his box, and it is scheduled to be drilled open for inspection if the owner doesn't show up for an appointment with "the authorities." When choosing a location for your safety deposit box, be sure you consider these details as it could make a huge impact on your entire asset protection strategy

Is it Safe to Bank Offshore in Grenada?

2009-11-15T03:58:00.005-08:00

Offshore banking in Grenada has long been a staple of the financial economy for the island nation, however recently the benefits of banking offshore and globally here has come into question. Located between the Caribbean Sea and the Atlantic Ocean, Grenada is a sunny tropical Caribbean vacation and investing haven, covering 133 sq. miles of land. It has a land mass twice the size of Washington D.C. with its capital located in Saint George.
Grenada is famous, or perhaps "infamous," as an offshore banking and offshore tax haven. In the history of offshore investing, few countries have been as corrupted as this one. However, things are starting to look up in the offshore sector in Grenada as the authorities are taking a direct approach in restructuring the legislation and enforcing closer regulation on the financial institutions here. A great many investors would be wise though to be leery of investing in Grenada just yet though.
The more than 90,000 people who live there speak English, which is the official language, with a French creole accent, making it easy for tourist to communicate. Grenada relies heavily on tourism for its commerce as do the citizens, with a per capita GDP of $13,400 (2008 est.). The official currency is the East Caribbean dollar (XCD; symbol EC$) which is broken down into 100 cents. It has a very favorable exchange rate for U.S. citizens traveling there of, 1 East Caribbean Dollar (XCD) = 0.36751 US Dollar (USD).
During the years 2004 and 2005, 2 hurricanes devastated the Island, damaging the agricultural sector severely and making tourism the industry most relied upon for economic growth. Tourism coupled with a strong construction industry and a growing financial center, has helped the country economy recover. The offshore banking sector of Grenada is reemerging yet again as well and is reportedly ready to take its place in the world scene as a reputable offshore institution. Or at least that's what the authorities are telling the world.
After the news and press the country has received, as well as the ponzi scheme scandals that led to the collapse of many of the offshore banks and institutions in Grenada, perhaps its wise to keep a close eye on the country and adopt a "wait and see" attitude.

Using a Financial Directory

2009-11-15T03:58:00.003-08:00

Financial Directory user guide.
The way to get the best out of any financial directory is to fully understand the ways they are put together and produced. Many directories contain listings from the main CPC cost per click providers online such as yahoo. The main issue with cost per click listings as opposed to general natural listings is the fact they are not listed via relevance but listed by the company with the largest budgets or maximum cost per click rates.
As a result bear this in mind when looking for your particular finance product or service. It is worth while browsing through the top 10 listings to compare prices and offers. It is great using many financial directories compare insurance options.
The compare insurance options available on car, van, home and even breakdown cover provide a way of saving hours browsing through sites looking for the best quotes. In one felled swoop you can compare from 50 of the top insurance providers and save an amazing amount of time. When you have found your particular service also consider can I get this in a cashback offer.
What is a cash back offer you may ask ? Put simply there is something called affiliate marketing. All of the major providers in insurance offer these schemes. Where sites such as financial directories can use them to generate funds from the traffic there sites provide. Now what financial listings sites are doing to help drag in the customers is to split the affiliate fee they receive with you the customer.
The is means on many quotes you can receive anything from £40 up to £75 per policy. So lets say you car insurance costs £500 for the year minus £40 cash back bringing the yearly fee to only £460. Now take this one step further and some policy providers offer a charity cash back offer where people can donate there cash back fees to a charity of there choice. This is ideal lets say for someone fundraising or someone looking to help a local charity.

The Benefits to Setting Up a Seychelles Company

2009-11-15T03:58:00.001-08:00

Many people are constantly trying to find ways to keep their businesses afloat in this harsh economic climate. The options that exist in their particular jurisdiction do not necessarily offer the security to continue operating their businesses. For people like these, a Seychelles company is the perfect alternative or option for your business. Seychelles international business companies (IBCs) which are commonly known as Seychelles companies, are set up in the offshore region of the Seychelles Islands and allow you to operate and conduct your business from your own jurisdiction.
The Seychelles company is perhaps one of the best kept offshore secrets that offers secure offshore entities. It is virtually impossible for unscrupulous entities to penetrate the secure shield that the company provides to your IBC because of the privacy laws and legislation that the set of islands has set up. Once great benefit to having a Seychelles company is that no IBC is required to divulge the name of the directors or owners of the company. In fact, none of the information pertaining to the company will be divulged. This means that it is virtually impossible for your individual name to be tied in with that setup in the Seychelles Islands.
Setting up a company in Seychelles has been one of the best options for many people who wanted to go offshore and who wanted to ensure the highest level of protection available. Without doubt, Seychelles would be able to provide that because the set of islands constantly applies legislation to protect people's interests. A company in Seychelles can be used for a number of business related activities including offshore investing, holdings, trading, import and export, e-commerce, consultancy and many others. Because of how flexible setting up a Seychelles company is, most people will vouch to the fact that it is a relatively easy thing to establish.
The Seychelles Islands are known as a stable and independent jurisdiction. Setting up a Seychelles company offers you unparalleled privacy as there is no requirement in the Seychelles to disclose the individual directors or owners of a particular company. There is no restriction on the movement of shares, and the incorporation process is usually very fast and attracts low incorporation fees. There are no requirements for a board of directors; one shareholder and one director are enough to meet the minimum requirements for setting up a Seychelles company.
If your main concern is protecting and securing the assets of your company, then you should consider a Seychelles company as your option for getting your business incorporated. Having it set up in the Seychelles jurisdiction means that it will be completely secure from any kind of attempts to access your assets or information about your company. This jurisdiction has had a wealth of history in successfully protecting the assets of many business owners so they can rest easy with a peace of mind.

Accounting Errors, Old Software, No Organization

2009-11-15T03:57:00.003-08:00

The growth of the city budget shot up from $69 Million in 1999, to $471 Million by 2007 - quite an increase. This caused increased reliance in the city's finance department, and, accounting practices became less pressing needs.
After two major financial failings last year, however, the city went out and hired an accounting firm. It seems as though the finance office just couldn't keep up, and, an audit was needed. Auditors arrived this past Monday to start looking at everything from city payments to surprise investment. City leaders, at this point, hope that the audit will identify flaws in the city's financial state.
It appears as though the failure to keep up with accounting demands is a byproduct of rapid growth. This latest audit follows a problematic one from 2007, where a California based consulting company decided that the city had real, serious financial issues.
City leaders were more hard pressed to order this latest review after two embarrassing disclosures were announced. For one, in July of 2008, the city failed to perform an industry standard procedure, contributing to a $4.5 Million shortfall. Second, the city discovered overpayments to more than 20 former employees; these were severance payments that cost the city about $28,000.
In essence, the city's system is broken. Cities typically use accounting software specific to their individual size and needs. The system the city uses is in questions. Two years ago the Finance Department told city officials that the enterprise accounting software system was broken and frustrating. Things were never amended. The system was originally installed in 2002 for about $160,000, but it ended up costing the town a lot more in the long run. Finance employees describe the software as cumbersome, not intuitive, and not user friendly. The system takes up too much time and is inefficient, which in the end will cost the city even more - there are steps where data has to be entered, and re-entered in a tedious process, which leads to accounting errors.
As of now, the city has recommended installing a more sophisticated system by 2011. Until then, though, the finance workers will continue using their "Parallel System," a system that they developed themselves for more accurate reporting. A 2007 Citygate review, however, found that this system tracked purchase orders so poorly that auditors didn't even know what their fiscal condition was. While parallel systems do exist in some other cities and enterprises, it is almost a fact that they are not cost efficient or accurate enough to be the main financial solution.
Top financial officers still hope to implement a new software solution by 2011, and they will continue to expose and correct problems with the city's finances. Auditors expect to deliver a primary report by mid December, 2009. Until then, no one will know just how off the city's accounting and finances truly are.

Innovation of Money Transfer With the Help of Technology

2009-11-15T03:57:00.001-08:00

Money transfer is one of the safest ways of sending money from one account to another with just the use of a credit or ATM card. This term generally describes the activity where cash is not used as a mode of payment for purchasing something or for debt payment.
Different Types of Money Transfer:
1. Wire Transfer - this mode of transferring funds is an international bank-to-bank fund transfer in where a bank sends money to a recognized bank in another country.
2. Electronic Funds Transfer - this term is used for cashless based payments such as the use of cards upon purchase of products from a grocery store. This is very common in major credit card bank companies.
3. Email Money Transfer - this is very common in Canadian banks in which email is used for transferring accounts to another. One good example of this is the online and mobile banking in which is very convenient for majority bankers in the United States.
4. Giro - this kind of money transfer is done through online cash direct deposit. This method is also known as credit transfer.
How does online money transfer work?
Online money transfer is one of the trendiest and fastest ways of sending money to different places all over the world. A depositor wouldn't have to spend a lot of time and effort traveling to a bank just to withdraw money for shopping when they can just pay without using actual money through the use of their card. Sending money to relatives in other countries will be hassle free with the use of online cash remittance in which money can be sent to other countries in a flash. Online money transfer is an innovation to the postal money transfer in which is very risky and takes a long time to send and receive money.
Online Money Transfer with the use of the Internet.
The Internet indeed is one of the fastest ways to communicate with different people all around the world. The Internet is also an inexpensive way at the same time safest way to transfer money or to conduct bank-to-bank transfers all across the world. Sending money from the United States to Europe can be done in a minute with just few clicks in the computer. Online money transfer on the other hand can be used to send money to places that have very few banks as long as there are remittance centers in the area.
Many international cash transfer remittance centers have numerous branches across the world. This on the other hand is one fast way to send money to relatives across different countries. Most people in the United States are using the online bank transfer wherein they can log on to a bank's website to be able to transfer the funds to other accounts. Some people still conduct the traditional way of making cash transfers since they fear that online cash transfer is not safe due to the large presence of online hackers.

The Importance of Keeping Up With Finance News

2009-11-15T03:56:00.003-08:00

The modern world has numerous intricacies to it compounded by the realities of globalization and rapid technological advancements. What this means is that no one can decide to remain ignorant of their environment and all that is going on around the world as this directly or in directly affects our lives. Many people have always regarded financial issues as a preserve of the financial gurus and those who specialize in finance issues. Acquiring the knowledge of financial matters, at least the general matters, is essential for everyone.
Finance news keep you abreast with developments in various critical sectors of the either the national or international economy. For instance if you may want to keep abreast with opportunities that exist for you in domains like forex trader then you need to know what is happening in line with developments of the volatile stock market and money markets. On another front you may want to know where there are affordable foreclosure properties that you can makes the most of to get yourself that dream real estate property as your residence or for investment.
Many people are getting hands on with financial matters because it does not really take an expert to get into financial trade circle and the make the most of what the industry can offer. What happens in the finance world affects your life directly it does not matter if it happens on a national scale or international locale. The fact is that the global economy in intertwined such that financial matters in the Australia economy for instance may affect the whole of the global financial landscape, which has an impact on the state of the economies, inflation, interest rate, etc. These are kinds of issues that get to affect you directly.
Keeping abreast with financial developments has been quiet a critically important aspect in the recent global economic meltdown. The global financial sector has been riddled with negative developments which cost some people huge profits from various business ventures. Keeping up with finance news helped people to stay on the look out and alert on the next move to do for instance in terms of example selling property, buying a property, getting a bank loan etc. the principle of keeping pace with financial developments is very important especially for entrepreneur who want to keep a close eye on the financial developments every second in order to position themselves for expediency and survival.

Why Business Corporations Issue Corporate Bonds

2009-11-15T03:56:00.001-08:00

Generally we can divide the bonds market deals in two kinds of bonds, one is known as the corporate bonds while the other one is known as the municipal bonds. Here we would introduce and explain about the bonds and the ways one can make investment in them.
Corporate bonds, as the name suggests are issued by different business corporations. The only purpose behind floating these bonds is to collect the required capital that is needed for further investment as well as for meeting the daily expenses.
It is important to know that floating bonds is not the only option with business corporations for collecting money, rather they can also go for taking loans from banks, they can float shares in the stock exchange and of course the option of selling inventory is always in their hands.
The only reason why they rely upon corporate bonds is that they have to pay far less interest rate upon corporate bonds than that is demanded by banks or other financial institutions. Moreover, some times the condition of company is that much weak that no institution is ready to lend money to it.
While floating the bonds the companies do not need to keep the collateral with lending person as the bonds are not backed by any physical property of the company. It is just the reliability of a company that helps people decide about whether to buy the bonds of one company or not. Another advantage of floating bonds is that, if until the maturity date company does not want to pay back the money, it can convert these bonds into shares.
On the contrary, by investing into corporate bonds the investors help themselves get highest returns in the market. If an investment in the corporate bonds is made after a thorough research and in a professional way, one can get ones investment grow with an amazing pace.

Before making an investment into the corporate bonds, one needs to consider the prevailing interest rate as well as the interest rates of other companies, the demand of the bond in market, reliability of company, past performance and the credit rating that it holds. An investment decision that would be based upon all these factors would surely yield good returns as well as would ensure the safety of money.

Day -Trading -Strategy

2009-11-10T10:18:00.001-08:00

Day trading is one of those occupations which are attracting more people every day. Currency trading can show many benefits and allow someone to really cash in. Despite the risks involved, it can really pay off in the long run, as long as you do not trade without knowing what to do. Utilizing a Day Trading Strategy can really increase your chances of reaping the benefits from the market.
One strategy is called scalping, which is the most popular and probably the safest. It involves selling as soon as the value of the asset increases. Although the profit may not be so large, it is a sure profit. Another strategy is utilizing the daily pivot rule. It was always understood that things balance themselves out in the end, as what comes up must come down. During day trading, there is a time of day when the value reaches its highest point, before coming back down. The time to sell would be at the climax of the climb. Buyers during this time of day may see the asset is doing very well and may want to cash in too and buy your stock. That is why it is important for you to watch the progress of your stock to know exactly where the value would fall. Using these very basic strategies will increase your earnings if done correctly, and you will soon find yourself in rising success in day trading. Just use your head as well as your instincts, and you are in good shape.

Day -Trading- Rules

2009-11-10T10:17:00.000-08:00

Day trading is the act of trading various financial tools in one day. This is done by having traders take on positions before the trading begins.
Here are some day trading rules that you may opt to follow:
You have to know your market
Good day traders know that in order to have good, quality performance, they must focus on only a small number of indices, stocks and currencies. Get to know those details so you can have a grasp of the earning potential of each.
Prepare everyday
Review your work and be ready for new encounters everyday. Also, decide on what market will you be entering per day. This will help you prepare for the trading day.
Be consistent with your plan
If you have you adhered to a particular day trading type and style and planned for the day's trade, then stick to your plan. You will never know the potential of your preparations unless you try. If you are jumping from one style or one market to another, you'll easily fall and quickly lose.
Do not be greedy
Do not feel wasted for a tenth of a point that you miss. After all, you do not need to squeeze all points in one day trade. You can always take a loss when necessary. Stay focused on your goal. You should always stick to the point you are aspiring for.
The mentioned day trading rules can be utilized to ensure that you'll earn from business transactions during the trading day.

Day -Trading -Services

2009-11-10T10:16:00.001-08:00

Day trading is a very complex work and is often demanding for the trader. There are times a trader may need some help in order to keep himself productive. The trader may consider availing of Day trading services. That way, one may have someone else shoulder some of the work, while he can devote his valuable time to more profitable means. There are many Day trading services that can be found online that anyone can hire to aid them in their daily trading.
Some services offered are bookkeeping services. Every trader needs to keep track of their assets as well as safely keep his data available and update it regularly. It is an advantage for the trader; having someone take care of that task professionally will help guarantee all his data is organized and easily accessible. An organized trader can devote his talents to more important things such as trading. Another very important service is a Trader status analysis. This helps the trader get a bird's eye view of himself and his standing in the trading world.
It is very important in knowing how else the trader can better his status and climb the trader's social ranks. Success is all about what level you belong to. The better your status, the more investments one might be contracted to do. Everyone wants to do business with someone in high standing. This improves your image and future business ventures as well. If you are a successful trader, hiring services such as these are essential in enabling yourself to increase productivity as well your profits.

How to Get a Government Grant For Women

2009-11-10T10:08:00.000-08:00

Looking for a government grant for women? The good news is that there are plenty of these grants out there for you to get. The bad news is that it's pretty tough to actually qualify for one. The government has made some huge cuts to their budget the past couple years and it's no longer as easy as it was to qualify for grant funding.
It's still possible to get free grant money from the government, however. The key to getting a grant is to be persistent. You want to send out as many applications as you can and continually find new grants that you qualify for.
So, what sort of grants for women are available from the government? The government offers grants to promote growth in certain areas it has an interest in. Women's rights for example, are always a big deal with the government. Women have historically been less inclined to start businesses than men. The government, to address this imbalance, has made available various government grants for women starting a business. The government grants will allow women to start a business with some start up capital from the government. Education is also another big source of grant funding for women. Historically, men have gone to college more so than women. Because of this, the government makes available college grants for women. Many women are single mothers and don't have the sort of economic opportunity that other groups has. Because of this, single moms can sometimes get special hardship grants.
Getting a federal government gift aid or women is fairly easy - simply look around online for these grants and start applying.

Government _Grant For- Single Parents

2009-11-10T09:38:00.003-08:00

Looking for a government grant for single parents? The good news is that there are plenty out there for you to find. If you want to find one of these free grants, here is how to get one. Just be warned that it's not exactly easy to get one!
The first thing to do is look at the government website about grants to see what sort of resources you can find. This is the place where the government lists most of their grants. You can look through the listings to see what sort of free-money programs you can find. There should be many grants that specifically target single mothers or single parents.
What sort of grants can you expect to see? Grants for business, education, homes, etc.
Now, don't just limit yourself to looking at a government grant website. You should spend some time looking at other websites as well. You will want to look online to see what you can find. Now all grants are listed on the government website. You can also seek out websites that will help you search for grants that you qualify for as well.
The key to actually getting aid for single moms is to send off as many applications as you can. The more applications you send off, the better the chance you will have of actually getting grant money. It can be pretty tough to get a grant, but through the sheer volume of applications you send, you stand a very good chance of qualifying for a grant. So keep this in mind when you apply.

Paper -Coins

2009-11-10T09:38:00.001-08:00

Paper coins are an anomaly, but consider the advantages that paper coins could pose in our daily exchange of currencies. Paper used in monetary values, has always provided a lighter and easier kept monies. You can look back in the history of paper currencies and see that the value of a paper money has always superseded when used as less than a whole dollar.
Paper coins could eliminate the need for metal usage as a coin in the use of money exchanges and when you think of it, personal checks have been use for decades in settling over payments and refunds from many retailers if making restitution by mail.
Sending monies via regular mail cannot make use of metal coins, but paper would be no problem. Can you think of more ways that paper coins could be a better application in our day to day financial operations?
Thinking outside the box when choosing paper money material as a wider usage to include replacing metal coins could be a major adjustment but not an impossible task. Paper and vending machines are no longer a non-application excuse, since we now see vending machines accept paper money. So if a vending machine accepts paper money why not paper in making change?
Paper coins have so many money saving advantages that we should seriously consider the redesign of our monetary monies and the materials we use. The advantage of weight savings, transporting in and out of businesses, providing change to customers that don't have pockets for metal coins, the list goes on and on.
Many of you who have followed this article along are probably thinking either we are thinking too far out or we may have hit on a new benchmark idea that paper coins could be a real solution to many metal coin obstacles. If you know of other applications where paper would be a better use, then spread the word and you can be a part of an unexpected change in how we use coins whether using metal or paper.

Waterfront Real Estate Review

2009-11-03T21:58:00.000-08:00

Introduction
Paradise Cay is a waterfront community of about 200 homes (including a few newly-built town homes and free standing homes) on the North-East edge of the Tiburon Peninsula.
About thirty-nine of the homes front directly onto San Francisco Bay and have spectacular views. The rest are situated on canals approximately 90 ft wide and have docks capable of berthing cruisers some of which are up to 60ft in length.
Waterfront and Canal-front Homes
In common with many other Bayfront homes the ones in Paradise Cay do not have docks because permanently berthing a boat directly on the Bay is not practical due to wave motion. Nevertheless these absolute waterfront homes have excellent views of the Bay. The boats on the canals and in the Paradise Cay Yacht Harbor, which is part of the development, all have direct access to the Bay.
The canals are a little tight for maneuverability of large cruisers but that will just improve your boat maneuvering skills won't it? There is also a minor matter of fairly steep gangplanks at low tide but that is a small price to pay for a protected berth with direct access to the Bay. The canals are currently being dredged (October 2009) and dredging will be repeated about every five years.
The Yacht Harbor and Tiburon Yacht Club
The new, six acre Paradise Cay Yacht Harbor (marina), at the Northern end of the Paradise Cay development, can accommodate boats up to 115 feet with up to 24-foot beam on the end ties. It has two pump-out facilities, lots of parking and new restrooms.
The nearby Tiburon Yacht Club (400 Trinidad Drive) has about 230 members (about 40% of them from the Cay) but has no berthing facilities of its own given the close proximity of the Paradise Cay Yacht Harbor. It is an active sailing club with over thirty scheduled races per year - not just a social venue.
Community
However, the Tiburon Yacht Club does also serve as a gathering place for the community which has a number of notable residents. These include the Moseleyes (Tim the "patriach" being responsible for the Paradise Cay development in the sixties) and the interestingly controversial radio personality Michael Savage of the "Savage Nation". There is a good community spirit evidenced in various activities throughout the year.
Summary
Paradise Cay is one of the very few localities in Marin County where you can have a big boat safely berthed at your back door. Although it may appear a bit isolated on a map, it is only ten miles from the Golden Gate Bridge and a few miles away from a good (some say excellent) supermarket (Paradise Market) and the two extensive shopping areas of Corte Madera - "Town Center" and "The Village" either side of Hwy 101.
Route 113 Golden Gate buses run between Paradise Cay and Redwood High School on school days. The Cay lies in the highly rated Tiburon Reed School district.
There are very few localities in Marin that offer the variety of water views, boating options, a good school district and good shopping not too far away, that are to be found in Paradise Cay.
Further Information
Of course, as with any residential property, there are some secrets of location that are known only to those who do diligent research. Let us be your guide to finding the ideal property for you in this unique locality - or elsewhere in Marin.
We can give you expert help in sorting out all your housing options in Marin - especially when it comes to waterfront properties.
If you are seeking honest, dedicated, personal assistance in finding your dream home in Marin County please contact me.

Specialize in Real Estate

2009-11-03T21:57:00.002-08:00

Virtual assistants trained and experienced in real estate professionals are in high demand today!
Did you know that as many as 80% of homebuyers start looking for their next home online? Real estate agents need to have websites maintained in order to compete in today's internet society.
They need to rely on a knowledgeable VA who understands the industry, latest internet technology and industry software.
Although there is plenty of bad news today about the current economy and housing market troubles, there is an opportunity to make money as well. Plenty of overworked agents could really use your help. As more and more people are losing their jobs, or are in danger of losing their jobs, it's wise to look at ways to support yourself. A home based business as a Virtual Assistant is an excellent opportunity right now as many businesses are outsourcing...particularly real estate agents.
Real estate professionals are a busy, hard-working bunch who could really use an extra pair of hands... and that could be you!
Today real estate professionals understand how important it is to spend their time with their clients and are looking to outsource many tasks to skilled virtual assistants.
If you have experience or interest in this market, then you may just want to consider becoming a real estate virtual assistant. Just think of the many ways you could assist a busy agent and free up their valuable time.
A skilled and experienced Virtual Assistant can take over tasks such as

posting blog entries
inputting MLS data
updating inventory on websites
creating marketing material
hardcopy inventory sheets
and much more!

Are you interested but worried you don't have the necessary qualifications?
There are training and certification programs that can teach you the important skills necessary for supporting a realestate professional. You may need to take a little time and money to invest in yourself; however, this will be the best investment you make. Imagine the freedom of working for yourself in your own home based business.
To be an invaluable assistant that an agent can't live without, you will need to have a good understanding of the industry. Training and certification programs for real estate virtual assistant provide a basic knowledge of:

The business of real estate
Agency representation and disclosures
MLS, local listing and sales forms
Transaction management
Key marketing concepts

If you are tech-savvy, that's even better. Many busy agents would welcome help with the overwhelming amount of new technology today.

Growth Drivers For Real Estate Sector

2009-11-03T21:55:00.003-08:00

Losses of industry players were capped by the timely intervention of RBI, which increased the interest rate since 2006. The sector continues to remains unsteady. However, driven by the global economic recovery and macro-economic and sector-specific factors, experts believe that capital will start flowing in this sector. Besides global economic recovery, the following are the indicators of this sector's growth in the near future:
Industry experts estimate that by 2010, Indian IT and ITES sector will need approximately 150 million square feet of official space.
Growth in organized retail sector will provide significant boost to commercial real estate sector, which is expected to demand 220 million sq ft of additional commercial space across tier-I and tier-II cities.
According to the Tenth Five Year Plan of the government, there is a shortage of approximately 22 million residential units and over the medium and long term around 90 million dwelling units will have to be constructed especially for middle and lower income families. Housing Development & Infrastructure Ltd (HDIL) and the Mumbai Metropolitan Development Authority (MMRDA), together plan to build a residential-cum-commercial complex in Virar, a suburb of Mumbai at a cost of around $1.49 billion.
Introduction of REMFs (Real Estate Mutual Funds) and REITs (Real Estate Investment Trusts) will definitely have a major impact on realty sector by helping players for price determination. As per CRISIL, REITs has the potential to reach the size of $1400 billion in next 3 years.
The following section has some of the new projects expected to be undertaken by private realty developers:
* Tata Housing Development Company is expected to build around 1300 low-cost residential units at Boisar, 100km from Mumbai
* Atlas Group plans to diversify into Indian real estate sector and invest $201.51 million in Kerala over the next years
* Tata Realty and Infrastructure (TRIL) will invest approximately $4.2 billion for building SEZs, roads and other core sector projects
* All major realty players including DLF, Unitech and HDIL have big housing projects lined up for marked-down properties
* Avinash Bhosale Group (ABIL) will invest $126.25 million across Pune, Nagpur and Mumbai for developing 5-star hotels
* Marriott International plans to open 24 new properties in India over the next three years
* Cinepolis, a Mexican global multiplex operator plans to invest around $357.7 million in India and open 500 movie screens in the next 7 years for its film exhibition business.

Making Bad Mortgages Healthy Again

2009-11-03T21:55:00.001-08:00

In today's economy, and any recession in general, the loss of income is felt particularly by homeowners. Owning a home is the central part of the American dream in order to build a lifestyle and source of wealth for an entire family and generations to come. As the job market declines, home foreclosures become a reality, and this can sometimes end that dream for many families.
When facing a potential foreclosure, there are many steps that can be taken to avoid the loss of the home. Many homeowners take advantage of opportunities to modify a home loan in order to make payments more manageable. Home loan modification programs cover nearly every situation and will offer solutions that allow families to live in their homes and still afford to pay the bills every month on time.
Let's take a look at how a little hard work and diligence can save a mortgage.
Making Contact
The first, most important step in order to modify a home loan is to make contact with the principle lender or a home loan modification specialist. Suffering in silence is not the answer, and in fact, can jeopardize any attempt to fix the problem. Being pro-active and seeking help even before the first payment is missed allows for the greatest chance for a successful resolution to any financial crisis.
Home Loan Modification Specialists
Negotiating contracts is rarely a pleasant experience. It is easy to feel intimidated by a bank or lender when it comes time to modify a home loan. Thankfully, there are specialists available that can do all of the negotiating and contract work on behalf of a homeowner. These companies work with banks and lenders to change mortgage terms in order to make monthly payments palatable.
When choosing a representative, be careful to find the best in the field. When looking for a representative, verify that the company is an Online Business Bureau approved site or part of the Better Business Bureau.
Starting The Home Loan Modification Process
Putting together a financial statement of the homeowner's income, assets, and liabilities is the first step when negotiating the terms of a mortgage whether it is done personally or through an advocate. Developing a thorough financial statement requires monthly bank statements (at least 2 months worth), copies of recent paychecks, the last year's tax return, as well as bills and living expenses. To complete the initial package, a hardship letter should be included that states why a loan modification is necessary and the desire to stay current on the mortgage and remain in the home.
Once the financial package is in order, the process can begin. There are many options available when re-arranging loan terms to fit any situation. Loan advocates are an excellent resource for weighing the options in order to make the best decision. Regardless of what changes are needed in a mortgage, obtaining a home loan modification early is the best way to avoid foreclosure.

Real Estate Finding a New Track in Indian Economy

2009-11-03T21:54:00.001-08:00

A big impact of recession is seen in the worldwide market, where many big companies posted big losses, asked for a bailout and even filed for the bankruptcy. The recession had such an impact on the world over economy that even a core business of a particular country went in loss with many citizens pulling their hands off from investment part.
Same happened with the Indian real estate market, the most bullish sector where not many hesitated before putting their money forward for an investment related to some plot, flat, office, shop etc.
In the month of September 2008, when recession captured the world with a full grip, the real estate of India suffered a big loss session. All the major reality players like Jaypee Group, Unitech and DLF came up with the schemes and rebates on flats to attract as many buyers as they can and sell off the reserve as soon as possible.
The cities like Mumbai, Delhi, Bangalore, Kolkata and National Capital Region accounts for big business of the country with many property owners earning big money from the rental income from homes and offices.
One can analyse the downfall of rental income in these cities as many fully constructed buildings are standing with a very less space occupied with them and that too on a small amount of rent in comparison with the rentals of 2007.
This downfall was not limited to the rental part of real estate industry but the pure buying and selling of properties also came to a halt after financial crises reached the Indian economy.
With the global economic crises on one side, leading players of real estate India like DLF and Unitech are focusing more on the repayment of debts as soon as possible.
This has resulted in big real estate players selling their personal office properties, shifting their focus from core property business to some other businesses like insurance and hospitality and selling off some part of the company by getting listed on the capital market.
However, according to the recent study conducted by several industry watchers, the real estate of India is coming back on profitable track with the demand for offices is increasing in major cities like Bangalore and Mumbai, however Delhi and NCR are still far from witnessing growth in demand as many are expecting further fall in rentals here.
Besides the growth factor in office and shop rentals, a slight growth is also seen in the buying and selling transactions of properties.
With the Indian economy coming on track again, the demand for flats are seen rising in past one month. The real estate developers like Amrapali, Parsvanath and Unitech are nor registering some potential bookings on their order books.
The recent festive season has also added some profits to the real estate industry when many were keen on buying a new home.
During the last festive season, a very low rush was seen for the real estate buying but this year, the banks came up with some attractive home loan schemes with the help of rebate provided by Reserve Bank of India.

AUTO FOREX TRADING SYSTEM

2009-10-28T20:11:00.002-07:00

When it comes to earn lots of money with forex trading in an easiest manner, it is highly recommended to go for auto forex system trading. Now, you must be wondering why it is so. Well, before taking into the account of these systems, it is essential for you to consider their worth first. Basically, forex trade market works for twenty four hours a day. It means that opportunities of earning money can come at anytime. But, is it possible for you to monitor all these trade activities for the whole day? Well, the answer will definitely be no! Now, here comes the requirement of these auto forex system trading.

Such systems can assist you as a professional broker and that too without charging any monthly wages. Now, let us consider the functioning of these trading systems. Basically, these systems work upon the specific software which acts according to the growth or fall of the currency. It means that the decisions taken by auto trading system are the assurance of earning a lot of money.

In addition, these systems do not require you to sit in front of them to monitor their activities. They work for you throughout the whole day and as soon as any earning opportunity arrives, you are sure to grab that instantly. Although these systems are quite trendiest these days, but it doesn't mean that you should trust them blindly. As forex trading is a risky game and even a single mistake of yours could put you into halt. That's why it would be a prudent decision to go for a demo session of these systems.

In addition, make sure the system that you are going to deal with is tested under the practical conditions of forex market. You can also search over the Internet to find out the most appropriate auto forex system trading software for you. It doesn't matter which software you are using in the forex trading, the only thing which matters is your strategy to make the most out of it. Therefore, select the software that works according to your strategies.

Forex Trading System - A Key To Successful Forex Trading And Trading For A Living

2009-10-28T20:11:00.000-07:00

Every one has his days when no matter how well he has planned out his trades, he may find some of his trades not performing to what is planned. It is only natural for one to feel upset, but for the follower of a forex trading system, making money or losing money from that trade is not the paramount objective.

Why is this so?

For the trader who employs a forex trading system, he can still face the losing trade with a smile, because he has had followed through the trading signals in a disciplined way, and it is only when a trader follows a system, he can be sure of keeping his losses small and to live to trade again another day.

By using a forex trading system, the trader can have a cool head, and can face his trades rather unemotionally. He can execute his trades following pre-determined price levels of initial stop loss, trailing loss and computed and projected price profit.

He knows his tolerable level of loss, his threshold of pain - and of course, his risk to reward ratio even before he trades.

Now when a trader has a trading system and follows through the trading plan, making profits is a natural result when he makes a correct trade. But when his trade is wrong, his forex trading system will very quickly show him that the direction of his trade is wrong, so that he is out of the game fairly quickly.

I am often flabbergasted at some very broad claims of some traders who condemn day trading systems and relegate them to the garbage bin. When you look at forex trading systems, review them quickly by peer recommendation whenever possible. By peer recommendation, I mean you can ask existing traders their experience on the trading system, and how they are doing with it. Posting to the numerous reliable trading forums will allow you to receive some independent reviews fairly quickly. At the same time, my personal experience, and that of many other professional traders is that day trading can be profitable, though it is never easy to day trade. Otherwise, how is it that so many day traders are able to earn their income day trading the short swings of the market daily for a living? So it is important for you to have a broad view of forex trading systems if you are contemplating of learning or purchasing any trading system that relates to day trading.

If you ever wish to trade successfully, whether you day trade or swing trade, it is important that you have a trading system that will allow you to approach trading in a disciplined manner. It is only when you are a disciplined trader that you can see consistent large gains and small losses.

Trend Following System - Building a System For Triple Digit Annual Gains

2009-10-28T20:10:00.003-07:00

Forex markets trend long term, they always have and they always will as long as we have a free market and the big trends which reflect the underlying economic cycle can last for many weeks, months or even years. If you learn to trend follow correctly you can make huge long term profits in around 30 minutes a day...

Many traders like to trade the market noise and trade short term but this is doomed to failure, as all short term volatility is random. If you trade the big trends you get better odds, more profits and spend less time on your trading. Lets look at trend following in more detail.

If you want to succeed at Forex trend following, you should keep the key points in mind below when formulating your Forex trading strategy.

Simple and Robust

The best trend following systems are simple and it's a fact that in Forex simple systems work better than complex ones, as they have fewer elements to break than complex ones. A graphic example of this is the free one we have on this site which has only one rule yet, test it and you will see how much money it makes. A Successful trend following system can be based on just looking at support and resistance and have a few indictors to confirm your view and that will work just fine.

Use Breakouts

All big trends start and continue from breakouts to new market highs or lows so if you are considering trend following, breakout methodology should be used in your Trading strategy. Breakouts are simple to understand and simply trade the reality of price change and trading breakouts is a highs odds way of trading Forex.

Trade Infrequently

I know traders that trade maybe once or twice a month and make triple digit gains and that's because they focus on the best high odds trades. You get nothing for effort in Forex trading, you're judged purely on results and if you are patient and wait for the best set ups you will increase your odds of success and reduce your work rate

Acceptance of Short Term Volatility

If you are tend following in Forex you are after trends that last for weeks, months or even years and you have to accept that you cannot predict tops or bottoms, you always have to give a bit back at the end of a trend and you also have to accept short term drawdown in equity against you as you follow the trend.

Long term trend following, requires patience and discipline but if you caught just 60% of every major trend, you would make a lot of money.

Forex Trading Signal - A Free Simple to Understand Equation Which Makes Big Profits

2009-10-28T20:10:00.001-07:00

Here we are going to look at a free Forex trading signal that makes big gains and has done for over 25 years and is used by some of the world's top traders in their Forex trading strategies. Let's take a look at it.

The signal doesn't even need trading software to generate it, you can actually do it in your head. The signal is credited to famous trader Richard Donchain who is considered the grandfather of modern trend following and he called it the four week Rule and this is the rule

1. When prices move to a new 4 month high buy a currency and hold it.

2. Wait for a new 4 week low to occur, liquidate the long and take a short position.

3. Always maintain a position long or short in the market and simply reverse on each new 4 week high or low.

The above rule could not be simpler but it works and if you test it, you will see how much money it makes and the reason it works is because it works on two pieces of logic which will never go out of date and there the following:

1. Markets trend up or down for sustained periods of time.

2. All major trends start and continue from major breakouts

This system over the long term, will catch a good chunk of profit from every major trend but despite the fact it works most traders won't use it for the following reasons:

1. They prefer the get rich quick route and buy a cheap automated software package with no independent verification of gains instead, the above Forex trading signal is proven and has a real track record over a quarter of a century.

2. It takes discipline to follow as its long term and traders have a problem with holding long term trends, they think trading frequently means more profits and its clear this is not true.

3. Most traders simply pass it buy because they think a signal so simple cant work but of course all the best systems are simple because they are so robust.

The 4 Week Rule, as stood the test of time and any trader can use it to seek Forex trading success. In the next article in this series we will look at how to add filters to the above trading signal to make it even more effective and also look at some of Richard Donchian's other Forex trading tools.

forex signal provider

2009-10-28T20:09:00.001-07:00

So you decided to make full time leaving from foreign exchange market? Or you are going to supplement your income from here? You have set up yourself with proper broker available. I believe you spent hundred of hours in front of PC trying to put together all maths and physics involving currency market. Now you watching business news in the morning paper and following CNBC channel to be on the top with latest information from exchange market. You trading your demo account trying to figure out how to make it all work? So? Does it? No?

Face the fact that in currency market all is possible and there is no golden rule to follow. There are so many aspects to consider that you will need at least another head to set this puzzle together.

But do not worry there is a hope that can make it work.

Signal solutions for forex trading. People who traded forex for a long time and developed their own systems to enter and exit with profit strategies. They will share this knowledge with you for varieties of prices from usd49 to usd499 a month for those precious information. Problem is which one will suit you best. Are they scams? How do I know?

For medium advanced forex trader is almost impossible to choose proper forex signal system, which is not a scam, or at least not profitable. There is bulk of forex signals providers out there. They all offer their signal solution to trade currency with success.

Advice is that you will have to establish what type of trader are you? Do you want to trade quickly or maybe over the days or weeks? What losses can you manage and how much money you want to invest.

As long as you know al that it is a time to pick up signal trade provider.

Few things worth researching are: performance, service offered and rewievs of the signal. Search on forum for another users of the product you are interested in and ask for comment. Every profitable system should be up on collective2 with real track performance. Look for service offered. You will quickly find out that only few offer free trail-option to try signals before you pay. Demand performance evidence.

But while doing all that hard work choosing your automat forex signal system remember that you will have to totally follow it without exceptions to make most out of it. Any even small innovation may have dramatic results in your own gains.

The opportunities of trading the Forex hedged grid system

2009-10-28T20:08:00.001-07:00

I have seen the hedged grid system been used successfully (and highly unsuccessfully) over the last few years. Unfortunately the failures tend to discourage traders from taking advantage of this great system. I have found that the failures are mainly due to ignorance, impatience and greed (common reasons for trading failure).

In a nutshell the grid system uses the following methodology. You start by buying and selling a currency. When the price moves a predetermined distance (grid leg) you cash in the positive leg, leave the negative leg and buy and sell again. Sooner or later the system goes positive and you would then cash in when it is positive.

This is a brief summary of the content of our free hedged grid trading course available on expert-4x.com. Please refer to this course for more details of how money is made. The attraction is that the system is reasonably mechanical, can be programmed and does not take much supervision as exclusively entry orders are used.

Money is made when the price retraces 100%, 50%, 33% at various levels. This starts looking like a strategy that supports the Fibonacci concept. The grid system is also based on the nature of the market to trade sideways 80% of the time and to trend 20% of the time.

The dangers are that what if the price does not retrace and continues to trend. The Grid system can not make money in a trending market – full stop. One has to realize that. You therefore need Strategies to minimize damage during these periods:-

Firstly I have found that the biggest mistake made by traders is that they select a very small grid leg sizes e.g. 20 to 30 pips. This is a recipe for disaster. The trick is to use big leg sizes between 150 and 300 pips. What this does is that it sometimes turns a trending phase into movement in a sideways market. I would typically use 300 pips for the GBPJPY and 150 pips for the EURUSD for instance.

Secondly there is no rule that says that the legs have to be the same size. So I change my leg sizes in trending markets to be even bigger. If I started with 150 for the 1st leg I would go to 200 for the 2nd leg and 250 for the 3rd leg etc. This makes sure that I am carrying less loss making transactions in a trend.

Thirdly – sometimes it is wise to increase the number of lots with the trend compared to the numbers against the trend in a good trend. However be aware of having the same number of sell and buy transactions. All you will have done was lock in your current status in a 100% hedge.

Fourthly – This is the biggest change and most important one that I personally have made in my grid trading strategy. Always cash in all your transactions when your system is positive and when the price reaches the end of one of your grid legs. By cashing in you are reducing the risk of carrying negative lots in a trending market. This also gives you an opportunity to re-assess the market conditions.

Fifthly:- Cash in a start again is always an option. One of my strategies is to cash in all my open positions when the 3rd leg of my grid is reached and start again. Experience has taught me that this is a short term pain that goes away very quickly and is soon forgotten.

People that have traded the grid system will immediately see how the above approaches will reduce the risks of exponential losses building up in a strongly trending market. Please feel free to contact Mary McArthur at marymcarthur@expert4x.com for clarification on any items discussed above. She has numerous examples of successful applications of grid trading

This article is part of a series and many more will follow on Grid trading, money management and Forex Trading Strategies.

Automated Forex Trading

2009-10-23T07:53:00.001-07:00

Why automated Forex trading? This is a logical question and it demands a logical, well-thought-out answer. After all, with so many hundreds of different varieties of investment vehicles around, why choose to trade foreign currencies? And more to the point, why try to automate the process?

To find a sensible answer, we'll need to look more closely at Forex investing and its various aspects. First, of course, the volume traded on the Forex market is huge relative to the other markets.

Second is its ready liquidity. With the market operating 24 hours a day, it's always open for business anywhere, anytime.

Third, since the market is so vast, one trader's buying or selling, even in very large volume, will cause no significant movement in market price.

Fourth, this market commands the largest number and variety of traders.

Trading locations are scattered all around the world, rather than being centered in just a few major cities of the USA or Europe.

Of course, as with any major market, many factors can influence foreign exchange rates, which may account for the powerful attraction for many Forex traders - the excitement. Average daily turnover in the foreign exchange market stands around 2 to 3 trillion dollars. That's DAILY turnover, and the figures come from none other than the Triennial Central Bank Survey of the BIS (Bank for International Settlements).

And the trend is upward. In other words, more money gets traded with each passing year, and may surpass $3 trillion within a very few years.

Perhaps most amazing, however, is the fact that anyone can enter this market and begin to trade foreign currencies. Entry requirements are low. This has been both a positive (because initial deposits are minimal) and a negative (a lack of experience can bring losses very quickly).

Now however, Forex trading can be partly automated by software that is sophisticated enough to offset much of a beginner's lack of knowledge. Even better, this software is not at all expensive - not when compared with the profits it may bring.

The concept of automation marks an important new trend in the foreign exchange trading market. The Interbank spot Forex market has also considered automating as well.

Automation actually brings a number of important benefits to Forex traders - especially those just entering the market.

With your computer handling much of the trading process for you, transactions can be done in real time. Although manual systems are well established, they have never offered the speed that an automated Forex trading system does. All trades are initiated and completed within milliseconds, which can be a huge plus because they virtually eliminate any lag time.

Problems that characterized manual trading methods can now be addressed and eliminated, or at least minimized. For example, if a trader were hit by a few losses in a row, he could be wiped out and unable to make new trades. This problem can easily be addressed using an automatic trading system.

Automated Forex trading also permits greater diversification. In the past, if you wanted to trade more currency pairs simultaneously, or a wider variety of them, you were limited by your memory and concentration. But thanks to automated trading, you can execute trades with other traders in Singapore or London or wherever, even it's midnight where you are. Thus you have the option of doing multiple exchanges.

You can also quickly evaluate various trading models from short-term data, projecting trends for as short as 15-minute or half-hour time slices.

As mentioned, extreme liquidity makes the Forex market unique. And greater automation will only increase this liquidity, with funds flowing faster than ever.

Risk becomes easier to manage with automation. International checks, now commonly used in Forex market purchases, are synchronized via automation technology. Since automated transactions are handled in real time, there is little chance of delayed payments, reducing the risk of non-payment by either party. And although issues still exist with the use of automated systems, they can easily be addressed and resolved through consistently updating the technology.

With the spread of automated Forex trading, the $3 trillion daily turnover may soon be far surpassed. And given the fast, efficient trades between any and every time zone, Forex trading is certain to remain one of the most profitable business models in today's changing world.

4x Trading Software At Its Best

2009-10-23T07:52:00.003-07:00

The Forex MegaDroid has been developed by John Grace and Albert Perrie. Both are forex traders with 38 years 4x trading experience between them. As close friends, over time they firmed up their thoughts about developing their own 4x trading software robot.

Sadly the Forex MegaDroid has a horrid sales page like all the others do - which initially was a big turn off for me.

It's exactly the look and feel you'd expect from a used car salesman with sleazy tactics. It is so tacky that I expected to be reporting here that their 4x software product is a disgrace. But during my research of them, I was forced to reconsider my first impressions. The proven, ongoing live testing results confirm this.

In all of the live-account testing I have seen, there is no question that it performs exceptionally well. They claim better than a 95% successful trade rate - which I doubted very much - but it's true. I have seen the proof many times.

Visit Forex Robots Reviewed by clicking the link below to see links to live 4x trading accounts of this 4x software in action.

This guy bought his MegaDroid, installed it easily, and opened live forex trading accounts with 3 different brokers. In each account he put $3,000. From each account ID, he gave his MegaDroid the data feed from each broker. The robot can then execute trades on his accounts.

He set his limits of risk he was happy with per the training. And then he sat and watched. He is a novice trader. He has just started out. He did nothing more than install it, set it on the default risk levels. Then he just watched and let it do its thing.

At the time of writing that review (May 14, 2009) - his 3 different broker accounts (using the one copy of MegaDroid) had made 37 trades.

Of the 37 trades, 36 made a profit - only 1 trade lost money - $7.36. For the 24 days trading till just then (on fully automatic) - his net profit is $1,067.15.

I am impressed by that. As of May 14, 2009 that's 97.3% profitable trades.

Also it is important to note the $/trade profit versus the $/trade loss. The 36 profitable trades were for an average of $29.85 profit each trade. As said, the 1 losing trade was for $7.36.

So, that's 36:1 profit to lose ratio on the number of trades. And a 4:1 ratio on the size of profits compared to losses.

My view is that even if a trader was expert and smart enough to do what the MegaDroid has demonstrated here, no human could concentrate long enough and consistently enough to match the performance.

Still not impressed? Then look at other live 4x trading account on the website Forex Robots Reviewed (link below).

MegaDroid $10,000 opening balance January 1, 2009 LIVE

As of May 14, 2009 it has now got a balance of $78,138.70. 103 trades - 101 trades made a profit. Look at the profit graph - sorry you have to visit the web page to get the link to the live 4x trading account.

Through the years of Forex trading John and Albert did realize that most Forex robot systems were designed and developed with only a single forex market condition in mind.

While this maybe true, I don't really care - I just want it to make money reliably and safely.

Every Forex trader does know that the forex market changes all the time. It is clear from real proof that the MegaDroid Forex Trading Robot has a system built into it that embraces this change.

The vendors claim this system has been successfully created to perform at 95.82% accuracy. What I have witnessed from real traders doing real trading it performs better than that. The novice is seeing 97.3%, and the professional is seeing just slightly better than 98%.

But don't rush off an buy Megadroid just yet. There are some important facts you need to know - so visit Forex Robots Reviewed to find out all about it.

COMMON MISTAKE BY FOREX TRADERS

2009-10-23T07:52:00.001-07:00

Forex trading is among the most lucrative industries that independent individuals can participate in. Beginners, though, are susceptible to making mistakes that may result in the depletion or total loss of their investment.

One of the strong suits of currency trading is that it allows traders to use leverage or to trade on margin. This means that they can buy or sell currencies despite a small account balance. Novice traders at times take advantage of this opportunity and decide to use too much leverage on a large trade. Such a move is highly risky since if the market shifts the opposite direction from what is expected, the trader may suffer greater losses.

Over trading is another tendency that beginners and experts in forex trading alike should avoid. Newbies often easily get excited by observed market movements and trade by impulse, expecting drastic shifts that fail to materialize. To some extremes, they engage in multiple trades at once simply because they wish to. Frequent trading in the absence of real earning opportunities may as well lead to loss.

In an effort to maximize their profit, a lot of new traders also speculate the point at which the chosen currency pair will turn around. Referred to as "tops" and "bottoms", these points are difficult to determine even for veteran traders. At times, it is more advisable to trade when a gradual, but constant movement is observed that yields less but more definite earning.

Forex trading firms today utilize their own platform that allows novices to trade in simulation mode. With enough practice, there are fewer chances that traders would make these mistakes and increased likelihood of earning high in this profitable business.

Growing Popularity of Forex Trading

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Today it is very hard to ignore the fact that forex market is the world's biggest financial market. Over the past few years, it has become the most popular market with trades amounting to more than USD 3 trillion every day. Generally referred as currency trading market, it always involves the combination of two currencies. For example- either you can buy Euro or sell US dollars, or you can buy and sale any other combination of globally accepted currencies.

In recent times, fx trading has gained huge popularity and turned out to be a very profitable money making option. If we look at the present scenario, it can be recognized as one of the most potentially rewarding types of investments available in the global market. Though this form of trading involves great risks but the potential to earn profits are enormous relative to initial capital investments. The major reason of growing recognition is its very low dealing costs, high leverage margin, 24 hours trading a day and high liquidity market. For example, with a $5000 account, you can make about $5000 per month.
Obviously it decidedly depends on the manner that you trade and the strategy you follow but good and experienced traders can double their money every month.

The key positive sign of fx currency trading that can help you consider it as a money-making affair can be its size. Its wide yet easily accessible size prevents almost all attempts by others to influence the market for their own gain. Consequently, when you invest in foreign currency market, you can be certain that the deal you are making has the same opportunity for profit as other investors do throughout the world.

So, if you are looking to get involve in this type of currency trading, it is always better to enjoy trading with the help of a forex broker. A forex broker can be the key person who can guide you to earn more profits from market, as a result it is always better to carefully select a right forex broker for right deal. Apart from all this, the next major fact about this form of currency trading is- in this form of trading there is no centralized location of foreign currency trading. With the help of various online platforms you can trade currency from any parts of the world. With the help of internet connection and active forex trading account you can easily trade in foreign currencies.

Today it can be considered as one of the few trading markets in the world that always provides you with opportunities to trade because of currencies strengthening or weakening. The supply and demand are the factors that determine the price in any market. Now when there are too many buyers and sellers, similar to the current situation in forex market, the price volatility can be much higher, market may be more dynamic and chances to make money can be even more. The price may go up and down more frequently and this dynamic nature helps in making decent money. Consequently, if you are looking to choose Forex as your business, its better you do not get worried about competition but must make sure you develop a proper strategy to earn money and enjoy good success in fx trading.

Forex Indicators For Better Trading Accuracy

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For some traders, they prefer to use the forex indicators to make some trading decisions. They spend hours in front of the computers to observe the movements of the indicators to make sure that they have already made the perfect decision. For them, they accuracy on examining the indicators is the life of their trading sessions. Once they made mistake, it would be a bit hard to recover.

Some traders are using the forex indicators to see the forex signal. The signal gives them some hints to make a decision. Most of the traders prefer to combines some forex indicators. These forex indicators would give them some forex signals combination. They need to determine the direction of the market to make some decision. Are they going to buy, or they want to get the sell position? The decision could be made after they see and examine the forex indicators.

Those traders realized that not all the time those signal forex combinations are correct. They might make misjudge of a movement of the market that surely might impact the whole trading process. To avoid this situation, those traders should really understand about the forex indicators. This is the best way to eliminate some mistakes that might be done.

The Foreign Exchange Market Differs From The Stock Market

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The alien interchange market is likewise known as the FX market, and the forex market. Syndication that takes place amongst two regions with dissimilar currencies is the basis for the fx market and the background of the Syndication in this market. The forex market is over thirty years old, traditionalistic in the early 1970's. The forex market is one that is not grounded on any one business or laying out money in any one business, but the retail and retail of currencies.

The divergence amongst the stock market and the forex market is the tremendous retail that occurs on the forex market. There is millions and millions that are traded daily on the forex market, almost two trillion dollars is traded daily. There is is much higher than the cash traded on the daily stock market of any country. The forex market is one that involves governments, banks, financial foundations and those similar types of foundations from other countries. The

What is traded, purchased and sold on the forex market is a thing that can easily be liquidated, meaning it can be turned back to cash fast, or often times it is really going to be cash. From one currency to another, the accessibility of cash in the forex market is a thing that can take place fast for any investor from any country.

The divergence amongst the stock market and the forex market is that the forex market is worldwide, worldwide. The stock market is a thing that takes place only within a country. The stock market is grounded on businesses and products that are within a country, and the forex market takes that a step farther to include any country.

The stock market has set business hours. In general, this is going to follow the business day, and will be closed on banking holidays and weekends. The forex market is one that is open in general twenty four hours a day because the tremendous number of countries that have part in forex retail, buying and retail are located in galore dissimilar times zones. As one market is opening, another countries market is closing. This is the continual method of how the forex market retail occurs.

The stock market in any country is going to be grounded on only that countries currency, say as an illustration the Japanese yen, and the Japanese stock market, or the United States stock market and the dollar. However, in the forex market, you're involved with galore types of countries, and galore currencies. You will find references to a variety of currencies, and this is a big divergence amongst the stock market and the forex market.

Forex Trading and Rack up Profits

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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.

Always remember that in all trades done in the financial market, you are working to build an upward trend, which will inevitably include both some gains and some losses. The goal is to keep the losses small while you maximize the gains. If you continually hold a long-term view, you will maintain emotional stability so that losses never discourage you and gains never over-excite you.

Make Money And Minimize Your Losses Trading On The Forex Market

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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.

There is money to be made on the Forex but it is also easy to lose money. Before you begin trading, you should do your research and learn about how currency trading on the Forex works. It is also important to take a good look at your finances so that you can use good judgment when choosing how much money you can afford to invest in Forex trading.

Right Forex Trading Software

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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.

Forex trading is a great way to lock up that future and to make a living in the current economy. If anyone tells you that it is going to be an overnight get rich quick deal, run away. What you need is a good, reliable program that spots good deals that you can make money from time and again.

Global Forex Trading

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There are many kinds of trading in the market exchange, but these days the most favorite one is the Global Forex Trading. Its daily volume even reaches $2 trillion dollars. It becomes popular since the speculator George Soros of the Quantum Hedge Fund was able to get over $1 billion dollars profits in couples of days by shorting the British pound in 1992. A fantastic number, isn’t it? But, what is it that makes more and more people interested in it? Well, the lures of Global Forex trading lie on these reasons:

First attraction will be the market’s hour. The Global Forex trading markets are almost always open, 24 hours a day and 5 days in a week non-stop. It is possible because the currencies fluctuate all day and night that any trader can do any trading without being limited by market hours. This is something that other equities might fall behind. They can be effective only during the market hours when the stock exchanges are open. Furthermore, the advance online Forex brokerages that allow people to trade comfortably from their homes or offices will be another excellent charm.

Secondly, the immense leverage will be the most charm for most traders. In the Global Forex trading, a trader can obtain 20 times, 50 times, or even 100 times from his original capital. It is unlike in stock trading where the leverage can only be twice as much as the original capital. To give you a better understanding, here’s the number illustration:

You open an account in an online Forex brokerage worth $10,000 dollars. In Forex market, trading is realized in lots where 1 Lot = 100,000. With an immense leverage, you may control $500,000 positions or worth as 10 lots. And if your positions moved favorably, let’s say giving you 5% gain, you already have $25,000 dollars in your pocket.

While in stock trading, you can either trade with the available funds or you can open a margin account and trade with double leverage only. So,when you have $10,000 dollars account, you can control only $20,000 dollars worth of equity positions.

Hopefully, this illustration can give you a better understanding on how the immense leverage in Global Forex trading can lure a lot of players into the game. However, you also need to know that although the immense leverage may give you benefit, it’s possible to wipe out your fund as well.

Somehow, the most important reason will be the large sums of money that can be made in the Forex markets. These are the reasons more and more people interested to jump in the market, including those who are full time traders and those who make it as merely a hobby.

If you decided to play in the Forex trading, you need to learn about Forex analysis first. This analysis involves two very important aspects, fundamental and technical. Dan Ho is an expert on technical analysis who does the trading too. You can get his book, or newsletter to help you start of with Forex trading. Or An online Forex course which is highly recommended for those who want to start this business can be a good option to consider.

However, you should never forget that global Forex trading is a highly speculative business where you can get a fantastic profit, or you can lose all of your funds as well. There is no guarantee here. Even having the best newsletter analysis service or Forex trading course are also not a guarantee for you profits nor able to prevent you against any losses.

What’s best needed here is having strong control over your impulses and emotions besides any methodological and technical tools. You also need to be disciplined and is alert to any fault in order to get your success in a global forex trading market.

Forex Online Trading

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Foreign Exchange market is commonly known as Forex market that has been established since 1970s. It is successfully recognized as the leader of liquid financial market these days. The transactions compared to the New York Stock Exchange reaches hundreds times bigger. The market is basically selling and buying money freely. It involves buying one currency and selling another.The main currencies in Forex will be US dollars competes with British Pound sterling, Japanese yen, Swiss franc, and Euro. The currencies here are symbolized in three letters, for example USD, GBP, JPY, CHF . The first two letter are indicating the name of the country, and the last letter is indicating the name of the currency. The trading of these currency pairs are constantly going because it’s done in all around the world. The value of each currency is pretty much determined by the demand in the market, not by the exchange as in the futures and stock markets. So it can be rising or failing. This is when the trader can take any position in the market, and if the market moved favorably from their position, they may gain profit. Forex trading also allows an immense leverage so that a trader can take position even up to 100 times of their actual capital. The trading can either be done in short period of time within the same day, or in an extended duration or overnight period.

Forex trading market is unique because it requests a quite simple qualification for the traders to invest and also the market is done worldwide, so it’s not based in any particular place. It is where a free competition runs in the market without having any external control. The market is considered objective too because the prices can’t be manipulatively changed unless one has tens of billions dollars to operate.

However, you must be aware that Forex trading is a high risk high return business. Although you can get a great amount of money, you can also lose a great amount of money as well. The way of investing is not complicated and it is a solid investment where you can gain a good profit if you do it right. So, before jumping in the field, learning Forex , both technical and fundamental analysis, are an obligation steps. Finally, does Forex suit you? Are you ready with all it needs

Forex Capital Market

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These days a Foreign exchange market or is commonly known as a forex market trading has been growing so fast that it becomes the leader of financial market in the world. To the traders, Forex market is something familiar in which they know how all the systems in it work. But, to most people, they don’t have a very deep understanding of what is the Forex market? So, this article will try to explore and show you the basic important things about forex market trading.

The activity of foreign exchange to pay for a business has been commonly done. If you are travelling abroad, you will of course need to exchange your money with the currency of the country you are going to. Or a traveler’s check can be another solution when you need to pay for a transaction abroad. When you are doing all these, you already engaged in foreign exchange, but it is NOT the kinds of activity happened in the Forex market. In the Forex market, the traders are trading foreign exchange in which the main purpose is 100% to make a profit from certain currency being traded for another currency.

Forex market trading is done all over the world 24 hours a day and 5 days a week by dealers at major banks or forex brokerage companies. Before the development of online trading, the market is dominated by banks, major currency dealers and large speculators. But now, thanks to the internet, small traders are also able to take part in the Forex market. The larger sized inter-bank units are broken down into small units by Foreign exchange market brokers so that it is affordable for individual traders to buy or sell the units. This way, the brokers give the opportunity for any traders to take position in the market at the same rates and price movements as the big players who once dominated the market. The traders can also have an overnight position without waiting for the opening market because the market itself runs 24 hours a day. Trading in Forex market moves from major banking centers of the U.S. to Australia and New Zealand, to the Far East, to Europe and finally back to the U.S., so that the currency trading is not centered on an exchange. This is where the difference from the futures and stock markets lied down.

Unlike the stock market, the price movements on the forex market trading are relatively very smooth. It is because the market is 24 hours-open non stop in which the trade can be continuously executed so that there is no gaps occurred. Even on September 11, 2001, the forex market was still open. The danger in which an investor is not able to enter and exit positions whenever they want is eliminated because the Forex market’s daily turnover reaches a fantastic number around $1.2 trillion.

Forex Advantages

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But one of the main advantages of the FOREX market is margin. In this market, a trader's money can play with 5-times as much value of product as a futures trader's, or 50 times more than a stock trader's.

Just like futures and stock speculation, a FOREX trader has the ability to control a large amount of currency by putting up a small amount of margin. However, the margin requirements that are needed for trading futures are usually around 5% of the full value of the holding, or 50% of the total value if you are trading stocks. The margin requirements for FOREX are about 1%. For example, the margin required to trade foreign exchange is $1000 for every $100,000. This can be a very profitable way to trade, but it's important to fully understand the risks that are involved.

When you trade in futures, you have to pay exchange and brokerage fees. FOREX is commission free, a much better scenario. Currency trading occurs on a worldwide inter-bank market that lets buyers be matched with sellers in an instant. But even though you do not have to pay a commission charge to a broker to be matched up with a buyer or seller, the spread is usually larger than it is when you are trading futures. And the spread is where the brokerage makes their money.

For example, if you are trading a Japanese Yen/US Dollar pair, a FOREX trade would have about a 3 point spread (worth $30). Trading a JY futures trade would likely have a spread of only 1 point (worth $10), but you would also be charged the broker's commission on top of that. This price could be as low as $10 for self-directed online trading, or as high as $50 for full-service trading. However, this is generally all-inclusive pricing. It’s a good idea to compare both online FOREX and your specific futures commission charges to see which commission is the greater one.

This may seem complicated, and frankly, it is a bit. The FOREX market is a technical market, but if you are willing to take the time to understand its workings and apply good trading discipline, you will realize substantial profits.

Currency Pairs

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There are five major currency pairs that are trades on the FOREX market, and they account for about 85% of all daily transactions. They are: Euro against US dollar, US dollar against Japanese yen, British pound against US dollar, US dollar against Swiss franc, and US dollar against Canadian dollar. They appear on the market in this form: EUR/USD, USD/JPY, GBP/USD, USD/CHF, and USD/CAD.

The key to understanding FOREX quotes is to remember that the currency listed first is the base currency and that the value of the base currency is always 1. So, a quote of EUR / USD 1.35 means that one 1 Euro is equal to 1.35 U.S. dollars. If the number increases, the value of the Euro is increasing while the U.S. dollar is decreasing, and if the number decreases then the Euro is weakening and the U.S. dollar is gaining strength.

The US dollar is normally considered the 'base' currency for quotes in the FOREX market, though there are exceptions, such as the GBP/US, where the British pound is the base currency. This also occurs with the Euro, and with the Australian Dollar. Of course, there are other currencies on the market than the major five. You may come across them being called cross currency pairs. These are simply currency pairs that do not involve the U.S. dollar. For example, EUR / JPY at 128.55 means 1 Euro is equal to 128.55 Japanese yen.

Bids, Asks, and Spreads

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Once you are comfortable with the concept of currency pairs, you are ready to consider the composition of a FOREX quote. These quotes are generally two-sided. The two sides of the quote are the bid and ask, which is can also be called the bid and offer. The bid is the price a seller is offering for a currency, the ask is the price a seller is willing to take for the currency. The difference between these two numbers is called a spread. Spreads are quoted in pips, which are the smallest unit of difference between the two currencies in the quote. If the quote between GBP/USD at a given moment is 1.5354/6, the bid is 1.5354 and the ask is 1.5356, which makes the spread equal 2 pips, the difference between the 4 and the 6. If the quote is 1.53545/6, then the spread is going to equal 1.5 pips.

The spread is how brokers make their money. Wider spreads will result in a higher asking price and a lower bid price. The end result of this is that you will pay more when you buy and get less when you sell, making it more difficult to realize a profit. Brokers generally don’t earn the full spread, especially when they hedge client positions. The spread helps to compensate the brokerage for the risk it assumes from the time it starts a client trade to when the broker's net exposure is hedged (which could possibly be at a different price).

Spreads affect the return on your trading strategy in a big way. As a trader, your sole interest is buying low and selling high (like futures and commodities trading). Wider spreads means buying higher and having to sell lower. A half-pip lower spread doesn't necessarily sound like much, but it can easily mean the difference between a profitable trading strategy and one that isn’t.

The tighter the spread is the better things are going to be for you. But tight spreads are only meaningful when they are paired up with good execution. A good example of when this is not happening is when your screen shows a tight spread, but your trade is filled a few pips in the wrong direction, or is mysteriously rejected. Then it’s time to reconsider your broker.

Finding a Broker

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It’s not always easy to know what to look for in a broker in any market, much less a market as complex as the FOREX. But, if you want to trade in FOREX you need a broker. While it might be tempting to simply ask the brokers what they can do for you, you can’t always depend on them to give you a straight answer. Here are a few things to consider when choosing your broker.

You will want a broker that has low spreads. Since FOREX brokers don't charge a commission, this difference is how they make money. Low spreads will save you money.

Along with this, you should be looking for a broker attached to a reputable institution.

Unlike equity brokers, FOREX brokers are usually attached to large banks or lending institutions. The broker should also be registered with the Futures Commission Merchant (FCM) as well as regulated by the Commodity Futures Trading Commission (CFTC).

Once you’ve narrowed your choices down to brokers that won’t cost you too much, and that are reputable, consider the trading tools that they are offering you. FOREX brokers have many different trading platforms for their clients, just like brokers in other markets. These often show real-time charts, technical analysis tools, real-time news and data, and may even offer support for the various trading systems.

Before you commit to any one broker, request free trials of their tools. Brokers generally provide technical as well as fundamental commentaries, economic calendars, and other research to help you make good trades. Shop around until you find a broker who will give you what you need to succeed.

The next item that you will need to evaluate carefully is the number of leverage options your potential broker has. Leverage is a necessity in FOREX trading because the price deviations in the currencies are set at fractions of a cent. Leverage is expressed as a ratio between the total capital that is available to be traded and your actual capital. For example, when you have a ratio of 100:1, your broker will lend you $100 for every $1 of actual capital you have. Many brokerage firms will offer you as much as 250:1. If you have low levels of capital you will need a brokerage with high levels of leverage to make reasonable profits.

If capital is not a problem, any broker that has a wide variety of leverage options would be a good choice for you. A variety of options will let you vary the amount of risk you choose to take. For example, less leverage (and therefore less risk) may be preferable if you are dealing with highly volatile (exotic) currency pairs.

Along with different levels of leverage, look for brokers that offer different types of accounts. Many brokers will offer you two or more types. The smallest account is known as a mini account and it requires you to trade with a minimum of around $300. The mini account also generally offers a high amount of leverage.

The standard account allows you to trade at a variety of different leverages, but it requires minimum initial capital of $2,000. And finally, there are premium accounts, which often require significant amounts of capital. They also generally have different levels of leverage available to the traders who use them, and often offer additional tools and services. You will need to make sure that the broker you choose has the right leverage, tools, and services for the amount of capital that you are able to work with.

Brokers to Avoid

2009-10-06T04:21:00.002-07:00

A broker that meets all of these needs should be a good broker for you, but you still need to be certain that they are honest. Dishonest brokers can be prone to prematurely buying or selling near preset points (commonly referred to as sniping and hunting) or may indulge in other habits that will cost you money.

Obviously, no broker admits to doing things like these, but there are ways to know if they have. The best ways to find out more about your potential broker is to talk to fellow traders. There is no actual list or organization that reports dishonest activity, but a visit to online discussion forums, or a simple conversation will often reveal who is an honest broker.

You should also watch to see if a broker has strict margin rules. Since you are trading with borrowed money, your broker has a say in how much risk you are able to take. You agree to this when you sign a margin agreement for your account. This means your broker can buy or sell at his discretion, to cover the brokerage firm’s interests, which could have repercussions for you.

Say you have a margin account, and your position takes a headlong nosedive before it begins to rebound to all-time highs. Even if you have enough cash to cover it, some brokers will liquidate your position on a margin call at that low point. This action on their part can cost you dearly. You can only find out whether the firm is prone to this kind of activity by talking to other traders.

When this occurs repeatedly, it means that your broker is showing tight spreads but is effectively delivering wider spreads. Rejected trades, delayed execution, slipping, and stop hunting are strategies that some brokers use to get rid of the promise of tight spreads.

Spreads should always be considered in conjunction with depth of book. Oddly enough, when it comes to economies of scale, FOREX doesn't even act like most other markets. On the inter-bank market, for example; the larger the ticket size, the larger the spread is. So when you see a 1-pip spread on an ECN platform, you have to wonder if that spread is valid for a $2M, $5M or $10M trade, which it probably isn’t. In many cases, the tight spread that is offered applies only to a capped trade sizes that don’t work for most of the common trading strategies.

Spread policies change a great deal from broker to broker, and the policies are often difficult to understand. This makes comparing brokers difficult. Some brokers actually offer fixed spreads that are guaranteed to remain the same regardless of market liquidity. But since fixed spreads are traditionally higher than average variable spreads, you can end up paying an insurance premium during most of the trading day so that you can get protection from short-term volatility.

Other brokers offer traders variable spreads depending on market liquidity. Spreads are tighter when there is good market liquidity but they will widen as liquidity dries up. When it comes to choosing between fixed and variable rates, the choice depends on your individual trading pattern. If you trade primarily on news announcements that you hear, you may be better off with fixed spreads. But only if the quality of execution is good.

Some brokers have base the spreads they offer their clients on the type of account the client has. For example; those clients that have larger accounts or those who make larger trades may receive tighter spreads, while the clients that are referred by an introducing broker might receive wider spreads in order to cover the costs of the referral. Other brokers offer the same spreads to everyone.

It is often difficult to get information on a company’s spread policy or its order book depth. Because of this, many traders get caught up in the promises they hear, often take a broker's words at face value. This can be dangerous. The only real way to find out what a company’s policy really is, is to try out various brokers or talk to those who have.

Margin Wisely

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Any broker you consider will likely have a minimum account size, also known as account margin or initial margin available to traders. Once you have deposited your money into the account you will be able to begin trading. The broker will also stipulate how much equity they require per position, or lot, traded. Always make sure that you know how your margin account is going to work.

Read the margin agreement between you and your clearing firm carefully. Remember, a margin account is basically a loan. The margin agreement will describe how the interest on that loan is calculated, how you are responsible for repaying the loan, and how the securities you purchase serve as collateral for the loan. Carefully review the agreement to determine what notice, if any, your firm must give you before selling your securities to collect the money you have borrowed. Talk to your account representative if you have any questions.

Trading currencies on margin greatly increases your buying power. If you have $5,000 cash in a margin account that allows 100:1 leverage, you could purchase up to $500,000 worth of currency – because you only have to post 1% of the purchase price as collateral. This is particularly useful in the FOREX market, where traders work with small price changes to realize profits. But the FOREX market is a volatile market, and positions can quickly move against a trader. This is when the high margin rates can create spectacular losses.

If the market moves against you, the positions that you have in your account could be partially or completely liquidated if the available margin in your account falls below your maintenance level. Always remember that your broker may not berequired to make a margin call, and even if your agreement states that they do, they may not wait for you to respond to the call. Because of this, you should monitor your margin balance on a regular basis and utilize stop-loss orders on every open position to limit risk. With care, margin can be a powerful and lucrative tool. Used wisely, as part of a carefully thought out approach to trading, it makes the FOREX market work for small traders.

Strategy and Analysis

2009-10-06T04:20:00.001-07:00

All successful traders have a carefully thought out system that they follow to make profitable trades. This system is generally based on a strategy that allows them to find good trades. And the strategy is based on some form of market analysis. Successful traders need some way to interpret and even predict some of the movements of the market.

There are two basic approaches to analysing market movements, in both equity markets and the FOREX market. These are technical analysis and fundamental analysis. However, technical analysis is much more likely to be used by traders. Still, it’s good to have an understanding of both types of analysis, so that you can decide which type would work best for your system.

Trading Tools

2009-10-06T04:19:00.001-07:00

Whether you choose to use fundamental analysis, or technical analysis, you will need a way to access and interpret information about the market. The Internet is filled with websites that offer you unique insight into the FOREX market, and it’s often difficult to know which ones to consider. Here is a roundup of some the more useful tools available. Of course, these offerings are always changing, so nothing is guaranteed until you try a program and find that it gives you the information you require.

The first program we’ll consider is the Advanz Auto4X Trading Platform. This is an automatic execution tool that will help you keep track of multiple trades, and automates your trading processes by taking Trade Station strategy signals, incorporating your trading strategy, and sending the results to Capital’s trading platform. Advanz Auto4X can handle a variety of trading strategies on various time frames. It can also handle any of the FOREX crosses that are made available for trading.

However, the majority of tools available to the individual trader are analytical tools, not automatic execution tools. Here are a selection of some that I have found useful.

FX Trading Systems Which Work

2009-10-02T12:11:00.004-07:00

Summary

1. Trading systems
2. Managing your funds
3. Trader Psychology
4. Summary

There are many different methods, systems and strategies which traders, “newbies” and old “pro’s”, apply to the market to make a profit from the movements in the prices. Each trader will assert that his or her methods are the best and the most profitable, but the truth is that each trading system has its strengths and weaknesses. The real keys to making money from the Forex market are the following:

1. Having and clear and simple trading system, and applying it consistently
2. Managing the funds you are trading with tight disciplines
3. Taking control of your psychology

This article will examine each of these three keys separately and propose some simple guidelines for traders to follow to avoid being trapped by the market during the inevitable periods of volatility which occur daily.

1. Trading systems
There are essentially two types of systems which traders employ. These are:

a. Price following systems
b. Price prediction systems

Let’s examine each one briefly.

Price following systems

These are systems which rely on momentum indicators, oscillators and averaging methods to simply follow the market in the direction in which it is moving. The simplest of these is to find a suitable moving average (MA) and trade in the direction the MA is pointing, with the price on the correct side of that average.

One can add to that a whole variety of other indicators such as MACD, Stochastics, RSI and Bollinger Bands etc. One charting package I use has 29 different indicators, leading to an overload of endless possible combinations to use. Furthermore, there are about 20 different possible time frames to study. Its not hard to see why traders end up with the commonly know “paralysis of analysis” which is recognized by the comatose mouse hand and glazed eyes of someone sitting in front of the screen for 12 hours without taking a trade.

They key is to keep it simple. Decide on the time from you choose to trade from (scalpers may prefer 5 minute or 15 minute charts, whereas session/day traders may prefer 1 hour, 4 hour of day charts) and look for a very simple system which combines no more than 2 or 3 indicators. Such systems may also incorporate simple trend line studies, with the trade direction following the prevailing straight line trend.

When the signals are given by your system, take your trades confidently and consistently. Do not abandon your method and start searching for another after the first loss.

Price Prediction systems

These are systems which are generally longer term systems, applied to session, day or longer periods. They involve deciding the overall direction of the currency pair over a longer time frame and then trading a simple “buy on dips” or “sell on rallies” approach, depending on the direction you have decided on. There are various tools to help the strategy trader, such as horizontal lines, trend lines, Fibonacci retracement levels, moving averages and so on. These will help to a) identify the direction of trade, b) identify a logical entry point and c) identify a logical exit point. These trades can then be programmed into the dealing software and left to take care of themselves, allowing the trader spend his time doing other things. This form of trading requires more skill and experience, but this can be learned with time and practice.

Essentially, price following systems generally tend to be shorter term “scalping” type systems, which involve screen watching for a large part of each day. Price prediction systems tend to involve strategies lasting 8 hours up to several days and allow the trader to get away from the screen and enjoy more free time.

Everyone has their preference but I have found from my own experience and observations that intense screen watching cannot be sustained for very long by most traders, before burning out after several weeks or months. You can recognize these traders immediately by their bagged eyes, short tempers and lack of social skills.

2. Managing your funds
Whilst most traders can invent or learn a reasonable trading system to suit their styles of trading, many cannot manage their account safely enough to prevent large losses and the dreaded margin call. Even the some best traders in the World suffer from temporary lack of sanity in this area (including “yours truly”). Interesting case histories are described, for example, in Jack Schwager’s book “Market Wizards: Interviews with Top Traders”

There are three simple rules which can be applied here:

a) Never leverage over 10:1 and as your account grows larger, reduce this to below 5:1
b) Never risk more than 5% of your equity on a given day, and as your account grows, reduce this to less than 2%
c) Never take a trade where you are risking more than 50% of the projected gains from the trade with your stop loss. In other words, the Win/Lose ratio (profit target in pips/stop loss in pips) should be 2:1 or higher.

Following these simple rules, even with a half baked trading system, will ensure that you can lose 2 out of every 3 trades and still break even on your account.

3. Trader Psychology
All humans are subject to two (often opposing) forces – the mind and the emotions. The key to successful trading psychology is to prevent your emotions from dominating your mind.

The emotions you will experience will fluctuate wildly from fear to greed, to self-doubt and elation. These are all the enemy of the trader and need to be tempered by clear, objective and logical thinking.

Work out your trading strategy based on your previously defined system. Apply the system with safe account management rules, and shut out the emotional noise which will attempt to convince you to close early, over leverage, risk too much, risk too little etc.

4. Summary
It is clear that the best traders aim for small and consistent gains without seeking “the latest” system to produce enormous profits. There simply are no such systems which work reliably day in and day out. Keep your money management tight and keep your emotions in check and you should succeed.

Finally – it is well worth the money spent on good education. Attend a seminar by a truly active trader and teacher, and buy lots of books on the subject. Do not think you can go from “zero to hero” in the FX market without investing time, effort and money in learning from experienced players. The money you might save initially will probably be lost many times over as the market works you over later.

Stock Market Leadership

2009-10-02T12:11:00.002-07:00

Stocks that act well while the Market is selling off may give you a clue to new Leadership

Over the past few years many investors have given up on the market especially when another round of selling has occurred. However this is exactly the wrong time to give up on the market because when the market reverses to the upside those stocks which had been acting well during the sell off may become the next big winners.

Here are a few examples of what I’m talking about. Let us compare the charts of HITK and USNA with the chart of the S&P 500 this past Summer and Fall when the market was selling off.

Looking at HITK first shows that this past Summer and Fall while the S&P 500 was dropping (points A to B) HITK was actually rising (points C to D) while completing the right side of a 1 1/2 year Cup. HITK then traded sideways for 4 weeks while developing a Handle (point E) and then broke out in late October. After breaking out HITK nearly doubled in price over the next few months before topping out in early January.

Now let us compare USNA with the S&P 500. USNA formed a 2 1/2 year Cup from the early part of 2000 until June of 2002. When the S&P 500 began to sell off last Summer and Fall USNA basically traded sideways during that period of time while developing a 4 month Handle from July through September. Then when the market made a bottom in early October and began to rally USNA broke out of its Handle on huge volume (point F). After breaking out in early October USNA then doubled in price over the next three months.

As you can see noticing which stocks are acting well when the market is selling off can give you a clue to whom the next leaders will be when the market begins to reverse strongly to the upside.

Earnings Growth and Stock’s Performance

2009-10-02T12:11:00.000-07:00

Why Earnings Growth is Important to a Stock’s Performance

If you go back through the history of the stock market there is a recurring theme among those stocks which have had some of the strongest price appreciation and it’s related to their Earnings Growth. If you plot a chart of Earnings Growth versus a companies Stock Price there is a usually a strong relationship between the two.

Here are a few examples over the past few years. First lets look at ELNT and its associated table of Earnings Growth and Stock Price over the past two years.

Meanwhile if we take the table above and make a graphical plot of ELNT’s Earnings Growth versus its Stock Price show a very strong relationship. Notice how ELNT’s stock price (blue line) began to rise significantly as its Earnings Growth (red line) started to accelerate beginning in December of 1999 (point A) and continued through September of 2000 (point B). From September of 1999 until September of 2000 ELNT saw its stock price rise from $9 to over $90 a share for a return of nearly 900%.

Next look what happened as ELNT’s Earnings Growth peaked in September of 2000 and began to decelerate over the next several months. As you can see ELNT’s stock price dropped in unison with its Earnings Growth (points B to C) and eventually gave back much of its gains that had occurred in 2000.

Now lets look at another example which proves that even in a Bear Market stocks can do well if they have strong Earnings Growth. BEL was a company that had major problems with its Earnings Growth in 2000 as shown by the table below. BEL didn’t start to see any positive Earnings Growth until 2001 but when it did finally occur BEL’s Earnings Growth accelerated strongly in the latter half of 2001 into early 2002.

As shown by the graphical chart of the table above BEL’s stock price went nowhere in 2000 (points D to E) as their Earnings Growth remained negative. However as BEL’s Earnings Growth accelerated in 2001 into early 2002 investors took notice as BEL’s stock price exploded in early 2002 (point F to G). Since the Fall of 2001 BEL’s stock price has risen from around $4 to over $20 a share for a return of 375% even in a negative market environment.

As these examples show regardless of market conditions companies which have strong accelerating Earnings Growth have the potential to perform very well until their Earnings Growth begins to decelerate. If you don’t believe this go back and research some of the best performing stocks of all time and a majority of them will exhibit similar characteristics.

The key is to recognize those companies which are starting to establish a trend of accelerating Earnings Growth before everyone else does which takes a lot of time and research. This is what I do every week as I spend over 20 hours a week looking for companies that are starting to show signs of accelerating Earnings Growth. This is how I found BEL and ELNT well before their stock prices took off.

Using Stop Loss Orders to prevent an Investing Disaster

2009-10-02T12:09:00.003-07:00

Many investors fail to use a Stop Loss Order to protect themselves in case they end up buying a stock at the wrong time. In his book "How to Make Money in Stocks" William O’Neil states even the most successful investors maybe wrong about 50% of the time when choosing stocks to invest in. The key is to cut your losses early when a stock fails to follow through to the upside and minimize your losses. However many investors fail to do so and allow a small loss to turn into a much bigger one by not using a proper Stop Loss Order.

A good rule of thumb is to never let a stock drop more than 8% below the Pivot Point when it reverses to the downside after initially trying to breakout. Thus this is where a Stop Loss Order would come into play.

Let’s look at a specific example. CLZR first formed a Double Bottom pattern in 2002 and then traded sideways for 12 weeks while developing a Handle. While forming the Handle CLZR traded roughly between $6 and $7 with its Pivot Point near $7. CLZR then broke out strongly in February and above its Pivot Point (point A) and rose to $10 very quickly. In this case a proper Stop Loss Order should have been placed 8% or so below the Pivot Point of $7 near $6.50.

After rising very quickly and stalling out near the $10 level CLZR had then completed the right side of a 2 year Cup. Over the next 10 weeks CLZR traded sideways again between $7.50 and $9.25 while developing a Handle. Then in April CLZR broke out again and rose to $12.50 rather quickly. In this case if you had missed the original breakout in February you got a second chance in April and should have placed a Stop Loss Order 8% or so below CLZR Pivot Point of $9.25 near $8.50.

Remember its always important to use a Stop Loss Order just in case a stock doesn’t perform the way you think it will. Allowing a small 8% loss to turn into something much bigger can be avoided by using a proper Stop Loss Order as the example below shows.

Imagine if you would have bought AMZN right before it peaked in the late part of 1999 (point A) near $120 and failed to use a proper Stop Loss Order once it began to sell off. If you had invested $5000 in it during the latter half of 1999 and used an 8% Stop Loss Order you would have lost only $400 as it sold off. If you had held on to it and rode it down to the $10 level which occurred in the Fall of 2002 you would have lost over $4000 instead.

Trading in Partnership

2009-10-02T12:09:00.001-07:00

Trading together with a friend can have its advantages. If one of you has more experience and the other more money, you can help your friend through your experience and he can help with margins. Together, you can trade larger size and perhaps make more profits. However, unless you both agree to the same line of action and what the possible contingencies might be, it is essential that you decide which of you is to execute the trades. It is more difficult reaching trading decisions together than on your own.

If you haven’t decided on the contingency measures in advance you’ll find yourself arguing and disagreeing in the middle of a trade going against you when timely action is of the essence. It can be quite disheartening and dangerous.

If you are not absolutely sure about your partner, and you don’t agree with the way he trades, you are better off trading on your own.

Take for example an instance where the order placed was ambiguous and the broker executed it twice. The traders accepted the mistake and then the market moved against them. The partner with the greater margins but less experience was in charge of execution. He placed the order before the market opened to roll the position out. The market moved against him, he covered the position at three times the premium received and then the market corrected. He was unable to get the other side because he couldn’t watch intraday.

Trading is a business! You must be totally prepared in terms of having a business plan, knowing how to place orders, and being on top of them from beginning to end. Even then things can go wrong, but being unprepared can lead to disaster. The smallest details must be thought of and prepared in advance, but mistakes and oversights still happen.

I came across an interesting concept. The path to enlightenment involves conquering five human weaknesses: greed, fear, ignorance, pride and jealousy. We should be all familiar with the first two, which cause much grief to traders, but the last three can be a big problems, too, so it’s worth pondering on them. Human weaknesses always show up to undermine one’s trading.

Greed makes people stay in a trade too long, or trade too big a size. Fear makes one get out of winning trades too early. Ignorance makes people commit innumerable mistakes. Pride doesn’t allow one to admit one is wrong and often, small losses are allowed to turn into huge losses because one doesn’t want to accept one is wrong. Jealousy can make one trade in a subjective manner.

A detached attitude is a great asset in trading. Trading is war and it is essential that you execute a pre-planned line of action flawlessly and unemotionally. You must be flexible and let things (that are now second nature) take their course. Be like an outside passive observer.

That is why it is so important to be at your best when trading. You must have all possible things on your side. You need to feel totally on top of it, prepared, in top physical shape,

by Joe Ross

Trading vs Gambling

2009-10-02T12:04:00.001-07:00

What are the differences between trading and gambling?

Many people think that trading is similar to gambling. Is this really the case?

For example, let’s take a look at Black Jack. If you start with $10,000 gambling capital, placing bets of $100 per hand and play 100 hands per day, how long will you last? In the game of Black Jack, with Las Vegas Strip rules, a casino has a built-in advantage of 1.5% over the player in the long run. That means that on average, a player will lose $1.5 per any $100 he bets with. After 100 hands, on average he’ll be down $150. Starting with a capital of $10,000 a player would last about 67 gambling days. That is very similar to the previously described trading scenario. In such case I would choose gambling because at least I would be losing my money in a more pleasant environment.

I chose Black Jack for our example because it is the only casino game in which it is possible for a skilled player to increase his odds to such extent as to be able to beat the House in the long run. A skilled counter can obtain advantage of up to 1.5% per hand over the House in the long run. That means that such a player playing 100 hands per day and average hand being $100 could double his gambling capital of $10,000 in less than 50 days. Similar odds apply to trading stocks, with more potential for profit and less chances for being kicked out of a casino. In order to make it work for you, we’ll need to get the odds on your side. Now lets look at how we can extract as much profits from our trades as possible.

Understanding Trailing Stops

Once you are in the trade and the price has started moving in your direction, you need to extract as much profit as possible. Not being able to do so will make you a losing trader in the long run. How can a trader lose if he only takes small profits at a time? Profit is profit, isn’t it? Not exactly… Profit of $550 is not the same as a profit of $850. If such profits are followed by three losses of $200 each, profit of $550 will become $50 loss, while profit of $850 will become $250 win. Do you get my point?

Profits are always followed by losses and if the profits are small they will not make up for the losses that will eventually and surely follow. However, becoming too greedy can turn a small profit into a loss. This will make you lose money in the long run. The best solution to resolving these conflicts is to use trailing stops.

As the name says, trailing stop follows the stock price that is moving in your direction. For example, let’s say that we have bought two S&P 500 contracts at 875. We will automatically put our stop loss at 1 point below the support line or if that is over our 4% limit we will put our stop loss at 871. The price starts to move upwards and reaches 876. We will now move our stop loss at $871.75. For every one point move in our direction we will move our stop loss 0.75 points up (or down if we were in a shortsell trade).

However if we were trading two contracts and the price has in our example hit 879 (4 points profit for ES or 10 points for NQ) we would sell one contract to protect our profit and for the remaining contract we would use trailing stop.

What is The Law of Charts™?

2009-10-02T12:00:00.001-07:00

The Law of Charts was discovered by Master Trader Joe Ross. As he likes to say, "It was there all along. It just happened to fall on my head much as the law of gravity was discovered when an apple fell on Isaac Newton’s head."

The Law of Charts defines four basic formations known as 1-2-3 lows and highs, Ross hooks, trading ranges, and ledges. These occur in all time frames because the depict human action and reaction vis-à-vis price movement.

What makes these formations unique is that they can be specifically defined. The ability to formulate a more precise definition sets these formations apart from such vague generalities as "head and shoulders," "coils," "flags," "pennants," "megaphones," and other such supposed price patterns that are frequently attached as labels to the action of prices.

A 1-2-3 high or low comes at the end of a trend or swing. It forms as the result of a change in the direction of prices. The 1-2-3 low forms as the result of buying pressure overcoming that of selling pressure. The 1-2-3 high forms as the result of selling pressure overcoming buying pressure.

A Ross hook™ always forms as the result of profit taking in an trend or swing.

A ledge forms as a result of profit taking, uncertainty about future price direction, or both. You might consider it as a pause in the overall movement of prices in a single direction.

A ledge is the smallest of a number of consolidation formations: it never consists of more than 10 or less than 4 price bars. It is denoted by containing two matching or nearly matching highs and two matching or nearly matching lows.

A consolidation consisting of eleven to 20 price bars is called a congestion, and a consolidation consisting of 21 or more price bars.

As simple as these definitions are, the have been found to constitute a "law." Any data that contains both a high and a low, will form these patterns; even data that has nothing to do with markets and trading.

Learn more about The Law of Charts, it is a free resource on our website. Study it as much as you want. And while you are visiting take a look at the Traders Trick™ entry.

The truth about Buy and sell signals

2009-10-02T11:59:00.003-07:00

Hey Joe!
If I get all my buy and sell signals to work properly, I should come out a winner, right?

Wrong! The perennial questions are, "Should I buy? Should I sell?" All too many traders focus their efforts on identifying buy and sell signals. In fact, that’s what most trading books consist of-some way to find buy and sell signals. Trading systems are usually all about "where to get in."

The research and analysis traders do is geared towards reaching the goal of getting that magic "base line" directive to guide their actions. How ignorant can you be?

Any successful, experienced trader will tell you that although properly identifying buy/sell signals is important, it’s not the key to being successful. Instead, the way you manage each trade is what will determine your success.

Traders who take the baseline approach tend to believe that the success of their trading activity is dependent on following the right buy/sell signals at the right time. Clearly, it’s important that a trader be able to understand the process of generating signals and to use the methods involved. Realistically though, almost any trader can find a way to generate signals (whether using technical methods already out there, coming up with their own system, or using their platform’s automated signal generation tools).

Any successful, experienced trader will tell you that your trade doesn’t begin and end with a buy or sell. There’s a trade management process involved. For each trade you make, you’re making a group of decisions. The way you manage and time those decisions is what will determine the success of your trade.

Let’ say two traders get the same signal at the same time and act on it. One’s trade may result in profits while the other’s results in losses. How is this possible? It can occur because each trader made a different combination of decisions throughout the course of the trade. The decisions might include scaling in and/or out of the trade, using or not using trailing stop losses, setting or not setting profit objectives prior to entry, patience or lack thereof, etc. The trader who made the most effective overall combination of decisions will have the better trade results in the end. Of course, there are times when pure chance, gives the better result to the worst trader.

It’s very important to regard trading as a process, and to understand that as a trader your efforts need to be focused on the activity of trading itself, as opposed to getting a quick base line answer. Because there are many things to take into consideration in making your trades successful, it’s essential that you educate and train yourself in all the different areas. Learn how to develop better trading plans and analysis methods, and then learn how to apply what you’ve developed to the process of a making a trade-from the original impulse to enter or stay out of a trade to the control of your thought processes and emotions in managing that trade.

Disgruntled Trading -Trading Plans

2009-10-02T11:59:00.001-07:00

The following situation happens quite often to many traders. Look it over and see if it has been happening to you:

You have been faithfully following your trading plan and the rules you’ve set for trading. By following them you are now in a trade that doesn’t look so good. At the same time, by following your trading plan, you see that you’ve missed a beautiful move in a different market, one that could have made you a lot of money.

You are in a bad trade and you’ve missed out on a great trade. You become disgruntled. You think to yourself that your trading plan must not be so great. You think there must be a better methodology that you should use that will prevent this from happening. You think to yourself, "Yes! That’s it, I’ll change the way I do things." So you create a new rule or modify an old one so that such a rule would have let you capture the trade you missed and avoid the one you took. Have you been making this mistake?

Here’s another way it can happen: You are in a trade, and your rules cause you to be stopped out with little or no profit. Shortly after you exit the trade according to plan, prices take off and move to where, had you stayed in, you would have made substantial profits. The move leaves you sitting there thinking you are stupid. You reason that there must be something wrong with the way you do things.

Your rules, your plan, or both must not be right. So you change what you are doing, or make a new rule so that the next time this happens, you won’t be left behind.

You have just abandoned all of the hard work you’ve previously done that enabled you to successfully trade futures. You’ve abandoned your education and learning. You’ve abandoned the wisdom that will enable you to be consistently successful as a trader. You’ve just started trading history, and you are supposed to be trading on the future movement of prices. You are trading what happened, not what will happen. By not being willing to be left behind, you are setting yourself up for being left out.

If you’ve been having thoughts, or have been acting as we’ve just described, you have a terrible problem with greed. Why? Because greed can never get enough. You can’t satisfy greed. Greed wants more, and yet more.

Not every trade is your trade. Not every trade has to work out for you. You have to be satisfied with getting a reasonable share of trades that fit your description of a good trade. Some of those trades will turn out to be great trades, others are good trades, and a certain percentage of your trades will be bad. There’s no way around it.

Not every good trade will turn into a great trade. When you enter a trade according to your rules and trading plan, you have no idea whether or not it will turn out to be a good trade, much less a great trade. The reality of trading is that, try as you might, you cannot know the future.

Whenever we miss a big move and then try to find some pattern, indicator, rationale, or modification to make to what we are doing so that the next time we will not miss the "big" move, it is a part of the hunt for something magic ¾ a continuation of our quest for the holy grail of trading.

What a terrible mistake to allow yourself to make. Winning as a trader consists of making some small profits and some larger profits on a regular basis. Obviously, there will be some losses. We regularly want to keep losses small, but there are times when a loss will get away from us and turn out to be bigger than desired.

If adversity causes you to become disgruntled, then you really need to examine your thinking and your approach to trading. Your trading plan must allow for disappointment and loss.

You’ve got to believe in what you are doing and be able to trade from the knowledge that when you follow your rules and your plan, you will make money from your trading.
When you become disgruntled and begin to change your plan, your rules, or both, you are setting yourself up for almost certain failure and the worst thing that can happen to a trader ¾ you will lose the courage of your convictions. Without it you cannot trade with any level of confidence.

This is why we encourage you to write out the reasons and rationale for every trade you make, even if you have to do it after you have completed the trade. You must develop a keen recognition of the trades that are your trades. Write out your trading plan every day and for every trade you intend to make. If you did not have time to plan every trade, be sure to review those you did make without pre-planning. Then you can go back over your trading and be able to see why and when you are successful.

Reminder: Here are some steps to take before the market opens.

· View major formations on the charts of those futures you intend to trade. View potential congestion areas, get the big picture from the longer term charts.

· Write down all potential entries as you see them on the chart.

You need to go through this exercise every day that you trade. This takes discipline. However, doing so will help you develop the kinds of habits that will mold you into a great trader.

If you are too busy to be disciplined, then you are too busy to trade. If you don’t discipline yourself, you will soon disappear from the trading scene.

Using the 10 Day Moving Average of the VIX (Volatility Index) to time a Reversal in the the S&P 500

2009-10-02T11:56:00.001-07:00

Investors can get an idea of when the market may reverse when the 10 Day Moving Average (MA) of the Volatility Index (VIX) becomes significantly stretched away from its 10 Day Moving Average (MA). A simple example is shown below which compares the 10 Day MA of the VIX to the S&P 500.

Notice when the VIX got stretched significantly away from its 10 Day MA (blue line) to the upside (points A) that the S&P 500 made a bottom (points B) and then reversed to the upside.

Thus keeping track of where the Volatility Index is in relation to its 10 Day Moving Average can give investors a clue to when the market may be getting close to a near term bottom and possible upside reversal.

Planning: A Key to Successful Trading

2009-10-02T11:55:00.001-07:00

From time to time I get some very interesting confessions. Here is a very recent one, along with a solution.

"Hey Joe! I had been looking at a profitable trade setup all day. I studied indicator after indicator looking for confirmation, even though I know many are correlated and redundant. But I just kept on searching. I thought, ’Maybe I missed something.’ My account is now so small that I just wanted to be sure that this was the right trade. My thought was that I must take into consideration anything and everything that could cause this trade to fail. I can’t afford to lose any more money. What should I do?"

Well, my friend, you need to be able to make a decision, but you can’t do it if you are trading undercapitalized and making your trading decisions out of fear and uncertainty.

You are suffering from too much analysis. You are looking at so many things, you no longer can see straight. If you keep on over-analyzing your trades, it may develop into a deep-seated psychological problem.

Carefully analyzing the possible consequences of your trading decisions is healthy, but it becomes unhealthy when it is overdone. When it comes to trading, it’s important to have a clearly defined trading plan. You want to be sure that any given trade is not going to wipe out your trading account. That is one of the reasons we want you to use a time stop in addition to a money stop. When you use both types of stops you are clearly defining the signs and signals that indicate your trading plan is not working, suggesting that you should close out the trade to protect your capital.

Trading, by its very nature, is uncertain. There is little that can be described as security for traders. Every trade is a new event, and every entry is an entirely new business. A trader does not have the luxury of living from his past accomplishments.

If you have an unquenchable thirst for certainty, then trading is not for you. Uncertainty in trading is co-equal with insecurity. If money represents security to you, you have a real problem as a trader. Losing money not only costs you your financial security, but also your emotional security.

At many of my seminars and private tutorings I tell people that I have completely divorced myself from the money involved in trading. I don’t even know until the end of the month whether I have won or lost. I trained myself to think of trading as an endeavor in which I strive to make points. Only later are those points translated to dollars. In that sense, for me trading is a game. But I never lose sight of the fact that trading is also a serious business.

Insecurity in traders who over-analyze manifests in searching for the holy grail of trading, desperately seeking the right indicator or the perfect trade setup. The problem you’re having is that even when you see something, you are not sure it is sufficiently perfect for you to act on. Why? Because you lack confidence in your ability to trade what you see. Because you lack confidence in yourself. And because you fear the pain of another loss.

Here’s how I was taught to do my analytical work.

First, I went through all my charts to get an overview of the markets. During that time, I looked for trending markets. Trend lines were placed on the charts as long as they had a 30° or greater angle. Until I became used to what that looked like, I used a protractor to determine the angle. This action got me used to identifying the trend. These days it is easily done with your software.

Next, I went through all my charts again looking for "against the grain" moves-the intermediate trend that went against the longer term trend. This alerted me to markets that might soon resume trending.

Then I went through all my charts looking for Ross hooks™. I marked each hook with a bright red "h". Then, in light of the size of my margin account, I tried to select those markets that appeared to have the greatest potential, and I placed order entry stops just above or below the hooks. These were resting orders in the market. I tried to never miss a hook. I phoned my orders in daily.

How did I know which markets had the greatest potential? The answer is simple. I selected those markets that had the strongest trend lines.

Now there was a trick to this. I didn’t want too steep an angle, because in a rising market that often signals that the end of a move is near. Markets that break out too fast and go straight up rarely give an opportunity for entry before they start to chop around in congestion. Markets that have been going up at a steady angle, and suddenly that angle steepens-goes parabolic, are giving a warning that the move may soon be over.

In down markets I was willing to allow a steeper angle, because often a market will move down a lot faster than it moved up.

What I most wanted was trending markets that were making a retracement. Then I could attempt an entry as the market retraced, when it reached the proximity of the trend line, and then seemed to resume its trend, and when it took out the Ross hook™ created by the retracement.

Sometimes I had to wait for weeks before the markets started trending. The same is true today; nothing has changed other than that intraday it can happen a lot sooner. There will usually be at least a couple of markets in that condition, but there are times when there are none.

Yet I did my homework every day. The only way to know when an important breakout, the beginning of a trend, would occur, was to perform my daily analytical work.

Finally, I would set my work aside and take a break for dinner. After dinner, when my head had cleared a bit, I would look at my charts again. I would then do my best to come up with a trading plan. I would try to think through what I was going to do. I would ask myself a million "what if’s." I tried to anticipate what might happen in the market.

Often that kind of thinking would cause me to eliminate some of my potential trades. Also, a second look at times resulted in "why didn’t I see this before?"

For instance, what if you look at a market that is approaching its trend line. Isn’t it reasonable to ask yourself, "If this market breaks the trend line, what would I do?" Ask yourself how such an event would change the picture. If you had a position, would you still want to hold it? If you had no position, would this cause you to take a position opposite what was the trend? If it would, then why not place an order entry stop with limit, just the other side of that trend line? Very often, when prices approach a trend line from what has been a trending channel, they are already in a counter trend within the channel. That means a breakout of the trend line would be a continuation of this newly formed trend.

Finally, I would put my work aside and go to bed. In the morning I would look at my charts once again. Then I would write out scripts for the orders I wanted to place.

I would rehearse how authoritatively I was going to give these orders.

I did all this and more before I entered a trade. But do you know what most traders do? They do their analysis after the trade is made. Too often, they do it when the trade is already going against them.

How many times have you entered a trade, and then said to yourself, "Oh no, why didn’t I see that before?" How could you have seen it if you hadn’t looked, and looked again, and thought about it, and then perhaps looked one more time?

Also, many traders do their analysis after entering the trade in search of a justification for having entered. "Now I’m in the trade, let’s see if I can find out a couple of good reasons as to why!"

If you want to be a successful trader, you have to be hard. Hard on yourself and hard on your broker. I don’t mean that you have to be a rat, or be impolite, or be contemptuous. You just have to be firm in all that you do. You can’t afford to be "Mickey Mouse" about the way you do things. This is a business; you must be businesslike in conducting your affairs.

As a business person, you must manage your business. One of the main functions of management is planning. You have to plan your trades. Other things to look for as you go through your charts are: One-two-three formations, cups with handle, matching congestions, reversal bars, and Doji’s. These should all be part of your plan.

Some people give more thought to choosing which flavor ice cream to eat than to which market to enter and how and when to do it.

By not taking the time for preparation, you end up not having enough time to weigh the pros and cons or really familiarize yourself with what you are getting into.

You don’t have time to realize that prices have supported two ticks away from your entry about forty times in the past. You don’t have time to see that you are trading right into overhead selling. You don’t have time to notice that if prices break out of yesterday’s high, they will also probably take out a Ross hook. You don’t have time to see where prices are in relation to the trend line. You don’t have time to really grasp the overall trend, or the wave that is going counter trend. You don’t have time to really consider where you will place your stop. You don’t have time to read the market and to see what it might be telling you.

All of these things can be done ahead of time. If you do not do your homework, you will end up chasing markets in a desperate attempt to get into "the big move."

How to Make Consistent Profits Trading Futures Part I

2009-10-02T11:54:00.003-07:00

One of the mistakes I consistently made in my early years as a trader was to try to make too much money in relation to my trading capital. To make £1000 a day while Futures Trading with £10,000 is absurdly ambitious; of course I have done it many times, as would anyone with this intention, but I have also gone bust on more than one occasion. To have the aspiration of taking £1000 out of the market each day, when trading with £10,000 or under is, I think, a quick route to the poor house.

So what is a reasonable objective for a day / futures trader?

A few weeks ago I visited an ex-floor trader who has set up a trading operation backing young aspiring traders. I was interested to find out from him how he trains his team. The essence of his approach is to give them a grounding in discipline and confidence. He believes that confidence is one of the primary keys to success in futures trading and that confidence is a by-product of taking money out of the market.

One of the reasons he has chosen to work with young futures traders is that he wants people who have minimal financial commitments. He knows it will take a while for them to start earning an income from the business. So his belief is that if his traders can regularly take small amounts of money out of the market, their knowledge, skills and confidence will grow and in time they will become bigger traders. What is critical about this approach is that his traders do not grow in size until they have achieved consistent, regular success on a small scale; and we are talking small, I mean £25 or £50 in a day.

What can we learn from this low risk approach? Well first let me ask you: what is more important, to make money today, or to become a consistently profitable trader? Because if we want to become consistently successful traders we need to take a different tack than if we are just out to make as much money as we can today.

So back to the question, what is a reasonable objective for a day trader? Well let’s look at bringing our daily target right down to £100, with £10,000 of trading capital, i.e. 1%. Now £100 a day, trading a market like the FTSE seems an achievable target to me. That is a net profit of 10 FTSE points a day. Can you come up with a system that trades 5 times a day and has an average net profit of 2 points? Or a system that trades 10 times a day with an average net profit of 1 point?

Is that a yes I hear? Because if you can make an average of £100 a day you will double your money in 100 trading days i.e. 20 weeks or about 5 months. If you double you position size every time you double your money, your account will grow to £1,000,000 in 140 weeks, which is less than 3 years! Of course this does not take into account the impact of tax; but my point is that by taking a low risk, conservative approach to trading objectives, we give ourselves the chance to grow and develop into traders, while also availing ourselves of the possibility of a deceptively good return.

If at this point you are tearing your hair out and screaming at the screen that I am a fool for suggesting that you can trade a strategy that averages a few points a trade, I assume that you are not familiar with the benefits of direct access trading. Direct access trading effectively gives everyone and their uncle the same low costs, immediate trade execution and access as was exclusively enjoyed by the floor traders before the advent of the electronic market place. To learn about the advantages of direct access trading...

Futures Spread Trading

2009-10-02T11:54:00.001-07:00

How professional traders optimize profits

Futures spread trading is probably the most profitable, yet safest way to trade futures. Almost every professional trader uses spreads to optimize his profits. Trading spreads offers many advantages which make it the perfect trading instrument, especially for beginners and traders with small accounts (less than $10,000).

The following example of a Soybean-Spread shows the advantages of futures spread trading:

Example: Long May Soybeans (SK3) and Short November Soybeans (SX3)

Four Advantages of Futures Spread Trading

Advantage 1: Easy to trade

Do you see how nicely this spread starts trending in mid February? Whether you are a beginner or an experienced trader, whether you use chart formations or indicators, the existence of a trend is obvious. (If you are looking for a concept of how to identify a trend, we strongly recommend visiting http://www.tradingeducators.com/?source=Tradejuicetrading_philosophy.htm). Spreads tend to trend much more dramatically than outright futures contracts. They trend without the interference and noise caused by computerized trading, scalpers, and market movers.

Advantage 2: Low Margin requirements

Many spreads have reduced margin requirements, which means that you can afford to put on more positions. While the margin on an outright futures position in corn is $540, a spread trade in corn requires only $135 — 25% as much. That’s a great advantage for traders with a small account. With a $10,000 trading account risking 8% of your account, you can enter 6 corn spreads, instead of only 1-2 outright corn futures trade. How’s that for leverage?

Advantage 3: Higher return on margin

Each point in the spread carries the same value ($50) as each point in the outright futures ($50). That means that on a 3 point favorable move in corn futures or a 3 point favorable move in the spread, you would earn $150. However, the difference in return on margin is extraordinary:
Corn futures - $150/$540 = 27.8% return
Corn spread - $150/$135 = 111% return
And keep in mind that you can trade 6 times as many spread contracts as you can outright futures contracts. In our example you would achieve a 24 times higher return on you margin.

Advantage 4: Low time requirements

You don’t have to watch a spread all day long. You do not need real-time data. The most effective way to trade spreads is using end-of-day data. Therefore, spread trading is the best way to trade if you do not want to watch or cannot watch your computer all day long (i.e. because you have a daytime job). And you can save all the money you would have had to spend for real-time data systems (up to $600 per month).
So where is the catch?
If futures spread trading is so fantastic, why does it seems that hardly anybody trades spreads? Well, it is not true that hardly anybody trades spreads: the professional traders do, every day. But either by accident or design, the whole truth of spread trading has been hidden from the public over the years.
The purpose of this website is to inform you about futures spread trading. In the following we will answer the four frequently asked questions:

What is a spread?
Why trade spreads?
What can you expect when trading spreads?

What Is a Spread?

A spread is defined as the sale of one or more futures contracts and the purchase of one or more offsetting futures contracts. You can turn that around to state that a spread is the purchase of one or more futures contracts and the sale of one or more offsetting futures contracts. A spread is also created when a trader owns (is long) the physical vehicle and offsets by selling (going short) futures. Furthermore, a spread is defined as the purchase and sale of one or more offsetting futures contracts normally recognized as a spread by the fact that the two sides of the spread are actually related in some way. This explicitly excludes those exotic spreads put forth by some vendors, which are nothing more than computer generated coincidences which are not in any way related. Such exotic spreads as Long Bond futures and Short Bean Oil futures may show up as reliable computer generated spreads, but bean oil and bonds are not really related. Such spreads fall into the same category as believing the annual performance of the U.S. stock market is somehow related to the outcome of the Super Bowl sporting event. In any case, for tactical reasons in carrying out a particular strategy, you want to end up with:

simultaneously long futures of one kind in one month, and short futures of the same kind in another month. (Intramarket Calendar Spread)
simultaneously long futures of one kind, and short futures of another kind. (Intermarket Spread)
long futures at one exchange, and short a related futures at another exchange. (Inter-exchange Spread)
long an underlying physical commodity, and short a futures contract. (Hedge)
long an underlying equity position, and short a futures contract. (Hedge)
long financial instruments, and short financial futures. (Hedge)
long a single stock futures and short a sector index.

The primary ways in which this can be accomplished are:

Via an Intramarket spread.
Via an Intermarket spread.
Via an Inter-exchange spread.
By ownership of the underlying and offsetting with a futures contract.

Intramarket Spreads

Officially, Intramarket spreads are created only as calendar spreads. You are long and short futures in the same market, but in different months. An example of an Intramarket spread is that you are Long July Corn and simultaneously Short December Corn.

Intermarket Spreads

An Intermarket spread can be accomplished by going long futures in one market, and short futures of the same month in another market. For example: Short May Wheat and Long May Soybeans.
Intermarket spreads can become calendar spreads by using long and short futures in different markets and in different months.

Inter-Exchange Spreads

A less commonly known method of creating spreads is via the use of contracts in similar markets, but on different exchanges. These spreads can be calendar spreads using different months, or they can be spreads in which the same month is used. Although the markets are similar, because the contracts occur on different exchanges they are able to be spread. An example of an Inter-exchange calendar spread would be simultaneously Long July Chicago Board of Trade (CBOT) Wheat, and Short an equal amount of May Kansas City Board of Trade (KCBOT) Wheat. An example of using the same month might be Long December CBOT Wheat and Short December KCBOT Wheat.

Why Spreads?

The rationale behind spread trading is one of the best-kept secrets of the insiders of the futures markets. While spreading is commonly done by the market "insiders," much effort is made to conceal this technique and all of its benefits from "outsiders," you and me. After all, why would the insiders want to give away their edge? By keeping us from knowing about spreading, they retain a distinct advantage.
Spreading is one of the most conservative forms of trading. It is much safer than the trading of outright (naked) futures contracts. Let’s take a quick look at some of the benefits of using spreads:

Intramarket, and some Intermarket, spreads require considerably less margin, typically around 25% - 75% of the margin needed for outright futures positions.
Intramarket, and some Intermarket, spreads offer a far greater return on investment than is possible with outright futures positions. Why? Because you are posting less margin for the same amount of possible return.
Spreads, in general, trend more often than do outright futures.
Spreads often trend when outright futures are flat.
Spreads can be filtered by virtue of seasonality, backwardation, and carrying charge differentials, in addition to any other filters you might be using in your trading.
Spreads can be used to create partial futures positions. In fact, virtually anything that can be done with options on futures can be accomplished via spread trading.
Spreads allow you to take less risk than is available with outright futures positions. The amount of risk between two Intramarket futures positions is usually less than the risk in an outright futures position. The risk between owning the underlying and holding a futures contract involves the least risk of all. Spreads make it possible to hedge any position you might have in the market. Whether you are hedging between physical ownership and futures, or between two futures positions, the risk is lower than that of outright futures. In that sense, every spread is a hedge.
Spread order entry enables you to enter or exit a trade using an actual spread order, or by independently entering each side of the spread (legging in/out).
Spreads are one of the few ways to obtain decent fills by legging in/out during the market Closing.
Live data is not needed for spread trading, saving you $$ in exchange fees.
You will not be the victim of stop running when using Intramarket spreads.

What Can You Expect?

Here is an example of what you can expect from Intramarket spread trading. We think you may be pleasantly surprised!!

This spread was entered not only on the basis of seasonality, but also by virtue of the formation known as a Ross hook (Rh). The spread moved from -69.0 to -7.5 = $3,075 per contract. The margin required to put on this spread was only $608, thus the return on margin is more than 500%.

Here is an example of an Intermarket spread. Look at the the following chart: Would you want to have been long live cattle from December until February?

But, what about a spread between Live Cattle and Feeder Cattle?

The spread moved from -10,200 to -7,200 = $3,000 per contract. The margin required to put on this spread was only $540. The return on margin is more than 550%.

Lastly, we show you another intermarket spread. This one was made between Euro and British Pound. Although you might have made money on a Euro trade, you would have suffered from serious whipsaw during the entire length of the trade.

What about a spread between the Euro and the British Pound?

You didn’t have to be in this spread for very long in order to take some fat profits: During February the spread moved from $32,500 to $36,187.50 = $3,687.50 per contract.

How do I start trading spreads?

We can barely scratch the surface of what is available in the almost lost art of spread trading. There are times when seasonal spreads, coupled with chart formations, make a lot of sense. Backwardation in any market often provides an excellent signal for entry into a spread.

Achieving Trading Perfection

2009-10-02T11:53:00.001-07:00

Achieving Trading Perfection - Trade quality, not quantity. Take the best of the best. Get the big picture. If you haven’t previously come across such advice, or if you have and are not following it, it is time that you take these words to heart. But how?

Trade selection and adequate planning go hand in hand. This is where most would-be professional traders miss the boat.

Much more money is made as a result of proper planning than from sitting and trading everything that comes along or "looks" good.

It’s difficult to fully understand why people think they have to trade so much. It’s difficult to truly grasp why people think that they have to take as many trades as they do.

Just the opposite is true. There is a correct approach to each and every trade. That is what achieving perfection is all about.

It all starts with proper management: planning, organizing, delegating, directing, and controlling.

These facets of management must be woven together into your trading; they do overlap.

Although planning is the major management function involved in achieving perfection, you can’t possibly plan well unless you are organized to do so.

You must have your tools at hand: your trading software, your data, the proper equipment. All of the rudiments for planning must be in place, which in itself is a part of organizing.

You must be physically fit when you plan: well nourished, properly exercised, well rested and mentally alert - all part of having your life organized, all part of achieving perfection as a trader.

To be a winning trader, you have to be among the best. There can be no middle ground. There are only winners and losers, and to be a winner you have to be a champion. And, just like any champion, you must have discipline, self-control, and a willingness to train, train, train.

There are no runners-up in trading, you either get the gold or you give the gold. Often, while others are busy going to parties or watching sports events, you are busy poring over charts, studying, thinking, planning. When others are listening to music or watching TV, you are busy practicing your trading, practicing trade selection, working hard to become a more astute trader.

Part of achieving perfection involves the diligent study of charts. The data, as presented on your screen and preserved as charts, are, for the most part, all you have for making trading decisions. They are a picture, a visualization of what is taking place in the reality of the market. Your job in achieving perfection and becoming an adequate trader is to picture and imagine in your mind what makes prices move and form the way they do. Ask yourself, "How does what I see in front of me relate to the supply and demand for the underlying?" Ask yourself, "Is what I am seeing on the chart even related to supply and demand, or is what I am seeing related to an engineered move by some insider or market mover?"

Supply and demand are not what makes prices move or fail to move most of the time. The sooner you realize that fact, the better off you will be. Markets are engineered, manipulated ¾ you need to know that.

But there’s more to a chart than merely price patterns. Reflected in the chart are the emotional reactions of human beings. Reactions to rumors and news; to national and world events; to government reports - these, too, are on the charts.

You might say that price movement, or the lack thereof, is the net effect of all the perceptions of all the traders who are participating in the market for a particular futures.

There is something else on the charts, something that too few take into account. That something is the manipulations from and by the insiders, the market movers, and by commercials holding large inventories of the underlying you are attempting to trade.

In achieving perfection as a trader, you must train yourself to look for evidence of any and all of these things as you study your charts. It is the cumulative action of all perceptions which causes patterns to form on a price chart.

You must learn to look for the truths in the markets. There are certain truths which are self-evident; they are always true. For instance, take the phenomenon of a breakout. When prices break out, no one can change the fact that they did break out. It is a fact and it is true. The breakout may turn out to be a "false" breakout, but nevertheless it is a breakout. As part of achieving perfection in your trade selection skills, you have to learn to tell which breakouts are most likely true breakouts, and which ones are most likely false. How can you know? By the price patterns on the chart.

And what about trend? Your job in achieving perfection as a trader is to master how to trade a trend. A trend is a trend, is a trend. It is a trend until the end, and part of your job is to know when a market is not trending.

The trend is the trend while it lasts. While a market is trending it is telling the truth. The trend can change, but the truth is the truth. If prices are rising, the trend is up. If prices are falling, the trend is down. The truth can be found in the trend. It is an immutable fact. You are to learn to make my money by trading with the trend. You are to learn what constitutes a trend. You have to learn to spot trends early so that you can make the most out of the market while it is trending. Your job in achieving perfection as a trader is to learn to recognize when a trend will most likely begin, and just as important, to learn to be even more adept at deciphering when a trend is ending.

In achieving perfection, you must learn to recognize "your" trade(s), and to take only "your" trades. Trade the formations and patterns that you can easily recognize and identify.

You must learn to trade using tips and tricks that you are shown and to accumulate and keep a collection of techniques that result in the selection of high probability trades.

How are you to do all this? Practice, practice, PRACTICE. Practice recognition of congestion areas. Practice recognition of high probability breakouts. Practice trend recognition. Practice and more practice. Just like anyone who wants to achieve perfection at anything, there must be total dedication, study, practice and more practice. You are to become a trading virtuoso. You are to practice, yet always realizing that you will never attain true perfection, that there is always room for improvement. There is usually a way to refine: ways that you can do things better, more efficiently, and with greater speed and finesse.

Global Forex Trading – The Easy Way to Make Money

2009-10-01T11:14:00.002-07:00

Global forex trading was founded in 1997 and is today one of the world’s leading providers when it comes to forex real time trading. Global forex trading offer you the chance to deal in real time online currency trading that is making millions of forex brokers rich each day.
Global forex trading serves over 100 countries, using its DealBrook FX2 software and 24 hour market access with one of the highest levels of customer service available in the forex trading industry. With Global forex trading forex brokers have access to pricing for more than 60 currency pair and excellent analytical services from renowned experts. There are up to the minute currency news bulletins and advanced forex charts available. Global forex trading boasts that they provide the only forex trading platform that is suitable for both beginners and professionals.
Forex Trading Advantages
The forex trading market is open 24 hours a day and is today the most liquid market in the world. With forex and the available leverage strategy you can use 100 to 1 leverage which in turn reduces the need for large amounts of capital to be placed in your account. Forex trading is also commission free and trading is available on more than 60 currencies worldwide. Another advantage of forex trading is of course the fact that it is global and there are not restrictions placed on shorting which means that you can enjoy your profit opportunities no matter what the market condition.
Prior to reading this information you may have assumed that forex trading was only available for large investors but thanks to Global forex trading smaller transactions are now available which allows all traders to take part giving everyone the opportunity to profit from forex trading. Don’t you think it’s time you started profiting?
Our mission is to gather all Forex info on one place. Find it only on the Forex

Best Forex Online Platforms Trading

2009-10-01T11:14:00.000-07:00

The term forex refers to Foreign Exchange. The foreign exchange market deals basically with the trade of a particular currency for another. It is considered to be the world’s largest financial market. The forex market includes various levels and forms of trading. It includes the trade carried out between various banks, currency speculators, central banks, governments, multinational corporations, and various other financial markets and institutions.
The main advantage which forex trading has over the conventional New York Stock Exchange and other similar stock exchange markets is that the traders can trade any time of the day. The conventional stock exchange markets limit the trading in the actual trading hours of the market. The best forex online platforms trading is preferred nowadays by most people owing to the fact that it enables forex trading anytime of the day and from anywhere in the world. This is done by giving access to traders of the online community of forex trading through online trading platforms.
The forex market is a great success compared to the other stock markets owing to the fact that the currency exchange market of the world operates around the clock. The prime requisites for a trader thus are time, money, a computer with the Internet facility and a telephone. The traders or the banks just need to log in to their forex trading account to start trading.
The best forex online platforms trading are also highly beneficial owing to the numerous advantages. The forex market is estimated to witness the trade of around one trillion dollars. The primary process can be understood in simple terms. It involves the trading of one country’s currency for another country’s currency.
The best forex online platforms trading are also the fastest and the most efficient modes of online forex trading. The traders can gain large profits owing to the structure of the market.

Online Forex Trading Education

2009-10-01T11:13:00.001-07:00

There are many people who are interested in forex trading. But before you start trading in forex, getting a good online forex trading education is important. The forex market is largely a technical market with its own forex terms and processes so it is important you grasp the fundamentals with an online forex trading education.
Why Online Forex Trading Education?
Most people who want to try forex trading are often busy with other aspects of life to take care of. They probably do not have the time to attend a course on forex trading. Therefore, an online forex trading education is more suited.
Since it’s online, you can take your time to read and digest the information at your own pace. Also most of the basics of forex trading can be found online for free. There are tons of websites that provide free forex trading courses and tutorials.
There are also free forex trading seminars online available plus advanced forex trading courses online such as the forexmentor program. While it’s usually not free, the costs are pretty cheap compared to attending a forex trading course in a classroom.
Another important part of an online forex trading education is practice. I believe no matter how well you understand forex trading or if you score an A in a forex trading course, the real deal comes when you actually start trading.
Most forex trading sites provides a demo account for new beginners to forex trading to learn how to manage their forex trading account. There is no monetary risk, so it is a very good way to learn the ropes.
Once you feel you have sufficient experience, you can open a regular forex trading account or a mini forex account. I would highly recommend you open a mini forex account and start trading in smaller amounts. It has all the features of a regular forex accounts yet you can start one usually with about US $100.
It’s important you do not rush through your online forex trading education. Take your time to understand and start trading in small amounts to practice. As the saying goes, practice make perfect.
Ricky Lim runs an online forex trading education site for beginners. Visit his site today for more forex tutorials such as a free forex trading strategy.

10 More Forex Trading Essentials For Winning Forex Trading

2009-10-01T11:12:00.003-07:00

here are some simple but very effective 10 essentials that every Forex trader should follow in order to become as successful as possible as a Forex trader which I have previously discussed. This article will discuss another 10 essentials of Forex trading. Keep reading to get instant access to a Forex $100.000.00 demo account.
Essentials Of Forex Trading Number 1: In order to succeed as a Forex trader you must be 100 percent committed. The Forex market is not a playing field. It should be respected and treated seriously.
Essentials Of Forex Trading Number 2: Forex trading is a business. Like in professional property investing, there should be no emotions involved whatsoever. The Forex market is not a place to show your bad side and your bad habits.
Essentials Of Forex Trading Number 3: The best Forex traders think one way only. If the trend is down then sell rallies. If the trend is up then buy the dips.
Essentials Of Forex Trading Number 4: The busiest hours in the Forex, bar none, are the London hours, after 2am New York time, when the rally for the Euro begins.
Essentials Of Forex Trading Number 5: Wait for bona fide signals at all times. Look for the clues in the MACD divergence, trendline breakouts and pivot point breakthroughs.
Essentials Of Forex Trading Number 6: Follow the leader. Price is the number one main indicator. Be patient and wait for it to reveal itself.
Essentials Of Forex Trading Number 7: The best trades are made in and around pivot points. All other areas are dead man’s land.
Essentials Of Forex Trading Number 8: Always take the little time required to draw pivot points on your 15 minute chart.
Essentials Of Forex Trading Number 9: If you’re wondering how many signals you need before you pull the trigger, one is enough, but more than enough make the signal all the more stronger and clearer.
Essentials Of Forex Trading Number 10: Every Forex trader makes mistakes, and costly ones at that. Don’t beat yourself up over it. Accept the mistake, analyze what you did and move on.
Although this list is relatively short these are very powerful 10 essentials of Forex Trading. These 10 essentials of Forex trading build a strong foundation, particularly for beginner Forex traders. I strongly suggest you print out this list and look at it every day you do Forex trading to remain focused. Keep reading to get the chance to practice and perfect your Forex trading with a $100,000.00 Forex demo trading account.
Copyright 2007. Are you ready to get the best education in Forex trading? “Fast Education For Fast Forex Profits” is what this Forex Trading System Course. is all about. Learn how to start making money trading the Forex market within 30 days. Study, practice, trade – get a 30 day FREE trial to practice Forex trading with your own $100,000.00 Forex account so you never have to risk any of your own money!

How To Read Forex Charts

2009-10-01T11:12:00.001-07:00

The forex market can be a confusing place to be in, especially if you are new to the field of currency trading. This is where the knowledge of how to read forex charts can be of immense help. Experienced traders always reiterate the point of proper training before making a foray into forex trading for this reason. There are many online tutorials available these days which can equip you with the basic knowledge of the forex market. It is also preferable that beginners make a start with smaller accounts before graduating on to bigger things in the forex market.
These days to a large extent the question of how to read forex charts has been answered by the numerous forex charting software that is available. This software can help you keep track of both your money as well as your time. Such software tools can come in handy if you are interested in being a forex trading pro. The charts generated by such software would give you a deep insight into the workings of the large forex market.
The currency trading market is the largest and perhaps the busiest market in the world. It is sometimes very difficult to keep track of all the happenings in the market. Unfortunately though for every forex trader, keeping track of various important happenings in the market is something that becomes almost imperative. This is where good forex charting software can come in handy. Using these software tools you will be able to keep track and also study the behavior of the forex market and that too over long periods of time. This study would help you immensely when you actually trade in the market.
The answer to the question how to read forex charts probably lies in installing forex charting software. Various trends and patterns based on forex charts can be generated in a matter of minutes using these specialized software tools. This type of detailed analysis based on forex charts help traders to make an informed decision. Forex charting software has come as a relief to those who were till now wondering how to read forex charts If you are someone who is wants to become a successful trader in the forex market and is wondering how to read forex charts help is at hand in the form of charting software. Apart from helping in reading forex charts they would also help in predicting future market trends, thereby giving that much needed edge to a forex trader.

Trading Forex is a Recession Proof Business

2009-10-01T11:11:00.001-07:00

Trading forex has been described as a recession proof business. And yet other voices caution that trading forex is not a way to get rich quick and that it can lead to financial hardship.
So should you trade forex? What are the issues you need to consider here?
Trading forex (short for the foreign exchange market) is like any other skill. It takes time to master the art/science of the forex market. Yes, you might open a forex account and experience the thrill of a few profitable trades but that does not make you a competent trader. Indeed spectacular performance in any past period is no guarantee of future returns, of course.
As you learn to trade the forex you will see that it is both challenging and attractive because of its potential profits. The only time forex is not being traded is when the whole world is in a weekend.
However, before deciding to become a forex trader you should consider your investment objectives, level of experience and level of tolerance for risk. Trading forex has been likened to like watching a school of fish move — one minute it is total harmony, the next minute complete chaos.
Until recently, trading forex has been largely the realm of major professional players with global activities – like banks, commercial organizations with global connections, and of course forex brokers.
However, there are now ways for individuals who do not have much time or much spare cash to participate in forex trading. This forex trading system has been designed for regular people who have jobs and families (which is why they don’t have much time or much spare cash, of course).
As a result, the forex trade is now available as a home based business for people all around the world.
Today you can open a forex trading account with as little as $100.
Not only that, you do all your forex trading on the weekend. You can learn more right now at

Forex Buy and sell indicators by Ivan Tan

2009-10-01T11:10:00.001-07:00

The fluctuations in the FX market or the foreign exchange market are recorded and displayed by the forex buy and sell indicators. Thus the buy and sell indicators are the most perfect tools for assessing the currency rates and thus devise a currency buying or selling plan.
The buy and sell indicators are the ones which are derived by correlating the past trend and the current trend of the currency. Thus it is a good indicator of the projections of the currency. When manually a currency is analyzed there are chances of human errors caused by the psychological state of the person. The buy and sell indicators nullifies the human errors and can be trusted.
The buy and sell indicators helps the trader to decide when to sell a currency or when to buy one. There are different algorithms used for making the indicators and most of the indicator data may vary slightly. However, which ever be the indicator it specifies the best currency to be sold and the best to be bought at a given time. Thus the buy and sell indicators influence the traders immensely to buy or to sell a particular currency at a given time.
There are free and paid softwares or buy and sell indicators. The free ones are never inferior to the paid ones, but some paid softwares allow additional functionalities that are not available with the free softwares. An example of paid software is the Forex Auto Pilot, this is a highly automated software and is capable of initiating a trade. The trader just has to specify the ranges of the minimum values and the maximum values that he intends to trade and the software does the rest. This software also has a good indicator and shows the projections in a real time basis.
The buy and sell indicators are thus the tools that helps the traders to decide on which currency to sell or purchase at a given time of the day. The indicators show the projections of the currencies as live graphs or projections. The indicators can be used to see the gains of the currencies in the past period and the current trends of the currency. The indicators also show the future projections thus the trader can plan his purchase or sell out. This is more suitable for the beginners.
There are a lot of free forex indicators available in the market, but it is always better to go for a paid one because of the added functionalities that it offers.
find out more about

Forex Broker

2009-10-01T11:09:00.001-07:00

A broker is any person or firm that charges a fee in exchange for executing trades for a trader. A Forex broker does not charge a commission for placing a buy or a sell order the way a real estate broker would charge a percentage fee of the total price of a sale. A Forex broker is paid according to the spread – or the difference between the trader’s bid for a currency, and the seller’s asking price for that currency. Usually this spread is less than 0.1% or ten pips. (Pips are the smallest movement a currency can make on the Forex. Pips are commonly called referred to as points.) The lower the spread, the less a trader pays a Forex broker for a trade.
The Forex market is global and does not have one central regulatory agency like the Security Exchange Commission. Each country is responsible for the actions of trades in it’s own country. A Forex broker in America must register with the Commodities Futures Trading Commission (CFTC). While traders are not regulated, Forex brokers are. A Forex broker must be registered as a Futures Commercial Merchant (FCM) before that Forex broker is allowed to accept a deposit for an account from a trader. Once registered, a Forex broker is given an identification number so that a trader can check the status of a Forex broker before hiring that Forex broker. There are such people known as introducing brokers who may solicit traders for a registered Forex broker, but the introducing broker cannot accept a deposit for a trader’s account. It is a good idea for any trader hiring a Forex broker to check the status of the Forex broker with the authorities.
Kevin Anderson is the owner and opperator of http://www.forextradingcenter.info a site developed to give users the most updated information, articles, and news related to the Forex Market.

Techniques for Advanced Forex Trading

2009-10-01T11:08:00.001-07:00

Forex is a potential platform for earning substantial profit. In fact it is one of the largest trading markets of the world. Featuring an average daily trade of US$ 2 trillion and above, this market is best known for its high scale trading volume and intense liquidity. Adding to this, today with the advancement of technology it can be done from anywhere of the world. Backed up by world-wide web, you can easily trade in the forex market at the comfort of your own home. However, it is important to understand that fx trading is based hugely on speculation. You must be smart enough to guess exactly when the rate of a certain currency pair will rise and go down, and then buy or sell based on that. Indeed it is said that if you learn to study the speculation of this market, you will have a better chance of getting profit.

Today, it is more advanced and turned into an active investment arena, where only a factual understanding of the intricacies and complexities can make your capital grow every day. Moreover, like any other business, it also involves some amount of risks. There is no shot fx trading technique for success in the currency trading market, but there are some well-known techniques that can assist you formulate a good advanced foreign exchange trading strategy. Here are few essential techniques that can help you cut your losses and increases profits:

Forex Scalping: It is a latest technique of trading where profits are taken after relatively small moves in the forex market. It is a technique where trading is done over small time frames, and smaller profits are taken more frequently. As the position exposed to the market is shorter, it automatically reduces the risk of adverse market events causing the price to go against the trade. It is a different approach to most other forex strategies, but still requires you to analyze the market to ensure that the set up for a trade is present. This type of trading greatly appeals to day traders and those who look to reduce the risk involved in trading currencies.

Forex Hedging: It is a technique that helps in reducing some of the risk involved in holding an open forex position. It decreases the risk by taking both sides of a trade at once. If your broker allows it, a simple way to hedge is just to initiate a long and a short position on the same pair. Advanced traders sometimes use two different pairs to make one hedge, but that can get very complicated.

It is important to understand that much of the risk involved in holding any forex position is market risk; i.e. if the market falls sharply, your losses may escalate dramatically. So if you have an open Forex position with fine projection but you think the currency pair may reverse against you, it is advised to hedge your position.

Forex Position Trading: Forex position trading approach is yet another trouble-free technique to boost your position size without increasing your risk. This trading tactic is very effective with mini lots. The major highlight with this technique is that - with forex position trading your exposure to the market is less and so therefore is no need to monitor the market continuously. Moreover, you may even earn profit with negligible loss that can further boost your trading confidence. For Example- you might make a short trade on EUR/USD at 1.40. If the pair is ultimately trending lower, but happens to retrace up, and you take another short at say 1.42, your average position would be 1.41. Once the EUR/USD drops back below 1.41, you will be back in overall profit.

Today forex trading is all about watching your options when you make a trade. Aside from using effective risk management and extreme vigilance, advanced trading can be an alternate way to make profits and control losses. Nevertheless, these above mentioned advanced trading techniques are more about using the market behavior to your advantage. Utilizing these advanced techniques can give you the edge from other average trader.

Automated Forex Trading

2009-10-01T11:07:00.000-07:00

Trading locations are scattered all around the world, rather than being centered in just a few major cities of the USA or Europe.

Of course, as with any major market, many factors can influence foreign exchange rates, which may account for the powerful attraction for many Forex traders - the excitement. Average daily turnover in the foreign exchange market stands around 2 to 3 trillion dollars. That's DAILY turnover, and the figures come from none other than the Triennial Central Bank Survey of the BIS (Bank for International Settlements).

And the trend is upward. In other words, more money gets traded with each passing year, and may surpass $3 trillion within a very few years.

Perhaps most amazing, however, is the fact that anyone can enter this market and begin to trade foreign currencies. Entry requirements are low. This has been both a positive (because initial deposits are minimal) and a negative (a lack of experience can bring losses very quickly).

Now however, Forex trading can be partly automated by software that is sophisticated enough to offset much of a beginner's lack of knowledge. Even better, this software is not at all expensive - not when compared with the profits it may bring.

The concept of automation marks an important new trend in the foreign exchange trading market. The Interbank spot Forex market has also considered automating as well.

Automation actually brings a number of important benefits to Forex traders - especially those just entering the market.

With your computer handling much of the trading process for you, transactions can be done in real time. Although manual systems are well established, they have never offered the speed that an automated Forex trading system does. All trades are initiated and completed within milliseconds, which can be a huge plus because they virtually eliminate any lag time.

Problems that characterized manual trading methods can now be addressed and eliminated, or at least minimized. For example, if a trader were hit by a few losses in a row, he could be wiped out and unable to make new trades. This problem can easily be addressed using an automatic trading system.

Automated Forex trading also permits greater diversification. In the past, if you wanted to trade more currency pairs simultaneously, or a wider variety of them, you were limited by your memory and concentration. But thanks to automated trading, you can execute trades with other traders in Singapore or London or wherever, even it's midnight where you are. Thus you have the option of doing multiple exchanges.

You can also quickly evaluate various trading models from short-term data, projecting trends for as short as 15-minute or half-hour time slices.

As mentioned, extreme liquidity makes the Forex market unique. And greater automation will only increase this liquidity, with funds flowing faster than ever.

Risk becomes easier to manage with automation. International checks, now commonly used in Forex market purchases, are synchronized via automation technology. Since automated transactions are handled in real time, there is little chance of delayed payments, reducing the risk of non-payment by either party. And although issues still exist with the use of automated systems, they can easily be addressed and resolved through consistently updating the technology.

With the spread of automated Forex trading, the $3 trillion daily turnover may soon be far surpassed. And given the fast, efficient trades between any and every time zone, Forex trading is certain to remain one of the most profitable business models in today's changing world.

Trading with Strategy

2009-10-01T11:05:00.001-07:00

Trading successfully is by no means a simple matter. It requires time, market knowledge and market understanding and a large amount of self restraint. ACM does not manage accounts, nor does it give market advice, that is the job of money managers and introducing brokers. As market professionals, we can however point the novice in the right direction and indicate what are correct trading tactics and considerations and what is total nonsense.

Anyone who says you can consistently make money in foreign exchange markets is being untruthful. Foreign exchange by nature, is a volatile market. The practice of trading it by way of margin increases that volatility exponentially. We are therefore talking about a very ’fast market’ which is naturally inconsistent. Following that precept, it is logical to say that in order to make a successful trade, a trader has to take into account technical and fundamental data and make an informed decision based on his perception of market sentiment and market expectation. Timing a trade correctly is probably the most important variable in trading successfully but invariably there will be times where a traders’ timing will be off. Don’t expect to generate returns on every trade.

Let’s enumerate what a trader needs to do in order to put the best chances for profitable trades on his side:

Trade with money you can afford to lose:

Trading fx markets is speculative and can result in loss, it is also exciting, exhilarating and can be addictive. The more you are ’involved with your money’ the harder it is to make a clear-headed decision. Money you have earned is precious, but money you need to survive should never be traded.

Identify the state of the market:

What is the market doing? Is it trending upwards, downwards, is it in a trading range. Is the trend strong or weak, did it begin long ago or does it look like a new trend that’s forming. Getting a clear picture of the market situation is laying the groundwork for a successful trade.

Determine what time frame you’re trading on:

Many traders get in the market without thinking when they would like to get out, after all the goal is to make money. This is true but when trading, one must extrapolate in his mind’s eye the movement that one expects to happen. Within this extrapolation, resides a price evolution during a certain period of time. Attached to this is the idea of exit price. The importance of this is to mentally put your trade in perspective and although it is clearly impossible to know exactly when you will exit the market, it is important to define from the outset if you’ll be ’scalping’ (trying to get a few points off the market) trading intra-day, or going longer term. This will also determine what chart period you’re looking at. If you trade many times a day, there’s no point basing your technical analysis on a daily graph, you’ll probably want to analyse 30 minute or hour graphs. Additionally it is important to know the different time periods when various financial centers enter and exit the market as this creates more or less volatility and liquidity and can influence market movements.

Time your trade:

You can be right about a potential market movement but be too early or too late when you enter the trade. Timing considerations are twofold, an expected market figure like CPI, retail sales or a federal reserve decision can consolidate a movement that’s already underway. Timing your move means knowing what’s expected and taking into account all considerations before trading. Technical analysis can help you identify when and at what price a move may occur. We will look at technical analysis in more detail later.

If in doubt, stay out:

If you’re unsure about a trade and find you’re hesitating, stay on the sidelines.

Trade logical transaction sizes:

Margin trading allows the fx trader a very large amount of leverage, trading at full margin capacity (in ACM’s case 1% or 0.5%) can make for some very large profits or losses on an account. Scaling your trades so that you may re-enter the market or make transactions on other currencies is generally wiser. In short, don’t trade amounts that can potentially wipe you out and don’t put all your eggs in one basket. ACM offers the same rates regardless of transaction sizes so a customer has nothing to lose by starting small.

Gauge market sentiment:

Market sentiment is what most of the market is perceived to be feeling about the market and therefore what it is doing or will do. This is basically about trend. You may have heard the term ’the trend is your friend’, this basically means that if you’re in the right direction with a strong trend you will make successful trades. This of course is very simplistic, a trend is capable of reversal at any time. Technical and fundamental data can indicate however if the trend has begun long ago and if it is strong or weak.

Market expectation:

Market expectation relates to what most people are expecting as far as upcoming news is concerned. If people are expecting an interest rate to rise and it does, then there usually will not be much of a movement because the information will already have been ’discounted’ by the market, alternatively if the adverse happens, markets will usually react violently.

Use what other traders use:

In a perfect world, every trader would be looking at a 14 day RSI and making trading decisions based on that. If that was the case, when RSI would go under the 30 level, everyone would buy and by consequence the price would rise. Needless to say, the world is not perfect and not all market participants follow the same technical indicators, draw the same trendlines and identify the same support & resistance levels. The great diversity of opinions and techniques used translates directly into price diversity. Traders however have a tendency to use a limited variety of technical tools. The most common are 9 and 14 day RSI, obvious trendlines and support levels, fibonnacci retracement, MACD and 9, 20 & 40 day exponential moving averages. The closer you get to what most traders are looking at, the more precise your estimations will be. The reason for this is simple arithmetic, larger numbers of buyers than sellers at a certain price will move the market up from that price and vice-versa.

Forex Technical Analysis

2009-10-01T11:04:00.001-07:00

The difference between forex technical and forex fundamental analysis is that forex technical analysis ignores fundamental factors and is applied only to the price action of the market. Forex technical analysis primarily consists of a variety of forex technical studies, each of which can be interpreted to predict market direction or to generate buy and sell signals. The technical analysis works by correlating the results and moves of current markets to create a short-term outlook for currencies. The rolling data that is produced throughout the trading day creates the interest in the markets and informs traders of the strong markets to back.

The Trend is Your Friend

Forex technical analysis is largely based around forex market movement trends, thus creating the widely used phrase ’the trend is your friend’ amongst traders. Buying and selling at the right time is the key in maintaining good levels of profits, following a trend is also about knowing where to entry a trade and more importantly where to exit.

Support and Resistance

Support and resistance is the basic of forex technical analysis. Support and resistance levels are points where a chart experiences recurring upward or downward pressure. A support level is usually the low point in any chart pattern (hourly, weekly or annually), whereas a resistance level is the high or the peak point of the pattern. Buying and selling at the support and resistance points makes a greater profit margin as long as they remain unbroken.

History Tends To Repeat Itself

Another important idea in technical analysis is that history tends to repeat itself, mainly in terms of price movement. The repetitive nature of price movements is attributed to market psychology; in other words, market participants tend to provide a consistent reaction to similar market stimuli over time. Forex technical analysis uses chart patterns to analyze forex market movements and understand trends. Although many of these charts have been used for more than 30 years, they are still believed to be relevant because they illustrate patterns in price movements that often repeat themselves.

Forex Software - Choosing the Best

2009-10-01T11:03:00.001-07:00

When it comes to forex trading the forex software you choose is essential. There are so many forex trading companies all competing for your business that choosing the right forex software can be quite a difficult task. Most of the forex software products available offers live online forex trading platforms but what other components are vital when it comes to your forex software.

Key Elements For Your Forex Software

Before purchasing any forex software there are a few essential items that should be included. The most important is security and your online forex trading software should include a 128 bit SSL encryption which will prevent hackers from accessing any of your personal details and information such as your account balance, transaction history, etc.

Providing the best security for your forex trading will include a company that provides 24 hour technical server support for your forex software, 24 hour maintenance should anything go wrong, daily backups of all information, and a security system that has been designed to prevent any unauthorized access. Along with these security protocols there are also some forex trading companies that use smart cards and fingerprint scanners to ensure that only their employees can have access to their servers.

Another important factor when it comes to choosing your forex software is to check what the company’s downtime is like. When it comes to trading forex and particularly your online forex trading you need to ensure that the forex software you choose is reliable and available 24 hours a day. The forex software you choose for your forex trading should also have technical support available at all times should your session be cut short.

Ensuring that all the above features are listed in the forex software you choose will help to ensure your forex trading success.

SaneBull World Market Watch

2009-09-28T07:20:00.001-07:00

stock market info

Hedging Risks and Rewards

2009-09-18T19:38:00.000-07:00

Forex trading is a risky business. This chapter will explain the usage of Stop Loss
(SL) and Take Profit (TP) orders. These are used for hedging your risks and
rewards, realizing your profits and minimizing your losses.
eToro places an automatic Stop Loss order on all your trades to prevent you from
losing more than you’ve invested. If the rate of your open trade drops below
what’s covered by your investment, the trade is closed by the automatic Stop
Loss.

This means the maximum amount you can lose on a trade is almost always
limited to the initial investment of the trade.

Still, there is no reason why you should wait until you lose your entire investment
to close the trade. By setting a Stop Loss order you make sure that the value of
your trade doesn’t drop below a certain level. This way you control the maximum
amount that you are willing to lose on a trade, without having to monitor each
trade around the clock.

Take Profit orders are similar to stop loss orders, only referring to profits. Take
Profit orders make sure that once your trade reaches a certain level of profit it will
be closed.

For instance, imagine that you’ve opened a Long EUR/USD trade for at the rate of
1.5400. After a few hours the rate rises to 1.5500, but an hour later drops to
1.5300. Without a Take Profit order, you might miss the rise in the rate, and end
up with a loss on your hands.

If you had set a Take Profit order, the potential profit of the trade would have
been realized, without you having to monitor the trade around the clock.

Remember, Stop Loss and Take Profit orders are very simple tools that can
make the difference between a successful trading career and a big hole in
your pocket. Consider using these orders with every trade that you make.

Top forex swings in history

2009-09-18T19:36:00.000-07:00

The foreign exchange industry exists whenever one currency is traded for another. It is by far the largest market in the world in terms of cash value traded, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. The market is unique due to several factors including trading volume, the extreme liquidity of the market, geographical dispersion, the 24 hour trade day, the large number and variety of traders in the market and the variety of factors that affect exchange rates.

Among these factors that affect exchange rates is the news. This is one of the greatest advantages that the forex market has over all of the other markets; there is no such thing as insider trading. All a trader needs to do in the forex market is to stay abreast of the news, develop an opinion and apply that opinion to the markets. Some of the best currency trades in the world have been placed by investors following the news and taking advantage of the information given to them.

During the summer of 1992 there was wide spread speculation that England was going to be rejected from the European Monetary Union, which would severely hurt the English pound. George Soros, founder and head of one of the largest hedge funds in the world, The Quantum Fund, took advantage of England's poor fortune, by placing a ten billion short position in the market. The Bank of England attempted to stabilize the pound's value by intervening and depleting all of their foreign currency reserves. Despite their efforts, on September 16, 1992, known around the world as Black Wednesday, the fight was over and the pound plummeted. England was forced to withdraw from the European Monetary Union and in one day, Soros earned $1 billion. He is now known as the man who broke the Bank of England.

Stanley Druckenmiller, former money manager for George Soros, now runs Duquesne Capital which he founded in 1981. In 1989, he developed one of his greatest ideas. While working at George Soros's Quantum Fund, Druckenmiller bought two billion German marks. He believed that due to the falling of the Berlin wall and the reunification of Germany, the deutschemark was set for a huge rally. That one idea made him a very rich man, with the deutschemark climbing enormously in value over the next few years. Druckenmiller's exact profits on this investment remain unknown, but the Quantum Fund posted returns of over 60%.

Andy Krieger, once a star at Banker's Trust before resigning to work for no other than Mr. George Soros, is best remembered in New Zealand. During the U.S. stock market crash of 1987, traders were buying up any currency that was appreciating against the dollar, the most popular being the New Zealand dollar or the "kiwi" as it is known in the currency market. Mr. Krieger, knowing that this rally could never last and believing that the kiwi was one of the most overvalued currencies in the market, shorted 200 million kiwi which is more than the entire money supply of New Zealand. The currency not surprisingly buckled under this pressure, allowing Kreiger to cover his positions and walk away with a huge profit. .

All of these trades have one common underlying factor. Each of these traders had an opinion that was based on pure economic, fundamental data. Due to markets being more efficient and traders being more regulated, it would be nearly impossible to replicate any of these trades, however it would be rather easy to replicate the foundation on which each and every one of these trades were based.

OCO Order

2009-09-18T19:34:00.000-07:00

To Begin - Click on the bid or ask price of the particular currency that you want to trade. A window will appear which is labeled “Open Order for (the abbreviation of the currency)”. Fill in the boxes for Operation, Account, and Units in the same way that you would for a market order.

Next, click on the bullet entry button labeled “OCO”. There will now be two entry fields where the single rate box was located, with one labeled “Stop” and the other labeled “Limit”.

Input the desired rates at which you want your Stop or Limit to be triggered. Both boxes must be filled in for the order to be accepted, however, only one of the rates will be used to trigger or execute an order. If the Limit order is executed first, the stop will be cancelled and vice versa.

The Second Step - To cancel the order at any time, select the “cancel” button located on the bottom middle of the window. To proceed, select “place order” and a window labeled “Confirmation” will appear. This does not mean your order was executed. This window asks you to confirm that all of the information entered regarding the trade is correct. If the information is correct and you want to proceed with the trade, select “yes”. Selecting “no” will take you back to the previous window.

After “yes” has been selected there are three possible outcomes:

1. A box will appear indicating that you do not have enough funds in your account for the transaction.

2. A box will appear indicating that the OCO order has been incorrectly entered. This may occur if the rates entered for the Stop and Limit levels have been reversed.

3. If you have sufficient margin and your order was entered correctly, it will be displayed in the “Open Orders” window. This may take a few seconds depending on the speed of your Internet connection.

The order will remain in the “Open Orders” window until cancelled or executed. If executed, the order will disappear from the “Open Orders” window and the necessary changes will be reflected in the “Open Trades” window.

CFD Trading

2009-09-18T19:31:00.001-07:00

In the present day, there are quite a few options that can allow you to trade from commodities, stocks, CFD as well as bonds. A Contract for Difference (CFD) is growing in popularity as a preferred method to trade the stocks. It allows you to heighten up and endows with all the facilities where you can play safe in the market. However, a lot of traders have started realizing that CFD is the most attractive of all with the fact that you can trade all 24 hours of the day with six days per week. It also happens to be the highest liquid market in the world and is known as FOREX. Hence, with all the hype that surrounds CFD, there are a lot of things you need to know about CFD.* As far as the CFD trading is concerned, you would have to know how to trade them and where to trade them. It is mandatory to know which companies would trade the CFDs. This is by far the fastest trading tool in the world and for more information on the trading you can always refer to the Broker or have a look at the CFD FX report. There are quite a few applications that can help you learn better about CFD trading.* You also have to know about the latest CFD terminology such as the contracts of all kinds. It is extremely important to know all the terms before you actually start trading in the market.* The next step is to look for the broker. Getting hold of the right broker is as important as winning the trade itself. You can do your own research and practice on all those sites that help you create a free demo account. Such a way you wouldn’t be spending money as well. At the time of picking the right broker, you need to understand that you have to check for the kind of spread they present and they way in which they are regulated. You can also know about what kind of assistance they offer and what sort of charting packages are being offered by them. Stay in pace with the CFD FX Report that has the names of all the CFD brokers and they are highly appreciated in the report.* Lastly, find out whether you are going to trade yourself or allow the robot to do the procedure. The robots have their own pros and cons and it becomes necessary to assess your risk profile and then implement the robots.These are just a few things that you need to keep in mind before getting started on the CFD trade. It is important to know that the educated trader is usually a better trader. So get all the tools that can educate you such as the educational sites, free charts and demos.

Effective Forex Trading Techniques

2009-09-18T19:30:00.003-07:00

A lot of Forex trading systems that are being used today by a majority of the beginners are focused towards the short term gains and they allow you to take minimal risk and promise elevated profits as well as claim to generate a steady income out of it. So here are some ways which are proven to work. We have listed the biggest challenges faced by a Forex trader in the present day:There are loads of individuals with a different skill set, different opinions, who belong to different knowledge backgrounds and who trade differently. Honestly, it is almost impossible to predict the moves in Forex trading system. With all the varied elements involved in Forex, it is simply impossible to know what’s going to happen in the next hour of the market. Well, as a fact, all the volatility that is involved in the short term frame is supposed to be random and you cannot get the odds on your advantage and on the other hand, you cannot win the long term as well.A majority of the Forex strategies or the systems that are being purchased today do not help you heighten the profits; it’s that element of luck that can bring profit to most of the people. Quite a few would show the results of the previous tests and predict that you can get a positive outcome from the trade if the tests were adjusted accordingly.It has been proved that a lot of these systems come with a great sales pitch that can attract people and also formulate good case studies. This is a gimmick to bring more people on the trading bandwagon. However, there are some authentic programs that can help you win, but it’s not all about switching on the computer and getting started with the bids. It requires a lot of skill and knowledge on the subject.All you need to do is get the odds in your favor and then once you are able to do this, you need to hold on to that strategy for long term. Follow the current trends in the market and once you apply a combination of your techniques along with the correct market perception, you would be able to gain huge profits out of the Forex Trading system.Lastly, it would be advisable to avoid the Forex scalping. It is mandatory to get the right Forex education and if you really want to enjoy the long term benefits of the trade, you need to upgrade your trading skills constantly. There are a lot of sources on the internet that provide free learning sessions on the subject.

Global Forex Trading and great investments

2009-09-18T19:30:00.001-07:00

The global Forex market which is widely known as the foreign exchange or the currency trading market has become one of the most popular markets to deal with in the last few years. With the increase in the global economy, a lot of people have started trading in Forex. Prior to this, the economy was not spread over all the countries. It is now possible for people to convert large sum of money into different currencies. This market is the largest in the world and includes all kinds of investors including banks, other financial institutions and other individual investors. The daily volume of trade in the forex market exceeds four trillion dollars and hence it appears to be quite a lucrative market to venture in.There are quite a few things that would separate the forex trading from the conventional markets. The trading volume differs greatly and then follows the other factors such as the exchange rates and lower profits. Hence a lot of people are turning towards the global foreign exchange market to beat the competition and this market has a demonstrated track record of its increase since 2001.The other way in which the forex market differs from the traditional market is that here the inter-bank market is at the top of the pyramid. Unlike the stock options, the investors to not have a same access to all the prices. It differs greatly. As the level of access is decreased, the difference between the asking price and the bidding price also increases. Hence it is still possible for someone with lower access to earn large amounts of money.At the same time as there is no central market involved in forex, there are no specific regulations that control the exchange. Global trading system in forex includes quite a lot of countries and hence compiles an intertwined market. Therefore there is not much of the single trading system here considering the scores of different prices and rates. These differences in the exchange have a direct effect on the gross domestic product, the inflation rates as well as the trade and the budgets of the economic transactions.There are a lot of people who plunge into the forex trading market in order to invest large sum of money and with the intention of making more money from it. This financial market is still on a rise, despite the recessive economy all around the world. A lot of new invest

What is Forex Trading ?
Forex trading also known as currency trading refers to a series of transactions on foreign exchange markets used by investors for speculative or hedging purposes. A basic forex transaction consists in the simultaneous buying and selling of one currency against another. Currencies are thus traded in pairs (majors or crosses) for instance: the Euro against the US Dollar (EUR/USD) or the British Pound against the US Dollar (GBP/USD). For example, buying the pair EUR/USD at 1.3305 means that you need 1.3305 USD to buy one euro.Trading forex can also be described as speculating on the direction of one currency against another. You make profit when the market moves in your favor and you lose if the market moves against you. For example, you'll buy EUR/USD if you think that the Euro will strengthen against the US Dollar. Conversely, if you think the Euro will weaken compared to the US Dollar, then you will sell EUR/USD.Although it may seem easy at first glance, there is much more to forex than meets the eye. Predicting market moves is a complicated matter and that's why Finotec has its own online forex Education Center where you can learn Forex. With Finotec, you may also practice online trading by opening a Forex Demo Account. The simulation platform will allow you to trade with virtual money in real market conditions. Once you have acquired the skills to trade, use our wide range of tools and indicators to make wise and informed decisions for successful online forex trading.Forex: the largest financial market!The investor's goal in Forex trading is to profit from foreign currency movements. Forex trading or currency trading is always done in currency pairs. For example, the exchange rate of EUR/USD on Aug 26th, 2003 was 1.0857. This number is also referred to as a "Forex rate" or just "rate" for short. If the investor had bought 1000 euros on that date, he would have paid 1085.70 U.S. dollars. One year later, the Forex rate was 1.2083, which means that the value of the euro (the numerator of the EUR/USD ratio) increased in relation to the U.S. dollar. The investor could now sell the 1000 euros in order to receive 1208.30 dollars. Therefore, the investor would have USD 122.60 more than what he had started one year earlier. However, to know if the investor made a good investment, one needs to compare this investment option to alternative investments. At the very minimum, the return on investment (ROI) should be compared to the return on a "risk-free" investment. One example of a risk-free investment is long-term U.S. government bonds since there is practically no chance for a default, i.e. the U.S. government going bankrupt or being unable or unwilling to pay its debt obligation.

Why People Learn Forex Trading

2009-09-18T19:29:00.001-07:00

"I realized several years back the FOREX is the best opportunity available to every day people like me to build a sound financial future. See you in the trade rooms.""2006 is the year of financial freedom for me - "I can feel it in my bones." I know it's coming and I know that forex trading is the key. Once I learn to master this skill my life never be the same - none of our lives will.""I'm 18 years old, and im interested in doingcurrency trading. I have no previous experience in FX training, trading, or any other type related to this, but i hope to catch on quickly. I've wanted to invest in real estate since I was 14, and have studied it on and off since then, but I think this is agreater financial and career establishing opportunity, and im trying to learn as much as I can.""I have no experience in the financial world I don't even balance the check book! BUT I do know that I can do this and so can you!! So far I have been successful...I promise its not hard.""I come into this enterprise with miniscule experience as a trader and just enough knowledge about fx to lose my shirt in 5 minutes or less. I’m here to learn a workable system for foreign exchange trading. I like the concept of being ableto make money from anywhere I can take my laptop.""I am new to forex trading. My expectation in this course is to build a base of understanding and knowledge of the forex exchange. My goal is to learn how to trade effectively to retire from my 9-5 within the next three years if not sooner. My challenge is to leave emotions out and follow the fundamental rules to become a successful trader.""I have been with FXT since February 2005 and have enjoyed the program very much. My wife and I have been busy learning how to be successful traders over the last few months. Our goals are to become financially successful so we can provide more for our church and spread the Lord's word acorss the world. May God bless us all abundantly through this wonderful program.""I am new to Forex Trading. I've played the HYIP game and I look forward to learning a skill that will provide me the opportunity to be successful based on how I apply what I have learned. Success is a choice and I plan on being successful.""I am a retired airline pilot who has done a little commodity trading in the past, however, have always been very intrigued by the FX market. Now that I have completed the beginner's and advanced training from FXT, I am doing a review with the new Interactive Training Modules. I'm pleased to report that I am already having success in live trading, and am VERY excited about the FX market and the FXT products and business!What a fantastic opportunity!""I am looking forward to learning and trading the forex market. Some years ago, I traded options with some success, but discovered the forex market could be more rewarding. So looking forward to learning.""I joined one month ago and have been in corporate chat rooms. I am up over 130 pips and really just learning! I spent over $7000 on other systems and training and couldn't make money. FXT is FANTASTIC!""I found out about forex while looking for a new career. I have bookkeeping experience but thats about it! I love the concept of this type of trading and look forward to learning the skills and "enjoying the game"."I'm very excited to learn about Forex. I want to build my skills so that I can generate enough from Forex to raise my kids and sustain a nice life style as well as have time to help others.""I started with FXT about 3 weeks ago and I am excited to have an opportunity to learn how to be a FX Trader the right way. At 58 I feel like I am going to college for the first time, but my mentor has made me feel quite comfortable here. I feel I have finally found a home with FXT and working in the FX currency market.""I am looking forward to opportunity and education that is offered by FxT. The interaction that the business provides through this learning center and the potential for positively changing your life is exciting.

Forex Trading Rollovers

2009-09-18T19:28:00.001-07:00

Rollovers occur when a transaction continues for more than two days, and the Forex trading order is automatically rolled over to the next day.Because the Forex trading market is a spot market, where trandsaction are made instantaneously, trades must settle in two business days. But don’t worry… You don’t have to sell everything after two days! This is exactly why we have the option for Forex trading rollovers.In Forex system trading you have the option of a rollover, so that your transaction will remain relevant for two more days. Forex trading Rollover can happen every two days, so your investment stays indefinitely.Rollover Charges and Interest RatesEvery rollover has a certain transaction cost, which is set according to the Forex site and software you are using. This information needs to be looked over before you invest, so there won't be any surprises.Rollover charges are different according to the currency you invest in, and this should also come into account when deciding how to trade.Forex trading Rollovers occur when the NY trading market closes at 17:00 ET. Traders sometimes earn interests on rollovers. US interest rates, for example, are higher than Japan's, so if you are holding a long USD/JPY you will be able to accumulate interest for the rollover. On the other hand, holding the JPY will means paying interest on the rollover.When the rollover is made, the currency can also move up or down for a few pips, so also take that into account when you notice changes in the Forex currency the day after.

Discipline in Forex Trading and Investing

2009-09-14T08:47:00.000-07:00

The one thing I can think of that most affects both trading and investing has to be self-discipline.
Being disciplined is fully 50% of the job of forex trading or of investing. I don't care how good your trading system is, without the discipline needed to follow the system you don't have much of a chance for success in meeting your goals.
It doesn't matter how great a planner or organizer you are, without discipline your plans will most likely fail to bear fruit. Discipline involves self-control, and self-control involves your ego. If you want to succeed, you must learn to trade without your ego getting in the way.
Don't be fooled. A person's self image must be separated from his trading or his investing. When personal self-worth gets tangled up with your business activities, it not only wrecks your best trading or investing intentions, but it also damages your self-esteem.
You hear and read about great traders and investors who have done amazing things. They tell about how great they are. They talk about "The Big" trades they made. They talk about "Big" numbers. It all derives from their oversized egos.
Don't be misled. Sooner or later, there are "Big Downfalls." It goes with the territory.
For a moment, let's look at the results of what a huge ego can do. Due to his oversized ego, Nick Leeson brought down the Barings Bank. Victor Niederhoffer ran his fund into deficit. John Merriweather was so sure his strategies would work that he ended up threatening the health of the entire banking system by betting more than fifty times his capital that he could forecast, without any chance of a loss, the direction of various bond markets.
As we study the examples of these three men, there seems to be a pattern of temporary real success followed by a collapse for themselves and for those caught up in blindly following them.
Here are the kinds of problems that arise from putting your ego into the mix.
- Not putting in stops: You don't want to be proven wrong.
- Hesitation before entry: You want reassurance before you act.
- Overtrading: You want to prove how really big you are.
- Not getting out when you should: You have married your trade and just don't want to get a divorce. Getting out would mean you were wrong.
- Adding to a losing trade: You are making a massive effort to prove you were originally right.
- Grabbing a profit too soon: You want affirmation that you did the right thing.
- Missing an opportunity because you can't pull the trigger on a trade: You are still living with past mistakes.
In my 47 years of trading, I have seen great traders and investors come and go. All too many of them lost everything they had ever made. The great W.D. Gann died a pauper. The legendary Jess Livermore was flat broke when he committed suicide.
I have known dozens of traders who lost money because their egos got in the way.
I agree 100% with the following statement by Marty Schwartz, the great S&P 500 daytrader.
"I've said it before, and I'm going to say it again, because it cannot be overemphasized - the most important change in my trading career occurred when I learned to DIVORCE MY EGO FROM THE TRADE. Trading is a psychological game. Most people think that they're playing against the market, but the market doesn't care. You're really playing against yourself. You have to stop trying to will things to happen in order to prove that you're right. Listen only to what the market is telling you now. Forget what you thought it was telling you five minutes ago. The sole objective of trading is not to prove you're right, but to hear the cash register ring."
To that I would add, "trade what you see, not what you think." You cannot afford to get your ego or your opinion involved in your trading activities. Because both trading and investing are uncertain businesses of probabilities filled with uncertain outcomes, a huge ego or a fragile ego can easily get smashed. Defending your ego saps you of energy, distorts your perception, and will eventually destroy your business.
If your self-esteem is connected to your currency trading and investing choices, if it goes up and down with the results of your activities, you and your business are in trouble. Your self-image needs to be strong, not at the mercy of the outcome of your trading or investment choices.
To succeed in the fx markets, you have to have confidence in what you are doing and confidence in yourself. But self-confidence must not become confused with self-image. Remember not to marry a market or a trade. If you see you are not right, be quick to get out. Run your trading or investing as a business. Practice self-discipline. You'll be glad you did.

Destructive Patterns in Trading

2009-09-14T08:44:00.000-07:00

Before we get into the topic of destructive trading, allow me to explain how psychologists assess whether or not a person has a problem with alcohol consumption. Here are ten questions that a professional might ask in order to assess any kind of substance use disorder, including alcohol abuse:

1) Have you found that your drinking is bringing unwanted, negative consequences?

2) Have you recently felt guilty over the way you have been drinking?

3) Do you find you need to drink more just to get the good feeling?

4) Do you find that your personality changes when you drink excessively?

5) Do you find it difficult to take a break from drinking, even when part of you knows that this would be best for you?

6) Do you find yourself drinking to feel good about yourself?

7) Do you sometimes feel that you cannot control how much you drink?

8) Do you find yourself getting angry when someone close to you questions your drinking?

9) Do you find yourself vowing to limit your drinking, only to slip back into overdrinking?

10) Do you find it difficult to not drink given the opportunity, even when the occasion is not really appropriate?

Now for the topic of destructive trading: Please answer the above questions, but substitute the word “trading” for “drinking”, and substitute the word “trade” for “drink”.

Fear and greed are potent influences on trading, but the greatest trading problems, I find, are addictive in nature. Successful traders really want to trade; they have a passion for trading. Addictive traders need to trade; they have a passion for action and excitement.

An addictive trader will not manage his risk. That is because risk is part of the high.

An addictive trader will not stop trading, even when losing money. That is because action, not profit, is the goal.

An addictive trader will cycle between periods of guilt and responsibility and periods of excess and irresponsibility.

Good traders trade actively. Addictive traders overtrade.

If you see yourself in this profile, do the right thing, before your patterns ruin your career and harm those who depend on you. Get help. You can change. Your trading and your happiness lie in the balance.

Avoid Making Predictions in the Market

2009-09-14T08:43:00.001-07:00

Most people make a big deal out of market prediction. They think they need to be right 70% or better in order to "pass" the exam that the market gives them. They also believe that they might get an "A" if they could be right 95% of the time. The need to predict the market steps from this desire to be right. People believe that they cannot be right unless they can predict what the market is doing.
Among our best clients, I have traders who continually make 50% or more each year with very few losing months. Surely, they must be able to predict the market very well to have that kind of track record. Well, I recently sent out a request for predictions and here is what I got back from some of the better traders.
Trader A; "I don't predict the market, and I think this is a dangerous exercise."
Trader B: "…these are just scenarios, the market is going to do what the market is going to do."
Ironically, I got these comments from them despite the fact that I was not interested in any of their specific opinions, just the consensus opinion.
So how do they make money if they have no opinions about what they market is going to do? Well, there are five critical ingredients involved:

They follow the signals generated by the system.
They get out when the market proves them wrong.
They allow their profits to run as much as possible—meaning they have a high positive expectancy system.
They have enough opportunity so that there is a great chance of realizing the positive expectancy any given month and little chance of having a losing month.
They understand position sizing well enough so that they will continue to be in the game if they are wrong and make big money when they are right.

Most traders, including most professionals, do not understand these four points. As a result, they are very much into prediction. The average Wall Street Analyst usually makes a large six-figure income analyzing companies. Yet very few of these individuals, in my opinion, could make money trading the companies they analyze. Nevertheless, people believe that if analysts tell you the fundamentals of the marketplace, someone can use that information to make money.
Others have decided that fundamental analysis doesn't work. Instead, they have chosen to draw lines on the computer or in their chart book to analyze the market technically. These people believe that if you draw enough lines, and interpret enough patterns, you can predict the market. Again, it doesn't work. Instead, cutting losses short, really riding profits hard and managing your risk so that you continue to survive is what really makes you money. When you finally understand this at a gut level, you will know one of the key secrets to trading success. In the meantime, we will continue to make predictions in our column, so that you will begin to understand that they are entertaining, but nothing more!

Five Guiding Principles of Trading Psychology

2009-09-14T08:41:00.001-07:00

When I recently participated in an online chat presentation for John Forman, I assembled my ideas into ten basic principles that have guided my thinking about the psychology of traders and the psychology of markets. In the very near future, if my testing continues to be promising, I hope to present a market indicator for swing traders that rests firmly upon these principles. Stay tuned! In the interim, here are the five principles that pertain specifically to trading psychology. Next up will be five principles for trading the markets.

Principle #1: Trading is a performance activity - This is the core idea behind my most recent book. Like the playing of a concert instrument or the playing of a sport, trading entails the application of knowledge and skills to real time performances. Success at trading, as with other performances, depends upon a developmental process in which intensive, structured practice and experience over an extended time yield competence and expertise. Many trading problems are attributable to attempts to succeed at trading prior to undergoing this learning process. My research suggests that professional traders account for well over three-quarters of all share and futures contract volume. It is impossible to sustain success against these professionals without honing one's performance--and by making sure that you don't lose your capital in the learning process. Confidence in one's trading comes from the mastery conferred by one's learning and development, not from psychological exercises or insights.

Principle #2: Success in trading is a function of talents and skills - Trading, in this sense, is no different from chess, Olympic events, or acting. Inborn abilities (talents) and developed competencies (skills) determine one's level of success. From rock bands to ballet dancers and golfers, only a small percentage of participants in any performance activity are good enough to sustain a living from their performances. The key to success is finding a seamless fit between one's talents/skills and the specific opportunities available in a performance field. For traders, this means finding a superior fit between your abilities and the specific markets and strategies you will be trading. Many performance problems are the result of a suboptimal fit between what the trader is good at and how the trader is trading.

Principle #3: The core skill of trading is pattern recognition - Whether the trader is visually inspecting charts or analyzing signals statistically, pattern recognition lies at the heart of trading. The trader is trying to identify shifts in demand and supply in real time and is responding to patterns that are indicative of such shifts. Most of the different approaches to trading--technical and fundamental analysis, cycles, econometrics, quantitative historical analysis, Market Profile--are simply methods for conceptualizing patterns at different time frames. Traders will benefit most from those methods that fit well with their cognitive styles and strengths. A person adept at visual processing, with superior visual memory, might benefit from the use of charts in framing patterns. Someone who is highly analytical might benefit from statistical studies and mechanical signals.

Principle #4: Much pattern recognition is based on implicit learning - Implicit learning occurs when people are repeatedly exposed to complex patterns and eventually internalize those, even though they cannot verbalize the rules underlying those patterns. This is how children learn language and grammar, and it is how we learn to navigate our way through complex social interactions. Implicit learning manifests itself as a "feel" for a performance activity and facilitates a rapidity of pattern recognition that would not be possible through ordinary analysis. Even system developers, who rely upon explicit signals for trading, report that their frequent exposure to data gives them a feel for which variables will be promising and which will not during their testing. Research tells us that implicit learning only occurs after we have undergone thousands of learning trials. This is why trading competence--like competence at other performance activities such as piloting a fighter jet and chess--requires considerable practice and exposure to realistic scenarios. Without such immersive exposure, traders never truly internalize the patterns in their markets and time frames.

Principle #5: Emotional, cognitive, and physical factors disrupt access to patterns we have acquired implicitly - Once a performer has developed skills and moved along the path toward competence and expertise, psychology becomes important in sustaining consistency of performance. Many performance disruptions are caused when shifts in our cognitive, emotional, and/or physical states obscure the felt tendencies and intuitions that lie at the heart of implicit learning. This most commonly occurs as a result of performance anxiety--our fears about the outcome of our performance interfere with the access to the knowledge and skills needed to facilitate that performance. Such performance disruptions also commonly occur when traders trade positions that are too large for their accounts and/or do not maintain sound risk management with their positions. The large P/L swings cause shifts in emotional states that interfere with the (implicit) processing of market data. Cognitive, behavioral, and biofeedback methods can be very useful in teaching traders skills for maintaining the "Yoda state" of calm concentration needed to access implicit knowledge.

The most important question I can ask an aspiring trader is: Are you engaged in a structured training process? Education--simply reading articles in magazines, websites, blogs, and books--is important, but it is not training. Training is the systematic work on oneself to build skills and hone performance. It requires constant feedback about your performance--what is working and what isn't--and it requires a steady process of drilling skills until they become automatic. No amount of talking with a coach or counselor will substitute for the training process: not in trading, not in athletics, and not in the dramatic arts. Training yourself to proficiency is the path to a positive psychology.

Best trading systems

2009-09-03T04:10:00.000-07:00

At the time I decided to start forex trading (2 years ago) the Forex Boom was just starting. I really did think I had stumbled on that legendary pot of gold, and that I would soon be on easy street.
Here was a multi-trillion dollar online business where a smart guy like me couldn't fail to make lots of easy money.
I'd read that over 90% of forex traders fail, but hey — that wouldn't happen to me — I've got a college degree! If I learned the best forex trading techniques and studiously avoided the pitfalls, I'd be a top forex trader in no time!
So I invested in the best forex training course I could find, almost entirely dvd-based training, and it cost me more than $4000. It came on 10 dvds, with 14 hours of top quality forex education, and several pieces of software, including free forex signals software which was already set up with passwords etc... and ready to go. I even got a forex spread-betting account. Mmm... better still, now I can trade forex tax-free!
I also received access to the author's web site and could see his daily forex trades. Every evening I could review his trades and listen to his commentary, and see how many pips he had made or lost. Most days he made about 20 — 30 forex pips — mostly in the GBP/Dollar market.
This was going to be be easy!
The course covered all aspects of trading including preparation, record keeping, paper trading, even the phsychology of forex trading. I watched the entire dvd set over a couple of days. Then I re-watched the dvds covering actual FX trades and particular forex techniques — he was a technical trader.
I coudn't wait to get started. So I opened my spread betting account (another $5,000 but what the hell....). Oh, and I sent for the latest Mercedes and Ferrari literature — it wouldn't be long now....
That was nearly 2 years ago.
So do I have the Mercedes or the Ferrari? Nope! Have I made my fortune? Not yet!
In fact I've lost money — lots of money!
I haven't lost my confidence in the forex market as a way to make money online, I've seen and met too many traders who make good money trading the forex markets. I know it's possible, I've seen it done.
So it must be my system! So I invested even more money.
I bought the very best online forex trading systems — but only after I had carefully checked their testimonials and ensured that people were making serious money with them. I also bought books — lots of books. Books on forex training, books on forex trading, books to compare forex trading systems. I also bought downloadable forex courses and forex guides, I studied day trading systems versus long term trading systems — I was determined to succeed and make money in forex trading.
So am I making money now? Not really!
But at last I know where the problem is and why I have failed. It hurts to admit it, but...
The problem is ME.
Yep- me! I'm the problem.
I now know that my approach, my style, my methods, were all letting me down. Even when using a proven winning trading system, I would lose money.
And for a long (and very costly) time, I hadn't even realized it. It wasn't because I didn't invest enough money either.
I now accept that I can purchase a winning forex trading system online for very little, and that a top forex course will cost very little too. Indeed, there are a whole range of very affordable forex resources and training out there.
I can quickly and easily be ALMOST fully equipped to make money on the forex markets. Almost?
So what's the missing link? What's the difference between the winners and the losers? Who else should I consult to be the complete forex trader?
Well — me... It's me!
I've identified a whole load of personal traits and deficiencies that have prevented my success — (and very uncomfortable reading they make too). Words like self-discipline, concentration, resolution, dedication and honesty come to mind.
I've also learned that MOST available forex tutorials fail to cover this topic adequately — probably because their writers are successful forex traders who already possess the vital ingredient that the rest of us lack. They just don't realize it's a problem.
What's the problem?
In a sentence — "Most forex traders are incapable of sticking to the systems they have learned". That's why most forex traders fail.
So now I have written "The Missing Link, the other successful forex trading strategy". It's nothing to do with entry or exit points, or technical analysis, or news trading. It's everything to do with attitude and mind-set- and provides a totally different set of trading rules without which even the most successful forex trading strategy can fail.

Take Control in Forex Trading

2009-09-03T04:09:00.000-07:00

Forex Trading is not that easy, all FX traders before they enter this business, they think that they will be rich very quickly and make $20 000 in one or two weeks, but when they begin trading currencies they discover it is not true, it is not easy to make money especially when we work with money. Very tricky business, many of us think that there is a conspiracy planned by "THE BIG GUYS", they know what we think what we plan to do and they do the opposite to steel our money, many times we think to make the opposite of our decision (if I see the market is going up then I will sell). And we begin searching for someone to help us making at least 200 or 300 pips a month, probably many of us work with signals advisors who simply took our money and probably do not help us making decent profit. Many of us thought stop trading many of us quit FX trading but I think most of us will not quit easily because we see in it a golden opportunity to have our own business and make our fortune!
Foreign exchange is an opportunity to make a fortune and in same time it is an opportunity to loose our money, we can make a fortune if we knew how to handle Forex, if we don't know how to control Forex it will destroy us, so we must be stronger than it, and if we don't know how to control it with our own hands it will destroy us too. So how I can be stronger than this ferocious beast? It is simply by learning, observing, and practicing. The FX market will not go anywhere it will be trending and ranging for ever, so learn from experienced traders how they became that good, observe charts and look for common points look for the reason why the price change direction, and when you discover the reason which influence a currency you will have in your hand the first tool that gives you control. And each new thing you discover, try it on a demo account, see if it is valid and develop it. In this Forex article I am helping you to find your way, this Forex article does not give you the fish but it teaches you fishing. There is no conspiracy theory in this business, no big or small guys, we loose because we don't know, and the first thing we must do to become good traders is to admit that we don't know and we must always learn.
In this Forex Article I will give some clues and I will leave you learn, observe and practice.
First of all you must know that you must use fundamental and technical analysis in conjunction, both complete each others, so don't rely on one and leave the other. Fundamental is one of the reasons which influence the market, so if you are in a long trade and suddenly the trading currency went down so go and see if a report was released and see what its forecast and what was the released data and compare this data to your chart and you will have your first tool to control your business.
Second, in my opinion all the technical indicators didn't help me at all, I tried all the combinations nothing work, and indicators describe the status of the market but don't give you information about the next direction. I read a Forex article about a guy who describes his Forex Trading strategy in a Forex article, I was completely lost, he uses a combination of 12 indicators EMA340, SEMA890, EMA2900 etc: and he inserted FIBONACCI in it. I was totally lost. Even if his strategy worth 95% success I will not use it because I can control the market by using simpler techniques. So we don't need to seek indicators, only one indicator I use the Bollinger Bands which is the perfect weapon in my battle against Forex trading. So I want you to look at the Bollinger Bands and see how it affects a currency, focus on it and read well this Forex article and you will discover a lot of things, and you will have your second tool.
Third, suppose you are in a long trade and suddenly for no reason the Forex Trading price went down, there are no released reports it just turned down, this is weird. But weird things are those we don't understand, but if you observe your chart and go back several hours or days and drop a break line from higher swing points you will see that the price turns down because it reached that break line, you see there is no mystery. So this break line will be your Resistance and if price breaks it, it will continue going up, but going where and till when? Observe very carefully and you will learn as I did. And no need for midnight or afternoon candles, be simple as you can, that beast is not as ferocious as you think. So breakout is your third tool.
Fourth, what timeframe to use, it is up to you to choose the suitable timeframe, H1, H4, D1: I don't know, compare the charts and you will see the suitable timeframe. Timeframe is important and when you find it you will have your Fourth tool.
And that's it, I repeat observe your charts and focus and think in these clues in this Forex article and the more you think the more you discover, read Forex article, learn strategies and get foreign exchange books.
I do good profit from my Forex trading strategy because I program it, I gave my system the data and leave it do his job. This eliminates the fear factor and gave me more time to go out and have fun.

FOREX trading potential can be predicted by looking at your daily emotional behavior

2009-09-03T04:08:00.002-07:00

As hundreds and thousands of articles have been written on the subject of trading the markets, and with the emergence of new financial instruments every day, I feel compelled to put together a dissertation on the most important element of trading, the emotional effect.
Before detailing the key elements, I will offer to you the thoughts of two prominent individuals. They do not need any introduction, as their work is known and appreciated all over the world. I am sure you will love their insight into the human psyche.
"When dealing with people, remember you are not dealing with creatures of logic but creatures of emotion". Dale Carnegie (1888-1955)
"Let's not forget that the little emotions are the great captains of our lives and we obey them without realizing it". Vincent Van Gogh (1853-1890)
In a world apparently dominated by logic, it is very interesting to find such "heretic" ideas. There is nothing more debilitating than the thought of us acting not on our heavily trained conscious, but rather on the unknown subconscious impulses.
I would like to add just one more fact to my presentation, in order for you to fully grasp the importance of this new approach to trading and in general to any business activity.
The Institute for Health and Human Potential, with offices in U.S.A., Canada and Australia is a research and learning organization that uses Emotional Intelligence to leverage performance and leadership. Fortune 500 companies, the world's top business schools, professional athletes and Olympic medallists seek their expertise.
According to their studies, "Research tracking over 160 high performing individuals in a variety of industries and job levels revealed that emotional quotient was two times more important in contributing to excellence than intellect and expertise alone"
Shocking? Not at all. It is our way to act on impulse, without questioning the triggers. .
It is well known already that the two emotions dominating trading are GREED and FEAR. What is less grasped is the extent to which these emotions influence our decisions.
While amateur traders are greedy when they lose and fearful when they win, professional operators have an exactly opposite attitude, being fearful when losing and greedy when winning.
While simple psychological training could help you discipline your impulse reactions, it is the experience you get "in the ring" that makes you understand how to play with these primal emotions.
We all hate to lose, not necessarily money. The sentiment is very powerful. ALL professional operators are well versed in dealing with it day in and day out. Although they have been through tense moments due to financial losses, they have learned the most important rule in trading the markets: losses are the COST OF DOING BUSINESS. They have a high emotional management procedure and are trained to implement it no matter how hard their "ego" may suffer.
This is easier said than done, as emotions kick in and all theory crash and burn together with any trading plan.
Here you have some easy steps to help you start taming your emotional horses.
— What you see is NOT what you get, as opposed to what you have been taught all your life. The way you act is just a consequence of years and years of education and interaction with others and not your genuine attitude. You are the product of an outside education, not necessarily positive.
— In the long run, your Forex business is just PART of your whole life, together with your family, friends, hobbies, long-term projects and various other activities. I personally use a very powerful "mantra" when in pain following a loss. LIVE TO FIGHT ANOTHER DAY!
— Never lose sight of the general picture. That is your primary goal. For a professional Forex operator, the primary goal is the PROTECTION of his or her trading capital. Keep a trading journal and learn from your mistakes.
— If you want to get a pretty accurate picture of your trading prospects, take a look at your daily emotional decisions. Most of the time, you will repeat all emotional behavior in your professional life.
If you take your time to sit back and observe your daily routines, the picture will emerge with greater clarity, helping you foresee hurdles along your trading career. Do you have a swinging mood? Do you change your mind very often? Are you capable of keeping a commitment? Do you lose your temper easily? Are you on the "half-full glass" or "half-empty glass" side of life?
These traits will not change just because you start trading. That is why you have to be very careful with your expectations. Base them both on your assets as well as liabilities, in order to obtain an accurate picture.
That is just the beginning, but a very resourceful one on a journey few of us have started yet.
I have seen traders taking NLP (Neuro-Linguistic Programming) lessons, practicing the Tai-Chi art or simply meditating. They try to get in touch with unseen forces at work deep inside, vectors of influence that rule our inner world.
The way to succeed in life has infinite variations but one common start, superbly crystallized in the following aphorism, inscribed in golden letters at the entrance to the Temple Of Apollo at Delphi and attributed to Socrates, among several other ancient Greek philosophers: NOSCE TE IPSUM,(Know yourself).

The Funny Sort Of Traders In Forex Currency Trading

2009-09-03T04:08:00.001-07:00

What is the very reason why people get into forex currency trading? The money, of course. They would not be in it for anything other than that. Although there are very few who are more interested in knowing how the foreign market and the system work. But few of them really. Forex currency trading can offer a lot of money if the trader knows how to play their cards right.
Foreign currency trading has become the best income-generating industry in the world today. It is quite understandable because people do not need years of education to get into one. Compared with other industries that require some years of expertise, traders only have to learn some basic points about foreign currency trading, online for that matter. With the many online web sites offering free trainings and instant education, it is no wonder that people can get into foreign currency trading without any hassle at all.
Many people get into foreign currency trading but not all become successful either.
Some of the factors affecting the foreign currency trading are those within the market itself. These are expected and traders should know them about them first-hand to be able to anticipate and plan the needed action to counter it.
Other reasons for not succeeding in the foreign currency trading is because of the traders themselves. lacking of discipline and poor money management to mention some. These are problems that could be prevented but was not given much attention to.
There are really no personification of the "perfect trader" because the foreign currency trading is not perfect itself. Though some advises are given, they do not really ensure smooth sailing in the foreign currency trading. they just serve as guidelines to give traders some pointers on what to do when the situation calls for it.
Here are some of types of persons who enter into foreign currency trading that people do not know about and may not get to read everyday. They may sound almost absurd but there are really some of them out there.
The type who put your investment in the safest possible market. Then try to forget about them. The fact that some traders are really not into the foreign currency trading but is trying to "make" it there is an accepted fact. There are those who just want to invest and not make time for them. This is the best advise that can be given those kinds.
If they do not have the patience to try and make their trades work then they could just invest into some stable market and have them check one in a while. Or forget them altogether. They would be surprise at how their foreign currency trading is coming along without them putting any time and work into them.
It can work too. Money is not the issue here. Some people may just want to be a part of foreign currency trading and leave everything to fate. One way or another they are at least contributing to the industry. At least, their money is.
The itchy trader. This is the traders who are the exact opposite of the first ones mentioned. This kind of trader is the impatient one. Always trying to check what has been happening to the foreign currency trading especially the trade that he or she have invested on.
This is the kind that does not play around with money. Every cent counts and if putting some of it into the foreign currency trading would multiply that sum, then the trader would do everything to make it gain some profit. If it means taking more time and dedication that is allowed, then this trader would be more than happy to spend more time in the foreign currency trading.
This is also the kind that views foreign currency trading as a sport. Should always be there to see the action taking place and not wanting to miss a thing.
It is ironic how these two types of foreign currency traders have qualities that goes extremely opposite each other. Either way, one or more of the styles they are using can also bring some money into the bag. The one thing that they have in common is the fact that they both are willing enough to take the inherent risks.

The Advantages of Trading Alone

2009-09-03T04:08:00.000-07:00

People sometimes experiment with the idea to trade with other people. It might work, but for me, it did not. I trade alone. The advantages of trading alone are:

You are free to make your own decisions without having to find a way to explain the rationale of your decisions to anybody else. Your time and effort can be focussed on what the market is doing and how you react to it, instead of worrying about the psychological and emotional dynamics of a trading group.
You are free to experiment, based on the knowledge you gain from your experiences and your self-education, without having to asking others to allocate a certain portion of the trading funds to let you conduct your experiments.
No one can blame you for their failures. No time is wasted on justifying your actions or feeling guilty about the impact of your trading blunders on someone else's financial situation.
You alone are responsible and accountable for your own success or failure. You cannot shift the blame to anybody else. It could be disappointing to some knowing that they cannot blame anyone else if they fail. For others, it is very empowering to know that they, and they alone, are in charge of their own destiny.

Personally, I believe that a person should trade alone first before he or she decides to trade with other people. This allows the individual to develop his own philosophy and his own understanding about himself and the market. I understand, however, that not everybody can trade alone because it requires a set of beliefs and values to be part of the trader's character. Not all people are created with the same set of characteristics. Not everyone can operate under the solitude of the journey. For example, there are people who need social contact more than others. Individuals who are social by nature and those who solve problems by talking to other people, may have difficulty undertaking a solitary endeavour.
Furthermore, there are people who do not have faith in their abilities and in their capacity to learn to trade successfully. I know of individuals who need constant reassurance before they take any step towards their goals. In similar circumstances, trading in a group may be the only option available for some people to give them the push they need: otherwise, they may never start.

Trading Your Emotions: How to Cope with Psychological Pressures

2009-09-03T04:07:00.000-07:00

We all like to read about and study the subjects of strategy and analysis and Forex trading. For many traders, that is the familiar, understandable, and easier part of trading. By contrast, emotional control and money management belong to the more arcane category of knowledge in currency trading. On news channels, the websites of brokers and online and visual sources of news and analysis, you often find the various market movements and strategies based on them debated heatedly and with passion, but commentators who are often not traders themselves do not feel so inclined to discuss the psychological aspect of trading in their presentations.
The fact, however, is that the vast majority of online traders fail, and that the main cause of the failure is lack of emotional control and mental discipline. In many cases, the trader does not even reach a stage where a good knowledge of economic data and statistics can support his trading to generate better results. Instead, many accounts get wiped out early, as traders act like scared rabbits in the tense and emotionally charged atmosphere of the markets. Clearly, seekers of success in trading must devote a lot more energy to perfecting their skills of psychological control.
What are we seeking in trading? We seek money, profits. Does money, and the market action that creates it respond to our joy, pride, sorrow, or despair? Are the markets crueler on us when we are sad, or more gentle when we feel invincible? Are we more successful when we trade on baseless optimism, or panicky pessimism? Which is the better way to manage our emotions?
The better way of managing our feelings in trading is to isolate and exclude them while we are dealing with the markets. Prices move according to emotional responses in the short term, and economic dynamics in longer periods. But they can only be evaluated by logic, as that is the only tool possessed by human beings.
And some will rise and say, perhaps justifiably, that the markets move on emotions, and that by isolating and excluding them from our decisions we are losing the chance to understand the markets. In response we say that human beings understand and analyze through reason only, and as emotions cannot be predicted through reason, there is almost no benefit in trying to trade the markets emotional responses. Emotions are unpredictable, we all know that much. What is the point of trying to predict or evaluate market action on the basis of something which is itself unknowable, and unpredictable?
In sum, emotions have no place in a successful trading career. There should be no joy in profit, and no pain or sorrow in a loss. We can enjoy the fruits of our profits with friends and family later, but if we try to enjoy them while trading, our joy will quickly turn to sorrow. Until you absorb this piece of Forex wisdom, do not spend much of your time screening the Forex broker list seeking the best choice for you. The first step to success in Forex is emotional control. Without it, no broker or mentor will help you much.

Trading Psychology: Mistakes in a Trading Environment

2009-09-03T04:06:00.001-07:00

When it comes to trading, one of the most neglected subjects are those dealing with trading psychology. Most traders spend days, months and even years trying to find the right system. But having a system is just part of the game. Don't get us wrong, it is very important to have a system that perfectly suits the trader, but it is as important as having a money management plan, or to understand all psychology barriers that may affect the trader decisions and other issues. In order to succeed in this business, there must be equilibrium between all important aspects of trading.
In the trading environment, when you lose a trade, what is the first idea that pops up in your mind? It would probably be, "There must be something wrong with my system", or "I knew it, I shouldn't have taken this trade" (even when your system signaled it). But sometimes we need to dig a little deeper in order to see the nature of our mistake, and then work on it accordingly.
When it comes to trading the Forexa market as well as other markets, only 5% of traders achieve the ultimate goal: to be consistent in profits. What is interesting though is that there is just a tiny difference between this 5% of traders and the rest of them. The top 5% grow from mistakes; mistakes are a learning experience, they learn an invaluable lesson on every single mistake made. Deep in their minds, a mistake is one more chance to try it harder and do it better the next time, because they know they might not get a chance the next time. And at the end, this tiny difference becomes THE big difference.
Mistakes in the trading environment
Most of us relate a trading mistake to the outcome (in terms of money) of any given trade. The truth is, a mistake has nothing to do with it, mistakes are made when certain guidelines are not followed. When the rules you trade by are violated. Take for instance the following scenarios:
First scenario: The system signals a trade.
1. Signal taken and trade turns out to be a profitable trade. Outcome of the trade: Positive, made money. Experience gained: Its good to follow the system, if I do this consistently the odds will turn in my favor. Confidence is gained in both the trader and the system. Mistake made: None.
2. Signal taken and trade turns out to be a loosing trade. Outcome of the trade: Negative, lost money. Experience gained: It is impossible to win every single trade, a loosing trade is just part of the business; our raw material, we know we can't get them all right. Even with this lost trade, the trader is proud about himself for following the system. Confidence in the trader is gained. Mistake made: None.
3. Signal not taken and trade turns out to be a profitable trade. Outcome of the trade: Neutral. Experience gained: Frustration, the trader always seems to get in trades that turned out to be loosing trades and let the profitable trades go away. Confidence is lost in the trader self. Mistake made: Not taking a trade when the system signaled it.
4. Signal not taken and trade turns out to be a loosing trade. Outcome of the trade: Neutral. Experience gained: The trader will start to think "hey, I'm better than my system". Even if the trader doesn't think on it consciously, the trader will rationalize on every signal given by the system because deep in his or her mind, his or her "feeling" is more intelligent than the system itself. From this point on, the trader will try to outguess the system. This mistake has catastrophic effects on our confidence to the system. The confidence on the trader turns into overconfidence. Mistake made: Not taking a trade when system signaled it
Second Scenario: System does not signal a trade.
1. No trade is taken Outcome of the trade: Neutral Experience gained: Good discipline, we only need to take trades when the odds are in our favor, just when the system signals it. Confidence gained in both the trader self and the system. Mistake made: None
2. A trade is taken, turns out to be a profitable trade. Outcome of the trade: Positive, made money. Experience gained: This mistake has the most catastrophic effects in the trader self, the system and most importantly in the trader's trading career. You will start to think you need no system, you know better from them all. From this point on, you will start to trade based on what you think. Confidence in the system is totally lost. Confidence in the trader self turns into overconfidence. Mistake made: Take a trade when there was no signal from the system.
3. A trade is taken, turned out to be a loosing trade. Outcome of the trade: negative, lost money. Experience gained: The trader will rethink his strategy. The next time, the trader will think it twice before getting in a trade when the system does not signal it. The trader will go "Ok, it is better to get in the market when my system signals it, only those trade have a higher probability of success". Confidence is gained in the system. Mistake made: Take a trade when there was no signal from the system
As you can see, there is absolutely no correlation between the outcome of the trade and a mistake. The most catastrophic mistake even has a positive trade outcome, made money, but this could be the beginning of the end of the trader's career. As we have already stated, mistakes must only be related to the violation of rules a trader trades by.
All these mistakes were directly related to the signals given by a system, but the same is applied when getting out of a trade. There are also mistakes related to following a trading plan. For example, risking more money on a given trade than the amount the trader should have risked and many more.
Most mistakes can be avoided by first having a trading plan. A trading plan includes the system: the criteria we use to get in and out the market, the money management plan: how much we will risk on any given trade, and many other points. Secondly, and most important, we need to have the discipline to follow strictly our plan. We created our plan when no trade was placed on, thus no psychology barriers were up front. So, the only thing we are certain about is that if we follow our plan, the decision taken is on our best interests, and in the long run, these decisions will help us have better results. We don't have to worry about isolated events, or trades that could had give us better results at first, but then they could have catastrophic results in our trading career.
How to deal with mistakes
There are many possible ways to properly manage mistakes. We will suggest the one that works better for us.
Step one: Belief change. Every mistake is a learning experience. They all have something valuable to offer. Try to counteract the natural tendency of feeling frustrated and approach mistakes in a positive manner. Instead of yelling to everyone around and feeling disappointed, say to yourself "ok, I did something wrong, what happened? What is it?
Step two: Identify the mistake made. Define the mistake, find out what caused the mistake, and try as hard as you can to effectively see the nature of that mistake. Finding the mistake nature will prevent you from making the same mistake again. More than often you will find the answer where you less expected. Take for instance a trader that doesn't follow the system. The reason behind this could be that the trader is afraid of loosing. But then, why is he or she afraid? It could be that the trader is using a system that does not fit him or her, and finds difficult to follow every signal. In this case, as you can see, the nature of the mistake is not in the surface. You need to try as hard as you can to find the real reason of the given mistake.
Step three: Measure the consequences of the mistake. List the consequences of making that particular mistake, both good and bad. Good consequences are those that make us better traders after dealing with the mistake. Think on all possible reasons you can learn from what happened. For the same example above, what are the consequences of making that mistake? Well, if you don't follow the system, you will gradually loose confidence in it, and this at the end will put you into trades you don't really want to be, and out of trades you should be in.
Step four: Take action. Taking proper action is the last and most important step. In order to learn, you need to change your behavior. Make sure that whatever you do, you become "this-mistake-proof". By taking action we turn every single mistake into a small part of success in our trading career. Continuing with the same example, redefining the system would be the trader's final step. The trader would put a system that perfectly fits him or her, so the trader doesn't find any trouble following it in future signals.
Understanding the fact that the outcome of any trade has nothing to do with a mistake will open your mind to other possibilities, where you will be able to understand the nature of every mistake made. This at the same time will open the doors for your trading career as you work and take proper action on every mistake made.
The process of success is slow, and plenty of times it is attributed to repeated mistakes made and the constant struggle to get past these mistakes, working on them accordingly. How we deal with them will shape our future as a trader, and most importantly as a person.

Forex Trading: The Fear Factor

2009-09-03T04:06:00.000-07:00

Market knowledge and ability to understand analysis will only get you so far in forex trading, but without the nerve to actively compete risking your own money in the process you can never become a successful trader.
Wagering huge volumes of money in a market as susceptible to change is liable to cause a whole range of opposing emotions; fear, excitement and anxiety just to name a few. Battling against your emotions in order to complete a successful deal is one of the major hurdles, which must be overcome if you are to become a trader able to close huge deals and earn vast sums of money. If you can overcome or even use these emotions to make trades on the Forex then a successful career may be beckoning, but failure to do so will almost certainly cost you a substantial amount of money and end any lingering desires to progress in the busy world of exchange rate trading.
Initiating and closing a trade at the right times are the backbone of becoming a successful Forex trader. If a person cannot execute these deals at the right times, the psychological and financial damage can be crippling. Missing a huge trend or sitting too long on a good price, can be a demoralising experience, but one that many will encounter during a career in Forex trading.
Entering at the right time is just one thing that must be done correctly, but if you are unable to leave at the right time or hold your nerve during the course of the trade, the implications are potentially severe. For example accepting a small loss just before the market rises can lead to a horrendous huge profit/loss ratio margin. Similarly sitting on a currency price that is plummeting for too long could be financially crippling. Understanding the Forex market and having faith in your ability to judge a trend will pay dividends if you hold your nerve, backing out at the wrong time can prove to be a catastrophic misnomer.
The fear generated by investing your own personal money is the main thing that must be overcome. It is the culprit in so many failure stories, people who just couldn't overcome their anxiety investing unwisely, pulling out at the wrong time, missing a rise completely, all result in failure and are caused by fear. Accepting this fear, and using it to your potential will make you a stronger trader, able to trade freely and enjoy the thrill of the exchange. Fighting it will get you nowhere, understanding and overcoming it are the best remedies to this baseless emotion.
Trading strategies will help you ride out the rough times and capitalize on the good ones. Sometimes just taking a step back and accepting a few losses will give you the energy and the knowledge to attack the Forex with renewed vigour, and make some serious profits. Accepting that sometimes you will lose out, you need to be able to take the hits and roll with a punch, there are no guarantees in the trading market, so being able to move on and start again is a skill that is paramount to generating success.
Analysis and charts can only get you so far. You must first master these things, and be able to correctly interpret the figures that are represented in order to spot the trends and make your move. But this all means nothing if you don't have the courage of your convictions. If you are too afraid to buy and not sure when to sell then a glittering career in market trading is likely to elude you. 'The trend is your friend' but it means nothing if you firstly can't spot it and secondly don't have the courage to back it. Knowledge, strategies and overcoming fear may well be the 3 best ways to become to unlock the door to becoming a successful trader. Without all 3 you will more often than not become unstuck, so prepare, practice and evaluate everything before taking the plunge in the complicated world of Forex trading.

Forex: No psychological limitations

2009-09-03T04:05:00.000-07:00

Back when I first started learning about investing, I decided to start from the beginning and read basic books on personal finance as well as "guides" for understanding all of the investment world in a nut shell. Most of these authors were very knowledgeable and informative, but their investment advice was far too conservative for my taste. They would literally write chapter after chapter talking about the differences between conservative investing, which according to them generally yields somewhere around 5% PA, as opposed to "risky" investing which usually meant a diversified stock/mutual fund portfolio yielding (in my mind) only slightly higher averages. What kind of returns can you expect in the stock market? Well they say the market has gone up an average of 10% a year since Adam and Eve. Popular indexes like the DOW and the now more popular S&P500 have always, like real estate, "gone up over time."
Now, these market averages are almost worshiped like golden calves. Repeatedly drilled into my brain was the concept that there were hundreds (if not thousands) of fund managers and other "professionals" out there with Harvard degrees, decades of experience, millions of dollars under management, and they were all spending 15 hours a day consuming every single bit of market information in the hopes of beating these golden calves by a few points.
What chance did I have? If Dr. Fund Guru Jr. who eats, sleeps, breathes the markets and has more credentials than I have individual hairs on my body can't consistently make 20% a year...well...forget it kid...your chances are slim to none. I guess I'll buy some shares of XYZ fund and accept the scraps off the table from the stock gurus.
NOT!
The foreign exchange market offers many benefits that the stock market does not have. Most of these have been beaten to death on various forums, blogs, articles, e-books, etc. However, it's always good to reiterate the positive (my own personal reason is last): — Forex offers unprecedented liquidity. With over two trillion dollars transacted per day on the market, it makes filling any buy/sell order virtually instant. That equates to less slippage and more profitability. "Paper trading" stocks vs actually trading stocks is very different, because orders may not be filled in a timely manner. The difference between trading a forex demo account and an actual account is virtually nill. — Forex is available 24 hours a day 5.5 days a week, as opposed to the daylight trading hours of the stock exchanges. — Forex is uncontrollable by large entities. Large net worth individuals, banks and fund managers who throw their weight around in the stock market can often have huge effects on price action. Because of the immense volume of foreign currency traded per day, the market is unmoved by "heavy hitters." Not even central banks can control the Forex market. — Forex offers up to 200:1 leverage as opposed to 2:1 stock leverage. — Forex has no restrictions for selling short, as opposed to the stock market's "uptick" rule — Forex can actually be traded INSIDE of an IRA or Roth IRA account. — Forex gains are taxed at the preferred 60/40 rate, no matter what trading style you use (intra-day, swing, position) as opposed to the tax penalties for holding stocks for short periods of time.
The list does go on, but for me the biggest advantage is a psychological one. I know it probably sounds silly, but fear and intimidation can sometimes subconsciously defeat us before we even begin. I don't like the idea of having to live up to, and in a way, compete with "professional managers" who have more knowledge of the fundamentals of the markets than I ever will. It's almost as if Forex, in some way, levels the playing field. I don't have to psychologically compete against anyone's idea of what kind of returns are "acceptable and realistic" and what kind of returns are "pure fantasy." I only have to trade until I can find an acceptable reward to risk ratio, and consistent profitability thereof.

Emotions And Forex Trading Don't Mix

2009-09-03T04:04:00.001-07:00

The key to making money in the currency exchange market is to avoid emotional decisions and to follow a carefully thought out strategy that takes the current market and history into account. Going with your gut is not the way to go in the Forex market. Going with your gut could cost you money. Forex trading is a highly volatile market where emotions tend to run high. Emotions can influence your trading decisions, unless you have a strategy planned in advance, and stick to it, no matter what you think you're seeing at the moment. The keys to success in Forex are system, analysis and perseverance.
Most experienced traders tell novice traders that they need to develop a system — and stick to it no matter what. Letting your emotions rule your decisions can hurt your trading in a number of ways. The system tells you when to buy, what to buy, when to trade and what to trade for. By sticking to your system you'll maximize your profits. A system based on technical analysis of historical market trends is one of the most potent tools that you can utilize if you're just getting started in Forex trading. Many traders, with years of experience, continue to use this system to keep the profits rolling in. Many traders will tell you that when their gut instinct and their system collide, the system is almost always right.
Using a mechanical system takes the emotion out of your trading, eliminating one of the reasons people fail. Your system doesn't sway with emotions. It sticks to a tried and true course. To be effective, your system — whether you develop your own or adopt one created by someone else — should identify the entry and exit point of your trade, mitigating factors, and an exit strategy. In general terms this is as follows:
Under what conditions should I acquire a currency?
For instance, you may have a buy order for when a particular currency drops more than 5 pips because your analysis tells you that that's likely to be as low as it goes.
When should I trade one currency for another and for which one?
There are two reasons to exit — to maximize your profit, or minimize your loss. That means you have a set stop-loss order and a set take-profit order at which point you cash out your trade.
What factors will I allow to change that decision?
While the money market moves in predictable patterns, there are always individual variations of a trend within those patterns. If you've taken those variations into account, it will be far easier to decide when a factor really does make a difference, and when it's just wishful thinking. If you're not careful however this is where emotion could come into play and sour deals for you.
How will I trade out of a currency?
Your exit strategy may be as simple as a stop-loss order when my loss hits 5% or a take-profit order when I make 40% profit'.
Another key is perseverance. Analysis of trends in the market will show you that the market moves in dips and spurts within overall patterns that are predictable. No trend moves smoothly in an up or down line — there are inevitable periods of time when values suddenly spiral up or down based on some outside factor. These are the times when emotion can hurt your portfolio. When a currency that you're holding takes a sudden dip south, it's tempting to succumb to panic trading, cut your losses and run even if your system tells you to hold on. On the other hand, it's easy to catch the rising excitement as a trade starts increasing in value and scramble to buy more of the same. These are exactly the times to rely most heavily on your trading system. It will tell you exactly when to trade for maximum profit.

Forex Market Trading And The Mind Games

2009-09-03T04:04:00.000-07:00

First, what is Forex: The FOREX or Foreign Exchange market is the largest financial market in the world, with an volume of more than $1.5 trillion daily, dealing in currencies. Unlike other financial markets, the Forex market has no physical location, no central exchange. It operates through an electronic network of banks, corporations and individuals trading one currency for another.
Mind Games defined: Mind Games are a kind of social interaction where participants try to screw with one anothers' heads. The concept is most often used colloquially to refer to deceitful, confusing or Machiavellian situations. However some mind games are described by the psychology of transactional analysis.
When it comes to trading on the Forex market, winning is a matter of the mind rather than mind over matter. Any trader who's been in the game for any length of time will tell you that psychology has a lot to do with both your own performance on the trading floor and with the way that the market is moving. Playing a winning hand depends on knowing your own mind — and understanding the way that psychology moves the market.
Studying the psychology of the market is nothing new. It doesn't take a genius to understand that any arena that rides and falls on decisions made by people is going to be heavily influenced by the minds of people. Few people take into account all the various levels of mind games that motivate the market, though. If you keep your eye on the way that psychology influences others — including the mass psychology of the people that use the currency on a daily basis — but neglect to know what moves you, you're going to end up hurting your own position. The best Forex coaches will tell you that before you can really become a successful trader, you have to know yourself and the triggers that influence you. Knowing those will help you overcome them or use them. Are you saying 'Huh?" about now? Believe me, I understand. I felt the same way the first time that someone tried to explain how the mind games we play with ourselves influence the trades and decisions that we make. Let me break it down into more manageable pieces for you.
Anything involving winning or losing large sums of money becomes emotionally charged. All right. You've heard that playing the market is a mathematical game. Plug in the right numbers, make the right calculations and you'll come out ahead. So why is it that so many traders end up on the losing end of the market? After all, everyone has access to the same numbers, the same data, the same info — if it's math, there's only one right answer, right?
The answer lies in interpretation. The numbers don't lie, but your mind does. Your hopes and fears can make you see things that just aren't there. When you invest in a currency, you're investing more than just money — you make an emotional investment. Being 'right' becomes important. Being 'wrong' doesn't just cost you money when you let yourself be ruled by your emotions — it costs you pride. Why else would you let a loser ride in the hope that it will bounce back? It's that little thing inside your head that says, "I KNOW I'm right on this, dammit!"
To most people, being right is more important than making money. Here's the deal. The way to make real money in the forex market is to cut your losses short and let your winners ride. In order to do that, you have GOT to accept that some of your trades are going to lose, cut them loose and move on to another trade. You've got to accept that picking a loser is NOT an indication of your self-worth, it's not a reflection on who you are. It's simply a loss, and the best way to deal with it is to stop losing money by moving on — and really move on. Moving on means you don't keep a running total of how many losses you've had — that's the way to paralyze yourself. This brings us to the next point:
Losing traders see loss as failure. Winning traders see loss as learning. Not too long ago, my twelve year old son told me that before Thomas Edison invented a working light bulb, he invented 100 light bulbs that didn't work. But he didn't give up — because he knew that creating a source of light from electricity was possible. He believed in his overall theory — so when one design didn't work, he simply knew that he'd eliminated one possibility. Keep eliminating possibilities long enough, and you'll eventually find the possibility that works.
Winning traders see loss in the same way. They haven't failed — they've learned something new about the way that they and the market work. Winning traders can look at the big picture while playing in the small arena.
Suppose I told you that last year, I made 75 trades that lost money, and 25 that made money. In the eyes of most people, that would make me a pretty poor trader. I'm wrong 75% of the time. But what if I told you that my average loss was $1000, but my average profit on a winning trade was $10,000? That means that I lost $75,000 on trades — but I made $250,000, making my overall profit $175,000. It's a pretty clear numbers game — but how do you keep on trading when you're losing in trade after trade? Simple — just remember that one trade does not make or break a trader. Focus on the trade at hand, follow the triggers that you've set up — but define yourself by what really matters — the overall record.
Bottom line: You can't keep emotions out of the picture, but you can learn not to let them control your decisions. Keep it all in perspective and realise that there are a lot of big boys playing this game and playing it to win...

Psychiatrists Make Better Traders Than Expert Economists

2009-09-03T04:03:00.000-07:00

It should be noted that millionaire traders, Elder, Williams and some others are in fact professional psychiatrists. And it is not accidental that not the economists are the leaders and most successful traders, but professional psychiatrists and psychotherapists. Think about it. You will become a successful trader when you understand why it happens with Forex. You will understand what your Forex mistakes are, and why you are making them. And when you correct these mistakes you will become a trader who has no psychological barriers and obstacles on his way to better earnings in the Forex market.
So, why do the psychiatrists make better traders than economists who, as one would think, have the Forex market at their finger tips?
The economists are confused by:
— the fact that exchange rates are not always related directly to the economic circumstances in the countries. Well, do you know any economist who would be bidding for low fx rates when the economic situation is getting better and better? Or the one who admits that technical analysis of currency pairs is more important for Forex trading than the fundamental one? Any economist is confident that this can never happen because he knows all the economic dogmas. But it happens in the Forex. After all, how can a trader lose with the currencies moving up and down by the economic rules? The currency will surely react to the economic changes in the country, but who knows when and how? Here is a tip: there is the Elliott fifth way to teach a lesson to the ones who believe that fundamental knowledge is enough (before the trend turns, the currency spurts absurdly by the old trend), to confuse and draw the newbies into the game, while the experts wait for the trend to turn back.
— the lack of psychological knowledge that helps to understand the behavior of the crowd. And that is self-evident.
Are there any methods to overcome this fear?
It seems that every Forex book, every article offers efficient solutions for psychological difficulties experienced by the traders.
IN FACT NEITHER OF THESE BOOKS CONTAINS METHODS TO OVERCOME THE FEAR EXPERIENCED BY A FOREX TRADER!
But what do these books offer instead?
Almost every book of this kind consists of two unequal parts:
— the bigger part of the book narrates about traders' problem that interfere with their Forex work and make it unsuccessful (nervousness, doubts, worries, fear, sleep deprivation, etc.). As if the traders do not know their own problems.
— the considerably lesser part contains conclusions and recommendations to the traders who are to solve their problems and overcome their fears to become successful.
The conclusions are disappointing:
Many psychiatrists realize that the new field opens before their eyes — now they may treat traders whose number amounts to millions all over the world and is growing with every day. And since most traders have a dream to become as successful as George Soros and other famous traders, this new field promises to be rather lucrative.
One thing is bad though: the overwhelming majority of these new-sprung trader brain specialists do not even know what the Forex is all about.

Serious Money

2009-09-03T01:46:00.000-07:00

There is an article in this week's news section which is entitled How to Combat Over Trading. It's an issue that I tackle often in this column because it is probably the greatest source of pain for most traders I know. K and I are often amazed by emails we get from subs who tell us that they have blown up even after BKT has had a huge run of winning trades. The reason clearly is that they over trading their account. Now this particular article tries to fix the problem by talking about the need to "visualize you plan", "talk out your trades" and "keep a running diary". While all those sentiments are noble I am here to tell you that they are all pure bunk.
Let's face it, as currency traders we are in the markets because we love to trade. We don't pore over balance sheets looking for misalignment in cashflow calculations like the credit gnomes in the bond market. Nor do we spend endless hours researching business plans like stock investors. FX is the purest speculative market there is driven first and foremost by sentiment. What is the value of a currency anyway? Some will argue that the dollar isn't worth the paper its printed on. But we don't care. There are no bear markets in FX. We are the ultimate "absolute return" asset class.
We are in the game because we want to PLAY. We want to match wits with the smartest people in the world and win. Trading is also very much like violin playing. If you don't practice every day - you lose your touch. But just as violin players miss a few notes from time to time, so do we miss a few trades. The key difference of course is that the violin does not crumble into a thousand little pieces after each bad performance, but our trading account can be decimated by just one bad trade.
So how do we reconcile our desire to play with our need remain disciplined and preserve capital? Simple. We separate our money. I have multiple accounts just for that reason. For example we trade the BKT account only twice or three times a week and not surprisingly it has the best performance by far. The reason is of course because we are extremely disciplined and take only the trades that are consistent with our trading model. Next, I have an account where trade K's calendar calls both proactively and reactively. Those of you who have been with me in live chat are familiar with some of those trades. Finally I have an account that I just trade - no real rules, lots of experimentation and needless to say a lot of stupid mistakes.
The BKT account is serious money, the procactive/reactive account is semi-serious money and the free trade account is just stupid money. The key to winning in FX is not to curtail the over trading. It is not only futile but arrogant to think that we can conquer our worst impulses. The key is not to over trade your serious money. Ironically enough the more freedom you give yourself to experiment in your stupid account, the more likely you are to stick to your trading plan in your primary account. Give it a try and let me know if it helps.