Tips of Forex Trading

I think I had better start off by clarifying that there really are no “secrets” to trading in the forex market, but there are certain things that successful traders do that unsuccessful traders do not do – and vice versa.It seems to be a well established fact that 95% of all the people that trade the forex lose some or all of their investment while a small percentage of traders make a very handsome return. Why is this?

If we were able to make a detailed study of every successful trader, we would find that there is a common thread that runs through these people. The details that we could take from this thread could be considered to be the five secrets of successful forex trading.So here is the first “secret”. Successful Forex Traders love to trade. They love everything about trading. They love the studying, the planning, the scheming, the waiting, the anticipation, the execution, the result, the atmosphere and of course they love making lots of money.

These traders talk, eat, sleep and dream trading. It is not a job. It is a way of life. They DO NOT do it just for the money!In my forex trading business, one very common question that I am asked is “how do you overcome the boredom of being stuck in front of your PC all day?”.The answer is of course that I do not find it boring. I love trading and if I didn’t, I would find a different way to make a living.

The next “secret” is emotional control. Successful traders have learned the ability to trade without emotion. This does not mean that they do not care about the outcome of their trade, quite the opposite. Successful traders always trade to win, but they do not let their emotions play a part in the process. They just look at the cold hard facts and then either trade or wait. Successful traders also accept that there will be both winning and losing trades and they treat both with the same lack of emotion.The next “secret” is to have a system. Now it really does not matter what system you use so long as it produces more and bigger winning trades than losing ones. This is referred to in trading circles as “an edge”. If you do not have an edge, then I highly recommend that you consider the trading system that I co-developed called The Amazing Stealth Forex Trading System.

The penultimate “secret” is to be disciplined. This means having the self discipline to STICK TO THE PLAN. There is a great maxim in trading. Plan the trade and trade the plan. If you have a winning system, make sure that you have the discipline to stick to the rules exactly.

The final “secret” is to have enough money to trade safely. In many ways this should be RULE NUMBER ONE. More people fail to make money when trading on the forex through insufficient trading capital than for any other single reason.

When trading it is vital to adhere to strict money management and capital conservation techniques. Money management must be an integral part of any good trading system, and of course you should never trade with money that if lost would cause you or your family financial difficulty.If you can take onboard and learn these not so secret “secrets”, there is no reason why you should not be able to join the ranks of successful forex traders.

Future Trading

“A Future trading is a financial exchange where people can trade future contracts”. Simply, it is buying or selling a specified quantity and quality of a financial instrument at a specified time in the future at a price determined at the time of purchase and sale. Many people take it as a complicated, high stakes, risky business. This misconception is due to the lack of the proper financial knowledge and a clear understanding of its purpose. Because of high gain and financial security in future market, many professional traders don’t trade the stock market any longer.
The best way to start the trade is to get educated. Many seminars are offered by reputable broking houses to learn future trading from experienced traders. A specialized mentor can save a lot of time and money.  Most traders are now relying on technical analysis to predict price fluctuation, to predict entry or exit price levels and timing. There is no magic formula exists to analyze the market. Fundamental analysis is one way to evaluate whether a market is likely to go higher or lower.
Future contracts can be purchased on margin, meaning that an investor can buy a contract with a partial loan from his or her broker. Maintenance Margin is the amount of money that a trader must maintain in his account in order to keep a future position running. If cash balance falls below this level, he/she would receive “Margin Call”, a notification from broker to top up his/her margin balance with cash back up to its initial margin level.  It is done so that trader’s entire equity can’t be wiped out. Future trading is a zero-sum game; means if somebody makes a million dollars, somebody else loses a million dollars. Future traders have an incredible amount of leverage on them. Despite of all these problems, future trading is one of the best ways to make some quick profit.

FOREX

START FOREX TRADING AND GET RICH !

Forex Triple Top Chart

Triple Top formations are reversal patterns with bearisch bias, this pattern is not often seen in the forex market (also note Triple Bottoms, Double Bottoms and Double Tops). Triple Tops are identified by three consecutive highs of similar (or almost) height with 2 moderate pull backs in between (neckline).

The triple top can be a major reversal pattern (if found on a daily chart or bigger timeframe) that can be formed after an extended uptrend. This pattern is confirmed when the currency pair price breaks from (it's third peak) above through the neckline, the most likely price direction is now DOWN.

What does a Triple Top formation look like?

A triple top formation is a distinct chart pattern characterized by a rally to a new high (peak1 or resistance1) followed by a moderate pull back (10 -20%) to the neckline (support level), a second rally to test a new high ( peak2 or resistance2) followed by a moderate pull back (10 -20%) to the neckline (support level) and finally a third rally to test a new high ( peak3 or resistance3).

The three peaks (highs or resistance levels) are at approximately the same price level. What follows is a pull back to below the neck line (support).

How to trade this pattern?

Go short below the Neck Line (support level) when the currency pair price breaks from (it's third peak) above, the most likely price direction is now DOWN. Place your stop couple of pips above it's third peak price!

Your target must be at least twice the distance from it's third peak break to the neckline.

Example: If the third peak price is at 1.2300 and the neckline is at 1.2250, your target level must be at least 100 pips when trading the break out!

Chart example


USD/JPY Daily Chart Triple Top reversal chart pattern

Forex Trading

he forex market is quickly becoming one of the most popular markets for trading.
Not only are the experienced traders looking to this market to maximize their trading returns, but many new, individual investors are now able to trade the Forex market — just as they do stocks and futures.
More and more individuals are seeing Forex not only as a new way to diversify their portfolio, but are also finding that it is becoming the most profitable component of their investments.
And that's because of the many advantages Forex offers over other markets like stocks or commodities. Here's what you will typically see advertized about Forex:
— Unparallelled liquidity. It is the largest financial market in the world by far. Almost $2 trillion being traded daily!
— Excellent leverage potential. Individual investors have access to leverage of 100:1 and even 200:1
— No Commissions (more on this later on)
— Low trading costs.
And yes, the Forex market really does offer all these advantages.
But the last two points above talk about costs, and that's what we'd like to focus on in this article.
Like any trading, there are costs involved, and, while these may be much lower than they used to be, it is important to understand what those are.
Let's start by looking at stock trading, something that most of us investors are pretty familiar with.
When trading stocks, most investors will have a trading account with a broker somewhere and will have investment funds deposited in that account.
The broker will then execute the trades on behalf of the account holder, and of course, in return for providing that service, the broker will want to be compensated.
With stocks, typically, the broker will earn a commission for executing the trade. They will charge either a fixed dollar amount per trade, or a dollar amount per share, or (most commonly) a scaled commission based on how big your trade is.
And, they will charge it on both sides of the transaction. That is to say, when you buy the stock you get charged commission, AND then when you sell that same stock you get charged another commission.
With Forex trading, the brokers constantly advertise "no commission". And, of course that's true — except for a few brokers, who do charge a commission similar to stocks.
But also, of course, the brokers aren't performing their trading services for free. They too make money.
The way they do that is by charging the investor a "spread". Simply put, the spread is the difference between the bid price and the ask price for the currency being traded.
The broker will add this spread onto the price of the trade and keep it as their fee for trading.
So, while it isn't a commission per se, it behaves in practically the same way. It is just a little more hidden.
The good news though is that typically this spread is only charged on one side of the transaction. In other words, you don't pay the spread when you buy AND then again when you sell. It is usually only charged on the "buy" side of the trades.
So the spread really is your primary cost of trading the Forex and you should pay attention to the details of what the different brokers offer.
The spreads offered can vary pretty dramatically from broker to broker. And while it may not seem like much of a difference to be trading with a 5 pip spread vs a 4 pip spread, it actually can add up very quickly when you multiply it out by how many trades you make and how much money you're trading. Think about it, 4 pips vs 5 pips is a difference of 25% on your trading costs.
The other thing to recognize is that spreads can vary based on what currencies you're trading and what type of account you open.
Most brokers will give you different spreads for different currencies. The most popular currency pairs like the EURUSD or GBPUSD will typically have the lowest spreads, while currencies that have less demand will likely be traded with higher spreads.
Be sure to think about what currencies you are most likely to be trading and find out what your spreads will be for those currencies.
Also, some brokers will offer different spreads for different types of accounts. A mini account, for example may be subject to higher spreads than a full contract account.
And finally, because the spreads really are the difference between bid prices and ask prices as determined by the free market, it is important to recognize that they are not "guaranteed". Most brokers will tell you that there may be times during periods of low demand, or very active trading when the spreads widen and you will be charged that wider spread.
These do tend to be rarer situations because the Forex market really is so large and demand and supply are generally quite predictable, but they do occur, especially with some of the lesser traded currencies. So it's important to be aware of that.
In summary then, when trading Forex, understand that the "spread" is truly your most important consideration for trading costs.
Spreads can vary significantly between brokers, account types and currencies traded. And small differences in the spread can really add up to thousands of dollars in trading costs over even just a few months.
So be sure to understand what currencies you are going to be trading, how frequently, and in what type of account and use those factors to help decide which broker can offer you the best trading costs.

Advance Your Financial Position

Everyday, currencies are traded in an international foreign exchange market, otherwise known as the forex market, with the main marketplaces (otherwise known as bourses) existing in the world's financial centes New York, London, Tokyo, Frankfurt and Zurich. Historically, the only way to participate was from the trading floor of one of these bourses, but today, people can trade forex from anywhere through a secure internet connection and a PC.
Today's traders operate in a global network, taking positions in the market and making investment decisions based on either relative value between two currencies, or a particular currency's actual price. Currency value fluctuations are constantly renegotiated through trading activity, and this activity, and the corresponding currency values are also indicators of the levels of currency supply.
An example of market behaviour greater demand for the Euro might indicate a weakening supply. Low supply and increased demand will drive the price of the Euro up against other currencies like the dollar, until the price better reflects what traders are prepared to pay when short supply exists. Another way to look at this situation is this higher demand means it will cost more dollars to buy the Euro, which equates to a weakening of the dollar in comparison. Analysis of situations such as in this example forms the basis for a trader's investment decisions, and they will purchase or sell currency accordingly.
This should be remembered, as while many see the foreign exchange market as the vehicle for converting their home currency while travelling abroad, many others choose to use the market to advance their financial position and secure their future.
by Jay Moncliff

How Forex Brokers Work

Like any other business in the history of business, your broker’s raison d’etre, is to make as big a profit as possible. There are about as many ways to go about this as there are brokers. For those who are in it for the long haul, however, it is generally best to adopt a set of practices which are deemed fair by their clients: certain boundaries are set, and operating beyond them can cost a brokerage its reputation, and along with it its clients. Straying outside these boundaries, therefore, is not considered as being in line with the long term goals of the business. How strictly these boundaries are enforced, especially when there is little chance of clients ever even becoming aware of any transgression, again varies from business to business. For the sake of simplicity, in this article we assume that everyone in the business is squeaky clean, as if every client could peek into the broker’s back office at any time and dissect every trade. This is obviously not the case, and many brokers do take advantage of this opaqueness, but the details of that are best left for another discussion.
So without further ado, let’s get into the details of how forex brokers function. Somewhat removed from the top-tier interbank market, retail forex brokers are there to provide a service that would otherwise not be available, that is, giving an investor with a $10,000 bankroll the chance to speculate in the up-until-recently very exclusive forex market. There are generally considered to be 2 types of brokers providing access at the retail level: Electronic Communications Networks (ECNs) and Market Makers. ECNs are generally somewhat more exclusive, requiring larger deposits to get started, but are seen as providing more direct access to the interbank market. As we will see, there are certainly advantages to this, but some disadvantages as well. Market makers, on the other hand are more often than not, the counter party to their clients’ trades, creating somewhat of a conflict of interest, whereas ECNs profit from commission fees charged directly to the clients, regardless of the result of any trade, they are seen as being completely impartial – an ECN has no incentive for a client to lose money. In fact, one could argue that an ECN stands to profit more if a client is successful, meaning that s/he will stay around longer and they will be able to collect more commission fees from them. A market maker, on the other hand, being the counterparty to a client’s trade, makes money if the client loses money, providing an incentive for some shady practices, particularly in an unregulated market. The extent to which this happens varies among individual blo. There are akers lso some benefits to trading with a market maker (see our ECNs vs. Market Makers article) Some brokers also provide a service that doesn’t quite fit into either category – they route different orders differently, depending on complex algorithms, or on a dealing desk, that analyze each order and attempt to fill it in the way that will be most beneficial to the broker’s bottom line. They can offset some client orders against one another, effectively creating an in-house market, they can choose to be the counterparty to a client’s trade (trade “against” the client), or they can offset their position with a hedge through a higher-tier counterparty. Note that the market maker is mainly concerned with managing its net exposure, and NOT with any single individual’s trades. They are NOT gunning for your stop losses specifically, but may be gunning for clusters of stops.
If you have already read the first article in the series, structure of the forex, you will recall that market mechanics are responsible for the variation in bid/ask spreads, and also for slippage. So it seems the two biggest novice traders’ pet peeves are not so much a function of who their broker is, but rather their lack of understanding of the way the forex market operates. A broker that offers a fixed spread tends not to fill orders during periods of low liquidity because this would expose them to undue risk, and as much as their job is to cater to their clients, remember they are in business primarily to make money for themselves. Some brokers also offer guaranteed order fills, such as “guaranteed stop losses”. Again, if there is no counter party to take the trade, they have to expose themselves to risk in order to fulfill this guarantee, so don’t be surprised if you see such a broker quoting different/delayed prices around important trend lines or support/resistance levels. Be especially aware of brokers who offer both guaranteed fills AND fixed spreads.