Currency Trading

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

2007-05-21T09:10:00.000-07:00

Losing money in forex?

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.

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FOREX Trading Success - Getting the Right Mindset for Big Profits

2007-05-20T08:57:00.000-07:00

90% or more FOREX traders lose and only 10% or less achieve FOREX trading success.

Everything about trading however can be specifically learned.

The reason so many traders fail, is not they can’t be successful (anyone can), they simply cannot adopt the right mindset needed for trading.

If you can adopt the right mindset and have desire to learn, you can enter the minority of traders who achieve FOREX trading success – Let’s look at this in more detail.

1. Your On Your Own

If you want to make it in FOREX Trading you are responsible for your success.

Today, more than ever before people don’t like taking responsibility for their actions - they want to consult an “expert”.

Many people think that they can buy success in FX trading, but you can’t.

If you think buying an e-book for $100.00 or so will make you rich think again.

The only way you will be successful is to do it on your own. With this attitude you will now be able to learn the right knowledge for FOREX trading success.

2. Learning the RIGHT knowledge

This means leaving your ego behind and being humble.

This may seem a strange trait for trading success, but it’s true.

Many traders think that learning lots of knowledge, developing complicated trading systems and being clever means success.

They think the fact they are smart, means they have “a right” to be successful.

This is of course is not true you make money not for being clever or working hard, but for getting market direction right.

The really successful traders know this, they learn what they need to know, have essentially simple FOREX trading systems and are humble, in terms of their attitude to the market.

Many traders who make millions have no formal qualifications, yet they make money, that’s because they learn the RIGHT knowledge and work smart rather than hard.

3. Confidence and discipline

If you develop your own trading methodology, you will know how and why it works – this means you will be confident in it and apply it with discipline in the market.

Discipline is a hard trait to acquire and it’s hard to put into words actually how hard it is.

Staying for example with a trading system through a string of losses can be frustrating and this is where you need mental discipline to stick with your system.

More traders fail due to lack of discipline than any other character trait, but it’s essential for FOREX Trading success.

It comes from learning your own trading methodology and having confidence in it.

4. Trade In Isolation

If you want to be successful in currency trading, then you need to trade in isolation.

The real pro traders understand this.

They don’t discuss their trades with others, give or seek opinions, they focus on what their doing in the currency markets and ignore everyone else.

If you don’t trade in isolation, you will find that your emotions get involved and discipline suffers.

5. Patience.

You can’t hurry the currency markets, or profits so don’t try. Trading requires immense patience to ride out losing periods and wait for good risk to reward opportunities to present themselves.

6.Love what your doing

Trading should be fun and you should love what you do. If you constantly are feeling nervous, don’t like risk, constantly checking quotes and willing the market to go your way, then trading is not for you.

If you can approach online FOREX trading with the character traits above, you have the opportunity to achieve FOREX Trading success and make some great long term capital gains.

Good luck!

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Forex Trading Education - The London Open Checklist

2007-05-19T08:52:00.000-07:00

A thorough Forex trading education must include an understanding of the effect market timings can have on trading and liquidity.

One of the most active periods of the day is from the time the London market opens. Often around that time good trading opportunities will appear.

As part of your Forex trading education, learn to analyze market conditions around London open and begin to recognize good setups.

The following questionnaire and checklist will help.

London Open Preparation

About 15 to 30 minutes before London open check the answers to these questions:

Are the MACD indicators on the 4 hour and 1 hour charts in agreement? If they are not going in the same direction be very careful!

Is there MACD divergence on the 4 hour, 1 hour, or 15 minute chart? Look for other clues to confirm that price may go in the direction of MACD divergence.

On the 4 hour chart what is the overall trend?

Do a Fibonacci calculation on the last swing high and low and see if price is pulling back to an optimum retracement level or whether it is reaching a key extension level.

Note price in relation to the 200 EMA (Exponential Moving Average) on the 4 hour, 1 hour and 15 minute charts. Is price bucking the trend? In other words, is price above the 200 EMA on the 4 hour and 1 hour chart but below it on the 15 minute? Then be prepared for price to go long at some stage. (Draw the opposite conclusion if price is below the 200 EMA on the 4 hour and 1 hour chart but above it on the 15 minute chart.)

Are any Economic Reports imminent?

As the candle closes on the 15 minute chart at London open, do you see any distinctive candle patterns such as tweezers, or doji's or hammers indicating price exhaustion?

If I entered a trade right now in a particular direction, what would be the risk and where would I place my stop?

Within a few minutes of London open, if you see a number of factors converging from the analysis above, make a decision one way or the other:

trade

wait for clearer signals or a better entry point

Carrying out an analysis in this way each day at London open will do much to increase your Forex trading education.

It will make you aware of what is happening on the charts and in the marketplace and help you to arrive at conclusions.

There is no magic formula involved with Forex trading education. Put simply, successful Forex trading is the result of years of hard work, study, practice, and experience often gained through painful trading scenarios.

Eventually the newer trader learns mental discipline, and how to control the emotions - probably the biggest part of a Forex trading education.

Practice a procedure like the one above day after day and begin to see some progress as you get nearer the time you make profits consistently from currency trading.

Michael A. Jones is a writer, webmaster and Forex trader.

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Forex Currency Trading- Steps To Become A Forex Trader Now

2007-05-18T08:46:00.000-07:00

Intense belief that you have the inherent qualities to transit from a different professional field of enterprise or work into the field of forex trading is a powerful driving force that comes to many working individuals sometime along their path of life.

I have seen many doctors, lawyers, accountants , dentists and teachers and college professors who are imbued with a deep sense of ability - that because they have been successful in their own fields before, they would be equally successful in forex trading.

How untrue!

I have seen many of them fail in trading, and rake up losses that bite into their capital until they would finally give up in fear of financial ruin. While there are some who make it successfully, what were the common steps that they took to become successful? How did they become a successful forex trader?

Consider the following steps to their successful forex trading:

1. They recognize that forex trading is a specialized field of enterprise that require specialized knowledge, and that their previous skills may or may not be useful to them in forex trading.

2. They recognise that they could lose as easily as they could win in forex trading, and it was important for them to learn systematically how to trade.

3. They did not plunge headlong into forex trading. They undertook periods of learning - from opening trading accounts, to getting familiar with their trading platform, knowing when to trade with the trend and counter trends, and when to stay out of the market.

4. They invariably started off small, most with forex mini accounts.

5. They had constant help from some experienced trader, who acted like a mentor and showed them the ropes.

6. They stayed focused in just one type of trading using one trading method. They invariably started off trading with just one currency pair with a keen sense of devotion and dedication to be disciplined and to follow their trading plan.

7. They set aside sufficient capital to fund their trading, and did not come under pressure because they did not use money they needed for a living to trade forex.

8. They invariably keep a trading log, and reviewed their trades to re-inforced what they learnt from their trades.

To become a successful forex trader is not an overnight story. Preparation and learning is part of the process if you wish to be a forex trader now. The steps outlined above will be useful, and you will need to learn and practise your skills. The first step is to locate a mentor and to adopt a successful forex trading system. Pay your dues by learning first, and then success in the forex market will come.

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